Exhibit 10.39
 
Date:  June 10, 2010
Pope Resources, A Delaware Limited Partnership
 
Customer/Note No. 56548-811

 
REVOLVING OPERATING NOTE
 
For Value Received, on the Loan Maturity Date, Borrower, as defined below, as
principal, promises to pay to Lender, as defined below, or order, at its office
in Spokane, Washington, or such other place as the holder of this Revolving
Operating Note (this “Note”) may designate in writing, the principal sum of
Twenty Million and no/100’s Dollars ($20,000,000.00) (the “Total Commitment
Amount”) or so much thereof as may be outstanding, plus interest thereon from
and after any Disbursement Date, at interest rates as provided for
hereafter.  For all intents and purposes, all Loan Segments are treated as one
obligation under this Note and the other Loan Documents.

1.           Definitions.  For purposes of this Note, the following definitions
apply.  Capitalized terms not otherwise defined herein shall have the meanings
given in the First Amended and Restated Master Loan Agreement, dated on or about
the same date herewith (as amended and modified, the “Loan Agreement”).

“Applicable Margin” means the per annum percentage set forth below, which
corresponds to the Borrower’s Pricing Level as of the most recent Calculation
Date.

 
Pricing
Level
 
Consolidated
Interest Coverage
Ratio
Applicable
Margin
for Base Rate
Applicable
Margin for Fixed
Rate Options
Unuse
Commitment
Fee
I
≥ 3.00:1.00
2.25%
2.25%
 
0.15%
 
II
≥ 2.00:1.00
2.75%
2.75%
 
0.25%
 
III
< 2.00:1.00
3.25%
3.25%
 
0.35%
 

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
III 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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“Base Rate” shall have the meaning given in Section 4.01 hereof.

“Base Rate Loan Segment” means the principal portion of the Loan plus accrued
interest, priced using the Base Rate.

“Beneficiary” means the party designated as the recipient of a Letter of Credit
issued by Lender under this Loan.

“Borrower” means Pope Resources, A Delaware Limited Partnership, a Delaware
limited partnership.

“Calculation Date” means the first three Fiscal Quarter-Ends and the Fiscal
Year-End of Borrower.

“Closing Date” means the date the Loan Documents are fully executed and the
conditions precedent to Loan closing have been met to Lender’s satisfaction or
waived by Lender in writing.

“Collateral” means all the property pledged to secure the Loan as described in
the Loan Documents, including but not limited to the real property consisting of
approximately 58,554 acres of fee-owned timberland, located in Washington,
together with all improvements located thereon, as more particularly described
in that certain Mortgage dated of or around the same date herewith.

“Commitment Period” means the Closing Date to the Loan Maturity Date.

“Consolidated Interest Coverage Ratio” means, as of any date of determination
for the prior four (4) Fiscal Quarters ending on such date, the ratio of (a)
Consolidated EBITDDA minus Consolidated Capital Expenditures to (b) Consolidated
Interest Expense. The payment of mark to market costs to John Hancock Insurance
Company (approximately $2,400,000) shall be excluded from the calculation
through the Fiscal Quarter ending March 31, 2011.

“Default Interest” shall have the meaning given in Section 7.03 hereof.

“Disbursement Date” means any Business Day when Loan principal is advanced under
this Note to or on the account of Borrower.

“Fixed Rate Loan Segment” means each principal portion of the Loan, plus
interest accrued thereon, with all the following attributes that distinguish
such Fixed Rate Loan Segment from other Fixed Rate Loan Segments: a different
Fixed Rate Maturity Date; and or a different date to which a given Fixed Rate
Option was assigned to the Fixed Rate Loan Segment, except as otherwise provided
herein.
 
 
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“Fixed Rate Maturity Date” shall have the meaning given in Section 4.02 hereof;
provided however, if a Fixed Rate Maturity Date falls on a date that is not a
Business Day, then the Fixed Rate Maturity Date shall be deemed to be the
preceding Business Day, unless such Business Day falls in another calendar month
in which case the Fixed Rate Maturity Date shall be deemed to be the succeeding
Business Day.

“Fixed Rate Option” means any of the Fixed Rate Options defined in Section 4.02
hereof.

“Lender” means Northwest Farm Credit Services, PCA.

“Letter of Credit” means a letter of credit issued by Lender to a Beneficiary at
the request of Borrower.

“LIBOR” means the rate per annum at approximately 11:00 a.m. (London time) on
the date that is two (2) Business Days prior to the beginning of the relevant
interest period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in Dollars (the “Index”), as set forth by the
Bloomberg Information Service or any successor thereto, which has been
designated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rates (the “LIBOR Index Source”) for a
period equal to such interest period.

“Loan” or “Loan No. 56548-811 means all principal amounts advanced by Lender to
Borrower or on the account of Borrower or otherwise under this Note and the
other Loan Documents, and all fees or charges incurred as provided for in this
Note and the other Loan Documents, plus all interest accrued thereon.

“Loan Documents” means this Note and all other documents executed in connection
with the Loan, including without limitation the Loan Agreement, the Mortgage
dated on or about the same date herewith and all renewals, extensions,
amendments, modifications, substitutions and replacements thereof.

“Loan Maturity Date” means August 1, 2013.

“Loan Purpose” means (a) to provide financing for Borrower’s operating and
capital needs (including distributions to Borrower’s unitholders in the ordinary
course of business and repurchases of partnership units from Borrower’s
unitholders as may be approved by Borrower’s Board of Directors), and (b) to pay
for Stock, Loan fees and all of Lender’s reasonable transaction costs.

“Loan Segment” means the Base Rate Loan Segment, an LOC Loan Segment or a Fixed
Rate Loan Segment.

“LOC Loan Segment” means the total principal commitment of all Letters of Credit
issued by Lender under this Note.

“Notice” shall have the meaning given in Section 2.04 hereof.
 
 
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“Pricing Date” means the date a given Loan Segment begins to accrue interest
under a given Rate Option or a day when there is a change in the Base Rate.

“Rate Option” means the Base Rate or one of the Fixed Rate Options.

“Unused Commitment Fee” shall have the meaning given in Section 2.01 hereof.

2.           Loan Fee, Expenses, Stock and Notice.

2.01           Loan Fee.  Borrower shall pay Lender the Loan fees, set forth in
a separate Loan fee letter, on the Closing Date.  In addition, Borrower shall
pay Lender, quarterly in arrears, an Unused Commitment Fee to be calculated by
multiplying the average daily unused balance of the Loan by the annual
percentage indicated in the pricing grid in the definition of Applicable Margin
and dividing the resulting product by four.  The Unused Commitment Fee shall be
due on the first day following each Fiscal Quarter-End and shall be payable by
the tenth day following each Fiscal Quarter-End.

2.02           Costs and Expenses.  Borrower shall pay Lender, on the Closing
Date and subsequently on Lender’s demand, all costs and expenses related to
closing, whether or not the Loan is disbursed.

2.03           Stock.  Borrower shall comply with the capitalization
requirements of ACA, as provided in the Loan Agreement.

2.04           Notice.

a.           Prepayment of Principal.  Borrower shall provide Lender with Notice
of the amount of any prepayment of a Fixed Rate Loan Segment no later than 10:00
a.m. Spokane time three Business Days prior to the Business Day the prepayment
will be made.

b.           Pricing.  Borrower shall provide Lender irrevocable Notice of
pricing of a Fixed Rate Loan Segment by 10:00 a.m. Spokane time three days prior
to the Pricing Date.

c.           Form of Notice.  Borrower may provide Lender any Notice required
under this Note by use of a Notice in form substantially the same as set forth
in Exhibit A hereto or other documentation as may be prescribed by
Lender.  Alternatively, Borrower may telephone Lender at the numbers designated
on Exhibit A or as may be provided by Lender from time to time.  If Notice is by
telephone, Lender will confirm to Borrower the elected prepayment or pricing in
writing.  All such Notices are deemed irrevocable when given and are subject to
Breakage Fees.

3.           Advances and Pricing Elections.

3.01           Advances.  So long as there is no Event of Default or Incipient
Default under this Note or the other Loan Documents during the Commitment
Period, Lender will make advances to Borrower on a Disbursement Date for a
purpose consistent and in compliance with the Loan Documents in amounts
requested by Borrower, provided that, after giving effect to any requested
advance, the aggregate principal amount of such advances made hereunder will not
exceed the Total Commitment Amount.  The advances constitute a revolving line of
credit.  During the Commitment Period, Borrower may borrow, repay and reborrow
Loan principal on the terms and conditions contained herein.
 
 
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3.02           Letters of Credit.  Lender will made Letters of Credit available
to Borrower as one means of advancing Loan proceeds.  Borrower may only request
Letters of Credit prior to the Loan Maturity Date within the Total Commitment
Amount for an approved Loan purpose and so long as there is no Event of Default
or Incipient Default under the Loan Documents.  Letters of Credit are subject to
the terms and conditions of this Note and the other Loan Documents, including,
but not limited to, the following terms and conditions:

a.           Purpose.  Lender and Borrower agree that the sole purpose for the
advance of any Loan proceeds under a Letter of Credit shall be by Lender to pay
directly to the Beneficiary designated therein, upon its written demand,
pursuant to the terms of that certain Letter of Credit, issued by Lender for the
account of Borrower.

b.           Termination.  Lender's duty to advance loan proceeds to the
Beneficiary shall terminate on July 20, 2013, or the earlier termination of the
Letter of Credit.  The aggregate amount that Lender shall be required to advance
shall be limited to the commitment amount of such Letter of Credit.

c.           Payment.  In the event any amount is advanced under a Letter of
Credit, Borrower shall repay interest and principal associated with such advance
pursuant to the terms of this Note.

d.           Letter of Credit Fee.  Borrower shall pay Lender a fee of one and
one half percent (1.5%) of the Letter of Credit commitment amount, at inception
and annually during the term of such Letter of Credit, for each Letter of Credit
issued.

e.           Indemnification.  Borrower shall defend, indemnify and hold Lender
harmless for any and all claims, damages, liabilities, costs or expenses
whatsoever by Borrower, or any other party (“liabilities”) which Lender may
incur or suffer by reason of or in conjunction with Lender's performance under a
Letter of Credit except only if and to the extent that any such liability shall
be caused by the willful misconduct or gross negligence of Lender in performing
its obligations under such Letter of Credit.  Provided however, Lender may rely
on the documents presented to Lender by the Beneficiary in accordance with the
Letter of Credit as to any and all matters set forth therein, whether or not any
statement or any document presented pursuant thereto proves to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
proves to be untrue or inaccurate in any respect.  Borrower shall reimburse
Lender for any legal or other expenses incurred in connection with investigating
or defending against any of the foregoing except if the same is due to Lender's
gross negligence or willful misconduct.  The indemnities contained herein shall
survive the expiration of any Letter of Credit.
 
 
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f.           LOC Loan Segment.  Any LOC Loan Segment shall be treated as fully
disbursed for purposes of determining the amount that Borrower may borrow under
the Loan.

3.03           Pricing Elections.  Upon irrevocable Notice to Lender, as to
principal (i) in the amount of an advance, (ii)  in a Base Rate Loan Segment, or
(iii) in a Fixed Rate Loan Segment on a Fixed Rate Maturity Date, Borrower may
elect to designate all or any part of an advance or the unpaid principal balance
of such Loan Segment on such Pricing Date to bear interest at any Rate Option;
provided however, that (1) there is no Event of Default or Incipient Default;
(2) Borrower shall price principal in Fixed Rate Loan Segments in initial
minimum principal amounts of $1,000,000.00; (3) no Fixed Rate Option may be
selected which would have for its Fixed Rate Maturity Date a date later than the
Loan Maturity Date; and (4) there are no more than five Fixed Rate Loan Segments
at any one time.  If Borrower does not provide Lender irrevocable Notice of
election of a Rate Option three Business Days prior to a Fixed Rate Maturity
Date for a Fixed Rate Loan Segment, the unpaid principal balance of such Loan
Segment shall be priced at the Base Rate effective on such Pricing Date.

3.04           Single Base Rate Loan Segment.  If on a Pricing Date, a Loan
Segment is priced under the Base Rate resulting in more than one Loan Segment
priced under the Base Rate, all Loan principal priced under the Base Rate will
be treated as a single Base Rate Loan Segment by combining the principal
balances from all such Loan Segments priced under the Base Rate on such Pricing
Date.

4.           Pricing Options.

4.01           Base Rate: LIBOR Variable Base.  The Base Rate is the LIBOR
Variable Base.  The “LIBOR Variable Base” for any day during a given month means
the one-month LIBOR rate, as made available by the LIBOR Index Source, rounded
up to the nearest .05 percent, plus the Applicable Margin.  The LIBOR Variable
Base shall be effective on the first day of the month and remain constant for
such month.  Provided however, if a LIBOR rate cannot be ascertained using this
method for a given month, then the Base Rate shall be determined for any day of
such month by use of the NW Variable Base.  The “NW Variable Base” on any given
date, is the per annum interest rate equal to the Index for the NW Variable Base
on such date plus the Applicable Margin.  On any given date, the “Index” for the
NW Variable Base is a per annum interest rate, as made available and determined
by Northwest Farm Credit Services, PCA (the “NW Variable Base Index Source”) in
its sole discretion, on the last Business Day of the prior month.  The
Applicable Margin may be adjusted to provide a new interest rate under the NW
Variable Base that is comparable to the LIBOR Variable Base.

4.02           1-, 3-, or 6- Month LIBOR Fixed Rate Options.  A Fixed Rate Loan
Segment may be priced at a fixed rate equal to the 1-, 3-, or 6- Month LIBOR, as
made available by the LIBOR Index Source plus the Applicable Margin.  With the
LIBOR Fixed Rate Options: (i) rates may be fixed for an Interest Period, as
defined herein of 1-, 3-, or 6- months; and (ii) rates take effect on the
Pricing Date.  For purposes hereof, the “Interest Period” shall mean a period
commencing on the Pricing Date and ending on the numerically corresponding day
of the month that is 1, 3, or 6 months thereafter (the “Fixed Rate Maturity
Date”).
 
 
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4.03           Additional Pricing Options.  In the event Borrower should desire
to price a Loan Segment using an Index, Pricing Date and repricing margin other
than as provided for herein, Borrower may request Lender to quote a rate and
lock-in fee for an identified principal amount and desired pricing
option.  Lender will provide Borrower such a quote, if available under Lender's
then existing policies and procedures, and shall provide Borrower the option to
elect such a rate upon payment of the lock-in fee, which rate shall be effective
on the date determined upon terms and conditions and within timeframes as Lender
may prescribe at the time of the quote.

4.04           Changes in Circumstances.  In the event that, on any date on
which an interest rate for pricing the Loan or a Loan Segment is to be
determined, Lender determines that the applicable interest rate can not be
ascertained or does not adequately reflect the cost to Lender of making or
maintaining its Loan or Loan Segment(s) for which the interest rate is to be
determined, Lender shall promptly give notice of such facts to Borrower.  Within
ten days thereof, Borrower shall make an appointment to meet with Lender to
determine a new Index and or Applicable Margin for pricing of the Loan or
applicable Loan Segment(s).

5.           Payment.

5.01           Payment of Loan Segments.  Borrower shall make quarterly interest
only payments, which payments shall consist of interest that accrued during such
period on the unpaid principal balance of each Loan Segment.  Interest only
payments shall be paid on or before the tenth day of the following month.

5.02           Payment in Full on Loan Maturity Date.  The unpaid principal
balance, unpaid interest thereon, and all other amounts due under this Note and
the other Loan Documents shall be paid on the Loan Maturity Date.

5.03           Application of Payments.  So long as there is no Event of Default
or Incipient Default, payments received prior to the Loan Maturity Date, in
amounts other than as billed, shall be applied to Loan Segments, as of the date
of receipt, as follows:

a.           First to any fees and reimbursable expenses due under this Note or
any other Loan Documents;

b.           Second to billed and unpaid interest by Loan Segment, beginning
with the Loan Segment bearing the highest interest rate and then to Loan
Segments in descending order of their interest rates.  Provided however, if two
or more Loan Segments are subject to the same interest rate as of the date of
receipt of payment, the payment shall be applied first to the Base Rate Loan
Segment, then to the Fixed Rate Loan Segment with the earliest Fixed Rate
Maturity Date and then to the Fixed Rate Loan Segments in increasing order of
their Fixed Rate Maturity Dates;

c.           Third to the principal balance in the Base Rate Loan Segment; and

d.           Thereafter to Borrower's FPF Account, except where Borrower
provides Lender Notice that such payment amount should be applied against one of
the Fixed Rate Loan Segments subject to the Prepayment Fee as provided for
herein.  Provided however, on the Loan Maturity Date, payments shall be applied
as provided in subparagraphs a.-c. above, and then to the principal balance in
any Fixed Rate Loan Segments.
 
 
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5.04           Payment from FPF Account.  Upon Borrower’s request, Lender will
apply funds, if any, held in the FPF Account with respect to the Loan to the
unpaid balance, if any, of the Loan.  Each payment from the FPF Account will be
applied to Loan Segments as provided for in subparagraphs a.-c. of Section 5.03
above.  The FPF Account is governed by the terms of the Loan Documents.  In the
Event of Default or Incipient Default, Lender shall have the right to apply
payments made by or for the account of Borrower, including without limitation,
from the FPF Account, to any Loan Segment as Lender may determine, in its sole
discretion, at any time.

5.05           Timber Cutting Payments.  Lender will calculate a Timber Cutting
Payment annually, at the Fiscal Year-End.  The Timber Cutting Payment will be
due and payable 15 days after it is billed.  After the pro-rata allocation of
the Timber Cutting Payment between Loans is made pursuant to the Loan Agreement
and so long as there is no Event of Default or Incipient Default, Borrower may
elect the Loan Segment(s) against which the Timber Cutting Payment will be
applied.  A Timber Cutting Payment shall not excuse Borrower from making any
other required payments.  Timber Cutting Payments will be subject to the
Prepayment Fee provisions hereof.

6.           Prepayment and Breakage Fees.  The Loan is subject to the
Prepayment and Breakage Fees indicated in the Loan Agreement.

7.           Default.

7.01           Events of Default.  Time is of the essence in the performance of
this Note.  The occurrence of any one or more of the following events shall
constitute an “Event of Default” under this Note:

a.           Borrower fails to make any payment of principal, interest or other
costs, fees or expenses when due and payable or to perform any obligation or
covenant as and when required under the Loan Documents for the Loan or any other
note, loan or contract Borrower, or any of them, may have with Lender or an
affiliate of Lender.

b.           Any financial statement, representation, warranty or certificate
made or furnished by Borrower to Lender in connection with the Loan, or as an
inducement to Lender to enter into the Loan is materially false, incorrect, or
incomplete when made.

c.           Borrower shall fail generally to pay its debts as such debts become
due, or becomes insolvent or becomes the subject of an insolvency proceeding.

d.           This Note or any other Loan Document ceases to be valid and binding
on Borrower or is declared null and void, or the validity or enforceability
thereof is contested by Borrower, or Borrower denies that it has any or further
liability under this Note or any of the other Loan Documents.
 
 
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7.02           Acceleration.  In the event of any uncured Event of Default
beyond any applicable cure periods provided for in the Loan Documents, at
Lender's option, without notice or demand, the unpaid principal balance of the
Loan, plus all accrued and unpaid interest thereon and all other amounts due
shall immediately become due and payable.

7.03           Default Interest.  The Default Interest rate applicable to a
delinquent payment for a Loan Segment shall remain at the rate in effect on such
Loan Segment at the time such payment was due.  Provided however, upon
acceleration and or maturity, the Default Interest rate shall be equal to and
remain at four percent (4%) per annum above the interest rate in effect for each
Loan Segment at the time of acceleration or maturity and shall accrue on the
entire unpaid balance of each Loan Segment, until paid in full.

8.           Loan Terms, Provisions and Covenants.  The Loan is subject to the
terms, provisions and covenants of this Note and the other Loan Documents.

9.           Miscellaneous.

9.01           Notice of Default.  Borrower shall provide Lender immediate
Notice of any Event of Default or Incipient Default under this Note and the
other Loan Documents.

9.02           Interest Rates.  The interest rates set forth herein, including
that used to compute the unused commitment fee, are per annum rates and are
calculated on the basis of the actual number of days elapsed during the year for
a 360 day year.  If any payment date is not a Business Day, then payment shall
be due on the next succeeding Business Day.

9.03           Exhibits.  All Exhibits hereto are incorporated herein and made a
part of this Note.

9.04           Index and Index Source.  The Indexes used herein do not
necessarily represent the lowest rates charged by Lender on its loans.  If any
Index or Index Source provided for herein becomes unavailable during the Loan
term, Lender will choose a new Index or Index Source, which it determines in its
sole discretion is comparable, to be effective upon notification thereof to
Borrower.

9.05           Payments.  Upon Lender’s written request, payments shall be
electronically submitted no later than 10:00 a.m. Spokane time on the date
specified for payment.  All sums payable to Lender hereunder shall be paid
directly to Lender in immediately available funds in U.S. dollars.  Lender shall
send to Borrower periodic statements of all amounts due hereunder at applicable
interest rates, which statements shall be considered correct and conclusively
binding on Borrower in all respects and for all purposes unless Borrower
notifies Lender in writing of any objections within 15 days of receipt of any
such statement.

9.06           Authorization.  Borrower authorizes a Responsible Officer, or any
other individual(s) as Borrower may authorize in writing, to request advances of
principal under this Note, to confirm interest rates and lock-in fees, and to
provide Lender notice of pricing, repricing or prepayment, as required under
this Note.
 
 
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9.07           Advances, Fees and Costs.  Borrower shall pay Lender, on demand,
all attorney fees and costs incurred to protect or enforce any of Lender's
rights in bankruptcy, appellate proceedings, or otherwise, under this Note or
the other Loan Documents.  All sums advanced by Lender to protect its interests
hereunder or under the other Loan Documents and all Prepayment and Breakage Fees
shall be payable, on demand, and shall accrue interest under the interest rate
in effect for the Base Rate Loan Segment on such date and shall be treated as an
advance under the Base Rate Loan Segment.

9.08           Funds Management Services. Lender may provide funds management
services to Borrower.  Upon request, Lender shall provide Borrower a quote for
identified funds management services.  Borrower shall comply with all funds
management service agreements during the term of this Note.  All fees incurred
shall be considered a request for an advance under the Loan.  The funds
management services and fees may be adjusted upon reasonable notice by Lender.

9.09           Governing Law.  The substantive laws of the State of Washington
shall apply to govern the construction of the Loan Documents and the rights and
remedies of the parties, except where the location of the Collateral for the
Loan may require the application of the laws of another state or where federal
laws, including the Farm Credit Act of 1971, as amended, may be applicable.

9.10           General Provisions.  Borrower agrees to this Note as of the date
first above written.  Borrower waives presentment for payment, demand, notice of
nonpayment, protest, notice of protest and diligence in enforcing payment of
this Note.  This Note and the other Loan Documents constitute the entire
agreement between Borrower and Lender and supersede all prior oral negotiations
and promises, which are merged into such writings.  Upon written agreement of
the parties, the interest rate, payment terms or balances due under this Note
may be indexed, adjusted, renewed or renegotiated.  Lender may at any time,
without notice, release all or any part of the security for the Loan, including
the real estate and or personal property covered by the Loan Documents; grant
extensions, deferments, renewals or reamortizations of any part of the Loan over
any period of time; and release from personal liability any one or more of the
parties who are or may become liable for the Loan, without affecting the
personal liability of any other party.  Lender may exercise any and all rights
and remedies available at law, in equity and provided herein and in the other
Loan Documents.  Any delay or omission by Lender in exercising a right or remedy
shall not waive that or any other right or remedy.  No waiver of default by
Lender shall operate as a waiver of the same or any other default on a future
occasion.  Lender shall not be obligated to renew the Loan or any part thereof
or to make additional or future loans to Borrower.

9.11           WAIVER OF JURY TRIAL.  BORROWER AND LENDER HEREBY IRREVOCABLY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LOAN DOCUMENT AND ANY
FUTURE MODIFICATIONS, AMENDMENTS, EXTENSIONS, RESTATEMENTS AND SERVICING ACTIONS
RELATING TO THIS LOAN DOCUMENT.  THE PARTIES INTEND THAT THIS JURY WAIVER WILL
BE ENFORCED TO THE MAXIMUM EXTENT ALLOWED BY LAW.
 
 
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9.12           No Personal Liability of General Partners.  In any action brought
to enforce the obligation of Borrower to pay Borrower’s Obligations, any
judgment or decree shall not be subject to execution on, nor be a lien on, the
assets of the General Partners of Borrower, other than their interests in the
Collateral.  The foregoing shall in no way otherwise affect the personal
liability of Borrower.

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.

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
 

 

Pay to the Order of CoBank, ACB.

 
 
 
 
 
 
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Pope Resources, A Delaware Limited Partnership
Customer/Note No. 56548-811

EXHIBIT A
NOTICE/CONFIRMATION

To:    
Technical Accounting Services
   
Northwest Farm Credit Services, PCA
P. O. Box 2515
Fax: 509-340-5508
1700 South Assembly Street
Spokane, WA 99220-2515
Tel.: 1-800-216-4535
Spokane, WA 99224-2121
 
 

NOTICE
This Notice is provided pursuant to the Revolving Operating Note dated June 10,
2010, as extended, renewed, amended or restated.

o  PRICING.  If checked, Borrower elects to price or reprice principal in a Loan
Segment as follows:
 

o
New Advance
    o
Base Rate Loan Segment
    o
Fixed Rate Loan Segment Currently Priced Under Fixed Rate Option
   
Principal Amount
     
To New Fixed Rate Option
     
To be Effective (Date)
           

 
o  PREPAYMENT OF PRINCIPAL.  If checked, Borrower elects to prepay principal as
follows:
 

o
Base Rate Loan Segment
    o
Fixed Rate Loan Segment Priced
     
Under Option
     
Principal Amount
     
To be Effective (Date)
           

 

     
POPE RESOURCES, A DELAWARE LIMITED
     
PARTNERSHIP
           
Date:
   
By:
           
Authorized Agent
 

 
CONFIRMATION
Lender confirms that the above actions were taken or modified as provided for
below:

         

 

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

 
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