Document:

Exhibit
10.3

 

 

 

STUMPAGE
AGREEMENT

Between

ATLANTIC
STAR FORESTRY LTD.

NOVA STAR
FORESTRY LTD.

and

NEENAH
PAPER COMPANY OF CANADA

 

 

 

STUMPAGE
AGREEMENT

This
Agreement is made as of June 29th, 2006 by and among Nova Star Forestry Ltd. (“Nova”)
and Atlantic Star Forestry Ltd. (“Atlantic”) hereinafter collectively referred
to as “Seller”, located at 150 Orford Rd., Lyme, NH 03768, and Neenah  Paper Company of Canada, hereinafter called “Neenah”,
located at the address of 3460 Preston Ridge Road, Suite 600, Alpharetta, GA
30005.

Recitals

A.   Pursuant to a Timberland Purchase and Sale
Agreement dated as of May 5, 2006 (as the same may be amended, the “Purchase
and Sale Agreement”), Seller has purchased certain timberlands from Neenah.

B.   Seller desires to sell and Neenah desires the
opportunity to purchase, on the terms and conditions hereinafter set forth,
certain quantities and types of wood fiber located on said timberlands.

Therefore,
in consideration of the mutual covenants and agreements set forth herein, the
parties hereto agree as follows:

Agreement

1.    Definitions.  For the purposes of this Agreement the
capitalized terms set forth below shall have the meanings set forth after them:

1.1                               “Actual Designated Tracts” shall have the meaning set forth
in Section 3.1(b)(ii).

1.2                               “Affected Party” shall have the meaning set forth in Section
7.5.

1.3                               “Affiliate” shall mean with respect to any Person, any Person
Controlling, Controlled by, or under common Control with, such Person.

1.4                               “Softwood
Sawable Volume” shall mean [Text Redacted]*
per year of Softwood Sawlogs and Softwood Studwood with at least [Text Redacted]* of such volume to be made up of Softwood
Sawlogs.

1.5                               “Annual Purchase Amount” shall mean (a) for the Short
Harvesting Year, a prorated portion of the Softwood Sawable Volume and the
associated Softwood Pulpwood, Hardwood Sawlog and Hardwood Pulpwood volumes
harvested from the Actual Designated Tracts necessary to produce the Softwood
Sawable Volume (the “Residual Qualifying Stumpage Volume”); and (b) for each
Harvesting Year beginning January 1, 2007 through the remainder of the Term,
the Softwood Sawable Volume and the associated Residual Qualifying Stumpage
Volume.

*             The redacted text has
been filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

 

1.6                               “Annual Seller Notice” shall mean the annual notice provided
by Seller to Neenah in accordance with the provisions of Section 3.1(b)(i).

1.7                               “Applicable Laws” shall mean, with respect to any Person, all
laws, ordinances, judgments, decrees, injunctions, writs, orders, rules,
regulations, determinations, licenses and permits of any Governmental Authority
applicable to or binding upon such Person or any of its property.

1.8                               “Assumed Volume” shall have the meaning set forth in Section
11.1(b).

1.9                               “Base
Price” shall mean the initial price for Qualifying Stumpage more
particularly described in Exhibit B attached hereto and incorporated
herein by this reference..

1.10                        “Price Adjustment Date” shall mean January 1, 2007 and each
July 1 and January 1 thereafter during the Term.

1.11                        “Business Day” shall mean any day other than a Saturday,
Sunday, or other day on which banks are authorized to be closed in the Province
of Nova Scotia, Canada.

1.12                        “Clearcut” shall mean the cutting and removal of
substantially all merchantable Qualifying Stumpage from a site excluding
Qualifying Stumpage located in SMZ’s or otherwise not loggable in accordance
with Neenah’s harvesting best management practices, the requirements of
maintaining SFI® Certification (as hereinafter defined) and all requirements of
the Nova Scotia Department of Natural Resources.

1.13                        “Closing Date” shall mean the date of closing of the real
property sale contemplated by the Purchase and Sale Agreement.

1.14                        “Control” shall mean, with respect to any Person, the power
to direct or cause the direction of the management of such Person, directly or
indirectly, whether through the ownership of voting securities or otherwise.

1.15                        “Counter-Notice” shall have the meaning set forth in Section
10(b)(iv).

1.16                        “Dispute” shall have the meaning set forth in Section
10(b)(i).

1.17                        “Event of Default” shall have the meaning set forth in
Section 8.2.

1.18                        “Exempt Acres” shall have the meaning set forth in Section
11.1(d).

1.19                        “Final Harvest” shall mean a Clearcut or Modified Clearcut.

1.20                        “Force
Majeure Event” shall mean any act, omission or circumstance occasioned by
or resulting from any acts of God, acts of the public enemy, wars, 

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blockades, insurrections,
riots, hurricanes, epidemics, landslides, lightning, earthquakes, tornadoes,
windstorms, volcanoes, fires, storms, floods, disasters, civil disturbances,
explosions, sabotage, endangered species habitation, change in Applicable Laws
that materially impairs the ability of either party to comply with the terms of
the Agreement, strikes or other organized labor disputes that materially
disrupt operations or results in a temporary or permanent shutdown of the Mill;
provided, however, that “Force Majeure Event” shall not include (i) a party’s
financial inability to perform other than as specifically described in this
Agreement, or (ii) an act, omission or circumstance arising from the gross
negligence or willful misconduct of the party claiming that a Force Majeure
Event has occurred.

1.21                        “Governmental
Authority” shall mean any federal, provincial, local or foreign government,
political subdivision, agency, board, court, regulatory body or commission, any
arbitrator with authority to bind a party at law, or any Person acting lawfully
on behalf of any of the foregoing.

1.22                        “Hardwood Pulpwood” shall mean hardwood trees meeting the
applicable specifications set forth in Exhibit A attached hereto.

1.25                        “Hardwood Pulpwood Price” shall initially mean the price set
forth on Exhibit B attached hereto and made a part hereof (the “Hardwood
Pulpwood Base Price”) adjusted up or down on a bi-annual basis on each Price
Adjustment Date the Stumpage Price Index.

1.26                        “Hardwood Sawlogs” shall mean hardwood trees meeting the
applicable specifications set forth in Exhibit A attached hereto.

1.27                        “Hardwood Sawlogs Price” shall initially mean the price set
forth on Exhibit B attached hereto and made a part hereof (the “Hardwood
Sawlogs Base Price”) adjusted up or down on a bi-annual basis on each Price
Adjustment Date by the Stumpage Price Index.

1.28                        “Hardwood Qualifying Stumpage” shall mean standing Timber
which meets or exceeds the specifications for Hardwood Pulpwood or Hardwood
Sawlogs set forth in Exhibit A to this Agreement.

1.29                        “Harvesting Year” shall mean the period from January 1
through December 31 of each year during the term of this Agreement.

1.30                        “Initiating Party” shall have the meaning set forth in
Section 10(b)(iv).

1.31                        [Intentionally
Deleted]  [Text not
redacted.  Same as original document]

1.32                        “Market Region” shall mean the geographical area covered in
the Stumpage Price Index which includes the Counties of Annapolis, Antigonish,
Colchester, 

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Cumberland, Guysborough,
Halifax, Hants, Kings, Lunenburg, Pictou and Queens in the Province of Nova
Scotia, Canada.

1.33                        “Mediation Notice” shall have the meaning set forth in
Section 10(b)(iv).

1.34                        “Mill” shall mean Neenah’s pulp mill located in Pictou in the
Province of Nova Scotia, Canada.

1.35                        “New Owner” shall have the meaning set forth in Section
11.1(b).

1.36                        “Objection Notice” shall have the meaning set forth in
Section 11.1(c).

1.37                        “Person” means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or Governmental Authority.

1.38                        “Purchase and Sale Agreement” shall have the meaning set
forth in the Recitals of this Agreement.

1.39                        “Qualifying Stumpage” shall mean collectively Hardwood
Qualifying Stumpage and Softwood Qualifying Stumpage.

1.40                        “Qualifying Stumpage Price” shall mean the Hardwood Pulpwood
Price for all Hardwood Pulpwood; the Hardwood Sawlogs Price for all Hardwood
Sawlogs; the Softwood Pulpwood Price for all Softwood Pulpwood; the Softwood
Sawlog Price for all Softwood Sawlogs; and the Softwood Studwood Price for all
Softwood Studwood.

1.41                        “Recipient Party” shall have the meaning set forth in Section
10(b)(iv).

1.42                        “Reduction
Amount” shall have the meaning set forth in Section 7.5.

1.43                        “Short Harvesting Year” shall mean the period from the
Closing Date through December 31, 2006.

1.44                        “SMZ’s” shall mean Special Management Zones, designated as
such by the mutual consent of Neenah and Seller, and any similar
environmentally protected zones so designated during the Term and in compliance
with all laws, regulations or requirements of the Nova Scotia Department of
Natural Resources or necessary to maintain SFI® Certification.

1.45                        “SFI®
Certification” the Sustainable Forestry Initiative Certification received
by Neenah for the Timberlands in April of 2005.

1.46                        “Softwood Pulpwood” shall mean softwood trees meeting the
applicable specifications set forth in Exhibit A attached hereto.

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1.47                        “Softwood Pulpwood Price” shall initially mean the price set
forth on Exhibit B attached hereto and made a part hereof (the “Softwood
Pulpwood Base Price”) adjusted up or down on a bi-annual basis on each Price
Adjustment Date by the Stumpage Price Index.

1.48                        “Softwood Sawlogs” shall mean softwood trees meeting the
applicable specifications set forth in Exhibit A attached hereto.

1.49                        “Softwood Sawlogs Price” shall initially mean the price set
forth on Exhibit B attached hereto and made a part hereof (the “Softwood
Sawlogs Base Price”) adjusted up or down on a bi-annual basis on each Price
Adjustment Date by the Stumpage Price Index.

1.50                        “Softwood Studwood” shall mean softwood trees meeting the
applicable specifications set forth in Exhibit A attached hereto.

1.51                        “Softwood Studwood Price” shall initially mean the price set
forth on Exhibit B attached hereto and made a part hereof (the “Softwood
Studwood Base Price”) adjusted up or down on a bi-annual basis on each Price
Adjustment Date by the Stumpage Price Index.

1.52                        “Softwood Qualifying Stumpage” shall mean standing Timber
which meets or exceeds the specifications for Softwood Sawlogs, Softwood
Studwood and Softwood Pulpwood set forth in Exhibit A to this Agreement.

1.53                        “Stumpage Price Index” shall mean as follows:

a.               For Softwood
Sawlogs the index shall be the delivered price for spruce-pine-fir, 2x4, #1 and
#2 Eastern Kiln Dried Dimensional Lumber, F.O.B., Eastern Boston in $US/Mfbm
(converted to $CDN using Bank of Canada Daily Noon Rate) as published by Random
Lengths Weekly;

b.              For Softwood
Studwood the index shall be the delivered price for spruce-pine-fir, 2”x4”x8”,
PET Eastern Kiln Dried Dimensional Lumber, F.O.B., Eastern Boston in $US/Mfbm
(converted to $CDN using Bank of Canada Daily Noon Rate) as published by Random
Lengths Weekly;

c.               For Softwood
Pulpwood the index shall be the RISI Index for Northern Bleached Softwood Kraft
pulp (“NBSK”) $US/ADMT (converted to $CDN using Bank of Canada Daily Noon Rate)
as published by Miller and Freeman Pulp and Paper Weekly under the Price Watch:
Market Pulp Delivered;

d.              For Hardwood
Pulpwood the index shall be the trailing six month weighted average price
actually received by Seller and Neenah for 

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Hardwood Pulpwood on the
open market, including such appropriate support documentation as deemed
reasonably necessary by the receiving party to verify such pricing data.

e.               For Hardwood
Sawlogs the index shall be the trailing six month weighted average price
actually received by Seller and Neenah for Hardwood Sawlogs on the open market,
including such appropriate support documentation as deemed reasonably necessary
by the receiving party to verify such pricing data.

The Stumpage Price
Index shall be applied to the Base Price listed in Exhibit B  as follows: 
(1) The base for the Stumpage Price Index will be established as of July
1, 2006 and reset each Price Adjustment Date (the “Rolling Index”), (2) On each
Price Adjustment Date the Stumpage Price Index on such date will be measured
against the previous Rolling Index and each applicable Base Price will be
adjusted upward or downward by the percentage increase or decrease in the
applicable Stumpage Price Index compared to such previous Rolling Index,  [Text Redacted]*

To the extent any
of the publications or published indices listed in this Section 1.54 are
discontinued, or otherwise are no longer available to the parties, during the
Term of the Agreement (the “Publication Change”) Seller and Neenah shall
mutually agree on a replacement publication or published index, as applicable,
of similar quality and reputation.  If no
suitable replacement publication or index is available Seller and Neenah shall
mutually agree on a replacement index definition for the impacted Qualifying Stumpage.  The Agreement shall be amended to reflect the
replacement publication or index, or revised index description, as
applicable.  Until such time as the
Agreement is amended as described herein, the Stumpage Price Index shall not
apply for the Qualifying Stumpage impacted by the Publication Change

1.54                        “Term” shall mean the term of this Agreement, namely the
period from the Closing Date through December 31, 2010, unless sooner
terminated pursuant to the provisions of this Agreement in accordance with the
provisions of Section 8.2 or extended pursuant to the provisions of this
Agreement in accordance with Section 8.3.

1.55                        “Timber” shall mean the following types of standing timber
now or hereafter located on the Timberlands: Hardwood Pulpwood, Hardwood Sawlogs,
Softwood Pulpwood, Softwood Sawlogs and Softwood Studwood.

1.56                        “Timberlands” shall mean those certain tracts of real
property as described and purchased by Seller from Neenah pursuant to the
Purchase and Sale Agreement.

1.57                        “Tracts” shall have the meaning set forth in Section 3.1.

1.58                        “Valuation Consultant” shall mean J.W. Sewall Company or a
mutually agreed to alternative.

*             The
redacted text has been filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

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2.    Agreement to Sell and
Purchase.

2.1         Quantities to be Offered.  Subject to and in accordance with  the terms of this Agreement, Seller agrees to
offer to sell to Neenah for each Harvesting Year during the Term the Annual
Purchase Amount applicable to such Harvesting Year.

2.2         Right
to Bid.  Seller
shall notify Neenah of any proposed open-market bid sales of Qualifying
Stumpage by Seller beyond the sales to Neenah contemplated by this Agreement,
said notice to be provided not later than thirty (30) days prior to the
proposed open-market bid sale.  The
notice to Neenah shall specify the tracts of Timberland to be harvested,
proposed Qualifying Stumpage volumes and any other information provided to
other potential buyers.  Neenah shall
have the right to bid on all such proposed open-market bid sales.  Nothing contained in this Section 2.2 shall
be construed to prohibit Seller from selling Qualifying Stumpage to any third
party pursuant to a separate negotiated agreement with said third party so long
as the Annual Purchase Amount of Qualifying Stumpage is available to Neenah as
described in this Agreement.

3.    Designation of Tracts and Determination of
Volumes.

3.1         Designation
of Tracts to Be Harvested.  During the Term, Seller shall designate the
portions of the Timberlands (the “Tracts”) which Seller shall make available to
Neenah for harvesting during each Harvesting Year.  A sufficient number of Tracts shall be made
available so as to satisfy the obligations of Seller herein to offer to sell to
Neenah the Annual Purchase Amount. 
Seller shall follow the procedure for designating such Tracts
hereinafter set forth in this Section 3. 
Seller and Neenah  hereby
acknowledge and agree that the Timberlands will, at all times during the term
of this Agreement, be owned, managed and operated in a manner consistent with
and necessary to maintain the Timberlands’ SFI® Certification and that both
parties will have responsibilities for maintaining such certification.  Neenah’s responsibility for maintaining the
Timberlands’ SFI® Certification shall be limited to its harvesting activities
on Actual Designated Tracts.  Seller
shall be solely responsible for all other SFI® Certification requirements on
the Timberlands.  Failure to maintain the
Timberlands’ SFI® Certification shall be deemed a material breach of this
Agreement.

(a)  Initial Designation of
Tracts to be Harvested.  Exhibit
C attached hereto and made a part hereof sets forth the portions of the
Timberlands which Seller shall make available to Neenah for the Short Harvesting
Year and for the Harvesting Year commencing January 1, 2007 for the exercise by
Neenah of its rights to harvest the Annual Purchase Amount situated thereon in
accordance with the terms of this Agreement.

(b)  Subsequent Designation of
Tracts to be Harvested. 
For the Harvesting Year commencing January 1, 2008, and for all
subsequent Harvesting Years during the Term, the portions of the Timberlands
which Seller shall make available for harvesting shall be determined in accordance
with the following procedure:

(i)   Designation of Potential
Harvesting Areas.  On or
before the first Business Day following May 1 prior to each applicable
Harvesting Year 

 7
 

 

except the Short Harvesting Year, Seller shall
designate in a written notice (the “Annual Seller Notice”) to Neenah all of
those portions of the Timberlands which it proposes to make available for
harvesting during the subsequent Harvesting Year  including the estimated Qualifying Stumpage
volumes thereon sufficient to satisfy 110% of the Annual Purchase Amount and
the proposed route of access from a public road to the property boundary.  To qualify, an individual tract offered by
Seller shall contain no less than forty percent (40%) of Qualifying Softwood
Stumpage on a volume per acre basis. 
With respect to timber quality and volume per acre, the Tracts shall be
reasonably representative of all the harvestable portions of the Timberlands.

(ii)  Selection of Actual
Harvesting Areas.  During
the 45-day period following receipt by Neenah of the applicable Annual Seller
Notice, Neenah shall select and deliver notice to Seller in writing, which of
the Tracts Neenah desires to harvest for such Harvesting Year, containing
sufficient Softwood Sawlog and Softwood Studwood volumes to satisfy the Annual
Purchase Amount (the “Actual Designated Tracts”).

(iv) Composition Goals.  Seller recognizes and acknowledges that the
goal of the parties is to achieve the Annual Purchase Amounts through the
inclusion of as many Final Harvest areas as practicable.

3.2         Boundary
and Timber Markings. 
Within fifteen (15) Business Days prior to the scheduled commencement of
harvesting activities on each applicable Actual Designated Tract as set forth
in the harvesting schedule described below in Section 4.1, Seller shall
designate on the ground (using accepted local practices for marking boundary
and cut lines) the boundary lines of such Actual Designated Tract.  The boundary lines shall clearly delineate
the boundaries of the Actual Designated Tract from the boundaries of adjacent
land not owned by Seller, and from the boundaries of other Timberlands not
constituting Actual Designated Tracts for such Harvesting Year.  Subject to Seller’s reasonable acceptance and
approval, Neenah, or Neenah’s third party contractor, shall designate on the
ground (using accepted local practices for marking boundary and cut lines) all
SMZ’s within the Actual Designated Tracts and any Qualifying Stumpage to be
removed from such designated SMZ’s.

4.    Harvesting Procedures.

4.1         Harvesting
Schedule. 
Following determination of the Actual Designated Tracts, Neenah shall
provide a harvesting schedule to Seller setting forth approximate start and
completion dates relating to harvesting Qualifying Stumpage within each of the
Actual Designated Tracts.  Neenah shall
modify said harvesting schedule based upon any reasonable objections raised by
Seller with respect to any of said harvesting dates.  Notwithstanding the foregoing, Neenah shall
harvest the Actual Designated Tracts on the basis of the bi-annual harvesting
notices provided by Neenah to Seller each six (6) months during the term of
this Agreement, subject to a Force Majeure Event, and subject to the provisions
of Section 4.3 below.

4.2         Timber
Roads.  Neenah
shall construct, or cause to be constructed, at Neenah’s sole cost and expense,
haul roads to the Actual Designated Tracts necessary to provide 

 8
 

 

Neenah with proper
access to such Actual Designated Tracts for its harvesting operations.  Neenah will consult with Seller concerning
the location and course of any proposed new road, and Seller may request
non-material and reasonable modifications to proposed routes or minimum
construction standards.  The cost of any
such non-material modifications requested by Seller shall be borne by
Neenah.  The cost of any material modification
shall by borne equally by Seller and Neenah. 
Construction of such roads shall be accomplished in a good and
workmanlike manner in compliance with the specifications set forth in Exhibit
E.  Following the construction of
said roads and continuing until the completion of harvesting operations on the
Actual Designated Tract associated with such roads and the removal of all
equipment and vehicles associated with such harvesting operations, Neenah shall
at its sole cost and expense maintain and repair said roads.  All such road construction, maintenance and
repair shall be performed in a manner so as not to violate any Applicable Laws,
or with respect to SMZ’s, to maintain compliance with all laws, regulations or
requirements of the Nova Scotia Department of Environment and Labor or as
necessary for the Timberlands to maintain SFI® Certification.  Any timber damaged or destroyed during the
course of Neenah’s road construction shall be treated for purpose of this
Agreement as if harvested by Neenah as part of harvesting operations on the
associated Actual Designated Tract.

4.3         Timber
Harvesting.  Neenah
shall harvest (i.e., cut and remove) within each
Harvesting Year all Qualifying Stumpage located on the Actual Designated Tracts
for such Harvesting Year, or such smaller volume of Qualifying Stumpage as
mutually agreed upon by Neenah and Seller in writing, subject to a Force
Majeure Event.  Such harvesting
operations shall be conducted in accordance with all Applicable Laws, in a
manner consistent with established industry logging practices and in compliance
with all laws, regulations or requirements of the Nova Scotia Department of
Natural Resources or as necessary for the Timberlands to maintain SFI®
Certification.  Upon severance of any
portion of the timber on the Timberlands by Neenah or its logging contractors,
risk of loss, title to and ownership of such timber shall pass to Neenah.      Neenah shall repair all fences or
structures damaged by its harvesting operations and shall leave all roads, fire
breaks, property lines, lakes, streams, and drainage ditches clear of logs,
timber, limbs or other debris.  All oil
drums, cans, bottles, cartons, delimbing bars, loading decks, abandoned
equipment and other debris resulting from Neenah’s operations shall be removed
from the applicable portions of the Timberlands upon completion of the
harvesting operations at Neenah’s expense. 
If repairs are not made or if the debris is not removed and cleared
within sixty (60) days after notice from Seller to Neenah, then Neenah shall be
deemed in material breach of this Agreement. 
Neenah shall not, under any circumstance, bury any material underground
or discharge, release or otherwise cause the Timberlands or any portion thereof
to be affected by hazardous wastes or hazardous substances.  Neenah shall use normal and customary care
while conducting its harvesting operations so as not to materially damage the
Timberlands.  Neenah acknowledges that
under SFI Standards a higher degree of care is required when the site is abnormally
wet and that such circumstances may require Neenah to alter harvesting
activities to accommodate the ground conditions; however, Neenah shall not be
liable for any damage to the Timberlands caused by anyone other than Neenah or
Neenah’s contractors engaged in harvesting, trucking or road construction on
the portion of the Timberlands impacted by such damage.

4.4         Unauthorized
Cutting.  Seller
shall be entitled to seek all remedies available at law for timber trespass if
Neenah or its contractors harvest or destroy any timber that 

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is outside an
Actual Designated Tract; however, Neenah shall not be liable for any such
damage to the Timberlands caused by anyone other than Neenah or its
contractors.

4.5         Access
Rights.  Seller
hereby grants to Neenah the rights to ingress and egress over the Tracts
designated on Exhibit D during the Term for the sole purposes (i) of
harvesting Qualifying Stumpage on the Actual Designated Tracts for a given
Harvesting Year and all reasonable activities associated therewith and (ii)
inspecting and monitoring existing timber plantations on all other Tracts
comprising the Timberlands in order for Neenah to continue collecting data for
ongoing research and analysis initiated by Neenah prior to the Closing Date.  If Seller has provided Neenah with access to
an Actual Designated Tract (through easement or otherwise), but Neenah prefers
to enter upon lands not owned or subject to easement by Seller, Neenah  shall be solely responsible for securing
permission to do so.

5.    Prices and Payments.

5.1         Time
of Payment.  All
Stumpage harvested and removed by Neenah from the Timberlands shall have an
accompanying trip ticket.  Seller shall
provide Neenah with trip tickets and Neenah will follow Sellers policy
governing use of trip tickets.  All
Qualifying Stumpage shall be weighed promptly after harvest.  Volumes will be based on volumes by product
class shown on mill scale or load tickets. 
Neenah shall cause all logging contractors to maintain written log books
of all loads or partial loads of Qualifying Stumpage cut and removed from the
Timberlands and to (i) identify in such log books each load removed from the
Timberlands; (ii) record in such log books the load ticket numbers for each
load delivered to the Mill; (iii) deliver such log book for inspection by
Seller, as requested; and (iv) clearly tag, by adhering to guidelines
reasonably required by Seller, each load coming from the Timberlands before
such load is removed from the Timberlands. 
Neenah shall provide Seller on a weekly basis with a list of scale
tickets, a settlement statement, and any other supporting documentation
reasonably requested by Seller and shall remit payment to the Seller within
thirty (30) days of delivery of said settlement statement the total Qualifying
Stumpage Price for all Qualifying Stumpage weighed-in during such week.

5.2         Price
Changes and Stumpage True-up.

(a)           On each Price Adjustment Date during
the Term, the Qualifying Stumpage Price for any product class of Qualifying
Stumpage shall be adjusted upward or downward, as the case may be, as described
in Article 1 of this Agreement.

(b)           On Each Price Adjustment Date Neenah
and Seller shall review the actual Softwood Sawable Volume harvested in the
preceding six (6) months period.  [Text Redacted]*.

5.3         Silviculture
Credits.  Neenah
shall reimburse Seller for on-going silviculture expenses during the term
of this Agreement, on a quarterly basis on or before the 5th business day of each calendar quarter, up to
and as calculated in accordance with the Nova Scotia Sustainable Forestry
Fund (the “Provincial Standard”) at $3.00 per cubic meter of softwood and $0.60
per cubic meter of hardwood harvested by Neenah pursuant to this Agreement (the
“Silviculture Expenses”).  Seller shall conduct silviculture activities
according to 

*             The redacted text has
been filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

 

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its business
judgment on the Tracts, but at a minimum at the level necessary to produce the
credits to transfer to Neenah pursuant to the Provincial Standard.  In
return for the reimbursement of the Silviculture Expenses, Seller shall
transfer to Neenah silviculture credits, when available to Seller, equal to the
Silviculture Expenses reimbursed to Seller pursuant to this Section 5.3.

6.    Indemnity.

6.1         Indemnification
by Seller.  Seller
shall defend, indemnify and hold Neenah harmless from and against any and all
claims, liabilities, costs or damages (including without limitation reasonable
attorneys’ fees and court costs through all appeals) arising out of the breach
by Seller of its obligations hereunder.

6.2         Indemnification
by Neenah .  Neenah
shall defend, indemnify and hold Seller harmless from and against any and all
claims, liabilities, costs or damages (including without limitation reasonable
attorneys’ fees and court costs through all appeals) arising out of (i)
personal injury, death or property damage resulting from Neenah’s harvesting
operations, or Neenah’s access rights pursuant to Section 4.5, on the
Timberlands or the presence of employees, agents or other invitees of Neenah on
the Timberlands, and (ii) the performance or non-performance by Neenah of its
covenants and obligations hereunder.

7.    Force Majeure.

7.1         Effect of Force Majeure.  Except for the obligation of a party to make
payments required hereunder, the parties shall be excused from performing any
of their respective obligations under this Agreement and shall not be liable in
damages or otherwise on account of the non-performance of any such obligation,
for so long as and to the extent that such party is unable to perform such
obligation as a result of any Force Majeure Event.

7.2         Mitigation
and Notice.  The
occurrence of a Force Majeure Event shall not relieve a party of its obligations
and liability hereunder to the extent such party fails to use commercially
reasonable efforts to remove the cause and remedy or mitigate the effects of
the Force Majeure Event if, with commercially reasonable efforts, such party
could have removed such cause or remedied or mitigated such effects.  In addition, no Force Majeure Event shall
relieve a party of its obligations or liability hereunder unless such party
shall give notice (including a reasonable description of such Force Majeure
Event) to the other party as soon as reasonably possible and in any event
within twenty (20) days of the occurrence of such Force Majeure Event. Upon
request, the party whose obligations were suspended shall provide the other
party with a plan for remedying the effects of such Force Majeure Event.

7.3         Failure
to Give Notice.  A
failure to give notice under Section 7.2 above “as soon as reasonably possible”
will not affect the rights and obligations of the party whose obligations are
suspended except if, and only to the extent that, the party which was entitled
to receive such notice was actually prejudiced as a result of such failure.

7.4         Force
Majeure Event Affecting Actual Designated Tracts.  If a Force Majeure Event makes a portion of
any Actual Designated Tract unavailable or commercially 

 11
 

 

impracticable for
harvesting by Neenah in accordance with the harvesting schedule contemplated by
the parties or if the Qualifying Stumpage is materially damaged by the Force
Majeure Event, then Seller shall promptly designate and make available for
harvesting such other portions of the Timberlands as shall be necessary to
satisfy its obligations under this Agreement.

7.5         Volume
Reduction Based on Force Majeure Event.  If the party that becomes subject to a Force
Majeure Event (the “Affected Party”) reduces the volume of Qualifying Stumpage
to be purchased or sold due to a Force Majeure Event (the amount of such
reduction, the “Reduction Amount”), the Affected Party shall give written
notice to the Non-Affected Party of such reduction and the effective date
thereof.  If such reduction continues in
effect for a period of sixty (60) days or more, the Non-Affected Party shall
then have the right, in the case of Seller, to sell all or part of the Reduction
Amount of such Qualifying Stumpage not purchased by Neenah to another buyer or
buyers, and in the case of Neenah, to purchase all or part of the Reduction
Amount of Qualifying Stumpage not sold by Seller from another seller or
sellers, subject to the following:

(a)  The Non-Affected Party shall not enter into
any contract for any such sale or purchase for a term longer than one (1) year’s
duration.

(b)  The Non-Affected Party shall give the Affected
Party written notice of each such contract, including the volume sold or
purchased hereunder and the term thereof.

(c)  The annual volume commitment of the
Non-Affected Party for Qualifying Stumpage as specified herein shall be reduced
by such volume sold or purchased under such contract for the duration thereof.

(d)  any other plan of action  mutually agreed to by both parties.

8.    Term and Termination.

8.1         Term.  This Agreement shall expire on December 31,
2010, unless (i) this Agreement is sooner terminated for cause pursuant to
Section 8.2 hereof or (ii) the term of this Agreement is extended by Neenah in
accordance with Section 8.3 hereof.

8.2         Termination
for Cause.  This
Agreement shall immediately terminate if any one of the following events (each,
a “default”) has occurred and is continuing on the tenth (10th) day after
receipt of notice of an intent to cancel by reason of such default (each, an “Event
of Default”):

(a)  Failure to make any payment required hereunder
when due which failure is not cured within ten (10) Business Days after receipt
of written notice thereof; or

 12
 

 

(b)  Breach of any other material term of this
Agreement, which breach is not cured within thirty (30) Business Days after
receipt of written notice thereof; or

(c)  Insolvency or the filing by or against Seller
or Neenah of a petition in bankruptcy (which, in the event of an involuntary
bankruptcy, is not dismissed within ninety (90) days from the date of its
commencement), or appointment by a court of a temporary or permanent receiver,
trustee or custodian.

Termination shall
not relieve a defaulting party of any liability to the nondefaulting party for
breach of its obligations hereunder.

8.3         Extension
Terms.  Neenah
shall have the option to extend the Term beyond December 31, 2010 for one (1)
additional five (5) year renewal.  In the
event that Neenah elects to extend the Term, Neenah shall provide written
notice of such election to Seller (“Renewal Notice”) not later than (i) July 1,
2010.  Neenah and Seller, by mutual
agreement, may extend the term of up to one (1) additional five (5) period by
with mutual agreement prior to July 1, 2015. 
Each Renewal Period shall be upon the same terms and conditions as the
initial five (5) years of the Term; provided, however that Neenah may elect in
the first Renewal Notice to decrease the Annual Purchase Amount by up to twenty
percent (20%), and provided that in the second renewal period, by mutual
agreement, the amount of the Annual Purchase Amount shall be established
collaboratively by Neenah and Seller based on a new timber inventory of the
Timberlands.

9.    Governing Law. This Agreement shall
be governed by and construed in accordance with the domestic laws of the
Province of Nova Scotia, Canada and the federal laws of Canada applicable
therein as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies (without giving effect to any
choice or conflict of law provision or rule).

10.  Dispute Resolution.

(a)  Consultation by Responsible Executives.   In the event of any dispute, controversy or
claim arising out of or relating to this Agreement, that the personnel
designated by Neenah and the Seller with operational responsibility for
implementing this Agreement are unable to resolve, each of the parties will
cause its chief officer in charge of managing the Timberlands (or the chief operating
officer of any manager of the Timberlands, as the case may be), to consult with
each other promptly and in good faith to endeavor to resolve such dispute,
controversy or claim before seeking mediation as provided in Section 10(b), but
failure to do so shall not limit the right of either party to submit the issue
to such mediation or arbitration.

(b)  Mediation.

(i)   In the event of any dispute, controversy or
claim arising out of or relating to this Agreement or the breach, termination,
or validity thereof, except for disputes in respect of which equitable relief
is sought and except for any matter which this Agreement provides is to be
conclusively resolved by the 

 13
 

 

Valuation Consultant (a “Dispute”), the parties shall
make a good faith attempt to settle the Dispute by mediation pursuant to the
provisions of this Section 10(b) before resorting to the procedure set forth in
Section 10(c).

(ii)  Unless the parties agree otherwise, the
mediation shall be conducted in Halifax, Nova Scotia, in accordance with the
National Mediation Rules of the ADR Institute of Canada, Inc. by a mediator who
has the qualifications and experience set forth in paragraph (iv) of this
Section 10(b) and is selected as provided in paragraph (iv) of this Section
10(b).

(iii) Unless the parties agree otherwise, the
mediator shall be an individual of recognized expertise and experience in the
timber market in the general operating range of the Timberlands who has
mediated cases involving similar transactions for the federal or provincial courts
or for a reputable commercial alternative dispute resolution (“ADR”) firm or
not-for-profit ADR organization.

(iv) Either party (the “Initiating Party”) may
initiate mediation of the Dispute by giving the other party (the “Recipient
Party”) written notice (a “Mediation Notice”) setting forth a list of the names
and resumes of qualifications and experience of three (3) impartial persons who
the Initiating Party believes would be qualified as a mediator pursuant to the
provisions of paragraph (iii) hereof. 
Within seven (7) days after the delivery of the Mediation Notice, the
Recipient Party shall give a counter-notice (the “Counter-Notice”) to the
Initiating Party in which the Recipient Party may designate a person to serve
as the mediator from among the three (3) persons listed by the Initiating Party
in the Mediation Notice (in which event such designated person shall be the
mediator).  If none of the persons listed
in the Mediation Notice is designated by the Recipient Party to serve as the
mediator, the Counter-Notice shall set forth a list of the names and resumes of
three (3) impartial persons who the Recipient Party believes would be qualified
as a mediator pursuant to the provisions of paragraph (iii) hereof.  Within seven (7) days after the delivery of
the Counter-Notice, the Initiating Party may designate a person to serve as the
mediator from among the three (3) persons listed by the Recipient Party in the
Counter-Notice (in which event such designated person shall be the mediator).  If the parties cannot agree on a mediator
from the three (3) impartial nominees submitted by each party, each party shall
strike two (2) names from the other party’s list, and the two (2) remaining
persons on both lists will jointly select as the mediator any person who has
the qualifications and experience set forth in paragraph (iii) hereof.  If they are unable to agree, then the
mediator will be selected by the ADR Institute of Canada, Inc.

(v)  If the Dispute cannot be settled within thirty
(30) days after the mediator has been selected as provided above, either party
may give the other and the mediator a written notice declaring the mediation
process at an end, in which event either party may pursue any remedies
available at law or in equity to resolve the Dispute.

 

 14

 

(vi) All conferences and discussions which occur in
connection with mediation conducted pursuant to this Agreement shall be deemed
settlement discussions, and nothing said or disclosed, nor any document
produced which is not otherwise independently discoverable, shall be offered or
received as evidence or used for impeachment or for any other purpose in any
current or future arbitration or litigation.

(vii)                Each party shall bear its own
costs and expenses with respect to mediation; provided that the costs of the
mediator shall be shared equally between the parties.

11. Assignment.

11.1      Assignment by Seller.

(a)  Except as provided in this Section 11.1, this
Agreement may not be assigned by Seller in whole or in part.  Notwithstanding the foregoing, at any time
during the Term, Seller may assign this Agreement (i) to any lender or lenders
as security for obligations to such lender or lenders in respect to financing
arrangements of Seller or any Affiliate thereof with such lender or lenders.,
or (ii) upon prior written notice to Neenah, to any Person that is and at all
times remains an Affiliate of Seller or that merges, amalgamations or
consolidates with or into Seller or that acquires all or substantially all of
the Timberlands.

(b)  Notwithstanding any other provision of this
Agreement to the contrary, Neenah and Seller acknowledge and agree that Seller
(or any entity comprising Seller) shall not be prohibited from selling all or
any portion of the Timberlands, provided that any such sale of the Timberlands
shall be made subject to the terms of this Agreement and all of Seller’s
obligations hereunder respecting the applicable portion of Qualifying Stumpage
volumes required hereunder.  Seller (or
any entity comprising Seller) shall be able to sell a portion of the
Timberlands pursuant this Section 11.1 (b) no more than three (3) times during
the Term of the Agreement.  Upon any sale
of a portion of the Timberlands, the purchaser of said portion of the
Timberlands (“New Owner”) shall assume the obligation to supply a portion of
the Annual Purchase Amount to be supplied hereunder, said portion of the
Qualifying Stumpage volumes (“Assumed Volume”) to be agreed to by Seller and
said New Owner, subject to Neenah’s consent to such volume allocation, which
consent shall not be unreasonably withheld or delayed.  Upon such assumption by said New Owner,
Seller’s obligations to supply Annual Purchase Amount hereunder shall be
reduced by the Assumed Volume, and Seller shall thereafter have no obligation
or liability with respect to said Assumed Volume or with respect to the portion
of the Timberlands so conveyed.

(c)  At the request of Seller, upon any such sale
to a New Owner, Neenah shall execute an amendment to this Agreement
acknowledging the foregoing. 
Furthermore, upon request of Neenah, upon such sale to a New Owner,
Neenah and such New Owner 

 15
 

 

shall enter into a separate Fiber Supply Agreement on
the same terms and conditions as contained in this Agreement except for the
portion of the Timberlands covered thereby and the volume of Qualifying
Stumpage to be supplied thereunder.  In
the event Neenah objects to any proposed Assumed Volume, Neenah shall provide
written notice of the same to Seller within fifteen (15) days of notice to Neenah
of said proposed Assumed Volume (“Objection Notice”), said Objection Notice to
include a detailed explanation of the basis for said objection.  In the event Neenah  timely provides an Objection Notice, Seller
shall have the option of (a) revising said proposed Assumed Volume, in which
case Neenah shall have the further right to object by providing a new Objection
Notice as provided above or (b) retaining the Assumed Volume Consultant to
determine whether the proposed Assumed Volume is reasonable.  In the event the Assumed Volume Consultant is
so retained and determines that said proposed Assumed Volume is reasonable,
Neenah shall be deemed to have consented to said Assumed Volume and shall pay
all costs and expenses of said Assumed Volume Consultant.  Otherwise, said costs and expenses shall be
paid by Seller.

(d)  Notwithstanding the foregoing, Seller may
convey free and clear from the obligations of this Agreement (i) during the
Term up to twelve percent (12%) of the acreage of the Timberlands on an
aggregate basis.  Neenah agrees, upon
request, to execute any reasonable instrument or instruments requested by
Seller to confirm the same.

(e)  Subject only to the provisions of the
following sentence, the rights of Neenah under this Agreement shall be and are
subject and subordinate at all times to the lien of any and all mortgages,
security deeds, deeds to secure debt or loan deeds in any amount or amounts
whatsoever now or hereafter placed on Seller’s interest in the Timberlands (or
any portion thereof) (collectively, a “Seller’s Mortgage”).  Notwithstanding the foregoing, Seller
acknowledges and agrees that Neenah’s subordination to a Seller’s Mortgage
shall be conditioned upon Seller obtaining from the holder of such Seller’s
Mortgage (a “Seller’s Mortgagee”) an agreement in writing that for so long as
Neenah is not in default under this Agreement beyond any applicable notice and
cure periods, the holder of such Seller’s Mortgage shall recognize Neenah’s
rights to purchase Timber under this Agreement. 
Although such subordinations shall be self-operative, Neenah shall
execute within ten (10) business days of request by Seller such further
reasonable instruments confirming such subordinations as may be requested by
Seller, including, but not limited to, a Subordination, Non-Disturbance and
Attornment Agreement.  If any such Seller’s
Mortgage shall be foreclosed, upon request of the mortgagee or the purchaser at
foreclosure, Neenah shall attorn to the purchaser at any such foreclosure sale
(or purchaser by deed in lieu of foreclosure) and recognize such purchaser as
Seller under this Agreement and will execute such reasonable instruments as may
be necessary or appropriate to evidence such attornment.  Notwithstanding any of the above, Neenah
agrees that Seller or its successor in interest shall have the right to declare
this Agreement prior and superior to any such Seller’s Mortgage, and Neenah
agrees, upon request, to execute any reasonable instrument or instruments
requested by Seller or such Seller’s Mortgagee to confirm same.  The holder or holders of any such Seller’s
Mortgage are hereby made third party beneficiaries to this Agreement for the
purposes of this Section 11.  No advance
notice to, or consent from, Neenah with respect to an acquisition of the
Timberlands (or any portion thereof) 

 16
 

 

or this Agreement
by any Seller’s Mortgagee through foreclosure, deed in lieu of foreclosure or
any other remedial actions (or transfers in lieu of such remedial actions)
shall be required.

11.2      Assignment
by Neenah .  Except
as provided in this Section 11.2, this Agreement may not be assigned by Neenah
in whole or in part.  Notwithstanding the
foregoing, at any time during the Term, Neenah 
may assign this Agreement (a) to any lender or lenders as security for
obligations to such lender or lenders in respect of financing arrangements of
Neenah  or any affiliate thereof with
such lender or lenders, or (b) upon prior written notice to Seller to any
Person that (i) is and at all times remains an Affiliate of Neenah or that merges
or consolidates with or into Neenah or that acquires all or substantially all
of the assets or stock of  Neenah, or
(ii) purchases or leases the Mill or assumes responsibility for operating the
Mill and assumes Neenah’s liabilities and obligations hereunder.

12.   Publicity.  This Agreement is confidential and no party
shall issue press releases or engage in other types of publicity of any nature
dealing with the commercial and legal details of this Agreement without the
other party’s prior written approval. 
However, approval of such disclosure shall be deemed to be given to the
extent such disclosure is required to comply with Applicable Laws, governmental
rules, regulations or other governmental requirements. In such event, the
publishing party shall furnish, in advance, a copy of such proposed disclosure,
to the other party.

13.   Headings.  The headings contained in this Agreement are
for convenience only and should not be construed to limit or expand any terms
otherwise provided.

14.   Notices.  All notices, requests, demands and other communications
provided for hereunder shall be in writing and personally delivered or sent by
regular U.S.P.S. or Canada Post certified mail, facsimile or similar type of
overnight courier to the applicable party at the address indicated below:

	
  If to Neenah, to:

  	
   

  	
  Neenah Paper Company of Canada

  	
   

  	
   

  
	
   

  	
   

  	
  260 Abercrombie Brand Road

  	
   

  	
   

  
	
   

  	
   

  	
  Abercrombie Point, Nova Scotia

  	
   

  	
   

  
	
   

  	
   

  	
  Canada B2H 5E8

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Mill Manager

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile No.: 902-752-5404

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone No.: 902-752-9172

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Neenah Paper, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
  3460 Preston Ridge Road, Suite 600

  	
   

  	
   

  
	
   

  	
   

  	
  Alpharetta, Georgia 30005

  	
   

  	
   

  
	
   

  	
   

  	
  Attn: Legal Department

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile No.: 678-518-3283

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone No.: 678-566-6500

  	
   

  	
   

  

 

 17
 

 

 

	
  If to Seller:

  	
   

  	
  Thomas Colgan

  	
   

  	
   

  
	
   

  	
   

  	
  Wagner Forest Management

  	
   

  	
   

  
	
   

  	
   

  	
  150 Orford Road

  	
   

  	
   

  
	
   

  	
   

  	
  Lyme, NH 03768

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile No.: 
  603-795-4631

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone No.: _603-795-2002

  	
   

  	
   

  

 

or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section.  Notice shall be deemed received
when (i) hand delivered; (ii) sent, after receipt of confirmation if sent by
facsimile; (iii) five business days after deposit with the U.S.P.S. or Canada
Post, postage prepaid, for certified mail; and (iv) one business day after
delivery to overnight courier, properly addressed to the applicable party.

15.   Partial
Illegality.  If any
provision, or part of a provision, of this Agreement is held to be invalid or
unenforceable under any Applicable Law, then the parties shall use all
commercially reasonable efforts to replace the invalid or unenforceable
provision by a provision that, to the extent permitted by Applicable Law,
achieves the purposes intended under the original provision and to allow the
parties to have the intended benefit of their bargain.  If it cannot be so reformed, it shall be
omitted.  The balance of this Agreement
shall remain valid and unchanged and in full force and effect.

16.   Waiver of Compliance.  Any delay or omission on the part of either
party to this Agreement in requiring performance by the other party hereunder
or in exercising any right hereunder shall not operate as a waiver of any
provision of this Agreement or of any right or rights hereunder.  Further, any failure by either party to
enforce at any time any term or condition under this Agreement shall not be
considered a waiver of that party’s right thereafter to enforce each and every
term and condition of this Agreement.

17.   Amendments and Waivers.  This Agreement may not be terminated,
amended, supplemented, waived or modified orally, but only by a document in
writing signed by the party against which the enforcement of such termination,
amendment, supplement, waiver or modification is sought.  No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any such prior or subsequent
occurrence.

18.   Counterparts.  This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same document.  All
signatures need not be on the same counterpart.

19.   Estoppel
Certificates.  Either
party shall, at no cost to the requesting party, from time to time, upon twenty
(20) days prior request by the other party, execute, acknowledge and deliver to
the requesting party a certificate signed by an officer of the certifying party
stating that this Agreement is unmodified and in full force and effect (or, if
there have been modifications, that this Agreement is in full force and effect
as modified, and setting forth such modifications) 

 18
 

 

and the dates
through which payments have been made, and either stating that to the knowledge
of the signer of such certificate no default exists under this Agreement or
specifying each such default to which the signer has knowledge.

20.   Submission To Jurisdiction.  Without limiting the parties’ agreement to
submit any and all disputes to mediation and arbitration as herein provided,
if, notwithstanding said section, any party shall have the right to seek
recourse to a court with respect to any dispute arising out of or related to
this Agreement or the transactions contained in or contemplated by this Agreement,
whether in tort or contract or at law or in equity, then any action or
proceeding in respect of any such dispute shall be brought exclusively in any
Superior Court in the Province of Nova Scotia (the “chosen courts”) and with
respect to any such action each party (i) irrevocably submits to the exclusive
jurisdiction of the chosen courts for such purposes, (ii) waives any objection
to laying venue in any such action or proceeding in the chosen courts, (iii)
waives any objection that the chosen courts are an inconvenient forum or do not
have jurisdiction over any party hereto, and (iv) agrees that service of
process upon such party in any such action or proceeding shall be effective if
notice is given in accordance with Section 14 of this Agreement.  Each party agrees that a final judgment in
any action or proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at equity.  Each party also agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court.

21.   Prevailing Party.  If either party brings any proceeding for the
judicial or other interpretation, enforcement, termination, cancellation or
rescission of this Agreement, or for damages for the breach thereof, the
prevailing party in any such proceeding or appeal thereon shall be entitled to
its reasonable attorneys’ fees and court and other reasonable costs incurred,
to be paid by the losing party as fixed by the court in the same or a separate
proceeding, and whether or not such proceeding is pursued to decision or
judgment.

22.   Entire Agreement.  This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and merges all prior discussions and negotiations between the
parties.  None of the parties shall be
bound by any conditions, definitions, representations, or warranties with
respect to the subject matter of this Agreement other than as expressly set
forth above.

23.   Third-Party Beneficiaries.  Except as hereinafter provided, this
Agreement is intended to be solely for the benefit of the parties thereto and
their permitted assigns and is not intended to and shall not confer any rights
or benefits on any third party not a signatory hereto.

24.   Memorandum of Contract.  A Memorandum of this Agreement shall be
attached to each deed pursuant to which Seller acquired the Timberlands, to be
recorded in the recording offices of each and every registration district in
Nova Scotia in which the Timberlands are located.

25.   Insurance.  Neenah, or in the event that Neenah retains
any third-party contractor to conduct harvesting operations on the Timberlands,
Neenah or said third-party contractor shall, before conducting any operations,
obtain and maintain the following types of insurance and be duly registered
with the Nova Scotia Workers Compensation Board, in addition to any other 

 19
 

 

insurance required
by law:  (a) Worker’s Compensation and
Employer’s Liability Insurance fully covering all operations; (b) Comprehensive
Vehicle Liability Insurance, including owned, hired and non-owned vehicles,
with limits of not less than $2,000,000 single occurrence and $2,000,000
cumulative bodily injury liability; and (c) Comprehensive or Commercial General
Liability Insurance, including all contractual liability hereunder, with limits
of not less than $2,000,000 single occurrence and $2,000,000 cumulative bodily
injury liability.  Prior to the beginning
of any harvesting operations hereunder, evidence of all such insurance and
registration shall be furnished to Seller if requested in writing.

26.   Construction and
Enforcement.  In
construing and enforcing this Agreement, the following rules shall be followed:

26.1      Control
of Drafting.  Each
provision of this Agreement shall be construed simply according to its fair
meaning and not strictly for or against any party to this Agreement.  No consideration shall be given to the fact
or presumption that any party to this Agreement had a greater or lesser hand in
drafting this Agreement.

26.2      Captions.  Except for the boldfaced defined terms used
in Section 1, in construing and enforcing this Agreement, no consideration
shall be given to the captions of the articles, sections, subsections, and
clauses of this Agreement, which are inserted for convenience in organizing and
locating the provisions of this Agreement, not as an aid in its construction.

26.3      Plural
and Singular Forms. 
Plural words shall be understood to include their singular forms and vice
versa.

26.4      Including.  The word “include” and its syntactical forms
mean “include, but are not limited to,” and corresponding syntactical
forms.  The principle of ejusdem generis shall not be used to limit the scope of the
category of things illustrated by the items mentioned in a clause introduced by
the word “including.”

26.5      Definitions.  A defined term has its defined meaning
throughout this Agreement, regardless of where in this Agreement the term is
defined.

26.6      Internal
Cross-References. 
Except as otherwise provided in this Agreement, a reference to an
Article, Section, or clause means an article, section, or clause of this
Agreement and may be understood to mean, for example, “Section 5.1 of this
Agreement” or “Section 5.1 hereof.”  The
term “Section” is used variously to identify entire Sections (as in “Section
3.1”), subsections (as in “Section 3.1(b)”), and clauses (as in “Section
3.1(b)(i)”).

26.7      Currency.  Unless otherwise specifically referenced
herein all dollar amounts listed or described in this Agreement shall refer to
and be interpreted to represent Canadian Dollars.

26.8      Joint and Several
Liability.  Nova and
Atlantic are and shall be joint and severally liable for all of the obligations
of Seller under this Agreement.

(Signatures on
following pages)

 20
 

 

Executed under
seal as of the date first set forth above.

SELLER:

	
  

  	
  NOVA STAR FORESTRY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  s/s/ Thomas J. Colgan

  
	
   

  	
  Name:

  	
  Thomas J. Colgan

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC STAR FORESTRY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  s/s Thomas J. Colgan

  
	
   

  	
  Name:

  	
  Thomas J. Colgan

  
	
   

  	
  Title:

  	
  President

  

 

 

[Signatures
continued on following page]

 21
 

 

[Signatures
continued from previous page]

 

NEENAH:

	
  

  	
   

  	
   

  
	
   

  	
  NEENAH PAPER COMPANY OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  s/s/ Sean T. Erwin

  
	
   

  	
  Name:

  	
  Sean T. Erwin

  
	
   

  	
  Title:

  	
  President

  

 

 

 22

 

 

EXHIBIT A

Qualifying
Stumpage Specifications

 “Softwood Sawlogs” shall
mean:

	
  (a)

  	
   

  	
  Length

  	
   

  	
  12,14, and 16 foot

  
	
  (b)

  	
   

  	
  Trim

  	
   

  	
  2” to 8”

  
	
  (c)

  	
   

  	
  Minimum top diameter

  	
   

  	
  4” outside bark

  
	
  (d)

  	
   

  	
  Maximum diameter

  	
   

  	
  28” outside bark

  
	
  (e)

  	
   

  	
  Acceptable species

  	
   

  	
  All Spruces & Jack Pine

  
	
  (f)

  	
   

  	
  Dead wood

  	
   

  	
  White, sound, dead wood is acceptable — provided no
  sap rot

  
	
  (g)

  	
   

  	
  Burned wood

  	
   

  	
  No burned or charred wood

  
	
  (h)

  	
   

  	
  Rot

  	
   

  	
  Not acceptable

  
	
  (i)

  	
   

  	
  Stain

  	
   

  	
  Solid hard red stain acceptable (growth rings must
  be visible)

  
	
  (j)

  	
   

  	
  Sweep (& other)

  	
   

  	
  1/2 top diameter maximum sweep (e.g., less than 3”
  sweep on a 6” diameter bolt); no seams or forked pieces

  
	
  (k)

  	
   

  	
  Limbs

  	
   

  	
  Must be cut flush with bole.

  
	
  (m)

  	
   

  	
  Butt Flare

  	
   

  	
  No excessive butt flare

  

 

“Softwood Studwood”
shall mean:

	
  (a)

  	
   

  	
  Length

  	
   

  	
  8 9 or 10 foot

  
	
  (b)

  	
   

  	
  Trim

  	
   

  	
  2” to 8”

  
	
  (c)

  	
   

  	
  Minimum top diameter

  	
   

  	
  3.6 inches outside bark

  
	
  (d)

  	
   

  	
  Maximum top diameter

  	
   

  	
  12.0” outside bark

  
	
  (e)

  	
   

  	
  Acceptable species

  	
   

  	
  All Spruces, Balsam Fir & Jack Pine

  
	
  (f)

  	
   

  	
  Loads

  	
   

  	
  Mixed species loads

  
	
  (g)

  	
   

  	
  Dead wood

  	
   

  	
  White, sound, dead wood is acceptable — rovided no
  sap rot

  
	
  (h)

  	
   

  	
  Burned wood

  	
   

  	
  No burned or charred wood

  
	
  (i)

  	
   

  	
  Rot

  	
   

  	
  Not Acceptable

  
	
  (j)

  	
   

  	
  Stain

  	
   

  	
  Solid hard red Stain acceptable (growth rings must
  be visible)

  
	
  (k)

  	
   

  	
  Sweep (& other)

  	
   

  	
  1/2 top diameter maximum sweep (e.g., less than 3”
  sweep on a 6” diameter (bolt); no seams or forked pieces

  
	
  (l)

  	
   

  	
  Limbs

  	
   

  	
  Must be cut flush with bole.

  
	
  (m)

  	
   

  	
  Butt Flare

  	
   

  	
  No excessive butt flare

  

 

“Softwood Pulpwood”
shall mean :

	
  (a)

  	
   

  	
  Length

  	
   

  	
  8 foot

  
	
  (b)

  	
   

  	
  Trim

  	
   

  	
  2 to 8 inches

  
	
  (c)

  	
   

  	
  Minimum top diameter

  	
   

  	
  2.5 outside bark

  
	
  (d)

  	
   

  	
  Maximum top diameter

  	
   

  	
  13.0” outside bark

  
	
  (e)

  	
   

  	
  Acceptable species

  	
   

  	
  All softwood species

  
	
  (f)

  	
   

  	
  Loads

  	
   

  	
  Mixed species loads permitted unless notified in
  writing that species segregation is required (spruce/fir segregated from
  other softwood species)

  
	
  (g)

  	
   

  	
  Dead wood

  	
   

  	
  White, sound, dead wood is acceptable

  

 

 

 

	
  (h)

  	
   

  	
  Rot

  	
   

  	
  Maximum 1⁄2 diameter (60% of end area) is acceptable

  
	
  (j)

  	
   

  	
  Burn/charred wood

  	
   

  	
  Unacceptable

  
	
  (j)

  	
   

  	
  Sweep (& other)

  	
   

  	
  12” maximum sweep; no forked pieces

  
	
  (k)

  	
   

  	
  Limbs

  	
   

  	
  Must be cut flush with bole.

  

 

“Hardwood Sawlogs”
shall mean:

 

	
  (a)

  	
   

  	
  Length

  	
   

  	
  7 or 8 foot

  
	
  (b)

  	
   

  	
  Trim

  	
   

  	
  2 to 8 inches

  
	
  (c)

  	
   

  	
  Minimum top diameter

  	
   

  	
  7.0 inches outside bark

  
	
  (d)

  	
   

  	
  Maximum diameter

  	
   

  	
  36.0 inches outside bark

  
	
  (e)

  	
   

  	
  Acceptable species

  	
   

  	
  sugar maple, red maple, yellow birch, white birch,
  oak, ash, beech

  
	
  (f)

  	
   

  	
  Clear faces

  	
   

  	
  minimum 2 clear faces

  
	
  (g)

  	
   

  	
  Heart

  	
   

  	
  sugar & red maple — 1⁄2

  
	
  (h)

  	
   

  	
  Stain

  	
   

  	
  no stain

  
	
  (i)

  	
   

  	
  Rot

  	
   

  	
  red maple, beech no rot; all other species over 10
  inches top diameter with 3 clear faces up to 30% rot

  
	
  (j)

  	
   

  	
  Burn/charred wood

  	
   

  	
  Unacceptable

  
	
  (k)

  	
   

  	
  Sweep (& other)

  	
   

  	
  less 10 inches top diameter straight; less than 3
  inches over 10 inch top; no forks

  
	
  (l)

  	
   

  	
  Limbs

  	
   

  	
  Must be cut flush with bole.

  
	
  (m)

  	
   

  	
  Loads

  	
   

  	
  Mixed species loads acceptable

  

 

“Hardwood Pulpwood”
shall mean:

	
  (a)

  	
   

  	
  Length

  	
   

  	
  8 foot or 12 to 18 feet

  
	
  (c)

  	
   

  	
  Minimum top diameter

  	
   

  	
  3.0 inches outside bark

  
	
  (d)

  	
   

  	
  Maximum diameter

  	
   

  	
  18.0 inches outside bark

  
	
  (e)

  	
   

  	
  Acceptable species

  	
   

  	
  All hardwood species except poplar

  
	
  (i)

  	
   

  	
  Rot

  	
   

  	
  Sound and cut from living trees unless specific
  market has tolerance for rot.

  
	
  (f)

  	
   

  	
  Burn/charred wood

  	
   

  	
  Unacceptable

  
	
  (g)

  	
   

  	
  Sweep (& other)

  	
   

  	
  Less than 6 inches; no forks; cut square at ends

  
	
  (h)

  	
   

  	
  Limbs

  	
   

  	
  Must be cut flush with bole.

  
	
  (i)

  	
   

  	
  Butt Flare

  	
   

  	
  Butt flare and scarf removed

  

 

 

EXHIBIT B

Base
Stumpage Prices

Softwood Sawlogs:              [Text
Redacted]*

Softwood Studwood:          [Text Redacted]*

Softwood Pulpwood:           [Text Redacted]*

Hardwood Sawlogs:            [Text Redacted]*

Hardwood Pulpwood:         [Text Redacted]*

*             The redacted text has
been filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

 

 

EXHIBIT C

Harvest Plan 2006 and 2007 on OFFERED LANDS

 

	
  2006

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating

  	
   

  	
  Softwood (tonnes)

  	
   

  	
  Hardwood (tonnes)

  	
   

  	
  Grand

  	
   

  
	
  Unit

  	
   

  	
  Sawlogs

  	
   

  	
  Studwood

  	
   

  	
  Pulpwood

  	
   

  	
  Chips

  	
   

  	
  Total

  	
   

  	
  Sawlogs

  	
   

  	
  Pulpwood

  	
   

  	
  Chips

  	
   

  	
  Total

  	
   

  	
  TOTAL

  	
   

  
	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  2007

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating

  	
   

  	
  Softwood

  	
   

  	
  Hardwood

  	
   

  	
  Grand

  	
   

  
	
  Unit

  	
   

  	
  Sawlogs

  	
   

  	
  Studwood

  	
   

  	
  Pulpwood

  	
   

  	
  Chips

  	
   

  	
  Total

  	
   

  	
  Sawlogs

  	
   

  	
  Pulpwood

  	
   

  	
  Chips

  	
   

  	
  Total

  	
   

  	
  TOTAL

  	
   

  
	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*             The
text redacted from this column has been filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment.

 

 

EXHIBIT C CONTINUED 

The GIS Shapefiles of the
2006 and 2007 Harvest Plan previously made available to Seller in the Tamarack
due diligence data-room and e-mailed to Seller by Neenah on May 5, 2006.

 

 

EXHIBIT D

	
  PID

  	
   

  	
  Test ID

  	
   

  	
  Test Type

  	
   

  	
  Location

  	
   

  	
  County

  	
   

  	
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00838409

  	
   

  	
  PT81/1B

  	
   

  	
  range-wide provenance test

  	
   

  	
  Scotsburn

  	
   

  	
  Pictou

  	
   

  	
  Nova Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00845313

  	
   

  	
  PT84/1D

  	
   

  	
  g x e rooted cutting test

  	
   

  	
  Central West River

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00900993

  	
   

  	
  PT90/1C

  	
   

  	
  family test

  	
   

  	
  Springville

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00900993

  	
   

  	
  PT90/2C

  	
   

  	
  family test

  	
   

  	
  Springville

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01036169

  	
   

  	
  NSBP97I

  	
   

  	
  block planting

  	
   

  	
  Piedmont

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01036623

  	
   

  	
  PT99/3C

  	
   

  	
  polycross test

  	
   

  	
  Browns Mill Rd

  	
   

  	
  Pictou - Stora

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01036623

  	
   

  	
  PT99/1D

  	
   

  	
  polycross test

  	
   

  	
  Browns Mill Rd

  	
   

  	
  Pictou - Stora

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01040203

  	
   

  	
  PT91/2C

  	
   

  	
  polycross test

  	
   

  	
  Weavers Mtn

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01040203

  	
   

  	
  PT91/1C

  	
   

  	
  polycross

  	
   

  	
  Weavers Mtn

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01042688

  	
   

  	
  PT88/2C

  	
   

  	
  provenance test

  	
   

  	
  Haggard Lake

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01042688

  	
   

  	
  PT88/1C

  	
   

  	
  family test

  	
   

  	
  Haggard Lake

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20016259

  	
   

  	
  PT99/1B

  	
   

  	
  polycross test

  	
   

  	
  Clydesdale Rd

  	
   

  	
  Colchester

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25265968

  	
   

  	
  PT84/1B

  	
   

  	
  g x e rooted cutting test

  	
   

  	
  Eatonville

  	
   

  	
  Cumberland

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25265968

  	
   

  	
  PT84/1B

  	
   

  	
  g x e rooted cutting test

  	
   

  	
  Eatonville

  	
   

  	
  Cumberland

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25265968

  	
   

  	
  PT78/1B

  	
   

  	
  progeny

  	
   

  	
  Apple River

  	
   

  	
  Cumberland

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25265968

  	
   

  	
  PT78/3B

  	
   

  	
  stand test

  	
   

  	
  Apple River

  	
   

  	
  Cumberland

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25265968

  	
   

  	
  PT78/2B

  	
   

  	
  progeny

  	
   

  	
  Apple River

  	
   

  	
  Cumberland

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25265968

  	
   

  	
  PT78/4B

  	
   

  	
  Ottawa Valley; NS orchard test

  	
   

  	
  Apple River

  	
   

  	
  Cumberland

  	
   

  	
  Atlantic Star

  
	
  45165107

  	
   

  	
  PT91/2B

  	
   

  	
  polycross test

  	
   

  	
  Urbania

  	
   

  	
  Hants

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65009797

  	
   

  	
  PT00/1D

  	
   

  	
  polycross

  	
   

  	
  Piedmont Valley

  	
   

  	
  Pictou - Stora

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65011165

  	
   

  	
  PT90/3C

  	
   

  	
  family test

  	
   

  	
  Groveland

  	
   

  	
  Pictou

  	
   

  	
  Atlantic Star

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65090748

  	
   

  	
  PT99/2D

  	
   

  	
  polycross test

  	
   

  	
  Lansdowne

  	
   

  	
  Pictou - Stora

  	
   

  	
  Atlantic Star

  

 

 

 

EXHIBIT E

Road
Specification

Neenah will improve or
build temporary haul roads for the removal of Qualifying Stumpage as set forth
in Section 4.2 under the following conditions:

1.               To the extent
possible Neenah will use or improve existing haul roads.

2.               It is Neenah’s
intent that construction of new haul roads will be held to the minimum
necessary to remove the Qualifying Stumpage.

3.               Seller will approve
plans for construction of any new roads.

4.               Haul roads will be
improved or designed for one lane traffic capable of accommodating standard 18
wheel tractor-trailer log trucks.  The
road width will normally be   5.0 to
5.5   meters or less, unless terrain features
require additional width.

5.               Roads will be
designed to minimize the number of stream crossings.

6.               Neenah will be
responsible for road construction cost. 
However, if changes are made in the roads location or design solely for
the benefit of the Seller, than the additional cost of those changes will be
the responsibility of the Seller.

7.               The construction,
maintenance, and use of haul roads will comply with all laws, regulations or
requirements of the Nova Scotia Department of Natural Resources or as necessary
to maintain SFI ® Certification for the Timberlands.

8.               Following the
completion of harvesting operations roads will be left in as good or better
condition as existed prior to the harvesting. 
Temporary stream crossing will be removed, and where necessary water
control structures will be constructed.

9.               Neenah will notify
Seller of completion of the harvest operation and final road maintenance, after
which responsibility for the road reverts to the Seller.

 

APPENDIX 1

Stumpage Price
Index Examples

Example 1

ACTION:                                             On the
first Price Adjustment Date, the Rolling Index indicates an increase by 10%;
current Price paid by Neenah is the Base Price [Text
Redacted]*

RESULT:                                               The
Price Adjustment [Text Redacted]*.  Neenah’s applicable Qualifying Stumpage Price
is adjusted upwards by [Text Redacted]*;
Neenah’s new Qualifying Stumpage Price for subsequent 6 months is [Text Redacted]*.

ACTION:                                           On a
subsequent Price Adjustment Date, the Rolling Index indicates a decrease by
10%; current Qualifying Stumpage Price paid by Neenah is [Text
Redacted]*.

RESULT:                                               [Text Redacted]*. 
Neenah’s applicable Qualifying Stumpage Price is adjusted downwards by [Text Redacted]*; Neenah’s new Qualifying Stumpage Price for
subsequent 6 months is [Text Redacted]*

Example 2 

ACTION:                                           On the Price
Adjustment Date, the Rolling Index indicates a decline by 10%; current
Qualifying Stumpage Price paid by Neenah is the Base Price [Text
Redacted]*

RESULT:                                               [Text Redacted]*.

ACTION:                                           On a
subsequent Price Adjustment Date, the Rolling Index indicates an additional
decrease by 10%; the current Qualifying Stumpage Price paid by Neenah is [Text Redacted]*.

RESULT:                                               [Text Redacted]*

ACTION:                                           On a
subsequent Price Adjustment Date, the Rolling Index indicates an increase by
10%; current Qualifying Stumpage Price paid by Neenah is the [Text Redacted]*.   [Text Redacted]*

RESULT:                                               [Text Redacted]*.  Neenah’s
new Qualifying Stumpage Price for the subsequent 6 months is [Text Redacted]*.

*             The redacted text has
been filed separately with the Securities and Exchange Commission pursuant to a
request for Confidential treatment.

 

APPENDIX 2

[Text
Redacted]*

 

*             The text of this appendix
has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.Exhibit
10.4

FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT

THIS
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (hereinafter referred to as this
“Amendment”) is made and entered into as of the 29th day of June, 2006, between
WAGNER FOREST MANAGEMENT, LTD., a New Hampshire corporation (hereinafter
referred to as “Purchaser”), and NEENAH PAPER COMPANY OF CANADA (hereinafter
referred to as “Seller”);

W
I  T  N  E  S  S  E  T  H:

WHEREAS,
Seller and Purchaser previously have entered into that certain Purchase and
Sale Agreement, dated May 5, 2006 (hereinafter referred to as the “Agreement”);
and

WHEREAS,
Seller and Purchaser now desire to modify the terms of the Agreement in certain
respects;

NOW,
THEREFORE, for and in consideration of the premises, the mutual agreements
contained herein, and for other good and valuable considerations, the parties
hereto do hereby covenant and agree that the Agreement is hereby amended as
follows:

1.             Amendment to Section 7.  The words “at Closing” in the sixth line of
Section 7 are deleted.

2.             Amendment to Section 9.  The fourth line of Section 9 is hereby
revised to read as follows:  “shall equal
the fair market value of the parcel or portion of the parcel of the Real
Property.”

3.             Amendment to Section 13(a).  The word “either” in the second line of
subparagraph (iii) is deleted.

4.             Amendment to
Section 14.1(a).  “Schedule 8(c)”
in subparagraph (iii) is deleted and replaced with “Schedule 5 (c).”

5.             Amendment to Schedule 10.3.  Schedule 10.3 is deleted, and replaced with
the new Schedule 10.3 attached hereto.

6.             Capitalized Terms.  All capitalized terms herein shall have the
meaning ascribed to such terms in the Agreement.

7.             Reaffirmation of Agreement.  This Amendment shall be deemed a part of the
Agreement for all purposes, and the Agreement remains in full force and effect
in accordance with its terms and as modified herein.

8.             Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

IN
WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to be duly
executed by authorized representatives as of the day and year first above
written.

	
  

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Neenah Paper Company of Canada

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  s/s Sean T. Erwin

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Sean T. Erwin

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  

 

 2
 

 

	
  

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Wagner Forest Management, Ltd.,

  a New Hampshire corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  s/s Thomas J. Colgan

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Thomas J. Colgan

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President and Chief Executive Officer

  

 

 

 3

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