exv10w4



 





EXHIBIT 10.4




CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



PULP SUPPLY AGREEMENT




between




KIMBERLY-CLARK GLOBAL SALES, INC.




and




NEENAH PAPER, INC.




Made as of the
30th day of November, 2004




 









 








CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1
	 	DEFINITIONS	 	 	1	 
	1.01
	 	Airdry Metric Ton (“ADMT”)	 	 	1	 
	1.02
	 	Annual Supply Obligation or ASO	 	 	1	 
	1.03
	 	Annual Purchase Obligation or APO	 	 	1	 
	1.04
	 	Contract Year	 	 	1	 
	1.05
	 	Delivery Point	 	 	1	 
	1.06
	 	Distribution Date	 	 	1	 
	1.07
	 	Environmental/Safety Laws	 	 	2	 
	1.08
	 	Invoice Price	 	 	2	 
	1.09
	 	Phase Down Period	 	 	2	 
	1.10
	 	Pulp	 	 	2	 
	1.11
	 	Regions	 	 	2	 
	1.12
	 	Shipping Points	 	 	2	 
	1.13
	 	Specifications	 	 	2	 
	1.14
	 	Transaction Price	 	 	2	 
	1.15
	 	2004 Supply Period	 	 	2	 
	ARTICLE 2
	 	ANNUAL PURCHASE AND SUPPLY OBLIGATIONS; ANNUAL FORECASTS AND QUARTERLY ESTIMATES; SAFETY STOCKS	 	 	2	 
	2.01
	 	Annual Purchase and Supply Obligations	 	 	2	 
	2.02
	 	Regional Terms	 	 	4	 
	2.03
	 	Quarterly Estimates	 	 	4	 
	2.04
	 	Annual Forecasts	 	 	4	 
	2.05
	 	Safety Stocks	 	 	5	 
	2.06
	 	Ordering	 	 	5	 
	ARTICLE 3
	 	QUALITY AND SPECIFICATIONS; SPECIFICATION CHANGES;  WARRANTIES; PRODUCT SAFETY CERTIFICATIONS; REPORTS, RECORDKEEPING, AND ACCESS	 	 	6	 
	3.01
	 	Quality and Specifications	 	 	6	 
	3.02
	 	Specifications Change	 	 	6	 
	3.03
	 	Forestry	 	 	6	 
	3.04
	 	Warranties; Product Safety Certification	 	 	7	 
	3.05
	 	Reports, Recordkeeping, and Access	 	 	7	 
	ARTICLE 4
	 	PRICE AND PAYMENT TERMS	 	 	8	 
	4.01
	 	Price	 	 	8	 
	4.02
	 	Discounts	 	 	9	 







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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page
	4.03
	 	Freight and Other Shipping Costs	 	 	9	 
	4.04
	 	Payment Terms	 	 	9	 
	ARTICLE 5
	 	SHIPMENT AND DELIVERY	 	 	9	 
	5.01
	 	Shipment Method/Shipping and Delivery Points	 	 	9	 
	5.02
	 	Arrearage	 	 	9	 
	5.03
	 	Title and Risk of Loss	 	 	10	 
	5.04
	 	Bale Finishing	 	 	10	 
	ARTICLE 6
	 	TERM AND TERMINATION	 	 	10	 
	6.01
	 	Term	 	 	10	 
	6.02
	 	Termination	 	 	10	 
	6.03
	 	Termination Without Cause	 	 	11	 
	6.04
	 	Effect of Termination	 	 	11	 
	ARTICLE 7
	 	CLAIMS: DISPUTE RESOLUTION	 	 	11	 
	7.01
	 	Claims	 	 	11	 
	7.02
	 	Dispute Resolution	 	 	12	 
	7.03
	 	Litigation	 	 	12	 
	7.04
	 	Governing Law	 	 	12	 
	ARTICLE 8
	 	INDEMNIFICATION	 	 	12	 
	ARTICLE 9
	 	CONTINGENCIES	 	 	12	 
	9.01
	 	Force Majeure	 	 	12	 
	9.02
	 	Environmental/Safety Laws	 	 	13	 
	9.03
	 	Forestry Considerations	 	 	13	 
	9.04
	 	Notice	 	 	13	 
	ARTICLE 10
	 	CONFIDENTIALITY	 	 	13	 
	ARTICLE 11
	 	CUSTOMS	 	 	14	 
	ARTICLE 12
	 	GENERAL	 	 	14	 
	12.01
	 	Parties Bound/Assignment	 	 	14	 
	12.02
	 	Right of Offset	 	 	14	 
	12.03
	 	Compliance With Law	 	 	14	 
	12.04
	 	Independent Contractor Status	 	 	14	 
	12.05
	 	Waiver of Breach	 	 	14	 
	12.06
	 	Notices	 	 	15	 
	12.07
	 	Severability of Provisions	 	 	15	 







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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page
	12.08
	 	Headings	 	 	15	 
	12.09
	 	Entire Agreement	 	 	16	 
	12.10
	 	Counterparts	 	 	16	 







	 	 	 
	EXHIBIT A

	 	PULP PURCHASE OBLIGATIONS, SUPPLY OBLIGATIONS, DELIVERY POINTS AND TRANSPORTATION TERMS
	 
	 	 
	EXHIBIT B

	 	SPECIFICATIONS
	 
	 	 
	EXHIBIT C

	 	DISCOUNT SCHEDULE
	 
	 	 
	EXHIBIT D

	 	CERTIFICATE







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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



PULP SUPPLY AGREEMENT




     THIS
PULP SUPPLY AGREEMENT (“Agreement”), entered into as of the
30th day
of November 2004, is by and between NEENAH PAPER, INC., a Delaware corporation
(“Seller”), and KIMBERLY-CLARK GLOBAL SALES, INC., a Delaware corporation
(“K-C”).




WITNESSETH




     WHEREAS, Seller pursuant to a Distribution Agreement (the “Distribution
Agreement”) dated as of November 30, 2004, Kimberly-Clark Corporation, a
Delaware corporation (“Parent”), will transfer certain assets and businesses to
Seller and its subsidiaries in connection with a tax free spin-off of Parent’s
United States paper and Canadian pulp businesses to the stockholders of Parent
(the “Spin-off Transaction”); and



     WHEREAS, following the Spin-off Transaction, Seller and its subsidiaries
will own and operate pulp mills and related woodlands operations in Terrace
Bay, Ontario and Pictou, Nova Scotia; and



     WHEREAS, from and after the Spin-off Transaction, K-C wishes to purchase
from Seller, and Seller wishes to sell to K-C, Pulp, as defined herein, upon
the terms and conditions hereinafter set forth.



     NOW THEREFORE, in consideration of the foregoing premises, which are
incorporated herein, and the mutual covenants recited hereinafter, it is hereby
agreed as follows.



ARTICLE 1

DEFINITIONS




     The following terms shall have the meanings set forth below when used in
this Agreement and when used in any Purchase Order issued pursuant to this
Agreement.



     1.01 Airdry Metric Ton (“ADMT”). One Thousand (1,000) kilograms of
air-dry Pulp, containing ninety percent (90%) bone-dry fiber and ten percent
(10%) moisture.



     1.02 Annual Supply Obligation or ASO. The maximum tonnage of Pulp, as
set forth in Exhibit A hereto and as amended from time to time, which Seller
must make available to K-C for purchase in any one Contract Year.



     1.03 Annual Purchase Obligation or APO. The maximum tonnage of Pulp, as
set forth in Exhibit A hereto and as amended from time to time, which K-C must
purchase from Seller in any one Contract Year.



     1.04 Contract Year. Any of the consecutive calendar years in the term of
this Agreement, with the first year beginning on January 1, 2005 and ending
December 31, 2005.



     1.05 Delivery Point. The facilities or ports set forth in Exhibit A, or
as otherwise mutually agreed to by the parties in writing from time to time.



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



     1.06 Distribution Date. As such term is defined in the Distribution
Agreement.



     1.07 Environmental/Safety Laws. Any foreign or domestic law, regulation,
rule, order or directive related to a concern for human health, safety, welfare
or the natural environment, which in any way affects Seller’s ability to sell
Pulp to K-C or K-C’s ability to purchase and utilize Pulp, all pursuant to the
terms hereof.



     1.08 Invoice Price. Transaction Price less discounts as set forth in
Exhibit C.



     1.09 Phase Down Period. The two (2) year phase down period, invoked by
either party pursuant to Section 3.02 or Section 6.03.



     1.10 Pulp. Prime bleached Elemental Chlorine Free (“ECF”) grade northern
bleached softwood kraft (NBSK) or hardwood kraft (NBHK, which is either
High-Maple or Aspen as requested by K-C) pulp grades meeting the Specifications
and the provisions of Section 9.02 hereof.



     1.11 Regions. K-C’s global locations referred to regionally as: North
America (US and Canada), and Europe.



     1.12 Shipping Points. Seller’s existing stocking terminals from which
Pulp purchased by K-C is to be shipped, or such other locations as the parties
mutually agree in writing.



     1.13 Specifications. Any or all of K-C’s Pulp specifications listed in
Exhibit B hereto, as amended from time to time by mutual agreement of the
parties.



     1.14 Transaction Price. The price, in USD, per ADMT of Pulp from which
discounts are to be taken as set forth in Article 4.



     1.15 2004 Supply Period. The period from the day after the Distribution
Date to December 31, 2004, inclusive.



ARTICLE 2

ANNUAL PURCHASE AND SUPPLY OBLIGATIONS; ANNUAL FORECASTS

AND QUARTERLY ESTIMATES; SAFETY STOCKS




     2.01 Annual Purchase and Supply Obligations.




      (a) Subject to the terms and conditions herein:




         (i) For the 2004 Supply Period, Seller shall make available to
K-C for purchase, and K-C shall purchase from Seller, Pulp in each
Region as set forth in Exhibit A; and




         (ii) Beginning January 1, 2005, Seller shall make the Annual
Supply Obligations available to K-C for purchase, and K-C shall
purchase from Seller, the Annual Purchase Obligations.



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




      (b) Failure of K-C to Satisfy its Annual Purchase Obligations. If
K-C fails to purchase the Annual Purchase Obligation for any Contract
Year, and such failure is not excused pursuant to this Agreement, then in
lieu of any other direct, indirect, incidental, special, or consequential
damages arising from K-C’s failure to purchase, Seller shall be entitled
to receive from K-C the Purchase Shortfall Amount (as defined below).
Upon notification that K-C will be unable to meet the Annual Purchase
Obligation, Seller will diligently attempt to procure an alternate
purchaser for that quantity of Pulp which, when added to the quantity of
Pulp actually purchased by K-C during the applicable Contract Year, would
equal the Annual Purchase Obligation for such year (the “Purchase
Shortfall Quantity”).



The Purchase Shortfall Amount shall be equal to the amount Seller would
have received from K-C had K-C purchased the Purchase Shortfall Quantity
in accordance with the price and payment terms in Article 4 of this
Agreement (the “Purchase Shortfall Price”), reduced by the amount of
payments made to Seller for the Purchase Shortfall Quantity by alternate
purchasers (the “Purchase Shortfall Mitigation Amount”), and increased by
ten percent (10%) of the difference between the Purchase Shortfall Price
and the Purchase Shortfall Mitigation Amount. If the Purchase Shortfall
Mitigation Amount is greater than the Purchase Shortfall Price, then the
Purchase Shortfall Amount will be zero.



Any tonnage for which payment is made by K-C as a result of the
circumstances described in this subparagraph (b) shall be deducted from
K-C’s Annual Purchase Obligation and Seller’s Annual Supply Obligation
for such Contract Year.




      (c) Failure of Seller to Satisfy its Annual Supply Obligations. If
Seller fails to make available for purchase by K-C the Annual Supply
Obligation for any Contract Year, and such failure is not excused
pursuant to this Agreement, then in lieu of any other direct, indirect,
incidental, special, or consequential damages arising from Seller’s
failure to sell, K-C shall be entitled to receive from Seller the Supply
Shortfall Amount (as defined below). The quantity of Pulp which, when
added to the quantity of Pulp actually supplied by Seller during the
applicable Contract Year, would equal the Annual Supply Obligation for
such year is referred to below as the “Supply Shortfall Quantity”).



The Supply Shortfall Amount shall be equal to the price paid by K-C for
the Supply Shortfall Quantity on the open market (the “Supply Shortfall
Cover Amount”), reduced by the price K-C would have paid Seller for the
Supply Shortfall Quantity if Seller had supplied such Pulp as required by
this Agreement (the “Supply Shortfall Price”) and increased by ten
percent (10%) of the difference between the Supply Shortfall Cover Amount
and the Supply Shortfall Price. If the Supply Shortfall Cover Amount is
less than the Supply Shortfall Price, then the Supply Shortfall Amount
will be zero.



Any tonnage purchased elsewhere by K-C as a result of the circumstances
described in this subparagraph (c) shall be deducted from K-C’s Annual
Purchase Obligation and Seller’s Annual Supply Obligation for such
Contract Year.




      (d) Shortfall Payments; Exclusive Remedy. In the event that a
shortfall occurs in the Annual Purchase Obligation, or in the Annual
Supply Obligation, the



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




Purchase Shortfall Amount or the Supply Shortfall Amount, as the
case may be, shall be payable within forty-five (45) days of the date
that a written claim is made, provided that such claim shall not be made
until the amount of the shortfall can be determined with reasonable
certainty. Seller’s sole remedy for K-C’s unexcused failure to satisfy
its Annual Purchase Obligation shall be as set forth in paragraph
2.01(b). K-C’s sole remedy for Seller’s unexcused failure to satisfy its
Annual Supply Obligation shall be as set forth in paragraph 2.01(c).



     2.02 Regional Terms. Both parties agree that the terms and conditions of
this Agreement adequately reflect differences in market Regions for Pulp
specifications, transaction price, delivery, and payment terms.



     2.03 Quarterly Estimates. Beginning with the calendar quarter commencing
January 1, 2005, the parties shall communicate thirty (30) days prior to the
commencement of each quarter to forecast: 1) proposed quarterly purchases to
be made by K-C for each of K-C’s mills listed in Exhibit A; and 2) the month
within the calendar quarter upon which Seller shall make such quantities
available to K-C.



     2.04 Annual Forecasts. By October 15 of each preceding Contract Year, for
general guidance, K-C shall provide Seller with K-C’s preliminary non-binding
forecast of purchases for the subsequent Contract Year. K-C shall provide
Seller with its final non-binding forecast of purchases for each subsequent
Contract Year by November 15. Additionally, on an annual basis Seller and K-C
may agree to start discussions on or before October 15, without binding
obligation unless so mutually agreed, to increase the volume of Pulp to be
supplied and purchased above the volumes required by this Agreement, and such
discussions will conclude by November 15 (regardless whether mutual agreement
is reached or not). If mutually agreed upon, the additional volume of Pulp to
be supplied and purchased will be according to the terms and conditions of this
Agreement.



     2.05 Safety Stocks. Seller shall maintain safety stocks which are
adequate to assure the continuous supply of Pulp to K-C set forth in Exhibit A,
taking into account K-C’s forecasts, Seller’s production schedule, normal
shipping times for vessel and inland shipments and other pertinent factors. In
the event that K-C believes that additional safety stock is required, K-C shall
discuss in good faith the safety-stock levels with Seller. If after the
discussions, K-C reasonably determines that additional safety stock is needed,
it shall so notify Seller and, at Seller’s election either (i) Seller may bring
the safety-stock level to the required level within 30 days of receipt of K-C’s
notice or (ii) K-C may purchase Pulp from other suppliers and Seller shall pay
K-C the difference between the higher price paid by K-C for safety stock on the
open market and the price K-C would have paid Seller if Seller had supplied
Pulp as required by this Agreement, plus liquidated damages equal to ten
percent (10%) of such difference in lieu of any other direct, indirect,
incidental, special or consequential damages arising from such failure to
deliver. Any tonnage purchased by K-C from other suppliers pursuant to this
Section 2.05 shall be deducted from K-C’s Annual Purchase Obligation and
Seller’s Annual Supply Obligation.



     2.06 Ordering. Periodic scheduling instructions for Pulp shall be placed
by K-C and followed by Seller as follows, or as the parties may otherwise
mutually agree in writing from time to time:



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




      (a) K-C shall advise Seller of K-C’s particular need for Pulp under
this Agreement (a “Delivery Schedule”). The Delivery Schedule shall be
communicated to Seller, at least 30 days prior to the date on which the
shipment would be scheduled to leave the mill, by e-mail, or other means
mutually agreed upon in writing by K-C and Seller. The Delivery Schedule
shall set forth:




         (i) the specific quantity and grade of Pulp needed;




         (ii) the requested shipping date(s) and delivery date(s); and




         (iii) shipping instructions and Delivery Points.




      (b) Subject to K-C’s obligations pursuant to Section 2.01, K-C may
cancel any specific quantity of Pulp specified in the Delivery Schedule
by providing a revised Delivery Schedule to Seller for such quantity, by
e-mail, or other means mutually agreed upon in writing by K-C and Seller.
If the revised Delivery Schedule for such quantity is received by Seller
prior to Seller delivering such quantity to a carrier for shipment, then
K-C will be responsible for any out-of-pocket demurrage or other costs
incurred by Seller as a result of such cancellation, provided that Seller
uses commercially reasonable efforts to mitigate any such additional
costs. If the revised Delivery Schedule for such quantity is received by
Seller after such quantity has been delivered to a carrier for shipment,
then K-C will be responsible for any additional costs incurred by Seller
in complying with the revised Delivery Schedule for such quantity,
provided that Seller uses commercially reasonable efforts to mitigate any
such additional costs.




      (c) Upon Seller’s receipt of a Delivery Schedule, Seller shall
promptly notify K-C of any proposed deviations from K-C’s instructions.



ARTICLE 3

QUALITY AND SPECIFICATIONS; SPECIFICATION CHANGES;

WARRANTIES; PRODUCT SAFETY CERTIFICATIONS;

REPORTS, RECORDKEEPING, AND ACCESS




     3.01 Quality and Specifications. The Pulp to be sold and purchased
hereunder shall be consistent with the quality of prime pulp grades used
throughout the world and shall be produced in accordance with and shall meet
all of K-C’s requirements and Specifications as set forth in this Agreement and
K-C’s shipping instructions under Article 5. In the event of any conflict or
inconsistency between or among requirements, standards or conditions and unless
otherwise herein specifically provided otherwise, the higher or more detailed
requirement, standard or condition shall control. The parties agree to work
together to make any necessary changes to the Specifications to ensure that the
Pulp meets the performance, processing and other requirements in the
manufacture of products into which the Pulp is incorporated and that the
requirements of such products are met.



     3.02 Specifications Change. K-C shall have the right to propose
reasonable changes to Specifications at any time during the term of this
Agreement, and Seller agrees to use its commercially reasonable efforts to meet
such changes within a reasonable period of time (not to exceed 90 days) after
K-C’s written request has been received. For purposes of this paragraph,



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



a reasonable change to Specifications shall mean that the Specifications
requested could be met by third-party pulp suppliers in the commercial pulp
market. If Seller is unable to meet such changes within such reasonable
period, K-C may purchase Pulp meeting changed Specifications elsewhere, and
K-C’s Annual Purchase Obligations shall be reduced accordingly. If Seller is
able to make such changes, but Seller’s costs are increased or decreased as a
direct result of such revised Specifications, Seller and K-C agree to negotiate
in good faith to establish, within thirty (30) days of Seller’s knowledge that
price changes shall result, any commercially reasonable revisions in price and
terms. If the parties are unable to agree on a price adjustment within such 30
day period and K-C elects not to forego the Specifications change, irrespective
of any other provision hereof, either party shall have the right to commence
the Phase Down Period immediately with respect to the quantity of Pulp for
which the change to Specifications was requested.



     Seller understands that the introduction of process changes in its Pulp
manufacturing can potentially affect K-C’s manufacturing process and/or final
product attributes. Therefore, Seller will provide K-C with Pulp samples for
evaluation at least one hundred twenty (120) days in advance of making any such
changes. If, in the sole, reasonable opinion of K-C, a process change by
Seller will negatively affect K-C’s manufacturing process and/or final product
attributes, then K-C agrees to give Seller an additional ninety (90) days
written notice of such negative effects. At the end of such ninety (90) day
notice period Seller shall either revoke such process change or immediately and
permanently release K-C from its purchase obligations under this Agreement as
to the Pulp in question.



     3.03 Forestry. Seller shall, by December 31, 2005, cause its wholly-owned
wood fiber suppliers to be formally certified in one of the
internationally-recognized forest certification programs, such as the American
Forest and Paper Association’s (AF&PA) Sustainable Forestry
Initiative® (SFI)
program. In addition, Seller will use its commercially reasonable efforts to
work with and encourage its industrial contract wood fiber suppliers to be so
certified by December 31, 2005 and shall encourage its non-industrial contract
wood suppliers to adopt the principles of sustainable forestry and to seek
independent certification of their woodlands in an appropriate program such as
the American Tree Farm System’s Standards of Sustainability for Forest
Certification.



     3.04 Warranties; Product Safety Certification.




      (a) Each party represents and warrants to the other party that:




         (i) it is a corporation duly organized, existing and in good
standing under the laws of the state of Delaware and its execution
and performance of this Agreement is within its corporate powers,
has been duly authorized, and is not in contravention or violation
of its charter, by-laws or any corporate resolution or of law or of
any indenture, agreement, undertaking or other obligation to which
it is bound;




         (ii) it has obtained all governmental licenses, approvals and
registrations necessary to perform and fulfill its obligations
under this Agreement;



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




         (iii) the individual signing this Agreement on its behalf is
duly authorized to do so and this Agreement is legally valid,
binding and enforceable in accord with its terms; and




         (iv) it shall take all steps necessary to assure that all
delivery dates and other obligations established in this Agreement
by it to be performed are met in a timely fashion.




      (b) Seller agrees that the Pulp shall be, at the time of delivery to
K-C, free from contamination or other defects and shall conform in all
respects with the Specifications and other requirements hereof.




      (c) Seller agrees that, in addition to the other requirements of
this Agreement, each shipment of the Pulp:




         (i) shall conform to the U.S. Food and Drug Administration
requirement for pulp as defined in 21 C.F.R. Section 186.1673, and
requirements for Indirect Food Additives: Pulp and Paperboard
Components as defined in 21 C.F.R. Part 176; and




         (ii) will be sufficiently tested to certify that it meets the
Council of Northeast Governors (“CONEG”) heavy metal requirements
for levels of lead, mercury, cadmium and chromium.



Upon execution of this Agreement, Seller shall provide to K-C a certificate
attesting to the foregoing in the form attached hereto as Exhibit D.



     3.05 Reports, Recordkeeping, and Access. Seller shall maintain a quality
assurance program that meets the sampling process, test methods and technical
attributes set forth in the Specifications in Exhibit B. Seller understands
that K-C relies on Seller’s quality assurance program to assure that Pulp
delivered is in compliance with the Specifications and other provisions set
forth herein. During the term of this Agreement, Seller shall collect and for
five (5) years after termination hereof, shall maintain: (i) process control
data and property data typical in the industry for the production of Pulp, (ii)
all data required to document compliance with the Specifications and other
terms hereof, and (iii) any other process control or property data related to
the production of Pulp as K-C may from time to time reasonably request. Seller
shall provide K-C, upon its request, with access, at reasonable times, to
Seller’s facilities for purposes of reviewing such operations and Seller’s
compliance with the terms hereof, including Seller’s records required to be
kept pursuant to this Section 3.05.



ARTICLE 4

PRICE AND PAYMENT TERMS




     4.01 Price.




      (a) The parties acknowledge that the price for Pulp fluctuates with
market conditions and agree that the price at which Seller shall sell and
K-C shall purchase Pulp hereunder shall be determined as set forth in
this Article 4. In order to determine the



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price for Pulp invoiced in any given month, the parties shall first
establish the Transaction Price which shall be based on the prevailing
price per ADMT of Pulp for the preceding month as quoted by one or more
major, regular market producers of prime bleached Pulp for contract or
regular, long-term customers for any given month. Based upon such
quote(s), Seller and K-C shall attempt to mutually agree on the
applicable Transaction Price for any given month’s shipments. If the
parties cannot agree on the Transaction Price, then the Transaction Price
shall be determined by reference to published market data as follows:




For Softwood (NBSK) Shipped to North American Delivery Points:




      The Transaction Price shall be the average of:




            1) Pulp and Paper Week’s posted price in the “Price
Watch: Market Pulp” table for the preceding month. In the
case of a range of prices, the range average; and




            2) The posted price in RISI World Pulp Monthly’s “Table
5 Market Pulp Price Summary” Delivered to United States for
the preceding month.




In the event that the next issue of the subject publications
adjusts or corrects previously published prices, such resulting
adjustments shall be credited to the proper party and incorporated
into the methodology on a going-forward basis.




For Hardwood (NBHK):




The Transaction Price shall be the posted Aspen and Maple price in
RISI World Pulp Monthly’s “Table 5 Market Pulp Price Summary”
Delivered to United States for the preceding month.




For Softwood (NBSK) Shipped to European Delivery Points:




The Transaction Price shall be the average of:




            1) The Hawkins Wright PulpWatch posted price in the
“Price Indication” table for the preceding month. In the
case of a range of prices, the range average; and




            2) The posted price in RISI World Pulp Monthly’s “Table
5 Market Pulp Price Summary” Delivered to Europe for the
preceding month.




In the event that the next issue of the subject publications
adjusts or corrects previously published prices, such resulting
adjustments shall be credited to the proper party and incorporated
into the methodology on a going-forward basis.




Discontinuation of a Publication



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




In the event that one or more of the subject publications cease to
exist, then the parties agree to negotiate in good faith to
determine a commercially reasonable alternative to that publication
for use in this Section 4.01.




      (b) Notwithstanding anything in Section 4.01(a) to the contrary, in
no event shall the Transaction Price for NBSK shipped during the period
from the Distribution Date to and including December 31, 2007 to North
American Delivery Points be less than $*** per ADMT or more than $*** per
ADMT.



     4.02 Discounts. The price to be paid by K-C for Pulp purchased pursuant
to this Agreement shall be the Transaction Price established pursuant to
Section 4.01 (including, if applicable Section 4.01(b)) less the discounts set
forth in Exhibit C.



     4.03 Freight and Other Shipping Costs. Except as otherwise set forth
herein, Seller shall pay shipping costs for, and insure deliveries of Pulp to
the Delivery Points set forth in Exhibit A. K-C may request accelerated
deliveries or designate other Delivery Points, in which event the parties shall
review costs associated with such accelerated deliveries or other Delivery
Points and establish appropriate shipping costs therefor.



     4.04 Payment Terms. Seller shall invoice K-C on a per load basis for all
Pulp sold under this Agreement. K-C North America’s payment term is forty-five
(45) days from date of shipment of Pulp. Seller shall invoice K-C Europe and
K-C Europe shall pay Seller sixty (60) days from vessel arrival.



ARTICLE 5

SHIPMENT AND DELIVERY




     5.01 Shipment Method/Shipping and Delivery Points. All purchases of Pulp
made hereunder shall be shipped from Seller’s Terrace Bay and Pictou pulp mills
to K-C Delivery Points consistent with the parties’ 2004 shipping history or as
mutually agreed. Seller shall deliver all Pulp to K-C at the Delivery Points
set forth in Exhibit A, or as otherwise mutually agreed from time to time, in
accordance with K-C’s shipping instructions. All pulp received by K-C’s
European locations shall be supplied solely by Seller’s Pictou, Nova Scotia
mill.



     5.02 Arrearage. Seller shall make and monitor all shipments and
deliveries in accordance with the shipment schedules specified in K-C’s
shipping instructions. When Seller becomes aware that it may be unable to ship
any quantity of Pulp hereunder in accordance with K-C’s specified delivery
schedule, Seller shall immediately notify K-C both orally and in writing of
this possibility, and the parties shall determine whether Seller can effect
delivery to meet K-C’s requirements. If, after discussion with Seller, K-C
reasonably determines, in its sole good faith judgment, that Seller will not be
able to make a delivery in time to meet K-C’s requirements, K-C shall have the
right to obtain delivery of the required quantities of Pulp from an alternate
supplier. In the event that K-C is required to purchase Pulp from another
supplier pursuant to this Section 5.02, Seller shall pay K-C the difference
between the higher price paid by K-C for Pulp on the open market and the price
K-C would have paid to Seller if Seller had supplied Pulp as required by this
Agreement, plus liquidated damages equal to ten percent (10%) of such
difference, in lieu of any other direct, indirect, incidental, special or
consequential damages arising from such failure to deliver. Purchases by K-C of
Pulp from another supplier pursuant to



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.



this Section 5.02 shall be deducted from K-C’s Annual Purchase Obligation
and Seller’s Annual Supply Obligation.



     5.03 Title and Risk of Loss. All shipments to North American Delivery
Points shall be made FOB Delivery Point at which point risk of loss or damage
shall pass to K-C. All shipments to European Delivery shall be made CIF
European Delivery Point and risk of loss or damage shall pass in accordance
with such CIF terms. Legal title to the Pulp shall pass to K-C at the Delivery
Point designated by K-C.



     5.04 Bale Finishing. For North America, Seller will use commercially
reasonable best efforts to work with K-C to develop and supply wireless bales
meeting K-C technical and transportation requirements no later than June 1,
2006. For Europe, Seller will continue to provide wired bales, unless and
until the parties mutually agree otherwise. Additionally, Seller will use
commercially reasonable efforts to work with K-C to create uniform bale shape,
dimensions, weights, and wrap requirements that will be implemented by June 1,
2006, but the parties acknowledge that transitioning to uniform bale shape,
dimensions, weights, and wrap requirements is capital intensive and that there
is not currently a provision in the budget of Seller for such an outlay and
operational priorities may delay the implementation of uniform bale shape,
dimensions, weights, and wrap requirements.



ARTICLE 6

TERM AND TERMINATION




     6.01 Term. The term of this Agreement shall commence on the Distribution
Date, and shall continue until terminated in accordance with the terms of this
Agreement.



     6.02 Termination. This Agreement may be terminated:




      (a) Upon the mutual written agreement of the parties; or




      (b) By either party for material breach of any of the terms hereof
by the other party if the breach is not corrected (or remedied) within
thirty (30) calendar days after written notice of breach is delivered to
the defaulting party; or




      (c) By either party, upon thirty (30) days written notice to the
other party, for three or more material breaches of the terms of this
Agreement by the other party within a Contract Year, whether or not such
breaches have been cured; or




      (d) By either party, forthwith, upon written notice to the other
party, if such other party shall become insolvent, or shall be placed in
receivership, reorganization, liquidation or bankruptcy, by the other
party, immediately, upon written notice; or




      (e) By K-C, forthwith, upon written notice to Seller, if for any
reason, the ownership or control of Seller or any of Seller’s production
facilities becomes vested in, or is made subject to the control or
direction of, any direct competitor of K-C or any governmental or
regulatory authority or any other third party, who in K-C’s reasonable
judgment may not be able to reliably perform the obligations of Seller
hereunder; or



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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




      (f) By either party, upon no less than ninety (90) days written
notice to the other party, in the event of a fundamental change in the
nature of the business of either party that may substantially affect its
ability to sell or to purchase and utilize Pulp hereunder; or




      (g) As otherwise provided for in this Agreement in Article 6,
Sections 9.01, Section 9.02, Section 9.03, or Article 11.



     6.03 Termination Without Cause.




      (a) As to the Entire Agreement, at any time on or after December 31,
2007, either party may provide written notice to the other party of its
intent to commence the Phase Down Period. The notice shall specify the
commencement date of such Phase Down Period. The earliest that the
twenty-four month Phase Down Period can start is January 1, 2009. The
Annual Purchase Obligation and Annual Supply Obligation under the Phase
Down Period are set forth at Exhibit A.




      (b) As to that portion of the Agreement concerning NBHK Pulp only,
Seller may give a three month written notice, consistent with timing of
the Quarterly Estimate process per Section 2.03, to terminate the
Purchase and Supply Obligations for either or both of the hardwood Pulp
grades. The notice shall specify the effective termination date and must
be acknowledged by K-C in writing.



     6.04 Effect of Termination. Upon termination of this Agreement:




      (a) The parties shall meet and discuss which outstanding and not yet
fulfilled orders should be filled and which shall be cancelled.




      (b) Each party shall immediately return to the other (or destroy)
all items of Confidential Information delivered hereunder and all copies
thereof.




      (c) Seller shall continue to fulfill its warranty obligations with
respect to any Pulp sold by Seller to K-C pursuant to this Agreement.




      (d) All requirements of warranties, reports, recording, access,
indemnification, payment terms, obligations related to use or protection
of Confidential Information, and provisions related to venue and choice
of laws, shall survive termination or expiration of this Agreement
according to their terms.



ARTICLE 7

CLAIMS: DISPUTE RESOLUTION




     7.01 Claims. Claims by K-C relative to its inability to utilize the Pulp
as a result of the failure of the Pulp to meet the Specifications must be made
within thirty (30) calendar days after receipt and acceptance of the shipment
by K-C at one of the Delivery Points. K-C shall retain fifty percent (50%) of
the Pulp shipment in dispute, when practical, pending examination by Seller or
its nominee. Seller shall examine the Pulp held by K-C or its consignee within
ten (10)



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calendar days of notification by K-C, and Seller shall immediately notify
K-C regarding how to dispose of any Pulp which is nonconforming.



     7.02 Dispute Resolution. The parties shall attempt to resolve claims or
other disputes arising with respect to this Agreement within ninety (90)
calendar days of the time a claim or other dispute arises by presenting the
major issues for resolution to appropriate level managers in the normal chain
of command of the affected business units.



     7.03 Litigation. Nothing herein, including the provisions of Section 7.02
above, shall prohibit either party from at any time pursuing or exercising any
or all of its remedies at law or equity.



     7.04 Governing Law. The interpretation, validity and enforcement of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Wisconsin, without regard to choice of law provisions, and shall not
be governed by the Convention on Contracts for the International Sale of Goods.



ARTICLE 8

INDEMNIFICATION




     Each party hereto agrees to defend, indemnify and hold harmless the other
party, its officers, directors, agents and employees, from and against any and
all claims, demands, judgments, costs, expenses and damages for personal injury
or property damage caused by the indemnifying party’s negligent act or omission
or willful misconduct.



     The foregoing indemnifications are subject to and conditioned upon:




      (a) prompt written notice being given to the indemnifying party by
the indemnified party of any threatened or pending claim or other
liability;




      (b) the indemnified party fully cooperating with the indemnifying
party in the investigation and/or defense of any such claim or other
liability; and




      (c) the indemnifying party having the absolute right to direct the
defense and/or settlement of any such claim or other liability and to
select counsel to represent it and the indemnified party.



ARTICLE 9

CONTINGENCIES




     9.01 Force Majeure. If either party is prevented or delayed in the
performance of this Agreement by any cause beyond the affected party’s
immediate or reasonable control and which arises without its fault or
negligence, including an act of God, war or threat of war, strike or other form
of labor disturbances, fire, explosion, or other casualty, any law, restraint,
rule, regulation or other governmental restriction, or by any
Environmental/Safety Laws, then the obligations of the parties to sell and
deliver or to purchase and receive Pulp shall be reduced or canceled during the
continuance of such event with regard to the quantity of Pulp which cannot be
delivered or purchased as a direct consequence of such event. Specifically,
during the



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continuance of any one or more of the above events impairing Seller’s
performance, Seller shall offer available supplies first to its long-term
contract customers, including K-C, and shall allocate to K-C quantities not
less than that quantity determined by multiplying K-C’s percentage of such
total long term contract amounts by the total available supply. During the
continuance of any one or more of the above events impairing K-C’s ability to
accept or utilize Pulp, K-C’s obligations to purchase Pulp shall be reduced by
such quantity as K-C shall be unable to accept or utilize. Quantities which
Seller is unable to deliver by reason of force majeure shall be deducted from
K-C’s Annual Purchase Obligation and Seller’s Annual Supply Obligation. If a
force majeure shall prevent a party from performing its obligations under this
Agreement for more than one year, the other party may, upon written notice,
terminate this Agreement as to that portion affected by the force majeure.



     9.02 Environmental/Safety Laws. Irrespective of any provision herein to
the contrary, if Seller is unable to supply K-C with Pulp or K-C is unable to
purchase and/or receive Pulp hereunder which complies with all applicable
Environmental/Safety Laws, K-C may reduce the quantity of Pulp to be purchased
hereunder in accordance with Section 9.01 during the period of non-compliance.
Notwithstanding any such reductions, K-C and Seller shall work together for a
reasonable period of time (not to exceed ninety (90) days) to determine whether
Seller can provide any Pulp not affected by Environmental/Safety Laws. In the
event Seller is unable to provide Pulp meeting Environmental/Safety Laws by the
end of such ninety (90) day period, K-C may terminate this Agreement, in whole
or in part, immediately upon written notice to Seller.



     9.03 Forestry Considerations.




      (a) In the event that as a result of Seller’s forestry activities,
continued use of Seller’s Pulp by K-C does, or in the reasonable judgment
of K-C is likely to, result in a substantial loss of sales of K-C
products or to otherwise materially and adversely affect the reputation
of K-C or its products, K-C shall give Seller written notice of the facts
or allegations upon which it relies to base its conclusion that continued
use of Seller’s Pulp will likely cause such consequences (such notice is
referred to herein as the “Section 9.03 Notice”). Within a reasonable
time (not to exceed 90 days from the receipt of K-C’s Section 9.03
Notice), Seller and K-C shall discuss such facts or allegations and work
together in good faith to arrive at a mutually agreeable solution to
reasonably address such facts or allegations.




      (b) If Seller and K-C are able to agree on a mutually acceptable
solution, that agreement will be reduced to writing and will set forth
the respective obligations of the parties under the agreed solution. If
Seller and K-C are unable to agree on a solution, then K-C shall have the
right to terminate this Agreement upon written notice effective not
earlier than one year following the date of such written notice.



     9.04 Notice. If either party is prevented or delayed in performance by
any of the events specified in Section 9.01 or Section 9.02, the party affected
shall give immediate written notice to the other party of the cause, the date
of commencement and other relevant details of any such nonperformance, and to
the best of its knowledge, the extent of such nonperformance and when
deliveries, acceptance or utilization may be anticipated to resume. The
parties agree to cooperate with each other and to use all commercially
reasonable efforts to resolve any such situation in good faith and in a timely
manner. Such resolution may include, but shall not be



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limited to, reapportioning or otherwise adjusting the Annual Purchase
Obligation to be purchased by K-C during the term hereof and/or the Annual
Supply Obligation.



ARTICLE 10

CONFIDENTIALITY




     The specific terms and conditions of this Agreement and any information
conveyed or otherwise received by or on behalf of a party in conjunction
herewith are confidential and are subject to the terms of the Confidentiality
provisions of the Distribution Agreement.



ARTICLE 11

CUSTOMS




     K-C is certified by the U.S. Customs Service as compliant with the
Customs-Trade Partnership Against Terrorism program (“C-TPAT”). Seller agrees
to familiarize itself with the applicable standards of the C-TPAT program
(i.e., see www.customs.gov/xp/cgov/import/ commercial_enforcement/ctpat/). To
the extent Seller deals with K-C in the supply chain of products to be imported
into the U.S., Seller shall implement a verifiable, documented program that
complies with C-TPAT standards and K-C’s requests that K-C reasonably believes
are necessary to maintain K-C’s C-TPAT certification. If K-C has received
notice of non-compliance with C-TPAT from the U.S. Customs Service or a court
or federal agency of competent jurisdiction or if K-C reasonably believes that
Seller has failed to comply with the preceding sentence, K-C shall give Seller
written notice stating in reasonable detail the factual basis for K-C’s claim
of non-compliance, including a copy (if any) of the notice of non-compliance
with C-TPAT from the U.S. Customs Service or a court or federal agency of
competent jurisdiction. The parties shall attempt to resolve K-C’s claim in
accordance with the Dispute Resolution procedure stated in §7.02 hereof and in
good faith discussions among K-C, Seller and the U.S. Customs Service or court
or federal agency of competent jurisdiction. If the parties have not resolved
K-C’s claim to the reasonable satisfaction of K-C or within the time period the
U.S. Customs Service provides to K-C for remedying the non-compliance, then K-C
shall have the right to terminate this Agreement, in whole or in part, without
penalty by giving 180 days written notice to Seller.



ARTICLE 12

GENERAL




     12.01 Parties Bound/Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective legal
representatives, successors, and permitted assigns. Neither party shall assign
or transfer any right, obligation or interest under this Agreement without the
prior written consent of the other, provided that either party may assign this
Agreement to a wholly owned subsidiary and, except for the situation described
in Section 6.02(e), either party may assign to a successor company by merger or
corporate reorganization but only upon assumption by such successor of the
assignor’s obligations under this Agreement.



     12.02 Right of Offset. Upon written notice to the other party, each party
has the right to deduct from amounts owed to the other party undisputed amounts
due and owing to it by the other party if those amounts go unpaid more than 60
days after they are due and owing.




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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




     12.03 Compliance With Law. Each party shall comply with all applicable
laws, rules, regulations or other requirements of any governmental entity that
affect such party’s obligations and other responsibilities hereunder in
performing this Agreement.



     12.04 Independent Contractor Status. Each party shall be an independent
contractor in its performance of this Agreement and shall not be deemed,
expressly or by implication, to be an agent, employee, representative or
servant of the other for any purpose whatsoever.



     12.05 Waiver of Breach. No waiver of breach or non-performance of any of
the provisions of this Agreement shall be construed as a waiver of any
succeeding breach or non-performance of the same or any other provision.



     12.06 Notices. Other than routine communications in the ordinary course
of performing any obligations under this Agreement, all notices and
communications in connection with this Agreement shall be in writing and shall
be deemed complete upon transmittal by a recognized international courier or by
facsimile, with a confirmation of receipt, addressed to the parties hereto at
their respective addresses or facsimile numbers set forth below:


IF TO SELLER:


Neenah Paper, Inc.

Preston Ridge III, Suite 600

3460 Preston Ridge Road

Alpharetta, Georgia 30005

Attn: Chief Executive Officer

Phone: (678) 566-6500

Fax: (678) 518-3283


with copy to:


Neenah Paper, Inc.

Preston Ridge III, Suite 600

3460 Preston Ridge Road

Alpharetta, Georgia 30005

Attn: General Counsel

Phone: (678) 566-6500

Fax: (678) 518-3283


IF TO K-C:


Kimberly-Clark Global Sales, Inc.

2300 Winchester Road

Neenah, WI 54956

Attn: Director Virgin Fiber Procurement

Phone: (920) 721-4116

Fax: (920) 721-4976



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with copy to:


Chief Counsel, Neenah Operations

Kimberly-Clark Corporation

401 N. Lake Street

Neenah, WI 54957 –0349

Phone: (920) 721-2000

Fax: (920) 721-8446



or any other address or fax number and to the attention of any other person as
either of the parties may specify hereafter by written notice to the other.




     12.07 Severability of Provisions. If any provision of this Agreement
shall be determined to be invalid, illegal or unenforceable under law, the
validity and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.



     12.08 Headings. Article and section headings used in this Agreement are
for the purpose of reference only and shall not be considered in construing
this Agreement.



     12.09 Entire Agreement. This Agreement, including its Exhibits and
documents referenced herein, constitutes the entire agreement between the
parties related to the subject matter hereof, and cancels and supersedes all
prior or contemporaneous agreements, whether oral or written, relating to the
subject matter of this Agreement and all prior agreements, negotiations,
dealings and understandings, whether written or oral, regarding the subject
matter hereof are hereby superseded and merged into this Agreement. No
conditions, usage of trade, course of dealing or performance, understanding or
agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgement or acceptance of purchase order or shipping instruction,
invoice or other forms containing terms or conditions at variance with or in
addition to those set forth in this Agreement.



     12.10 Counterparts. This Agreement may be executed by the parties in two
or more counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same agreement.



     IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts by the duly authorized representatives of the parties as of the
date first written above.



	 	 	 	 	 	 	 
	NEENAH PAPER, INC.	 	KIMBERLY-CLARK GLOBAL SALES, INC.
	 
	 	 	 	 	 	 
	BY:

	 	 	 	BY:	 	 
	

	 	
 
	 	 	 	
 
	

	 	Sean T. Erwin

Chief Executive Officer
	 	 	 	Mark A. Buthman, President








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EXHIBIT A

To

Pulp Supply Agreement Between Kimberly-Clark Global Sales, Inc. and Neenah

Paper, Inc.




NORTH AMERICAN ANNUAL SOFTWOOD PULP PURCHASE OBLIGATIONS,

SUPPLY OBLIGATIONS, DELIVERY POINTS AND TRANSPORTATION TERMS




Northern Bleach Softwood Kraft (NBSK)




	 	 	 	 	 
	 	 	Annual Purchase Obligation	 	 
	Contract Year	 	(K-C)	 	Annual Supply Obligation (Seller)
	2004 [Fourth
Quarter Only]

	 	93,000 ADMT (less tonnage
transferred to K-C during
the Fourth Quarter of
2004 prior to the
Distribution Date)
	 	93,000 ADMT (less
tonnage transferred
to K-C during the
Fourth Quarter of
2004 prior to the
Distribution Date)
	 	 	 	 	 
	2005 & 2006

	 	360,000 ADMT
	 	360,000 ADMT
	 	 	 	 	 
	2007†

	 	320,000 ADMT
	 	320,000 ADMT
	 	 	 	 	 
	2008 and all
subsequent Contract
	 	 	 	 
	Years

	 	275,000 ADMT
	 	275,000 ADMT
	 	 	 	 	 
	Phase Down Year 1

	 	225,000 ADMT
	 	225,000 ADMT
	 	 	 	 	 
	Phase Down Year 2

	 	150,000 ADMT
	 	150,000 ADMT







† Seller shall use its commercially reasonable best efforts so that, as of
January 1, 2007, each K-C mill shall receive pulp solely from one Seller mill.




Delivery Points and Transportation Terms for K-C North America




	 	 	 	 	 
	Beech Island, SC

	 	Chester, PA
	 	Owensboro, KY
	Huntsville, Ontario

	 	Loudon, TN
	 	Marinette, WI
	Mobile, AL

	 	Corinth, MS
	 	*Celu-Tissue Mills
	Jenks, OK

	 	New Milford, CT
	 	*Schweitzer-Maudit’s Lee, MA Mill







Delivery during the Phase Down Period to be consistent with tonnages across
Delivery Points during the two contract years prior to the start of the Phase
Down Period.


All transportation costs to be paid by Seller.

*Solely for fiber needs related to K-C products.




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NORTH AMERICAN ANNUAL HARDWOOD PULP PURCHASE OBLIGATIONS, SUPPLY OBLIGATIONS,

DELIVERY POINTS AND TRANSPORTATION TERMS




Northern Bleached Hardwood Kraft (NBHK)




	 	 	 	 	 
	Contract Year	 	Annual Purchase Obligation (K-C)	 	Annual Supply Obligation (Seller)
	 
	2004 [Fourth Quarter Only]

	 	High-Maple 10,000 ADMT*
	 	High-Maple 10,000 ADMT*
	 	 	 	 	 
	

	 	Aspen 12,500 ADMT*
	 	Aspen 12,500 ADMT*
	 	 	 	 	 
	2005

	 	High-Maple 40,000 ADMT
	 	High-Maple 40,000 ADMT
	 	 	 	 	 
	

	 	Aspen 40,000 ADMT
	 	Aspen 40,000 ADMT
	 	 	 	 	 
	2006

	 	High-Maple 30,000 ADMT
	 	High-Maple 30,000 ADMT
	 	 	 	 	 
	

	 	Aspen 30,000 ADMT
	 	Aspen 30,000 ADMT
	 	 	 	 	 
	2007†

	 	High-Maple 20,000 ADMT
	 	High-Maple 20,000 ADMT
	 	 	 	 	 
	

	 	Aspen 20,000 ADMT
	 	Aspen 20,000 ADMT
	 	 	 	 	 
	2008

	 	High-Maple 10,000 ADMT
	 	High-Maple 10,000 ADMT
	 	 	 	 	 
	

	 	Aspen 10,000 ADMT
	 	Aspen 10,000 ADMT
	 	 	 	 	 
	2009 and all
subsequent contract
years

	 	No obligation
	 	No obligation







* These amounts shall be reduced by any tonnage transferred to K-C during the
Fourth Quarter of 2004 prior to the Distribution Date.



† Seller will use its commercially reasonable best efforts so that, as of
January 1, 2007, each K-C mill shall receive pulp solely from one Seller mill.




2









 








CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




Delivery Points and Transportation Terms for K-C North America




	 	 	 	 	 
	Beech Island, SC

	 	Chester, PA
	 	Marinette, WI
	Owensboro, KY

	 	Huntsville, Ontario
	 	Loudon, TN
	*Fullerton, CA

	 	Mobile, AL
	 	Corinth, MS
	Jenks, OK

	 	New Milford, CT
	 	**Celu-Tissue Mills








	*	 	Seller will not be required to deliver to Fullerton, CA after December 31,
2004.
	 	 	 	 
	**Solely for fiber needs related to K-C
products.
	 	 	 	 
	All transportation costs to be paid by Seller.





EUROPE ANNUAL SOFTWOOD PULP PURCHASE OBLIGATIONS, SUPPLY OBLIGATIONS, DELIVERY

POINTS AND TRANSPORTATION TERMS




Northern Bleached Softwood Kraft (NBSK)




	 	 	 	 	 
	Contract Year	 	Annual Purchase Obligation (K-C)	 	Annual Supply Obligation (Seller)
	2004 [Fourth

Quarter Only]

	 	21,250 ADMT (less tonnage
transferred to K-C during the
Fourth Quarter of 2004 prior to
the Distribution Date)
	 	21,250 ADMT (less
tonnage transferred
to K-C during the
Fourth Quarter of
2004 prior to the
Distribution Date)
	 	 	 	 	 
	2005 & 2006

	 	80,000 ADMT
	 	80,000 ADMT
	 	 	 	 	 
	2007†

	 	75,000 ADMT
	 	75,000 ADMT
	 	 	 	 	 
	2008 and all
subsequent Contract
Years

	 	70,000 ADMT
	 	70,000 ADMT
	 	 	 	 	 
	Phase Down Year 1

	 	52,500 ADMT
	 	52,500 ADMT
	 	 	 	 	 
	Phase Down Year 2

	 	35,000 ADMT
	 	35,000 ADMT







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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




Delivery Points and Transportation Terms for K-C Europe




	 	 	 
	Europe (can only
be supplied by
Seller’s Pictou Mill)
	 	 
	Duffel

	 	CIF* Flushing
	Northfleet

	 	CIF* Northfleet
	Barrow

	 	CIF* Northfleet/Barrow
	Rouen

	 	CIF* Rouen
	Salamanca

	 	CIF* Santander
	VSE

	 	CIF* Rouen







† Seller will use its commercially reasonable best efforts so that, as of
January 1, 2007, each K-C mill shall receive pulp solely from one Seller mill.




* As defined according to INCOTERMS 2001(or applicable latest edition).




END OF EXHIBIT A




4









 









CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




EXHIBIT B

To

Pulp Supply Agreement Between Kimberly-Clark Global

Sales, Inc. and Neenah Paper, Inc.


Kimberly-Clark Raw Material Specifications




K-C Raw Material Specification (RMS) documents listed below are incorporated
herein by reference. These documents are controlled by the K-C Corporate
Quality Systems & Compliance team in Neenah, Wisconsin. Copies of RMS
documents are forwarded directly to Seller’s Sales Department and are otherwise
available upon request. These documents are the primary source of information
necessary to specify pulp for K-C pursuant to this Agreement.




	 	 	 	 	 
	Pulp Grade Specifications

	K-C RMS Department
	 	Material

	RM 2763
	 	LL-19 ECF
	RM 3061
	 	LL-16 ECF
	RM 3082
	 	Pictou Harmony
	RM 3087
	 	Hi-Mape Pictou







The RMS documents listed above contain Quality Parameters and summarize key
aspects of pulp quality mutually agreed to by K-C and Seller. As used therein,
Quality Parameters have the following definitions:





     ACCEPTANCE Characteristics: used to determine suitability of pulp for
shipment to K-C.




     TRACKING Characteristics: not for ACCEPTANCE, but run-to-target is
expected, per vendor test results.




     OTHER Instructions: additional features of the material and packaging
details for shipping.



The RMS documents listed above shall govern purchases by all K-C locations.
Should any K-C location seek different specifications for pulp to be delivered
to a specific mill(s), such requirements shall be detailed in a K-C regional
Purchase Order, and shall be accommodated in accordance with Section 3.02 of
this Agreement.




In order to continually and accurately specify the pulp materials being
purchased by K-C, the RMS documents listed above, any exceptions thereto, and
the information shown in this EXHIBIT B, may be modified from time to time
upon mutual written agreement between K-C and Seller. All mutually approved
modifications will be communicated in writing and on a timely basis to all
concerned parties.




END OF EXHIBIT B




5









 








CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




EXHIBIT C




To

Pulp Supply Agreement Between Kimberly-Clark Global Sales, Inc. and Neenah

Paper, Inc.




DISCOUNT SCHEDULE




Northern Bleached Softwood Kraft (NBSK)




     NORTH AMERICA: ***% off of the North American Transaction Price for the
prior month.



     EUROPE: ***% off of the European Transaction Price for the prior month.



Northern Bleached Hardwood Kraft (NBHK) (North America only)




     Aspen: ***% off the North American Transaction Price for the prior month.



     Maple: ***% off the North American Transaction Price for the prior month.



END OF EXHIBIT C




6









 








CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 24b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OMITTED INFORMATION WAS REPLACED WITH ASTERISKS.




EXHIBIT D




To

Pulp Supply Agreement Between Kimberly-Clark Global Sales, Inc. and Neenah

Paper, Inc.




CERTIFICATE




Seller will provide the following information for all bleached kraft Pulp
grades manufactured by Seller and supplied to Kimberly-Clark Global Sales, Inc.





	1.	 	The Pulp has been sampled in the past year and found to be
non-detectable for 2,3,7,8 -TCDD (dioxin). We use elemental chlorine
free bleaching for all Pulp delivered to Kimberly-Clark Global
Sales, Inc.
	 
	2.	 	The Pulp has been sampled for CONEG heavy metals in the past
year. All metals were non-detectable in all samples and, therefore,
easily meet the 100 ppm CONEG requirement.
	 
	3.	 	All wood Pulp produced by Seller is manufactured with
conventional processes and is considered Generally Recognized As
Safe (GRAS) as an indirect food additive under 21 CFR 186.1673.
Based on this listing, a complete survey of our raw material
suppliers and an independent review by technical and legal
consultants, our products and raw materials also conform to 21 CFR
176.170 – Indirect Food Additives: Paper and Paperboard Components.
	 
	4.	 	In addition, Seller does not use ozone depleting substances
(ODS) in the manufacture of its bleached kraft Pulp.





Contact us if you require additional information.




DATE & Location




Signature




Title




END OF EXHIBIT D





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