Exhibit 10.7
CONSENT AND GUARANTEE AGREEMENT
CONCERNING AMENDED AND RESTATED PULP SUPPLY AGREEMENT
This Consent and Guarantee Agreement ("Agreement") is effective as of June 19,
2008 and is by and between Neenah Paper, Inc., a Delaware corporation ("NPI")
and Kimberly-Clark Global Sales, LLC, a limited liability company ("K-C").
WITNESSETH
WHEREAS NPI and K-C are parties to the Amended and Restated Pulp Supply
Agreement by and between Neenah Paper, Inc. and Kimberly-Clark Global Sales, LLC
(as successor in interest to Kimberly-Clark Global Sales, Inc.) dated as of
August 29, 2006 as amended to and including the date hereof (the "August 29
Agreement");
WHEREAS NPI desires to assign, delegate and transfer (the "Assignment") all of
its rights, obligations and interests under the August 29 Agreement relating to
the Pictou, Nova Scotia Mill (the "Pictou R&O") to Northern Pulp Nova Scotia
Corporation, a Nova Scotia unlimited company ("Northern Pulp");
WHEREAS K-C is willing to grant its consent to the Assignment if NPI guarantees
the performance of Northern Pulp under the August 29 Agreement for a certain
period;
NOW THEREFORE in consideration of the foregoing premises, the mutual covenants
herein contained and intended to be legally bound hereby, NPI and K-C agree as
follows:
1.
Consent.
K-C hereby consents to NPI's Assignment of the Pictou
R&O to Northern Pulp.
For greater certainty, from the date hereof through
June 30, 2008 NPI retains all rights, obligations and interests of the August 29
Agreement as concerns the Terrace Bay Mill.
2.
Guarantee.
From the date hereof until the date that a
Guarantee Ending Event (as defined below) occurs, NPI unconditionally and
irrevocably guarantees the performance when due by Northern Pulp of the Pictou
R&O.
FOR THE PURPOSES OF THIS AGREEMENT "GUARANTEE ENDING EVENT" MEANS THE OCCURRENCE
OF ANY ONE OF (I) DECEMBER 31, 2010 BUT PROVIDED THAT ANY UNFULFILLED
OBLIGATIONS ARISING BEFORE DECEMBER 31, 2010 SHALL SURVIVE UNDER THIS AGREEMENT
UNTIL THEY ARE PERFORMED, (II) NORTHERN PULP HAS DELIVERED TO K-C 384,000 ADMT
OF PULP UNDER THE AUGUST 29 AGREEMENT, (III) NORTHERN PULP AND K-C HAVE ENTERED
INTO A NEW CONTRACT WHICH REPLACES THE AUGUST 29 AGREEMENT, OR (IV) THE
AUGUST 29 AGREEMENT IS AMENDED BY K-C AND NORTHERN PULP TO ESTABLISH (A) A NEW
VOLUME OF PULP IN EXCESS OF 384,000 ADMT OR (B) A NEW LENGTH OF THE CONTRACT
BEYOND DECEMBER 31, 2010 OR (C) A NEW DISCOUNT FOR PULP IN EXCESS OF THE CURRENT
DISCOUNT.
FURTHER, IN THE EVENT THAT THE AUGUST 29 AGREEMENT IS AMENDED IN A
WAY OTHER THAN A GUARANTEE ENDING EVENT, AND SUCH AMENDMENT IS WITHOUT THE
CONSENT OF NPI, THEN SUCH AMENDMENT SHALL NOT SERVE TO INCREASE THE LIABILITY OF
NPI UNDER THIS AGREEMENT.
THIS GUARANTY IS A GUARANTY OF PERFORMANCE, PROVIDED THAT K-C SHALL BE OBLIGATED
BEFORE ENFORCING THIS GUARANTEE TO HAVE MADE WRITTEN DEMAND (INCLUDING BY,
E-MAIL, FAX OR POSTAL LETTER) FOR PERFORMANCE FROM NORTHERN PULP AND THE
NORTHERN PULP FAILURE OF PERFORMANCE SHALL HAVE CONTINUED FOR THREE (3) BUSINESS
DAYS AFTER SUCH WRITTEN DEMAND HAS