Amendment of Memorandum of Agreement Year 2006



 Exhibit 10.20.1 
 Confidential Treatment Requested by Appleton Papers Inc. 
 

 
 AMENDMENT OF 
 MEMORANDUM OF AGREEMENT 
 YEAR 2006  
 BASESTOCK SUPPLY AGREEMENT (effective as of June 27, 2001) 
 For valuable consideration, the above-referenced agreement (herein “Agreement”) shall be and it is hereby amended as follows: 
  

	1.	Section 1., VOLUME/MIX, is amended so as to provide, in its entirety, as follows: 

 “Except as hereinafter provided, Buyer shall be obligated to purchase from Seller, and Seller shall be obligated to sell to Buyer, 60,000 tons (2,000
lbs/ton), total, of the grades listed in Schedule I of this Amendment, in Agreement Year 2006. The volumes set forth above are hereinafter referred to as the “Annual Volume.” 
 “Except as hereinafter provided or from time-to-time agreed by the parties, Buyer will purchase and Seller will make available the Annual Volume
utilizing a level load pattern of equal monthly volumes. Adjustments for scheduled “Holiday Downs” will be planned and agreed to in advance. Buyer shall have the ability to adjust, on a calendar quarter-by-quarter basis, the then
applicable Annual Volume by plus or minus ten percent (10%), provided that Buyer shall have given Seller notice, of its intention to so adjust said volumes, at least 90 days prior to the beginning of each calendar quarter in question. Seller will
provide any additional tonnage at the same terms as stated in this agreement. Said adjustments, if any, shall not be cumulative, i.e. the amount of quarterly adjustment, in Agreement Year 2006, shall not exceed plus or minus 1,500 tons in any
calendar quarter. If buyer does elect to alter volumes by plus or minus ten percent (10%) in any given quarter, Annual volume requirements under this Agreement shall be adjusted accordingly. 
 “In addition to the purchases referred to above, Buyer agrees to purchase product (on or before January 1, 2007), per section 7 below,
required to bring the consignment inventory to 10% of the Annual Volume applicable to the 2007 Agreement Year. Any year-end purchases made by Buyer to adjust the consignment inventory shall be in addition to the Buyer’s Annual Volume
commitment. 
 “Buyer and Seller shall meet on or before July 1, 2006 and review options for Agreement volume and price in 2007.
Volume target range is expected to be between 50,000 and 60,000 tons for the year 2007 based upon current market conditions,” 


	*	The redacted portion of this document has been omitted pursuant to a request for confidential treatment and such redacted portion has been filed separately with the
Securities and Exchange Commission. 








 Confidential Treatment Requested by Appleton Papers Inc. 
  

	2.	Section 3., Grade Mix, is amended by deleting the last sentence and substituting the following sentence: 

 “All grades represented in Schedule 1 of this Amendment are considered qualified grades for purposes of meeting the Annual Volume requirements under
this Agreement.” 
  

	3.	Section 4., Payment Terms, is amended so as to read, in its entirety, as follows: 

 Terms are two percent (2%) discount if paid via electronic fund transfer to Seller’s financial institution (if capable), within the time periods
specified in Schedule 3 to this Agreement; otherwise, the discount shall be one percent (1%) if paid within 20 days from date of invoice. Except as provided in Section 7 hereof, title shall be deemed transferred at time of shipment or, as
the case may be, release from the “consignment” inventory. 
  

	4.	Section 6., TERM, is amended by deleting the first sentence and substituting the following two sentences therefor: 

 “This Agreement is effective as of January 2, 2006 and is modified for one fiscal year beyond the current Amendment, thereby ending on
January 2, 2007. As utilized herein, the term “Agreement Year” refers to a fiscal year ending on the Saturday that is closest to December 31 in the year in question.” 
  

	5.	Section 7., SERVICE, is amended so as to provide in its entirety as follows: 

 “Seller agrees to maintain a consignment inventory of product. Seller will maintain as Seller’s inventory, a maximum of 5,500 tons in Agreement Year 2006. Seller will maintain an additional 500 tons of
in-transit inventory if required to support Buyers’ Purchase Order due dates. Seller agrees to utilize Buyer’s leased warehouse space on Warehouse Road or other mutually agreed upon site within the Fox Valley for storage of the consignment
inventory. Seller also agrees to be responsible for the monthly warehouse rental charges for the space utilized to manage this consignment inventory at a cost not to exceed Buyer’s leased space rate. Notwithstanding any other provision herein,
Product within this inventory will be purchased by and title transferred to Buyer, either when withdrawn from said inventory, or, if not withdrawn, upon reaching 90 days in the consignment inventory.” 
  

	6.	Section 8., ORDER MINIMUMS, is amended so as to provide, in its entirety, as follows: 

 “Order minimums and run frequencies shall be as specified in Schedule 1 to this Agreement.” 
  

 2 








 Confidential Treatment Requested by Appleton Papers Inc. 
  

	7.	Section 9., TRIM, is amended so as to provide, in its entirety, as follows: 

 “All trim charges are established by grade for all grades listed on Schedule 2 of this Agreement. Buyer, at time of order, will calculate all applicable trim charges and will adjust its Purchase Order for said
adjustment per the charges in Schedule 2 of this Agreement. 
  

	8.	Section 10., PRICING, is amended so as to provide, in its entirety, as follows: 

 “Pricing is per Schedule 1, for Agreement Year 2006. 
  

	9.	Section 11., CONTINUOUS COST REDUCTION, is amended so as to provide, in its entirety, as follows: 

 “Buyer and Seller shall each appoint representatives to serve on a “process improvement team” that will be directed to make and implement
recommendations for the improvement of 31.1# Thermal Base paper to be manufactured and supplied by Seller hereunder. The team shall, among other things, engage in the “Kempner Tregoe (“KT”) problem solving process,” and be
assisted by an objective leader qualified in KT principles and techniques. Schedule 4 hereto sets forth guidelines for administering the bonus/penalty for 31.1# Thermal Base paper performance.” 
  

	10.	Section 12., QUALITY, is amended by changing the first sentence thereof so as to provide as follows: 

 “All products shall meet or exceed the quality specifications as described in Buyer’s basestock specification (including basestock finishing
specifications) in effect on January 24, 2003 or thereafter adopted by mutual agreement of the parties.” 
  

	11.	Section 13., INTERFACES, is changed so as to provide, in its entirety, as follows: 

 “Issues related to pricing, terms, service issues and other matters arising hereunder shall be coordinated by Buyer’s - HQ Procurement
Specialist (currently Ed Hammond) and Seller’s Senior Vice President of Customer and Business Services (currently Dan Regal) or his or her designee.” 
  

	12.	Section 17., EXECUTION, is deleted in its entirety; however, deletion of said section shall not result in or require the renumbering of the remaining sections of the
Agreement. 

  

	13.	A new Section, identified as “Section 31, Business Review,” is added, said new Section, to provide, in its entirety, as follows: 

 “Buyer and Seller agree to conduct a Strategic Business Review annually during the first calendar quarter of each year of this Agreement.”

  

 3 








 Confidential Treatment Requested by Appleton Papers Inc. 
  

	14.	Schedules, Prior Amendments, and Implied Terms. Schedules I through 4 and 7 to the Agreement shall be and they are hereby cancelled and annulled for all purposes. The
Schedules annexed to this Addendum, and identified as “Schedule 1,” “Schedule 2,” “Schedule 3,” and “Schedule 4, Performance Improvement for 31.1 Fax,” shall be and they are hereby incorporated herein by
reference. Schedules 5 and 6 to the Agreement remain in full force and effect. References, in the Agreement, to Schedule 2 are hereby deemed amended so as to refer instead to annexed Schedule 1. All prior amendments to the Agreement, including all
schedules to such amendments, shall be and they are hereby cancelled and annulled for all purposes. Sections of the Agreement that are not referenced in this Amendment shall be deemed amended, by implication, in order to give effect to the intention
of the parties as set forth in this Amendment. 

 Except as otherwise provided herein, all terms and conditions of the Agreement shall be and
remain in full force and effect. 
 This Agreement is executed by the parties on October 14, 2005. 
  

					
		 	APPLETON PAPERS INC.	  	APPLETON COATED LLC
			
	 SIGNATURE:
	 	 /s/ John Depies
	  	 /s/ Dan Regal

	 TITLE:
	 	 Vice President and General Manager,
 Thermal
Products
	  	 Senior Vice President,
 Customer & Business
Service

	 DATE:
	 	October 14, 2005	  	October 14, 2005

  

 4 








 Confidential Treatment Requested by Appleton Papers Inc. 
 SCHEDULE 1 
 2006 Pricing/Making Master Breakout 
 ALL PRICES LISTED ARE PER HUNDRED WEIGHT PRICING 
 ALL GRADES REQUIRE 24
HOUR MINIMUM RUN LENGTH UNLESS MUTUALLY AGREED TO BETWEEN AC AND API 
 ALL PRICES INCLUDE FREIGHT TO DESTINATION IN THE FOX VALLEY 
  

													
	 Grade Description:
	  	#6 PM
MM#	 	 	#7 PM
MM#	  	2006
Pricing	 	 	Effective
Date	  	 
	 Primary Gradeline For 2006
	  			 		  			 		  	
	 46.5# Wh OBA Ctg Base
	  	—  	 	 	8018	  	[	 	 	1/1/2002	  	
	 28.0# Wh Hi-Strength Base
	  	—  	 	 	8020	  			 	1/1/2001	  	
	 61.1# White OBA Base
	  	—  	 	 	8089	  			 	1/1/2002	  	
	 37.8# Wh Integra Ctg Base
	  	8119	 	 	8395	  			 	1/1/2002	  	
	 26.25# WH Hi-Strength
	  	—  	 	 	8452	  			 	1/1/2001	  	
	 43.3# Dull Label Base
	  	—  	 	 	8457	  			 	1/1/2002	  	
	 31.1# WH THRML Fax
	  	—  	 	 	8081	  			 	1/1/2006	  	
	 43.3# WH LBL Base
	  	8530	*	 	8907	  			 	1/1/2002	  	
	 50.8# WH NO OBA (DULL)
	  	9980	 	 	9115	  			 	1/1/2006	  	
	 31.1# WH THRML FAX (CFS Back)
	  	8484	 	 	9750	  			 	1/1/2006	  	
	 30.20# PK PRCT
	  	8390	 	 	8264	  			 	1/1/2006	  	
	 30.2# CN PRCT
	  	8396	 	 	8248	  			 	1/1/2006	  	
	 26.2 Canary ST
	  	8025	 	 	8075	  			 	1/1/2002	  	
	 60.6# WH NO OBA (DULL)
	  			 	9774	  			 	6/1/2005	  	Replaces 61.1# Dull
						
	 Secondary Gradeline For 2006
	  			 		  			 		  	
	 26.8# Pink Superior
	  	8296	 	 	9078	  			 	1/1/2002	  	
	 26.8# Canary Superior Base
	  	8276	 	 	9531	  			 	1/1/2001	  	
	 26.8# White for Sprint CFB Base
	  	8265	 	 	8371	  			 	1/1/2001	  	
	 27.1# Pink Premimum Base
	  	8103	 	 	9077	  			 	1/1/2001	  	
	 30.2# White For Precoat
	  	8392	 	 	8245	  	]	*	 	1/1/2002	  	



	*	Grade not currently qualified on PM6. 


	*	The redacted portion of this document has been omitted pursuant to a request for confidential treatment and such redacted portion has been filed separately with the Securities and
Exchange Commission. 








 Confidential Treatment Requested by Appleton Papers Inc. 
 

 
 Appleton Ideas Basestock Trim Upcharge Guidelines 
 SCHEDULE 2 
  

																																	
	 MM
	  	 Mach.
	  	 BW
	 	 Description
	 	 2006
	 	 2006
	  	 2006
	 	 2006
 Trim Adjusted Pricing

	  	  	 	 	 Average
Trim
Standard
	 	 $/Ton/
Inch Trim
Penalty
	  	 Base
Price
	 
	  	  	 	 	 	  	 	 0”-1”
	 	 1”-2”
	 	 2”-3”
	 	 3”-4”
	 	 4”-5”
	 	 5”-6”
	 	 6”-7”
	 	 7”-8”
	 	 8”-9”
	 	 9”-10”

	 8025
	  	7	  	26.2	 	CAN ST Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8075
	  	6	  	26.2	 	CAN ST Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8452
	  	7	  	26.25	 	WH Hbt Nonoba Histgth	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8020
	  	7	  	28	 	WH SCCB Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8248
	  	7	  	30.2	 	CAN Precoat Premium	 		 		  		 		 		 		 		 		 		 		 		 		 	]*
	 8386
	  	6	  	30.2	 	CAN Precoat Premium	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8395
	  	7	  	37.8	 	WH Integra Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8119
	  	6	  	37.8	 	WH Integra Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8264
	  	7	  	30.2	 	PK Precoat Premium	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8390
	  	6	  	30.2	 	PK Precoat Premium	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8296
	  	6	  	26.8	 	Pink	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8276
	  	6	  	26.8	 	Canary	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8371
	  	7	  	26.8	 	White	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 9078
	  	7	  	26.8	 	Pink Histgth	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8265
	  	6	  	26.8	 	Wh For Sprint	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8245
	  	7	  	30.2	 	Wh Precoat	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 9115
	  	7	  	50.8	 	White Dull	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 9980
	  	6	  	50.8	 	White Dull	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8081
	  	7	  	31.1	 	WH Thermal Fax Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8457
	  	7	  	43.3	 	Dull Label Base	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8907
	  	7	  	43.3	 	WH Label Base OBA	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8018
	  	7	  	46.5	 	WH Ctg Base OBA	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 8089
	  	7	  	61.1	 	WH Base OBA	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 9750
	  	7	  	31.1	 	New Back Coat (CFS Ctg)	 		 		  		 		 		 		 		 		 		 		 		 		 	
	 9774
	  	7	  	60.0	 	White Dull	 		 		  		 		 		 		 		 		 		 		 		 		 	



	*	The redacted portion of this document has been omitted pursuant to a request for confidential treatment and such redacted portion has been filed separately with the
Securities and Exchange Commission. 








 Confidential Treatment Requested by Appleton Papers Inc. 
 SCHEDULE 3 
 PAYMENT TERMS 
  

													
	 ACTUAL
USAGE
DATE
	  	AC
INVOICE
DATE	  	API
VOUCHER
DATE	  	AC
DUE
DATE	  	API
EFT
DATE	  	AC
RECEIPT
OF CASH	  	BUSINESS DAYS
	 MON
	  	MON	  	TUE	  	FRI	  	FRI	  	MON	  	5
	 TUE
	  	TUE	  	WED	  	MON	  	FRI	  	MON	  	4
	 WED
	  	WED	  	THU	  	TUE	  	FRI	  	MON	  	3
	 THU
	  	THU	  	FRI	  	WED	  	TUE	  	WED	  	4
	 FR/SAT/SU
	  	SUN	  	MON	  	THU	  	TUE	  	WED	  	3








 Confidential Treatment Requested by Appleton Papers Inc. 
 SCHEDULE 4 
  

															
	BASESTOCK RUNNABILITY	 		  		  	
	 CONTINUOUS COST IMPROVEMENT
	 		  	YEAR:	  	2006
	 CONTRACT PROPOSAL
	 		  	SUPPLIER:	  	Appleton Coated
		 	 [
	 		 		 		 		  	GRADE:	  	[    ]*
		 		 		 		 		 		  	COATERS:	  	[            ]*
		 		 		 	 ]*
	 		 		  	BPH:	  	

  

																
	 	  	BREAKS PER
HUNDRED	  	NO. OF
ROLLS	  	 TOTAL
 BREAKS
	  	 COST PER
 BREAK
	  	TOTAL
COST	  	 ANNUAL
 SAVINGS/LOSS
	  	 ANNUAL
 BONUS /
 PENALTY
	 
								
	 [
	  		  		  		  		  		  		  		
								
		  		  		  		  		  		  		  		
		  		  		  		  		  		  		  		
		  		  		  		  		  		  		  	]	*

                                        
                                        
                                 ACTUAL
                                        
        TARGET 
                                 SAVINGS / LOSS FORMULA = ((# ROLLS/100 X BPH) X
$/BREAK) – ((#ROLLS/100 X BPH) X $/BREAK) 


	*	The redacted portion of this document has been omitted pursuant to a request for confidential treatment and such redacted portion has been filed separately with the
Securities and Exchange Commission.