Amend - Basestock Supply Agreement dtd 6/27/02



Exhibit 10.22.1 
 

	 [APPLETON PAPERS LOGO]
	 	 [APPLETON COATED LOGO]


 
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. 
 
 
AMENDMENT OF 
MEMORANDUM OF AGREEMENT 
YEARS 2003-2004 
BASESTOCK SUPPLY AGREEMENT
(effective as of June 27, 2002) 
 
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: 

 
“Buyer shall be obligated to purchase from Seller, and Seller shall be obligated to sell to Buyer, not
less than (i) 65,000 tons (2,000 lbs/ton), total, of the grades listed in Schedule 1 of this Amendment, in Agreement Year 2003 and (ii) 40,000 tons, total, of the grades listed in Schedule 1 of this amendment, in Agreement Year 2004. The volumes set
forth above are hereinafter referred to as the “Annual Volume(s). 
 
“Buyer’s purchases of the Opaque Grades listed in Schedule 1, shall be limited to not more than 20% of the Annual Volume, in Agreement year 2003; and not more than 25% of the Annual Volume in Agreement Year 2004.

 
“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 6,500 tons in 2003 and 4,000 tons in 2004. Any reduction in consignment inventory below these levels is in addition to the Buyer’s annual purchase
commitment. 
 
“Buyer will purchase and Seller
will make available the obligatory volume utilizing a level load order pattern of equal monthly volumes unless mutually agreed to by Buyer and Seller otherwise. Adjustments for scheduled “Holiday Downs” will be planned and agreed to in
advance. 
 

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

 

1 








“This Agreement is effective as of December 30, 2002 and extends for two fiscal years
ending on January 1, 2005. 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.” 
 

	3.	 	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 6,500 tons in Agreement Year 2003 and 4,000 tons in Agreement Year 2004. Buyer/Seller agree, that as a result of year to year volume changes, the consignment inventory maximum will be decreased in volume by March 31, of the
Agreement Year in question. 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 warehouse rent for the space utilized to manage this
consignment inventory 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.” 
 

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

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

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

 
“Except as noted elsewhere in this Agreement, pricing is per Schedule 1, for Agreement Year 2003; and
Schedule 1, as respects Agreement Year 2004. 
 
“Schedule 2 is provided for pricing adjustment of Opaque Grades for 2004.” 
 

	6.	 	Section 11., CONTINUOUS COST REDUCTION, 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. 

 

	7.	 	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/CF specification (including basestock finishing specifications) in effect on June 27, 2001 or thereafter adopted by mutual agreement of the parties.” 
 

	8.	 	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 Director of Logistics and Information Technology (currently Dan Regal).” 
 

	9.	 	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. 

 

2 








 

	10.	 	Schedules, Prior Amendments, and Implied Terms. Schedules 1 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” and “Schedule 2,” 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 that certain “Amendment of Basestock Supply Agreement Dated June 27,
2001,” 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. 
 
 

	 APPLETON PAPERS INC.
	 	 	 	 APPLETON COATED LLC

	
	 SIGNATURE:
	 	 /s/    Rick J. Fantini

	 	 	 	 /s/    MJ VanEyck


	 TITLE:
	 	 VP, Operations

	 	 	 	 CEO


	 DATE:
	 	 12/20/02

	 	 	 	 12/19/02



 

3 








 
SCHEDULE 1

 
All prices listed are per hundred weight pricing

All grades require 24 hour minimum run length unless mutually agree to between AC and API 
All prices include freight to destination in the fox valley designated at time of shipment 
 

	 Item Grp

	  	 Item Grp 01

	  	 2002 Prices

	  	 2003 Prices

	  	 2004 Prices

	    	 Qualified PM’s

	  	 Special Notes


	 313R
	  	 BASE 26.2# WHITE NSST CTG
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8018R
	  	 46.5# WH OBA CTG BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8020R
	  	 28.0# WH HI-STRGTH BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8031R
	  	 26.25#WHCTGBSNOOBA#7PMWEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8041R
	  	 29.9 WHT PRCT SUP FSO WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8065R
	  	 26.2# WH RST30 CTG BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8066R
	  	 30.9# WH RST30 CTG BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8077R
	  	 28.3# WH ULTIMARK BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8081R
	  	 31.1# WH THRML FAX BS
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8089R
	  	 61.1# WH OBA BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8103R
	  	 27.1# PK/PREM CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8113R
	  	 27.1# CN/PREM CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8119R
	  	 37.8# WH INTEGA CTG BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8140R
	  	 30.1# WH HI-BLK CTG BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8216R
	  	 30.9# WH ST BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8245R
	  	 30.2 WHT PRCT PREM WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8248R
	  	 30.20 CAN PRT PRM PM7 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8264R
	  	 30.2 PK PRT PRM WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8265R
	  	 26.8 WH FOR SPR CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8276R
	  	 26.8 CAN SUP CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8296R
	  	 26.8 PNK SUP BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8318R
	  	 26.8 GRN FOR SUP CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 24 hour min run every other month

	 8321R
	  	 34# WH OBA BS LP#7 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8328R
	  	 26.8# GLD FOR SUP CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 24 hour min run every other month

	 8370R
	  	 26.8# BLUE FOR SUP CFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 24 hour min run every other month

	 8371R
	  	 26.8# WHFORSUPCFB WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6,7
	  	 
	 8386R
	  	 30.2 CN PRCT PREM PM#6 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8387R
	  	 29.9# CAN PRECT SUPER WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8390R
	  	 30.2 PK PRT PRM PM#6 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8392R
	  	 30.2 WH PRCT PRM COD6 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8394R
	  	 29.9#PK PRECT SUPR FSO
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8420R
	  	 39.5# WH ST CTG BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8423R
	  	 29.9# CAN PRCT SPR WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8424R
	  	 29.9# PK PRT SUPR WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 8452R
	  	 26.25 WH HISTGTH
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 8907R
	  	 4.33# WH LBL BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9041R
	  	 27.8# WH SCCB HISTGTH WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9077R
	  	 27.1# PK PRM CFB HISTRNGTH WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9078R
	  	 26.8# PKSUPCFB HISTRNGTH WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9153R
	  	 26.25 WH HISTGTH HBTNONOBA
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9229R
	  	 28.3 ULTMK HI-STRG FSO WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9238R
	  	 30.5# WHT CONVERTING BS
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 9268R
	  	 38# WH OPAQUE BASE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6,7
	  	 
	 9322R
	  	 34# WH OPAQUE BASE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6,7
	  	 201” minimum trim base line for 2003 and 2004

	 9323R
	  	 30.1# WH OPAQUE BASE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6,7
	  	 
	 9639
	  	 40# WHITE OPAQUE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6,7
	  	 
	 9643
	  	 30.5# WHITE OPAQUE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 9429R
	  	 30.9# WH ST BS COD7 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9430R
	  	 26.2# WH ST BS COD7 WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9455R
	  	 38.1 PREM PREC WH BS
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 9563R
	  	 26.2 # CAN ST BS WEB
	  	 [*]
	  	 [*]
	  	 [*]
	    	 6
	  	 
	 9572R
	  	 26.2 CANARY ST BASE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 
	 9857R
	  	 43.3# DULL LABEL BASE
	  	 [*]
	  	 [*]
	  	 [*]
	    	 7
	  	 








 
SCHEDULE 2

 
2004 PRICE ADJUSTMENT FOR OPAQUE GRADES 
 
Adjustments to Opaque pricing for 2004 will be 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. 
 

	Ø	 	A cost change or more than [*] per ton ADMT (increase or decrease) will trigger the Basestock price change. 


	Ø	 	The [*] / ton ADMT change will be from the Base or the last Basestock price adjustment. 


	Ø	 	Pricing will be reviewed semi-annually. Price review discussion and agreement will take place 30 days before the effective date. 


	Ø	 	The November issue of Pulp and Paper Week U.S. Price Watch from RISI World Pulp Monthly shall be the cost index for the price change discussion.


 
EXAMPLE: 
 

	Ø	 	NBSK equals [*] / ADMT delivered 


	Ø	 	[*] / 2205 X 2000 = [*] / Short Ton delivered 


	Ø	 	[*] becomes the Base 


	Ø	 	NBSK increases by [*] / metric ton delivered 


	Ø	 	[*] / 2205 X 2000 = [*] / Short Ton delivered 


	Ø	 	[*]—[*] = [*] 


	Ø	 	Since the pulp cost change is over [*] / ton, the price change is triggered 


	Ø	 	[*] / cwt increase is applied to the 2003 Basestock Price