**Exhibit 10.1**

**LABORAGREEMENT**

**BETWEEN**

**BLUERIDGE PAPER PRODUCTS INCORPORATED**

**AND**

**UNITEDSTEEL, PAPER AND FORESTRY, RUBBER,MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICEWORKERS INTERNATIONAL UNION**

**PREAMBLE**

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

**ARTICLE IRECOGNITION**

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

**ARTICLEIIGENERAL PURPOSE**

A.           The general purpose ofthis Agreement is in the mutual interest of the Company, its staff employeesand the employees represented by the Union, to provide for the uninterruptedoperation of the plant under methods which will further to the fullest extentpossible the safety, welfare, and health of the employees, economy ofoperation, quality and quantity of output, cleanliness and maintenance of theplant, and the protection of the property. The Union recognizes its 

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responsibilities as theexclusive bargaining agent of the employees covered by the Agreement, andrealizes that in order to provide maximum opportunities for continuingemployment, good working conditions, and fair and equitable wages, the Company mustbe in a strong competitive position.

B.             Therefore, it shallbe the duty of the Company, its staff employees, and the employees representedby the Union, to cooperate fully, individually and collectively, in thisregard.  Further insure this ESOP be acceptedas a part of this Agreement by reference. This clause shall not be used to discriminate against any employee’srights under this Agreement.

**ARTICLEIIIEQUAL EMPLOYMENT OPPORTUNITY**

A.           The Company and theUnion agree that all employees shall have equal employment opportunitiesregardless of race, color, religion, sex, national origin, and within theframework of federal and state laws regarding age discrimination.

B.             The Company and theUnion shall observe the rights of the handicapped as provided in theRehabilitation Act of 1973 and the rights of disabled veterans and veterans ofthe Vietnam era as provided in the Vietnam Era Veterans’ ReadjustmentAssistance Act.

C.             Wherever used in thisAgreement, the masculine personal pronoun and/or the feminine personal pronounshall have equal application to the other.

**ARTICLEIVLENGTH OF AGREEMENT**

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

**ARTICLE VCHANGES OR MODIFICATION**

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

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**ARTICLEVITERMINATION OF AGREEMENT**

A.           At any time after May14, 2009, or any anniversary date thereafter, if no agreement on the questionsat issue has been reached, either party may give written notice to the otherparty of intent to terminate the Agreement in not less then ten (10) days.

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

B.             If the parties havefailed to resolve their differences before the specified time has elapsed, allobligations under this Agreement are automatically cancelled.

**ARTICLEVIINO INTERRUPTION OF PRODUCTION**

There shall be nolockouts by the Company, or strikes, slowdowns or work stoppage of any kind bythe Union, its representatives, agents or members during the duration of thisAgreement.

**ARTICLEVIIISENIORITY**

The principles ofseniority shall govern in promotions, layoff, demotions, and filling ofvacancies, transfers and recalls as hereinafter provided.

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

B.             For the purpose ofthis Agreement, employees shall have four (4) types of seniority:  Plant Seniority; Department Seniority; GroupSeniority and Job Seniority.  The type ofseniority used at each location and the method of application shall be governedby each Local supplement that is a part of this agreement.  Such supplement shall apply to each locationnamed in each supplement.   Should aquestion of Local supplement application occur and it cannot be resolved by thelocation, then this Master Agreement shall apply.  Seniority as it pertains to employees withinthe bargaining unit shall retain the same application as is accrued withChampion International Corporation

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

1.               Voluntary quit.

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2.               Discharge for justcause.

3.               Failure to returnfrom a leave of absence as of the first scheduled workday following thetermination date of the leave.

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

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

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

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

 

## **D.****            PROMOTIONS IN LINES OFPROGRESSION**

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

## **E.****              JOB BIDDING**

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

## **F.****              TEMPORARY VACANCIES**

Temporaryvacancies shall be filled in accordance with the method of applicationdeveloped in each Local Supplement.

## **G.****            DEMOTIONS AND LAYOFFS**

Demotions and layoffs shall follow the reverse order ofpromotions.  The method of administeringthis seniority provision for demotions and layoffs shall be developed in eachLocal Supplement.  However, in anylocation probationary employees shall be laid off first.  Layoffs from the plant shall be by plantseniority.  Any employee’s jobclassification affected by a layoff shall be given an opportunity to receive atleast thirty (30) days training prior to being reduced from their line ofprogression, job, group, department or the plant.

## **H.****            RECALL**

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

## **I.****                 TRANSFERS**

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

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**ARTICLEIXGRIEVANCES AND ARBITRATION**

## **A.  GRIEVANCES**

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

**Step 1:**  The employee and the steward shall discusshis complaint with his immediate supervisor within seven (7) days following thedate the incident occurred that gave rise to the complaint; however, if theincident occurred while the employee was on an excused absence and he had noknowledge of it until his return to work, the seven (7) day period shall beginon his first scheduled work day following the return from the absence.  The employee, his shop steward, and hissupervisor are encouraged to make every possible effort to settle the grievanceat this stage.  The supervisor shallreply to the employee within three (3) days of the date the complaint wasbrought to his attention.

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

**Step 2:**  A complaint, which is not resolved betweenthe employee and his supervisor, must be reduced to writing and submitted tothe department manager within seven (7) days of the supervisor’s reply.  The department manager and/or his designatedrepresentative and foreman involved shall meet with the employee, a local unionofficer and the steward within seven (7) days of the date the written grievancewas received.  He shall give his writtenanswer within three (3) days of the date of the meeting.

**Step 3:**  An appeal of the department manager’s answermust be made in writing to the Plant Manager or his designated representativewithin seven (7) days after receipt of the department manager’s answer by thelocal Union.  As a result of a meetingattended by the Plant Manager or his designated representative, together withthe International Representative or his designated representative, a committeerepresenting the Local Union, plus the aggrieved employee, a discussion of theappealed grievance shall take place within nine (9) days of the date the appealnotice was received.  The Plant Managershall give his answer within ten (10) days of the date of the meeting.

A grievance not appealedfrom one step to the next within the specified time limits shall be consideredsettled on the basis of the last answer, unless such time limits are extendedin writing by mutual agreement.  Failureon the part of the Company to answer within the specified time limits shallcause the grievance to be settled in favor of the grievant.

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

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**B. ARBITRATION**

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

### The decision of the arbitrator on all matters properly submitted, shallbe final and binding on both parties to this Agreement.  Arbitrator selection shall be accomplished inaccordance with the procedure in each Local Supplement if different from above.

### 2. The arbitrator shall have jurisdiction and authority only tointerpret, apply, or determine compliance with the provisions of thisAgreement, insofar as shall be necessary to the determination of grievances appealedto him.  He shall have no authority toadd to, detract from, or alter in any way, the provisions of the Agreement, norto establish or change any wage rate. The same arbitrator shall not arbitrate multiple issues.

### 3. The Company and the Union shall share the expenses of the arbitratorequally.  The expenses of the witnessesshall be paid by the party requesting the witness to testify.

### 4. The arbitrator shall render his award within thirty (30) days afterthe receipt of post-hearing briefs.  Ifthe parties do not file briefs, the arbitrator shall render his award withinthirty (30) days after the close of the hearing.

**ARTICLE XVACATIONS**

 

## **A.ELIGIBILITY**

All hourly paid employeeswho have at least one (1) year seniority in the plant shall be granted avacation with pay each calendar year. Below are the numbers of years of continuous employment in the Company’sservice that must be completed to be eligible for the number of weeks vacationindicated:

1 week vacation after           *Theactual number of weeks of*

2 weeks vacation after         *eligibilityshall be those years*

3 weeks vacation after         *referredto in the Local Supplement*

4 weeks vacation after         *ateach location.*

5 weeks vacation after

6 weeks vacation after

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**B.**Anemployee who works less than 1,040 hours because of an illness or injury shallreceive credit for forty (40) hours per week for all full weeks lost because ofsuch illness or injury.  The accumulationof these credits will be limited to the first calendar year of each continuousperiod of loss of hours due to such illness or injury.

## **C.VACATION PAY**

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

2. An employee who leavesthe employ of the Company and has not taken the vacation to which he isentitled, shall receive vacation pay at the time of leaving the employment ofthe Company.  The amount of suchadditional vacation pay shall be prorated according to the number of monthsworked.

3. An employee who entersthe armed services, retires, or dies, and who has completed one (1) year ormore of continuous employment in the company’s service on the last previousanniversary date of such continuous employment, shall upon termination ofemployment receive in addition to vacation pay as provided above, vacation payfor time worked during the calendar year in which his employment isterminated.  The amount of suchadditional vacation pay shall be prorated according to the number of months worked.

### **B. VACATION PERIODS**

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

2. Vacations are notaccumulative from year to year.

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

4. Vacations will betaken to coincide with the established workweek.

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

**ARTICLE XIHOLIDAYS**

 

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

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of holidays exceed the number listed in thisArticle.  In addition to the numberdeviation of holidays contained in each Local Supplement, each Local Supplementshall determine annually which of those holidays that the location wishes torecognize as holidays for the forthcoming year. Such identification meeting shall occur in December of the prior year.  The method of calculating the properclassified rate may vary in each Local supplement.

**A. ELIGIBILITY**

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

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

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

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

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

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

D.            Hours not worked butpaid for on a holiday shall be counted as time worked for the purpose of computingweekly overtime.

**ARTICLE XIIHOURS OF WORK AND OVERTIME**

** **

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

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

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

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

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

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

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

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

E.              All time worked byan employee in excess of eight (8) hours in any twenty-four (24) work period orover forty (40) hours in any work week shall be paid at one and one-half (1 1⁄2)times the base rate.  It is furtherprovided that hours not worked on any of the twelve (12) holidays designated inArticle XI, Section A, of this Agreement shall be considered as hours worked incomputing hours in excess of forty (40) per week.

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

G.             The Company will postchanges in work schedules for the following week not later than 12:00 noon onThursday.

H.            There shall be noduplication of overtime pay for the same hours, and payment of overtime for anyhour or part of an hour on one basis shall exclude that time from considerationfor payment of overtime on any other basis.

#### **ARTICLE XIIISHIFT DIFFERENTIAL**

Employees working on thesecond and third shift shall be paid in accordance with the LocalSupplements.  This amount may varybetween each facility.

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**ARTICLEXIVWAGES**

Wage rates shall be paidin accordance with the Appendix attached as a part of the Local Supplement ateach location.  The necessary increase ofwages because of working in a higher classification or the lowering of wagesbecause of working in a lower classification shall be in accordance with themethods provided in each Local Supplement.

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

B.             When new jobs arecreated, or when substantial charges are made in the duties and/or workload ofexisting jobs, the Company and the Union will meet within thirty (30) days fromthe date request is received, unless mutually agreed to extend the time limit,to negotiate the rate of the new job or the rate of the existing job that hasbeen substantially changed.  If noagreement can be reached, the Company will set the job rate.  Such rate may be subject to negotiations atthe next general contract negotiations, and any change agreed upon at that timewill be made retroactive to persons then on the payroll of the Company to suchtime as the Company and the Union shall agree.

C.             The matter of wagesis not to be a subject of arbitration.

D.            REPORTING TIME

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

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

#### **ARTICLE XVJURY DUTY**

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

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

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

#### **ARTICLE XVICALL-IN TIME**

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

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

#### **ARTICLE XVIIDISCIPLINE AND DISCHARGE**

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

B.             An employeedischarged shall have the right to request in writing the reason for suchdischarge.  A copy of the reason for suchdischarge shall be sent to the Local Union President.

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

#### **ARTICLE XVIIIFUNERAL LEAVE**

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

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lost up to a maximum ofthree (3) consecutive calendar days.  Forthe computation of the three (3) days maximum pay, the two (2) days precedingthe funeral, the day of the funeral, and the day after the funeral are the onlydays to be considered.  In the event aLocation has a greater number of days then those specified, the LocalSupplement for the Location will apply. The Company may require proof of deathand relationship before making such payments.

B.             The immediate familyof the employee shall be limited to those listed in the Local Supplement ateach location.

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

D.            Funeral leave pay willnot be payable if any of the days lost fall within an employee’s approvedvacation period or leave of absence.  Noallowance will be granted in the case where, because of distance or othercause, the employee does not attend the funeral of the deceased.

#### **ARTICLE XIXMILITARY LEAVE**

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

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

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

**ARTICLEXXLEAVE OF ABSENCE**

# A. GENERAL

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

2. Extension may begranted at the discretion of the Company and seniority shall accrue during anapproved extension.

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

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

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

6. A leave of absence isnot required when absence is due to occupational injury or disease.

## B. ELECTED OFFICE LEAVE

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

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

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

C. UNION LEAVE

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

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

D. FAMILY MEDICAL LEAVE

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

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**ARTICLE XXIMISCELLANEOUS**

A.           Supervisors will notperform work normally done by hourly rated employees, nor will the Companycondone such work, except in cases of emergencies or unforeseen circumstanceswhere failure to act promptly might result in harm or damage to personnel,plant, or equipment.

B.             When it becomesnecessary to change methods of operation or kinds of products, which may resultin elimination of jobs or combining of jobs, the Company will advise andnegotiate the matter with the Local Union.

C.             With respect to thesubject of contracting out, it is understood production employees will normallyperform production work and maintenance employees will normally performmaintenance work.  It is understood theremay be times the Company must employ the service of outside contractors.  The Company will notify, meet and discuss theneed, manner and necessity to use such outside services with the Union prior toletting of the contract.  If the work canbe accomplished by the use of mill forces then bargaining employees willperform the work.

Excluding from these provisions are new constructionand major replacement of equipment that requires special tools orequipment.  The use of outsidecontractors shall be unionized contractors as long as cost and service levelsare competitive.

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

E.              Itemspertaining to any particular location at the time of development of this MasterAgreement will continue to be handled by the Supplement at each Location.

F.              The Company willcompensate those Union Officers, Stewards, or members, as designated by theUnion at their respective hourly rates for the time lost from work due tokeeping their appointments with Management, or investigating incidents that maybecome grievances.

G.             Future medical/dentalplan cost increases and decreases, starting 1/1/07, will be shared 50/50 untilemployee contribution reaches 20% of premium, starting with current dollarcontributions.  This change will replaceall current cost sharing language in the Master and Local Supplements.

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

 

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#### **ARTICLE XXIICOMPANY RULES**

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

# **ARTICLEXXIIINON-COERCION**

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

# **ARTICLEXXIVCONTRAVENTION OF LAW**

If any provision orsection of this Agreement is found to be in violation of laws or regulations ofthe United States, or the State in which the mill covered by this Agreement islocated, such provisions shall be superseded by the appropriate provisions ofsuch law or regulations, so long as same is in force and effect.  All other provisions of this Agreement shallcontinue in full force and effect.  Theparties will discuss any change to a federal or state law, which may be relatedto this Agreement, and if it is found to affect a provision of this Agreement,the parties shall meet and negotiate the change or changes to the Agreement toconform to the law.  Should Section 14Bof the National Labor Relations Act be amended or repealed, by either the Stateor Federal Government, the Company will notify the bargaining unit members theyhave thirty (30) days to become members of the Union.

# **ARTICLEXXVDEDUCTION OF UNION DUES**

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

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

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B.             It shall be the soleobligation of the Company to remit the sums deducted to the designatedFinancial Officer of the Local Union. The Union shall keep the Company harmless against all claims, demands orother forms of liability that may arise out of the Company’s compliance withthis Article.

C.             The Company agreesthat it will deduct voluntary contributions to the USW Political Action Fundeach pay period from the earnings of those employees who voluntarily authorizesuch contributions on forms provided for that purpose by the USW/PAC.  The signing of USW/PAC checkoff forms and themaking of such voluntary contributions are not conditions of membership in theUnion or of employment with the Company. The USW/PAC checkoff program shall remain in compliance with anyapplicable state or federal statute.

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

The Union shall indemnify and save the Companyharmless against any and all claims, demands, suits or other forms of liabilitythat shall arise out of or by reason of action taken or not taken by theCompany for the purpose of complying with any of the provisions of thisunderstanding.

# **ARTICLEXXVISAFETY AND HEALTH COMMITTEE**

1. The Company agrees toprovide and maintain a safe and healthy workplace for its employees.  The Company will maintain all reasonable andnecessary precautions for safeguarding the safety and health of employees andemployees are expected to cooperate in the implementation of this safe workenvironment.

2. Inaddition to “for cause” drug and alcohol testing, “post accident” drug andalcohol testing will be used by the Company in the event of on the jobinjuries.  It is understood that suchtesting will be conducted only when an injured employee is treated by alicensed physician.  This provisionbecomes effective 1/1/07.  The method ofadministering this provision shall be set forth in each Local supplement ofthis Agreement.

#### **ARTICLE XXVIIATTENDANCE POLICY**

The need for allemployees to attend work whenever scheduled is an inherent portion of this workprocess.  Therefore, each location shallestablish and maintain an attendance 

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policy that fits thecircumstances at each of their locations. Such attendance policy shall be included as part of this Agreement byreference.

#### **ARTICLE XXVIIICONTINUOUS WORK**

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

# **ARTICLEXXIXPROFIT SHARING**

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

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

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

D.            The full contents ofthe Profit Sharing plan are attached hereto as Appendix A. It shall describethis Profit Sharing plan in detail.

##### **ARTICLE XXXWORK PLACE CULTURE DEVELOPMENT**

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

There is a mutualrecognition on the part of both the Union and the Company in order to maintaineconomic viability, gain a competitive advantage in the marketplace, andmaintain job security, it is necessary for Blue Ridge Paper Products Inc. toupgrade 

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profitability throughincreased efficiency, team effort, mutual cooperation and the elimination ofbarriers to improved productivity.

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

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

Each Location shall havea Work Place Culture Steering Committee. The provisions set forth in each Local supplement shall determine thecreation and maintenance of this Committee.

# **ARTICLEXXXIESOP RECOGNITION AND ELECTION**

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

**A.Board of Directors**

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

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

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

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

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

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

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

###### **B.****            Benefit Pool**

There shall be a pool of funds established from unused funds thatresult from the contribution from Blue Ridge Paper Products to employeebenefits.  At the conclusion of the LaborAgreement or the sale of Blue Ridge Paper Products, any funds that remain inthis pool, including any earned interest, shall be distributed to bargainingunit employees.  This distribution shallbe in some type of monetary compensation.

##### **ARTICLE XXXIIESOP DISPUTE RESOLUTION**

Any ESOP Plan or Board ofDirectors disputed issues or fiduciary responsibility issues shall be handledin the following manner:

1.               The ESOP PlanAdministration Committee shall appoint a Mediator to explore resolution of thedispute.

2.               Failing to achieveresolution of the dispute by a Mediator, the complainant and the ESOP shallmutually agree on an arbitrator to hear the disputed issue.  At the conclusion of the hearing thearbitrator shall be required to provide the Parties with an immediatedecision.  The arbitrator’s decisionshall be final and binding on all parties.

# **ARTICLEXXXIIIESOP PLAN ADMINISTRATION COMMITTEE**

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

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

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

# **ARTICLEXXXIVESOP TRUST COMMITTEE**

There shall be an ESOPTrust Committee created and maintained. This committee shall have two (2) Union members nominated and elected tothis committee.

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

# **ARTICLEXXXVCOMMITTEE COMPENSATION**

All Board of Director andCommittee positions shall be reimbursed for any hours lost from work at theirregular rate of pay.  The Company shallpay this reimbursement.

# **ARTICLEXXXVISEVERANCE PAY**

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

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

The employee’s continuousservice shall be calculated from his most recent date of hire without furtherinterruption in service.

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

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

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IN WITNESS WHEREOF, theparties hereto, have caused their names to be subscribed below by their dulyauthorized officers and representatives as of this              day of                         ,2006.
| United Steelworkers, AFL-CIO/CLC |       | Blue Ridge Paper Products Inc.          |   |
|----------------------------------|------------|-----------------------------------------|--------|
|                             |       |                                    |   | 41 Main Street |   |
|                             |       |                                    |   | Canton, NC, 28716 |   |
|                             |       |                                    |   |   |   |   |
| By:                              |       |                                    |   |   | By: | /S/ Darrell E. Douglas |   |
|                             |       | Leo G. Gerard                           |   |   | Darrell E. Douglas |   |
|                             |       | International  President                |   |   | VP-Human Resources |   |
|                             |       |                                    |   |   |   |   |
|                             |       |                                    |   |   |   |   |
|                             |       |                                    |   |   |   | /S/ Terry Huskey |   |
|                             |       | James D. English                        |   |   | Terry Huskey |   |
|                             |       | International  Secretary-Treasurer      |   |   | VP-Gen. Mgr. Paper Division |   |
|                             |       |                                    |   |   |   |   |
|                             |       |                                    |   |   |   |   |
|                             |       |                                    |   |   |   | /S/ Robert M. Shanahan |   |
|                             |       | Thomas Conway                           |   |   | Robert M. Shanahan |   |
|                             |       | International Vice President            |   |   | VP-Mfg., Mill Mgmt.-Canton, NC |   |
|                             |       | Administration                          |   |   |   |   |
|                             |       |                                    |   |   |   |   |
|                             |       |                                    |   |   |   | /S/ David M. Lewallen |   |
|                             |       | Fred Redmond                            |   |   | David M. Lewallen |   |
|                             |       | International Vice President            |   |   | VP-Operations, DairyPak |   |
|                             |       | Human Affairs                           |   |   |   |   |
|                             |       |                                    |   |   |   |   |
|                             |       |                                    |   |   |   | /S/ Alan W. Denney |   |
|                             |       | C.L. “Connie” Entrekin        |   |   | Alan W. Denney |   |
|                             |       | Director, District 9                    |   |   | VP & Gen. Mgr. Extrusion— |   |
|                             |       |                                    |   |   | Waynesville |   |
|                             |       |                                    |   |   |   |   |   |
|                             |       |                                    |   |   |   |   |   |
|                             |       | Stan Johnson                            |   |   | /S/ James E. Froehlich |   |
|                             |       | Assistant to the Director, District 9   |   |   | James E. Froehlich |   |
|                             |       |                                    |   |   | Director Human Resources-Canton |   |
| ** **                       | ** ** | ** **                              |   |   |   |   |
| ** **                       | ** ** | **Local  Union Negotiating Committee:** |   |   |   |   |
|                             |       |                                    |   |   | /S/ Chuck Grotsky |   |
|                             |       |                                    |   |   | Chuck Grotsky |   |
|                             |       | /S/ Howard  Taylor                      |   |   |   | Manager HROD-Olmsted Falls, OH |   |
|                             |       | President Local  No. 507                |   |   |   |   |
|                             |       |                                    |   |   | /S/ Larry Foster |   |
|                             |       | /S/ Robert Riggs                        |   |   |   | Larry Foster |   |
|                             |       | President Local  No. 673                |   |   | Plant Manager-Clinton, IA |   |
|                             |       |                                    |   |   |   |   |
|                             |       | /S/ Mark Howard                         |   |   |   | /S/ Jeff Hykin |   |
|                             |       | President Local  No. 761                |   |   | Jeff Hykin |   |
|                             |       |                                    |   |   | Plant Manager-Olmsted Falls, OH |   |
|                             |       | /S/ Pat Kitchens                        |   |   |   |   |   |
|                             |       | President Local  No. 794                |   |   | /S/ Victor G. Orr |   |
|                             |       |                                    |   |   | Victor G. Orr |   |
|                             |       |                                    |   |   | Plant Manager-Athens, GA |   |

 

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**AppendixA**

**AGREEMENT ONPROFIT SHARING**

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

**1.****              Eligibility**

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

**2.****              Contribution Formula**

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

**3.****              Definition of Profit**

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

**4.****              Allocation ofBenefits**

The total Profit Sharing Contribution shall be dividedequally among eligible employees, as determined under the Eligibilityclause.  Eligible employees or theirbeneficiaries who retire, die, go on military, pregnancy, union or sick leave,or are laid off during a Plan Year will receive their applicable profit sharingcheck for the Plan Year the event occurs.

**5.****              Distribution ofBenefits**

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

**6.****              Audits and Reports**

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

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All computations and adjustments required under thisPlan shall be reviewed by an Auditor, who shall be from an independentCertified Public Accounting firm that is mutually acceptable to the Company andthe Union.  As soon as practicable afterthe close of each Plan Year, the Auditor shall provide the Union with a reporton the operation of the Plan.  Suchreport shall include information on the adjustments, if any, that are necessaryto determine Profits in Section 3, and other relevant information reflectingPlan experience.  In addition, theCompany shall respond as soon as practicable to requests from the Union forinformation supporting the Profit Sharing Contribution calculations.  The Union shall have access to all financialrecords for the purpose of verifying the profit sharing calculations.

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

**7.****              Other Understandings**

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

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

**8.****              Effective Dates andDuration**

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

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**Appendix B**

**HOURLY RELOCATIONGUIDELINES**

At the time a Blue Ridgemanufacturing location makes a decision to fill an hourly job position(s) fromoutside the facility (new hire), the following guidelines will apply perArticle VIII (Seniority), Section I (Transfers), of the new master LaborAgreement.  Note:  These guidelines are effective for allcurrent Blue Ridge Paper Products Inc. manufacturing facilities.

1.               When a vacancyoccurs, prior to hiring a new employee, incumbent Blue Ridge employees shall begiven an opportunity for transfers between locations.  It will be the responsibility of the locationHuman Resources representatives to notify other Blue Ridge manufacturingfacilities of vacancies utilizing the attached form (A).  This form will be transmitted after allinternal bidding procedures have been utilized at a facility and a decision hasbeen made to fill the vacancy externally.

2.               “Incumbent BlueRidge employees,” as used above, includes current active employees as well aslaid off employees so long as they continue to maintain recall rights under theterms of their location labor agreement.

3.               Although currentBlue Ridge incumbent employees shall be considered prior to hiring from theoutside, interested employees are still subject to the selection criteria(i.e., interview, testing, drug screening, etc.) in effect at the receivinglocation.  Whenever possible theselection process will be coordinated with the interested employee’s currentlocation to minimize travel (i.e., telephone interview, local testing and/ordrug screening, etc.).  It must also beunderstood that the receiving location controls the timing of their vacanciesand to be considered the employee must be able and willing to make themselvesavailable based upon the time constraints of the receiving location.

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

5.               Transferringemployees shall only retain their prior location seniority for earned vacationand pension.  Their selection of specificvacation weeks will be in accordance with their new seniority and vacationscheduling procedures at their new location.

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6.               Any existingwaiting periods for employee benefits will be waived for a transferringemployee and the employee will be immediately eligible for those benefits ineffect at the new location.

7.               A transferringemployee will maintain membership in the international union and will be amember of the local union on the date of transfer.

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**Appendix C**

**EMPLOYEE STOCKOWNERSHIP PLAN**

Refer to Blue Ridge PaperProducts Inc. Employee Stock Ownership Plan incorporated herein byreference. Copies of the Plan are available from

The Blue Ridge ESOP

41 Main St.

Canton, NC 28716

Attn:  ESOP Coordinator

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**Appendix D**

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

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

2. MOA regarding “Clarificationof Article XX “Leave of Absence, Section D., “Family Medical Leave”, effectiveApril, 28, 2004.

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

4. Side Letter Agreementdated July 10, 2006 regarding a potential future Acquisition of or by BlueRidge Paper Products Inc.

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

 

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