<SUBMISSION>
<ACCESSION-NUMBER>0001193125-10-288504
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>10
<PERIOD>20101227
<ITEMS>1.01
<ITEMS>1.02
<ITEMS>2.03
<ITEMS>3.01
<ITEMS>3.03
<ITEMS>5.01
<ITEMS>5.02
<ITEMS>5.03
<ITEMS>9.01
<FILING-DATE>20101228
<DATE-OF-FILING-DATE-CHANGE>20101228
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>Cellu Tissue Holdings, Inc.
<CIK>0001295976
<ASSIGNED-SIC>2621
<IRS-NUMBER>061346495
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0228
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-34606
<FILM-NUMBER>101275100
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>3442 FRANCIS ROAD
<STREET2>SUITE 220
<CITY>ALPHARETTA
<STATE>GA
<ZIP>30004
<PHONE>(678)393-2651
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>3442 FRANCIS ROAD
<STREET2>SUITE 220
<CITY>ALPHARETTA
<STATE>GA
<ZIP>30004
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
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 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Washington, D.C. 20549 </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>FORM 8-K
</B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Pursuant to Section&nbsp;13 or 15(d) of the </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Securities Exchange Act of
1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Date of Report (Date of earliest event reported): December&nbsp;27, 2010 </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>CELLU TISSUE HOLDINGS, INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>001-34606</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>06-1346495</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or other jurisdiction</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>of incorporation)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Commission</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>File Number)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(IRS Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1855 Lockeway Drive
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Suite 501 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Alpharetta, Georgia 30004 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Address of principal executive offices) (Zip
Code) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Registrant&#146;s telephone number, including area code: (678)&nbsp;393-2651 </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:8px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
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<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;1.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Entry into a Material Definitive Agreement. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;27, 2010, Cellu Tissue Holdings, Inc., a Delaware corporation (&#147;<U>Cellu Tissue</U>&#148;), was acquired by Clearwater Paper Corporation, a Delaware corporation (&#147;<U>Clearwater
Paper</U>&#148;), pursuant to that certain Agreement and Plan of Merger, dated as of September&nbsp;15, 2010 (the &#147;<U>Merger Agreement</U>&#148;), by and among Clearwater Paper, Cellu Tissue, and Sand Dollar Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of Clearwater Paper (&#147;<U>Merger Sub</U>&#148;). Clearwater Paper&#146;s acquisition of Cellu Tissue was effected by merging Merger Sub with and into Cellu Tissue (the &#147;<U>Merger</U>&#148;). As a
result of the Merger, Merger Sub ceased to exist and Cellu Tissue, the surviving entity, is a wholly-owned subsidiary of Clearwater Paper. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In
connection with the Merger, each issued and outstanding share of Cellu Tissue common stock immediately prior to the effective time of the Merger, other than shares of Cellu Tissue common stock (a)&nbsp;owned by Clearwater Paper or Merger Sub,
(b)&nbsp;held by Cellu Tissue as treasury stock or otherwise or by any wholly-owned subsidiary of Cellu Tissue and (c)&nbsp;held by dissenting stockholders who exercised and perfected their appraisal rights under Delaware law, were cancelled and
automatically converted into the right to receive $12.00 per share in cash, without interest and less any applicable withholding taxes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
foregoing description of the Merger and the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to Cellu Tissue&#146;s Current Report on Form 8-K filed with the Securities and Exchange
Commission (the &#147;<U>SEC</U>&#148;) on September&nbsp;16, 2010 and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Supplemental Indentures under
Clearwater Paper&#146;s 2009 Notes and 2010 Notes </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">On June&nbsp;11, 2009, Clearwater Paper entered into an
indenture (the &#147;<U>2009 Notes Indenture</U>&#148;) with U.S. Bank National Association, as Trustee (the &#147;<U>Trustee</U>&#148;), relating to Clearwater Paper&#146;s $150 million aggregate principal amount of 10<FONT SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;5</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2016 (the &#147;<U>2009 Notes</U>&#148;).
</FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">On October&nbsp;22, 2010, Clearwater Paper entered into an indenture (the &#147;<U>2010 Notes Indenture</U>&#148;)
with the Trustee relating to Clearwater Paper&#146;s $375 million aggregate principal amount of 7<FONT SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;1</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2018 (the &#147;<U>2010 Notes</U>&#148;). </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;27, 2010,
Cellu Tissue, certain subsidiaries of Cellu Tissue, Clearwater Paper and the Trustee executed a supplemental indenture to the 2009 Notes Indenture (the &#147;<U>Supplemental 2009 Notes Indenture</U>&#148;), and a supplemental indenture to the 2010
Notes Indenture (the &#147;<U>Supplemental 2010 Notes Indenture</U>&#148;), providing for a guarantee of the payment of principal, premium and interest on the 2009 Notes and the 2010 Notes, respectively. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The 2009 Notes Indenture and 2010 Notes Indenture contain covenants that, among other things, limit Clearwater Paper&#146;s ability and the ability of
Cellu Tissue and its guarantor subsidiaries to (i)&nbsp;borrow money, (ii)&nbsp;pay dividends, redeem or repurchase its capital stock, (iii)&nbsp;make investments, (iv)&nbsp;sell assets, (v)&nbsp;create restrictions on the payment of dividends or
other amounts to Clearwater Paper from its subsidiary guarantors, (vi)&nbsp;enter into transactions with affiliates, (vii)&nbsp;enter into sale and lease back transactions, (viii)&nbsp;create liens and (ix)&nbsp;consolidate, merge or sell all or
substantially all of its assets. These covenants are subject to a number of exceptions, limitations and qualifications set forth in the 2009 Notes Indenture and 2010 Notes Indenture. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing descriptions of the 2009 Notes Indenture and the 2010 Notes Indenture are qualified in their
entirety by reference to the 2009 Notes Indenture, which is attached as Exhibit 4.2 to Clearwater Paper&#146;s Current Report on Form 8-K filed with the SEC on June&nbsp;12, 2009 and incorporated herein by reference, and by reference to the 2010
Notes Indenture, which is attached as Exhibit 4.1 to Clearwater Paper&#146;s Current Report on Form 8-K filed with the SEC on October&nbsp;27, 2010 and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The foregoing descriptions of the Supplemental 2009 Notes Indenture and the Supplemental 2010 Notes Indenture are qualified in their entirety by reference to the Supplemental 2009 Notes Indenture, a copy
of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference, and by reference to the Supplemental 2010 Notes Indenture, a copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K
and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Guaranty under the Clearwater Paper Credit Agreement </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to that certain Loan and Security Agreement, dated as of November&nbsp;26, 2008, by and among Bank of America, N.A., as administrative agent for
the lenders, the lenders party thereto and Clearwater Paper (the &#147;<U>Credit Agreement</U>&#148;), the lenders made available to Clearwater Paper a revolving credit facility in an initial aggregate principal amount not to exceed $125 million.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount available to Clearwater Paper under the Credit Agreement is based on the lesser of (i)&nbsp;the sum of 85% of eligible accounts
receivable and 65% of eligible inventory minus deductions for liens on the collateral and reserves that may be established from time to time by the agent for inventory, dilution, rent, bank products, royalties on intellectual property licenses,
pensions, repurchases and other matters, or (ii)&nbsp;$125 million. The Credit Agreement is a revolving facility with a term ending November&nbsp;26, 2012 and is secured by first priority liens on certain future and existing assets of the borrowers
and the subsidiary guarantors, including accounts receivable, inventory, and deposit accounts. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Concurrent with the execution of the Merger
Agreement on September&nbsp;15, 2010, Clearwater Paper amended the Credit Agreement to, among other things, (i)&nbsp;permit the Merger and the other transactions contemplated by the Merger Agreement and, in connection therewith, to issue up to $500
million principal amount of debt securities or, alternatively, to draw the committed amounts under a commitment letter, (ii)&nbsp;permit the construction of the previously announced tissue manufacturing facility in Shelby, North Carolina, including
an increase in permitted capital expenditures of up to an aggregate of $150 million per year in 2011 and 2012 and incurring additional debt to finance or refinance the construction thereof, up to $250 million, and (iii)&nbsp;change the interest rate
margins applicable to base rate loans and Libor loans in circumstances based on Clearwater Paper&#146;s fixed charge coverage ratio from time to time, and to reduce the fees paid by Clearwater Paper on undrawn amounts. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Credit Agreement contains covenants that, among other things, limit Clearwater Paper&#146;s and its subsidiary guarantors&#146; ability to create
liens, merge or consolidate, incur indebtedness and guarantees, declare and pay dividends, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, or enter into certain transactions with affiliates. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A minimum fixed charge coverage ratio is the only financial covenant requirement under the Credit Agreement and must be complied with only when an event
of default exits or when availability falls below $50 million, at which time the minimum fixed charge coverage ratio must be at least 1.0-to-1.0. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Events of default under the Credit Agreement include, but are not limited to, payment defaults, covenant
defaults, breaches of representations and warranties, cross defaults to certain other material agreements and indebtedness, bankruptcy and other insolvency events, material adverse judgments, actual or asserted invalidity of security interests or
loan documentation, and certain change of control events. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue and certain subsidiaries of Cellu Tissue have guaranteed all of the
obligations of Clearwater Paper under the Credit Agreement, pursuant to a Guarantee and Security Agreement, dated December&nbsp;27, 2010 (the &#147;<U>Cellu Tissue Guaranty</U>&#148;). In addition, the obligations of Clearwater Paper under the
Credit Agreement are secured by first priority liens on certain of the assets of Cellu Tissue and the other subsidiaries of Cellu Tissue party to the Cellu Tissue Guaranty. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The foregoing description of the Credit Agreement is qualified in its entirety by reference to the Credit Agreement, which is attached as Exhibit 10.1 to Clearwater Paper&#146;s Current Report on Form 8-K
filed with the SEC on November&nbsp;26, 2008 and incorporated herein by reference, by reference to the First Amendment to the Loan and Security Agreement, which is attached as Exhibit 10.3 to Clearwater Paper&#146;s Current Report on Form 8-K filed
with the SEC on September&nbsp;21, 2010 and incorporated herein by reference, and by reference to the Second Amendment to the Loan and Security Agreement, which is attached as Exhibit 10.1 to Clearwater Paper&#146;s Current Report on Form 8-K filed
with the SEC on October&nbsp;27, 2010 and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing description of the Cellu Tissue Guaranty is
qualified in its entirety by reference to the Cellu Tissue Guaranty, a copy of which is attached as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Guaranty under the CityForest Second Amended and Restated Reimbursement Agreement </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue-CityForest LLC (&#147;<U>CityForest</U>&#148;), a wholly-owned subsidiary of Cellu Tissue, is party to a loan agreement, dated March&nbsp;1,
1998, with the City of Ladysmith, Wisconsin, pursuant to which the City of Ladysmith loaned the proceeds of its Variable Rate Demand Solid Waste Disposal Facility Revenue Bonds, Series 1998, (the &#147;<U>IRBs</U>&#148;) to CityForest to finance the
construction by CityForest of a solid waste disposal facility. Approximately $16 million in aggregate principal face amount of the IRBs is outstanding as of the date hereof. The IRBs have scheduled semi-annual payments of principal, with the balance
payable at maturity on March&nbsp;1, 2028. The IRBs are guaranteed by Cellu Tissue and contain various customary covenants and events of default. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">CityForest is required, under the terms of the Indenture of Trust governing the IRBs (the &#147;<U>CityForest Indenture</U>&#148;), to provide a letter of credit in favor of the trustee (the
&#147;<U>Bonds Trustee</U>&#148;) under the CityForest Indenture. CityForest previously entered into the Amended and Restated Reimbursement Agreement, dated as of March&nbsp;21, 2007 (the &#147;<U>Original Reimbursement Agreement</U>&#148;), by and
between CityForest and Associated Bank, National Association (&#147;<U>Associated Bank</U>&#148;) pursuant to which Associated Bank provided a letter of credit to the Bonds Trustee (the &#147;<U>Letter of Credit&#148;)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In connection with the Merger, CityForest entered into a Second Amended and Restated Reimbursement Agreement, dated as of December&nbsp;27, 2010, with
Associated Bank (the &#147;<U>Second </U> </FONT></P>

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<U>Amended and Restated Reimbursement Agreement</U>&#148;), amending and restating the Original Reimbursement Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Bonds Trustee is required to draw upon the Letter of Credit to pay principal and interest due on the IRBs, and to provide liquidity to purchase IRBs tendered to CityForest by bondholders and not
remarketed; and CityForest is obligated under the Second Amended and Restated Reimbursement Agreement to reimburse Associated Bank for any such draws. The expiration date of the Letter of Credit is February&nbsp;15, 2012. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under the terms of the Second Amended and Restated Reimbursement Agreement, CityForest has agreed, on or before September&nbsp;30, 2011, to cause the
Letter of Credit to be replaced with a substitute letter of credit from a third party bank. CityForest&#146;s failure to cause the Letter of Credit to be replaced by September&nbsp;30, 2011 will constitute an event of default under the Second
Amended and Restated Reimbursement Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Second Amended and Restated Reimbursement Agreement contains customary events of default,
including payment defaults; breaches of representations and warranties; covenant defaults; cross-defaults to certain other debt; certain events of bankruptcy and insolvency; judgment defaults; certain defaults related to the Employee Retirement
Income Security Act of 1974, as amended; and a change of control of Clearwater Paper. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Second Amended and Restated Reimbursement Agreement
also contains various customary representations and warranties and negative covenants. The negative covenants include limitations on indebtedness; liens; acquisitions, mergers and consolidations; investments; guarantees; asset sales; sale and
leaseback transactions; dividends and distributions; transactions with affiliates; capital expenditures; and changes to the status of the IRBs. CityForest is also required to comply on a quarterly basis with a maximum leverage covenant and a minimum
fixed charge coverage covenant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue has guaranteed all of the obligations of CityForest under the Second Amended and Restated
Reimbursement Agreement, pursuant to a Guaranty, dated December&nbsp;27, 2010 (the &#147;<U>Cellu Tissue Bank Guaranty</U>&#148;), executed in favor of Associated Bank. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The foregoing description of the Second Amended and Restated Reimbursement Agreement is qualified in its entirety by reference to the Second Amended and Restated Reimbursement Agreement, a copy of which
attached as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing description of the Cellu
Tissue Bank Guaranty is qualified in its entirety by reference to the Cellu Tissue Bank Guaranty, a copy of which is attached as Exhibit 10.5 to this Current Report on Form 8-K and incorporated herein by reference. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;1.02</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Termination of a Material Definitive Agreement. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;27, 2010, in connection with the consummation of the Merger, (i)&nbsp;that certain Shareholders&#146; Agreement of Cellu Tissue Holdings, Inc. dated January&nbsp;27, 2010, by and between
Cellu Tissue Holdings, Inc. and Weston Presidio V, L.P., was terminated by the parties thereto; (ii)&nbsp;Cellu Tissue repaid in full all outstanding advances under, and terminated, the Credit Agreement, dated as of June&nbsp;12, 2006, among Cellu
Paper Holdings, Inc., Cellu Tissue, as U.S. Borrower, Interlake Acquisition Corporation Limited, a subsidiary of Cellu Tissue, as Canadian Borrower, the loan guarantors party thereto, JPMorgan Chase Bank, N.A., as U.S. Administrative
</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Agent, JPMorgan Chase Bank, N.A. Toronto Branch, as Canadian Administrative Agent, and the lenders party thereto; and, (iii)&nbsp;Cellu Tissue satisfied and discharged its obligations under the
Indenture, dated as of June&nbsp;3, 2009, among Cellu Tissue, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (the &#147;<U>Cellu Tissue Indenture</U>&#148;), governing Cellu Tissue&#146;s 11<FONT
SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;1</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">2</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Secured Notes Due 2014 (the &#147;<U>Cellu
Tissue Notes</U>&#148;). </FONT></FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;2.03</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Creation of a Direct Financial Obligation </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The disclosures under Item&nbsp;1.01 of this Current Report on Form 8-K under the captions &#147;Supplemental Indentures under Clearwater Paper&#146;s
2009 Notes and 2010 Notes,&#148; &#147;Guaranty Under the Clearwater Paper Credit Agreement,&#148; and &#147;Guaranty Under the CityForest Second Amended and Restated Reimbursement Agreement,&#148; are incorporated by reference. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;3.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In connection with the consummation of the Merger, the New York Stock Exchange (the &#147;<U>Exchange</U>&#148;) was notified that each outstanding share
of Cellu Tissue common stock (except as described in Item&nbsp;1.01 above) was converted pursuant to the Merger into a right to receive $12.00 per share in cash, without interest and less any applicable withholding taxes, subject to the terms and
conditions of the Merger Agreement. On December&nbsp;27, 2010, Cellu Tissue requested that the Exchange file a notification of removal from listing on Form&nbsp;25 with the SEC with respect to the delisting of the shares of Cellu Tissue common
stock. Trading in shares of Cellu Tissue common stock was suspended as of the close of trading on December&nbsp;27, 2010. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition, Cellu
Tissue intends to file with the SEC a certification on Form&nbsp;15 to suspend its duty under Section&nbsp;15(d) of the Securities Exchange Act of 1934 to file reports required by Section&nbsp;13(a) of such Act. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;3.03</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Material Modification to Rights of Security Holders. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Common Stock </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Effective as of the effective time of the Merger, each share of Cellu
Tissue common stock (except as described in Item&nbsp;1.01 above) ceased to be outstanding and each holder ceased having any rights with respect thereto, except the right to receive the per share merger consideration. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Cellu Tissue Notes </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
disclosures under Item&nbsp;1.02 of this Current Report on Form 8-K regarding the satisfaction and discharge of the Cellu Tissue Indenture governing the Cellu Tissue Notes are incorporated by reference. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Changes in Control of Registrant. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
disclosure set forth under Item&nbsp;1.01 of this Current Report on Form 8-K regarding the Merger is incorporated by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">On
December&nbsp;27, 2010, pursuant to the terms of the Merger Agreement, Clearwater Paper completed its acquisition of Cellu Tissue via the Merger, and Cellu Tissue became a wholly-</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
owned subsidiary of Clearwater Paper. The aggregate purchase price paid for all equity securities of Cellu Tissue was approximately $247 million. The purchase price was funded from cash of
Clearwater Paper and proceeds from Clearwater Paper&#146;s issuance of its 2010 Notes. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The disclosures under
Item&nbsp;1.01 of this Current Report on Form 8-K regarding the Merger are incorporated by reference. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Departure of Directors
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, Merger Sub&#146;s directors became the directors
of Cellu Tissue. The new directors of Cellu Tissue are Gordon L. Jones, Linda K. Massman and Michael S. Gadd. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to resignation letters
delivered on December&nbsp;27, 2010, all of Cellu Tissue&#146;s executive officers resigned immediately prior to the effective time of the Merger. The new executive officers of Cellu Tissue that replaced the previous executive officers are Gordon L.
Jones, President and Chief Executive Officer, Linda K. Massman, Vice President, Finance and Chief Financial Officer, and Michael S. Gadd, Vice President, General Counsel and Corporate Secretary. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Gordon L. Jones, age 60, has served as President and Chief Executive Officer, and a director of the Clearwater Paper since December 2008. From July 2008
to December 2008, Mr.&nbsp;Jones served as a Vice President of Potlatch Corporation, pending completion of the spin-off of Clearwater Paper Corporation. Mr.&nbsp;Jones also serves as the President and Managing Member of Jones Investment Group LLC,
an investment company, since 2001. Prior to that, Mr.&nbsp;Jones served from May 1999 to November 2000 as President, Chief Executive Officer, and Director of Blue Ridge Paper Products, Inc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman, age 44, has served as Vice President, Finance and Chief Financial Officer of Clearwater Paper since December 2008. From September 2008 to December 2008, Ms.&nbsp;Massman served as a Vice
President of Potlatch Corporation, pending completion of the spin-off of Clearwater Paper Corporation. From May 2002 to August 2008, Ms.&nbsp;Massman served as the Group Vice President, Finance and Corporate Planning for SUPERVALU Inc., a grocery
retail company. Prior to that, Ms.&nbsp;Massman served from 1999 to 2001 as Vice President, Business Planning and Operations for Viquity Corporation, an enterprise software company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In connection with Russell Taylor&#146;s resignation from his position as Chief Executive Officer and President of Cellu Tissue, on December&nbsp;27, 2010 Clearwater Paper provided Mr.&nbsp;Taylor with a
separation agreement (the &#147;<U>Taylor Separation Agreement</U>&#148;) under which Clearwater Paper agreed to provide Mr.&nbsp;Taylor with the severance benefits he is entitled to upon his termination of his employment with Cellu Tissue for
&#147;Good Reason,&#148; as such term is defined in his Employment Agreement with Cellu Tissue, dated May&nbsp;8, 2006, and subsequently amended on January&nbsp;18, 2010,&nbsp;September&nbsp;15, 2010 and November&nbsp;18, 2010 (the &#147;<U>Taylor
Severance Benefits</U>&#148;), subject to Mr.&nbsp;Taylor providing a general release of all claims against Clearwater Paper and its past and present subsidiaries. Mr.&nbsp;Taylor&#146;s receipt of the Taylor Severance Benefits is conditioned on
(i)&nbsp;Mr.&nbsp;Taylor signing and returning the Taylor Separation Agreement by February&nbsp;17, 2011 and (ii)&nbsp;not revoking the Taylor Separation Agreement during the revocation period provided for in the Taylor Separation Agreement.
</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In connection with David Morris&#146; resignation from his position as Chief Financial Officer of Cellu
Tissue, on December&nbsp;27, 2010 Clearwater Paper provided Mr.&nbsp;Morris with a separation agreement (the &#147;<U>Morris Separation Agreement</U>&#148;) under which Clearwater Paper agreed to provide Mr.&nbsp;Morris with the severance benefits
he is entitled to upon his termination of his employment with Cellu Tissue for &#147;Good Reason,&#148; as such term is defined in his Employment Agreement with Cellu Tissue, dated August&nbsp;6, 2007, and subsequently amended on January&nbsp;18,
2010,&nbsp;September&nbsp;15, 2010 and November&nbsp;18, 2010 (the &#147;<U>Morris Severance Benefits</U>&#148;), subject to Mr.&nbsp;Morris providing a general release of all claims against Clearwater Paper and its past and present subsidiaries.
Mr.&nbsp;Morris&#146;s receipt of the Morris Severance Benefits is conditioned on Mr.&nbsp;Morris (i)&nbsp;signing and returning the Morris Separation Agreement by February&nbsp;17, 2011 and (ii)&nbsp;not revoking the Morris Separation Agreement
during the revocation period provided for in the Morris Separation Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing descriptions of the Taylor Separation Agreement
and Morris Separation Agreement are qualified in their entirety by reference to the Taylor Separation Agreement and Morris Separation Agreement, copies of which are attached as Exhibit 10.6 and Exhibit 10.7, respectively, to this Current Report on
Form 8-K and which are incorporated herein by reference. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.03</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;27, 2010 and upon the effective time of the Merger, Cellu Tissue amended and restated its certificate of incorporation (the &#147;<U>Restated Charter</U>&#148;). The Restated Charter
provides for (i)&nbsp;one class of stock designated &#147;Common Stock&#148; with a par value of $0.001 per share and (ii)&nbsp;authorizes for issuance 1,000 shares of Common Stock. The foregoing description of the Restated Charter is qualified in
its entirety by reference to the Restated Charter, a copy of which is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;27, 2010 and upon the effective time of the Merger, Cellu Tissue amended and restated its bylaws, a copy of which is attached as Exhibit 3.2 to this Current Report on Form 8-K and
incorporated herein by reference. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;9.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Financial Statements and Exhibits. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d)
<B>Exhibits. </B> </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:25pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit<BR>No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amended and Restated Certificate of Incorporation.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">3.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amended and Restated Bylaws.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Supplemental Indenture to Clearwater Paper Corporation&#146;s
10<FONT SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;5</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2016 dated as of December
27, 2010, among Cellu Tissue Holdings, Inc., the subsidiary guarantors, Clearwater Paper Corporation and U.S. Bank National Association, as Trustee.</FONT></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Supplemental Indenture to Clearwater Paper Corporation&#146;s
7<FONT SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;1</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2018 dated as of December
27, 2010, among Cellu Tissue Holdings, Inc., the subsidiary guarantors, Clearwater Paper Corporation and U.S. Bank National Association, as Trustee.</FONT></FONT></TD></TR></TABLE>

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<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD WIDTH="94%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Guaranty and Security Agreement dated as of December&nbsp;27, 2010, by Cellu Tissue Holdings, Inc. and the subsidiary guarantors in favor of Bank of America, N.A., as agent on
behalf of each secured party.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.4</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Second Amended and Restated Reimbursement Agreement dated as of December 27, 2010, by and between Cellu Tissue-CityForest LLC and Associated Bank, National
Association.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.5</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Guaranty dated December 27, 2010, by Cellu Tissue Holdings, Inc. in favor of Associated Bank, National Association.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.6</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Taylor Separation Agreement dated as of December 27, 2010.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.7</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Morris Separation Agreement dated as of December 27, 2010.</FONT></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date: December&nbsp;28, 2010 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE HOLDINGS, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Michael S. Gadd</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;Michael S. Gadd, Corporate Secretary</FONT></TD></TR></TABLE></DIV>

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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EXHIBIT INDEX </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:25pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit<BR>No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amended and Restated Certificate of Incorporation.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amended and Restated Bylaws.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Supplemental Indenture to Clearwater Paper Corporation&#146;s 10<FONT SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;5</SUP></FONT><FONT
SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2016 dated as of December 27, 2010, among Cellu Tissue Holdings, Inc., the subsidiary guarantors, Clearwater Paper Corporation and U.S.
Bank National Association, as Trustee.</FONT></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Supplemental Indenture to Clearwater Paper Corporation&#146;s 7<FONT SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;1</SUP></FONT><FONT
SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2018 dated as of December 27, 2010, among Cellu Tissue Holdings, Inc., the subsidiary guarantors, Clearwater Paper Corporation and U.S.
Bank National Association, as Trustee.</FONT></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Guaranty and Security Agreement dated as of December 27, 2010, by Cellu Tissue Holdings, Inc. and the subsidiary guarantors in favor of Bank of America, N.A., as agent on behalf
of each secured party.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.4</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Second Amended and Restated Reimbursement Agreement dated as of December 27, 2010, by and between Cellu Tissue-CityForest LLC and Associated Bank, National
Association.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.5</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Guaranty dated December 27, 2010, by Cellu Tissue Holdings, Inc. in favor of Associated Bank, National Association.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.6</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Taylor Separation Agreement dated as of December 27, 2010.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.7</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Morris Separation Agreement dated as of December 27, 2010.</FONT></TD></TR></TABLE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>dex31.htm
<DESCRIPTION>AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
<TEXT>
<HTML><HEAD>
<TITLE>Amended and Restated Certificate of Incorporation</TITLE>
</HEAD>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 3.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>AMENDED AND RESTATED CERTIFICATE OF INCORPORATION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>OF </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>CELLU TISSUE HOLDINGS, INC. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>FIRST:</B> The name of the corporation is: <B>Cellu Tissue Holdings, Inc.</B> (the &#147;<B>Corporation</B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>SECOND:</B> The address of the registered office of the corporation in the State of Delaware is c/o The Corporation Trust Company, 1209 Orange Street, in the City of Wilmington, County of New Castle
19801. The name of its registered agent at such address is The Corporation Trust Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THIRD:</B> The nature of the
business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the &#147;<B>DGCL</B>&#148;) and to
possess and exercise all of the powers and privileges granted by the DGCL and any other law of the State of Delaware. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>FOURTH:</B> The Corporation is authorized to issue one class of stock, to be designated &#147;<B>Common Stock</B>,&#148; with a par
value of $0.001 per share. The total number of shares of Common Stock that the Corporation shall have authority to issue is 1,000. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>FIFTH:</B> The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon direction
by statute or by this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
Election of directors need not be by written ballot, unless the Bylaws so provide. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIXTH:</B> The Board of Directors is
authorized to make, adopt, amend, alter or repeal the Bylaws of the Corporation, except as otherwise specifically provided therein. The stockholders shall also have power to make, adopt, amend, alter or repeal the Bylaws of the Corporation.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SEVENTH:</B> The Corporation reserves the right to amend any provision contained in this Amended and Restated Certificate
of Incorporation as the same may from time to time be in effect in the manner now or hereafter prescribed by law, and all rights conferred on stockholders or others hereunder are subject to such reservation. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EIGHTH: </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1) <B><U>Exculpation</U></B>. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for liability (i)&nbsp;for any breach of the director&#146;s duty of loyalty to the Corporation or its stockholders, (ii)&nbsp;for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)&nbsp;under Section&nbsp;174 of the DGCL, or (iv)&nbsp;for any transaction from which the director derived an improper personal benefit. If the DGCL is amended after the effective
date of this Amended and Restated Certificate of Incorporation to authorize corporate </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended. Any amendment, modification or repeal of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of
such amendment, modification or repeal. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B></B>(2)<B> <U>Indemnification</U>. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Right to Indemnification</U>. Each person who was or is made a party or is threatened to be made a party to or is otherwise
involved in any action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise (hereinafter a &#147;<B>Proceeding</B>&#148;), by reason of the fact that he or she is or was a director or officer of the Corporation
or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an &#147;<B>Indemnitee</B>&#148;), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless and advanced expenses by the Corporation, in accordance with the Bylaws of the Corporation, to the fullest extent authorized by the DGCL, as the
same exists or may hereafter be amended (but, in the case of any such amendment, except as may be prohibited by applicable law, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted
prior thereto), against all expense, liability and loss (including attorneys&#146; fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith and
such indemnification shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the Indemnitee&#146;s heirs, executors and administrators. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Non-Exclusivity of Rights</U> The rights to indemnification and to the advancement of expenses conferred in this Article shall not
be exclusive of any other right which any person may have or hereafter acquire under any statute or this Amended and Restated Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Insurance</U>. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense,
liability or loss under the DGCL. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Indemnification of Employees and Agents of the Corporation</U>. The Corporation may,
to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Section with
respect to the indemnification and advancement of expenses of directors and officers of the Corporation. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) <U>Amendment</U>. Neither any amendment nor repeal of this Article EIGHTH, nor the
adoption of any provision of the Corporation&#146;s Certificate of Incorporation inconsistent with this Article EIGHTH, shall eliminate or reduce the effect of this Article EIGHTH in respect of any matter occurring, or action or proceeding accruing
or arising or that, but for this Article EIGHTH, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. </FONT></P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>dex32.htm
<DESCRIPTION>AMENDED AND RESTATED BYLAWS
<TEXT>
<HTML><HEAD>
<TITLE>Amended and Restated Bylaws</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 3.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>AMENDED AND RESTATED </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>BYLAWS </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>OF </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>CELLU TISSUE HOLDINGS, INC. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE I. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>STOCKHOLDERS </U></B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>MEETINGS</U>. </B> </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.1.1. <U>PLACE</U></B>. Meetings of the stockholders shall be held at such place, if any, as may be designated by the board of
directors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.1.2. <U>ANNUAL MEETING</U></B>. An annual meeting of the stockholders for the election of directors and for
other business shall be held on such date and at such time as may be fixed by the board of directors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.1.3. <U>SPECIAL
MEETINGS</U></B>. Special meetings of the stockholders may be called at any time by the president, or the board of directors, or the holders of a majority of the outstanding shares of stock of the Company entitled to vote at the meeting. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.1.4. <U>QUORUM</U></B>. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of stock of the
Company entitled to vote on a particular matter shall constitute a quorum for the purpose of considering such matter. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.1.5. <U>VOTING RIGHTS</U></B>. Except as otherwise provided herein, in the certificate of incorporation or by law, every stockholder
shall have the right at every meeting of stockholders to one vote for every share standing in the name of such stockholder on the books of the Company which is entitled to vote at such meeting. Every stockholder may vote either in person or by
proxy. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE II. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>DIRECTORS </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.1. <U>NUMBER AND TERM</U></B>. The board of directors shall have
authority to determine the number of directors to constitute the board. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>MEETINGS</U></B>. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.2.1. <U>PLACE</U></B>. Meetings of the board of directors shall be held at such place as may be designated by the board or in the
notice of the meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.2.2. <U>REGULAR MEETINGS</U></B>. Regular meetings of the board of directors shall be held at
such times as the board may designate. Notice of regular meetings need not be given. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.2.3. <U>SPECIAL MEETINGS</U></B>.
Special meetings of the board may be called by direction of the president or any two members of the board on three days&#146; notice to each director, </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
either personally or by mail, telegram, facsimile transmission or other form of electronic transmission. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>2.2.4. <U>QUORUM</U></B>. A majority of all the directors in office shall constitute a quorum for the transaction of business at any meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>2.2.5. <U>VOTING</U></B>. Except as otherwise provided herein, in the certificate of incorporation or by law, the vote of a majority of the directors present at any meeting at which a quorum is present
shall constitute the act of the board of directors. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE III. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>OFFICERS </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.1.
<U>ELECTION</U></B>. At its first meeting after each annual meeting of the stockholders, the board of directors shall elect a president, treasurer, secretary and such other officers as it deems advisable. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.2. <U>AUTHORITY, DUTIES AND COMPENSATION</U></B>. The officers shall have such authority, perform such duties and serve for such compensation as may
be determined by resolution of the board of directors. Except as otherwise provided by board resolution, (i)&nbsp;the president shall be the chief executive officer of the Company, shall have general supervision over the business and operations of
the Company, may perform any act and execute any instrument for the conduct of such business and operations and shall preside at all meetings of the board and stockholders, (ii)&nbsp;the other officers shall have the duties customarily related to
their respective offices, and (iii)&nbsp;any vice president, or vice presidents in the order determined by the board, shall in the absence of the president have the authority and perform the duties of the president. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE IV. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>INDEMNIFICATION </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.1.</B>&nbsp;<B><U>RIGHT TO INDEMNIFICATION</U></B><B>.</B> Each person who was or is made a party or is threatened to be made a party to or is
otherwise involved (as a witness or otherwise) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a &#147;proceeding&#148;), by reason of the fact that he or she
is or was a director or an officer of the Corporation or, while serving as a director or an officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or
of a partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an &#147;indemnitee&#148;), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law,
as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys&#146; fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered&nbsp;by such
indemnitee in connection therewith; provided, however, that, except as provided in Section&nbsp;4.3 with respect to proceedings to enforce rights to indemnification, the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the
Board of Directors. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.2.&nbsp;<U>RIGHT TO ADVANCEMENT OF EXPENSES</U>.</B> In addition to the right to indemnification conferred in
Section&nbsp;4.1, an indemnitee shall also have the right to be paid by the Corporation on an as-incurred basis the expenses (including attorney&#146;s fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter
an &#147;advancement of expenses&#148;); provided, however, that, if the Delaware General Corporation Law (&#147;<B>DGCL</B>&#148;) requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an unsecured undertaking (hereinafter an
&#147;undertaking&#148;), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a &#147;final
adjudication&#148;) that such indemnitee is not entitled to be indemnified for such expenses under this Section&nbsp;4.2 or otherwise. All advances hereunder shall be interest free and shall be made without regard to indemnitee&#146;s financial
ability to repay any amounts advanced. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.3.&nbsp;<U>RIGHT OF INDEMNITEE TO BRING SUIT</U>.</B> If a claim under Section&nbsp;4.1 or 4.2 is
not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at
any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses), it shall be a defense that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of
the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are not parties to such action, a
committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in
the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article&nbsp;IV or otherwise shall be on the Corporation.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.4.&nbsp;<U>NON-EXCLUSIVITY OF RIGHTS</U>. </B>The rights to indemnification and to the advancement of expenses conferred in this
Article&nbsp;IV shall not be exclusive of any other right </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
which any person may have or hereafter acquire under any statute, the Corporation&#146;s Certificate of Incorporation, Bylaws, agreement, vote of stockholders or directors or otherwise.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.5.&nbsp;<U>INSURANCE</U>.</B> The Corporation may maintain insurance, at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such
expense, liability or loss under the DGCL. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.6.&nbsp;<U>INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION</U>.</B> The
Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this
Article IV with respect to the indemnification and advancement of expenses of directors and officers of the Corporation. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.7.&nbsp;<U>NATURE OF RIGHTS</U>. </B>The rights conferred upon indemnitees in this Article&nbsp;IV shall be contract rights and such rights shall
continue as to an indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the indemnitee&#146;s heirs, executors and administrators. Any amendment, alteration or repeal of this Article&nbsp;IV that adversely
affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act
that took place prior to such amendment or repeal. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE V. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>TRANSFER OF SHARE CERTIFICATES </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Transfers of share certificates and the shares represented thereby shall be made on the books of the Company only by the registered holder or by duly authorized attorney. Transfers shall be made only on
surrender of the share certificate or certificates. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE VI. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>AMENDMENTS </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">These
bylaws may be amended or repealed at any regular or special meeting of the board of directors by vote of a majority of all directors in office or at any annual or special meeting of stockholders by vote of holders of a majority of the outstanding
stock entitled to vote. Notice of any such annual or special meeting of stockholders shall set forth the proposed change or a summary thereof. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>dex101.htm
<DESCRIPTION>SUPPLEMENTAL INDENTURE TO CLEARWATER PAPER CORPORATION'S 10 5/8% SENIOR NOTES
<TEXT>
<HTML><HEAD>
<TITLE>Supplemental Indenture to Clearwater Paper Corporation's 10 5/8% Senior Notes</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SUPPLEMENTAL INDENTURE </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">S<SMALL>UPPLEMENTAL</SMALL> I<SMALL>NDENTURE</SMALL>
(this &#147;<I>Supplemental Indenture</I>&#148;), dated as of December&nbsp;27, 2010, among the entities listed on <U>Exhibit&nbsp;A</U> attached hereto (each a &#147;<I>Guaranteeing Subsidiary</I>&#148;), each a subsidiary of Clearwater Paper
Corporation (or its permitted successor), a Delaware corporation (the &#147;<I>Company</I>&#148;), the Company, and U.S. Bank National Association, as trustee under the Indenture referred to below (the &#147;<I>Trustee</I>&#148;). </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">W I T N E S S E T H </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:0px;"><FONT
STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of June&nbsp;11, 2009 (the &#147;<I>Indenture</I>&#148;), providing for the issuance of 10<FONT SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;5</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2016 (the &#147;<I>Notes</I>&#148;);
</FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall unconditionally guarantee all of the Company&#146;s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the
&#147;<I>Note Guarantee</I>&#148;); and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, pursuant to Section&nbsp;9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, each Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. C<SMALL>APITALIZED</SMALL> T<SMALL>ERMS</SMALL>. Capitalized terms used herein without definition shall have the meanings assigned to
them in the Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. A<SMALL>GREEMENT</SMALL> <SMALL>TO</SMALL> G<SMALL>UARANTEE</SMALL>. Each Guaranteeing Subsidiary
hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. N<SMALL>O</SMALL> R<SMALL>ECOURSE</SMALL> A<SMALL>GAINST</SMALL> O<SMALL>THERS</SMALL>. No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guaranteeing Subsidiaries, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
</FONT></P>

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INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. C<SMALL>OUNTERPARTS</SMALL>. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. E<SMALL>FFECT</SMALL> <SMALL>OF</SMALL>
H<SMALL>EADINGS</SMALL>. The Section headings herein are for convenience only and shall not affect the construction hereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8. T<SMALL>HE</SMALL> T<SMALL>RUSTEE</SMALL>. The Trustee shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries and the Company. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<I>Signature Page Follows</I>] </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first written above. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Holdings, Inc., a Delaware corporation </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Corporation&#150;Natural Dam, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Corporation&#150;Neenah, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue LLC, a
Delaware limited liability company </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Coastal Paper Company, a Virginia general partnership </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Menominee Acquisition Corporation, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Van Paper Company, a Mississippi corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Van Timber Company, a Mississippi
corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue&#150;Thomaston, LLC, a Delaware limited liability company </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue&#150;Long Island, LLC, a Delaware limited liability company </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Corporation&#150;Oklahoma City, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu
Tissue-CityForest LLC, a Minnesota limited liability company </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR></TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="86%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President and</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Clearwater Paper Corporation
</B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR></TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="86%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President and</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">S<SMALL>IGNATURE</SMALL> P<SMALL>AGE</SMALL> <SMALL>TO</SMALL> S<SMALL>UPPLEMENTAL</SMALL> I<SMALL>NDENTURE</SMALL> (2009
N<SMALL>OTES</SMALL>) </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>U.S. Bank National Association, </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;as Trustee </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Debby R. Wight</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name: Debby R. Wight</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title: Vice President</FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">S<SMALL>IGNATURE</SMALL> P<SMALL>AGE</SMALL> <SMALL>TO</SMALL> S<SMALL>UPPLEMENTAL</SMALL> I<SMALL>NDENTURE</SMALL> (2009
N<SMALL>OTES</SMALL>) </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Exhibit A </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Guaranteeing Subsidiaries </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Holdings, Inc., a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Corporation&#150;Natural Dam, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Corporation&#150;Neenah, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue LLC, a Delaware limited liability company </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Coastal Paper Company, a Virginia general partnership </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Menominee Acquisition Corporation, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Van Paper Company, a Mississippi corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Van Timber Company, a Mississippi corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue&#150;Thomaston, LLC, a Delaware limited liability company </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue&#150;Long Island, LLC, a Delaware limited liability company </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Corporation&#150;Oklahoma City, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue-CityForest LLC, a Minnesota limited liability company </FONT></TD></TR></TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>dex102.htm
<DESCRIPTION>SUPPLEMENTAL INDENTURE TO CLEARWATER PAPER CORPORATION'S 7 1/8% SENIOR NOTES
<TEXT>
<HTML><HEAD>
<TITLE>Supplemental Indenture to Clearwater Paper Corporation's 7 1/8% Senior Notes</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SUPPLEMENTAL INDENTURE </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Supplemental Indenture (this &#147;<I>Supplemental
Indenture</I>&#148;), dated as of December&nbsp;27, 2010, among the entities listed on <U>Exhibit A</U> attached hereto (each a &#147;<I>Guaranteeing Subsidiary</I>&#148;), each a subsidiary of Clearwater Paper Corporation (or its permitted
successor), a Delaware corporation (the &#147;<I>Company</I>&#148;), the Company, any Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under the Indenture referred to below (the
&#147;<I>Trustee</I>&#148;). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">W I T N E S S E T H </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of October&nbsp;22,
2010 (the &#147;<I>Indenture</I>&#148;), providing for the issuance of 7<FONT SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&nbsp;1</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">8</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="2">% Senior Notes due 2018 (the &#147;<I>Notes</I>&#148;); </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the
Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall unconditionally guarantee all of the
Company&#146;s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the &#147;<I>Note Guarantee</I>&#148;); and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, pursuant to Section&nbsp;9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby
acknowledged, each Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of Holders as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1. C<SMALL>APITALIZED</SMALL> T<SMALL>ERMS</SMALL>. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. A<SMALL>GREEMENT</SMALL> <SMALL>TO</SMALL> G<SMALL>UARANTEE</SMALL>. Each Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3. N<SMALL>O</SMALL> R<SMALL>ECOURSE</SMALL> A<SMALL>GAINST</SMALL> O<SMALL>THERS</SMALL>. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiaries, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.
NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. C<SMALL>OUNTERPARTS</SMALL>. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. E<SMALL>FFECT</SMALL> <SMALL>OF</SMALL> H<SMALL>EADINGS</SMALL>. The Section headings
herein are for convenience only and shall not affect the construction hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. T<SMALL>HE</SMALL> T<SMALL>RUSTEE</SMALL>.
The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the
Guaranteeing Subsidiaries and the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<I>Signature Page Follows</I>] </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first written above. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Holdings, Inc., a Delaware corporation </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Corporation&#150;Natural Dam, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Corporation&#150;Neenah, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue LLC, a
Delaware limited liability company </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Coastal Paper Company, a Virginia general partnership </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Menominee Acquisition Corporation, a Delaware corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Van Paper Company, a Mississippi corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Van Timber Company, a Mississippi
corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue&#150;Thomaston, LLC, a Delaware limited liability company </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue&#150;Long Island, LLC, a Delaware limited liability company </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Cellu Tissue Corporation&#150;Oklahoma City, a Delaware corporation </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR></TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="86%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President and</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Clearwater Paper Corporation
</B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR></TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="86%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President and</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">S<SMALL>IGNATURE</SMALL> P<SMALL>AGE</SMALL> <SMALL>TO</SMALL> S<SMALL>UPPLEMENTAL</SMALL> I<SMALL>NDENTURE</SMALL> (2010
N<SMALL>OTES</SMALL>) </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">U.S. Bank National Association, </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;as Trustee </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Debby R. Wight</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name: Debby R. Wight</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title: Vice President</FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">S<SMALL>IGNATURE</SMALL> P<SMALL>AGE</SMALL> <SMALL>TO</SMALL> S<SMALL>UPPLEMENTAL</SMALL> I<SMALL>NDENTURE</SMALL> (2010
N<SMALL>OTES</SMALL>) </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Exhibit A </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Guaranteeing Subsidiaries </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Holdings, Inc., a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Corporation&#150;Natural Dam, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Corporation&#150;Neenah, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue LLC, a Delaware limited liability company </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Coastal Paper Company, a Virginia general partnership </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Menominee Acquisition Corporation, a Delaware corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Van Paper Company, a Mississippi corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Van Timber Company, a Mississippi corporation </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue&#150;Thomaston, LLC, a Delaware limited liability company </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue&#150;Long Island, LLC, a Delaware limited liability company </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Corporation&#150;Oklahoma City, a Delaware corporation </FONT></TD></TR></TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>dex103.htm
<DESCRIPTION>GUARANTY AND SECURITY AGREEMENT DATED AS OF DECEMBER 27, 2010
<TEXT>
<HTML><HEAD>
<TITLE>Guaranty and Security Agreement dated as of December 27, 2010</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.3 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">GUARANTY AND SECURITY AGREEMENT </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">GUARANTY AND SECURITY AGREEMENT, dated as of
December&nbsp;27, 2010 (as amended, supplemented, restated or otherwise modified from time to time, this &#147;<U>Agreement</U>&#148;), made by each of the Persons identified on the signature pages hereto as a &#147;Guarantor&#148;, together with
any Person who becomes a party hereto pursuant to <U>Section&nbsp;2.10</U> (each a &#147;<U>Guarantor</U>&#148; and collectively, the &#147;<U>Guarantors</U>&#148;), in favor of Agent (as defined below) on behalf of each of the Secured Parties (as
defined below). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>W</U> <U>I</U> <U>T</U> <U>N</U> <U>E</U> <U>S</U> <U>S</U> <U>E</U> <U>T</U> <U>H</U>: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, CLEARWATER PAPER CORPORATION, a Delaware corporation (and together with any other Person that at any time after the date hereof
becomes a Borrower in accordance with the terms thereof, each individually a &#147;<U>Borrower</U>,&#148; and collectively, the &#147;<U>Borrowers</U>&#148;), has entered into the Loan and Security Agreement, dated as of November&nbsp;26, 2008 (as
it may be amended, restated or otherwise modified from time to time, the &#147;<U>Loan Agreement</U>&#148;), with the lenders signatory thereto (collectively, together with their respective successors, transferees and assigns, the
&#147;<U>Lenders</U>&#148;) and Bank of America, N.A., in its capacity as agent (&#147;<U>Agent</U>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, each
Guarantor is a Subsidiary of a Borrower; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, pursuant to <U>Section&nbsp;10.1.9</U> of the Loan Agreement, Agent has
required Guarantors to guaranty the Obligations and execute and deliver this Agreement; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, Guarantors have duly
authorized the execution, delivery and performance of this Agreement and will receive direct and indirect benefits by reason of the making of the Loans by Lenders to the Borrowers; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce
Lenders to make the initial Loans to the Borrowers pursuant to the Loan Agreement, each Guarantor hereby agrees with Agent as follows: </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE 1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>DEFINITIONS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 1.1 <U>Certain Terms</U>. The following terms when used in this Agreement, including its preamble and recitals, shall have the
following meanings (such definitions to be equally applicable to the singular and plural forms thereof): </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Agreement</U>&#148; is defined in the <U>preamble</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Borrower</U>&#148; and &#147;<U>Borrowers</U>&#148; are defined in the <U>first recital</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Collateral</U>&#148; is defined in <U>Section&nbsp;2.3</U>. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Collateral Related Intellectual Property</U>&#148; Intellectual Property used in
connection with any manufacture, marketing, distribution or disposition of Collateral. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Guaranteed
Obligations</U>&#148; is defined in <U>Section&nbsp;2.1</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Guarantor</U>&#148; and &#147;<U>Guarantors</U>&#148;
are defined in the <U>preamble</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>IP License</U>&#148; is defined in <U>Section&nbsp;5.3</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>License Rejection Liabilities</U>&#148; all damages of Agent or any Lender (a)&nbsp;arising from the diminution of value of the
Inventory of any Guarantor in connection with any disposition thereof, or (ii)&nbsp;as determined by a court of competent jurisdiction, in each case, resulting from any Bankruptcy Rejection of the IP License. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Loan Agreement</U>&#148; is defined in the <U>first recital</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Lenders</U>&#148; is defined in the <U>first recital</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Secured Parties</U>&#148; means Agent, Issuing Bank, Lenders and providers of Bank Products. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 1.2 <U>Loan Agreement Definitions</U>. Unless otherwise defined herein or the context otherwise requires, terms used in this
Agreement, including its preamble and recitals, shall have the meanings provided in the Loan Agreement. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE 2
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>GUARANTY, GUARANTORS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.1 <U>Guaranty</U>. Each Guarantor hereby unconditionally and irrevocably guarantees the full and prompt payment when due, whether at stated maturity, by acceleration or otherwise (including,
without limitation, all amounts which would have become due but for the operation of the automatic stay under Section&nbsp;362(a) of the Federal Bankruptcy Code, 11 U.S.C. 362(a)), of the following (collectively, the &#147;<U>Guaranteed
Obligations</U>&#148;), </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) all Obligations of the Borrowers to each Secured Party now or hereafter existing
under the Loan Agreement and each other Loan Document (including this Agreement), whether for principal, interest, fees, expenses or otherwise; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) any and all costs and expenses (including reasonable fees and expenses of legal counsel) incurred by each Secured Party in enforcing any of its rights under this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Agreement constitutes a guaranty of payment when due and not merely of collection, and each Guarantor specifically agrees that it
shall not be necessary or required that Agent or any Lender exercise any right, assert any claim or demand or enforce any remedy whatsoever against any Borrower, any other Guarantor or any other Person, or any Collateral before or as a condition to
the obligations of Guarantor hereunder. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.2 <U>Guaranty Absolute</U>. This Agreement is a continuing, absolute,
unconditional and irrevocable guarantee of payment and shall remain in full force and effect until Full Payment of the Guaranteed Obligations. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the
terms of the agreement under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Agent or any Lender with respect thereto. The liability of
Guarantors under this Agreement shall be absolute and unconditional irrespective of: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) any lack of validity,
legality or enforceability of the Loan Agreement, any other Loan Document or any other agreement or instrument relating to any thereof; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any compromise, renewal, extension, acceleration or release with respect
thereto, or any other amendment or waiver of or any consent to departure from the Loan Agreement or any other Loan Document; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) any addition, exchange, release, impairment or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) the failure of Agent or any Lender </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) to assert any claim or demand or to enforce any right or remedy against any Guarantor, any Borrower or any other
Person (including any other guarantor) under the provisions of the Loan Agreement, any other Loan Document or otherwise, or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any of the Guaranteed Obligations; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of
the Loan Agreement or any other Loan Document; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) any defense, set-off or counterclaim which may at any time
be available to or be asserted by any Guarantor or any Borrower against Agent or any Lender; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) any
reduction, limitation, impairment or termination of the Guaranteed Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and each Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, the Guaranteed
Obligations or otherwise; or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Borrower or any Guarantor, other than payment of the Guaranteed Obligations by a Borrower or Guarantor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.3 <U>Grant and Perfection of Security Interest</U>. To secure the prompt payment and performance of all Guaranteed Obligations, each Guarantor hereby grants to Agent, for the benefit of Secured
Parties, a continuing security interest in and Lien upon all Property of such Guarantor, including all of the following Property, whether now owned or hereafter acquired, and wherever located (with respect to each Guarantor, its
&#147;Collateral&#148; and collectively, the &#147;Collateral&#148;, as the context indicates): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) all Accounts; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) all Deposit Accounts; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) all Inventory; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) all supporting obligations in respect of Accounts,
including letters of credit and guaranties issued in support of Accounts or Proceeds of Collateral; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) all securities
accounts to the extent of the Cash Equivalents contained therein that were derived from Accounts, Inventory or Deposit Accounts; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) all certificates of title, documents or instruments evidencing ownership or title to any of the Property described in <B>Section&nbsp;2.3 (c)&nbsp;and (h)</B>; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) all monies, whether or not in the possession or under the control of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender
that were derived from or consist of any of the Property described in this <B>Section&nbsp;2.3</B>, and any Cash Collateral; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) all accessions to, substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing, including
proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any of the Property described in this <B>Section&nbsp;2.3</B> (the &#147;<U>Proceeds</U>&#148;); and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) all books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and computer records)
pertaining to any of the Property described in this <B>Section&nbsp;2.3</B>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As security for the payment of all License
Rejection Liabilities, each Guarantor hereby assigns to Agent, for the benefit of the Secured Parties, and grants to Agent, for the benefit of the Secured Parties, a continuing security interest in all of such Guarantor&#146;s Collateral Related
Intellectual Property, whether now or hereafter owned, existing, acquired or arising and wherever now or hereafter located. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.4 <U>Deposit Accounts</U>. To further secure the prompt payment and performance of all Guaranteed Obligations, each Guarantor
hereby grants to Agent, for the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


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benefit of Secured Parties, a continuing security interest in and Lien upon all amounts credited to any Deposit Account of such Guarantor, including any sums in any blocked or lockbox accounts or
in any accounts into which such sums are swept. Each Guarantor hereby authorizes and directs each bank or other depository to deliver to Agent, upon request, all balances in any Deposit Account maintained by such Guarantor, without inquiry into the
authority or right of Agent to make such request. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.5 <U>Cash Collateral</U>. Any Cash Collateral may be invested, at
Agent&#146;s discretion, in Cash Equivalents, but Agent shall have no duty to do so, regardless of any agreement or course of dealing with any Guarantor, and shall have no responsibility for any investment or loss. Each Guarantor hereby grants to
Agent, for the benefit of Secured Parties, a security interest in all Cash Collateral held from time to time and all proceeds thereof, as security for the Guaranteed Obligations, whether such Cash Collateral is held in a Cash Collateral Account or
elsewhere. Agent may apply Cash Collateral to the payment of any Obligations, in such order as Agent may elect, as they become due and payable. Each Cash Collateral Account and all Cash Collateral shall be under the sole dominion and control of
Agent. No Guarantor or other Person claiming through or on behalf of any Guarantor shall have any right to any Cash Collateral, until Full Payment of all Guaranteed Obligations. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.6 <U>Other Collateral</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Intentionally Omitted</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Certain After-Acquired
Collateral</U>. Guarantors shall promptly notify Agent in writing if, after the Closing Date, any Guarantor obtains any interest in any Collateral consisting of Deposit Accounts, Chattel Paper, Documents, Instruments, Investment Property or
Letter-of-Credit Rights and, upon Agent&#146;s request, shall promptly take such actions as Agent deems appropriate to effect Agent&#146;s duly perfected, first priority Lien upon such Collateral, including obtaining any appropriate possession,
control agreement or Lien Waiver. If any Collateral is in the possession of a third party, at Agent&#146;s request, Guarantors shall obtain an acknowledgment that such third party holds the Collateral for the benefit of Agent. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.7 <U>No Assumption of Liability</U>. The Lien on Collateral granted hereunder is given as security only and shall not subject
Agent or any Lender to, or in any way modify, any obligation or liability of Guarantor relating to any Collateral. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION
2.8 <U>Further Assurances</U>. Promptly upon request, Guarantors shall deliver such instruments, assignments, title certificates, or other documents or agreements, and shall take such actions, as Agent reasonably deems appropriate under Applicable
Law to evidence or perfect its Lien on any Collateral, or otherwise to give effect to the intent of this Agreement. Each Guarantor authorizes Agent to file any financing statement that Agent deems reasonably desirable to preserve and perfect
Agent&#146;s security interest in the Collateral of such Guarantor, and ratifies any action taken by Agent before the Closing Date to effect or perfect its Lien on any Collateral. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 2.9 <U>Additional Guarantors</U>. If Borrowers are required, pursuant to
<U>Section&nbsp;10.1.9</U> of the Loan Agreement, to cause a Subsidiary to become a guarantor hereunder, such Subsidiary shall execute and deliver to Agent a Joinder Agreement substantially in the form of <U>Annex 1</U> and shall thereafter for all
purposes be a party hereto and have the same rights, benefits and obligations as a Guarantor party hereto on the date hereof. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE 3 </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>COLLATERAL ADMINISTRATION </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 3.1 <U>Administration of Accounts</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Records and
Schedules of Accounts</U>. Each Guarantor shall keep accurate and complete records of its Accounts, including all payments and collections thereon, and shall submit to Agent sales, collection, reconciliation and other reports in form satisfactory to
Agent, on such periodic basis as Agent may request. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Taxes</U>. If an Account of any Guarantor includes
a charge for any Taxes and an Event of Default has occurred and is continuing, Agent is authorized, in its discretion, to pay the amount thereof to the proper taxing authority for the account of such Guarantor and to charge Guarantors therefor;
<U>provided</U>, <U>however</U>, that neither Agent nor Lenders shall be liable for any Taxes that may be due from Guarantors or with respect to any Collateral. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Account Verification</U>. Whether or not a Default or Event of Default exists, Agent shall have the right at any time, in the name of Agent, any designee of Agent or any Guarantor, to verify the
validity, amount or any other matter relating to any Accounts of Guarantors by mail, telephone or otherwise. Guarantors shall cooperate fully with Agent in an effort to facilitate and promptly conclude any such verification process. Agent shall give
Guarantors notice after any such verification; <U>provided</U>, <U>however</U>, that the failure by Agent to provide Guarantors such notice shall not give rise to any liability on its part or adversely affect any of the relative rights or
obligations of Agent or any Guarantor as provided herein. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Maintenance of Dominion Account</U>.
Guarantors shall maintain Dominion Accounts, if any, pursuant to lockbox or other arrangements acceptable to Agent. Guarantors shall obtain an agreement (in form and substance satisfactory to Agent) from each lockbox servicer and Dominion Account
bank, establishing Agent&#146;s control over and Lien in the lockbox or Dominion Account, which may be exercised by Agent during any Trigger Period, requiring immediate deposit of all remittances received in the lockbox to a Dominion Account, and
waiving offset rights of such servicer or bank, except for customary administrative charges. If a Dominion Account is not maintained with Bank of America, Agent may, during any Trigger Period, require immediate transfer of all funds in such account
to a Dominion Account maintained with Bank of America. Agent and Lenders assume no responsibility to Guarantors for any lockbox arrangement or Dominion Account, including any claim of accord and satisfaction or release with
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


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respect to any Payment Items accepted by any bank. Notwithstanding the foregoing in this Section&nbsp;3.1(d), Guarantors may for a period not exceeding six months after the date of this Agreement
maintain the account and lockbox arrangements existing on the date of this Agreement, subject to such accounts being subject to Deposit Account Control Agreements as provided in Section&nbsp;3.4. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) <U>Proceeds of Collateral</U>. Guarantors shall request in writing and otherwise take all necessary steps to ensure
that all payments on Accounts or otherwise relating to Collateral are made directly to a Dominion Account, which Dominion Account may be a Dominion Account of Borrowers (or a lockbox relating to a Dominion Account). If any Guarantor receives cash or
Payment Items with respect to any Collateral, it shall hold same in trust for Agent and promptly (not later than the next Business Day) deposit same into a Dominion Account (including a Dominion Account of Borrowers). </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 3.2 <U>Administration of Inventory</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Records and Reports of Inventory</U>. Each Guarantor shall (or Borrower shall on such Guarantor&#146;s behalf) keep accurate and complete records of its Inventory, including costs and daily
withdrawals and additions, and shall submit to Agent inventory and reconciliation reports in form satisfactory to Agent, on such periodic basis as Agent may request. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Returns of Inventory</U>. No Guarantor shall return any Inventory to a supplier, vendor or other Person, whether
for cash, credit or otherwise, unless (a)&nbsp;such return is in the Ordinary Course of Business; (b)&nbsp;no Default, Event of Default or Overadvance exists or would result therefrom; (c)&nbsp;Agent is promptly notified if the aggregate Value of
all Inventory returned in any month exceeds $3,000,000; and (d)&nbsp;any payment received by a Guarantor for a return during any Trigger Period is promptly remitted to Agent for application to the Guaranteed Obligations. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Maintenance</U>. Each Guarantor shall take all steps to assure that all Inventory it produces is produced in
accordance with Applicable Law, including the FLSA. Guarantors shall use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law, and
shall make current rent payments (within applicable grace periods provided for in leases) at all locations where any Collateral is located. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 3.3 <U>Condition of Equipment</U>. The Equipment necessary for the continued operation of Guarantors&#146; business is in good operating condition and repair, and all necessary replacements and
repairs have been made so that Guarantors can continue the operation of their business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 3.4 <U>Administration of
Deposit Accounts</U>. <U>Schedule 3.4</U> sets forth all Deposit Accounts maintained by Guarantors, including all Dominion Accounts. Within sixty (60)&nbsp;days of the date hereof (or such earlier date as Agent may request if an Event of Default has
occurred and is continuing), each Guarantor shall take all actions necessary to establish Agent&#146;s </FONT></P>
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control of each such Deposit Account (other than an account exclusively used for payroll, payroll taxes or employee benefits). A Guarantor shall be the sole account holder of each Deposit Account
and shall not allow any other Person (other than Agent) to have control over a Deposit Account or any Property deposited therein. Each Guarantor shall promptly notify Agent of any opening or closing of a Deposit Account and, with the consent of
Agent, will amend <U>Schedule 3.4</U> to reflect same. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 3.5 <U>General Provisions</U>. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Location of Collateral</U>. All tangible items of Collateral, other than Inventory in transit or located with
customers, shall at all times be kept by Guarantors at the business locations set forth in <U>Schedule 3.5(a)</U>, except that Guarantors may (a)&nbsp;make sales or other dispositions of Collateral in accordance with <U>Section&nbsp;10.2.6</U> of
the Loan Agreement, and (b)&nbsp;move Collateral to: (i)&nbsp;another location in the United States, upon 30 Business Days&#146; prior written notice to Agent, and (ii)&nbsp;another location in Canada, upon 30 Business Days&#146; prior written
notice, so long as (A)&nbsp;no Default or Event of Default has occurred and is continuing or would result therefrom, and (B)&nbsp;the aggregate amount of Collateral (as defined in the Loan Agreement) moved to Canada does not exceed $8,000,000 (or
such larger amount as greed to by Agent). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Insurance of Collateral; Condemnation Proceeds</U>.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Each Guarantor shall (or Borrowers shall on such Guarantor&#146;s behalf) maintain insurance with respect
to the Collateral, covering casualty, hazard, theft, malicious mischief, flood and other risks, in amounts, with endorsements and with insurers (with a Best Rating of at least A7, unless otherwise approved by Agent) satisfactory to Agent, except
that flood insurance obtained by the Guarantors on the properties located at Neenah and Ladysmith, Wisconsin need not be for more than $4,000,000 and $5,000,000, respectively. All proceeds under each policy shall be payable to Agent with respect to
the Collateral. From time to time upon request, Guarantors shall deliver to Agent the originals or certified copies of its insurance policies and updated flood plain searches. Unless Agent shall agree otherwise, each policy shall include
satisfactory endorsements (i)&nbsp;showing Agent as lender loss payee; (ii)&nbsp;requiring 30 days&#146; prior written notice to Agent in the event of cancellation of the policy for any reason whatsoever; and (iii)&nbsp;specifying that the interest
of Agent shall not be impaired or invalidated by any act or neglect of any Guarantor or the owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy. If any Guarantor fails to provide
and pay for any insurance (or Borrowers fail to provide and pay for such insurance on such Guarantor&#146;s behalf), Agent may, at its option, but shall not be required to, procure the insurance and charge Guarantors therefor. While no Event of
Default exists, Guarantors may settle, adjust or compromise any insurance claim, as long as the proceeds are delivered to Agent in accordance with Section&nbsp;3.5(b)(ii). If an Event of Default exists, only Agent shall be authorized to settle,
adjust and compromise any claims involving any Collateral. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) Any proceeds of insurance relating to the Collateral and any awards
arising from condemnation of any Collateral shall be paid to Agent. Any such proceeds or awards that relate to Inventory shall be applied to payment of the Revolver Loans, and then to any other Guaranteed Obligations. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Protection of Collateral</U>. All expenses of protecting, storing, warehousing, insuring, handling, maintaining and
shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Agent to any Person to realize upon any Collateral following the occurrence of an Event of Default
or to prevent any Default or Event of Default, shall be borne and paid by Guarantors. Agent shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its
custody while Collateral is in Agent&#146;s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Guarantors&#146;
sole risk. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Defense of Title to Collateral</U>. Each Guarantor shall at all times defend its title to
Collateral and Agent&#146;s Liens therein against all Persons, claims and demands whatsoever, except Permitted Liens. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION
3.6 <U>Power of Attorney</U>. Each Guarantor hereby irrevocably constitutes and appoints Agent (and all Persons designated by Agent) as such Guarantor&#146;s true and lawful attorney (and agent-in-fact) for the purposes provided in this Section.
Agent, or Agent&#146;s designee, may, without notice and in either its or a Guarantor&#146;s name, but at the cost and expense of Guarantors: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) Endorse a Guarantor&#146;s name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Agent&#146;s possession or control; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) During an Event of Default, (i)&nbsp;notify any Account Debtors of the assignment of their Accounts, demand and
enforce payment of Accounts by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii)&nbsp;settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal
proceedings brought to collect Accounts or Collateral; (iii)&nbsp;sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Agent deems advisable; (iv)&nbsp;collect, liquidate and receive balances in
Deposit Accounts or investment accounts, and take control, in any manner, of proceeds of Collateral; (v)&nbsp;prepare, file and sign a Guarantor&#146;s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any
notice, assignment or satisfaction of Lien or similar document; (vi)&nbsp;receive, open and dispose of mail addressed to a Guarantor, and notify postal authorities to deliver any such mail to an address designated by Agent; (vii)&nbsp;endorse any
Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory or other Collateral; (viii)&nbsp;use a Guarantor&#146;s stationery and sign its name to verifications of Accounts and notices to
Account Debtors; (ix)&nbsp;use information contained in any data </FONT></P>
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processing, electronic or information systems relating to Collateral; (x)&nbsp;make and adjust claims under insurance policies; (xi)&nbsp;take any action as may be necessary or appropriate to
obtain payment under any letter of credit, banker&#146;s acceptance or other instrument for which a Guarantor is a beneficiary; and (xii)&nbsp;take all other actions as Agent deems appropriate to fulfill any Guarantor&#146;s obligations under the
Loan Documents. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE 4 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>REPRESENTATIONS AND WARRANTIES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 4.1 <U>Representations and
Warranties</U>. Each Guarantor hereby represents and warrants to Agent and Lenders as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a)
<U>Organization and Qualification</U>. Such Guarantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Such Guarantor is duly qualified, authorized to do business and in good standing
as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Power and Authority</U>. Such Guarantor is duly authorized to execute, deliver and perform its Loan Documents. The execution, delivery and performance of the Loan Documents have been duly
authorized by all necessary action, and do not (a)&nbsp;require any consent or approval of any holders of Equity Interests of any Guarantor, other than those already obtained; (b)&nbsp;contravene the Organic Documents of such Guarantor;
(c)&nbsp;violate or cause a default under any Applicable Law or Material Contract; or (d)&nbsp;result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Guarantor. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Enforceability</U>. Each Loan Document is a legal, valid and binding obligation of such Guarantor party thereto,
enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors&#146; rights generally. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 4.2 <U>Representations and Warranties in Loan Documents</U>. Each Guarantor hereby represents and warrants to Agent and Lenders
that it has reviewed <U>Section&nbsp;9</U> of the Loan Agreement, and restates as though fully set forth herein, each such representation and warranty made by or with respect to such Guarantor (whether referred to therein as an Obligor or as a
Subsidiary of a Borrower) therein other than the representations and warranties in <U>Sections 9.1.1</U> through <U>9.1.3</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 4.3 <U>Complete Disclosure</U>. Each Guarantor hereby represents and warrants to Agent and Lenders that no Loan Document contains
any untrue statement of a material fact, nor fails to disclose any material fact necessary to make the statements contained therein not materially misleading (it being understood that forecasts and projections are subject to uncertainties and
contingencies and no assurance can be given that any forecast or projection </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10 </FONT></P>



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will be realized). There is no fact or circumstance that any Guarantor has failed to disclose to Agent in writing that could reasonably be expected to have a Material Adverse Effect. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE 5 </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>COVENANTS AND CONTINUING AGREEMENTS, REMEDIES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 5.1 <U>Affirmative and Negative Covenants</U>. Each Guarantor hereby represents and warrants to Agent and Lenders that it has reviewed <U>Section&nbsp;10.1</U> and <U>Section&nbsp;10.2</U> of the
Loan Agreement, and restate as though fully set forth herein, and agree to be bound by and strictly observe, each covenant made by Borrowers with respect to Guarantors (whether referred to therein as an Obligor or as a Subsidiary of a Borrower)
therein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 5.2 <U>Remedies upon Default</U>. Each Guarantor hereby represents and warrants to Agent and Lenders that
they have reviewed <U>Section&nbsp;11.2</U> of the Loan Agreement, and restate as though fully set forth herein, and agree to be bound by and strictly observe, and consent in every respect to each right and remedy afforded to Agent and Lenders with
respect to Guarantors (whether referred to therein as an Obligor or as a Subsidiary of a Borrower) therein following the occurrence of a Default or Event of Default. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 5.3 <U>License</U>. Agent is hereby granted an irrevocable, non-exclusive and royalty-free license or other right to use, license or sub-license (without payment of royalty or other compensation
to any Person) (collectively, the &#147;<U>IP License</U>&#148;) any or all Intellectual Property of Guarantors, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging
materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral. Each Guarantor&#146;s rights and interests under
Intellectual Property shall inure to Agent&#146;s benefit. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 5.4 <U>Setoff</U>. At any time during an Event of Default,
Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency)
at any time held and other obligations (in whatever currency) at any time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the account of a Guarantor against any Guaranteed Obligations, irrespective of whether or
not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Guaranteed Obligations may be contingent or unmatured or are owed to a branch or office of Agent,
Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Agent, Issuing Bank, each Lender and each such Affiliate under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Person may have. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 5.5 <U>Remedies Cumulative;
No Waiver</U>. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Cumulative Rights</U>. All agreements, warranties, guaranties, indemnities and other
undertakings of Guarantors under the Loan Documents are cumulative and not in derogation of each other. The rights and remedies of Agent and Lenders are cumulative, may be exercised at any time and from time to time, concurrently or in any order,
and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until Full Payment of all Guaranteed Obligations. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Waivers</U>. No waiver or course of dealing shall be established by (i)&nbsp;the failure or delay of Agent or any Lender to require
strict performance by Guarantors with any terms of the Loan Documents, or to exercise any rights or remedies with respect to Collateral or otherwise; or (ii)&nbsp;acceptance by Agent or any Lender of any payment or performance by an Obligor under
any Loan Documents in a manner other than that specified therein. It is expressly acknowledged by Guarantors that any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a
subsequent date. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE 6 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>MISCELLANEOUS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.1 <U>Reinstatement, etc</U>. Guarantors agree
that this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Guaranteed Obligations is rescinded or must otherwise be restored by any Lender, upon the
insolvency, bankruptcy or reorganization of any Borrower, any other Guarantor or otherwise, all as though such payment had not been made. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.2 <U>Waiver</U>. Guarantors hereby waive promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Agreement and any requirement
that Agent or any Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against the Borrowers or any other Person (including any other Guarantor) or any collateral securing the
Guaranteed Obligations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.3 <U>Waiver of Subrogation</U>. Guarantors hereby irrevocably waive any claim or other
rights which they may now or hereafter acquire against any Borrower that arises from the existence, payment, performance or enforcement of Guarantors&#146; obligations under this Agreement or any other Loan Document, including any right of
subrogation, reimbursement, exoneration or indemnification, any right to participate in any claim or remedy of Agent or any Lender against any Borrower or any other Guarantor or any collateral which Agent or any Lender now has or hereafter acquires,
whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including the right to take or receive from any Borrower or any other Guarantor, directly or indirectly, in cash or other property or by set-off
or in any manner, payment or security on account of such claim or other rights, until such time as </FONT></P>
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the Guaranteed Obligations shall have been indefeasibly paid in full in cash or Cash Collateralized. If any amount shall be paid to Guarantors in violation of the preceding sentence, such amount
shall be deemed to have been paid to Guarantors for the benefit of, and held in trust for, Agent for itself and for the benefit of Lenders, and shall forthwith be paid to Agent to be credited and applied against the Guaranteed Obligations, whether
matured or unmatured. Guarantors acknowledge that they will receive direct and indirect benefits from the financing arrangements contemplated by the Loan Agreement and that the waiver set forth in this Section is knowingly made in contemplation of
such benefits. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.4 <U>Successors, Transferees and Assigns, etc</U>. This Agreement shall: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) be binding upon Guarantors and their respective successors, transferees and assigns; provided, however, that
Guarantors may not assign any of their obligations hereunder without the prior written consent of Agent and each Lender; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) inure to the benefit of and be enforceable by Agent and Lenders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Without limiting the
generality of <U>clause (b)</U>, any Lender may assign or otherwise transfer (in whole or in part) its rights under this Agreement to any Person to whom it is permitted to assign its rights and obligations under the Loan Documents pursuant to
<U>Section&nbsp;13.3</U> of the Loan Agreement, and such other Person shall thereupon become vested with all rights and benefits in respect thereof granted to such Lender under any Loan Document (including this Agreement) or otherwise. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.5 <U>Loan Document</U>. This Agreement is a Loan Document executed pursuant to the Loan Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.6 <U>Binding on Successors, Transferees and Assigns; Assignment</U>. In addition to, and not in limitation of,
<U>Section&nbsp;6.4</U>, this Agreement shall be binding upon, and shall inure to the benefit of, and be enforceable by Agent and Lenders and their respective successors, transferees and assigns. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.7 <U>Amendments, Etc</U>. No amendment or waiver of any provision of this Agreement nor consent to any departure by Guarantors
therefrom shall in any event be effective unless the same shall be in writing and signed by Agent and Required Lenders and, if required, approved by the Bankruptcy Court and, in the case of any such amendment, Guarantors, and then such waiver or
consent shall be effective only in the specific instance and for the specific purpose for which given. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.8
<U>Addresses for Notices</U>. All notices and other communications provided for hereunder shall be in writing or by facsimile transmission and, if to Guarantors, mailed, given by facsimile transmission or delivered to it care of the Borrower Agent
at its address provided for in the Loan Agreement. All such notices shall be given in a manner and otherwise subject to the terms of <U>Section&nbsp;14.3</U> of the Loan Agreement. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.9 <U>Severability</U>. Wherever possible, each provision of the Loan Documents
shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents
shall remain in full force and effect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.10 <U>Counterparts</U>. This Agreement may be executed in counterparts, each
of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when Agent has received counterparts bearing the signatures of all parties hereto. Delivery of a
signature page of any Loan Document by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.11 <U>Governing Law; Entire Agreement</U>. <B>THIS AGREEMENT SHALL BE GOVERNED BY THE 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).</B> </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.12 <U>Consent to Forum; Arbitration</U>. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Forum</U>. EACH GUARANTOR HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING
IN OR WITH JURISDICTION OVER LOS ANGELES COUNTY, CALIFORNIA, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH GUARANTOR IRREVOCABLY
WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT&#146;S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN <U>SECTION 6.8</U>. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Guarantor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable
Law. Nothing in this Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Arbitration</U>. Notwithstanding any other provision of this Agreement to the contrary, any controversy or claim among the parties relating in any way to any Guaranteed Obligations or Loan
Documents, including any alleged tort, shall at the request of any party hereto be determined by binding arbitration conducted in accordance with the United States Arbitration Act (Title 9 U.S. Code). Arbitration proceedings will be determined in
accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association (&#147;AAA&#148;), and the terms of this Section. In the event of any inconsistency, the terms
of this Section shall control. If AAA is unwilling or unable to serve as the provider of arbitration or to enforce any provision of this Section, Agent may designate another </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
arbitration organization with similar procedures to serve as the provider of arbitration. The arbitration proceedings shall be conducted in Los Angeles, California. The arbitration hearing shall
commence within 90 days of the arbitration demand and close within 90 days thereafter. The arbitration award must be issued within 30 days after close of the hearing (subject to extension by the arbitrator for up to 60 days upon a showing of good
cause), and shall include a concise written statement of reasons for the award. The arbitrator shall give effect to applicable statutes of limitation in determining any controversy or claim, and for these purposes, service on AAA under applicable
AAA rules of a notice of claim is the equivalent of the filing of a lawsuit. Any dispute concerning this Section or whether a controversy or claim is arbitrable shall be determined by the arbitrator. The arbitrator shall have the power to award
legal fees to the extent provided by this Agreement. Judgment upon an arbitration award may be entered in any court having jurisdiction. The arbitrator shall not have the power to commit errors of law or legal reasoning, and any award may be
reviewed and vacated or corrected on appeal to a court of competent jurisdiction for any such error. The institution and maintenance of an action for judicial relief or pursuant to a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. No controversy or claim shall be submitted to arbitration without the consent of all
parties if, at the time of the proposed submission, such controversy or claim relates to an obligation secured by Real Estate, but if all parties do not consent to submission of such a controversy or claim to arbitration, it shall be determined as
provided in the next sentence. At the request of any party, a controversy or claim that is not submitted to arbitration as provided above shall be determined by judicial reference; and if such an election is made, the parties shall designate to the
court a referee or referees selected under the auspices of the AAA in the same manner as arbitrators are selected in AAA sponsored proceedings and the presiding referee of the panel (or the referee if there is a single referee) shall be an active
attorney or retired judge; and judgment upon the award rendered by such referee or referees shall be entered in the court in which proceeding was commenced. None of the foregoing provisions of this Section shall limit the right of Agent or Lenders
to exercise self-help remedies, such as setoff, foreclosure or sale of any Collateral or to obtain provisional or ancillary remedies from a court of competent jurisdiction before, after or during any arbitration proceeding. The exercise of a remedy
does not waive the right of any party to resort to arbitration or reference. At Agent&#146;s option, foreclosure under a mortgage may be accomplished either by exercise of power of sale thereunder or by judicial foreclosure. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECTION 6.13 <U>Waiver of Certain Claims</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) To the fullest extent permitted by Applicable Law, each Guarantor waives (i)&nbsp;the right to trial by jury (which Agent and each Lender hereby also waives) in any proceeding or dispute of any kind
relating in any way to any Loan Documents, Guaranteed Obligations or Collateral; (ii)&nbsp;presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial
paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Agent on which a Guarantor may in any way be liable, and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15 </FONT></P>



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hereby ratifies anything Agent may do in this regard; (iii)&nbsp;notice prior to taking possession or control of any Collateral; (iv)&nbsp;any bond or security that might be required by a court
prior to allowing Agent to exercise any rights or remedies; (v)&nbsp;the benefit of all valuation, appraisement and exemption laws; (vi)&nbsp;any claim against Agent or any Lender, on any theory of liability, for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (vii)&nbsp;notice of acceptance hereof. Guarantor also agrees
that the &#147;fair market value&#148; provisions of Section&nbsp;580a of the California Code of Civil Procedure (and any similar law of or any other applicable jurisdiction) shall have no applicability with respect to the determination of
Guarantors&#146; liability under this Guaranty. Each Guarantor acknowledges that the foregoing waivers are a material inducement to Agent and Lenders entering into this Agreement and that Agent and Lenders are relying upon the foregoing in their
dealings with Guarantors. Each Guarantor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) If Agent or any Lender forecloses on
any real property collateral that may be pledged by Guarantors, the amount of the Guaranteed Obligations or any obligations of any Guarantor in respect thereof may be reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price, and Agent may collect from Guarantors, even if Agent or any Lender, by foreclosing on the real property collateral, has destroyed any right Guarantors may have to collect from Borrowers
or any other Guarantor. This is an unconditional and irrevocable waiver of any rights and defenses Guarantors may have if all or part of the Guaranteed Obligations are secured by real property. These rights and defenses are based upon
Section&nbsp;580a, 580b, 580d, or 726 of the California Code of Civil Procedure and any similar law of or any other jurisdiction. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, GUARANTORS HEREBY WAIVE, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL BENEFITS
OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE &#167;&#167;&nbsp;2787, 2799, 2808, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2847, 2848, AND 2855, CALIFORNIA CODE OF CIVIL PROCEDURE &#167;&#167;&nbsp;580A,
580B, 580C, 580D, AND&nbsp;726, AND CHAPTER&nbsp;2 OF TITLE&nbsp;14 OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR LAWS OF ANY OTHER APPLICABLE JURISDICTION </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) Agent&#146;s right to enforce this Agreement is absolute and is not contingent upon the genuineness, validity or enforceability of the Guaranteed Obligations or any of the Loan Documents. Guarantors
waive all benefits and defenses they may have under California Civil Code Section&nbsp;2810 or any similar laws in any other applicable jurisdiction and agrees that Agent&#146;s rights under this Agreement shall be enforceable
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">16 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
even if Borrowers had no liability at the time of execution of the Loan Documents or the Guaranteed Obligations are unenforceable in whole or in part, or Borrowers cease to be liable with respect
to all or any portion of the Guaranteed Obligations </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Guarantors waive all benefits and defenses they may
have under California Civil Code Section&nbsp;2809 or any similar laws in any other applicable jurisdiction with respect to its obligations under this Agreement and agree that Agent&#146;s rights under the Loan Documents will remain enforceable even
if the amount guaranteed hereunder is larger in amount and more burdensome than that for which Borrowers are responsible. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) Guarantors waive all benefits and defenses they may have under California Civil Code &#167;&#167;&nbsp;2845, 2849 and&nbsp;2850 or any similar laws of any other applicable jurisdiction with respect to
its obligations under this Agreement, including the right to require Agent to (A)&nbsp;proceed against Borrowers, any guarantor of Borrowers&#146; obligations under any Loan Document, any other pledgor of collateral for any Person&#146;s obligations
to Agent or any other person in connection with the Guaranteed Obligations, (B)&nbsp;proceed against or exhaust any other security or collateral Agent may hold, or (C)&nbsp;pursue any other right or remedy for Guarantors&#146; benefit. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">[Remainder of page intentionally left blank; signatures begin on following page] </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">17 </FONT></P>



<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, Guarantors have caused this Agreement to be duly executed and delivered
by their officer thereunto duly authorized as of the date first above written. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE HOLDINGS, INC., a Delaware corporation
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE CORPORATION &#150; NATURAL DAM, a Delaware corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE CORPORATION &#150; NEENAH, a Delaware corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE LLC, a Delaware
corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">COASTAL PAPER COMPANY, a Virginia general partnership </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">MENOMINEE ACQUISITION CORPORATION, a Delaware corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">VAN PAPER COMPANY, a Mississippi
corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">VAN TIMBER COMPANY, a Mississippi corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE &#150; THOMASTON, LLC, a Delaware limited liability company </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE - LONG
ISLAND, LLC, a Delaware limited liability company </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE CORPORATION &#150; OKLAHOMA CITY, a Delaware corporation </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR></TABLE>
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<TR>
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<TD WIDTH="92%"></TD></TR>

<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name: Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:&nbsp;Vice&nbsp;President,&nbsp;Finance&nbsp;and&nbsp;Chief&nbsp;Financial&nbsp;Officer</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Chief Executive Office </U></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1885 Lockeway Drive </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Suite 501 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Alpharetta, GA 30004 </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">S-1
</FONT></P>


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 <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accepted&nbsp;and&nbsp;Agreed&nbsp;as&nbsp;of&nbsp;the&nbsp;date&nbsp;first&nbsp;written&nbsp;above:</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">BANK OF AMERICA, N.A.,</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">as Agent</FONT></P></TD></TR></TABLE>
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<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Ron Bornstein</FONT></P></TD></TR></TABLE>
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<TD></TD>
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<TD WIDTH="99%"></TD></TR>

<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name: Ron Bornstein</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title: Vice President</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">S-2
</FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 3.4 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>DEPOSIT ACCOUNTS </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">See Attached. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 3.5(a) </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>INVENTORY LOCATIONS </U></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">555 North Research Place, Central Islip, NY 11722</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Two Forbes St., East Hartford, CT 06108</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">14 Eastern Park Road, East Hartford, CT 06108</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">1321 South Magnolia Drive, Wiggins, MS 39577</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">50 N. Council Road, Oklahoma City, OK 73127</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">2002 N. Orville Drive, N. Ronkonkoma, NY 11779</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">50 Emjay Blvd., Brentwood, NY, 11717</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">85 Nicon Court, Hauppauge, NY, 11788</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">8530 Janseen Drive, Neenah, WI, 54956</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">1222 Ehlers Road, Neenah, WI,</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">54956; 772 and 845 Specialists Ave., Neenahm WI 54956;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">3621 East Newberry Street, Appleton, WI,</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">13.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">54915 Blair Avenue, Neenah, WI 54956</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">729 Chapman Avenue, Neenah, WI, 54956</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">15.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">144 First Street, Menominee, MI</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">16.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">1215 East Worden Ave., Ladysmith, WI 54848</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">17.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">1201 Barnesville Road, Thomaston, GA 30286</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">18.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">100 McIntosh Parkway, Thomaston, GA</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">19.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">4921 Route 58N, Gouverneur, NY 13642</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">20.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">249 N. Lake St., Neenah, Wisconsin 54956,</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">21.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">209 North Lake St. Neenah, WI, 54956</FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ANNEX I </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>FORM OF JOINDER AGREEMENT </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This JOINDER AGREEMENT, dated as of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>, is delivered pursuant <U>Section&nbsp;2.10</U> of the Guaranty and Security Agreement (the &#147;<U>Agreement</U>&#148;), dated as of
[<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>], 2010, by each of the Persons identified on the signature pages hereto as a &#147;Guarantor&#148;, together with any Person who has become a party hereto pursuant to
<U>Section&nbsp;2.10</U> of the Guaranty and Security Agreement, in favor of Bank of America, N.A. as Agent on behalf of each of Lenders. Capitalized terms used herein without definition are used as defined in the Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">By executing and delivering this Joinder Agreement, the undersigned, as provided in <U>Section&nbsp;2.10</U> of the Agreement, hereby
becomes a party to the Agreement as a Guarantor thereunder with the same force and effect as if originally named as a Guarantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or otherwise) of the Guaranteed Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Agent for the benefit of the Secured Parties, and grants to the
Administrative Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned, and expressly assumes all obligations and liabilities of a
Guarantor thereunder. The undersigned hereby agrees to be bound as a Guarantor for the purposes of the Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
information set forth in <U>Annex 1-A</U> is hereby added to the information set forth in <U>Schedules&nbsp;3.4</U> and <U>3.5(a)</U> of the Agreement. The undersigned hereby represents and warrants that each of the representations and warranties
contained in <U>Article 4</U> of the Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, THE UNDERSIGNED HAS CAUSED THIS JOINDER AGREEMENT TO BE DULY EXECUTED AND DELIVERED AS OF THE DATE FIRST ABOVE WRITTEN. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>],</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">as a Guarantor</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR></TABLE></DIV><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR></TABLE></DIV><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="10%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="89%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR></TABLE></DIV><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="99%"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>

<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Chief Executive Office</U></FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</FONT></TD></TR></TABLE></DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">ACKNOWLEDGED AND AGREED</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">as of the date first above written:</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">BANK OF AMERICA, N.A,</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">as Agent</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ANNEX I-A </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>INFORMATION TO BE ADDED TO SCHEDULES </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 3.4 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Deposit Accounts </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 3.5(a) </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Inventory Locations </FONT></P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>7
<FILENAME>dex104.htm
<DESCRIPTION>SECOND AMENDED AND RESTATED REIMBURSEMENT AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Second Amended and Restated Reimbursement Agreement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.4 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>SECOND AMENDED AND RESTATED REIMBURSEMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THIS SECOND
AMENDED AND RESTATED REIMBURSEMENT AGREEMENT</B>, dated as of December&nbsp;27, 2010, is by and between CELLU TISSUE-CITYFOREST LLC, a Minnesota limited liability company (the &#147;<U>Borrower</U>&#148;), and ASSOCIATED BANK, NATIONAL ASSOCIATION,
a national banking association (the &#147;<U>Bank</U>&#148;). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>RECITALS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A. The Borrower and the Bank are parties to that certain Amended and Restated Reimbursement Agreement dated as of March&nbsp;21, 2007, as
amended by that certain First Amendment to Amended and Restated Reimbursement Agreement dated as of December&nbsp;3, 2009, and by that certain Second Amendment to Amended and Restated Reimbursement Agreement dated as of December&nbsp;9, 2010 (as so
amended, the &#147;<U>Amended and Restated Reimbursement Agreement</U>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">B. On the date hereof, Cellu Tissue Holdings,
Inc., a Delaware corporation (&#147;<U>Cellu Tissue</U>&#148;), merged with Sand Dollar Acquisition Corporation, a Delaware corporation (the &#147;<U>Clearwater Merger Sub</U>&#148;) and a wholly-owned subsidiary of Clearwater Paper Corporation, a
Delaware corporation (&#147;<U>Clearwater</U>&#148;), pursuant to that certain Merger Agreement, dated as of September&nbsp;15, 2010, by and among Cellu Tissue, Clearwater Merger Sub and Clearwater (the &#147;<U>Clearwater Merger</U>&#148;), with
Cellu Tissue continuing as the surviving corporation in the Clearwater Merger. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">C. The Borrower has requested that the Bank
consent to the Clearwater Merger and amend certain provisions of the Original Reimbursement Agreement pursuant to this Agreement, and the Bank is willing to do so subject to the terms and conditions of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the premises and other good and valuable consideration the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree to amend and restate the Original Reimbursement Agreement as follows: </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE
I. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>DEFINITIONS AND ACCOUNTING TERMS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>1.1. <U>Defined Terms</U>. </B>In addition to terms defined elsewhere in this Agreement, the following terms shall have the following respective meanings (and such meanings shall be equally applicable
to both the singular and plural form of the terms defined, as the context may require): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Account</U>&#148;: The
Borrower&#146;s &#147;Receivables&#148;. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Account Debtor</U>&#148;: Any Person who is or who may become obligated to
the Borrower under, with respect to, or on account of an Account, General Intangible or other Collateral. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Adjusted
Net Income</U>&#148;: For any period, the Borrower&#146;s net income for such period but adjusted to exclude: (i)&nbsp;non-operating gains and losses (including extra-ordinary or unusual gains
</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
and losses, gains and losses from discontinuance of operations, gains and losses arising from the sale of assets other than Inventory and other non-recurring gains and losses) during such period;
and (ii)&nbsp;any income attributable to the Borrower&#146;s or any of its Subsidiaries&#146; Investment in any non-wholly owned subsidiary which is not distributed in cash during such period. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Affiliate</U>&#148;: As applied to any Person, means any other Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this definition, &#147;control&#148; (including with correlative meanings, the terms &#147;controlling,&#148; &#147;controlled by&#148; and &#147;under common control with&#148;), as
applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Agreement</U>&#148;: This Second Amended and Restated Reimbursement Agreement, as it may be amended, modified,
supplemented, restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Amended and Restated Reimbursement Agreement</U>&#148;: As
provided in the recitals hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Amortization Schedule</U>&#148;: As provided in <U>Section&nbsp;8.18</U>.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Annual Budget</U>&#148;: The Annual Budget for the Borrower approved by the Borrower&#146;s Board of Directors and
delivered to the Bank pursuant to <U>Section&nbsp;8.14(c)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Annual Date</U>&#148;: Each annual date on which the
Borrower is required to pay the Letter of Credit Fee to the Bank pursuant to <U>Section&nbsp;2.3(a)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Applicable
Letter of Credit Fee Percentage</U>&#148;: 2.50%. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Assigned Agreements</U>&#148;: As provided in the Security
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Assignment of Leases and Rents</U>&#148;: The Assignment of Leases and Rents dated as of June&nbsp;29,
2005 made by the Borrower in favor of the Collateral Agent to secure the Obligations, as assigned by the Collateral Agent to the Bank and amended pursuant to that certain Assignment of Assignment of Leases and Rents and Amendment (the &#147;Rent
Assignment/Amendment&#148;) dated as of March&nbsp;21, 2007, as so amended and as it may be further amended, modified, supplemented, restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bank</U>&#148;: As provided in the preamble hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Board of
Directors</U>&#148;: As to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly
authorized committee thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bond Documents</U>&#148;: The Indenture, the Bond Loan Agreement, the Bonds, the
Remarketing Agreement, the Bonds Placement Agreement, the Security Documents and all other documents delivered by the Borrower pursuant to the Bond Loan Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bond Loan Agreement</U>&#148;: Loan Agreement dated as of March&nbsp;1, 1998 by and between the Issuer and the Borrower. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bond Prepayment Fund</U>&#148;: As provided in <U>Section&nbsp;2.8</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bond Proceeds</U>&#148;: The proceeds from the sale of the Bonds. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bonds</U>&#148;: the Issuer&#146;s Variable Rate Demand Solid Waste Disposal Facility Revenue Bonds, Series 1998 (CityForest
Corporation Project). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bonds Letter of Credit</U>&#148;: As provided in <U>Section&nbsp;2.1</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bonds Pledge Agreement</U>&#148;: The Pledge and Security Agreement dated as of June&nbsp;29, 2005 made by the Borrower in favor
of the Bank to secure the Obligations, as originally executed and as it may be amended, modified, supplemented, restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Bonds Promissory Note</U>&#148;: The Promissory Note dated March&nbsp;26, 1998 made by the Borrower payable to the order of the Issuer in the original principal amount of $27,000,000.00 and on
which there is an outstanding principal amount of $15,744,541.10 on the date hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Borrower</U>&#148;: As provided
in the preamble hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Business Day</U>&#148;: Any day (other than a Saturday, Sunday or legal holiday in the State
of Wisconsin) on which national banks are permitted to be open in Green Bay, Wisconsin. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>CA Accounts</U>&#148;: The
Bond Prepayment Fund described in <U>Section&nbsp;2.8</U>, the Letter of Credit Fee Account described in <U>Section&nbsp;2.16</U> and the Senior Debt Reserve Fund described in <U>Section&nbsp;2.10</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Capital Expenditure</U>&#148;: Any amount debited to the fixed asset account on the Borrower&#146;s consolidated balance sheet
in respect of: (a)&nbsp;the acquisition (including, without limitation, acquisition by entry into a Capitalized Lease), construction, improvement, replacement or betterment of land, buildings, machinery, equipment or of any other fixed assets or
capitalized leaseholds; and (b)&nbsp;to the extent related to and not included in (a)&nbsp;above, materials, contract labor and direct labor (excluding expenditures charged to repairs or maintenance in accordance with GAAP). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Capitalized Lease</U>&#148;: Any lease which, in accordance with GAAP, is capitalized on the books of the lessee. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Cash Collateral Account</U>&#148;: As provided in <U>Section&nbsp;10.4</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Cellu Tissue</U>&#148;: As provided in the recitals hereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Cellu Tissue Bank Guaranty</U>&#148;: The Amended and Restated Guaranty dated as of December&nbsp;27, 2010 made by Cellu Tissue
in favor of the Bank, as originally executed and as it may be amended, modified, supplemented, restated or replaced from time to time </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Change of Control</U>&#148;: The occurrence of any of the following events (or any combination of the following) whether arising from any single transaction or event or any series of
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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transactions or events (whether as the most recent transaction in a series of transactions) which, individually or in the aggregate, results in a change in the direct or indirect ownership of
Borrower, such that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) any &#147;person&#148; or &#147;group&#148; of related persons (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have &#147;beneficial ownership&#148; of all shares
that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total outstanding voting Equity Interests of Clearwater or any
of its direct or indirect parent entities (or their successors by merger, consolidation or purchase of all or substantially all of their assets) (for the purposes of this clause, such person or group shall be deemed to beneficially own any
outstanding voting Equity Interests of Clearwater or any of its direct or indirect parent entities held by a parent entity, if such person or group &#147;beneficially owns&#148; (as defined above), directly or indirectly, more than 50% of the
outstanding voting Equity Interests of such parent entity); or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the first day on which a majority of the
members of the Board of Directors of Clearwater are not Continuing Directors; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) the sale, lease,
transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Clearwater and its Subsidiaries taken as a whole to any
&#147;person&#148; (as such term is used in <U>Sections&nbsp;13(d)</U> and <U>14(d)</U> of the Exchange Act); or </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) the adoption by the shareholders of Clearwater of a plan or proposal for the liquidation or dissolution of Clearwater;
or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Clearwater shall cease to own, free and clear of all Liens other than Liens not prohibited by the
Clearwater Bank of America Loan Agreement, 100% of the outstanding Equity Interests of Cellu Tissue, or Cellu Tissue shall cease to own, free and clear of all Liens other than Liens not prohibited by the Clearwater Bank of America Loan Agreement,
100% of the outstanding Equity Interests of the Borrower; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) any other &#147;Change of Control&#148;
(howsoever defined) shall occur under the Clearwater Credit Facility Loan Documents or by any Clearwater Senior Notes Indenture; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">provided,
that a holding company with no material assets or operations independent of its ownership of the Equity Interests of Clearwater that is a direct or indirect parent Clearwater shall not be deemed to &#147;beneficially own,&#148; directly or
indirectly, the voting Equity Interests of Clearwater or a direct or indirect parent of Clearwater provided that the beneficial ownership of such parent remains the same as existed prior to the creation of such entity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Chief Office</U>&#148;: As provided in the Security Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater</U>&#148;: As provided in the recitals hereto. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater 7-1/8% Senior Notes</U>&#148;: The 7-1/8% Senior Notes due 2018 now or
hereafter issued under the Clearwater 7-1/8% Senior Notes Indenture and any subsequent term Indebtedness refinancing, replacing or extending such notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater 10-5/8% Senior Notes</U>&#148;: The 10-5/8% Senior Notes due 2016 now or hereafter issued under the Clearwater 10-5/8% Senior Notes Indenture and any subsequent term Indebtedness
refinancing, replacing or extending such notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater 7-1/8% Senior Notes Indenture</U>&#148;: The Indenture
dated as of October&nbsp;22, 2010, among Clearwater, the subsidiary guarantors party thereto and U.S. Bank National Association as trustee or if the Clearwater 7-1/8% Senior Notes have been replaced by any subsequent term Indebtedness, the loan
agreement or other instrument governing such subsequent term Indebtedness; in each case, as amended, modified, supplemented, restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater 10-5/8% Senior Notes Indenture</U>&#148;: The Indenture dated as of June&nbsp;11, 2009, among Clearwater, the subsidiary guarantors party thereto and U.S. Bank National Association as
trustee or if the Clearwater 10-5/8% Senior Notes have been replaced by any subsequent term Indebtedness, the loan agreement or other instrument governing such subsequent term Indebtedness; in each case, as amended, modified, supplemented, restated
or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Bank Guaranty</U>&#148;: The Guaranty dated as of December&nbsp;27, 2010
made by Clearwater in favor of the Bank, as originally executed and as it may be amended, modified, supplemented, restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Credit Facility</U>: The revolving credit and letter of credit facility provided under the Loan and Security Agreement dated as of November&nbsp;26, 2008 (as amended prior to the date
hereof, the &#147;<U>Clearwater Bank of America Loan Agreement</U>&#148;) among Clearwater and Bank of America, N.A., as agent or, if the Clearwater Bank of America Loan Agreement has been replaced by any subsequent credit facility, the loan
agreement providing for such subsequent credit facility; in each case, as amended, modified, supplemented, restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Credit Facility Loan Documents</U>&#148;: The Clearwater Bank of America Loan Agreement and the other &#147;Loan Documents&#148; described therein or, if the Clearwater Bank of America
Loan Agreement has been replaced by any subsequent credit facility, the documentation evidencing, guaranteeing or securing such subsequent credit facility; in each case, as amended, modified, supplemented, restated or replaced from time to time.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Merger</U>&#148;: As provided in the recitals hereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Merger Agreement</U>&#148;: As provided in the recitals hereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Merger Sub</U>&#148;: As provided in the recitals hereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Merger Transactions</U>&#148;: (a)&nbsp;Clearwater&#146;s acquisition of all the outstanding Equity Interests in
Cellu Tissue and the consummation of the Clearwater Merger, and the other </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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transactions contemplated by the Clearwater Merger Agreement, (b)&nbsp;the Borrower&#146;s execution and delivery of the Clearwater Senior Notes Loan Documents to which the Borrower is party, and
(c)&nbsp;the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents and the consummation of the other transactions contemplated by this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Prepayment Event</U>&#148;: The occurrence of the following: (a)&nbsp;either (i)&nbsp;Clearwater incurs Indebtedness
(including, without limitation, any &#147;Disqualified Stock&#148; described in either Clearwater Senior Secured Notes Indenture) that is not permitted by <U>Section&nbsp;4.9</U> of either Clearwater Senior Secured Notes Indenture as in effect on
the date of this Agreement or any substitute covenant limiting debt incurrence which the Bank has consented to in writing as a replacement for <U>Section&nbsp;4.9</U> of the Clearwater Senior Secured Notes Indenture; and/or (ii)&nbsp;Clearwater
refinances any of the Clearwater Senior Secured Notes pursuant to an extension of either Clearwater Senior Secured Notes Indenture or to any subsequent credit facility and the Bank determines that the terms and conditions of such refinancing are
materially adverse to the rights and benefits of the Bank under the Loan Documents; and (b)&nbsp;the Bank, within 60 days after the date of on which the Borrower notifies the Bank of the occurrence of any event described in clause (a)(i) or
(ii)&nbsp;above, delivers a written demand to the Borrower and Clearwater that the Borrower prepay all of the Obligations in full, rather than approving Clearwater&#146;s requested debt increase or refinancing. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Senior Notes</U>&#148;: Individually and collectively, the Clearwater 10-5/8% Senior Notes and the Clearwater 7-1/8%
Senior Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Senior Notes Indenture</U>&#148;: Individually and collectively, the Clearwater 7-1/8%
Senior Notes Indenture and the Clearwater 10-5/8% Senior Notes Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Senior Notes Loan
Documents</U>&#148;: The Clearwater Senior Notes Indentures, the Clearwater Senior Notes, and the &#147;Guaranties&#148; and &#147;Loan Documents&#148; described therein or, if the Clearwater Senior Notes have been replaced by any subsequent term
Indebtedness, the documentation evidencing, guaranteeing or securing such subsequent term Indebtedness; in each case, as amended, modified, supplemented, restated or replaced from time to time. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Clearwater Senior Notes Subsidiary Guaranty</U>&#148;: The Note Guaranty described in the Clearwater 10-5/8% Senior Notes
Indenture that has been made by the Borrower to secure the &#147;Obligations&#148; described therein, or, if the Clearwater 10-5/8% Senior Notes have been replaced by any subsequent term Indebtedness, any similar guaranty made by the Borrower
guaranteeing the payment of such subsequent term Indebtedness; in each case as amended, modified, supplemented or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Code</U>&#148;: The Internal Revenue Code of 1986, as amended, or any successor statute, together with regulations thereunder. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Collateral</U>&#148;: Any property in which the Bank, as the assignee of the Collateral Agent, has been granted a Lien pursuant
to any Security Document. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Collateral Agency Agreement</U>&#148;: The Collateral Agency and Intercreditor Agreement
dated as of June&nbsp;29, 2005 (the &#147;Original Collateral Agency Agreement&#148;) among the Borrower, </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


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the Bank, the Bank in its separate capacity as collateral agent (in such capacity, the &#147;Collateral Agent&#148;) and the &#147;Senior Subordinated Agent&#148; described therein;
<U>provided</U>, <U>however</U>, that on the Effective Date (as defined in the Original Reimbursement Agreement) and immediately after the Collateral Agent&#146;s assignments of its rights under the Security Documents to the Bank, the Borrower, the
Bank and the Collateral Agent terminated the Collateral Agency Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Collateral Agent</U>&#148;: Associated
Bank, National Association, in its capacity as collateral agent for the benefit of itself and the ratable benefit of the &#147;Secured Parties&#148; as defined in the Original Reimbursement Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Compliance Certificate</U>&#148;: As provided in <U>Section&nbsp;8.14(b)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Contingent Obligation</U>&#148;: With respect to any Person at the time of any determination, without duplication, any
obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the &#147;primary obligor&#148;) in any manner, whether directly or otherwise, or entered into for
the purpose of assuring in any manner the owner of such Indebtedness of the payment of such Indebtedness or to protect the owner against loss in respect thereof; provided, that the term &#147;Contingent Obligation&#148; shall not include
endorsements for collection or deposit, in each case in the ordinary course of business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Continuing
Directors</U>&#148;: As of any date of determination, any member of the Board of Directors of Clearwater who: (1)&nbsp;was a member of such Board of Directors on December&nbsp;27, 2010; or (2)&nbsp;was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors (or a majority of the nomination committee of the Board of Directors) who were members of such Board of Directors at the time of such nomination or election. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Conversion Date</U>&#148;: As provided in the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Damages</U>&#148;: All condemnation awards, warranty payments, proceeds of property or casualty insurance policies of the
Borrower, liquidated damages or other damages received from time to time by or on behalf of the Borrower. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Default</U>&#148;: Any event which, with the giving of notice to the Borrower or lapse of time, or both, would constitute an
Event of Default. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Default Rate</U>&#148;: The sum of (i)&nbsp;the one-month LIBOR rate (the &#147;LIBOR Rate&#148;)
quoted by the Bank from Telerate page 3750 or any successor thereto, which shall be that one-month LIBOR rate in effect two (2)&nbsp;Eurodollar Business Days prior to the beginning of each calendar month, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation, such rate to be reset at the beginning of each succeeding month, plus (ii)&nbsp;4.50%. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Drawing</U>&#148;: As provided in the Bonds Letter of Credit. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Drawing Date</U>&#148;: Any date on which the Bank honors a Drawing. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>EBITDA</U>&#148;: For any period, the sum of: (a)&nbsp;the Adjusted Net Income for
such period; plus (b)&nbsp;the sum of the following amounts deducted in arriving at such adjusted net income (but without duplication for any item): (i)&nbsp;Interest Expense; (ii)&nbsp;depreciation and amortization expense; and (iii)&nbsp;federal,
state and local income taxes or, if the Borrower is a pass-through tax entity, the maximum Permitted Tax Distributions that are permitted to be paid with respect to such net income (assuming compliance with <U>Section&nbsp;9.7(b)(i)</U>), regardless
of whether actually paid during such Measurement Period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Effective Date</U>&#148;: The date of this Agreement or, if
the conditions precedent set forth in Article VI shall not have been satisfied or waived in writing by the Bank on such date, then such later date specified by the Borrower and the Bank as being the Effective Date. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Environmental Indemnity</U>&#148; or &#147;<U>Indemnity</U>&#148;: The Environmental and ADA Indemnity Agreement dated as of
June&nbsp;29, 2005 made by the Borrower in favor of the Collateral Agent, as assigned by the Collateral Agent to the Bank and amended pursuant to that certain Assignment of Environmental Indemnity and Amendment (the &#147;<U>Indemnity
Assignment/Amendment</U>&#148;) dated as of March&nbsp;21, 2007, as so amended and as it may be further amended, modified, supplemented, restated or replaced from time to time. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Environmental Laws</U>&#148;: All present and future federal, state, regional or local laws, statutes, ordinances, rules,
regulations and other requirements of governmental authorities relating to the environment or to any Hazardous Substance or Hazardous Substance Activity including, without limitation, at the federal level, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980,42 U.S.C. Section&nbsp;9601, et seq., as now or hereafter amended (&#147;<U>CERCLA</U>&#148;), the Resource Conservation and Recovery Act, 42 U.S.C. Section&nbsp;6901 et seq., as now or hereafter amended, the
Hazardous Materials Transportation Act, 49 U.S.C. Section&nbsp;1801, et seq., as now or hereafter amended, the Clean Water Act, 33 U.S.C. Section&nbsp;1251, to sea., as now or hereafter amended, the Clean Air Act, 42 U.S.C. Section&nbsp;7901, et
seq., as now or hereafter amended, the Toxic Substances Control Act, 15 U.S.C. Sections 2601 through 2629, as now or hereafter amended, and the Safe Drinking Water Act, 42 U.S.C. Section&nbsp;300f through 300j, as now or hereafter amended.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Environmental Report(s)</U>&#148;: The environmental report(s) described in Schedule 1 to the Environmental
Indemnity covering the &#147;Premises&#148; subject to the Mortgage and delivered to the Bank pursuant to <U>Section&nbsp;6.1(a)(iii)</U> of the Original Reimbursement Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Equipment</U>&#148;: As provided in the UCC including, without limitation, all of the Borrower&#146;s present and future
interests in (i)&nbsp;equipment in all of its forms wherever located, now or hereafter existing, whether owned or leased by the Borrower, including, without limitation, machinery, transportation equipment, manufacturing, distribution, selling, data
processing and office equipment, assembly systems, tools, molds, dies, fixtures, appliances, furniture, furnishings, and trade fixtures, (ii)&nbsp;other tangible personal property (other than the Borrower&#146;s Inventory), and (iii)&nbsp;any and
all accessions, parts and appurtenances attached to any of the foregoing or used in connection therewith, and any substitutions therefor and replacements, products and proceeds thereof. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Equity Interests</U>&#148;: Shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity
interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>ERISA</U>&#148;: The Employee Retirement Income Security Act of 1974, as amended, or any successor
statute, together with regulations thereunder. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>ERISA Affiliate</U>&#148;: Any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower or any of its Subsidiaries is a member and that is treated as a single employer under Section&nbsp;414 of the Code. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Eurodollar Business Day</U>&#148;: Means any day which is a Business Day and also a day (other than a Saturday or Sunday) on
which commercial banks are open for business in New York, New York and a day for trading by and between banks in United States dollar deposits in the interbank Eurodollar market. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Event of Default</U>&#148;: Any event described in <U>Section&nbsp;10.1</U> which has not been cured to the satisfaction of, or
waived by, the Bank in accordance with <U>Section&nbsp;11.1</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Exchange Act</U>&#148;: the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Federal Reserve
Board</U>&#148;: The Board of Governors of the Federal Reserve System or any successor thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Final
Drawing</U>&#148;: As provided in the Bonds Letter of Credit. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Financial Officer</U>&#148;: With respect to any
described Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Financing Agreements</U>&#148;: This Agreement, the other Loan Documents and the Bond Documents. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Fixed Charge Coverage Ratio</U>&#148;: At any Quarterly Measurement Date, the numerical ratio of: (a)&nbsp;the sum of:
(i)&nbsp;the EBITDA for the Measurement Period ending at such date; <U>plus</U> (ii)&nbsp;rent expense on Operating Leases deducted from the net income included in the Adjusted Net Income used in calculating such EBITDA; plus (iii)&nbsp;non-cash
corporate allocations incurred during such Measurement Period; to (b)&nbsp;the sum of: (i)&nbsp;the Interest Expense during such Measurement Period; plus (ii)&nbsp;the Mandatory Principal Payments scheduled to have been paid during such Measurement
Period; <U>plus</U> (iii)&nbsp;the rent expense on Operating Leases scheduled to have been paid during such Measurement Period; <U>plus</U> (iv)&nbsp;the greater of: (A)&nbsp;Non-Financed Capital Expenditures made during such Measurement Period; or
(B)&nbsp;a maintenance Capital Expenditures requirement of $500,000.00, regardless of whether actually paid during such Measurement Period; <U>plus</U> (v)&nbsp;federal, state and local income taxes with respect to the net income included in the
EBITDA for such Measurement Period or, if the Borrower is a pass-through tax entity, the maximum Permitted Tax Distributions that are permitted to be paid with respect to </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9 </FONT></P>


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such net income (assuming compliance with <U>Section&nbsp;9.7(b)</U>), regardless of whether actually paid during such Measurement Period. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>GAAP</U>&#148;: Generally accepted accounting principles as in effect from time to time including, without limitation,
applicable statements, bulletins and interpretations of the Financial Accounting Standards Board and applicable bulletins, opinions and interpretations issued by the American Institute of Certified Public Accountants or its committees. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Governmental Approvals</U>&#148;: The Permits and all other permits, authorizations, consents, approvals, licenses, consent
certificates, rulings, certifications, orders, waivers, exemptions of, or filings or registrations with, any Governmental Person required in connection with the operation or maintenance of the Plant and the consummation of the transactions set forth
in the Transaction Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Governmental Person</U>&#148;: Any national, federal, state or local government
(whether foreign or domestic), any political subdivision thereof or any governmental, quasi-governmental, administrative, judicial, public or statutory instrumentality, authority, body or entity, or any other regulatory bureau, authority, body or
entity, including the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Governmental Rule</U>&#148;: Any law, statute, permit, concession, grant, franchise, license, requirement, rule, regulation, ordinance, order, code, interpretation, judgment, decree, directive,
guideline, policy or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Person whether now or hereafter in effect. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Hazardous Materials Claims</U>&#148;: As provided in <U>Section&nbsp;8.15</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Hazardous Substance Activity</U>&#148;: Any storage, holding, disposal, leaching, existence, use, release, migration, emission,
discharge, generation, processing, abatement, removal, repair, cleanup or detoxification, disposition, handling or transportation of any Hazardous Substance from, under, into, on or about the Property. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Hazardous Substances</U>&#148; Any substance that is at any time defined or listed in, or otherwise classified or regulated
pursuant to, any Environmental Laws as (a)&nbsp;a &#147;hazardous substance,&#148; &#147;hazardous material,&#148; &#147;hazardous waste,&#148; &#147;infectious waste,&#148; &#147;designated waste,&#148; &#147;biohazard,&#148; &#147;toxic
substance,&#148; &#147;toxic pollutant,&#148; &#147;pollutant,&#148; &#147;contaminant&#148; or similarly designated substance; or (b)&nbsp;otherwise having or exhibiting deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity or &#147;EP toxicity,&#148; including asbestos, polychlorinated biphenyls and also including petroleum products, by-products and wastes or by-products associated with the extraction, refining or use
of petroleum or petroleum products, whether or not so listed or classified in such laws or regulations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Historical
Financial Statements</U>&#148;: As provided in <U>Section&nbsp;7.5(b)</U>. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Indebtedness</U>&#148;: Without duplication, all obligations, contingent or
otherwise, which in accordance with GAAP should be classified upon the obligor&#146;s balance sheet as liabilities, but in any event including the following (whether or not they should be classified as liabilities upon such balance sheet):
(a)&nbsp;obligations secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the obligation secured thereby shall have been assumed and whether or
not the obligation secured is the obligation of the owner or another party; (b)&nbsp;any obligation on account of deposits or advances; (c)&nbsp;any obligation for the deferred purchase price of any property or services, except Trade Accounts
Payable; (d)&nbsp;any obligation as lessee under any Capitalized Lease; (e)&nbsp;all Contingent Obligations; (f)&nbsp;undertakings or agreements to reimburse or indemnify issuers of letters of credit or in connection with bankers&#146; acceptances
including, without limitation, the Letter of Credit Obligations; and (g)&nbsp;all Rate Protection Obligations. For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture as
to which such Person is or may become personally liable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Indenture</U>&#148;: As provided in the recitals hereto.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Insolvency or Liquidation Proceedings</U>&#148;: Any receivership, conservatorship, general meeting of creditors,
insolvency or bankruptcy proceeding, assignment for the benefit of creditors or any proceeding or action by or against the Borrower or any guarantor of the Obligations for any relief under any bankruptcy or insolvency law or other laws relating to
the relief of debtors, readjustment of indebtedness, reorganizations, dissolution, liquidation, compositions or extensions, or the appointment of any receiver, intervenor or conservator of, or trustee, or similar officer for, the Borrower or any
guarantor of the Obligations or any substantial part of its or their respective properties or assets, including, without limitation, proceedings under the United States Bankruptcy Code (the &#147;Bankruptcy Code&#148;), or under other federal, state
or local statute, laws, rules and regulations, all whether now or hereafter in effect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Interest Expense</U>&#148;:
For any period, the aggregate interest expense (including capitalized interest) of the Borrower for such period including, without limitation, the interest portion of any Capitalized Lease, the Letter of Credit Fee and other fees and charges with
respect to the Bonds Letter of Credit; <U>provided</U>, <U>however</U>, that the foregoing shall be adjusted to reflect only the net effect of any interest rate swap, interest hedging transaction, or other similar arrangement entered into by the
Borrower in order to reduce or eliminate variations in its interest expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Interest Payment Date</U>&#148;: As
provided in the Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Inventory</U>&#148;: As provided in the UCC including, without limitation, including,
without limitation, all of the Borrower&#146;s present and future: (a)&nbsp;inventory in all of its forms wherever located, now or hereafter existing, (b)&nbsp;goods, merchandise and other personal property furnished or to be furnished under any
contract of service or intended for sale, lease or exchange, and all consigned goods and all other items which have previously constituted Equipment of the Borrower but are then currently being held for sale or lease in the ordinary course of the
Borrower&#146;s business, (c)&nbsp;raw materials, work-in-process and finished goods, (d)&nbsp;materials and supplies of any kind, nature or description used or consumed in the Borrower&#146;s business or in connection with the manufacture,
production, packing, shipping, advertising, finishing or sale of any of the Property described in <U>clauses (a)</U>&nbsp;through <U>(c)</U>&nbsp;above, (e)&nbsp;goods in which the Borrower </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">11 </FONT></P>



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has a joint or other interest or right of any kind (including, without limitation, goods in which the Borrower has an interest or right as consignee), and (f)&nbsp;goods which are returned to or
repossessed by the Borrower, in each case whether in the possession of the Borrower, a bailee, a consignee, or any other Person for sale, storage, transit, processing, use or otherwise, and any and all accessions thereto, products thereof, and
documents for or relating to any of the foregoing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Investment</U>&#148;: The acquisition, purchase, making or
holding of any stock or other security, any loan, advance, contribution to capital, extension of credit (except for trade and customer accounts receivable for Inventory sold or services rendered in the ordinary course of business and payable in
accordance with customary trade terms), any acquisitions of real or personal property (other than real and personal property acquired in the ordinary course of business) and any purchase or commitment or option to purchase stock or other debt or
equity securities of, or any interest in, another Person or any integral part of any business or the assets comprising such business or part thereof. The amount of any Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Issuer</U>&#148;: City of Ladysmith, Wisconsin. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Land</U>&#148;: As provided in the Mortgage. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Letter of Credit Amount</U>&#148;: As provided in the Bonds Letter of Credit. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Letter of Credit Fee</U>&#148;: As provided in <U>Section&nbsp;2.3(a)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Letter of Credit Fee Account</U>&#148;: As provided in <U>Section&nbsp;2.19</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Letter of Credit Obligations</U>&#148;: At any date of determination, the sum of: (a)&nbsp;the aggregate amount available to be drawn on the Bonds Letter of Credit on such date; <U>plus</U>
(b)&nbsp;the aggregate amount owed by the Borrower to the Bank on such date as a result of a Drawing on the Bonds Letter of Credit for which the Borrower has not reimbursed the Bank (such unpaid amount being the &#147;Unreimbursed Amount&#148;).
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Leverage Ratio</U>&#148;: At any Quarterly Measurement Date, the ratio of: (a)&nbsp;the sum (without duplication) of
any unpaid Unreimbursed Amount, the outstanding principal balance of the Bonds Promissory Note, the outstanding principal balance of any Indebtedness incurred by the Borrower pursuant to <U>Section&nbsp;9.2(g)</U>, and the outstanding principal of
all other interest bearing Indebtedness of the Borrower and its Subsidiaries (including, without limitation, the portion of any Capitalized Lease allocable to principal in accordance with GAAP but excluding Indebtedness arising under the Clearwater
Senior Notes Subsidiary Guarantee so long as the Indebtedness created thereby has not become due and payable at the maturity of the guarantied obligations, by acceleration or otherwise, and remains unpaid) at such date; to (b)&nbsp;the EBITDA for
the Measurement Period ending on such Quarterly Measurement Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Liabilities</U>&#148;: At any date of
determination, the aggregate amount of liabilities appearing on the Borrower&#146;s balance sheet at such date prepared in accordance with GAAP. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Lien</U>&#148;: Any security interest, mortgage, pledge, lien, hypothecation,
judgment lien or similar legal process, charge, encumbrance, title retention agreement or analogous instrument or device (including, without limitation, the interest of the lessors under Capitalized Leases and the interest of a vendor under any
conditional sale or other title retention agreement). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Liquidity Drawing</U>&#148;: As provided in the Bonds Letter
of Credit. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Loan Documents</U>&#148;: This Agreement, the Security Documents, the Rate Protection Agreements, the
Cellu Tissue Bank Guaranty, the Clearwater Bank Guaranty and each other instrument, document, guaranty, security agreement, mortgage, or other agreement executed and delivered by the Borrower or any other Loan Party pursuant to which the Borrower or
such Loan Party incurs any liability to the Bank with respect to the Obligations, agrees to perform any covenant or agreement with respect to the Obligations or grants any security interest to secure the Obligations. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Loan Party</U>&#148;: The Borrower, Clearwater and Cellu Tissue. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Lockbox Agreement</U>&#148;: The Lockbox Services Agreement dated as of June&nbsp;29, 2005 between the Borrower and the Bank, as
amended by a First Amendment to Lockbox Services Agreement dated as of June&nbsp;29, 2005, as so amended and as it may be further amended, modified, supplemented, restated or replaced from time to time </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Mandatory Principal Payments</U>&#148;: For any period, the payments required to be made on the Bonds pursuant to the
Amortization Schedule, and other principal payments (including the portion of any payment on any Capitalized Lease allocable to principal in accordance with GAAP) regularly scheduled to be paid by the Borrower or any of its Subsidiaries during such
period on the Borrower&#146;s Capitalized Leases and other interest-bearing Indebtedness. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Material Adverse
Occurrence</U>&#148;: The occurrence of any event which the Bank, in good faith, determines could reasonably be expected to have a material adverse effect on (a)&nbsp;the business, property, assets, operations or condition, financial or otherwise of
either: (i)&nbsp;the Borrower; or (ii)&nbsp;Cellu Tissue and its Subsidiaries, taken as a whole; or (b)&nbsp;the Borrower&#146;s or any other Loan Party&#146;s prospective ability to perform any of its payment or other obligations under the Loan
Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Material Contract</U>&#148;: Each contract (other than a lease, sublease or assignment of an interest in
land, improvements, equipment or fixtures) to which the Borrower is a party that: (a)&nbsp;adversely affects the value of any of the Collateral as security for the Obligations; or (b)&nbsp;is materially adverse to the rights and benefits of the Bank
under the Loan Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Maximum Debt Service Reserve Amount</U>&#148;: As provided in the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Measurement Period</U>&#148;: At any Quarterly Measurement Date, the four fiscal quarters ending on such Quarterly Measurement
Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Monthly Date</U>&#148;: The first Business Day of each month. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Moody&#146;s</U>&#148;: Moody&#146;s Investors Service, Inc. and any successor thereto. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13 </FONT></P>



<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Mortgage</U>&#148;: The Mortgage, Security Agreement, Financing Statement and
Assignment of Rents and Leases dated as of June&nbsp;29, 2005 made by the Borrower in favor of the Collateral Agent to secure the Obligations, as assigned by the Collateral Agent to the Bank and amended by that certain Assignment of Mortgage,
Security Agreement, Financing Statement and Assignment of Rents and Leases and Amendment dated as of March&nbsp;21, 2007 (the &#147;<U>Mortgage Assignment/Amendment</U>&#148;), as so amended and as it may be further amended, modified, supplemented,
restated or replaced from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Multiemployer Plan</U>&#148;: A Plan that is a &#147;multiemployer
plan&#148; within the meaning of Section&nbsp;4001(a)(3) of ERISA. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Multiemployer Plan Insolvency</U>&#148;: With
respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section&nbsp;4245 of ERISA. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Net Proceeds</U>&#148;: With respect to any sale, transfer or other disposition of any of the Borrower&#146;s assets (other than
sales of Inventory in the ordinary course of business) or from the issuance of any Equity Interest in the Borrower other than to Cellu Tissue) or of any option, warrant or other right to acquire the same, or from the incurrence of any other
Indebtedness (excluding Indebtedness permitted to be incurred by <U>Section&nbsp;9.2</U>) by the Borrower, in any case net of the actual cash expenses paid by the Borrower in connection with such issuance or incurrence, the cash proceeds received by
the Borrower or such Subsidiary from such transaction less the sum of: (a)&nbsp;the reasonable costs associated with such transaction; and (b)&nbsp;the amount of any Indebtedness (other than the Obligations) which is required to be paid in
connection with such transaction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Non-Financed Capital Expenditures</U>&#148;: For any period, the portion of the
Capital Expenditures made during such period which was not financed by Purchase Money Indebtedness or Capitalized Leases permitted to be incurred by Section&nbsp;9.2(f). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Obligations</U>&#148;: All Letter of Credit Obligations, Rate Protection Obligations, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Bank of any kind
or nature, present or future, which arise under this Agreement, any other Loan Document or any Rate Protection Agreement or by operation of law, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of
money, whether arising by reason of an extension of credit, opening, guarantying or confirming of a letter of credit, guaranty, indemnification or in any other manner, whether joint, several, or joint and several, direct or indirect (including those
acquired by assignment or purchases), absolute or contingent, due or to become due, and however acquired. The term includes, without limitation, all principal, interest, fees, charges, expenses, attorneys&#146; fees, and any other sum chargeable to
the Borrower under this Agreement, any other Loan Document or any Rate Protection Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Operating
Account</U>&#148;: The Borrower&#146;s general operating account maintained at the Bank, being account no. 2283089064 on the Effective Date and any successor account therefor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Operating Lease</U>&#148;: Any lease of personal property other than a Capitalized Lease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Optional Tender Date</U>&#148;: As provided in the Indenture. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Original Reimbursement Agreement</U>&#148;: Reimbursement Agreement dated
June&nbsp;29, 2005, between the Bank and the Borrower. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Paying Agent</U>&#148;: As provided in the Indenture.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>PBGC</U>&#148;: The Pension Benefit Guaranty Corporation, established pursuant to Subtitle A of Title IV of ERISA,
and any successor thereto or to the functions thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permits</U>&#148;: The permits set forth on <U>Schedule
7.3</U> attached hereto and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permitted Debt Repayments</U>&#148;: The repayments of
the Borrower&#146;s Indebtedness to Cellu Tissue for borrowed money that are permitted to be paid pursuant to <U>Section&nbsp;9.15(a)(vi)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permitted Distributions</U>&#148;: The dividends and distributions that are permitted to be paid pursuant to <U>Section&nbsp;9.7(b)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permitted Encumbrances</U>&#148;: The Liens, charges and encumbrances on title to the Project listed on Exhibit B to the
Mortgage. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permitted Investments</U>&#148;: &#147;Qualified Investments&#148; as defined in the Indenture.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permitted Liens</U>&#148;: The following: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Liens for taxes, assessments or governmental charges for the then current year and Liens for other taxes, assessments
or governmental charges that are not yet delinquent or the amount or validity of which is being timely contested in good faith and for the payment of which the Borrower has made adequate reserves; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) deposits or pledges to secure the payment of workers&#146; compensation, unemployment insurance, old-age pensions or
other social security benefits or obligations; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) mechanics&#146;, materialmen&#146;s, warehousemen&#146;s,
carriers&#146; or other like Liens arising in the ordinary course of business securing obligations that are not overdue for more than 30 days or that are being timely contested in good faith and for the payment of which the Borrower has made
adequate reserves; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Liens incurred or created in the ordinary course of business in connection with or to
secure the performance of bids, tenders, contracts (other than for the payment of money), leases, statutory obligations, surety bonds or appeal bonds; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) Liens covered by a bond in form and substance reasonably satisfactory to the Bank; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) statutory banker&#146;s liens and rights of set-off; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) the
Permitted Encumbrances; and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) Liens of judgments covered by insurance, or upon appeal and covered by
bond so long as: (i)&nbsp;no cash or property (other than proceeds of insurance payable by reason of such judgments, decrees or attachments) is deposited or delivered to secure any such judgment, or any appeal bond in respect thereof; (ii)&nbsp;levy
and execution on such Lien have been and continue to be stayed; and (iii)&nbsp;such Lien does not prevent Bank from having a perfected first priority security interest in the Collateral or with respect to future credit extensions made under this
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Permitted Tax Distributions</U>&#148;: As provided in <U>Section&nbsp;9.9(b)(i)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Person</U>&#148;: Any natural person, corporation, partnership, joint venture, firm, association, trust, unincorporated
organization, government or governmental agency or political subdivision, or any other entity, whether acting in an individual, fiduciary or other capacity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Plan</U>&#148;: An &#147;employee pension benefit plan&#148; (as defined in Section&nbsp;3(2)(A) of ERISA) that is maintained for employees of the Borrower or of any ERISA Affiliate, and subject
to Title IV of ERISA or Section&nbsp;412 of the Code. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Plant</U>&#148;: Tissue mill owned by the Borrower in the Town
of Ladysmith, Rusk County, Wisconsin, as the same may be modified, improved, upgraded or expanded from time to time. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Pledged Bond Account</U>&#148;: As provided in Section&nbsp;309 of the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Pledged Bonds</U>&#148;: As provided in the Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Pledged Permits</U>&#148;: As provided in the Security Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Property</U>&#148;: As provided in the Environmental Indemnity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Purchase Money Indebtedness</U>&#148;: Any Indebtedness incurred for the purchase of personal property where the repayment
thereof is secured solely by an interest in the personal property so purchased. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Quarterly Measurement
Date</U>&#148;: The last day of each quarter of the Borrower&#146;s fiscal year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Rate Protection
Agreement</U>&#148;: Any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate futures contract, interest rate options contract or similar agreement or arrangement between the Borrower and the Bank
designed to protect the Borrower against fluctuations in interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Rate Protection Obligations</U>&#148;: The
liabilities, indebtedness, and obligations of the Borrower, if any, to the Bank under the Rate Protection Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Rating Agency</U>&#148;: Moody&#146;s and any other national rating service maintaining a rating on the Bonds at the request of
the Issuer or the Borrower. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">16 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Receivables</U>&#148;: All of the Borrower&#146;s present and future
(a)&nbsp;accounts, (b)&nbsp;contract rights, chattel paper, instruments, documents, general intangibles, deposit accounts, and other rights to payment of any kind, now or hereafter existing, whether or not arising out of or in connection with the
sale, lease or exchange of goods or the rendering of services, and whether or not earned by performance, (c)&nbsp;any of the foregoing which are not evidenced by instruments or chattel paper, (d)&nbsp;inter-company receivables, and any security
documents executed in connection therewith, (e)&nbsp;proceeds of any letters of credit or insurance policies on which the Borrower is named as beneficiary, (f)&nbsp;claims against third parties for advances and other financial accommodations and any
other obligations whatsoever owing to the Borrower, (g)&nbsp;tax refunds, tax refund claims or guarantee claims, held by or granted to the Borrower; (h)&nbsp;rights now or hereafter existing in and to all security agreements, leases, guarantees,
instruments, securities, documents of title and other contracts securing, evidencing, supporting or otherwise relating to any of the foregoing, together with all rights in any goods, merchandise or Inventory which any of the foregoing may represent,
and (i)&nbsp;rights in returned and repossessed goods, merchandise and Inventory which any of the same may represent, including, without limitation, any right of stoppage in transit. Such leases, security agreements and other contracts described in
this definition are referred to as the &#147;<U>Related Contracts</U>&#148;. The foregoing uncapitalized terms &#147;account&#148;, &#147;account debtor&#148;, &#147;bill of lading&#148;, &#147;chattel paper&#148;, &#147;contract right&#148;,
&#147;deposit account&#148;, &#147;document&#148;, &#147;document of title&#148;, &#147;electronic chattel paper&#148;, &#147;equipment&#148;, &#147;general intangible&#148;, &#147;investment property&#148;, &#147;letter-of-credit right&#148;,
&#147;instrument&#148;, &#147;inventory&#148;, &#147;money&#148;, &#147;payment intangible&#148;, &#147;proceeds&#148;, products&#148;, &#147;purchase money security interest&#148;, &#147;supporting obligation&#148; and &#147;warehouse receipt&#148;
as used in this Agreement shall have the meanings ascribed thereto in the UCC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Regulatory Change</U>&#148;: As to
the Bank, any change (including any scheduled change) applicable to a class of banks which includes the Bank in any: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) federal or state law or foreign law; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) regulation,
interpretation, directive or request (whether or not having the force of law) of any court or governmental authority charged with the interpretation or administration of any law referred to in clause (a)&nbsp;of this definition or of any fiscal,
monetary or other authority having jurisdiction over such class of banks; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">or the adoption after the date hereof of any new or final law,
regulation, interpretation, directive or request applicable to a class of banks which includes the Bank. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Related
Contracts</U>&#148;: As provided in the definition of &#147;Receivables&#148;. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Related Party</U>&#148;: Any Person
(other than a Subsidiary, the Bank or any other subsidiary or affiliate of Associated Bancorp): (a)&nbsp;which directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Borrower;
(b)&nbsp;which beneficially owns or holds 5% or more of the Equity Interest of the Borrower; or (c)&nbsp;5% or more of the Equity Interest of which is beneficially owned or held by the Borrower or a Subsidiary. The term &#147;control&#148; means the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">17 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Release</U>&#148;: As provided in the Environmental Indemnity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Remarketing Agent</U>&#148;: Wells Fargo Brokerage Services, LLC, or any successor thereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Remarketing Agreement</U>&#148;: The Remarketing Agreement, dated as of March&nbsp;27, 2003 between the Remarketing Agent and
the Borrower. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Remediation Work</U>&#148;: As provided in the Environmental Indemnity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Rent Expense</U>&#148;: For any Measurement Period, the aggregate amount of rent expense as determined in accordance with GAAP.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Reorganization</U>&#148;: With respect to any Multiemployer Plan, the condition that such plan is in reorganization
within the meaning of Section&nbsp;4241 of ERISA. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Reportable Event</U>&#148;: A &#147;reportable event&#148;, as
defined in Section&nbsp;4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC, by regulation, has waived the requirement of Section&nbsp;4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding standard of Section&nbsp;412 of the Code and Section&nbsp;302 of ERISA shall be a reportable event regardless of the issuance of any such
waivers in accordance with Section&nbsp;412(d) of the Code. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Required Secured Parties</U>&#148;: The Bank.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Required Senior Reserve Balance</U>&#148;: With respect to the Senior Debt Service Reserve Fund, $1,000,000.00.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Restricted Debt Payment</U>&#148;: Any payment of the principal of any of the Borrower&#146;s Indebtedness to Cellu
Tissue for borrowed money. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Restricted Payment</U>&#148;: Any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Scheduled Expiration Date</U>&#148;: As provided in the Bonds Letter of Credit. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Secured Parties</U>&#148;: The Bank. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Security Agreement</U>&#148;: The Security Agreement dated as of June&nbsp;29, 2005 made by the Borrower in favor of the Collateral Agent to secure the Obligations, as assigned by the Collateral
Agent to the Bank and amended pursuant to that certain Assignment of Security Agreement and Amendment dated as of March&nbsp;21, 2007, and as it may be further amended, modified, supplemented, restated or replaced from time to time. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">18 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Security Document</U>&#148;: The Security Agreement, the Mortgage, the Assignment
of Rents, the Indemnity, the Bonds Pledge Agreement, the Lockbox Agreement and any substitute or replacement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Semiannual Date</U>&#148;: Each Monthly Date occurring in March and September. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Senior Debt Service Reserve Fund</U>&#148;: As provided in <U>Section&nbsp;2.10(b)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Senior Secured Parties</U>&#148;: The Bank and any subsequent holder of the Obligations. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Single Employer Plan</U>&#148;: A Plan that is not a Multiemployer Plan. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Solvent</U>&#148; shall mean, with respect to any Person on any date of determination, that on such date: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) the fair value of such Person&#146;s tangible and intangible assets is in excess of the total amount of such
Person&#146;s liabilities including, without limitation, Contingent Obligations; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) such Person is then
able to pay its debts as they mature; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) such Person has capital sufficient to carry on its business.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Subsidiary</U>&#148;: With respect to any described Person, any other Person of which or in which the described
Person and its other Subsidiaries own directly or indirectly 50% or more of: (a)&nbsp;the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such
Person, if it is a corporation, (b)&nbsp;the capital interest or profit interest of such Person, if it is a partnership, joint venture or similar entity, or (c)&nbsp;the beneficial interest of such Person, if it is a trust, association or other
unincorporated organization. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Substitute Credit Facility</U>&#148;: As provided in the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Taking</U>&#148;: An exercise of the power of eminent domain by a Governmental Person. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Tendered Bonds</U>&#148;: As provided in the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Termination Event</U>&#148;: Any of: (a)&nbsp;a Reportable Event, (b)&nbsp;the institution of proceedings to terminate a Single
Employer Plan by the PBGC under Section&nbsp;4042 of ERISA, (c)&nbsp;the appointment by the PBGC of a trustee to administer any Single Employer Plan or (d)&nbsp;the existence of any other event or condition that would reasonably be expected to
constitute grounds under Section&nbsp;4042 of ERISA for the termination of, or the appointment by the PBGC of a trustee to administer, any Single Employer Plan. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Title Company</U>&#148;: First American Title Insurance Company. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Title Policy</U>&#148;: The policy of title insurance issued to the Collateral Agent by the Title Company with respect to the
Property, as assigned by the Collateral Agent to the Bank. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">19 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Trade Accounts Payable</U>&#148;: The trade accounts payable of the described
Person with a maturity of not greater than 90 days incurred in the ordinary course of such Person&#146;s business. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Transaction Documents</U>&#148;: The Loan Documents, the Bond Documents, the Clearwater Senior Notes Loan Documents, the
Clearwater Credit Facility Loan Documents, the Clearwater Merger Agreement, and the Indemnity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Transfer
Certificate</U>&#148;: As provided in the Bonds Letter of Credit. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Transfer Fee</U>&#148;: As provided in
<U>Section&nbsp;2.3(c)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Trustee</U>&#148;: As provided in the recitals hereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>UCC</U>&#148;: The Uniform Commercial Code as enacted in the State of Minnesota, as amended from time to time; <U>provided</U>,
<U>however</U>, that: (a)&nbsp;to the extent that the UCC is used to define any term herein, and such term is defined differently in different Articles of the UCC, the definition of such term contained in Article 9 shall govern; and (b)&nbsp;if, by
reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Secured Party&#146;s security interest in any Collateral is governed by the Uniform Commercial Code as enacted and in
effect in a jurisdiction other than the State of Minnesota, the term &#147;UCC&#148; shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection or priority of, or remedies with respect to, the Secured Party&#146;s security interest and for purposes of definitions related to such provisions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;<U>Unreimbursed Amount</U>&#148;: As provided in the definition of &#147;Letter of Credit Obligations.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>1.2. <U>Accounting Terms and Calculations</U>.</B> Except as may be expressly provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations
hereunder (including, without limitation, determination of compliance with financial ratios and restrictions in <U>ARTICLE VIII</U> and <U>ARTICLE IX</U> shall be made in accordance with GAAP consistently applied for the Borrower as used in the
preparation of the Borrower&#146;s audited financial statements described in <U>Section&nbsp;7.5</U>. To the extent any change in GAAP affects any computation or determination required to be made pursuant to this Agreement, such computation or
determination shall be made as if such change in GAAP had not occurred unless the Borrower and the Bank agree in writing on an adjustment to such computation or determination to account for such change in GAAP. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.3. <U>Computation of Time Periods</U>.</B> In this Agreement, in the computation of a period of time from a specified date to a
later specified date, unless otherwise stated, the word &#147;from&#148; means &#147;from and including&#148; and the words &#147;to&#148; or &#147;until&#148; each means &#147;to but excluding.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.4. <U>Other Definitional Provisions</U>.</B> The words &#147;hereof,&#148; &#147;herein,&#148; and &#147;hereunder&#148; and words
of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Sections, Exhibits, Schedules and like references are to this Agreement unless otherwise
expressly provided. The </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">20 </FONT></P>



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words &#147;include,&#148; &#147;includes&#148; and &#147;including&#148; shall be deemed to be followed by the phrase &#147;without limitation.&#148; Unless the context in which used herein
otherwise clearly requires, &#147;or&#148; has the inclusive meaning represented by the phrase &#147;and/or.&#148; </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE
II. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>BONDS LETTER OF CREDIT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>2.1. <U>Bonds Letter of Credit</U>. </B>Pursuant to that certain Reimbursement Agreement, the Borrower requested that the Bank issue the &#147;Bonds Letter of Credit&#148; described therein (the
&#147;Bonds Letter of Credit&#148;) and the Bank did so; a copy of the Bonds Letter of Credit and all amendments thereto is attached hereto as <B><U>Exhibit A</U></B>. The Bank issued and delivered the Bonds Letter of Credit on the terms and
conditions contained in this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.2. <U>Repayment of Advances by the Bank to Honor Drafts Drawn on the Letter of
Credit</U>.</B> The Borrower hereby agrees to reimburse the Bank for all Letter of Credit Obligations arising from Drawings on the Bonds Letter of Credit that are paid by the Bank in accordance with the terms of this Agreement. Reimbursement for all
such Letter of Credit Obligations shall be immediately due and payable on the date that the Draw is paid by the Bank. Until fully reimbursed, Unreimbursed Amounts shall bear interest at a fluctuating rate per annum at all times equal to the Default
Rate. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.3. <U>Bonds Letter of Credit Fees.</U> </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <B><U>Letter of Credit Fee</U>.</B> Contemporaneously with the execution of the Second Amendment to Amended and
Restated Reimbursement Agreement referred to in Recital&nbsp;A hereof, the Borrower paid the Bank a fee (the &#147;Letter of Credit Fee&#148;) for the extension of the Bonds Letter of Credit through February&nbsp;15, 2012. The Letter of Credit Fee
was fully earned upon receipt and is nonrefundable even though in Section&nbsp;2.4 the Borrower has agreed to provide for the return of the Bonds Letter of Credit, with no draws having been made thereon, by September&nbsp;30, 2011. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <B><U>Optional Redemption Fee</U>. </B>If the Borrower exercises its rights under <U>Section&nbsp;8.18</U> of this
Agreement and Section&nbsp;404 of the Indenture to redeem Bonds (excluding any redemption required by <U>Section&nbsp;8.17</U> or made in connection with a Clearwater Prepayment Event), the Borrower shall pay to the Bank a fee (the &#147;Optional
Redemption Fee&#148;) equal to 1.00% of the principal amount of the Bonds being optionally redeemed; <U>provided</U>, <U>however</U>, that no Optional Redemption Fee shall be required if the Bank exercises its rights under <U>Section&nbsp;4.1</U> of
this Agreement to require a mandatory redemption of the Bonds. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <B><U>Transfer Fee</U>.</B> Any transfer of
the Bonds Letter of Credit by the Trustee shall be made by, and be only effective upon, the Trustee&#146;s providing the Bank with a &#147;Transfer Certificate&#148; described in the Bonds Letter of Credit and payment to the Bank by the Borrower of
a transfer fee (the &#147;Transfer Fee&#148;) of $3,000.00 for each transfer and the costs payable to the Bank pursuant to <U>Section&nbsp;2.3(d)</U> below in respect of each such transfer. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">21 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <B><U>Other Fees</U>.</B> In addition to the Bonds Letter of Credit Fee
and the Transfer Fee, the Borrower shall pay to the Bank, on demand, such fees as are customarily charged by the Bank from time to time in connection with the issuance, renewal, amendment and administration of letters of credit (including, without
limitation, a draw fee, renewal fee and amendment fee), as the same may change from time to time. If the Borrower fails to pay any such fee when due, the unpaid amount shall bear interest from the date due until paid at the Default Rate. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.4. <U>Return of Letter of Credit</U>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) The Bonds Letter of Credit has a Scheduled Expiration Date of February&nbsp;15, 2012. However, notwithstanding such Scheduled Expiration Date, the Borrower hereby agrees to return the original Bonds
Letter of Credit to the Bank on or before September&nbsp;30, 2011 with no draw having been made thereon and to provide a Substitute Credit Facility to the Trustee pursuant to the Indenture in order effectuate such return. If the Borrower fails to
effectuate such return by September&nbsp;30, 2011, the Borrower agrees to pay interest from and after such date on the Letter of Credit Amount (as defined in the Bonds Letter of Credit) until such Letter of Credit is returned with no draw having
been made thereon at the Default Rate. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The Borrower acknowledges and agrees that the Bank shall have no
obligation to renew the Bonds Letter of Credit at any time in the future. The Borrower and the Bank each acknowledges and understands that the Bonds will be subject to mandatory redemption or purchase pursuant to the Indenture if the Bank does not
renew the Bonds Letter of Credit thereby resulting in a Drawing under the Bonds Letter of Credit unless a Substitute Credit Facility is delivered to the Trustee pursuant to the Indenture. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) In accordance with the procedures set forth in the Bonds Letter of Credit, the Letter of Credit Amount of the Bonds
Letter of Credit shall be reduced by a sum equal to the principal of and 35 days&#146; maximum interest on each Bond which is no longer &#147;Outstanding&#148; under the Indenture. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.5. <U>Limited Resolution of Issues by the Bank</U>.</B> The Bank shall not be called upon to resolve any issues of law or fact with
respect to the honoring or dishonoring of any draft submitted under the Bonds Letter of Credit other than whether a Draw strictly complies with the Bonds Letter of Credit as determined in accordance with this Agreement and applicable law.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.6. <U>Liabilities of the Bank</U>. </B>Neither the Bank nor any of its officers or directors shall be liable or
responsible for: (a)&nbsp;the use which may be made of the Bonds Letter of Credit or for any acts or omissions of the Issuer, the Trustee, or any assignee or transferee in connection therewith; (b)&nbsp;the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents should, in fact, prove to be in any or all respects invalid, insufficient, fraudulent or forged; or (c)&nbsp;any other circumstances whatsoever in making or failing to make payment
under the Letter of Credit, except only that the Borrower shall have a claim against the Bank, and the Bank shall be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by the
Borrower which the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">22 </FONT></P>



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Borrower prove were caused by (i)&nbsp;the Bank&#146;s willful misconduct or gross negligence in determining whether documents presented under the Bonds Letter of Credit comply with the terms of
such Letter of Credit or (ii)&nbsp;the Bank&#146;s willful failure to pay under the Bonds Letter of Credit after the presentation to it by the beneficiary or its permitted assignee or transferee of a sight draft and certificate strictly complying
with the terms and conditions of the Bonds Letter of Credit. In furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless
of any notice or information to the contrary. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.7. <U>Reinstatement of Letter of Credit for Certain Draws</U>.</B> The
Letter of Credit Amount shall be reduced by each Drawing on the Bonds Letter of Credit; <U>subject</U>, <U>however</U>, to reinstatement in accordance with the terms of the Bonds Letter of Credit. The Borrower acknowledges that the Bank shall not
have any obligation to reinstate the amount drawn on the Bonds Letter of Credit pursuant to any &#147;Final Drawing&#148; described in the Letter of Credit. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>2.8. <U>Bond Prepayment Fund</U>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Prior to the date
hereof, the Collateral Agent, at the Borrower&#146;s and the Bank&#146;s direction, assigned all of its rights in the &#147;Bond Prepayment Fund&#148; described in the Collateral Agency Agreement (including, without limitation, any balance thereof)
to the Bank as the CITYFOREST Project-Bond Prepayment Fund (the &#147;Bond Prepayment Fund&#148;) and the Borrower irrevocably directed the Collateral Agent to effect such assignment and agrees that the Bond Prepayment Fund shall be maintained with
the Bank pursuant to this Agreement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Subject to <U>Section&nbsp;2.9(c)</U> below, the Borrower shall cause
all Damages to be deposited promptly into the Bond Prepayment Fund. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Subject to the Borrower&#146;s right
to apply Damages to the repair and rebuilding of property pursuant to <U>Section&nbsp;2.9(d) </U>below, amounts on deposit from time to time in the Bond Prepayment Fund shall, at the direction of the Bank or the Borrower, be transferred to the
Trustee and used to redeem outstanding Bonds. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) In the event of any loss, damage or destruction of or to any
property of the Borrower or any condemnation of any property of the Borrower, or a sale thereof in lieu of or in anticipation of, the exercise of the power of condemnation or eminent domain, any Damages received by or on behalf of the Borrower in
connection with such loss, damage, destruction or condemnation shall be used to pay the cost of repairing, rebuilding or restoring such property in accordance with Section&nbsp;11 or 12 of the Mortgage, as the case may be. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.9. <U>Letter of Credit Fee Account</U>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On the Effective Date (as defined in the Amended and Restated Reimbursement Agreement), the Collateral Agent, at the Borrower&#146;s and the Bank&#146;s direction, assigned all of its rights in the
&#147;Letter of Credit Fee Account&#148; described in the Collateral Agency Agreement (including, without limitation, the $189,997.75 then existing balance thereof) to the Bank as the CITYFOREST Project-Letter of Credit Fee Account (the &#147;Letter
of </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">23 </FONT></P>



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Credit Fee Account&#148;) and the Borrower irrevocably directed the Collateral Agent to effect such assignment and agrees that the Letter of Credit Fee Account shall be maintained with the Bank
pursuant to this Agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.10. <U>Senior Debt Service Reserve Fund</U>. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) As described in the Amended and Restated Reimbursement Agreement, immediately prior to the Cellu Tissue Merger
Sub&#146;s (as defined in the Amended and Restated Reimbursement Agreement) acquisition of the shares of CF Corporation (as defined in the Amended and Restated Reimbursement Agreement), the Bank instructed the Collateral Agent to release any amount
on deposit in the &#147;Senior Debt Service Reserve Fund&#148; described in the Collateral Agency Agreement in excess of $1,000,000.00 to the Borrower and to transfer such amounts to the Operating Account. On the Effective Date (as defined in the
Amended and Restated Reimbursement Agreement), the Collateral Agent, at the Borrower&#146;s and the Bank&#146;s direction, assigned all of its rights in such &#147;Senior Debt Service Reserve Fund&#148; (including, without limitation, the
$1,000,000.00 balance thereof) to the Bank as the CITYFOREST Project-Senior Debt Service Reserve Fund (the &#147;Senior Debt Service Reserve Fund&#148;) and the Borrower irrevocably directed the Collateral Agent to effect such assignment and agrees
that the Senior Debt Service Reserve Fund shall be maintained with the Bank pursuant to this Agreement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) On
each Semiannual Date, the Borrower shall deposit to the Senior Debt Service Reserve Fund, an amount equal to the difference, if any, between (a)&nbsp;the Required Senior Reserve Balance as of such date; minus (b)&nbsp;the amount on deposit in the
Senior Debt Service Reserve Fund immediately prior to the deposit provided for in this paragraph (but after giving effect to any withdrawals from the Senior Debt Service Reserve Fund on such date). </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Amounts on deposit in the Senior Debt Service Reserve Fund shall be used by the Bank as necessary from time to time to
reimburse the Bank for the account of the Bank for Drawings in respect of principal or interest on the Bonds or other Obligations, in each case when due to the extent that there are insufficient funds available therefor in the Operating Account.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) On each Semiannual Date, the Bank shall transfer to the Operating Account amounts on deposit in the Senior
Debt Service Reserve Fund in excess of the sum of the Required Senior Reserve Balance. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) The Bank shall,
upon the written request of the Borrower, transfer to the Trustee any amount requested by the Borrower for the purpose of redeeming Bonds on the first date available therefor; provided, however, that after giving effect to such transfer, the balance
of the Senior Debt Service Reserve Fund shall not be less than the Required Senior Reserve Balance. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f)
Interest income earned on amounts in the Senior Debt Service Reserve Fund shall not be withdrawn from the Senior Debt Service Reserve Fund prior to such </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">24 </FONT></P>



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time as the Required Senior Reserve Balance has been met, and once the Required Senior Reserve Balance has been met, such interest income shall be deposited into the Operating Account.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) The Bank acknowledges that the Senior Debt Service Reserve Fund is being established by the Borrower as a
reasonably required debt service reserve fund under Section&nbsp;148 of the Internal Revenue Code of 1986, as amended, funded in part from &#147;gross proceeds&#148; of the Bonds. The Bank agrees to (A)&nbsp;maintain records in a form to permit the
Borrower and its agents to periodically calculate rebatable arbitrage, (B)&nbsp;preserve such records for a period of not less than six months following the date on which the Bonds have been fully redeemed and paid, (C)&nbsp;to make such records
available to the Borrower, the Issuer or the Trustee upon written request therefor, and (D)&nbsp;upon written directions by the Borrower, accompanied by a report of the Borrower&#146;s rebate analyst or any opinion of Bond Counsel, to transfer the
&#147;arbitrage rebate amount&#148; set forth therein to the Trustee for credit to the Rebate Account under the Indenture. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE III. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>COMPUTATIONS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.1. <U>Computations</U>.</B> Interest, the Letter of
Credit Fee and any other fee calculated on a per annum basis shall be computed on the basis of actual days elapsed and a year of 360 days. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE IV. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PAYMENTS, PREPAYMENTS AND SETOFF </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.1. <U>Mandatory Redemption of Bonds</U>. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) If required by, and as directed by, the Bank, the Borrower, contemporaneously with the Borrower&#146;s receipt of any
Net Proceeds arising from the issuance of any equity interest in the Borrower or options or warrants or other rights to acquire the same shall: (i)&nbsp;exercise its rights under Section&nbsp;404 of the Indenture to optionally redeem Bonds by the
amount of such Net Proceeds; and/or (ii)&nbsp;deposit such Net Proceeds in the Cash Collateral Account described in <U>Section&nbsp;10.4</U> of this Agreement to secure the payment of the Obligations in accordance with <U>Section&nbsp;10.4</U>.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) If a Clearwater Prepayment Event occurs, then, by no later than the 180th calendar day (or, if such day is
not a Business Day, the immediately following Business Day) after the date of the Borrower&#146;s receipt of the Bank&#146;s written demand for prepayment of the Obligations, the Borrower shall have exercised its rights under Section&nbsp;404 of the
Indenture to optionally redeem the Bonds or shall have caused the Bonds Letter of Credit to be replaced by a &#147;Substitute Credit Facility&#148; permitted by the Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>4.2. <U>Payments</U>. </B>All payments and prepayments of all fees, expenses and other Obligations under the Loan Documents payable to the Bank shall be made without deduction, set-off, or counterclaim
in immediately available funds not later than 2:00 p.m., Green Bay time, on the dates due at the main office of the Bank in Green Bay, Wisconsin. Funds received on any day after such time shall be deemed to have been received on the next Business
Day. Whenever </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">25 </FONT></P>



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any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be
included in the computation of any interest or fees. The Borrower authorizes the Bank to charge any of the Borrower&#146;s accounts maintained at the Bank for the amount of any payment or prepayment or any amount owing pursuant to any of the other
Loan Documents. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE V. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ADDITIONAL PROVISIONS RELATING TO THE BOND LETTER OF CREDIT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.1.
<U>Increased Costs</U>. </B>In the event that any Regulatory Change reduces or shall have the effect of reducing the rate of return on the Bank&#146;s capital or the capital of its parent corporation as a consequence of the Bonds Letter of Credit
issued pursuant hereto to a level below that which the Bank or its parent corporation could have achieved but for such Regulatory Change (taking into account Bank&#146;s policies and the policies of its parent corporation with respect to capital
adequacy), then Borrower shall, within twenty days after written notice and demand from Bank, pay to Bank additional amounts sufficient to compensate Bank or its parent corporation for such reduction. Determinations by Bank for purposes of this
<U>Section&nbsp;5.1</U> of the additional amounts required to compensate Bank shall be determinative in the absence of manifest error. If the Bank fails to give such notice within 60 days after it obtains knowledge of such an event, then the Bank
shall, with respect to compensation payable pursuant to this <U>Section</U>, only be entitled to payment under this <U>Section</U> for costs incurred from and after the date 60 days prior to the date that the Bank does give such notice. In
determining such amounts, the Bank may use any reasonable averaging, attribution and allocation methods. Failure on the part of the Bank to demand compensation under this <U>Section</U> for any period shall not constitute a waiver of the Bank&#146;s
rights to demand compensation for any subsequent period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.2. <U>Funding Through the Sale of Participation</U>.</B> The
Borrower acknowledges that the Bank may fund all or any part of the Letter of Credit Obligations by sales of participation to various participants and agrees that the Bank may, in invoking its rights under this <U>ARTICLE V</U>, demand and receive
payment for reasonable costs and other amounts incurred by, or allocable to, any such participant, or take other action arising from circumstances applicable to any such participant, to the same extent that such participant could demand and receive
payments, or take other action, under this <U>ARTICLE V</U> or if such participant were the Bank under this Agreement except that no participant&#146;s claims for payment of costs and other amounts under this Article V shall exceed the amount which
the Bank would have received had the Bank not sold a participation to such participant. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE VI. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>CONDITIONS PRECEDENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>6.1. <U>Conditions of Effective Date</U>.</B> The Effective Date of this Agreement shall be subject to the satisfaction of the conditions precedent in addition to the applicable conditions precedent
set forth in Section&nbsp;6.2 below, at the Borrower&#146;s sole cost and expense: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) the Clearwater Bank
Guaranty in the form provided by the Bank appropriately completed and duly executed by Clearwater; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">26 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the Cellu Tissue Bank Guaranty in the form provided by the Bank
appropriately completed and duly executed by Cellu Tissue; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) a certificate of the Secretary of each Loan
Party having attached (A)&nbsp;a copy of the corporate resolution of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party; (B)&nbsp;an incumbency certificate showing the names
and titles, and bearing the signatures of, the officers of such Loan Party authorized to execute such Loan Documents; and (C)&nbsp;a copy of the bylaws or limited liability company operating agreement, as applicable, of such Loan Party in effect as
of the Effective Date; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) a copy of the articles or certificate of incorporation or organization, as
applicable, of each Loan Party in effect as of the Effective Date, certified by the appropriate governmental official of the jurisdiction of its incorporation as of a date acceptable to the Bank; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) certificates (or other evidence) of good standing for each Loan Party in the jurisdiction of its incorporation or
formation and, in the case of the Borrower, a certificate (or other evidence) of authority to do business in the State of Wisconsin, certified by the appropriate governmental officials as of a date acceptable to the Bank; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) a No Default Certificate in a form provided by the Bank executed by a Financial Officer of the Borrower; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g)(i) an opinion of counsel to Cellu Tissue and Clearwater, addressed to the Bank, substantially in form attached hereto
as&nbsp;Exhibit C, and (ii)&nbsp;an opinion of counsel to the Borrower, addressed to the Bank, substantially in form attached hereto as Exhibit&nbsp;C; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(h) certified copies of (i)&nbsp;the Clearwater Merger Agreement, (ii)&nbsp;the Clearwater Senior Notes Loan Documents, and (iii)&nbsp;the Clearwater Credit Facility Loan Documents, each certified as a
true and correct copies by a Financial Officer of Clearwater; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) a Certificate appropriately completed and
duly executed by a Financial Officer of Clearwater stating (A)&nbsp;all conditions precedent to the consummation of the Clearwater Merger set forth in Section&nbsp;7.1, Section&nbsp;7.2 and Section&nbsp;7.3 of the Clearwater Merger Agreement have
been satisfied or waived (including the condition relating to the HSR Act and other applicable regulatory laws set forth in Section&nbsp;7.1(b) of the Clearwater Merger Agreement and the condition relating to the absence of certain orders set forth
in Section&nbsp;7.1(c) of the Clearwater Merger Agreement), and (B)&nbsp;the Clearwater Merger has been consummated in accordance with the terms Clearwater Merger Agreement, together with evidence that the Certificate of Merger has been filed in the
office of the Delaware Secretary of State; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) evidence of insurance for all insurance required by the
Loan Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6.2. <U>Conditions Precedent to Effective Date</U>.</B> The Effective Date of this Agreement shall be
subject to the satisfaction of the following conditions precedent: </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">27 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) the representations and warranties contained in <U>ARTICLE VII</U> shall
be true and correct as of the Effective Date as though made on such date; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) no Default or Event of
Default shall have occurred and be continuing. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE VII. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>REPRESENTATIONS AND WARRANTIES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">To induce the Bank to enter into this Agreement, and to issue the Bonds Letter of Credit, the Borrower represents and warrants to the Bank: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.1. <U>Existence. Etc.</U></B> The Borrower is a limited liability company duly formed and validly existing under the laws of the
State of Minnesota. The Borrower has all power and authority to do business in, and is in good standing in, the State of Wisconsin. Other than the States of Minnesota and Wisconsin, there are no other jurisdictions where the nature of the
Borrower&#146;s business or the nature of the property owned or leased by the Borrower requires the Borrower to qualify for authorize to do business, except where the failure to effect such qualification could not reasonably be expected to cause a
Material Adverse Occurrence. The Borrower has all power and authority to own its properties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.2. <U>Due Authorization, No
Breach, No Liens</U>. </B>The execution, delivery and performance by the Borrower of each Transaction Document to which the Borrower is a party are within the Borrower&#146;s powers, have been duly authorized by all necessary action by the managing
member of the Borrower, and do not contravene (a)&nbsp;the Borrower&#146;s articles of organization, certificate of formation, operating agreement, member control agreement, limited liability company agreement or other organizational document,
(b)&nbsp;any Governmental Rule or (c)&nbsp;any indenture, loan or credit agreement or any other material agreement, lease or instrument to which the Borrower is a party or by which it or any of its properties may be bound; and such execution,
delivery and performance do not result in or require the creation of any Lien upon or with respect to any of the Borrower&#146;s properties, other than Permitted Liens. The Borrower is not in default under or in violation of any such law, statute,
rule or regulation, order, writ, judgment, injunction, decree, determination or award or any such indenture, loan or credit agreement or other material agreement, lease or instrument in any case in which the consequences of such default or violation
could reasonably be expected to cause a Material Adverse Occurrence. No Default or Event of Default has occurred and is continuing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.3. <U>Governmental Approvals</U>. </B>No Governmental Approval is required for the due execution, delivery and performance by the Borrower of the Transaction Documents to which it is a party, other
than those already obtained and those not yet required but obtainable in the ordinary course as and when required.<B> </B>The Governmental Approvals set forth on <U>Schedule 7.3</U> attached hereto and incorporated herein by reference constitute all
of the Governmental Approvals necessary for the lawful ownership, operation and maintenance of the Plant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.4.
<U>Transaction Documents</U>. </B>The Transaction Documents to which the Borrower is a party are the valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">28 </FONT></P>



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affecting the enforcement of creditors&#146; rights or by general principles of equity limiting the availability of equitable remedies. The Transaction Documents are in full force and effect in
all material respects and no default under any Transaction Document has occurred and is continuing. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.5. <U>Financial
Condition</U>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) The Borrower&#146;s audited financial statements as at December&nbsp;31, 2009 and
unaudited financial statements dated October&nbsp;31, 2010, as heretofore furnished to the Bank (the &#147;<U>Historical Financial Statements</U>&#148;), have been prepared in accordance with GAAP on a consistent basis (except, in the case of the
unaudited financial statements, for the omission of footnotes and prior period comparative data required by GAAP and for variations from GAAP which in the aggregate are not material) and fairly present the financial condition of the Borrower as at
such dates and the results of its operations and changes in financial position for the respective periods then ended. Other than the Clearwater Senior Notes Subsidiary Guarantee, the Borrower has no material liabilities which have not been disclosed
in such financial statements or otherwise disclosed in writing to the Bank. Since December&nbsp;31, 2009, no event has occurred which could reasonably be expected to cause a Material Adverse Occurrence. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The Historical Financial Statements present fairly the financial condition of the Borrower on a pro forma basis
assuming consummation of the Clearwater Merger Transactions as of the last day of the period covered thereby, except that the Historical Financial Statements do not reflect (i)&nbsp;the satisfaction and discharge and release of liens, as of the date
hereof, of the Cellu Tissue Senior Secured Notes Loan Documents and the Cellu Tissue Credit Facility Loan Document (each as defined in the Original Reimbursement Agreement), (ii)&nbsp;the Clearwater Senior Notes Subsidiary Guarantee, and
(iii)&nbsp;subject to the proviso in <U>Section&nbsp;9.13(x)(ii)</U>, the restrictions existing on the date hereof in the Clearwater Senior Notes Indenture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.6. <U>Material Contracts</U>. </B>Neither the Borrower nor any of its property is a party to, or bound by, any Material Contracts. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.7. <U>Proceedings</U>. </B>There is no pending or, to the best of the Borrower&#146;s knowledge, threatened action or proceeding
which is material before any court, governmental agency or arbitrator to which the Plant, the Borrower or any Affiliate thereof, or the property of any of the foregoing, is or may become a party, which could, if adversely determined, reasonably be
expected to cause a Material Adverse Occurrence or which purports to affect or challenge the legality, validity or enforceability of any Transaction Document. All pending or threatened proceedings or claims are disclosed on <B><U>Schedule
7.7</U></B> attached hereto and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.8. <U>Compliance with Laws. Etc.</U></B> The Borrower
is in material compliance with all statutes and Governmental Rules and Governmental Approvals applicable to the Borrower, its properties and operations except to the extent that such noncompliance could not reasonably be expected to constitute a
Material Adverse Occurrence. Without limiting the generality of the foregoing, the Plant complies in all material respects with all applicable Governmental </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">29 </FONT></P>



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Approvals and Governmental Rules, including zoning, environmental protection, use and land use and building laws, ordinances and regulations, except to the extent that such noncompliance could
not reasonably be expected to constitute a Material Adverse Occurrence. The Borrower has no knowledge of any notices of violations of any such laws, ordinances or regulations issued by any Governmental Person having jurisdiction over the Borrower or
its properties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.9. <U>Taxes</U>. </B>The Borrower has filed all tax returns (federal, state and local) required to be
filed by it and has paid or caused to be paid all taxes due for the periods covered thereby, including interest and penalties, except for any such taxes, interest or penalties which are being timely contested in good faith and by proper proceedings
and in respect of which the Borrower has set aside adequate cash (or cash equivalent) reserves for the payment thereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.10. <U>ERISA</U>. </B>No Reportable Event has occurred during the five-year period prior to the date on which this representation is
made with respect to any Plan that has resulted, or could reasonably be expected to result, in a Material Adverse Occurrence. Each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. The present value of
all accrued benefits under all Single Employer Plans maintained by the Borrower or any of its ERISA Affiliates (based on those assumptions used to fund the Plans) did not, as of the last annual valuation date prior to the date on which this
representation is made, exceed the value of the assets of such Plans by an aggregate amount greater than $100,000.00. Neither the Borrower nor any of its ERISA Affiliates has had a complete or partial withdrawal (as defined in Section&nbsp;4201 of
ERISA) from any Multiemployer Plan that has resulted, or could reasonably be expected to result, in a Material Adverse Occurrence. The present value (determined using actuarial and other assumptions that are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrower and each ERISA Affiliate for post-retirement benefits (excluding benefits required by Section&nbsp;4980B of the Code and similar Governmental Rules) to be provided to their
current and former employees under any Plans that include &#147;welfare benefit plans&#148; (as defined in Section&nbsp;3(1) of ERISA) does not, in the aggregate, exceed the assets under all such Plans that are allocable to such benefits by an
amount that could reasonably be expected to result in a Material Adverse Occurrence. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.11. <U>Business</U>. </B>The sole
business of the Borrower is the operation of the Plant and the sale of Inventory. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.12. <U>Insurance</U>. </B>All
insurance required by <U>Section&nbsp;8.8</U>, in each case required to be in effect on the Effective Date, is in full force and effect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.13. <U>Title to Collateral</U>.</B> The Borrower possesses good and marketable title to the Collateral that it purports to own, including all properties and assets referred to in the most recent
financial statements of the Borrower referred to in <U>Section&nbsp;7.5</U> (other than property disposed of since the date of such financial statements in the ordinary course of business). None of the properties, revenues or assets of any such
Person is subject to a Lien, except for Liens permitted under <U>Section&nbsp;9.1</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.14. <U>Security Documents;
Liens</U>.</B> The Security Documents: (a)&nbsp;create valid and first priority security interests in the Collateral, subject only to the Liens permitted under <U>Section&nbsp;9.1</U>; </FONT></P>
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and (b)&nbsp;are &#147;Permitted Liens&#148; as defined in the Clearwater Senior Notes Indentures and are permitted under <U>Section&nbsp;10.2.2</U> of the Clearwater Bank of America Loan
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.15. <U>Sufficiency of Rights</U>. </B>All roads necessary for the full utilization of the Plant for its
intended purpose have been completed. The Borrower has all rights and property interests that are required to enable the Borrower to obtain all services, materials and rights required for the operation and maintenance of the Plant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.16. <U>Disclosure</U>. </B>No exhibit, schedule, report or other information (unless superseded by a subsequently provided,
corrected exhibit, schedule or report or by corrected information) provided by the Borrower or any of its Affiliates or their respective agents to the Bank in connection with the negotiation and execution of the Transaction Documents to which the
Borrower is party and otherwise in connection with the transactions contemplated thereby contains any material misstatement of fact or omits to state a material fact necessary to make the statements contained therein taken as a whole not misleading,
as of the date provided. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.17. <U>Use of Bond Proceeds</U>. </B>No Bond Proceeds were used to acquire any security in any
transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.18. <U>Margin Stock</U>.
</B>The Borrower is not engaged in the business of extending credit for the purpose of buying or carrying margin stock (within the meaning of Regulation U issued by the Federal Reserve Board), and no proceeds of any Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.19.
<U>Incorporation of Representations and Warranties</U>.</B> Each of the following representations and warranties were true and correct when made and if any such representation and warranty is a continuing representation and warranty under the
relevant Transaction Document as of the Effective Date, then such continuing representation and warranty is true and correct as of the Effective Date: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) all representations and warranties of the Borrower in the Bond Documents to which the Borrower is a party; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) all representations and warranties of the Borrower in any Clearwater Senior Notes Loan Documents to which the Borrower is party or pertaining to the Borrower or any of its properties in any Clearwater
Senior Notes Loan Document (for purposes of providing an example as to the scope of the representations and warranties covered by this <U>Section&nbsp;7.19</U>, but without limiting the terms of this <U>Section&nbsp;7.19</U>, any representation of
warranty in any Clearwater Senior Notes Loan Document pertaining to a &#147;Subsidiary&#148;, a &#147;Restricted Subsidiary&#148;, a &#147;Guarantor&#148;, a &#147;Grantor&#148;, a &#147;Mortgagor&#148;, a &#147;Trustor&#148; or words to similar
effect pertaining to the Borrower shall be deemed covered by this <U>Section&nbsp;7.19</U>); and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) all
representations and warranties of, or pertaining relating to, the Borrower or any of its properties in the Clearwater Merger Agreement. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Borrower has no knowledge that any of the representations and warranties made in the
Transaction Documents by or on behalf of any party thereto other than the Borrower is untrue or incorrect in any material respect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.20. <U>Status</U>. </B>The Borrower is not an &#147;investment company&#148; or a company &#147;controlled&#148; by an &#147;investment company&#148; within the meaning of the Investment Company Act
of 1940, as amended, or an &#147;investment advisor&#148; within the meaning of the Investment Company Act of 1940, as amended. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.21. <U>Broker&#146;s Fees</U>.</B> The Borrower has not dealt with any Person who may be entitled to any finder&#146;s fee,
brokerage commission, loan commission or other sum in connection with the transactions contemplated by this Agreement. The Borrower hereby agrees to indemnify, defend and hold harmless the Bank against any and all loss, liability, cost or expense,
including reasonable attorneys&#146; fees, that such parties may suffer or sustain with respect to any finder&#146;s fee, brokerage commission or other sum due in connection with this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.22. <U>Leases; Other Agreements</U>. </B>Except as set forth on <B><U>Schedule 7.22</U></B> attached hereto and incorporated herein
by reference, there are no leases or subleases affecting the Plant. As of the date of this Agreement, there are no contracts or agreements materially affecting the use, operation or maintenance of the Plant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.23. <U>Environmental Matters</U>. </B>Except as otherwise disclosed in the Environmental Reports listed in Schedule 1 to the
Environmental Indemnity: (a)&nbsp;to the best knowledge of the Borrower, there are no facts, circumstances, conditions or occurrences regarding the Property that could reasonably be anticipated (i)&nbsp;to form the basis of a Hazardous Materials
Claim against the Property, the Borrower or any of its officers, directors, employees, or agents or, to the best knowledge of the Borrower, any other Persons occupying or conducting operations on or about the Property, that individually or in the
aggregate could reasonably be expected to result in a Material Adverse Occurrence, (ii)&nbsp;to cause the Property to be subject to any restrictions on its ownership, occupancy, use (other than those imposed pursuant to the Permits described in
<B><U>Schedule 7.3</U></B> attached hereto) or transferability under any applicable Environmental Law, or (iii)&nbsp;to require the filing or recording of any notice, registration, permit or disclosure documents under any applicable Environmental
Law, except for any necessary recording or filing of the Permits described in <B><U>Schedule 7.3</U></B> attached hereto; (b)&nbsp;all Governmental Approvals required under Environmental Laws to operate the Project and the Plant are identified in
<B><U>Schedule 7.3</U></B> attached hereto; and (c)&nbsp;the representations and warranties set forth in Section&nbsp;2 of the Environmental Indemnity are incorporated herein by reference as though fully set forth herein. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.24. <U>Transactions with Affiliates</U>. </B>Except for the Clearwater Senior Notes Subsidiary Guarantee or as disclosed in
<B><U>Schedule 7.24</U></B>, the Borrower is not a party to any agreement with or subject to any commitment in favor of any Affiliate of the Borrower. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.25. <U>Ownership and Control</U>. </B>Clearwater owns 100% of Cellu Tissue&#146;s issued and outstanding Equity Interests, and Cellu Tissue owns 100% of the Borrower&#146;s issued and outstanding
Equity Interests. All of the issued and outstanding Equity Interests of the Borrower are duly authorized, validly issued, fully paid and non-assessable. The Borrower has not granted or issued, and has not agreed to grant or issue, any options,
warrants or similar rights to any </FONT></P>
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Person to acquire any Equity Interests of, or other securities convertible into, the Borrower&#146;s Equity Interests. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.26. <U>Indebtedness</U>. </B>Except for Indebtedness permitted by <U>Section&nbsp;9.2</U>, the Borrower does not have any Indebtedness. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.27. <U>Guaranty or Suretyship</U>. </B>Except for Contingent Obligations permitted by <U>Section&nbsp;9.4</U>, the Borrower is not a
party to any contract of guaranty or suretyship and none of its assets is subject to such a contract. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.28. <U>Trademarks,
Patents</U>.</B> The Borrower possesses or has the right to use all of the patents, trademarks, trade names, service marks and copyrights, and applications therefor, and all technology, know-how, processes, methods and designs used in or necessary
for the conduct of its business, without known conflict with the rights of others. <B><U>Schedule 7.29</U></B> attached hereto and incorporated herein by reference is a complete list of all such patents and trademarks. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.29. <U>Subsidiaries</U>. </B>The Borrower does not have any Subsidiaries. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.30. <U>Partnerships and Joint Ventures</U>. </B>The Borrower is not a partner (limited or general) or joint venturer in any
partnerships or joint ventures. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.31. </B>Intentionally Deleted. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.32. <U>Solvency</U>. </B>The Borrower is Solvent after giving effect to the issuance of the Bonds Letter of Credit, the incurrence
of any other Indebtedness pursuant to the Loan Documents, and the granting of Liens pursuant to the Loan Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.33.
<U>Contracts; Labor Matters</U>. </B>Except as disclosed on <B><U>Schedule 7.33 </U></B>attached hereto and incorporated herein by reference: (a)&nbsp;the Borrower is not a party to any contract or agreement, or subject to any charge, corporate
restriction, judgment, decree or order, the performance of which could reasonably be expected to cause a Material Adverse Occurrence; (b)&nbsp;on the Effective Date: (i)&nbsp;the Borrower is not a party to any labor dispute; and (ii)&nbsp;there are
no strikes or walkouts relating to any labor contracts to which the Borrower is subject. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.34. <U>Trading with the Enemy
Act</U>. </B>The execution of this Agreement does not violate the Trading with the Enemy Act of 1917, as amended, nor any of the foreign assets control regulations promulgated thereunder or the under the International Emergency Economic Powers Act
or the U.N. Participation Act of 1945. Neither the Borrower nor any person who owns a controlling interest in or otherwise controls the Borrower or any Subsidiary of the Borrower is listed on the Specially Designated Nationals and Blocked Person
List or other similar lists maintained by the Office of Foreign Assets Control (&#147;<U>OFAC</U>&#148;), the Department of the Treasury or included in any Executive Orders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7.35. <U>Survival of Representations</U>.</B> All representations and warranties contained in this <U>ARTICLE VII</U> shall survive the issuance of the Bonds Letter of Credit and any investigation at
any time made by or on behalf of the Bank shall not diminish the Bank&#146;s rights to rely thereon. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE VIII. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>AFFIRMATIVE COVENANTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">From the date of this Agreement and thereafter
until the Bonds Letter of Credit are terminated or expired and the Letter of Credit Obligations and all other Obligations of the Borrower to the Bank hereunder and under the other Loan Documents or otherwise have been paid in full, unless the Bank
shall otherwise expressly consent in writing: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.1. <U>Preservation of Existence. Etc.</U></B> The Borrower shall:
(a)&nbsp;preserve and maintain its legal existence, rights, franchises and privileges in the jurisdiction of its incorporation except where the failure to do so can be cured without any adverse effect on the Borrower&#146;s rights, franchises or
privileges; and (b)&nbsp;qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is necessary or desirable in view of its business and operations or the ownership of its properties, except where the
failure to so qualify or remain qualified could not reasonably be expected to result in a Material Adverse Occurrence. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.2. <U>Governmental Approvals</U>. </B>The Borrower shall maintain in effect and comply with at all times in all material respects,
all Governmental Approvals except where non-compliance could not reasonably be expected to result in a Material Adverse Occurrence. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>8.3. <U>Maintenance of Properties, Etc.</U></B> The Borrower shall maintain and preserve all of its properties necessary in the conduct of its business in good working order and condition, ordinary
wear and tear, and obsolescence, excepted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.4. <U>Maintenance and Operation of the Plant</U>. </B>The Borrower shall
administer, maintain, repair and operate the Plant (including the making from time to time of all necessary renewals and replacements), in a sound and workmanlike manner consistent with good engineering practice and safety standards, ordinary wear
and tear and obsolescence excepted, and substantially in accordance with sound tissue mill industry practices and in compliance with the Bond Documents and the Loan Documents and all applicable Governmental Approvals. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.5. <U>Maintenance of Security Interests</U>. </B>The Borrower shall take or cause to be taken all actions that may be necessary or
that the Bank may reasonably request to maintain and preserve the security interests and Liens created by the Security Documents and the priority thereof, including without limitation executing any and all further instruments (including financing
statements, continuation statements and similar statements with respect to any of the Security Documents) reasonably requested by the Bank for such purpose. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>8.6. <U>Performance of Transaction Documents</U>. </B>The Borrower shall: (a)&nbsp;perform and observe all material terms and provisions of each Bond Document, each Clearwater Senior Notes Loan
Document and each Clearwater Facility Loan Document to be performed or observed by the Borrower; (b)&nbsp;maintain each Bond Document in full force and effect; and (c)&nbsp;enforce each Bond Document in accordance with its terms and take all actions
concerning enforcement of each Bond Document as the Bank may from time to time reasonably request. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.7. <U>Payment of
Taxes. Etc.</U></B> The Borrower shall pay and discharge all taxes, assessments and governmental charges or levies imposed upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims (including
claims for </FONT></P>
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labor, materials and supplies to the extent Liens relating thereto are not Permitted Liens), which, if unpaid, might become a lien or charge upon any properties of the Borrower, provided that the
Borrower shall not be required to pay any such tax, assessment, charge, levy or claim which is being timely contested in good faith and by proper proceedings and in respect of which the Borrower has set aside adequate cash (or cash equivalent)
reserves for the payment thereof; provided, however that, in all events, the Borrower shall pay or cause to be paid all such taxes, assessments, charges or levies forthwith upon the commencement of foreclosure of any Lien which may have attached as
security therefor. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.8. <U>Maintenance of Insurance</U>. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <B><U>General Requirements</U>.</B> The Borrower shall maintain or cause to be maintained in effect, in amounts, from
carriers with an A.M. Best Company Key Rating Guide of &#147;A-IX&#148; or better and authorized to do business in the State of Wisconsin, and in form satisfactory to the Bank, the insurance described in the Bond Documents and such other insurance
as the Bank shall reasonably request from time to time, and shall maintain such additional insurance as set forth in Schedule 8.8 attached hereto and incorporated herein by reference. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <B><U>Certificates of Insurance</U>. </B>By no later than 10 days prior to the then current expiration date of the
polices shown on any insurance certificate delivered by the Borrower to the Bank, the Borrower shall deliver to the Bank updated certificates of insurance for all insurance required under any Bond Document or Loan Document. Such certificates shall
be executed by each respective insurer or by an authorized representative of each insurer. Such certificates shall identify the underwriters or companies issuing such insurance, the type of insurance, the policy term and shall specifically list the
special provisions enumerated for such insurance in any of the Bond Documents or Loan Documents. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c)
<B><U>Insurance Reports</U>. </B>Concurrently with the delivery of the certificates required in (b)&nbsp;above at least 10 days prior to the expiration of any insurance policy, the Borrower shall deliver to the Bank a letter from the Borrower&#146;s
insurance broker, signed by an officer of the broker, stating that all premiums then due have been paid and that, in the opinion of such broker, the Borrower&#146;s insurance then carried or to be renewed meets or exceeds the requirements of the
Bond Documents and/or the Loan Documents. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <B><U>Proceeds of Insurance</U>. </B>All proceeds of any
insurance required hereunder shall be applied in accordance with the terms of the Security Documents. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e)
<B><U>Certain Requirements Regarding Liability Policies</U>. </B>Liability policies covering general liability and automobile liability shall include endorsements providing (i)&nbsp;for additional insured coverage for the Bank, and their respective
officers, directors, employees, agents and representatives; (ii)&nbsp;that insurance for the Bank as additional insured is primary insurance and any other insurance available to the Bank shall apply as excess; (iii)&nbsp;thirty days prior written
notice of cancellation by certified mail in the event of cancellation (other than cancellation for nonpayment of premium, for which the notice period may be ten days); (iv)&nbsp;a cross-liability or severability of interests provision
</FONT></P>
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stipulating that insurance available to the Bank as an insured applies separately with respect to insurance available to other insureds as though separate policies had been issued to each; and
(v)&nbsp;a waiver of subrogation by insurers in favor of the Bank. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) <B><U>Certain Requirements Regarding
Property Insurance</U>. </B>Property policies (including builder&#146;s risk and boiler and machinery coverage) covering real and personal property of the Plant shall include, (i)&nbsp;a lender&#146;s loss payable endorsement or a standard first
mortgage endorsement in favor of the Bank, (ii)&nbsp;thirty days prior written notice of cancellation in the event of cancellation of any policy and (iii)&nbsp;a waiver of subrogation by insurers in favor of the Bank. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) <B><U>Amendment of Coverage</U>. </B>The Bank, in its reasonable discretion, may at any time amend the amount and
scope of coverage of any of the insurance policies required hereunder to cover such risks that could not have been foreseen by the parties hereto on the date of this Agreement and which, in the reasonable judgment of the Bank, renders such coverage
materially inadequate; <U>provided</U>, <U>however</U>, that the Bank shall not require the Borrower to obtain insurance that is not reasonably commercially available or which is not commonly maintained by businesses in the same line of business and
geographic location as the Borrower. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.9. <U>Keeping of Records and Books of Account</U>. </B>The Borrower shall keep
adequate records and books of account, in which full and correct entries shall be made in accordance with generally accepted accounting principles of all financial transactions of the Borrower, the assets and business of the Borrower and all costs
and expenses in connection with the Plant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.10. <U>Inspection Rights</U>. </B>The Borrower shall, at any reasonable time
and from time to time, permit the Bank and its agents and representatives, upon reasonable prior notice, to examine and make copies of and abstracts from the records and books of account of, and visit and inspect the properties of, the Borrower and
to discuss the affairs, finances and accounts of the Borrower and of the Plant with the Borrower and any of its officers or directors. The Borrower agrees to pay, or reimburse the Bank for the payment of, the Bank for its reasonable fees and
out-of-pocket expenses incurred with respect to such examinations for: (a)&nbsp;one (1)&nbsp;examination and inspection during any fiscal year (the pre-closing examination and inspection not counting as inspection during the current fiscal year);
(b)&nbsp;two (2)&nbsp;examinations and inspections during any fiscal year in which the Borrower completes a material acquisition or any fiscal year thereafter; (c)&nbsp;any examination and inspection that reveals that the Borrower&#146;s financial
reports most recently delivered to the Bank contain significant errors or discrepancies; and/or (d)&nbsp;any examination and inspection conducted at any time after the occurrence and during the continuance of an Event of Default. None of the
foregoing shall imply that the Bank is under any duty to examine any books and records. Any inspection or examination by the Bank is for the sole purpose of protecting the Bank&#146;s security and preserving the Bank&#146;s rights under the Loan
Documents. No Default or Event of Default will be deemed waived by any such inspection. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.11. <U>Compliance with Laws</U>.
</B>The Borrower shall comply in all material respects with all applicable Governmental Rules, including all applicable federal, state and local energy and </FONT></P>
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labor laws and similar laws, rules, regulations and orders except where such non-compliance could not reasonably be expected to result in a Material Adverse Occurrence. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.12. <U>Banking Accounts</U>.</B> The Borrower shall maintain all of its banking accounts with the Bank except that the Borrower may
maintain its payroll account no. 124599 and its health claims account no. 126332 with Pioneer National Bank, Ladysmith, Wisconsin so long as such bank has entered into a deposit account control agreement with the Bank. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.13. <U>Reporting Requirements</U>. </B>The Borrower shall furnish to the Bank, in each case in form and substance reasonably
acceptable to the Bank: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) as soon as available and in any event within 30 days after the end of each fiscal
month, a copy of the unaudited financial statements of the Borrower prepared in conformity with GAAP on a consistent basis (except (i)&nbsp;for the omission of footnotes and prior period comparative data required by GAAP and for variations from GAAP
which in the aggregate are not material and (ii)&nbsp;that the unaudited financial statements for the month ending December&nbsp;31, 2010 may be delivered on a non-GAAP historic basis consistent with financial statements delivered prior to the
Clearwater Merger) consisting of a balance sheet of the Borrower as of the end of such month and statements of income, cash flows and retained earnings of the Borrower for the period commencing at the end of the previous fiscal year and ending with
the end of such month, setting forth in each case in comparative form the corresponding figures for the corresponding period of the preceding fiscal year and the budgets for such period, certified by a Financial Officer of the Borrower; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) as soon as available and in any event within 30 days after the end of each fiscal quarter of the Borrower, a
Compliance Certificate (the &#147;<U>Compliance Certificate</U>&#148;) in the form of <U>Exhibit B</U> attached hereto certified by a Financial Officer of the Borrower; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) as soon as available and in any event by the 15</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> day of each fiscal year, a copy of the operating budget of the
Borrower for the then current fiscal year, certified by a Financial Officer of the Borrower (provided that the operating budget for the fiscal year commencing January&nbsp;1, 2011, may be delivered no later than February&nbsp;14, 2011; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, a copy of the
annual audited financial statements for such year for the Borrower prepared in conformity with GAAP, containing financial statements of the Borrower for such year and statements of income, cash flows and retained earnings, setting forth in each case
in comparative form corresponding figures from the previous annual audit, certified without qualification by independent certified public accountants of recognized standing selected by the Borrower and acceptable to the Bank together with
(i)&nbsp;any management letters, management reports or other supplementary comments or reports to the Borrower or its board of directors furnished by such accountants; (ii)&nbsp;a Compliance Certificate certified by a Financial Officer of the
Borrower; and (iii)&nbsp;a statement by the accounting firm performing such audit stating whether they obtained knowledge during the course of their examination of such financial statements of any Default or Event of Default (which certificate may
be limited to the </FONT></P>
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extent required by accounting rules or guidelines and internal policies of such accounting firm); </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) as soon as possible and in any event within 5 days after the Borrower becomes aware of the occurrence of any Default or Event of Default continuing on the date of such statement, a statement of an
authorized officer of the Borrower setting forth details of such Default or Event of Default and the action which the Borrower has taken and proposes to take with respect thereto; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) as soon as possible and in any event within 5 days after the Borrower becomes aware of the institution of any action
or proceeding affecting the Borrower or the Plant before any court, Governmental Person or arbitrator which, if determined adversely to the Borrower or the Plant, as applicable, would materially adversely affect the performance of the Transaction
Documents or which purports to affect the legality, validity or enforceability of any of the Transaction Documents, a statement of an authorized officer of the Borrower setting forth details of such action or proceeding and the action which the
Borrower has taken and proposes to take with respect thereto; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) upon preparation for recording, copies of
any documents granting easements, licenses, or other similar rights benefiting or encumbering the Property; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) upon delivery or receipt thereof, a copy of any notice required to be delivered by or to the Borrower under any Bond
Document; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)(i) as soon as possible and in any event within 30 days after the Borrower knows or has reason to
know that any Termination Event with respect to any Single Employer Plan has occurred, a statement of a Responsible Officer of the Borrower describing such Termination Event and the action, if any, that the Borrower proposes to take with respect
thereto; (ii)&nbsp;promptly and in any event within ten Business Days after receipt thereof by the Borrower or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Borrower or any of its ERISA Affiliates of the
PBGC&#146;s intention to terminate any Plan or to have a trustee appointed to administer any Plan; (iii)&nbsp;promptly and in any event within 30 days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each Single Employer Plan maintained for or covering employees of the Borrower if the present value of the accrued benefits under the Single Employer Plan exceeds its assets by an
amount in excess of $1,000,000.00 and (iv)&nbsp;promptly and in any event within fifteen Business Days after receipt thereof by the Borrower or any of its ERISA Affiliates from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each
notice received by the Borrower or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability under Section&nbsp;4202 of ERISA or indicating that such Multiemployer Plan may enter reorganization status under
Section&nbsp;4241 of ERISA; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) concurrently with delivery thereof to the Trustee or any Governmental Person,
any report, certificate, request, statement, notice, instrument or opinion of </FONT></P>
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counsel required to be delivered by the Borrower pursuant to any Bond Document, in each case addressed to the Bank; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) promptly, and any event by no later than five (5)&nbsp;Business Days prior to the date on which Cellu Tissue proposes
to consummate any transaction described in clause (a)&nbsp;of the definition of &#147;Clearwater Prepayment Event&#148;, notify the Bank of Clearwater&#146;s intent to do so and provide the Bank with copies of the relevant documentation governing
such transaction or, in each case, cause Clearwater to do so; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(l) within five (5)&nbsp;Business Days after
making a Permitted Debt Payment, a certificate from a Financial Officer of the Borrower certifying compliance with <U>Section&nbsp;9.7(b)(ii)</U> or <U>Section&nbsp;9.15(a)(iv)</U>, as the case may be; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(m) such other information respecting the condition or operations, financial or otherwise, of the Borrower, any other Loan
Party or the Plant as the Bank may from time to time reasonably request. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.14. <U>Environmental Matters</U>. </B>The
Borrower shall at all times: (a)&nbsp;not cause or permit the Property to be in violation of any Environmental Law which violation would have a material effect on the ability of the Borrower to perform its obligations under the Bond Documents or the
Loan Documents; and (b)&nbsp;promptly upon the Borrower&#146;s knowledge thereof, advise the Bank in writing of (i)&nbsp;any and all enforcement, cleanup, removal, mitigation or other governmental or regulatory actions affecting the Property
instituted in writing against the Borrower pursuant to any Environmental Laws and (ii)&nbsp;all claims made in writing by any third party against the Borrower or the Property relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Substance Activity at or from the Property in violation of applicable Environmental Laws (the matters set forth in clauses (a)&nbsp;and (b)&nbsp;above are hereinafter referred to as &#147;Hazardous Materials
Claims&#148;). In addition, the Borrower shall (i)&nbsp;comply in all material respects and cause all other Persons constructing, occupying or conducting operations on or about the Property, to comply in all material respects with all Environmental
Laws now or hereafter applicable to the Property; (ii)&nbsp;obtain, at or prior to the time required by applicable Environmental Laws, all Governmental Approvals required pursuant to applicable Environmental Law for the Borrower&#146;s operations,
and the construction, operation and maintenance of the Plant, and maintain such Governmental Approvals in full force and effect; (iii)&nbsp;not generate, use, treat, recycle, store, release or dispose of, or permit the generation, use, treatment,
recycling, storage, release or disposal of Hazardous Substances on the Property, or transport or permit the transportation of Hazardous Substances to or from the Property, other than in material compliance with all applicable Environmental Laws;
(iv)&nbsp;conduct and complete any reasonable investigation, study, sampling and testing and undertake any reasonable cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Substances released at, on, in, under or
emanating from the Property for which the Borrower is liable, in accordance with and to the extent necessary under all applicable Environmental Laws; and (v)&nbsp;provide the Bank with written notice of (A)&nbsp;any fact, circumstance, condition,
occurrence or release at, on, under or from the Property that results in material noncompliance with any Environmental Law or that has resulted or could reasonably result in personal injury or material property damage claims or could have a material
adverse effect on the Borrower, such notice to be given promptly after the condition is discovered by or made known to the Borrower and (B)</FONT></P>
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any pending or threatened Hazardous Materials Claim against the Borrower or any other Persons occupying or conducting operations on the Property, such notice to be given promptly after such
Hazardous Materials Claim is commenced or threatened against the Borrower. All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, incident, or occurrence and the Borrower&#146;s response thereto. In
addition, the Borrower will provide the Bank with copies of all written communications with any Governmental Person relating to any material violation by the Borrower of any applicable Environmental Law or any Hazardous Materials Claim commenced
against the Borrower promptly after the giving or receiving of any such written communications. The Borrower shall also provide such detailed reports of any Hazardous Materials Claim as may be reasonably requested by the Bank. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.15. <U>Further Assurances</U></B>. The Borrower shall, at the request of the Bank, execute, deliver and furnish such documents or
take such further action as the Bank may reasonably deem necessary or desirable to evidence the Obligations, perfect the security therefor, or otherwise carry out the terms of this Agreement or any other Loan Document. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.16. <U>ERISA</U></B>. The Borrower shall maintain each Single Employer Plan in material compliance with all applicable requirements
of ERISA and of the Code and with all applicable rulings and regulations issued under the provisions of ERISA and of the Code. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.17. <U>Amortization Schedule</U></B>. The Borrower shall cause the Bonds to be retired in accordance with the amortization schedule
set forth in Schedule 8.18 attached hereto and incorporated herein by reference (the &#147;Amortization Schedule&#148;). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.18. <U>Consent to Optional Redemption</U></B>. The Borrower hereby agrees that, prior to the effectiveness of any election by the
Borrower to exercise its right of optional redemption of the Bonds pursuant to the Indenture and the Bond Loan Agreement (excluding redemptions required by <U>Section&nbsp;8.18</U> or made in connection with a Clearwater Prepayment Event), the
Borrower will obtain the Bank&#146;s prior written consent to such optional redemption of the Bonds, and if consented to by the Bank, the Bank shall execute such written consents with respect thereto as may be required by the Trustee under the
Indenture. The Bank shall not withhold its consent to such optional redemption of the Bonds so long as the Borrower shall satisfy the Bank that the Borrower will have funds available to it in an amount sufficient to reimburse the Bank for the
Drawing under the Bonds Letter of Credit to pay the redemption price of such Bonds and that such funds will be on deposit with the Trustee or the Bank at such time as would enable the Bank to be reimbursed for Drawings made in connection with such
redemption on the proposed redemption date and to pay the Optional Redemption Fee required by <U>Section&nbsp;2.3(b)</U>, if applicable. The Borrower further agrees to take all action requested by the Bank to cause Bonds to be redeemed pursuant to
<U>Section&nbsp;4.2(c)</U> or <U>Section&nbsp;8.18</U> of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.19. <U>Replacement of Trustee</U></B>. Upon
the Bank&#146;s written request, the Borrower shall take such action as may be necessary to remove the Trustee pursuant to Section&nbsp;1107 of the Indenture, in which case the $3,000.00 Transfer Fee shall be waived. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE IX. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NEGATIVE COVENANTS </B></FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">From the date of this Agreement and thereafter until the Bonds Letter of Credit is
terminated or expired and all other Obligations of the Borrower to the Bank hereunder and under the other Loan Documents or otherwise have been paid in full, unless the Bank shall otherwise expressly consent in writing: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.1. <U>Liens. Etc</U></B>. The Borrower shall not create or suffer to exist any Lien on any asset of the Borrower other than:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Liens under the Security Documents, or permitted thereby or by this Agreement; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Liens securing Purchase Money Indebtedness incurred in connection with Capital Expenditures made after the date of
this Agreement by way of purchase money security interest, purchase money mortgage, conditional sale or other title retention agreement, Capitalized Lease or other deferred payment contract, and attaching only to the property being acquired,
provided that the Indebtedness secured thereby is permitted as a Capital Expenditure at the time of such incurrence and does not exceed the lesser of the purchase price or the fair market value of such property at the time of its acquisition;
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Liens on equipment leased in a manner not prohibited by any Transaction Document; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Liens listed on <U>Schedule 7.13</U> to this Agreement; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Permitted Liens. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>9.2. <U>Indebtedness</U></B>. The Borrower shall not create or suffer to exist any Indebtedness except: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) Indebtedness under this Agreement; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Current liabilities,
other than for borrowed money, incurred in the ordinary course of business; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Contingent Obligations under
the Clearwater Senior Notes Subsidiary Guarantee; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Other Indebtedness existing on the date of this
Agreement and disclosed on <U>Schedule 9.2</U> attached hereto and incorporated herein by reference and any extension, refinancing or renewal thereof that: (i)&nbsp;does not include an increase in the principal amount thereof; and/or (ii)&nbsp;does
not impose any standard of financial performance on the Borrower that is greater than the standards of financial performance set forth in this Agreement; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) Purchase Money Indebtedness and Capital Leases so long as no Event of Default has occurred and is continuing on the date of the incurrence of such Indebtedness; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">41 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) Indebtedness of the Borrower to Cellu Tissue or Clearwater or its wholly
owned subsidiaries; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) Indebtedness consisting of endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary course of business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.3. <U>Lease
Obligations</U></B>. Intentionally Deleted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.4. <U>Guaranty Obligations</U></B>. Except as provided in the Loan Documents
or for Indebtedness permitted by <U>Section&nbsp;9.2</U>, the Borrower shall not: (a)&nbsp;be or become liable on any Contingent Obligations; or (b)&nbsp;agree to maintain the net worth or working capital of, or provide funds to satisfy any other
financial test applicable to, any other Person. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.5. <U>Mergers, Restriction on Fundamental Changes, Etc</U></B>. The
Borrower shall not liquidate or dissolve, or merge into or consolidate with or into, or acquire all or substantially all of the assets of, any Person, except as contemplated in the Clearwater Merger Transactions. The Borrower shall not permit any
material amendment of its organizational documents, except as contemplated in the Clearwater Merger Transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.6.
<U>Sales, Etc. of Assets</U></B>. The Borrower shall not, nor shall it permit any Person to, whether by operation of law or otherwise, sell, assign, lease, transfer or otherwise dispose of all or any substantial part of its assets (whether now owned
or hereafter acquired) to any Person, except that the Borrower may sell any of its assets: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) dispositions of
Inventory, or used, worn-out or surplus Equipment, all in the ordinary course of business; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the sale of
Equipment to the extent that such Equipment is exchanged for credit against the purchase price of similar replacement Equipment, or the proceeds of such sale are applied with reasonable promptness to the purchase price of such replacement Equipment;
or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) other dispositions of property during the term of this Agreement so long as the Net Proceeds to be
obtained from any such transaction (or related series of transactions) does not exceed $100,000.00 or the aggregate Net Proceeds determined from all such transactions in any fiscal year does not exceed $100,000.00. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.7. <U>Restricted Payments</U></B>. The Borrower shall not declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) the Borrower may
declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) so long as no Default or Event of Default has occurred and is continuing at the time of a proposed payment of a Permitted Tax Distribution or could reasonably be expected to result from such payment,
the Borrower may make distributions (the </FONT></P>
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&#147;Permitted Tax Distributions&#148;) to its member for the sole purpose of paying the tax liabilities of the Borrower&#146;s member resulting from the reported net income of the Borrower so
long as the Borrower is a pass-through tax entity under the Code; <U>provided</U>, <U>however</U>, that: (A)&nbsp;such member&#146;s federal and state income tax liability shall be computed on the basis of the highest marginal tax rates under the
Code and the laws of the State of Minnesota; (B)&nbsp;Permitted Tax Distributions shall be paid in estimated quarterly installments contemporaneously with its member&#146;s obligations to pay estimated income taxes based upon the Borrower&#146;s
annualized income through the end of its fiscal month immediately preceding such tax installment&#146;s due date and also contemporaneously with such member&#146;s filing of its federal and state income tax returns if the estimated Permitted Tax
Distributions paid for any of the Borrower&#146;s fiscal years are not sufficient to pay such member&#146;s actual income tax liability computed at the highest marginal rates based on its share of the Borrower&#146;s actual taxable income for such
fiscal year as disclosed by copies of the Borrower&#146;s tax returns and related Schedules K-1 for such fiscal year delivered to the Bank pursuant to this Agreement; and (C)&nbsp;if the Permitted Tax Distributions actually paid with respect to any
of the Borrower&#146;s fiscal years exceed the Permitted Tax Distributions permitted by this <U>Section&nbsp;9.7(b)</U> based upon the Borrower&#146;s actual taxable net income as disclosed by copies of such tax returns and schedules described
above, then the Borrower shall immediately recover the excess amount from the recipient and shall not pay any further Permitted Tax Distributions to any Person until such excess amount is recovered. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.8. <U>Investments in Other Persons</U></B>. Other than Permitted Investments, the Borrower shall not make any loan or advance to any
Person or purchase or otherwise acquire any capital stock, obligations or other securities of, make any capital contribution to, or otherwise invest in, any Person (other than the Borrower). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.9. <U>Change in Nature of Business</U></B>. The Borrower shall not engage in any business other than the operation of the Plant or
make any material change in the nature of its business as carried on at the date hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.10. <U>Change of Fiscal
Year</U></B>. The Borrower will not change its fiscal year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.11. <U>Plans</U></B>. The Borrower shall not permit any
condition to exist in connection with any Single Employer Plan that could reasonably be expected to constitute grounds for the PBGC to institute proceedings to have such Single Employer Plan terminated or a trustee appointed to administer such
Single Employer Plan; permit any Single Employer Plan to terminate under any circumstances that would cause the Lien provided for in Section&nbsp;4068 of ERISA to attach to any property, revenue or asset of the Borrower or any of its ERISA
Affiliates; or permit the underfunded amount of any Single Employer Plan benefits guaranteed under Title IV of ERISA to exceed $50,000.00. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>9.12. <U>Subsidiaries, Partnerships and Joint Ventures</U></B>. The Borrower shall not: (a)&nbsp;form or acquire any corporation or company which would thereby become a Subsidiary; or (b)&nbsp;form or
enter into any partnership as a limited or general partner or form or enter into any joint venture. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">43 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.13. <U>Restrictive Agreements</U></B>. The Borrower shall not directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) the ability of the Borrower to create, incur or permit to exist any Lien upon any of its property or assets in favor of the Bank; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the Bank&#146;s right to impose the conditions set forth in this Agreement upon the Borrower&#146;s ability to pay
dividends or distributions with respect to its Equity Interests or to repay loans or advances made to the Borrower by Cellu Tissue or Clearwater; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>provided</U> that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(x) the foregoing shall not apply to:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) restrictions and conditions imposed by law or by any Loan Document, </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) restrictions and conditions existing on the date hereof identified on <U>Schedule 9.13</U> attached hereto and
incorporated herein by reference including the Clearwater Senior Notes Indenture and the Clearwater Bank of America Loan Agreement; <U>provided</U> <U>further</U>, that in no event shall any such restriction or condition be breached or violated by:
(A)&nbsp;the Borrower&#146;s incurrence of the Indebtedness under this Agreement and the grant of Liens in its property pursuant to the Loan Documents; or (B)&nbsp;the Borrower&#146;s performance of its obligations under the Loan Documents; or
(C)&nbsp;the Borrower&#146;s incurrence of any Indebtedness to refinance the Indebtedness incurred under this Agreement so long as: (1)&nbsp;the terms of such re-refinancing Indebtedness comply with any requirement then imposed by the Clearwater
Senior Notes Loan Documents and the Clearwater Credit Facility Loan Documents for permitted re-financing Indebtedness; (2)&nbsp;with respect to all Letter of Credit Obligations, the Liens securing such re-financing Indebtedness shall be
substantially the same as those created by the Security Documents; and (3)&nbsp;the applicable restrictions described in Section&nbsp;9.13(b) in the documentation for the re-financing Indebtedness are not materially more restrictive, when taken as a
whole, than the applicable restrictions in this Agreement; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) customary restrictions and conditions
contained in agreements relating to the sale of the Borrower pending such sale; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(y) clause (a)&nbsp;of the
foregoing shall not apply to: (i)&nbsp;restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such
Indebtedness; and (ii)&nbsp;customary provisions in leases and other contracts restricting the assignment thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.14.
<U>Payment Terms</U></B>. The Borrower shall not materially change its selling terms of payment on Accounts as in effect on the date of this Agreement in any manner that materially </FONT></P>
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affects the value of the Accounts as collateral for the Obligations or provide dating terms that exceed 90 days after the relevant invoice date. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.15. <U>Transactions with Related Parties</U></B>. The Borrower shall not: (a)&nbsp;permit the direct or indirect transfer,
distribution or payment of any of its funds, assets or property to any Related Party, except that the Borrower may pay: (i)&nbsp;bona fide employee compensation (including benefits) to Related Parties for services actually rendered to the Borrower;
(ii)&nbsp;expenses incurred by an employee in the ordinary course of business; (iii)&nbsp;expenses or rents for services or property or the use thereof allocated to the Borrower; <U>provided</U>, <U>however</U>, that all such payments pursuant to
subsections (a)(i), (ii)&nbsp;and (iii)&nbsp;shall not exceed the amount which would be payable in a comparable arm&#146;s length transaction with a third party who is not a Related Party; (iv)&nbsp;repayment of Indebtedness permitted by
<U>Section&nbsp;9.2(g)</U> (such repayments being &#147;Permitted Debt Payments&#148;) so long as: (A)&nbsp;no Default or Event of Default has occurred and is continuing at the time of the proposed Permitted Debt Payment; (b)&nbsp;lend or advance
money, credit or property to any Related Party; (c)&nbsp;invest in (by capital contribution or otherwise) or purchase or repurchase any stock or indebtedness, or any assets or properties, of any Related Party except otherwise permitted by other
subsections of this <U>Section&nbsp;9.15</U>; or (d)&nbsp;guarantee, assume, endorse or otherwise become responsible for, or enter into any agreement or instrument for the purpose of discharging or assuming (directly or indirectly, through the
purchase of goods, supplies or services or otherwise) the indebtedness, performance, capability, obligations, dividends or agreement for the furnishing of funds of any Related Party or any officer, director or employee thereof except for the
Contingent Obligations permitted by <U>Section&nbsp;9.4</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.16. <U>Unconditional Purchase Obligations</U></B>. The
Borrower shall not enter into or be a party to any contract for the purchase or lease of materials, supplies or other property or services if such contract requires that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.17. <U>Intentionally Omitted</U></B>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.18. <U>Leverage Ratio</U></B>. The Borrower shall not permit, as of any Quarterly Measurement Date, the Leverage Ratio to be greater
than 2.5 to 1.0. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.19. <U>Fixed Charge Coverage Ratio</U></B>. The Borrower shall not permit, as of any Quarterly
Measurement Date, the Fixed Charge Coverage Ratio to be less than 1.2 to 1.0. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.20. <U>Capital Expenditures</U></B>. The
Borrower shall not make any Capital Expenditure if, after giving effect to such Capital Expenditure, the aggregate Capital Expenditures made by the Borrower during any of its fiscal years would exceed $3,000,000.00. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.21. <U>Sale and Lease</U></B>. The Borrower shall not enter into any agreement providing for the leasing by the Borrower of property
which has been or is to be sold or transferred by the Borrower to the lessor thereof, or which is substantially similar in purpose to property so sold. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>9.22. <U>Bonds Interest Rate Mode Election</U></B>. The Borrower shall not convert the interest rate on the Bonds from the &#147;Variable Rate&#148; to the &#147;Adjusted Interest Rate&#148; permitted
by Section&nbsp;302 of the Indenture. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">45 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.23. <U>Bond Status</U></B>. The Borrower will not take any action or fail to take any
action within its reasonable control that shall cause the Rating Agency to reduce the rating on the Bonds. The Borrower shall not be responsible for any change in such rating of the Bonds resulting from the Bank&#146;s actions or a change in the
rating of the Bank. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.24. <U>Bond Documents</U></B>. Except as may be required to maintain the tax-exempt status of the
Bonds, the Borrower will not amend, modify or terminate, or agree to amend, modify or terminate any Bond Document. Unless approved by the Bank in writing, the Borrower shall not consent to the appointment of any successor to the Trustee or the
Paying Agent and shall not appoint or consent to the appointment of any other agent appointed pursuant to the Indenture or any additional Paying Agents or other such agents with respect to the Bonds. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.25. <U>Certain Transaction Documents</U></B>. The Borrower will not amend, modify, or supplement any provision of, or waive any
other party&#146;s compliance with any of the terms of the Clearwater Merger Agreement in any manner that: (a)&nbsp;requires the Borrower or any of its Subsidiaries to pay any additional consideration under the Clearwater Merger Agreement or
otherwise imposes any financial obligation or burden on the Borrower of any of its Subsidiaries; (b)&nbsp;could reasonably be expected to result in a Material Adverse Occurrence; or (c)&nbsp;is materially adverse to the rights and benefits of the
Bank under the Loan Documents. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE X. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">EVENTS OF DEFAULT AND REMEDIES </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>10.1. <U>Events of Default</U></B>. The
occurrence of any one or more of the following events shall constitute an Event of Default upon the expiration of the cure period, if any, described in the relevant event: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) The Borrower shall fail to pay any Obligation when due, whether by acceleration or otherwise, including, without
limitation, (i)&nbsp;any Letter of Credit Obligation; or (ii)&nbsp;any fee or other amount required to be made to the Bank pursuant to any Loan Document; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) Any representation or warranty made or deemed to have been made by or on behalf of any Loan Party in any of the Loan Documents or by or on behalf of any Loan Party in any certificate, statement,
report or other writing furnished by or on behalf of such Loan Party to the Bank pursuant to the Loan Documents shall prove to have been false or misleading in any material respect on the date as of which the facts set forth are stated or certified
or deemed to have been stated or certified; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) The Borrower shall fail to comply with <U>Sections 8.1(a),
8.8(a) or (b), 8.14(e)</U>, or any Section of <U>ARTICLE IX</U>; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Any Loan Party shall fail to comply
with any agreement, covenant, condition, provision or term contained in the Loan Documents on its part to be performed (and such failure shall not constitute an Event of Default under any of the other provisions of this <U>Section&nbsp;10.1</U>) and
such failure to comply shall continue for 30 calendar days after the earlier to occur of: (i)&nbsp;the Borrower&#146;s receipt of notice of such failure from </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">46 </FONT></P>



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the Bank; or (ii)&nbsp;the date on which the Borrower is required to give notice of an Event of Default to the Bank pursuant to <U>Section&nbsp;8.1(e)</U>; or </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Any Loan Party shall become insolvent or shall generally not pay its debts as they mature or shall apply for, shall
consent to, or shall acquiesce in the appointment of a custodian, trustee or receiver of any Loan Party or for a substantial part of its property or, in the absence of such application, consent or acquiescence, a custodian, trustee or receiver shall
be appointed for any Loan Party or for a substantial part of its property and shall not be discharged within 30 days; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) Any bankruptcy, reorganization, debt arrangement or other proceedings under any bankruptcy or insolvency law shall be instituted by or against any Loan Party and, if instituted against such Loan
Party, shall have been consented to or acquiesced in by such Loan Party, or shall remain undismissed for 60 days, or an order for relief shall have been entered against any Loan Party, or any Loan Party shall take any corporate action to approve
institution of, or acquiesced in, such a proceeding; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) Any dissolution or liquidation proceeding shall be
instituted by or against any Loan Party and, if instituted against any Loan Party, shall be consented to or acquiesced in by such Loan Party or shall remain for 60 days undismissed, or any Loan Party shall take any corporate action to approve
institution of, or acquiescence in, such a proceeding; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) A judgment or judgments (other than judgment(s)
that are covered by insurance where the insurance company has not reserved its rights against the Borrower with respect to the insurance company&#146;s payment of such judgment) for the payment of money in excess of the sum of $250,000.00 in the
aggregate shall be rendered against the Borrower and the Borrower shall not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof, prior to any execution on such judgments by such
judgment creditor, within 30 days from the date of entry thereof, and within said period of 30 days, or such longer period during which execution of such judgment shall be stayed, appeal therefrom and cause the execution thereof to be stayed during
such appeal; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) The Borrower or any ERISA Affiliate institutes steps to terminate any Single Employer Plan
if, in order to effectuate such termination, the Borrower or any ERISA Affiliate would be required to make a contribution to such Single Employer Plan, or would incur a liability or obligation to such Single Employer Plan, in either case, in excess
of $250,000.00, or the PBGC terminates any Single Employer Plan if such termination causes the Borrower or any of its ERISA Affiliates to incur any liability or obligation in excess of $250,000.00; or (ii)&nbsp;the Borrower or any ERISA Affiliate
incurs any liability in excess of $250,000.00 in connection with the withdrawal from any Multiemployer Plan; or </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) The maturity of any Indebtedness of the Borrower (other than Indebtedness under this Agreement or the other Loan
Documents or the Clearwater Senior Notes Loan Documents or the Clearwater Credit Facility Loan Documents) in the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">47 </FONT></P>



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aggregate amount of more than $250,000.00 shall be accelerated, or the Borrower shall fail to pay any such Indebtedness when due and any applicable grace period shall have expired or, in the case
of such Indebtedness payable on demand, when demanded, or any event shall occur or condition shall exist and shall continue for more than the period of grace, if any, applicable thereto and shall have the effect of causing, or permitting (any
required notice having been given and grace period having expired) the holder of any such Indebtedness or any trustee or other Person acting on behalf of such holder to cause such Indebtedness to become due prior to its stated maturity or to realize
upon any collateral given as security therefor; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) Any Change of Control shall occur; or </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(l) If the validity or enforceability of any of the Loan Documents shall be challenged by any Loan Party or any other
party thereto, or any Loan Document shall fail to remain in full force and effect; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(m) The Bank shall have
reasonably determined in good faith that the Bank&#146;s interest in any material Collateral has been materially adversely affected or impaired, or the value thereof to the Bank has been diminished to a material extent except for depreciation in the
ordinary course of business and normal wear and tear; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(n) Any &#147;Event of Default&#148; (howsoever
defined) shall occur and be continuing under any Clearwater Senior Notes Loan Document, any Clearwater Credit Facility Loan Document or any Bond Document. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>10.2. <U>Remedies</U></B>. If: (a)&nbsp;any Event of Default described in <U>Sections 10.1(e)</U>, <U>(f)</U>, or <U>(g)</U>&nbsp;shall occur, the Letter of Credit Obligations and all other Obligations
under the Loan Documents shall automatically become immediately due and payable; or (b)&nbsp;any other Event of Default shall occur and be continuing, then the Bank may take any or all of the following actions: (i)&nbsp;declare that the Letter of
Credit Obligations and all other Obligations under the Loan Documents to be forthwith due and payable, whereupon the Letter of Credit Obligations and all such Obligations shall immediately become due and payable, in each case without demand or
notice of any kind, all of which are hereby expressly waived, anything in this Agreement or in any Loan Document to the contrary notwithstanding; (iii)&nbsp;exercise all rights and remedies under any other instrument, document or agreement between
the Borrower and the Bank; and (iv)&nbsp;enforce all rights and remedies under any applicable law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition to the
remedies set forth in the preceding paragraph, the Bank may: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(x) Notify the Trustee that the amount of a
Drawing under the Bonds Letter of Credit will not be reinstated in accordance with the terms of the Bonds Letter of Credit; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(y) Notify the Trustee that an Event of Default has occurred and is continuing and direct the Trustee to: (i)&nbsp;cancel any Bonds then owned or held by the Borrower including, but not limited to, any
Pledged Bonds and (ii)&nbsp;forthwith accelerate payment of all other Bonds all in accordance with Section&nbsp;1003 of the Indenture or to purchase the Bonds in accordance with Section&nbsp;1205 of the Indenture; and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">48 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(z) Notify the Trustee to cancel all applicable Pledged Bonds. Any such
cancellation pursuant to this <U>Section&nbsp;10.2</U> shall not be deemed to discharge or extinguish any of the Borrower&#146;s Letter of Credit Obligations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>10.3. <U>Offset</U></B>. In addition to the remedies set forth in <U>Section&nbsp;10.2</U>, upon the occurrence of any Event of Default or at any time thereafter while such Event of Default continues,
the Bank may offset any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies of the Borrower then or thereafter with the Bank or such other holder, or any obligations of the Bank against
the Indebtedness then owed by the Borrower to the Bank. The Borrower hereby grants to the Bank a security interest in all such balances, credits, deposits, accounts or monies. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>10.4. <U>Prepayment Obligations</U></B>. The Borrower agrees that if the Obligations become immediately due and payable in full at a time when the Bond Letter of Credit is outstanding the Borrower
shall thereupon automatically be obligated to pay the Bank, in addition to all other amounts owing under this Agreement, the aggregate face amount of the Bonds Letter of Credit then outstanding. The foregoing obligation to pay in advance for amounts
which the Bank may later have to pay pursuant to the Bonds Letter of Credit is and shall at all times constitute a part of the &#147;Obligations&#148;. Amounts paid by the Borrower pursuant to this <U>Section&nbsp;10.4</U> shall be made directly to
an interest-bearing collateral account (the &#147;Cash Collateral Account&#148;) maintained at the Bank for application to the Borrower&#146;s reimbursement obligations under <U>Section&nbsp;2.2</U> as payments are made on the Bonds Letter of
Credit, with the balance, if any, to be applied to the other Obligations if any Event of Default has occurred and is continuing, or if no Event of Default has occurred and is continuing, returned to the Borrower. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>10.5. <U>Right of the Bank to Cure Defaults under Bond Loan Agreement</U></B>. If the Borrower shall fail to make any required payment
under the Bond Loan Agreement on the day such payment is first due and payable, or shall fail to comply with any other covenant or agreement of the Borrower under the Bond Loan Agreement, the Bank shall have the option, in the Bank&#146;s sole
discretion, to cure any such failure by taking action reasonably required to effect such cure including, without limitation, making the required payment directly to the Trustee; <U>provided</U>, <U>however</U>, that nothing herein shall be deemed to
require the Bank to cure any such failure. Any such payment by the Bank shall constitute Obligations payable upon demand, and shall bear interest from the date such payment is made by the Bank (regardless of whether a demand for payment by the
Borrower is made by the Bank) at the Default Rate. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE XI. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MISCELLANEOUS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.1. <U>Waiver and Amendment</U></B>. No failure on the part of the Bank to exercise and no delay in exercising any power or right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The remedies herein and in any other instrument, document or agreement delivered or
to be delivered to the Bank hereunder or in connection herewith are cumulative and not exclusive of any remedies provided by law. No notice to or demand on the Borrower not required hereunder or under any Loan Document shall in any event entitle the
Borrower to any other or further notice or demand </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">49 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
in similar or other circumstances or constitute a waiver of the right of the Bank or the holder of any Note to any other or further action in any circumstances without notice or demand. No
amendment, modification or waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall be effective unless the same shall be in writing and signed by the Bank, and then such amendment, modification, waiver
or consent shall be effective only in the specific instances and for the specific purpose for which given. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.2.
<U>Expenses and Indemnities</U>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <B><U>Loan Documents</U></B>. The Borrower agrees to pay and
reimburse the Bank upon demand and/or on the Effective Date for all reasonable expenses paid or incurred by the Bank (including filing and recording costs and fees and expenses of legal counsel, who may be employees of the Bank, and including the
costs of any appraisals and environmental assessments) in connection with the preparation, review, execution, delivery, amendment, modification or interpretation of the Loan Documents. The Borrower agrees to pay and reimburse the Bank upon demand
for all reasonable expenses paid or incurred by the Bank (including reasonable fees and expenses of legal counsel, who may be employees of the Bank) in connection with the collection and enforcement of the Loan Documents. The Borrower agrees to pay,
and save the Bank harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of the Loan Documents. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <B><U>General Indemnity</U></B>. In addition to the payment of expenses pursuant to <U>Section&nbsp;11.2(a)</U>,
whether or not the transactions contemplated hereby shall be consummated, the Borrower hereby indemnifies, and agrees to pay and hold the Bank, its affiliates and their respective officers, directors, employees, agents, successors and assigns
(collectively called the &#147;Indemnitees&#148;) harmless from and against, any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for any of such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not any of such
Indemnitees shall be designated a party thereto), that may be imposed on, incurred by, or asserted against the Indemnitees (or any of them), in any manner relating to or arising out of the Loan Documents, the statements contained in any commitment
letters delivered by the Bank, the Bank&#146;s agreement to issue the Bonds Letter of Credit, or the use or intended use of the proceeds of the Bonds Letter of Credit (the &#147;<U>Indemnified Liabilities</U>&#148;); <U>provided</U>, <U>however</U>,
that the Borrower shall have no obligation to an Indemnitee hereunder with respect to Indemnified Liabilities arising from the gross negligence or willful misconduct of an Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any of them. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c)
<B><U>Survival</U></B>. The obligations of the Borrower under this <U>Section&nbsp;11.2</U> shall survive any termination of this Agreement. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">50 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.3. <U>Notices</U></B>. Except when telephonic notice is expressly authorized by this
Agreement, any notice or other communication to any party in connection with this Agreement shall be in writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or United States mail (postage prepaid)
addressed to such party at the address specified on the signature page hereof, or at such other address as such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of delivery
thereof if manually delivered, from the date of sending thereof if sent by telegram, telex or facsimile transmission, from the first Business Day after the date of sending if sent by overnight courier, or from four days after the date of mailing if
mailed; <U>provided</U>, <U>however</U>, that any notice to the Bank under <U>Article II</U> shall be deemed to have been given only when received by the Bank. The Borrower hereby authorizes the Bank to rely upon the telephone or written
instructions of any person identifying himself as an authorized officer of the Borrower and upon any signature which the Bank believes to be genuine, and the Borrower shall be bound thereby in the same manner as if the Borrower were authorized or
such signature were genuine. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.4. <U>Successors</U></B>. This Agreement shall be binding upon the Borrower, the Bank and
their respective successors and assigns, and shall inure to the benefit of the Borrower, the Bank and the successors and assigns of the Borrower and the Bank. The Borrower shall not assign its rights or duties hereunder without the consent of the
Bank. With the prior written consent of the Borrower (other than with respect to any of the transactions described in the proviso clause hereto (an &#147;Exempt Transfer&#148;)), which consent shall not be unreasonably withheld or delayed by the
Borrower, the Bank may assign its rights and obligations under this Agreement and the Loan Documents to any Person; <U>provided</U>, <U>however</U>, that no Borrower consent shall be required with respect to any assignment made: (a)&nbsp;during any
period when an Event of Default has occurred and is continuing; <U>provided</U> <U>further</U>, <U>however</U>, that the Borrower&#146;s consent shall be required for any assignment to any Person that has been engaged in all or one of the business
lines of the Borrower during the preceding two (2)&nbsp;years except where the assignment is made after the Obligations have become due and payable at maturity, upon acceleration or otherwise; (b)&nbsp;to another subsidiary or affiliate of
Associated Bancorp; (c)&nbsp;in connection with the sale of all or substantially all of the Bank&#146;s assets; or (d)&nbsp;in response to any regulatory action affecting the Bank. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.5. <U>Participations</U></B>. The Bank may sell participation interests in any or all of the Bonds Letter of Credit to any Person;
<U>provided</U>, <U>however</U>, that the Borrower&#146;s prior written consent shall be required for any sale of a participation to any Person that has been engaged in all or one of the business lines of the Borrower during the preceding two
(2)&nbsp;years except where such sale is made after the Obligations have become due and payable at maturity, upon acceleration or otherwise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.6. <U>Severability</U></B>. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.7. <U>Captions</U></B>. The captions or headings herein and any table of contents hereto are for convenience only and in no way define, limit or describe the scope or intent of any provision of this
Agreement. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">51 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.8. <U>Entire Agreement</U></B>. This Agreement, and the other Loan Documents embody
the entire agreement and understanding between the Borrower and the Bank with respect to the subject matter hereof and thereof. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.9. <U>Counterparts</U></B>. This Agreement may be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.10. <U>Governing Law</U></B>. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THE BORROWER IS A PARTY SHALL BE GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.11. <U>Consent to Jurisdiction</U></B>. AT THE OPTION OF THE BANK, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THE BORROWER IS A PARTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA
STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; OR ANY FEDERAL COURT SITTING IN GREEN BAY, WISCONSIN OR WISCONSIN STATE COURT SITTING IN GREEN BAY, WISCONSIN AND THE BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND
WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS
AGREEMENT, THE BANK, AT ITS OPTION, SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.12. <U>Waiver of Jury Trial</U></B>. THE BORROWER AND THE BANK WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a)&nbsp;UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (b)&nbsp;ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.13. <U>Document Construction</U></B>. This Agreement and each other Loan Document has been reviewed by all the parties hereto and incorporates the requirements of such parties. Each party waives the
rule of construction that any ambiguities are to be resolved against the party drafting the same and agrees such rules will not be employed in the interpretation of this Agreement or any other Loan Document. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">52 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.14. <U>Customer Identification - USA Patriot Act Notice</U></B>. The Bank hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October&nbsp;26, 2001) (the &#147;Act&#148;), and the Bank&#146;s policies and practices, the Bank is required to obtain,
verify and record certain information and documentation that identifies the Borrower, which information includes the name and address of the Borrower and such other information that will allow the Lender to identify the Borrower in accordance with
the Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.15. <U>Confidentiality</U></B>. The Bank shall use reasonable efforts to assure that information about the
Borrower and its operations, affairs and financial condition, not generally disclosed to the public or to trade and other creditors, which is furnished to the Bank pursuant to the provisions hereof is used only for the purposes of this Agreement any
other relationship between the Borrower, on the one hand, and the Bank and its Affiliates, on the other hand, and shall not be divulged to any Person other than the Bank, its Affiliates and their respective officers, directors, employees and agents,
except: (a)&nbsp;to their attorneys and accountants, (b)&nbsp;in connection with the enforcement of the rights of the Bank hereunder and under the Loan Documents or otherwise in connection with applicable litigation, (c)&nbsp;in connection with
assignments and participations and the solicitation of prospective assignees and participants referred to in <U>Sections 11.4</U> or <U>11.5</U> of this Agreement, (d)&nbsp;if such information is generally available to the public other than as a
result of disclosure by the Bank, (e)&nbsp;to any direct or indirect contractual counterparty in any hedging arrangement or such contractual counterparty&#146;s professional advisor, (f)&nbsp;to any nationally recognized rating agency that requires
information about the Bank&#146;s investment portfolio in connection with ratings issued with respect to such Bank, and (g)&nbsp;as may otherwise be required or requested by any regulatory authority having jurisdiction over the Bank or by any
applicable law, rule, regulation or judicial process, the opinion of the Bank&#146;s counsel concerning the making of such disclosure to be binding on the parties hereto. The Bank shall not incur any liability to the Borrower by reason of any
disclosure permitted by this <U>Section&nbsp;11.15</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.16. <U>Effect on Amended and Restated Reimbursement
Agreement</U></B>. On the Effective Date, the Amended and Restated Reimbursement Agreement shall be completely amended and restated by this Agreement, and each reference to the &#147;Reimbursement Agreement,&#148; &#147;Credit Agreement,&#148;
&#147;Loan Agreement,&#148; &#147;therein,&#148; &#147;thereof,&#148; &#147;thereby,&#148; or words of like import referring to the Amended and Restated Reimbursement Agreement in any other Loan Document shall mean and be a reference to this
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.17. <U>Consent</U></B>. On the Effective Date, the Bank consents to the consummation of the Clearwater
Merger and the consummation of the other Clearwater Merger Transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.18. <U>Reaffirmation of Loan
Documents</U></B>. The Borrower hereby reaffirms its obligations under all of the Loan Documents executed prior to the date hereof and acknowledges and agrees that all such documents remain in full force and effect. Any and all references in Loan
Documents to the Reimbursement Agreement shall be deemed to refer to this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>11.19. <U>Release</U></B>. The
Borrower and each Guarantor by signing the Acknowledgment and Agreement of Guarantors set forth below, each hereby absolutely and unconditionally releases and forever discharges the Bank, and any and all participants, parent corporations, subsidiary
corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">53 </FONT></P>



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together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the Borrower or such Guarantor has had, now has or has made claim to have against any such person for or by reason of any
act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Agreement, whether such claims, demands and causes of action are matured or unmatured or known or unknown. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>CELLU TISSUE CITY-FOREST LLC</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice&nbsp;President,&nbsp;Finance&nbsp;and&nbsp;Chief&nbsp;Financial&nbsp;Officer</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Address:</U></FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">1215 East Worden Avenue</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ladysmith, WI 54848</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attn:&nbsp;Chief&nbsp;Financial&nbsp;Officer,&nbsp;Clearwater&nbsp;Paper&nbsp;Corporation</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (509)&nbsp;344-5900</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Facsimile: (509)&nbsp;342-2551</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ASSOCIATED BANK, NATIONAL ASSOCIATION</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Paul E. Way</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">Paul E. Way</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">Senior Vice President</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Address:</U></FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">740 Marquette Avenue</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Minneapolis, MN 55402</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attn: Paul Way</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (612)&nbsp;359-4452</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Facsimile: (612)&nbsp;338-3950</FONT></TD></TR></TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Signature Page to Second Amended and Restated Reimbursement Agreement </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ACKNOWLEDGEMENT AND AGREEMENT OF GUARANTORS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The undersigned, each a guarantor of the indebtedness of CELLU TISSUE-CITYFOREST LLC (the &#147;Borrower&#148;) to Associated Bank,
National Association (the &#147;Bank&#148;) pursuant to a separate Guaranty each dated as of December&nbsp;27, 2010 (each, a &#147;Guaranty&#148;), hereby (i)&nbsp;acknowledges receipt of the foregoing Agreement; (ii)&nbsp;consents to the terms
(including without limitation the release set forth in the Agreement) and execution thereof; (iii)&nbsp;reaffirms its obligations to the Bank pursuant to the terms of its Guaranty; and (iv)&nbsp;acknowledges that the Bank may amend, restate, extend,
renew or otherwise modify the Agreement and any indebtedness or agreement of the Borrower, or enter into any agreement or extend additional or other credit accommodations, without notifying or obtaining the consent of the undersigned and without
impairing the liability of the undersigned under its Guaranty for all of the Borrower&#146;s present and future indebtedness to the Bank. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="88%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE HOLDINGS, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice&nbsp;President,&nbsp;Finance&nbsp;and&nbsp;Chief&nbsp;Financial&nbsp;Officer</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">CLEARWATER PAPER CORPORATION</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President, Finance and Chief Financial Officer</FONT></TD></TR></TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Signature Page to Acknowledgment and Agreement of Guarantors </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EXHIBIT A </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(BONDS LETTER OF CREDIT INCLUDING AMENDMENT NO. 2 EXTENDING THE </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">EXPIRATION DATE TO
FEBRUARY 15, 2012) </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Exhibit A </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EXHIBIT B </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">FORM OF COMPLIANCE CERTIFICATE </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to <U>Section&nbsp;8.13(b)</U> of the
Second Amended and Restated Reimbursement Agreement dated as of December&nbsp;27, 2010, (the Second Amended and Restated Reimbursement Agreement as it may be amended, modified, supplemented or restated from time to time being the &#147;Reimbursement
Agreement&#148;; the terms defined therein being used herein as therein defined) by and between the undersigned and Associated Bank, National Association (the &#147;Bank&#148;), the undersigned certifies to the Bank as follows: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. For December 2010 monthly financial statements: The unaudited financial statements for the month ending December&nbsp;31, 2010 have
been prepared a non-GAAP historic basis consistent with financial statements delivered prior to the Clearwater Merger. For all subsequent monthly financial statements: The financial statements of the Borrower attached hereto for the period ending
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;</U> (the &#147;Financial Statements&#148;) have been prepared in accordance with GAAP applied on a consistent basis subject only year-end
adjustments which in the aggregate are not expected to be materially adverse and the omission of footnotes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. The
representations and warranties contained in Article VII of the Reimbursement Agreement are true and correct as of the date hereof as though made on that date except that the representations and warranties set forth in Section&nbsp;7.5 to the
financial statements of the Borrower shall be deemed a reference to the audited and unaudited financial statements of the Borrower, as the case may be, then most recently delivered to the Bank pursuant to <U>Section&nbsp;8.13(a)</U> or
<U>8.13(b)</U>, as the case may be. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. As of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
20<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>, (the &#147;Measurement Date&#148;) no Default or Event of Default has occurred and is continuing [except <U>(describe here any Default or Event of Default and the action which the undersigned proposes to take with
respect thereto.)</U>]. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. Section&nbsp;1.1. for purposes of this Certificate, EBITDA was calculated as follows in accordance
with the Reimbursement Agreement: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" STYLE="padding-bottom:2pt; margin-bottom:-1pt" ALIGN="center">

<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD WIDTH="69%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Net Income</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Non-operating Gains/Losses</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Non-distributed income from Subsidiaries</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Adjusted Net Income</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Sum of
(i) minus (ii) minus (iii))</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$<U STYLE="border-bottom:0.5pt double; padding-bottom:0.5pt"></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Interest Expense</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Depreciation and Amortization</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Federal, state and local income taxes</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">and/or Permitted Tax Distributions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">EBITDA (Sum of (iv) plus (v) plus</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(vi) plus (vii))</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. <U>Section&nbsp;9.18</U>. If the Measurement Date is
a Quarterly Measurement Date, the undersigned&#146;s maximum permitted Leverage Ratio at the Measurement Date was not greater than </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Exhibit B
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
2.50 to 1.00 and the undersigned&#146;s actual ratio at such Measurement Date was
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to 1,.00 and was computed in accordance with the Reimbursement Agreement as follows: </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="4%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD WIDTH="62%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Revolving Loans</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unreimbursed Amount</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Bonds Promissory Note</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Inter-company Loans</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Capitalized Leases</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other interest-bearing Indebtedness</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total Debt (Sum of (i) plus (ii) plus</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(iii) plus (iv) plus (v) plus (vi))</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">EBITDA</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Leverage Ratio (Ratio of (vii) plus (vi))</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;to&nbsp;1.00</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">6. <U>Section&nbsp;9.19</U>. If the Measurement Date is a Quarterly Measurement Date, the undersigned&#146;s minimum required Fixed Charge Coverage Ratio for the Measurement Period ending at the
Measurement Date was not less than 1.20 to 1.00 and the undersigned&#146;s actual ratio at such Measurement Date was <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to
1.00 and was computed in accordance with the Reimbursement Agreement as follows: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="4%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD WIDTH="62%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">EBITA</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operating Lease rent expense</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Non-cash corporate allocations</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Numerator</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Sum of (i) plus
(ii) plus (iii))</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Interest Expense</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mandatory Principal Payments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operating Lease rent expense</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Non-Financed Capital Expenditures</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">But not less than $500,000</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Federal, state and local income taxes</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">and/or Permitted Tax Distributions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(x)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Denominator (Sum of (v) plus</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi) plus (vii) plus (viii) plus (ix))</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xi)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fixed Charge Coverage Ratio (Ratio of (iv) to (x))</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;to&nbsp;1.00</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">7. <U>Section&nbsp;9.20</U>. The undersigned&#146;s maximum permitted Capital Expenditures for its current fiscal year is $3,000,000 and, as of the Measurement Date, the undersigned has made the following
Capital Expenditures during the undersigned&#146;s current fiscal year: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD WIDTH="64%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Purchase Money Indebtedness</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Capitalized Leases</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Non-Financed Capital Expenditures</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sum of (i) plus (ii) plus (iii)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="50%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE-CITY FOREST LLC</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">59 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="5%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR></TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">60 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.3 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Governmental Approvals&nbsp;&amp; Permits </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company is the owner of the
following material licenses and permits, issued by the authority indicated opposite thereto: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="51%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:19pt"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="border-bottom:1px solid #000000;width:56pt"><FONT STYLE="font-family:Times New Roman" SIZE="1">Issuing Authority</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. WPDES Permit</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. Operations permit # 855009540-P20 Air Permit</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. Solid Waste Facility Operation License</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wisconsin Dept of Natural Resources</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wisconsin Dept of Natural Resources</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wisconsin
Dept of Natural Resources</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.3 </FONT></P>

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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.7 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Proceedings </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">None. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.7 </FONT></P>

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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.13 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Liens </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="35%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:48pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Secured Party</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Date</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Filing Number</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Collateral</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Associated Bank National Association</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">06-29-05</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-21-07</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Amendment)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">04-07-10</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Continuation)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200517089130</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The City of Ladysmith,</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wisconsin Variable</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rate Demand Solid</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Waste Disposal</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Facility Revenue</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Bonds, Series 1998</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Associated Bank National Association</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">06-29-05</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-23-07</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Assignment)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-23-07</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Amendment)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-23-07</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Amendment)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">04-07-10</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Continuation)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200517089205</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">All personal property</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Associated Bank National Association</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">06-30-05</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-23-07</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Assignment)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-23-07</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Amendment)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">04-07-10</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Continuation)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200517102843</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">All real property</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Associated Bank National Association</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-21-07</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200716009260</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The City of Ladysmith,</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wisconsin Variable</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rate Demand Solid</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Waste Disposal</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Facility Revenue</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Bonds, Series 1998</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Associated Bank National Association</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-21-07</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200716009296</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">All real property</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Associated Bank National Association</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">03-23-07</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200716048772</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">All personal property</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">GFV Leasing</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">06-25-08</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200812286737</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Copier</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">NMHG Financial Services LLC</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">08-07-08</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">200812790849</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">All equipment leased</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">from
NMHG</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.13 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="35%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:48pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Secured Party</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Date</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Filing Number</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Collateral Description</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">NMHG Financial Services Inc.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">01-21-10</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Original
Filing)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">201018822124</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">All equipment leased</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">from
NMHG</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.13 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.22 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Leases </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">None. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.22 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.24 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Transactions with Affiliates </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">None. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.24 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.28 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Trademarks and Patents </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="27%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="23%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD WIDTH="21%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Country</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Trademark</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Ser./Reg./App No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Status</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">USA</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">CITYFOREST</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">SN: 75-622691</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">RN:
2,321,203</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Registered: Feb 22 2000</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">USA</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">MISC DESIGN</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">SN:75-623636</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Registered: Mar 7 2000</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.28
</FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 7.33 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Labor Matters </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">None. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Schedule 7.33 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 8.8 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Additional Insurance </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">See attached certificate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 8.8 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 8.17 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Amortization Schedule </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="86%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="24%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="24%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="25%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="24%"></TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>#</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Semiannual Dates</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Payments</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Balance</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2010</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15,790,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2011</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15,410,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2011</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15,030,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2012</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14,650,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2012</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14,270,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2013</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13,890,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2013</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13,510,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2014</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13,130,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2014</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12,750,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2015</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12,370,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2015</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">11,990,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2016</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">11,610,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">13.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2016</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">11,230,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2017</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10,850,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">15.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2017</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10,470,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">16.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2018</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10,090,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">17.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2018</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,710,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">18.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2019</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,330,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">19.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2019</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8,950,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">20.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2020</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8,570,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">21.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2020</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8,190,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">22.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2021</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7,810,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">23.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2021</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7,430,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">24.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2022</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7,050,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">25.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2022</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6,670,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">26.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2023</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6,290,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">27.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2023</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,910,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">28.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2024</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,530,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">29.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2024</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,150,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">30.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2025</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,770,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">31.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2025</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,390,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">32.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2026</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,010,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">33.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2026</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,630,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">34.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2027</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,250,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">35.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9/1/2027</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">380,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,870,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">36.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3/1/2028</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,870,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 8.17 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 9.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Indebtedness </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Loan Agreement, dated March&nbsp;1, 1998, between Cellu Tissue - CityForest, LLC, f/k/a CityForest Corporation, and City of Ladysmith, Wisconsin.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Irrevocable Letter of Credit No. DCN3886, dated June&nbsp;29, 2005, between Cellu-Tissue- CityForest LLC f/k/a CityForest Corporation and Wells Fargo Bank, National
Association, as Trustee, as amended by Amendment No.&nbsp;1, dated March&nbsp;21, 2007. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Indenture, dated March&nbsp;1, 1998, between City of Ladysmith, Wisconsin and Wells Fargo Bank, N.A., as successor to Norwest Bank Wisconsin, N.A.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Replacement Revolving Note, dated March&nbsp;21, 2007, between Cellu Tissue-CityForest LLC and Associated Bank, National Association. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Security Agreement, dated June&nbsp;29, 2005, between CityForest Corporation and Associated Bank, National Association. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pledge and Security Agreement, dated June&nbsp;29, 2005, by and among CityForest Corporation, Associated Bank, National Association, and Wells Fargo Bank, National
Association, as success to Norwest Bank Wisconsin, N.A. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Irrevocable Letter of Credit No. DCN3886, dated June&nbsp;29, 2005, between Cellu-Tissue- CityForest LLC f/k/a CityForest Corporation and Wells Fargo Bank, National
Association, as Trustee, as amended by Amendment No.&nbsp;1, dated March&nbsp;21, 2007. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Assignment of Leases and Rents, dated June&nbsp;29, 2005, between CityForest Corporation and Associated Bank, National Association, as assigned and amended by the
Assignment of Assignment of Leases and Rents and Amendment, dated March&nbsp;21, 2007, by and among Cellu-Tissue CityForest LLC, Associated Bank, National Association, as collateral agent, and Associated Bank, National Association, as bank.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mortgage, Security Agreement, Financing Statement and Assignment of Rents and Leases, dated June&nbsp;29, 2005, between CityForest Corporation and Associated Bank,
National Association, as assigned and amended by the Assignment of Mortgage, Security, Financing Statement and Assignment of Rents and Leases and Amendment, dated March&nbsp;21, 2007, by and among Cellu-Tissue CityForest LLC, Associated Bank
National Association, as collateral agent, and Associated Bank, National Association, as bank. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 9.2
</FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULE 9.13 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Restrictions and Conditions </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Subject to the proviso in Section&nbsp;9.13(x)(ii), the Clearwater Senior Notes Indenture and the Clearwater Bank of America Loan Agreement. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Schedule 9.13 </FONT></P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>8
<FILENAME>dex105.htm
<DESCRIPTION>GUARANTY DATED DECEMBER 27, 2010
<TEXT>
<HTML><HEAD>
<TITLE>Guaranty dated December 27, 2010</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.5 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>GUARANTY </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">THIS GUARANTY is made, executed and delivered this 27th day of
December, 2010 (the &#147;Guaranty&#148;) by CELLU TISSUE HOLDINGS, INC., a Delaware corporation (the &#147;Guarantor&#148;) in favor of ASSOCIATED BANK, NATIONAL ASSOCIATION, a national banking association with an office at 740 Marquette Avenue,
Minneapolis, MN 55402 (the &#147;Bank&#148;). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>RECITALS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A. Cellu Tissue-CityForest LLC, a Minnesota limited liability company (the &#147;Borrower&#148;), and the Bank are the parties to that
certain Amended and Restated Reimbursement Agreement dated as of March&nbsp;21, 2007, as amended by that certain First Amendment to Amended and Restated Reimbursement Agreement dated as of December&nbsp;3, 2009 and by that certain Second Amendment
to Amended and Restated Reimbursement Agreement dated as of December&nbsp;9, 2010 (as so amended, the &#147;Original Reimbursement Agreement&#148;). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">B. On the date hereof, the Guarantor merged with Sand Dollar Acquisition Corporation, a Delaware corporation (the &#147;Clearwater Merger Sub&#148;) and a wholly-owned subsidiary of Clearwater Paper
Corporation, a Delaware corporation (&#147;Clearwater&#148;) pursuant to that certain Merger Agreement dated as of September&nbsp;15, 2010, by and among the Guarantor, Clearwater Merger Sub and Clearwater (the &#147;Clearwater Merger&#148;) with the
Guarantor continuing as a surviving corporation in the Clearwater Merger. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">C. The Borrower has requested that the Bank consent
to the Clearwater Merger and amend certain provisions of the Original Reimbursement Agreement as amended and restated in that certain Second Amended and Restated Reimbursement Agreement dated as of December&nbsp;27, 2010 (the Second Amended and
Restated Reimbursement Agreement as it may be amended, modified, supplemented, increased, restated, or replaced from time to time being the &#147;Reimbursement Agreement&#148;; capitalized terms not otherwise defined herein being used herein as
defined therein) between the Borrower and the Bank. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">D. As a condition to the &#147;Effective Date&#148; of the Reimbursement
Agreement, the Bank has required that the Guarantor execute and deliver this Guaranty. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">E. The Guarantor has determined that
the execution, delivery and performance of this Guaranty are in the Guarantor&#146;s best business and pecuniary interest. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties
hereto, and in order to induce the Bank to amend and restate the Original Reimbursement Agreement pursuant to the Reimbursement Agreement, the Guarantor hereby agrees with the Bank as follows: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. <U>Guaranty of Payment</U>. The Guarantor hereby unconditionally guarantee(s) the full and prompt payment when due, whether by acceleration or
otherwise, and at all times thereafter, of all obligations of the Borrower to the Bank, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due or to become due, including,
without limitation, all Obligations of the Borrower to the Bank arising under the Reimbursement Agreement or any other Loan Document (all such obligations being hereinafter </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
collectively called the &#147;Guaranteed Obligations&#148;) and the Guarantor further agrees to pay all reasonable expenses, including reasonable fees of attorneys (who may be employees of the
Bank) and legal expenses, paid or incurred by the Bank in endeavoring to collect the Guaranteed Obligations, or any part thereof, and in enforcing this Guaranty. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2. <U>Representations and Warranties</U>. The Guarantor represents and warrants to the Bank that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Existence, Etc</U>. The Guarantor is a corporation duly incorporated and validly existing under the laws of the State of Delaware. The Guarantor has all power and authority to do business in, and
is in good standing in, all other jurisdictions where the nature of its business or the nature of the property owned or leased by it makes such qualification necessary, except where the failure to effect such qualification could not reasonably be
expected to cause a Material Adverse Occurrence. The Guarantor has all power and authority to own its properties. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Due
Authorization, No Breach, No Liens</U>. The execution, delivery and performance by the Guarantor of this Guaranty and each other Transaction Document to which the Guarantor is a party are within the Guarantor&#146;s powers, have been duly authorized
by all necessary action by the board of directors of the Guarantor, and do not contravene (a)&nbsp;the Guarantor&#146;s articles of incorporation or bylaws, (b)&nbsp;any Governmental Rule or (c)&nbsp;any indenture, loan or credit agreement or any
other material agreement, lease or instrument to which the Guarantor is a party or by which it or any of its properties may be bound including, without limitation, the Clearwater Credit Facility Loan Documents and the Clearwater Senior Notes Loan
Documents; and such execution, delivery and performance do not result in or require the creation of any Lien upon or with respect to any of the Guarantor&#146;s properties. The Guarantor is not in default under or in violation of any such law,
statute, rule or regulation, order, writ, judgment, injunction, decree, determination or award or any such indenture, loan or credit agreement or other material agreement, lease or instrument in any case in which the consequences of such default or
violation could reasonably be expected to cause a Material Adverse Occurrence. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Governmental Approvals</U>. No
Governmental Approval is required for the due execution, delivery and performance by the Guarantor of this Guaranty or any other Transaction Document to which it is a party, other than those already obtained and those not yet required but obtainable
in the ordinary course as and when required. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Transaction Documents</U>. This Guaranty and the other Transaction
Documents to which the Guarantor is a party are the valid and binding obligations of the Guarantor enforceable against the Guarantor in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors&#146; rights or by general principles of equity limiting the availability of equitable remedies. This Guaranty is in full
force and effect in all material respects and no default under this Guaranty has occurred and is continuing. To the knowledge of the Guarantor, the other Transaction Documents to which the Guarantor is a party are in full force and effect in all
material respects and no default under any such other Transaction Document to which the Guarantor is party has occurred and is continuing. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) <U>Financial Condition</U>. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) The Guarantor has heretofore furnished to the Bank its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i)&nbsp;as of and for the fiscal year ended February&nbsp;28, 2010 reported on by <B>PricewaterhouseCoopers LLP</B>, independent public accountants, and (ii)&nbsp;as of and for the fiscal
quarter ended August&nbsp;26, 2010 and for the six months ending August&nbsp;26, 2010, certified by the chief financial officer of the Guarantor. Such financial statements present fairly, in all material respects, the financial position and results
of operations and cash flows of the Guarantor and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii)&nbsp;above. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) No event, change or condition has occurred that has resulted in, or could reasonably be
expected to result, in a Material Adverse Occurrence since August&nbsp;26, 2010. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) <U>Disclosure</U>. No exhibit, schedule,
report or other information (unless superseded by&#146; a subsequently provided, corrected exhibit, schedule or report or by corrected information) provided by the Guarantor or any of its Affiliates or their respective agents to the Bank in
connection with the negotiation and execution of the Transaction Documents to which the Guarantor is party and otherwise in connection with the transactions contemplated thereby contains any material misstatement of fact or omits to state a material
fact necessary to make the statements contained therein taken as a whole not misleading, as of the date provided. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g)
<U>Margin Stock</U>. The Guarantor is not engaged in the business of extending credit for the purpose of buying or carrying margin stock (within the meaning of Regulation U issued by the Federal Reserve Board). </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) <U>Incorporation of Representations and Warranties</U>. Each of the representations and warranties of the Guarantor or pertaining to
the Guarantor or any of its properties in the Clearwater Merger Agreement were true and correct when made and if any such representation and warranty is a continuing representation and warranty under the relevant Clearwater Merger Agreement as of
the Effective Date, then such continuing representation and warranty is true and correct as of the Effective Date. The Guarantor has no knowledge that any of the representations and warranties made in the Transaction Documents by or on behalf of any
party thereto other than the Guarantor is untrue or incorrect in any material respect. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) <U>Status</U>. The Guarantor is not
an &#147;investment company&#148; or a company &#147;controlled&#148; by an &#147;investment company&#148; within the meaning of the Investment Company Act of 1940, as amended, or an &#147;investment advisor&#148; within the meaning of the
Investment Company Act of 1940, as amended. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) <U>Broker&#146;s Fees</U>. The Guarantor has not dealt with any Person who may
be entitled to any finder&#146;s fee, brokerage commission, loan commission or other sum in connection with the transactions contemplated by the Loan Documents. The Guarantor hereby agrees to indemnify, defend and hold harmless the Bank against any
and all loss, liability, cost or expense, including reasonable attorneys&#146; fees, that such parties may suffer or sustain </FONT></P>

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with respect to any finder&#146;s fee, brokerage commission or other sum due in connection with the Reimbursement Agreement, the other Loan Documents or any other Transaction Document.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) <U>Solvency</U>. The Guarantor is Solvent after giving effect to the issuance of the Bonds Letter of Credit, the
incurrence of the Indebtedness under the Clearwater Senior Notes Loan Documents, and the incurrence of Indebtedness under the full amount of the &#147;Commitments&#148; available under the Clearwater Credit Facility. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(l) <U>Trading with the Enemy Act</U>. The execution of this Guaranty does not violate the Trading with the Enemy Act of 1917, as amended,
nor any of the foreign assets control regulations promulgated thereunder or the under the International Emergency Economic Powers Act or the U.N. Participation Act of 1945. Neither the Guarantor nor any person who owns a controlling interest in or
otherwise controls the Guarantor or any Subsidiary of the Guarantor is listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (&#147;OFAC&#148;), the Department
of the Treasury or included in any Executive Orders. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(m) <U>Survival of Representations</U>. All representations and
warranties contained in this Section&nbsp;2 shall survive the delivery of this Guaranty, the issuance of the Bonds Letter of Credit and any investigation at any time made by or on behalf of the Bank shall not diminish the Bank&#146;s rights to rely
thereon. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. <U>Affirmative Covenants</U>. From the date of this Guaranty and thereafter until this Guaranty is either terminated or
performed, unless the Bank shall otherwise expressly consent in writing, the Guarantor will do all of the following: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a)
<U>Financial Statements and Reports</U>. Furnish to the Bank: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) within 90 days after the end of each fiscal year of
Clearwater, Clearwater&#146;s audited consolidated balance sheet and related statements of operations, stockholders&#146; equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by <B>KPMG LLP</B> or other nationally recognized auditors (without a &#147;going concern&#148; or like qualification or exception and without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Clearwater and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, accompanied by any management letter prepared by said accountants; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) within 45 days after the end of each of the
first three fiscal quarters of Clearwater, Clearwater&#146;s consolidated balance sheet and related statements of operations, stockholders&#146; equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of Clearwater&#146;s Financial
Officers as presenting fairly in all material respects the financial condition and results of operations of Clearwater </FONT></P>

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and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) within five (5)&nbsp;Business Days following the Bank&#146;s request, copies of all publicly available periodic and other reports,
proxy statements and other materials filed by Clearwater or any of its Subsidiaries with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national
securities exchange; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Guarantor or any of its Subsidiaries, or compliance with the terms of any Loan Document, as the Bank may reasonably request. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Notices of Material Events</U>. Furnish to the Bank prompt written notice of the following: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(i) the occurrence of any Default or Event of Default; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) the proposed
consummation of any event described in clause (a)&nbsp;of the definition of &#147;Clearwater Prepayment Event&#148; in the Reimbursement Agreement, where such notice shall be delivered by no later than five (5)&nbsp;Business Days prior to the date
of consummation and shall be accompanied by copies of the relevant documentation governing such event; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) any other
development that results in, or could reasonably be expected to result in, a Material Adverse Occurrence. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Corporate
Existence</U>. Except as provided by Section&nbsp;4(a), maintain its corporate existence and good standing under the laws of its jurisdiction of incorporation and its qualification to transact business in each jurisdiction in which the character of
the properties owned, leased or operated by it or the business conducted by it makes such qualification necessary and where the failure to so qualify results in, or could reasonably be expected to result in, a Material Adverse Occurrence.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. <U>Negative Covenants</U>. From the date of this Guaranty and thereafter until this Guaranty is either terminated or performed, unless the
Bank shall otherwise expressly consent in writing, the Guarantor will not do any of the following: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Merger</U>.
Liquidate or dissolve, or merge into or consolidate with or into, any Person; provided that the Guarantor may enter into any merger, consolidation, or other transaction permitted by <U>Section&nbsp;5.01</U> of the Clearwater Senior Notes Indenture
so long as: (i)&nbsp;the resulting, surviving or transferee entity (if not the Guarantor) shall assume the obligations of the Guarantor under this Guaranty pursuant to a written instrument of assumption that is reasonably satisfactory to the Bank;
and (ii)&nbsp;no Change of Control has resulted from such transaction. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Restricted Agreement</U>. Directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) the ability of the
Borrower to create, incur or permit to exist any Lien in favor of the Bank upon any of the Borrower&#146;s property or assets; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) the Bank&#146;s right to prohibit, restrict or impose conditions upon the Borrower&#146;s ability to pay dividends or distributions
with respect to its Equity Interests or to repay loans or advances made to the Borrower by the Guarantor; provided that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.
the foregoing shall not apply to: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1) restrictions and conditions imposed by law or by any Loan Document; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2) restrictions and conditions existing on the date hereof identified on <U>Schedule 9.13</U> attached to the Reimbursement Agreement
including the Clearwater Senior Notes Indenture and the Clearwater Bank of America Loan Agreement; provided further, that in no event shall any such restriction or condition be breached or violated by: (a)&nbsp;the Borrower&#146;s incurrence of the
Indebtedness under the Reimbursement Agreement and the grant of Liens in its property pursuant to the Loan Documents; or (b)&nbsp;the Borrower&#146;s performance of its obligations under the Loan Documents; or (c)&nbsp;the Borrower&#146;s incurrence
of any Indebtedness to refinance the Indebtedness incurred under the Reimbursement Agreement so long as: (i)&nbsp;the terms of such re-refinancing Indebtedness comply with any requirement then imposed by the Clearwater Senior Notes Loan Documents
and the Clearwater Credit Facility Loan Documents for permitted re-financing Indebtedness; (ii)&nbsp;with respect to all Letter of Credit Obligations, the Liens securing such re-financing Indebtedness shall be substantially the same as those created
by the Security Documents; and (3)&nbsp;the applicable restrictions described in Section&nbsp;9.13(b) of the Reimbursement Agreement in the documentation for the re-financing Indebtedness are not materially more restrictive, when taken as a whole,
than the applicable restrictions in the Reimbursement Agreement; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3) customary restrictions and conditions contained in
agreements relating to the sale of the Borrower pending such sale; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">B. clause (b)(i) of the foregoing shall not apply to:
(I)&nbsp;restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only </FONT></P>

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to the property or assets securing such Indebtedness; and (II) customary provisions in leases and other contracts restricting the assignment thereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. <U>Continuing Guaranty</U>. This Guaranty shall in all respects be a continuing, absolute and unconditional Guaranty, and shall remain in full force
and effect (notwithstanding, without limitation, the dissolution of the Guarantor or that no Guaranteed Obligations may exist from time to time) until payment in full of the Guaranteed Obligations; subject, however, to reinstatement pursuant to the
Section&nbsp;6 hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. <U>Rescission or Return of Payment on Guaranteed Obligations</U>. The Guarantor further agrees that, if at any time
all or any part of any payment theretofore applied by the Bank to any of the Guaranteed Obligations is or must be rescinded or returned by such Person for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of the Borrower), such Guaranteed Obligations shall, for the purposes of this Guaranty, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence, notwithstanding such application by
the Bank, and this Guaranty shall continue to be effective or be reinstated, as the case may be, as to such Guaranteed Obligations, all as though such application by such Person had not been made. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. <U>Bank Permitted to Take Certain Actions</U>. The Bank may, from time to time (but shall not be obligated to), whether before or after any
discontinuance of this Guaranty, at its sole discretion and without notice to the Guarantor, take any or all of the following actions: (a)&nbsp;retain or obtain a security interest in any property to secure any of the Obligations or any obligation
hereunder; (b)&nbsp;retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to the Guarantor, with respect to any of the Obligations; (c)&nbsp;increase any of the Obligations or extend or renew for one or more
periods (whether or not longer than the original period), alter or exchange any of the Obligations, or release or compromise any obligation of any nature of any other obligor with respect to any of the Obligations; (d)&nbsp;release its security
interest in, or surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Obligations or any obligation hereunder, or extend or renew for one or more periods (whether Or not longer than the
original period) or release, compromise, alter or exchange, any Obligations of any nature of any obligor with respect to any such property; and (e)&nbsp;resort to the Guarantor for payment of any of the Guaranteed Obligations, whether or not the
Bank: (i)&nbsp;shall have resorted to any property securing any of the Obligations or any obligation hereunder or (ii)&nbsp;shall have proceeded against any other obligor primarily or secondarily obligated with respect to any of the Obligations (all
of the actions referred to in preceding clauses (i)&nbsp;and (ii)&nbsp;being hereby expressly waived by the Guarantor). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.
<U>Subrogation</U>. The Guarantor hereby waives, until payment in full of the Guaranteed Obligations, any claim, right or remedy which the Guarantor may now have or hereafter acquire against the Borrower that arises hereunder and/or from the
performance by the Guarantor hereunder, including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of the Bank against the
Borrower or any security which the Bank now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law, or otherwise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">9. <U>Waiver of Notice and Other Matters</U>. The Guarantor hereby expressly waives: (a)&nbsp;notice of the acceptance by the Bank of this Guaranty; (b)&nbsp;notice of the existence or creation or
non-</FONT></P>

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payment of all or any of the Guaranteed Obligations; (c)&nbsp;presentment, demand, notice of dishonor, protest, and all other notices whatsoever; and (d)&nbsp;all diligence in collection or
protection of or realization upon the Obligations or any thereof, any obligation hereunder, or any security for or guaranty of any of the foregoing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">10. <U>Additional Obligations of the Borrower Permitted</U>. The creation or existence from time to time of Obligations in excess of the Guaranteed Obligations is hereby authorized, without notice to the
Guarantor, and shall in no way affect or impair the rights of the Bank and the obligations of the Guarantor under this Guaranty. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.
<U>Assignment of Guaranteed Obligations</U>. The Bank may, from time to time, whether before or after any discontinuance of this Guaranty, with notice to the Guarantor, and only in connection with an assignment by the Bank of its rights and
obligations in accordance with Section&nbsp;11.4 of the Reimbursement Agreement, assign or transfer any or all of the Guaranteed Obligations owed to it or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Guaranteed Obligations shall be and remain Guaranteed Obligations for the purposes of this Guaranty, and each and every immediate and successive assignee or transferee of any of the Guaranteed Obligations or of
any interest therein shall, to the extent of the interest of such assignee or transferee in the Guaranteed Obligations, be entitled to the benefits of this Guaranty to the same extent as if such assignee or transferee were the assigning or
transferring Bank. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">12. <U>Information Concerning Borrower</U>. The Guarantor hereby warrants to the Bank that the Guarantor now has and will
continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Borrower. The Bank shall not have any duty or responsibility to provide the Guarantor with any credit or other information
concerning the affairs, financial condition or business of the Borrower which may come into the Bank&#146;s possession. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">13. <U>Waiver and
Modifications</U>. No delay on the part of the Bank in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by the Bank of any right or remedy shall preclude other or further exercise thereof or
the exercise of any other right or remedy; nor shall any modification or waiver of any of the provisions of this Guaranty be binding upon the Bank except as expressly set forth in a writing duly signed and delivered on behalf of the Bank.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">14. <U>Obligations Under Guaranty</U>. No action of the Bank permitted hereunder shall in any way affect or impair the rights of the Bank or
the obligations of the Guarantor under this Guaranty. The obligations of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of any circumstance whatsoever which might constitute a legal or equitable discharge or
defense of the Borrower or the Guarantor. The Guarantor hereby acknowledges that there are no conditions to the effectiveness of this Guaranty. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">15. <U>Successors</U>. This Guaranty shall be binding upon the parties, and upon the successors and assigns of the parties. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">16. <U>Governing Law</U>. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES </FONT></P>

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THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS. Wherever possible each provision of this Guaranty shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Guaranty. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">17. <U>Consent to Jurisdiction</U>. AT THE OPTION OF THE BANK, THIS GUARANTY
MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.
IN THE EVENT GUARANTOR COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS GUARANTY, THE BANK, AT ITS OPTION, SHALL BE ENTITLED TO HAVE THE CASE
TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">18. <U>WAIVER OF JURY TRIAL</U>. GUARANTOR AND THE BANK WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a)&nbsp;UNDER THIS GUARANTY OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (b)&nbsp;ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">19. <U>Captions</U>. Section captions used in this Guaranty are for convenience only,
and shall not affect the construction of this Guaranty. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">20. <U>Recitals</U>. The recitals to this Guaranty are incorporated herein by
reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>[Remainder of page intentionally left blank.] </I></FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the date first above
written. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="80%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>GUARANTOR:</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="5"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">CELLU TISSUE HOLDINGS, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Linda K. Massman</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Linda K. Massman</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President, Finance and</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Address:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="5"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">601 W. Riverside, Suite 1100</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">Spokane, WA 99201</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attn: Michael S. Gadd</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (509) 344-5920</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">Facsimile: (509) 835-1561</FONT></TD></TR></TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>BANK:</B>
(solely with respect to Section&nbsp;18 hereof) </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">ASSOCIATED BANK, NATIONAL ASSOCIATION </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Paul E. Way</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name: Paul E. Way</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title: Senior Vice President</FONT></TD></TR></TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>9
<FILENAME>dex106.htm
<DESCRIPTION>TAYLOR SEPARATION AGREEMENT DATED AS OF DECEMBER 27, 2010
<TEXT>
<HTML><HEAD>
<TITLE>Taylor Separation Agreement dated as of December 27, 2010</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.6 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Clearwater Paper Corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">601 West Riverside Ave., Suite 1100 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Spokane, WA 99201 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">December&nbsp;27, 2010 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;Russell&nbsp;C. Taylor </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue
Holdings, Inc. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1855 Lockeway Dr., Suite 501 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Alpharetta, GA 30004 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Re: Separation Agreement </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Russ: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This letter
constitutes the agreement (&#147;Agreement&#148;) between you and Clearwater Paper Corporation, including any and all of its past and present affiliated companies (including, but not limited to, Cellu Tissue Holdings, Inc.), divisions, subdivisions,
parent companies, successors, assigns, officers, directors, employees and contractors (collectively referred to hereinafter as &#147;Clearwater Paper&#148; or &#147;Company&#148;), with respect to your release and waiver of claims against Clearwater
Paper. This Agreement is entered into in connection with your termination of employment with Cellu Tissue Holdings, Inc. (&#147;Cellu Tissue&#148;) on December&nbsp;27, 2010, in connection with the closing of the transaction outlined in the
Agreement and Plan of Merger by and among Clearwater Paper Corporation, Sand Dollar Acquisition Corporation and Cellu Tissue, dated as of September&nbsp;15, 2010. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>PLEASE READ THIS AGREEMENT CAREFULLY </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Should you agree to the terms and
conditions set forth herein, please sign this Agreement and return it to me. You are afforded at least twenty-one (21)&nbsp;days from the date of your receipt of this letter to consider this Agreement. This should provide you with adequate time to
review the terms and conditions of this Agreement and to consult with an attorney, which you are hereby advised to do. If you determine that you do not need the entire twenty-one (21)&nbsp;days to consider the Agreement, you may sign this Agreement
and return it to me before the end of the 21-day period, but you should not sign and return this Agreement earlier than December&nbsp;27, 2010. Upon your execution of this Agreement, you will have seven (7)&nbsp;days from the date of your signature
to revoke the Agreement (&#147;Revocation Period&#148;). The provisions of this Agreement will not take effect until after the seven (7)&nbsp;day period has expired. Any revocation must be received by me in writing no later than the close of
business on the seventh day. Thereafter, this Agreement is final and may not be revoked or modified. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1. <U>SEVERANCE BENEFITS AND OTHER CONSIDERATION</U>.</B> Under Section&nbsp;5(e) of your
Employment Agreement with Cellu Tissue, dated May&nbsp;8, 2006, and subsequently amended on January&nbsp;18, 2010,&nbsp;September&nbsp;15, 2010 and November&nbsp;18, 2010 (the &#147;Employment Agreement&#148;), you are entitled to receive certain
severance benefits (the &#147;Severance Benefits&#148;) upon your termination of employment with Cellu Tissue for Good Reason (as such term is defined in Section&nbsp;5(e) of your Employment Agreement). Clearwater Paper will treat your resignation
as of December&nbsp;27, 2010 as satisfying all of the requirements for a resignation for Good Reason under your Employment Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">As provided under Section&nbsp;5(e) of your Employment Agreement, payment of the Severance Benefits is conditioned on your execution and delivery of this Agreement, such that the Agreement becomes
irrevocable (as described above) before the end of the sixty (60)&nbsp;day period which starts on the date of your termination from employment. This means that you will need to sign and deliver this Agreement no later than February&nbsp;17, 2011,
and not revoke this Agreement during the Revocation Period, in order to receive the Severance Benefits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You understand that
your failure to execute and deliver this Agreement to me by February&nbsp;17, 2011, or your revocation of this Agreement during the Revocation Period, will completely release and discharge Clearwater Paper from any and all obligations to provide the
Severance Benefits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2. <U>ADEQUATE CONSIDERATION</U>. </B>You agree that the Severance Benefits are adequate and valid
consideration for your promises and the releases contained in this Agreement, and that no further payments or benefits are due you except those otherwise provided for under the Employment Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3. <U>RELEASE AND WAIVER</U>. </B>In consideration of the Severance Benefits, you agree, except as may be necessary to enforce the
provisions of the Employment Agreement, not to make any claims of any kind against Clearwater Paper, before any agency, court of other forum and to release Clearwater Paper, from any claim, known or unknown, arising in any way from any actions taken
by Clearwater Paper up to the date of the signing of this Agreement including, without limitation, any claim for wrongful discharge, breach of contract or other common law claims, or any claims arising under the Age Discrimination in Employment Act
of 1967, as amended by the Older Workers Benefit Protection Act of 1990, the Occupational Safety and Health Act of 1970, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the Civil Rights Act of
1964, as amended, the Workers Adjustment and Retraining Notification Act of 1988, the Connecticut Fair Employment Practices Act, or any other federal, state, or local statute or regulation dealing with discrimination on any bases, including sex,
race, national origin, marital status, religion, disability, sexual orientation, or age, and any claims for attorney&#146;s fees, expenses or costs. This paragraph does not restrict your right to file a charge of discrimination with the EEOC or to
assist the EEOC in any investigation, however, by executing this Agreement, you waive any right that you may have to receive of any monetary award resulting from any action </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
brought against Clearwater Paper by the EEOC or any other agency, person or entity and you expressly waive any right to bring a lawsuit or other action in your name. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THIS MEANS THAT, BY SIGNING THIS AGREEMENT, YOU WAIVE ANY AND ALL RIGHTS YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY CLAIM OF ANY KIND
WHATSOEVER AGAINST CLEARWATER PAPER, OR ITS PAST AND PRESENT, AFFILIATES, DIVISIONS, SUBDIVISIONS, TRUSTEES, OFFICIALS, OFFICERS, DIRECTORS, AGENTS, CONTRACTORS, ATTORNEYS OR EMPLOYEES, PERSONALLY OR IN THEIR OFFICIAL CAPACITY, BASED ON ANY ACTION,
EVENT OR CONDUCT OCCURRING PRIOR TO THE DATE OF YOUR SIGNING OF THIS AGREEMENT.</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Further, this Agreement shall inure to
the benefit of and be binding upon you, your heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of and be binding upon Clearwater Paper, it successors and assigns. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.</B> <B><U>CONFIDENTIALITY; INTELLECTUAL PROPERTY; RESTRICTED ACTIVITIES</U>. </B>In consideration of the Severance Benefits, you
also agree that the terms, provisions and restrictions set forth in Sections 7, 8, 9 and 10 of the Employment Agreement survive the termination of the Employment Agreement, and are incorporated into this Agreement as though fully set forth herein
and remain fully enforceable by the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5. <U>NO MODIFICATION WITHOUT WRITING</U>. </B>The terms of this Agreement
cannot be changed or modified in any respect except in writing signed by you and Clearwater Paper. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6. <U>FULL AND ENTIRE
AGREEMENT</U>. </B>This Agreement and the Employment Agreement represent the full and entire agreement between you and Clearwater Paper regarding the subject matter hereof, and supersede all prior understandings, agreements and obligations between
you and Clearwater Paper. In the event that any provision of this Agreement is held to be void or unenforceable by a court of competent jurisdiction, the remaining provisions of the Agreement shall nevertheless be binding upon the parties with the
same effect as though the void or unenforceable part had been severed and deleted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7. <U>SURRENDER OF MATERIALS</U>.</B>
You acknowledge that you have returned all Clearwater Paper related reports, files, memoranda, notes, records, and other documents (whether stored electronically or otherwise) as well as door and file keys, and any other property that you received
or prepared or helped to prepare in connection with your employment. You also agree that your expense account and use of Company credit and telephone cards will cease immediately and you will promptly return such cards or other similar Company
property in your possession and submit your final expense account, including an accounting for any advances. You further acknowledge that you have not and will not retain any copies or excerpts of the materials described above, and
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
that you will not attempt to retrieve or recreate any of the materials described above after the termination of your employment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8. <U>RELATIONSHIP WITH CLEARWATER PAPER</U>.</B> You acknowledge that you have no right to rehire into any job with Clearwater Paper
at any time in the future. You also agree that this Agreement is sufficient reason for Clearwater Paper to reject any application you might make for future employment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>9. <U>FURTHER ACKNOWLEDGMENT</U>.</B> You acknowledge that you have read this Agreement carefully, and fully understand its terms. You have been advised to seek counsel and have had an opportunity to
do so and you are executing this Agreement knowingly and voluntarily. You fully understand that by signing this Agreement, you waive all claims of any kind whatsoever against Clearwater Paper, whether known or unknown, asserted or unasserted,
suspected or unsuspected, including all claims for attorneys&#146; fees, and expenses based upon any actions taken by Clearwater Paper up to the date of the signing of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Remainder of Page Left Intentionally Blank </I></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you agree with the terms and conditions as set forth herein, you must sign this Agreement
in the space provided below and return the original to me. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sincerely,</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Thomas H. Carter</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Thomas H. Carter</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President, Human Resources</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Voluntarily accepted and
agreed to on this, the <U>&nbsp;&nbsp;&nbsp;&nbsp;</U> of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Russell C. Taylor</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>10
<FILENAME>dex107.htm
<DESCRIPTION>MORRIS SEPARATION AGREEMENT DATED AS OF DECEMBER 27, 2010
<TEXT>
<HTML><HEAD>
<TITLE>Morris Separation Agreement dated as of December 27, 2010</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.7 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Clearwater Paper Corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">601 West Riverside Ave., Suite 1100 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Spokane, WA 99201 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">December&nbsp;27, 2010 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;David&nbsp;J.
Morris </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cellu Tissue Holdings, Inc. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1855 Lockeway Dr., Suite 501 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Alpharetta, GA
30004 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Re: Separation Agreement </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Dear David: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This letter constitutes the agreement (&#147;Agreement&#148;)
between you and Clearwater Paper Corporation, including any and all of its past and present affiliated companies (including, but not limited to, Cellu Tissue Holdings, Inc.), divisions, subdivisions, parent companies, successors, assigns, officers,
directors, employees and contractors (collectively referred to hereinafter as &#147;Clearwater Paper&#148; or &#147;Company&#148;), with respect to your release and waiver of claims against Clearwater Paper. This Agreement is entered into in
connection with your termination of employment with Cellu Tissue Holdings, Inc. (&#147;Cellu Tissue&#148;) on December&nbsp;27, 2010, in connection with the closing of the transaction outlined in the Agreement and Plan of Merger by and among
Clearwater Paper Corporation, Sand Dollar Acquisition Corporation and Cellu Tissue, dated as of September&nbsp;15, 2010. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PLEASE READ THIS AGREEMENT CAREFULLY </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Should you agree to the terms and conditions set forth herein, please sign this Agreement and return it to me. You are afforded at least twenty-one (21)&nbsp;days from the date of your receipt of this
letter to consider this Agreement. This should provide you with adequate time to review the terms and conditions of this Agreement and to consult with an attorney, which you are hereby advised to do. If you determine that you do not need the entire
twenty-one (21)&nbsp;days to consider the Agreement, you may sign this Agreement and return it to me before the end of the 21-day period, but you should not sign and return this Agreement earlier than December&nbsp;27, 2010. Upon your execution of
this Agreement, you will have seven (7)&nbsp;days from the date of your signature to revoke the Agreement (&#147;Revocation Period&#148;). The provisions of this Agreement will not take effect until after the seven (7)&nbsp;day period has expired.
Any revocation must be received by me in writing no later than the close of business on the seventh day. Thereafter, this Agreement is final and may not be revoked or modified. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1. <U>SEVERANCE BENEFITS AND OTHER CONSIDERATION</U>.</B> Under Section&nbsp;5(e) of your
Employment Agreement with Cellu Tissue, dated August&nbsp;6, 2007, and subsequently amended on January&nbsp;18, 2010,&nbsp;September&nbsp;15, 2010 and November&nbsp;18, 2010 (the &#147;Employment Agreement&#148;), you are entitled to receive certain
severance benefits (the &#147;Severance Benefits&#148;) upon your termination of employment with Cellu Tissue for Good Reason (as such term is defined in Section&nbsp;5(e) of your Employment Agreement). Clearwater Paper will treat your resignation
as of December&nbsp;27, 2010 as satisfying all of the requirements for a resignation for Good Reason under your Employment Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">As provided under Section&nbsp;5(e) of your Employment Agreement, payment of the Severance Benefits is conditioned on your execution and delivery of this Agreement, such that the Agreement becomes
irrevocable (as described above) before the end of the sixty (60)&nbsp;day period which starts on the date of your termination from employment. This means that you will need to sign and deliver this Agreement no later than February&nbsp;17, 2011,
and not revoke this Agreement during the Revocation Period, in order to receive the Severance Benefits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You understand that
your failure to execute and deliver this Agreement to me by February&nbsp;17, 2011, or your revocation of this Agreement during the Revocation Period, will completely release and discharge Clearwater Paper from any and all obligations to provide the
Severance Benefits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2. <U>ADEQUATE CONSIDERATION</U>. </B>You agree that the Severance Benefits are adequate and valid
consideration for your promises and the releases contained in this Agreement, and that no further payments or benefits are due you except those otherwise provided for under the Employment Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3. <U>RELEASE AND WAIVER</U>. </B>In consideration of the Severance Benefits, you agree, except as may be necessary to enforce the
provisions of the Employment Agreement, not to make any claims of any kind against Clearwater Paper, before any agency, court of other forum and to release Clearwater Paper, from any claim, known or unknown, arising in any way from any actions taken
by Clearwater Paper up to the date of the signing of this Agreement including, without limitation, any claim for wrongful discharge, breach of contract or other common law claims, or any claims arising under the Age Discrimination in Employment Act
of 1967, as amended by the Older Workers Benefit Protection Act of 1990, the Occupational Safety and Health Act of 1970, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the Civil Rights Act of
1964, as amended, the Workers Adjustment and Retraining Notification Act of 1988, the Connecticut Fair Employment Practices Act, or any other federal, state, or local statute or regulation dealing with discrimination on any bases, including sex,
race, national origin, marital status, religion, disability, sexual orientation, or age, and any claims for attorney&#146;s fees, expenses or costs. This paragraph does not restrict your right to file a charge of discrimination with the EEOC or to
assist the EEOC in any investigation, however, by executing this Agreement, you waive any right that you may have to receive of any monetary award resulting from any action </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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brought against Clearwater Paper by the EEOC or any other agency, person or entity and you expressly waive any right to bring a lawsuit or other action in your name. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THIS MEANS THAT, BY SIGNING THIS AGREEMENT, YOU WAIVE ANY AND ALL RIGHTS YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY CLAIM OF ANY KIND
WHATSOEVER AGAINST CLEARWATER PAPER, OR ITS PAST AND PRESENT, AFFILIATES, DIVISIONS, SUBDIVISIONS, TRUSTEES, OFFICIALS, OFFICERS, DIRECTORS, AGENTS, CONTRACTORS, ATTORNEYS OR EMPLOYEES, PERSONALLY OR IN THEIR OFFICIAL CAPACITY, BASED ON ANY ACTION,
EVENT OR CONDUCT OCCURRING PRIOR TO THE DATE OF YOUR SIGNING OF THIS AGREEMENT.</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Further, this Agreement shall inure to
the benefit of and be binding upon you, your heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of and be binding upon Clearwater Paper, it successors and assigns. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.</B> <B><U>CONFIDENTIALITY; INTELLECTUAL PROPERTY; RESTRICTED ACTIVITIES</U>. </B>In consideration of the Severance Benefits, you
also agree that the terms, provisions and restrictions set forth in Sections 7, 8, 9 and 10 of the Employment Agreement survive the termination of the Employment Agreement, and are incorporated into this Agreement as though fully set forth herein
and remain fully enforceable by the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5. <U>NO MODIFICATION WITHOUT WRITING</U>. </B>The terms of this Agreement
cannot be changed or modified in any respect except in writing signed by you and Clearwater Paper. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6. <U>FULL AND ENTIRE
AGREEMENT</U>. </B>This Agreement and the Employment Agreement represent the full and entire agreement between you and Clearwater Paper regarding the subject matter hereof, and supersede all prior understandings, agreements and obligations between
you and Clearwater Paper. In the event that any provision of this Agreement is held to be void or unenforceable by a court of competent jurisdiction, the remaining provisions of the Agreement shall nevertheless be binding upon the parties with the
same effect as though the void or unenforceable part had been severed and deleted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7. <U>SURRENDER OF MATERIALS</U>.</B>
You acknowledge that you have returned all Clearwater Paper related reports, files, memoranda, notes, records, and other documents (whether stored electronically or otherwise) as well as door and file keys, and any other property that you received
or prepared or helped to prepare in connection with your employment. You also agree that your expense account and use of Company credit and telephone cards will cease immediately and you will promptly return such cards or other similar Company
property in your possession and submit your final expense account, including an accounting for any advances. You further acknowledge that you have not and will not retain any copies or excerpts of the materials described above, and
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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that you will not attempt to retrieve or recreate any of the materials described above after the termination of your employment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8. <U>RELATIONSHIP WITH CLEARWATER PAPER</U>.</B> You acknowledge that you have no right to rehire into any job with Clearwater Paper
at any time in the future. You also agree that this Agreement is sufficient reason for Clearwater Paper to reject any application you might make for future employment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>9. <U>FURTHER ACKNOWLEDGMENT</U>.</B> You acknowledge that you have read this Agreement carefully, and fully understand its terms. You have been advised to seek counsel and have had an opportunity to
do so and you are executing this Agreement knowingly and voluntarily. You fully understand that by signing this Agreement, you waive all claims of any kind whatsoever against Clearwater Paper, whether known or unknown, asserted or unasserted,
suspected or unsuspected, including all claims for attorneys&#146; fees, and expenses based upon any actions taken by Clearwater Paper up to the date of the signing of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Remainder of Page Left Intentionally Blank </I></FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you agree with the terms and conditions as set forth herein, you must sign this Agreement
in the space provided below and return the original to me. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. </FONT></P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sincerely,</FONT></TD></TR>
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<TD HEIGHT="16"></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Thomas H. Carter</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Thomas H. Carter</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice President, Human Resources</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Voluntarily accepted and
agreed to on this, the <U>&nbsp;&nbsp;&nbsp;&nbsp;</U> of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>. </FONT></P>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">David J. Morris</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>

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