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 been made, but further provided that K-C shall not be
obligated to have exhausted all rights and remedies K-C may have
against Northern Pulp or commence any suit or other
proceeding
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