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                                                                   Exhibit 10.29

                                                 EXHIBIT I

                      READ CAREFULLY AND CONSULT WITH YOUR
                            ATTORNEY BEFORE SIGNING

                              RELEASE


         1.  In full consideration of the execution of this Release by Charles 
G. Hanson, III ("CGH"), American Pad & Paper Company (the "Company") will
provide CGH with the consideration and other rights set forth in the letter
agreement (the "Letter Agreement") dated July 8, 1998 to which this Release is
attached as Exhibit I.

         2.  CGH, intending to be legally bound and for and in consideration of 
the benefits described in the Letter Agreement, does for himself his heirs,
executors, administrators, successors and assigns hereby remise, release and
forever discharge the Company, its successors, predecessors, subsidiaries,
affiliates, directors, officers, agents and employees, and all persons,
corporations or other entities who might be claimed to be jointly and severally
liable with them, from any and all actions and causes of action, claims and
demands, suits, damages including back pay, front pay, employee benefits,
bonuses, liquidated damages, attorneys' fees, expenses, debts, dues, accounts,
bonds, covenants, contracts, agreements and compensation whatsoever and from
any claims for retaliation, and from any and all other claims of any nature
whatsoever against the Company, whether known or unknown or whether asserted or
unasserted, including but not limited to claims under the Americans with
Disabilities Act of 1990 (42 U.S.C. Section 12101 et seq.), Title VII of the
Civil Rights Act of 1964 (42 U.S.C. Section 2000e et seq.), the Consolidated
Omnibus Budget Reconciliation Act of 1985 (29 U.S.C. Section 1161 et seq.), and
the Age Discrimination in Employment Act (29 U.S.C. Section 626 et seq.),
claims for breach of contract, discrimination, wrongful discharge, tortious
interference with contract, intentional and negligent infliction of emotional
distress, and any other statutory or common law theories, including any claim
for attorneys' fees and costs, from the beginning of time to the date of the
Letter Agreement, which he or anyone claiming by, through or under him in any
way might have or could claim against the Company; provided that, CGH
specifically does not release and specifically reserves all of his rights with
respect to the following:

         (a)     the Letter Agreement;

         (b)     the Employment Agreement;

         (c)     those certain Stock Option Agreements between CGH and the 
                 Company;

         (d)     that certain Amended and Restated Management Agreement dated 
                 as of December 29, 1992, as amended as of June 6, 1996, 
                 between CGH and the Company;

         (e)     any rights of CGH pursuant to the Company's health and welfare 
                 plans; and


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         (f)     any rights of CGH as to indemnification with regard to any 
                 existing or future litigation involving CGH to the extent such 
                 rights are provided to CGH in the Company's certificate of 
                 incorporation and/or bylaws.

         3.  CGH confirms that he has (a) received adequate notice and election 
forms regarding his and his family's rights to elect COBRA continuation
coverage and he and his family have chosen not to elect such coverage in light
of the benefits provided to he and his family pursuant to paragraph 3 of the
Letter Agreement and (b) had at least twenty-one (21) day to consider whether
or not to sign this Release, it first having been presented to CGH on July 1,
1998.  CGH certifies that he has read the terms of the Letter Agreement and the
Release, that he understands the terms and effects, and that he has signed the
Letter Agreement and the Release voluntarily and knowingly in exchange for the
consideration described in the Letter Agreement, which consideration CGH
acknowledges is in addition to anything to which CGH already is entitled and
which he acknowledges as adequate and satisfactory to him.

         4.  CGH acknowledges that he understands he may revoke his agreement 
to this release if he does so within 7 days of executing it and that this
release is not effective until that 7 day period has expired.

         5.  This Release shall be governed by and construed in accordance with 
the laws of the State of Texas.

         6.  Except as provided herein, each of the provisions of this Release
is intended to be severable.  If any term or provision is held to be invalid,
void or unenforceable by a court of competent jurisdiction for any reason
whatsoever, such ruling shall not effect the remainder of this Release.

         7.  CGH, intending to be legally bound, has voluntarily executed this 
Release with full understanding of the contents hereof and after having had
ample time to review and study the  Letter Agreement and this Release.

         Signed and executed this ____ day of July, 1998.

WITNESS:



    /s                                        /s
------------------------                  --------------------------(SEAL)
                                          CHARLES G. HANSON, III





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