**Exhibit 10.3**

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

June 13, 2007

United Steelworkers

Five Gateway Center

Pittsburgh, PA 15222

RE: Acquisition of BlueRidge by Rank Group Limited.

Ladies and Gentlemen:

The following willconfirm our understanding and agreement as to the terms and conditions ofemployment that will apply to United Steelworker-represented (“USW”) bargainingunit employees of Blue Ridge Paper Products (“Blue Ridge”) in the event thatBlue Ridge is acquired (the “Acquisition”) either directly or indirectly,including through a merger with Packaging Holdings Inc(the “Company”) by RankGroup Limited.

The Company and the USWagree that if the Acquisition is consummated, then.

1.  The agreements between Blue Ridge and the USWexisting as of the today (the “Current CBAs”) shall remain in effect for theiroriginal term, except as expressly set forth herein.  The Notice of Termination sent by the USW,dated May 1, 2007, shall be cancelled and the Right to Terminate letteragreement, dated July 10, 2006, shall be of no further force or effect.

2.  The major pulp and paper making equipment atthe Canton facility and the major equipment at the Waynesville facility will beoperated without interruption and there shall be no involuntary lay-offs ofUSW-represented employees as a result of the Acquisition during the term of theCurrent CBAs provided, however, that (a) layoffs resulting from the failure tooperate said machines as a result of shutdowns for maintenance or “Acts of God”will not constitute or result in a violation of this agreement; and (b) layoffsresulting from changes in market conditions which make certain products oroperations non-competitive will not constitute a violation of this agreement.

3.  The Company may close no more than one of theUSW represented, as of this date, converting facilities during the term of theCurrent CBAs, unless changes in market conditions make certain products,operations or facilities non-competitive, in which event this paragraph willnot apply to such products, operations or facilities.  Any contractual severance obligation will behonored in the event a facility is closed and such provisions will controlunless the USW 

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and the Company agree toother terms at or subsequent to the time of the announcement of the closure.

4.  Any bargaining unit headcount reductions madepossible through the synergies of the Acquisition will be achieved throughattrition.

5.  The disposition of any converting facility,as required by any governmental agency as a requirement for approval of thecontemplated Acquisition will not constitute a violation of this agreement.

6.  Profit sharing, as defined in the CurrentCBAs, will be eliminated as of the effective date of the Acquisition and inlieu thereof the USW represented employees will receive an additional 2% wageincrease in the second year of the contract and a 1% wage increase in the thirdyear of the contract.

7.  The Company has been advised by Blue Ridgeand the USW that Article 31.B. of the Master Agreement between Blue Ridge andthe USW has never been implemented and is of no force or effect; and for thisreason, Article 31.B. is deleted from the Master Agreement.

8.  Blue Ridge and the USW will cause the ESOP tobe terminated as of immediately following the consummation of the Acquisition,with proceeds to be distributed in accordance with the terms of the ESOP.

9. In the event of a plantclosure or layoff from a former Blue Ridge facility represented by the USW, theimpacted bargaining unit employee(s) will be offered preferential hire rightsto other facilities represented by the USW as provided on Attachment A to thisletter of agreement..

10.  This letter agreement has been dulyauthorized, executed and delivered by the parties hereto and is the legal,valid and binding obligation of USW and the Company, enforceable in accordancewith its terms

11. This letter agreementshall be binding upon and inure solely to the benefit of the parties and theirpermitted assigns and nothing herein is intended to or shall confer upon anyother person or entity, any right, benefit or remedy of any nature whatsoever,under or by reason of this Agreement. USW acknowledges that this agreement shall be enforceable on behalf ofthe Company by Rank Group Limited or any affiliate of Rank Group Limited and/orBlue Ridge (provided that any enforcement by Blue Ridge prior to the closing ofthe Acquisition shall require the consent of Rank Group Limited).

12.  This letter is the complete agreement of theparties concerning the subject matter hereof and supersedes any prioragreements concerning such subject matter.

[REMAINER OF PAGEINTENTIONALLY LEFT BLANK]

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|        | Sincerely,               |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | Packaging  Holdings Inc. |
|   |                     |
|   |                     |
|   | By:                      | /s/ GREGORY ALAN  COLE |   |
|   | Name: Gregory  Alan Cole |
|   | Title: Vice  President   |
|   |                     |

 
| Agree To and Confirmed on  behalf of                         |
|--------------------------------------------------------------|
| the United  Steelworkers                                     |
|                                                         |
|                                                         |
| /s/ STAN JOHNSON                                             |   |
| Name: Stan  Johnson                                          |
| Title:  Authorized Representative of the United Steelworkers |

 

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**ATTACHMENT A:  Preferential Hiring**

**1.  Eligibility.**  Inthe event of a plant closure or layoff from a former Blue Ridge facilityrepresented by the USW, the impacted bargaining unit employee(s) will beeligible for preferential hiring opportunities before the Company hires newemployees at other Blue Ridge facilities presented by the USW or EvergreenPackaging Inc. hires new employees at its facilities represented by the USW,provided that preferential hiring will not apply to any employee who opted toretire or otherwise voluntarily sever his or her employment relationship withthe Company upon layoff or complete plant closure.  Preferential hire positions will not befilled until regular recall is exhausted at the facility requested.

**2.  Qualifications.** Preferential hire applicants will not be subjected to interviews, tests,qualifications or other criteria not required of regular laid off employeesbeing recalled to similar jobs within the facility in which preferential hireis desired.  If the preferential hireapplicant were qualified in a similar job in their home facility that applicantwill be considered as qualified for similar jobs in the new facility.

**3.  Preferential Hiring List.**  TheCompany will maintain a master list of preferential hire requests, in order ofCompany seniority.  Laid-off employeesdesiring to place their names on the list shall submit a written request to theCompany, on forms to be provided by the Company and delivered to an addressspecified by the Company.  The forms willallow the laid-off employee to identify which other Blue Ridge facility orfacilities represented by the USW at which the employee desires to beconsidered for preferential hiring. Prior to hiring new employees from the street at any such facility, theCompany will  offer those vacantpositions  to laid-off employees listedon the Preferential Hiring List, with offers made in sequence on the basis of  Company Seniority.

4.  **Duration of PreferentialHiring Rights**.  Preferentialhire rights will be maintained as long as the individual employee would haveretained recall rights under the terms of the Collective Bargaining Agreementin place at the time of layoff or plant closure, unless improvements are madein subsequent collective bargaining agreements.

5**.  Retention of Prior Rights**.  While awaiting an opportunity forpreferential hire, laid-off  bargainingunit employees who place their names on the Preferential Hiring List  will retain all rights and privileges attheir original home facility as specified by the applicable  Collective Bargaining Agreement  If preferential hire is offered and acceptedat another facility, the employee will continue to  retain recall rights to their home facility,if the home facility remains in operation.

6.  **Seniority AfterPreferential Hiring**.  Uponentry in to a different facility as a result of preferential hire thebargaining unit employee will retain total company seniority for purposes ofvacation, pension, or other contractual rights specifically allowed within themaster contract agreement.  However, thebargaining unit employee exercising preferential hire will not be able toutilize their Company Seniority for purposes of shift preference, job bidding, vacationscheduling or other seniority rights dependent upon seniority normally heldwithin the specific site or unit; plant seniority will control as to suchrights.

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7.  The specific language incorporating theprinciples set forth above will be negotiated in good faith by the partieswithin the current Collective Bargaining Agreement(s) by addendum upon closingof the transaction using Appendix “B” within the current Collective BargainingAgreement as a template (it being understood that the terms set forth hereinshall be binding until such time as such addendum is agreed upon).

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