Exhibit 10.1

LABOR AGREEMENT

BETWEEN

BLUE RIDGE PAPER PRODUCTS INCORPORATED

AND

UNITED STEEL, PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE
WORKERS INTERNATIONAL UNION

PREAMBLE

THIS AGREEMENT is made and entered into this 14th day of May 2006, by and
between Blue Ridge Paper Products Incorporated (the “Company”), for its plants
or mills located at Canton, North Carolina; Waynesville, North Carolina; Athens,
Georgia; Clinton, Iowa, and Olmsted Falls, Ohio, hereinafter referred to as the
“Company”, and the United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International Union (USW) AFL-CIO,
CLC, on behalf of Local 2-0507; Local 3-0794; Local 7-0761; and Local 5-0673,
both hereafter referred to as the “Union.”

ARTICLE I
RECOGNITION

The Company recognizes the Union as the sole and exclusive bargaining
representative for the purposes of collective bargaining with respect to rates
of pay, wages, hours of employment, and other conditions of employment for all
production and maintenance employees of the Company’s facilities as described in
the Preamble, but excluding all clerical employees, professional employees,
guards and supervisors as defined under the National Labor Relations Act as
amended.

ARTICLE II
GENERAL PURPOSE

A.           The general purpose of this Agreement is in the mutual interest of
the Company, its staff employees and the employees represented by the Union, to
provide for the uninterrupted operation of the plant under methods which will
further to the fullest extent possible the safety, welfare, and health of the
employees, economy of operation, quality and quantity of output, cleanliness and
maintenance of the plant, and the protection of the property.  The Union
recognizes its

1

--------------------------------------------------------------------------------

responsibilities as the exclusive bargaining agent of the employees covered by
the Agreement, and realizes that in order to provide maximum opportunities for
continuing employment, good working conditions, and fair and equitable wages,
the Company must be in a strong competitive position.

B.             Therefore, it shall be the duty of the Company, its staff
employees, and the employees represented by the Union, to cooperate fully,
individually and collectively, in this regard.  Further insure this ESOP be
accepted as a part of this Agreement by reference.  This clause shall not be
used to discriminate against any employee’s rights under this Agreement.

ARTICLE III
EQUAL EMPLOYMENT OPPORTUNITY

A.           The Company and the Union agree that all employees shall have equal
employment opportunities regardless of race, color, religion, sex, national
origin, and within the framework of federal and state laws regarding age
discrimination.

B.             The Company and the Union shall observe the rights of the
handicapped as provided in the Rehabilitation Act of 1973 and the rights of
disabled veterans and veterans of the Vietnam era as provided in the Vietnam Era
Veterans’ Readjustment Assistance Act.

C.             Wherever used in this Agreement, the masculine personal pronoun
and/or the feminine personal pronoun shall have equal application to the other.

ARTICLE IV
LENGTH OF AGREEMENT

THIS AGREEMENT shall remain in full force and effect from May 14, 2006 through
May 13, 2009, and from year to year thereafter, unless terminated in accordance
with the provisions outlined below. The terms of this Agreement will not be
altered, varied, or amended except by mutual agreement in writing and signed by
the parties hereto.

ARTICLE V
CHANGES OR MODIFICATION

In the event that either party desires to change any provisions of this
Agreement, it shall give written notice of such desire by certified mail to the
other party not more than ninety (90) days nor less than sixty (60) days in
advance of the anniversary date or May 14, 2009.  The giving of notice, as
provided above, shall constitute an obligation upon both parties to negotiate in
good faith all questions at issue with the intent of reaching a written
agreement prior to the anniversary date.

2

--------------------------------------------------------------------------------

ARTICLE VI
TERMINATION OF AGREEMENT

A.           At any time after May 14, 2009, or any anniversary date thereafter,
if no agreement on the questions at issue has been reached, either party may
give written notice to the other party of intent to terminate the Agreement in
not less then ten (10) days.

All provisions of the Agreement shall remain in full force and effect until the
specified time has elapsed.  During this period, attempts to reach agreement
shall be continued.

B.             If the parties have failed to resolve their differences before
the specified time has elapsed, all obligations under this Agreement are
automatically cancelled.

ARTICLE VII
NO INTERRUPTION OF PRODUCTION

There shall be no lockouts by the Company, or strikes, slowdowns or work
stoppage of any kind by the Union, its representatives, agents or members during
the duration of this Agreement.

ARTICLE VIII
SENIORITY

The principles of seniority shall govern in promotions, layoff, demotions, and
filling of vacancies, transfers and recalls as hereinafter provided.

A.           An employee shall be considered probationary for the first sixty-
(60) calendar days, after which he shall be considered a regular employee and
his seniority shall date from the most recent date of hire.  During the
probationary period, the Company shall have the right to transfer or discharge
such employee and any such action shall not be subject to the grievance and
arbitration procedure.

B.             For the purpose of this Agreement, employees shall have four (4)
types of seniority:  Plant Seniority; Department Seniority; Group Seniority and
Job Seniority.  The type of seniority used at each location and the method of
application shall be governed by each Local supplement that is a part of this
agreement.  Such supplement shall apply to each location named in each
supplement.   Should a question of Local supplement application occur and it
cannot be resolved by the location, then this Master Agreement shall apply. 
Seniority as it pertains to employees within the bargaining unit shall retain
the same application as is accrued with Champion International Corporation

C.             Seniority shall be broken and employment terminated for the
following reasons:

1.               Voluntary quit.

3

--------------------------------------------------------------------------------

2.               Discharge for just cause.

3.               Failure to return from a leave of absence as of the first
scheduled workday following the termination date of the leave.

4.               Absent from work for three (3) consecutive scheduled workdays
without proper notification to the Company.  Excluded in the computation of
“days” in this sentence are Saturdays, Sundays, and Holidays.

5.               Employment on another job while on a leave of absence except as
provided in Article XX, Section B & C.

6.               Failure to notify the Company of intent to return to work
within seven (7) days following receipt of certified letter sent to the
employee’s address as carried on the Company’s records and failure to return to
work from layoff within ten (10) days following receipt of such letter.

7.               Exceptions may be made to 3, 4 and 6, if a justifiable reason
is given.

 

D.            PROMOTIONS IN LINES OF PROGRESSION

When promotions are to be made at any location, the language as applied in each
Local Supplement shall be the controlling language.

E.              JOB BIDDING

Job bidding shall be applied by using the employee’s seniority as developed in
each Local Supplement.

F.              TEMPORARY VACANCIES

Temporary vacancies shall be filled in accordance with the method of application
developed in each Local Supplement.

G.            DEMOTIONS AND LAYOFFS

Demotions and layoffs shall follow the reverse order of promotions.  The method
of administering this seniority provision for demotions and layoffs shall be
developed in each Local Supplement.  However, in any location probationary
employees shall be laid off first.  Layoffs from the plant shall be by plant
seniority.  Any employee’s job classification affected by a layoff shall be
given an opportunity to receive at least thirty (30) days training prior to
being reduced from their line of progression, job, group, department or the
plant.

H.            RECALL

Recall of laid off employees shall be in the reverse order of layoff seniority. 
Employees laid off shall retain their plant seniority.

I.                 TRANSFERS

Transfers between lines of progression or departments shall be governed by the
use of seniority application determined at each Local facility.  When a vacancy
occurs, prior to hiring a new employee, incumbent employees shall be given an
opportunity for transfers between locations.  The transferring employee(s) shall
retain their seniority for earned vacation and pensions.  Their seniority date
in the new location shall be in accordance with Section B above.  This transfer
policy is attached as Appendix B.

4

--------------------------------------------------------------------------------

 

ARTICLE IX
GRIEVANCES AND ARBITRATION

A.  GRIEVANCES

An earnest effort shall be made to promptly settle complaints in the following
order and manner:

Step 1:  The employee and the steward shall discuss his complaint with his
immediate supervisor within seven (7) days following the date the incident
occurred that gave rise to the complaint; however, if the incident occurred
while the employee was on an excused absence and he had no knowledge of it until
his return to work, the seven (7) day period shall begin on his first scheduled
work day following the return from the absence.  The employee, his shop steward,
and his supervisor are encouraged to make every possible effort to settle the
grievance at this stage.  The supervisor shall reply to the employee within
three (3) days of the date the complaint was brought to his attention.

When the Company immediately agrees to resolve the issue, the Company will
provide written documentation to the personnel department and Union in lieu of
the formal grievance procedure.

Step 2:  A complaint, which is not resolved between the employee and his
supervisor, must be reduced to writing and submitted to the department manager
within seven (7) days of the supervisor’s reply.  The department manager and/or
his designated representative and foreman involved shall meet with the employee,
a local union officer and the steward within seven (7) days of the date the
written grievance was received.  He shall give his written answer within three
(3) days of the date of the meeting.

Step 3:  An appeal of the department manager’s answer must be made in writing to
the Plant Manager or his designated representative within seven (7) days after
receipt of the department manager’s answer by the local Union.  As a result of a
meeting attended by the Plant Manager or his designated representative, together
with the International Representative or his designated representative, a
committee representing the Local Union, plus the aggrieved employee, a
discussion of the appealed grievance shall take place within nine (9) days of
the date the appeal notice was received.  The Plant Manager shall give his
answer within ten (10) days of the date of the meeting.

A grievance not appealed from one step to the next within the specified time
limits shall be considered settled on the basis of the last answer, unless such
time limits are extended in writing by mutual agreement.  Failure on the part of
the Company to answer within the specified time limits shall cause the grievance
to be settled in favor of the grievant.

“Days” in the Grievance and Arbitration Articles shall mean calendar days,
excluding Saturdays, Sundays, and Holidays.

5

--------------------------------------------------------------------------------

B. ARBITRATION

1. An appeal of the Plant Manager’s answer must be made in writing to the
Company within thirty (30) days.  An extension of this time limit will be
granted up to a maximum of thirty (30) days if requested by the Union.  If
written notice is given, the Company within three (3) days will ask the Federal
Mediation and Conciliation Service to furnish the parties with a panel of seven
(7) qualified arbitrators.  Within fourteen (14) days after receipt of the list
of arbitrators, the Union and the Company shall alternately strike a name from
the list.  The Union and the Company shall alternate on each case in being the
first party to strike a name from the list, with the Union striking first on the
first case under this new Agreement.  The person whose name remains shall be the
arbitrator.  Either party has the right to reject one panel of arbitrators and
another panel will be requested.

THE DECISION OF THE ARBITRATOR ON ALL MATTERS PROPERLY SUBMITTED, SHALL BE FINAL
AND BINDING ON BOTH PARTIES TO THIS AGREEMENT.  ARBITRATOR SELECTION SHALL BE
ACCOMPLISHED IN ACCORDANCE WITH THE PROCEDURE IN EACH LOCAL SUPPLEMENT IF
DIFFERENT FROM ABOVE.

2. THE ARBITRATOR SHALL HAVE JURISDICTION AND AUTHORITY ONLY TO INTERPRET,
APPLY, OR DETERMINE COMPLIANCE WITH THE PROVISIONS OF THIS AGREEMENT, INSOFAR AS
SHALL BE NECESSARY TO THE DETERMINATION OF GRIEVANCES APPEALED TO HIM.  HE SHALL
HAVE NO AUTHORITY TO ADD TO, DETRACT FROM, OR ALTER IN ANY WAY, THE PROVISIONS
OF THE AGREEMENT, NOR TO ESTABLISH OR CHANGE ANY WAGE RATE.  THE SAME ARBITRATOR
SHALL NOT ARBITRATE MULTIPLE ISSUES.

3. THE COMPANY AND THE UNION SHALL SHARE THE EXPENSES OF THE ARBITRATOR
EQUALLY.  THE EXPENSES OF THE WITNESSES SHALL BE PAID BY THE PARTY REQUESTING
THE WITNESS TO TESTIFY.

4. THE ARBITRATOR SHALL RENDER HIS AWARD WITHIN THIRTY (30) DAYS AFTER THE
RECEIPT OF POST-HEARING BRIEFS.  IF THE PARTIES DO NOT FILE BRIEFS, THE
ARBITRATOR SHALL RENDER HIS AWARD WITHIN THIRTY (30) DAYS AFTER THE CLOSE OF THE
HEARING.

ARTICLE X
VACATIONS

 

A. ELIGIBILITY

All hourly paid employees who have at least one (1) year seniority in the plant
shall be granted a vacation with pay each calendar year.  Below are the numbers
of years of continuous employment in the Company’s service that must be
completed to be eligible for the number of weeks vacation indicated:

1 week vacation after           The actual number of weeks of

2 weeks vacation after         eligibility shall be those years

3 weeks vacation after         referred to in the Local Supplement

4 weeks vacation after         at each location.

5 weeks vacation after

6 weeks vacation after

6

--------------------------------------------------------------------------------

B. An employee who works less than 1,040 hours because of an illness or injury
shall receive credit for forty (40) hours per week for all full weeks lost
because of such illness or injury.  The accumulation of these credits will be
limited to the first calendar year of each continuous period of loss of hours
due to such illness or injury.

C. VACATION PAY

1. The amount of vacation pay for an eligible employee shall be calculated at
the rate of pay as set forth in each Local Supplement.

2. An employee who leaves the employ of the Company and has not taken the
vacation to which he is entitled, shall receive vacation pay at the time of
leaving the employment of the Company.  The amount of such additional vacation
pay shall be prorated according to the number of months worked.

3. An employee who enters the armed services, retires, or dies, and who has
completed one (1) year or more of continuous employment in the company’s service
on the last previous anniversary date of such continuous employment, shall upon
termination of employment receive in addition to vacation pay as provided above,
vacation pay for time worked during the calendar year in which his employment is
terminated.  The amount of such additional vacation pay shall be prorated
according to the number of months worked.

B. VACATION PERIODS

1. Vacations shall be taken in periods of not less than one week, except as
provided by other provisions of this Agreement that applies to Incremental
Vacation.

2. Vacations are not accumulative from year to year.

3. Holidays falling in a vacation period shall not extend the vacation period.

4. Vacations will be taken to coincide with the established workweek.

5. The administration of the vacation scheduling for employees shall be the
process that is established by the supplemental agreements at each Local
facility.

ARTICLE XI
HOLIDAYS

 

Each employee shall receive eight (8) hours straight time pay at his hourly rate
(including any additional pay provided in each Local Supplement) for the
following holidays:  Memorial Day (Federal); Independence Day, Labor Day,
Thanksgiving Day, the day after Thanksgiving Day, December 24, Christmas Day,
December 26, a floating holiday, Good Friday, Easter Monday, New Years Day and
Presidents’ Day.  These are identified maximum numbers of holidays only for
purposes of this Agreement.  Each Local facility may contain a different number
of holidays, but in no event will the number

7

--------------------------------------------------------------------------------

of holidays exceed the number listed in this Article.  In addition to the number
deviation of holidays contained in each Local Supplement, each Local Supplement
shall determine annually which of those holidays that the location wishes to
recognize as holidays for the forthcoming year.  Such identification meeting
shall occur in December of the prior year.  The method of calculating the proper
classified rate may vary in each Local supplement.

A. ELIGIBILITY

1. The employee must have completed his probationary period prior to such paid
holiday.

2. The employee must work his last scheduled workday before the holiday and his
first scheduled workday after the holiday unless absence on either or both of
these days is due to a layoff, absence with employer’s permission, bona fide
illness of the employee, or illness of a member of the employee’s immediate
family requiring his presence.

3. If a holiday occurs during a period when an employee who otherwise is
eligible for holiday pay is laid off he will receive pay for such holiday when
he returns to work, provided the entire duration of his layoff has not exceeded
one hundred eighty (180) days.

4. An employee who is absent because of illness or industrial injury and is
otherwise eligible for holiday pay will receive holiday pay in the regular pay
period covering the holiday which occurs within one hundred eighty (180) days of
his last day worked.

B.             An employee who is required to work on a holiday shall be paid
time and one-half for all hours worked on the holiday; and in addition, if he
qualifies as provided above, he shall be paid holiday pay.

C.             When any specified paid holiday is celebrated within an eligible
employee’s approved vacation period and he is absent from work because of such
vacation, he shall be paid for such holiday in accordance with the provisions
set out herein.

D.            Hours not worked but paid for on a holiday shall be counted as
time worked for the purpose of computing weekly overtime.

ARTICLE XII
HOURS OF WORK AND OVERTIME

 

A.           The established workweek begins at 7:00 a.m. on Monday and shall
continue for seven (7) consecutive twenty-four (24) hour periods.  The workweek
shall end at 6:59 a.m. the following Monday.  The starting of the workweek for
the DairyPak plants may begin at 11:00 p.m. on Sunday and shall continue for
seven (7) consecutive twenty-four (24) hour periods.  The workweek shall end at
10:59 p.m. the following Sunday.

8

--------------------------------------------------------------------------------

B.             The normal schedule for shift workers, which includes a paid
lunch period, is as follows:

First Shift - 6:30 a.m. to 2:30 p.m.

Second Shift - 2:30 p.m. to 10:30 p.m.

Third Shift - 10:30 p.m. to 6:30 a.m.

This shift starting and quitting time may vary between each Local Supplement. 
However, in no event shall a shift begin any later then 7:00 a.m., 3:00 p.m. or
11:00 p.m. or end any later than 3:00 p.m., 11:00 p.m., or 7:00 a.m.

C.             Work performed prior to or following the work shift will be paid
at the appropriate overtime rate.

D.            For the purpose of computing overtime, the workweek will be forty
(40) hours and the workday will be eight (8) hours.

E.              All time worked by an employee in excess of eight (8) hours in
any twenty-four (24) work period or over forty (40) hours in any work week shall
be paid at one and one-half (1 ½) times the base rate.  It is further provided
that hours not worked on any of the twelve (12) holidays designated in Article
XI, Section A, of this Agreement shall be considered as hours worked in
computing hours in excess of forty (40) per week.

F.              The normal schedule of day workers is 7:00 a.m. to 12:00 noon
and 12:30 p.m. to 3:30 p.m., Monday through Friday.  The Company will arrange
the schedule of day workers for five (5) consecutive days of eight (8)
consecutive hours, lunch period of thirty (30) minutes excepted.  An employee on
day work requested to work through meal time will continue to work until 3:30
p.m. unless the emergency work is completed and the employee requests to be
released at 3:00 p.m.  Emergency work making it necessary to work through
mealtime will be held to a minimum and will not be performed unless directed by
the department manager.

G.             The Company will post changes in work schedules for the following
week not later than 12:00 noon on Thursday.

H.            There shall be no duplication of overtime pay for the same hours,
and payment of overtime for any hour or part of an hour on one basis shall
exclude that time from consideration for payment of overtime on any other basis.

ARTICLE XIII
SHIFT DIFFERENTIAL

Employees working on the second and third shift shall be paid in accordance with
the Local Supplements.  This amount may vary between each facility.

9

--------------------------------------------------------------------------------

ARTICLE XIV
WAGES

Wage rates shall be paid in accordance with the Appendix attached as a part of
the Local Supplement at each location.  The necessary increase of wages because
of working in a higher classification or the lowering of wages because of
working in a lower classification shall be in accordance with the methods
provided in each Local Supplement.

A.           Rates on existing jobs shall not be subject to adjustment
throughout the life of this Agreement, except as provided in “B” below.

B.             When new jobs are created, or when substantial charges are made
in the duties and/or workload of existing jobs, the Company and the Union will
meet within thirty (30) days from the date request is received, unless mutually
agreed to extend the time limit, to negotiate the rate of the new job or the
rate of the existing job that has been substantially changed.  If no agreement
can be reached, the Company will set the job rate.  Such rate may be subject to
negotiations at the next general contract negotiations, and any change agreed
upon at that time will be made retroactive to persons then on the payroll of the
Company to such time as the Company and the Union shall agree.

C.             The matter of wages is not to be a subject of arbitration.

D.            REPORTING TIME

1.               Should an employee report for work at his regularly scheduled
time, and due to unavoidable circumstances his services are not required for
that workday, payment will be made for four (4) hours straight time at his
regular rate of pay.  Reporting time hours paid for, but not actually worked,
will be counted toward computation.

2.               Reporting time pay shall not be paid if the failure to provide
work is caused by storm, flood, fire, accidental breakdown, power failure, or
other causes beyond the control of the Company.

ARTICLE XV
JURY DUTY

A.           When a regular employee is called upon to serve on a jury, he shall
receive the difference between the amount received for such jury duty and the
“total rate” he would have received on his regularly scheduled job at straight
time, provided the employee notifies his supervisor so necessary arrangements
can be made.

B.             If an employee is scheduled to work the third shift on the night
before he reports for jury duty, he will be excused from work that night.  His
pay will be computed as outlined above.

10

--------------------------------------------------------------------------------

C.             Employees seeking reimbursement under this Article must present
proof of hours served on jury duty and compensation received from the court in
connection therewith.  In the event that an employee is required to appear in
court as a witness or defendant, the Company will try to grant the employee time
off without pay.

ARTICLE XVI
CALL-IN TIME

A.           An employee who is called in to work at a time other than his
regularly scheduled shift shall be guaranteed a minimum of four (4) hours at his
regular straight time rate or time and one-half for hours worked, whichever is
greater.  An employee so called will be allowed to leave after the work for
which he was called has been completed.  However, such employee may be required
to do work of an urgent nature that has developed after the Company has called
him.

B.             Call-in is not applicable when work is planned in advance and
scheduled to commence at any specific time, if the employee is scheduled to work
and is notified before leaving the mill on prior shift, or sixteen (16) hours in
advance of starting time of such work.

ARTICLE XVII
DISCIPLINE AND DISCHARGE

A.           If an employee is called in for a disciplinary interview he/she
shall be advised he/she has the right to union representation and the employee
and union representative have the right to examine the materials in their
personnel files if used in the disciplinary interview.  When a statement against
an employee is to be entered into the personnel record of the employee, the
Company will furnish the employee and the Union with a copy.

B.             An employee discharged shall have the right to request in writing
the reason for such discharge.  A copy of the reason for such discharge shall be
sent to the Local Union President.

C.             All disciplinary action will be taken within five (5) working
days (excluding Saturdays, Sundays, and holidays) from the date the Company
becomes aware of the infraction.

ARTICLE XVIII
FUNERAL LEAVE

A.           In the event of a death (except for the employee’s spouse,
children, mother and/pr father) in the immediate family of an employee who has
been in the employ of the Company for sixty (60) days or more, the employee will
be compensated at a regular straight time rate of pay for his scheduled days of
work

11

--------------------------------------------------------------------------------

lost up to a maximum of three (3) consecutive calendar days.  For the
computation of the three (3) days maximum pay, the two (2) days preceding the
funeral, the day of the funeral, and the day after the funeral are the only days
to be considered.  In the event a Location has a greater number of days then
those specified, the Local Supplement for the Location will apply. The Company
may require proof of death and relationship before making such payments.

B.             The immediate family of the employee shall be limited to those
listed in the Local Supplement at each location.

C.             Time spent while on funeral leave will be counted as hours worked
for computing overtime.

D.            Funeral leave pay will not be payable if any of the days lost fall
within an employee’s approved vacation period or leave of absence.  No allowance
will be granted in the case where, because of distance or other cause, the
employee does not attend the funeral of the deceased.

ARTICLE XIX
MILITARY LEAVE

A.           The Company shall comply with the applicable federal and state
statues pertaining to the re-employment rights of returning servicemen/women.

B.             Any regular employee who is a member of a National or State Guard
Unit, or any United States Armed Forces Reserve component, who is required to
participate in training for thirty (30) days or less, or temporary guard duty,
will be granted a leave of absence for such purpose and may receive pay from the
Company as follows:

The difference between the base pay received from the government and the
straight time earnings of his scheduled work hours at the mill during the period
of absence, up to a maximum of ninety-six (96) hours in any one calendar year.

ARTICLE XX
LEAVE OF ABSENCE

A. GENERAL

1. Upon application by an employee and written permission from the Company, a
leave of absence without pay may be granted at the discretion of the Company for
a period of not more than thirty (30) calendar days without prejudice to
seniority rights.

2. Extension may be granted at the discretion of the Company and seniority shall
accrue during an approved extension.

12

--------------------------------------------------------------------------------

3. Upon termination of an absence from work for five (5) or more scheduled
workdays because of illness, or fifteen (15) or more calendar days for any
reason other than vacation, the employee will report to the Medical Center.

4. An employee granted a leave of absence would notify his department manager at
least twenty-four (24) hours in advance of the scheduled starting time of his
job he will be ready to resume his work.

5. Copies of all approved leaves of absence and extensions thereof shall be
furnished the Union.

6. A leave of absence is not required when absence is due to occupational injury
or disease.

B. ELECTED OFFICE LEAVE

1. Employees who are duly elected to a full-time elected public governmental
office at the Federal, State or Local level will be granted a leave of absence
up to a maximum of four (4) years  (six (6) years if elected to the United
States Senate).

2. In the case of an employee elected to the State or Federal House of
Representatives or Senate, a leave of absence will be granted and seniority
shall accrue for the length of time the body is in full session.

3. Seniority shall not accrue during an elected office leave except as provided
above.  The Company shall be notified at least two (2) weeks prior to the end of
the leave of the employee’s intent to return.

C. UNION LEAVE

1. Employees may be granted a leave to work for the International Union and
employees to work for the Local Union, provided the request is made in writing
by the Union and approved by the Company. Such leave shall have a maximum of two
(2) years.  Extensions may be granted at the discretion of the Company.

2. Seniority shall accrue during a Union leave.  When a promotion becomes
available for which an employee who is on Union leave is eligible, that
promotion shall be offered to him upon his return from leave.  The company shall
be notified at least two (2) weeks prior to the end of the leave of the
employee’s intent to return.

D. FAMILY MEDICAL LEAVE

In accordance with the provisions of the Family Medical Leave Act, the Parties
agree a request for Family Medical Leave will be granted when applied for by an
employee.  This Family Medical Leave will be granted without sacrifice of any
other negotiated benefits.  (See MOA referenced in Appendix D)

13

--------------------------------------------------------------------------------

ARTICLE XXI
MISCELLANEOUS

A.           Supervisors will not perform work normally done by hourly rated
employees, nor will the Company condone such work, except in cases of
emergencies or unforeseen circumstances where failure to act promptly might
result in harm or damage to personnel, plant, or equipment.

B.             When it becomes necessary to change methods of operation or kinds
of products, which may result in elimination of jobs or combining of jobs, the
Company will advise and negotiate the matter with the Local Union.

C.             With respect to the subject of contracting out, it is understood
production employees will normally perform production work and maintenance
employees will normally perform maintenance work.  It is understood there may be
times the Company must employ the service of outside contractors.  The Company
will notify, meet and discuss the need, manner and necessity to use such outside
services with the Union prior to letting of the contract.  If the work can be
accomplished by the use of mill forces then bargaining employees will perform
the work.

Excluding from these provisions are new construction and major replacement of
equipment that requires special tools or equipment.  The use of outside
contractors shall be unionized contractors as long as cost and service levels
are competitive.

D.            Each employee is expected to respect his supervisors and each
supervisor is expected to respect the employee.  Both parties to this Agreement
realize the importance of getting along in the plant.  Harassment, profanity, or
any other act of disrespect in the plant will not be tolerated.

E.              Items pertaining to any particular location at the time of
development of this Master Agreement will continue to be handled by the
Supplement at each Location.

F.              The Company will compensate those Union Officers, Stewards, or
members, as designated by the Union at their respective hourly rates for the
time lost from work due to keeping their appointments with Management, or
investigating incidents that may become grievances.

G.             Future medical/dental plan cost increases and decreases, starting
1/1/07, will be shared 50/50 until employee contribution reaches 20% of premium,
starting with current dollar contributions.  This change will replace all
current cost sharing language in the Master and Local Supplements.

H.            Attached as Appendix D, is a listing of Memorandum Of Agreement’s
(MOA’s) and Side Letter Agreements incorporated into this Agreement by
reference.

 

14

--------------------------------------------------------------------------------

ARTICLE XXII
COMPANY RULES

Company rules include those listed in each Local supplement and are included in
this Master Agreement by reference.  Changes or additions to these rules may be
made from time to time and the parties shall agree on the rules prior to the
notification to all employees.  By the publishing of these rules and
notification of changes and additions, it shall be considered that employees
will have complete knowledge of the rules.  The employees shall abide by the
Company’s rules and practices.

ARTICLE XXIII
NON-COERCION

The Company agrees not to interfere in any way with the exercise by employees of
their legitimate rights to join and be active in the Union.  The Union agrees
not to intimidate or coerce employees to join the Union.

ARTICLE XXIV
CONTRAVENTION OF LAW

If any provision or section of this Agreement is found to be in violation of
laws or regulations of the United States, or the State in which the mill covered
by this Agreement is located, such provisions shall be superseded by the
appropriate provisions of such law or regulations, so long as same is in force
and effect.  All other provisions of this Agreement shall continue in full force
and effect.  The parties will discuss any change to a federal or state law,
which may be related to this Agreement, and if it is found to affect a provision
of this Agreement, the parties shall meet and negotiate the change or changes to
the Agreement to conform to the law.  Should Section 14B of the National Labor
Relations Act be amended or repealed, by either the State or Federal Government,
the Company will notify the bargaining unit members they have thirty (30) days
to become members of the Union.

ARTICLE XXV
DEDUCTION OF UNION DUES

A.           Subject to the provisions of State and Federal laws, the Company
agrees to make a payroll deduction of current Union dues of employees who are
members of the Union.  This deduction will commence with the next full bi-weekly
pay period following receipt of an authorization signed by the employee in the
following form:

The form shall be the standard form for Union dues deduction provided by the
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union (USW).

15

--------------------------------------------------------------------------------

B.             It shall be the sole obligation of the Company to remit the sums
deducted to the designated Financial Officer of the Local Union.  The Union
shall keep the Company harmless against all claims, demands or other forms of
liability that may arise out of the Company’s compliance with this Article.

C.             The Company agrees that it will deduct voluntary contributions to
the USW Political Action Fund each pay period from the earnings of those
employees who voluntarily authorize such contributions on forms provided for
that purpose by the USW/PAC.  The signing of USW/PAC checkoff forms and the
making of such voluntary contributions are not conditions of membership in the
Union or of employment with the Company.  The USW/PAC checkoff program shall
remain in compliance with any applicable state or federal statute.

The Company shall remit monthly to the Treasurer of the USW/PAC, the total
amount of voluntary contributions and a list of the employees who made said
voluntary contributions.  The remission of monthly USW/PAC checkoff will be made
to the USW Political Action Fund at Five Gateway Center, Pittsburgh, PA 15222
within fifteen days following the end of each month.

The Union shall indemnify and save the Company harmless against any and all
claims, demands, suits or other forms of liability that shall arise out of or by
reason of action taken or not taken by the Company for the purpose of complying
with any of the provisions of this understanding.

ARTICLE XXVI
SAFETY AND HEALTH COMMITTEE

1. The Company agrees to provide and maintain a safe and healthy workplace for
its employees.  The Company will maintain all reasonable and necessary
precautions for safeguarding the safety and health of employees and employees
are expected to cooperate in the implementation of this safe work environment.

2. In addition to “for cause” drug and alcohol testing, “post accident” drug and
alcohol testing will be used by the Company in the event of on the job
injuries.  It is understood that such testing will be conducted only when an
injured employee is treated by a licensed physician.  This provision becomes
effective 1/1/07.  The method of administering this provision shall be set forth
in each Local supplement of this Agreement.

ARTICLE XXVII
ATTENDANCE POLICY

The need for all employees to attend work whenever scheduled is an inherent
portion of this work process.  Therefore, each location shall establish and
maintain an attendance

16

--------------------------------------------------------------------------------

policy that fits the circumstances at each of their locations.  Such attendance
policy shall be included as part of this Agreement by reference.

ARTICLE XXVIII
CONTINUOUS WORK

In consideration of the Union’s execution of this Agreement, the Employer
promises its operations covered by this Agreement shall not be sold, conveyed,
or otherwise transferred or assigned to any successor without first securing the
agreement of the successor to assume the Employer’s obligations under this
Agreement.

ARTICLE XXIX
PROFIT SHARING

A.           The intention of Blue Ridge Paper Products Inc. is to establish a
profit sharing program to bind Blue Ridge Paper and its Union employees together
in a team to improve Company profits.  Increased profits in one fiscal year may
be used in part to increase wages of its employees in the next fiscal year.

B.             The Company will pay to its hourly employees the contracted
amount of operating profits before taxes earned in the fiscal year January 1 to
December 31 of any given year.  The total payments due will be divided equally
between employees on an annual basis.

C.             Blue Ridge Paper Products Inc. will absorb the administrative
costs of the plan.

D.            The full contents of the Profit Sharing plan are attached hereto
as Appendix A. It shall describe this Profit Sharing plan in detail.

ARTICLE XXX
WORK PLACE CULTURE DEVELOPMENT

The parties signatory to the Labor Agreement between the United Steel, Paper and
Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers
International Union (USW) and its affiliated Local Unions and Blue Ridge Paper
Products Inc. (an ESOP Company) at each of its locations do jointly enter into
the following agreement:

There is a mutual recognition on the part of both the Union and the Company in
order to maintain economic viability, gain a competitive advantage in the
marketplace, and maintain job security, it is necessary for Blue Ridge Paper
Products Inc. to upgrade

17

--------------------------------------------------------------------------------

profitability through increased efficiency, team effort, mutual cooperation and
the elimination of barriers to improved productivity.

It is agreed between the parties, as part of Work Place Cultural Development,
during the life of the Agreement the Company and the Union will work together to
explore either new or improved work processes or concepts.  It is understood
that any subsequent changes that may be required in any provisions of the
Agreement are subject to negotiations and agreement between the parties.

The method of development of this Work Place Culture shall be determined by each
location.  Its necessary and use shall be incorporated as part of this agreement
by reference.

Each Location shall have a Work Place Culture Steering Committee.  The
provisions set forth in each Local supplement shall determine the creation and
maintenance of this Committee.

ARTICLE XXXI
ESOP RECOGNITION AND ELECTION

The Bargaining Unit members recognize with the ratification of this Labor
Agreement they are accepting the Employee Stock Ownership Plan (ESOP) as a part
of this Agreement.  The ESOP, along with its supporting documents is
incorporated herein by reference. (See Appendix C)

A. Board of Directors

1. The Company and the Union acknowledge that every member of the Company’s
Board of Directors (Board, members of such Board, Directors) has a fiduciary
duty to the Company and all of its stockholders.

2. The Company agrees that the Union shall have the right, subject to the
procedure; the Directors’ discharge of their fiduciary duties; and as described
below, to designate three (3) individuals to serve on the Board.

a. The International President shall provide the Board’s Chairman with the names
and resumes of the individuals whom s/he wishes to have serve on the Board.

b. Provided that the individuals are acceptable to the Chairman, (it being
understood that in all respects each individual will be dealt with separately)
such acceptance not to be unreasonably withheld, the Chairman shall promptly
recommend such individual(s) to the Board’s Nominating Committee, who absent
compelling reasons to the contrary, shall promptly recommend such individual(s)
to the full Board for election at its next meeting.

c. Once elected, the individual(s) shall be recommended by the Board for
election by the shareholders to serve a regular term at the Company’s next
Annual Meeting of Shareholders.

18

--------------------------------------------------------------------------------

3. If after election, the individual(s) becomes unwilling or unable to serve, or
the Union wishes to replace one or all of them, the International President
shall provide the Board’s Chairman with the name of a new individual(s) whom
s/he wishes to have serve on the Board and the process outlined above shall
thereafter be followed.  In such case the individual(s) previously named by the
International President may be removed from or not nominated for re-election to
the Board.

4. At the time that any person is nominated by the Union as provided in this
Section A, said nominee shall acknowledge in whatever fashion such
acknowledgement is given by all of the Company’s other Directors, that such
nominee, if elected to the Board, would have a fiduciary duty to the Company and
its stockholders.

B.            BENEFIT POOL

There shall be a pool of funds established from unused funds that result from
the contribution from Blue Ridge Paper Products to employee benefits.  At the
conclusion of the Labor Agreement or the sale of Blue Ridge Paper Products, any
funds that remain in this pool, including any earned interest, shall be
distributed to bargaining unit employees.  This distribution shall be in some
type of monetary compensation.

ARTICLE XXXII
ESOP DISPUTE RESOLUTION

Any ESOP Plan or Board of Directors disputed issues or fiduciary responsibility
issues shall be handled in the following manner:

1.               The ESOP Plan Administration Committee shall appoint a Mediator
to explore resolution of the dispute.

2.               Failing to achieve resolution of the dispute by a Mediator, the
complainant and the ESOP shall mutually agree on an arbitrator to hear the
disputed issue.  At the conclusion of the hearing the arbitrator shall be
required to provide the Parties with an immediate decision.  The arbitrator’s
decision shall be final and binding on all parties.

ARTICLE XXXIII
ESOP PLAN ADMINISTRATION COMMITTEE

There shall be an ESOP Plan Administration Committee created and maintained for
the ESOP.  This Committee shall have two (2) Union members nominated and elected
to this position.  These members shall be from the Canton and Waynesville, North
Carolina locations.

There shall as well be an ESOP Plan Administration Sub-Committee created and
maintained for the ESOP.  This Sub-Committee shall have two (2) Union members

19

--------------------------------------------------------------------------------

nominated and elected to this position from each DairyPak location.  All
committee positions shall be for terms of two (2) years.

ARTICLE XXXIV
ESOP TRUST COMMITTEE

There shall be an ESOP Trust Committee created and maintained.  This committee
shall have two (2) Union members nominated and elected to this committee.

There shall be an ESOP Trust Sub-Committee created and maintained.  This
Sub-Committee shall have two (2) Union members nominated and elected to this
Committee from each DairyPak location.  All committee positions shall be for
terms of two (2) years.

ARTICLE XXXV
COMMITTEE COMPENSATION

All Board of Director and Committee positions shall be reimbursed for any hours
lost from work at their regular rate of pay.  The Company shall pay this
reimbursement.

ARTICLE XXXVI
SEVERANCE PAY

In the event a plant must sustain a permanent curtailment or shut down, an
employee with one (1) or more year’s plant seniority will be eligible for
severance pay.

A laid off employee entitled to severance pay will be paid one (1) week of pay
for each year of continuous service at his classified rate of pay.

The employee’s continuous service shall be calculated from his most recent date
of hire without further interruption in service.

If an employee is recalled after having received all the severance pay due, he
or she, will begin again as of the date of his or her return accumulating a
period of time which will be credited toward any future lay-off.

20

--------------------------------------------------------------------------------

This Master Agreement, including any appendix or exhibits hereto, and the Local
Supplemental Agreements, embodies the entire agreement and understanding of the
parties in all respects.  This Master Agreement and the Local Supplemental
Agreements supersede all prior agreements and understandings between the
parties.

21

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto, have caused their names to be subscribed
below by their duly authorized officers and representatives as of this
              day of                         , 2006.

United Steelworkers, AFL-CIO/CLC

 

Blue Ridge Paper Products Inc.

 

 

 

 

 

41 Main Street

 

 

 

 

 

Canton, NC, 28716

 

 

 

 

 

 

 

 

By:

 

 

 

 

By:

/S/ Darrell E. Douglas

 

 

 

Leo G. Gerard

 

 

Darrell E. Douglas

 

 

 

International President

 

 

VP-Human Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/S/ Terry Huskey

 

 

 

James D. English

 

 

Terry Huskey

 

 

 

International Secretary-Treasurer

 

 

VP-Gen. Mgr. Paper Division

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/S/ Robert M. Shanahan

 

 

 

Thomas Conway

 

 

Robert M. Shanahan

 

 

 

International Vice President

 

 

VP-Mfg., Mill Mgmt.-Canton, NC

 

 

 

Administration

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/S/ David M. Lewallen

 

 

 

Fred Redmond

 

 

David M. Lewallen

 

 

 

International Vice President

 

 

VP-Operations, DairyPak

 

 

 

Human Affairs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/S/ Alan W. Denney

 

 

 

C.L. “Connie” Entrekin

 

 

Alan W. Denney

 

 

 

Director, District 9

 

 

VP & Gen. Mgr. Extrusion—

 

 

 

 

 

 

Waynesville

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stan Johnson

 

 

/S/ James E. Froehlich

 

 

 

Assistant to the Director, District 9

 

 

James E. Froehlich

 

 

 

 

 

 

Director Human Resources-Canton

 

 

 

 

 

 

 

 

 

 

Local Union Negotiating Committee:

 

 

 

 

 

 

 

 

 

/S/ Chuck Grotsky

 

 

 

 

 

 

Chuck Grotsky

 

 

 

/S/ Howard Taylor

 

 

 

Manager HROD-Olmsted Falls, OH

 

 

 

President Local No. 507

 

 

 

 

 

 

 

 

 

/S/ Larry Foster

 

 

 

/S/ Robert Riggs

 

 

 

Larry Foster

 

 

 

President Local No. 673

 

 

Plant Manager-Clinton, IA

 

 

 

 

 

 

 

 

 

 

/S/ Mark Howard

 

 

 

/S/ Jeff Hykin

 

 

 

President Local No. 761

 

 

Jeff Hykin

 

 

 

 

 

 

Plant Manager-Olmsted Falls, OH

 

 

 

/S/ Pat Kitchens

 

 

 

 

 

 

 

President Local No. 794

 

 

/S/ Victor G. Orr

 

 

 

 

 

 

Victor G. Orr

 

 

 

 

 

 

Plant Manager-Athens, GA

 

 

22

--------------------------------------------------------------------------------

Appendix A

AGREEMENT ON PROFIT SHARING

On this 14th day of May 1999, Blue Ridge Paper Products Inc. hereinafter
referred to as the Company, and the USW and its Locals, hereby agree to the
establishment of this Profit Sharing Plan for the purpose of providing profit
sharing contributions by the Company to eligible employees:

1.              Eligibility

Eligible employees are all active employees of Blue Ridge Paper Products Inc.,
including those who retire, die, go on military, pregnancy, union or sick leave,
or are laid off during a Plan Year, who have completed the probationary period
(as set forth under the Collective Bargaining Agreement between the parties) as
of the last day of such Plan Year, and have completed 1,000 or more hours.  Plan
Years end on December 31.

2.              Contribution Formula

The total Profit Sharing Contribution each Plan Year shall be an amount equal to
10% of Profit, as defined in Section 3.

3.              Definition of Profit

Profit means the Company’s reported profit, before income taxes, and before
deductions.

4.              Allocation of Benefits

The total Profit Sharing Contribution shall be divided equally among eligible
employees, as determined under the Eligibility clause.  Eligible employees or
their beneficiaries who retire, die, go on military, pregnancy, union or sick
leave, or are laid off during a Plan Year will receive their applicable profit
sharing check for the Plan Year the event occurs.

5.              Distribution of Benefits

The Company shall pay all Profit Sharing Benefits by separate check within 90
days following the close of the Plan Year.

6.              Audits and Reports

Future changes in the Company’s accounting procedures should not significantly
affect payments under this Plan.  The parties shall meet prior to the
determination of the annual Profit Sharing Contribution to discuss the
adjustments, if any, needed to offset such changes.

23

--------------------------------------------------------------------------------

All computations and adjustments required under this Plan shall be reviewed by
an Auditor, who shall be from an independent Certified Public Accounting firm
that is mutually acceptable to the Company and the Union.  As soon as
practicable after the close of each Plan Year, the Auditor shall provide the
Union with a report on the operation of the Plan.  Such report shall include
information on the adjustments, if any, that are necessary to determine Profits
in Section 3, and other relevant information reflecting Plan experience.  In
addition, the Company shall respond as soon as practicable to requests from the
Union for information supporting the Profit Sharing Contribution calculations. 
The Union shall have access to all financial records for the purpose of
verifying the profit sharing calculations.

If the Union should question a conclusion or decision of the Auditor, the
Auditor shall review its methods and procedures with the Union and will take
into account any new information, which may be developed by such review.

7.              Other Understandings

A.           In the event an otherwise eligible employee dies during a Plan
Year, his/her Profit Sharing Benefit shall be paid to the person designated as
his/her Beneficiary under the Company’s group life insurance plan.

B.             The parties agree to refer any disagreement over the
interpretation of the terms of this Agreement to a mutually acceptable impartial
person or persons for resolution.

8.              Effective Dates and Duration

The Plan will become effective May 14, 1999.  This Agreement and the Plan will
continue in effect until May 13, 2006, and will continue from Plan Year to Plan
Year thereafter unless either party, upon written notice to the other, requests
a modification, change or termination of the Agreement at the end of such yearly
period; provided further, the party requesting such modifications shall, at
least sixty (60) days prior to December 31st, or prior to the completion of any
such subsequent yearly period, as the case may be, serve notice in writing upon
the other party setting forth such changes or modifications so desired, together
with a request that a meeting be held to discuss such proposals, and both
parties shall thereupon arrange such meetings as may be required for the purpose
of negotiating on such proposals.

24

--------------------------------------------------------------------------------

Appendix B

HOURLY RELOCATION GUIDELINES

At the time a Blue Ridge manufacturing location makes a decision to fill an
hourly job position(s) from outside the facility (new hire), the following
guidelines will apply per Article VIII (Seniority), Section I (Transfers), of
the new master Labor Agreement.  Note:  These guidelines are effective for all
current Blue Ridge Paper Products Inc. manufacturing facilities.

1.               When a vacancy occurs, prior to hiring a new employee,
incumbent Blue Ridge employees shall be given an opportunity for transfers
between locations.  It will be the responsibility of the location Human
Resources representatives to notify other Blue Ridge manufacturing facilities of
vacancies utilizing the attached form (A).  This form will be transmitted after
all internal bidding procedures have been utilized at a facility and a decision
has been made to fill the vacancy externally.

2.               “Incumbent Blue Ridge employees,” as used above, includes
current active employees as well as laid off employees so long as they continue
to maintain recall rights under the terms of their location labor agreement.

3.               Although current Blue Ridge incumbent employees shall be
considered prior to hiring from the outside, interested employees are still
subject to the selection criteria (i.e., interview, testing, drug screening,
etc.) in effect at the receiving location.  Whenever possible the selection
process will be coordinated with the interested employee’s current location to
minimize travel (i.e., telephone interview, local testing and/or drug screening,
etc.).  It must also be understood that the receiving location controls the
timing of their vacancies and to be considered the employee must be able and
willing to make themselves available based upon the time constraints of the
receiving location.

4.               If an incumbent employee satisfies the hiring criteria and
accepts an offer of employment at another Blue Ridge facility, they will
establish a new plant seniority date consistent with the date they report for
work at their new location.  Transferring employees will not be subject to the
new hire probationary period at the receiving location.

5.               Transferring employees shall only retain their prior location
seniority for earned vacation and pension.  Their selection of specific vacation
weeks will be in accordance with their new seniority and vacation scheduling
procedures at their new location.

25

--------------------------------------------------------------------------------

6.               Any existing waiting periods for employee benefits will be
waived for a transferring employee and the employee will be immediately eligible
for those benefits in effect at the new location.

7.               A transferring employee will maintain membership in the
international union and will be a member of the local union on the date of
transfer.

26

--------------------------------------------------------------------------------

Appendix C

EMPLOYEE STOCK OWNERSHIP PLAN

Refer to Blue Ridge Paper Products Inc. Employee Stock Ownership Plan
incorporated herein by reference. Copies of the Plan are available from

The Blue Ridge ESOP

41 Main St.

Canton, NC 28716

Attn:  ESOP Coordinator

27

--------------------------------------------------------------------------------

Appendix D

Listing of Side Letter Agreements and MOA’s incorporated in the Master Agreement
by reference.

1. MOA regarding Health Care Program for 2003 and future years, dated November
2. 2002.

2. MOA regarding “Clarification of Article XX “Leave of Absence, Section D.,
“Family Medical Leave”, effective April, 28, 2004.

3. MOA interpreting Article V of the Master Labor Agreement, dated January 20,
2005.

4. Side Letter Agreement dated July 10, 2006 regarding a potential future
Acquisition of or by Blue Ridge Paper Products Inc.

5. Side Letter Agreement dated July 10, 2006 regarding the “Right to Terminate”
the Labor Agreement by the Union upon the occurrence of certain circumstances.

 

28

--------------------------------------------------------------------------------