Exhibit 10.45
 
PROMISSORY NOTE
 
 

 
Loan No. 194231
$11,000,000
September 1, 2010

 
 

 
FOR VALUE RECEIVED, the undersigned, ORM TIMBER OPERATING COMPANY II, LLC, a
Delaware limited liability company with an  address at 19245 Tenth Avenue NE,
Poulsbo, Washington 98370 (hereinafter referred to as “Maker”), promises to pay
to the order of METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation,
together with any subsequent holder of this Note (“Holder”), at the location and
in the manner provided in Section 1.3 of the Loan Agreement between Maker and
the Lender (as defined therein) (as amended, restated or supplemented from time
to time, the “Loan Agreement”), or at such other location and manner as Holder
may designate in writing from time to time, the principal sum of ELEVEN MILLION
AND NO/100 DOLLARS (US$11,000,000.00) in lawful money of the United States of
America (the “Loan”) together with interest thereon at the rates and times
specified below.  Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned thereto in the Loan Agreement.
 
1.  INTEREST RATE

 
1.1      INTEREST.      Maker promises to pay interest on the unpaid principal
balance from the date of funding by Holder until payment in full at the rate of
four and 85/100 percent (4.85%) per annum (the “Loan Rate”).  Interest at the
Loan Rate shall be calculated on the basis of a three hundred sixty day (360)
calendar year containing twelve (12) months of thirty days (30) each; provided
that for partial payment periods, interest shall be calculated on the basis of
the actual number of days elapsed over a three hundred sixty-five (365) day
calendar year.  The date of funding hereunder shall be considered the date that
the Loan funds are wired or delivered by Holder to Maker or if the Loan is being
closed through an escrow, to the escrow agent responsible for closing the Loan,
regardless of the date that the escrow agent releases such funds to Maker.
 
1.2      DEFAULT INTEREST.      Upon the occurrence of (i) an Event of Default
and/or (ii) maturity of this Note (whether maturity occurs by demand,
acceleration, lapse of time or otherwise), at the option of Holder, the unpaid
principal balance of the Loan and accrued but unpaid interest due on this Note
and all other sums owed by Maker to Holder shall bear interest until paid at a
default rate of interest of four percent (4.00%) per annum above the Loan Rate
but not in excess of the maximum interest rate permitted by law (the “Default
Rate”).  Any interest due at the Default Rate shall be added to the amount due
hereunder, and shall be deemed to be secured by the Deeds of Trust.  The fact
that any such interest shall become due hereunder shall not be construed as an
agreement or privilege to extend the date of the payment of any amount due
hereunder, nor as a waiver of any other right or remedy available to Holder by
reason of the occurrence of any Event of Default, nor to prevent Holder from
collecting the late fee rate set forth in Section 2.3 below.
 
 
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2.    PAYMENTS; MATURITY DATE
 
2.1      PAYMENTS.      Maker promises to pay the principal and interest under
this Note to Holder as follows:
 
2.1.1      Accrued interest only at the Loan Rate shall be due and payable
quarterly, commencing on October 1, 2010 and continuing on the first day of each
succeeding January, April, July and October thereafter (each such day, a
“Payment Date”) until the Maturity Date.
 
2.1.2      The outstanding principal balance and all accrued and unpaid interest
thereon and all other sums and fees due under this Note, the Loan Agreement and
the other Loan Documents shall be due and payable on September 1, 2020 (the
“Maturity Date”).
 
2.2      PAYMENT ON NON-BUSINESS DAYS.      If a payment of principal or
interest on this Note is due on a day other than a Business Day, such payment
shall be due on the next succeeding Business Day.  A “Business Day” shall mean
any day that is not a Saturday, Sunday or holiday and on which the New York, New
York office of Holder and the New York Stock Exchange are open for business.
 
2.3      LATE FEE.      In the event Maker fails to make any required payment by
the end of the fourth (4th) calendar day following the due date of any such
payment (the “Grace Period”), Holder shall be entitled to collect, and Maker
agrees to pay, in addition to the amount of the scheduled payment, a late charge
equal to five percent (5%) of the overdue amount, as liquidated damages for the
costs and risk incurred by Holder as a result of the delinquent payment (the
“Late Charge”). The Late Charge is intended to reimburse Holder for a portion of
the administrative cost and additional loan risk associated with said late
payment and shall be in addition to, and not in lieu of, any other remedy Holder
may have (e.g., to collect Default Rate interest) and is in addition to Holder’s
right to collect reasonable fees and charges of any agents or attorneys which
Holder employs in connection with any Event of Default, whether or not
litigation is commenced.  Such late charges if not previously paid shall become
part of the indebtedness evidenced hereby and shall, at the option of Holder, be
added to any succeeding monthly payment due hereunder.  Failure to pay such late
charges with such succeeding monthly payment shall constitute an Event of
Default and such late charges shall bear interest at the Default Rate from the
date due.  Notwithstanding the foregoing, in no event shall Maker be entitled to
the benefit of the Grace Period for payments due on the Maturity Date.
 
3.    APPLICATION OF PAYMENTS

 
Provided no Event of Default has occurred, each payment received with respect to
the Loan may be applied by Holder as follows:  first, to recovery, with interest
thereon at the Default Rate, of any expenses, costs, or fees, including
attorneys’ fees, funds paid or advanced by Holder or any similar charges
pursuant to any of the Loan Documents; second, to any scheduled escrow for tax,
insurance or similar items; third, to any late charge or interest calculated at
the Default Rate then due; fourth, to the payment of accrued interest at the
Loan Rate from time to time remaining unpaid; fifth, to any prepayment premium
due with respect to the current payment and any other prepayment premium that
may remain unpaid; and sixth, subject to the prepayment provisions of this Note,
to reduce the principal hereunder, whether or not due and payable.  If any
partial payment is accepted on this Note at a time when an amount in excess of
such partial payment is then due and payable, such partial payment shall be
applied to the oldest outstanding amount in arrears in the order of the
arrearage unless Holder elects to apply such payment in some other
order.  Notwithstanding any other provision of this Note or of any of the other
Loan Documents, from and after the occurrence of an Event of Default, all
payments and other amounts received by Holder may be applied by Holder in such
manner and to such indebtedness (whether to payment of advances made by Holder
pursuant to any provision of any of the Loan Documents, interest, principal,
Late Charges, interest at the Default Rate, prepayment premium, fees and
expenses or otherwise) and in such amounts and order of priority as Holder may
determine in the exercise of its sole and absolute discretion.
 
 
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4.    PREPAYMENTS
 
4.1      PREPAYMENT.      Subject to the provisions of this Section 4, upon not
less than thirty (30) days prior written notice to Holder, which notice must
identify the amount being prepaid and the date of prepayment (a “Prepayment
Notice”), Maker shall have the right to prepay this Note in full or in part,
subject to the conditions provided below, on any Payment Date by paying, in
addition to the amount of the principal prepayment, all accrued and unpaid
interest hereunder and all additional sums and charges due under this Note
and/or the other Loan Documents, together with a prepayment premium equal to the
greater of:
 
(a)              an amount determined by calculating one percent (1%) of the
outstanding principal balance;
 
OR
 
(b)              an amount determined by:
 
(i) calculating the sum of the present values of all unpaid principal and
interest payments required under the Loan Documents through and including the
scheduled Maturity Date and including the present value of the outstanding
principal balance as of such date (prior to the application of the principal
being prepaid), by discounting such payments from their scheduled payment dates
back to the date prepayment will be made utilizing a discount rate equal to the
Converted Treasury Yield (as defined below); and
 
(ii) subtracting from such sum the outstanding principal balance (prior to
application of the principal being prepaid) as of the date prepayment will be
made; and
 
 
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(iii) multiplying such remainder by the quotient of (A) the principal being
prepaid, divided by (B) the outstanding principal balance as of the date of
prepayment (prior to application of the principal being prepaid).
 
The “Converted Treasury Yield” means 50 basis points plus the yield available,
or if there is more than one yield available, the average yields of United
States Treasury non-callable bonds and notes having a maturity date closest to
(before, on, or after) the scheduled Maturity Date as reported in The Wall
Street Journal or similar publication on the fifth (5th) Business Day preceding
the date prepayment will be made (as calculated by Holder in the exercise of its
reasonable judgment), converted to a quarterly equivalent yield.  As used
herein, the terms “Converted Treasury Yield” and quarterly equivalent yield are
annualized rates which reflect the frequency of the interest payments made
during a calendar year.
 
Notwithstanding the foregoing, no prepayment premium shall be payable if Maker
voluntarily prepays the Loan in full or in part, within the fifteen (15) day
period immediately preceding  the scheduled Maturity Date, and on the date such
prepayment is made Holder has not exercised and is not entitled to exercise its
right to accelerate the scheduled Maturity Date.
 
4.2      PREPAYMENT RIGHTS.      Maker acknowledges that it possesses no right
to prepay the Loan, except as expressly provided herein.  Maker further
acknowledges and agrees that, except as expressly provided herein, if the Loan
is prepaid prior to the scheduled Maturity Date, for any reason, including, but
not limited to, acceleration of the Maturity Date by reason of an Event of
Default, any subsequent tender of payment of the Loan made by Maker or by anyone
on behalf of Maker or otherwise, including any tender of payment at any time
prior to or at foreclosure sale or proceedings or during any redemption period
following foreclosure, or during any federal or state bankruptcy or insolvency
proceedings, shall constitute an evasion of the restrictions on prepayment set
forth herein, and shall be deemed a voluntary prepayment prior to the scheduled
Maturity Date requiring payment of the prepayment premium provided for, if any,
and Holder shall not be required to accept such prepayment if it does not
include payment of the prepayment premium provided for, if any.  Further,
Holder’s acceptance of such prepayment without the requisite prepayment premium
shall not constitute or be deemed to constitute a waiver by Holder of its right
to seek payment of the required prepayment premium in accordance with the terms
hereof or any rights and remedies Holder may have under this Note, the other
Loan Documents, at law or in equity on account of Maker’s failure to timely pay
such prepayment premium as and when required hereunder.  To the extent permitted
by law, Holder may bid at any foreclosure sale, as part of the indebtedness
evidenced by the Loan Documents, the amount of the prepayment premium, if any,
which is payable hereunder calculated as if prepayment of the Loan occurs on the
date of such foreclosure sale.  To the extent the amount of the indebtedness
evidenced by this Note must be determined as of a date certain pursuant to a
judicial foreclosure, the Loan will be deemed prepaid as of the date judgment
enters and the prepayment premium due and payable hereunder (if any) will be
calculated as if prepayment of the Loan occurred on the date of said judgment.
 
4.3      NEGOTIATION OF PREPAYMENT PREMIUM.      Maker and Holder have
negotiated the Loan upon the understanding that if the Loan is paid or prepaid
prior to the scheduled Maturity Date, for any reason, except as expressly
provided herein, Holder shall receive the prepayment premium provided for as
partial compensation for: (i) the cost of reinvesting the prepayment proceeds
and/or the loss of the contracted rate of return on the Loan; and (ii) the
privilege of early payment of the Loan, which Maker has expressly bargained for
and which privilege Holder would not have granted to Maker without a prepayment
premium.  Maker agrees that the prepayment premium provided for herein is
reasonable.  Maker agrees that Holder shall not be obligated, as a condition
subsequent to its receipt of the prepayment premium provided for, to actually
reinvest all or any part of the amount prepaid in any United States Treasury
instruments or obligations or otherwise.
 
 
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4.4      APPLICATION OF PREPAYMENTS.      Any partial prepayments of the
principal of this Note shall be applied to installments of principal coming due
hereunder in the inverse order of maturity, and shall not reduce the scheduled
installments of principal payable hereunder, if any.  If the amounts necessary
to prepay this Note in accordance with the terms and provisions hereof are
received by Holder after 2:00 p.m. (Eastern Time), such prepayment shall be
deemed to have been made on the next occurring Business Day and Holder shall be
entitled to receive interest on the outstanding principal balance of the Loan,
calculated at the Loan Rate or the Default Rate, as applicable, and a
re-calculated prepayment premium to the effective date of such prepayment.
 
4.5      PREPAYMENT IN CONNECTION WITH CASUALTY, CONDEMNATION OR EXCESS
INTEREST.      Notwithstanding anything to the contrary set forth in this Note
or the other Loan Documents, Holder agrees that provided no Event of Default has
occurred, no prepayment premium shall be due and payable in connection with the
reduction of the outstanding principal balance of the Loan pursuant to (i) the
application of insurance or condemnation proceeds received by Holder pursuant to
the Deed of Trust, or (ii) the application of Excess Interest (as defined in the
this Note).
 
4.6      PREPAYMENT PERMITTED WITHOUT PREMIUM.      Subject to the provisions of
this Section 4, but notwithstanding Section 4.1, Maker may prepay principal in
an amount of not more than ten percent (10%) of the original principal amount of
the Loan during any calendar year or portion thereof without prepayment premium,
provided that no Event of Default exists.
 
4.7      NOTICE OF PREPAYMENTS.      Any prepayment otherwise permitted under
Sections 4.1, 4.5 and 4.6, shall not be permitted unless Holder shall have
received written notice from Maker of the amount of such prepayment and the date
such prepayment will be paid at least thirty (30) days prior to such date of
prepayment.
 
4.8      PREPAYMENT NOT PERMITTED.      Except as hereinabove set forth, no full
or partial prepayments of principal shall be allowed.
 
 
MAKER’S INITIALS _____
INITIALS ______
INITIALS ______

 
 
 
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5.    ISSUANCE PURSUANT TO LOAN AGREEMENT
 

This Note has been issued by the Maker pursuant to the terms of the Loan
Agreement, and Maker and Holder are entitled to the benefits and subject to the
obligations thereof.  This Note is secured by, among other things, the Deeds of
Trust.  Reference is hereby made to the Loan Agreement for a full statement of
the rights of the holder of, and the nature and extent of the security for, this
Note.  All covenants, conditions and agreements contained in the Loan Agreement,
the Deeds of Trust and any other document securing this Note, are hereby made a
part of this Note.  In the event of any conflict between the terms of the Note
and the terms of the Loan Agreement, the Deeds of Trust and other security
instruments, the terms of this Note shall govern.  Maker acknowledges and agrees
that the Loan and the other obligations evidenced and secured by the Loan
Documents are fully recourse and that, subject to the provisions of this Note,
the Loan Agreement, the Loan Documents and the Deeds of Trust and applicable
law, Holder’s remedies upon default by Maker are not limited to foreclosure of
the Deeds of Trust.
 
6.    EVENTS OF DEFAULT AND REMEDIES
 
The entire unpaid principal balance and accrued interest under this Note, and
any and all other notes of Maker to Holder or other sums owed from Maker to
Holder, shall, as set forth in the Loan Agreement, either automatically or as
declared at the option of Holder, be immediately due and payable upon the
occurrence of an Event of Default with respect to any automatic acceleration and
upon the occurrence and during the continuance of one or more Events of Default,
with respect to any optional acceleration.  Upon the occurrence and during the
continuance of one or more Events of Default, Holder shall also have the right
to (i) demand additional security in lieu of asserting any other remedy; (ii)
use any remedy Holder has under any federal, state, or local law of the United
States; and (iii) use any remedy given to Holder in the Loan Agreement or in any
of the Loan Documents.
 
7.    ACTIONS BY HOLDER
 

Any forbearance by Holder in exercising any right or remedy under this Note, the
Deeds of Trust, the Loan Agreement, or any other Loan Document or otherwise
afforded by applicable law shall not be a waiver of or preclude the exercise of
that or any other right or remedy.  The acceptance by Holder of any payment
after the due date of such payment or in an amount which is less than the
required payment shall not be a waiver of Holder’s right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment.  Enforcement by Holder of any
security for Maker’s obligations under this Note shall not constitute any
election by Holder of remedies so as to preclude the exercise of any other right
or remedy available to Holder.
 
8.    ATTORNEYS’ FEES
 

If Holder shall employ the services of legal counsel in connection with (i) any
request made by Maker to Holder for a modification, amendment, waiver, or
consent in connection with the Loan Documents, (ii) defending or protecting
Holder’s interests in any Loan Document or any property securing the Loan from
and against any claim or assertion made by any third party, (iii) rendering
advice to Holder, enforcing Holder’s legal rights, or performing other legal
services for Holder upon the occurrence of an Event of Default, including,
without limitation, any services relating to any so-called “work-out” or other
negotiations following or anticipating the occurrence of any Event of Default,
(iv) representing the interests of Holder in any lawsuit arising out of or in
connection with the Loan Documents or Holder’s position as secured party or
beneficiary under any Loan Document, or (v) any other judicial or nonjudicial
action, suit or proceeding instituted by Holder or any other person connected
with or related to or with reference to the Loan or to reclaim, seek relief from
a judicial or statutory stay, sequester, protect, preserve or enforce Holder’s
interest in this Note or the Deeds of Trusts or any other Loan Document
(including proceedings under state or federal bankruptcy or insolvency law, in
eminent domain, under probate proceedings, or in connection with any state or
federal tax lien), then in such event Maker promises to pay or reimburse Holder,
within thirty (30) days following demand, for all reasonable attorneys’ fees and
reasonable costs and expenses and any other professional’s fees incurred by
Holder and/or its attorney in connection with the above-mentioned events.
 
 
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9.    MAXIMUM INTEREST RATE/CHARGES

 
It being the intention of Holder and Maker to comply with the laws of the State
of Washington with regard to the rate of interest charged hereunder, it is
agreed that, notwithstanding any provision to the contrary in this Note or any
of the other Loan Documents, no such provision shall require the payment or
permit the collection of any amount (“Excess Interest”) in excess of the maximum
amount of interest permitted by law to be charged for the use or detention, or
the forbearance in the collection, of all or any portion of the indebtedness
evidenced by this Note.  If any Excess Interest is provided for, or is
adjudicated to be provided for, in this Note or any of the other Loan Documents,
then in such event:
 
(a)           The provisions of this paragraph shall govern and control;
 
(b)           Maker shall not be obligated to pay any Excess Interest;
 
(c)           Any Excess Interest that Holder may have received hereunder shall,
at the option of Holder, be (i) applied as a credit against the then-outstanding
principal balance due under this Note, accrued and unpaid interest thereon not
to exceed the maximum amount permitted by law, or both, (ii) refunded to the
payor thereof, or (iii) any combination of the foregoing;
 
(d)           The applicable interest rate or rates shall be automatically
subject to reduction to the maximum lawful rate allowed to be contracted for in
writing under the applicable usury laws of the aforesaid State, and this Note,
the Loan Agreement and the other Loan Documents shall be deemed to have been,
and shall be, reformed and modified to reflect such reduction in such interest
rate or rates; and
 
(e)           Maker shall not have any action or remedy against Holder for any
damages whatsoever or any defense to enforcement of the Note, Loan Agreement or
any of the other Loan Documents arising out of the payment or collection of the
Excess Interest.
 
 
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10.   GOVERNING LAW AND OTHER AGREEMENTS
 

 
Maker agrees that:  (i) this Note and the rights and obligations of the parties
hereunder shall be governed by the laws of the State of Washington without
reference to the conflict of law principles of such state; (ii) the obligation
evidenced by this Note is an exempted transaction under the Truth In Lending
Act, 15 U.S.C. Section 1601, et seq.; and (iii) said obligation constitutes a
business loan and is not intended by Maker for use for personal, family, or
household purposes.
 
11.   WAIVERS

 
Maker and any and all others who may become liable for all or part of the
obligations of Maker under this Note (collectively the “Obligors”) agree to be
jointly and severally bound hereby and jointly and severally, to the extent
permitted by law:  (i) waive and renounce any and all redemption and exemption
rights and the benefit of all valuation and appraisement privileges against the
indebtedness evidenced by this Note or by any extension or renewal hereof; (ii)
waive presentment and demand for payment, notices of nonpayment and of dishonor,
protest of dishonor, and notice of protest; (iii)waive all notices in connection
with the delivery and acceptance hereof and all other notices in connection with
the performance, default, or enforcement of the payment hereof or hereunder,
except as otherwise specifically provided in the Loan Documents; (iv) waive any
and all lack of diligence and delays in the enforcement of the payment hereof;
(v) agree that the liability of each Obligor shall be unconditional and without
regard to the liability of any other person or entity for the payment hereof,
and shall not in any manner be affected by any indulgence or forbearance granted
or consented to by Holder to any Obligor or any such other person or entity;
(vi) consent to any and all extensions of time, renewals, waivers, or
modifications that may be granted by Holder with respect to the payment or other
provisions hereof, and to the release of any security at any time given for the
payment hereof, or any part thereof, with or without substitution, and to the
release of any person or entity liable for the payment hereof; and (vii) consent
to the addition of any and all other makers, endorsers, guarantors, and other
obligors for the payment hereof, and to the acceptance of any and all other
security for the payment hereof, and agree that the addition of any such
obligors or security shall not affect the liability of any of Obligors for the
payment hereof.
 
12.   ENTIRE AGREEMENT
 

This instrument, together with the other Loan Documents as defined above,
constitutes and sets forth the entire understanding and agreement between the
parties, and no party hereto has relied upon any representations, agreements or
understandings, verbal or written, not set forth herein, or in such other Loan
Documents, whether made by any party hereto or by any agent, employee or
representative of any party hereto.  Specifically, without limiting the
generality of the foregoing, the parties agree that Holder has made no agreement
to extend or renew this Note in any way, and no such agreement will be binding
upon Holder unless made in writing, subsequent to the date hereof, and executed
by a duly authorized representative of Holder.
 
 
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13.   HEADINGS AND INTERPRETATION
 

Headings are for convenience only and are not intended as a limitation on the
content of the paragraph following, nor as an aid to the construction
thereof.  The parties hereto intend and believe that each provision in this Note
comports with all applicable law.  However, if any provision in this Note is
found by a court of law to be in violation of any applicable law, and if such
court should declare such provision of this Note to be unlawful, void or
unenforceable as written, then it is the intent of Maker and Holder that there
shall be added in lieu thereof a provision as similar in terms to such provision
as is possible which is legal, valid and enforceable, provided, however, that if
any provision of this Note which is found to be in violation of any applicable
law concerns the imposition of interest hereunder, the rights, obligations and
interests of Maker and Holder with respect to the imposition of interest
hereunder shall be governed and controlled by the provisions of this Note.  TIME
IS OF THE ESSENCE OF THIS NOTE.  Use of the word “including” shall not be
construed as a limitation and the word “including” shall be deemed to mean
“including, but not limited to.”
 
14.   MISCELLANEOUS
 
14.1      CHANGES TO NOTE.      This Note may not be modified, amended, waived,
extended, changed, discharged, or terminated orally or by any act or failure to
act on the part of Maker or Holder, but only by an agreement in writing signed
by both Maker and Holder.  Holder may change any terms of payment of this Note,
including extensions of time and renewals, and release any security for, or any
party to, this Note, without notifying or releasing any accommodation maker,
endorser or guarantor from liability on this Note.
 
14.2      LOSS, THEFT OR DESTRUCTION OF NOTE.      In the event of the loss,
theft or destruction of this Note, upon Maker’s receipt of a reasonably
satisfactory indemnification agreement executed in favor of Maker by Holder or
in the event of the mutilation of this Note, upon the surrender of the mutilated
Note by Holder to Maker, Maker shall execute and deliver to Holder a new note in
form and content identical to this Note in lieu of the lost, stolen, destroyed
or mutilated Note.
 
14.3      MEANING OF PARTICULAR TERMS.      Wherever used, the singular member
shall include the plural, the plural the singular, and the words “Holder” and
“Maker” shall include their respective successors, assigns, heirs, executors and
administrators.  Upon any endorsement, assignment, or other transfer of this
Note by Holder or by operation of law, the term “Holder,” as used herein, shall
mean such endorsee, assignee, or other transferee or successor to Holder then
becoming the holder of this Note.  This Note shall inure to the benefit of
Holder and its successors and assigns and shall be binding upon the undersigned
Maker and its successors and assigns.  Maker agrees that Holder and any future
Holders or participants may grant or sell participation interests in this Note
to other Persons without notice to, or approval of Maker.
 
14.4      NOTICES.      All notices required to be given hereunder shall be
given in the manner specified in the Loan Agreement directed to the parties at
their respective address as provided therein.
 
 
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14.5      JOINT AND SEVERAL LIABILITY.      If Maker consists of more than one
person or party, the obligations and liabilities of each such person or party
shall be joint and several.
 
14.6      COUNTERPARTS.      This Note may be executed in several counterparts,
each of which when executed and delivered is an original, but all of which
together shall constitute one instrument.  In making proof of this Note, it
shall not be necessary to produce or account for more than one such counterpart
which is executed by the party against whom enforcement of such Note is sought.
 
14.7      PURPOSE OF NOTE.      MAKER ACKNOWLEDGES, REPRESENTS AND WARRANTS TO
HOLDER THAT THE LOAN EVIDENCED BY THIS NOTE IS FOR COMMERCIAL PURPOSES.  MAKER
FURTHER ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT IT IS ENGAGED EXCLUSIVELY IN
COMMERCIAL PURSUITS AND THAT THE PROCEEDS OF THIS NOTE ARE TO BE UTILIZED IN THE
BUSINESS ACTIVITIES OF MAKER AND WILL NOT BE UTILIZED FOR CONSUMER PURPOSES.
 
14.8      WAIVER OF TRIAL BY JURY.      MAKER WAIVES TRIAL BY JURY IN ANY
PROCEEDING RELATING TO THIS NOTE, THE DEEDS OF TRUST, OR THE OTHER DOCUMENTS OR
TRANSACTIONS EVIDENCED HEREBY OR THEREBY AND AGREES THAT NO SUCH ACTION WITH
RESPECT TO WHICH A JURY TRIAL HAS BEEN WAIVED SHALL BE SOUGHT TO BE CONSOLIDATED
WITH ANY OTHER ACTION WITH RESPECT TO WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.
 
14.9      NO ORAL AGREEMENTS.
 
THIS NOTE AND ALL THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT OF
THE BORROWER AND THE LENDER AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE LOAN AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE BORROWER AND
THE LENDER. THERE ARE NO ORAL AGREEMENTS BETWEEN THE BORROWER AND THE LENDER.
THE PROVISIONS OF THIS NOTE AND THE OTHER LOAN DOCUMENTS MAY BE AMENDED OR
REVISED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE BORROWER AND THE LENDER.
 
 
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ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
 
IN WITNESS WHEREOF, Maker has executed this Note as of the date first above
written.
 

 
ORM TIMBER OPERATING COMPANY II, LLC   a Delaware limited liability company    
      By:
Olympic Resource Management LLC, a
   
Washington limited liability company
    Its Manager                     By:         David L. Nunes       President &
Chief Executive Officer

 
 
[Signature Page to Promissory Note]