**Exhibit 10.7****INDEMNITY AGREEMENT**     This Indemnity Agreement (“Agreement”) is made and entered into by and between PioneerCompanies, Inc., a Delaware corporation (“Company”), and Richard L. Urbanowski (“Indemnitee”).Introduction     Indemnitee is a director of the Company. The parties desire that the Company provideindemnification (including advancement of expenses) to Indemnitee against any and all liabilitiesasserted against Indemnitee to the fullest extent permitted by the Delaware General Corporation Lawand any other law (including statutory law and law established by judicial decision) of the Stateof Delaware (collectively, “Law”), as the Law presently exists and may be expanded from time totime. Based on such premise, and for certain good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereby agree as follows:     1. *Continued Service*. Indemnitee will serve at the will of the Company or under separatecontract, if such exists, as a director of the Company for so long as Indemnitee is duly electedand qualified in accordance with the Bylaws of the Company or until Indemnitee tenders Indemnitee’sresignation to the Company.     2. *Indemnification*. The Company shall indemnify Indemnitee as follows:          2.1. The Company shall indemnify Indemnitee when Indemnitee was or is a party or is threatenedto be made a party to any threatened, pending or completed action, suit or proceeding, whethercivil, criminal, administrative or investigative (other than an action by or in the right of theCompany), by reason of the fact that Indemnitee is or was a director, officer, employee or agent ofthe Company, or is or was serving at the request of the Company as a director, officer, employee oragent of another corporation, partnership, joint venture, trust or other enterprise, againstexpenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually andreasonably incurred by Indemnitee in connection with such action, suit or proceeding (includingpunitive and similar damages, to the extent permitted by Law) if Indemnitee acted in good faith andin a manner Indemnitee reasonably believed to be in or not opposed to the best interests of theCompany, and, with respect to any criminal action or proceeding, had no reasonable cause to believethat Indemnitee’s conduct was unlawful.          2.2. The Company shall indemnify Indemnitee when Indemnitee was or is a party or is threatenedto be made a party to any threatened, pending or completed action or suit by or in the right of theCompany to procure a judgment in its favor by reason of the fact that Indemnitee is or was adirector, officer, employee or agent of the Company, or is or was serving at the request of theCompany as a director, officer, employee or agent of another corporation, partnership, jointventure, trust or other enterprise against expenses (including attorneys’ fees) actually andreasonably incurred by Indemnitee in connection with the defense or settlement of such action orsuit if Indemnitee acted in good faith and in a manner that Indemnitee reasonably believed to be inor not opposed to the best interests of the Company and except that no
 

 
indemnification pursuant to this Agreement shall be made in respect of any claim, issue ormatter as to which Indemnitee shall have been adjudged to be liable to the Company unless and onlyto the extent that the Court of Chancery or the court in which such action or suit was broughtshall determine upon application that, despite the adjudication of liability but in view of all thecircumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for suchexpenses which the Court of Chancery or such other court shall deem proper.          2.3. Any indemnification under Sections 2.1 and 2.2 (unless ordered by a court) shall be madeby the Company only as authorized in the specific case upon a determination, in accordance with theprocedures set forth in Section 3, that indemnification of Indemnitee is proper in thecircumstances because Indemnitee has met the applicable standard of conduct set forth in suchSections 2.1 and 2.2. Subject to Section 3.3, such determination shall be made (1) by the board ofdirectors of the Company by a majority vote of a quorum consisting of directors who were notparties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even ifobtainable a quorum of disinterested directors so directs, by independent legal counsel in awritten opinion, or (3) by the stockholders of the Company.          2.4. Expenses (including attorneys’ fees) incurred by Indemnitee in defending any civil,criminal, administrative, or investigative action, suit or proceeding shall be paid from time totime by the Company in advance of the final disposition of such action, suit or proceeding, within14 days after the receipt by the Company from Indemnitee of a Statement of Undertaking insubstantially the form set forth in Exhibit A, in which Indemnitee (1) states that Indemnitee hasreasonably incurred actual expenses in defending a civil, criminal, administrative, orinvestigative action, suit or proceeding and (2) undertakes to repay such amount if it shallultimately be determined that Indemnitee is not entitled to be indemnified by the Company asauthorized in this Section 2.          2.5. The indemnification and advancement of expenses provided by, or granted pursuant to, thisSection 2 shall not be deemed exclusive of any other rights to which Indemnitee may be entitledunder any bylaw, agreement, vote of stockholders or disinterested directors, Law or otherwise, bothas to action in Indemnitee’s official capacity and as to action in another capacity while holdingsuch office, shall continue after Indemnitee has ceased to be a director, officer, employee oragent of the Company, and shall inure to the benefit of the heirs, executors and administrators ofIndemnitee.          2.6. The termination of any action, suit or proceeding by judgment, order, settlement orconviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create apresumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonablybelieved to be in or not opposed to the best interests of the Company, and, with respect to anycriminal action or proceeding, had reasonable cause to believe that Indemnitee’s conduct wasunlawful.     3. *Determination of Right to Indemnification*. For the purpose of making the determination ofwhether to indemnify Indemnitee in a specific case under Section 2.3, the board of directors of theCompany, independent legal counsel or stockholders, as the case may be, shall make thedetermination in accordance with the following procedures:
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          3.1. Indemnitee shall submit to the board of directors a Statement of Request forIndemnification in substantially the form set forth in Exhibit B, in which Indemnitee states thatIndemnitee has met the applicable standard of conduct set forth in Sections 2.1 and 2.2.          3.2. Indemnitee’s submission of a Statement of Request for Indemnification to the board ofdirectors shall create a rebuttable presumption that Indemnitee has met the applicable standard ofconduct set forth in Sections 2.1 and 2.2 and, therefore, is entitled to indemnification underSection 2. The board of directors, independent legal counsel or stockholders, as the case may be,shall determine, within 45 days after submission of the Statement of Request for Indemnification,specifically that Indemnitee is so entitled, unless it or they shall possess clear and convincingevidence to rebut the foregoing presumption, which evidence shall be disclosed to Indemnitee withparticularity in a sworn written statement signed by all persons who participated in thedetermination and voted to deny indemnification.          3.3. At Indemnitee’s option, Indemnitee may elect that the determination as to indemnificationis to be made by Independent Counsel (as defined below), in which event the Independent Counselshall be selected by Indemnitee, and Indemnitee shall give written notice to the Company(“Independent Counsel Notice”) within 10 days after the delivery of the Statement of Request forIndemnification advising it of the identity of the Independent Counsel so selected (unlessIndemnitee shall request in the Independent Counsel Notice that such selection be made by the boardof directors of the Company), in which event the Company shall give written notice to Indemniteewithin 10 days after receipt of Indemnitee’s Independent Counsel Notice advising Indemnitee of theidentity of the Independent Counsel so selected). In either event, Indemnitee or the Company, asthe case may be, may, within seven days after such written notice of selection shall have beengiven, deliver to the Company or to Indemnitee, as the case may be, a written objection to suchselection. Any objection to selection of Independent Counsel pursuant to this Section 3.3 may beasserted only on the ground that the Independent Counsel so selected does not meet the requirementsof the definition of “Independent Counsel” below, and the objection shall set forth withparticularity the factual basis of such assertion. If such written objection is timely made, theIndependent Counsel so selected may not serve as Independent Counsel unless and until a court hasdetermined that such objection is without merit. In the event of a timely written objection to achoice of Independent Counsel, the party originally selecting the Independent Counsel shall haveseven days to make an alternate selection of Independent Counsel and to give written notice of suchselection to the other party, after which time such other party shall have seven days to make awritten objection to such alternate selection. If, within 45 days after submission by Indemniteeof a Statement of Request for Indemnification pursuant to Section 3.1 hereof, no IndependentCounsel shall have been selected and not objected to, either the Company or Indemnitee may petitiona court of competent jurisdiction (the “Court”) for resolution of any objections that shall havebeen made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or forthe appointment as Independent Counsel of a person selected by the Court or by such other person asthe Court shall designate, and the person with respect to whom an objection is so resolved or theperson so appointed shall act as Independent Counsel for purposes of the determination to be madeunder Section 2.3 hereof. The Company shall pay any and all reasonable fees and expenses ofIndependent Counsel incurred by such Independent Counsel in connection with acting pursuant
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to hereto and provide such person with appropriate indemnification, and the Company shall payall reasonable fees and expenses incident to the procedures of this Section 3.3, regardless of themanner in which such Independent Counsel was selected or appointed. The rights and obligations ofthe parties under this Section 3.3 shall be subject to, and shall be given effect only to theextent permitted by, applicable Law.          3.4. If the person or persons empowered or selected under this Agreement to determine whetherIndemnitee is entitled to indemnification shall not have made a determination within 45 days afterreceipt by the Company of the Statement of Request for Indemnification by Indemnitee therefor (or,if the determination of entitlement to indemnification is to be made by Independent Counselpursuant to Section 3.3 of this Agreement, and such determination shall not have been made anddelivered in written opinion within 90 days after (i) such Independent Counsel’s being appointed,(ii) the overruling by the Court of objections to such Counsel’s selection or (iii) expiration ofall periods for the Company or Indemnitee to object to such Counsel’s selection), the requisitedetermination of entitlement to indemnification shall be deemed to have been made and Indemniteeshall be entitled to such indemnification, absent a prohibition of such indemnification underapplicable Law; *provided, however,*that such 45-day period may be extended for a reasonable time,not to exceed an additional 30 days, if the person making the determination with respect toentitlement to indemnification in good faith requires such additional time for the obtaining orevaluating of documentation and/or information relating to such determination; *and provided,further,*that the 45-day limitation set forth in this Section 3.4 shall not apply and such periodshall be extended as necessary if Independent Counsel is not to make the determination pursuant tosection 3.3 of this Agreement and if within 30 days after receipt by the Company of the Statementof Request for Indemnification the Board has resolved to submit such determination to thestockholders for their consideration at an annual meeting thereof to be held within 90 days aftersuch receipt and such determination is made thereat, or a special meeting of stockholders is calledwithin 30 days after such receipt for the purpose of making such determination, such meeting isheld for such purpose within 60 days after having been so called and such determination is madethereat.     4. *Merger, Consolidation or Change in Control*. If the Company is a constituent corporation ina merger or consolidation, whether the Company is the resulting or surviving corporation or isabsorbed as a result thereof, or if there is a change in control of the Company, or a sale or othercomplete disposition of all or substantially all of the assets of the Company, Indemnitee shallstand in the same position under this Agreement with respect to the resulting, surviving, changedor acquiring corporation or other entity as Indemnitee would have with respect to the Company ifits separate existence had continued or if there had been no change in control of the Company or asale or other complete disposition of all or substantially all of the assets of the Company.     5. *Certain Definitions*. For the purposes of this Agreement, the following terms shall havethe indicated meanings and understandings:          5.1. The term “other enterprise” shall include, among others, employee benefit plans andcivic, non-profit and charitable organizations, whether or not incorporated.
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          5.2. The term “fines” shall include any excise taxes assessed on Indemnitee with respect toany employee benefit plan.          5.3. The term “serving at the request of the Company” shall include any service, at therequest or with the express or implied authorization of the Company, as a director, officer,employee or agent of another corporation, partnership, joint venture, trust or other enterprise,which service imposes duties on, or involves services by, Indemnitee with respect to suchcorporation, partnership, joint venture, trust or other enterprise, its participants orbeneficiaries. If Indemnitee acted in good faith and in a manner Indemnitee reasonably believed tobe in or not opposed to the best interests of such other enterprise, its participants orbeneficiaries, Indemnitee shall be deemed to have acted in a manner not opposed to the bestinterests of the Company.          5.4. The term “change in control” shall include any change in the ownership of a majority ofthe outstanding voting securities of the Company or in the composition of a majority of the membersof the board of directors of the Company.          5.5. The term “Independent Counsel” means a law firm, or a member of a law firm, that isexperienced in matters of corporation law and neither contemporaneously is, nor in the five yearstheretofore has been, retained to represent: (a) the Company or Indemnitee in any matter materialto either such party, (b) any other party to the proceeding giving rise to a claim forindemnification hereunder or (c) the beneficial owner, directly or indirectly, of securities of theCompany representing 25% or more of the combined voting power of the Company’s then outstandingvoting securities. Notwithstanding the foregoing, the term “Independent Counsel” shall not includeany person who, under the applicable standards of professional conduct then prevailing, would havea conflict of interest in representing either the Company or Indemnitee in an action to determineIndemnitee’s rights under this Agreement.     6. *Attorneys’ Fees*. If Indemnitee institutes any legal action to enforce Indemnitee’s rightsunder this Agreement, or to recover damages for breach of this Agreement, Indemnitee, if Indemniteeprevails in whole or in part, shall be entitled to recover from the Company all fees and expenses(including attorneys’ fees) incurred by Indemnitee in connection therewith.     7. *Deposit of Funds In Trust*. If the Company voluntarily decides to dissolve or to file apetition for relief under the applicable bankruptcy, moratorium or similar laws, then not laterthan 10 days prior to such dissolution or filing, the Company shall deposit in trust for the soleand exclusive benefit of Indemnitee a cash amount equal to all amounts previously authorized to bepaid to Indemnitee hereunder, such amounts to be used to discharge the Company’s obligations toIndemnitee hereunder. Any amounts in such trust not required for such purpose shall be returned tothe Company. This Section 7 shall not apply to the dissolution of the Company in connection with atransaction as to which Section 4 applies.     8. *Amendments to Law*. This Agreement is intended to provide indemnity to Indemnitee to thefullest extent allowed under Law, including but not limited to statutory law and judicialdecisions. Accordingly, to the extent permitted by Law, if the Law permits greater indemnity thanthe indemnity set forth herein, or if any amendment is made to any Law expanding the indemnitypermissible under Law, the indemnity obligations contained herein
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automatically shall be expanded, without the necessity of action on the part of any party, tothe extent necessary to provide to Indemnitee the fullest indemnity permissible under Law.     9. *Miscellaneous Provisions*.          9.1. This Agreement shall continue for so long as Indemnitee serves as a director of theCompany or as a director, officer, partner, employee, agent or fiduciary of any other corporation,partnership, joint venture, trust, employee benefit plan or other enterprise in which theIndemnitee served at the request of the Company, and thereafter shall survive until and terminateupon the later to occur of: (a) the final termination of all pending proceedings in respect ofwhich Indemnitee is granted rights of indemnification or advancement of expenses hereunder and ofany proceeding commenced by Indemnitee relating thereto; or (b) the expiration of all statutes oflimitation applicable to possible claims arising out of Indemnitee’s services as described above.This Agreement shall be binding upon the Company and its successors and assigns and shall inure tothe benefit of Indemnitee and Indemnitee’s heirs, executors, legal representatives andadministrators.          9.2. This Agreement constitutes the full understanding of the parties and a complete andexclusive statement of the terms and conditions of this Agreement and supersedes all priornegotiations, understandings and agreements, whether written or oral, between the parties, theiraffiliates, and their respective principals, shareholders, directors, officers, employees,consultants and agents with respect thereto; provided, however, that no rights of Indemnitee underany certificate of incorporation, bylaw, insurance policy, Law or other agreement shall be limitedor terminated by this Agreement.          9.3. No alteration, modification, amendment, change or waiver of any provision of thisAgreement shall be effective or binding on any party hereto unless the same is in writing and isexecuted by all parties hereto.          9.4. If a court of competent jurisdiction declares that any provision of this Agreement isillegal, invalid or unenforceable, then such provision shall be modified automatically to theextent necessary to make such provision fully legal, valid or enforceable. If such court does notmodify any such provision as contemplated herein, but instead declares it to be wholly illegal,invalid or unenforceable, then such provision shall be severed from this Agreement, this Agreementand the rights and obligations of the parties hereto shall be construed as if this Agreement didnot contain such severed provision, and this Agreement otherwise shall remain in full force andeffect.          9.5. This Agreement shall be enforceable by and against the Company, the Indemnitee andtheir respective executors, legal representatives, administrators, heirs, successors and assignees.          9.6. This Agreement shall be governed by, construed under, and enforced in accordance with thelaws of the State of Delaware without reference to the conflict-of-laws provisions thereof thatwould require the application of another state’s law.
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          9.7. This Agreement may be executed by the parties hereto in multiple counterparts, each ofwhich shall be deemed an original for all purposes, and all of which together shall constitute oneand the same instrument.          9.8. The Company shall be precluded from asserting in any judicial proceeding commenced underthis Agreement that the procedures and presumptions of this Agreement are not valid, binding andenforceable and shall stipulate in any such court that the Company is bound by all the provisionsof this Agreement.          9.9. Unless otherwise expressly provided herein, all notices, requests, demands, consents,waivers, instructions, approvals and other communications hereunder shall be in writing and shallbe deemed to have been duly given if personally delivered to or mailed, certified mail returnreceipt requested, first-class postage paid, addressed as follows:If to the Company, to it at:Pioneer Companies, Inc.