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                                                                 Exhibit 10.13.1

                      Applied Extrusion Technologies, Inc.
                               3 Centennial Drive
                          Peabody, Massachusetts 01960

                                                              September 30, 2002



By hand delivery

Thomas E. Williams
40 Foster Street
Marblehead, Massachusetts  01945

Dear Mr. Williams:

     As we have discussed, you and we have agreed that your employment with
Applied Extrusion Technologies, Inc., a Delaware corporation (the "Company"),
has terminated, effective as of today, September 30, 2002 (the "Termination
Date"). The purpose of this letter is to confirm the agreement between you and
the Company concerning certain financial arrangements and other matters, as
follows:

     1.   Resignations. You hereby resign as the President and Chief Executive
Officer of the Company, and as an officer and/or director of each subsidiary of
the Company if you hold such position(s) with such subsidiary, and all other
positions, offices and directorships with the Company and its subsidiaries.
Notwithstanding the foregoing, you will remain a member of the Board of
Directors of the Company (the "Board") until the end of your current term,
subject to law and the governing documents of the Company. The Company, for
itself and on behalf of each such subsidiary, hereby accepts such resignation.
It is understood and agreed that the Company and its subsidiaries will take
actions in reliance on these resignations and that they are irrevocable. You
agree and acknowledge that as of the Termination Date, except solely in your
capacity as a member of the Board, you do not have the authority, and will not
endeavor, to act or to make representations or commitments for the Company or
any of its subsidiaries, or to obligate the Company or any of its subsidiaries
to any contracts or to pledge their credit. You hereby confirm that you have no
disagreement with the Company that would lead to an obligation to file a Current
Report on Form 8-K under the Securities Exchange Act of 1934 and the rules and
regulations thereunder, all as from time to time in effect (collectively, the
"1934 Act"), by virtue of such disagreement, and you agree not to submit a
letter to the Company which would require disclosure in such a Current Report on
Form 8-K.

     2.   Final Salary and Vacation Pay. You acknowledge that you have received
pay for all work you have performed for the Company during the current payroll
period, to the extent not previously paid, as well as pay, at the rate of your
Salary (as hereinafter

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defined), for the eight vacation days you had earned, but not used, as of the
Termination Date determined in accordance with Company policy and as reflected
on the books of the Company.

     3.   Severance Benefits. In consideration of your acceptance of this
Agreement and subject to your meeting in full your obligations under it and
under your Amended and Restated Employment Agreement, initially made as of April
1, 2002 and amended and restated as of August 1, 2002 (the "Employment
Agreement"), the Company agrees with you as follows:

          (a)  For all purposes hereof and of the Employment Agreement, the
     following terms shall have the following meanings:

               (i)    "Average Bonus" shall mean $135,750;

               (ii)   "Benefits Termination Date" shall mean September 30, 2005;

               (iii)  "Expiration Date" shall mean August 1, 2005;

               (iv)   "Salary" shall mean $543,000; and

               (v)    "Termination Date" shall mean September 30, 2002.

          (b)  On the date which is the sixth business day following the later
     of the Termination Date or the date that a copy of this Agreement executed
     by you is received by the Company, the Company shall pay to you in cash an
     amount equal to three (3) times the sum of Salary plus Average Bonus.

          (c)  During the period beginning on the Termination Date and ending on
     the Benefits Termination Date, the Company shall extend to you the
     applicable fringe benefits referred to in Sections 3(d) and 3(e) of the
     Employment Agreement on the terms referred to therein (or the equivalent
     thereof in all material respects if continuation of participation in
     benefit plans is not able to be continued under applicable law or the terms
     of such benefit plans).

          (d)  The Company confirms that you will be deemed for all vesting
     requirements contained in any of the Company's benefit plans, programs or
     offerings in which you are currently participating (including without
     limitation with regard to the Company's 1999 Supplemental Executive
     Retirement Plan (the "SERP") or other benefits and any unvested stock
     options) to have been employed by the Company until the Expiration Date,
     with all vested stock options remaining exercisable until the Benefits
     Termination Date, provided they do not otherwise expire by reaching the end
     of their stated term.

          (e)  You will continue to participate in the Company's SERP on the
     terms and conditions in effect on the date hereof and as from time to time
     hereafter amended in accordance with the terms and conditions specified
     therein.

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You and the Company agree that compliance by the Company with the foregoing
provisions will constitute performance in full of the Company's obligations
under Sections 4(a) through 4(g) of the Employment Agreement, if and to the
extent applicable to the termination of your employment. The provisions of
Sections 4(h), 4(i) (as if your employment had been terminated pursuant to
Section 4(e) or 4(f) of the Employment Agreement), 5, 6, 7, 8, 10, 11, 12 and 17
of the Employment Agreement shall survive the effectiveness of this Agreement
and shall, to the extent applicable, apply to the provisions of this Agreement.

     4.   Expenses. Within 60 days you will submit requests for reimbursement
for all legitimate, business-related expenses incurred by you prior to the
Termination Date, along with supporting documentation, and that no further
reimbursement will be due you from the Company or any of its subsidiaries upon
reimbursement by the Company to you of such expenses.

     5.   Acknowledgement of Full Payment. You acknowledge and agree that the
payments provided under paragraph 2 of this Agreement are in complete
satisfaction of any and all compensation due to you from the Company, whether
for services provided to the Company or otherwise, through the Termination Date
and that, except as expressly provided under this Agreement, no further
compensation is owed to you.

     6.   Confidentiality.

          (a)  You agree that you will not disclose this Agreement or any of its
     terms or provisions, directly or by implication, except to members of your
     immediate family and to your legal and tax advisors, and then only on
     condition that they agree not to further disclose this Agreement or any of
     its terms or provisions to others; provided, however, that you may disclose
     such terms and provisions (i) as may become publicly available otherwise
     than by reason of your or their violation of the foregoing, (ii) as may be
     required by law or legal process or (iii) to the extent required to enforce
     your rights hereunder.

          (b)  The Company agree that it will not disclose this Agreement or any
     of its terms or provisions, directly or by implication, except to its
     directors, officers, employees, advisors and agents who are reasonably
     required to know such terms and provisions in the course of the performance
     of their duties to the Company, and then only on condition that they agree
     not to further disclose this Agreement or any of its terms or provisions to
     others; provided, however, that the Company may disclose such terms and
     provisions (i) as may become publicly available otherwise than by reason of
     its or their violation of the foregoing, (ii) as may be required by law or
     legal process (including without limitation the 1934 Act) or (iii) to the
     extent required to enforce its rights hereunder. You acknowledge that the
     terms of this Agreement will have to be disclosed, and that this Agreement
     will have to be filed as an exhibit, pursuant to the 1934 Act.

     7.   Non-Disparagement. You agree that you will continue to use your best
efforts to support and promote the interests and reputation of the Company and
its subsidiaries in the community (without any obligation to devote time or
financial resources in connection

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therewith); you will not do or say anything that might be detrimental to the
business or reputation of the Company or any of its subsidiaries; or that might
disparage the Company or any of its subsidiaries or any of its or their past or
present directors, officers, employees, agents, or stockholders or any other
persons, corporations and other entities connected with them; and that you will
not otherwise do or say anything that could disrupt the good morale of the
employees of the Company and its subsidiaries or otherwise harm its or their
interests or reputation.

     8.   Public Announcements. You and the Company will mutually agree (such
agreement not to be unreasonably withheld) on the text of a press release to be
made by the Company announcing the termination of your employment. You will
direct all inquiries for references on your behalf to the Chairman of the
Company.

     9.   Release of Claims.

          (a)  In consideration of the Company's covenants in Section 3 above,
     on your own behalf and that of your heirs, executors, administrators,
     beneficiaries, personal representatives and assigns, you agree that this
     Agreement shall be in complete and final settlement of any and all causes
     of action, rights or claims, whether known or unknown, that you have had in
     the past, now have, or might now have, in any way related to, connected
     with or arising out of your employment or its termination or pursuant to
     Title VII of the Civil Rights Act, the Americans with Disabilities Act, the
     Age Discrimination in Employment Act, the fair employment practices
     statutes of the state or states in which you have provided services to the
     Company or any other federal, state or local law, regulation or other
     requirement and you hereby release and forever discharge the Company and
     its subsidiaries and other affiliates and all of their respective past,
     present and future directors, shareholders, officers, members, managers,
     general and limited partners, employees, agents, representatives,
     successors and assigns, and all others connected with any of them, both
     individually and in their official capacities, from any and all such causes
     of action, rights or claims; provided, however, that, if and to the extent
     that a third party asserts a claim against you with respect to which you
     would be entitled to indemnification as a director or officer of the
     Company or any subsidiary, you do not release the Company or such
     subsidiary from such indemnification obligations.

          (b)  This Agreement, including the release of claims set forth the
     paragraph immediately above, creates legally binding obligations and the
     Company therefore advises you to consult an attorney before signing this
     Agreement. In signing this Agreement, you give the Company assurance that
     you have signed it voluntarily and with a full understanding of its terms;
     that you have had sufficient opportunity, before signing this Agreement, to
     consider its terms and to consult with an attorney, if you wished to do so,
     or to consult with any other person referred to in Section 6(a) above; and
     that, in signing this Agreement, you have not relied on any promises or
     representations, express or implied, that are not set forth expressly in
     this Agreement.

          (c)  The Company agrees that this Agreement shall be in complete and
     final settlement of and releases you, your heirs, executors, administrators
     and assigns and all others connected with you, from, any and all causes of
     action, rights or claims which the

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         Company have had in the past or now have against you in any way related
         to or arising out of your employment and its termination; provided,
         however, that the Company does not release you from any claim arising
         out of any conduct by you that was not undertaken both in good faith
         and in the reasonable belief that it was in the best interests of the
         Company to the extent the Company incurs costs or expenses in
         connection with third party claims or settlements.

         10.      Miscellaneous.

                  (a) This Agreement constitutes the entire agreement between
         you and the Company and supersedes all prior and contemporaneous
         communications, agreements and understandings, whether written or oral,
         with respect to your employment, its termination and all related
         matters, excluding only the Employment Agreement, the SERP, any stock
         options held by you and your obligations with respect to the securities
         of the Company, all of which shall remain in full force and effect in
         accordance with their terms.

                  (b) This Agreement may not be modified or amended, and no
         breach shall be deemed to be waived, unless agreed to in writing by you
         and the Chairman of the Company or his expressly authorized designee.
         The captions and headings in this Agreement are for convenience only
         and in no way define or describe the scope or content of any provision
         of this Agreement.

                  (c) The obligation of the Company to make payments to you or
         on your behalf under this Agreement is expressly conditioned upon your
         continued full performance of your obligations under this Agreement and
         under the Employment Agreement.

                  (d) This Agreement may be executed in one or more
         counterparts, each of which shall constitute an original and all of
         which together shall constitute one and the same document. This
         Agreement shall be binding upon, and shall inure to the benefit of the
         successors and assigns of the parties hereto.

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         If the terms of this Agreement are acceptable to you, please sign, date
and return it to me within twenty-one days of the date you receive it. You may
revoke this Agreement at any time during the seven-day period immediately
following the date of your signing. If you do not revoke it, then, at the
expiration of that seven-day period, this letter will take effect as a
legally-binding agreement between you and the Company on the basis set forth
above. The enclosed copy of this letter, which you should also sign and date, is
for your records.

                                    Sincerely,

                                    APPLIED EXTRUSION TECHNOLOGIES, INC.


                                    By:   /s/ Amin J. Khoury
                                          Amin J. Khoury
                                          Chairman

Accepted and agreed:


Signature: /s/ Thomas E. Williams

Date: September 30, 2002

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