Document:

Exhibit 10

	

   

  	

  Exhibit 10.25

  

 

 

 

 

 

 

 

 

 

After

Recording, Return to:

Douglas W. MacDougal

Schwabe, Williamson & Wyatt, P.C.

1211 SW Fifth Ave., Suite 1700

Portland, OR 97204

 

 

 FOURTH AMENDMENT TO TIMBERLAND DEED OF TRUST

AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS

(STATE OF WASHINGTON)

 

 

Reference numbers of related documents:

 

Grantor(s):

 

 

 

Grantee(s):

 

 

 

Legal

Description:

 

 

 

Assessor’s

Property Tax Parcel Account Number(s):

 

 

 

 

 

FOURTH AMENDMENT TO TIMBERLAND DEED

OF TRUST

AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS

(STATE OF WASHINGTON)

 

 

 

This Fourth Amendment to Timberland Deed of Trust and

Security Agreement With Assignment of Rents (“Amendment”) amends that certain

Timberland Deed of Trust and Security Agreement with Assignment of Rents (“Deed

of Trust”), dated and recorded April 29, 1992, in Volume 371,

pages 237-332, Records of Jefferson County, Washington; first amended

May 13, 1992 by Amendment recorded August 26, 1992, in

Volume 385, pages 204-206, records of Jefferson County, Washington;

and amended May 25, 1993 by Second Amendment recorded June 14, 1993,

in Volume 417, pages 297-299, records of Jefferson County,

Washington, and amended May 25, 1993 by Third Amendment recorded

December 29, 1995, in Volume 542, pages 447-448, records of

Jefferson County, Washington.  All

references to the Deed of Trust herein mean and refer to the Deed of Trust as

so amended.

1.             Section 1.19(d) of the Deed of Trust is amended to

add the following:

Anything to the contrary

in this Deed of Trust notwithstanding, up to an aggregate of 130,550 MBF of

timber may be harvested from the Real Property during the five-year period from

January 1, 1999 to December 31, 2003 without creating any additional

obligation of the Grantor to reduce the principal balance under the Note.  Any harvest in excess of said 130,50 MBF

during said five-year period will require principal reduction payments as

specified above; provided, no more than 75,000 MBF may be harvested within

calendar years 1999-2000; and provided further, if harvest volume exceeds this

amount, growth estimates shall be recomputed and Beneficiary may require that a

new harvest level be set.

2.             All references to the Note in the Deed of Trust shall

mean and refer to the Note as amended by First Amendment to Promissory Note

dated May 25, 1993 and Second Amendment to Promissory Note

December 19, 1995, and as amended by Third Amendment to Promissory Note

dated                                  , 1999.

[Remainder

of page intentionally left blank]

 

 

 

2

 

3.             As amended hereby, the Deed of Trust is ratified and

confirmed.

 

4.             The effective date of this Amendment shall be

January 1, 1999.

	

  DATED: 

  December 20, 1999.

  	

   

  	

   

  	

   

  
	

   

  	

  POPE RESOURCES, A Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  POPE MGP, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ Gary F. Tucker

  
	

   

  	

   

  	

   

  	

  Name: 

  Gary F. Tucker

  
	

   

  	

   

  	

   

  	

  Title: 

  President & CEO

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  ATTEST:

  	

    /s/ Craig L. Jones

  
	

   

  	

   

  	

   

  	

  Name:  Craig L. Jones

  
	

   

  	

   

  	

   

  	

  Title:  Senior Vice President

  
					

 

	

   

  	

   

  	

   

  	

   

  
	

   

  	

  JOHN HANCOCK MUTUAL

  LIFE INSURANCE COMPANY

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ C. Whitney Hill

  
	

   

  	

   

  	

  C. Whitney Hill

  
	

   

  	

   

  	

  Its: 

  Assistant Investment Officer

  
					

 

[Notaries

on following page]

 

 

 

 

3

 

	

  STATE OF WASHINGTON

  	

  )

  
	

   

  	

  )  ss.

  
	

  COUNTY

  OF KITSAP

  	

  )

  

 

                On this 20th day

of December, 1999, before me, the undersigned, a Notary Public in and for the

State of Washington, duly commissioned and sworn, personally appeared

Gary F. Tucker and Craig L. Jones, to me known to be the

President & CEO and Senior Vice President, respectively, of Pope MGP,

Inc., the corporation that executed the foregoing instrument as Managing

General Partner of Pope Resources, A Delaware Limited Partnership, and

acknowledged the said instrument to be the free and voluntary act and deed of

said corporation on behalf of said Pope Resources, A Delaware Limited

Partnership, for the uses and purposes therein mentioned, and on oath stated

that they were authorized to execute the said instrument.

 

                Witness

my hand and official seal hereto affixed the day and year first above written.

 

 

	

   

  	

    /s/ Wendy C. Battaglino

  
	

   

  	

  NOTARY

  PUBLIC IN AND FOR THE STATE OF WASHINGTON

  
	

   

  	

  residing

  at Silverdale, Washington

  
	

   

  	

  My

  appointment expires 4-9-02

  

 

 

	

  STATE

  OF CALIFORNIA

  	

  )

  
	

   

  	

  )  ss.

  
	

  COUNTY

  OF SACRAMENTO

  	

  )

  

 

                On

December 17, 1999, before me, Sharon A. Sturm (notary name), Notary

Public, personally appeared C. Whitney Hill (signer), personally known to

me (or proved to me on the basis of satisfactory evidence) to be the persons)

whose names) is/are subscribed to the within instrument and acknowledged to me

that he/she/they executed the same in his/her/their authorized capacity(ies),

and that by his/her/their signatures) on the instrument the person(s), or the

entity upon behalf of which persons) acted, executed the instrument.

 

	

   

  	

  WITNESS my hand and

  official seal.

  
	

   

  	

   

  
	

   

  	

    /s/

  Sharon A. Sturm

  	

   

  
	

   

  	

  Sharon A. Sturm, Notary Public

  
	

   

  	

  My Commission expires November 3, 2000

  

 

4FOURTH AMENDMENT TO TIMBERLAND DEED OF TRUST

	

  AFTER RECORDING RETURN TO:

  	

  Exhibit

  10.26

  
	

   

  
	

  Mark A. Stayer, Esq.

  
	

  Schwabe Williamson & Wyatt

  
	

  1211 SW Fifth Avenue, Suite 1700

  
	

  Oregon Portland, Oregon 97204

  

 

	

  Document Title

  	

   

  	

  :

  	

   

  	

  AMENDED AND RESTATED TIMBERLAND

  DEED OF TRUST AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS AND FIXTURE

  FILING

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Reference # of related documents

  	

   

  	

  :

  	

   

  	

   

  
	

  Grantor

  	

   

  	

  :

  	

   

  	

  POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Grantee

  	

   

  	

  :

  	

   

  	

  JOHN HANCOCK LIFE INSURANCE COMPANY

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Abbreviated Legal Description:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  S3 T25 R2W; S4 T25 R2W;

  S5 T25 R2W; S16 T25 R2W; S20 T25 R2W; S29 T25 R2W; S1 T26 R1W; S2 T26 R1W;

  S11 T26 R1W; S22 T26 R1W; S23 T26 R1W; S27 T26 R1W; S1 T26 R2W; S2 T26 R2W;

  S3 T26 R2W; S28 T26 R2W; S29 T26 R2W; S30 T26 R2W; S32 T26 R2W; S33 T26 R2W;

  S34 T26 R2W; S5 T27 R1E; S6 T27 R1E; S7 T27 R1E; S8 T27 R1E; S17 T27 R1E; S18

  T27 R1E; S19 T27 R1E; S1 T27 R1W; S2 T27 R1W; S3 T27 R1W; S4

  T27 R1W; S5 T27 R1W; S6 T27 R1W; S7 T27 R1W; S10 T27 R1W; S11 T27 R1W; S12

  T27 R1W; S13 T27 R1W; S14 T27 R1W; S15 T27 R1W; S18 T27 R1W; S20 T27 R1W; S22

  T27 R1W; S25 T27 R1W; S26 T27 R1W; S29 T27 R1W; S31 T27 R1W; S32 T27 R1W;

  SEAHOME ADDITION; S3 T27 R2W; S4 T27 R2W; S9 T27 R2W; S10 T27 R2W; S14 T27

  R2W; S28 T27 R2W; S15 T28 R1E; S19 T28 R1E; S22 T28 R1E; S27 T28 R1E; S28 T28

  R1E; S29 T28 R1E; S30 T28 R1E; S31 T28 R1E; S32 T28 R1E; S2 T28 R1W; S6 T28

  R1W; S7 T28 R1W; S8 T28 R1W; S9 T28 R1W; S10 T28 R1W; S11 T28 R1W; S12 T28

  R1W;

  

 

S13 T28 R1W; S14 T28 R1W; S15 T28 R1W; S17 T28 R1W;

S18 T28 R1W; S19 T28 R1W; S20 T28 R1W; S21 T28 R1W; S22 T28 R1W; S23 T28 R1W;

S24 T28 R1W; S25 T28 R1W; S26 T28 R1W; S27 T28 R1W; S28 T28 R1W; S29 T28 R1W;

S30 T28 R1W; S31 T28 R1W; S32 T28 R1W; S35 T28 R1W; S36 T28 R1W; S10 T28 R2W;

S11 T28 R2W; S13 T28 R2W; S14 T28 R2W; S15 T28 R2W; S22 T28 R2W; S23 T28 R2W;

S24 T28 R2W; S25 T28 R2W; S26 T28 R2W; S27 T28 R2W; S33 T28 R2W; S13 T29 R1W;

S24 T29 R1W; S21 T29 R2W; S22 T29 R2W; S26 T29 R2W; S27 T29 R2W; S28 T29 R2W;

S33 T29 R2W; S34 T29 R2W; and S35 T29 R2W.

 

Additional Legal

Description set forth in Exhibit A attached to the Amended and Restated

Timberland Deed of Trust and Security Agreement with Assignment of Rents and

Fixture Filing

Assessor’s Tax Parcel

I.D. #:

502 032 001; 502 041 000;

502 043 001; 502 051 000; 502 202 002; 801 301 001; 992 600 029; 502 161

000; 502 292 002; 601 012 001; 601 012 002; 601 021 001; 601 022

008; 601 024 001; 601 024 002; 601 024 003; 601 024 004; 601 112 004;

601 221 001; 601 221 002; 601 224 035; 601 232 002; 601 232 003;

601 272 001; 602 014 001; 602 023 003; 602 034 001; 602 283 001;

602 283 002; 602 283 004; 602 283 005; 602 291 011; 602 293 002;

602 302 006; 602 302 007; 602 321 002; 602 322 001; 602 322 002;

602 331 002; 602 332 001; 602 343 003; 701 011 001;

701 021 002; 701 031 001; 701 031 002; 701 051 005;

701 062 004; 721 072 001; 721 080 001; 721 080 002; 721 172 001;

721 173 001; 721 182 001; 721 191 001; 721 192 007; 701 074 002;

701 103 002; 701 111 001; 701 121 001; 701 131 001;

701 141 001; 701 151 002; 701 181 002; 702 142 002;

702 144 003; 702 281 002; 721 051 001; 721 054 002; 721 062 001;

701 201 003; 701 224 001; 701 231 001; 701 244 001; 701 251 001;

701 251 006; 701 251 007; 701 262 001; 701 291 001;

701 311 007; 701 321 003; 702 031 001;

702 041 001; 702 041 002; 702 091 002; 702 102 001;

821 192 001; 821 221 001; 821 222 001; 821 271

003; 821 272 002; 821 281 001; 821 281 002;

281 281 003; 821 291 001; 821 291 002; 821 302 001;

821 311 001; 821 312 001; 821 322 001; 821 324 001;

821 324 002; 802 262 001; 821 152 001; 821 152 008;

801 021 007; 801 062 002; 801 063 001; 801 071 001;

801 071 002; 801 081 001; 801 082 001;

801 101 001; 801 111 002; 801 122 002; 801 132 001;

801 141 001; 801 154 001; 801 172 002; 801 181

001; 801 193 004; 801 201 002; 801 214 002;

801 224 001; 801 231 001; 801 241 001; 801 251 001;

801 261 001; 801 273 001; 801 281 001;

801 292 002; 802 221 002; 802 222 002; 801 311 002;

801 323 001; 801 351 001; 801 361 001; 802 104

000; 802 112 002; 802 113 000; 802 132 004;

802 143 001; 802 233 001; 802 244 011; 802 223 001;

802 233 002; 802 234 001; 802 234 002;

802 253 008; 802 253 011; 802 254 001; 802 271 001;

802 333 001; 901 131 001; 901 244 001; 902 211

000; 902 222 002; 902 262 004; 902 271 000; 902 281 000;

902 331 000; 902 340 000; 902 351 001; 701 041 001

 

 

 

AMENDED AND RESTATED TIMBERLAND DEED

OF TRUST

AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS 

AND FIXTURE FILING

(STATE OF WASHINGTON)

WHEREAS, This Amended and Restated Timberland Deed of

Trust and Security Agreement with Assignment of Rents and Fixture Filing amends

and restates that certain Timberland Deed of Trust and Security Agreement with

Assignment of Rents, by and between Grantor, as grantor, and John Hancock

Mutual Life Insurance Company, now known as John Hancock Life Insurance

Company, as beneficiary, dated and recorded April 29, 1992, in Volume 271,

pages 237-332, records of Jefferson County, Washington, as amended May 13,

1992, by Amendment recorded August 26, 1992, in Volume 385, pages 204-206,

records of Jefferson County, Washington, as amended May 25, 1993, by Second

Amendment recorded June 14, 1993, in Volume 417, pages 297-299, records of

Jefferson County, Washington, and as amended December 19, 1995, by Third

Amendment recorded December 29, 1995, in Volume 542, pages 447 and 448,

records of Jefferson County, Washington, and by Fourth Amendment recorded

December 30, 1999, in Volume 666, pages 274 and 278, records of Jefferson

County, Washington (such Deed of Trust, and amended previously and herein, and

as may be amended hereafter, is herein referred to as the “Deed of Trust”),

given to secure Grantor’s payment and performance obligations under that

certain Promissory Note dated April 29, 1992, in the original amount of

$16,000,000, as amended by instruments dated May 25, 1993, December 19, 1995,

December 20, 1999, and instrument of even date herewith (such Promissory Note,

as amended previously and as may be amended hereafter, is herein referred to as

the “1992 Note”).

WHEREAS, under that certain Note Purchase Agreement

(said Note Purchase Agreement together with any and all replacements,

supplements, modifications, amendments, restatements, renewals or extensions

thereof is hereinafter referred to as the “Note Purchase Agreement.”) dated of

even date herewith, by and among Grantor, John Hancock Life Insurance Company,

and the Holders, as defined in the Note Purchase Agreement, Grantor issued to

the Holders, as defined in the Note Purchase Agreement, certain Class A Fixed

Rate Senior Secured Notes (said notes, together with any and all replacements,

supplements, modifications, amendments, restatements, renewals or extensions

thereof are hereinafter individually and collectively referred to as the “2001

Notes”) all dated of even date herewith in the aggregate principal amount of

$30,000,000;

WHEREAS, the 2001 Notes are secured by that certain

Timberland Deed of Trust dated of even date herewith, by and between Grantor,

as grantor, and John Hancock Life Insurance Company, as collateral agent and

beneficiary, and recorded in the Jefferson County, Mason County, Kitsap County,

and Clallam County records (said Deed of Trust, as may be amended hereafter is

herein referred to as the “2001 Deed of Trust”).

WHEREAS, to secure the indebtedness evidenced by the

1992 Note and the indebtedness evidenced by the 2001 Notes, Grantor has duly

authorized the execution and delivery of this Amended and Restated Timberland

Deed of Trust and Security Agreement

1

with Assignment of Rents and Fixture Filing upon

certain property in Jefferson, County, Washington, as hereinafter particularly

described.

WHEREAS, unless otherwise defined herein all

capitalized terms shall have the meanings ascribed to them in the Deed of

Trust.

NOW, THEREFORE, the parties agree to amend and restate

the Deed of Trust as follows: for good and valuable consideration, the receipt

and adequacy of which is hereby acknowledged, and for the purpose of securing

the obligations described in Section 1.1 below, Grantor hereby irrevocably

grants, conveys, warrants, assigns, transfers, pledges, hypothecates and grants

in and confirms to Trustee, in trust, with power of sale, for the benefit and

security of Beneficiary, subject to the terms and conditions hereinafter set

forth, all of Grantor’s right, title and interest in and to the real property

located in Jefferson, County, Washington more particularly described in Exhibit

A attached hereto and incorporated herein by reference thereto (the

“Property”); and all fences, gates, roads, rights of way or easements for

roads, rights of ingress and egress, waters, water courses, water rights and

powers, rights to underground waters, licenses, rights, interests, privileges,

liberties, and all tenements, hereditaments and appurtenances whatsoever, upon

or attached to or in any way belonging, relating or appertaining to the

Property, or which hereafter shall be related to or in any way belong, or be

appurtenant thereto, and all licenses, easements, rights, interests, privileges

or liberties now or hereafter owned by Grantor belonging, relating or

appertaining to the Property, or the timber or logs located thereon; and

TOGETHER WITH the Grantor’s interest in any timber

supply, cutting or similar contract involving the sale of trees standing on the

Property; any books and records to the extent such books and records relate to

the use and operation of all or any portion of the Property; and all rights,

titles and interests of Grantor in and to all present and future licenses,

permits, approvals and agreements with or from any municipal corporation,

county, state, or other governmental or quasi–governmental entity or

agency relating to the development, improvement, division or use of all or any

portion of the Property to the extent such licenses, permits, approvals, and

agreements are assignable by law; and

TOGETHER WITH all rights of Grantor in and to any

escrow or withhold agreements, title insurance, surety bonds, warranties,

management contracts, leasing or sales agreements, and service contracts which

are in any way relevant to the ownership, development, improvement, management,

sale or use of all or any portion of the Property; and

TOGETHER WITH Grantor’s rights under any payment,

performance, or other bond in connection with construction of any improvements,

and all construction materials, supplies, and equipment delivered to the

Property or intended to be used in connection with the construction of

improvements on the Property; and

TOGETHER WITH all rights, interests, and claims that

Grantor now has or may hereafter acquire with respect to any damage to or

taking of all or any part of the Property and all awards made for taking by

eminent domain, or by any proceeding or purchase in lieu 

 

2

thereof, of the whole or any part of the Property, and

any and all awards resulting from any other damage to the Property, all of

which are hereby assigned to the Beneficiary and the Beneficiary is hereby

authorized to collect and receive the proceeds thereof and to give proper

receipts and acquittances therefor, and to apply the same to the Obligations

secured hereby notwithstanding the fact that the same may not then be due and

payable; and

TOGETHER WITH any and all rights, interest, and claims

that Grantor now has or may hereafter acquire with respect to any and all

mineral, oil and gas rights, air rights, development rights, water rights and

water stock, drainage rights, zoning rights, and other similar rights or

interests which benefit or are appurtenant to the Property and any proceeds

arising therefrom; and

TOGETHER WITH all structures, buildings, and

improvements of every kind and description now or at any time hereafter located

on the Property (hereinafter referred to as the “Improvements”), including all

equipment, apparatus, machinery, fixtures, fittings, and appliances and other

articles and any additions to, substitutions for, changes in or replacements of

the whole or any part thereof, now or at any time hereafter affixed or attached

to, and which are an integral part of said structures, buildings, improvements,

or the Property or any portion thereof, and such Improvements shall be deemed

to be fixtures and an accession to the freehold and a part of the Property as

between the parties hereto and all persons claiming by, through, or under such

parties except that same shall not include such machinery and equipment of any

tenant of any portion of the Property or Improvements, which is part of and/or

used in the conduct of the normal business of such tenant conducted upon the

Property; and

TOGETHER WITH all data, files, and computer software

and hardware relating to the accounting and management functions of the

Property; and

TOGETHER WITH all timber, standing, cut or down, now

or hereafter grown, growing or located on the Property, deemed for the purposes

of this Deed of Trust to be real property.

All of the foregoing is hereinafter referred to as

“Property” or as the “Trust Estate.”

The Note Purchase Agreement provides for additional

covenants, agreements, obligations and conditions to be kept, observed,

performed, carried out and executed by Grantor, which additional covenants,

agreements, obligations and conditions deal with conditions which Grantor must

observe in the conduct and maintenance of its business and of the Property and

in its dealings with Beneficiary.  The

Note Purchase Agreement is by reference hereby incorporated herein to the same

extent and effect as though the Note Purchase Agreement was set forth herein in

full.  In the event of any conflict

between the provisions of the Note Purchase Agreement and the provisions of the

Deed of Trust, the provisions of the Note Purchase Agreement shall control,

provided that the parties agree that the Note Purchase Agreement and the Deed

of Trust shall be interpreted and construed, to the fullest extent possible, so

as not to be in conflict with each other, it being the intentions of the

3

parties that all provisions of the Note Purchase

Agreement and this Deed of Trust shall be enforceable to the fullest extent

possible.  All capitalized terms not

otherwise defined herein shall have the meanings attributed to them in the Note

Purchase Agreement.

 

TO PROTECT THE PROPERTY AND SECURITY GRANTED BY THIS

DEED OF TRUST, THE GRANTOR HEREBY WARRANTS, COVENANTS AND AGREES AS FOLLOWS:

ARTICLE

1

Particular Covenants and Warranties of Grantor

1.1           Obligations Secured. 

This Deed of Trust secures the following, collectively referred to

hereinafter as the “Obligations”:

(a)           The

payment of all indebtedness and the performance of all covenants and

obligations of Grantor under the 1992 Note, whether such payment and

performance is now due or becomes due in the future; and

(b)           The

payment and performance of all covenants and obligations in this Deed of Trust,

and in all other security agreements, notes, agreements, and undertakings now

existing or hereafter executed by Grantor with or for the benefit of

Beneficiary relative to the loan evidenced by the 1992 Note, whether such

payment and performance is now due or becomes due in the future; and

(c)           The

payment of all indebtedness and the performance of all covenants and

obligations of Grantor under the 2001 Notes, whether such payment and

performance is now due or becomes due in the future; and

(d)           The

payment and performance of all covenants and obligations contained in the 2001

Deed of Trust, and all other security agreements, notes, agreements, and

undertakings now existing or hereafter executed by Grantor with or for the

benefit of Beneficiary relative to the loan evidenced by the 2001 Notes,

including, without limitation the Note Purchase Agreement and the Financing

Documents, as defined in the Note Purchase Agreement, whether such payment and

performance is now due or becomes due in the future.

1.2           Payment of Indebtedness, Performance of Covenants and

Warranties.  Grantor shall duly

and punctually pay and perform all of the covenants and Obligations of Grantor

under the Obligations, including, without limitation the covenants and

obligations of Grantor under the Note Purchase Agreement; Grantor represents

and warrants that Grantor’s representations and warranties contained in the

Note Purchase Agreement are and remain true and accurate in all material

respects as of the date of this Deed of Trust.

1.3           Title To Property, Type, Acres,

Volume of Timber.  Grantor warrants that Property is not used

principally for agricultural or farming purposes. Grantor covenants that it

4

will forever defend the Beneficiary’s

rights hereunder and the priority of this Deed of Trust against the adverse

claims of all persons.

1.4           Further Assurances; Filing; Re–Filing; etc.

(a)           Grantor

shall execute, acknowledge and deliver, from time to time, such further

instruments as Beneficiary may require to accomplish the purposes of this Deed

of Trust.

(b)           Grantor,

immediately upon the execution and delivery of this Deed of Trust, and

thereafter from time to time, shall cause this Deed of Trust, any security

agreement, or deed of trust supplemental hereto and each instrument of further

assurance to be recorded and re–recorded in such manner and in such

places as may be required by any present or future law in order to perfect, and

continue perfected, the lien and estate of this Deed of Trust.

(c)           Grantor

shall pay all filing and recording fees, and all expenses incident to the

execution, filing, recording and acknowledgment of this Deed of Trust, any

security agreement, or deed of trust supplemental hereto and any instrument of

further assurance, and all federal, state, county, and municipal taxes,

assessments and charges arising out of or in connection with the execution,

delivery, filing, and recording of this Deed of Trust, any security agreement,

Deed of Trust or deed of trust supplement hereto, or any instruments of further

assurance.

1.5           Compliance with Laws. 

Grantor further represents, warrants and covenants that the Property

will be maintained in all material respects in full compliance with all

applicable laws, statutes, ordinances, regulations and codes of all federal,

state and local governments (collectively “Laws”); and all covenants,

conditions, easements and restrictions affecting the Property. Grantor may,

without being deemed to be in violation of this section 1.5, contest in

good faith the application of any laws, covenants, conditions, easements or

restrictions affecting the Property; provided, that in the event such contest

involves a lien on the Property, or any part thereof, that would, if valid,

have priority over the lien of this Deed of Trust, Grantor shall provide to

Beneficiary an appropriate monetary deposit or corporate surety bond fully

protecting Beneficiary against such lien should Grantor’s contest be

unsuccessful.

1.6           Environmental Protection Requirements, Warranties and

Indemnities.

(a)             Except

to the extent Grantor may do so, in accordance with applicable state, federal

or local laws and regulations, in the ordinary course of its timber planting,

growing, management and harvesting business, Grantor shall not use, or permit

any tenant, occupant, or any other party or entity to use, the Property, or any

part thereof, for the purpose of generating, treating, producing, storing,

handling, transferring, processing, transporting, disposing, or otherwise

releasing “hazardous substances,” as hereinafter defined, either on, in, from,

or about the Property which:

 

5

 

(i)            creates

or causes a contamination either on the Property or elsewhere which is required

by any governmental authority to be removed, remediated, or otherwise cleaned–up

under any applicable “Environmental Law,” as defined below,

(ii)           creates

any form of liability, civil or criminal, direct or indirect, due to such

contamination, or

(iii)          is

in contravention of any Environmental Law.

(b)           The

terms “Environmental Law” and “Environmental Laws” as used in this Deed of

Trust include any and all current and future federal, state, and local

environmental laws, statutes, rules, regulations, and ordinances relative to

hazardous substances, as the same shall be amended and modified from time to

time, including but not limited to “common law,” the Comprehensive

Environmental Response, Compensation and Liability Act, (CERCLA) as amended

from time to time, the Resource Conservation and Recovery Act, (RCRA) as

amended from time to time, and the Toxic Substances Control Act, (TSCA) as

amended from time to time.

(c)           The

term “hazardous substances” as used in this Deed of Trust includes any and all

“hazardous substances” as defined in CERCLA, any and all “hazardous wastes” as

defined in RCRA, any and all “toxic substances” as defined in TSCA, petroleum

products, asbestos or asbestos–containing materials, polychlorinated

biphenyls (“PCB’s”), radon gas, urea formaldehyde form insulation (“UFFI”), and

any and all other hazardous substances, hazardous wastes, pollutants, and

contaminants regulated or controlled by any of the Environmental Laws.

(d)           Grantor

shall, promptly after learning thereof, in the event of any material discharge,

spill, injection, escape, emission, disposal, leak, or other release of

hazardous substances on, in, under, onto, or from the Property, which is not

authorized by a currently valid permit or other approval issued by the

appropriate governmental agencies:

(i)            Promptly

notify Beneficiary and if required by applicable laws or regulations, the

Environmental Protection Agency National Response Center and the appropriate

State Department of Environmental Resources,

(ii)           take

all steps necessary to promptly clean up such discharge, spill, injection,

escape, emission, disposal, leak, or another release in accordance with the

provisions of all applicable Environmental Laws, and

(iii)          if

legally required, receive certification from the appropriate State Department

of Environmental Resources or Federal Environmental Protection Agency that the

Property, and any other property affected, has been cleaned up to the

satisfaction of those agencies.

 

6

 

(e)           Grantor

shall and does hereby grant Beneficiary and Beneficiary’s agents, employees,

contractors and designees an irrevocable license (coupled with an interest) to

enter the Property, until such time as the Obligations are fully paid, upon at

least 10 days prior written notice to Grantor, from time to time to:

(i)            evaluate

and monitor the Property for compliance with all Environmental Laws and the

terms of this Deed of Trust.

(ii)           to

evaluate the presence of hazardous substances, and

(iii)          to

perform appropriate tests and test borings, including taking soil and ground

water samples.

(f)            That

Grantor shall provide Beneficiary with all notices and other communications

received from federal, state, and local agencies and departments which enforce

and administer the Environmental Laws relating to violations thereof on the

Property.  From time to time Grantor

shall provide Beneficiary, upon request, any and all information requested by

Beneficiary concerning the use of the Property and Grantor’s compliance with

the Environmental Laws and the terms of this Deed of Trust, including but not

limited to, all licenses, permits, and certificates, and the books and records

pertaining to the Property.

(g)           Grantor

shall require that all tenants, subtenants, undersubtenants, and other

occupants of the Property to use and occupy the Property in strict compliance

with the Environmental Laws and the terms of this Deed of Trust.

(h)           Grantor

shall and does hereby release, indemnify, agree to pay on behalf of and defend

and hold harmless Beneficiary, its officers, directors, agents, employees,

successors, and assigns of, from, and against any impositions imposed by any

governmental authority for any lien or so–called “super priority lien”

upon the Property, as well as all losses, claims, costs, liabilities,

penalties, punitive damages, causes of action, actions, demands, damages, fines

(civil or criminal), penalties, expenses, clean–up costs, attorneys’

fees, and court costs (all of which are hereinafter referred to as

“Environmental Damages”), regardless of when such Environmental Damages

occurred, caused in whole or in part by any past, present, or future owner,

occupier, tenant, subtenant, undersubtenant, licensee, guest, or any other

person or entity, unless and to the extent such Environmental Damages arise as

a result of the negligence or willful misconduct of Beneficiary, its employees,

agents, contractors, or subcontractors, which may be incurred, suffered, or

sustained by Beneficiary, its officers, directors, successors, or assigns, at

any time, and from time to time, hereunder whether before, during, or after

enforcement of its rights and remedies hereunder after the occurrence of an

Event of Default and after payment of all sums secured hereby, by reason of or

arising from, in whole or in part:

(i)            the

presence or alleged presence of asbestos, asbestos–containing materials,

PCB’s, radon gas, or UFFI on the Property;

 

7

 

(ii)           any

violation or alleged violation of any Environmental Law; and

(iii)          any

release or contamination caused by any hazardous substance on, in, under, onto,

from, or about the Property; or

(iv)          any

liability for personal injury, property damage, or damage to the environment

due to (i), (ii), or (iii) above (all of the foregoing are hereinafter referred

to collectively as the “Receivable Claims”).

Provided, always, that Grantor’s liability under this

subsection (h) shall be limited to that derived from event(s) occurring prior

to or during Grantor’s ownership of the Property or portion thereof on which

the event(s) occurred giving rise to the liability covered by the foregoing

indemnity. In the event the liability arises from a continuing event that

occurred both during or prior to Grantor’s ownership, but also after Grantor’s

ownership, Grantor’s liability under the indemnity set forth above shall

remain, but shall be reduced to the extent that the liability occurs after

Grantor’s ownership.

(i)            The

terms of paragraph 1.6 (h) shall survive the payment in full of all sums

secured hereby and the termination and satisfaction of record of this Deed of

Trust and/or a deed in lieu of foreclosure.

(j)            Grantor

agrees that in the event Beneficiary shall pay any Receivable Claims, all such

sums shall be added to the amount secured hereby, shall be deemed to be

obligatorily advanced under the terms of the Financing Documents, as defined in

the Note Purchase Agreement, shall be secured hereby, and shall be payable on

demand by Grantor.  The terms of this

paragraph shall survive the payment in full of all other sums secured hereby

and the termination and satisfaction of record of this Deed of Trust and/or a

deed in lieu of foreclosure.

(k)           Grantor

warrants and represents to Beneficiary that Grantor has investigated the prior

ownership and use of the Property, in a manner consistent with good commercial

practice, to determine that the Property is free of hazardous substances,

except as otherwise disclosed to Beneficiary in writing.  Grantor, in performing its investigation,

has considered, among other factors:

(i)            the

relationship of the purchase price to the value of the Property if

uncontaminated when acquired,

(ii)           commonly

known or ascertainable information about the Property, and

(iii)          the

obviousness of the presence, or likely presence, of contamination.

 

8

 

(l)            Grantor

warrants and represents to Beneficiary, except to the extent disclosed to

Beneficiary in writing, that to the best of the Grantor’s knowledge:

(i)            none

of the Property owned and/or occupied by Grantor has ever been used to treat,

store, produce, handle, transfer, process, transport, dispose or otherwise

release hazardous substances and/or any other substances regulated or

controlled by the Environmental Laws or which would result in any liability

therefor;

(ii)           there

is no pollution or danger of pollution resulting from a condition which exists

on the Property which requires any corrective action under the Environmental

Laws or which would result in any liability therefor;

(iii)          no

notification has been filed with regard to a release of hazardous substances

on, into, onto, or from the Property under the Environmental Laws;

(iv)          neither

Grantor nor any prior owner or occupier of the Property has received a summons,

citation, Notice of Violation, Administrative Order, directive, letter, or

other communication, written or oral, from any governmental or quasi–governmental

authority concerning any violation or alleged violation of any Environmental

Laws with respect to the Property;

(v)           there

are no underground storage tanks, visible asbestos, asbestos–containing

materials, PCB’s, or UFFI located on, in, under, or about the Property;

(vi)          there

have been no releases at, upon, under, or within, and no past or ongoing

migration from neighboring lands to, the Property of any hazardous substances;

(vii)         there

is no radon gas infiltrating any buildings on the Property in excess of current

state and federal guidelines; and

(viii)        all

warranties and representations given by Grantor in this Deed of Trust are true,

complete, and correct as of the date hereof.

(m)          Grantor

agrees that any materials or other items found in, on, under, or around the

Property which were placed on the Property before or during Grantor’s

ownership, of which Grantor is aware, and which qualify as hazardous

substances, or any otherwise deemed unacceptable by the Beneficiary, in its

sole discretion, shall be immediately removed from the Property, at Grantor’s

sole cost and expense, in compliance with all applicable Environmental Law;

provided, however, that Grantor need not remove any substances pursuant to this

subsection (m) that Grantor requires in the ordinary course of its timber

planting, growing, management, and harvesting business and if such usage is in

compliance with applicable state, federal, or local laws and regulations.

 

9

 

(n)           Beneficiary

shall be under no obligation or duty to inspect for or discover any hazardous

substances on the Property.

(o)           Grantor

shall, in addition to those notifica­tions required elsewhere in this Deed of

Trust, notify Beneficiary of:

(i)            the

presence in any material amount known to Grantor of any visible asbestos or

asbestos–containing materials, PCB’s (except as shown on the

Environmental Certificate), radon gas beyond acceptable limits, or urea

formaldehyde foam insulation at, in, on, under, onto, or from the Property, and

(ii)           the

receipt by Grantor of any written notice or other written communication from

any governmental entity or authority or from any tenant or other occupant or

from any other person or source with respect to any alleged or actual release,

contamination or other event involving a hazardous substance on, in, under,

onto, or from the Property, and

(iii)          shall

promptly send Beneficiary copies of all results of tests conducted by or on

behalf of Grantor of any underground storage tanks on the Property.

1.7           Waste or Deterioration. 

Grantor shall not commit, permit, or suffer any waste or deterioration

of the Property. Grantor shall give Beneficiary no less than 20 days prior

notice before commencing any construction, alteration, or improvement on the

Property, excepting that any such activity, such as road construction, normal

to the cutting and removal of timber from the Property shall not require such prior

notice.

1.8           Liens.  Except to the

extent, if any, permitted by the Note Purchase Agreement, Grantor shall not

create or suffer or permit to be created any mortgage, deed of trust, lien,

security interest, charge, or encumbrance upon the Property or any part

thereof, prior to, on a parity with, or subordinate to, the lien of this Deed

of Trust.

1.9           Impositions.

(a)           Grantor

shall pay or cause to be paid, when due and before any fine, penalty, interest,

or cost attaches thereto, all taxes, assessments, utility charges, and all

other governmental or nongovernmental charges or levies now or hereafter

assessed or levied against any part of the Property (including, without

limitation, levies or charges resulting from covenants, conditions and

restrictions affecting the Property) or upon the lien or estate of the

Beneficiary therein (collectively, the “Impositions”); provided, however, that

if by law any such imposition may be paid in installments, whether or not

interest shall accrue on the unpaid balance thereof, the Grantor may pay the

same in installments (together with accrued interest on the unpaid balance

thereof) as the same become due, before any fine, penalty, or cost attaches

thereto.  Grantor shall also pay when

due all claims for labor, materials, or supplies that, if unpaid, might become

a lien on the Property or any portion thereof. 

Notwithstanding the terms of this Section 1.9(a) to the contrary Grantor

shall have the right to

 

10

contest any such amounts and defer the payment thereof

as and to the extent provided in the Note Purchase Agreement.

(b)           Should

an Event of Default occur and be continuing Beneficiary, at its option, may

engage Ticor Tax Service (or other realty tax payment monitoring service

Beneficiary shall select) to monitor, for the balance of the term of the Notes,

the payments made by Grantor on the real estate taxes due on the Property.  Grantor shall reimburse Beneficiary on

demand, the charges for such service. 

If not so paid, such charges shall be deemed an advancement by the

Beneficiary as provided for in section 1.9(d) and shall bear interest

accordingly.

(c)           Grantor

may, at its expense and after prior notice to Beneficiary, contest by

appropriate legal, administrative, or other proceedings conducted in good faith

and with due diligence, the amount, validity, or application, in whole or in

part, of any Imposition or lien therefor or any claim of any laborer,

materialmen, supplier or vendor or lien therefor, and may withhold payment of

the same pending completion of such proceedings if permitted by law, provided

that:  (i) such proceedings shall

suspend collection from the Property; (ii) neither the Property nor any

part thereof nor interest therein will be sold, forfeited, or lost if Grantor

pays the amount or satisfies the condition being contested, and Grantor would

have the opportunity to do so in the event of Grantor’s failure to prevail in

the contest; (iii) Beneficiary shall, by virtue of such permitted contest,

not be exposed to any risk of any criminal liability or any civil liability for

which Grantor has not furnished additional security as provided in clause (iv)

following; and (iv) Grantor shall have furnished to Beneficiary additional

security in respect of the claim being contested or the loss or damage which

may result from Grantor’s failure to prevail in such contest in such form and

amount as may be reasonably requested by Beneficiary.

(d)           Upon

Grantor’s failure to comply with the covenants and agreements contained in this

Deed of Trust, including without limitation payment of taxes, charges,

assessments, insurance premiums, maintenance and repair of the Property and

costs incurred for the protection of the Property and Beneficiary’s priority,

Beneficiary, without prejudice to any rights given herein and after ten (10)

days’ notice to Grantor, may make advances to perform or cure same in behalf of

Grantor; and Grantor hereby agrees to repay all sums so advanced, on written

demand, with interest from the date advanced at the Default Rate, as defined in

the Note Purchase Agreement.  All sums

so advanced, with interest as aforesaid, until paid by Grantor, shall be

immediately due and payable and be added to and become a part of any indebtedness

or obligation secured hereby in such manner or order as Beneficiary may desire

or determine, having the benefit of the lien hereby created as a part thereof

and of its priority; but no such advances shall be deemed to relieve Grantor

from any default hereunder or impair any right or remedy consequent

thereto.  The exercise of the rights to

make advances granted in this paragraph shall be optional with Beneficiary and

not obligatory; and Beneficiary shall not, in any case, be liable to Grantor for

failure to exercise any such right.

 

11

 

1.10         Partnership Status, Continuous Operations, etc. Grantor covenants that:

(a)           It

is a validly existing limited partnership under the laws of the State of

Delaware, duly qualified to do business in the State of Washington and any

other place where such qualification is necessary.

(b)           It

has the necessary power and authority to enter into the Note Purchase

Agreement.

(c)           The

making and performance by Grantor of this Deed of Trust, the Financing

Documents, and all other Obligations have been duly authorized by partnership

action and will not violate any provision of law or of its partnership

agreement, result in the breach of or constitute a default under any indenture

or other agreement or instrument to which Grantor is a party or by which

Grantor or the Property may be bound or affected.

1.11         Limitations of Use. 

Grantor shall not initiate, join in, or consent to any change in any

private restrictive covenant, zoning ordinance, or other public or private restrictions

limiting or defining the uses that may be made of the Property, or any part

thereof, without the prior written consent of Beneficiary, other than granting

road easements incident to normal forest management and logging operations.  Provided, that the preceding sentence to the

contrary notwithstanding, Grantor may, without violating the terms of this Deed

of Trust accomplish any or all of the actions proscribed by the preceding

sentence if the taking of such action or actions (whether taken at one or more

than one time) does not have the result of eliminating the Grantor’s ability,

based on the reasonable projections using the market conditions then

prevailing, to fully service the debt secured hereby, according to its terms,

from the harvesting of timber from the Property.

1.12         Local Improvement District. 

Grantor will not, without the prior written consent of Beneficiary,

create or initiate, vote for, or in any other manner foster, join in or consent

to the creation of, or the inclusion of the Property or any part thereof within

the boundaries of any irrigation, levee, drainage or other improvement district

(except school or road), under which any such district has or will have the

power to issue bonds or other evidence of indebtedness and/or the power to make

assessments against the Property or any part thereof.

1.13         Insurance.

No casualty insurance coverage on the Property or any

part thereof shall be required to be provided by Grantor.

1.14         Mineral Extraction.

That neither Grantor nor any successor in interest to

Grantor in the Property shall drill or extract or enter into any lease for the

drilling or extraction of oil, gas, or other hydrocarbon substances on the

Property without the prior written consent of Beneficiary.  Drilling for

 

12

extraction of other minerals of any kind or character

from the Property or from any part thereof will not require such prior written

or other consent from the Beneficiary; provided, however, that this

Section 1.14 shall not prohibit the exercise of rights, existing as of the

date hereof and disclosed on the title reports provided to Beneficiary, of

parties other than Grantor, to develop, bore, or mine for any water, gas, oil,

or mineral on or under the surface of the Property; and provided further, that

in the exercise of any rights permitted to it hereunder with or without

Beneficiary’s prior written consent, Grantor, or its contractors and assigns,

shall use all commercially reasonable efforts to preserve or realize the value

of any timber that shall be impacted by such activities.

ARTICLE

2

Condemnation

2.1           Condemnation.

(a)           Should

the Property or any part thereof or interest therein be taken or damaged by

reason of any public improvement, eminent domain, or condemnation proceeding,

or in any other manner (a “Condemnation”), or should Grantor receive any notice

or other information regarding such a proceeding, Grantor shall give immediate

written notice thereof to Beneficiary, except if the reasonably projected value

of the interest involved in the Condemnation shall not exceed $25,000.

(b)           Beneficiary

shall be entitled to 100% of all compensation, awards and other payments that

exceed $25,000 in the aggregate for a single condemnation proceeding

(“Condemnation Proceeds”) or relief therefor, and shall be entitled, at its

option, to commence, appear in and prosecute any Condemnation proceeding in its

own or Grantor’s name and make any compromise or settlement in connection with

such Condemnation; provided that the aforesaid right to prosecute in the

Grantor’s name and to enter into any compromise or settlement in connection

therewith shall be available to Beneficiary only during such time as the

Grantor is in default under this Deed of Trust.

(c)           Beneficiary

shall apply the condemnation proceeds to the reduction of the Obligations in

such order as Beneficiary may determine.

ARTICLE

3

Assignments of Rents, Issues and Profits

3.1           Grantor

hereby assigns and transfers to Beneficiary the rents, revenues, issues,

profits, income, and benefits derived from the Property (collectively, the

“Rents”), and hereby gives to and confers upon Beneficiary the right, power,

and authority to collect the same. 

Grantor irrevocably appoints Beneficiary its true and lawful attorney–in–fact,

with power of substitution, at the option of Beneficiary at any time and from

time to time following the occurrence and during the continuance of an Event of

Default, to demand, receive and enforce payment of, to give receipts, releases

and satisfactions for, and, in the name of Grantor or otherwise, to sue for the

Rents and apply the same to the Obligations; provided, however, that

 

13

Grantor shall have

the right to collect the Rents except during the occurrence and continuance of

an Event of Default and after receipt of notice from Beneficiary to cease such

collection.  The foregoing is intended

to constitute an absolute assignment by Grantor for the benefit of Beneficiary,

subject only to the terms of this Deed of Trust.

 

ARTICLE

4

Security Agreement

4.1           Security Agreement. 

To secure the Obligations, Grantor hereby grants to Beneficiary a

security interest in all personal property included in the Trust Estate, and

the products and proceeds thereof, whether now existing or hereafter acquired,

including but not limited to any and all timber that is severed from the

Property covered by this Deed of Trust; provided, that unless an Event of

Default shall have occurred and be continuing any lien in favor of Beneficiary

on severed timber shall automatically expire at such time as the timber in

question is removed from the Property or, should the timber in question have

been removed from the Property during the continuance of an Event of Default

and such Event of Default is later cured, any lien in favor of Beneficiary on

such removed timber shall automatically expire at the time of such cure.  This Trust Deed shall constitute a security

agreement under Article 9 of the Uniform Commercial Code of the State of

Washington.  The mailing address of

Grantor and the address of Beneficiary from which information may be obtained

are set forth in the introductory paragraph of this Deed of Trust.

4.2           Fixtures.  It is understood

and agreed that, in order to protect Beneficiary from the effect of RCW

62A.9-313, as amended from time-to-time, in the event that (i) Grantor intends

to purchase any goods which may become fixtures attached to the Property, or

any part thereof, and (ii) such goods will be subject to a purchase money security

interest held by a seller or any other party:

(A)          Grantor shall, before executing any

security agreement or other document evidencing such security interest, obtain

the prior written approval of Beneficiary, and all requests for such written

approval shall be in writing and contain the following information:

(1)                                  a description of the fixtures to be

replaced, added to, installed or substituted,

(2)                                  the address at which the fixtures will be

replaced, added to, installed or substituted and

(3)                                  the name and address of the proposed

holder and proposed amount of the security interest,

and any failure of Grantor to obtain such approval

shall be a material breach of Grantor’s covenant under this Deed of Trust, and

shall, at the option of Beneficiary, entitle Beneficiary to all rights and

remedies provided for herein upon default provided, that Beneficiary shall be

 

14

deemed to have approved such agreement if it fails to

object to such agreement within thirty (30) days of its actual receipt of

Grantor’s written request for such approval. 

No consent by Beneficiary pursuant to this subsection shall be deemed to

constitute an agreement to subordinate the right of Beneficiary in fixtures or

other property covered by this Deed of Trust.

(B)           If at any time Grantor fails to make

any payment on an obligation secured by a purchase money security interest in

any fixtures, Beneficiary, at its option, may at any time pay the amount

secured by such security interest and the amount so paid shall be

(1) secured by this Deed of Trust and shall be a lien on the Property

having the same priorities as the liens and security interests created by this

Deed of Trust, and (2) payable on demand with interest at the rate specified in

the Note from the time of such payment. 

If Grantor shall fail to make such payment to Beneficiary within ten

(10) days after demand, the entire principal sum secured hereby with all unpaid

interest accrued thereon shall, at the option of Beneficiary, become due and

payable immediately.

(C)           Beneficiary shall have the right to

acquire by assignment from the holder of such security interest any and all

contract rights, accounts receivable, negotiable or nonnegotiable instruments,

or other evidence of Grantor’s indebtedness for such Personal Property or

fixtures, and, upon acquiring such interest by assignment, shall have the right

to enforce the security interest as assignee thereof, in accordance with the

terms and provisions of the Washington Uniform Commercial Code then in effect,

and in accordance with any other provisions of law.

(D)          Whether or not Beneficiary has paid

the indebtedness secured by or taken an assignment of such security interest,

Grantor convenants to pay all sums and perform all obligations secured thereby,

and if Grantor at any time shall be in default for a period of ten (10) days or

after the expiration of all applicable cure periods, whichever is longer, under

such security agreement, it shall be a material breach of Grantor’s covenants

under this Deed of Trust, and Beneficiary may, at its option, declare the

principal sum secured hereby immediately due and payable, time being of the

essence.

4.3           Fixture Filing. 

To the extent that any of the Property constitutes a fixture, this Deed

of Trust shall serve as a fixture filing pursuant to the Washington Uniform

Commercial Code.

ARTICLE

5

Events of Default; Remedies

5.1           Events of Default. 

Each “Event of Default” under the Note Purchase Agreement shall

constitute an “Event of Default” under this Deed of Trust.

5.2           Remedies in Case of Default. 

If an Event of Default shall occur, Beneficiary may exercise any one or

more of the following rights and remedies, in addition to any other remedies

which may be available by law, in equity, or otherwise:

 

15

 

(a)           Acceleration.

(i)            Automatic.  Upon the occurrence of an Event of Default

specified in subsections 6.1(h) or (i) of the Note Purchase Agreement, the

principal of and the interest of the 1992 Note and the 2001 Notes at the time

outstanding, and all other amounts owed to Beneficiary under this Deed of

Trust, the 2001 Deed of Trust, the Note Purchase Agreement or any of the other

Financing Documents, as defined in the Note Purchase Agreement, shall thereupon

immediately become due and payable without presentment, demand, protest, or

other notice of any kind, all of which are expressly waived, anything in this

Deed of Trust, the Note Purchase Agreement or any of the Financing Documents,

as defined in the Note Purchase Agreement, to the contrary notwithstanding.

(ii)           Optional.  If any other Event of Default shall have

occurred and be continuing, in every such event, Beneficiary may, at its

option, declare the principal of and interest on the 1992 Note and the 2001 Notes

at this time outstanding, and all other amounts owed to Beneficiary under this

Deed of Trust, the 2001 Deed of Trust, the Note Purchase Agreement or any of

the Financing Documents, as defined in the Note Purchase Agreement, to be

forthwith due and payable, whereupon the same shall immediately become due and

payable without presentment, demand, protest or other notice of any kind, all

of which are expressly waived, anything in this Deed of Trust, the Note

Purchase Agreement or the Financing Documents, as defined in the Note Purchase

Agreement, to the contrary notwithstanding.

(b)           Remedies

Under Note Purchase Agreement. 

Beneficiary may elect to exercise one or more of the remedies which are

set forth in Section 6.3 and 6.4 of the Note Purchase Agreement.

(c)           Receiver.  Beneficiary may have a receiver appointed

for all or any part of the Property. Beneficiary shall be entitled to the

appointment of a receiver as a matter of right whether or not the apparent

value of the Property exceeds the amount of the indebtedness secured by this

Deed of Trust.  Grantor consents to the

appointment of a receiver at Beneficiary’s option and waives any and all

defenses thereto.

(d)           Possession.  Beneficiary may, either through a receiver

or as lender–in–possession, enter and take possession of all or any

part of the Property and use, operate, manage and control it as the Beneficiary

shall deem appropriate in its sole discretion. 

Upon request after an Event of Default, Grantor shall peacefully

relinquish possession and control of Property to Beneficiary or any receiver

appointed under this Deed of Trust.

(e)           Rents

and Profits.  Beneficiary may revoke

Grantor’s right to collect the Rents and any profits from the harvest and sale

of timber, in a commercially reasonable manner and in accordance with best

management practices, and may either itself or through a receiver, collect the

same.  Beneficiary may harvest and sell

timber from the Property and collect any profits or rents therefrom.  Beneficiary shall not be deemed to be in

possession of the Property solely by reason of exercise of the rights contained

in this subsection (d).  If 

16

Rents

are collected by Beneficiary under this subsection (d), Grantor hereby

irrevocably appoints Beneficiary as Grantor’s attorney–in–fact,

with power of substitution, to endorse instruments received in payment thereof

in the name of Grantor and to negotiate such instruments and collect the

proceeds thereof.  After payment of all

obligations, any remaining amounts shall be paid to Grantor and this power

shall terminate.

(f)            Power

of Sale.  Beneficiary may direct the

Trustee, and the Trustee shall be empowered, to exercise the power of sale

granted herein in the manner provided by Washington law.

(g)           Foreclosure.  Beneficiary may judicially foreclose this

Deed of Trust and obtain a judgment foreclosing Grantor’s interest in all or

any part of the Property and giving Beneficiary the right to collect any

deficiency remaining due after disposition of the Property.

(h)           Fixtures

and Personal Property.  With respect

to any fixtures or personal property subject to a security interest in favor of

Beneficiary, Beneficiary may exercise any and all of the rights and remedies of

a secured party under the Washington Uniform Commercial Code.  To the extent any notice is required under

applicable law and is not waived by Grantor, Grantor agrees that as it relates

to this paragraph only if such notice is marked, postage prepaid, to the

Grantor at the above address at least five (5) days before the time of the sale

or disposition, such notice shall be deemed reasonable and shall fully satisfy

any requirement for giving of said notice.

(i)            Abandon

Security.  Beneficiary may abandon

any security afforded by this Deed of Trust or any other collateral by

notifying Grantor of Beneficiary’s election to do so.

5.3           Sale.  In any sale

pursuant to any judgment, the Property, to the extent permitted by law, may be

sold as an entirety or in one or more parcels and in such order as Beneficiary

may elect, without regard to the right of Grantor, any person claiming under

Grantor, or any guarantor or surety to the marshalling of assets.  The purchaser at any such sale shall take

title to the Property or the part thereof so sold free and clear of the estate

of Grantor (other than statutory redemption rights, if any), the purchaser

being hereby discharged from all liability to see to the application of the

purchase money.  Any person, including

Beneficiary, may purchase at any such sale.

5.4           Cumulative Remedies – No Duty to Marshall Assets. 

All remedies under this Deed of Trust are cumulative and not

exclusive.  Any election to pursue one

remedy shall not preclude any other remedy. 

No delay or omission in exercising any right or remedy, or any agreement

to an extension of time, shall impair that or any other right or remedy or

constitute a waiver of any default.  No

release of any part of the Property or any person liable hereunder shall impair

any other right or remedy or constitute a waiver of any default.

 

17

 

5.5           Receiver or Beneficiary–in–Possession. 

Upon taking possession of all or any part of the Property, Beneficiary

or a receiver may:

(a)           Management.  Use, operate, manage, control, and conduct

business with the Property and make expenditures for such purposes and for

maintenance and improvements as are reasonably necessary.

(b)           Rents

and Revenues.  Collect all rents,

revenues, income, issues, and profits from the Property, and may harvest and

sell timber therefrom in a commercially reasonable manner and in accordance

with best management practices, and apply such sums to the reasonable expenses

of use, operation, management, maintenance, and improvements.

(c)           Construction.  At its option, complete any construction in

progress on the Property, and in that connection pay bills, borrow funds,

employ contractors, and make any changes in plans and specifications as it

deems appropriate.

(d)           Additional

Indebtedness.  If the revenues

produced by the Property are insufficient to pay expenses, Beneficiary or the

receiver may borrow or advance such sums upon such terms as it deems reasonably

necessary for the purposes stated in this section.  All advances shall bear interest, unless otherwise provided, at

the Default Rate, as defined in the Note Purchase Agreement, and repayment of

such sums shall be secured by this Deed of Trust.

5.6           Application of Proceeds. 

All proceeds realized from the exercise of the rights and remedies under

this Article V shall be applied as follows:

(a)           Costs

and Expenses.  To pay all costs of

exercising such rights and remedies, including the costs of maintaining and

preserving the Property, the costs and expenses of any receiver or lender–in–possession,

the costs of any sale, and the costs and expenses provided for in Section 6.8

below.

(b)           Indebtedness.  To pay all the Obligations, in such order as

Beneficiary shall deem appropriate in its sole discretion.

(c)           Surplus.  The surplus, if any, remaining after

satisfaction of all the Obligations shall be paid to the clerk of the court.

5.7           Deficiency.  No sale or other

disposition of all or any part of the Property pursuant to this Article V

shall be deemed to relieve Grantor of any of the Obligations, except to the

extent the proceeds thereof are applied to the payment of such

Obligations.  If the proceeds of sale,

collection or other realization of or upon the Property are insufficient to

cover the costs and expenses of such realization and the payment in full of the

obligations, Grantor shall remain liable for any deficiency.

 

18

 

5.8           Waiver of Stay, Extension, Moratorium and Valuation Laws. 

To the fullest extent permitted by law, Grantor hereby waives the

benefit of any existing or future stay, extension or moratorium law which may

affect observance or performance of the provisions of this Deed of Trust and

any existing or future law providing for the valuation or appraisal of the

Property prior to any sale.

ARTICLE

6

Appointment, Rights and Obligations of

Beneficiary as Agent

6.1           Appointment.  The Holders, as

defined in the Note Purchase Agreement, by their acceptance of the benefits of

this Deed of Trust, hereby irrevocably designate Beneficiary as agent to act as

specified herein.  Each Holder hereby

irrevocably authorizes, and each subsequent holder of any of the Notes by the

acceptance of such Note shall be deemed irrevocably to authorize Beneficiary to

take such action on its behalf under the provisions of this Deed of Trust and

to exercise such powers and to perform such duties hereunder as are

specifically delegated to or required of Beneficiary by the terms hereof and

such other powers as are reasonably incidental thereto.  Beneficiary may perform any of its duties

hereunder by or through its agents or employees.

6.2           Nature of Duties. 

Beneficiary shall have no duties or responsibilities except those

expressly set forth herein.  Neither

Beneficiary nor any of its officers, directors, employees or agents shall be

liable for any action taken or omitted by it as agent hereunder or in

connection herewith unless caused by its or their gross negligence or willful

misconduct.  The duties of the

Beneficiary shall be mechanical and administrative in nature; Beneficiary shall

not have by reason of this Deed of Trust a fiduciary relationship in respect of

any Holder, and nothing in this Deed of Trust, expressed or implied, is

intended to or shall be so construed as to impose upon Beneficiary any

obligations in respect of this Deed of Trust except as expressly set forth

herein.

6.3           Lack of Reliance. 

Independently and without reliance upon the Beneficiary, each Holder, to

the extent it deems appropriate, has made and shall continue to make (i) its

own independent investigation of the financial condition and affairs of the

Grantor in connection with the indebtedness evidenced by the Notes and the

taking or not taking of any action in connection therewith, and (ii) its own

appraisal of the creditworthiness of Grantor, and Beneficiary shall have no

duty or responsibility, either initially or on a continuing basis, to provide

any Holder with any credit or other information with respect thereto, whether

coming into its possession before the purchase of any Notes, or at any time or

times thereafter.  Beneficiary shall not

be responsible to any Holder for any recitals, statements, information,

representations or warranties herein or in any document, certificate or other

writing delivered in connection herewith or for the execution, effectiveness,

genuineness, validity, enforceability, perfection, collectibility, priority or

sufficiency of this Deed of Trust or the financial condition of the Grantor or

be required to make any inquiry concerning either the performance or observance

of any of the terms, provisions or conditions of this Deed of Trust, or the

financial condition of the Grantor or the existence or possible existence of

any Event of Default.

 

19

 

6.4           Certain Rights of Beneficiary. 

For purposes of this Deed of Trust, the Holders holding at least 66.67%

of the aggregate principal amount of the Notes at any one time outstanding

shall be referred to collectively as the “Required Holders.”  If Beneficiary shall request instructions

from the Required Holders with respect to any act or action (including failure

to act) in connection with this Deed of Trust, the Note Purchase Agreement or

any other Financing Documents, Beneficiary shall be entitled to refrain from

such act or taking such action unless and until it shall have received

instructions from the Required Holders, and to the extent requested,

appropriate indemnification in respect of actions to be taken; and Beneficiary

shall not incur liability to any Person (as defined in the Note Purchase

Agreement) by reason of so refraining. 

Without limiting the foregoing, no Holder shall have any right of action

whatsoever against the Beneficiary as a result of Beneficiary acting or

refraining from acting hereunder in accordance with the instructions of the

Required Holders.

6.5           Reliance.  Beneficiary shall

be entitled to rely, and shall be fully protected in relying, upon any note,

writing, resolution, notice, statement, certificate, telex, teletype or

telecopier message, cablegram, radiogram, order or other document or telephone

message signed, sent or made by the proper Person or entity on behalf of any

Holders, and, with respect to all legal matters pertaining to this Deed of

Trust and its duties hereunder, upon advice of counsel selected by it.  Grantor shall be entitled to rely, and shall

be fully protected in relying, on the fact that Beneficiary is acting as agent

on behalf of the Holders and has received any consent or direction required

from the Holders until such time as Grantor shall have received a written

notice from Beneficiary stating the Beneficiary is no longer acting in its

capacity as agent for the Holders.

ARTICLE

7

General Provisions

7.1           Time is of the Essence. 

Time is of the essence with respect to all covenants and obligations of

Grantor under this Deed of Trust.

7.2           Reasonability and Materiality. 

Whenever this Deed of Trust shall require or permit Grantor or

Beneficiary to exercise judgment or discretion or otherwise make any subjective

determination, including the giving of consent or approvals hereunder, both

Grantor and Beneficiary shall do so reasonably and in good faith.  All provisions requiring Grantor to pay

costs, expenses or fees shall be construed as requiring the payment of only such

costs, expenses and fees as shall be reasonable.  Grantor’s representations, warranties and covenants in this Deed

of Trust shall be deemed to include and shall be subject to a materiality

standard, in that an immaterial inaccuracy, breach or default may not be used

by Beneficiary as a basis to declare the existence of an Event of Default,

accelerate the indebtedness secured hereby and/or otherwise exercise remedies

available to Beneficiary in the event of a default hereunder.  “Material” items shall include, but shall

not be limited to, a default in monetary payment, not properly maintaining the

Property, violating the prohibition against placing additional liens on the

Property (or any part thereof), a default in the environmentally related

provisions of the Note Purchase Agreement, or material misrepresentation of

fact.

 

20

 

7.3           Notices.

7.3.1        Method; Address.  All notices and communications required or

permitted to be given under this Agreement shall be in writing and shall either

be mailed by first class United States mail, postage prepaid, registered or

certified with return receipt requested, or delivered in person to the intended

addressee, or sent by telecopier, prepaid telegram or telex, or sent by

reliable express mail (such as Federal Express or U.S. Express Mail), and shall

be addressed,

(a)           if

to Beneficiary, at the address shown in Annex I to this Deed of Trust, marked

for attention as there indicated, or at such other address as Beneficiary shall

have furnished to Grantor in writing, or

(b)           if

to Grantor, at the following address:

Pope Resources

19245 Tenth Avenue Northeast

Poulsbo, WA 98370

Attention:  Mr. Thomas M. Ringo

With copies to:

Mr. Greg Adams

Davis Wright Tremaine LLP

2600 Century Square

1501 Fourth Avenue

Seattle, WA 98101-1688

or at such other address as Borrower shall have

furnished in writing to the Administrative Agent.

7.3.2        When Given.  Any notice so mailed shall be deemed to be given and become

effective three (3) days after deposit in the U.S. Mail.  Any notice given in any other manner shall

be deemed to be given and become effective only if and when actually received

(or rejected) by the addressee.

7.4           Deed of Trust Binding on Successors and Assigns. 

This Deed of Trust shall be binding upon and inure to the benefit of the

successors and assigns of Grantor, Trustee and Beneficiary.

7.5           Usury Laws.  Notwithstanding any

provision herein or in the Notes, the total liability for payments in the

nature of interest shall not exceed the limits now imposed by the usury laws of

the State of Washington.

 

21

 

7.6           Administrative Fees of Beneficiary. 

Grantor promises to pay and reimburse Beneficiary for administrative

fees, costs, and expenses, including attorneys’ fees, incurred in reviewing and

processing post–closing requests of Grantor.  With respect to requests which involve purely administrative

functions and which do not affect any obligations under any of the Financing

Documents, as defined in the Note Purchase Agreement, and/or any other

instrument, agreement or undertaking now existing or hereafter executed by

Grantor relative to the loans evidenced by the Notes or the Property, such

fees, costs, and expenses shall be limited to Beneficiary’s normal and

customary fees, costs, and expenses; all other requests shall not be limited.

7.7           Reconveyance by Trustee. 

At any time upon the request of Beneficiary, payment of

Trustee’s fees, if any, and presentation of this Deed of Trust, without

affecting liability of any persons for the payment of the Obligations, Trustee

may reconvey, without warranty, all or any part of the Property.  Beneficiary shall have no obligation to

reconvey the Property or any portion thereof or request a reconveyance thereof

unless and until all outstanding obligations under the Obligations, including,

without limitation the 1992 Note and the 2001 Notes have been fully paid and

satisfied.  The grantee in any

reconveyance may be described as the “person or persons legally entitled

thereto,” and the recitals therein of any facts shall be conclusive proof of

the truthfulness thereof.

7.8           Substitute Trustee. 

In the event of dissolution or resignation of the Trustee, or for any

other reason, Beneficiary may substitute one or more trustees to execute the

trust hereby created, and the new trustee(s) shall succeed to all the powers

and duties of the prior trustee(s).

7.9           No Partnership or Joint Venture. 

Grantor acknowledges and agrees that in no event shall Beneficiary be

deemed to be a partner or joint venturer with Grantor.  Without limitation of the foregoing,

Beneficiary shall not be deemed to be such a partner or joint venturer on

account of its becoming a mortgagee in possession or exercising any rights

pursuant to this Deed of Trust or pursuant to any other instrument or document

securing any portion of the indebtedness secured hereby or on account of

receiving any release fee for partial releases of this Deed of Trust, or

otherwise.

7.10         No Personal Liability of General Partners. 

In any action brought to enforce the obligation of the maker of the

Notes secured hereby to pay the indebtedness evidenced by such Notes or to

enforce the obligation of Grantor to pay any indebtedness or obligation created

or arising under this Deed of Trust, any judgment or decree shall be

enforceable against the General Partners of Grantor only to the extent of their

interests in the Property, and any such judgment or decree shall not be subject

to execution on, nor be a lien on, assets of such General Partners of Grantor

other than their interests in the Property. 

The foregoing shall in no way otherwise affect the personal liability of

Grantor.

7.11         Successors in Interest. 

This Trust Deed applies to, inures to the benefit of, and is binding not

only on the parties hereto, but on their heirs, executors, administrators,

successors, and assigns.  The term

“Beneficiary” shall mean the holder and owner, including

 

22

pledgees, of the

Notes, whether or not named as Beneficiary herein and any owner or holder of

the beneficiary interest under this Trust Deed.

 

7.12         Right to Release. 

Without affecting the liability of any other person for the payment of

any indebtedness herein mentioned (including Grantor should it convey the

Property) and without affecting the lien or priority hereof upon any property

not released, Beneficiary may, without notice, release any person so liable,

extend the maturity or modify the terms of any such obligation, or grant other

indulgences, release or reconvey or cause to be released or reconveyed at any

time all or any part of the Property, take or release any other security or

make compositions or other arrangements with debtors.  Beneficiary may also accept additional security, either

concurrently herewith or hereafter, and sell same or otherwise realize thereon

either before, concurrently with, or after sale hereunder.

7.13         Marshalling of Assets. 

To the extent allowed by applicable law, Grantor on its own behalf and

on behalf of its successors and assigns hereby expressly waives all rights to

require a marshalling of assets by the Trustee or Beneficiary or to require

Trustee or Beneficiary to first resort to the sale of any portion of the

Property which might have been retained by Grantor before foreclosing upon and

selling any other portion as may be conveyed by Grantor subject to this Deed of

Trust.

7.14         Expenses and Attorney Fees. 

If Beneficiary refers any of the Obligations to an attorney for

collection or seeks legal advice following a default; if Beneficiary is the

prevailing party in any litigation instituted in connection with any of the

Obligations; or if Beneficiary or any other person initiates any judicial or

nonjudicial action, suit or proceeding in connection with any of the

Obligations or the Property (including but not limited to proceedings under

federal bankruptcy law, eminent domain, under probate proceedings or in

connection with any state or federal tax lien), and an attorney is employed by

Beneficiary to (a) appear in any such action, suit or proceeding, or

(b) reclaim, seek relief from a judicial or statutory stay, sequester,

protect, preserve or enforce Beneficiary’s interests, then in any such event

Grantor shall pay reasonable attorney fees, costs and expenses incurred by

Beneficiary and/or its attorney in connection with the above mentioned events

or any appeals related to such events, including but not limited to costs

incurred in searching records, the cost of title reports and the cost of

surveyors’ reports. Such amounts shall be secured by this Deed of Trust and

shall bear interest at the Default Rate, as defined in the Note Purchase

Agreement, from the date Beneficiary’s written demand for reimbursement to

Grantor therefor is forwarded to Grantor; and all such sums and the interest thereon

shall be immediately due and payable and be added to and become a part of the

Obligations secured hereby in such manner or order as Beneficiary may desire or

determine and be secured hereby, having the benefit of the lien hereby created

and of its priority.

7.15         Applicable Law. 

The laws of the State of Washington shall govern the validity,

interpretation, performance, and enforcement of this Deed of Trust.

7.16         Captions.  The captions to the

sections and paragraphs of this Deed of Trust are included only for the

convenience of the parties and shall not have the effect of defining,

 

23

diminishing, or

enlarging the rights of the parties or affecting the construction or

interpretation of any portion of this Deed of Trust.

 

7.17         “Person” Defined. 

As used in this Deed of Trust, the word “person” shall mean any natural

person, partnership, trust, corporation, or other legal entity of any nature.

7.18         Severability. 

If any provision of this Deed of Trust shall be held to be invalid,

illegal, or unenforceable, such invalidity, illegality, or unenforceability

shall not affect any other provisions of this Deed of Trust, and such other

provisions shall be construed as if the invalid, illegal, or unenforceable provision

had never been contained herein.

7.19         Commercial Trust Deed. 

Grantor warrants that the loan secured hereby is for commercial purposes

and is not now, nor will it be, for residential, household, personal,

agricultural, or consumer purposes.

7.20         Regulation G. 

No part of the proceeds from the loan secured by this Deed of Trust will

be used for the purpose (whether immediate, incidental, or ultimate) of

“purchasing” or “carrying” any “margin security” as such terms are defined in

Regulation G (12 CFR Part 207) of the Board of Governors of the Federal

Reserve Systems, or for the purpose of reducing or retiring any indebtedness

which was originally incurred for any such purpose.

7.21         Conflicts. Any conflict between the terms and provisions of this Deed

of Trust and the Note Purchase Agreement shall be governed and controlled by

the Note Purchase Agreement.

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

 

24

 

7.22         Statutory Notice.

GRANTOR ACKNOWLEDGES THAT 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.

Executed as of the date

first above written.

	

  GRANTOR:

  	

  BENEFICIARY:

  
	

   

  	

   

  
	

  POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP, a

  Delaware limited partnership,

  	

  JOHN HANCOCK LIFE INSURANCE COMPANY, a corporation

  incorporated under the laws of the Commonwealth of Massachusetts,

  
	

   

  	

   

  
	

  Pope MPG, Inc.,

  a Delaware corporation, its managing general

  	

   

  
	

  partner,

  	

   

  
	

  By:

  	

  /s/ Thomas M. Ringo

  	

   

  	

  By:

  	

  /s/ Charles W. Hill

  	

   

  
	

  Its:

  	

  Vice President and CFO

  	

   

  	

  Its:

  	

  Director

  	

   

  
	

  Date:

  	

  March 29, 2001

  	

   

  	

  Date:

  	

  March 29, 2001

  	

   

  

 

	

  STATE OF WASHINGTON

  	

  )

  
	

   

  	

  ) ss.

  
	

  County of

  	

  King

  	

  )

  
			

 

On this   28th

day of March, 2001, before me, the undersigned, a Notary Public in and for the

State of Washington, duly commissioned and sworn, personally appeared Thomas M.

Ringo, to me known to be the Vice President and CFO, of Pope MGP, Inc., the

corporation that executed the foregoing instrument as managing general partner

of Pope Resources, A Delaware Limited Partnership and acknowledged the said

instrument to be the free and voluntary act and deed of said corporation on

behalf of said Pope Resources, A Delaware Limited Partnership, for the uses and

purposes therein mentioned, and on oath stated that they were authorized to

execute the said instrument.

Witness my hand and official seal hereto affixed the

day and year first above written.

	

   

  	

  /s/ Terri Ray

  	

   

  
	

   

  	

  Notary Public in and far the State of Washington

  
	

   

  	

  residing at

  	

  Seattle

  	

   

  
	

   

  	

  My Commission expires:

  	

  10/29/01

  	

   

  
	

   

  	

   

  	

  Terri Ray

  
					

 

25

 

State of California

County of Sacramento

On March 28, 2001, before me, Sharon a. Sturm (notary

name), Notary Public, personally appeared Charles W. Hill (signer), personally

known to me (or proved to me on the basis of satisfactory evidence) to be the

person(s) whose name(s) is/are subscribed to the within instrument and

acknowledged to me that he/she/they executed the same in his/her/their authorized

capacity(ies), and that by his/her/their signature(s) on the instrument the

person(s), or the entity upon behalf of which person(s) acted, executed the

instrument.

	

  WITNESS my hand and official seal

  
	

  /s/ Sharon A. Sturm

  	

   

  
	

   

  	

  , Notary Public

  
	

  My Commission Expires

  	

  Nov. 28, 2004

  	

   

  

 

 

26

 

ANNEX I.

SCHEDULE OF

INFORMATION FOR NOTICES

JOHN HANCOCK LIFE INSURANCE COMPANY

John Hancock Life

Insurance Company

John Hancock Place

200 Clarendon Street

P.O. Box 111

Boston, MA 02117

Attention: Bond and Corporate Finance Group T-57

with a copy to:

John Hancock Life

Insurance Company

Bond and Corporate Finance Group

2520 Venture Oaks Way, Suite 120

Sacramento, CA  95833

Attn:  C. Whitney Hill

and:

John Hancock Life Insurance

Company

John Hancock Place

200 Clarendon Street

Boston, MA 02117

Attention: Investment Law Division, T-30

 

27

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