Document:

Commitment Letter

 Exhibit 10.2 

BANC OF AMERICA SECURITIES LLC 

BANC OF AMERICA BRIDGE LLC 

One Bryant Park 

New York, NY 10036 

September 15, 2010 
 Clearwater Paper
Corporation 
 601 West Riverside, Suite 1100 

Spokane, Washington 99201 
 Attention: Chief
Financial Officer 
 Project Columbia 

Commitment Letter 

$300 Million Senior Bridge Facility 

Ladies and Gentlemen: 
 You
have advised Banc of America Bridge LLC (“Banc of America Bridge”) and Banc of America Securities LLC (“BAS” and, together with Banc of America Bridge, the “Commitment Parties”)
that Clearwater Paper Corporation, a Delaware corporation (the “Borrower” or “you”), intends to acquire (the “Acquisition”) all of the capital stock of Cellu Tissue Holdings,
Inc., a Delaware corporation (the “Acquired Business”) (the Borrower, the Acquired Business and their subsidiaries are sometimes collectively referred to herein as the “Companies”) from the
stockholders of the Acquired Business, for consideration consisting of not more than $12.00 per share in cash. The Acquisition will be effected through the merger of a newly created, wholly-owned subsidiary of the Borrower with and into the Acquired
Business, with the Acquired Business being the surviving corporation as a wholly owned subsidiary of the Borrower. The consummation of the Acquisition is referred to as the “Merger Closing.” 

You have also advised us that you intend to finance the Acquisition, the repayment, redemption, defeasance or
purchase via tender offer of certain existing indebtedness of the Companies, including the Acquired Business’ existing 11 1/
2% senior secured notes due 2014 (the “Refinancing”), the costs and expenses related to the Transaction (as defined below) and the ongoing
working capital and other general corporate purposes of the Companies after consummation of the Acquisition from the following sources (and that no financing other than the financing described herein will be required in connection with the
Transaction): (a) cash on hand of approximately $274 million; (b) at least $300 million in gross proceeds from the issuance and sale by the Borrower of senior unsecured notes having substantially similar terms and guarantees as the
Borrower’s existing 10 5/8% senior notes due
2016 (which, for avoidance of doubt, will include a guarantee by the Acquired Business) (the “Notes”) or, if the Notes are not issued and sold on or prior to the date of consummation of the Acquisition, $300 million in senior
unsecured loans (the “Bridge Loans” and, together with any Rollover Loans and Exchange Notes (each, as defined in Annex I hereto), the “Bridge Facility”) made available to the Borrower as interim
financing to the Permanent Securities (as hereinafter defined) and (c) certain existing industrial revenue bonds of the Acquired Business in an aggregate principal amount not to exceed $16 million to remain outstanding following the
Acquisition. The Acquisition, the Refinancing, the issuance and sale of the Notes or the entering into and funding of the Bridge Loans and all related transactions are hereinafter collectively referred

 
to as the “Transaction.” The sources and uses for the financing for the Transaction are as set forth on Schedule I hereto. 

You and BAS have entered into a separate engagement letter dated the date hereof (the “Engagement Letter”)
setting forth the terms on which BAS is engaged (but not committed) to act as sole underwriter, sole initial purchaser, sole arranger and sole placement agent (in such capacity, the “Investment Bank”) for (i) the Notes
or (ii) any and all other debt or equity securities of the Borrower that may be issued on or prior to the Closing Date in lieu of the Notes or after the Closing Date for the purpose of refinancing all or a portion of the outstanding amounts
under the Bridge Facility (the “Permanent Securities”). 
 1. Commitments. In connection with the
foregoing, Banc of America Bridge is pleased to advise you of its commitment to provide the full principal amount of the Bridge Facility (in such capacity, the “Initial Lender”) and its willingness to act as the sole and
exclusive administrative agent (in such capacity, the “Administrative Agent”) for the Bridge Loans, all upon and subject solely to the conditions set forth in Section 5 of this letter agreement (the “Bridge
Funding Conditions”). Annexes I and II of this letter agreement are collectively referred to as the “Summary of Terms” and the Summary of Terms, together with this letter agreement, are collectively referred to
as the “Commitment Letter.” BAS is also pleased to advise you of its willingness, and you hereby engage BAS, to act as the sole and exclusive arranger and sole and exclusive bookrunning manager (in such capacity, the
“Arranger”) for the Bridge Facility, and in connection therewith to form a syndicate of financial institutions and institutional lenders for the Bridge Facility, including Banc of America Bridge, in consultation with you. You
agree that no other agents, co-agents, arrangers or bookrunners will be appointed, no other titles will be awarded and no compensation will be paid to any lender in order to obtain its commitment to participate in the Bridge Facility without the
prior written consent of the Arranger. The commitments of the Initial Lender in respect of the Bridge Facility and the undertaking of the Arranger to provide the services described herein are subject solely to the satisfaction of the Bridge Funding
Conditions. All capitalized terms used and not otherwise defined herein shall have the same meanings as specified therefor in the Summary of Terms. If you accept this Commitment Letter as provided in the last paragraph of this letter agreement, the
date of the initial funding of the Bridge Facility or of the issuance and sale of the Notes in lieu of funding of the Bridge Facility, in either case, is referred to herein as the “Closing Date.” 

2. Syndication. The Arranger intends to commence syndication of the Bridge Facility promptly after your acceptance of the terms of
this Commitment Letter and the Fee Letter (as hereinafter defined). You agree to actively assist, and to use your commercially reasonable efforts to cause the Acquired Business and its subsidiaries to actively assist, the Arranger in achieving a
syndication of the Bridge Facility that is satisfactory to the Arranger and you. Such assistance shall include (a) your providing and causing your advisors to provide, and using your commercially reasonable efforts to cause the Acquired
Business, its subsidiaries and its advisors to provide, the Arranger and the Initial Lender upon request with all written information available to you and to the extent publicly available or made available to you by the Acquired Business, the
Acquired Business reasonably deemed necessary by the Arranger to complete such syndication, including, but not limited to, (i) information and evaluations prepared by you and to the extent publicly available or made available to you by the
Acquired Business, the Acquired Business and your and its advisors, or on your or its behalf, relating to the Transaction, (ii) within 15 days after the end of each month, unaudited consolidated balance sheets and related statements of income,
changes in equity and cash flows of the Borrower and, within 2 days of receipt thereof by the Borrower after using commercially reasonable efforts to cause the Acquired Business to deliver within 15 days after the end of each month, the Acquired
Business, respectively, for each month ended after July 31, 2010 and (iii) no later that 30 days after the end of each fiscal quarter of the Borrower, updated forecasts prepared by management of the Companies, in form reasonably
satisfactory to the Arranger and the Initial Lender, of balance sheets, income statements and cash flow statements for each fiscal quarter for 

 

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the first eight fiscal calendar quarters following the Closing Date and for each of the five years commencing with the first fiscal year following the Closing Date, (b) your using
commercially reasonable efforts to assist the Arranger in the preparation, within 14 days of the date hereof, of an information memorandum with respect to the Bridge Facility in form customary for transactions of this type containing information
with respect to the Companies that is publicly available as of the date hereof (the “Information Memorandum”), (c) without incurring any cost or expense, your using your commercially reasonable efforts to ensure that the
syndication efforts of the Arranger benefit materially from the existing banking relationships of the Borrower and (d) your otherwise using commercially reasonably efforts to assist the Arranger in its syndication efforts, including by making
your officers and advisors, and using your commercially reasonable efforts to make the officers and advisors of the Acquired Business, available from time to time to attend and make presentations regarding the business and prospects of the Companies
and the Transaction at one or more meetings and conference calls with prospective lenders. 
 Notwithstanding anything to the
contrary contained in this Commitment Letter or the Fee Letter or any other letter agreement or undertaking concerning the financing of the Transaction to the contrary, the Initial Lender agrees that the completion of the syndication is not a
condition to its commitments hereunder or the funding of the Bridge Facility on the Closing Date and the Initial Lender further agrees that (i) no assignment of commitments of the Initial Lender on or prior to the date of the consummation of
the Acquisition shall reallocate, reduce or release the Initial Lender’s primary obligation to fund its entire commitment in the event any assignee of the Initial Lender shall fail to do so on the Closing Date and (ii) unless you
reasonably object, the Initial Lender shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Bridge Facility, including all rights with respect to consents, modifications, supplements,
waivers and amendments, until the Closing Date has occurred. 
 It is understood and agreed that the Arranger will manage and
control all aspects of the syndication of the Bridge Facility in consultation with you, including decisions as to the selection of prospective lenders and any titles offered to proposed lenders, when commitments will be accepted and the final
allocations of the commitments among the lenders. It is understood that no lender participating in the Bridge Facility will receive compensation from you in order to obtain its commitment, except on the terms contained herein and in the Summary of
Terms. It is also understood and agreed that the amount and distribution of the fees among the lenders will be at the sole and absolute discretion of the Arranger. 

3. Information Requirements. You represent, warrant and covenant that (a) all financial projections concerning you that have
been or are hereafter prepared by you or at your direction and made available to the Commitment Parties or the Lenders by you or any of your representatives (the “Projections”) have been or will be prepared in good faith
based upon assumptions that were reasonable at the time made (it being recognized by the Commitment Parties and the Lenders that such Projections are not to be viewed as facts and that actual results may differ from the projected results, and such
differences may be material) and (b) all information (and, with respect to information regarding the Acquired Business, all information to your knowledge), other than Projections, which has been or is hereafter made available to the Arranger or
any of the lenders by you or any of your representatives (or on your or their behalf) or by any of the Acquired Business or any of their representatives (or on their behalf) in connection with any aspect of the Transaction (the
“Information”), as and when furnished, when taken as a whole, is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein not misleading in light of the circumstances under which such statements were made. You agree to promptly furnish us with further and supplemental information from time to time until the
Closing Date and, if requested by us, for a reasonable period thereafter as is necessary to complete the syndication of the Bridge Facility so that the representations, warranties and covenants in the immediately preceding sentence are correct on
the Closing Date and on such later date on which the syndication of the 
  

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Bridge Facility is completed as if the Information and Projections were being furnished, and such representations, warranties and covenants were being made, on such date. In issuing this
commitment and in arranging and syndicating the Bridge Facility, the Commitment Parties are and will be using and relying on the Information and the Projections without independent verification thereof. The Information and the Projections provided
to the Arranger by you or at your direction prior to the date hereof are hereinafter referred to as the “Pre-Commitment Information.” The Information, the Projections, the Summary of Terms and any additional summary of terms
prepared for distribution to Public Lenders (as hereinafter defined) are hereinafter referred to as the “Information Materials.” 

You acknowledge that (a) BAS and/or Banc of America Bridge on your behalf will make available the Information Materials to the
proposed syndicate of lenders by posting the Information Materials on IntraLinks or another similar electronic system and (b) certain prospective lenders (such lenders, “Public Lenders”; all other lenders, “Private
Lenders”) may have personnel that do not wish to receive material non-public information (within the meaning of the United States federal securities laws, “MNPI”) with respect to the Companies, their respective
affiliates or any other entity, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such entities’ securities. If requested, you will assist us in
preparing an additional version of the Information Materials not containing MNPI (the “Public Information Materials”) to be distributed to prospective Public Lenders. 

Before distribution of any Information Materials (a) to prospective Private Lenders, you shall provide us with a customary letter
authorizing the dissemination of the Information Materials and (b) to prospective Public Lenders, you shall provide us with a customary letter authorizing the dissemination of the Public Information Materials and confirming the absence of MNPI
therefrom. In addition, at our request, you shall identify Public Information Materials by clearly and conspicuously marking the same as “PUBLIC”. 

You agree that BAS and/or Banc of America Bridge on your behalf may distribute the following documents to all prospective lenders, unless
you advise BAS and Banc of America Bridge in writing (including by email) within a reasonable time prior to their intended distributions that such material should only be distributed to prospective Private Lenders: (a) administrative materials
for prospective lenders such as lender meeting invitations and funding and closing memoranda, (b) notifications of changes to the terms of the Bridge Facility and (c) other materials intended for prospective lenders after the initial
distribution of the Information Materials, including drafts and final versions of the Bridge Facility Documentation (as defined in Annex I-A hereto). If you advise us that any of the foregoing items should be distributed only to Private Lenders,
then the Arranger will not distribute such materials to Public Lenders without further discussions with you. You agree (whether or not any Information Materials are marked “PUBLIC”) that Information Materials made available
to prospective Public Lenders in accordance with this Commitment Letter shall not contain MNPI. 
 4. Fees and
Indemnities. 
 (a) You agree to pay the fees set forth in the Fee Letter dated as of the date hereof (the “Fee
Letter”) among the parties hereto, if, as and when required thereby. You also agree to reimburse BAS and Banc of America Bridge from time to time on demand, upon presentation of a reasonably detailed summary statement, for all
reasonable and documented out-of-pocket fees and expenses (including, but not limited to, the reasonable fees, disbursements and other charges of Cahill Gordon & Reindel LLP, as counsel to the Arranger and the Administrative
Agent, and of any special and local counsel to the lenders retained by the Arranger, and reasonable and documented out-of-pocket due diligence expenses) incurred in connection with the Bridge Facility, the syndication thereof, and the preparation of
the Bridge Facility Documentation, whether or not the Closing Date occurs or any Bridge Facility Documentation is executed 
  

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and delivered or any extensions of credit are made under the Bridge Facility. We agree to provide you an initial estimate of all such fees and expenses together with updates of such estimates at
such times as you may request. Out-of-pocket fees and expenses incurred by BAS in connection with the Notes or the Permanent Securities will be reimbursed to the extent provided in the Engagement Letter. 

(b) You also agree to indemnify and hold harmless each of BAS and Banc of America Bridge, each other lender and each of their affiliates,
successors and assigns and their respective officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party as the same are
incurred for) any and all claims, damages, losses, liabilities and expenses (including, without limitation, the reasonable fees, disbursements and other charges of counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) any aspect of the
Transaction or (b) the Bridge Facility, or any use made or proposed to be made with the proceeds thereof (in all cases, whether or not caused or arising, in whole or in part, out of the comparative, contributory or sole negligence of the
Indemnified Party), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful
misconduct. In the case of any claim, litigation, investigation or proceeding (any of the foregoing, a “Proceeding”) to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such
Proceeding is brought by you, your equity holders or creditors or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto and whether or not any aspect of the Transaction is consummated. You also agree that no
Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to you, the Acquired Business or your or its subsidiaries or affiliates or to your or their respective equity holders or creditors or any other
person arising out of, related to or in connection with any aspect of the Transaction, except to the extent of direct (as opposed to special, indirect, consequential or punitive) damages determined in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. It is further agreed that Banc of America Bridge shall be severally liable solely in respect of its commitment to the Bridge Facility,
on a several, and not joint, basis with any other lender. Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained
through electronic telecommunications or other information transmission systems, other than for direct, actual damages resulting from the gross negligence or willful misconduct of such Indemnified Party as determined by a final, non-appealable
judgment of a court of competent jurisdiction. You shall not, without the prior written consent of an Indemnified Party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened Proceeding against an
Indemnified Party in respect of which indemnity could have been sought hereunder by such Indemnified Party unless (i) such settlement includes an unconditional release of such Indemnified Party from all liability or claims that are the subject
matter of such Proceeding and (ii) does not include any statement as to any admission. 
 5. Conditions to
Financing. The commitment of the Initial Lender to fund the Bridge Loans are subject solely to the satisfaction of (a) the conditions set forth in this Section 5 and (b) each of the conditions set forth in Annex II.
Notwithstanding anything in this Commitment Letter, the Fee Letter, the Bridge Facility Documentation or any other letter agreement or other undertaking concerning the financing of the Transaction to the contrary, the only representations relating
to the Companies, their subsidiaries and businesses the accuracy of which shall be a condition to the availability of the Bridge Facility on the Closing Date shall be (x) with respect to the Borrower and its subsidiaries, the Specified
Representations (as hereinafter defined) and (y) with respect to the Acquired Business and its subsidiaries, the representations made by or with respect to the Acquired Business and its subsidiaries in the Acquisition Agreement (as hereinafter
defined) as are material to the interests of the Initial Lender, 
  

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but only to the extent that you have the right to terminate your obligations under the Acquisition Agreement, or to decline to consummate the Acquisition pursuant to the Acquisition Agreement, as
a result of a breach of such representations in the Acquisition Agreement (the “Acquisition Agreement Representations”). For purposes hereof, “Specified Representations” means the representations and
warranties of the Borrower and the Guarantors set forth in the Bridge Facility Documentation relating to corporate, limited liability company or partnership status, requisite power and authority to enter into the Bridge Facility Documentation, due
authorization, execution, delivery and enforceability of the Bridge Facility Documentation, that the entering into and performance of the Bridge Facility Documentation will not conflict with organizational documents or laws (solely in the case of
the latter, in a manner which could reasonably be expected to give rise to a material adverse effect on the financial condition, business, assets, liabilities or operations of the Companies, taken as a whole), solvency as of the Closing Date (after
giving effect to the Transaction) of the Borrower and its subsidiaries on a consolidated basis, absence of an injunction or other legal prohibition with respect to the Bridge Facility, Federal Reserve margin regulations, the U.S.A. Patriot Act and
the Investment Company Act. 
 6. Confidentiality and Other Obligations. This Commitment Letter, the Fee Letter and the
Engagement Letter and the contents hereof and thereof are confidential and, may not be disclosed in whole or in part to any person or entity without our prior written consent except (i) on a confidential basis to your accountants, attorneys and
other professional advisors in connection with the Transaction, (ii) pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal
process based on the reasonable advice of your legal counsel (in which case your agree to inform us promptly thereof), and (iii) this Commitment Letter and the Fee Letter (redacted in a manner reasonably satisfactory to us) may be disclosed
(a) on a confidential basis to the board of directors and advisors of the Acquired Business in connection with their consideration of the Transaction and (b) after your acceptance of this Commitment Letter and the Fee Letter, in filings
with the Securities and Exchange Commission (the “SEC”). 
 BAS and Banc of America Bridge shall use all
confidential information provided to them by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and the Engagement Letter and otherwise in connection with the Transaction
and shall treat confidentially all such information; provided, however, that nothing herein shall prevent BAS and Banc of America Bridge from disclosing any such information (i) pursuant to the order of any court or administrative
agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case BAS and Banc of America Bridge agree to inform you promptly thereof prior to such disclosure to the
extent not prohibited by law or regulation), (ii) upon the request or demand of any regulatory authority having jurisdiction over BAS, Banc of America Bridge or any of their respective affiliates, (iii) to the extent that such information
becomes publicly available other than by reason of disclosure in violation of this Commitment Letter by BAS and Banc of America Bridge, or any other obligation to you to keep such information confidential, (iv) to BAS’s and Banc of America
Bridge’s respective affiliates, employees, legal counsel, independent auditors and other experts or agents who need to know such information in connection with the Transaction and are informed of the confidential nature of such information,
(v) to the extent that such information is received by BAS and Banc of America Bridge from a third party that is not to BAS’s and Banc of America Bridge’s knowledge subject to confidentiality obligations to you, (vi) to the
extent that such information is independently developed by BAS and Banc of America Bridge or (vii) to potential lenders, participants or assignees who agree to be bound by the terms of this paragraph (or language substantially similar to this
paragraph or as otherwise reasonably acceptable to you and BAS and Banc of America Bridge, including as may be agreed in any confidential information memorandum or other marketing material). This paragraph shall terminate on the second anniversary
of the date hereof. 
  

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 You acknowledge that BAS and Banc of America Bridge or their affiliates may be providing
financing or other services to parties whose interests may conflict with yours. BAS and Banc of America Bridge agree that they will not furnish confidential information obtained from you to any of their other customers and will treat confidential
information relating to the Companies and their respective affiliates with the same degree of care as they treat their own confidential information. BAS and Banc of America Bridge further advise you that they will not make available to you
confidential information that they have obtained or may obtain from any other customer. In connection with the services and transactions contemplated hereby, you agree that BAS and Banc of America Bridge are permitted to access, use and share with
any of their bank or non-bank affiliates, agents, advisors (legal or otherwise) or representatives any information concerning the Companies or any of their respective affiliates that is or may come into the possession of BAS and Banc of America
Bridge or any of such affiliates. 
 In connection with all aspects of each transaction contemplated by this Commitment Letter,
you acknowledge and agree, and acknowledge your affiliates’ understanding, that: (i) the Bridge Facility and any related arranging or other services described in this Commitment Letter is an arm’s-length commercial transaction between
you and your affiliates, on the one hand, and BAS and Banc of America Bridge, on the other hand, (ii) BAS and Banc of America Bridge have not provided any legal, accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby and you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, (iii) you are capable of evaluating, and understand and accept, the terms, risks and conditions of the
transactions contemplated hereby, (iv) in connection with each transaction contemplated hereby and the process leading to such transaction, each of BAS and Banc of America Bridge has been, is, and will be acting solely as a principal and has
not been, is not, and, except as otherwise expressly agreed in writing, will not be acting as an advisor, agent or fiduciary, for you or any of your affiliates, stockholders, creditors or employees or any other party, (v) except for certain
advisory services provided by an affiliate of BAS as specified in that certain letter agreement dated June 15, 2010, BAS and Banc of America Bridge have not assumed and will not assume an advisory, agency or fiduciary responsibility in your or
your affiliates’ favor with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether any of BAS or Banc of America Bridge has advised or is currently advising you or your affiliates on other
matters) and BAS and Banc of America Bridge have no obligation to you or your affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth in this Commitment Letter and (vi) BAS and Banc of
America Bridge and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and BAS and Banc of America Bridge have no obligation to disclose any of such
interests to you or your affiliates. To the fullest extent permitted by law, you hereby waive and release any claims that you may have against BAS and Banc of America Bridge with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated by this Commitment Letter. 
 BAS and Banc of America Bridge hereby
notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “U.S.A. Patriot Act”), each of them is required to obtain, verify and record
information that identifies you, which information includes your name and address and other information that will allow BAS and Banc of America Bridge, as applicable, to identify you in accordance with the U.S.A. Patriot Act. 

7. Survival of Obligations. The provisions of Sections 2, 3, 4, 6 and 8 shall remain in full force and effect regardless of
whether any Bridge Facility Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of BAS and Banc of America Bridge hereunder, except that the provisions of
Sections 2 and 3 shall not survive if the commitments and undertakings of BAS and Banc of America Bridge are terminated prior to the effectiveness of the funding of the Bridge Facility. 

 

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 8. Miscellaneous. This Commitment Letter and the Fee Letter may be executed in
multiple counterparts and by different parties hereto in separate counterparts, all of which, taken together, shall constitute an original. Delivery of an executed counterpart of a signature page to this Commitment Letter or the Fee Letter by
telecopier, facsimile or other electronic transmission (e.g., a “pdf” or “tiff”) shall be effective as delivery of a manually executed counterpart thereof. Headings are for convenience of reference only and shall not affect the
construction of, or be taken into consideration when interpreting, this Commitment Letter or the Fee Letter. 
 This Commitment
Letter and the Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York; provided, however, that any issues regarding the Acquisition Agreement Representations and the occurrence or purported
occurrence under the Acquisition Agreement of a Company Material Adverse Effect (as defined therein) shall be determined in accordance with the laws and related judicial interpretations of the State of Delaware. Each party hereto hereby irrevocably
waives any and all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter (including, without limitation, the Summary of Terms), the Fee
Letter, the Transaction and the other transactions contemplated hereby and thereby or the actions of BAS and Banc of America Bridge in the negotiation, performance or enforcement hereof. Each party hereto hereby irrevocably and unconditionally
submits to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the
provisions of this Commitment Letter, the Fee Letter, the Transaction and the other transactions contemplated hereby and thereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in
any such court. Each party hereto agrees that service of any process, summons, notice or document by registered mail addressed to such party shall be effective service of process against such party for any suit, action or proceeding relating to any
such dispute. Each party hereto waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim
that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction
you are or may be subject by suit upon judgment. 
 This Commitment Letter, the Fee Letter and the Engagement Letter, embody the
entire agreement and understanding among the parties hereto and your affiliates with respect to the Bridge Facility and supersede all prior agreements and understandings relating to the subject matter hereof. No party has been authorized by the
Commitment Parties to make any oral or written statements that are inconsistent with this Commitment Letter. Neither this Commitment Letter (including the attachments hereto) nor the Fee Letter or the Engagement Letter may be amended or any term or
provision hereof or thereof waived or modified except by an instrument in writing signed by each of the parties hereto. 
 This
Commitment Letter may not be assigned by you without our prior written consent (and any purported assignment without such consent will be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer
any benefits upon, or create any rights in favor of, any person other than the parties hereto (and the Indemnified Parties). Each of BAS and Banc of America Bridge may assign its commitment hereunder, in whole or in part, to any of its affiliates or
to any lender in accordance with the syndication provisions set forth in Section 2. 
 All commitments and undertakings of
the Commitment Parties under this Commitment Letter will expire at 11:59 p.m. (New York City time) on September 17, 2010 unless you execute this Commitment Letter as provided below and the Fee Letter and the Engagement Letter, in each case, as
provided therein to accept such commitments and return them to us prior to that time. Thereafter, all 
  

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accepted commitments and undertakings of the Commitment Parties hereunder will expire on the earliest of (a) February 1, 2011, unless the Closing Date occurs on or prior thereto,
(b) the closing of the Acquisition without the use of the Bridge Facility, and (c) the termination of the Acquisition Agreement. In addition, all accepted commitments and undertakings of BAS and Banc of America Bridge hereunder may be
terminated by us if you materially breach this Commitment Letter, the Fee Letter or the Engagement Letter and fail to cure such breach within a reasonable period after receipt of written notice from us notifying you of such breach. 

[The remainder of this page intentionally left blank.] 

 

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 We are pleased to have the opportunity to work with you in connection with this important
financing. 
  

					
	Very truly yours,
	
	BANC OF AMERICA BRIDGE LLC
		
	By:	 	 /s/ William H. Pegher, Jr.

		 	Name:	 	William H. Pegher, Jr.
		 	Title:	 	Director
	
	BANC OF AMERICA SECURITIES LLC
		
	By:	 	 /s/ William H. Pegher, Jr.

		 	Name:	 	William H. Pegher, Jr.
		 	Title:	 	Director

  

 Signature Page to Commitment Letter 

					
	The provisions of this Commitment Letter are
	accepted and agreed to as of the date first written above:
	
	CLEARWATER PAPER CORPORATION
		
	By:	 	 /s/ Linda Massman

		 	Name:	 	Linda Massman
		 	Title:	 	Vice President, Finance & CFO

  

 Signature Page to Commitment Letter 

 SCHEDULE I 

SOURCES AND USES OF FUNDS 

($ millions) 
  

											
	 Sources
	  	 	  	 	  	 Uses
	  	 
	 Cash on hand
	  	$	274	  		  	Equity consideration	  	$	247
	 Revolver borrowing
	  	$	0	  		  	Acquired Business retired
debt1	  	$	257
	 Bridge Loans/Notes
	  	$	300	  		  	Acquired Business assumed debt	  	$	16
	 Acquired Business assumed debt
	  	$	16	  		  	Estimated fees and expenses	  	$	30
		  			  		  	Bond breakage
fees2	  	$	40
					
	 Total Sources
	  	$	590	  		  	 Total Uses
	  	$	590

  

	1
	 Includes $234.5 million and $22.5 million drawn on Acquired Business’ existing revolving credit facility. 

	2
	 Assumes bond take-out price of $117.10 on $234.5 million of Acquired Business’ existing notes. 

 

 Schedule I-1 

 ANNEX I-A 

SUMMARY OF TERMS AND CONDITIONS 

BRIDGE LOANS 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex
I is attached. 
  

			
	Borrower:	  	Clearwater Paper Corporation, a Delaware corporation (the “Borrower”).
		
	Guarantors:	  	The obligations of the Borrower and its subsidiaries under the Bridge Facility will be guaranteed by the Acquired Business and each of the existing and future direct and indirect
subsidiaries of the Borrower that guarantees the Borrower’s existing
10 5/8% senior notes due 2016 (the
“Existing Notes”) (the “Guarantors”). For the avoidance of doubt, neither Cellu Tissue CityForest LLC nor Interlake Acquisition Corporation Limited will be a Guarantor. All guarantees will be
guarantees of payment and not of collection.
		
	Administrative Agent:	  	Banc of America Bridge LLC or an affiliate thereof will act as sole and exclusive administrative agent for the lenders (the “Administrative
Agent”).
		
	 Sole Arranger and Sole

Bookrunning Manager:
	  	  
 Banc of America Securities LLC (“BAS”)
will act as sole and exclusive arranger and sole and exclusive bookrunning manager for the Bridge Loans (in such capacity, the “Arranger”).

		
	Bridge Lenders:	  	Banc of America Bridge LLC or an affiliate thereof (“Banc of America Bridge”; or the “Initial Lender”) and other financial
institutions and institutional lenders selected by the Arranger in consultation with the Borrower.
		
	Bridge Loans:	  	$300 million of senior unsecured bridge loans (the “Bridge Loans”), less the aggregate gross proceeds of Permanent Securities issued on or prior to the
Closing Date. The Bridge Loans will be available to the Borrower in one drawing upon consummation of the Acquisition.
		
	Ranking:	  	The Bridge Loans will be senior unsecured obligations of the Borrower and ranking pari passu in right of payment with or senior to all other unsecured obligations of the Borrower.
The guarantees will be senior unsecured obligations of each Guarantor, ranking pari passu in right of payment with or senior to all other unsecured obligations of such Guarantor.
		
	Security:	  	None.
		
	Purpose:	  	The proceeds of the Bridge Loans shall be used (i) to finance in part the Acquisition and the Refinancing and (ii) to pay fees and expenses incurred in connection with the
Transaction.
		
	Closing Date:	  	On or before February 1, 2011.

  

 Annex I-A-1 

			
	Interest Rate:	  	The interest rates per annum applicable to the Bridge Facility will be at the Total Cap (as such term is defined in the Fee Letter).
		
		  	During the continuance of an event of default or a payment default, interest will accrue on the principal of the Bridge Loans and on any other outstanding amount at a rate of 200
basis points in excess of the Total Cap, and will be payable on demand.
		
		  	All calculations of interest shall be made on the basis of actual number of days elapsed in a 360-day year.
		
	Cost and Yield Protection:	  	Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes
in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes.
		
	Amortization:	  	None.
		
	Optional Prepayments:	  	The Bridge Loans may be prepaid prior to the first anniversary of the Closing Date (the “Rollover Date”), without premium or penalty, in whole or in part,
upon written notice, at the option of the Borrower, at any time, together with accrued interest to the prepayment date.
		
	Mandatory Prepayments:	  	The Borrower shall prepay the Bridge Loans without premium or penalty and offer to purchase Exchange Notes at the premium for optional redemptions set forth in Annex I-C (on a pro
rata basis) together with accrued interest to the prepayment or purchase date, with (a) all net cash proceeds from (i) sales of property and assets of the Borrower or any of its subsidiaries (including sales or issuances of equity interests by
subsidiaries of the Borrower but excluding sales of inventory in the ordinary course of business and other exceptions to be agreed in the Bridge Facility Documentation), and (ii) Extraordinary Receipts (to be defined to include extraordinary
receipts such as tax refunds, casualty and indemnity payments, and certain insurance proceeds and to exclude cash receipts in the ordinary course of business), in each case, subject to reinvestment rights to be agreed, (b) all net cash proceeds
from the issuance or incurrence after the Closing Date of additional debt of the Borrower or any of its subsidiaries other than certain debt permitted under the Bridge Facility Documentation, and (c) all net cash proceeds from any issuance of
equity interest by, or equity contribution to, the Borrower, subject to exceptions to be agreed.
		
	Change of Control:	  	In the event of a Change of Control (using the same definition as set forth in the Existing Notes), each lender will have the right to require the Borrower, and the Borrower must
offer, to prepay the outstanding principal amount of the Bridge Loans at a premium equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment. Prior to making any such offer, the Borrower will,

  

 Annex I-A-2 

			
	 	  	within 30 days of the Change of Control, obtain any required consents to make such prepayment
of the Bridge Loans.
		
	Conversion into Rollover Loans:	  	  
 If the Bridge Loans have not been previously prepaid in full for
cash on or prior to the Rollover Date, the principal amount of the Bridge Loans outstanding on the Rollover Date may, subject to the conditions precedent set forth in Annex I-B, be converted into unsecured, senior rollover loans with a maturity of
seven years from the Closing Date and otherwise having the terms set forth in Annex I-B (the “Rollover Loans”). Any Bridge Loans not converted into Rollover Loans shall be repaid in full on the Rollover
Date.

		
	 Exchange into

Exchange Notes:
	  	  
 Each lender that is (or will immediately transfer its Exchange
Notes to) an Eligible Holder (as defined in Annex I-C) will have the right, at any time on or after the earlier of the Rollover Date or the Demand Failure Date (as defined in the Fee Letter), to exchange Bridge Loans or Rollover Loans held by
it for unsecured senior exchange notes of the Borrower having the terms set forth in Annex I-C (the “Exchange Notes”). In connection with each such exchange, or at any time prior thereto if requested by the Initial Lender,
the Borrower shall (i) deliver to the lender that is receiving Exchange Notes, and to such other lenders as the Initial Lender requests, an offering memorandum of the type customarily utilized in a Rule 144A offering of high yield securities
covering the resale of such Exchange Notes or Bridge Loans by such lenders, in such form and substance as reasonably acceptable to the Borrower and the Initial Lender, and keep such offering memorandum updated in a manner as would be required
pursuant to a customary Rule 144A securities purchase agreement, (ii) execute an exchange agreement containing provisions customary in Rule 144A transactions (including indemnification provisions) and a registration rights agreement customary
in Rule 144A offerings, in each case, if requested by the Initial Lender, (iii) deliver or cause to be delivered such opinions and accountants’ comfort letters addressed to the Initial Lender and such certificates as the Initial Lender may
request as would be customary in Rule 144A offerings and otherwise in form and substance reasonably satisfactory to the Initial Lender and (iv) take such other actions, and cause its advisors, auditors and counsel to take such actions, as reasonably
requested by the Initial Lender in connection with issuances or resales of Exchange Notes or Bridge Loans, including providing such information regarding the business and operations of the Borrower and its subsidiaries as is reasonably requested by
any prospective holder of Exchange Notes or Bridge Loans and customarily provided in due diligence investigations in connection with purchases or resales of securities.

		
	Documentation:	  	The definitive documentation for the Bridge Facility (the “Bridge Facility Documentation”) will contain only those representations and
warranties substantially similar to the Loan and Security Agreement, dated as of November 26, 2008, by and among the Borrower, certain financial institutions as lenders and Bank of America, N.A., as agent (the “ABL
Facility”)

  

 Annex I-A-3 

			
		  	and covenants and events of default provisions substantially similar to those contained in the Existing Notes (the “Applicable Bond Standard”)
and with modifications to reflect all appropriate differences between an asset-based revolving credit facility and an indenture for publicly held and traded securities, on one hand, and a bridge loan facility, on the other, the definitive terms of
which will be negotiated in good faith (including as to operational requirements of the Borrower and its subsidiaries in light of their industries, businesses and business practices), and shall be consistent with this Annex I-A.
		
	Conditions to Borrowing:	  	The availability of the initial borrowing under the Bridge Facility on the Closing Date shall be conditioned solely upon the satisfaction of the applicable conditions set forth in
Section 5 of the Commitment Letter and Annex II to the Commitment Letter.
		
	Representations and Warranties:	  	  
 The Bridge Facility Documentation will contain representations and
warranties as are substantially similar to those in the ABL Facility, with additional representations and warranties usual and customary for high yield financings consistent with the Applicable Bond Standard and to the extent necessary to reflect
differences in documentation.

		
	Covenants:	  	The Bridge Facility Documentation will contain such affirmative and negative covenants applicable to the Borrower and its restricted subsidiaries usual and customary for publicly
traded high yield securities consistent with the Applicable Bond Standard, all of which will be incurrence-based covenants. From and after the Rollover Date, the debt and lien incurrence and the restricted payment covenants of the Bridge Loans may
be more restrictive than those of the Rollover Loans and the Notes, as reasonably agreed by the Administrative Agent and the Borrower.
		
	Financial Maintenance Covenants:	  	  
 None.

		
	Events of Default:	  	The Bridge Facility Documentation will contain such events of default applicable to the Borrower and its restricted subsidiaries usual and customary for publicly traded high yield
securities consistent with the Applicable Bond Standard.
		
	Assignments and Participations:	  	  
 Each lender will be permitted to make assignments in minimum
amounts to be agreed to other entities approved by the Administrative Agent and, if no event of default exists, the Borrower, which approval shall not be unreasonably withheld or delayed; provided, however, that no such approval shall
be required in connection with assignments to other lenders or any of their affiliates. Each lender will also have the right, without any consent, to assign as security all or part of its rights under the Bridge Facility Documentation to any Federal
Reserve Bank. Lenders will be permitted to sell participations with voting rights limited to significant matters such as changes in amount, rate and maturity date. An assignment fee in the amount of $3,500 will be charged with respect to
each

  

 Annex I-A-4 

			
		  	assignment unless waived by the Administrative Agent in its sole discretion.
		
		  	If the Initial Lender makes an assignment of Bridge Loans at a price less than par, the assignment agreement may provide that, upon any repayment or prepayment of such Bridge Loans
with the proceeds of an issuance of securities of the Borrower or any of its subsidiaries in which the Initial Lender or an affiliate thereof acted as underwriter or initial purchaser (an “Applicable Offering”), (i) the
Borrower shall pay the holder of such Bridge Loans the price set forth in the assignment agreement as the price (which may be the price at which the Initial Lender assigned such Bridge Loans but in any event may not be greater than par) at which the
holder of such Bridge Loans will be repaid by the Borrower with the proceeds of an Applicable Offering (the “Agreed Price”) and (ii) the Borrower shall pay the Initial Lender the difference between par and the Agreed Price.
Such payments by the Borrower shall be in full satisfaction of such Bridge Loans in the case of a repayment or prepayment with proceeds of an Applicable Offering. For the avoidance of doubt, the provisions of this paragraph do not apply to any
repayments or prepayments other than with proceeds of an Applicable Offering.
		
	Indemnification:	  	The Borrower will indemnify and hold harmless the Administrative Agent, the Arranger, the Initial Lender and each other lender and each of their affiliates and their officers,
directors, employees, agents and advisors from and against all losses, liabilities, claims, damages or expenses arising out of or relating to the Transaction, the Bridge Facility, the Borrower’s use of loan proceeds or the commitments,
including, but not limited to, reasonable attorneys’ fees and settlement costs. This indemnification shall survive and continue for the benefit of all such persons or entities, notwithstanding any failure of the Bridge Facility to
close.
		
	Governing Law:	  	New York; provided, however, that any issues regarding the Acquisition Agreement Representations and the occurrence or purported occurrence under the Acquisition
Agreement of a Company Material Adverse Effect (as defined therein) shall be determined in accordance with the laws and related judicial interpretations of the State of Delaware.
		
	Expenses:	  	The Borrower will pay all reasonable costs and expenses associated with the preparation, due diligence, administration, syndication and enforcement of all Bridge Facility
Documentation, including, without limitation, the legal fees and expenses of the Administrative Agent’s counsel, regardless of whether or not the Bridge Facility is closed. The Borrower will also pay the expenses of each lender in connection
with the enforcement of any of the Bridge Facility Documentation.
		
	 Counsel to the

Arranger:
	  	  
 Cahill Gordon & Reindel
LLP

		
	Miscellaneous:	  	Each of the parties shall (i) waive its right to a trial by jury and (ii) submit to New York jurisdiction.

 

 Annex I-A-5 

			
		
	Fees:	  	As provided in the Fee Letter.

  

 Annex I-A-6 

 ANNEX I-B 

SUMMARY OF TERMS AND CONDITIONS 

SENIOR ROLLOVER LOANS 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex
I-B is attached. 
  

					
	Borrower:	  	Same as the Borrower of the Bridge Loans.
		
	Guarantors:	  	Same as the Bridge Loans.
		
	Rollover Loans:	  	Rollover Loans in an initial principal amount equal to 100% of the outstanding principal amount of the Bridge Loans on the Rollover Date. Subject to the conditions
precedent set forth below, the Rollover Loans will be available to the Borrower to refinance the Bridge Loans on the Rollover Date. The Rollover Loans will be governed by the Bridge Facility Documentation and, except as set forth below, shall have
the same terms as the Bridge Loans.
		
	Ranking:	  	Same as Bridge Loans.
		
	Interest Rate:	  	Interest shall be payable quarterly in arrears at the Total Cap (as defined in the Fee Letter).
		
		  	During the continuance of an event of default or a payment default, interest will accrue on the principal of the Rollover Loans and on any other outstanding amount at a
rate of 200 basis points in excess of the Total Cap, and will be payable on demand.
		
		  	All calculations of interest shall be made on the basis of actual number of days elapsed in a 360-day year.
		
	Maturity:	  	Seven years after the Closing Date (the “Rollover Maturity Date”).
		
	Optional Prepayments:	  	For so long as the Rollover Loans have not been exchanged for Exchange Notes of the Borrower as provided in Annex I-C, they may be prepaid at the option of the Borrower,
in whole or in part, at any time, together with accrued and unpaid interest to the prepayment date (but without premium or penalty).
		
	Conditions Precedent to Rollover:	  	  
 The ability of the Borrower to convert any Bridge
Loans into Rollover Loans is subject to the following conditions being satisfied:

			
		  	(i)	  	at the time of any such refinancing, there shall exist no event of default or event that, with notice and/or lapse of time, could become an event of default, and there shall be no
failure to comply in all material respects with the Take-out Demand (as defined in the Fee Letter);

  

 Annex I-B-1 

					
	 	  	(ii)	  	all fees due to the Arranger and the Initial Lender shall have been paid in full;
			
		  	(iii)	  	the lenders shall have received promissory notes evidencing the Rollover Loans (if requested); and
			
		  	(iv)	  	no order, decree, injunction or judgment enjoining any such refinancing shall be in effect.
		
	Covenants:	  	From and after the Rollover Date, the covenants applicable to the Rollover Loans will conform to those applicable to the Exchange Notes; except that the Rollover Loans
may contain covenants relating to the obligation of the Borrower to use commercially reasonably efforts to refinance the Rollover Loans, as reasonably agreed by the Administrative Agent and the Borrower.
		
	Assignments and Participations:	  	  
 Same as the Bridge Loans.

		
	Governing Law:	  	New York.
		
	Indemnification and Expenses:	  	  
 Same as the Bridge Loans.

		
	Fees:	  	As provided in the Fee Letter.

  

 Annex I-B-2 

 ANNEX I-C 

SUMMARY OF TERMS AND CONDITIONS 

SENIOR EXCHANGE NOTES 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex
I-C is attached. 
  

			
	Issuer:	  	Same as the Borrower of the Bridge Loans.
		
	Guarantors:	  	Same as the Bridge Loans.
		
	Exchange Notes:	  	At any time on or after the earlier of the Rollover Date or the Demand Failure Date, Rollover Loans or Bridge Loans due to any Bridge Lender may, at the option of such Bridge
Lender, be exchanged for an equal principal amount of unsecured, senior exchange notes of the Borrower (the “Exchange Notes”). The Borrower will issue the Exchange Notes under an indenture that complies with the Trust
Indenture Act of 1939, as amended (the “Indenture”). The Borrower will appoint a trustee reasonably acceptable to the holders of the Exchange Notes (it being understood that the trustee under the Existing Notes shall be
deemed reasonably acceptable to such holders). The Indenture will include provisions customary for an indenture governing publicly traded high yield debt securities; provided that the covenants shall not be less favorable to the Borrower than those
applicable to the Bridge Loans. Except as expressly set forth above, the Exchange Notes shall have the same terms and maturity as the Rollover Loans.
		
	Ranking:	  	Same as the Bridge Loans.
		
	Security:	  	None.
		
	Interest Rate:	  	Interest shall be payable quarterly in arrears at a per annum rate equal to the Total Cap (as defined in the Fee Letter).
		
		  	During the continuance of an event of default or a payment default, interest will accrue on the principal of the Exchange Notes and on any other outstanding amount at a rate of 200
basis points in excess of the Total Cap, and will be payable on demand.
		
	Maturity:	  	Same as the Rollover Loans.
		
	Amortization:	  	None.
		
	Optional Redemption:	  	Until the fourth anniversary of the Closing Date, the Exchange Notes will be redeemable at a customary “make-whole” premium calculated using a discount rate equal to the
yield on comparable Treasury securities plus 50 basis points. Thereafter, the Exchange Notes will be redeemable at the option of the Issuer at a premium equal to 50% of the coupon on the Exchange Notes, declining ratably to par on the date which is
one year prior to the Rollover Maturity Date.

  

 Annex I-C-1 

			
		  	In addition, Exchange Notes will be redeemable at the option of the Issuer prior to the third anniversary of the Closing Date with the net cash proceeds of qualified equity
offerings of the Issuer at a premium equal to the coupon on the Exchange Notes; provided that after giving effect to such redemption at least 65% of the aggregate principal amount of Exchange Notes originally issued shall remain outstanding.

		
	 Mandatory
 Offer to
Purchase:
	  	  
 The Issuer will be required to offer to purchase the Exchange
Notes upon a Change of Control (to be defined in a manner substantially consistent with the Existing Notes) at 101% of the principal amount thereof plus accrued interest to the date of purchase.

		
	 Right to Transfer

Exchange Notes:
	  	  
 Each holder of Exchange Notes shall have the right to transfer its
Exchange Notes in whole or in part, at any time to an Eligible Holder and, after the Exchange Notes are registered pursuant to the provisions described under “Registration Rights”, to any person or entity; provided that if
the Issuer or any of its affiliates holds Exchange Notes, such Exchange Notes shall be disregarded in any voting. “Eligible Holder” will mean (a) an institutional “accredited investor” within the meaning of
Rule 501 under the Securities Act, (b) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, (c) a person acquiring the Exchange Notes pursuant to an offer and sale occurring outside of the United
States within the meaning of Regulation S under the Securities Act or (d) a person acquiring the Exchange Notes in a transaction that is, in the opinion of counsel reasonably acceptable to the Issuer, exempt from the registration requirements of the
Securities Act; provided that in each case such Eligible Holder represents that it is acquiring the Exchange Notes for its own account and that it is not acquiring such Exchange Notes with a view to, or for offer or sale in connection with, any
distribution thereof (within the meaning of the Securities Act) that would be in violation of the securities laws of the United States or any state thereof.

		
	Registration Rights:	  	The Issuer will be required to:
		
		  	 •       within 180 days after the earlier of Rollover Date or the Demand Failure Date, as
the case may be (the “Registration Filing Date”), file a registration statement for an offer to exchange the Exchange Notes for publicly registered notes with identical terms;

		
		  	 •       use its commercially reasonable efforts to cause the registration statement to
become effective under the Securities Act within one year of the Registration Filing Date;

		
		  	 •       complete the exchange offer promptly after effectiveness of the registration
statement; and

		
		  	 •       file and use its commercially reasonable efforts to cause to be declared
effective by the SEC a shelf registration statement for the

  

 Annex I-C-2 

			
		  	 resale of the Exchange Notes if it cannot complete an exchange offer by the one year anniversary of the Registration Filing Date and in certain other
customary circumstances, and keep such shelf registration statement effective, with respect to resales of the Exchange Notes, for as long as it is required by the holders of the Exchange Notes to resell the Exchange Notes.

		
		  	Upon failure to comply with the requirements of the registration rights agreement (a “Registration Default”), the Issuer shall pay liquidated damages to each
holder of Exchange Notes with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to 0.25% per annum on the principal amount of Exchange Notes held by such holder. The amount
of the liquidated damages will increase by an additional 0.25% per annum on the principal amount of Exchange Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated
damages for all Registration Defaults of 1.00% per annum.
		
	Governing Law:	  	New York.
		
	Indemnification and Expenses:	  	  
 Same as the Bridge Loans.

 

 Annex I-C-3 

 ANNEX II 

CONDITIONS PRECEDENT TO CLOSING 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex
II is attached. 
 The funding of the Bridge Loans under the Bridge Facility will be subject to satisfaction of the following
conditions prior to or concurrently with such funding: 
 (i) The Acquisition shall be consummated pursuant to
the Acquisition Agreement substantially concurrently with the initial funding of the Bridge Facility without giving effect to any amendments to the Acquisition Agreement or any waivers that, in any such case, are materially adverse to the Lenders in
their capacities as lenders without the prior written consent of the Arranger (it being understood that any modification, amendment, consent or waiver to the definition of “Company Material Adverse Effect” (as defined in the Acquisition
Agreement) or that changes the “Merger Consideration” (as defined in the Acquisition Agreement) to be paid pursuant to the Acquisition Agreement shall be deemed to be material and adverse to the interest of the Lenders in their capacities
as lenders). 
 (ii) Since February 28, 2010, there has not been any Change (as that term is defined in the
Acquisition Agreement) that would, individually or in the aggregate, have a Company Material Adverse Effect, it being understood that the determination of a Company Material Adverse Effect will be subject to the qualifications with respect to
related representations and warranties and disclosure schedules contained in the Acquisition Agreement. 
 (iii)
The Initial Lender shall have received a solvency certificate of the Borrower’s chief financial officer (certifying that, after giving effect to the Transaction, the Borrower and its subsidiaries on a consolidated basis are solvent) in the form
attached hereto as Exhibit A (it being understood that the subsidiary guarantees under the Bridge Facility and Notes shall include a fraudulent transfer savings clause in customary form). 

(iv) The Initial Lender and the other lenders shall have received reasonably satisfactory opinions (subject to customary
assumptions, qualifications and limitations) of counsel to the Borrower and the Guarantors covering the following: authority, legality, validity, binding effect and enforceability of the documents for the Bridge Facility) and corporate resolutions,
certificates and other closing documents as are customary and as the Initial Lender shall reasonably require. 

(v) The Arranger and Initial Lender shall have received (a) audited consolidated balance sheets of the Borrower and
the Acquired Business, respectively, and the related statements of income, changes in equity and cash flows of the Borrower and the Acquired Business, respectively, for the three most recently completed fiscal years ended at least 90 days before the
Closing Date and (b) unaudited consolidated balance sheets and related statements of income, changes in equity and cash flows of the Borrower and the Acquired Business, respectively, for each subsequent fiscal quarter after December 31,
2009 ended at least 45 days before the Closing Date. 
 (vi) The Arranger and Initial Lender shall have received
a pro forma balance sheet and related pro forma statement of income of the Borrower as of and for (a) the twelve-month period ending on December 31, 2009 and (b) each fiscal quarter since December 31, 2009 including the most
recently completed fiscal quarter ended at least 45 days prior to the Closing Date, prepared after giving effect to the Transaction as if the Transaction had occurred as of such date (in 

 

 Annex II-1 

 
the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements); provided that such pro forma financial statements shall meet the
requirements of Regulation S-X under the Securities Act of 1933, as amended, and all other accounting rules and regulations of the SEC promulgated thereunder applicable to a registration statement under such Act on Form S-1; provided,
further, that the pro forma financial statements were prepared in good faith on the basis of the assumptions stated therein, which assumptions are reasonable in light of the then existing conditions, and, in the case of each of this and the
immediately preceding provisos, the chief financial officer of the Borrower shall have provided to each of the Arranger and Initial Lender a written certification to that effect. 

(vii) Based on the pro forma financial statements referred to in clause (vi) above, after giving effect to the
Transaction, the ratio of (x) consolidated total indebtedness for borrowed money of the Borrower to (y) consolidated EBITDA of the Borrower for the four most recent fiscal quarters ending at least 45 days prior to the Closing Date is not
greater than 2.85:1.0. 
 (viii) The Borrower shall not have materially breached its obligations under the Fee
Letter, other than any such breaches which shall have been waived by the Arranger. All fees due to the Administrative Agent, the Arranger and the lenders shall have been paid, and all expenses to be paid or reimbursed to the Administrative Agent and
the Arranger that have been invoiced a reasonable period of time prior to the Closing Date shall have been paid, in each case, from the proceeds of the initial funding under the Bridge Facility. 

(ix) The Borrower shall not have materially breached the Engagement Letter, other than any breaches which shall have been
waived by the Arranger. If the Arranger has made a Take-out Demand prior to the Merger Closing, the Borrower shall have used its commercially reasonable efforts to cause the Take-out Financing (as defined in the Fee Letter) to be issued and sold on
or prior to the Closing Date. Without limitation of the foregoing and to the extent applicable to the financing contemplated by such Take-out Financing, the Borrower shall have (i) not later than 25 days prior to the Closing Date, prepared one
or more preliminary prospectuses, offering memoranda or private placement memoranda (in customary form and including all financial statements and other information that would be required in a registration statement on Form S-1 for an offering
registered under the Securities Act) relating to the Take-out Financing, and thereafter prepared supplements to or final versions of such prospectuses, offering memoranda or private placement memoranda (promptly upon request by the Investment Bank,
and in customary form) (collectively, the “Offering Document”), (ii) used its commercially reasonable efforts to cause the independent registered public accountants of the Borrower and the Acquired Business to render
customary “comfort letters” (including customary “negative assurances”) with respect to the financial information in the Offering Document, (iii) caused the senior management and other representatives of the Borrower, and
used its commercially reasonable efforts to cause the senior management and other representatives of the Acquired Business, to provide access in connection with due diligence investigations and to participate in a customary high-yield “road
show,” for a consecutive 25-day period commencing on the date of delivery of a final Offering Document (at no time during which period the financial information in the Offering Document shall be “stale”) and ending on the third
business day prior to the Closing Date; provided that the days from and including November 22, 2010 to and including November 26, 2010 and the days from and including December 20, 2010 to and including January 3, 2011
shall not be included in determining such 25-day period and (iv) used its commercially reasonable efforts to obtain, not later than 25 days prior to the Closing Date, ratings of the Notes from Moody’s Investors Service, Inc.
(“Moody’s”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) (collectively, the “Ratings”). 

 

 Annex II-2 

 (x) The Borrower shall have delivered to the Arranger and the Initial Lender
the Information Memorandum not later than 14 days after the date of the Commitment Letter. 
 (xi) After giving
effect to the Transaction, the Borrower and its subsidiaries shall have outstanding no indebtedness for money borrowed or preferred stock other than (a) the loans and other extensions of credit under the Bridge Facility, (b) the Existing
Notes, (c) the Acquired Business’ existing industrial revenue bonds in an aggregate principal amount not to exceed $16 million (and related obligations under the Reimbursement Agreement and letter of credit outstanding thereunder), and
(d) the ABL Facility (as hereinafter defined) and all indebtedness permitted under the ABL Facility. 

(xii) After giving effect to the Transaction, the sum of (x) unrestricted cash and cash equivalents on the pro forma
consolidated balance sheet of the Borrower and its subsidiaries and (y) amounts available for borrowing by the Borrower under the ABL Facility shall be at least $150 million. For purposes of this clause (xii), the borrowing availability under
the ABL Facility shall be determined whether or not the applicable conditions to funding under the ABL Facility have then been satisfied. As used herein, “ABL Facility” means the Loan and Security Agreement dated as of November 26,
2008 and as amended on the date hereof, by and among the Borrower, certain financial institutions as lenders, and Bank of America, N.A., as agent, or any similar asset based lending facility agreement that may replace or refinance such Loan and
Security Agreement. 
 (xiii) The Arranger shall have received reasonably satisfactory
evidence of the consummation of the Refinancing, including, for avoidance of doubt, the repayment, redemption, defeasance or purchase via tender offer of the Acquired Business’
11 1/2% senior secured notes due 2014, and the
discharge (or the making of arrangements for discharge) of all liens securing such senior secured notes. 

(xiv) The Borrower and each of the Guarantors shall have provided the documentation and other information to the
Administrative Agent that are required by regulatory authorities under applicable “know-your-customer” rules and regulations, including the U.S.A. Patriot Act, within 20 business days following written request therefor by the
Administrative Agent. 
  

 Annex II-3 

 EXHIBIT A 

SOLVENCY CERTIFICATE 

[            ], [2010/2011] 

This Solvency Certificate (this “Certificate”) is furnished to the Administrative Agent and
the Lenders pursuant to Section [        ] of the Credit Agreement, dated as of              , 2010, among
[                    ] (the “Bridge Loan Agreement”). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Bridge Loan
Agreement.3 

I, [                    ], the Chief
Financial Officer of the Borrower (after giving effect to the Transactions), in that capacity only and not in my individual capacity (and without personal liability), DO HEREBY CERTIFY on behalf of the Borrower that as of the date hereof, after
giving effect to the consummation of the Transactions (including the execution and delivery of the Acquisition Agreement and the Bridge Loan Agreement, the making of the Bridge Loans and the use of proceeds of such Bridge Loans on the date hereof):

 1. The sum of the liabilities (including contingent liabilities) of the Borrower and its subsidiaries, on a
consolidated basis, does not exceed the fair value of the present assets of the Borrower and its subsidiaries, on a consolidated basis. 

2. The present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis, is greater
than the total amount that will be required to pay the probable liabilities (including contingent liabilities) of the Borrower and its subsidiaries as they become absolute and matured. 

3. The capital of the Borrower and its subsidiaries, on a consolidated basis, is not unreasonably small in relation to
their business as contemplated on the date hereof. 
 4. The Borrower and its subsidiaries, on a consolidated
basis, have not incurred and do not intend to incur, or believe that they will incur, debts or other liabilities, including current obligations, beyond their ability to pay such debts or other liabilities as they become due (whether at maturity or
otherwise). 
 5. The Borrower and its subsidiaries, on a consolidated basis, are “solvent” within the
meaning given to that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. 

6. For purposes of this Certificate, the amount of any contingent liability has been computed as the amount that, in light
of all of the facts and circumstances existing as of the date hereof, represents the amount that can reasonably be expected to become an actual or matured liability. 

 

	3
	 Note: Description to be modified to reflect the description of the final Credit Agreement. Defined terms used herein shall also be modified to reflect
the defined terms used in the Bridge Facility Documentation. 

  

 Exhibit A-1 

 7. In reaching the conclusions set forth in this Certificate, the
undersigned has (i) reviewed the Bridge Loan Agreement and other Credit Documents referred to therein and such other documents deemed relevant, (ii) reviewed the financial statements (including the pro forma financial statements) referred
to in Section [    ] of the Bridge Loan Agreement (the “Financial Statements”) and (iii) made such other investigations and inquiries as the undersigned has deemed appropriate. The undersigned is familiar with the
financial performance and prospects of the Borrower and its Subsidiaries and hereby confirms that the Financial Statements were prepared in good faith and fairly present, in all material respects, on a pro forma basis as of
[            ] (after giving effect to the Transactions), the Borrower’s and its Subsidiaries’ consolidated financial condition. 

8. The undersigned confirms and acknowledges that the Arrangers, the Administrative Agent and the Lenders are relying on
the truth and accuracy of this Certificate in connection with the Commitments and Bridge Loans under the Bridge Loan Agreement. 

[Remainder of Page Intentionally Left Blank] 

 

 Exhibit A-2 

 IN WITNESS WHEREOF, I have executed this Certificate this as of the date first written
above. 
  

					
	CLEARWATER PAPER CORPORATION
		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

  

 Exhibit A-3First Amendment to Loan and Security Agreement

 Exhibit 10.3 

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT 

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of September 15, 2010 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) The definition of “Applicable Margin” in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entirety to read as follows: 
 “Applicable Margin:
with respect to any Type of Loan, the margin set forth below, as determined by the Fixed Charge Coverage Ratio for the last Fiscal Quarter: 
  

									
	 Level
	  	 Fixed Charge Coverage Ratio
	  	 Base Rate
Revolver Loans
	 	 	 LIBOR
Revolver Loans
	 
	I	  	Greater than or equal to 1.50 to 1.00	  	0.75	% 	 	2.25	% 
				
	II	  	 Less than 1.50 to 1.00 but greater

than or equal to 1.25 to 1.00
	  	1.00	% 	 	2.50	% 
				
	III	  	Less than 1.25 to 1.00	  	1.25	% 	 	2.75	% 

 The margins
shall be subject to increase or decrease upon receipt by Agent pursuant to Section 10.1.2 of the financial statements and corresponding Compliance Certificate for the last Fiscal Quarter, which change shall be effective on the first day
of the calendar 

 
month following receipt. If, by the first day of a month, any financial statements and Compliance Certificate due in the preceding month have not been received, then, at the option of Agent or
Required Lenders, the margins shall be determined as if Level III were applicable, from such day until the first day of the calendar month following actual receipt.” 

(b) The definition of “Availability Block” in Section 1.1 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows: 
 “Availability Block: $0.” 

(c) The definition of “EBITDA” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read
as follows: 
 “EBITDA: with respect to any period, determined on a consolidated basis for
Borrowers and Subsidiaries, net income for such period, calculated before (i) interest expense, (ii) provision for income taxes, (iii) depreciation and amortization expense, (iv) any non-cash items relating to stock based
employee compensation or equity or stock option plans, (v) gains or losses arising from the sale of capital assets, (vi) gains (and losses) arising from the write-up (and write-downs) of assets, (vii) any extraordinary gains,
(viii) fees and expenses incurred in connection with Project Columbia, (ix) for any period ending on or prior to the
24th month following the consummation of Project Columbia,
non-recurring or unusual expenses incurred in connection with Permitted Acquisitions, consolidations, restructuring, reorganizations, Permitted Asset Dispositions, damage to properties (not covered by insurance) caused by natural disasters, such as
severance, earn-out obligations, costs associated with retention, and the like to the extent such consolidations, restructurings, reorganizations, or other dispositions are permitted pursuant to the terms of this Agreement in an amount not to exceed
$20,000,000, (x) all non-cash charges, including purchase accounting and any write-down of or impairment charges with respect to goodwill and other intangibles, (xi) losses and gains realized on Permitted Asset Dispositions (other than
dispositions of Inventory), (xii) currency translation and hedging gains and losses, and (xiii) net loss from discontinued or disposed of operations permitted pursuant to the terms of this Agreement, (in each case, to the extent included
in determining net income for such period).” 
 (d) The definition of “Fixed Charges” in Section 1.1 of the
Loan Agreement is hereby amended and restated in its entirety to read as follows: 
 “Fixed Charges: the sum of
interest expense (other than payment-in-kind), principal payments made on Borrowed Money (other than: (i) repayments of the Revolver Loans; (ii) repayments of the Potlatch Indebtedness to the extent permitted under
Section 10.2.8(c); and (iii) repayments of Debt permitted under Section 10.2.1(v) to the extent permitted under Section 10.2.8(e)), cash taxes paid, Capital Expenditures (except those financed with Borrowed
Money other than Revolver Loans), Distributions made, and all payments required to be made under the Code or applicable law on account of any Plan, Pension Plan, Multiemployer Plan or Foreign Plan.” 

 

 2 

 (e) The definition of “Letter of Credit” in Section 1.1 of the Loan Agreement
is hereby amended and restated in its entirety to read as follows: 
 “Letter of Credit: any standby or documentary
letter of credit issued by Issuing Bank for the account of a Borrower, or any indemnity, guarantee, exposure transmittal memorandum or similar form of credit support issued by Agent or Issuing Bank for the benefit of a Borrower or City Forest under
the Sub Bond Facility.” 
 (f) The definition of “Letter of Credit Subline” in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entirety to read as follows: 
 “Letter of Credit Subline:
$50,000,000.” 
 (g) The definition of “Permitted Acquisition” in Section 1.1 of the Loan Agreement is
hereby amended and restated in its entirety to read as follows: 
 “Permitted Acquisition: any Acquisition by any
Borrower in a transaction that satisfies each of the following requirements: (a) such Acquisition is not a hostile acquisition or contested by the Person to be acquired; (b) the assets being acquired (other than a de minimis amount
of assets in relation to Borrower’s and its Subsidiaries’ total assets), or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of Borrower and its Subsidiaries or a business
reasonably related thereto; (c) both before and after giving effect to such Acquisition, each of the representations and warranties in the Loan Documents is materially true and correct (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof); (d) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of such
Acquisition; (e) as soon as available, but not less than 30 days prior to such Acquisition, the Borrowers have provided Agent (i) notice of such Acquisition and (ii) a copy of all available business and financial information
reasonably requested by Agent including pro forma financial statements, statements of cash flow, and Availability projections; (f) not later than 15 Business Days prior to the anticipated closing date of such Acquisition, Borrowers shall have
provided the Agent with copies of the acquisition agreement and other material documents relative to such Acquisition, which agreement and documents must be reasonably acceptable to Agent; (g) the aggregate purchase consideration payable
(including deferred payment obligations, but excluding issuances of Equity Interests of Clearwater) in respect of all Acquisitions made during the term of this Agreement shall not exceed $100,000,000; (h) if such Acquisition is an acquisition
of the Equity Interests of a Person, the Acquisition is structured so that the acquired Person shall become a wholly-owned direct or indirect Subsidiary of a Borrower and, in accordance with Section 10.1.9, an Obligor pursuant to the
terms of this Agreement; (i) if such Acquisition is an acquisition of assets, the Acquisition is structured so that an Obligor (or a newly organized Subsidiary that becomes an Obligor) shall acquire such assets; (j) the assets being
acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States, or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the
United States; (k) no Debt will be incurred, 
  

 3 

 
assumed, or would exist with respect to Borrower or its Subsidiaries as a result of such Acquisition, other than Debt permitted under Section 10.2.1 and no Liens will be incurred,
assumed, or would exist with respect to the assets of Borrower or its Subsidiaries as a result or such Acquisition other than Permitted Liens; and (l) both before and after giving effect to any such Acquisition, Modified Availability is greater
than $50,000,000; provided that, notwithstanding the foregoing, Project Columbia shall be a Permitted Acquisition so long as (1) each of the conditions set forth in clauses (a), (b), (h), (i), (k) and (l) are satisfied,
(2) the assets being acquired are located within the United States and Canada, (3) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of Project Columbia and Clearwater shall have the
right terminate its obligation to consummate Project Columbia and (4) the aggregate purchase consideration payable in connection with Project Columbia shall not exceed $550,000,000. In no event will assets acquired pursuant to a Permitted
Acquisition constitute Eligible Accounts, Eligible Inventory or Eligible Semi-Finished Inventory prior to completion of a field examination and other due diligence acceptable to Agent in its discretion.” 

(h) The definition of “Permitted Asset Disposition” in Section 1.1 of the Loan Agreement is hereby amended and restated in
its entirety to read as follows: 
 “Permitted Asset Disposition: as long as: (x) no Default or Event of Default
exists (provided that, in the case of clauses (a) and (c) only, such Asset Dispositions will continue to be permitted unless Agent has given Borrower Agent notice otherwise), and (y) in the case of clauses (a) and (c) only,
all Net Proceeds are remitted to a Dominion Account, an Asset Disposition that is: (a) a sale of Inventory in the Ordinary Course of Business; (b) a disposition of assets (other than Accounts or Inventory) that, in the aggregate during any
12 month period, has a fair market or book value (whichever is more) of $10,000,000 or less; (c) a disposition of Inventory that is obsolete, unmerchantable or otherwise unsalable in the Ordinary Course of Business; (d) termination of a
lease of real or personal Property that is not necessary for the Ordinary Course of Business, could not reasonably be expected to have a Material Adverse Effect and does not result from an Obligor’s default; (e) a disposition of Property
(other than any Collateral) that is exchanged for credit against the purchase price of similar replacement property (including like-kind exchanges), (f) a transfer of Property by: (i) a Borrower to another Borrower; (ii) a Guarantor
to another Guarantor; (iii) a Guarantor to a Borrower or (iv) a Borrower to a Guarantor in the Ordinary Course of Business, upon fair and reasonable terms fully disclosed to Agent and no less favorable than would be obtained in a
comparable arm’s-length transaction with a non-Affiliate; (g) a sale of Property in one transaction, the proceeds of which will be used to satisfy and discharge or make arrangements for the satisfaction and discharge or prepayment of
Clearwater’s obligations under the Retained Obligation Agreement so long as: (i) the aggregate fair market or book value (whichever is more) of all Collateral sold in such transaction does not exceed $10,000,000; (ii) such transaction
could not reasonably be expected to have a Material Adverse Effect; (iii) Borrowers remit to Agent for application to the Obligations an amount equal to the fair market or book value (whichever is more) of all Collateral sold in such
transaction; (iv) not later than thirty (30) days prior to the anticipated closing date of such transaction, Borrowers shall have provided the Agent with written notice of such proposed transaction; (v) the

  

 4 

 
proceeds of the proposed transaction which can be allocated to the Collateral being sold in such transaction exceed the amount of the Borrowing Base attributable to such Collateral; and
(vi) not later than 15 Business Days prior to the anticipated closing date of such transaction, Borrowers shall have provided the Agent with copies of the sale agreement and other material documents relative to such transaction, which agreement
and documents must be reasonably acceptable to Agent; (h) a transfer of Property by Clearwater to Retainco prior to the “Distribution” (as defined in the Separation Agreement) in accordance with the terms of the Spin-Off Documents;
(i) a distribution of Retainco to Potlatch in accordance with the terms of the Spin-Off Documents; (j) a disposition of assets (other than Accounts or Inventory) that are surplus or obsolete or otherwise unusable in the Ordinary Course of
Business, (k) a dissolution or liquidation of any of Borrower’s Subsidiaries so long as such dissolution or liquidation is permitted pursuant to Section 10.2.9, (l) a disposition of non-strategic assets (other than
Accounts or Inventory) identified by Clearwater’s board of directors as such or (j) approved in writing by Agent and Required Lenders.” 

(i) The definition of “Restricted Investment” in Section 1.1 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows: 
 “Restricted Investment: any Investment by a Borrower or Subsidiary, other than
(a) Investments in Subsidiaries (i) to the extent existing on the Closing Date, (ii) made after the Closing Date so long as, as of the making of such Investment (A) no Default or Event of Default exists and (B) after giving
effect to any such Investment, Borrower has Excess Availability of at least $60,000,000; provided that (1) the aggregate amount of all such Investments made by a Borrower in a Guarantor pursuant to this clause (ii) together with all
intercompany loans made pursuant to clause (e) of Section 10.2.7 shall not exceed $120,000,000; and (2) the foregoing limitation shall be increased from time to time (without duplication of any increase pursuant to clause
(e) of Section 10.2.7) in the amount of distributions by a Subsidiary to a Borrower, and by redemptions and repurchases of Equity Interests issued by a Subsidiary and held by a Borrower; provided further that
(x) the aggregate amount of all such Investments made by a Borrower in any Foreign Subsidiary and City Forest pursuant to this clause (ii) together with all intercompany loans made pursuant to clause (f) of Section 10.2.7
shall not exceed $30,000,000; provided that the foregoing limitation shall be increased from time to time (without duplication of any increase pursuant to clause (f) of Section 10.2.7) by the amount of repayments and prepayments
made to a Borrower by a Foreign Subsidiary or City Forest; and (y) before any Investments have been made in any Foreign Subsidiary pursuant to this clause (ii), Agent shall have been granted a security interest in 65% of the voting stock of
such Foreign Subsidiary; (b) Cash Equivalents that are subject to Agent’s Lien and control, pursuant to documentation in form and substance satisfactory to Agent; (c) loans and advances permitted under Section 10.2.7;
(d) Permitted Acquisitions; (e) Investments consisting of accounts receivable created, acquired or made by any Obligor in the Ordinary Course of Business and payable or dischargeable in accordance with customary trade terms;
(f) Investments consisting of Equity Interests, obligations, securities or other Property received by any Obligor in settlement of accounts receivable from bankrupt obligors; (g) Investments set forth on Schedule P-1; (h) Investments
received as the non-cash portion of the consideration received in connection with a Permitted Asset 
  

 5 

 
Disposition; (i) Investments resulting from pledges and deposits constituting Permitted Liens; (j) Hedging Agreements to the extent permitted under Section 10.2.15;
(k) Investments made in the Ordinary Course of Business in connection with obtaining, maintaining or renewing customer contracts; (l) Investments consisting of the establishment, deposit of funds (other than proceeds of any Revolver Loans)
into, and investment of funds on deposit in, the Potlatch Escrow Account in accordance with the terms of the Retained Obligation Agreement (it being understood that this clause (l) shall not be deemed to be implied consent to any Asset
Disposition or incurrence of Debt otherwise prohibited by the terms and conditions of this Agreement); (m) so long as both before and after giving effect to any such Investment, Modified Availability is greater than $50,000,000, and so long as
no Default or Event of Default shall have occurred and be continuing or would result from the making of such Investment, Investments in joint ventures in which a Borrower or a Guarantor acquires or has an Equity Interest, not to exceed at any time
$5,000,000, provided that such limitation shall be increased from time to time as such Borrower or Guarantor receives distributions or redemptions with respect to such an Equity Interest; (n) the transfer by Clearwater of $50,000,000 to
Retainco prior to the distribution of Retainco by Clearwater to Potlatch, all in accordance with the Spin-Off Documents; and (o) Investments otherwise permitted by Agent in writing.” 

(j) The definition of “Trigger Period” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows: 
 “Trigger Period: the period (a) commencing on the day that an Event of Default occurs, or
Availability is less than, at any time, $50,000,000; and (b) continuing until, during the preceding 60 consecutive days, no Event of Default has existed and Availability has been greater than, at all times, $62,500,000.” 

(k) The definition of “Unused Line Margin” in Section 1.1 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows: 
 “Unused Line Margin: the percentage set forth below, as determined by the Line Usage
for the prior month: 
  

						
	 Level
	  	 Line Usage
	  	 Unused Line
Margin
	 
	I	  	Greater than 50%	  	0.50	% 
			
	II	  	Less than or equal to 50%	  	0.75	% 

 The Unused
Line Margin shall be subject to increase or decrease based upon the Line Usage for the prior month, as determined by Agent. If by the first day of a month, any Borrowing Base Certificate due in the preceding month has not been received, then, at the
option of Agent or Required Lenders, the Unused Line Margin shall be determined as if Level II were applicable, from such day until the first day of the calendar month following actual receipt.” 

(l) Section 1.1 of the Loan Agreement is hereby amended by inserting the following definitions in their proper alphabetical order:

  

 6 

“11 
1/2% Senior Secured Notes Indenture: the notes issued under the
11 1/2% Senior Secured Notes Indenture.”

“11 
1/2% Senior Secured Notes Indenture: that certain Indenture, dated as of
June 3, 2009, by and among Cellu Tissue Holdings, Inc., certain of its Subsidiary Guarantors and The Bank of New York Mellon Trust Company, N.A.” 

“City Forest: Cellu Tissue-CityForest LLC, a Wisconsin limited liability company.” 

“Clearwater Indenture: Indenture dated as of June 11, 2009 between Clearwater and US Bank National Association.”

 “Project Columbia: the acquisition of Cellu Tissue Holdings, Inc. and certain of its Subsidiaries pursuant to that
certain Agreement and Plan of Merger, dated as of September 15, 2010 among Clearwater, Sand Dollar Acquisition Corporation, a Delaware corporation and wholly owned Subsidiary of Clearwater, and Cellu Tissue Holdings, Inc.” 

“Sub Bond Facility: that certain Loan Agreement, dated as of March 1, 1998, between City of Ladysmith, Wisconsin and City
Forest (as successor by merger to CityForest Corporation), that certain Amended and Restated Reimbursement Agreement, dated as of March 21, 2007 (the “Reimbursement Agreement”), between City Forest and Associated Bank (as
amended by the First Amendment to the Amended and Restated Reimbursement Agreement, dated as of December 4, 2009 and as may be amended after the date hereof), that certain Indenture of Trust, dated as of March 1, 1998, from City of
Ladysmith, Wisconsin, as Grantor, to Norwest Bank Wisconsin, N.A., as Trustee, that certain Guaranty, executed and delivered as of March 21, 2007 by Cellu Tissue Holdings, Inc. in favor of Associated Bank, National Association (and any Guaranty
that may need to be issued by Clearwater), and that certain “Bonds Letter of Credit” (as defined in the Reimbursement Agreement), including any replacement thereof issued by Associated Bank after the date hereof.” 

(m) The first sentence of Section 2.1.7(a) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 “Provided there exists no Default or Event of Default, and subject to the terms and conditions of this
Section 2.1.7, on no more than 2 occasions, upon notice to Agent and Lenders, Borrowers may request an increase in the Revolver Commitments to an amount not more than $175,000,000 in the aggregate.” 

(n) Section 8.6.1(b) of the Loan Agreement is hereby amended and restated in its entirety to read as follows: “(b) move
Collateral to: (i) another location in the United States, upon 30 Business Days’ prior written notice to Agent, and (ii) another location in Canada, upon 30 Business Days’ prior written notice, so long as (A) no Default or
Event of Default has occurred and is continuing or would result therefrom, and (B) the aggregate amount of Collateral moved to Canada does not exceed $8,000,000 (or such larger amount as greed to by Agent)”. 

 

 7 

 (o) The second sentence of Section 9.1.15 of the Loan Agreement is hereby amended and
restated in its entirety to read as follows: “No Borrower or Subsidiary is a party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.15 or as permitted in Section 10.2.14.” 

(p) The last sentence of Section 10.1.2 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 “Documents required to be delivered pursuant to Sections 10.1.2(a) or (b) shall be deemed to have been
delivered on the date on which such documents have been posted with the Securities Exchange Commission, unless Agent notifies Borrower Agent that no service is available to Agent and the Lenders under which the service provider will provide Agent
and the Lenders copies of such documents promptly following the posting with the Securities Exchange Commission.” 
 (q)
Section 10.1.9 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
 “10.1.9
Future Subsidiaries. Promptly notify Agent upon any Person becoming a Subsidiary and, if such Person is not a Foreign Subsidiary and Agent so requests, cause it to guaranty the Obligations in a manner satisfactory to Agent, and to execute and
deliver such documents, instruments and agreements and to take such other actions as Agent shall require to evidence and perfect a Lien in favor of Agent (for the benefit of Secured Parties) on all assets of such Person which are of the same type as
the Collateral, including delivery of such legal opinions, in form and substance satisfactory to Agent, as it shall deem appropriate; provided that, for so long as the terms and conditions of the Restrictive Agreement described in clause
(e) of Section 10.2.14 prohibit City Forest from guarantying the Obligations, this Section 10.1.9 shall not apply to City Forest.” 

(r) Section 10.2.1 of the Loan Agreement is hereby amended by: (1) deleting the “and” at the end of clause
(o) of such Section, (2) inserting “or the foregoing” in clause (p) after “any of the preceding”, (3) deleting the “.” at the end of clause (p) of such Section and replacing it with a
“;” in lieu thereof, and (4) adding the following clauses to the end of such Section: 
 “(q)
Debt to finance the construction of Clearwater’s facility located in Shelby, North Carolina so long as: (i) it is in an aggregate principal amount that does not exceed $250,000,000, (ii) it has a final maturity date no sooner than
ninety (90) days following the Revolver Termination Date, (iii) if it is secured, it is secured solely by such facility and Agent shall have received a mortgagee waiver in form and substance reasonably satisfactory to Agent, (iv) it
is upon fair and reasonable terms, and (v) both before and after giving effect thereto, no Trigger Period is in effect; 

(r) Debt consisting of senior notes to be issued by Clearwater, on terms and conditions materially
similar to those in the Clearwater Indenture, in an aggregate amount not to exceed $500,000,000 the principal purpose of which is to finance Project Columbia, to satisfy and discharge the tender offer and redemption of the
11 1/2% Senior Secured Notes and to repay any Debt
incurred by Clearwater pursuant to clause (v) below; 
  

 8 

 (s) Debt assumed as a result of the
11 1/2% Senior Secured Notes remaining outstanding
after the closing of Project Columbia pending their discharge under the
11 1/2% Senior Secured Notes Indenture in an amount
not to exceed $234,500,000; 
 (t) Debt under the Sub Bond Facility, in an aggregate amount not to
exceed $16,000,000; 
 (u) Guarantee given by Clearwater for the benefit of the Associated Bank, National
Association, guarantying the Debt permitted under clause (t) above pursuant to the Sub Bond Facility; 

(v) Debt in an aggregate amount not to exceed $350,000,000 under a bridge loan facility the principal
purpose of which is to finance Project Columbia, to satisfy and discharge the tender offer and redemption of the
11 1/2% Senior Secured Notes, on terms and
conditions substantially similar to those set forth in the commitment letter from Banc of America Securities LLC and Banc of America Bridge LLC to Clearwater dated September 15, 2010, in the event the senior note offering described in clause
(r) above is not closed concurrently with or prior to the closing of Project Columbia; provided that at such time as the Debt permitted pursuant to clause (r) above is incurred, Debt under such bridge loan facility shall no longer
be permitted; and 
 (w) Obligations of Cellu Tissue Holdings, Inc. and certain of its Subsidiaries to
reimburse the issuer or issuers of letters of credit outstanding at the time of the consummation of Project Columbia.” 

(s) Section 10.2.2 of the Loan Agreement is hereby amended by: (1) deleting the “and” at the end of clause
(q) of such Section, (2) inserting “or the following clauses (s) and (t)” in clause (r) after “the foregoing clauses (a) through (q)”, (3) deleting the “.” at the end of clause (r) of
such Section and replacing it with a “;” in lieu thereof, and (4) adding the following clauses to the end of such Section: 

“(s) Liens securing Debt permitted pursuant to clause (q) of Section 10.2.1 but only so long as
(i) such Liens encumber only the fixed assets located at Clearwater’s facility located in Shelby, North Carolina and (ii) Clearwater has delivered to Agent mortgagee waiver, in form and substance satisfactory to Agent, from the holder
of such secured Debt; 
 (t) Liens solely encumbering the assets of City Forest securing the Obligations under
the Sub Bond Facility; and 
 (u) Liens on cash and deposit accounts securing the Debt permitted under
Section 10.2.1.(w).” 
 (t) Section 10.2.3 of the Loan Agreement is hereby amended by replacing
“$40,000,000” as it appears in clauses (iv) and (v) thereof with “$150,000,000”. 
 (u)
Section 10.2.7 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
 “10.2.7
Loans. Make any loans or other advances of money to any Person, except (a) advances to an officer or employee for salary, travel, relocation and other expenses, 

 

 9 

 
commissions and similar items in the Ordinary Course of Business; (b) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business; (c) deposits with
financial institutions permitted hereunder; (d) as long as no Default or Event of Default exists, intercompany loans by a Borrower to another Borrower; (e) so long as (i) no Default or Event of Default exists and (ii) after
giving effect to any such intercompany loans from a Borrower to a Guarantor, Borrower has Excess Availability of at least $60,000,000, intercompany loans by a Borrower to a Guarantor; provided that the aggregate amount of all such
intercompany loans pursuant to this clause (e) and all Restrictive Investments made by a Borrower in any Guarantor pursuant to clause (a)(ii) of the definition of Restricted Investments shall not exceed $120,000,000; provided that the foregoing
limitation shall be increased (without duplication of any increase pursuant to clause (a)(ii) of the definition of Restricted Investments) from time to time by the amount of repayments and prepayments made to a Borrower by a Guarantor and
(f) so long as (i) no Default or Event of Default exists, (ii) after giving effect to any such intercompany loans from a Borrower to any Foreign Subsidiary and City Forest, Borrower has Excess Availability of at least $60,000,000, and
(iii) Agent has been granted a security interest in 65% of the voting stock of any such Foreign Subsidiary, intercompany loans by a Borrower to any of Borrower’s Foreign Subsidiaries or City Forest; provided that the aggregate
amount of all such intercompany loans pursuant to this clause (f) and all Restrictive Investments made by a Borrower in any Foreign Subsidiaries or City Forest pursuant to clause (a)(ii) of the definition of Restricted Investments shall not
exceed $30,000,000; provided that the foregoing limitation shall be increased from time to time (without duplication of any increase pursuant to clause (a)(ii) of the definition of Restricted Investments) by the amount of repayments and prepayments
made to a Borrower by a Foreign Subsidiary or City Forest.” 
 (v) Section 10.2.8 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows: 
 “ 10.2.8 Restrictions on
Payment of Certain Debt. Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to (a) any Subordinated Debt, except regularly scheduled payments of principal,
interest and fees, but only to the extent permitted under any subordination agreement relating to such Debt (and a Senior Officer of Borrower Agent shall certify to Agent, not less than five Business Days prior to the date of payment, that all
conditions under such agreement have been satisfied); (b) any Borrowed Money (other than the Obligations, the Potlatch Indebtedness, Debt permitted under Section 10.2.1(v), and Debt under the
11 1/2% Senior Secured Notes) prior to its due date
under the agreements evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of Agent) unless (i) permitted under Section 10.2.1(n) or (ii) such repayment is made with the proceeds of an
issuance of Equity Interests by Clearwater not otherwise prohibited under the terms of this Agreement; (c) the Potlatch Indebtedness unless such repayment is made with the proceeds of (i) Debt permitted under Section 10.2.1(g);
(ii) an Asset Disposition permitted under clause (g) of the definition of Permitted Asset Disposition; or (iii) an issuance of Equity Interests by Clearwater not otherwise prohibited under the terms of this Agreement;
(d) payments (other than those set forth in clause (a) above) on intercompany loans, except payments by an Obligor to a Borrower; or (e) Debt permitted under Section 10.2.1(v) unless such repayment is made with the
proceeds of: (i) Debt incurred to refinance such Debt; or (ii) an issuance of Equity Interests by Clearwater not otherwise prohibited under the terms of this Agreement.” 

 

 10 

 (w) Section 10.2.9(a)(iii)(D) of the Loan Agreement is hereby amended and restated in
its entirety to read as follows: “(D) Borrower Agent provides Agent with notice: (1) no less than ten (10) days prior to such liquidation or dissolution if a Borrower is the subject of such liquidation or dissolution, and (2) no
more than thirty (30) days after such liquidation or dissolution if any Person other than a Borrower is the subject of such liquidation or dissolution;” 

(x) Section 10.2.9(b) of the Loan Agreement is hereby amended by inserting the following before the period at the end thereof:
“; provided that nothing in this clause (b) shall prohibit the reorganization or conversion of any Obligor (other than Clearwater) into a corporation, limited liability company or other permissible form or organization for a business upon
no less than five (5) days prior written notice to Agent of such reorganization or conversion.” 
 (y)
Section 10.2.14 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 

“10.2.14 Restrictive Agreements. Become a party to any Restrictive Agreement, except a
Restrictive Agreement (a) in effect on the Closing Date; (b) relating to secured Debt permitted hereunder, as long as the restrictions apply only to collateral for such Debt; (c) constituting customary restrictions on assignment in
leases and other contracts; (d) imposing any restrictions on any Property pursuant to an agreement that has been entered into in connection with a Permitted Disposition of such Property; (e) under the Sub Bond Facility; (f) under the
11 1/2% Senior Notes Indenture; (g) in
connection with the Debt described in Section 10.2.1(g); (h) in connection with the Debt described in Section 10.2.1(q); in connection with the Debt described in Section 10.2.1(v); or (h) in connection
with the Debt described in Section 10.2.1(r).” 
 (z) Effective upon the consummation of Project
Columbia, Schedule 9.1.20 to the Loan Agreement is hereby amended and restated in its entirety with Schedule 9.1.20 attached hereto or as further amended with the consent of the Agent. 

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) Consent Fee. Borrower shall have paid to Wells Fargo Capital Finance, LLC a consent fee in the amount
of $250,000, which fee is fully earned, non-refundable, and due and payable on the date hereof. 
 (c) Representations and
Warranties. The representations and warranties set forth herein must be true and correct. 
 (d) No Default. No event
has occurred and is continuing that constitutes an Event of Default. 
 (e) 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: 

 

 11 

 (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. 
 (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 

 

 12 

 
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. 
 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] 
  

 13 

 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 K. Massman
	Title:	 	Vice President and Chief Financial Officer

  

 14 

			
	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 Gulmino

	Name:	 	Tim Gulmino
	Title:	 	Vice President

  

 15

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