On January 23, 2013, Clearwater Paper Corporation completed its previously announced offering of $275 million aggregate principal amount of 4.500% Senior Notes due 2023. The Notes were issued pursuant to an indenture, dated as of January 23, 2013, by and among the company, the existing direct and indirect domestic subsidiaries of the company and U.S. Bank National Association, a national banking association, as trustee. The Notes were offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (‘Securities Act') and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act.

Interest on the Notes will accrue at the rate of 4.500% per annum and will be payable semiannually in arrears on February 1 and August 1, commencing on August 1, 2013. Interest on overdue principal and interest will accrue at a rate that is 1% higher than the then-applicable interest rate on the Notes. The company will make each interest payment to the holders of record of the Notes on the immediately preceding January 15 and July 15.

The Notes are unsecured and effectively subordinated to all of the company's existing and future secured debt, including borrowings under its existing secured revolving credit facility. The Notes are guaranteed by each of the company's existing direct and indirect domestic subsidiaries, and will be guaranteed by each future direct and indirect subsidiary of the company that is a domestic subsidiary and is not designated as an ‘Unrestricted Subsidiary' by the company. Each Restricted Subsidiary must provide a guarantee of the payment of principal, premium and interest on the Notes on an unsecured basis.

If the company is unable to make payments on the Notes when they are due, each subsidiary guarantor is obligated to make such payments. Prior to February 1, 2016, the company may redeem, at any time at its option, up to 35% of the aggregate principal amount of the Notes with the net cash proceeds of qualified equity offerings at a redemption price equal to 104.500% of the aggregate principal amount of the Notes redeemed plus accrued and unpaid interest, if any. The company has the option to redeem all or a portion of the Notes at any time prior to February 1, 2018 at a redemption price equal to 100% of the principal amount of the Notes redeemed plus a “make-whole” premium and accrued and unpaid interest, if any.

In addition, the company has the option to redeem all or a portion of the Notes at any time on or after February 1, 2018 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any. If the company sells certain assets and does not apply the proceeds as required under the Indenture or experiences specific kinds of changes of control, the company must offer to repurchase the Notes from holders at the prices set forth in the Indenture. Eighth Amendment to Loan and Security Agreement: On January 17, 2013, the company entered into the Eighth Amendment to the Loan and Security Agreement with Bank of America, N.A., as Administrative Agent, and the financial institutions party thereto.

The ABL Amendment amends the negative covenants contained in the company's existing Loan and Security Agreement, dated as of November 26, 2008, as amended, to permit the offering of the Notes. Redemption of 10.625% Senior Notes due 2016 and Satisfaction and Discharge of Indenture: On January 23, 2013, the company notified the holders of the company's existing 10.625% Senior Notes due 2016 that the company elected to redeem all of the currently outstanding $150 million aggregate principal amount of Existing Notes on February 22, 2013, in accordance with the indenture governing the Existing Notes. Using the proceeds from the issuance of the Notes, the company irrevocably deposited with the Trustee sufficient funds to fund the redemption of the Existing Notes.

As a result, the company's and the guarantors' obligations under the indenture governing the Existing Notes have been discharged.