Exhibit 10.1

CONSENT

June 23, 2009

To the Lenders under the Credit Agreement referenced below

 

  Re: Credit Agreement dated as of December 8, 2008 (as amended or modified from
time to time pursuant to the terms thereof, the “Credit Agreement”) among
Potlatch Corporation, a Delaware corporation and a REIT (the “Company”),
Potlatch Forest Holdings, Inc., a Delaware corporation (“Potlatch Forest”),
Potlatch Land & Lumber, LLC, a Delaware limited liability company and a taxable
REIT subsidiary of the Company (“Potlatch Land & Lumber”; together with the
Company and Potlatch Forest, the “Borrowers”), Clearwater Paper Corporation
(formerly known as Potlatch Forest Products Corporation), a Delaware corporation
and a former taxable REIT subsidiary of the Company which as of the date hereof
is no longer a party to the Credit Agreement (“Clearwater”), PFHI Idaho
Investment LLC, a Delaware limited liability company, as a guarantor, certain
other Material Subsidiaries of the Borrowers from time to time party thereto as
guarantors, the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).

Ladies and Gentlemen:

Reference is hereby made to the above-referenced Credit Agreement. Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Credit Agreement.

The Company has notified the Administrative Agent that (i) Clearwater has issued
$150,000,000 of senior notes and, by agreement between the Company and
Clearwater, Clearwater has deposited $107 million of the net proceeds of such
notes with the Trustee (as defined in the CSD Indenture (as defined below)),
representing an amount sufficient to satisfy all remaining principal and
interest on the Credit Sensitive Debentures through their stated maturity of
December 1, 2009 and (ii) the Company has taken all such other actions as were
necessary under the Indenture, dated as of April 1, 1986, between Potlatch
Forest and U.S. Bank National Association, successor to The Bank of California,
National Association, as trustee (as amended, restated, supplemented or modified
from time to time, the “CSD Indenture”), to satisfy and discharge the CSD
Indenture in accordance with the terms set forth in Section 401 thereof (the
“Discharge”). The Company is requesting that the Required Lenders acknowledge
and agree that, as a result of the Discharge, (i) the Credit Sensitive
Debentures will no longer be considered “outstanding” for the purposes of the
applicability of the Availability Reserve in Sections 2.01, 2.03(a)(i), 2.04(a),
2.05(b)(i) and 4.02(f) of the Credit Agreement and (ii) (A) the Credit Sensitive
Debentures will no longer be counted as outstanding Funded Indebtedness for the
purposes of calculating the Funded Indebtedness to Capitalization Ratio, (B) the
Credit Sensitive Debentures will no longer be counted as outstanding
Indebtedness for purposes of calculating the Collateral Coverage Ratio and
(C) the interest expense associated with the Credit Sensitive Debentures
following the Discharge will be excluded as Consolidated Interest Expense for
the purposes of calculating the Interest Coverage Ratio.

Notwithstanding the provisions of the Credit Agreement to the contrary, the
Administrative Agent and the Required Lenders hereby acknowledge and agree that
(i) the Credit Sensitive Debentures will no longer be considered “outstanding”
for the purposes of the applicability of the Availability Reserve in

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June 23, 2009

Page 2

Sections 2.01(a), 2.03(a)(i), 2.04(a), 2.05(b)(i) and 4.02(f) of the Credit
Agreement and (ii) (A) the Credit Sensitive Debentures will no longer be counted
as outstanding Funded Indebtedness for the purposes of calculating the Funded
Indebtedness to Capitalization Ratio, (B) the Credit Sensitive Debentures will
no longer be counted as outstanding Indebtedness for purposes of calculating the
Collateral Coverage Ratio and (C) the interest expense associated with the
Credit Sensitive Debentures following the Discharge will be excluded as
Consolidated Interest Expense for the purposes of calculating the Interest
Coverage Ratio.

The Loan Parties hereby represent and warrant that the CSD Indenture has been
satisfied and discharged in accordance with the terms of Section 4.01 thereof
and covenant and agree to provide to the Administrative Agent any documentation
related thereto as reasonably requested by the Administrative Agent.

Except to the extent specifically provided to the contrary in this letter (the
“Consent”), all terms and conditions of the Credit Agreement and the other Loan
Documents shall remain in full force and effect, without modification or
limitation. This Consent shall not operate as a consent to any action or
inaction by the Loan Parties, or as a waiver of any other right, power, or
remedy of any Lender or the Administrative Agent under, or any provision
contained in, the Credit Agreement or any other Loan Document except as
specifically provided herein. This Consent shall be governed by and construed
and interpreted in accordance with the laws of the State of New York. This
Consent shall constitute a Loan Document and may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart by telecopy or email shall be as effective
as an original. This Consent shall become effective upon the Administrative
Agent’s receipt of counterparts hereof duly executed by the Loan Parties and the
Required Lenders.

The Borrowers agree to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Consent, including, without limitation, the reasonable fees and expenses
of Moore & Van Allen PLLC, counsel to the Administrative Agent.

Each of the Borrowers party hereto acknowledges and agrees that it is a Borrower
under the Credit Agreement, that it is bound by all terms of the Credit
Agreement applicable to a Borrower and that it is responsible for the observance
and full performance of its respective obligations under the Credit Agreement
and the Loan Documents. Each of the Guarantors party hereto acknowledges and
agrees that it is a Guarantor under the Credit Agreement, that it is bound by
all terms of the Credit Agreement applicable to a Guarantor and that it is
responsible for the observance and full performance of its respective
obligations under the Credit Agreement and the Loan Documents.

To evidence your consent to the foregoing, please sign and return a copy of this
Consent to counsel to the Administrative Agent by no later than 2:00 P.M.
Pacific time, Tuesday, June 23, 2009 via facsimile to the attention of Stacy
McIlvain of Moore & Van Allen PLLC at 704-339-5961.

[SIGNATURE PAGES FOLLOW]

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Thank you for your time and consideration of this matter.

 

    Very truly yours, BORROWERS:     POTLATCH CORPORATION,     a Delaware
corporation     By:  

/s/    Eric J. Cremers

    Name:   Eric J. Cremers     Title:   Vice President, Finance and CFO    
POTLATCH FOREST HOLDINGS, INC.,     a Delaware corporation     By:  

/s/    Eric J. Cremers

    Name:   Eric J. Cremers     Title:   Vice President, Finance and CFO    
POTLATCH LAND & LUMBER, LLC,     a Delaware limited liability company     By:  

/s/    Eric J. Cremers

    Name:   Eric J. Cremers     Title:   Vice President, Finance and CFO
GUARANTORS:     PFHI IDAHO INVESTMENT LLC,     a Delaware limited liability
company     By:  

/s/    Eric J. Cremers

    Name:   Eric J. Cremers     Title:   Vice President, Finance and CFO    
POTLATCH TIMBERLANDS, LLC,     a Delaware limited liability company     By:  

/s/    Eric J. Cremers

    Name:   Eric J. Cremers     Title:   Vice President, Finance and CFO

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POTLATCH LAKE STATES TIMBERLANDS, LLC, a Delaware limited liability company By:
 

/s/    Eric J. Cremers

Name:   Eric J. Cremers Title:   Vice President, Finance and CFO

POTLATCH MINNESOTA TIMBERLANDS, LLC,

a Delaware limited liability company

By:  

/s/    Eric J. Cremers

Name:   Eric J. Cremers Title:   Vice President, Finance and CFO

POTLATCH WISCONSIN TIMBERLANDS, LLC,

a Delaware limited liability company

By:  

/s/    Eric J. Cremers

Name:   Eric J. Cremers Title:   Vice President, Finance and CFO

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BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

/s/ Anthea Del Bianco

Name:   Anthea Del Bianco Title:   Vice President

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BANK OF AMERICA, N.A.,

as a Lender, an L/C Issuer and Swing Line Lender

By:  

/s/ Michael Balok

Name:   Michael Balok Title:   Senior Vice President

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U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Janice T. Thede

Name:   Janice T. Thede Title:   Senior Vice President

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WELLS FARGO BANK, N.A. By:  

/s/ Deborah S. Watson

Name:   Deborah S. Watson Title:   Senior Vice President

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NORTHWEST FARM CREDIT SERVICES, PCA By:  

/s/ Casey Kinzer

Name:   Casey Kinzer Title:   Account Manager

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GREENSTONE FARM CREDIT SERVICES, ACA/FLCA By:  

/s/ Alfred S. Compton, Jr.

Name:   Alfred S. Compton, Jr. Title:   Senior Vice President/Managing Director

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STERLING SAVINGS BANK By:  

/s/ Brandon Elieff

Name:   Brandon Elieff Title:   SVP

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UNION BANK OF CALIFORNIA, N.A. By:  

/s/ Kevin Sullivan

Name:   Kevin Sullivan Title:   Senior Vice President

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UNITED FCS, PCA D/B/A FCS

COMMERCIAL FINANCE GROUP

By:  

/s/ Lisa Caswell

Name:   Lisa Caswell Title:   Assistant Vice President

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CAPITAL FARM CREDIT By:  

/s/ Robert P. Abbott

Name:   Robert P. Abbott Title:   President Corporate Lending

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BADGERAND FINANCIAL By:  

/s/ Kenneth H. Rue

Name:   Kenneth H. Rue Title:   VP - Loan Participation, Capital Markets

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FARMCREDIT SERVICES OF THE

MOUNTAIN PLAINS

By:  

/s/ Bradley K. Leafgren

Name:   Bradley K. Leafgren Title:   Vice President

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AMERICAN AGCREDIT, PCA By:  

/s/ Vern Zander

Name:   Vern Zander Title:   Vice President

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COBANK, ACB By:  

/s/ Pete Huffine

Name:   Pete Huffine Title:   Vice President