Document:

Amendment to Basestock Supply Agreement dated February 25, 2004

 Exhibit 10.22.2 
  

	 [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 2004-2005 
 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, (i) 75,000 tons (2,000 lbs/ton), total, of the grades listed in Schedule 1 of this Amendment, in Agreement Year 2004 and (ii) 40,000 tons, total, of the grades listed in Schedule 1 of this amendment, in Agreement Year 2005. 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 25% of the Annual Volume in Agreement Year 2004 and 2005. 
  
 “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 alter volumes by plus or minus ten percent (10%) per calendar quarter provided that Buyer shall have given Seller notice, of its intention to alter said volumes, at least 90 days prior to the beginning of the calendar quarter in question.
Seller will provide any additional tonnage at the same terms as stated in this Agreement. Each quarterly option of Buyer to alter volumes shall be limited to plus or minus ten percent (10%). If Buyer does not elect to alter volumes by plus or minus
ten percent (10%) in any given quarter, such option to elect shall not carry over and/or be available in addition to the 10% volume alteration option available in the following 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. 
  
 “Additionally, Buyer agrees to purchase product (on or before January 1, 2005), per section 7 below, required to bring the consignment inventory to
10% of the 

 
Annual Volume agreed to for the 2005 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. 
  

	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, net 30 days. 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 December 28, 2003 and extends for one
fiscal year beyond the current Amendment, thereby ending on January 2, 2006. 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 7,000 tons in Agreement Year 2004 and 3,500 tons in Agreement Year 2005. Seller will maintain an additional 500 tons of in-transit inventory if required to support Buyers’ Purchase Order due dates. For the Agreement year 2004, Buyer
and Seller will review, on June 1, 2004, the anticipated Annual Volume and reset the consignment inventory maximum (including “tons in transit”) to be 10% of such anticipated Annual Volume. On October 1, 2004, Buyer and Seller will review
the anticipated Annual Volume for the 2005 Agreement Year (currently 40,000 tons) and set the 2004 Year end consignment target to be 10% of the 2005 anticipated Annual Volume. Seller agrees to utilize Buyer’s leased warehouse space on Radio
Road or other mutually agreed upon site 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 

  

 2 

 
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.” 
  

	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 Years 2004 and 2005. 
  

	9.	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 . 

  

	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 Vice President of Logistics and Information Technology (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. 

  

 3 

	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 
  

	14.	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,” “Schedule 2,” and “Schedule 3,” 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 Fantini	 	/s/ Dan Regal
	 	 	
	 	

	 TITLE:
	 	Vice President	 	VP Logistics & I.T.
	 	 	
	 	

	 DATE:
	 	2/25/04	 	1-27-04
	 	 	
	 	

  

 4 

 2004 Pricing / Making Master Breakout 
 SCHEDULE 1 
  
 ALL PRICES LISTED ARE PER HUNDRED WEIGHT PRICING

  
 ALL GRADES REQUIRE 24 HOUR MINIMUM RUN LENGTH UNLESS MUTUALLY AGREED TO BETWEEN
AC AND API 
  
 FOR 61.1, 43.3, AND 50.8 DULL GRADES WE WILL RUN A MINIMUM 12 HOUR
RUN PER GRADE IN A 24 HOUR RUN SCHEDULE 
  
 ALL PRICES INCLUDE FREIGHT TO
DESTINATION IN THE FOX VALLEY 
  

										
	
	 	 	 
	Grade Description:	  	 #6 PM
 MM#
	  	 #7 PM
 MM#
	  	2004 /2005
Pricing:	 	 	 
	
	 	 	 
	Group #1 Grades Mfg’ed in 2003	  	 	  	 	 	 	 
	 26.2# White NSST
	  	3132	  	9430	  	[ * ]	 	 	 
	 46.5# Wh OBA Ctg Base
	  	—	  	8018	  	 	 	 	 
	 28.0# Wh Hi-Strength Base
	  	—	  	8020	  	 	 	 	 
	 61.1# White OBA Base
	  	—	  	8089	  	 	 	 	 
	 37.8# Wh Integra Ctg Base
	  	8119	  	8395	  	 	 	 	 
	 30.2# CN PRCT
	  	8386	  	8248	  	 	 	 	 
	 26.25# WH Hi-Strength
	  	—	  	8452	  	 	 	 	 
	 26.2# CN ST Base
	  	8025	  	8075	  	 	 	 	 
	 43.3# Dull Label Base
	  	—	  	8457	  	 	 	 	 
	 31.1# WH THRML Fax
	  	—	  	8081	  	 	 	 	 
	 34# WH OPAQUE Base
	  	8467	  	8466	  	 	 	 	 
	 30.5# WH OPAQUE Base
	  	9238	  	9643	  	 	 	 	 
	 34# WH OBA Base #7
	  	—	  	8321	  	 	 	 	 
	 43.3# WH LBL Base
	  	—	  	8907	  	 	 	 	 
	 61.1# WH NO OBA (DULL)
	  	—	  	9774	  	 	 	 	 
	 50.8# WH NO OBA (DULL)
	  	9980	  	9115	  	 	 	 	 
	 31.1# WH THRML FAX (CFS Back)
	  	—	  	9750	  	 	 	 	Eff. 3/1/04
	 	  	 	  	 	  	 	 	 	 
	
	 	 	 
	Grade Description:	  	 #6 PM
 MM#
	  	 #7 PM
 MM#
	  	2004
Pricing:	 	 	 
	
	 	 	 
	Group #2 Grades Mfg’ed Prior to 2003	  	 	  	 	  	 	 	 	 
	 33# WH ST CTG Base
	  	8238	  	—	  	[ * ]	 	 	 
	 30.20 PK PRCT
	  	8390	  	8264	  	 	 	 	 
	 26.8# Pink Superior
	  	8296	  	—	  	 	 	 	 
	 26.8# Green Superior
	  	8318	  	—	  	 	 	 	 
	 26.8# Gold Superior
	  	8328	  	—	  	 	 	 	 
	 26.8# Blue Superior
	  	8370	  	—	  	 	 	 	 
	 26.25# WH Histrgth HBNT NO OBA
	  	—	  	8452	  	 	 	 	 
	 26.2# WH RST30 CTG Base
	  	8065	  	—	  	 	 	 	 
	 30.9# WH RST30 Ctg Base
	  	8066	  	—	  	 	 	 	 
	 27.1# PJK Premium Base
	  	8103	  	—	  	 	 	 	 
	 26.8# Canary Superior Base
	  	8276	  	—	  	 	 	 	 
	 26.8# WH Superior Base
	  	—	  	—	  	 	 	 	 
	 26.8# WH For Sprint CFB Base
	  	—	  	—	  	 	 	 	 
	 30.2# White For PRCT
	  	8392	  	8245	  	 	 	 	 
	 38# WH OPAQUE Base
	  	—	  	9268	  	 	 	 	 

  

 5 

							
	

	Grade Description:	  	 #6 PM
 MM#
	  	 #7 PM
 MM#
	  	2004
    Pricing:    
	

	Group 3 Grades Eliminated	  	 	  	 	  	 
	 26.25# WH CTG BS NO OBA
	  	8031	  	 	  	 
	 29.9# WHT PRCT
	  	8041	  	 	  	 
	 28.3# WH Ultimark
	  	8077	  	 	  	 
	 27.1# CN PREM
	  	8113	  	 	  	 
	 30.1# WH HI-BLK
	  	8140	  	 	  	 
	 30.9# WH ST
	  	8216	  	 	  	 
	 29.9# CAN PRECT
	  	8387	  	 	  	 
	 30.2# WH PRECT
	  	8392	  	 	  	 
	 29.9# OK PRECT
	  	8394	  	 	  	 
	 39.5# WH ST
	  	8420	  	 	  	 
	 29.9# CAN PRECT
	  	8423	  	 	  	 
	 29.9# PK PRECT
	  	8424	  	 	  	 
	 27.8# WH SCCB HI-STRGTH
	  	9041	  	 	  	 
	 27.1# PK PRM HI-STRNGTH
	  	9077	  	 	  	 
	 28.3# ULTMK HI-STRNGTH
	  	9229	  	 	  	 
	 30.1# WH OPAQUE
	  	9323	  	 	  	 
	 40# WH OPAQUE
	  	9639	  	 	  	 
	 30.9# WH ST
	  	9429	  	 	  	 
	 26.2# WH ST
	  	9430	  	 	  	 
	 38.1# PREM PRECT WH
	  	9455	  	 	  	 

  

 6 

 [Appleton Logo] 
  
 Appleton Ideas Basestock Trim Upcharge Guidelines 
  
 SCHEDULE 2 

																																											
	 	 	Red denotes grades not on API’s list.	 	2002

	 	2003

	 	2004

	 	2004

	 	2004

	 	 2004 Trim Adjusted Pricing
 (Inches of Variance from 2002/2003 Weighted Average)

	 Product
Family

	 	MM

	 	Mach

	 	BW

	 	 Description

	 	2002
Actual
Trim

	 	2002
Actual
Tons

	 	Actual
Trim
(thru
SEP)

	 	Actual
Tons
(thru
SEP)

	 	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”

	 C
	 	9572/8075	 	7	 	26.2	 	CAN ST Base	 	209.11	 	1,607	 	198.10	 	365	 	198.10	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]	 	[    *    ]
	 C
	 	9563/8025	 	6	 	26.2	 	CAN ST Base	 	214.70	 	1,015	 	207.60	 	374	 	198.10	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	3132	 	6	 	26.2	 	WH ST BS-CM	 	211.24	 	797	 	216.43	 	340	 	216.43	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	9153/8452	 	7	 	26.25	 	WH Hbt Nonoba Histgth	 	214.59	 	4,412	 	217.91	 	4,005	 	217.91	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8020	 	7	 	28	 	WH SCCB Base	 	201.77	 	2,408	 	199.15	 	1,848	 	199.15	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8248	 	7	 	30.2	 	CAN Precoat Premium	 	213.00	 	1,765	 	0	 	0	 	213.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8386	 	6	 	30.2	 	CAN Precoat Premium	 	217.20	 	588	 	213.76	 	2,680	 	213.76	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8321	 	7	 	34	 	WH Base	 	212.04	 	189	 	213.11	 	192	 	213.11	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8395	 	7	 	37.8	 	WH Integra Base	 	207.25	 	14	 	0	 	0	 	207.25	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8119	 	6	 	37.8	 	WH Integra Base	 	217.73	 	538	 	219.31	 	792	 	219.31	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8264	 	7	 	30.2	 	PK Precoat Premium	 	223.50	 	345	 	—  	 	0	 	223.50	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8390	 	6	 	30.2	 	PK Precoat Premium	 	213.00	 	732	 	—  	 	0	 	213.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8296	 	6	 	26.8	 	Pink	 	213.00	 	870	 	—  	 	0	 	213.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8318	 	6	 	26.8	 	Green	 	213.00	 	480	 	—  	 	0	 	213.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8328	 	6	 	26.8	 	Gold	 	213.00	 	538	 	—  	 	0	 	213.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8370	 	6	 	26.8	 	Blue	 	213.65	 	895	 	—  	 	0	 	213.65	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8065	 	6	 	26.2	 	Wh RST 30 Ctg Bs	 	215.51	 	160	 	—  	 	0	 	215.51	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8066	 	6	 	30.9	 	Wh RST 30 Ctg Bs	 	215.70	 	304	 	—  	 	0	 	215.70	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8103	 	6	 	27.1	 	Pink Premium	 	—  	 	0	 	—  	 	0	 	214.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8276	 	6	 	26.8	 	Canary	 	—  	 	0	 	—  	 	0	 	214.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8371	 	7	 	26.8	 	White	 	—  	 	0	 	—  	 	0	 	214.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	9078	 	7	 	26.8	 	Pink Histgth	 	—  	 	0	 	—  	 	0	 	214.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8265	 	6	 	26.8	 	Wh For Sprint	 	—  	 	0	 	—  	 	0	 	214.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8245	 	7	 	30.2	 	Wh Precoat	 	—  	 	0	 	—  	 	0	 	214.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 C
	 	8238	 	6	 	33	 	White ST Base	 	220.50	 	127	 	—  	 	0	 	220.50	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 O
	 	9643	 	7	 	30.5	 	WH Opaque Base	 	221.00	 	8	 	218.83	 	4,669	 	218.83	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 O
	 	9238/8891	 	6	 	30.5	 	WH Converter Base	 	218.04	 	2,143	 	216.73	 	2,811	 	216.73	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 O
	 	9322/8467	 	6	 	34	 	WH Opaque Base	 	201.48	 	1,893	 	201.59	 	3,278	 	201.59	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 O
	 	9641/8466	 	7	 	34	 	WH Opaque Base	 	198.68	 	533	 	202.71	 	2,173	 	202.71	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 O
	 	9115	 	7	 	50.8	 	White Dull	 	—  	 	0	 	 	 	 	 	206.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 O
	 	9980	 	6	 	50.8	 	White Dull	 	—  	 	0	 	 	 	 	 	206.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	8081	 	7	 	31.1	 	WH Thermal Fax Base	 	209.99	 	27,332	 	209.18	 	18,283	 	209.18	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	9857/8457	 	7	 	43.3	 	WH Label Base OBA	 	215.25	 	209	 	219.02	 	1,638	 	217.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	8907	 	7	 	43.3	 	WH Label Base OBA	 	219.09	 	21,604	 	217.57	 	16,485	 	217.57	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	8018	 	7	 	46.5	 	WH Ctg Base OBA	 	212.82	 	891	 	212.14	 	794	 	212.14	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	8018	 	7	 	46.5	 	WH Ctg Base OBA	 	212.82	 	3,106	 	212.14	 	3,403	 	212.14	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	8089	 	7	 	61.1	 	WH Base OBA	 	214.88	 	857	 	215.14	 	773	 	215.14	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	9750	 	7	 	31.1	 	New Back Coat (CFS Ctg)	 	—  	 	0	 	 	 	 	 	210.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 T
	 	8774	 	7	 	61.1	 	White Dull	 	—  	 	0	 	 	 	 	 	215.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 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	 	3Service Agreement dated June, 14 2000

 EXHIBIT 10.27 
  
 DATED 14 JUNE 2000 
  
  
  
  
 (1) INHOCO 2059 LIMITED 
  
 (2) GRAHAM BENNINGTON 
  
  
  
 SERVICE AGREEMENT 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 EVERSHEDS 
 Cloth
Hall Court 
 Infirmary Street 
 Leeds LS 1 2JB 
 Tel: 0113 243 0391 
 Fax: 01132456188 
  

 THIS AGREEMENT is made on 14 June 2000 BETWEEN 
  
 (1) INHOCO 2059 Limited (registered number 3978230) whose registered office is at PO Box 18, Wayzgoose Drive,
Derby DE21 6XL (“the Company”); and 
  
 (2) GRAHAM
BENNINGTON of Ings House, The Green, Ellerker, Brough HU15 2DP (“the Executive”). 
  

	1.	 	MEANING OF WORDS USED 

  
 In this Agreement the following expressions have the following meanings: 
  
 “Acquisition Agreement” the agreement dated 14 June 2000 for the sale and purchase of the
businesses of the Henry Booth Group, Bemrose Security Printing and Bemrose Promotional Products, and HBG International Inc, and made between (1) Bemrose UK Limited (2) HBG International Inc (3) The Henry Booth Group Limited (4) INHOCO Corporation
and (5) Bemrose Corporation plc 
  
 “Board” the Board of Directors of the Company from time to time 
  
 “Commencement Date” the date of Completion 
  
 “Completion” means Completion as defined in the Acquisition Agreement 
  
 “Critical Person” any person who was an employee,
agent, director, consultant or independent contractor employed, appointed or engaged by the Company or any Relevant Group Company at any time within the Relevant Period who by reason of such employment, appointment or engagement and in particular
his/her seniority and expertise or knowledge of trade secrets or confidential information of the Company or any Group Company or knowledge of or influence over the clients, customers or suppliers of the Company or any Group Company is likely to be
able to assist or benefit a business in or proposing to be in competition with the Company or any Relevant Group Company 
  
 “Group” the Company and any holding company for the time being of the Company or any subsidiary for the time being of the
Company or of any such holding company (as defined in section 736 of the Companies Act 1985 as amended) 
  
 “Group Company” any company in the Group. 
  
 “Investment Agreement” the agreement dated 14 June 2000 for investment in the company and made
between (1) the Company (2) G. Bennington, A Lindsey and M Smith and (3) Lloyds TSB Development Capital Limited, LDC Co-Investment Plan 2000 “A” and LDC Co-Investment Plan 2000 “B” 
  
 “Investor Director” the non executive director of
the Company appointed pursuant to clause 6.1 of the Investment Agreement 
  
 “Relevant Customer” any person, firm company or organisation who or which at any time during the Relevant Period is or was: (a) negotiating with the Company or a Relevant Group Company for the 

  

 2 

 
sale or supply of Relevant Products or Services; or (b) a client or customer of the Company or any Relevant Group Company for the sale or supply of Relevant
Products or Services; or (c) in the habit of dealing with the Company or any Relevant Group Company for the sale of supply of Relevant Products or Services, 
  
 and in each case with whom or which the Executive was directly concerned or connected or of whom or which the Executive had personal knowledge during the
Relevant Period in the course of his employment hereunder 
  
 “Relevant Group Company” any Group Company (other than the Company) for which the Executive has performed services under this Agreement or for which he has had management responsibility at any time during
the Relevant Period 
  
 “Relevant
Period” the period of 12 months immediately before the Termination Date 
  
 “Relevant Products or Services” products or services which are of the same kind as or of a materially similar kind to or competitive with any products or services sold or supplied by the Company or any
Relevant Group Company within the Relevant Period and with which sale or supply the Executive was directly concerned or connected or of which he had personal knowledge during the Relevant Period in the course of his employment hereunder 

 
 “Termination Date” the date on which the
Executive’s employment under this Agreement terminates and references to “from the Termination Date” mean from and including the date of termination 
  
 “Restricted Territory” any area or territory in which the Executive worked or to which the
Executive was assigned by the Company or any Relevant Group Company at any time during the Relevant Period. 
  

	2.	 	PREVIOUS AGREEMENTS 

  

	2.1	 	This Agreement and the rights and obligations of the parties are conditional on Completion. To the extent Completion does not occur (in accordance with the terms of the Acquisition
Agreement) all liabilities of the parties hereunder will cease and determine and neither party will have any claim against the other. 

  

	2.2	 	Provided the condition in clause 2.1 is satisfied. this Agreement contains the entire and only agreement “and will govern the relationship between the Company and the Executive
from the Commencement Date in substitution for all previous agreements and arrangements (whether written, oral or implied) between the Company or any Group Company and the Executive relating to the Executive’s services all of which will be
deemed to have terminated by consent with effect from the Commencement Date. 

  

	3.	 	TITLE AND NOTICE 

  

	3.1	 	The Company will employ the Executive as Chief Executive of the Company on the terms and conditions of this Agreement from the Commencement Date unless and until this Agreement is
terminated by either party giving the other at least twelve months’ written notice. 

  

 3 

	3.2	 	Notwithstanding the provisions of clause 3.1 the Executive’s employment will terminate automatically on his 60th birthday. 

  

	3.3	 	The Executive’s continuous employment with the Company for the purposes of the Employment Rights Act 1996 commenced on 1 September 1977. No employment with a previous employer
counts as part of the Executive’s period of continuous employment. 

  

	4.	 	DUTIES 

  

	4.1	 	The Executive will carry out the duties and functions, exercise the powers and comply with the instructions assigned or given to him from time to time by the Board. Except when
prevented by illness, accident or holiday, the Executive will devote all of his working time to the affairs of the Company and where appropriate the Group and do his best to promote their interests provided that the Bo3:I:d may at any time for any
reason require the Executive to cease performing and exercising all or any of his duties, functions or powers. 

  

	4.2	 	The Executive will if and so long as he is so required by the Company carry out duties for and/or act as director, officer or employee of any other Group Company.

  

	5.	 	PLACE OF WORK 

  

	5.1	 	The Executive will perform his duties principally at the head office of the Company or any other place of business of the Company or of any Group Company as the Company reasonably
requires and it is a condition of the Executive’s employment that he complies with any such requirement. The Executive will not be required to go to or reside anywhere outside the United Kingdom except for occasional visits in the ordinary
course of his duties. 

  

	6.	 	HOURS OF WORK 

  
 The Company’s normal office hours are from 8:45 am to 4:45 pm Monday to Thursday and 8:45 am to 4:30 pm Friday but the Executive will be required to work outside these hours without additional remuneration in
order to meet the requirements of the business and for the proper performance of his duties. . 
  

	7.	 	REMUNERATION 

  

	7.1	 	The Company will pay the Executive with effect from the Commencement Date an annual salary (inclusive of any director’s fees) of £135,OOO (or any higher rate notified to
him by the Board). Salary will accrue from day to day and be payable in arrears by equal monthly installments on the last day of each month. 

  

	7.2	 	The Executive’s salary will be reviewed annually by the Board in its absolute discretion on or about 1 January (such review commencing on 1 January 2001 or the first business
day thereafter). The salary referred to in clause 7.1 will be inclusive of any director’s fees to which the Executive may be entitled as a director of the Company or of any Group Company. 

  

	7.3	 	At the absolute discretion of the Board, the Executive may be allowed to participate in such bonus scheme or schemes as the Company operates for executives of comparable status and
on such terms (including any performance targets or criteria) as the Board may determine from time to time. 

  

 4 

 Participation in any such scheme for any year does not confer on the Executive any right to participate
the following year or any subsequent years. 
  

	8.	 	EXPENSES 

  
 The Executive will be reimbursed for all out of pocket expenses reasonably and properly incurred by him in the performance of his duties on hotel, traveling, entertainment and other similar items subject to production
of satisfactory evidence of expenditure. 
  

	9.	 	MOTORCAR 

  

	9.1	 	During the Executive’s employment under this Agreement and whilst the Executive is legally entitled to drive the Company will provide for use in the performance of his duties
under this Agreement a motor car in accordance with the Company’s car policy (as amended from time to time), such car to be of the Executive’s choice as approved by the remuneration committee, such committee to be chaired by the investor
Director and to comprise the investor Director and the non-executive Chairman. The Company will pay all costs of road fund license, insurance premiums and running expenses in respect of the motor car including fuel, oil, maintenance and repairs.

  

	9.2	 	The Executive will be permitted reasonable use of the motor car for his own private purposes (including use on holidays). 

  

	9.3	 	The Executive will take good care of the motor car and procure that the provisions and conditions of any policy of insurance relating to it are observed in all respects and will at
all times conform with all regulations which may from time to time be imposed by the Company in regard to motor cars provided by the Company for use by its officers or employees. 

  

	9.4	 	On the termination of his employment under this Agreement for any reason the Executive will immediately return the motor car, its keys and all documents relating to it to the
Company at its principal place of business or as otherwise directed by the Company. 

  

	10.	 	PENSION AND OTHER BENEFITS 

  

	10.1	 	The Executive will be entitled to continue to be a member of the Bemrose Corporation Pension Scheme (“the Scheme”) subject to the rules of the Scheme from time to time in
effect. There is a contracting out certificate in force in respect of the Executive’s employment 

  

	10.2	 	During his employment the Executive will be entitled to participate at the Company’s expense in the Company’s: 

  
 10.2.1 life insurance scheme; 
  
 10.2.2 private medical expenses insurance scheme for the benefit of the
Executive and his wife and all children in full time education under the age of 21; and 
  
 10.2.3 permanent health insurance scheme (the “PHI Scheme”), 

	

  
  

 5 

 subject to the rules of the said schemes from time to time (and any replacement schemes provided by the
Company) and subject to the Executive (and where appropriate his wife and children) being eligible to participate in or benefit from such schemes pursuant to their rules. 
  

	10.3	 	During his employment the Executive will be entitled: 

  
 10.3.1 to a fully expensed mobile telephone; and 
  
 10.3.2 to payment by the Company of all home telephone bills. 
  

	10.4	 	The Company reserves the right to withdraw or terminate the schemes referred to above or to amend them at any time without compensation. 

  

	11.	 	HOLIDAYS 

  

	11.1	 	In addition to normal public holidays the Executive will be entitled to 26 working days’ paid holiday in each holiday year, pro-rated in relation to the period from the
Commencement Date until 31 December 2000, such holiday to be taken at such time or times as may be approved by the Board. 

  

	11.2	 	For the purposes of this clause 11 “holiday year” means the period from January to December in each year. The Executive may carry forward to the following holiday year up
to 5 days’ unused holiday entitlement but he must take any holiday which is carried forward before the end of February in that year. 

  

	11.3	 	The Executive’s entitlement to paid holiday in the holiday year in which his employment terminates will be 2.167 days for each completed calendar month in that year rounded up
to the nearest half day provided that no such entitlement to paid holiday will arise if the Executive terminates his employment without the Company’s consent before the expiry of notice given by him pursuant to clause 3.1 or without giving
notice or if the Company terminates the Executive’s employment pursuant to clause 16. 

  

	11.4	 	Where the Executive has taken more or less than his holiday entitlement in the year his employment terminates, a proportionate adjustment will be made by way of addition to or
deduction from (as appropriate) his final gross pay calculated on a pro-rata basis. 

  

	12.	 	OUTSIDE INTERESTS 

  
 The Executive will not during his employment (except with the Board’s written permission) whether alone or on behalf of or in association with any other person be directly or indirectly engaged, concerned or
interested in any capacity in any other trade, business or occupation other than the business of the Company or any Group Company provided the Executive will not be precluded from being interested for investment purposes only as a beneficial owner
of any shares representing up to three per cent. of the total issued share capital in any company whose shares are listed or dealt in on any recognized investment exchange (within the meaning of section 207 of the Financial Services Act 1986).

  

	13.	 	CONFIDENTIALITY 

  
  

 6 

 The Executive will not either during his employment or after it terminates without time limit for any reason and in any
manner use or divulge to any person, company or other organisation (except to officials of any Group Company who are entitled to know) any trade secret or confidential information or information constituting a trade secret acquired or discovered by
him in the course of his employment with the Company relating to the private affairs or business of the Company or any Group Company or their suppliers, customers, management or shareholders. This restriction does not apply to any information which
is or becomes in the public domain otherwise than through the Executive’s unauthorised disclosure. 
  

	14.	 	RESTRICTIVE COVENANTS 

  

	14.1	 	The Executive will not without the prior written consent of the Company directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether
as a principal, shareholder, director, employee, agent, consultant, partner or otherwise: 

  
 14.1.1 within the Restricted Territory for a period of twelve months from the Termination Date be engaged, concerned or interested in, or provide
technical, commercial ‘or professional advice to, any other business which supplies Relevant Products or Services in competition with the Company or any Relevant Group Company provided that this restriction does not apply to prevent the
Executive from holding shares or other securities in any company which is quoted, listed or otherwise dealt in on a recognised investment exchange or other securities market and which confer not more than 3% of the votes which could be cast at a
general meeting of such company; 
  
 14.1.2 within the Restricted
Territory for a period of twelve months from the Termination Date be engaged, concerned or interested in any business which at any time during the Relevant Period has supplied Relevant Products or Services to the Company or any Relevant Group
Company or is or was at any time during the Relevant Period a Relevant Customer of the Company or any Relevant Group Company if such engagement, concern or interest causes or would cause the supplier to cease or materially reduce its supplies to the
Company (or any Relevant Group Company as the case may be) or the Relevant Customer to cease or materially to reduce its orders or contracts with the Company or any Relevant Group Company; 
  
 14.1.3 for a period of twelve months from the Termination Date so as to
compete with the Company or any Relevant Group Company canvass, solicit or approach or cause to be canvassed, solicited or approached any Relevant Customer for the sale or supply of Relevant Products or Services or endeavour to do so; 
  
 14.1.4 for a period of twelve months from the Termination Date so as to
compete with the Company or any Relevant Group Company deal or contract with any Relevant Customer in relation to the sale or supply of any Relevant Products or Services, or endeavour to do so; 
  
 14.1.5 for a period of twelve months from the Termination date solicit,
induce or entice away from the Company or any Relevant Group Company or, in connection with any business in or proposing to be in competition with the Company or any Relevant Group Company, employ, engage or appoint or in any way cause to be
employed, engaged or appointed a Critical Person whether or not such person would commit any breach of his or her contract of employment or engagement by leaving the service of the Company or any Relevant Group Company; 
  

 7 

 14.1.6    use in connection with any business any name which includes the name of any
Group Company or any colourable imitation of it. 
  

	14.2	 	Whilst the restrictions in this clause 14 (on which the Executive has had an opportunity to take independent advice as the Executive hereby acknowledges) are regarded by the parties
as fair and reasonable, it is hereby declared that each of the restrictions in this clause 14 is intended to be separate and severable. If any restriction is held to be unreasonably wide but would be valid if part of the wording (including in
particular but without limitation the defined expressions referred to in clause 14.1) were deleted, such restriction will apply with so much of the wording deleted as may be necessary to make it valid. 

  

	14.3	 	The parties agree that the periods referred to in clauses 14.1.1, 14.1.2, 14.1.3, 14.1.4 and 14.1.5 above will be reduced by one day for every day during which at the Company’s
direction and pursuant to clause 16.2 below the Executive has been excluded from the Company’s premises and/or has not carried out any duties or has carried out duties other than his normal duties. 

  

	14.4	 	If the Executive breaches any of the provisions in this clause 14 the Company will be entitled by written notice to the Executive to extend the period during which the provisions of
this clause 14 which have been. breached apply by an equivalent period to that during which the breach or breaches have continued, such additional period to commence on the date on which the said period would have otherwise expired. The Executive
hereby agrees that if the Company so extends the period of any such restriction, this will not prejudice the right of the Company to apply to the Courts for injunctive relief in order to compel the Executive to comply with the provisions of this
clause 14 and/or damages, as the case may be. 

  

	14.5	 	For the purposes of this clause 14 “the Company has entered into this Agreement as agent for and trustee of all Relevant Group Companies. 

  

	14.6	 	If the Executive applies for or is offered a new employment appointment or engagement before entering into any related contract the Executive will bring the terms of this clause 14
and clauses 3,4,13 and 15.2 to the attention of a third party proposing directly or indirectly to employ, appoint or engage him. 

  

	15.	 	INCAPACITY 

  

	15.1	 	If the Executive is absent from his duties as a result of illness or injury he will notify the Company Secretary as soon as possible and complete any self-certification forms
required by the Company. If the incapacity continues for a period of seven days or more he will produce to the Company medical certificates for the duration of the absence. 

  

	15.2	 	Subject as follows and provided he complies with the Company’s notification and certification procedures if the Executive is absent from his duties as a result of illness or
injury he will be entitled to receive his full salary for a maximum period (in total) of 26 weeks in any period of 12 months. 

  

	15.3	 	 The remuneration paid under clause 15.2 will include any Statutory Sick Pay payable and when this is exhausted will be reduced by Social Security Sickness Benefit
or other benefits recoverable by the Executive (whether or not recovered). For the avoidance of doubt the Executive’s right to receive sick pay from the Company pursuant to clause 15.2 and subject to clause 16.1.7 any right or 

  

 8 

 
prospective right to receive any benefits under the pm Scheme will not prejudice or limit in any way the Company’s right to terminate the
Executive’s. employment pursuant to this Agreement. 
  

	15.4	 	Whether or not the Executive is absent by reason of sickness, injury or other incapacity he will at the request of the Board agree to have a medical examination by a doctor
appointed and paid for by the Company and the Executive authorises the Board to have unconditional access to any report or reports (including copies) produced as a result of any examination from time to time required by the Board.

  

	16.	 	TERMINATION 

  

	16.1	 	The Company may terminate the Executive’s employment immediately by summary notice in writing if he: 

  
 16.1.1    commits, repeats or continues any serious breach of this Agreement; or 
  
 16.1.2    is guilty of serious misconduct or gross
incompetence; or 
  
 16.1.3    adversely
prejudices or does or fails to do anything which in the reasonable opinion of the Board is likely to prejudice adversely the interests or reputation of the Company or any Group Company; or 
  
 16.1.4    is convicted of any criminal offence (other
than an offence which does not in the opinion of the Board affect his employment); or 
  
 16.1.5    becomes bankrupt or enters into or makes any arrangement or composition with or for the benefit of his creditors generally; or 
  
 16.1.6    becomes of unsound mind; or 
  
 16.1.7    becomes incapacitated by illness, injury or
otherwise from performing his duties for a period exceeding (in total) 26 weeks in any period of 12 months unless and for such period as the Executive is eligible to receive benefits under the PHI Scheme at no cost to the Company (including, without
limitation, any cost of a premium for the pm Scheme, income tax and national insurance contributions), such decision to be taken at and remain subject to the discretion of the Board and not to be taken without the consent of the Investor Director;
or 
  
 16.1.8    becomes prohibited by law
from being a director of a company. 
  

	16.2	 	After notice of termination has been given by either party under clause 3.1 or if the Executive seeks or indicates an intention to resign from his employment without notice,
provided that the Executive continues to be paid and to enjoy his full contractual benefits until his employment terminates in accordance with the terms of this Agreement, the Board has absolute discretion for all or part of the notice period under
clause 3.1 to exclude the Executive from the premises of the Company; and/or require him to carry out specified duties for the Company other than those referred to in clause 4 or to carry out no duties; and/or to instruct him not to communicate with
suppliers, customers, employees, agents or representatives of the Company or any Group Company until his employment has terminated. 

  

 9 

	16.3	 	On commencement of any period of exclusion pursuant to clause 16.2 the Executive will deliver up the Company in accordance with clause 18 all property belonging to the Company or
any Group Company. During any such exclusion period holiday entitlement will not accrue. Any untaken holiday entitlement accrued up to the beginning of the exclusion period should be taken during that period. The Executive will agree holiday days in
advance with the Board. 

  

	17.	 	DEDUCTIONS 

  
 The Executive authorises the Company to deduct from his remuneration on termination of employment (including salary, pay in lieu of notice, commission, bonus, holiday pay and sick pay) all debts owed by him to the
Company or any Group Company. 
  

	18.	 	DOCUMENTS AND COMPANY PROPERTY 

  
 On termination of his employment for any reason (or earlier if requested) the Executive will immediately deliver up to the Company originals and copies of all documents,
accounts, computer disks and printouts and all other property in his possession or control which belong or relate in any way to the business of the Company or any Group Company. 
  

	19.	 	RESIGNATION AS DIRECTOR 

  
 The Executive will on the termination of his employment for any reason at the request of the Board immediately resign without claim for compensation as a director or other officer and as a trustee of the Company and
all Group Companies. 
  

	20.	 	DISCIPLINARY AND GRIEVANCE PROCEDURES 

  
 The Company does not have a formal disciplinary procedure which is applicable to the Executive. If the Executive has a grievance in relation to his employment or is
dissatisfied with a disciplinary decision against him he may apply in writing to the Chairman of the Board whose decision shall be final. 
  

	21.	 	NOTICES 

  
 Notices to be given under this Agreement by the Executive to the Company should be left at its registered office or sent by first class post and notices given by the Company to the Executive should be handed to him
personally or sent by first class post or sent by facsimile transmission addressed to his usual or last known place of residence. 
  

	22.	 	LAW AND JURISDICTION 

  
 This Agreement will be governed by and interpreted in accordance with the law of England and Wales. The parties submit to the exclusive jurisdiction of the English Courts in relation to any claim, dispute or matter
arising out of or relating to this Agreement. 
  

 10 

 THIS DOCUMENT is executed as a deed and delivered by the Executive on the date stated at the beginning of this Deed.

  
 SIGNED by 
  
 /s/    Mark Smith 
 duly
authorised to sign for and on behalf 
 of INHOCO 2059 LIMITED in the presence of: 
  
 /s/    J. Day 
 Witness
signature: 
  
 Name: J Day 
 Address: Gugrsheds, Leeds 
 Occupation: Solicitor 
  
  
  
  
 SIGNED by GRAHAM BENNINGTON    ) 
 in the presence
of:                                       )

  
 Witness signature:    /s/    Robert
Riley 
  
 Name: Robert Riley 
  
 Address: Booth & Co. 
  
 Occupation: Solicitor 
  

 11

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