<B>American Pad &amp; Paper Selling Divisions to American Tissue</B>

American Pad & Paper Co. signed an agreement to sell its Ampad and Forms divisions to an affiliate of American Tissue Inc. for $67.1 million subject to final closing adjustments. AP&P's Ampad division is one of North America's largest suppliers of writing pads, filing supplies and retail envelopes. The sale is subject to a number of conditions including bankruptcy court approval.

AP&P has been pursuing the sale of various business assets to reduce its debt. Earlier this year, AP&P concluded the sale of its Chicago-based Creative Card division to Taylor Corporation and signed a letter of intent with Saratoga Partners for the sale of its other major business asset, the Williamhouse division. Once the sale processes for Ampad, Forms and Williamhouse are completed, AP&P and its advisors will review options for finalizing the Chapter 11 process.