Exhibit 10.7

 

THIRD AMENDMENT

 

THIRD AMENDMENT, dated as of September 26, 2008 (this “Amendment”), to the
CREDIT AGREEMENT, dated as of June 12, 2006 (as amended on March 21, 2007 and
July 2, 2008 and as further amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), by and among CELLU PAPER HOLDINGS, INC.,
CELLU TISSUE HOLDINGS, INC. (the “Borrower”), INTERLAKE ACQUISITION CORPORATION
LIMITED, the Loan Guarantors party thereto, the lenders party thereto (the
“Lenders”), JPMORGAN CHASE BANK, N.A., as US Administrative Agent (in such
capacity, the “Administrative Agent”) and JPMORGAN CHASE BANK, N.A., TORONTO
BRANCH, as Canadian Administrative Agent (the “Canadian Administrative Agent”).

 

RECITALS

 

A.            WHEREAS, the Borrower has requested that the Lenders increase the
amount of the Canadian Commitments by $2,000,000 and reduce the amount of the US
Commitments by an equal amount;

 

B.            WHEREAS, the Lenders are willing to agree to such amendments and
provide certain other waivers and amendments, in each case subject to the terms
and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

AGREEMENT

 

1.            Defined Terms. Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

2.            Amendments to Section 1.01. Section 1.01 of the Credit Agreement
is hereby amended by:

 

(a) in the definition of “US Commitment”, deleting the amount “US$57,000,000”
and substituting therefor the amount “US$55,000,000”; and

 

(b) in the definition of “Canadian Commitment”, deleting the amount
“US$3,000,000” and substituting therefor the amount “US$5,000,000”.

 

3.            Amendments to Section 5.09. Section 5.09 of the Credit Agreement
is hereby amended by deleting the word “A+” in the second line thereof and
substituting therefor the word “A-”.

 

4.            Waiver. The Lenders hereby waive for the purpose of Section 2 of
this Amendment the requirement under Section 2.10(c) of the Credit Agreement
that each reduction of the US Commitments be in a minimum amount equal to
US$3,000,000.

 

5.            Condition to Effectiveness. This Amendment shall become effective
on the date on which the Administrative Agent shall have received this
Amendment, duly executed and delivered by the Loan Parties and the Lender.

 

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6.            Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

 

7.            Representations and Warranties. The Borrower hereby represents and
warrants to the Lenders and the Administrative Agent as follows:

 

(a)           The Borrower has the corporate power and authority and the legal
right to execute, deliver and perform this Amendment and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Amendment. This Amendment has been duly executed and delivered on behalf of the
Borrower and constitutes the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

(b)           The representations and warranties of the Borrower set forth in
Article III of the Credit Agreement as amended hereby are true and correct in
all material respects as of the date hereof.

 

8.            Fees, Costs and Expenses. The Borrower agrees to (i) pay to the
Administrative Agent any amendment fees previously agreed in connection with
this Amendment and (ii) reimburse the Administrative Agent for all reasonable
fees, costs and expenses incurred by it in connection with this Amendment,
including but not limited to the reasonable fees, costs and expenses of counsel.

 

9.            Governing Law. This Amendment and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

CELLU PAPER HOLDINGS, INC.

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

CELLU TISSUE HOLDINGS, INC.

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

INTERLAKE ACQUISITION CORPORATION

 

LIMITED

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

CELLU TISSUE LLC

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

CELLU TISSUE CORPORATION – NATURAL DAM

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

Signature Page to Third Amendment

 

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CELLU TISSUE CORPORATION – NEENAH

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

COASTAL PAPER COMPANY

 

 

 

By:

Van Paper Company,

 

 

its Managing Partner

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

VAN PAPER COMPANY

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

VAN TIMBER COMPANY

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

MENOMINEE ACQUISITION CORPORATION

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

CELLU TISSUE-CITYFOREST LLC

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

Signature Page to Third Amendment

 

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CELLU TISSUE - HAUPPAUGE, LLC

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

 

 

CELLU TISSUE - THOMASTON, LLC

 

 

 

 

 

By:

/s/ David J. Morris

 

 

Name: David J. Morris

 

 

Title: Senior Vice President and Chief Financial
Officer

 

Signature Page to Third Amendment

 

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JPMORGAN CHASE BANK, N.A., individually, as US

 

Administrative Agent, Issuing Bank, Swingline Lender

 

and a Lender

 

 

 

 

 

By:

/s/ John M. Hariaczyi

 

 

Name: John M. Hariaczyi

 

 

Title: Vice President

 

 

 

JPMORGAN CHASE BANK, N.A., TORONTO

 

BRANCH, individually and as Canadian Administrative

 

Agent and a Lender

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Signature Page to Third Amendment

 

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JPMORGAN CHASE BANK, N.A., individually, as US

 

Administrative Agent, Issuing Bank, Swingline Lender

 

and a Lender

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

JPMORGAN CHASE BANK, N.A., TORONTO

 

BRANCH, individually and as Canadian Administrative

 

Agent and a Lender

 

 

 

 

 

By:

/s/ Michael N. Tam

 

 

Name: Michael N. Tam

 

 

Title: Senior Vice President

 

Signature Page to Third Amendment

 

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