Exhibit 10.40
 
Pope Resources, a Delaware Limited Partnership
Customer / Note No. 56548-811

AMENDMENT NO. 1 TO REVOLVING OPERATING NOTE

THIS AMENDMENT NO. 1 TO REVOLVING OPERATING NOTE (this “Amendment”) is made and
entered into effective June 15, 2010, by and between NORTHWEST FARM CREDIT
SERVICES, PCA (“Lender”) and POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
(“Borrower”).

RECITALS

WHEREAS, Borrower and Lender entered into a Revolving Operating Note dated June
10, 2010 (herein, as at any time amended, extended, restated, renewed,
supplemented or modified, the “Note”) and certain related loan documents
referenced as Loan No. 56548-811, (herein, as at any time amended, extended,
restated, renewed, supplemented or modified, collectively the “Loan Documents”);

WHEREAS, Borrower and Lender have agreed that Borrower qualifies for incentive
pricing, which was not reflected in the Note; and

WHEREAS, Borrower and Lender desire to modify the Note for the purposes stated
herein.

NOW, THEREFORE, for good and valuable consideration, Borrower and Lender agree
as follows:

1.           Except as expressly modified or changed herein, all terms and
conditions of the Note and the other Loan Documents shall remain in full force
and effect and shall not be changed hereunder.

2.           The narrative following the pricing grid in the definition of
“Applicable Margin” contained in Section 1 of the Note is hereby amended, in its
entirety, to provide as follows:

The pricing level shall be determined and adjusted on the date ten (10) Business
Days after the date Borrower provides Lender the Compliance Certificate, as
required herein, for Borrower’s most recent Calculation Date (each, an
“Adjustment Date”); provided however, that the initial pricing level shall be II
and shall remain at such pricing level until the first Adjustment Date occurring
after the first Calculation Date following the Closing Date.  On such Adjustment
Date and on each Adjustment Date thereafter, the pricing level shall be
determined by the Consolidated Interest Coverage Ratio as of the most recent
Calculation Date.  If Borrower fails to timely provide Lender the Compliance
Certificate for such most recent Calculation Date, the pricing level commencing
the day after the due date thereof shall be the highest pricing level, which
shall remain in effect until subsequently adjusted ten (10) Business Days after
the delivery of the required Compliance Certificate.  Any adjustment in the
pricing level shall be applicable to all existing Loan Segments.  Provided,
however, in the Event of Default, Lender shall have the right at any time to
change to the highest pricing level and the applicable interest rate shall also
be subject to default interest, as provided in Section 7.03 hereof.  In
calculating the pricing level, Lender will use the Consolidated Interest
Coverage Ratio, notwithstanding any grace period provided for in the Loan
Documents.
 
 
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3.           This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.  This Amendment shall not constitute
a novation and shall in no way adversely affect or impair the lien priority of
the Loan Documents.  Each of the Loan Documents shall remain in effect and is
valid, binding and enforceable according to its terms, except as modified by
this Amendment.  Time is of the essence in the performance of the Loan
Documents.  This Amendment shall be binding upon and inure to the benefit of the
respective successors and assigns of Borrower and Lender.

In Witness Whereof, the parties hereto have duly executed this Amendment to be
effective as of the date first above written.

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.

LENDER:
NORTHWEST FARM CREDIT SERVICES, PCA
 
By:
     
Authorized Agent
 

 

BORROWER:
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
By: Pope MGP, Inc., a Delaware corporation, its Managing General Partner
 

 
By:
       
David L. Nunes, President and CEO
 

 
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