Exhibit 10.3(iii)

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of February 7, 2011 is entered into by and among the financial institutions
signatory hereto (each a “Lender” and collectively the “Lenders”), BANK OF
AMERICA, N.A., as Agent for the Lenders (in such capacity, “Agent”) and
CLEARWATER PAPER CORPORATION, a Delaware corporation (“Borrower”).

RECITALS

A. Borrower, Agent and the Lenders have previously entered into that certain
Loan and Security Agreement dated as of November 26, 2008 (as amended,
supplemented, restated and modified from time to time, the “Loan Agreement”),
pursuant to which the Lenders have made certain loans and financial
accommodations available to Borrower. Terms used herein without definition shall
have the meanings ascribed to them in the Loan Agreement.

B. Borrower has requested that Agent and the Lenders amend the Loan Agreement,
which Agent and the Lenders are willing to do pursuant to the terms and
conditions set forth herein.

C. Borrower is entering into this Amendment with the understanding and agreement
that, except as specifically provided herein, none of Agent’s or any Lender’s
rights or remedies as set forth in the Loan Agreement is being waived or
modified by the terms of this Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1. Amendments to Loan Agreement.

(a) Section 1.1 of the Loan Agreement is hereby amended by inserting the
following definition in its proper alphabetical order:

“Reporting Trigger Period: the period (a) commencing on the day that an Event of
Default occurs, or the sum of: (i) the principal balance of all outstanding
Revolver Loans, plus (ii) the aggregate of all LC Obligations, is greater than,
at any time, $35,000,000; and (b) continuing until, during the preceding 60
consecutive days, no Event of Default has existed, and the sum of: (i) the
principal balance of all outstanding Revolver Loans, plus (ii) the aggregate of
all LC Obligations, is less than or equal to, at all times, $35,000,000.”

(b) The first sentence of Section 8.1 of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:

“By the 20th day after the end of each calendar quarter, Borrowers shall deliver
to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base
Certificate prepared as of the close of business of the previous calendar
quarter, and at such other times as Agent may request; provided that: (a) during
any Reporting Trigger Period,

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Borrowers shall be required to deliver to Agent monthly Borrowing Base
Certificates by the 20th day of each month which begins during such Reporting
Trigger Period, and (b) during any Trigger Period, Borrowers shall be required
to deliver to Agent weekly Borrowing Base Certificates by the second Business
Day of each week which begins during such Trigger Period.”

(c) The second sentence of Section 8.2.1 of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:

“Each Borrower shall also provide to Agent, on or before the 20th day of each
calendar quarter, a detailed aged trial balance of all Accounts as of the end of
the preceding calendar quarter, specifying each Account’s Account Debtor name,
amount, invoice date and due date, showing any credit, authorized return or
dispute, and upon request by Agent, including such proof of delivery, copies of
invoices and invoice registers, copies of related documents, repayment
histories, status reports and other information as Agent may reasonably request;
provided, that, during any Reporting Trigger Period, Borrowers shall be required
to deliver to Agent all such reports on a monthly basis by the 20th day of each
month which begins during such Reporting Trigger Period.”

2. Effectiveness of this Amendment. The following shall have occurred before
this Amendment is effective:

(a) Amendment. Agent shall have received this Amendment fully executed in a
sufficient number of counterparts for distribution to all parties.

(b) Representations and Warranties. The representations and warranties set forth
herein must be true and correct.

(c) No Default. No event has occurred and is continuing that constitutes an
Event of Default.

(d) Other Required Documentation. All other documents and legal matters in
connection with the transactions contemplated by this Amendment shall have been
delivered or executed or recorded and shall be in form and substance
satisfactory to Agent.

3. Representations and Warranties. Borrower represents and warrants as follows:

(a) Authority. Borrower has the requisite corporate power and authority to
execute and deliver this Amendment, and to perform its obligations hereunder and
under the Loan Documents (as amended or modified hereby) to which it is a party.
The execution, delivery and performance by Borrower of this Amendment have been
duly approved by all necessary corporate action and no other corporate
proceedings are necessary to consummate such transactions.

(b) Enforceability. This Amendment has been duly executed and delivered by
Borrower. This Amendment and each Loan Document to which Borrower is a party (as
amended or modified hereby) is the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, and is in
full force and effect.

(c) Representations and Warranties. The representations and warranties contained
in each Loan Document to which Borrower is a party (other than any such
representations or warranties that, by their terms, are specifically made as of
a date other than the date hereof) are correct on and as of the date hereof as
though made on and as of the date hereof.

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(d) Due Execution. The execution, delivery and performance of this Amendment are
within the power of Borrower, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval, if any, and
do not contravene any law or any contractual restrictions binding on Borrower.

(e) No Default. No event has occurred and is continuing that constitutes an
Event of Default.

4. Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of California, without giving effect to any conflict of law
principles (but giving effect to Federal laws relating to national banks). The
consent to forum and arbitration provisions set forth in Section 14.15 of the
Loan Agreement are hereby incorporated in this Amendment by reference.

5. Counterparts. This Amendment may be executed in any number of counterparts
and by different parties and separate counterparts, each of which when so
executed and delivered, shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment by telefacsimile or a
substantially similar electronic transmission shall have the same force and
effect as the delivery of an original executed counterpart of this Amendment.
Any party delivering an executed counterpart of this Amendment by telefacsimile
or a substantially similar electronic transmission shall also deliver an
original executed counterpart, but the failure to do so shall not affect the
validity, enforceability or binding effect of such agreement.

6. Reference to and Effect on the Loan Documents.

(a) Upon and after the effectiveness of this Amendment, each reference in the
Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to “the Loan Agreement”, “thereof” or words of like import referring
to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified and amended hereby.

(b) Except as specifically amended above, the Loan Agreement and all other Loan
Documents are and shall continue to be in full force and effect and are hereby
in all respects ratified and confirmed and shall constitute the legal, valid,
binding and enforceable obligations of Borrower to Agent and the Lenders.

(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of Agent or any Lender under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.

(d) To the extent that any terms and conditions in any of the Loan Documents
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.

7. Ratification. Borrower hereby restates, ratifies and reaffirms each and every
term and condition set forth in the Loan Agreement, as amended hereby, and the
Loan Documents effective as of the date hereof.

8. Estoppel. To induce Lenders to enter into this Amendment and to continue to
make advances to Borrower under the Loan Agreement, Borrower hereby acknowledges
and agrees that, as of the date hereof, there exists no right of offset,
defense, counterclaim or objection in favor of Borrower as against Agent or any
Lender with respect to the Obligations.

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9. Integration. This Amendment, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.

10. Severability. In case any provision in this Amendment shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

[Remainder of Page Left Intentionally Blank]

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.

 

BORROWER

CLEARWATER PAPER CORPORATION,

a Delaware corporation

By:  

/s/ Linda K. Massman

Name:   Linda Massman Title:   CFO & VP Finance

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AGENT AND LENDERS

BANK OF AMERICA, N.A., as Agent and as Lender By:  

/s/Ron Bornstein

Name:   Ron Bornstein Title:   Vice President

 

WELLS FARGO CAPITAL FINANCE, LLC,

as Lender

By:  

/s/Tim Guilanians

Name:   Tim Guilanians Title:   Vice President