Exhibit

EX-10.(II) 3 ex10iiq2-2018.htm AMENDMENT NO.2 TO THE CREDIT AGREEMENT AND AMENDMENT TO THE COLLATERAL AGREEMENT Exhibit

Exhibit 10(ii)

AMENDMENT NO. 2 TO THE CREDIT AGREEMENT AND AMENDMENT TO THE COLLATERAL AGREEMENT

This AMENDMENT NO. 2 TO THE CREDIT AGREEMENT AND AMENDMENT

TO THE COLLATERAL AGREEMENT (this “Amendment”), dated as of June 27, 2018, is entered into by and among (1) CLEARWATER PAPER CORPORATION, a Delaware corporation (the “Borrower”); (2) Lenders (as defined below) constituting the Required Lenders (as defined in the Credit Agreement referred to below); and (3) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as administrative agent for the Lenders (in such capacity, the “Administrative Agent”):

WHEREAS the Borrower, the lenders from time to time party thereto (the “Lenders”) and the Administrative Agent have previously entered into that certain Credit Agreement, dated as of October 31, 2016 (as amended and in effect immediately prior to the date hereof, the “Existing Credit Agreement” and as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, including, but not limited to, by this Amendment, the “Credit Agreement”);

WHEREAS the Borrower, certain of its Subsidiaries, as grantors, and the Administrative Agent have previously entered into that certain Collateral Agreement, dated as of October 31, 2016 (as in effect immediately prior to the date hereof, the “Existing Collateral Agreement” and as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, including, but not limited to, by this Amendment, the “Collateral Agreement”);

WHEREAS the Borrower has requested that the Administrative Agent and the Required Lenders make amendments to the Existing Credit Agreement and the Existing Collateral Agreement as set forth in this Amendment; and

WHEREAS the Administrative Agent and the Lenders that are signatories hereto, constituting Required Lenders, are willing to grant such request on the terms and subject to the conditions set forth in this Amendment;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Definitions. Capitalized terms are used in this Amendment as defined in the Credit Agreement and the Collateral Agreement, as applicable, unless otherwise defined herein.

2.Amendments to the Existing Credit Agreement. On the terms of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 below:

(a)Section 1.1 of the Existing Credit Agreement is hereby amended by adding the following definitions thereto in appropriate alphabetical order:

“Permitted A/R Finance Transaction” means the bona fide sale for cash by the Borrower or its Subsidiaries to an unaffiliated third party on an arm’s length and non-recourse basis (except for breach of representations and warranties, commercial disputes and other standard recourse or repurchase obligations in transactions of this type made available by the Administrative Agent or its Affiliates) of Receivables

and Related Assets in an amount of up to $100,000,000 in face value per fiscal quarter.

“Receivables and Related Assets” means (a) accounts receivable (including all rights to payment created by or arising from the sales of goods, leases of goods or the rendition of services, no matter how evidenced (including in the form of chattel paper) and whether or not earned by performance) and (b) any interest in such accounts receivable and all collateral securing such accounts receivable, all contracts and contract rights, purchase orders, security interests, financing statements or other documentation in respect of such accounts receivable, any guarantees, indemnities, warranties or other obligations in respect of such accounts receivable, any other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with receivable purchase arrangements involving receivables similar to such accounts receivable and any collections or proceeds of any of the foregoing.

(b)Section 1.1 of the Existing Credit Agreement is hereby amended by adding the following clause to the end of the definition of “Specified Transactions” immediately before the period:

“, it being understood that no sale of Receivables and Related Assets in a Permitted A/R Finance Transaction shall constitute a Specified Transaction”.

(c)Section 8.2 of the Existing Credit Agreement is hereby amended by (i) deleting “and” at the end of subclause (q), (ii) re-lettering subclause (r) as subclause (s) and (iii) adding new subclause (r) as follows:

“(r)(i) customary backstop Liens on any Receivables and Related Assets granted to the provider of any Permitted A/R Finance Transaction, and (ii) a security interest in any deposit or lockbox account maintained by the Borrower or its Subsidiaries into which Receivables and Related Assets that are subject to Permitted A/R Finance Transactions are received; and”.

(d)Section 8.3 of the Existing Credit Agreement is hereby amended by (i) deleting “and” at the end of subclause (p), (ii) re-lettering subclause (q) as subclause (r) and (iii) adding new subclause (q) as follows:

“(q) Investments constituting the extension of credit made to any purchaser of Receivables and Related Assets in connection with any Permitted A/R Finance Transaction relating to the balance of the purchase price payable therefor by such purchaser; and”.

(e)Section 8.5 of the Existing Credit Agreement is hereby amended by (i) deleting “and” at the end of subclause (p), (ii) re-lettering subclause (q) as subclause (r) and (iii) adding new subclause (q) as follows:

“(q) the sale of Receivables and Related Assets in Permitted A/R Finance Transactions; and”.

3.Amendments to the Existing Collateral Agreement. On the terms of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 below:

(a) Section 2.1 of the Existing Collateral Agreement is hereby amended by (i) deleting “or” at the end of clause (vii) of the first proviso thereto and (ii) adding the following after the end of clause (viii) of the first proviso thereto:

“or (ix) Receivables and Related Assets that have been sold in Permitted A/R Finance Transactions”.

4.Conditions Precedent to the Effectiveness of this Amendment. The provisions of Sections 2 and 3 of this Amendment are conditioned upon, and such provisions shall not be effective until, satisfaction of the following conditions (the first date on which all of the following conditions have been satisfied being referred to herein as the “Amendment Effective Date”):

(a)The Administrative Agent shall have received, on behalf of the Lenders, this Amendment, duly executed and delivered by the Borrower, the Required Lenders and the Administrative Agent (and consented to by the Guarantors);

(b)The Borrower shall have paid to the Administrative Agent, for the account of each Lender that has executed and delivered a signature page to this Amendment on or prior to the date hereof (each, a “Consenting Lender”), a non-refundable amendment fee in an amount equal to 0.05% of such Consenting Lender’s Commitments as of the Amendment Effective Date (collectively, the “Amendment Fees”). The Amendment Fees are fully earned, due and payable as of the Amendment Effective Date.

(c)The Administrative Agent shall have received a corresponding amendment to the FCS Facility, duly executed by each party thereto (and consented to by the Guarantors (as defined under the FCS Facility)) in form and substance reasonably satisfactory to the Administrative Agent;


(d)	No Default or Event of Default shall have occurred and be continuing; and

(e)The representations and warranties set forth in this Amendment shall be true and correct in all material respects as of the Amendment Effective Date (except to the extent any such representation and warranty is expressly stated to have been made as of a specific date, in which case it shall be true and correct as of such specific date).

5.Representations and Warranties. In order to induce the Administrative Agent and the Lenders to enter into this Amendment and to amend each of the Existing Credit Agreement and the Existing Collateral Agreement in the manner provided in this Amendment, the Borrower represents and warrants to the Administrative Agent and each Lender as follows:

(a)Authorization of Agreements; Enforceability. The Borrower has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Amendment in accordance with its terms. This Amendment has been duly executed and delivered by duly authorized officers of the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

(b)Representations and Warranties in the Credit Agreement and the Collateral

Agreement. The Borrower confirms that as of the Amendment Effective Date, (i) the representations and warranties contained in Article VI of the Credit Agreement are true and correct in all material respects (except to the extent any such representation and warranty is expressly stated to have been made as of a specific date, in which case it shall be true and correct as of such specific date), (ii) the representations and warranties contained in Article III of the Collateral Agreement are true and correct in all material respects (except to the extent any such representation and warranty is expressly stated to have been made as of a specific date, in which case it shall be true and correct as of such specific date) and (iii) no Default or Event of Default has occurred and is continuing.


6.	Miscellaneous.

(a)Letter Agreement. On the terms of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 above, the Required Lenders acknowledge and agree that the Administrative Agent is authorized to enter into a letter agreement in connection with the sale of Receivables and Related Assets, in the form attached hereto as Exhibit A.

(b)Reference to and Effect on the Existing Credit Agreement, the Existing Collateral Agreement and the other Loan Documents.

(i)Except as specifically amended by this Amendment and the documents executed and delivered in connection herewith, the Credit Agreement, the Collateral Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed by the Borrower in all respects.

(ii)The execution and delivery of this Amendment and performance of each of the Credit Agreement and the Collateral Agreement shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders under, the Existing Credit Agreement, the Existing Collateral Agreement or any of the other Loan Documents.

(iii)Upon the conditions precedent set forth herein being satisfied, this Amendment shall be construed as one with each of the Existing Credit Agreement and the Existing Collateral Agreement, and each of the Existing Credit Agreement and the Existing Collateral Agreement shall, where the context requires, be read and construed throughout so as to incorporate this Amendment.

(iv)If there is any conflict between the terms and provisions of this Amendment and the terms and provisions of the Credit Agreement, the Collateral Agreement or any other Loan Document, the terms and provisions of this Amendment shall govern.

(c)Expenses. The Borrower expressly acknowledges its obligations under Section 11.3 of the Credit Agreement (Expenses; Indemnity) and Section 7.3 of the Collateral Agreement (Expenses; Indemnification, Waiver of Consequential Damages, etc.) with respect to this Amendment.

(d)Headings. Section and subsection headings in this Amendment are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

(e)Counterparts. This Amendment may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes. Delivery of an executed counterpart of this Amendment by electronic

mail shall be equally as effective as delivery of an original executed counterpart of this Amendment.

(f)Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.

7.Loan Documents. This Amendment is a Loan Document as defined in the Credit Agreement, and the provisions of the Credit Agreement and the Collateral Agreement generally applicable to Loan Documents are applicable hereto and incorporated herein by this reference.

[This Space Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

BORROWER:

CLEARWATER PAPER CORPORATION,

a Delaware corporation

By: /s/ John Hertz

Name: John D. Hertz

Title: Sr. Vice President, Finance

and Chief Financial Officer

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent and a Lender

By: /s/ Thomas M. Thoen

Name: Thomas M. Thoen

Title: VP

[BANK OF AMERICA, N.A.,]

as a Lender

By: /s/ Daryl K. Hogge

Name: Daryl K. Hogge

Title: Senior Vice President

[JPMORGAN CHASE BANK, N.A.],

as a Lender

By: /s/ Lynn Braun

Name: Lynn Braun

Title: Executive Director

[GOLDMAN SACHS BANK USA],

as a Lender

By: /s/ Chris Lam

Name: Chris Lam

Title: Authorized Signatory

[U.S. BANK NATIONAL ASSOCIATION],

as a Lender

By: /s/ Glenn Leyrer

Name: Glenn Leyrer

Title: Vice President

The undersigned hereby acknowledge and consent to the foregoing Amendment and confirm and agree that the Guaranty executed by the undersigned in connection with the Credit Agreement remains in full force and effect in accordance with its terms and is hereby reaffirmed, confirmed and ratified by the undersigned, and the undersigned hereby confirm that the representations and warranties contained in such Guaranty (including any incorporated by reference to the Credit Agreement) are (before and after giving effect to this Amendment) true and correct in all material respects (except to the extent any such representation and warranty is expressly stated to have been made as of a specific date, in which case it shall be true and correct in all material respects as of such specific date); provided that, if a representation and warranty is qualified as to materiality, the materiality qualifier set forth above shall be disregarded with respect to such representation and warranty for purposes of this confirmation.

GUARANTORS:

CELLU TISSUE HOLDINGS, INC.

By: /s/ John Hertz

Name: John D. Hertz