Exhibit 4.21
                               SEVENTH AMENDMENT

SEVENTH  AMENDMENT  (this  "Amendment"),  dated as of September 30, 1998,  among
American  Pad  &  Paper  Company   ("Holdings"),   WR  Acquisition,   Inc.  ("WR
Acquisition"),  American Pad & Paper Company of Delaware, Inc. (the "Borrower"),
the lending institutions party to the Credit Agreement referred to below (each a
"Bank" and, collectively,  the "Banks"), Bank of Tokyo-Mitsubishi Trust Company,
Bank One Texas,  N.A.,  The Bank of Nova Scotia and The First  National  Bank of
Boston, as Co-Agents (the "Co-Agents"), and Bankers Trust Company, as Agent (the
"Agent").  All  capitalized  terms used herein and not otherwise  defined herein
shall have the respective meanings provided such terms in the Credit Agreement.

                              W I T N E S S E T H:


WHEREAS,  Holdings, WR Acquisition,  the Borrower,  the Banks, the Co-Agents and
the Agent are party to a Credit Agreement, dated as of July 8, 1996 (as amended,
modified and  supplemented  prior to the date hereof,  the "Credit  Agreement");
WHEREAS,  Holdings, WR Acquisition,  the Borrower,  the Banks, the Co-Agents and
the Agent are party to a number of  amendments,  modifications  and  waivers  in
connection with the Credit  Agreement,  including  without  limitation the Third
Amendment,  dated as of February 6, 1998 (the "Third  Amendment");  and WHEREAS,
the Borrower  has  requested  that the Banks  provide the  amendments,  waivers,
consents and agreements provided for herein and the Banks have agreed to provide
such  amendments,  waivers,  consents and agreements on the terms and conditions
set forth herein;

NOW, THEREFORE, it is agreed:
A.       Amendments

1.  Section  3.03(b) of the Credit  Agreement  is hereby  amended to read in its
entirety as follows:

(b) In addition to any other mandatory  commitment  reductions  pursuant to this
Section  3.03 (but subject to the last  sentence of each of Section  3.03(c) and
Section  3.03(g)),  the Total  Revolving  Loan  Commitment  shall be permanently
reduced on the dates set forth  below by the  amounts  set forth  opposite  such
dates below:

     Date                         Amount
     December 31, 1998            $25,000,000
     December 31, 1999            $25,000,000
     July 8, 2000                 $50,000,000


                                       24
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                                                                 Exhibit 4.21

2.  Section  3.03(c) of the Credit  Agreement  is hereby  amended to read in its
entirety as follows:

"(c) In addition to any other mandatory  commitment  reductions pursuant to this
Section 3.03, on the third  Business Day after each date on or after the Initial
Borrowing  Date on  which  Holdings  or any of its  Subsidiaries  receives  Cash
Proceeds from any Asset Sale (or, in the case of an Asset Sale in which payments
to Holdings or any of its Subsidiaries originate from outside the United States,
within five Business Days after the date of receipt of such Cash Proceeds),  the
Total Revolving Loan Commitment shall be permanently  reduced by an amount equal
to 100% of the Net Cash Proceeds from such Asset Sale. Each mandatory  reduction
pursuant to this Section  3.03(c)  shall be applied to reduce  future  scheduled
reductions pursuant to Section 3.03(b) as follows:  (i) first, to reduce in full
the scheduled  reduction on July 8, 2000,  and (ii) second,  in inverse order of
maturity."

3. Section  3.03(d) of the Credit  Agreement  is hereby  amended by deleting the
first  parenthetical  phrase appearing  therein and by inserting in lieu thereof
the following new parenthetical phrase:

"(other than  Indebtedness  permitted to be incurred pursuant to Section 8.04 as
in effect on the Effective Date, except for Indebtedness  incurred under Section
8.04(p) the net cash  proceeds of which will be required to be applied to reduce
the Total Revolving Loan Commitment pursuant to this Section 3.03(d))".

4. Section  3.03(e) of the Credit  Agreement  is hereby  amended by deleting the
reference to "50%" contained therein and inserting "100%" in lieu thereof.

5.  Section  3.03 of the  Credit  Agreement  is hereby  further  amended  by (a)
redesignating clauses (g) and (h) thereof as clauses (h) and (i),  respectively,
and (b) inserting therein immediately following clause (f) thereof the following
new clause (g):

(g) In addition to any other mandatory  commitment  reductions  pursuant to this
Section 3.03, on the 90th day following each fiscal year of Holdings (commencing
with the  fiscal  year  ended  December  31,  1999),  the Total  Revolving  Loan
Commitment  shall be  permanently  reduced by an amount  equal to 100% of Excess
Cash Flow for such  fiscal  year.  Each  mandatory  reduction  pursuant  to this
Section 3.03(g) shall be applied to reduce future scheduled  reductions pursuant
to Section 3.03(b) in inverse order of maturity.

6.  Section  8.02(d) of the Credit  Agreement  is hereby  amended to read in its
entirety as follows:

(d) the Borrower and its  Subsidiaries  may sell assets,  provided  that (x) the
aggregate  sale proceeds from all assets  subject to such sales pursuant to this
clause (d) shall not exceed $10,000,000 in any fiscal year of the Borrower,  (y)
each  such  asset  sale is for at least  85% cash and at fair  market  value (as
determined  in good  faith  by the  Borrower)  and (z)  the  Net  Cash  Proceeds
therefrom are applied to reduce the Total  Revolving Loan Commitment as provided
in Section 3.03(c);.




                                       25
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                                                                 Exhibit 4.21

7.  Section  8.02(e) of the Credit  Agreement  is hereby  amended to read in its
entirety as follows:

"(e) the Borrower and its Subsidiaries may sell other assets, provided, that the
aggregate  sale proceeds  from all such asset sales  pursuant to this clause (e)
are  reinvested  within one year  following  such sale in assets  which,  in the
reasonable  judgment of the Borrower,  are useful to the Borrower's business and
do not exceed $250,000 in any fiscal year of the Borrower;".

8.  Section  8.02(q) of the Credit  Agreement  is hereby  amended to read in its
entirety as follows:

(q) so long as no  Default  or Event of  Default  then  exists  or would  result
therefrom, the Borrower and its Wholly-Owned  Subsidiaries may acquire assets or
the capital stock of any Person (any such  acquisition  permitted by this clause
(q), a (Permitted Acquisition),  provided,  that(i)no such Permitted Acquisition
shall be consummated  without the prior written  consent of the Required  Banks,
(ii) such  Person  (or the  assets so  acquired)was,  immediately  prior to such
acquisition,  engaged(or used) primarily in the business  permitted  pursuant to
Section  8.01(a),(iii)if  such acquisition is structured as a stock acquisition,
then  either(A)the  Person so acquired becomes a Wholly-Owned  Subsidiary of the
Borrower  or  (B)such  Person  is  merged  with  and  into  the  Borrower  or  a
Wholly-Owned  Subsidiary of the  Borrower(with the Borrower or such Wholly-Owned
Subsidiary being the surviving corporation of such merger), and in any case, all
of the  provisions  of Section 8.15 have been  complied  with in respect of such
Person and (iv) any Liens or  Indebtedness  assumed or issued in connection with
such acquisition are otherwise permitted under Section 8.03 or 8.04, as the case
may be.

9.  Section  8.02(u) of the Credit  Agreement  is hereby  amended to read in its
entirety as follows:

"(u) the Permitted Sale-Leaseback Transactions shall be permitted so long as (i)
the Net Cash Proceeds  therefrom are applied to reduce the Total  Revolving Loan
Commitment as provided in Section 3.03(c) and (ii) the lease obligations created
thereby are otherwise permitted under this Agreement;".

10.  Section  8.02 of the  Credit  Agreement  is hereby  further  amended by (a)
deleting the word "and" appearing at the end of clause (x) thereof, (b) deleting
the  period at the end of  clause  (y)  thereof  and  inserting  "; and" in lieu
thereof, and (c) inserting at the end thereof the following new clause (z):

"(z) the Borrower  and its  Subsidiaries  may sell the assets  listed on Annex X
hereto,  in each case  provided that (x) each such sale is for at least 85% cash
and at fair market value (as  determined  in good faith by the Borrower) and (y)
the Net Cash Proceeds  therefrom are applied to reduce the Total  Revolving Loan
Commitment as provided in Section 3.03(c)."




                                       26
<PAGE>

                                                                 Exhibit 4.21

11. Section 8.04(e) of the Credit Agreement is hereby amended by deleting clause
(ii) (B) contained  therein in its entirety and  inserting the following  clause
(ii) (B) in lieu thereof:

"(B)  during  any  fiscal  year of the  Borrower  thereafter  shall  not  exceed
$15,000,000;".

12.  Section  8.04(o) of the Credit  Agreement is hereby  amended to read in its
entirety as follows:

(o) Indebtedness of Holdings  incurred under Permitted  Holdings PIK Securities,
provided that (i) such PermittedHoldings PIK Securities are issued in connection
with and  asconsideration  for a Permitted  Acquisition  and (ii) the  aggregate
outstanding  principal amount of Permitted Holdings PIK Securities  constituting
Indebtedness, when added to the liquidation preference of Permitted Holdings PIK
Securities  constituting preferred stock, shall not exceed $10,000,000 (plus the
amount of interest or accrued  dividends,  as the case may be, on such Permitted
Holdings PIK Securities  paid in kind or through  accretion);  and". 13. Section
8.06(f) of the Credit Agreement is hereby amended by adding the following phrase
at the end thereof:

",  provided,  that no loan  may be made  pursuant  to this  clause  (ii)  after
September 15, 1998".

14.  Section  8.06(i) of the Credit  Agreement is hereby amended by deleting the
reference to  "$2,500,000"  contained  therein and inserting  "$500,000" in lieu
thereof.

15.  Section  8.06(u) of the Credit  Agreement is hereby amended by deleting the
reference to "$7,500,000"  contained  therein and by inserting in lieu thereof a
reference to "$250,000".

16.  Section  8.07(ii) of the Credit  Agreement is hereby amended to read in its
entirety as follows:

"(ii) Intentionally Omitted;".

17. Section  8.07(iii) of the Credit  Agreement is hereby amended to read in its
entirety as follows:

"(iii) Intentionally Omitted;".


                                       27
<PAGE>

                                                                  Exhibit 4.21

18.  Section  8.07(vi) of the Credit  Agreement is hereby amended to read in its
entirety as follows:

"(vi) Intentionally Omitted; and".

19.  Notwithstanding  anything to the contrary  contained in Section 8.08 of the
Credit  Agreement,  neither  Holdings nor any of its  Subsidiaries  may make any
payments pursuant to clause (iii) or (viii) of such Section,  provided that such
amounts  may  accrue  and may be  payable  when the  Credit  Agreement  has been
terminated  and all  Obligations  have  been  paid in  full  or  otherwise  when
permitted to be paid by the Required Banks.

20. Section 8.09(a) of the Credit Agreement is hereby amended by deleting clause
(y) contained therein in its entirety and inserting the following new clause (y)
in lieu thereof:

"(y) the Borrower and its Subsidiaries may make Capital  Expenditures (i) during
the  fiscal  quarter  ended  September  30,  1998,  in an  amount  not to exceed
$3,000,000,  (ii) during the two fiscal  quarter period ended December 31, 1998,
in an amount not to exceed  $8,500,000  (and so long as the aggregate  amount of
Capital  Expenditures  made by the Borrower and its  Subsidiaries in fiscal year
1998 does not exceed  $15,000,000) and (iii) during each fiscal year thereafter,
for the period  from the first day of such fiscal year to the end of each fiscal
quarter  occurring in such fiscal year set forth below (on a cumulative  basis),
in an amount not to exceed the amount set forth  opposite  such  fiscal  quarter
below:

Fiscal Year        Fiscal Quarter Ending               Amount
1999               March 31, 1999                      $ 5,500,000
                   June 30, 1999                       $ 9,500,000
                   September 30, 1999                  $13,500,000
                   December 31, 1999                   $15,000,000
2000               March 31, 2000                      $ 3,750,000
                   June 30, 2000                       $ 7,500,000
                   September 30, 2000                  $11,250,000
                   December 31, 2000                   $15,000,000
2001               March 31, 2001                      $ 3,750,000
                   June 30, 2001                       $ 7,500,000


                                       28
<PAGE>

                                                                 Exhibit 4.21

21.  Section  8.09(b) of the Credit  Agreement is hereby  amended to read in its
entirety as follows:

"(b) Intentionally Omitted."

22.  Section  8.09(c) of the Credit  Agreement is hereby  amended to read in its
entirety as follows:

"(c) Intentionally Omitted."

23. Section 8.09(f) of the Credit Agreement is hereby deleted in its entirety.

24.  Section  8.10 of the  Credit  Agreement  is hereby  amended  to read in its
entirety as follows:

"8.10 Minimum Consolidated EBITDA. (a) The Borrower will not permit Consolidated
EBITDA for any Test Period ending on the last day of a fiscal  quarter set forth
below to be less than the amount set forth opposite such fiscal quarter below:

Fiscal Quarter Ending ..................................   Minimum Consolidated
                                     EBITDA
  September 30, 1998 .........................................   $ 5,500,000
  December 31, 1998 ..........................................   $18,825,000
    March 31, 1999 ...........................................   $24,400,000
     June 30, 1999 ...........................................   $35,200,000
  September 30, 1999 .........................................   $44,800,000
  December 31, 1999 ..........................................   $52,600,000
    March 31, 2000 ...........................................   $53,500,000
    June 30, 2000 ............................................   $55,800,000
  September 30, 2000 .........................................   $61,300,000
  December 30, 2000 ..........................................   $72,400,000
    March 31, 2001 ...........................................   $73,900,000
    June 30, 2001 ............................................   $76,700,000"


                                       29
<PAGE>

                                                                  Exhibit 4.21

(b) The  Borrower  will not permit  Consolidated  EBITDA for the period from and
including  July  1,  1998 to and  including  February  28,  1999  (taken  as one
accounting period) to be less than $22,100,000.

25.  Section  8.11 of the  Credit  Agreement  is hereby  amended  to read in its
entirety as follows:

"8.11  Interest  Coverage  Ratio.  The  Borrower  will not permit  the  Interest
Coverage  Ratio for any Test Period  ending on the last day of a fiscal  quarter
set forth below to be less than the ratio set forth opposite such fiscal quarter
below:

Fiscal Quarter Ending ........................     Interest Coverage Ratio
 September 30, 1998 ..........................           0.45:1.00
  December 31, 1998 ..........................           0.85:1.00
   March 31, 1999 ............................           0.75:1.00
    June 30, 1999 ............................           0.80:1.00
 September 30, 1999 ..........................           1.00:1.00
  December 31, 1999 ..........................           1.20:1.00
   March 31, 2000 ............................           1.25:1.00
    June 30, 2000 ............................           1.25:1.00
 September 30, 2000 ..........................           1.40:1.00
  December 30, 2000 ..........................           1.70:1.00
   March 31, 2001 ............................           1.80:1.00
    June 30, 2001 ............................           1.90:1.00"


26. Section 8.12 of the Credit  Agreement (as amended) is hereby amended to read
in its entirety as follows:

"8.12  Leverage  Ratio.  The Borrower will not permit the Leverage  Ratio at any
time  during a period  set  forth  below to be more  than the  ratio  set  forth
opposite such period below:


                                       30
<PAGE>

                                                                 Exhibit 4.21

                    Period ................................       Leverage Ratio
June 30, 1999 through September 29, 1999 ..................       11.35:1.00
September 30, 1999 through December 30, 1999 ..............       9.00:1.00
December 31, 1999 through March 30, 2000 ..................       6.90:1.00
March 31, 2000 through June 29, 2000 ......................       6.75:1.00
June 30, 2000 through September 29, 2000 ..................       6.50:1.00
September 30, 2000 through December 30, 2000 ..............       5.90:1.00
December 31, 2000 through March 30, 2001 ..................       4.95:1.00
March 31, 2001 through June 29, 2001 ......................       4.30:1.00
Thereafter ................................................       4.15:1.00"


27.  Section  8.13(i) of the Credit  Agreement is hereby  amended to read in its
entirety as follows:

"(i) make (or give any notice in respect of) any  voluntary or optional  payment
or prepayment on or redemption or acquisition  for value of (including,  without
limitation,  by way of depositing  with the trustee with respect  thereto or any
other Person money or securities  before due for the purpose of paying when due)
any Senior Subordinated Note or any Permitted Holdings PIK Security."

28. Section 8 of the Credit  Agreement is hereby amended by inserting at the end
thereof the following new Section 8.16:

"8.16 Quick Ratio.  The Borrower  will not permit the Quick Ratio as of any date
set forth below to be more than the ratio set forth opposite such date below:


                                       31
<PAGE>

                                                                  Exhibit 4.21

                 Date .................................              Quick Ratio
September 30, 1998 ....................................              1.40:1.00
December 31, 1998 .....................................              1.25:1.00
March 31, 1999 ........................................              1.45:1.00
June 30, 1999 .........................................              1.35:1.00
September 30, 1999 ....................................              1.30:1.00
December 31, 1999 .....................................              1.00:1.00
March 31, 2000 ........................................              1.20:1.00
June 30, 2000 .........................................              1.20:1.00
September 30, 2000 ....................................              1.20:1.00
December 31, 2000 .....................................              1.20:1.00
March 31, 2001 ........................................              1.20:1.00
June 30, 2001 .........................................              1.20:1.00"


29. The definitions of "Applicable Base Rate Margin", "Applicable Commitment Fee
Percentage",  "Applicable  Eurodollar Margin" and "Interest  Reduction Discount"
contained in Section 10 of the Credit  Agreement  are hereby  amended to read in
their entirety as follows:

"Applicable  Base Rate Margin" shall mean a percentage per annum equal to 3.00%,
less the then applicable Interest Reduction Discount, if any.

"Applicable  Commitment Fee Percentage"  shall mean a percentage per annum equal
to .50%,  provided,  that from and after any  Start  Date to and  including  the
corresponding  End Date, the Applicable  Commitment Fee Percentage  shall be the
respective  percentage  per annum set forth in clause (A), (B), (C) or (D) below
if,  but  only if,  as of the Test  Date  for  such  Start  Date the  applicable
conditions  set forth in clause (A), (B), (C) or (D) below,  as the case may be,
are met:

(A) .45% if, but only if, as of the Test Date for such  Start Date the  Leverage
Ratio for the Test Period ended on such Test Date shall be less than 3.5:1.0 and
none of the  conditions set forth in clause (B), (C) or (D) below are satisfied;


                                       32
<PAGE>

                                                                 Exhibit 4.21

(B) .40% if, but only if, as of the Test Date for such  Start Date the  Leverage
Ratio for the Test Period ended on such Test Date shall be less than 3.0:1.0 and
neither of the conditions set forth in clause (C) or (D) below,  as the case may
be, are satisfied;

(C) .35% if, but only if, as of the Test Date for such  Start Date the  Leverage
Ratio for the Test Period ended on such Test Date shall be less than 2.5:1.0 and
the condition set forth in clause (D) below is not met; or

(D) .30% if, but only if, as of the Test Date for such  Start Date the  Leverage
Ratio for the Test Period ended on such Test Date shall be less than 2.0:1.0.

Notwithstanding anything to the contrary contained above in this definition, the
Applicable Commitment Fee Percentage shall be .50% at all times (i) prior to the
delivery of the June 30, 1999 financial  statements pursuant to Section 7.01(b),
(ii) when the  Leverage  Ratio  shall be more than  3.50:1.00  and (iii) when an
Event of Default shall exist.

"Applicable Eurodollar Margin" shall mean a percentage per annum equal to 4.00%,
less the then applicable Interest Reduction Discount, if any.

"Interest  Reduction Discount" shall mean zero, provided that from and after the
first day of any Margin Reduction Period (the "Start Date") to and including the
last  day of such  Margin  Reduction  Period  (the  "End  Date"),  the  Interest
Reduction  Discount  shall be the  respective  percentage per annum set forth in
clause (A), (B), (C), (D), (E), (F) or (G) below if, but only if, as of the last
day of the  most  recent  fiscal  quarter  or year,  as the  case may be,  ended
immediately prior to such Start Day (the "Test Date"), the applicable conditions
set forth in clause (A), (B),  (C), (D), (E), (F) or (G) below,  as the case may
be, are met:

(A) .50% if, but only if, as of the Test Date for such Start Date,  the Leverage
Ratio for the Test Period  ended on such Test Date shall be less than  8.00:1.00
and none of the  conditions  set forth in clause (B),  (C), (D), (E), (F) or (G)
below, as the case may be, are satisfied;

(B) 1.00% if, but only if, as of the Test Date for such Start Date, the Leverage
Ratio for the Test Period  ended on such Test Date shall be less than  7.00:1.00
and none of the  conditions set forth in clause (C), (D), (E), (F) or (G) below,
as the case may be, are satisfied;

(C) 1.50% if,  but not only if, as of the Test  Date for such  Start  Date,  the
Leverage  Ratio for the Test  Period  ended on such Test Date shall be less than
6.50:1.00  and none of the  conditions  set forth in clause (D), (E), (F) or (G)
below, as the case may be, are satisfied;

                                       33
<PAGE>

                                                                 Exhibit 4.21

(D) 1.75% if, but only if, as of the Test Date for such Start Date, the Leverage
Ratio for the Test Period  ended on such Test Date shall be less than  6.00:1.00
and none of the  conditions  set forth in clause (E),  (F) or (G) below,  as the
case may be, are satisfied;

(E) 2.00% if, but only if, as of the Test Date for such Start Date, the Leverage
Ratio for the Test Period  ended on such Test Date shall be less than  5.00:1.00
and none of the conditions set forth in clause (F) or (G) below, as the case may
be, are satisfied;

(F) 2.25% if, but only if, as of the Test Date for such Start Date, the Leverage
Ratio for the Test Period  ended on such Test Date shall be less than  4.00:1.00
and the condition set forth in clause (G) below is not satisfied; or

(G) 2.50% if, but only if, as of the Test Date for such Start Date, the Leverage
Ratio for the Test Period ended on such Test Date shall be less than 3.50:1.00.

Notwithstanding  anything  contained  above  in this  definition,  the  Interest
Reduction  Discount  shall be zero at all times (i) prior to the delivery of the
June 30, 1999 financial  statements  pursuant to Section 7.01(b),  (ii) when the
Leverage  Ratio shall be more than  8.00:1.00 and (iii) when an Event of Default
shall exist.

30. The  definition  of  "Consolidated  EBITDA"  contained  in Section 10 of the
Credit Agreement is hereby amended to read in its entirety as follows:

"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT, adjusted by
adding thereto the amount of all depreciation  expense and amortization  expense
that were deducted in determining  Consolidated  EBIT for such period,  it being
understood and agreed,  however,  that  Consolidated  EBITDA shall be determined
without  giving  effect  to any  Restructuring  Charges  otherwise  deducted  in
determining Consolidated EBITDA for such period.

31. The definition of "Cumulative  Income Amount" contained in Section 10 of the
Credit Agreement is hereby deleted in its entirety.

32.  The  definition  of "Test  Period"  contained  in  Section 10 of the Credit
Agreement is hereby amended to read in its entirety as follows:

"Test Period" shall mean the four  consecutive  fiscal  quarters of the Borrower
then last ended (taken as one period),  or, if shorter,  the period from July 1,
1998 to the last day of the fiscal quarter then last ended.

33. The following  new  definitions  are hereby  inserted into Section 10 of the
Credit Agreement in appropriate alphabetical order:


                                       34
<PAGE>

                                                                 Exhibit 4.21

"Consolidated Current Assets" shall mean, at any time, the current assets (other
than cash, Cash  Equivalents and deferred income taxes to the extent included in
current  assets)  of the  Borrower  and  its  Subsidiaries  (including,  without
limitation,  the interest in accounts  receivable  represented by the transferor
certificate  held by the  Receivables  Entity)  at  such  time  determined  on a
consolidated basis.

"Consolidated  Current  Liabilities"  shall  mean,  at  any  time,  the  current
liabilities  of the Borrower and its  Subsidiaries  determined on a consolidated
basis,  but  excluding  deferred  income  taxes and the  current  portion of and
accrued but unpaid  interest on any  Indebtedness  under this  Agreement and any
other long-term Indebtedness which would otherwise be included therein.

"Excess  Cash Flow" shall mean,  for any period (i) the sum of (A)  Consolidated
Net  Income  for  such  period,  plus (B) the  amount  of all  non-cash  charges
(including,  without  limitation  or  duplication,  depreciation,  amortization,
non-cash  interest expense and  Restructuring  Charges)  included in determining
Consolidated  Net Income  for such  period  plus (C) the  decrease,  if any,  in
Working Capital from the first day to the last day of such period (except to the
extent that such  decrease  occurs as a result of an  increase  in the  Accounts
Receivable  Facility),  minus  (ii)  the sum  (without  duplication)  of (A) any
non-cash  credits  (including  from sales of  assets)  included  in  determining
Consolidated  Net Income for such period,  (B) gains from sales of assets (other
than  sales of  inventory  in the  ordinary  course  of  business)  included  in
determining   Consolidated   Net  Income  for  such  period,   (C)  all  Capital
Expenditures  (excluding  Capital  Expenditures made during such period that are
financed by Indebtedness,  including Capitalized Lease Obligations but excluding
Loans hereunder),  (D) the amount expended in respect of Permitted  Acquisitions
during such period,  except to the extent constituting  Capital  Expenditures or
financed  with  Indebtedness,  (E) the aggregate  principal  amount of permanent
principal  payments of  Indebtedness  for borrowed money of the Borrower and its
Subsidiaries  (other  than (1)  repayments  of  Indebtedness  with  proceeds  of
issuance  of  other  Indebtedness  or  with  proceeds  Recovery  Events  and (2)
repayments  of Loans or other  Obligations,  provided  that  repayments of Loans
shall be deducted in determining  Excess Cash Flow if such  repayments  were (x)
required as a result of a mandatory  commitment  reduction under Section 3.03(b)
or (y) made as a voluntary  prepayment with  internally  generated funds (but in
the case of a voluntary  prepayment of Revolving Loans or Swingline Loans,  only
to the extent  accompanied by a voluntary  reduction to the Total Revolving Loan
Commitment))  during such period,  (F) non-cash charges added back in a previous
period  pursuant to clause (i)(B) above to the extent any such charge has become
a cash item in the current period, (G) the increase,  if any, in Working Capital
from the  first  day to the last  day of such  period,  (H)  costs  incurred  by
Holdings  during such period and paid for with the proceeds of dividends paid by
the  Borrower  pursuant  to  Section  8.07(iv)  to the extent  not  deducted  in
determining   Consolidated   Net  Income  for  such  period  and  (I)  any  cash
disbursements made against noncurrent  liabilities (such as transition  reserves
and deferred taxes) to the extent not deducted in determining  Consolidated  Net
Income for such period.

                                       35
<PAGE>

                                                                 Exhibit 4.21

"Restructuring  Charges" shall mean restructuring  charges taken by Holdings and
its  Subsidiaries  relating to plant  rationalization  and  obsolete  inventory,
provided that such  restructuring  charges shall only  constitute  Restructuring
Charges  hereunder  if taken on or after July 1, 1998 and on or before  December
31, 2000, and the aggregate amount of Restructuring Charges shall not exceed (i)
in the case of the plant  rationalization  program,  $13,300,000 and (ii) in the
case of obsolete inventory, $2,900,000.

"Quick  Ratio"  shall  mean,  at any  time,  the ratio of (i)  inventory  of the
Borrower  and its  Subsidiaries  at such time to (ii) the  accounts  payable and
accrued  expenses  (other than  expenses  accrued under  Sections  8.08(iii) and
(viii) of this Agreement) of the Borrower and its Subsidiaries at such time.

"Working  Capital"  shall mean the excess of  Consolidated  Current  Assets (but
excluding therefrom all cash and Cash Equivalents,  and deferred income taxes to
the extent included in current assets) over Consolidated Current Liabilities.

34. The Credit Agreement is hereby further amended by adding thereto a new Annex
X in the form of Annex X attached hereto.

B. Consents, Waivers and Agreement

1.  Section 1(b) of the Third  Amendment  is hereby  amended by (i) deleting the
references to "January 31, 1999" contained therein and inserting  "September 30,
1998" in lieu thereof and (ii) deleting the  references  to  "Scheduled  1/31/99
Reduction"  contained  therein  and  inserting  "Scheduled  September  30,  1998
Reduction" in lieu thereof.

2. The Banks hereby waive  compliance  with Sections 8.10 and 8.11 of the Credit
Agreement  for the Test  Period  ended June 30,  1998.  The Banks  hereby  waive
compliance  with  Section 8.12 of the Credit  Agreement  for the period from and
including July 1, 1998 to but excluding September 30, 1998.

3. The Banks  hereby  agree that  Section  6.03(ii) of the Credit  Agreement  is
deemed amended to exclude from the scope of such  representation and warrant any
conflict that exists between  Section 8.08 of the Credit  Agreement (as modified
by Section A(19) of this  Amendment)  and any  management  or similar  agreement
between  Holdings or any of its  Subsidiaries  and Bain Capital  and/or any Bain
Affiliate.

4. In order to induce  the  Banks to enter  into this  Amendment,  the  Borrower
hereby agrees to pay to each Bank which  executes and delivers a counterpart  of
this Amendment on or before 12:.00 noon (New York time) on September 30, 1998, a
fee equal to 1/4 of 1% of such  Bank's  Revolving  Loan  Commitment  immediately
after giving effect to this Amendment,  such fee to be earned and payable on the
Amendment Effective Date. 

                                       36
<PAGE>
                                                                 Exhibit 4.21

C. Miscellaneous Provisions

1. In order to induce the Banks to enter into this Amendment,  each of Holdings,
WR  Acquisition  and the Borrower  hereby  represents  and warrants  that (i) no
Default  or Event of  Default  exists  as of the  Amendment  Effective  Date (as
defined  below) after giving effect to this  Amendment and (ii) on the Amendment
Effective Date, after giving effect to this Amendment,  all  representations and
warranties  contained in the Credit  Agreement and in the other Credit Documents
are true and correct in all material respects.

2. This Amendment shall become  effective on the date (the "Amendment  Effective
Date") when the Required Banks,  Holdings, WR Acquisition and the Borrower shall
have signed a counterpart  hereof  (whether the same or different  counterparts)
and shall have delivered  (including by way of facsimile  transmission) the same
to the Agent at its Notice Office.

3.  This   Amendment  is  limited  as  specified  and  shall  not  constitute  a
modification,  acceptance  or  waiver  of any  other  provision  of  the  Credit
Agreement or any other Credit Document.

4. This  Amendment  may be  executed  in any number of  counterparts  and by the
different parties hereto on separate  counterparts,  each of which  counterparts
when  executed  and  delivered  shall be an  original,  but all of  which  shall
together constitute one and the same instrument.  A complete set of counterparts
shall be lodged with the Borrower and the Agent.

5. All  references in the Credit  Agreement and each of the Credit  Documents to
the Credit  Agreement shall be deemed to be references to such Credit  Agreement
after giving effect to this Amendment.

6. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES  HEREUNDER SHALL
BE GOVERNED BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW
YORK.
                                                                 * * *

                                       37
<PAGE>

                                                                Exhibit 4.21


IN WITNESS WHEREOF,  each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date hereof.




AMERICAN PAD & PAPER COMPANY



By:
Name:
Title:


WR ACQUISITION, INC.


By:
Name:
Title:


AMERICAN PAD & PAPER COMPANY OF DELAWARE, INC.


By:
Name:
Title:


BANKERS TRUST COMPANY, individually and as Agent


By:
Name:
Title:

                                       38
<PAGE>

                                                                Exhibit 4.21

BANKBOSTON, N.A.


By:
Name:
Title:



BANK LEUMI USA


By:
Name:
Title:


THE BANK OF NEW YORK


By:
Name:
Title:



THE BANK OF NOVA SCOTIA


By:
Name:
Title:



BANK OF SCOTLAND


By:
Name:
Title:

                                       39
<PAGE>

                                                                   Exhibit 4.21

BANK OF TOKYO-MITSUBISHI TRUST COMPANY


By:
Name:
Title:


BANK ONE TEXAS


By:
Name:
Title:


BANK POLSKA KASA OPIEKI, S.A.


By:
Name:
Title:


BEAR, STEARNS & CO. INC.


By:
Name:
Title:


CHASE SECURITIES, INC., as agent for CHASE MANHATTAN BANK


By:
Name:
Title:

                                       40
<PAGE>

                                                                  Exhibit 4.21

CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH


By:
Name:
Title:


By:
Name:
Title:


CIBC INC.



By:
Name:
Title:



ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG


By:
Name:
Title:


FIRST UNION CORP.


By:
Name:
Title:



GUARANTY FEDERAL BANK, F.S.B.



By:
Name:
Title:

                                       41
<PAGE>

                                                                  Exhibit 4.21

NATIONS BANK, N.A.


By:
Name:
Title:


PAM CAPITAL FUNDING,  L.P., by HIGHLAND CAPITAL MANAGEMENT,  L.P., as collateral
manager



By:
Name:
Title:



THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED, NEW YORK BRANCH


By:
Name:
Title:



SANWA BUSINESS CREDIT CORPORATION


By:
Name:
Title:


SOCIETE GENERALE


By:
Name:
Title:


                                       42
<PAGE>