TAX SHARING AGREEMENT

Exhibit 10.4

TAX SHARING AGREEMENT

by and among

POTLATCH CORPORATION,

POTLATCH FOREST HOLDINGS, INC.,

POTLATCH LAND & LUMBER, LLC,

and

CLEARWATER PAPER CORPORATION

Dated as of December 15, 2008

TABLE OF CONTENTS

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TAX SHARING AGREEMENT

This Tax Sharing Agreement (this " Agreement ") is dated as of December 15, 2008, by and among Potlatch Corporation, a Delaware corporation (" Potlatch "), Potlatch Forest Holdings, Inc., a Delaware corporation and wholly owned subsidiary of Potlatch (" Holdings "), Clearwater Paper Corporation f/k/a Potlatch Forest Products Corporation, a Delaware corporation and currently a direct, wholly owned subsidiary of Potlatch (" Clearwater "), and Potlatch Land & Lumber, LLC, a Delaware limited liability company and currently a direct, wholly owned subsidiary of Clearwater (" RetainCo ," and together with Potlatch, Holdings, and Clearwater, the " Parties ," with each sometimes referred to herein as a "Party").

RECITALS

WHEREAS, the Boards of Directors of the Parties have each determined that it is appropriate and desirable to separate the Pulp-Based Business from the Retained Business and accordingly have caused the Parties to enter into the Separation and Distribution Agreement dated as of December 15, 2008 (the " Separation Agreement ");

WHEREAS, as set forth in the Separation Agreement, and subject to the terms and conditions thereof, the Parties currently contemplate that Clearwater will contribute and transfer to RetainCo, and RetainCo will receive and assume, assets and liabilities currently held by Clearwater and associated with the Retained Business and Clearwater will distribute all of the stock of RetainCo to Holdings in a transaction intended to qualify as a tax-free reorganization and distribution under sections 368(a)(1)(D) and 355 of the Code (the " Internal Spin-off ");

WHEREAS, as set forth in the Separation Agreement, and subject to the terms and conditions thereof, the Parties currently contemplate that, following the Internal Spin-off, Holdings will distribute all of its shares of Clearwater common stock to Potlatch and Potlatch will distribute all of its shares of Clearwater common stock received from Holdings to Potlatch shareholders in a transaction intended to qualify as a tax-free distribution of the shares of a controlled corporation under section 355 of the Code (the " Public Spin-off ");

WHEREAS, in contemplation of the Internal Spin-off and the Public Spin-off (collectively, the " Spin-offs ") pursuant to which RetainCo and its subsidiaries will become direct and indirect subsidiaries of Potlatch and Holdings (each of Potlatch, Holdings, RetainCo, and the subsidiaries of RetainCo, a " Potlatch Entity ") and will cease to be direct and indirect subsidiaries of Clearwater, and Clearwater will become an independent corporation whose shares are listed on the New York Stock Exchange, the Parties have determined to enter into this Agreement, setting forth their agreement with respect to certain Tax matters; and

WHEREAS, the Parties desire to set forth their agreement on the rights and obligations of the Potlatch Entities, on the one hand, and Clearwater, on the other hand, with

respect to handling and allocating federal, state and local and foreign Taxes, in periods beginning prior to the Closing Date, Taxes resulting from transactions effectuated in connection with the Spin-offs and various other Tax matters.

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the Parties mutually covenant and agree as follows:

ARTICLE I

DEFINITIONS

" After Tax Amount " means any additional amount necessary to reflect (through a gross-up mechanism) the hypothetical Tax consequences of the receipt or accrual of any payment required to be made under this Agreement (including payment of an additional amount or amounts hereunder and the effect of the deductions available for interest paid or accrued and for Taxes such as state and local Income Taxes), determined by using the highest marginal corporate Tax rate (or rates, in the case of an item that affects more than one Tax) for the relevant taxable period (or portion thereof).

" Audit " includes any audit, assessment of Taxes, or other examination by any Taxing Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.

" Clearwater Representation Letter " means an officer’s certificate in which certain representations, warranties and covenants are made on behalf of Clearwater in connection with the issuance of a Tax Opinion.

" Closing Date " means the date on which the Public Spin-off is effected.

" Code " means the Internal Revenue Code of 1986, as amended, and any successor thereto.

" Combined Return " means any Tax Return, other than with respect to United States federal Income Taxes, filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination) or unitary basis wherein Clearwater joins in the filing of such Tax Return (for any taxable period or portion thereof) with one or more Potlatch Entities.

" Control " means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote.

" Dispute Resolution Commencement Date " has the meaning set forth in Section 8.3.

" Dispute " has the meaning set forth in Section 8.3.

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" Escrow Agreement " has the meaning set forth in Section 6.3.

" Estimated Tax Installment Date " means the estimated Tax installment due dates prescribed in section 6655(c) of the Code and any other date on which an installment of Taxes is required to be made.

" Filing Party " has the meaning set forth in Section 7.1.

" Final Determination " means the final resolution of liability for any Tax for any taxable period, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Code sections 7121 or 7122, or a comparable agreement under the laws of other jurisdictions, which resolves the entire liability for such Tax for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

" Income Tax " means any federal, state, local or foreign Tax determined by reference to income, net worth, gross receipts or capital, or any such Taxes imposed in lieu of such Tax.

" Indemnifiable Loss Deduction " has the meaning set forth in Section 5.3.

" Indemnified Loss " has the meaning set forth in Section 5.3.

" Indemnifying Party " has the meaning set forth in Section 5.3.

" Indemnitee " has the meaning set forth in Section 5.3.

" Independent Firm " means an accounting firm which has not, except pursuant to Section 8.3, performed any services since January 1, 2006 for any Party.

" Internal Spin-off " has the meaning given in the recitals to this Agreement.

" Initial Ruling " means any private letter ruling issued by the IRS in connection with the Spin-offs in response to Potlatch’s initial request for such a letter ruling.

" IRS " means the United States Internal Revenue Service or any successor thereto, including, but not limited to its agents, representatives, and attorneys.

" Non-Income Spin-off Taxes " means any Taxes other than Income Taxes imposed on any Party as a result of or in connection with the Spin-offs that would not have been imposed but for the Spin-offs.

" Option " means an option to acquire common stock, or other equity-based incentives the economic value of which is designed to mirror that of an option, including non-qualified stock options, discounted non-qualified stock options, cliff options to the extent stock is

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issued or issuable (as opposed to cash compensation), and tandem stock options to the extent stock is issued or issuable (as opposed to cash compensation).

" Owed Party " has the meaning set forth in Section 6.3.

" Owing Party " has the meaning set forth in Section 6.3.

" Payment Period " has the meaning set forth in Section 6.3(e).

" Person " means an individual, a partnership, a corporation, a limited liability company, 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.

" Post-Spin Period " means a taxable period beginning after the Closing Date.

" Potlatch Entity " has the meaning set forth in the recitals to this Agreement.

" Potlatch Representation Letter " means an officer’s certificate in which certain representations, warranties and covenants are made on behalf of any Potlatch Entity in connection with the issuance of a Tax Opinion.

" Pre-Spin Period " means a taxable period beginning before the Closing Date, including, for the avoidance of doubt, any taxable period that begins before the Closing Date and ends following the Closing Date.

" Pre-Spin Refinancing " means the series of transactions to be undertaken by Clearwater immediately preceding the Spin-offs whereby Clearwater will issue notes and contribute a portion of the proceeds of such notes to RetainCo in consideration of the assumption by RetainCo of a portion of Clearwater’s indebtedness.

" Prohibited Act " has the meaning set forth in Section 4.4.

" Public Spin-off " has the meaning set forth in the recitals to this Agreement.

" Pulp-Based Business " has the meaning set forth in the Separation Agreement.

" Qualifying Income " has the meaning set forth in Section 6.3.

" REIT " has the meaning set forth in Section 5.7.

" REIT Failure Taxes " means any Taxes that are imposed upon Potlatch as a result of Potlatch’s failure to satisfy the REIT income test requirements of section 856(c)(2) and 856(c)(3) of Code, which failure would not have occurred but for gain recognized by Potlatch from: (i) the failure of the Spin-offs to qualify as tax-free under sections 368(a)(1)(D) or 355 of the Code; or (ii) the application of section 355(d) or section 355(e) of the Code. REIT Failure Taxes include, but shall not be limited to: (i) corporate-level Taxes imposed on Potlatch during such years as Potlatch is ineligible to reelect REIT status as a result of the application of section 856(g) of the Code; and (ii) Taxes imposed under sections 856(c)(7), 856(g)(5), 857(b)(5), or

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4981 of the Code, or any section of the Code imposing interest, penalties, or additions to tax on such Taxes, as a result of the failure described in the immediately preceding sentence.

" REIT Savings Escrow Notice " has the meaning set forth in Section 6.3.

" Restated Tax Saving Amount " has the meaning set forth in Section 5.4.

" Restricted Period " has the meaning set forth in Section 4.4.

" Retained Business " has the meaning set forth in the Separation Agreement.

" Ruling Documents " means (1) the initial request for a private letter ruling under section 355 and various other sections of the Code, filed with the IRS in connection with the Spin-offs, together with any supplemental filings or ruling requests or other materials subsequently submitted in connection with such request on behalf of Potlatch, its subsidiaries and shareholders to the IRS, the appendices and exhibits thereto, and any rulings issued by the IRS to any Potlatch Entity in response to such request or (2) any similar filings submitted to, or rulings issued by, any other Tax Authority in connection with the Spin-offs.

" Separation Agreement " has the meaning set forth in the recitals to this Agreement.

" Separation Date " means the effective date and time of the transfers of property, assumption of liability, license, undertaking or agreement in connection with the separation of the Retained Business and the Pulp-Based Business, as set forth in the Separation Agreement.

" Spin-off Taxes " means any Taxes imposed on Clearwater or any Potlatch Entity resulting from, or arising in connection with, the failure of the Internal Spin-off or the Public Spin-off to be tax-free to such party under section 355 and section 368(a)(1)(D) of the Code, as the case may be (including, without limitation, any Tax resulting from the application of section 355(d) or section 355(e) of the Code) or corresponding provisions of the laws of any other jurisdictions, including any REIT Failure Taxes. Each Tax referred to in the immediately preceding sentence shall be determined using the highest marginal federal and state corporate Income Tax rate for the relevant taxable period (or portion thereof).

" Spin-offs " has the meaning set forth in the recitals to this Agreement.

" Supplemental Ruling Documents " means (1) any request for a Supplemental Ruling and any materials, appendices and exhibits submitted or filed therewith and any Supplemental Rulings issued by the IRS to any Potlatch Entity in response to any such request and (2) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with the Spin-offs.

" Supplemental Ruling " means (1) any ruling issued by the IRS in connection with the Spin-offs other than a ruling in response to Potlatch’s initial request for a private letter ruling, and (2) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to the Spin-offs.

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" Tax " and " Taxes " include all taxes, charges, fees, duties, levies, imposts, rates or other assessments imposed by any federal, state, local or foreign Taxing Authority, including, but not limited to, income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added and other taxes, and any interest, penalties or additions attributable thereto.

" Tax Asset " means any Tax Item that has accrued for Tax purposes, but has not been used during a taxable period, and that could reduce a Tax in another taxable period, including, but not limited to, a net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction, credit related to alternative minimum tax and any other Tax credit.

" Tax Benefit " means a reduction in the Tax liability of a taxpayer for any taxable period. A Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been if such Tax liability were determined without regard to such Tax Item.

" Tax Detriment " means an increase in the Tax liability of a taxpayer for any taxable period. A Tax Detriment shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is more than it would have been if such Tax liability were determined without regard to such Tax Item.

" Tax Item " means any item of income, gain, loss, deduction or credit, or other attribute that may have the effect of increasing or decreasing any Tax.

" Tax Opinion " means an opinion issued to Potlatch by Skadden, Arps, Slate, Meagher & Flom LLP with respect to the qualification of the Spin-offs for tax-free treatment under sections 368(a)(1)(D) and 355 of the Code.

" Tax Return " means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Taxing Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

" Tax Saving Amount " has the meaning set forth in Section 5.3.

" Tax Services " has the meaning set forth in Section 2.5(a).

" Taxing Authority " means any governmental authority or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

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" Transition Services Agreement " means the Transition Services Agreement between Potlatch, Holdings, Clearwater, and RetainCo dated as of December 15, 2008.

" Treasury Regulations " means the final and temporary (but not proposed) income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

ARTICLE II

PREPARATION AND FILING OF TAX RETURNS

Section 2.1 Potlatch Entities’ Responsibility . The Potlatch Entities shall have sole and exclusive responsibility for the preparation and filing of:

(a) all Tax Returns with respect to the Potlatch Entities and Clearwater for Pre-Spin Periods (including, for the avoidance of any doubt, any Pre-Spin Period with respect to which RetainCo files any Tax Return on a consolidated, combined, unitary or similar basis with Clearwater);

(b) all Tax Returns with respect to the Potlatch Entities for Post-Spin Periods.

Section 2.2 Clearwater’s Responsibility . Clearwater shall have sole and exclusive responsibility for the preparation and filing of all Tax Returns with respect to Clearwater for Post-Spin Periods.

Section 2.3 Agent . Subject to the other applicable provisions of this Agreement, Clearwater hereby irrevocably designates Potlatch as its sole and exclusive agent and attorney-in-fact to take such action (including execution of documents) as Potlatch, in its reasonable discretion, may deem appropriate in any and all matters (including Audits) relating to any Tax Return described in Section 2.1(a).

Section 2.4 Manner of Tax Return Preparation .

(a) Unless otherwise required by a Taxing Authority, the Parties shall prepare and file all Tax Returns, and take all other actions, in a manner consistent with this Agreement and the Separation Agreement, and, to the extent not inconsistent with this Agreement, the Separation Agreement or applicable law, any Ruling Documents and any Supplemental Ruling Documents. All Tax Returns shall be filed on a timely basis (taking into account applicable extensions) by the party responsible for filing such Tax Returns under this Agreement.

(b) Subject to Section 2.4(a), Potlatch shall have the exclusive right, in its reasonable discretion, with respect to any Tax Return described in Section 2.1 to determine (1) the manner in which such Tax Return shall be prepared and filed, including the elections, methods of accounting, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported, (2) whether any extensions may be requested, (3) the elections that will be made on such Tax Return, (4) whether any amended Tax Return(s)

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shall be filed, (5) whether any claim(s) for refund shall be made, (6) whether any refund shall be paid by way of refund or credited against any liability for the related Tax, and (7) whether to retain outside firms to prepare or review such Tax Returns; provided , that Potlatch shall prepare all Tax Returns described in Section 2.1(a) in a manner consistent with its past Tax reporting practices.

(c) Within sixty (60) days after filing the Tax Return for the tax year that includes the Closing Date, Potlatch shall notify Clearwater of the Tax attributes associated with Clearwater and with RetainCo, and the Tax bases of the assets and liabilities, transferred to RetainCo pursuant to the Separation Agreement. Potlatch shall provide Clearwater with preliminary estimates of such information on or before January 20, 2009.

Section 2.5 Tax Services .

(a) In General . It is the intention of the Parties that except as specifically provided herein, the Transition Services Agreement shall govern the provision of tax services by the Potlatch Entities to Clearwater (the " Tax Services ").

(b) Right to Review . Potlatch shall provide or cause to be provided any Tax Return (or portion or excerpt thereof relating exclusively to Clearwater) to be filed by Potlatch on behalf of Clearwater pursuant to the Potlatch Entities’ provision of Tax Services at least ten (10) business days prior to the due date of such Tax Return, including extensions. Clearwater shall have the right to comment on any such Tax Return (or portion or excerpt thereof, as applicable), and Potlatch shall reasonably consider Clearwater’s comments.

(c) Information . Potlatch shall provide or cause to be provided to Clearwater copies of all Tax Returns (or portions or excerpts thereof relating exclusively to Clearwater) filed on behalf of Clearwater, in each case within fifteen (15) days of filing, pursuant to the Potlatch Entities’ provision of Tax Services and promptly provide any notices or communications from any Taxing Authority relating to any Tax or Tax Return of Clearwater covered by the Tax Services.

(d) List of Tax Returns . As soon as practicable after the Closing Date, Potlatch shall provide to Clearwater an updated list of all Tax Returns to be filed by Potlatch on behalf of Clearwater pursuant to Section 2.1(a).

ARTICLE III

LIABILITY FOR TAXES

Section 3.1 Potlatch Entities’ Liability for Section 2.1 Taxes . The Potlatch Entities shall be liable for all Taxes due with respect to all Tax Returns described in Section 2.1, and shall be liable for any Tax deficiency assessed with respect to such Tax Returns. The Potlatch Entities shall be entitled to receive and retain all refunds of Taxes previously paid by any Potlatch Entities with respect to such Taxes.

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Section 3.2 Clearwater’s Liability for Section 2.2 Taxes . Clearwater shall be liable for all Taxes due with respect to Tax Returns described in Section 2.2, and shall be liable for any Tax deficiency assessed with respect to such Tax Returns. Clearwater shall be entitled to receive and retain all refunds of Taxes previously paid by Clearwater with respect to such Taxes.

Section 3.3 Subsequent Adjustments . If, as a result of any payment by a Potlatch Entity of a Tax in connection with an audit, adjustment, or amended Tax Return described in Section 2.1, Clearwater receives a reciprocal (i.e., arising directly from such adjustment) Tax Benefit, Clearwater shall pay the amount of such Tax Benefit to RetainCo. If, as a result of any payment by Clearwater of a Tax in connection with an audit, adjustment, or amended Tax Return described in Section 2.2, the Potlatch Entities receive a reciprocal net Tax Benefit on an aggregate basis, the Potlatch Entities shall pay the amount of such Tax Benefit to Clearwater.

ARTICLE IV

SPIN-OFF TAXES AND ALLOCATION

Section 4.1 Spin-off Taxes .

(a) Potlatch Entities’ Liability for Spin-off Taxes . Notwithstanding Article III, the Potlatch Entities shall be liable for one hundred percent (100%) of any Spin-off Taxes that are attributable to, or result from, one or more of the following:

(i) any action or omission by any Potlatch Entity that is materially inconsistent with any material or information, or that constitutes a material breach of any material covenant or material representation, pertaining to the Potlatch Entities in the Ruling Documents, Supplemental Ruling Documents, Initial Ruling, or Supplemental Ruling, or the Potlatch Representation Letter, if any;

(ii) any action or omission by any Potlatch Entity after the Closing Date, including, without limitation, a cessation, transfer to affiliates, or disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by any Potlatch Entity following the Spin-offs;

(iii) any acquisition of any stock or assets of any Potlatch Entity by one or more other Persons occurring prior to or following the Spin-offs; or

(iv) any issuance of stock by any Potlatch Entity, or change in ownership of stock in any Potlatch Entity, that causes section 355(d) or section 355(e) of the Code to apply to the Spin-offs.

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(b) Clearwater’s Liability for Spin-off Taxes . Notwithstanding Article III, Clearwater shall be liable for one hundred percent (100%) of any Spin-off Taxes that are attributable to, or result from, one or more of the following:

(i) any action or omission by Clearwater that is materially inconsistent with any material or information, or that constitutes a material breach of any material covenant or material representation, pertaining to Clearwater in the Ruling Documents, Supplemental Ruling Document