**Exhibit 10.4**

Packaging Holdings Inc

c/o Burns Philp& Company Pty LimitedLevel 23, 56 Pitt StreetSydney NSW 2000Australia

July 25, 2007

United Steelworkers

Five Gateway Center

Pittsburgh, PA 15222

RE:         Terminationof ESOP and Related Contractual Provisions, Including USWRepresentation On Board of Directors of Blue Ridge Paper Products, Inc.

Ladies and Gentlemen:

This letter is to confirmour understanding and agreement on the consequences which will result in theevent that Blue Ridge Paper Products, Inc. (“Blue Ridge”) is acquired (the “Acquisition”)either directly or indirectly, including through a merger with PackagingHoldings Inc., by Rank Group Limited.  Wehave previously agreed, in paragraph 8 of the letter agreement dated June 13,2007, that the Acquisition will result in the termination of the Employee StockOwnership Plan (“ESOP”) previously created pursuant to Article XXXI andAppendix C of the current collective bargaining agreement between Blue Ridgeand the USW.  This letter is to confirmthat (a) the termination of the ESOP will result in the automatic terminationof the provisions of Articles XXXI thru XXXV of the Master Agreement, includingbut not limited to cessation of the United Steelworker’s (“USW”) representationon the board of directors of Blue Ridge pursuant to Article XXXI; and (b)Articles XXXI thru XXXV will be deleted from the Master Agreement and of nofurther force or effect as of the effective date of the Acquisition.

Please confirm ourunderstanding and agreement by your signature below on behalf of the USW.  This letter agreement shall be binding uponand inure solely to the benefit of the parties and their permitted assigns andnothing herein is intended to or shall confer upon any other person or entity,any right, benefit or remedy of any nature whatsoever, under or by reason ofthis letter agreement.

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|                                      |                                                 | Sincerely,           |
|--------------------------------------|------------------------------------------------------|----------------------|
|                                 |                                                 |                 |
|                                 |                                                 | /s/ THOMAS J. DEGNAN |
|                                 |                                                 | Thomas J. Degnan     |
|                                 |                                                 |                 |
| Agree To and  Confirmed on behalf of |                                                 |                 |
| the United  Steelworkers             |                                                 |                 |
|                                 |                                                 |                 |
|                                 |                                                 |                 |
|                                 |                                                 |                 |
| /s/ STAN JOHNSON                     |                                                 |                 |   |
| Name:                                | Stan Johnson                                         |                 |   |
| Title:                               | Authorized Representative of the United Steelworkers |
|                                 | Director, USW  District 9                            |                 |
|                                      |                                                      |                      |  |  |  |

 

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