<PAGE>


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                                                                    EXHIBIT 10.2

                                                     GEORGIA-PACIFIC CORPORATION


                              OPERATING AGREEMENT


                                      OF

                          GEORGIA-PACIFIC TISSUE, LLC



                                 Dated As Of:

                                October 4, 1999
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                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page No.
                                                                                --------
<S>                                                                             <C>
ARTICLE I DEFINITIONS AND TERMS................................................   1

  Section 1.1  Certain Definitions.............................................   1
  Section 1.2  Rules of Construction...........................................  11

  ARTICLE II GENERAL MATTERS...................................................  12

  Section 2.1  Formation.......................................................  12
  Section 2.2  Purposes and Business...........................................  12
  Section 2.3  Offices.........................................................  12
  Section 2.4  Name............................................................  13
  Section 2.5  Term............................................................  13
  Section 2.6  Members.........................................................  13

ARTICLE III FINANCIAL AND TAX MATTERS..........................................  13

  Section 3.1  Capital Contributions...........................................  13
  Section 3.2  Loans from Members..............................................  14
  Section 3.3  Restrictions Relating to Capital; Company Property..............  15
  Section 3.4  Tax Treatment...................................................  15
  Section 3.5  Allocation of Profits...........................................  15
  Section 3.6  Allocation of Losses............................................  16
  Section 3.7  Special Allocations.............................................  16
  Section 3.8  Offsetting Special Allocations..................................  18
  Section 3.9  Other Allocation Rules..........................................  18
  Section 3.10 Tax Elections...................................................  19
  Section 3.11 Tax Allocations; Code Section 704(c)............................  19
  Section 3.12 Tax Matters Member..............................................  20
  Section 3.13 Regular Distribution Policy.....................................  20
  Section 3.14 Special Distribution............................................  20
  Section 3.15 Accelerated Gains Tax Liability of WISCO........................  21
  Section 3.16 Sharing of Company Tax Benefits.................................  24
  Section 3.17 Permanent Company Debt..........................................  26

ARTICLE IV MANAGEMENT..........................................................  28

  Section 4.1  General.........................................................  28
  Section 4.2  Board Composition...............................................  28
  Section 4.3  Term; Removal; Vacancies........................................  28
  Section 4.4  Notice; Quorum..................................................  28
  Section 4.5  Voting..........................................................  29
  Section 4.6  Telephonic Meeting; Written Consents............................  30
  Section 4.7  Committees of the Board; Officers...............................  30
  Section 4.8  Execution of Documents..........................................  30
</TABLE>

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<TABLE>
  <S>                                                                            <C>
  Section 4.9   Reliance on Documents and Reports..............................  31
  Section 4.10  Standard of Care; Indemnification..............................  31
  Section 4.11  Member Action..................................................  32
  Section 4.12  Certain Transactions...........................................  32

ARTICLE V ACCOUNTING, BOOKS AND RECORDS........................................  33

  Section 5.1   Fiscal Year....................................................  33
  Section 5.2   Books and Records..............................................  33
  Section 5.3   Auditors.......................................................  33
  Section 5.4   Reporting......................................................  33
  Section 5.5   Banking........................................................  34
  Section 5.6   Tax Return Information.........................................  34
  Section 5.7   Delegation of Responsibility for Accounting and Reports........  34

ARTICLE VI CONFIDENTIALITY.....................................................  34

  Section 6.1   Confidentiality Obligation.....................................  34
  Section 6.2   Exceptions from Confidentiality Obligation.....................  35
  Section 6.3   Employees, Agents and Advisers.................................  36
  Section 6.4   Return of Confidential Information.............................  36
  Section 6.5   Survival After Termination.....................................  37

ARTICLE VII TRANSFER OF UNITS; PUT AND CALL RIGHTS.............................  37

  Section 7.1   General........................................................  37
  Section 7.2   Put and Call Rights............................................  38
  Section 7.3   Member Transfers...............................................  39
  Section 7.4   Retirement.....................................................  39

ARTICLE VIII DISSOLUTION AND WINDING UP; BUY OUT RIGHTS........................  40

  Section 8.1   Dissolution....................................................  40
  Section 8.2   Winding Up.....................................................  40
  Section 8.3   In-Kind Distributions..........................................  41
  Section 8.4   Cancellation of Certificate of Formation.......................  41
  Section 8.5   Buy Out Rights.................................................  41

ARTICLE IX CERTIFICATES EVIDENCING UNITS.......................................  42

  Section 9.1   Certificates...................................................  42
  Section 9.2   Register.......................................................  42
  Section 9.3   New Certificates...............................................  42
  Section 9.4   Interest as a Security.........................................  42
  Section 9.5   Legends........................................................  43

ARTICLE X MISCELLANEOUS........................................................  43

  Section 10.1  Notices........................................................  43
  Section 10.2  Amendment; Waiver..............................................  43
  Section 10.3  Assignment.....................................................  44
  Section 10.4  Entire Agreement...............................................  44
</TABLE>

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<TABLE>
  <S>                                                                            <C>
  Section 10.5  Public Disclosure..............................................  44
  Section 10.6  Parties in Interest............................................  44
  Section 10.7  Governing Law; Submission to Jurisdiction; Selection of Forum..  44
  Section 10.8  Counterparts...................................................  45
  Section 10.9  Severability...................................................  45
  Section 10.10 Equitable Relief...............................................  45
  Section 10.11 No Agency......................................................  45
  Section 10.12 Limitation of Liability........................................  46
  Section 10.13 Non-Exclusive Business.........................................  46
  Section 10.14 Dispute Resolution.............................................  46
</TABLE>

EXHIBIT A     Form of Unit Certificate
SCHEDULE 1    Identification of Members

                                     -iii-
<PAGE>

                              OPERATING AGREEMENT
                                      OF
                          GEORGIA-PACIFIC TISSUE, LLC

          THIS OPERATING AGREEMENT of GEORGIA-PACIFIC TISSUE, LLC, a Delaware
limited liability company (the "Company"), is made and entered into as of
October 4, 1999, among WISCONSIN TISSUE MILLS INC., a Delaware corporation and a
wholly owned subsidiary of Chesapeake Corporation ("WISCO"), GEORGIA-PACIFIC
CORPORATION, a Georgia corporation ("G-P"), and such other Persons that become
Members as herein provided.

                                   RECITALS

          WHEREAS, the Company, G-P, WISCO and certain WISCO Affiliates are
parties to that certain Joint Venture Agreement, dated as of October 4, 1999
(the "Joint Venture Agreement");

          WHEREAS, pursuant to and subject to the terms and conditions of the
Joint Venture Agreement, each of WISCO and G-P will contribute, or cause to be
contributed, to the Company certain assets and liabilities in exchange for
equity interests in the Company;

          WHEREAS, the Members desire to enter into this Agreement, which shall
constitute the limited liability company agreement of the Members under the
Delaware Act, for the purpose of setting forth the agreements of the Members as
to the affairs of the Company and the conduct of its business;

          NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and undertakings contained herein, the parties agree as follows:

                                   ARTICLE I
                             DEFINITIONS AND TERMS

     Section 1.1  Certain Definitions.
                  -------------------

          As used herein, the following terms shall have the meanings set forth
or as referenced below:

          "Adjusted Capital Account Deficit" means, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant Fiscal Year, after giving effect to the following adjustments:

                  (i) Add to such Capital Account any amounts which such Member
is treated as obligated to restore pursuant to Regulations Section 1.704-
1(b)(2)(ii)(c) by virtue of such Member's guarantee or indemnity agreement with
respect to the Company Debt or is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-
2(i)(5); and

                                      -1-
<PAGE>

                  (ii) Subtract from such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-
1(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.

          "Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 3.5(e);

          "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such first Person as of the date on which, or at any time
during the period for which, the determination of affiliation is being made. For
the purpose of this definition, "control" means (i) the direct or indirect
ownership or control of more than 50% of the voting stock or general partnership
interest or other voting interest in any Person, or (ii) the ability to direct
or cause the direction of the management or affairs of a Person, whether through
the direct or indirect ownership of voting interests, by contract or otherwise.

          "Affiliate Member" shall have the meaning set forth in Section 7.3(a).

          "Agreed Value" means the Fair Market Value of Contributed Assets;
provided that the initial Agreed Value of Contributed Assets that a Member is
obligated to transfer, or cause to be transferred, to the Company pursuant to
the Joint Venture Agreement shall be the amount set forth in, or determined
pursuant to, Section 3.1 of this Agreement.

          "Agreement" shall mean this Operating Agreement, including the
schedules and exhibits hereto, as the same may be amended or supplemented from
time to time in accordance with the terms hereof.

          "Ancillary Agreements" shall have the meaning set forth in the Joint
Venture Agreement.

          "Board" means the governance board of the Company consisting of all
Managers or, as may be applicable, any duly appointed committee of the Board.

          "Built In Gain" means, with respect to any Contributed Asset, the
excess of the Fair Market Value of such Contributed Asset on the Closing Date as
determined under Section 3.1(a) over the Company's adjusted basis for federal
income tax purposes in such Contributed Asset immediately following its
contribution to the Company.

          "Business Day" means a day, other than a Saturday or Sunday, on which
banks generally are open in New York City for a full range of business.

          "Call Price" shall have the meaning set forth in Section 7.2(b).

                                      -2-
<PAGE>

          "Capital Account" means, with respect to any Member, the Capital
Account maintained for such Member in accordance with the following provisions:

               (i)   To each Member's Capital Account there shall be added the
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the Company by such Member (or its predecessors in
interest) with respect to the Interest in the Company held by such Member, such
Member's distributive share of Profits and any items in the nature of income or
gain which are specially allocated pursuant to Section 3.7 or Section 3.8, and
the amount of any Company liabilities assumed by such Member or which are
secured by any Company property distributed to such Member.

               (ii)  From each Member's Capital Account there shall be
subtracted the amount of money and the Gross Asset Value of any property
distributed to such Member pursuant to any provision of this Agreement, such
Member's distributive share of Losses and any items in the nature of expense or
loss which are specially allocated pursuant to Section 3.7 or Section 3.8, and
the amount of any liabilities of such Member assumed by the Company or which are
secured by any property contributed by such Member to the Company.

               (iii) In the event all or a portion of an Interest in the Company
is transferred in accordance with the terms of this Agreement, the transferee
shall succeed to the Capital Account of the transferor to the extent it relates
to the transferred Interest.

               (iv)  In determining the amount of any liability for purposes of
subparagraphs (i) and (ii) above, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and Regulations.

          The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations.  In the event the Board shall determine that
it is necessary to modify the manner in which the Capital Accounts, or any
debits or credits thereto (including, without limitation, debits or credits
relating to liabilities which are secured by contributions or distributed
property or which are assumed by the Company or any Member) are computed in
order to comply with such Regulations, the Board may make such modification,
provided that such modification is not likely to have a material adverse effect
on the amounts distributed to any Member upon the dissolution of the Company.
The Board also shall (i) make any adjustments that are necessary or appropriate
to maintain equality between the Capital Accounts of the Members and the amount
of Company capital reflected on the Company's balance sheet, as computed for
book purposes in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and
(ii) make any appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Regulations Section 1.704-
1(b), provided that, to the extent that any such adjustment is inconsistent with
other provisions of this Agreement and would have a material adverse effect on
any Member, such adjustment shall require the consent of such Member.

                                      -3-
<PAGE>

          "Capital Contribution" means, with respect to any Member, the amount
of cash and the Agreed Value of Contributed Assets contributed by such Member to
the Company in accordance with Section 3.1.

          "Cash Balances" means all cash accounts on a balance sheet
representing paper currency and coins, negotiable money orders, checks and bank
balances as well as cash equivalents in the form of highly liquid securities
with a known market value and a maturity, when acquired, of less than three
months.

          "Certificate" means a certificate evidencing Units substantially in
the form of Exhibit A to this Agreement.
            ---------

          "Certificate of Formation" shall have the meaning set forth in Section
2.1.

          "Closing" and "Closing Date" shall have the respective meanings set
forth in the Joint Venture Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor to such statute.

          "Commercial Tissue Business" shall have the meaning set forth in the
Joint Venture Agreement.

          "Company" shall have the meaning set forth in the preamble hereto.

          "Company Business" means the business intended to be carried on by the
Company Group, as described in Section 2.2 hereof.

          "Company Debt" means the debt incurred by the Company on or about the
Closing Date solely to fund the Special Distribution, as further described in
Section 2.8(b) of the Joint Venture Agreement, and refinancing or replacement
therefor (including up to $8 million of related expenses, including legal fees,
accounting fees, printing fees, filing fees, and underwriting fees).

          "Company Group" means the Company and any Subsidiaries of the Company
from time to time.

          "Company Group Affiliate" means any Person that is an Affiliate of the
Company.

          "Company Property" means any and all property of whatsoever nature,
tangible or intangible, real or personal, of the Company Group from time to
time.

          "Confidential Information" shall have the meaning set forth in Section
6.1.

          "Contributed Assets" means the property or other consideration (other
than cash) contributed to the Company in exchange for Units in the Company.

                                      -4-
<PAGE>

          "CPA Firm" means the independent public auditor determined pursuant to
Section 5.3.

          "CSK" means Chesapeake Corporation, a Virginia corporation, of which
WISCO is a wholly-owned subsidiary.

          "CSK Group" means CSK, WISCO, and all other CSK Subsidiaries from time
to time.

          "CSK Group Affiliate" means any Person that is an Affiliate of CSK.

          "Debt" means any liability of the Company (including, without
limitation, liabilities to Members) for borrowed money, or any liability for the
payment of money by the Company in connection with any guarantees, surety
agreements, letters of credit, or other interest bearing liabilities evidenced
by any bond, debenture, note or other similar instrument, excluding any trade
liabilities or any non-interest bearing liabilities or obligations; capital
lease (but not operating lease) liabilities and other liabilities which are in
the nature of financing; and any interest bearing off-balance sheet liabilities
and the net liability of off balance sheet derivative contracts.

          "Delaware Act" means the Delaware Limited Liability Company Act, 6
Del. C. (S)(S) 18-101 et seq., as amended from time to time, and any successor
-------               ------
to such statute.

          "Depreciation" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such Fiscal Year,
except that if the Gross Asset Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such Fiscal Year,
Depreciation shall be determined by the Board in the manner described in
Regulations Section 1.704-1(b)(2)(iv)(g)(3).

          "Distributable Cash" means the amount of cash that the Board
reasonably determines is available for distribution to Members at any applicable
time, taking into account available cash and anticipated cash flow and current
and anticipated expenses of the Company and after setting aside reserves in an
amount reasonably deemed necessary to provide for the Company's planned capital
expenditures, debt service and working capital.

          "EBITDA" means, at any time of determination as specified in this
Agreement, the earnings before interest, taxes, depreciation and amortization of
the Company Group, computed on a consolidated basis in accordance with GAAP
consistently applied, for the four fiscal quarters next preceding such date of
determination, excluding any one time, unusual or extraordinary items (and, if
determined at a time prior to the expiration of four fiscal quarters following
the Closing Date, then such EBITDA shall be deemed to be the EBITDA of the
Company Group for post-Closing completed fiscal quarters of the Company plus
combined EBITDA of the WISCO Business and the G-P Business for such number of
pre-Closing fiscal quarters as, together with the completed fiscal quarters of
the Company, shall equal four (4)).

          "Exercise Notice" shall have the meaning set forth in Section 7.2(c).

                                      -5-
<PAGE>

          "Fair Market Value" means, with respect to property, as of any date of
determination, the price for such property that could be negotiated in an arm's-
length free market transaction, for cash, between a willing seller and a willing
buyer, neither of whom is under pressure or compulsion to complete the
transaction, as of such date of determination, as determined in good faith by
the Board using a reasonable valuation method, which determination must include
the vote or consent of the WISCO Member; provided that if the full Board is
unable to reach such a determination with the vote or consent of the WISCO
Member, the WISCO Member and the G-P Member shall each select an independent and
nationally recognized accounting firm as its representative, and such accounting
firms shall select one independent and nationally recognized investment banking
firm, accounting firm or appraisal company as they deem appropriate and in the
best position to determine the Fair Market Value, whose determination of the
Fair Market Value shall be final and binding.

          "Final Determination" means (i) a decision, judgment, decree or other
order by any court of competent jurisdiction, which binds WISCO or CSK and has
become final and not subject to further appeal, (ii) a closing agreement which
binds WISCO or CSK entered into under Section 7121 of the Code or any other
binding settlement agreement with the Internal Revenue Service entered into in
connection with or in contemplation of an administrative or judicial proceeding,
or (iii) the completion of Internal Revenue Service administrative proceedings
which binds WISCO or CSK and if a judicial contest is not or is no longer
available or, in the sole discretion of WISCO or CSK, is not to be commenced or
continued.

          "Financing Agreements" means any agreement pursuant to which the
Company or any Company Affiliate incurs Debt.

          "Fiscal Year" means the fiscal year of the Company as specified in
5.1.

          "Formula Price" means, at any date of determination, the EBITDA of the
Company less Net Debt as of such date multiplied by 7.38.

          "G-P Books" means any books and records of G-P Related to calculation
of volume, price or cost allocation methodology for purposes of the Ancillary
Agreements.

          "G-P Call" shall have the meaning set forth in Section 7.2(b).

          "G-P Group" means G-P and its Subsidiaries from time to time.

          "G-P Group Affiliate" means any Person that is an Affiliate of G-P.

          "G-P Guarantee" shall have the meaning set forth in Section 3.17.

          "G-P Member" means, collectively if more than one, the G-P Group
Affiliate(s) who from time to time is (are) Member(s) of the Company.

          "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

                                      -6-
<PAGE>

               (i)   The initial Gross Asset Value of any asset contributed by a
Member to Company shall be the Agreed Value of such asset except as otherwise
provided in Section 3.1;

               (ii)  The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross Fair Market Values as of the following
times: (A) the acquisition of an additional Interest in the Company by any new
or existing Member in exchange for more than a de minimis capital contribution;
(B) the distribution by the Company to a Member of more than a de minimis amount
of money or other property as consideration for an Interest in the Company; and
(C) the liquidation of the Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses
(A) and (B) above shall be made only if such adjustments are reasonably
necessary or appropriate to reflect the relative economic interests of the
Members in the Company;

               (iii) The Gross Asset Value of any Company asset distributed to
any Member shall be adjusted to equal the gross Fair Market Value of such asset
on the date of distribution; and

               (iv)  The Gross Asset Values of Company assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulation Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the
definition of "Profits" and "Losses" or Section 3.7(g); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to
the extent the Board makes an adjustment pursuant to subparagraph (ii) that
would otherwise result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraphs (i), (ii), or (iv), such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.

          "Group" means the Company Group, the CSK Group or the G-P Group, or
both, as the context may require.

          "Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, is not the owner of in excess of a 5% Percentage
Interest in the Company and who is not a Member of any such 5% Owner.

          "Indemnitee" shall have the meaning set forth in Section 4.10.

          "Interest" means the ownership interest of a Member in the Company
(which shall be considered personal property for all purposes), consisting of
(i) such Member's interest in profits, losses, allocations and distributions,
(ii) such Member's right to vote or grant or withhold consents with respect to
Company matters as provided herein or in the Delaware Act and (iii) such
Member's other rights and privileges as provided herein or under the Delaware
Act.

                                      -7-
<PAGE>

          "Involuntary Dissolution Event" shall mean any event described in
Section 8.1(d) hereof if no Member filed a motion, petition, or other request
before a court or an administrative agency seeking a dissolution of the Company.

          "Joint Venture Agreement" shall have the meaning set forth in the
recitals hereto.

          "Law" means any federal, state, foreign or local law, constitutional
provision, code, statute, ordinance, rule, regulation, order, judgment or decree
of any governmental authority.

          "Manager" means a person duly elected to the Board pursuant to the
provisions of Section 4.2 or Section 4.3 hereof.  Each Manager shall constitute
a "manager" of the Company as such term is defined in Section 18-101 of the
Delaware Act.

          "Members" mean WISCO and G-P and all other Persons admitted as
additional or substituted Members pursuant to this Agreement, so long as they
remain Members.  Each Member shall constitute a "Member" of the Company, as such
term is defined in Section 18-101 of the Delaware Act.

          "Net Debt" means, at any date of determination, the amount of all Debt
of the Company Group on such date, less all Cash Balances held by or on behalf
of any Company Group Member and less loans made to the Members as of such date.

          "Nonrecourse Deductions" has the meaning set forth in Section 1.704-
2(b)(1) and 1.704-2(c) of the Regulations.

          "Obligations" shall have the meaning set forth in Section 3.17(b).

          "Nonrecourse Liability" has the meaning set forth in Section 1.704-
2(b)(3) of the Regulations.

          "Option Closing" shall have the meaning set forth in Section 7.2(c).

          "Option Right" shall have the meaning set forth in Section 7.2(c).

          "Partner Nonrecourse Debt" has the same meaning as the term "partner
nonrecourse debt" set forth in Section 1.704-2(b)(4) of the Regulations.

          "Partner Nonrecourse Debt Minimum Gain" means an amount, with respect
to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that
would result if such Partner Nonrecourse Debt were treated as a Nonrecourse
Liability, determined in accordance with Section 1.704-2(i)(3) of the
Regulations.

          "Partner Nonrecourse Deductions" has the same meaning as the term
"partner nonrecourse deductions" set forth in Sections 1.704-2(i)(1) and 1.704-
2(i)(2) of the Regulations.

                                      -8-
<PAGE>

          "Partnership Minimum Gain" has the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.

          "Percentage Interests" means the respective proportions in which the
Members hold their Interests in the Company, determined for any Member as of any
date by dividing the number of Units held by such Member on such date by the
total number of Units outstanding and held by all Members as of such date.

          "Permanent Company Debt" shall mean the indebtedness incurred by the
Company to refinance the Company Debt, as further described in Section 3.17
hereof, and shall include, where the context requires, any replacement or
refinancing thereof.

          "Person" shall mean an individual, a corporation, a partnership, an
association, a trust, a limited liability company, a governmental authority or
any other entity or organization.

          "Products" shall have the meaning set forth in Section 10.13(a).

          "Profits" and "Losses" means, for each Fiscal Year, an amount equal to
the Company's taxable income or loss for such Fiscal Year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

               (i)   Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
pursuant to this definition of "Profits" and "Losses" shall be added to such
taxable income or loss;

               (ii)  Any expenditures of the Company described in Code Section
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of "Profits" and
"Losses" shall be subtracted from such taxable income or loss;

               (iii) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraphs (ii) or (iii) of the definition of "Gross
Asset Value," the amount of such adjustment shall be taken into account as gain
or loss from the disposition of such asset for purposes of computing Profits or
Losses;

               (iv)  Gain or loss resulting from any disposition of property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;

               (v)   In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into

                                      -9-
<PAGE>

account Depreciation for such Allocation Year, computed in accordance with the
definition of "Depreciation";

               (vi)  To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in complete liquidation of a Member's Interest, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for purposes
of computing Profits or Losses; and

               (vii) Any items which are specially allocated pursuant to Section
3.7 or Section 3.8 shall not be taken into account in computing Profits or
Losses.

The amounts of the items of Company income, gain, loss or deduction available to
be specially allocated pursuant to Sections 3.7 and 3.8 shall be determined by
applying rules analogous to those set forth in subparagraphs (i) through (vi)
above.

          "Put Price" shall have the meaning set forth in Section 7.2(a).

          "Regulations" means the regulations promulgated by the U.S. Treasury
Department pursuant to the Code.

          "Regulatory Allocations" shall have the meaning set forth in Section
3.8.

          "Special Distribution" shall have the meaning set forth in Section
2.8(b) of the Joint Venture Agreement.

          "Subsidiary" means, with respect to any Person, any corporation,
partnership, association, trust, limited liability company or other legal entity
or organization of which such person, either directly or indirectly or through
or together with any other Subsidiary of such Person, owns more than 50% of the
equity interests.

          "Tax Matters Member" shall have the meaning set forth in Section 3.12.

          "Tax Opinion" means an opinion of CSK's legal counsel or public
accounting firm to the effect that it is substantially more likely than not that
(1) the transfer of the WISCO Business constituted a sale to the Company (in
whole or in part) for federal income tax purposes, or (2) the Special
Distribution is taxable to WISCO in whole or in part.  Such opinion must be
based upon an addition, amendment, or other modification to the Code or the
Regulations, the issuance by the Internal Revenue Service (or any other
administrative agency or authority having jurisdiction over the interpretation,
administration, or enforcement of federal income tax laws) of a ruling, notice,
or other administrative pronouncement, or the issuance or publication of a
decision by a court, in any such event occurring after the Closing but before
the eighth anniversary of the Closing Date.

                                      -10-
<PAGE>

          "Transfer" shall have the meaning set forth in Section 7.1.

          "Units" means the equal proportional units into which Interests in the
Company shall be divided, which term may include fractions of Units as well as
whole Units.  Subject to the Capital Contribution obligations of the Members
hereunder, all Units issued hereunder shall be fully paid and non-assessable.

          "Voluntary Dissolution Event" shall mean any event described in
Section 8.1 hereof other than an Involuntary Dissolution Event.

          "Voluntary Dissolution Event Without WISCO's Consent" shall mean any
Voluntary Dissolution Event which is described in Section 8.1 hereof if the
event occurs without the consent of the WISCO Member.  For this purpose, the
WISCO Member shall be deemed to have consented to (i) any action approved by the
Manager designated by the WISCO Member, (ii) any reduction of the WISCO Member's
(or the CSK Group's) ownership of the outstanding Units below 5% if such
reduction occurs because of an exercise of the WISCO Put, and (iii) the
dissolution of the Company under Section 8.1(d) hereof at the request of the
WISCO Member.

          "WISCO" shall have the meaning set forth in the preamble hereto.

          "WISCO Business" shall have the meaning set forth in the Joint Venture
Agreement.

          "WISCO Indemnity Period" shall have the meaning set forth in Section
3.17.

          "WISCO Manager" shall mean a Manager designated by the WISCO Member.

          "WISCO Member" means, collectively if more than one, the CSK Group
Affiliate(s) which from time to time is (are) Member(s) of the Company.

          "WISCO Put" shall have the meaning set forth in Section 7.2(a).

     Section 1.2  Rules of Construction.
                  ---------------------

          (a)     Words used herein, regardless of the number and gender used,
shall be deemed and construed to include any other number, singular or plural,
and any other gender, masculine, feminine or neuter, as the context requires,
and, as used herein, unless the context requires otherwise, the words "hereof",
"herein", and "hereunder" and words of similar import shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

          (b)     A reference to any statute or statutory provision shall be
construed as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted.

          (c)     The terms "dollars" and "$" shall mean United States dollars.

                                      -11-
<PAGE>

          (d) The term "including" shall be deemed to mean "including without
limitation."

          (e) Article and section headings used in this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.

          (f) This Agreement is among financially sophisticated and
knowledgeable parties and is entered into by the parties in reliance upon the
economic and legal bargains contained herein and shall be interpreted and
construed in a fair and impartial manner without regard to such factors as the
party who prepared, or caused the preparation of, this Agreement or the relative
bargaining power of the parties.

                                  ARTICLE II
                                GENERAL MATTERS

     Section 2.1  Formation.
                  ---------

          The Members have caused the formation of the Company as a Delaware
Limited Liability Company pursuant to the Delaware Act by filing a Certificate
of Formation of the Company (the "Certificate of Formation") with the Delaware
Secretary of State in accordance with the Delaware Act and, in connection
therewith, each Member has contributed $10.00 to the capital of the Company
prior to the date hereof.  The rights and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided in this Agreement.

     Section 2.2  Purposes and Business.
                  ---------------------

          Except as may otherwise be approved by the Board (which approval must
include the affirmative vote or consent of the WISCO Manager), the purpose of
the Company and the Company Group shall be to engage in any lawful business in
any way related to the business of producing, licensing for production and
selling commercial tissue products and related products for the "away from home"
market, on a worldwide basis.  The Company shall have all powers necessary or
desirable to accomplish the aforesaid purposes.  In connection therewith, the
Company may engage in and enter into any and all activities, contracts and
agreements related or incident to the above-stated purposes as the Board may
determine to be appropriate from time to time.  The Company shall have the power
to do all things necessary, appropriate, advisable, convenient, or incidental in
connection with the fulfillment of its business purposes.  The Company shall
not, and shall not permit any of its Subsidiaries to, engage in any other
activity or business except to the extent approved by the Board (which approval
must include the affirmative vote or consent of the WISCO Manager).

     Section 2.3  Offices.
                  -------

          (a)     The principal executive offices of the Company shall be
located at 55 Park Place, Atlanta, Georgia at the offices of G-P or such other
location as determined by the Board from time to time.

                                      -12-
<PAGE>

          (b)     The registered office of the Company in the State of Delaware
is located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The registered agent of the Company for service of process at such
address is The Corporation Trust Company. Such registered office or registered
agent may be changed by the Board from time to time.

     Section 2.4  Name.
                  ----

          The name of the Company shall be Georgia-Pacific Tissue, LLC or such
other name as the Board may from time to time select.

     Section 2.5  Term.
                  ----

          The existence of the Company commenced on the date its Certificate of
Formation was filed with the Secretary of State of the State of Delaware, and
shall continue in perpetuity unless dissolved in accordance with Section 8.1.

     Section 2.6  Members.
                  -------

          The name and business or mailing address of each Member of the Company
are set forth on Schedule 1 to this Agreement.  The Board shall cause Schedule 1
                 ----------                                           ----------
to be amended from time to time to reflect the addition or retirement of
Members, or transfers of Units, in accordance with the terms of this Agreement.
Except in connection with a permitted redemption or transfer of a Member's
entire Interest in accordance with the terms of this Agreement, no Member shall
have the right to retire from the Company prior to the termination of the
Company following dissolution and winding up.

                                  ARTICLE III
                           FINANCIAL AND TAX MATTERS

     Section 3.1  Capital Contributions.
                  ---------------------

          (a)     Simultaneously with the execution of this Agreement, WISCO is
contributing to the Company the WISCO Business, as defined and identified in the
Joint Venture Agreement, with an aggregate agreed value of $775,000,000 in
exchange for 5 Units, which number of Units reflects the Special Distribution.
Specifically, the various categories of assets comprising the Contributed Assets
of WISCO are as follows:

                  Shares of Wisconsin Tissue
                     de Mexico, S.A.
                  Shares of Wisconsin Tissue
                     Management LLC
                  Interest in Alsip Condominium Association
                  Working Capital
                  Land
                  Buildings
                  Equipment

                                      -13-
<PAGE>

                  Inventory
                  Goodwill

For purposes of maintaining the Company's books in accordance with Regulations
Section 1.704-1(b)(2)(iv), the initial Gross Asset Value of each asset within
each of the above categories shall be based on the relative Fair Market Values
of the assets within each category.

          (b)     Simultaneously with the execution of this Agreement, G-P is
contributing to the Company the G-P Contributed Assets, as defined and
identified in the Joint Venture Agreement, with an aggregate agreed value of
$376,400,000 in exchange for 95 Units, which number of Units reflects the
Special Distribution.  Specifically, the various categories of assets comprising
the Contributed Assets of G-P are as follows:

                  Working Capital
                  Land
                  Buildings
                  Equipment
                  Inventory
                  Goodwill

For purposes of maintaining the Company's books in accordance with Regulations
Section 1.704-1(b)(2)(iv), the initial Gross Asset Value of each asset within
each of the above categories shall be based on the relative Fair Market Values
of the assets within each category.

          (c)     Except as may otherwise be unanimously agreed to in writing by
the Members, the Members shall have no right or obligation to make any
additional Capital Contributions to the Company.

          (d)     Unless otherwise unanimously agreed by the Members, any
additional Capital Contributions made by the Members shall be made in accordance
with the Members' respective Percentage Interests, and additional Units shall be
issued in respect of any such additional Capital Contributions pro rata based on
the Members' respective Percentage Interests.

     Section 3.2  Loans from Members.
                  ------------------

          Loans by a Member to the Company shall not be considered Capital
Contributions.  Such loans shall bear interest at arm's length market rates and
may contain other customary commercial terms as agreed by the Company and the
Member; provided, however, that any such loans shall be fully subordinated to
        --------  -------
the Company Debt and the Permanent Company Debt in accordance with terms that
are reasonably acceptable to each Member.  If any Member shall advance funds to
the Company in excess of the amounts required hereunder to be contributed by
such Member to the capital of the Company, such advances shall not increase the
Capital Account of such Member.  The amounts of any such advances shall be a
debt of the Company to such Member and shall be payable or collectible only out
of Company assets in accordance with the terms and conditions upon which such
advances are made.  The repayment

                                      -14-
<PAGE>

of debt owed to a Member upon liquidation of the Company shall be subject to the
order of priority set forth in Section 8.2.

     Section 3.3  Restrictions Relating to Capital; Company Property.
                  --------------------------------------------------

          (a)     Except as otherwise provided herein or by the Delaware Act, no
Member shall have the right to withdraw, or receive any return of, all or a
portion of such Member's Capital Contribution, nor shall any Member have the
right to demand and receive property other than cash in return for its Capital
Contribution, except as provided in Section 8.3(a).

          (b)     No interest shall be paid by the Company on Capital
Contributions or on balances in Members' Capital Accounts.

          (c)     All Company Property, whether contributed by a Member or
otherwise acquired by the Company, shall be owned by the Company as a separate
legal entity and no Member shall have any right of partition with respect to any
Company Property. The Board shall cause the Company to execute, file and record
such documents as may be necessary or appropriate to reflect the Company's
ownership of Company Property in appropriate public offices.

          (d)     No Member shall be liable to the Company or to any other
Member to restore any deficit balance in its Capital Account (except as may be
required by the Delaware Act) or to reimburse any other Member for any portion
of such other Member's investment in the Company. No Member shall have priority
over any other Member, either as to the return of its Capital Contribution or as
to income, losses, interest, returns, or distributions, except for the priority
of the WISCO Member with respect to the Special Distributions and as set forth
in Section 8.3(a).

          (e)     The Company shall not enter into any transaction, other than
the Ancillary Agreements, with any Member or any Affiliate of any Member except
on arms length terms.

     Section 3.4  Tax Treatment.
                  -------------

          It is the intention of the Members that the Company shall be taxed as
a "partnership" for United States federal, state and local income tax purposes,
and, except as otherwise required by law, no Member shall take any action
inconsistent with the classification of the Company as a partnership for U.S.
tax purposes, including any action to cause the Company to be treated as an
association taxable as a corporation for U.S. tax purposes.

     Section 3.5  Allocation of Profits.
                  ---------------------

          After giving effect to the special allocations set forth in Sections
3.7 and 3.8, Profits for any Fiscal Year shall be allocated among the Members in
proportion to their respective Percentage Interests.

                                      -15-
<PAGE>

     Section 3.6  Allocation of Losses.
                  --------------------

          After giving effect to the special allocations set forth in Sections
3.7 and 3.8, Losses for any Fiscal Year shall be allocated as set forth in
Section 3.6(a), subject to the limitation in Section 3.6(b).

          (a)     Losses for any Fiscal Year shall be allocated among the
Members in proportion to their respective Percentage Interests.

          (b)     The Losses allocated pursuant to Section 3.6(a) shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Member to have an Adjusted Capital Account Deficit at the end of any Fiscal
Year. In the event some but not all of the Members would have Adjusted Capital
Account Deficits as a consequence of an allocation of Losses pursuant to Section
3.6(a), the limitation set forth in this Section 3.6(b) shall be applied on a
Member by Member basis so as to allocate the maximum permissible Losses to each
Member under Section 1.704-1(b)(2)(ii)(d) of the Regulations.

     Section 3.7  Special Allocations.
                  -------------------

          The following special allocations shall be made in the following
order:

          (a)     Minimum Gain Chargeback. Except as otherwise provided in
                  -----------------------
Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
this Article III, if there is a net decrease in Partnership Minimum Gain during
any Fiscal Year, each Member shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Member's share of the net decrease in
Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in accordance
with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section
3.7(a) is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(f) of the Regulations and shall be interpreted consistently
therewith.

          (b)     Partner Minimum Gain Chargeback.  Except as otherwise provided
                  -------------------------------
in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision
of this Article III, if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year,
each Member who has a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Company income and gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Member's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with Sections 1.704-
2(i)(4) and 1.704-2(j)(2)

                                      -16-
<PAGE>

of the Regulations.  This Section 3.7(b) is intended to comply with the minimum
gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and
shall be interpreted consistently therewith.

          (c)  Qualified Income Offset.  In the event any Member unexpectedly
               -----------------------
receives any adjustments, allocations, or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5) or Section 1.704-
1(b)(2)(ii)(d)(6) of the Regulations, items of Company income and gain shall be
specially allocated to each such Member in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 3.7(c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Article III have been tentatively made as
if this Section 3.7(c) were not in the Agreement.

          (d)  Gross Income Allocation.  In the event any Member has a deficit
               -----------------------
Capital Account at the end of any Fiscal Year which is in excess of the sum of
(i) the amount such Member is treated as obligated to restore pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c) by virtue of such Partner's guarantee
or indemnity with respect to the Company Debt, and (ii) the amount such Member
is deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be
specially allocated items of Company income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this
Section 3.7(d) shall be made only if and to the extent that such Member would
have a deficit Capital Account in excess of such sum after all other allocations
provided for in this Article III have been made as if Section 3.7(c) and this
Section 3.7(d) were not in the Agreement.

          (e)  Partner Nonrecourse Deductions.  Any Partner Nonrecourse
               ------------------------------
Deductions for any Fiscal Year shall be allocated to the Member who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).

          (f)  Nonrecourse Deductions.  Nonrecourse Deductions for any Fiscal
               ----------------------
Year shall be allocated to the Members in proportion to their respective
Percentage Interests.

          (g)  Section 754 Adjustments.  To the extent an adjustment to the
               -----------------------
adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulations Section 1.704-
1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as the result of a distribution to
a Member in complete liquidation of its interest in the Company, the amount of
such adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Members in accordance with their Interests in the Company in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom
such distribution was made in the event that Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.

                                      -17-
<PAGE>

          (h)     In the event that the Company makes a distribution to WISCO
pursuant to Section 3.15 hereof, then WISCO shall be specially allocated items
of Company income and gain from each Fiscal Year in which such distribution is
made (and, if necessary, subsequent Fiscal Years in the case of distributions
under Section 3.15(a) or (b)) in an amount equal to the total of such
distributions made to WISCO.

     Section 3.8  Offsetting Special Allocations.
                  ------------------------------

          The allocations set forth in Sections 3.6(b), and 3.7(a), (b), (c),
(d), (e), (f), and (g) (the "Regulatory Allocations") are intended to comply
with certain requirements of the Regulations.  It is the intent of the Members
that, to the extent possible, all Regulatory Allocations shall be offset either
with other Regulatory Allocations or with special allocations of other items of
Company income, gain, loss or deduction pursuant to this Section 3.8.
Therefore, notwithstanding any other provision of this Article III (other than
the Regulatory Allocations), the Board shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
Sections 3.5, 3.6(a) and 3.7(h).  In exercising its discretion under this
Section 3.8, the Board shall take into account future Regulatory Allocations
under Sections 3.7(a) and 3.7(b) that, although not yet made, are likely to
offset other Regulatory Allocations previously made under Sections 3.7(e) and
3.7(f).

     Section 3.9  Other Allocation Rules.
                  ----------------------

          (a)     Profits, Losses, and any other items of income, gain, loss or
deduction shall be allocated to the Members pursuant to this Article III as of
the last day of each Fiscal Year; provided that Profits, Losses and such other
items shall also be allocated at such times as the Gross Asset Values of Company
Property are adjusted pursuant to subparagraph (ii) of the definition of Gross
Asset Value.

          (b)     For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall
be determined on a daily, monthly, or other basis, as determined by the Board
using any permissible method under Code Section 706 and the Regulations
thereunder.

          (c)     All allocations to the Members pursuant to this Article III
shall, except as otherwise provided, be divided among them in proportion to
their respective Percentage Interests.

          (d)     The Members are aware of the income tax consequences of the
allocations made by this Article III and hereby agree to be bound by the
provisions of this Article III in reporting their shares of Company income and
loss for income tax purposes, except to the extent otherwise required by law.

          (e)     Solely for purposes of determining a Member's proportionate
share of the "excess nonrecourse liabilities" of the Company within the meaning
of Regulations

                                      -18-
<PAGE>

Section 1.752-3(a)(3), the Members' interests in Company profits are in
proportion to their Percentage Interests.

          (f)      To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the Board shall endeavor to treat distributions as having been made
from the proceeds of a Nonrecourse Liability or a Partner Nonrecourse Debt only
to the extent that such distributions would cause or increase an Adjusted
Capital Account Deficit for any Member.

     Section 3.10  Tax Elections.
                   -------------

          The Company shall make the following elections on the appropriate tax
returns:

          (a)      to adopt the accrual method of accounting, if permitted by
the Code, and to keep the Company's books and records in a manner consistent
therewith;

          (b)      to elect to amortize the organizational expenses and the
start-up expenditures of the Company ratably over a period of sixty (60) months
as permitted by Sections 709(b) and 195(b) of the Code;

          (c)      if so requested by any Member, an election under Section 754
of the Code to adjust the basis of the Company's property in the circumstances
described therein; and

          (d)      any other election not inconsistent with this Agreement or
the Joint Venture Agreement that the Tax Matters Member may deem appropriate and
in the best interests of the Members.

Neither the Company nor any Member may make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law.

     Section 3.11  Tax Allocations; Code Section 704(c).
                   ------------------------------------

          In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss, and deduction with respect to any Contributed Asset shall,
solely for tax purposes, be allocated among the Members so as to take account of
any variation between the adjusted basis of such Contributed Asset to the
Company for federal income tax purposes and its initial Gross Asset Value
(computed in accordance with subparagraph (i) of the definition of "Gross Asset
Value").

          In addition, in the event the Gross Asset Value of any Company asset
is adjusted pursuant to subparagraph (ii) of the definition of the "Gross Asset
Value," subsequent allocations of income, gain, loss, and deduction with respect
to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder.

          The Company shall adopt and use only the "traditional method"
permitted by the Regulations under Code Section 704(c), and therefore shall not
make any curative allocations

                                      -19-
<PAGE>

and/or remedial allocations. Allocations pursuant to this Section 3.11 are
solely for purposes of federal, state, and local taxes and shall not affect, or
in any way be taken into account in computing, any Member's Capital Account or
share of Profits, Losses, other items, or distributions pursuant to any
provision of this Agreement.

     Except as otherwise provided in this Agreement, all items of Company
income, gain, loss, deduction, and any other allocations not otherwise provided
for shall be divided among the Members in the same proportions as the Percentage
Interest for the Fiscal Year.

     Section 3.12  Tax Matters Member.
                   ------------------

          The Member having the highest Percentage Interest shall be the tax
matters partner (the "Tax Matters Member") of the Company pursuant to Section
6231(a)(7) of the Code.  Such Member shall take such action as may be necessary
to cause each other Member to become a notice partner within the meaning of
Section 6223 of the Code.  Such Member shall inform each other Member of all
significant matters that may come to its attention in its capacity as Tax
Matters Member by giving prompt notice thereof.  The Company agrees to defend,
indemnify and hold harmless the Tax Matters Member from and against all claims
and damages relating to actions taken in good faith in discharging its
responsibilities as Tax Matters Member.

     Section 3.13  Regular Distribution Policy.
                   ---------------------------

          (a)      The Board shall determine from time to time, in its complete
discretion whether and to what extent the Company shall distribute any portion
of available Distributable Cash to Members; provided, however, that aside from
the Special Distribution, distributions declared or made on or before January 1,
2002 shall not exceed the Company's "net cash flow from operations" as
determined under Section 1.707-4(b), unless unanimously approved by the Members.
All funds distributed to the Members pursuant to this Section 3.12 shall be
distributed to them in accordance with their respective Percentage Interests.

          (b)      Subject to Section 8.3 hereof, to the extent that the Board
approves any distribution that consists of property of a type or in a form other
than cash, the types and forms of such property shall be allocated in an
equitable manner among the Members entitled thereto, such that each Member
shall, except for immaterial variances, receive the same type or form of
property.

          (c)      Any distributions to be made by the Company shall be made
only to the extent permitted by the Company Debt and any other Financing
Agreements to which any Company Group Affiliate is a party and only if and to
the extent permitted by applicable Law (including, without limitation, Sections
18-607 and 18-804 of the Delaware Act).

     Section 3.14  Special Distribution.
                   --------------------

          Simultaneous with the Closing, the Company shall use the net proceeds
of the Company Debt (after deducting borrowing expenses) to make the Special
Distribution to the WISCO Member in an amount that will result in the WISCO
Member's Percentage Interest

                                      -20-
<PAGE>

equaling 5%. The amount of the Special Distribution shall be determined in
accordance with Section 2.1(b) of the Joint Venture Agreement.

     Section 3.15  Accelerated Gains Tax Liability of WISCO.
                   ----------------------------------------

          (a)      If (on one or more occasions) prior to the tenth anniversary
of the Closing Date, the Company sells or otherwise disposes of all or any part
of the WISCO Contributed Assets, and if WISCO therefore incurs and pays (either
directly or as an offset against a tax refund or overpayment of tax) federal
and/or state income tax liabilities (on a cumulative basis, taking into account
all such sales or other dispositions) exceeding $22 million as a result of the
allocation to it of income or gain(s) recognized by the Company from such sales
or dispositions (up to the total Built In Gain with respect to the WISCO
Contributed Assets sold or disposed of, determined by assuming, absent a Final
Determination or receipt by CSK of a Tax Opinion, that no income or gain is
recognized by WISCO on the transfer of such assets to the Company), then the
Company shall distribute to WISCO (after each such occasion and within 10 days
after WISCO has demonstrated to the Company's reasonable satisfaction the
appropriate amount to be distributed) an amount of money equal to the actual
amount, if any, of WISCO's total federal and state income tax liability in
excess of $22 million resulting from the allocation to it of income or gain so
recognized by the Company. No distribution to WISCO under this Section 3.15(a),
however, shall be made with respect to the Company's sale of inventory, the
collection or disposition of accounts receivable, or the retirement of other
assets in the ordinary course of operating the WISCO Business (it being
understood that the disposition or partial liquidation of a manufacturing
facility or of any stock or other equity interest in any WISCO Contributed
Subsidiary shall not be considered to be a transaction in the ordinary course of
business) regardless of whether the $22 million limit otherwise has been
exceeded.

          (b)      (i) Subject to the compliance of WISCO with its obligations
under clause (ii) of this Section 3.15(b), if (on one or more occasions) the
Company or G-P (other than satisfying its obligations under the G-P Guarantee)
pays all or any part of the principal amount of the Permanent Company Debt prior
to the thirtieth (30th) anniversary of the Closing Date, or if the Company takes
any action prior to such thirtieth (30th) anniversary that would result in a
reduction, after the funding of the Permanent Company Debt, of the portion of
such debt for which WISCO "bears the economic risk of loss" within the meaning
of Section 1.752-2 of the Regulations, then the Company shall distribute to
WISCO (after each such occasion and within 10 days after WISCO has demonstrated
to the Company's reasonable satisfaction the appropriate amount to be
distributed) an amount of money equal to the actual increase, if any, in WISCO's
total federal and state income tax liability incurred and paid by WISCO (either
directly or as an offset against a tax refund or overpayment of tax) as a result
of such payment or other action by the Company. Similar principles shall apply
if the Company repays the principal amount of the Company Debt other than by
replacing such debt with the Permanent Company Debt as provided in Section 3.17
hereof. WISCO has determined that it "bears the economic risk of loss" within
such meaning for the Company Debt up to the amount of the Special Distribution
as of the Closing Date and acknowledges that it will need to make a similar
determination with respect to the Permanent Company Debt, and the Members
acknowledge that no distribution will be made pursuant to this Section 3.15(b)
to compensate WISCO for any tax liability attributable to the incorrectness of
WISCO's determinations.

                                      -21-
<PAGE>

               (ii)  The Members acknowledge that the Company shall replace the
Company Debt and may replace the Permanent Company Debt from time to time with
other indebtedness so long as (x) such replacement does not result in a
reduction in the total amount of Company indebtedness for which WISCO "bears the
economic risk of loss," (y) such indebtedness is on terms that are no less
favorable to the Company (taking into account the Company's credit rating) than
prevailing terms in the credit markets in all material respects at the time such
indebtedness is incurred, and (z) the Company shall have provided notice to
WISCO of the terms of such indebtedness as soon after agreeing to such terms as
is reasonably practicable.  WISCO hereby agrees to cooperate to the extent
reasonably required to facilitate such one or more refinancings, including but
not limited to, executing agreements (in form and substance reasonably
satisfactory to WISCO) necessary for it to "bear the economic risk of loss" for
such replacement indebtedness in an amount not less than the Special
Distribution.  In such event, any such replacement indebtedness (and any and all
subsequent replacement indebtedness) shall be treated as Permanent Company Debt
for purposes of this Section 3.15(b).

          (c)  For the avoidance of doubt, the Members acknowledge that no
distribution will be made pursuant to this Section 3.15 as a result of the
exercise of the WISCO Put, nor shall any distribution be made pursuant to this
Section 3.15 to compensate WISCO for any tax liability resulting from any
treatment of the contribution of the WISCO Contributed Assets to the Company as
a sale in whole or in part for federal and/or state income tax purposes (such
treatment being evidenced by a Final Determination or by a Tax Opinion).  In
making any determination of the appropriate amount to be distributed pursuant to
this Section 3.15, any effect on WISCO's taxable income and/or gain resulting
from any distribution made to WISCO pursuant to this Section 3.15, or from any
corresponding special allocation of income under Section 3.7(h), shall be
disregarded.

          (d)  If G-P purchases WISCO's Interest in the Company pursuant to
Section 7.2(b) hereof, or if a Voluntary Dissolution Event Without WISCO's
Consent occurs, then the Company shall distribute to WISCO an amount of money
equal to the lesser of the following two amounts: (i) the amount of federal and
             ------
state income tax liability that WISCO actually incurred and paid (either
directly or as an offset against a tax refund or overpayment of tax) as a result
of the income and/or gain it recognized on the sale of its Interest to G-P (or
an Affiliate of G-P) pursuant to Section 7.2(b) or Section 8.5(b) hereof, or
upon the receipt of distributions in liquidation of its Interest pursuant to
Section 8.2 hereof, or (ii) the amount of federal and state income tax liability
that WISCO would have incurred on the sale of its Interest to G-P (or an
Affiliate of G-P), or upon the receipt of distributions in liquidation of its
Interest, if the income or gain recognized from such sale or liquidation were an
amount equal to the excess of (x) the aggregate Built In Gain in all of the
WISCO Contributed Assets over (y) any such Built In Gain previously recognized
by WISCO.  For purposes of clause (y) of the preceding sentence, the following
items shall be treated as recognized Built In Gain: (1) any gain actually
recognized by WISCO from action taken by the Company with respect to the Company
Debt if such action would give rise to a distribution obligation under Section
3.15(b) and (2) any Built In Gain in WISCO Contributed Assets consisting of
inventory or accounts receivable (whether or not recognized).  For purposes of
this Section 3.15(d), in computing the amount of income and/or

                                      -22-
<PAGE>

gain recognized by WISCO on the sale its Interest pursuant to Section 7.2(b) or
Section 8.5(b) hereof, or upon the receipt of distributions in liquidation of
its Interest pursuant to Section 8.2 hereof, there shall be included in the
amount realized by WISCO the entire amount of Company Debt (including for this
purpose the Permanent Company Debt) for which WISCO "bears the economic risk of
loss" within the meaning of Section 1.752-2 of the Regulations immediately
before such sale or liquidation, regardless of whether the indemnity agreement
or other arrangement causing WISCO to "bear the economic risk of loss" remains
in effect after such sale or liquidation. The Company shall distribute to WISCO
the amount determined in this Section 3.15(d) within 10 days after WISCO has
demonstrated to the Company's reasonable satisfaction the amount to be
distributed. If, following a Voluntary Dissolution Event Without WISCO's
Consent, the Company does not have sufficient funds to make the distribution to
WISCO required under this Section 3.15(d), G-P shall pay WISCO the amount of any
shortfall.

          (e) If any distribution to WISCO pursuant to this Section 3.15 is
smaller than it otherwise would have been because the event triggering the
Company's obligation to make the distribution reduced, eliminated, or prevented
the creation of or addition to a net operating loss carryover, capital loss
carryover, tax credit carryover, or other tax attribute of WISCO (collectively,
a "WISCO Tax Attribute"), then the Company shall distribute to WISCO (within 10
days after WISCO has demonstrated to the Company's reasonable satisfaction the
amount to be distributed) an amount equal to any actual increase in WISCO's
federal and state income tax liability in one or more prior or subsequent
taxable years of WISCO, but only to the extent that such increased liability is
attributable to the decrease in such WISCO Tax Attribute.

          (f) Upon the occurrence of an event requiring a distribution to WISCO
under Section 3.15(b) or (d), the amount of such distribution shall be increased
pursuant to this Section 3.15(f) if WISCO has theretofore incurred and paid
(either directly or as an offset against a tax refund or overpayment of tax),
and has not been indemnified by the Company pursuant to Section 3.15(a) (due to
the $22 million limit), federal and/or state income tax liabilities resulting
from the allocation to WISCO of Built In Gain in the WISCO Contributed Assets
upon the Company's sale or other disposition of all or any part of such assets.
The amount of the increased distribution, if any, under this Section 3.15(f)
shall be determined by multiplying (i) the federal and/or state income tax
liabilities actually incurred and paid by WISCO (either directly or as an offset
against a tax refund or overpayment of tax) from asset sales or other
dispositions by the Company to the extent that such liabilities were not
indemnified by the Company under Section 3.15(a) by reason of the $22 million
limit times (ii) the "Built In Gain Percentage."  For purposes of this Section
      -----
3.15(f), the "Built In Gain Percentage" in the case of a distribution to WISCO
pursuant to Section 3.15(b) is the percentage obtained by dividing (i) the
income or gain actually recognized by WISCO from action taken by the Company
with respect to the Company Debt or the Permanent Company Debt if such action
would give rise to a distribution obligation under Section 3.15(b) by (ii) the
aggregate Built In Gain in all of the WISCO Contributed Assets.  In the case of
a distribution to WISCO pursuant to Section 3.15(d), the "Built In Gain
Percentage" is 100%.

          (h) Notwithstanding anything to the contrary in this Section 3.15, no
distribution shall be made to WISCO pursuant to this Section 3.15 prior to the
day after the

                                      -23-
<PAGE>

second anniversary of the Closing Date. If a distribution otherwise would have
been due to WISCO under this Section 3.15 before the second anniversary of the
Closing Date, the amount of the distribution shall be increased by an amount
computed like interest at the prime rate published in the "Money Rates" table
(or any successor thereto) of The Wall Street Journal from time to time from the
date such distribution otherwise would have been due.

          (i)      For purposes of applying this Section 3.15, the Company's
adjusted basis for federal and state income tax purposes in the stock of
Wisconsin Tissue de Mexico, S.A. de C.V. immediately after the contribution of
such stock to the Company shall be increased by the amount of any intercompany
loss with respect to such stock recognized by the CSK Group as a result of the
contribution. WISCO shall inform the Company of the amount of any such
recognized loss on or before September 15, 2000, and shall inform the Company of
any adjustments to the amount of such recognized loss promptly after any such
adjustment is made (whether by the CSK Group or by the Internal Revenue
Service).

     Section 3.16  Sharing of Company Tax Benefits.
                   -------------------------------

          (a)      (i)  The Members believe that the contribution of the WISCO
Business constitutes a nonrecognition transaction pursuant to Section 721(a) of
the Code, and the Members and the Company shall report and otherwise treat the
transfer of the WISCO Contributed Assets to the Company as solely a
nonrecognition transaction pursuant to Section 721(a) of the Code on all
relevant tax returns and reports unless there is a Final Determination to the
contrary or CSK receives a Tax Opinion to the contrary.  In addition, unless
there is a Final Determination to the contrary or CSK receives a Tax Opinion to
the contrary, the Members and the Company agree to treat any excess of the
Special Distribution over WISCO's "allocable share" of the Company Debt (within
the meaning of Regulations Section 1.707-5(b)), and any excess of the Special
Distribution over WISCO's "allocable share" of the Permanent Company Debt
(within the meaning of Regulations Section 1.707-5(b)), as reimbursements of
capital expenditures incurred by WISCO with respect to the WISCO Contributed
Assets during the two-year period prior to the Closing Date to the extent
permitted by Regulations Section 1.707-4(d).  If CSK receives a Tax Opinion or,
prior to the eighth anniversary of the Closing Date, there is a Final
Determination that the transfer of the WISCO Business to the Company constituted
a sale to the Company (in whole or in part) for federal income tax purposes,
then WISCO and G-P shall jointly determine the change in the Company's adjusted
basis for federal income tax purposes in the WISCO Contributed Assets (such
change being referred to herein as the "Sale Step-Up").

                   (ii) If the Company is dissolved because of an Involuntary
Dissolution Event and WISCO recognizes taxable income and/or gain resulting from
the receipt of liquidating distributions pursuant to Section 8.2 hereof or upon
the sale of its Interest pursuant to Section 8.5 hereof, then WISCO and G-P
shall jointly determine the change, if any, in the Company's (or G-P's) adjusted
basis for federal income tax purposes in the WISCO Contributed Assets (such
change being referred to herein as the "Involuntary Dissolution Step-Up," and
together with the Sale Step-Up, the "Step-Up").

                                      -24-
<PAGE>

          (b)  Within 10 days after G-P or an Affiliate of G-P files any federal
or state income tax return (including for this purpose any amended return or
claim for refund) with the Internal Revenue Service or the applicable state
income tax authority, G-P shall pay to WISCO an amount equal to one-half of the
net income tax benefit to G-P or the Affiliate reflected on such return to the
extent that such benefit is attributable to the Step-Up.  In the case of any tax
return described in the preceding sentence in which a net operating loss or a
net capital loss is reported, the net income tax benefit attributable to the
Step-Up shall be determined as if each deduction or recognized loss of G-P (or
its Affiliate) claimed on such return were used in proportion to (i) the total
amount of deductions or losses claimed on such return before creating any net
operating loss or net capital loss, divided by (ii) the total amount of
deductions or losses claimed on such return (taking into account the amount of
deductions and losses resulting in a net operating loss or net capital loss for
the year).  Any deduction resulting from a net operating loss carryover, and any
net capital loss carryover used to offset a recognized capital gain, shall be
treated as a deduction or loss attributable to the Step-Up in proportion to a
fraction, the numerator of which is any portion of a deduction or loss
attributable to the Step-Up that is deemed not to have been used previously and
the denominator of which is the total amount of the deduction resulting from the
net operating loss carryover or, as the case may be, the total amount of the
capital loss carryover that is used to offset a recognized capital gain.  To the
extent that G-P or its Affiliate receives (either directly or as an offset
against a liability) a payment of interest or realizes a reduction in interest
expense as a result of filing a tax return described in the first sentence of
this Section 3.16(b), G-P shall pay to WISCO an amount computed in the same
manner as such interest on the amount described in such sentence.

          (c)  If CSK receives a Tax Opinion or, prior to the eighth anniversary
of the Closing Date, there is a Final Determination that the transfer of the
WISCO Business to the Company constituted a sale to the Company (in whole or in
part) for federal income tax purposes, and the WISCO Put is exercised in full
following receipt of such Tax Opinion or such Final Determination, G-P shall
continue to make payments to WISCO pursuant to Section 3.16(b) hereof until the
net income tax benefit attributable to the Step-Up is exhausted.  If, however,
WISCO exercises the WISCO Put (in whole or in part) prior to CSK's receipt of a
Tax Opinion or prior to a Final Determination that the transfer of the WISCO
Business to the Company constituted a sale to the Company (in whole or in part)
for federal income tax purposes, G-P's payment obligation under Section 3.16(b)
shall not apply to any income tax deductions or losses attributable to the Step-
Up which are claimed in any taxable year (or portion thereof, determined by pro
rating the number of days in such taxable year) of G-P (or its Affiliate) that
occurs after the first such exercise of the WISCO Put.

          (d)  If G-P makes a payment to WISCO under this Section 3.16 and if
WISCO and G-P jointly determine that there should have been no change in the
basis of assets or that the change was more or less than the amount they
originally determined, then (i) the amount of G-P's income tax savings
previously determined shall be redetermined to reflect the correct change (or no
change) in the basis of assets, and (ii) WISCO shall refund to G-P or G-P shall
pay to WISCO, as appropriate, the difference between the total amount previously
paid by G-P to WISCO under this Section 3.16 and the total amount that should
have been paid based on the redetermined tax savings.  To facilitate the
application of this Section 3.16(d), each party shall

                                      -25-
<PAGE>

promptly notify the other of any event (of which the party becomes aware) that
the party believes likely would give rise to a redetermination under this
Section 3.16(d).

     Section 3.17  Permanent Company Debt.
                   ----------------------

          The Company shall refinance the Company Debt (in accordance with
Section 3.15(b)(ii)) with new non-amortizing indebtedness that remains
outstanding for an aggregate term (taking into account the initial refinancing
and any subsequent refinancings) of 30 years from the maturity date of the
Company Debt (the "Permanent Company Debt"). The principal amount of the
Permanent Company Debt shall be equal to the Company Debt plus an amount of
expenses incurred in obtaining the Permanent Company Debt (including any
refinancings thereof) that does not exceed the difference between (i) $8,000,000
in the aggregate and (ii) the amount of any borrowing expenses that were
incurred to obtain the Company Debt and added to the principal amount thereof.
After deducting such expenses, the net proceeds of the Permanent Company Debt
shall be used solely to repay in full the principal amount of the Company Debt
(or, in the case of refinancings of Permanent Company Debt, such refinanced
Debt). In accordance with Section 3.15(b)(ii), WISCO hereby agrees to cooperate
to the extent reasonably required to facilitate the obtaining of the Permanent
Company Debt, including but not limited to, executing agreements (in form and
substance reasonably satisfactory to WISCO) necessary for it to "bear the
economic risk of loss" for such debt in an amount not less than the Special
Distribution. The Company agrees that the Permanent Company Debt shall be issued
pursuant to an indenture or credit agreement that contains covenants that are
substantially similar to those contained in the G-P Member's public bond
indenture dated March 1, 1983, from G-P to Chase Manhattan Bank National
Association, as trustee, a copy of which has been provided to the WISCO Member.
Further, the G-P Member shall fully and unconditionally guarantee all
refinancings of the Company Debt or Permanent Company Debt (such guarantee to be
in substance sufficient for G-P to bear the "economic risk of loss" for such
Debt, but for the WISCO Debt Indemnity (the "G-P Guarantee")), subject to an
indemnity from WISCO on substantially the same terms as the WISCO Debt
Indemnity.

          In addition, at all times that WISCO is subject to any continuing
liability under a WISCO debt indemnity (the "WISCO Indemnity Period"), the
Company agrees (and each of the G-P Member and WISCO Member agrees to cause the
Company) to abide by the following covenants:

          (a)      Notwithstanding Section 3.13 hereof, in the event the Company
or any of its Subsidiaries sells any assets (other than sales of inventory in
the ordinary course of its business) or incurs any indebtedness in addition to
the Permanent Company Debt, the proceeds of such sales or borrowings may not be
distributed to Members, or loaned or contributed to any Person (including,
without limitation, Subsidiaries of the Company); provided, however, that the
                                                  --------  -------
Company or any of its Subsidiaries shall be permitted to lend such proceeds to
G-P or a Subsidiary of the Company (such loan to be evidenced by a G-P note or
Company Subsidiary note, as the case may be, that is not subordinated to G-P's
or such Company Subsidiary's, as the case may be, other senior unsecured debt).

                                      -26-
<PAGE>

          (b)  Neither the Company nor any of its Subsidiaries shall guarantee
the debt or other obligations (the "Obligations") of any other Person
(including, without limitation, Subsidiaries of the Company) other than in the
ordinary course, consistent with the past practices of either Business, except
that (i) the Company or such Subsidiary shall be permitted to guarantee the
Obligations of G-P (including, without limitation, Obligations pursuant to G-P's
senior bank credit agreement), and (ii) the Company or such Subsidiary shall be
permitted to guarantee the Obligations of other Persons, provided that, with
                                                         --------
respect to clause (ii) hereof, G-P has also guaranteed such Obligations on terms
that provide that the beneficiaries of such guarantees will exhaust their rights
and remedies against G-P before exercising any rights or remedies against the
Company or such Subsidiary, as the case may be, pursuant to its guarantee.

          (c)  In addition to the negative pledge provisions to be included in
the indenture or credit agreement for the Permanent Company Debt, neither the
Company nor any Subsidiary of the Company shall grant any liens or encumbrances
on any of its assets to secure Obligations of any other Person (including,
without limitation, Subsidiaries of the Company), except (i) the Company or such
Subsidiary of the Company shall be permitted to grant liens to secure
Obligations of G-P, and (ii) the Company or such Subsidiary of the Company shall
be permitted to grant liens on its assets to secure Obligations of other
Persons, provided that with respect to clause (ii), G-P has guaranteed such
         --------
Obligations on terms that provide that the beneficiaries of such Obligations
will exhaust their rights and remedies against G-P before exercising any rights
or remedies with respect to the pledged assets of the Company or such Subsidiary
of the Company, as the case may be.

          (d)  In connection with the G-P guarantees referred to in the provisos
of clauses (b) and (c) of this section, G-P agrees to provide the WISCO Member
with the proposed form of such guarantee (which shall be the same in all
material respects as the actual guarantee entered into by G-P in connection with
the subject transaction) as soon as practicable, but in any event within five
(5) Business Days prior to G-P's execution of such guarantee.

          (e)  If the WISCO Debt Indemnity has terminated in accordance with its
terms, this Section 3.17 shall have no further effect.

                                      -27-
<PAGE>

                                  ARTICLE IV
                                  MANAGEMENT

     Section 4.1  General.
                  -------

          Subject to the delegation of rights and powers provided herein, the
Board shall have the sole right to manage the business of the Company and shall
have all powers and rights necessary, appropriate or advisable to effectuate and
carry out the purposes and business of the Company.  No Member, by reason of its
status as such, shall have any authority to act for or bind the Company or
otherwise take part in the management of the Company, but shall have only the
right to vote on or approve the matters specifically provided herein or in the
Delaware Act (or hereafter specified by the Board) to be voted on or approved or
determined by the Members.

     Section 4.2  Board Composition.
                  -----------------

          The Board shall consist of 5 Managers or such other number as the
Board shall determine.  Each Member shall have the right to designate such
number of Managers (rounded up or down to the nearest whole number) as is in
proportion to its respective Percentage Interest; provided that the WISCO Member
shall, so long as it holds any Units in the Company, be entitled to appoint at
least one Manager to the Board.  Each of CSK and G-P shall provide notice of its
initial designations of Managers in writing to the other on or prior to the
Closing Date.  Each Manager shall hold office until such Manager's resignation,
removal, death or incapacity; provided, however, that if the number of Managers
that a Member is entitled to designate is reduced by reason of a change in Unit
ownership, the one or more affected Managers appointed by such Member shall
automatically cease to be Managers (if more than one, in the reverse order of
the date of their respective appointments).

     Section 4.3  Term; Removal; Vacancies.
                  ------------------------

          Managers shall hold office at the pleasure of the Member that
designated them.  Any Member may at any time, by written notice to the other
Members and the Company, remove (with or without cause) any Manager designated
by such Member.  Subject to applicable Law and to the provisions of Section 4.2,
a Manager may not be removed except by written request of the Member that
designated the Manager.  In the event a vacancy occurs on the Board for any
reason, the vacancy will be filled by the written designation of the Member that
designated the Manager creating the vacancy.

     Section 4.4  Notice; Quorum.
                  --------------

          Meetings of the Board may be called by any Manager on two Business
Days' prior written notice to all Managers stating in general the purpose or
purposes thereof; provided, however, that any Manager may waive such notice
prior to, at or after the meeting.  The presence in person of a majority of the
Managers shall constitute a quorum for the transaction of business at any
meeting of the Board.  Each Member shall use its reasonable efforts to ensure
that a quorum is present at any duly convened meeting of the Board and each
Member may designate

                                      -28-
<PAGE>

by written notice to the others an alternate to act in the absence of any of its
previously designated Managers at any such meeting. If at any meeting of the
Board a quorum is not present, a majority of the Managers present may, without
further notice, adjourn the meeting from time to time until a quorum is
obtained.

     Section 4.5  Voting.
                  ------

          (a)     Each Manager shall be entitled to cast one vote on each matter
considered by the Board.  Except as otherwise expressly provided by this
Agreement, the act of a majority of the Managers present at any meeting at which
a quorum is present shall constitute an act of the Board.

          (b)     The following matters shall require, in addition to any other
vote required by applicable Law or as otherwise provided for herein, the
affirmative vote of a majority of the Board in attendance, which majority must
include a Manager designated by the WISCO Member:

                  (i)   except as provided in Article VIII hereof, and subject
to applicable Law, any dissolution or liquidation of the Company;

                  (ii)  any merger, consolidation, conversion or other
reorganization involving the Company, or the sale or other disposition of all or
substantially all of the assets of the Company in one transaction or a series of
related transactions;

                  (iii) the admission of an additional Member except as provided
in Section 7.1; and

                  (iv)  any amendment to or waiver or termination of, any
Ancillary Agreement, which amendment or waiver or termination would have the
effect of adversely altering the methodology for establishing the price of goods
or the cost allocation of services provided to the Company in the Ancillary
Agreements (other than the Parent Roll Supply Agreement) or adversely amend or
waive Section 4.1 of the Parent Roll Supply Agreement or terminate the Parent
Roll Supply Agreement.

          (c)     Any Manager, when making any determination in such capacity,
including voting or acting by consent with respect to any matter, shall be
entitled to act in his or her discretion, considering only such interests and
factors as such Manager desires, and such Manager shall have no duty or
obligation to give any consideration to any interest of, or other factors
affecting, the Company or any Member.  Further, a Manager may consider and act
in accordance with the interests of the Member appointing him or her, without
regard to the other interests or factors, including any fiduciary duties, when
acting on any matter presented to the Board for determination, and to the extent
permitted by the Delaware Limited Liability Company Act, the Members hereby
eliminate and waive any and all fiduciary duties and liabilities of the Manager
and their Affiliates to the Company and any other Members.

                                      -29-
<PAGE>

     Section 4.6  Telephonic Meeting; Written Consents.
                  ------------------------------------

          (a)     Any meeting of the Board may be held by conference telephone
or similar communication equipment so long as all Managers participating in the
meeting can hear one another. All Managers participating by telephone or similar
communication equipment shall be deemed to be present in person at the meeting.

          (b)     Any action to be taken by the Managers at a meeting of the
Board may be taken without such meeting by the written consent of a majority of
the Managers then in office (or such higher number of Managers as is required
take such action under the terms of this Agreement or applicable Law). Any such
written consent may be executed and given by telecopy or similar electronic
means and shall be filed with the minutes of the proceedings of the Board. If
any action is so taken by the Board by the written consent of less than all of
the Managers, prior notice of the taking of such action shall be furnished to
each Manager, which notice shall include a copy of the proposed consent, as well
as any other information provided by the Company to any Manager with such
consent (provided that the effectiveness of such action shall not be impaired by
any delay or failure to furnish such notice).

     Section 4.7  Committees of the Board; Officers.
                  ---------------------------------

          (a)     The Managers may, by resolution (which resolution shall have
been approved by the WISCO Manager), delegate any of the Board's powers to one
or more committees of the Board, each consisting of one or more Managers (other
than the power to take the actions specified in Section 4.5(b)). The Board, by
resolution, may adopt further procedures relating to the conduct of business by
any of the committees established by it.

          (b)     The Company shall have such officers as shall be appointed by
the Board, each having such powers and duties as shall be provided by resolution
of the Board. In addition, the Board may appoint, employ or otherwise cause the
Company to contract with such other Persons for the transaction of the business
of the Company or the performance of services for or on behalf of the Company as
it shall determine in its discretion from time to time. The Board may delegate
to any officer of the Company or to any such other Person such authority to act
on behalf of the Company as the Board may from time to time determine
appropriate in its discretion. The salaries or other compensation, if any, of
the officers and agents of the Company shall be fixed from time to time by the
Board. The Managers shall not be responsible for any misconduct or negligence on
the part of any officer, agent or other Person to whom authority is delegated,
provided that such Person was appointed by the Managers with reasonable care.

     Section 4.8  Execution of Documents.
                  ----------------------

          No Manager (acting solely in his capacity as such) shall have any
authority to bind the Company to any third party with respect to any action
except pursuant to a resolution authorizing such action.  Any Manager or officer
of the Company, or any other persons specifically authorized by the Board, may
execute any contract or other agreement or document on behalf of the Company and
may execute on behalf of the Company and file with the Secretary of State of the
State of Delaware any certificates or filings provided for in the Delaware Act.
The

                                      -30-
<PAGE>

filing of the Certificate of Formation with the Secretary of State of the State
of Delaware by the authorized person therein specified is hereby ratified and
confirmed.

     Section 4.9   Reliance on Documents and Reports.
                   ---------------------------------

          A Manager shall be fully protected in relying in good faith upon the
records of the Company and upon such information, opinions, reports or
statements presented to the Company by any of its other Managers, Members,
officers, employees or committees, or by any other Person, as to matters the
Manager reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Company (including, without limitation, information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits, or
losses of the Company or any other facts pertinent to the existence and amount
of assets from which distributions to Members might properly be paid).  In
addition, the Managers may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and advisors
selected by them, and reliance upon any opinion of any such Person as to matters
which the Managers reasonably believe to be within such Person's professional or
expert competence shall be full and complete protection in respect of any action
taken or suffered or omitted by the Managers hereunder in good faith and in
accordance with such opinion.

     Section 4.10  Standard of Care; Indemnification.
                   ---------------------------------

          Subject to Section 4.5(c), in carrying out his duties, a Manager or
officer of the Company shall not be liable to the Company or to any Member for
any actions taken in good faith and reasonably believed by the Manager or
officer to be in, or not opposed to, the best interests of the Company Group, or
for errors of judgment, neglect or omission, including any losses sustained,
liabilities incurred, or benefits not derived by Members in connection with any
action or inaction of the Manager, provided, however, that a Manager or officer
shall be liable for his willful misconduct or gross negligence.

          (a)      Each Manager shall, and each officer at the discretion of the
Board may (as so indemnified, an "Indemnitee") be indemnified and held harmless
by the Company from and against any and all losses, claims, damages,
liabilities, expenses (including legal fees and disbursements), judgments,
fines, settlements and all other amounts arising from any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise by reason of his status as a Manager or
officer, or his management of the affairs of the Company, or which relate to the
Company, its property, business or affairs, whether or not the Indemnitee
continues to be a Manager or officer at the time any such liability or expense
is paid or incurred, if the Indemnitee (i) acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Company Group and, (ii) with respect to any criminal proceeding, had no
reasonable cause to believe his conduct to be unlawful; provided however, that
no Indemnitee shall be entitled to indemnification if it shall be finally
determined that such Indemnitee's act or omission constituted willful misconduct
or gross negligence.

                                      -31-
<PAGE>

          (b)      Expenses (including legal fees and disbursements) incurred in
defending any proceeding shall be paid by the Company in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
the Indemnitee to repay such amount if it is ultimately determined by a court of
competent jurisdiction that the Indemnitee is not entitled to be indemnified by
the Company as authorized hereunder.

     Section 4.11  Member Action.
                   -------------

          In the event that any matter is required to be submitted to the
Members for their approval under the terms of this Agreement or the Delaware
Act, the following provisions shall apply:

          (a)      The Members may vote on any such matter at a meeting to be
held at such time and place as shall be designated by the Board. Any meeting of
the Members may be held by conference telephone or similar communication
equipment so long as all Members participating in the meeting can hear one
another. All Members participating by telephone or similar communication
equipment shall be deemed to be present in person at the meeting. Members shall
be given at least three Business Days' prior notice of any meeting; provided
that any Member may waive such notice prior to, at or after the meeting. The
notice shall specify the place, date and hour of the meeting and the general
nature of the business to be transacted. Every Member entitled to vote or act on
any matter at a meeting of Members shall have the right to do so either in
person or by proxy.

          (b)      Each Member shall be entitled to one vote for each Unit owned
by it. At any meeting of Members, the presence in person or by proxy of Members
having the right to vote more than 50% of the Units entitled to vote at such
meeting shall constitute a quorum for the transaction of business. Except as
otherwise required by this Agreement or applicable Law, the affirmative vote of
Members having the right to cast more than 50% of the votes present at a meeting
of Members at which a quorum is present is required to approve any action
requiring the Members' approval at such meeting.

          (c)      Any action that may be taken at any meeting of Members may be
taken without a meeting and without prior notice if a consent in writing setting
forth the action so taken is signed by all Members.  Any such written consent
may be executed and given by telecopy or similar electronic means and such
consents shall be filed with the minutes of the proceedings of the Members.

     Section 4.12  Certain Transactions.
                   --------------------

          (a)      Without requirement of further consent or action of the
Members or Managers of the Company, the Company is authorized to enter into the
Joint Venture Agreement and each of the Ancillary Agreements and all other
documents and agreements to be delivered by the Company at the Closing pursuant
to the Joint Venture Agreement, to perform the Company's obligations thereunder,
and to consummate the transactions contemplated thereby, all of which actions
are approved, ratified and confirmed by the Members. Without limiting the
foregoing, it is understood and agreed that, pursuant to the Management
Agreement (as defined in the Joint

                                      -32-
<PAGE>

Venture Agreement) G-P shall, subject to the authority of the Board, be
responsible for the management and operations of the Company.

          (b)     Notwithstanding anything herein to the contrary, prior to
agreeing to terminate any Ancillary Agreement (other than the Parent Roll Supply
Agreement, which may not be terminated at any time that WISCO is a Member of the
Company without the WISCO Manager's consent thereto), the Board must make a good
faith determination that it no longer requires the services provided by G-P in
such Ancillary Agreement.


                                   ARTICLE V
                         ACCOUNTING, BOOKS AND RECORDS

     Section 5.1  Fiscal Year.
                  -----------

          The fiscal year and fiscal periods of the Company shall be the same as
the fiscal year and fiscal periods of G-P, as the same may be changed or
modified from time to time.  The G-P Member shall give the WISCO Member prompt
notice of any material change in the fiscal year or fiscal periods of G-P.

     Section 5.2  Books and Records.
                  -----------------

          The Company shall keep at its principal executive offices books and
records typically maintained by Persons engaged in similar businesses and which
shall set forth a true, and complete account of the Company Business and affairs
of the Company Group in all material respects.  Such books and records shall be
kept in accordance with GAAP in a manner reasonably designed to provide such
information as well as permit preparation by Members of their Federal and State
tax returns and to calculate EBITDA of the Company.  Each of the Members and
their respective authorized representatives (and with respect to the G-P Books
the WISCO Member) shall have the right, at all reasonable times and upon
reasonable advance written notice to the Company, at such Member's expense, to
inspect, audit and copy the books and records of the Company Group (and with
respect to the G-P Books the WISCO Member) for any purpose reasonably related to
the Member's interests as a Member of the Company.  A Member requesting any such
access to books and records shall reimburse the Company or G-P, as the case may
be, for any costs reasonably incurred by it in connection therewith.

     Section 5.3  Auditors.
                  --------

          The CPA Firm of the Company shall be the same firm used by G-P, as
such CPA Firm may be changed from time to time so long as it is an auditing firm
of national standing.

     Section 5.4  Reporting.
                  ---------

          The Company shall use reasonable commercial efforts to deliver to each
Member (i) prior to each fiscal quarter, a quarterly forecast of the results of
operations of the Company

                                      -33-
<PAGE>

Group for such quarter, and, as soon as practicable, any material changes to
such forecast; (ii) within 15 days after the close of each fiscal quarter,
estimated financial statements for the Company Group; (iii) within 30 days after
the close of each fiscal quarter, an Unaudited Balance Sheet, Statement of
Income and Statement of Cash Flows for the Company Group, together with the
notes related thereto; and (iv) within 60 days after the close of each Fiscal
Year, an Audited Balance Sheet, Statement of Income and Statement of Cash Flows
for the Company Group for such Fiscal Year, together with the notes related
thereto. The Members acknowledge and agree that the Members shall have no
recourse against the Company or each other in the event the forecast is
incorrect and that no Member shall be entitled to rely on such forecast for any
purpose.

     Section 5.5  Banking.
                  -------

          All funds of the Company received from any and all sources shall be
deposited in the Company's name in such separate checking or other such accounts
as shall be determined by the Board.  In connection with the maintenance of such
bank accounts, the Board shall designate those individuals who will have
authority to write checks or otherwise disburse funds from such bank accounts on
behalf of the Company in connection with its activities.  Nothing contained
herein shall be construed to limit the ability of the Company to obtain and
utilize cash management services pursuant to the Management Agreement, as
defined in the Joint Venture Agreement.

     Section 5.6  Tax Return Information.
                  ----------------------

          The Company shall prepare all federal, foreign, state and local income
tax returns that the Company is required to file.  Within 120 days following the
close of each Fiscal Year, the Company shall send or deliver to each Person that
was a Member at any time during such year such tax information as shall
reasonably be required for the preparation by such Person of its federal,
foreign, state and local income and other income tax returns.

     Section 5.7  Delegation of Responsibility for Accounting and Reports.
                  -------------------------------------------------------

          Subject to the provisions of Section 5.3, the Board may cause the
Company to contract with any other Person for the provision of any of the
accounting, cash management and tax services required under Article III or this
Article V and may pay reasonable compensation for such services.

                                  ARTICLE VI
                                CONFIDENTIALITY

     Section 6.1  Confidentiality Obligation.
                  --------------------------

          The WISCO Member (and, in the case of Section 6.1(c) below, the
Company) shall use (and shall ensure that each of its Affiliates shall use) all
reasonable efforts to keep confidential (and to ensure that its officers,
employees, agents and professional and other advisers keep confidential) the
following ("Confidential Information"):

                                      -34-
<PAGE>

          (a)     all technical information, formulae, designs, specifications,
drawings, data, manuals, instructions and other know-how relating to the
products and technical processes of the Company Group, the Company Business or
the business of any other Member;

          (b)     any information which the WISCO Member may have or acquire
before or after the date of this Agreement with respect to the customers,
business, assets or affairs of any G-P Group Affiliate, or any Company Group
Affiliate, resulting from:

                  (i)   negotiating this Agreement, the Joint Venture Agreement
or any other agreement referred to in or entered into pursuant to this Agreement
or the Joint Venture Agreement;

                  (ii)  being a Member in the Company;

                  (iii) appointing Managers to the Board and their exercise of
their duties; or

                  (iv)  exercising its rights or performing its obligations
under this Agreement;

          (c)     any information which the Company may have or acquire before
or after the date of this Agreement in relation to the customers, business,
assets or affairs of any G-P Group Affiliate or any CSK Group Affiliate
resulting from the exercise of its rights or performance of its obligations
under this Agreement, the Joint Venture Agreement or any other agreement
referred to in or entered into pursuant to this Agreement or the Joint Venture
Agreement; or

          (d)     any information which such Member may have or acquire before
or after the date of this Agreement with respect to the customers, business,
assets or affairs of the Company Business.

     The WISCO Member (and, in the case of Section 6.1(c), the Company) shall
not (and shall cause its Affiliates not to) disclose to any third party any
Confidential Information without the consent of the G-P Member.  In performing
its obligations under this Article VI, the WISCO Member and the Company shall
(and shall cause its Affiliates to) apply no lesser confidentiality standards
and procedures than it applies generally in relation to its own confidential
information.  Notwithstanding anything herein to the contrary, for purposes of
this Agreement, the term Confidential Information shall not include information
of the type described in Sections 6.2(b) and 6.2(g).

     Section 6.2  Exceptions from Confidentiality Obligation.
                  ------------------------------------------

          The obligation not to disclose Confidential Information to any third
party under this Article VI does not apply to:

          (a)     the disclosure (subject to Section 6.3) on a `need to know'
basis to a company which is another CSK Group Member where the disclosure is for
a purpose reasonably

                                      -35-
<PAGE>

incidental to this Agreement; including, without limitation, as necessary for
the performance of its obligations under any Ancillary Agreement, in which case
such company shall be subject to the confidentiality obligations of Article VI
in this Agreement;

          (b)     information which is independently developed by the WISCO
Member or acquired from a third party to the extent that it is acquired with the
right to disclose the same after the date hereof;

          (c)     the disclosure of information to the extent required to be
disclosed by law, any stock exchange regulation or any binding judgment, order
or requirement of any court or other competent authority (subject to the
obligation to consult with the G-P Member in advance and to take account of its
reasonable requirements);

          (d)     disclosure of information to lenders and rating agencies;

          (e)     the disclosure of information to any tax authority to the
extent reasonably required for the purposes of the tax affairs of the WISCO
Member concerned or any Member of its Group;

          (f)     the disclosure (subject to Section 6.3) in confidence to the
WISCO Member's professional advisers of information reasonably required to be
disclosed for a purpose reasonably incidental to this Agreement; or

          (g)     information which becomes within the public domain (otherwise
than as a result of a breach of Article VI).

     Section 6.3  Employees, Agents and Advisers.
                  ------------------------------

          The WISCO Member shall inform (and shall ensure that each of its
Subsidiaries or Affiliates shall inform) any officer, employee or agent or any
professional or other adviser advising it in relation to the matters referred to
in this Agreement, or any other Person to whom it provides Confidential
Information, that such information is confidential and shall instruct them (i)
to keep it confidential and (ii) not to disclose it to any third party (other
than those persons to whom it has already been disclosed in accordance with the
terms of this Agreement).  The disclosing Member is responsible for any breach
of this Article VI by the person to whom the Confidential Information is
disclosed.

     Section 6.4  Return of Confidential Information.
                  ----------------------------------

          If the Company dissolves and terminates, either the WISCO Member or
the G-P Member may by notice to any other Member require the other Member to
destroy or return the first Member's (but not the Company's) Confidential
Information.  In addition, if at any time either the WISCO Member or the G-P
Member shall cease directly or indirectly to be a Member, the other Member may,
by notice to the first Member, require the first Member to destroy or return the
other Member's Confidential Information.  If so, the first Member shall (and
shall ensure that its Affiliates and its officers and employees shall):

                                      -36-
<PAGE>

          (a)     destroy or return all documents containing Confidential
Information which have been provided by or on behalf of the Member demanding the
return of Confidential Information; and

          (b)     destroy or return any copies of such documents and any
document or other record (including in electronic form) reproducing, containing
or made from or with reference to the Confidential Information

(except, in each case, for a record of any submission to or filings with
governmental, tax or regulatory authorities or papers required for a Member's
board or other corporate records or documents required in connection with
litigation).  The first Member shall return or destroy the Confidential
Information as soon as practicable after receiving notice and, in the case of
destruction, shall provide a certificate of an officer of that Member confirming
that destruction.

          (c)     The provisions of Section 6.4(a) shall not apply in the event
of a dissolution and termination in which the Board has expressed its rights
under Section 8.3(a) hereof.

     Section 6.5  Survival After Termination.
                  --------------------------

          The provisions of this Section 6.5 shall survive the dissolution and
termination of the Company and any Transfer of a Member's Units.  If either the
WISCO Member or the G-P Member shall cease to be a Member following a Transfer
of Units pursuant to this Agreement, then:

          (a)     the term Confidential Information for the purposes of this
Article VI shall extend to and include all Confidential Information held by CSK
Group Members or G-P Group Members (as the case may be) about the other
(excluding the Company) and the confidentiality obligations set out in Section
6.1 shall (subject to Section 6.2) thereafter apply to each CSK Group Member
ceasing to be a Member (as the case may be) as if it were a Member; and

          (b)     the provisions of Section 6.4 relating to return or
destruction of Confidential Information shall similarly apply to such extended
application of the term Confidential Information, pursuant to Section 6.5(a), as
if it were Confidential Information of the remaining Member.



                                  ARTICLE VII
                    TRANSFER OF UNITS; PUT AND CALL RIGHTS

     Section 7.1  General.
                  -------

          Except as permitted by Section 7.2, or with the prior written consent
of all other Members, no Member will directly or indirectly (i) sell, assign,
pledge, encumber, hypothecate, dispose of or otherwise transfer (collectively,
"Transfer") any Units, or any interest in any Units, (ii) agree to any such
Transfer or (iii) permit or suffer any such interest to be subject to Transfer,
directly or indirectly, by merger or other operation of law, agreement or
otherwise. Any

                                      -37-
<PAGE>

purported Transfer in any manner not permitted by this Article VII shall be null
and void and shall not be recognized or given effect by the Company or any
Member; provided, however, that a change of control of CSK or G-P shall not be
deemed to be a Transfer.

     Section 7.2  Put and Call Rights.
                  -------------------

          (a)     At any time on or after the third anniversary of the Closing
Date, the WISCO Member shall have a right to sell to G-P, or to obligate the
Company to redeem, in WISCO's sole discretion, all or any portion of the WISCO
Member's Units (the "WISCO Put") at a purchase or redemption price, as the case
may be, equal to the Formula Price multiplied by a fraction, the numerator of
which shall be the number of Units being sold or redeemed and the denominator of
which shall be the total number of Units of the Company then outstanding (the
"Put Price"); provided, however, that WISCO shall not have the right to exercise
the WISCO Put on more than (3) three occasions.

          (b)     At any time commencing after the tenth anniversary of the
Closing, G-P shall have the right to purchase, and the WISCO Member shall be
obligated to sell, all but not less than all of the Units owned by the WISCO
Member (the "G-P Call") at a purchase price equal to the Formula Price
multiplied by a fraction, the numerator of which shall be the number of Units
then owned by the WISCO Member and the denominator of which shall be the total
number of Units of the Company then outstanding (the "Call Price").

          (c)     In the event the WISCO Put or the G-P Call (either being
referred to as "Option Right") is exercised, the following procedure shall be
applicable:

                  (i)   The Member exercising its Option Right shall deliver a
written notice to the other Member and the Company (the "Exercise Notice").

                  (ii)  The Exercise Notice shall: (a) specify the identity of
each Member electing to exercise an Option Right; (b) specify the number of
Units to be sold, purchased or redeemed pursuant to such Exercise Notice; and
(c) be executed by a duly authorized officer of such Member.

                  (iii) In the event of exercise of a WISCO Put, the G-P Member
or the Company, as specified in any Exercise Notice regarding such WISCO Put,
shall purchase and the WISCO Member shall sell the Units specified in the
Exercise Notice. In the event of exercise of the G-P Call, the WISCO Member
shall sell and the G-P Member shall purchase all Units owned by the WISCO
Member.

                                      -38-
<PAGE>

                  (iv)  The closing of a Transfer pursuant to exercise of an
Option Right (an "Option Closing") shall take place at a time and place to be
designated by mutual agreement between the Members; provided, however, that the
date designated for the Option Closing shall not be more than ten (10) Business
Days from the date of receipt by the Company of the Exercise Notice. At the
Option Closing, the WISCO Member shall deliver to the Company certificates
representing the Units subject to the Exercise Notice (free and clear of all
liens, charges and encumbrances) and the Company or the G-P Member, as
applicable, shall pay to the WISCO Member the Put Price or the Call Price, as
applicable, by cashier's or certified check payable to any such WISCO Member, or
by wire transfer of immediately available funds to an account designated by such
WISCO Member.

                  (v)   At the Option Closing, the WISCO Member shall execute
and deliver such documents as reasonably requested by the G-P Member to fully
transfer title to the Units subject to such Exercise Notice, including documents
representing and warranting good and marketable title to such Units and that
such Units are owned free and clear of all liens, charges and encumbrances.

     Section 7.3  Member Transfers.
                  ----------------

          (a)     Upon not less than fifteen (15) days advance written notice to
the Company and effective as of the first day of the next calendar month, any
Member may Transfer any of the Units held by it to any of its Affiliates and
such transferee shall become a Member hereunder (an "Affiliate Member"),
provided that (i) such transferee shall execute a counterpart of this Agreement,
agreeing thereby to be bound by all of the provisions hereof and (ii) in the
event that such transferee would at any time thereafter cease to be an Affiliate
of the CSK Group or the G-P Group, as the case may be, then the Units so
transferred to such former Affiliate shall be Transferred back to CSK or G-P, or
an Affiliate of their respective Groups, as applicable, prior to such CSK Group
Affiliate or G-P Group Affiliate ceasing to be such (and if such transfer back
does not occur prior to the Affiliate ceasing to be such, the transaction which
results in the transferee ceasing to be an Affiliate shall be deemed a Transfer
which is subject to the restrictions of this Section 7.3).

          (b)     Notwithstanding anything herein to the contrary, G-P or an
Affiliate Member of G-P may transfer its Units or interests in its Units to any
third party at any time after the tenth anniversary of the date hereof, provided
that such transferee shall execute a counterpart of this Agreement, agreeing
thereby to be bound by all of the provisions hereof.

     Section 7.4  Retirement.
                  ----------

          Any Member that Transfers all of its Units pursuant to the terms
hereof shall be deemed to have retired and to have ceased to be a Member as of
the effective date of such Transfer.

                                      -39-
<PAGE>

                                 ARTICLE VIII
                  DISSOLUTION AND WINDING UP; BUY OUT RIGHTS

     Section 8.1  Dissolution.
                  -----------

          Subject to Section 8.5 hereof, the Company may, at the sole discretion
of the Board, be dissolved and its affairs wound up and terminated upon the
first to occur of the following:

          (a)     the unanimous consent of all Members to dissolve the Company,
it being expressly understood that Section 18-801(a)(3) of the Delaware Act
shall not apply to the Company;

          (b)     the sale or other disposition of all or substantially all of
the assets of the Company in one transaction or a series of related
transactions;

          (c)     the date the WISCO Member or the CSK Group holds less than 5%
of the outstanding Units; and

          (d)     the occurrence of an event causing a dissolution of the
Company under Section 18-801 of the Delaware Act, unless the Company is
continued as permitted under the Delaware Act.

     Section 8.2  Winding Up.
                  ----------

          If the Company is dissolved pursuant to Section 8.1, this Agreement
shall remain in full force and effect and shall continue to govern the rights
and obligations of the Members and Managers and the conduct of the Company
during the period of winding up the Company's affairs. The Board shall apply and
distribute the assets of the Company in the following order of priority (subject
to Section 8.3), unless otherwise required by mandatory provisions of applicable
law:

          (a)     to satisfy the Company Debt or the Permanent Company Debt;

          (b)     to other creditors, including Members who are creditors, to
the extent otherwise permitted by law, in satisfaction of the liabilities of the
Company (whether by payment, by the establishment of reserves of cash or other
assets of the Company for contingent liabilities in amounts, if any, determined
by the Board to be appropriate for such purposes or by other reasonable
provision for payment), other than liabilities for distributions to Members and
former Members under Sections 18-601 or 18-604 of the Delaware Act;

          (c)     to Members and former Members in satisfaction of liabilities
for distributions under 18-601 or 18-604 of the Delaware Act; and

          (d)     thereafter to the Members in proportion to the positive
balances of their respective Capital Accounts (determined after allocating all
income, gain, deduction, loss and

                                      -40-
<PAGE>

other like items arising in connection with the liquidation of Company assets
and otherwise making all Capital Account adjustments required under the
definition of Capital Account);

     Section 8.3  In-Kind Distributions.
                  ---------------------

          In the event of a dissolution or winding up of the Company, the Board
shall, to the extent permitted by law, (a) distribute to the G-P Member the
amount required by Section 8.2 in kind, from the Company's assets, and to the
WISCO Member the amount required by Section 8.2 in cash, or (b) if the Board
determines (which determination must include the affirmative vote or consent of
the WISCO Manager) that a prompt sale of part or all of the Company's assets
would be impractical or would cause undue loss to the value of Company assets,
the Board may defer for a reasonable time (up to three (3) years) the
liquidation of any assets, except those necessary to timely satisfy liabilities
of the Company (other than those to Members), and/or may distribute to the
Members, in lieu of cash, as tenants in common, undivided interests in such
Company assets as the Board deems not suitable for liquidation. Any such in-kind
distributions shall be made in accordance with the priorities set forth in
Section 8.2 as if cash equal to the Fair Market Value of the distributed assets
were being distributed. Any such distributions in kind shall be subject to such
conditions relating to the disposition and management of such properties as are
reasonable and equitable and to any joint operating agreements or other
agreements governing the operation of such properties at such time. The
liquidating distributions to be made pursuant to this section shall be made
within the time set forth in Regulations Section 1.704-1(b)(2)(ii)(b)(2).

     Section 8.4  Cancellation of Certificate of Formation.
                  ----------------------------------------

          Upon the completion of the distribution of Company Property as
provided in Sections 8.2 and 8.3, the Company shall be terminated, and the Board
shall cause the cancellation of the Certificate of Formation and all
qualifications of the Company as a foreign limited liability company and shall
take such other actions as may be necessary to terminate the Company.

     Section 8.5  Buy Out Rights.
                  --------------

          In the event of the occurrence of any of the events described in
Section 8.1, G-P shall have the option to either (a) cause the dissolution and
wind up the Company pursuant to this Article VIII; or (b) cause a Subsidiary of
G-P to purchase the Units held by the WISCO Member at a purchase price
calculated by multiplying the Formula Price times the WISCO Member's Percentage
Interest, in which case the Company shall not be dissolved; or (c) to the extent
legally permissible, take no action and continue the existence of the Company.
Such option shall be exercised, and notice of such exercise provided to the
WISCO Member, within 120 days after the occurrence of any of such events
described in Section 8.1.

                                      -41-
<PAGE>

                                  ARTICLE IX
                         CERTIFICATES EVIDENCING UNITS

     Section 9.1  Certificates.
                  ------------

          The Units owned by each Member shall be evidenced by one or more
Certificates. Each Certificate shall be executed by such Managers or such
officers of the Company as the Board shall designate.

     Section 9.2  Register.
                  --------

          The Company shall keep or cause to be kept a register in which,
subject to such regulations as the Board may adopt, the Company will provide for
the registration of Units and the registration of Transfers of Units. Upon
surrender for registration of Transfer of any Certificate, and subject to the
further provisions of this Section 9.2 and Section 9.3 and the limitations on
Transfer contained elsewhere in this Agreement, the Company will cause the
execution, in the name of the registered holder or the designated transferee, of
one or more new Certificates, evidencing the same aggregate number of Units as
did the Certificate surrendered or such other number as is appropriate in the
event such Transfer is pursuant to exercise of an Option Right. Every
Certificate surrendered for registration of Transfer shall be duly endorsed, or
be accompanied by a written instrument of Transfer in form satisfactory to the
Board, duly executed by the registered holder thereof or such holder's
authorized attorney.

     Section 9.3  New Certificates.
                  ----------------

          The Company shall issue a new Certificate in place of any Certificate
previously issued if the record holder of the Certificate (i) makes proof by
affidavit, in form and substance satisfactory to the Board, that a previously
issued Certificate has been lost, destroyed or stolen, (ii) requests the
issuance of a new Certificate before the Company has received notice that the
Certificate has been acquired by a purchaser for value in good faith and without
notice of an adverse claim, (iii) if requested by the Board, delivers to the
Company a bond, in form and substance satisfactory to the Board, with such
surety or sureties and with fixed or open liability as the Board may direct, to
indemnify the Company, as registrar, against any claim that may be made on
account of the alleged loss, destruction or theft of the Certificate, and (iv)
satisfies any other reasonable requirements imposed by the Board.

     Section 9.4  Interest as a Security.
                  ----------------------

          A Unit in the Company evidenced by a Certificate shall constitute a
security for all purposes of Article 8 of the Uniform Commercial Code
promulgated by the National Conference of Commissioners on Uniform State Laws,
as in effect in Delaware or any other applicable jurisdiction. Delaware law
shall constitute the local law of the Company's jurisdiction in its capacity as
the issuer of Units.

                                      -42-
<PAGE>

     Section 9.5  Legends.
                  -------

          A copy of this Agreement shall be kept with the records of the
Company. Each of the Members hereby agrees that each outstanding Certificate
shall bear a conspicuous legend reading substantially as follows:

          The Units represented by this Certificate have not been
          registered under the Securities Act of 1933 or applicable
          state and other securities laws and may not be sold,
          pledged, hypothecated, encumbered, disposed of or otherwise
          transferred without compliance with the Securities Act of
          1933 or any exemption thereunder and applicable state and
          other securities laws. The Units represented by this
          Certificate are subject to the restrictions on transfer and
          other provisions of an Operating Agreement dated as of
          October 4, 1999 (as amended from time to time, the
          "Agreement") by and among Company and its Members, and may
          not be sold, pledged, hypothecated, encumbered, disposed of
          or otherwise transferred except in accordance therewith. A
          copy of the Agreement is on file at the principal executive
          offices of the Company.


                                   ARTICLE X
                                 MISCELLANEOUS

     Section 10.1 Notices.
                  -------

          All notices and other communications required or permitted by this
Agreement shall be in writing and shall be delivered by personal delivery, by
nationally recognized overnight courier service, by facsimile, by first class
mail or by certified or registered mail, return receipt requested, addressed, to
any Member at its address as set forth on Schedule 1 (as the same may be updated
                                          ----------
from time to time at the direction of such Member) or to the Company at 55 Park
Place, Atlanta, Georgia 30303 (or to such other address as the Company shall
have designated to each of the Members by written notice given in the manner
hereinabove set forth). Notices shall be deemed given one day after sent, if
sent by overnight courier; when delivered and receipted for, if hand delivered;
when received, if sent by facsimile or other electronic means or by first class
mail; or when receipted for (or upon the date of attempted delivery where
delivery is refused or unclaimed), if sent by certified or registered mail,
return receipt requested.

     Section 10.2 Amendment; Waiver.
                  -----------------

          Any provision of this Agreement may, (i) in the case of an amendment,
be amended if, and only if, such amendment is in writing and signed by each
Member, or (ii) in the case of a waiver, be waived if such waiver is contained
in a writing, and signed by the party against whom the waiver is to be
effective. No failure or delay by any party in exercising any

                                      -43-
<PAGE>

right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single exercise thereof preclude any other or further exercise thereof or of
any other right, power or privilege. Except as otherwise provided rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

     Section 10.3 Assignment.
                  ----------

          Except as otherwise expressly provided herein, no party to this
Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent of the other parties hereto.

     Section 10.4 Entire Agreement.
                  ----------------

          This Agreement, the Joint Venture Agreement and the Ancillary
Agreements (including the schedules and exhibits hereto and thereto) contain the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters.

     Section 10.5 Public Disclosure.
                  -----------------

          Each Member hereby agrees that, except as may be required to comply
with the requirements of any applicable Laws or the rules and regulations of any
exchange upon which its securities (or the securities of one of its Affiliates)
are traded, it shall not make or permit to be made any press release or similar
public announcement or communication concerning the execution or performance of
this Agreement unless specifically approved in advance by all parties hereto,
which approval shall not be unreasonably withheld, conditioned or delayed. In
the event that, in the absence of such approval, legal counsel for any party is
of the opinion that a press release or similar public announcement or
communication is required by Law or by the rules and regulations of any exchange
on which such party's securities (or the securities of one of its Affiliates)
are traded, then such party may issue a public announcement limited solely to
that which legal counsel for such party advises is required under such Law or
such rules and regulations (and the party making any such announcement shall
provide a copy thereof to the other parties for review before issuing such
announcement).

     Section 10.6 Parties in Interest.
                  -------------------

          This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing in
this Agreement, express or implied, is intended to confer upon any Person other
than the Company, WISCO, G-P or their respective successors or permitted
assigns, any rights or remedies under or by reason of this Agreement. The
Company is executing this Agreement as a party, and this Agreement shall
constitute a contract among the Members and between the Company and each of the
Members.

     Section 10.7 Governing Law; Submission to Jurisdiction; Selection of
                  -------------------------------------------------------
Forum.
-----
          This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to any
choice of law provision or

                                      -44-
<PAGE>

rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the Laws of any jurisdiction other than the internal
Laws of the State of Delaware. Each of the Parties agrees that any legal action
between the parties, or any of them, relating to this Agreement, the
interpretation of the terms hereof or the performance hereof or the consummation
of the transactions contemplated hereby, whether in tort or contract or at law
or in equity, shall exclusively be brought in a Federal or State Court located
in New Castle County, Delaware, having jurisdiction of the subject matter
thereof, and each party irrevocably (i) consents to personal jurisdiction in any
such Federal or State Court, (ii) waives any objection to laying venue in any
such action or proceeding in any such Court, (iii) waives any immunity from suit
and any objection that any such Court is an inconvenient forum or does not have
jurisdiction over any party hereto and (iv) agrees that service of complaint or
other process may be made by certified or registered mail addressed to such
party at its address determined in accordance with Section 10.1 of this
Agreement.

     Section 10.8  Counterparts.
                   ------------

          This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.

     Section 10.9  Severability.
                   ------------

          The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable (i) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (ii) the remainder of this Agreement and the application of such provision
to other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

     Section 10.10 Equitable Relief.
                   ----------------

          Each party acknowledges that money damages would be inadequate to
protect against any actual or threatened breach of this Agreement by any party
and that each party shall be entitled to equitable relief, including specific
performance and/or injunction, without posting bond or other security, in order
to enforce or prevent any violations of the provisions of this Agreement.

     Section 10.11 No Agency.
                   ---------

          This Agreement shall not constitute an appointment of any party as the
agent of any other party, nor shall any party have any right or authority to
assume, create or incur in any manner any obligation or other liability of any
kind, express or implied, against, in the name or on behalf of, any other party.
Nothing herein or in the transactions contemplated by this Agreement shall be
construed as, or deemed to be, the formation of a partnership by or among

                                      -45-
<PAGE>

the parties hereto (provided that nothing in this Section 10.11 shall affect the
tax treatment of the Company under Article III hereof).

     Section 10.12 Limitation of Liability.
                   -----------------------

          The debts, obligations and liabilities of the Company, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member, Manager or officer of the Company
shall be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Member, Manager and/or officer.

     Section 10.13 Non-Exclusive Business.
                   ----------------------

          (a)      Notwithstanding anything herein to the contrary, the parties
hereto agree that the Company shall not be the exclusive vehicle for G-P to
engage in the manufacture or sale of commercial tissue products or "away from
home" tissue products (the "Products"), or to engage in the Commercial Tissue
Business and that G-P shall have the right to engage in the manufacture or sale
of Products and otherwise engage in the Commercial Tissue Business, whether
directly or through other Affiliates, without regard to the Company or any
requirement that G-P make such opportunity or Commercial Tissue Business
available to the Company in any way.

          (b)      Notwithstanding anything herein to the contrary, the parties
hereto agree that the Company may provide to any member of the G-P Group the
right to use intangible Company Property, and such member of the G-P Group will
have no obligation to reimburse the Company for such use.

          (c)      In the event G-P or a G-P Affiliate uses production equipment
and machines owned by the Company to produce products for G-P or a G-P
Affiliate, all costs, revenues and profits relating to such products shall be
allocated to the Company.

          (d)      In the event G-P or a G-P Affiliate uses production equipment
or machines it owns that are located in facilities owned or operated by the
Company to produce products for G-P or a G-P Affiliate, G-P shall reimburse to
the Company an amount equal to the allocated overhead (including facility costs)
determined pursuant to the cost allocation methodology set forth in Exhibit B to
the Operating Support Services Agreement.

     Section 10.14 Dispute Resolution.
                   ------------------

          Except as otherwise provided in this Agreement, any dispute among the
Members hereto, including disputes related to the Ancillary Agreements and the
review of G-P Books related thereto, shall be resolved by the Members through
good faith negotiations. If such dispute cannot be resolved by such negotiation
it shall be submitted to non-binding commercial arbitration pursuant to the
commercial arbitration rules then in effect of the American Arbitration
Association, before a panel of not less than three arbitrators. All costs and
expenses incurred in connection with such proceeding shall be shared equally by
the Members, however each Member shall bear the cost of its legal fees. Only
upon the conclusion of arbitration proceedings in which

                                      -46-
<PAGE>

a decision was rendered may the Members bring an action in connection with such
dispute in the United States District Court or the state court sitting in New
Castle County, Delaware. Each Member agrees to irrevocably submit to the
exclusive jurisdiction of such court and agrees to waive any objection to laying
venue in such court or that such court is an inconvenient forum or does not have
jurisdiction over the Member.

                                      -47-
<PAGE>

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


                         GEORGIA-PACIFIC CORPORATION


                         By: /s/ Michael C. Burandt
                            ----------------------------------------------
                         Name:   Michael C. Burandt
                         Title:  Senior Vice President - Packaged Products


                         WISCONSIN TISSUE MILLS INC.


                         By: /s/ William T. Tolley
                            ----------------------------------------------
                         Name:   William T. Tolley
                         Title:  Senior Vice President -
                                 Finance and Chief Financial Officer


Consented/Agreed To
By the Company as Referenced
In Section 10.6

GEORGIA-PACIFIC TISSUE, LLC


By: /s/ Michael C. Burandt
   -------------------------
Name:   Michael C. Burandt
Title:  Manager

                                      -48-
<PAGE>

                                                                       EXHIBIT A

                                    Form of

                      GEORGIA PACIFIC TISSUE COMPANY, LLC

                            MEMBERSHIP CERTIFICATE


     This Certifies that _______________________________________________________
is a member of the above named Limited Liability Company and is entitled to the
full benefits and privileges of such membership, subject to the duties and
obligations, as more fully set forth in the Limited Liability Company Operating
Agreement.

     In Witness Whereof, the Limited Liability Company has caused this
Certificate to be executed by its duly authorized members this _____________ day
of ______________, _____ and its Limited Liability Company seal to be hereunto
affixed.


<PAGE>

                       Schedule 1 to Operating Agreement
                       ---------------------------------
                              Members of the LLC
                              ------------------



Member                             Address
------                             -------

Georgia-Pacific Corporation        133 Peachtree Street, N.E.
                                   Atlanta, Georgia 30303
                                   Attn: General Counsel

Wisconsin Tissue Mills Inc.        c/o Chesapeake Corporation
                                   1021 Cary Street
                                   Richmond, Virginia 23218
                                   Attn: General Counsel