Exhibit 10.5

 

AMENDED AND RESTATED

RELATIONSHIP AGREEMENT

 

This AGREEMENT, dated as of June 11, 2004, is by and among ARJO WIGGINS APPLETON
LTD. (f/k/a Arjo Wiggins Appleton p.l.c.) (“AWA”), ARJO WIGGINS (BERMUDA)
HOLDINGS LIMITED (“AWA Sub” and, together with AWA, the “AWA Parties”),
PAPERWEIGHT DEVELOPMENT CORP. (“PDC”), PDC CAPITAL CORPORATION (“PDC Sub” and,
together with PDC, the “PDC Parties”) and ARJO WIGGINS APPLETON (BERMUDA)
LIMITED (“Bermuda”).

 

PRELIMINARY STATEMENTS:

 

(1) AWA is the sole holder of all of the issued and outstanding Class A Common
Shares of AWA Sub.

 

(2) PDC is the sole stockholder of PDC Sub.

 

(3) AWA Sub is the legal and beneficial owner of 800 Class A Common Shares and
1000 Class B Preference Shares of Bermuda (the “AWA Sub Bermuda Securities”).

 

(4) PDC Sub is the legal and beneficial owner of 200 Class A Common Shares and 1
Class C Preference Share of Bermuda (the “PDC Sub Bermuda Securities”).

 

(5) AWA, PDC, New Appleton LLC and Appleton Papers Inc. (“API”) are parties to
that certain AWA Fox River Environmental Indemnity Agreement, dated November 9,
2001 (as amended, supplemented or otherwise modified from time to time, the “AWA
Indemnity Agreement”).

 

(6) AWA and Bermuda are parties to that certain Assignment and Assumption Deed,
dated November 9, 2001 (the “Assumption Deed”).

 

(7) The parties have entered into this Agreement to set out certain mutual
agreements concerning the activities of Bermuda and the satisfaction of claims
under the Assumption Deed and the AWA Indemnity Agreement.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

SECTION 1. Definitions.

 

(a) “Administrative Agent” means Bear Stearns Corporate Lending Inc. or its
successor as administrative agent pursuant to the Credit Agreement.

 

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(b) “Credit Agreement” means that certain Credit Agreement, dated as of June 11,
2004 by and among PDC, API, Rose Holdings Limited, the several banks and other
financial institutions or entities from time to time parties thereto, Bear
Stearns & Co. Inc. and UBS Securities LLC as joint lead arrangers and joint
bookrunners, UBS Securities LLC, as syndication agent, US Bank National
Association, Associated Bank National Association and LaSalle Bank National
Association, each as documentation agent, and the Administrative Agent, together
with any amendments or modifications thereto.

 

(c) “Trustee” means (i) while such notes are outstanding, the trustee under an
indenture providing for the issuance of API’s 9 3/4% senior subordinated notes
due 2014 on the date hereof (the “Senior Subordinated Notes”) or any successor
trustee thereof; and (ii) while such notes are outstanding, the trustee under an
indenture providing for the issuance of API’s 8 1/8% senior notes due 2011 on
the date hereof (the “Senior Notes”) or any successor trustee thereof. At a time
when both the Senior Subordinated Notes and the Senior Notes are no longer
outstanding, all references to the Trustee in this Agreement shall be deleted.

 

(d) Other capitalized terms used in this Agreement not otherwise defined herein
shall have the meanings set forth in the AWA Indemnity Agreement.

 

SECTION 2. Prohibition of Certain Activities.

 

(a) Except with the prior written consent of AWA, and, at a time that AWA is
required to maintain the Acceptable Protection Coverage, of the Administrative
Agent and the Trustee, PDC shall not:

 

(i) transfer, whether voluntarily or involuntarily, any of the equity securities
of PDC Sub (collectively, the “PDC Sub Equity Securities”);

 

(ii) grant, whether voluntarily or involuntarily, any option or right, or enter
into any agreement, that (A) calls for the issuance, sale or other disposition
of any PDC Sub Equity Securities or (B) relates to the voting or control of any
PDC Sub Equity Securities;

 

(iii) create or permit to exist any pledge, lien, fixed or floating charge or
other encumbrance over any PDC Sub Equity Securities; or

 

(iv) vote as a stockholder of PDC Sub in favor of, or otherwise permit, (A) any
assignment by PDC Sub for the benefit of creditors, the appointment of a
receiver for the assets of PDC Sub or the filing of any petition or application
concerning PDC Sub under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or regulation, (B) the
issuance of additional equity securities by PDC Sub, (C) the amendment of the
Certificate of Incorporation or Bylaws of PDC Sub (collectively, the “PDC Sub
Constitutional Documents”), or (D) the taking of any act outside the corporate
powers of PDC Sub, as reflected in the PDC Sub Constitutional Documents.

 

(b) Except with the prior written consent of PDC, and, at a time that AWA is
required to maintain the Acceptable Protection Coverage, of the Administrative
Agent and the Trustee, AWA shall not:

 

(i) transfer, whether voluntarily or involuntarily, any of the equity securities
of AWA Sub (collectively, the “AWA Sub Equity Securities”);

 

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(ii) grant, whether voluntarily or involuntarily, any option or right, or enter
into any agreement, that (A) calls for the issuance, sale or other disposition
of any AWA Sub Equity Securities or (B) relates to the voting or control of any
AWA Sub Equity Securities;

 

(iii) create or permit to exist any pledge, lien, fixed or floating charge or
other encumbrance over any AWA Sub Equity Securities; or

 

(iv) vote as a stockholder of AWA Sub in favor of, or otherwise permit, (A) any
assignment by AWA Sub for the benefit of creditors, the appointment of a
receiver for the assets of AWA Sub or the filing of any petition or application
concerning AWA Sub under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or regulation, (B) the
issuance of additional equity securities by AWA Sub, (C) the amendment of the
Memorandum of Association or Bye-Laws of AWA Sub (the “AWA Sub Constitutional
Documents”) or (D) the taking of any act outside the corporate powers of AWA
Sub, as reflected in the AWA Sub Constitutional Documents.

 

(c) Except with the prior written consent of AWA, and, at a time that AWA is
required to maintain the Acceptable Protection Coverage, of the Administrative
Agent and the Trustee, PDC Sub shall not, and PDC shall cause PDC Sub not to:

 

(i) transfer, whether voluntarily or involuntarily, the PDC Sub Bermuda
Securities;

 

(ii) grant, whether voluntarily or involuntarily, any option or right, or enter
into any agreement, that (A) calls for the issuance, sale or other disposition
of any PDC Sub Bermuda Securities or (B) relates to the voting or control of any
PDC Sub Bermuda Securities; or

 

(iii) create or permit to exist any pledge, lien, fixed or floating charge or
other encumbrance over the PDC Sub Bermuda Securities.

 

(d) Except with the prior written consent of PDC, and, at a time that AWA is
required to maintain the Acceptable Protection Coverage, of the Administrative
Agent and the Trustee, AWA Sub shall not, and AWA shall cause AWA Sub not to:

 

(i) transfer, whether voluntarily or involuntarily, the AWA Sub Bermuda
Securities;

 

(ii) grant, whether voluntarily or involuntarily, any option or right or enter
into any agreement that (A) calls for the issuance, sale or other disposition of
any AWA Sub Bermuda Securities or (B) relates to the voting or control of any
AWA Sub Bermuda Securities; or

 

(iii) create or permit to exist any pledge, lien, fixed or floating charge or
other encumbrance over the AWA Sub Bermuda Securities.

 

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(e) Except with the prior written consent of PDC and AWA, and, at a time that
AWA is required to maintain the Acceptable Protection Coverage, of the
Administrative Agent and the Trustee, neither PDC Sub nor AWA Sub shall vote as
a stockholder of Bermuda in favor of, or otherwise permit:

 

(i) any assignment by Bermuda for the benefit of creditors, the appointment of a
receiver for the assets of Bermuda or the filing of any petition or application
concerning Bermuda under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or regulation;

 

(ii) the voluntary or involuntary transfer by Bermuda of Indemnity Claim
Insurance Policy No. 5295316 (the “Policy”) issued by Commerce & Industry
Insurance Company (the “Insurer”);

 

(iii) the commutation of the Policy pursuant to Section 3(6) of the Policy
without the presentation to the Insurer of certificates of the Administrative
Agent and the Trustee as to the discharge of certain indebtedness of PDC and its
Subsidiaries substantially in the forms attached hereto as Exhibit A-1 and A-2
respectively;

 

(iv) the amendment of or waiver of any right under the Policy other than (A) a
change of notice address or (B) to cure any ambiguity, omission, defect or
inconsistency in the Policy;

 

(v) the issuance of additional equity securities by Bermuda to a party other
than AWA Sub, PDC Sub or a third party holder of its Class D Preference Shares ;

 

(vi) the amendment of the Memorandum of Association or Bye-laws of Bermuda;

 

(vii) the grant, whether voluntarily or involuntarily, of any option or right,
or enter into any agreement, that calls for the sale or other disposition of the
Policy; or

 

(viii) the creation or continued existence of any pledge, lien, fixed or
floating charge or other encumbrance over the Policy, except pursuant to the
Collateral Assignment from Bermuda to PDC, API and New Appleton LLC dated as of
November 9, 2001.

 

(f) PDC Sub and AWA Sub shall cause Bermuda actively to contest any petition or
application filed against it under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or regulation.

 

(g) Neither AWA nor Bermuda shall permit the assignment of any rights or
obligations under the Assumption Deed without the prior written approval of (i)
at a time that AWA is obliged to maintain the Acceptable Protection Coverage, of
the Administrative Agent and, if such consent is required pursuant to Section
2(h), of the Trustee or (ii) at all other times, PDC.

 

(h) In the event that the consent of the Trustee is required under this Section
2 or Section 9, or if there is proposed any amendment, modification, waiver or
alteration of terms

 

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(other than the Economic Terms (as defined below)) of this Agreement, the
Policy, or the Assumption Deed, the prior written consent of the Trustee shall
also be required, and in either case the Trustee shall be provided with 30 days
prior written notice of the proposed amendment, modification, waiver, alteration
or other action to be taken, describing the same in reasonable detail and
providing any related documentation for the proposed implementation thereof,
together with the following, in each case in form and substance satisfactory to
the Trustee:

 

(i) a legal opinion from counsel acceptable to the Trustee, to the effect that
the proposed action, amendment, modification, waiver or alteration will not have
any adverse effect on the legal rights of the policyholder under the Policy or
the legal rights of API and PDC under the AWA Indemnity Agreement, the PDC
Agreement (as amended, supplemented or otherwise modified from time to time),
the Assumption Deed or this Agreement, and does not have an adverse effect on
the then remoteness of AWA Sub and Bermuda from AWA and its other affiliates for
bankruptcy, substantive consolidation or similar purposes;

 

(ii) officer’s certificates on behalf of PDC, certifying that it believes that
the proposed action, amendment, modification, waiver or alteration is not
adverse to the policyholder, PDC or API;

 

(iii) an opinion from an investment bank of recognized national standing, to the
effect that the proposed action, amendment, modification, waiver or alteration
is not adverse, from a financial point of view, to the policyholder or to the
holders of the Notes and would not, in such investment bank’s opinion, result in
any adverse effect on the trading or price of the Notes; and

 

(iv) any additional opinions or certificates that the Trustee determines may
reasonably be required given the circumstances of any proposed action,
amendment, modification, waiver or alteration;

 

provided, however that the Trustee shall not be requested to approve and shall
not approve any amendment, modification, waiver or alteration of the
requirements of this Section 2(h) or of any of the following terms (the
“Economic Terms”) of this Agreement, the Policy or the Assumption Deed: (i)
Section I – Insuring Agreement, Section II – Limits of Insurance, Section III –
Conditions (other than Sections 3.d., 8, 9, 18 and 20 thereof) and all related
definitions of the Policy; (ii) any provisions of the Assumption Deed; (iii)
requirements for certificates of approval from the Trustee or other lenders in
this Agreement or the Policy; (iv) the identity of the insurer under the Policy;
and (v) changes in the jurisdiction of organization of the policyholder under
the Policy to any jurisdiction other than a jurisdiction set forth on Exhibit B
hereto; it being agreed that any amendment, modification, waiver or alteration
of any of the Economic Terms shall require the prior consent of the holders of
the majority in aggregate principal amount of the then outstanding New Notes.
Notwithstanding the foregoing, the consent of the Trustee shall not be required
if AWA is the sole holder of the Senior Subordinated Note.

 

(i) Any purported action in violation of this Section 2 shall be null and void
and of no force and effect whatsoever.

 

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SECTION 3. Satisfaction of Obligations Under Assumption Deed.

 

(a) Without limiting Bermuda’s obligations under the Assumption Deed, to the
extent that funding under the Policy is available in respect of obligations of
AWA to PDC under the AWA Indemnity Agreement, Bermuda shall apply such proceeds
by making payment directly to PDC or API or to vendors or other third persons
entitled to payment thereof, in each case in a manner consistent with the terms
of the AWA Indemnity Agreement, in satisfaction of its obligations under the
Assumption Deed and the obligations of AWA under the AWA Indemnity Agreement.

 

(b) With respect to all other amounts payable by Bermuda pursuant to the terms
of the Assumption Deed, i.e. other than in satisfaction of AWA’s obligations to
PDC under the AWA Indemnity Agreement, Bermuda shall make such payments to AWA
or such other person as AWA may designate from time to time; provided that in
the event of a default by AWA in the payment of its indemnification obligations
under Section 4 hereof, no payments shall be made to AWA or its designee until
such obligations have been satisfied in full.

 

(c) Bermuda shall use commercially reasonable efforts to collect funds under the
Policy as promptly as amounts are available for payment under the terms of the
Policy.

 

(d) In the event AWA has not made or caused to be made a payment under the AWA
Indemnity when due and payable (a “Late Payment”), PDC or PDC Sub may
unilaterally cause Bermuda to make, and Bermuda agrees to make, such Indemnity
Claims (as defined in the Policy) and submit such Invoice Approval Packages (as
defined in the Policy) as PDC may deem appropriate to procure the Insurer’s
payment of such Late Payment (so long as in accordance with the terms of the
Policy).

 

SECTION 4. Tax Treatment.

 

(a) For so long as AWA continues to satisfy its obligation, if any, to indemnify
the PDC Parties in accordance with subsection 4(c) below, (i) the parties agree
to cause Bermuda to be classified as a partnership for United States federal
income tax purposes and (ii) PDC agrees that it shall, and shall cause PDC Sub
to, report all of the U.S. taxable income reportable by Bermuda in connection
with its ownership of the Policy. In the event AWA fails to satisfy its
obligation to indemnify PDC Parties in accordance with clause (c) below, PDC or
PDC Sub may unilaterally cause Bermuda to revoke its election to be classified
as a partnership for United States federal income tax purposes and PDC shall be
relieved of its obligation to report in accordance with clause (ii) above.

 

(b) AWA shall cause Bermuda to provide to PDC, a reasonable time prior to the
due date for the filing thereof, written notice of U.S. taxable income to be
reported consistent with clause (a), including information sufficient to enable
PDC to comply with its tax reporting obligations.

 

(c) AWA hereby covenants to indemnify and hold harmless the PDC Parties from and
against any and all increases in Taxes of a PDC Party or another Member of the
Buyers’ Group (as defined in the AWA Indemnity Agreement) which in any way
relate to or arise from Bermuda, including Taxes arising from the receipt of any
indemnification payment hereunder.

 

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(d) AWA’s indemnity set forth in clause (c) shall be governed, to the extent
appropriate in the context, by the procedural provisions set forth in Sections
4.1 and 5.1 of the AWA Indemnity Agreement. By way of illustration and without
limitation of the foregoing:

 

(i) AWA shall make payments to the PDC parties prior to the time that the PDC
Parties are obligated to pay indemnified Taxes, so that the PDC Parties are
never out of pocket in respect thereof.

 

(ii) The PDC Parties shall provide to AWA for AWA’s review, a reasonable time
prior to filing, copies of the PDC Parties’ tax returns reporting taxable income
in respect of the Bermuda.

 

(iii) The Parties shall cooperate in respect of Bermuda tax matters as provided
in Section 5.1.5 of the AWA Indemnity Agreement.

 

(e) If there shall be any change in United States, United Kingdom or Bermuda tax
law, regulation or ratings relevant to the relationships described in this
Agreement, or a change in any party’s tax status, at the request of either the
PDC Parties or AWA, the parties shall negotiate in good faith to amend (in
accordance with Sections 2 and 9 hereof) the relationships and tax treatment
summarized herein.

 

SECTION 5. Representations and Warranties.

 

(a) The AWA Parties, jointly and severally, represent and warrant that (i) AWA
is the sole stockholder of AWA Sub and (ii) attached hereto as Exhibit 5(a) are
true, complete and correct copies of the AWA Sub Constitutional Documents.

 

(b) The PDC Parties, jointly and severally, represent and warrant that (i) PDC
is the sole stockholder of PDC Sub and (ii) attached hereto as Exhibit 5(b) are
true, complete and correct copies of the PDC Sub Constitutional Documents.

 

SECTION 6. Payment of Certain Obligations.

 

(a) AWA shall provide AWA Sub, and AWA and AWA Sub shall provide Bermuda, with
sufficient funds to meet its statutory and other ordinary course obligations.

 

(b) PDC shall provide PDC Sub with sufficient funds to meet its statutory and
other ordinary course obligations.

 

SECTION 7. Access to Books and Records. To the extent permitted by antitrust and
other applicable laws, the parties shall allow each other reasonable access to
their books and records, and to personnel having knowledge of the whereabouts
and/or contents of their books and records, for purposes of confirming
compliance with the terms of this Agreement. Any such access to and review shall
be permitted and conducted only during normal business hours and upon reasonable
notice. Each party shall be entitled to recover its out-of-pocket costs
(including, without limitation, copying costs and a reasonable charge for
employee time) incurred in providing their books and records and/or personnel.
The requesting party shall hold in confidence all confidential information
identified as such by the disclosing party or any of its

 

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officers, agents, representatives or employees; provided, however, that
information that (i) was in the public domain; (ii) was in fact known to the
requesting party prior to disclosure by the disclosing party or its officers,
agents, representatives or employees; (iii) becomes known to the requesting
party from or through a third party not under an obligation of non-disclosure to
the disclosing party; or (iv) any party is required by law, rule or regulation
(of any applicable stock or securities exchange or otherwise) or otherwise deems
necessary and proper to disclose in connection with the filing of any tax return
or other document required to be filed with, or as required by, any governmental
authority, shall not be deemed to be confidential information. In addition, the
parties agree that confidential information shall not be used for any purpose
other than the specific purpose for which it was supplied.

 

SECTION 8. Dispute Resolution.

 

(a) The AWA Parties, on the one hand, and the PDC Parties, on the other hand,
shall attempt in good faith to resolve any dispute or difference between or
among the parties arising out of or relating to this Agreement promptly by
negotiation between executives of the relevant parties who have authority to
settle the controversy within fifteen (15) days after delivery of a notice of a
dispute by one or more parties to the others. All negotiations pursuant to this
Section 8(a) are confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.

 

(b) Any dispute or difference between or among the parties arising out of or
relating to this Agreement which has not been resolved by negotiation pursuant
to Section 8(a) within fifteen (15) days as therein provided, shall be settled
by arbitration in accordance with the CPR Rules of Non-Administered Arbitration
in effect on November 9, 2001, by a mutually acceptable single arbitrator
designated by the respective parties. If the parties are unable to agree on an
arbitrator within fifteen (15) days following the expiration of the negotiation
period described in Section 8(a), an arbitrator shall be selected by the Center
for Public Resources pursuant to the procedures set forth in its Rule 6.4.b or
by such other procedures as the parties may elect. In order to expedite the
process of selecting an arbitrator, the parties shall use their best efforts to
agree upon a standby arbitrator and an alternate within thirty (30) days
following November 9, 2001, and within thirty (30) days following the
resignation or inability of any such standby arbitrator or alternate to serve.
The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§
1-16, and judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction thereof. The place of arbitration shall be New
York, New York. The language of the arbitration shall be English. The
arbitration shall be governed by the law of the State of New York. The
arbitrator is not empowered to award damages in excess of compensatory damages
and each party expressly waives and foregoes any right to punitive, exemplary or
similar damages unless a statute requires that compensatory damages be increased
in a specified manner. Following the final arbitration hearings, which shall be
completed within thirty (30) days following the later of (i) the designation of
the arbitrator and (ii) the expiration of the negotiation period described in
Section 8(a) unless otherwise mutually agreed by the parties to the dispute, the
arbitrator shall promptly deliver a written decision with respect to the dispute
to each of the parties, who shall promptly act in accordance therewith. Each
party agrees that any decision of the arbitrator shall be final, conclusive and
binding and that they will not contest any action by any other party thereto in
accordance with a decision of the arbitrator. It is specifically understood and
agreed that any party may enforce any award rendered pursuant to

 

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the arbitration provisions of this Section 8(b) by bringing suit in any court of
competent jurisdiction.

 

(c) All reasonable fees, costs and expenses (including attorneys’ fees and
expenses) incurred by the party that prevails in any such arbitration commenced
pursuant to Section 8(b) or any judicial action or proceeding seeking to enforce
the agreement to arbitrate disputes as set forth in Section 8(b) or seeking to
enforce any order or award of any arbitration commenced pursuant to this Section
8 may be assessed (in whole or in part) against the party or parties that do not
prevail in such arbitration in such manner as the arbitrator or the court in
such judicial action, as the case may be, may determine to be appropriate under
the circumstances. All costs and expenses attributable to the arbitrator shall
be allocated among the parties to the arbitration in such manner as the
arbitrator shall determine to be appropriate under the circumstances.

 

(d) The parties hereto shall take all required steps in order to avoid any
inconsistencies between the resolutions of disputes hereunder and resolutions of
disputes under the AWA Indemnity Agreement including, without limitation, the
consolidation of any dispute resolution procedures.

 

SECTION 9. Amendment; Assignment. This Agreement may not be amended, modified or
assigned except at a time that AWA is required to maintain the Acceptable
Protection Coverage, with the written approval of the Administrative Agent and
the Trustee pursuant to Section 2(h). Any purported amendment, modification or
assignment that is not in compliance with the preceding sentence shall be null
and void and of no force and effect whatsoever. Subject to the foregoing, this
Agreement shall inure to the benefit of the parties’ respective successors and
assigns.

 

SECTION 10. Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. FOR THE LIMITED PURPOSE OF
ENFORCEMENT OF AN ARBITRAL JUDGMENT IN ACCORDANCE WITH SECTION 8(b), EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK OR THE COURTS OF THE UNITED
STATES OF AMERICA LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK FOR ANY ACTIONS,
SUITS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING
ARISING OUT OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN THE
COURTS OF THE STATE OF NEW YORK OR THE COURTS OF THE UNITED STATES OF AMERICA
LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

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SECTION 11. Notices.

 

(a) All communications provided for hereunder shall be in writing and shall be
deemed to be given when delivered in person or by private courier with receipt,
when telefaxed and received, and,

 

If to any PDC Party:

 

Paperweight Development Corp.

c/o Appleton Papers Inc.

825 E. Wisconsin Avenue

P.O. Box 359

Appleton, WI 54912-0359

Facsimile: (920) 991-7256

 

Attention: Paul Karch,

Vice President, Law and

Public Affairs and

General Counsel

 

with copies to:

 

Godfrey & Kahn, S.C.

780 N. Water Street

Milwaukee, WI 53202

Facsimile: (414) 273-5198

Attention: Christopher B. Noyes

 

State Street Bank and Trust Company

Trustee of the ESOP Component of the

Appleton Papers Retirement Saving Plan

Two International Place

Boston, MA 02110

Facsimile: (617)

Attention: Kelly G. Driscoll

 

Jones Day Reavis & Pogue

77 West Wacker

Suite 3500

Chicago, IL 60601-1692

Facsimile: (312) 782-8585

Attention: Ronald S. Rizzo

 

If to any AWA Party:

 

Arjo Wiggins Appleton Ltd

St. Clement House

 

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Alencon Link

Basingstoke

Hampshire RG21

ENGLAND

Facsimile: 011-44-1256-796075

Attention: Company Secretary

 

with a copy to:

 

McDermott, Will & Emery

50 Rockefeller Plaza

New York, NY 10020

Facsimile: 212-547-5444

Attention: C. David Goldman

 

or to such other address as any such party shall designate by written notice to
the other parties hereto.

 

(b) Without limiting the generality of Section 11(a), AWA Sub and PDC Sub hereby
agree that any notices given or received by the party identified above on behalf
of them shall be deemed given and received by each of them and that, pursuant
thereto, the other parties may rely upon the applicability of any such notice as
being binding upon, and applicable to each of them.

 

SECTION 12. Third Party Beneficiary. The Administrative Agent, on behalf of the
lenders pursuant to the Credit Agreement, and the Trustee, on behalf of the
holders of the Senior Subordinated Note or the New Notes, are third party
beneficiaries of this Agreement with full rights and remedies under or by reason
of this Agreement as if parties hereto. Other than the parties hereto and their
respective successors and permitted assigns and except as specifically set forth
in the preceding sentence, nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any other person any
rights or remedies under or by reason of this Agreement.

 

SECTION 13. Conflict with Bermuda Bye-Laws. In the event of an inconsistency
between any term of this Agreement and the Bye-Laws of Bermuda, the provisions
of this Agreement shall control.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

ARJO WIGGINS APPLETON LTD.

     

PAPERWEIGHT DEVELOPMENT CORP.

By:

 

/s/ Christopher Gower

     

By:

 

/s/ Dale E. Parker

Name:

 

Christopher Gower

     

Name:

 

Dale E. Parker

Title:

 

Authorized Signatory

     

Title:

 

Chief Financial Officer & Treasurer

ARJO WIGGINS (BERMUDA) HOLDINGS LIMITED

     

PDC CAPITAL CORPORATION

By:

 

/s/ Favier Vincent

     

By:

 

/s/ Dane E. Allen

Name:

 

Favier Vincent

     

Name:

 

Dane E. Allen

Title:

 

Authorized Signatory

     

Title:

 

Secretary

ARJO WIGGINS APPLETON (BERMUDA) LIMITED

       

By:

 

/s/ Christopher Gower

           

Name:

 

Christopher Gower

           

Title:

 

Director

           

 

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