Exhibit 10.3

Packaging Holdings Inc.
c/o Burns, Philp & Company Pty Limited
Level 23, 56 Pitt Street
Sydney NSW 2000
Australia

June 13, 2007

United Steelworkers

Five Gateway Center

Pittsburgh, PA 15222

RE: Acquisition of Blue Ridge by Rank Group Limited.

Ladies and Gentlemen:

The following will confirm our understanding and agreement as to the terms and
conditions of employment that will apply to United Steelworker-represented
(“USW”) bargaining unit employees of Blue Ridge Paper Products (“Blue Ridge”) in
the event that Blue Ridge is acquired (the “Acquisition”) either directly or
indirectly, including through a merger with Packaging Holdings Inc(the
“Company”) by Rank Group Limited.

The Company and the USW agree that if the Acquisition is consummated, then.

1.  The agreements between Blue Ridge and the USW existing as of the today (the
“Current CBAs”) shall remain in effect for their original term, except as
expressly set forth herein.  The Notice of Termination sent by the USW, dated
May 1, 2007, shall be cancelled and the Right to Terminate letter agreement,
dated July 10, 2006, shall be of no further force or effect.

2.  The major pulp and paper making equipment at the Canton facility and the
major equipment at the Waynesville facility will be operated without
interruption and there shall be no involuntary lay-offs of USW-represented
employees as a result of the Acquisition during the term of the Current CBAs
provided, however, that (a) layoffs resulting from the failure to operate said
machines as a result of shutdowns for maintenance or “Acts of God” will not
constitute or result in a violation of this agreement; and (b) layoffs resulting
from changes in market conditions which make certain products or operations
non-competitive will not constitute a violation of this agreement.

3.  The Company may close no more than one of the USW represented, as of this
date, converting facilities during the term of the Current CBAs, unless changes
in market conditions make certain products, operations or facilities
non-competitive, in which event this paragraph will not apply to such products,
operations or facilities.  Any contractual severance obligation will be honored
in the event a facility is closed and such provisions will control unless the
USW

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and the Company agree to other terms at or subsequent to the time of the
announcement of the closure.

4.  Any bargaining unit headcount reductions made possible through the synergies
of the Acquisition will be achieved through attrition.

5.  The disposition of any converting facility, as required by any governmental
agency as a requirement for approval of the contemplated Acquisition will not
constitute a violation of this agreement.

6.  Profit sharing, as defined in the Current CBAs, will be eliminated as of the
effective date of the Acquisition and in lieu thereof the USW represented
employees will receive an additional 2% wage increase in the second year of the
contract and a 1% wage increase in the third year of the contract.

7.  The Company has been advised by Blue Ridge and the USW that Article 31.B. of
the Master Agreement between Blue Ridge and the USW has never been implemented
and is of no force or effect; and for this reason, Article 31.B. is deleted from
the Master Agreement.

8.  Blue Ridge and the USW will cause the ESOP to be terminated as of
immediately following the consummation of the Acquisition, with proceeds to be
distributed in accordance with the terms of the ESOP.

9. In the event of a plant closure or layoff from a former Blue Ridge facility
represented by the USW, the impacted bargaining unit employee(s) will be offered
preferential hire rights to other facilities represented by the USW as provided
on Attachment A to this letter of agreement..

10.  This letter agreement has been duly authorized, executed and delivered by
the parties hereto and is the legal, valid and binding obligation of USW and the
Company, enforceable in accordance with its terms

11. This letter agreement shall be binding upon and inure solely to the benefit
of the parties and their permitted assigns and nothing herein is intended to or
shall confer upon any other person or entity, any right, benefit or remedy of
any nature whatsoever, under or by reason of this Agreement.  USW acknowledges
that this agreement shall be enforceable on behalf of the Company by Rank Group
Limited or any affiliate of Rank Group Limited and/or Blue Ridge (provided that
any enforcement by Blue Ridge prior to the closing of the Acquisition shall
require the consent of Rank Group Limited).

12.  This letter is the complete agreement of the parties concerning the subject
matter hereof and supersedes any prior agreements concerning such subject
matter.

[REMAINER OF PAGE INTENTIONALLY LEFT BLANK]

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Sincerely,

 

 

 

 

 

Packaging Holdings Inc.

 

 

 

 

 

By:

/s/ GREGORY ALAN COLE

 

 

Name: Gregory Alan Cole

 

Title: Vice President

 

 

 

Agree To and Confirmed on behalf of

the United Steelworkers

 

 

/s/ STAN JOHNSON

 

Name: Stan Johnson

Title: Authorized Representative of the United Steelworkers

 

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ATTACHMENT A:  Preferential Hiring

1.  Eligibility.  In the event of a plant closure or layoff from a former Blue
Ridge facility represented by the USW, the impacted bargaining unit employee(s)
will be eligible for preferential hiring opportunities before the Company hires
new employees at other Blue Ridge facilities presented by the USW or Evergreen
Packaging Inc. hires new employees at its facilities represented by the USW,
provided that preferential hiring will not apply to any employee who opted to
retire or otherwise voluntarily sever his or her employment relationship with
the Company upon layoff or complete plant closure.  Preferential hire positions
will not be filled until regular recall is exhausted at the facility requested.

2.  Qualifications.  Preferential hire applicants will not be subjected to
interviews, tests, qualifications or other criteria not required of regular laid
off employees being recalled to similar jobs within the facility in which
preferential hire is desired.  If the preferential hire applicant were qualified
in a similar job in their home facility that applicant will be considered as
qualified for similar jobs in the new facility.

3.  Preferential Hiring List.  The Company will maintain a master list of
preferential hire requests, in order of Company seniority.  Laid-off employees
desiring to place their names on the list shall submit a written request to the
Company, on forms to be provided by the Company and delivered to an address
specified by the Company.  The forms will allow the laid-off employee to
identify which other Blue Ridge facility or facilities represented by the USW at
which the employee desires to be considered for preferential hiring.  Prior to
hiring new employees from the street at any such facility, the Company will 
offer those vacant positions  to laid-off employees listed on the Preferential
Hiring List, with offers made in sequence on the basis of  Company Seniority.

4.  Duration of Preferential Hiring Rights.  Preferential hire rights will be
maintained as long as the individual employee would have retained recall rights
under the terms of the Collective Bargaining Agreement in place at the time of
layoff or plant closure, unless improvements are made in subsequent collective
bargaining agreements.

5.  Retention of Prior Rights.  While awaiting an opportunity for preferential
hire, laid-off  bargaining unit employees who place their names on the
Preferential Hiring List  will retain all rights and privileges at their
original home facility as specified by the applicable  Collective Bargaining
Agreement  If preferential hire is offered and accepted at another facility, the
employee will continue to  retain recall rights to their home facility, if the
home facility remains in operation.

6.  Seniority After Preferential Hiring.  Upon entry in to a different facility
as a result of preferential hire the bargaining unit employee will retain total
company seniority for purposes of vacation, pension, or other contractual rights
specifically allowed within the master contract agreement.  However, the
bargaining unit employee exercising preferential hire will not be able to
utilize their Company Seniority for purposes of shift preference, job bidding,
vacation scheduling or other seniority rights dependent upon seniority normally
held within the specific site or unit; plant seniority will control as to such
rights.

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7.  The specific language incorporating the principles set forth above will be
negotiated in good faith by the parties within the current Collective Bargaining
Agreement(s) by addendum upon closing of the transaction using Appendix “B”
within the current Collective Bargaining Agreement as a template (it being
understood that the terms set forth herein shall be binding until such time as
such addendum is agreed upon).

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