Document:

Exhibit 10.5

	

Exhibit 10.5

AUDIT
COMMITTEE CHARTER

POPE
MGP, Inc.

As
revised October 2003

I.  PURPOSE

The primary
function of the Audit Committee (“Committee”) is to assist the
Board of Directors of Pope MGP, Inc. in fulfilling its oversight
responsibilities for Pope Resources and its subsidiaries (the
“Partnership”) with respect to the following:

	 	•	Accounting
and financial reporting,

	 	•	Assessment and management of risk and the related internal control environment,

	 	•	Compliance
with laws and regulations, and

	 	•	Internal and external audit processes.

	

In fulfilling its
responsibilities, the Committee will:

	 	•	Serve as an independent and objective party to monitor the Partnership’s financial
reporting process and internal control system,

	 	•	Have sole authority for appointment, retention, and firing of independent accountants,

	 	•	Approve
all audit and non-audit services provided to the Partnership by the independent
accountants,

	 	•	Review and evaluate the audit efforts of the independent accountants and the
Partnership’s internal audit activities,

	 	•	Facilitate an open avenue of communication among the independent accountants, internal
audit, and the Board of Directors,

	 	•	Establish procedures for receiving and treating concerns (including anonymous ones from
Partnership employees) regarding accounting, internal accounting controls and auditing and
ensure that such concerns are treated confidentially with no threat of retaliation to the
party surfacing the concern.

	

The Committee will have
the complete and unrestricted authority and funding to conduct
investigations into any matters within the Committee’s scope of
responsibilities. The Committee shall be empowered to retain independent counsel
and other professionals to assist in the conduct of any investigation.

The Committee will
primarily fulfill these responsibilities by carrying out the activities
enumerated in Section III of this Charter.

	

Audit Committee Charter

Pope MGP, Inc.

Revised October 2003

II.  COMPOSITION, MEETINGS AND
ADMINISTRATIVE MATTERS

Number of Directors: The
Committee shall be comprised of three or more directors as determined by the Board.

Independence of
Directors: Each member of the Committee shall be an independent director. A
director shall be considered “independent” if he or she is free from
any relationship that may interfere with the exercise of his or her independence
from management and the Partnership or independent judgement as a member of the
Committee.

Committee Member
Qualifications: All members of the Committee shall have a working
familiarity with basic finance and accounting practices and be able to read and
understand financial statements at the time of their appointment.

Designation of
“Financial Expert”: The Committee will designate at least one of
its members in the Partnership’s annual Form 10-K as a “financial
expert” so defined under SEC rules.

Appointment of
Committee Members: The Members of the Committee shall be elected by the
Board at the annual meeting of the Board and shall serve until their
resignation, removal, or replacement. A Chair shall be elected by the full
Board.

Meeting Frequency:
The Committee shall meet at least three times annually in regularly scheduled
meetings. The Committee shall also meet at other times as necessary to discharge
its responsibilities and as circumstances dictate. Meetings of the Committee may
be in person or telephonically.

Meeting Attendees:
In addition to Committee Members, the Committee may ask that members of
Partnership management or the Partnership’s independent accountants be
present at Committee meetings. [Note: At present the Partnership does not have a
formally established internal audit function. On occasion, financial management
personnel perform reviews or procedures that emulate this function. As such, the
Committee may ask that personnel performing such internal audit functions be
present at Committee meetings. “Internal audit” as used herein is
understood to cover that function in broad terms, whether formally or informally
established.]

Private
Communications: Regularly at Committee meetings, there will be an
opportunity for Committee members to have private communications with each of
management, the financial officers, internal audit, and the independent
accountants. As part of its job to foster open communication, the Committee
should meet at least annually with the independent accountants in separate
executive session to discuss any matters that the Committee or the independent
accountants believe should be discussed privately.

Minutes: The
Committee Chair shall appoint an individual to prepare minutes for each meeting.
Draft minutes shall be distributed to Committee members, for approval at the
next meeting. Approved minutes shall be submitted to the Board of Directors for
ratification and such minutes shall be retained with the permanent corporate
records of the Partnership.

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Audit Committee Charter

Pope MGP, Inc.

Revised October 2003

Reporting to the
Board: The Chair or his or her designee will report Committee actions to the
Board of Directors with such recommendations, as the Committee may deem
appropriate.

Committee  Charter: Annually,
the Committee shall review its Charter and, if appropriate,  propose  revisions to the
Board of Directors for approval.

III.  DUTIES AND RESPONSIBILITIES

To fulfill its duties and
responsibilities the Committee shall:

Maintain  its
Independence

	 	1. 	Adhere
strictly to limitations on member compensation stipulated by SEC or  Nasdaq rules. 

	 	2. 	Monitor
rules defining “affiliated persons” so as to  avoid independence issues.

	

Review of
Documents and Reports 

	 	3. 	Review
with management the Partnership’s annual financial statements and  the independent
accountants’ opinion with respect to such financial  statements.

	 	4. 	Review
with the independent accountants the results of their audit of the annual  financial
statements, including all matters required to be communicated to audit  committees under
generally accepted auditing standards. Such communications  should include significant
audit adjustments, significant accounting policies  and any related changes thereto,
management judgments and accounting estimates,  disagreements with management, and any
other difficulties encountered during  their audit.

	 	5. 	Review
the Form 10-Q prior to its filing. This review may take place at a  scheduled meeting or
it may take place as a result of dissemination of a draft  10-Q followed by individual
responses to either management or the Committee  Chair.

	 	6. 	Review
comments provided by the independent accountants relating to the  Partnerships internal
controls or other related matters, and management’s  response.

	 	7. 	Review
any internal reports (if applicable) to management prepared by internal  auditors and
management’s response.

	

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Audit Committee Charter

Pope MGP, Inc.

Revised October 2003

Independent
Accountants

	 	8. 	Assume
direct responsibility for appointment, compensation, and oversight of the  independent
accountant. The independent auditor reports directly to the  Committee.

	 	9. 	Review
the independent accountants’ plan and scope relating to their audit  of the annual
financial statements. Review with the independent accountants the  coordination of audit
effort to assure completeness of coverage, reduction of  redundant efforts, and the
effective use of audit resources.

	 	10. 	On
an annual basis, review and discuss with the accountants all significant  relationships
the accountants have with the Partnership to determine and confirm  the accountants’ independence.
Obtain a formal written statement from the  outside auditors delineating all
relationships with the Partnership. Ensure that  the CEO, CFO, Controller (or persons in
equivalent positions) have not been  employed by the company’s audit firm during the
1-year period preceding the  current year audit.

	 	11. 	Ensure
that the independent accountants will not provide any non-audit services  including: a)
bookkeeping or other services related to the accounting records or  financial statements
of the audit client; b) financial information systems  design and implementation; c)
appraisal or valuation services, fairness  opinions, or contribution-in-kind reports; d)
actuarial services; e) internal  audit outsourcing services; f) management functions or
human resources; g)  broker or dealer, investment adviser, or investment banking
services; h) legal  services and expert services unrelated to the audit; i) any other
service that  the Committee determines is impermissible. The independent auditor may
engage in  any non-audit service, including tax services, that is not listed above, only
if  the activity is pre-approved by the Audit Committee.

	 	12. 	Ensure
that the lead audit or coordinating partner and the reviewing partner  must rotate off of
the audit every 5 years.

	

Financial
Reporting Processes and Internal Controls

	 	13. 	Review
with financial management the Partnership’s significant accounting  and reporting
policies and any changes thereto.

	

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Audit Committee Charter

Pope MGP, Inc.

Revised October 2003

	 	14. 	Review
with financial management the accounting treatment of individual events  or transactions
that may have a significant impact on financial reporting.

	 	15. 	Consider,
through periodic discussions, the independent accountants’ judgments about the
quality and appropriateness of the Partnership’s  accounting principles as applied
in its financial reporting.

	 	16. 	Determine
that management has implemented policies and procedures ensuring that  the Partnership’s
risks are identified and that controls are adequate, in  place, and functioning properly.

	 	17. 	Consider
and review with management and the independent accountants:

	 	The
adequacy  of the Partnership’s internal controls including computerized information
system controls and security. Any related significant findings and  recommendations of
the independent accountants regarding internal controls  together with management’s
responses thereto.

	 	18. 	Evaluate
whether management is setting the appropriate tone at the top by  communicating the
importance of internal controls and ensuring all individuals  possess an understanding of
their roles and responsibilities.

	 	19. 	Require
the independent accountant to keep the Committee timely informed about  fraud, illegal
acts, and deficiencies in internal control.

	

Ethical  and Legal
Compliance

	 	20. 	Confirm
that management has the proper review system in place to ensure that the  Partnership’s
financial statements, reports and other financial information  (disseminated to
governmental organizations and the public) satisfy legal  requirements.

	 	21. 	Evaluate
the need for and related activities (if applicable) of the  Partnership’s internal
audit activities. If applicable, review such  activities, organizational structure, and
qualifications of internal audit  resources.

	 	22. 	Review,
with management and Partnership counsel, the Partnership’s policies  and procedures
to minimize and monitor risks and exposures from noncompliance  with laws and
regulations. Specifically consider compliance matters pertaining  to corporate securities
trading policies.

	

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Audit Committee Charter

Pope MGP, Inc.

Revised October 2003

	 	23. 	Review
and approve any extension of credit by the Partnership to a director or  officer of the
Partnership or its general partners.

	 	24. 	Approve
a code of ethics for senior financial officers and review it annually  for potential
improvement. Obtain annually an assurance in writing from each  senior financial officer
that they have complied.

	 	25. 	Establish
and maintain procedures to receive, retain, and treat complaints from  employees and
others about accounting, internal accounting controls, or auditing  matters. The
procedures established must address “whistleblower  complaints” by establishing
for the confidential, anonymous submission by  employees of concerns regarding
questionable accounting or auditing matters.

	 	26. 	Review,
with management and Partnership counsel, the process for determining  risks and exposures
from litigation, claims and assessments, including  counsel’s assessment of specific
significant matters.

	 	27. 	Perform
any other activities consistent with this Charter, the Partnership  Agreement and
governing law, as the Committee or the Board deems necessary or  appropriate.

	

6 of 6Exhibit 10.69

	

Exhibit 10.69

TIMBERLAND

PURCHASE
AND SALE AGREEMENT

FOR THE MORTON, LEWIS COUNTY, WASHINGTON TIMBERLANDS

by and
between

PLUM
CREEK TIMBERLANDS, L.P.,

As Seller

and

POPE RESOURCES,
A Delaware Limited Partnership,

As
Purchaser

Dated
the — day of December, 2003

	

TIMBERLAND
PURCHASE
AND SALE AGREEMENT
FOR THE
MORTON, LEWIS COUNTY, WASHINGTON TIMBERLANDS

        THIS
AGREEMENT is made and entered into this ___ day of December, 2003, by and among
PLUM CREEK TIMBERLANDS, L.P., a Delaware limited partnership, as successor by
merger to Plum Creek Timber Company, L.P., a Delaware limited partnership
(“Seller”) whose address is 999 Third Avenue, Suite 4300, Seattle,
Washington 98104, and POPE RESOURCES, A Delaware Limited Partnership whose
address is 19245 Tenth Avenue Northeast, Poulsbo, Washington 98370-0239
(“Purchaser”).

        Purchaser
desires to purchase from Seller and Seller desires to sell to Purchaser
approximately 3,297 acres of timberland and associated property and assets
located in the State of Washington, known as the Morton, Lewis County,
Washington Timberlands. In consideration of the mutual covenants set forth in
this Agreement, the receipt and sufficiency of which are acknowledged, and
subject to all terms of this Agreement, the parties agree as follows:

        1. Purchase
and Sale of Assets.  Subject to the contingencies and other terms and conditions
contained herein, Seller  agrees to sell and Purchaser agrees to purchase the Assets (as
defined in Paragraph 1.6), as follows:

	                1.1
      Timberlands. All of Seller’s right, title and interest
      in and to certain real property owned by Seller in Lewis County, Washington,
      as further described on Exhibit “A” attached hereto and incorporated
      herein by this reference (“Real Property”), together with all
      other rights and interests related or appurtenant thereto, including but
      not limited to all of Seller’s right, title, and interest (i) in and
      to the merchantable and unmerchantable timber, growing, lying, standing
      or felled, timber interests and timber rights located on or appurtenant
      to the Real Property; (ii) in and to any mineral, sand, oil, gas, hydrocarbon
      substances and gravel and other hard rock rights on and under the Real Property
      not previously severed by Seller’s predecessors in interest; and (iii)
      in and to any development rights, air rights, water, water rights, ditch
      and ditch rights appurtenant to the Real Property (collectively, all property
      described in this Paragraph 1.1 is herein called the “Timberlands”).

	                1.2
      Access Rights and Easements. All rights and interests of Seller
      in and to any access rights, rights-of-way and easements appurtenant to
      or benefiting the Timberlands and listed in Schedule 1.2 (“Access
      Rights and Easements”).

	                1.3
      Maps and Records. All records and information in Seller’s
      possession or control used in connection with or pertaining to the Timberlands,
      including, without limitation, Seller’s records and information relating
      to timber inventories, timber management and operations reports, records
      relating to title matters, current agreements, roads, current easements
      and access rights, and environmental conditions, maps, Road Maintenance
      and Abandonment Plan, wildlife survey results, biological studies, open
      Forest Practice Applications (including any FPAs where any reforestation
      or other continuing forestland obligations remain uncompleted), aerial photos,
      plans, drawings, specifications, renderings, engineering studies, surveys,
      and electronic timber inventory data solely concerning the Timberlands (collectively,
      the “Maps and Records”). The term “Maps and Records”
      shall include all information, documents, records, maps, reports, due diligence
      materials, including, without limitation, surveys, forest management records,
      and wildlife and fisheries reports, received by Seller from the State Department
      of Natural Resources (“DNR”) in connection with Seller’s
      acquisition of the Timberlands from the DNR in 2001.

	

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	                1.4
      Assets. The Timberlands, Access Rights and Easements and Maps
      and Records are sometimes collectively referred to as the “Assets.”

	                1.7
      Possession. Purchaser shall be entitled to possession
      of the Assets upon Closing.

	

        2. Purchase
Price and Terms.

	                2.1
      Purchase Price. The purchase price for the Assets is Eight
      Million Five Hundred Five Thousand Dollars (US$8,505,000) (“Purchase
      Price”).

	                2.2
      Earnest Money. Upon full execution hereof, Purchaser shall
      place into the escrow with the Escrow Agent (defined below) the amount of
      Two Hundred Fifty Thousand Dollars (US$250,000), in cash or by wire transfer
      or otherwise immediately available federal funds paid or delivered as earnest
      money (the “Earnest Money”) in part payment of the Purchase Price
      for the Assets. The Earnest Money shall be invested by Escrow Agent in an
      interest-bearing account mutually acceptable to the parties, with all interest
      earned thereon being for the account of Purchaser. The Earnest Money shall
      be refunded to Purchaser if this Agreement terminates for any reason other
      than Purchaser’s failure to close without legal excuse. The Earnest
      Money shall constitute Seller’s sole and exclusive remedy in the event
      Purchaser fails to close this transaction without legal excuse.

	                2.3
      Payment of Purchase Price. At Closing, Purchaser shall pay
      Seller in cash or by wire transfer or otherwise immediately available federal
      funds the entire Purchase Price, of which the Earnest Money receipted herein
      is a part. The value of the Access Rights and Easements and Maps and Records
      is included in the value allocated to the Timberlands, which is 100% of
      the Purchase Price.

	

        3.
Closing. Subject to the provisions of Paragraph 14.1(h),
Closing (“Closing”) shall occur at the offices of Transnation Title
Insurance Company, 1200 Sixth Avenue, Seattle, Washington 98101 (“Escrow
Agent”) on or before January 9, 2004, unless such date is extended by
written agreement of the parties.

        4. Representations
and Warranties of Seller.  Seller represents and warrants to Purchaser that
except as  disclosed in a Schedule or Schedules hereinafter described:

	                4.1
      Organization. Seller is a limited partnership duly organized
      and validly existing under the laws of the State of Delaware.

	

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	                4.2
      Good Standing. Seller is qualified to do business in the State
      of Washington.

	                4.3
      Power and Authority for Transaction. Seller has the power
      and authority to execute, deliver and perform this Agreement and the transactions
      contemplated herein in accordance with the terms hereof.

	               4.4
      Authorization. The execution and delivery by Seller of this
      Agreement and the due consummation of the transactions contemplated herein
      have been duly and validly authorized by all necessary partnership actions
      on the part of Seller and this Agreement constitutes a valid and legally
      binding agreement of Seller.

	                4.5
      No Violation or Conflicts. Neither the execution and delivery
      of this Agreement by Seller nor the consummation by Seller of the transactions
      contemplated herein (i) constitute a violation of Seller’s certificate
      of limited partnership or limited partnership agreement, or (ii) result
      in the breach of or the imposition of any lien on any Assets pursuant to,
      or constitute a material default under, any indenture or bank loan or credit
      agreement or other agreement or instrument to which Seller is a party or
      by which it or its property may be bound or affected. Except for consents
      or approvals which will have been obtained or actions which will have been
      taken on or prior to the Closing Date, and except for consents, approvals,
      authorizations or actions described in Paragraph 16.2, no consent,
      approval, authorization or action by any governmental authority, or any
      person or entity having legal rights against or jurisdiction over Seller,
      is required in connection with the execution and delivery by Seller of this
      Agreement or the consummation by Seller of the transactions contemplated
      herein.

	                4.6
      No Defaults. To Seller’s knowledge, the Access Rights
      and Easements are valid and in full force and effect, and no event has occurred
      or is claimed to have occurred which may render unenforceable or permit
      the termination of any of the Access Rights and Easements. To Seller’s
      knowledge, neither Seller nor, to Seller’s knowledge, any other party
      thereto has breached or violated or is claiming Seller has breached or violated
      any provision of, or is in default or is claiming Seller is in default in
      any respect under, the terms or conditions of any Access Right or Easement.
      Except as disclosed on Schedule 1.2, the Access Rights and Easements
      are assignable to Purchaser without consent.

	                4.7
      Condemnation Proceedings. Subject to Paragraph 14.1(e), no
      condemnation proceeding is pending or, to the knowledge of Seller, threatened
      which affects or could reasonably be expected to affect the Timberlands.

	                4.8
      Environmental Matters. To Seller’s knowledge, Seller
      warrants that:

	                (a)
      the Timberlands are not nor have they at any time been used for or suffered
      the generation, transportation, management, handling, treatment, storage,
      manufacture, emission disposal, release or deposit of any hazardous substances
      or fill or other material containing hazardous substances in material violation
      of applicable laws;

	

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	                (b)
      there are no underground storage tanks on the Timberlands;

	                (c)
      Seller has not received written notification from any third party, including,
      but not limited to, any governmental agency, alleging that Seller, with
      respect to the management and operations of the Timberlands, and/or the
      Timberlands are not materially in compliance with, may require remediation
      under, or be subject to liability under applicable environmental laws; and

	                (d)
      there are no hazardous substances in, on or under the Timberlands or any
      part thereof that are in violation of applicable environmental laws except
      for such violations as would not (individually or in the aggregate) be material.

	

        Except
as to matters covered by Seller’s warranty set forth in this Paragraph 4.8,
Purchaser releases Seller from all costs, losses, liabilities, obligations and
claims, of any nature whatsoever, known and unknown, that Purchaser may have
against Seller or that may arise after the date of Closing based in whole or in
part upon (i) Seller’s failure to comply with any environmental laws
applicable to the Timberlands; or (ii) the presence, release or disposal of any
hazardous substance, solid waste, or any other environmental contamination on,
within, or from the Timberlands before, as of, or after the Closing Date. The
above-referenced release does not cover or apply to any statutory or common law
claim for contribution or indemnity that may arise to the extent Purchaser
suffers any liabilities or obligations from future claims of any governmental
agency arising out of (i) or (ii) above, or any claims, costs, losses,
liabilities, or obligations arising out of the activities of Seller or its
agents, contractors or employees on, in, under or about the Timberlands after
the Closing Date. As used herein, the term “environmental laws” shall
mean all applicable federal, state or local laws, rules, regulations,
governmental permits or other binding determinations of any governmental
authority relating to or addressing the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, as amended (“CERCLA”), and the Resource Conservation and Recovery
Act, as amended (“RCRA”), the Toxic Substances Control Act, as amended
(“TSCA”), the Clean Water Act, as amended (“CWA”), the Clean
Air Act, as amended (“CAA”), and the Oil Pollution Control Act of
1990, as amended (“OPA”). As used herein, the terms “hazardous
substance” and “release” (as it relates to the release of
hazardous substances as opposed to the release of claims) have the meanings
specified in CERCLA and the terms “solid waste” and
“disposal” (or “disposed”) have the meanings specified in
RCRA. If either CERCLA or RCRA is amended to broaden the meaning of any term
defined thereby, the broader meaning shall apply to this Paragraph 4.8 after the
effective date of the amendment. Moreover, to the extent that Washington law
establishes a meaning for “hazardous substance,” “release,”
“solid waste,” or “disposal” that is broader than that
specified in either CERCLA or RCRA, the broader meaning shall apply.

	                4.9
      Suits, Actions or Proceedings. There is (i) no court or administrative
      decision, permit, moratorium, judgment or order against Seller or specifically
      involving the Timberlands which materially and adversely affects the value
      of the Timberlands or the operations of the Timberlands as they are currently
      being operated; and (ii) no legal, administrative or other suit, action,
      proceeding or arbitration, or governmental investigation pending or, to
      the knowledge of Seller, threatened against Seller or specifically involving
      the Timberlands which would reasonably be expected to materially and adversely
      affect the value of the Timberlands or the operations of the Timberlands
      as they are currently being operated. There is no suit, action, claim, arbitration
      or other proceeding pending, or to the knowledge of Seller, threatened before
      any court or governmental agency, which may result in the restraint or prohibition
      of the consummation of the transactions contemplated by this Agreement.

	

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	                4.10
      Broker Fees. Seller has engaged Forestland Marketing /Troy
      Dana/Mike Flanagan (collectively, “Broker”) as its broker, agent
      or finder with respect to this transaction, and Seller shall pay Broker
      at Closing all brokerage fees, agents’ commissions and/or finders’
      fees owed to Broker in connection with the transaction contemplated herein.
      Purchaser shall have no liability or obligation to pay Broker any commissions
      or fees. Purchaser and Seller each represent and warrant to the other that
      no other broker, agent or finder, licensed or otherwise has been engaged
      by it, respectively, in connection with the transaction contemplated by
      this Agreement. In the event of any such claim for broker’s, agent’s
      or finder’s fee or commission for any broker, agent or finder other
      than the Broker in connection with the negotiation, execution or consummation
      of this transaction, the party upon whose alleged statement, representation
      or agreement such claim or liability arises shall indemnify, hold harmless
      and defend the other party from and against such claim and liability, including
      without limitation, reasonable attorney’s fees and court costs. Purchaser
      and Seller acknowledge that the representations and warranties contained
      in this Paragraph shall survive the Closing.

	                4.11
      Compliance. Seller has not received written notification from
      any governmental agency alleging that the Timberlands or the use or condition
      thereof are not presently in compliance with applicable laws and Seller
      has no knowledge of any such violations relating to the Timberlands or the
      use or condition thereof. To Seller’s knowledge, Seller maintains the
      Assets in material compliance with all applicable laws, ordinances, codes,
      permits, approved Forest Practices Applications, and regulations. Seller
      has not engaged in any timber harvest operations on the Timberlands since
      September 29, 2003.

	                4.12
      Marketable Title. Seller has good and marketable title to the
      Assets and at Closing such Assets will be free and clear of all liens, security
      interests, charges and encumbrances except, in the case of the Timberlands,
      Permitted Exceptions defined in Paragraph 7(c).

	                4.13
      Unrecorded Encumbrances; Ongoing Rights. There is currently
      and shall prior to Closing be no timber cutting or harvesting activity on
      or removal of any timber from the Timberlands. Except for the Forest Practice
      Application disclosed in Schedule 4.13, the Timberlands are not subject
      to any contracts, leases, cutting rights, logging, stumpage or other agreements,
      timber contracts or deeds, licenses, restrictive covenants, Forest Practice
      Applications, permits, tenancies, easements or reservations except those
      encumbrances of public record. Seller warrants that it shall not sell, mortgage
      or otherwise transfer the Assets or any portion thereof or interest therein,
      or modify, waive any rights under or terminate any Access Rights and Easements,
      breach or violate any terms or conditions in any Access Rights and Easements,
      or enter into any agreements, create any liens, claims, restrictions or
      encumbrances, or grant any rights or interests in or pertaining to the Assets
      or release or terminate any existing rights benefiting the Assets without
      the prior written consent of Purchaser, which shall not be unreasonably
      withheld. Seller has provided Purchaser with a copy of the FPA listed on
      Schedule 4.13.

	

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	                4.14
      No Adverse Claims. Except as to matters of public record,
      to Seller’s knowledge, the Timberlands are not subject to any rights
      of persons in possession or persons making use thereof which would reasonably
      be expected to have a material adverse effect on the value of the Timberlands,
      nor has Seller received any notice that that the Timberlands are subject
      to any claim of adverse possession or prescriptive easement.

	                4.15
      ESA. To Seller’s knowledge, there are no (i)
      endangered or threatened species (as defined or listed under federal law)
      nor any nesting site(s) or habitat of or waterways containing any such species
      located on or proximate to the Timberlands, or (ii) areas of the Timberlands
      within any “owl circles,” which would materially and adversely
      affect the harvesting of the timber on the Timberlands.

	                4.16
      Tribal Rights. Seller has not received written notice
      from any aboriginal or Native American tribe (or representative thereof)
      of any rights or claims of such tribe that relate to the Timberlands.

	                4.17
      Timber Harvest Obligations. Except for approximately 65
      acres located within the Timberlands in the area shown on the map attached
      hereto as Exhibit “B” for which an obligation remains to
      plant, (i) all timber harvest excise taxes, costs and liabilities associated
      with any prior harvesting and removal of timber or other natural resources
      from the Timberlands have been fully paid, and (ii) all other liabilities
      and obligations arising out of the use, ownership or possession of the Timberlands
      (including, without limitation, the removal of timber or other natural resources)
      prior to Closing will be fully paid and performed by Seller on or before
      Closing.

	

        5. Representations
and Warranties of Purchaser.  Purchaser represents and warrants to Seller that:

	                5.1
      Organization. Purchaser is a limited partnership duly organized
      and validly existing under the laws of the State of Delaware, and has the
      partnership power to enter into this Agreement and to carry out the transactions
      contemplated herein in accordance with the terms hereof.

	                5.2.
      Authorization; No Violation or Conflicts. The execution and
      delivery of this Agreement by Purchaser and the due consummation of the
      transactions contemplated herein have been duly and validly authorized by
      all necessary partnership action on the part of Purchaser, and this Agreement
      constitutes a valid and legally binding agreement of Purchaser. Neither
      the execution and delivery of this Agreement by Purchaser nor the consummation
      by Purchaser of the transactions contemplated herein constitute a violation
      of Purchaser’s agreement of limited partnership or other organizational
      documentation or agreements or result in the breach of, or the imposition
      of any lien on any assets of Purchaser pursuant to, or constitute a default
      under, any indenture or bank loan or credit agreement, or other agreement
      or instrument to which Purchaser is a party or by which it or any of its
      properties may be bound or affected. Except for consents, approvals, or
      authorizations which will have been obtained or actions which will have
      been taken on or prior to the Closing Date, no consent, approval, authorization
      or action by any governmental authority or any person or entity having legal
      rights against or jurisdiction over Purchaser is required in connection
      with the execution and delivery by Purchaser of this Agreement or for consummation
      by Purchaser of the transactions contemplated herein.

	

7

	                5.3
      Broker Fees. Purchaser has not employed any broker, agent
      or finder, or incurred any liability for any brokerage fees, agents’
      commissions or finders’ fees, in connection with the transactions contemplated
      herein.

	                5.4
      Suits, Actions or Proceedings. Purchaser has no knowledge
      of any suit, action, arbitration or other proceeding pending before any
      court or governmental agency, which may result in the restraint or prohibition
      of the consummation of the transactions contemplated by this Agreement.

	

        6. Survival;
Cushion Against Claims; Knowledge; Materiality.

	                6.1
      Survival. The respective representations and warranties of
      Seller and Purchaser contained herein or in any Schedule, certificate or
      other instrument delivered by or on behalf of such party pursuant to this
      Agreement, including the environmental matters set forth in Paragraph
      4.8, shall survive the Closing for a period of twelve (12) months and
      thereafter shall expire and terminate, and each party shall be forever released
      from liability to the other based upon such representations and warranties
      except as to matters for which notice has been given by a party of the inaccuracy
      or breach of any representation or warranty on or prior to such termination
      date. The representations and warranties of Seller contained in Paragraph
      4.12 and in any deeds or assignment instruments transferring the Assets
      shall not be subject to the terms of this Paragraph 6.1.

	                6.2
      Seller’s Knowledge Defined. “Knowledge” as
      used in this Agreement with respect to the Seller shall mean actual current
      knowledge (as opposed to constructive or imputed knowledge) of the fact
      or matter in question by any officer of the Seller or by David Crooker;
      Michael Yeager, Director Land Management, Lee Spencer, Resources Manager,
      and Gregg Lewis, Forester.

	                6.3
      Materiality Defined. “Material” or “materiality”
      or “materially” or “materially and adversely affect”
      as used in this Agreement with respect to Seller shall mean a claim, encumbrance
      or occurrence (including without limitation a breach of warranty or violation
      by Seller) that could lessen the value of the Assets by, or cause damages
      of, at least $25,000.00.

	

8

	

        7. Condition
of Title and Title Insurance.

	                (a)
      As of the date of closing, title to the Timberlands is to be free of all
      encumbrances or defects except those listed in the preliminary commitments
      for title insurance deemed to be Permitted Exceptions as described below.
      Monetary encumbrances and any encumbrances arising after the date of this
      Agreement not caused by or approved in writing by Purchaser shall not be
      deemed to be Permitted Exceptions and shall be discharged by Seller and
      be paid from Seller’s funds at Closing. The following shall not be
      deemed encumbrances or defects and shall be deemed to be Permitted Exceptions:
      rights reserved in federal patents or state deeds, building or use restrictions
      consistent with current zoning, and rights previously reserved for minerals,
      metals and ores of every kind and nature (excluding sand, rock and gravel),
      and previously reserved rights for oil, gas and other hydrocarbons.

	                (b)
      At closing, Seller shall, at Seller’s expense, cause the Transnation
      Title Insurance Company to furnish to Purchaser a standard form ALTA Owner’s
      or Purchaser’s Policy of Title Insurance (policy form 1970-B or other
      available form approved by Purchaser) in the amount of the Purchase Price
      for the Timberlands insuring the title to the Timberlands in Purchaser,
      subject only to the Permitted Exceptions and any liens or encumbrances suffered
      or incurred by Purchaser (“Title Policy”). Purchaser shall be
      entitled to obtain at closing, at Purchaser’s cost, such special endorsements
      to the Title Policy as Purchaser may reasonably request.

	                (c)
      Seller has provided a copy of the preliminary commitments for title insurance
      for the Timberlands, together with copies of the exception documents referenced
      therein. Purchaser shall have until close of business on the date that is
      ten (10) business days after the date of mutual execution and delivery of
      this Agreement to notify Seller of any objections Purchaser has to any matters
      shown or referred to in the title commitments. Any title encumbrances or
      exceptions that are set forth in the title commitments to which Purchaser
      does not object during the period specified, except the encumbrances that
      Seller is required to remove under Paragraph 7(a) above, shall be
      deemed to be permitted exceptions to the status of Seller’s title (the
      “Permitted Exceptions”). With regard to items to which Purchaser
      does object within the period specified, Seller shall attempt to cure and
      remove such items prior to Closing. If Seller is unable or fails to cure
      or remove such items by the date that is five (5) days after the date Purchaser
      gives notice of such objection, Seller shall notify Purchaser thereof by
      the expiration of such 5-day period, and Purchaser may either waive its
      objection and proceed with closing, or terminate this Agreement by written
      notice to Seller no later than the date that is five (5) days after the
      date Purchaser receives such notice from Seller (or if Seller is unable
      or fails to timely cure or remove such items or give such notice to Purchaser,
      no later than ten (10) days after Purchaser gives its notice of objection).
      If Purchaser fails to give such notice to Seller within the time specified,
      the objection(s) shall be deemed waived by the Purchaser. If any supplements
      to any of the title commitments are issued after the date of this Agreement,
      Purchaser shall have until the later of (i) the expiration of the initial
      ten (10) business day title review period, or (ii) five (5) business days
      after receipt of such supplement, to notify Seller of Purchaser’s objection
      to any such matters shown therein, and if such notice is not given within
      such period, Purchaser shall be deemed to have accepted such matters, except
      the encumbrances that Seller is required to remove under Paragraph 7(a)
      above, as Permitted Exceptions. If Seller is unable or fails to cure or
      remove such items by the required date for Closing, Seller shall notify
      Purchaser thereof at least two (2) business days prior to such required
      date for Closing, and Purchaser may either waive its objection thereto and
      proceed with closing, or terminate this Agreement by written notice to Seller
      no later than the required date for Closing.

	

9

	

        8. Condition
of Property; Subsequent Acts.

	                8.1
      Limitation on Representations. Purchaser agrees that neither
      Seller nor its agents, officers, employees or assigns shall be held to any
      covenant or representation respecting the condition of the Timberlands or
      any improvements thereon, nor shall Purchaser or Seller or the assigns of
      either be held to any covenant or agreement for alterations, improvements
      or repairs unless the covenant, representation or agreement relied on is
      contained herein or expressly or impliedly in the deeds or instruments transferring
      any of the Assets or is in writing and attached to and made a part of this
      Agreement.

	                8.2
      Limitation of Warranties. Except for the representations and
      warranties made in this Agreement or contained, expressly or impliedly,
      in the deeds or instruments transferring any of the Assets, Purchaser specifically
      acknowledges and agrees that (i) Seller does not make any representations
      or warranties of any kind whatsoever, either express or implied, with respect
      to the Timberlands; and (ii) the Timberlands are sold to Purchaser in an
      “AS IS” and “WITH ALL FAULTS” condition as of the Closing
      Date, including without limitation the stability of soils, suitability for
      any construction or development, encroachment or boundary questions, drainage,
      availability of utilities, zoning, quantity, quality, acreage, access and
      similar matters. Purchaser assumes the risk that adverse physical conditions
      may not have been revealed by its investigation. The limitations and “AS
      IS” provisions of this Paragraph 8.2 specifically do not apply
      to the express exceptions to the release granted to Seller in Paragraph
      4.8 hereof.

	

        9. Liabilities
Not Assumed.  Except for obligations under the Access Rights and Easements
arising from and  after Closing, and as otherwise expressly set forth in this Agreement,
Purchaser shall not assume or be responsible for any  liabilities of Seller.

        10. Access
Rights and Easements.

	                At
      Closing, Seller shall assign, to the extent assignable, and, subject to
      the terms of Paragraph 16.2 below, Purchaser shall assume the Access
      Rights and Easements listed on Schedule 1.2 pursuant to an executed
      blanket assignment in the form of Schedule 10 hereto. Seller has
      provided copies of the Access Rights and Easements to Purchaser.

	

10

	

        11.
Access to Information. Upon full execution hereof, Seller
will permit Purchaser to have reasonable access to the Timberlands and to
the Maps and Records, whether located in Seller’s Seattle office or
elsewhere, provided, however, that any such access must be coordinated through
Michael Yeager in Seller’s Seattle office. Seller shall provide Purchaser
with access to all other materials reasonably requested by Purchaser. Purchaser
and its employees, agents and consultants shall have the right, at
Purchaser’s sole cost and expense, to enter onto the Timberlands prior to
Closing to conduct such inspections of the Assets, document reviews, and tests
as Purchaser deems reasonable; provided, however, that such access must be
coordinated through Michael Yeager in Seller’s Seattle office.

        12. Confidentiality;
Public Announcements; Return of Information.  Subject to the provisions of
Paragraph 12.3  below:

	                12.1
      Neither Seller nor Purchaser shall disclose the content or substance of
      this Agreement to any individual, firm, partnership, corporation, entity,
      governmental authority, or other party except advisors, agents, lenders
      and representatives assisting each respective party in connection with this
      transaction, and except government agencies and other third parties to whom
      notice must be given or from whom consent must be obtained in order to complete
      the transactions described herein, until such disclosure is agreed upon
      in writing and then only to accomplish the consents and approvals required
      hereunder.

	                12.2
      No press releases or other public statements concerning this Agreement or
      the transactions contemplated hereby shall be made by either party without
      the prior written approval of the other, provided such approval shall not
      be unreasonably withheld or delayed; provided further that the parties shall
      cooperate in good faith with respect to issuing a joint press release at
      or prior to Closing. Seller acknowledges that this transaction constitutes
      a “material transaction” for Purchaser with respect to disclosure
      requirements and Purchaser’s press release will include disclosure
      of the Purchase Price. Seller agrees that upon the full execution of this
      Agreement, Purchaser may issue a press release regarding this transaction
      so long as the Purchase Price is not disclosed, and upon Closing Purchaser
      may issue a press release regarding this transaction including disclosure
      of the Purchase Price; provided, however, that Seller must approve the form
      and content of any such press release prior to its issuance, such approval
      not to be unreasonably withheld

	                12.3
      Each party hereto, its representatives, agents and employees shall hold
      in strict confidence and shall not use or disclose to any person or organization
      any information or data concerning this Agreement or the transaction contemplated
      hereby except to the extent that (i) said information has been published
      or constitutes a matter of public knowledge or record; (ii) such disclosure
      is reasonably necessary for communications with and reporting to the Board
      of Directors or other governing body of either party or reasonably appears
      to be required by a governmental agency having jurisdiction over the parties;
      (iii) such information is necessary in connection with any suit brought
      to enforce the obligations of any party hereunder; or (iv) if based upon
      the legal opinion of counsel for the disclosing party, that such counsel
      reasonably believes that disclosure is necessary or desirable to avoid conflict
      with or violation of any applicable law, rule, or regulation.

	

11

	                12.4
      In the event of termination of this Agreement for whatever reason, Purchaser
      will return all originals and copies of documents, work papers and other
      material obtained hereunder, whether obtained before or after the execution
      hereof (subject to retention of true copies for litigation purposes as applicable),
      and Purchaser agrees that it will not disclose or divulge any such information
      to any other person without Seller’s written consent, and will use
      its best efforts to keep any information so obtained confidential; provided,
      however, that (i) Purchaser may disclose this information to its employees,
      attorneys, accountants and prospective lenders who need to know such information
      in connection with this transaction and who have been informed of Purchaser’s
      obligation to maintain the information as confidential; and (ii) Purchaser
      shall not be obligated to treat as confidential any information which was
      known to it at the time of disclosure or which becomes publicly known or
      available thereafter or is rightfully received by Purchaser from a third
      party.

	

        13.
Exchange. Seller may wish to complete this transaction as
part of a Section 1031 tax-deferred exchange. Purchaser agrees to cooperate with
Seller in documenting and completing such exchange by agreeing that Seller may
transfer Seller’s rights and obligations under this Agreement to
Seller’s Qualified Intermediary, in Seller’s sole discretion, provided
that such assignment, if made, shall not release Seller from its obligations
under this Agreement. Purchaser agrees to accept Seller’s Qualified
Intermediary as the assigned Seller of the Property described in this Agreement.
Purchaser shall incur no additional expense or liability by such cooperation.
Purchaser may wish to complete this transaction (or portion thereof) as part of
a Section 1031 tax-deferred exchange. Seller agrees to cooperate with Purchaser
in documenting and completing such exchange by agreeing that Purchaser may
transfer all or any portion of Purchaser’s rights and obligations under
this Agreement to Purchaser’s Qualified Intermediary or Exchange
Accommodation Titleholder (as defined in Rev. Proc. 2000-37), in
Purchaser’s sole discretion, provided that such assignment, if made, shall
not release Purchaser from its obligations under this Agreement. Seller agrees
to accept Purchaser’s Qualified Intermediary or Exchange Accommodation
Titleholder as the assigned Purchaser of the Property described in this
Agreement. Seller shall incur no additional expense or liability by such
cooperation.

              14.
        Closing.

	                14.1
      Conditions to Purchaser’s Obligations. The obligations
      of Purchaser to perform this Agreement are subject to the satisfaction,
      in all material respects on or before the Closing Date or the date indicated
      for any such contingency listed below (whichever is earlier), of each of
      the following conditions and any other conditions to Purchaser’s obligations
      hereunder specified elsewhere in this Agreement, unless waived in writing
      by Purchaser in its sole discretion:

	                        (a)
      Material Inaccuracies. Seller’s representations and warranties
      shall be true and correct in all material respects on and as of the Closing
      Date as though made on and as of the Closing Date and Seller shall deliver
      a certificate to that effect at Closing.

	

12

	                        (b)
      Performance of Obligations. Seller shall have performed all
      obligations required to be performed by it prior to or on the Closing Date
      under this Agreement.

	                        (c)
      Title Insurance Commitment. At Seller’s expense, Purchaser
      shall have received a binding commitment from Transnation Title Insurance
      Company for the issuance of the Title Policy, and any special endorsements
      thereto reasonably required by Purchaser (which special endorsements shall
      be at Purchaser’s expense), subject only to the Permitted Exceptions.
      It shall be reasonable for Purchaser to require a special endorsement to
      the Title Policy which insures that the Declaration (as defined in Section
      14.1(h) below) and the Murray Pacific Habitat Conservation Plan (“HCP”),
      Amended HCP, Implementation Agreement and Amended Implementation Agreement,
      as described in the Declaration, do not affect or bind the Timberlands or
      any portion thereof.

	                        (d)
      Suits, Actions or Proceedings. No suit, action, arbitration
      or other proceeding shall be pending before any court or governmental agency,
      which may result in the restraint or prohibition of the consummation of
      the transactions contemplated by this Agreement, or which could reasonably
      be expected to have a material adverse effect on the value of the Assets
      or the use of the Timberlands as commercial timberlands, and all governmental
      and regulatory approvals and clearances which are required to consummate
      such transactions, if any, shall have been obtained.

	                        (e)
      Casualty, Loss or Condemnation. The Timberlands shall not
      have become subject, subsequent to the date of this Agreement and prior
      to the Closing Date, to physical damage by fire, flood, windstorm, earthquake
      or other similar occurrence, or to any condemnation proceeding, which causes
      or may result in a diminution in the value of the Timberlands by at least
      $800,000. If Purchaser elects to waive the condition set forth in this Paragraph
      14.1(e), or if any material casualty or condemnation loss diminishes the
      value of the Timberlands by less than $800,000, the Purchase Price shall
      be reduced to reflect the diminution in value resulting or expected to result
      from the casualty or condemnation, in which event Seller shall be entitled
      to retain any compensation awards, insurance proceeds or other payment or
      relief resulting from such casualty or condemnation. If the parties cannot
      agree upon the extent of the diminution in value, the determination shall
      be made by an independent expert mutually agreed upon by the parties. The
      foregoing notwithstanding, if the amount of the casualty or condemnation
      loss diminishes or is expected to diminish the value of the Timberlands,
      by $25,000 or less, there shall be no adjustment to the Purchase Price;
      provided, however, that in such event Purchaser shall be entitled to receipt
      and assignment of any compensation awards, insurance proceeds or other payment
      or relief resulting from such casualty or condemnation.

	                        (f)
      Due Diligence Review. Purchaser may, at Purchaser’s sole
      cost and expense, conduct a due diligence review of the Maps and Records,
      Access Rights and Easements, and the following conditions affecting or pertaining
      to the Timberlands: environmental, title, access, endangered or threatened
      species and any nesting site(s) or habitat thereof or waterways containing
      any such species, and “owl circles,” such due diligence review
      to be completed not later than the date that is ten (10) business days after
      the date of mutual execution and delivery of this Agreement. Purchaser’s
      due diligence review may include review and analysis of all documentation,
      determinations, reports, files and studies of any state or other governmental
      agency relating to endangered or threatened species, or any nesting site(s)
      or habitat thereof or waterways containing any such species, or any “owl
      circles” on or affecting the Timberlands. Purchaser’s obligations
      to consummate the transactions described herein are subject to and conditioned
      upon Purchaser’s acceptance of the findings of such due diligence review
      in Purchaser’s sole good faith discretion. In the event Purchaser fails
      to give notice to Seller of Purchaser’s nonacceptance of its due diligence
      review by the expiration of the 10 business day due diligence contingency
      period, Purchaser shall be deemed to have waived this condition to Closing.

	

13

	                        (g)
      Approval of Continuance Request. Purchaser’s
      request for continuance of the forestland or timberland designation or classification
      of the Timberlands shall have been granted by the Lewis County Assessor
      at or prior to Closing.

	                        (h)
      Removal of Declaration of Covenant from Timberlands. Prior
      to Closing, the Declaration of Covenant recorded under Lewis County Rec.
      No. 9313627, as amended by Amendment recorded under Lewis County Rec. No.
      9512060 (the “Declaration”), relating to the Murray Pacific HCP,
      Amended HCP, Implementation Agreement, and Amended Implementation Agreement,
      shall be removed from title with respect to the Timberlands and all portions
      thereof by a recorded release or other documentation reasonably satisfactory
      to Purchaser and the underwriters for Transnation Title Insurance Company
      (“Release”). Purchaser shall be deemed to have a reasonable basis
      to disapprove such release or other documentation if it is revocable, conditional,
      effective on a date later than the date of its recordation, or is not signed
      by all necessary parties. If this condition to Closing has not been satisfied
      by January 9, 2004, the Closing Date shall be automatically extended to
      allow said contingency to be satisfied, provided that the Closing Date shall
      not be extended beyond January 30, 2004. Seller shall use its reasonable
      efforts to cause the Release to be timely signed and recorded. Seller agrees
      to be a party to the Release. If this condition to Closing is satisfied,
      the Declaration shall not show as an exception on Purchaser’s title
      policy.

	

        In
the event any of the above conditions to Purchaser’s obligations hereunder
are not satisfied or waived by Closing or the earlier dates indicated above,
Purchaser will have the right, exercisable at Purchaser’s sole election, to
terminate this Agreement, whereupon the Earnest Money will be refunded to
Purchaser and no party hereto will have any further rights, duties or
obligations hereunder other than those which expressly survive a termination
hereof.

	                14.2.
      Conditions to Seller’s Obligations. The obligations of
      Seller to perform this Agreement are subject to the satisfaction, in all
      material respects on or before the Closing Date, of each of the following
      conditions and any other conditions to Seller’s obligations hereunder
      specified elsewhere in this Agreement, unless waived in writing by Seller
      in its sole discretion:

	

14

	                        (a)
      Material Inaccuracies. Purchaser’s representations and
      warranties shall be true and correct in all material respects on and as
      of the Closing Date and Purchaser shall have delivered a certificate to
      that effect at Closing.

	                        (b)
      Performance of Obligations. Purchaser shall have performed
      all obligations required to be performed by it prior to or on the Closing
      Date under this Agreement.

	                        (c)
      Suits, Actions or Proceedings. No suit, action, arbitration
      or other proceedings shall be pending before any court or governmental agency
      which may result in the restraint or prohibition of the consummation of
      the transactions contemplated by this Agreement, and all governmental and
      regulatory approvals and clearances which are required to consummate such
      transactions, if any shall have been received.

	

        In
the event any of the above conditions to Seller’s obligations hereunder are
not satisfied or waived by Closing, Seller will have the right, exercisable at
Seller’s sole election, to terminate this Agreement, whereupon the Earnest
Money will be refunded to Purchaser and no party hereto will have any further
rights, duties or obligations hereunder other than those which expressly survive
a termination hereof.

	                14.3
      Prorations. All real property taxes shall be prorated to the
      Closing Date.

	                14.4
      Closing Costs.

	                        (a)
      At Closing Seller shall pay the following costs and expenses associated
      with the closing of the transactions contemplated hereunder:

	 	        (i)
The cost of the standard owner’s policy or policies of title insurance;

	 	        (ii)
One-half of escrow fees;

	                                   (iii)
      All transfer, excise, and recording taxes or fees due on the transfer or
      conveyance of the Assets, including without limitation real estate excise
      tax on the conveyance of the Timberlands; and

	 	        (iv)
Seller’s Broker’s fees and commissions and Seller’s  attorney’s fees.

	                                    (v)
      Any and all compensating or “roll-back” taxes that may become
      due or assessable as a result of the removal of the Timberlands or any portion
      thereof from its present property tax classification or designation as “timberlands”
      or “forestland” prior to Closing or as a result of the inability
      of Purchaser to obtain a requested continuance of such classification or
      designation at Closing based upon any prior act or omission of Seller.

	

15

	 	        (b)
Purchaser shall pay:

	 	        (i)
One-half  of the escrow fees;

	                                   (ii)
      Title insurance premium attributable to extended coverage, if any, or any
      endorsements;

	 	        (iii)
Recording fees for deeds; and

	 	        (iv)
Purchaser’s attorneys’ fees.

	                                   (v)
      Any and all compensating or “roll-back” taxes that may become
      due or assessable as a result of the removal of the Timberlands or any portion
      thereof from its present property tax classification or designation as “timberlands”
      or “forestland” as of or after Closing, unless caused by action
      or failure to act on the part of Seller.

	

Except  as otherwise provided in
this Agreement, each party shall be responsible for the  payment of costs incurred by
said party in connection with the transaction  contemplated by this Agreement.

	 	        14.5 Closing.
At Closing:

	 	        (a)
Seller shall deliver to Purchaser the following:

	                                       (i)
      Special Warranty Deed for the Timberlands in the form attached as Schedule
      14.5(a)(i).

	                                       (ii)
      Nonforeign Affidavit to the effect that Seller is not a foreign person as
      that term is used in Section 1445 of the Internal Revenue Code;

	                                       (iii)
      An Assignment and Assumption Agreement for the Access Rights and Easements
      to be recorded in Lewis County in substantially the form attached hereto
      as Schedule 10;

	 	            (iv)
      A prepaid binding commitment for a standard coverage Policy of Title Insurance;
      and

	 	            (v)
      An Officer’s Certificate regarding representations and warranties.

	 	        (b)
Purchaser  shall deliver to Seller the following:

	                                      (i)
      Executed copy of the Assignment and Assumption Agreement of the Access Rights
      and Easements in substantially the form attached hereto as Schedule 10;

	

16

	 	        (ii)
An Officer’s Certificate regarding representations and warranties; and

	 	        (iii)
The Purchase Price.

	

        At
least ten (10) business days prior to Closing, Seller and Purchaser shall
complete and sign appropriate Real Estate Excise Tax Affidavit with respect to
the conveyance of the Timberlands in which Purchaser covenants that it will
request continuance of the present “timberlands” or
“forestland” property tax classification of the Timberlands, and
Purchaser may then, prior to Closing, submit such Real Estate Excise Tax
Affidavits to the County Assessor to obtain approval of the continuance request.

        At
Closing Seller and Purchaser shall sign and deliver into escrow notices to the
State Department of Natural Resources (“DNR”), on DNR approved forms,
wherein notice is given by Seller to the DNR of the assignment to Purchaser of
the approved Forest Practices Application to be assigned to Purchaser under this
Agreement, and Purchaser affirms, as the new landowner, timber owner and
operator, that it agrees to be bound by all conditions on such approved Forest
Practices Application. Upon Closing, such notices shall be transmitted to the
DNR.

              15.
        Indemnification. Seller shall defend and indemnify
        Purchaser and hold it harmless from any claim, damage, liability, loss,
        cost, deficiency, judgment or expense (reference to “expense”
        shall include, without limitation, reasonable attorneys’ fees and
        other costs and expenses incident to any actions, suits, proceedings or
        investigations or the defense of any claims, whether prior to or at trial
        or in appellate proceedings) (i) arising out of, resulting from or relating
        to claims by third parties arising out of any acts or omissions of Seller
        prior to Closing or any injuries, accidents, occurrences, activities or
        events occurring on the Timberlands prior to Closing, and (ii) for obligations
        or liabilities arising or accruing with respect to the Assets prior to
        the Date of Closing. Purchaser shall defend and indemnify Seller and hold
        it harmless from any claim, damage, liability, loss, cost, deficiency,
        judgment or expense (reference to “expense” shall include, without
        limitation, reasonable attorneys’ fees and other costs and expenses
        incident to any actions, suits, proceedings or investigations or the defense
        of any claims, whether prior to or at trial or in appellate proceedings)
        (i) arising out of, resulting from or relating to claims by third parties
        arising out of any acts or omissions of Purchaser for activities conducted
        by Purchaser or its employees, agents or contractors inspecting the Timberlands
        prior to Closing or any injuries, accidents, occurrences, activities or
        events occurring on the Timberlands after Closing (except to the extent
        caused by Seller or its agents, contractors or employees), and (ii) for
        obligations or liabilities arising or accruing with respect to the Assets
        after the Date of Closing. Purchaser’s and Seller’s respective
        defense and indemnity obligations under this Paragraph 18 shall survive
        Closing.

17

	

              16.
        Closing and Post-Closing Adjustments and Post-Closing Matters.

	                16.1
      Reforestation Obligations. Seller shall complete prior to
      Closing all statutory reforestation obligations it may have with respect
      to the Timberlands, except as expressly provided in the following sentence.
      Seller and Purchaser acknowledge and agree that approximately 65 acres of
      the Timberlands located in the area shown on the map attached hereto as
      Exhibit “B” are subject to reforestation obligations that Seller
      will not complete prior to Closing. Purchaser agrees to assume this reforestation
      obligation as to said approximate 65 acres; provided, however, Seller agrees
      to provide to Purchaser, at Seller’s sole cost and expense, 26,000
      suitable planting stock elevation and geographic zone Douglas-fir seedlings
      to fulfill such reforestation obligations; and provided, further, that Purchaser
      shall receive a credit at closing in the amount of $6,000 which the parties
      approximate is the cost of planting such seedlings.

	                16.2
      Third Party Consents. Notwithstanding anything to the contrary
      in this Agreement, the Access Rights and Easements identified on Schedule
      16.2 require the consent or approval of a third party, and if such consent
      is not obtained prior to Closing, such Access Rights and Easements for which
      required consent has not been obtained shall be assigned to Purchaser at
      Closing on the following basis, terms and conditions: (1) Seller shall assign
      such Access Rights and Easements subject to and effective only at such time
      as such consent is obtained; (2) Seller shall continue to use reasonable
      and diligent efforts, at its cost and expense, to obtain any such consent
      or approval after the Closing Date; (3) until such time as such consent
      has been obtained, Seller will cooperate in all reasonable respects with
      the Purchaser in any lawful and economically feasible arrangement to provide
      that the Purchaser shall receive the interest of the Seller in the benefits
      under any such Access Rights and Easements (except that any such arrangement
      shall not require performance by Seller as agent) provided that the Purchaser
      shall undertake to and shall pay or satisfy the corresponding liabilities
      for the enjoyment of such benefit to the extent Purchaser would have been
      responsible therefor if such consent or approval had been obtained; and
      (4) Purchaser shall have no obligations or liabilities under or with respect
      to such Access Rights and Easements until the earlier of (i) the date such
      consent is obtained and (ii) the date that Purchaser receives the benefits
      thereunder, and then only for obligations or liabilities arising thereunder
      or with respect thereto after such date. If this transaction closes on the
      foregoing basis, the Assignment and Assumption Agreement pertaining to any
      such Access Rights and Easements where such required consent has not been
      obtained as of Closing, shall contain appropriate provisions consistent
      with the provisions of this Paragraph 16.2.

	

18

	

        17.
Miscellaneous.

	                17.1
      Further Assurances. If, at any time after the Closing Date,
      either party shall consider or be advised that any further instruments or
      assurance or any other things are necessary or desirable to carry out the
      terms of this Agreement, the other party shall execute and deliver all such
      instruments and assurances and do all things reasonably necessary and proper
      to carry out the terms of this Agreement.

	                17.2
      Integration. This Agreement and the documents delivered pursuant
      hereto contain the entire agreement among the parties with respect to the
      subject matter hereof and supersede all prior negotiations. None of the
      parties shall be bound by nor shall be deemed to have made any representations,
      warranties or commitments except those required to be made by the terms
      of this Agreement, or those which are contained herein or in the documents
      delivered pursuant hereto.

	                17.3
      Counterparts. This Agreement may be executed in any number
      of counterparts, each of which shall be deemed to be an original instrument,
      and all such counterparts together shall constitute one Agreement.

	                17.4
      Severability. Any term or provision of this Agreement that
      is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
      be ineffective to the extent of such invalidity or unenforceability without
      rendering invalid or unenforceable the remaining terms and provisions of
      this Agreement or affecting the validity or enforceability of any of the
      terms or provisions of this Agreement in any other jurisdiction. If any
      term or provision of this Agreement is so broad as to be invalid or unenforceable,
      the provision shall be interpreted to be only so broad as is valid or enforceable.
      Subject to the foregoing provisions of this Paragraph 20.4, if any
      term or provision of this Agreement is invalid or unenforceable for any
      reason, such circumstances shall not have the effect of rendering such term
      or provision invalid or unenforceable in any other case or circumstance.

	                17.5
      Successors and Assigns. This Agreement shall be binding upon
      and shall inure to the benefit of the parties hereto and their respective
      successors and permitted assigns.

	                17.6
      Governing Law. This Agreement shall be governed by and construed
      in accordance with the internal laws of the State of Washington.

	                17.7
      Assignment. Except as expressly permitted pursuant to Paragraph
      13, neither party may assign its rights hereunder prior to the Closing without
      the prior written consent of the other, which may be withheld for any reason.

	                17.8
      Captions and Paragraph Headings. The headings used in this
      Agreement are for convenience only and shall not affect the construction
      of any of the terms of this Agreement.

	

19

	                17.9
      Notices. Notices under this Agreement shall be in writing
      and shall be effective when actually delivered or, if mailed, on the earlier
      of receipt (or refusal of receipt) or three (3) business days after being
      deposited, postage prepaid, in the United States’ mails as certified
      mail, return receipt requested, directed to the other party at the address
      set forth below, or, if sent via facsimile transmission, on the date such
      facsimile transmission to the facsimile number of the other party set forth
      below is confirmed by machine-printed confirmation of the sender’s
      facsimile machine. The address or facsimile numbers for notices to a party
      hereunder may be changed by such party by written notice to the other party.

	If to Seller: 	Plum
Creek Timberlands, L.P.
999 Third Avenue, Suite 4300

Seattle, WA 98104

Attention: Sheri L. Ward, Director Law

Facsimile: (206) 467-3799

	If to Purchaser: 	Pope
Resources, L.P.
19245 Tenth Avenue Northeast

Poulsbo, WA 98370-0239

Attn: John Shea, Director of Business Development

Facsimile: (360) 697-1156

	With a Copy to:	Warren Koons, Esq.

Davis Wright Tremaine LLP

777 - 108th Ave. NE, Suite 2300

Bellevue, Washington 98004-5149

Facsimile: (425) 646-6199

	                17.10
      Time is of the Essence. Time is of the essence of this
      Agreement.

	                17.12.
      Default. If either party defaults (that is, fails to perform
      the acts required of it) in its contractual performance herein or breaches
      any of its representations or warranties contained herein, the non-defaulting
      party, subject to the following paragraph, shall be entitled to exercise
      all rights and remedies available to it at law or equity, including but
      not limited to specific performance pursuant to the terms of this Agreement,
      damages or rescission. If the non-defaulting party seeking damages or rescission
      is the Purchaser, the Earnest Money, together with any interest thereon,
      shall be refunded.

	

        Purchaser
acknowledges that if Purchaser fails to purchase the Assets so as to constitute
a default by Purchaser hereunder, for any reason other than the breach of
Seller, Seller shall be entitled to forfeit the Earnest Money as compensation
for the detriment resulting from the removal of the Property from the market,
and entering into this Agreement rather than selling to other potential
purchasers. Therefore, in the event of Purchaser’s failure to purchase the
Assets so as to constitute Purchaser’s default hereunder, Seller shall
have, as Seller’s sole and exclusive remedy, the right to receive the
Earnest Money, together with any interest thereon, which sum shall represent
liquidated damages for breach and not a penalty therefor. The parties
acknowledge and agree that the Earnest Money is presently a reasonable estimate
of Seller’s damages, considering all of the circumstances existing on the
date of this Agreement, including the relationship of the sum to the range of
harm to Seller that reasonably could be anticipated and the expectation that
proof of actual damages would be impractical or extremely difficult. Factors
taken into consideration by the parties include Seller’s loss of
opportunity during the pendency of this Agreement to sell the Assets to others
on better terms, or at a higher price; Seller’s risk of loss of a bargain
if the market turns negative; Seller’s damages related to its continuing
obligations for the payment of taxes and insurance; and Seller’s loss of
earnings on the amount of the purchase price resulting from a delay in closing.
Purchaser hereby waives all rights or benefits of any law, rule or regulation,
now or hereafter existing, which would allow Purchaser, following
Purchaser’s failure to purchase the Assets so as to constitute
Purchaser’s default, to claim a refund of the Earnest Money, together with
any interest thereon, as unearned earnest money, a penalty or for any other
purpose. Seller hereby waives all rights, remedies and claims, other than
forfeiture of the Earnest Money that Seller may otherwise have for
Purchaser’s failure to purchase the Assets so as to constitute a default by
Purchaser under this Agreement.

20

	                17.13
      Schedules Incorporated. The schedules attached to this Agreement
      (“Schedules”) are incorporated herein by reference:

	Schedule	Description

	1.2 	Access
Rights and Easements

	4.13 	Unrecorded
Contracts, Agreements, FPAs, etc.

	14.5(a)(i) 	Form
of Special Warranty Deed for Washington

	10 	Assignment
of Access Rights and Assumption Agreement

	16.2 	Third
Party Consents for Assignment of Access Rights and Easements

	                17.14
      Costs and Expenses. Except as otherwise expressly provided
      in this Agreement, each party to this Agreement shall pay its own costs
      and expenses (including, without limitation, the fees and expenses of its
      agents, representatives, counsel and accountants) incurred in connection
      with the closing of the transactions contemplated under this Agreement.

	                17.15
      Attorneys Fees and Other Costs. If either party initiates
      any proceeding in law, equity or arbitration concerning this Agreement or
      any of its provisions, the party that substantially prevails in such proceeding
      shall be paid by the party not so prevailing therein all costs and expenses
      incurred in such proceeding, including reasonable attorneys’ fees at
      the pretrial, trial and appellate levels as determined by the court or courts
      considering the matter.

	

21

	                17.16
      No Third Party Beneficiaries. This Agreement is made and entered
      into for the sole protection and legal benefit of the parties and, subject
      to the restrictions on assignment set forth herein, their respective successors
      and assigns, and no other person or entity shall be a direct or indirect
      legal beneficiary of, or have any direct or indirect cause of action or
      claim in connection with, this Agreement.

	

22

	

        IN
WITNESS WHEREOF, the parties hereto have executed this instrument the day and
year first above written.

	PLUM CREEK TIMBERLANDS, L.P.

By Plum Creek Timber I, L.L.C.,
   Its General Partner		

      

      Attest:

	By

        ——————————————

        James A. Kraft

        Senior Vice President, General Counsel

        and Secretary		By:

        ——————————————

        Sheri L. Ward, Assistant Secretary

	

POPE RESOURCES, A Delaware Limited Partnership

By:

        ——————————————

        David L. Nunes

        CEO

23

	

EXHIBIT “A”

        That
certain real property located in Lewis County, Washington described as follows:

Township 12 North, Range 4
East, W.M.

	 	Section
36: ALL; Except that portion of the S1/2 lying Southerly of the following  described line:

	 	BEGINNING
at a point on the West line of said Section 36, which is 657.4 feet South of the  West
quarter corner thereof; thence Southeasterly to the South quarter corner of  said
Section; thence Northeasterly to a point on the East line of said Section  which is
662.34 feet South of the East quarter corner thereof and the terminus  of said line.

	

Township 13 North, Range 4
East, W.M.

	 	Section
36: NE1/4, SW1/4 and SE1/4.

	

Township 13 North, Range 5
East, W.M.

	 	Section
16: ALL

	 	Section
18: That portion of the SE1/4NE1/4 lying within a 50 foot wide strip of land,  the
centerline of which is described as follows:

	 	BEGINNING
at a point on the East line of said subdivision which is 1109 feet North of the
Southeast corner thereof; thence South 80o30’ West a distance of 67  feet;
thence on a curve to the left having a radius of 146.2 feet a distance of  141.2 feet;
thence South 24o West a distance of 89 feet; thence on a  curve to the right
having a radius of 287.9 feet a distance of 370 feet; thence  North 82o West a
distance of 116 feet to the Southerly line of the right  of way of the Tacoma and Eastern
Railway and the terminus of said centerline.

	 	ALSO
that portion of the E1/2SE1/4NE1/4 lying Southerly of the Tacoma and Eastern  Railway
right of way and Northerly of the above described property.

	 	Section
22: S1/2SW1/4 and S1/2SE1/4

	 	Section
26: ALL

	 	Section
27: E1/2

	

24

	 	Section
29:  That portion of the NW1/4 lying Northerly of the St. Regis Paper Company Logging
Road  as described in deed recorded April 15, 1959 under Auditor’s File No. 598947.

	 	Section
34: NE1/4, N1/2NW1/4, S1/2SW1/4, NE1/4SE1/4 and S1/2SE1/4.

	 	Section
35: N1/2NW1/4 and NW1/4NE1/4.

	

25

	

EXHIBIT “B”

Reforestation Map

26

	

SCHEDULE 1.2

Access Rights and
Easements

	Grantor		Grantee		Date		Recording
      Info.
	
      

    
	State
      of

      Washington, DNR		Plum
      Creek Timber Company, L.P.		11/28/1990		Rec.
      12/13/90

      AF# 9013191, Vol.459, Pg. 557, subsequently amended under Easement No. 50-51161,
      AF#3127415,

      recorded 12/12/2001
	
      

    
	Burlington
      Northern Railroad Company		State
      of Washington, DNR		4/10/84		AF#922072,
      Rec. 4/16/84,

      Vol. 283, Pg. 824
	
      

    
	Northern
      Pacific Railway Company		State
      of Washington, DNR		6/30/66		AF#697932.
      Rec. 7/14/66,

      Vol.446, Pg. 837
	
      

    
	Murray
      Pacific Corporation		State
      of Washington, DNR		11/3/93		AF#9316199,
      Rec. 11/3/93

      Vol.574, Pg. 744
	
      

    
	Milwaukee
      Land Company; Northern Pacific Railway Company; West Tacoma Newsprint Company;
      United States Plywood Corporation		State
      of Washington, DNR		2/14/67		AF#715221,
      Rec. 9/7/1967

      Vol. 454, Pg. 532
	
      

    
	Boise
      Cascade Corporation		State
      of Washington, DNR		1/12/77		AF#825376,
      Rec. 1/19/77

      Vol. 134, Pg. 374
	
      

    
	Murray
      Pacific Corporation		State
      of Washington, DNR		8/8/79		AF#867261,
      Rec. 8/21/79

      Vol. 194, Pg. 810
	
      

    

	

27

	

	Chicago, Milwaukee, St. Paul and Pacific Railroad Company		State of Washington, DNR		10/8/79		Rec. 3/17/80
Vol. 205, Pg. 787
	

	St. Regis Paper Company		Northern Pacific Railway Company		6/30/64		AF#669471
Vol. 435, Pg. 472
	

	St. Regis Paper Company		Northern Pacific Railway Co.		8/19/60		Rec.
      9/30/60

      Vol. 33, Pg. 589

      AF#617389
	

	United States Plywood Corp.		Northern Pacific Railway Co.		5/24/65		Recorded
      6/4/65

      Vol.439/Pg. 727

      AF#680424
	

	

28

	

SCHEDULE 4.13

Unrecorded
Contracts, Agreements, FPAs

1.  Forest Practices
Application/Notification No. 2510283 dated November 5, 2002

29

	

SCHEDULE 14.5(a)(i)

Form of Special
Warranty Deed

After recording return to:

TRANSNATION TITLE INSURANCE COMPANY

1200 Sixth Avenue, Suite 1910

Seattle, WA 98101

Attn: Kim Azure

File No. _____________________ (slw)

SPECIAL WARRANTY
DEED

      
      Grantor: PLUM
        CREEK TIMBERLANDS, L.P., a Delaware limited partnership

        Grantee: POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP

        Legal Description (abbreviated):______________________________________

        Assessor’s Tax Parcel ID #: _________________________________________

        KNOW
ALL PERSONS BY THESE PRESENTS: That PLUM CREEK TIMBERLANDS, L.P. a Delaware
limited partnership, successor by merger to Plum Creek Timber Company, L.P., a
Delaware limited partnership, qualified to do business and to own property in
the State of Washington with its principal place of business located in Seattle,
Washington, GRANTOR, in consideration of the sum of Ten and 00/100 Dollars
($10.00) and other good and valuable consideration, the receipt of which is
hereby admitted, does hereby grant, bargain, sell, convey and confirm unto POPE
RESOURCES, A DELAWARE LIMITED PARTNERSHIP, whose address is 19245
10th Avenue NE, Poulsbo, Washington 98370-0239, hereinafter referred
to as GRANTEE, and to its successors and assigns, FOREVER, the real property
situated in the County of Lewis, State of Washington, described on Exhibit
“A” attached hereto and incorporated herein by this reference as
though fully set forth.

        SUBJECT
TO only those encumbrances listed on the attached Exhibit “B” [Exhibit
“B” would be the recorded Permitted Exceptions.]]

        TOGETHER,
with all and singular the tenements, hereditaments and appurtenances thereto
belonging or in anywise appertaining.

        And
the said GRANTOR, for itself and its successors, further hereby covenants that
it will forever WARRANT and DEFEND all right, title, and interest in and to said
premises, and the quiet and peaceable possession thereof, unto the said GRANTEE,
its successors and assigns, against the acts and deeds of said GRANTOR, and all
and every person and persons whomsoever lawfully claiming or to claim by,
through or under GRANTOR .

30

	

        IN
WITNESS WHEREOF, said GRANTOR has caused its limited partnership name to be
subscribed and its seal to be affixed, by its proper officers, thereunto duly
authorized, on this ______ day of January, 2004.

			PLUM CREEK TIMBERLANDS, L.P.

	Attest:		By Plum Creek Timber I, L.L.C.,
   General Partner

	By

        ——————————————

        Sheri L. Ward, Assistant

        Secretary		By

        ——————————————

        Rick R. Holley, President

        and Chief Executive Officer

	

31

	

ACKNOWLEDGMENT

	STATE
      OF WASHINGTON	)
		)ss
	COUNTY
      OF KING	)

	

        On
this _____ day of _______________, 200__, before me personally appeared Rick R.
Holley and Sheri L. Ward, to me known to be the President and Chief Executive
Officer and the Assistant Secretary, respectively, of Plum Creek Timber I,
L.L.C., general partner of Plum Creek Timberlands, L.P., the limited partnership
that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said limited partnership
for the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument on behalf of the limited partnership and
that the seal affixed is the seal of said limited partnership.

        IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year last above written.

			
——————————————

Notary Public in and for the

State of Washington

Residing at _________________

My Commission Expires _______

Printed Name: _______________

	
      
      32

	

SCHEDULE 10

Form of Assignment
of Access Rights and Easements

After Filing Return To:

Warren Koons

Davis Wright Tremaine LLP

777 – 108th Ave. NE, Suite 2300

Bellevue, WA 98004-5149

Assignment of
Access Rights and Easements and Assumption Agreement

Assignor: PLUM CREEK TIMBERLANDS, L.P., a Delaware limited partnership

Assignee: POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP

Ref. Nos. of Documents Assigned: _________________________________

        This
Assignment of Access Rights and Easements and Assumption Agreement (this
“Assignment”), is made the ____ day of January, 2004, between PLUM
CREEK TIMBERLANDS, L.P., a Delaware limited partnership (the
“Assignor”), whose address is 999 Third Avenue, Suite 2300, Seattle,
Washington 98104, and POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP (the
“Assignee”), whose address is 19245 Tenth Avenue Northeast, Poulsbo,
Washington 98370-0239;

        WHEREAS,
by Timberland Purchase and Sale Agreement for the Morton, Washington Timberlands
between the Assignor and the Assignee, dated December __, 2003 (the
“Purchase and Sale Agreement”) and subsequent documents conveying the
Assets described therein, Assignee purchased certain real property, and all
rights and appurtenances associated therewith located in Lewis County,
Washington; and

        WHEREAS,
Assignor and Assignee desire that Assignor’s right, title and interest in,
to and under certain access rights and easements located in Lewis County,
Washington, be assigned to Assignee, as part of the transfer and conveyance of
the Assets to Assignee pursuant to the Purchase and Sale Agreement.

        NOW,
THEREFORE, the parties hereto, for good and valuable consideration and in
accordance with the terms of the Purchase and Sale Agreement, hereby agree as
follows:

        1.
Assignor assigns, transfers, and sets over to Assignee all of Assignor’s
right, title and interest in, to and under the rights-of-way, easements, use
agreements and other access rights appurtenant to, relating to or benefiting the
Timberlands (as hereinafter defined), as such rights-of-way, easements, use
agreements and other access rights were granted to or reserved by Assignor or
its predecessors in interest and as are further described on Exhibit
“A” attached hereto and incorporated herein by this reference as
though fully set forth (the “Access Easements”). Assignee may, at its
option, record this Assignment in the real property records of Lewis County,
Washington.

33

	

        2.
Assignor assigns, transfers, and sets over to Assignee all of Assignor’s
right, title and interest in, to and under any and all other rights-of-way,
easements, use agreements and other access rights presently held or claimed by
Assignor in Lewis County, Washington, which are appurtenant and provide access
to or otherwise benefit the real property being concurrently conveyed by
Assignor to Assignee and legally described on the attached Exhibit B (the
“Timberlands”).

        3.
Assignee hereby accepts this Assignment of the Access Easements and assumes and
agrees to be bound by and perform all of the Assignor’s obligations and
liabilities arising under the Access Easements after the date of this
Assignment.

        4.
Notwithstanding anything to the contrary in this Assignment, (1) this Assignment
(including Assignee’s obligations and liabilities) shall automatically be
effective as to any such Access Easement for which third party consent to this
assignment is required and has not yet been obtained (the “Unconsented To
Access Easements”) at such time, and only at such time, as the required
third party consent to its assignment is obtained; (2) Assignor shall use
reasonable and diligent efforts, at its cost and expense, to obtain any such
required consent or approval for this assignment of any Unconsented To Access
Easement; (3) until such time as such consent has been obtained, Assignor will
cooperate in all reasonable respects with the Assignee in any lawful and
economically feasible arrangement to provide the Assignee with the benefits of
the Assignor’s interest in or under any such Unconsented To Access Easement
(except that any such arrangement shall not require performance by Assignor as
agent) provided that the Assignee shall undertake to and shall pay or satisfy
the corresponding liabilities for the enjoyment of such benefits to the extent
Assignee would have been responsible therefor if such consent or approval had
been obtained; and (4) Assignee shall have no obligations or liabilities under
or with respect to any such Unconsented To Access Easement until the earlier of
(i) the date such consent is obtained and (ii) the date that Assignee receives
the benefits under such Unconsented To Access Easement, and then only for
obligations or liabilities arising thereunder or with respect thereto after such
date.

        5.
Assignee hereby agrees to indemnify and hold harmless Assignor from and against
any and all claims, liabilities, obligations, penalties, causes of action or
damages (including attorney’s fees, expenses of litigation and costs of
appeal), if any, arising or accruing under the Access Easements after the date
of this Assignment, or for any claim, loss, damage, cost or expense resulting
from Assignee’s failure to fulfill and perform the same after the date of
this Assignment, or arising out of Assignee’s use and enjoyment of the
Access Easements, or to enforce this indemnification provision. Assignor hereby
agrees to indemnify and hold harmless Assignee from and against any and all
claims, liabilities, penalties, causes of action or damages (including
attorney’s fees, expenses of litigation and costs of appeal), if any,
arising or accruing under the Access Easements prior to the date of this
Assignment, or for any claim, loss, damage, cost or expense resulting from
Assignor’s failure to fulfill and perform the same prior to the date of
this Assignment, or arising out of Assignor’s use and enjoyment of the
Access Easements, or to enforce this indemnification.

        6.
This Assignment shall be interpreted and construed under the laws of the State
of Washington.

34

	

        IN
WITNESS WHEREOF, the parties hereto have executed this Assignment of Access
Rights and Easements and Assumption Agreement the day and year first above
written.

	Assignor:		PLUM CREEK TIMBERLANDS, L.P.

	Attest:		By Plum Creek Timber I, L.L.C., General Partner

	By

        ——————————————

        Sheri L. Ward

        Assistant Secretary		By

        ——————————————

        Rick R. Holley, President

        and Chief Executive Officer

	Assignee:		POPE RESOURCES,
      A DELAWARE LIMITED PARTNERSHIP

      

      

      By:

                 ——————————————

      Name:

                 ——————————————

        Title:

                 ——————————————

      

	STATE
      OF WASHINGTON	)
		)ss
	COUNTY
      OF KING	)

	

        On
this ___ day of ______________, 2004, before me personally appeared RICK R.
HOLLEY and SHERI L. WARD, to me known to be the President and Chief Executive
Officer and Assistant Secretary, respectively, of Plum Creek Timber I, L.L.C.,
the general partner of Plum Creek Timberlands, L.P., the partnership that
executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said partnership for the
uses and purposes therein mentioned, and on oath stated that they are authorized
to execute said instrument on behalf of the partnership and that the seal
affixed is the seal of said partnership.

        IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year last above written.

			
——————————————

Notary Public in and for the

      State of ____________________

Residing at _________________

My Commission Expires _______

Printed Name: _______________

	

35

	STATE
      OF WASHINGTON	)
		)ss
	COUNTY
      OF KING	)

	

        On
this ___ day of ______________, 2004, before me personally appeared
___________________, to me known to be the ____________________ of Pope
Resources, A Delaware Limited Partnership, the limited partnership that executed
the within and foregoing instrument, and acknowledged the said instrument to be
the free and voluntary act and deed of said limited partnership for the uses and
purposes therein mentioned, and on oath stated that he is authorized to execute
said instrument on behalf of the limited partnership.

        IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year last above written.

			
——————————————

Notary Public in and for the

State of ____________________

Residing at _________________

My Commission Expires _______

Printed Name: _______________

	

36

	

SCHEDULE 16.2

Required Consents

1.  Private Road Crossing
Agreement between Richard B. Ogilvie, Trustee of Chicago,  Milwaukee, St. Paul & Pacific
Railroad Company and Burlington Northern,  Inc., Menasha Corporation and the State of
Washington dated October 8, 1979 and  recorded in the records of Lewis County, Washington
in Volume 205, Page 787.

37

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