ASSET PURCHASE AGREEMENT

Exhibit (2)(d)

ASSET PURCHASE AGREEMENT

(ADAMS)

between

POTLATCH FOREST HOLDINGS, INC.

and

WESTERN PACIFIC TIMBER, LLC

Dated as of September 11, 2007

TABLE OF CONTENTS

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TABLE OF CONTENTS

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ASSET PURCHASE AGREEMENT

(ADAMS)

This ASSET PURCHASE AGREEMENT (ADAMS) (this “ Agreement ”), dated as of September 11, 2007 (the “ Effective Date ”), is made between POTLATCH FOREST HOLDINGS, INC., a Delaware corporation (“ Buyer ”), and WESTERN PACIFIC TIMBER, LLC, an Oregon limited liability company (“ Seller ”).

RECITALS

Seller owns and operates timberlands in Adams, Boise and Valley Counties, Idaho, and leases office space located at 101 S Capitol Boulevard, Suite 1601, Boise, Idaho

Buyer desires to purchase from Seller such timberlands, its lease of the Boise, Idaho office and certain related assets.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants hereinafter set forth, Seller and Buyer hereby agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings (such definitions to be equally applicable to both the singular and plural forms of the terms defined):

“ Additional Coverage ” has the meaning set forth in Section 2.8(d)

“ Additional Exception ” has the meaning set forth in Section 2.8(b).

“ Affected Assets ” has the meaning set forth in Section 10.3(b).

“ Affected Parcel ” has the meaning set forth in Section 2.8(a).

“ Affiliate ” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. The ownership of 25% or more of the stock or voting interests in any Person shall be deemed control, and each director and officer of an entity shall be deemed an Affiliate of that entity.

“ Applicable Law ” means all applicable provisions of all (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances or codes of any Governmental Authority and (ii) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority.

“ Assignment and Assumption Agreement ” has the meaning set forth in Section 2.6(b)(iii).

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“ Assets ” has the meaning set forth in Section 2.1.

“ Assumed Contracts ” has the meaning set forth in Section 2.1.6.

“ Assumed Liabilities ” has the meaning set forth in Section 2.3.

“ Buyer’s Affiliate ” has the meaning set forth in Section 2.6(e).

“ Claim ” means any claim, demand, cause of action, suit, proceeding, arbitration, hearing or investigation.

“ Closing ” has the meaning set forth in Section 2.6.

“ Closing Date ” has the meaning set forth in Section 2.6.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Contamination” or “Contaminated” means the presence (actual or reasonably suspected) of Hazardous Substances in, on or under the soil, groundwater, surface water or other environmental media or any structure or improvement.

“ Deleted Parcel ” has the meaning set forth in Section 2.10.

“ Deposit ” has the meaning set forth in Section 2.5(b).

“ Disclosure Schedule ” has the meaning set forth in Article III.

“ Easements ” has the meaning set forth in Section 2.1.2.

“ Employee Benefit Plan ” means any pension, retirement, profit sharing, deferred compensation, bonus, commission, incentive, life insurance, health benefits and disability benefits and all other employee benefit plans or arrangements (including, without limitation, any contracts or agreements with trustees, insurance companies or others relating to any such employee benefit plans or arrangements) for current or former employees of Seller.

“ Environmental Law ” means any Applicable Law relating to the protection of the environment or human health or to any emission, discharge, generation, processing, storage, release, threatened release or transportation of any Hazardous Substances.

“ Escrow Agent ” means First American Title Company, with its office located at 7311 Potomac, Boise, ID 83704.

“ Excluded Assets ” has the meaning set forth in Section 2.2.

“ GAAP ” means United States generally accepted accounting principles.

“ Governmental Authority ” means any applicable federal, state or local municipal entity or government or other administrative, judicial or other governmental department, commission, court, board, bureau, agency or instrumentality.

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“ Hazardous Substances ” means any hazardous, toxic, radioactive or infectious substance, material or waste as defined, listed or regulated under any Environmental Law, and includes without limitation petroleum oil and its fractions.

“ Improvements ” has the meaning set forth in Section 2.1.5.

“ Indemnified Party ” has the meaning set forth in Section 8.4(b).

“ Indemnifying Party ” has the meaning set forth in Section 8.4(b).

“ Intermediary ” has the meaning set forth in Article IX.

“ Knowledge ” means the actual knowledge of a fact or matter, without any requirement of further investigation.

“ Letter of Intent Deposit ” has the meaning set forth in Section 2.5(b).

“ Liens ” means, collectively, all mortgages, liens (statutory or otherwise), security interests, pledges, charges, encumbrances, or restrictions of any nature whatsoever.

“ Losses ” has the meaning set forth in Section 8.2.

“ Material Adverse Effect ” means any event, occurrence, fact, condition, change or effect that has or is reasonably expected to have a material adverse effect, taken as a whole, on the Assets or the Assumed Liabilities, excluding the effects of changes to the extent related to economic or business conditions in the United States or the global economy, or to financial or capital markets generally, except to the extent that such changes materially disproportionately affect the Assets or the Assumed Liabilities compared to the manner in which the changes affect other timberland owners in Idaho.

“ Operating Statements ” has the meaning set forth in Section 3.16.

“ Permits ” means all permits, licenses, approvals and authorizations of a Governmental Authority held by Seller with respect to the operation or development of the Real Property, including, without limitation, road use permits, special use authorizations, harvest permits and any other approval required to conduct commercial timber operations on the Real Property, conditional use permits, variances or any other land use approval, approvals for partitions, subdivisions boundary or lot line adjustments, building or construction permits, and all rights of Seller in all applications for any of the foregoing.

“ Permitted Exception ” has the meaning set forth in Section 2.8(a).

“ Person ” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

“ Purchase Price ” has the meaning set forth in Section 2.5(a).

“ Real Property ” has the meaning set forth in Section 2.1.1.

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“ Real Property Leases ” has the meaning set forth in Section 2.1.7.

“ REC ” has the meaning set forth in Section 2.10.

“ REC Affected Area ” has the meaning set forth in Section 2.10.

“ REC Parcel ” has the meaning set forth in Section 2.10.

“ Records ” has the meaning set forth in Section 2.1.9.

“ Retained Liabilities ” has the meaning set forth in Section 2.4.

“ Seller’s Knowledge ” means the Knowledge of Timothy Blixseth, Andrew Hawes, Michael Doyle, Steve Gurnsey, Steve Haren, and Lynn House.

“ Tax ” or “ Taxes ” means all income, gross receipts, sales, use, employment, franchise, profits, property or other taxes, fees, stamp taxes and duties, assessments or charges of any kind whatsoever, whether payable directly or by withholding (together with any interest and any penalties, additions to tax or additional amounts imposed with respect thereto), imposed by any governmental or taxing authority.

“ Title Policy ” has the meaning set forth in Section 2.8(c).

“ Title Report ” has the meaning set forth in Section 2.8(a).

“ Update ” has the meaning set forth in Section 2.8(b).

“ Unacceptable Exceptions ” has the meaning set forth in Section 2.8(b).

“ Water Rights ” has the meaning set forth in Section 2.1.4.

Whenever the word “including” is used, such term shall not be interpreted as being restrictive, but shall mean in all cases, “including without limitation.”

ARTICLE II

PURCHASE AND SALE

2.1 Purchase and Sale of Assets

Subject to all the terms and conditions set forth in this Agreement, Seller shall, at the Closing, sell, assign, transfer, convey and deliver to Buyer, free and clear of all Liens except Permitted Exceptions and the matters listed in Part II of Schedule 2.1.6 and, with respect to the Ral Property, the matters described in Section 2.6(b)(i), and Buyer shall, at the Closing, purchase from Seller all of Seller’s right, title and interest in the following assets (the “ Assets ”), except in each case, the Excluded Assets:

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2.1.1. Real Property

The real property described on attached Schedules 2.1.1 and 2.10 , including (i) all trees growing or down and logs located thereon as of the Closing and (ii) all of Seller’s interest and rights in minerals, oil and gas, gravel and rock located on the Real Property (collectively the “ Real Property ”).

2.1.2. Easements

All easements, road use agreements, rights-of-way or other agreements or authorizations appurtenant to the Real Property, or owned by Seller and used to provide access to the Real Property, including those described on attached Schedule 2.1.2 , to the extent assignable and transferable (the “ Easements ”).

2.1.3. Permits

The Permits relating to the Real Property, including all applications therefore, described on attached Schedule 2.1.3 , to the extent assignable or transferable.

2.1.4. Water Rights

To the extent owned by Seller, all water rights appurtenant to or used in connection with the Real Property, including, any rights, agreements, or contracts relating to the delivery of water to the extent they apply to the Real Property and stock in water companies providing water to the Real Property (the “ Water Rights ”).

2.1.5. Improvements

All improvements located on the Real Property, including all buildings, bridges and gates (the “ Improvements ”).

2.1.6. Contracts

All rights, benefits and interests of Seller under the (i) contracts, agreements, commitments, understandings, documents and instruments, including logging contracts, listed on attached Schedule 2.1.6 and (ii) contracts entered into after the date hereof by Seller with respect to the operation of Property which have been specifically approved by Buyer in writing (the “ Assumed Contracts” ).

2.1.7. Real Property Leases

The lessee’s interest in the real property leases listed on Schedule 2.1.7 (the “ Real Property Leases ”).

2.1.8. Records, Manuals and Documents

All of the following records, manuals, documents and information of Seller (the “ Records ”): (i) all maps, aerial photographs, surveys, title reports and title records, timber inventories, biological

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studies, timber inventory data, records, studies, reports, research materials and other documents and information (including GIS data), manuals and warranty information and records of operations, whether in printed or electronic form, and in each case relating to Seller’s ownership of the Assets and operation of the Real Property through the close of business on the Closing Date; (ii) copies of the Operating Statements, and records relating to payments made, received or due under the Assumed Contracts, Real Property Leases, Permits and any agreements included in the Permitted Exceptions (such as payments made or owing under road use agreements or easements) through the Closing Date; (iii) with respect to the Real Property, all soil test reports, building inspection reports, building plans, blueprints, renderings and surveys in Seller’s possession; (iv) all studies, evaluations, appraisals and other information in Seller’s possession relating to the ownership or proposed development of the Real Property; and (v) personnel records for employees of Seller who accept employment with Buyer or Buyer’s Affiliates.

2.1.9. Seedlings

All conifer seeds or seedlings in Seller’s possession intended for use in reforestation of the Real Property.

2.1.10. Environmental Indemnity Rights

All rights of Seller for indemnity, contribution or reimbursement from, and claims or causes of action of Seller against, third parties (including, but not limited to prior owners of the Real Property), with respect to Contamination of the Real Property, violations of Environmental Laws with respect to the Real Property, or the environmental condition of the Real Property (the “ Environmental Indemnity Rights ”)

2.2 Excluded Assets

Notwithstanding the listing of Assets in Section 2.1, Seller will retain and not transfer, and Buyer will not purchase or acquire, assets not specifically referred to in Section 2.1 of this Agreement, or any of the following (collectively, the “ Excluded Assets ”):

2.2.1. Tax Refunds

Tax credits and Seller’s rights to refunds of Taxes paid with respect to the Real Property, for the periods, or any portion thereof, ending on or prior to the Closing Date.

2.2.2. Cash and Equivalents

Seller’s cash, bank deposits or similar cash and cash equivalent items.

2.2.3. Accounts Receivable

Any accounts receivable of Seller.

2.2.4. Other Working Capital

Any other items of working capital of the Assets.

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2.2.5. Accounting and Tax Records

Any of Seller’s Tax and accounting records (provided that Buyer shall receive copies of these to the extent provided in Sections 2.1.8).

2.2.6. Personnel Records

All personnel files, workers compensation files, employee medical files and other employee books and records, except such records for employees of Seller to whom Buyer extends an offer of employment to the extent disclosure is not prohibited by Applicable Law.

2.2.7. Contract, Insurance and Indemnity Claims

All of the rights of Seller under insurance policies or under contracts (including the Assumed Contracts) with respect to acts, omissions or occurrences prior to the Closing Date, including rights of indemnification or contribution, except for the Environmental Indemnity Rights.

2.2.8. Seller’s Washington Assets and Operations Records

All records, electronic or otherwise, relating to Seller’s Washington timberlands or other tangible assets located in Washington (but not records relating to the Real Property or Assumed Contracts, even if such records are located in Washington).

2.2.9. Deleted Parcels

The Deleted Parcels, if any, established pursuant to Section 2.10.

2.3 Assumption of Liabilities

Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, honor and discharge when due only the liabilities and obligations arising on or after the Closing Date under the Assumed Contracts, Permits, agreements included in Permitted Exceptions and the Real Property Leases (collectively, the “ Assumed Liabilities ”).

2.4 Retained Liabilities

Except for the liabilities and obligations to be assumed by Buyer pursuant to Section 2.3, Buyer will not assume or be liable for any liabilities of Seller, known or unknown, contingent or absolute, accrued or otherwise (the “ Retained Liabilities ”). Without limiting the generality of the foregoing, the following liabilities and obligations are Retained Liabilities:

(a) Any liabilities, obligations or debts of Seller, whether fixed, contingent or mixed and whether based on events occurring before or after the Closing, including without limitation those based on tort, contract, statutory or other claims or involving fines or penalties payable to any governmental authority, excepting contractual liabilities arising on or after the Closing Date under the Assumed Contracts, Permits, Real Property Leases and Permitted Exceptions;

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(b) Any liabilities, obligations or debts of Seller for any Taxes, including without limitation federal income taxes, state income and sales and excise taxes, state and local real and personal property taxes and federal, state and local withholding and payroll taxes, except as otherwise provided in this Agreement;

(c) Any liabilities, obligations or debts of Seller for trade payables or account payables (whether or not the same has become due and payable), loans, notes, advances, intercompany borrowing or other form of indebtedness incurred by Seller;

(d) Any liabilities, obligations or debts of Seller pursuant to warranties (express or implied) to customers for products sold by Seller on or prior to the Closing Date;

(e) Any liabilities, obligations or debts of Seller in respect of any Excluded Asset;

(f) Any liabilities, obligations or debts of Seller under any employment, severance or other agreement with any employee of Seller and all liabilities relating to payroll, bonus or deferred compensation, vacation, sick leave, workers compensation, unemployment benefits, pension or retirement benefits, stock bonuses, stock purchases, options, profit-sharing plans, health care plans or any other benefits or employee plans of any kind for all current and former employees of Seller with respect to their employment with Seller;

(g) Any liabilities, obligations or debts of Seller under or in connection with the Assumed Contracts, the Real Property Leases, Permitted Exceptions, Water Rights, or Permits arising from any performance or breach thereof occurring on or before the Closing Date;

(h) Any liabilities, obligations or debts of Seller arising from the operation by Seller of the Assets on or before the Closing Date; and

(i) Any liabilities, obligations or debts of Seller under any Environmental Law.

2.5 Purchase Price

(a) The aggregate purchase price for the Assets shall be the sum of FIFTY-TWO MILLION FORTY-SIX THOUSAND TWO HUNDRED SEVENTY AND NO/100 DOLLARS ($52,046,270.00) (the “ Purchase Price ”). The Purchase Price shall be paid in immediately available funds at the Closing.

(b) Pursuant to a letter of intent between Buyer and Seller dated June 20, 2007, Buyer has deposited with the Escrow Agent the sum of $10,500,000.00 (the “ Letter of Intent Deposit ”) in an interest bearing account. Upon execution of this Agreement, Buyer and Seller shall direct Escrow Agent to disburse to Buyer all interest accrued on the Letter of Intent Deposit as of the date of this Agreement. Thereafter $7,500,000 of the Letter of Intent Deposit shall be transferred to an escrow account held by the Escrow Agent as a deposit under this Agreement (the “ Deposit ”). The Deposit shall be held in an interest bearing account from the date of this Agreement through the Closing or earlier termination of this Agreement. Except as provided in Section 7.2, the Deposit and interest accrued thereon shall be credited against the Purchase Price at the Closing. Until the Closing or the termination of this Agreement, no party shall be entitled to receive, pledge, borrow against or otherwise receive the benefit of the Deposit.

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2.6 Closing

(a) Subject to the terms and conditions of this Agreement, the sale and purchase of the Assets and the assumption of the Assumed Liabilities contemplated hereby shall take place at a closing (the “ Closing ”) in escrow at the offices of the Escrow Agent, on January 9, 2008, or at such other time, date, place or manner as Seller and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the “ Closing Date ”).

(b) At the Closing, in addition to any other documents to be delivered by Seller under other provisions of this Agreement, Seller shall deliver or cause to be delivered to Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), to Buyer’s Affiliate):

(i) General Warranty Deeds, conveying the Real Property and Easements to Buyer (or to the extent Buyer designates pursuant to Section 2.6(e), to Buyer’s Affiliate), subject only to (1) the Permitted Exceptions, (2) the agreements listed on Part II of Schedule 2.1.6 , (3) discrepancies and conflicts in boundary lines, encroachments, shortage of area and similar matters which an ALTA survey would disclose, (4) rights of the public in roads and highways, (5) rights of way for utility lines now installed on the Real Property, (6) unpatented mining claims, and (7) reservations in federal patents or in acts authorizing the same. The standard permitted exceptions appearing in an ALTA standard owners policy shall not be exceptions in such deeds;

(ii) a Bill of Sale from Seller to Buyer, conveying to Buyer the Improvements and Records and personal property included in the Assets (or to the extent Buyer designates pursuant to Section 2.6(e), to Buyer’s Affiliate);

(iii) a counterpart of an Assignment and Assumption Agreement pursuant to which Seller assigns to Buyer, and Buyer assumes and agrees to perform the obligations arising on or after the Closing Date under the Assumed Contracts, Real Property Leases, and Permits included in the Assets (or to the extent Buyer designates pursuant to Section 2.6(e), Seller shall assign such designated Assets to Buyer’s Affiliates pursuant to an Assignment and Assumption Agreement, and Buyer’s Affiliate shall assume and agree to perform the obligations arising on or after the Closing Date under such Assets) (the “ Assignment and Assumption Agreement ”);

(iv) an assignment to Buyer of the Water Rights to the extent not already transferred or assigned to Buyer pursuant to the instruments described in Section 2.6(b)(i); (or to the extent Buyer designates pursuant to Section 2.6(e), to Buyer’s Affiliate)

(v) the consents obtained, if any, to the assignment of the Assumed Contracts, Real Property Leases, and Permits;

(vi) the certificates and other documents required to be delivered pursuant to Section 6.2;

(vii) a certificate of Seller in the form required by applicable regulations under Section 1445 of the Code, affirming that Seller is not a foreign person (as that term is defined therein) and containing such other information as may be required thereunder;

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(viii) the Records, except to the extent constituting Excluded Assets; and

(ix) if requested by Buyer, Quitclaim Deeds conveying the Real Property to Buyer utilizing the descriptions contained in the Quitclaim Deeds delivered to Seller in connection with Seller’s acquisition of the Real Property.

(x) an assignment of the Environmental Indemnity Rights; and

(xi) such other instruments executed by Seller as may reasonably be requested by Buyer to transfer title to the Assets to Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), to Buyer’s Affiliate).

(c) At the Closing, in addition to any other documents to be delivered by Buyer under other provisions of this Agreement, Buyer (or Buyer’s Affiliates, as appropriate) shall deliver or cause to be delivered to Seller:

(i) the Purchase Price in immediately available funds;

(ii) an executed counterpart to the Assignment and Assumption Agreement; and

(iii) the certificates and other documents required to be delivered pursuant to Section 6.1.

(d) The sale and purchase of the Assets and the assumption by Buyer of the Assumed Liabilities shall be deemed for all purposes to have taken place as of 12:01 a.m., P.S.T., on the Closing Date.

(e) By notice to Seller at least five (5) business days prior to the Closing, Buyer may designate certain of the Assets be conveyed directly by Seller to an affiliate of Buyer (a “ Buyer’s Affiliate ”). If Buyer does so, then at the Closing the Assets so designated by Buyer shall be conveyed directly by Seller to Buyer’s Affiliate.

2.7 Allocation

The parties agree to allocate the Purchase Price (plus the amount of Assumed Liabilities) for all purposes (including financial accounting and tax purposes) in accordance with the allocation schedule attached hereto as Exhibit A . Each party agrees to report the federal, state, local and other tax consequences of the transactions contemplated by this Agreement in a manner consistent with such allocation and shall not take any position inconsistent therewith upon examination of any tax return, in any refund claim, or in any litigation, investigation, or otherwise.

2.8 Title Commitments and Title Insurance

(a) Seller has delivered to Buyer the commitments for ALTA owners standard coverage policies of title insurance described on attached Schedule 2.8(i) (the “ Title Commitments ”). The items listed on Schedule 2.8(ii) shall be “ Permitted Exceptions ”.

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(b) If, after the date hereof and before the Closing, the Escrow Agent issues an updated title commitment (an “ Update ”) containing an exception to title not listed on a Title Commitment (an “ Additional Exception ”), then Buyer may, by notice to Seller no later than five (5) calendar days after receipt of the Update, advise Seller in writing of any Additional Exception reflected in such Update subject to which Buyer is unwilling to accept title (the ‘“ Unacceptable Exceptions ”). Failure of Buyer to provide such written notice within such five (5) calendar day period shall be deemed an election by Buyer to waive any Additional Exception disclosed in such Update and to accept title subject to the Additional Exception without any reduction in the Purchase Price for the Assets (in which case the Additional Exception will thereafter be a Permitted Exception). Within five (5) calendar days following Seller’s receipt of Buyer’s notice of Unacceptable Exceptions, if any, Seller shall advise Buyer in writing whether Seller intends to take action to correct such Unacceptable Exception, which corrective action may include, but is not limited to, taking steps to have the Unacceptable Exception removed or reducing the Purchase Price by an amount equal to the reduction in fair market value of the Assets resulting from the Unacceptable Exception. If Seller fails within such five (5) calendar day period to notify Buyer that Seller will cure the Unacceptable Exception (or following Seller’s timely notice, Seller fails to correct such Unacceptable Exception prior to the Closing Date), then Buyer shall have the option, as its sole remedy (except with respect to Unacceptable Exceptions created by Seller in violation of this Agreement) for the failure of Seller to eliminate any Unacceptable Exception, either to (i) accept title to the Real Property subject to such Unacceptable Exception (in which case the Unacceptable Exception will thereafter be a Permitted Exception) without any adjustment in the Purchase Price for the Assets, or (ii) eliminate the parcel or parcels of the Real Property affected by the Unacceptable Exception (each an “ Affected Parcel ”) from the transaction, in which event the Purchase Price shall be reduced by the fair market value of the Affected Parcel. Seller shall, in all events, be required to remove any Unacceptable Exceptions which are mortgages, deeds of trust, security interests or similar financial encumbrances created by Seller and any other Unacceptable Exceptions created by Seller in violation of this Agreement. If the parties are unable to agree upon the fair market value of the Affected Parcel, then value shall be determined pursuant to the procedure set forth in Section 10.3(c) of this Agreement.

(c) At the Closing, Seller shall furnish Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), to Buyer’s Affiliate), at Seller’s expense, an ALTA standard coverage policy of title insurance for the Real Property in the amount allocated to the Real Property under Section 2.7 containing no exceptions except Permitted Exceptions and the standard coverage form printed exceptions (the “ Title Policy ”).

(d) Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), Buyer’s Affiliate) may at its sole cost and expense obtain any endorsements to the Title Policy that are factually and legally available as it desires (“ Additional Coverage ”), so long as Buyer’s election to pursue Additional Coverage does not result in a delay of the Closing. Any additional expenses Buyer or Buyer’s Affiliate may elect to incur for surveys of the Real Property, extended coverage or Additional Coverage shall be borne solely by Buyer or Buyer’s Affiliate, as appropriate. Seller agrees to provide copies of any existing surveys of the Real Property to Buyer or Buyer’s Affiliate, as appropriate.

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2.9 Pro-ration, Tax Returns and Closing Costs

(a) Any and all property Taxes, payments due under the Assumed Contracts, Real Property Leases and other charges, costs and expenses applicable to or in connection with the Assets will be prorated as of the Closing Date, and such Taxes, payments and other charges shall be allocated between the parties by adjustment or payment at the Closing; provided that any security deposits or other deposits paid by Seller under the Assumed Contracts or Real Property Leases shall be refunded to Seller. To the extent possible, prorations shall be computed and appropriate payments made at the Closing. To the extent prorations and appropriate payments are not made as of the Closing, such prorations and adjustments shall be finally computed, and any payments due from one party to another paid, within thirty (30) days after the Closing, provided, as to items to be prorated for which information necessary to complete such prorations is not available within 30 days after the Closing, the parties shall prorate such items and make appropriate payments as soon as practicable after such information is available.

(b) All such Taxes shall be allocated on the basis of the fiscal year of the tax jurisdiction in question. With respect to all such Taxes, Seller shall timely prepare and file, or cause to be timely prepared and filed, with the appropriate authorities all tax returns, reports and forms relating to the Assets attributed to any period that ends on or prior to the Closing Date. Buyer shall prepare and file, or cause to be prepared and filed, with the appropriate authorities all tax returns, reports and forms relating to the Assets attributable to any period that ends after the Closing Date. Seller agrees to provide Buyer any information, records or other documents reasonably necessary to enable Buyer to prepare such tax returns.

(c) Seller shall pay one-half, and Buyer shall pay one-half, of the escrow fees of the Escrow Agent. Buyer shall pay the cost of recording all conveyance documents which are to be recorded.

2.10 Properties with Recognized Environmental Conditions

Buyer has previously delivered to Seller a Phase I Environmental Site Assessment which discloses Recognized Environmental Conditions (as defined in ASTM Practice E 1527 (each a “REC”) with respect to portions of the parcels of the Real Property described on Schedule 2.10 (each a “REC Parcel”).

Buyer intends to undertake further investigation of the RECs, and may conduct further environmental site assessment of the REC Parcels. Buyer may, at any time prior to December 15, 2007, by notice to Seller, elect to delete from the Assets portions of one or more of the REC Parcels on which Buyer identifies conditions indicative of releases or threatened releases (as defined in CERCLA section 101(22)) of hazardous substances (as defined in CERCLA section 101 (14)) on, at, in, from or to the REC Parcel. Such notice shall identify the portion of the REC Parcel which Buyer identifies as being potentially impacted by such releases (the “REC Affected Area”). If Buyer fails to so notify Seller by December 15, 2007 that Buyer is electing to delete all or a portion of a REC Parcel, it shall waive its right to delete any portion of such REC Parcel from this transaction.

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In the event Buyer timely elects to delete a REC Affected Area from this transaction, the area to be deleted shall be the smallest parcel which can legally be partitioned from the remainder of the applicable REC Parcel, and yet include the entire REC Affected Area (each such area is referred to as a “Deleted Parcel”). The parties shall cooperate in determining the boundaries of the Deleted Parcel, and in obtaining any partition or land division approvals for the creation of the Deleted Parcel and the remainder of applicable REC Parcel as separate legal lots which are separately conveyable. Buyer shall pay for any boundary survey required in connection with obtaining such partition and land division approvals and any application fee of the applicable Governmental Authority required in connection therewith. The Deleted Parcel(s) (and the Water Rights and Improvements relating thereto and the right to use any Easements providing access thereto) shall be retained by Seller, and no longer constitute part of the Assets, the Purchase Price shall be reduced by the acreage of the Deleted Parcel(s) multiplied by $1,209. If either the Deleted Parcel or the remainder of the related REC Parcel require access over the other to provide practical access to a public road, the parties shall at the Closing, create appropriate 60’ wide easements for roads and utilities benefiting the parcel requiring such access.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller, represents and warrants to Buyer that the statements contained in this Article III are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date, except as set forth in the disclosure schedule accompanying this Agreement and initialed by the parties (the “ Disclosure Schedule ”). The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Article III and each disclosure shall provide an exception to or otherwise qualify the corresponding representation or warranty of Seller and the other representations and warranties in this Article III to the extent that the relevance of such disclosure is clearly apparent on it face.

3.1 Organization, Good Standing and Qualification

Seller is a limited liability company duly organized and validly existing under the laws of the State of Oregon, duly qualified to do business in Idaho. Seller has the corporate power and authority to own and operate the Assets and to carry on its business as now being conducted.

3.2 Authority and Consents

Seller has the limited liability company power and authority to enter into this Agreement and perform its obligations under this Agreement. The execution, delivery and performance by Seller of this Agreement does not require any consent, approval, order, authorization or other action by, or filing with, any Governmental Authority, or the consent of any other third party. This Agreement and the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action of Seller, and this Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization and moratorium laws and (ii) other laws of general application affecting the enforcement of creditors’ rights generally and general principles of equity.

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3.3 Noncontravention

The execution, delivery and performance of this Agreement by Seller does not, and the consummation of the transactions contemplated by this Agreement will not, violate or conflict with the Articles of Organization or Operating Agreement of Seller, any Applicable Law or any Assumed Contract, Real Property Lease, or Permit that is material to the ownership or operation of the Assets.

3.4 Taxes

Seller has timely paid all Taxes due and owing by Seller with respect to the ownership and operation of the Assets prior to the Closing. There are no Liens on the Assets for Taxes, except for real property taxes not yet due or payable.

3.5 Real Property

(a) Seller has good and marketable title to the Real Property in fee simple. Except for the Permitted Exceptions, and the items listed in Part II of Schedule 2.1.6 , there are no existing leases, subleases, tenancies or licenses on any portion of the Real Property. There are no boundary disputes or condemnation actions pending or, to the Knowledge of Seller, threatened with respect to the Real Property.

(b) Neither the operations of Seller on any of the Real Property nor any improvements on the Real Property materially violate any applicable building code, zoning requirement, forest practice statute or regulation, or other statute, regulation or ordinance. Seller has not received any notice of any pending or contemplated special assessments against the Real Property.

(c) The Real Property, taken as a whole, has enforceable legal access to public roads or highways.

(d) To Seller’s Knowledge, except for rights of third parties under the Permitted Exceptions and under the Assumed Contracts listed in Part II of Schedule 2.1.6 , no Person other than Seller has a right of possession of any of the Real Property.

3.6 Personal Property

At the Closing, all personal property included in the Assets will be free and clear of Liens (except that personal property which constitutes a fixture or a part of the Real Property may be subject to Permitted Exceptions).

3.7 Assumed Contracts and Permits

Complete and correct copies of the Assumed Contracts listed on Schedule 2.1.6 , Real Property Leases and Permits have been provided to Buyer. There does not exist under the Assumed Contracts, Real Property Leases, or Permits any failure of condition, any event of default or event or condition (whether with or without notice, lapse of time or both), that would constitute a material breach, failure of condition or event of default thereunder, in each case, on the part of Seller.

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Furthermore, to Seller’s Knowledge, there does not exist under any of the Assumed Contracts, Real Property Leases, or Permits, any event of default or any event or condition (whether with or without notice, lapse of time or both), that would constitute a material breach or event of default thereunder, in each case, on the part of any other party to the Assumed Contracts, Real Property Leases, or Permits. The Assumed Contracts and Real Property Leases are valid and binding obligations of Seller and are enforceable by Seller in accordance with their terms. To Seller’s Knowledge, all Permits were validly issued by the appropriate Governmental Authority, remain valid and enforceable or exercisable by Seller in accordance with their terms and Applicable Law and, upon assignment (subject to obtaining any required consent to assignment or providing notice of assignment), will be valid and enforceable or exercisable by Buyer in accordance with their terms and Applicable Law.

3.8 Litigation and Condemnation

There is no claim, suit, action, arbitration or legal, administrative or other proceeding pending or, to Seller’s Knowledge, threatened against Seller relating to the Assets or affecting the Real Property. Seller is not subject to any order, writ, injunction, judgment or decree of any Governmental Authority that adversely affects the ability of Seller to operate the Real Property substantially as presently operated or that is reasonably likely to adversely and materially affect the ability of Buyer to operate the Real Property or use the Assets substantially as presently operated and used by Seller. Seller has not received notice of any condemnation proceeding affecting the Assets and, to Seller’s Knowledge, no condemnation proceeding is pending or has been threatened with respect to the Real Property.

3.9 Environmental Compliance

(a) No Violations . Seller is in material compliance with all applicable Environmental Laws pertaining to the Real Property (and the use and ownership thereof). Seller has made all material reports and given all material notices required by all Environmental Laws and Permits issued under Environmental Laws pertaining to the Real Property.

(b) Enforcement. No Governmental Authority has issued to Seller any citation or notice of, or to Seller’s Knowledge is investigating, planning or considering any investigation of, any violation or noncompliance by Seller under, any Environmental Law in connection with the Real Property or the Assets, except for matters which have been fully and finally resolved and for which there are no unpaid or unsatisfied obligations or liabilities.

(c) Contamination . No portion of the Real Property has been Contaminated by any activities of Seller, and to Seller’s Knowledge no portion of the Real Property is Contaminated. None of the Real Property is listed or, to Seller’s Knowledge, either proposed or likely to be listed on the Comprehensive Environmental Response, Compensation and Liability Information System or on any comparable list maintained by any other Governmental Authority.

(d) Pending Actions. Seller is not subject to any outstanding order, judgment, injunction, decree or writ from or other obligation to or with any Governmental Authority or other Person in respect of which Buyer may be required to incur any liabilities arising from the release or threatened release of a Hazardous Substance or any Contamination with respect to the

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Real Property. To Seller’s Knowledge, no investigation by any Government Authority is pending with respect to alleged failure of the Real Property or the Assets, or Seller’s operations on the Real Property or use of the Assets, to comply with Environmental Laws.

(e) Underground Storage Tanks . To Seller’s Knowledge, no regulated underground storage tank is or at any time was located on the Real Property.

(f) Environmental Reports . Seller has disclosed and made available to Buyer true, complete and correct copies of any reports, studies, investigations, audits, analysis, tests or monitoring in the possession of or initiated or prepared by Seller pertaining to any environmental matter relating to the Real Property, including without limitation compliance with Environmental Laws, employee safety or Contamination.

3.10 Endangered and Threatened Species

To Seller’s Knowledge, no federal or state endangered, threatened, sensitive, or otherwise listed or protected species are on or near the Real Property that would affect Buyer’s ability to conduct commercial timber operations on the Real Property, and Seller has received no notice of any actions the threatened actions against Seller or the Real Property based upon the presence of any endangered, threatened, sensitive or otherwise listed or protected species on or near the Real Property or of any set of facts which might give rise to any such action.

3.11 Labor Matters

Seller is not a party or otherwise subject to any collective bargaining or other agreement governing the wages, hours or terms of employment of its employees. Seller is and has been in compliance with all applicable laws regarding employment and employment practices, terms and conditions of employment, wages and hours and is not and has not been engaged in any unfair labor practice.

3.12 [Intentionally Deleted]

3.13 Compliance with Laws

Seller is in material compliance with, and is operating the Assets in material compliance with, all applicable statutes, ordinances, rules, regulations and orders of Governmental Authorities.

3.14 Forestry Obligations

There are no unfulfilled road maintenance, reforestation, or other forest management or forest operation obligations imposed by any statues, ordinances, rules, regulations or orders of Governmental Authorities or required by any timber harvest or other Permit with respect to the Real Property, and the Real Property is, all material respects, in the condition required by any such statues, ordinances, rules, regulations or orders of Governmental Authorities or required by any timber harvest or other Permit.

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3.15 Outstanding Obligations Related to Forest Operations

All Taxes related to timber harvest and all amounts owed to those involved in road construction and maintenance, the felling, logging and transportation of timber and logs from the Real Property have been fully paid or will be fully paid as of the Closing.

3.16 Operating Statements

Seller has previously furnished to Buyer unaudited operating statements for the Real Property for the year ended of Seller as of December 31, 2006 and for the six months ended June 30, 2007 (all such statements collectively, the “ Operating Statements ”). The Operating Statements present fairly the results of operations for the periods then ended, all in conformity with GAAP applied on a consistent basis.

3.17 Permits

Schedule 2.13 lists all Permits held by Seller with respect to the ownership, operation and potential development of the Real Property. Seller is in compliance with the terms and provisions of such Permits.

3.18 Brokerage

Seller has not retained any broker or finder in connection with the transactions contemplated by this Agreement. Any brokerage or finder’s fee due to any broker or finder in violation of the foregoing representation shall be paid by Seller.

3.19 Change in Condition of Assets

To Seller’s Knowledge, sine June 30, 2007, there has been no damage or loss to the Assets, including , without limitation, damage or loss by fire or other casualty to the timber on the Real Property, other than timber harvesting in the ordinary course of business.

3.20 Conditions of Assets

Buyer acknowledges that full inspection of the Assets has been made or will be made by Buyer prior to the Closing and that except as expressly provided herein, neither Seller nor any of its agents, officers, employees or assigns has made any representations or warranties respecting the condition of the Assets or made any agreements to make any improvements thereto.

Buyer specifically acknowledges and agrees that, except as expressly provided herein, (1) Seller does not make any representations or warranties of any kind whatsoever, either express or implied, with respect to the condition of the Assets, and (2) the Assets are sold to Buyer in an “ AS IS ” and “ WITH ALL FAULTS ” condition as of the Closing Date, including, without limitation, the stability of soils, the condition of the Assets or any building structure or improvements thereon, suitability, habitability, merchantability or fitness of the Assets for any construction or development, or for Buyer’s intended use, encroachment or boundary questions, compliance with any laws, drainage, availability or adequacy of water, sewer or other utilities, zoning, access and similar matters. Except as expressly provided in this Agreement, and except for Buyer’s rights under

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Article VIII with respect to breaches of representations and warranties contained herein, Buyer hereby waives any and all claims which Buyer has or may have against Seller with respect to the physical condition of the Assets. The provisions of this paragraph shall survive the Closing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer makes the following representations and warranties to Seller:

4.1 Organization, Good Standing and Qualification

Buyer is a corporation duly organized and validly existing under the laws of the State of Delaware and duly qualified to conduct business in Idaho. Buyer has the requisite power and authority to own and operate its assets and to carry on its business as now being conducted.

4.2 Authority and Consents

Buyer has the necessary power and authority to enter into this Agreement and perform its obligations under this Agreement. The delivery and performance by Buyer of this Agreement does not require any consent, approval, order, authorization or other action by, or filing with, any Governmental Authority, or the consent of any other third party (other than consents of third parties which may be required to assign the Assumed Contracts, Real Property Leases, or Permits). This Agreement and the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action of Buyer, and this Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization and moratorium laws and (ii) other laws of general application affecting the enforcement of creditors’ rights generally and general principles of equity.

4.3 Noncontravention

The execution, delivery and performance of this Agreement by Buyer does not, and the consummation of the transactions contemplated by this Agreement will not, violate or conflict with the Certificate of Incorporation or Bylaws of Buyer, any Applicable Law or any contract or judgment to which Buyer is a party or by which it is bound.

4.4 Brokerage

Buyer has not retained any broker or finder in connection with the transactions contemplated by this Agreement. Any brokerage or finder’s fee due to any broker or finder in violation of the foregoing representation shall be paid by Buyer.

4.5 Hart-Scott Rodino Antitrust Improvement Act

The parties are not required in connection with the transactions contemplated by this Agreement to file pre-merger notification under the Hart-Scott-Rodino Antitrust Improvement Act of 1976.

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ARTICLE V

COVENANTS

5.1 Buyer’s Access to Premises and