Document:

PURCHASE & SALE AGREEMENT

(WORTHINGTON BLOCKS IV AND V)
(JEFFERSON COUNTY, WASHINGTON)

POPE RESOURCES, a Delaware limited partnership (“BUYER”), hereby agrees to purchase from
the ESTATE OF TRENA B. WORTHINGTON, deceased, (“SELLER”), and SELLER, subject to the terms
and conditions contained herein, hereby agrees to sell and convey to BUYER that certain real estate
located in Jefferson County, Washington, described on Exhibit A attached hereto, together with all
rights, privileges and easements appurtenant thereto (“the Property”), for the price and
upon the following terms and conditions:

1.             PURCHASE PRICE; EARNEST
MONEY DEPOSIT.

BUYER hereby agrees to pay for the Property the amount of TWELVE MILLION THREE HUNDRED THOUSAND DOLLARS
(US$12,300,000) (“the Purchase Price”). 

As part of a sealed bid on the Property, BUYER proffered a check payable to THURSTON COUNTY TITLE COMPANY,
INC. (“the Title Company”) in the sum of ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
(US$1,250,000). BUYER acknowledges and agrees that such sum exceeds ten percent (10%) of the Purchase
Price. Upon signing of this Agreement by SELLER (which date shall be “the date of this Agreement”),
that check shall be deposited and held by the Title Company in an insured, interest-bearing account;
all principal and interest in such account is herein referred to as the “Earnest Money Deposit”.

2.               TERMS OF SALE.

At Closing (defined as the date the purchase price is paid to SELLER and the deed is recorded) the
balance of Purchase Price shall be paid to SELLER in cash, by official bank cashier’s check,
or by wiring immediately available Federal Funds to the closing agent or to such bank account as
SELLER shall designate to BUYER. The Earnest Money Deposit shall be credited against the Purchase
Price. 

3.               CLOSING AND RELATED COSTS.

SELLER shall pay the premium for a standard coverage owner’s title insurance policy without endorsements
or extended coverage, in the amount of the Purchase Price, one-half of the closing escrow agent’s
fee, SELLER’S attorneys fees incurred in this transaction, all recording fees to record documents
needed to clear any title exceptions required to be removed by SELLER under the terms hereof, documentary
stamps, and the real estate excise taxes. BUYER shall pay all other closing costs and settlement
expenses, including without limitation, use or other taxes, recording fees to record the deed from
SELLER, all fees and expenses of BUYER’S attorneys, premiums for any title policy endorsements
or extended coverage, one-half of the closing escrow agent’s fee, as well as any survey, environmental
audit and other due diligence costs of BUYER. Real estate taxes, and utilities constituting liens
shall be prorated as of the date of Closing. BUYER shall be responsible and shall indemnify SELLER
for any taxes attributable to all periods after Closing, including without limitation all taxes,
interest and penalties levied and assessed if BUYER’S acquisition of the Property results in
a change in the forest, open space, timberland or similar non-ad valorem tax classification or designation
applicable to the Property. SELLER shall not be obligated or under any duty to close this transaction
in the event of the filing of any bankruptcy or insolvency petition or action by or against BUYER.
Neither party shall have any obligation to the other and this Agreement shall become effective and
in full force only when this Agreement is duly and properly executed, authorized and delivered by the parties hereto.

	

Purchase and Sale Agreement – page 1 of 25

	
4.              CONVEYANCE.

SELLER has delivered to BUYER a copy of the commitment for title insurance (the “Title Report”)
for the Property issued by Jefferson Title Company under Order No. 63124 and Supplemental No. 1 thereto.
At Closing, SELLER shall convey the Property by Special Warranty Deed (the “Deed”) in substantially
the form attached as Exhibit B. The Deed shall be subject to (a) all matters of record, including
without limitation the title exceptions disclosed in the Title Report, except (i) Title Report Special
Exception No. 12 relating to Easement Agreement dated December 10, 1999, recorded on March 15, 2000,
under Jefferson County Auditor’s File No. 431936, and (ii) Title Report Special Exception No.
17 relating to Quit Claim Deeds recorded under Jefferson County Auditor’s File Nos. 356244 and
356797; (b) the matters disclosed in this Agreement; (c) current and subsequent real estate taxes;
(d) all outstanding mineral rights or reservations; (e) roadways; (f) rights of way; (g) other easements;
and (h) all other matters affecting title to the Property which would be disclosed by a thorough
physical inspection or an accurate survey of the Property (the “Permitted Exceptions”).
SELLER covenants to cause Title Report Special Exception No. 12 relating to Easement Agreement dated
December 10, 1999, recorded on March 15, 2000, under Jefferson County Auditor’s File No. 431936,
and Title Report Special Exception No. 17 relating to Quit Claim Deeds recorded under Jefferson County
Auditor’s File Nos. 356244 and 356797, to be removed from the Title Report prior to Closing,
and such exceptions shall not appear in the title insurance policy to be issued to BUYER at or after Closing.

5.             CLOSING.

Closing shall occur on any date selected by SELLER that is fourteen (14) days or more after SELLER’s
written notice to BUYER of such closing date. If Closing does not occur by close of business December
1, 2004, then this Agreement shall terminate effective that date, unless the date of Closing is extended
in writing by mutual agreement. THE PARTIES AGREE THAT TIME IS OF THE ESSENCE WITH RESPECT TO THIS
AGREEMENT. Notwithstanding the foregoing, in the event that either BUYER, SELLER, or the closing
agent is prevented from completing the Closing because of any event outside their reasonable control
notwithstanding the exercise of due care, including without limitation any act of war, act of terrorism,
labor strike, unavailability of banking or delivery services, or natural disaster, then the Closing
shall be postponed until the next business day upon which the Closing is not prevented by such event,
provided, however, that in no event shall the Closing occur after the termination date set forth
above. Closing shall be through an independent escrow established with Thurston County Title Company,
105 E. Eighth Avenue, Olympia, WA 98501. BUYER shall have possession of the Property upon Closing.

	

Purchase and Sale Agreement – page 2 of 25

	
6.              BREACH; REMEDIES.

If SELLER defaults hereunder or fails, without legal excuse, to close as required herein, BUYER, at
its election, may (a) terminate this Agreement and obtain a refund of the Earnest Money Deposit or
(b) bring an action for specific performance. If BUYER defaults hereunder or fails, without legal
excuse, to close as required herein, SELLER, at its election, may (a) terminate this Agreement and
receive the Earnest Money Deposit as liquidated damages and not as a penalty, the Earnest Money Deposit
constituting, in such event, a reasonable estimate of SELLER’S damages, (b) bring an action
for specific performance, (c) terminate SELLER’S obligations to perform further under this Agreement
and bring an action for damages, or (d) pursue any and all remedies in addition to or by way of alternative
to the foregoing available at law or in equity.

BUYER and SELLER expressly agree that (i) in the event of BUYER’S failure to close without legal
excuse actual damages may be difficult to ascertain, (ii) the Earnest Money Deposit has been specifically
negotiated and represents the parties’ reasonable estimation of the 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, and (iii) the disbursement of the
Earnest Money Deposit to SELLER in such event constitutes liquidated damages, not a penalty, and
represents compensation for the detriment to SELLER resulting from the removal of the Property from
the market, entering into this Agreement rather than selling to other potential purchasers, and carrying
costs and loss of earnings on the amount of the purchase price resulting from a delay in Closing.
BUYER hereby waives all rights or benefits of any law, rule or regulation, now or hereinafter existing,
which would allow BUYER following BUYER’S failure to purchase the Property (which event would
constitute BUYER’S default), to claim a refund of the Earnest Money Deposit as unearned earnest
money, a penalty or on any other basis. 

	

Purchase and Sale Agreement – page 3 of 25

	
7.              CONDITION OF PROPERTY.

BUYER acknowledges and agrees for itself and its successors and assigns (i) that it has inspected and
is thoroughly familiar with the Property and its physical aspects and is acquiring the Property in
its “as is” condition, (ii) that BUYER assumes the responsibility and risks of all defects
to and conditions in the Property, including defects and conditions, if any, that cannot be observed
by inspection, (iii) that SELLER has not made and makes no representations or warranties of any kind
with respect to acreage or the condition of the Property or its fitness, suitability or acceptability
for any particular use or purpose; (iv) that SELLER shall not be liable for any latent or patent
defects therein, (v) SELLER is selling the Property by the tract or parcel only, it being understood
and agreed that the acreage of the Property is not guaranteed or warranted in any way by SELLER,
and (vi) that SELLER shall have no obligation to repair or make any improvements to the condition
of the Property prior to Closing. By purchasing the Property, BUYER acknowledges and agrees for itself
and its successors and assigns (i) that it has been given a reasonable opportunity to inspect and
to investigate the Property and the timber thereon either independently or through agents of BUYER’S
choosing, (ii) that any information, whether written or oral, or in the form of maps, surveys, cruise
data, inventory information, plats, soil reports, engineering studies, environmental studies, inspection
reports, plans, specifications, or any other information whatsoever, without exception, pertaining
to the Property and the timber thereon, any and all other matters concerning the condition, suitability,
integrity, marketability, compliance with law, or other attributes or aspects of the Property and
the timber thereon, is furnished to BUYER solely as a courtesy, that neither SELLER nor its representatives
have warranted or verified the accuracy of any statements or other information therein contained
nor the qualifications of the persons preparing such information, (iii) that access is not guaranteed
by SELLER and that BUYER is responsible for determining access to the Property, including, contacting
any responsible government agencies regarding access permits, restrictions or existing hazards, (iv)
that mineral rights will not be included if not currently owned by SELLER, (v) that BUYER is also
responsible for evaluating whether the Property is suitable for BUYER’S intended purpose and
any and all environmental, land use, regulatory and other constraints relating to the use of the
Property or the harvest of timber therefrom, (vi) that BUYER shall be solely responsible for obtaining
all permits and licenses, if any, required of or by BUYER to carry on its intended operations or
activities on the Property, and (vii) that BUYER is responsible for determining the existence or
nonexistence of access or from the Property or any portion thereof, whether the Property or any portion
thereof is within any flood plain, flood prone area, watershed or “wetlands” area, the
availability of water, sewer, electrical, gas, or other utility services or the amount and type of timber on the Property.

Without limiting the generality of the foregoing, SELLER EXPRESSLY DISCLAIMS ALL WARRANTIES RELATING
TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE AND SUITABILITY FOR BUYER’S INTENDED USE AS WELL AS ANY WARRANTY WHATSOEVER
WITH RESPECT TO THE MARKETABILITY, HARVESTABILITY, AGE, SPECIES MIX, SITE CLASSIFICATION, BOUNDARIES
OF THE TIMBER OR THE PROPERTY, QUANTITIES, GRADES, OR QUALITY OF ANY TIMBER OR MINERALS ON THE PROPERTY,
PRESENCE OR ABSENCE OF THREATENED OR ENDANGERED SPECIES OR HAZARDOUS MATERIALS OR THE AVAILABILITY
OR ADEQUACY OF ACCESS TO THE PROPERTY.

8.              REPRESENTATIONS AND WARRANTIES OF SELLER.

SELLER hereby represents and warrants to BUYER as follows (such representations and warranties shall be true as of the date hereof and as of Closing):

                8.1           Status of Estate. SELLER is the Estate of Trena B. Worthington, a deceased person. The Estate is under probate in Thurston County, Washington, Superior Court Cause No.03-4-00350-1.

	

Purchase and Sale Agreement – page 4 of 25

	

                8.2           Personal Representative’s Authority. SELLER is acting through its Personal Representative, Dorothy M. Wack, who has all the power and
authority to execute, deliver and perform all of SELLER’S obligations under this Agreement.
This Agreement is a valid obligation binding upon the SELLER in accordance with its terms.

                8.3           No Adverse Results from Sale. The execution and delivery of this Agreement and the consummation of the transaction contemplated
hereby will neither constitute an event of default under any agreement to which SELLER is a party,
or by which SELLER is bound, nor an event which would result in the creation or imposition of any
valid lien, charge or encumbrance on the Property.

                8.4           No Restriction. There is neither pending nor, to the best of SELLER’S knowledge, threatened, any legal action,
arbitration, or administrative hearing before any governmental authority to which SELLER is a party
and which could enjoin or restrict SELLER’S right or ability to perform its obligations under
this Agreement.

9.              REPRESENTATIONS AND WARRANTIES OF BUYER.

BUYER hereby makes the following representations and warranties, each of which is material and is being
relied upon by SELLER and is true as of the date hereof and will be true as of Closing:

                9.1           Incorporation. BUYER is a limited partnership duly organized, validly existing, and in good standing under the laws
of the State of Delaware and authorized to transact business in the State of Washington.

                9.2           Corporate Authorization. BUYER has all the power and authority to execute, deliver, and perform all of BUYER’S obligations
under this Agreement. This Agreement is a valid obligation binding upon the BUYER in accordance with
its terms.

                9.3           No Adverse Results from Sale. The execution and delivery of this Agreement and the consummation of the transaction contemplated
hereby will neither constitute an event of default under any agreement to which BUYER is a party,
or by which BUYER is bound, nor an event which would result in the creation or imposition of any
valid lien, charge or encumbrance on the Property.

                9.4           No Restriction. There is neither pending nor, to the best of BUYER’S knowledge, threatened, any legal action, arbitration, or administrative hearing before any governmental authority to which BUYER is a party and which could enjoin or restrict BUYER’S right or ability to perform its obligations under this Agreement.

                9.5           Insolvency. There are no attachments, executions, assignments for the benefit of creditors, or proceedings in bankruptcy or under any other debtor relief laws contemplated by or pending or, to the best of BUYER’S knowledge, threatened by or against BUYER.

	

Purchase and Sale Agreement – page 5 of 25

	

                9.6           Document Review. BUYER has had a full and complete opportunity to review all recorded documents affecting the Property
(as disclosed in the Title Report) and accepts and approves the same.

                9.7           Due Diligence. BUYER acknowledges and agrees that BUYER is solely responsible for performing its due diligence with
respect to the purchase of the Property, including without limitation determining the boundary lines
and corners of the Property and that SELLER and SELLER’S representatives have not made any representations
or warranties with respect to the same. By purchasing the Property BUYER acknowledges that it is
fully satisfied with the results of its due diligence.

                9.8           Sufficient Funds. BUYER has sufficient funds to close this transaction.

10.          INDEMNITY.

Each party (the “Indemnitor”) agrees to indemnify and hold harmless the other party (the
“Indemnitee”) from and against any and all claims, losses, liabilities, and expenses (including
reasonable attorneys’ fees at trial and on any appeal or review) incurred by the Indemnitee
and arising out of any breach of any representation or warranty of the Indemnitor contained in this
Agreement, provided that notice of such breach is given in writing not later than two years following
the Closing Date. BUYER shall indemnify, defend and hold SELLER harmless from any claim by a third
party or any fines, penalties or clean up obligations under any applicable laws arising in any manner
out of the operations or activities of BUYER on the Property after BUYER takes possession of the Property. 

11.          RISK OF LOSS OR DAMAGE.

SELLER shall bear the risk of loss or damage to the Property and improvements thereon from any cause
whatsoever, or condemnation of any portion of the Property, prior to Closing. In the event of such
loss, damage, or condemnation prior to Closing, BUYER, at its election, may terminate this Agreement.
If BUYER does not elect to terminate this Agreement for said reasons, the transaction shall be closed
as otherwise agreed to, without reduction in Purchase Price, unless the parties shall agree thereto.
In the event both parties are not able to agree to close without reduction in Purchase Price, or
agree on any adjustment in Purchase Price, then this transaction shall terminate without any further
liability of either party to the other, except that SELLER shall refund to BUYER the Earnest Money Deposit.

12.          BROKER’S FEE.

Neither party has had any contact or dealings regarding the Real Property, or any communication in connection with the subject of this transaction, through any licensed real estate broker or other person who can claim a right to a commission or finder’s fee as a procuring cause of the purchase and sale contemplated by this Agreement. If any other broker or finder perfects a claim for a commission or finder’s fee, dealing or communication, the party through whom the broker or finder makes his or her claim will be responsible for that commission or fee and shall indemnify, defend and hold harmless the other party from and against any liability, cost or damages (including attorneys fees and costs) arising out of that claim.

	

Purchase and Sale Agreement – page 6 of 25

	
13.          PROFESSIONAL ADVICE.

BUYER and SELLER each acknowledge that the terms and conditions of this Agreement affect the parties’
rights and may have tax implications, and that it is therefore advisable to have this Agreement reviewed
by such party’s legal counsel and/or accountant. Each party is specifically aware that issues
such as the form of deed, agency representation, title insurance, liquidated damages, financing,
and representations and warranties are complicated and that the parties may require advice that a
real estate agent or broker is not qualified or licensed to give and for which each party should
contact its own attorney or accountant. Furthermore, each party confirms and agrees that (a) it is
not relying on any representations or advice by any real estate agent or broker involved in this
transaction, and (b) it has satisfied itself as to the terms and conditions of this sale.

14.          ASSIGNMENT, RECORDING AND CONFIDENTIALITY.

This Agreement shall not be assigned or encumbered, or otherwise transferred in any way, by BUYER without
the prior written consent of SELLER which may be withheld in SELLER’S sole discretion. The foregoing
notwithstanding, in the event BUYER elects to close the purchase of the Property as part of a tax
deferred exchange under Section 1031 of the Internal Revenue Code, SELLER agrees to reasonably cooperate
with BUYER in that regard, so long as the same does not delay the Closing or cause additional expense
or liability to SELLER. This Agreement shall not be recorded in any County Records or other office
where public records are maintained nor shall BUYER disclose, prior to Closing, the Purchase Price
or other provision of the Agreement or information it discovers about the Property to any third party
other than its lender, appraiser, attorney or representative integrally involved in this transaction
on behalf of the BUYER, except to the extent required otherwise by any applicable law, ordinance, or regulation. 

15.          ATTORNEY FEES AND COSTS.

In the event suit or action is instituted to enforce or interpret any of the terms of this Agreement,
or of any document required hereby, or to enforce any right arising out of or in any way connected
with this Agreement, or any document required hereby, or if BUYER is the subject of any bankruptcy
proceedings, the prevailing party shall be entitled to recover from the other party such sum as the
court may adjudge reasonable as attorney fees both at trial and on appeal of such suit or action,
in addition to all other sums provided by law, including reasonable title insurance company charges
or fees and reasonable and necessary fees, and costs, including but not limited to expert witness fees.

	

Purchase and Sale Agreement – page 7 of 25

	
16.          VALIDITY.

If, for any reason, any clause or provision of this Agreement, or the application of any such clause
or provision in a particular situation, circumstance or person, should be held unenforceable, invalid
or in violation of law by any court or other tribunal, then the application of such clause or provision
in contexts or to situations, circumstances or persons other than that in or to which it is held
unenforceable, invalid or in violation of the law shall not be affected thereby, and the remaining
clauses and provisions hereof shall nevertheless remain in full force and effect.

17.          CONTINUING FORESTLAND OBLIGATIONS.

BUYER acknowledges that the Property may be subject to certain continuing forestland obligations under
the forest practices rules adopted pursuant to RCW 76.09.370, including but not limited to the continuing
obligations, if any, listed on the notice which is attached hereto as Exhibit C (the “Continuing
Obligations”). At or before Closing, BUYER agrees to sign and deliver to SELLER the original
of the notice in the form attached hereto as Exhibit C or such other notice that indicates the BUYER’S
knowledge of the Continuing Obligations as may be required by the Washington Department of Natural
Resources (“DNR”) at the time of Closing. At Closing, SELLER shall send the executed notice
to DNR in accordance with the requirements of RCW 76.09.390. Upon passage of title, BUYER assumes
and agrees to perform the Continuing Obligations at BUYER’S sole cost and expense in a timely
fashion, and to indemnity, defend and hold SELLER harmless from and against the Continuing Obligations
and any claim, loss, damage, cost or expense resulting from BUYER’S failure to fulfill and perform
the same. The provisions of this indemnity shall survive the Closing.

18.          CONTINUATION OF NON-AD VALOREM TAX CLASSIFICATION.

The Property or a portion thereof may be presently designated or classified as forestland, timberland,
open space or similar non-ad valorem status for property tax purposed. BUYER shall bear the risk
that the Property or a portion thereof will be removed from such designation or classification as
a result of this transaction. If BUYER’S acquisition of the Property results in a change in
the forestland, open space, timberland or similar non-ad valorem tax classification or designation
applicable to the Property or any portion thereof, BUYER shall pay at Closing all compensating or
“roll back” taxes and related taxes, interest, liability, and penalties resulting from
such change in classification or designation (collectively, “Roll Back Taxes and Expenses”),
and indemnify, defend and hold SELLER harmless from all such Roll Back Taxes and Expenses. BUYER
recognized that if BUYER wished to request a continuance of the forestland or timberland or similar
non-ad valorem tax classification or designation of the Property or any portion thereof, then it
may be necessary for BUYER to submit the real estate tax affidavit containing such request and a
forest management plan to the applicable county assessor’s office in advance of the date of
Closing. If BUYER wishes to request such a continuance, SELLER agrees to cooperate with BUYER by
signing the applicable real estate excise tax affidavit for the transaction prior to Closing, as
reasonably requested by BUYER, in order to have BUYER’S continuance request considered in time
for Closing by the required date. If a forest management plan is required as a condition to obtaining
the continuance of the forestland, timberland or similar non-ad valorem tax designation or classification
of the Property or any portion thereof, BUYER shall be solely responsible to prepare and timely submit
such plan to the county assessor’s office and all costs in connection with the preparation and
submittal of such plan shall be at BUYER’S sole expense.

	

Purchase and Sale Agreement – page 8 of 25

	
19.          MISCELLANEOUS.

This Agreement shall be governed by and interpreted under the laws of the State of Washington. Venue
shall be in the county where the Property is located, or at the SELLER’S option, Thurston
County, Washington. No supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by all of the parties. In no event shall the Personal Representative of
SELLER have any personal liability in connection with this Agreement or transaction contemplated
hereunder. The headings and captions in this Agreement are for purposes of reference only and shall
not limit or define the meanings thereof. The terms BUYER and SELLER, together with any pronoun used
in connection therewith, wherever used in this Agreement shall include the singular and plural and
the masculine and feminine, so far as the context may permit or require. This Agreement shall inure
to and be binding upon heirs, successors and permitted assigns of the parties hereto, subject to
the terms hereof. This Agreement constitutes the entire agreement between the parties pertaining
to its subject matter and it supersedes all prior and contemporaneous agreements, representations,
and understandings of the parties. No failure of either party to exercise any power given hereunder
or to insist upon strict compliance with any obligation specified herein, and no custom or practice
at variance with the terms hereof, shall constitute a waiver of either party’s right to demand
exact compliance with the terms hereof. This Agreement may be executed in several counterparts, each
of which shall constitute an executed original hereof.

20.          SURVIVAL.

Portions of this Agreement are intended to survive any expiration or termination of this Agreement,
the Closing of the transaction contemplated hereby, and/or the execution and delivery of the Deed.
Unless otherwise provided herein, all provisions hereof which contemplate performance after any such
event shall so survive, as shall all representations and warranties, indemnity obligations, the reciprocal
attorneys’ fees provision, and the right to exercise remedies set forth in Section 6 above.

21.          PUBLICITY.

For the period prior to Closing, and for one year after Closing, neither BUYER nor SELLER shall release
any information to the media or the general public concerning BUYER’S purchase of the Property,
unless both parties have approved the content thereof, except to the extent required otherwise by
any applicable law, ordinance, or regulation.

	

Purchase and Sale Agreement – Page 9 of 25

	
22.          NOTICES.

All notices, requests, demands, and other communications required or permitted to be given under this Agreement shall be in writing and shall be either served (i) personally on the party to
whom notice is to be given (in which case such notice shall be deemed to have been duly given on
the date of such service), (ii) sent by Federal Express (or other overnight courier service) (in
which event notice shall be deemed to have been given on the day of receipt), or (iii) mailed to
the party to whom notice is to be given, by first class United States mail, registered or certified,
return receipt requested, postage prepaid, and properly addressed as follows (in which case such
notice shall be deemed to have been duly given on the third day following the date of such mailing):

TO BUYER:

Pope Resources
19245 Tenth Avenue N.E.

Poulsbo, Washington 98370-7456
Attention:  John T. Shea

360-394-0562

With a copy to:
Marco de Sa e Silva

Davis Wright Tremaine LLP
2600 Century Square

1501 Fourth Avenue

Seattle, Washington 98101

206-628-7766

TO SELLER:

Dorothy M. Wack, Personal Representative
Estate of Trena B. Worthington

c/o Ann Forest Burns

Burns & Williams

Lawyers
5508 35th Avenue NE, Suite 102

Seattle, WA 98105
206 527 5942

23.          COUNTERPARTS; FACSIMILE SIGNATURES.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same Agreement. The parties authorize each other to deliver such counterpart original agreements by personal delivery, mail, courier service, or telephone facsimile transmission (“fax”). The parties authorized each other to detach and combine original signature pages and fax signature pages and to consolidate them into a single identical original Agreement. Any one such completely executed counterpart shall be sufficient proof of this Agreement.

	

Purchase and Sale Agreement – page 10 of 25

	

24.          RIGHT OF ENTRY.

The Entry Permit and Indemnity Agreement between BUYER and SELLER (the “Permit”) shall be
amended as follows: the term of the Permit shall be extended from September 21, 2004, to the date
of Closing, expiration, or termination of this Agreement; the “Property” subject to the
Permit shall be limited to the Property subject to this Agreement; the Entry Purpose under the Permit
to be expanded to include Property marking and survey work relating to the preparation of Forest
Practice Applications; and SELLER waives any right to terminate the Permit until the expiration or
termination of this Agreement.

25.          MUTUAL CONDITION PRECEDENT: COURT APPROVAL.

The obligations of both parties to complete the purchase and sale of the Property under this Agreement
are subject to the condition precedent that SELLER shall have obtained the approval of this Agreement
by Thurston County Superior Court in the probate of the Estate of Trena B. Worthington, Cause No.
03-4-00350-1, prior to the date of Closing. SELLER’S Personal Representative shall instruct
the Estate’s probate counsel to bring the approval of terms of sale of the Property under this
Agreement before the Court as expeditiously as possible. SELLER’S Personal Representative has
been advised by the Estate’s probate attorney that the earliest that this matter could be heard
by the Court is October 22, 2004. Upon receipt of the Order of the Court approving the terms of the
sale, SELLER shall forward a copy of the Order to BUYER and to Thurston County Title Company’s
escrow department and shall take all further actions necessary to close the sale of the Property.

	

Purchase and Sale Agreement – page 11 of 25

	
THIS AGREEMENT is hereby duly executed by BUYER and SELLER on the date written below that party’s
signature. The date of this Agreement is the date below SELLER’S signature.

	 

	SELLER:

ESTATE of TRENA B. WORTHINGTON	BUYER:* 

POPE RESOURCES, a Delaware limited partnership, by Pope MGP, Inc., a Delaware corporation, its General Partner
	———————————————————	 
	by Dorothy M. Wack	————————————————————
	 its Personal Representative	by:
	 	      ———————————————————
	Date:	 
	 	its:
	 	      ———————————————————
	 	 
	 	Date:  September 28, 2004

	 
	
Exhibits

A -  Legal Descriptions

B -  Special Warranty Deed

C -  Continuing Forestland Obligations

Burns & Williams

Lawyers
5508 - 35th Avenue NE

Seattle, WA 98105
206 527 5942

* BUYER’S EXECUTION MUST COMPLY WITH INSTRUCTIONS ATTACHED.

	

Purchase and Sale Agreement – Page 12 of 25

	Instructions for Execution of Purchase and Sale Agreement on Behalf of Buyer

A Purchase and Sale Agreement executed by an attorney or agent on behalf of the Buyer shall be accompanied by an authenticated copy of his/her Power of Attorney or other evidence of his/her authority to act on behalf of the Buyer.

If the Buyer is a corporation, the bid must be executed under the corporate seal by some duly authorized officer of the corporation. There shall be attached to the Purchase and Sale Agreement so much of the records of the corporation as will show the official character and authority of the officer signing, duly certified by the secretary or assistant secretary, under the corporate seal, to be true copies.

If the Buyer is a partnership and all partners sign the bid with a notation that there are no other partners, the Estate will not ordinarily require any proof of the existence of the partnership. If all the partners do not sign the Purchase and Sale Agreement, then the names of those partners who have not signed except limited partners must be furnished on the Purchase and Sale Agreement and the Estate, in its sole discretion, may require evidence of the authority of the signer(s) to execute the Purchase and Sale Agreement on behalf of the partnership.

	

Purchase and Sale Agreement – page 13 of 25

	
EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY
(JEFFERSON COUNTY, WASHINGTON)

BLOCK IV

PARCEL A:

The Northwest 1/4 of the Northwest 1/4 of the Northwest 1/4 of Section 19, Township 27 North, Range
1 East, W.M., in Jefferson County, Washington.

EXCEPT that portion conveyed to Jefferson County for road purposes by deed recorded April 9, 1965,
under Auditor’s File No. 195646, records of Jefferson County, Washington.

Situate in the County of Jefferson, State of Washington.

PARCEL B:

The North 1/2 of the Northeast 1/4 of the Southeast 1/4 of Section 33, Township 26 North, Range 1 West,
W.M., in Jefferson County, Washington.

EXCEPT that portion conveyed to Jefferson County for road purposes by deed recorded April 30, 1973,
under Auditor’s File No. 217638, records of Jefferson County, Washington.

Situate in the County of Jefferson, State of Washington.

PARCEL C:

The North 1/2 of the Northeast 1/4 of the Southeast 1/4 of the Northwest 1/4 and the Northeast 1/4
of the Southwest 1/4 of the Northwest 1/4 and the Northwest 1/4 of the Southeast 1/4 of the Northwest
1/4 of Section 2, Township 26 North, Range 1 West of the Willamette Meridian.

EXCEPTING THEREFROM that portion if any for right of way of Coyle road.

Situate in the County of Jefferson, State of Washington.

PARCEL D:

The South 1/2 of the Southeast 1/4 of the Southwest 1/4 of Section 10, in Township 26 North, Range
1 West of the Willamette Meridian.

Situate in the County of Jefferson, State of Washington.

	

Purchase and Sale Agreement – page 14 of 25

	
PARCEL E:

The West 1/2 of the Southwest 1/4 of Section 11, Township 26 North, Range 1 West of the Willamette
Meridian.

Situate in the County of Jefferson, State of Washington.

PARCEL F:

The West 1/2 of the Northwest 1/4 and Government Lot 1 in Section 14, Township 26 North, Range 1 West
of the Willamette Meridian.

Situate in the County of Jefferson, State of Washington.

PARCEL G:

Northwest 1/4 of the Southwest 1/4 of Section 14, Township 26 North, Range 1 West of the Willamette
Meridian.

Situate in the County of Jefferson, State of Washington.

PARCEL H 

The East 1/2 of the Southwest 1/4 of Section 10, Township 27 North, Range 1 West, W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL I:

The North 1/2 of the Northwest 1/4 and the East 1/2 of the Northeast 1/4, EXCEPT that portion known
as Coyle Road, Section 15 Township 27 North, Range 1 West, W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL J:

That portion of the East 1/2 of the Southeast 1/4 of Section 17 in Township 28 North, Range 1 West
of the Willamette Meridian, lying East of the right of way of the existing Quilcene-Center County
Road, known as County Road No. 12; EXCEPT right of way of Dabob Road.

Situate in the County of Jefferson, State of Washington.

	

Purchase and Sale Agreement – page 15 of 25

	
PARCEL K:

The Southeast 1/4 of the Northeast 1/4 of Section 4 in Township 29 North, Range 1 West of the Willamette
Meridian.

Situate in the County of Jefferson, State of Washington.

PARCEL L:

The East 60 feet of the Northeast 1/4 of the Southwest 1/4, in Section 1, Township 27 North, Range
2 West of the W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL M:

The East 60 feet of the North 1/2 of the Southeast 1/4 of the Southwest 1/4 in Section 1, Township
27 North, Range 2 West of the W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL N:

The North 1/2 of the Southwest 1/4, and the North 1/2 of the South 1/2 of the Southwest 1/4 of Section
1, Township 27 North, Range 2 West of the Willamette Meridian;

Excepting therefrom a strip of land 60 feet wide, running North and South along the entire East line
of the above described premises;

Also excepting the right of way of State Road No. 9.

Also excepting therefrom the following described property:

That portion of the North 1/2 of the Southwest 1/4, and the North 1/2 of the South 1/2 of the Southwest
1/4 of Section 1, Township 27 North, Range 2 West, of the Willamette Meridian described as follows:
The North 381.23 feet of a 100 feet wide strip lying Southeasterly of and parallel with the Southeast
margin of SR 101 as shown on sheet 7 of 8 sheets of the map and profile of State Road No. 9, Jefferson
County, Crocker Lake to Quilcene, approved September 28, 1926, records of State of Washington. Department
of Highways, Olympia, Washington.

Situate in the County of Jefferson, State of Washington.

	

Purchase and Sale Agreement – page 16 of 25

	
PARCEL O:

The West 1/2 of the Southwest 1/4 of the Southwest 1/4 of Section 10, Township 27 North, Range 2 west, W.M.,

Situate in the County of Jefferson, State of Washington.

PARCEL P:

The Southeast 1/4 of the Southwest 1/4 of Section 10, Township 27 North, Range 2 West of the Willamette
Meridian.

Situate in the County of Jefferson, State of Washington.

PARCEL Q:

The Northeast 1/4 of the Northwest 1/4 of Section 15, Township 27 North, Range 2 West of the Willamette
Meridian.

Situate in the County of Jefferson, State of Washington.

PARCEL S:

The South 1/2 of the Southeast 1/4, EXCEPT that portion lying East of Lords Lake Loop Road in Section
21, Township 28 North, Range 2 West, W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL T:

South 1/2 of the Northeast 1/4, and the North 1/2 of the Southeast 1/4. All in Section 21, Township
28 North, Range 2 West, W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL U:

South 3/4 of the North 1/2 of the Northeast 1/4 of Section 21, Township 28 North, Range 2 West, W.M.

Situate in the County of Jefferson, State of Washington.

PARCEL V:

The Southwest 1/4 of the Southeast 1/4 of Section 22, Township 28 North, Range 2 West of the Willamette
Meridian.

Situate in the County of Jefferson, State of Washington.

	

Purchase and Sale Agreement – page 17 of 25

	
PARCEL W:

West 1/2 of Northwest 1/4 EXCEPT Lords Lake Road of Section 22, Township 28 North, Range 2 West, W.M.

Situate in the County of Jefferson, State of Washington.

BLOCK V

PARCEL R:

All that portion of the West 1/2 of the Southwest 1/4 of Section 13, Township 27 North, Range 2 West
W.M., lying West of State Road No. 9, now known as Highway 101.

EXCEPT right of way for ditch of Quilcene, Irrigation Company, as per Resolution filed November 6,
1917 under Jefferson County Commissioners proceedings recorded in Volume J, pages 228 through 230.

ALSO EXCEPTING the following described property; Commencing at a point 990 feet North of the Southeast
corner of the Southwest 1/4 of the Southwest 1/4 of Section 13, Township 27 North, Range 2 West;
thence North 5 chains; thence West 10 chains; thence South 5 chains and thence East 10 chains to
place of beginning, in Section 13, Township 27 North, Range 2 West.

ALSO EXCEPTING the following described property; Beginning at a point on the West line of the Northwest
1/4 of the Southwest 1/4 of Section 13, Township 27 North, Range 2 West, W.M., 40 feet South of the
Northwest corner of said forty acre tract; thence South 208 feet; thence East 416 feet; thence North
208 feet to a point 40 feet South of the North line of said forty acre tract; thence West 416 feet
to the place of beginning.

ALSO EXCEPT the following described property: Part of the Northwest 1/4 of the Southwest 1/4 of Section
13, Township 27 North, Range 2 West, W.M., described as follows:

Beginning at a point 30 feet North and 30 feet West of the Southeast corner of the Northwest 1/4 of
the Southwest 1/4 of said Section 13; thence West 630 feet; thence north 415 feet; thence East 610
feet, more or less, to the Southwesterly right of way line of the Olympic Highway; thence Southwesterly
along said right of way line to a point 30 feet West of the East line of the Southwest 1/4 of the
Northwest 1/4 of said Section 13; thence South 390 feet, more or less, to the place of beginning.

ALSO EXCEPT the following described property: Beginning at the Northeast corner of the Southwest 1/4
of the Southwest 1/4 of Section 13 in Township 27 North, Range 2 West of the Willamette Meridian;
thence West 690 feet to the TRUE POINT OF BEGINNING; thence continuing West 417 feet and 4 inches;
thence South 213 feet and 8 inches; thence East 417 feet and 4 inches; thence North 213 feet and
8 inches to the TRUE POINT OF BEGINNING; EXCEPTING THEREFROM the Northerly 5 feet now used for drainage
purposes.

	

Purchase and Sale Agreement – page 18 of 25

	
ALSO EXCEPT the following described property: Beginning at a point on the West line of the Northwest 1/4 of the Southwest 1/4 of Section 13, Township 27 North, Range 2 West, W.M., 40 feet South of the Northwest corner of said forty-acre tract; thence South 208 feet to mark the place of beginning; thence proceeding South 276 feet; thence East 158 feet; thence North 276 feet; thence West 158 feet to the point of beginning.

ALSO EXCEPT the following described property: A tract of land located in the Northwest 1/4 of the Southwest
1/4 of Section 13,Township 27 North, Range 2 West, W.M. in Jefferson County, Washington; From the
alleged location of the 1/4 corner between Sections 13 and 14 (said corner being in the Quilcene
Cemetery Road) thence South 15.0 feet to a 10 inch fence corner post; thence South 22.0 feet and
South 89 1/2o  East 411.3 feet to a point on the South edge of the right of way of the
Quilcene Cemetery Road, which point is the Northwest corner of the tract of land herein described;
From said Northwest corner South 89 1/2o East 168.5 feet along the Cemetary Road boundary to
it’s intersection with the boundary of the Olympic Highway; thence South 40o East 146.0
feet along said highway boundary; thence South 50o West 150.0 feet; thence North 89 1/2o
West 150.9 feet; and finally North 01o East 208.2 feet to the Northwest corner of the tract.

ALSO EXCEPT the following described property; That portion of the Northwest 1/4 of the Southwest 1/4
of Section 13, Township 27 North, Range 2 West of the Willamette Meridian, described as follows,
to-wit; beginning at the Northeast corner of the Northwest 1/4 of the Southwest 1/4 of said Section
13; thence South along the East boundary line of said tract a distance of 889.5 feet; thence South
87o 36’ West 54.6 feet to a point on the Southwesterly boundary line of the right of way
of State Road No. 9, said point being the TRUE POINT OF BEGINNING; thence North 40o 42’
West along the boundary line of said road, 220.0 feet; thence South 76o 02’ West, 216.0
feet; thence South 0o 55’ East, 129.3 feet; thence North 87o 36’ East, 351.4
feet, to the point of beginning.

ALSO EXCEPT the following described property; Beginning at the Northwest corner of the Southwest 1/4
of the Southwest 1/4 of Section 13, Township 27 North, Range 2 West, W.M.; thence North along the
West boundary of said Section 13, 467 feet; thence East 241 feet; thence South 675 feet; thence East
128 feet; thence South 320 feet; thence West 369 feet, and thence North along the West boundary of
said Section 13, 528 feet to the point of beginning.

ALSO EXCEPT the following described property; Commencing at a point 990 feet North of the Southeast
Corner of the Southwest 1/4 of the Southwest 1/4, Section 13, Township 27 North, Range 2 West, W.M.;
thence West 417.42 feet; thence South 208.71 feet; thence East 417.42 feet; thence North 208.71 feet
to place of beginning.

	

Purchase and Sale Agreement – page 19 of 25

	
ALSO EXCEPT the following described property; All that portion of the Northwest 1/4 of the Southwest 1/4 of Section 13, Township 27 North, Range 2 West, W.M., lying within an area described as follows:

Beginning at the Northwest corner of the aforesaid Northwest 1/4 of Southwest 1/4, Section 13 which
is the alleged location of 1/4 corner between Sections 13 and 24 (said corner being in Quilcene Cemetery
Road) thence South 15 feet to a 10 inch fence corner post; thence South 22 feet to South edge of
right of way of Quilcene Cemetery Road; thence South 89 1/2o East 579.8 feet along South edge
of said road to intersection with Southerly edge of Olympic Highway right of way; thence South 40o
East 146 feet along said highway boundary to a point which is the most Easterly corner of Tax #63;
thence continuing South 40o East 150 feet; thence South 68o West 673 feet to Southeast
corner of Tax #62; thence West along South boundary of Tax #62 to West line of Northwest 1/4 Southwest
1/4 Section 13; thence North along West boundary of the Northwest 1/4 of the Southwest; 1/4, Section
13 to point of beginning;

EXCEPT those certain Tax numbers 57, 62, and 63 in said Northwest 1/4 of Southwest 1/4, Section 13
as recorded in office of Jefferson County Auditor in Volume 112, page 456; Volume 109, page 255;
and Volume 118, page 345 respectively; and EXCEPT right of way for ditch of Quilcene Irrigation Company.

ALSO EXCEPT the following described property; Beginning at the Northeast corner of the Northwest 1/4
of the Southwest 1/4, Section 13, Township 27 North, Range 2 West, W.M.; thence Southerly along its
East boundary 889.5 feet; thence South 87o 36’ West 54.6 feet to a point on the Southwest
side of Olympic Highway right of way which is the Southeast corner of Tax #65 as described in deed
to George T. and Ora Richardson, husband and wife as recorded in Volume 119, page 271 of DEEDS of
Jefferson County Auditor, thence North 40o 42’ West 220 feet along the boundary of Olympic
Highway; thence South 76o 02’ West 216 feet to the Northwest corner of Tax #65, the point
of BEGINNINGS OF THIS DESCRIPTION, thence South 01o West 130.4 feet along the West boundary
of Tax #65 to its Southwest corner which is on the North boundary of Tax #60 as described in deed
to John E. Kruse as recorded in Volume 115, page 489 of DEEDS of Jefferson County Auditor, thence
South 89o 30’ West 237.7 feet more or less along said North boundary of Tax #60 to its
Northwest corner, thence North 00o 32’ East 75.8 feet more or less along the West boundary
of said Tax #60 extended to a point which lies South 76o 40’ West of point of beginning
of this description and being on the North boundary of Tax #65 extended, thence North 76o 40’
East 246.0 feet more or less to the point of beginning.

ALSO EXCEPT that portion of conveyed to Jefferson County for Columbia Street as per Quit Claim Deed
recorded August 23, 1948 under Jefferson County Auditor’s File No. 114866.

All situate in the County of Jefferson, State of Washington.

PARCEL X:

The North 495 feet of the Southeast 1/4 of the Northwest 1/4 of Section 33, Township 30 North, Range
2 West of the Willamette Meridian, EXCEPT 20 feet on the West side of said tract reserved for right
of way; ALSO EXCEPT the right of way for old Gardiner Road as conveyed July 3, 1935 under Jefferson
County Auditor’s File No. 74367.

	

Purchase and Sale Agreement – page 20 of 25

	
TOGETHER WITH all that part of the East 792 feet of the Southwest 1/4 of the Northeast 1/4 of Section
33, in Township 30 North, Range 2 West of the Willamette Meridian, which lies South of the right
of way of the existing Olympic Highway, and North of the right of way granted for a re-location of
said Highway as per Warranty Deed recorded January 23, 1947 under Jefferson County Auditor’s
File No. 109311, along the South line of said forty-acre tract; EXCEPTING THEREFROM that portion
granted to the State of Washington for Primary State Highway No. 9.

Situate in the County of Jefferson, State of Washington.

	

Purchase and Sale Agreement – page 21 of 25

	
EXHIBIT B

FORM OF SPECIAL WARRANTY DEED

SPECIAL WARRANTY DEED

                The
Grantor, Estate of Trena B. Worthington, deceased (for good and valuable consideration in hand paid,
the receipt and sufficiency of which are hereby acknowledged) (for and in consideration of “I.R.C.
Section 1031 Tax-Deferred Exchange of Like-Kind Real Property”), grants, bargains, sells, conveys
and confirms to POPE RESOURCES, a Delaware limited partnership, the following described real estate,
situated in the County of Jefferson, State of Washington.

                The
real property described on Exhibit A attached hereto and incorporated herein by this reference,

                SUBJECT
TO the exceptions, encumbrances and matters described on Exhibit B attached hereto and incorporated herein by this reference.

                The
Grantor for itself and its successors-in-interest does by the presents expressly limit the covenants
of this Deed to those herein expressed, and excludes all covenants arising or to arise by statutory
or other implication, and does hereby covenant that Grantor will forever warrant and defend the said
described real estate against all persons whomsoever claiming or to claim by, through, or under said
Grantor and not otherwise.

                DATED
as of _________________________________ , 2004.

	 

	 	ESTATE OF TRENA B. WORTHINGTON
		 
	 	————————————————————
	 	By:      Dorothy M. Wack
	 	            Personal Representative

	 	 
	STATE OF WASHINGTON	)
	 	)  ss.
	COUNTY OF KING	)

	 
	
                I,                                                                                              , Notary Public in and for the State of Washington, do hereby certify that on this ______________ day of ___________________,
2004 personally appeared before me Dorothy M. Wack to me known to be the Personal Representative
of the Estate of Trena B. Worthington described in and who executed the within instrument and acknowledged
that she signed the same as her free and voluntary act and deed for the uses and purposes herein
mentioned and on oath stated that she was authorized to execute the said instrument as Personal Representative
of the Estate.

	

Purchase and Sale Agreement – page 22 of 25

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

	 	——————————————————————
	 	NOTARY PUBLIC in and for the State of Washington,
	 	residing at __________________________________
	 	My appointment expires ________________________ 
	 	 
	                Print Name
______	 

	

Purchase and Sale Agreement – page 23 of 25

	
EXHIBIT C

CONTINUING FOREST LAND OBLIGATIONS

Washington State Department of Natural Resources

Notice of Continuing Forest Land Obligation

Sellers and buyers of land and perpetual timber rights have certain rights and responsibilities when
the land or perpetual timber rights are sold or transferred. Where the land is subject to certain
continuing forestland obligations including without limitation Reforestation, Road Maintenance and
Abandonment Plans and Harvest Strategies along Type 4 Waters in Eastern Washington, prior to the
sale or transfer of the land or perpetual timber rights the law requires that the following occur:
1) the seller shall notify the buyer of the existence and nature of the obligation and 2) the buyer
shall sign a Notice of Continuing Forestland Obligation Form indicating the buyer’s knowledge
of such obligation. At the time of sale or transfer of the land or perpetual timber rights the seller
shall send the signed Form to the Department of Natural Resources (DNR). The Form may be obtained
from your DNR region office.

If the seller fails to notify the buyer about the continuing forest land obligation referenced above,
the seller shall pay the buyer’s costs related to such continuing forest land obligation, (including
all legal costs) incurred by the buyer in enforcing the continuing forestland obligation against
the seller. Failure by the seller to send the required notice to the DNR at the time of sale shall
be prima facie evidence in all action by the buyer against the seller for costs related to continuing
forest land obligation, that the seller did not notify the buyer of the continuing forest land obligation
prior to sale. See RCW 73.09.070, RCW 76.09.390 and WAC 222-20-055.

There are also other types of continuing forestland obligations subject to certain requirements, including
without limitation Small Forest Landowner Forest Riparian Easements and Landowner Landscape Plans.
For more information contact the DNR Regional Office.

CONTINUING OBLIGATIONS

	 

	Reforestation	(RCW 76.09.070)
	 	 
	            |_|	Obligation exists on the property identified above and relates to the following Forest Practice Application/Notification

(FPA/N) Numbers (list all that apply, and attachment if necessary):
	 	 
	            |X|	No Reforestation obligation exists on the property.
	 	 
	Road maintenance and Abandonment Plan (WAC 222-24-051)
	 	 
	            |_|	Obligation exists on the property identified above and relates to the following Forest Practice Application/Notification (FPA/N) Numbers (list all that apply, and attachment if necessary):
	 	 
	            |X|	No Road Plan obligation exists on the property.
	 	 
	Harvest Strategy along Type 4 Waters in Eastern Washington (WAC 222-30-022 (2)(b))
	 	 
	           N/A      	Obligation exists on the property identified above and relates to the following Forest Practice Application/Notification (FPA/N) Numbers (list all that apply, and attachment if necessary):
	 	 
	           N/A      	No Harvest Strategy obligation exists on the property.

	

Purchase and Sale Agreement – page 24 of 25

	
PROPERTY IDENTIFICATION

Land/Rights Sold/Transferred (circle one): Land and Timber                  Land      Perpetual Timber Rights

Date that the Land/Rights was/were Sold/Transferred (month/day/year): ____________________________ . 

	 

	County/ies: _______________________________________________ 

	 
	
DNR Region/s: ______________________________________________________

Legal Description of the Lands/Rights being Sold/Transferred (including county parcel number/s, add
attachment if necessary):  _________________________________________________________________

	_____________________________________________________________________________________
	__________________________________________________________________________
	______________________________________
	 

	SELLER:	BUYER:
	Signature:_____________________________	Signature:_____________________________
	Date: ________________________________ 	Date: ________________________________ 
	Print Name: ___________________________ 	Print Name: ___________________________ 
	Title: ________________________________	Title: ________________________________
	Address: _____________________________ 	Address: _____________________________ 
	Phone: _______________________________	Phone: _______________________________
	 	 

	 
	
NOTE TO SELLER

At the time of sale or transfer of the property or the perpetual timber rights:

The seller is responsible for delivering (by certified mail or in person) the SIGNED ORIGINAL to the
DNR Region Office in which the property is located. However, if you choose to also have this form
recorded by the county, the original is delivered to the county and a copy delivered (by certified
mail or in person) to the DNR Region Office.

	

Purchase and Sale Agreement – page 25 of 25MANAGEMENT AGREEMENT

                MANAGEMENT AGREEMENT (“Agreement”), dated as of December 31, 2004, by and between Cascade Timberlands LLC, a Delaware limited
liability company (“Company”), and Olympic Resource Management LLC, a Washington limited liability company (“Manager”).

RECITALS

	 

	A.	Crown Pacific Limited Partnership (“CPLP”) will transfer the tree farms (“Tree Farms”) referred to, respectively, as the Olympic Tree Farm (“Olympic Tree Farm”), Hamilton Tree Farm (“Hamilton Tree Farm”) and Oregon Tree Farm (“Oregon Tree Farm”) in Exhibit A, and related assets, to the Company and its wholly owned subsidiaries (“Subsidiaries”) on the effective date of CPLP’s Second Amended Joint Consolidating Chapter 11 Plan, dated
as of November 10, 2004 (“Plan” and the date the Plan become effective, the “Effective Date”).
		 
	B.	Before the date of this Agreement, the Manager provided certain services relating to the Tree Farms
under an Engagement Agreement between the Manager, Debevoise & Plimpton LLP and Moore & Van
Allen PLLC dated May 13, 2004, as amended (“Interim Agreement”).
		 
	C.	The Company’s Amended and Restated Limited Liability Company Agreement, dated as of the date of
this Agreement (“Company LLC Agreement”), contemplates that the Company’s board of directors (“Company Board”) will delegate the Company’s and its Subsidiaries’ day-to-day operations to a manager.
		 
	D.	The Company wishes to have the Manager provide, and the Manager wishes to provide, certain management
services to the Company and its Subsidiaries from the date of this Agreement, with the Manager acting
as the manager contemplated by the Company LLC Agreement.
		 
	E.	The Company and the Manager wish to state the terms under which the Manager will provide these services.
	 	 
	 	NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
	 	 
	1. 	Services
	 	 

	 	
                1.1           Services. Subject to the terms and conditions in this Agreement, the Company hereby hires the Manager to provide
the following services to the Company and its Subsidiaries (“Services”) and the Manager agrees to provide the Services.

	

	 	
                (a)            Annual Budgets. At least two months before the start of each fiscal year (or, in the case of the 2005 fiscal year,
within 30 days after the Effective Date), the Manager shall submit to the Company Board, for its
approval, an annual budget (set forth on a monthly basis) for each Subsidiary for the forthcoming
fiscal year, together with projected quarterly and annual cash flow statements and projected balance
sheets for the end of each fiscal quarter of each fiscal year (“Annual Budget”). Each Annual Budget shall be based on the Manager’s recommendations, together with any
information supplied by the Company, about target levels of income and expenditures and shall reflect
the work to be performed, the income to be received and the expenses to be incurred with respect
to the relevant Tree Farm during that fiscal year (including the Manager’s Reimbursable Costs
under Section 2.3). The parties shall assist each other in good faith (including providing information)
to finalize the Annual Budgets in a timely manner with the intention of obtaining the approval of
the Annual Budgets by the Company Board before the start of the fiscal year to which they relate
(or, in the case of the 2005 Annual Budgets, within 60 days after the Effective Date). If no Annual
Budget is approved for a fiscal year, the Annual Budget for the immediately preceding fiscal year applies.

                (b)            Complying with Annual Budgets. After the Company Board has approved an Annual Budget, the Manager may spend the approved budgeted
amounts for each Tree Farm and the Company during the relevant fiscal year in consultation with,
and with the concurrence of, the Company’s President (“President”) but without requiring further approval by the Company Board. However, the Company Board may
modify the Annual Budget at any time (except for the Management Fees) and, to the extent the Manager
has not yet incurred expenses or obligations, the Manager shall comply with such modifications. To
facilitate ongoing management of the Tree Farms, the Manager may exceed any approved budgeted line
item amount by the lesser of 10% or $25,000 (although the aggregate variances for expenditures may
not exceed 5% of the aggregate budgeted expenditures in the Annual Budget). In addition, if an emergency
or natural disaster threatens the value or well-being of all or some of any Tree Farms, the Manager
shall use commercially reasonable efforts to protect the Tree Farms, and may spend up to $100,000
per Tree Farm in extra-budgetary funds for this purpose in consultation with, and with the concurrence
of, the President but without obtaining the prior approval of the Company Board. The Manager shall
notify the Company immediately (and in advance, if practicable) of any such emergency or natural
disaster, and the amount of and reason for any such expenditure or proposed expenditure. If the Manager
believes it needs to spend more than $100,000 in such circumstances, it shall promptly inform the
Company and obtain the President’s approval before spending more than $100,000.

                (c)            Financial Books and Records. The Manager shall keep full and accurate accounts of the Company’s and each Subsidiary’s
transactions in proper books and records of account which set forth the information required by the
Delaware Limited Liability Company Act. These books and records shall be maintained in accordance
with US generally accepted accounting principles (“GAAP”). Promptly after entering into this Agreement, the Manager and the Company will consult with
each other on developing reporting format templates.

	

2

	 	
                (d)           Monthly Reports. Within 10 Business Days after the end of each calendar month, the Manager shall give the Company,
in respect of each Subsidiary and in respect of the Company (on a consolidated basis):

	 	 

		 	(i)	an income statement for that calendar month;
				 
		 	(ii)	an analysis of the variances, if any, in the income statement from the relevant monthly budget in the
Annual Budget where the variance (whether favorable or unfavorable) is at least 5% of the budgeted
amount for that line item and the budgeted line item was an expenditure of at least $1,000;
				 
		 	(iii)	a trial balance showing assets and liabilities as of the end of that calendar month; 
				 
		 	(iv)	a balance sheet showing assets and liabilities as of the end of that calendar month;
				 
		 	(v)	a statement of cash flows during that calendar month; 
				 
		 	(vi)	a projection of monthly cash flows for the three calendar months immediately following that calendar
month; and
				 
		 	(vii)	such other ordinary course financial reports as the Company Board requires. 

	 	 
	 	
The Manager shall prepare these statements and reports in accordance with GAAP and in a form approved
by the Company in its reasonable discretion and shall deliver them to the President (and/or the President’s
designees) in both electronic and paper forms. 

                (e)            Quarterly Reports. Within 20 Business Days after the end of each first, second and third fiscal quarter of each fiscal
year, the Manager shall give the Company, in respect of each Subsidiary and, except for Section 1.1(e)(viii),
in respect of the Company (on a consolidated basis):

	 	 

		 	(i)	an income statement for that fiscal quarter;
				 
		 	(ii)	an analysis of the variances, if any, in the income statement from the relevant quarterly budget in
the Annual Budget where the variance (whether favorable or unfavorable) is at least 5% of the budgeted
amount for that line item and the budgeted line item was an expenditure of at least $3,000;

	

3

		 	(iii)	a statement of cash flows during that fiscal quarter;
				 
		 	(iv)	an analysis of the variances, if any, in the cash flow statement from the relevant quarterly budget
in the Annual Budget where the variance (whether favorable or unfavorable) is at least 5% of the
budgeted amount for that line item and the budgeted line item was a payment of at least $3,000;
				 
		 	(v)	a trial balance showing assets and liabilities as of the end of that fiscal quarter;
				 
		 	(vi)	a balance sheet showing assets and liabilities as of the end of that fiscal quarter;
				 
		 	(vii)	an analysis of the variances, if any, in the balance sheet from the relevant quarterly budget in the
Annual Budget where the variance (whether favorable or unfavorable) is at least 5% of the budgeted
amount for that line item and the budgeted line item was at least $100,000;
				 
		 	(viii)	at the Company’s request, a revised Annual Budget for any or all of the Subsidiaries (“Forward Looking Budgets”) for the remaining fiscal quarters of the fiscal year based on actual revenues and expenditures
for the fiscal year to date and revised forecasts of revenues and expenditures for the balance of
the fiscal year (and, once approved by the Company Board, any Forward Looking Budgets shall replace
the corresponding original Annual Budgets for the balance of the fiscal year); and
				 
		 	(ix) 	such other ordinary course financial reports as the Company Board requires. 

	 	 
	 	
The Manager shall prepare these statements, reports and Forward Looking Budgets in accordance with
GAAP and in a form approved by the Company in its reasonable discretion and shall deliver them to
the President (and/or the President’s designees) in both electronic and paper forms. The Manager
shall arrange for the Company’s and each Subsidiary’s books and records of account to be
reviewed as of the end of each fiscal quarter by the Company’s auditors (or other accounting
firm selected by the Company). 

                (f)             Annual Reports. Within two months after the end of each fiscal year, the Manager shall give the Company, in respect
of each Subsidiary and, except for Section 1.1(f)(ii), in respect of the Company (on a consolidated
basis):

	

4

		 	(i)	an income statements for that fiscal year;
				 
		 	(ii)	an analysis of the variances, if any, in each Subsidiary’s income statement from the annual budget
in the Annual Budget where the variance (whether favorable or unfavorable) is at least 5% of the
budgeted amount for that line item and the budgeted line item was an expenditure of at least $12,000;
				 
		 	(iii)	a statement of cash flows during that fiscal year;
				 
		 	(iv)	an analysis of the variances, if any, in the cash flow statement from the annual budget in the Annual
Budget where the variance (whether favorable or unfavorable) is at least 5% of the budgeted amount
for that line item and the budgeted line item was a payment of at least $12,000;
				 
		 	(v)	a trial balance showing assets and liabilities as of the end of that fiscal year;
				 
		 	(vi)	a balance sheet showing assets and liabilities as of the end of that fiscal year; 
				 
		 	(vii)	an analysis of the variances, if any, in the balance sheet from the annual budget in the Annual Budget
where the variance (whether favorable or unfavorable) is at least 5% of the budgeted amount for that
line item and the budgeted line item was at least $100,000; and
				 
		 	(viii)	such other ordinary course financial reports as the Company requests. 

	 	 
	 	
The Manager shall prepare these statements and reports in accordance with GAAP and in a form approved
by the Company in its reasonable discretion and shall deliver them to the President (and/or the President’s
designees) in both electronic and paper forms. The Manager shall arrange for the Company’s and
each Subsidiary’s books and records of account to be audited as of the end of each fiscal year
by the Company’s auditors (or other accounting firm selected by the Company), such audits to
be completed within two months of the end of the fiscal year. If requested by the Company, the Manager
shall prepare an annual internal control report that complies with the requirements of section 404
of the Sarbanes-Oxley Act of 2002 (and the rules promulgated under it) as if the Company were an
issuer to which such requirements applied (and the Manager may contract for Subcontract Services
at the Company’s cost to prepare such report and to document and/or test internal controls as
required to prepare such report). An officer of the Manager shall certify in writing for the audited
income statements, cash flow statements and balance sheets that: 

	

5

		 	(A)	he or she has reviewed these financial statements;
				 
		 	(B)          	based on his or her knowledge, these financial statements do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make such statements in the
financial statements, in light of the circumstances under which such statements in the financial
statements were made, not misleading with respect to the period covered by the financial statements;
and
				 
		 	(C)          	based on his or her knowledge, the financial statements fairly present in all material respects the
financial condition, results of operations and cash flows of the Subsidiary or Company (on a consolidated
basis) as of, and for, the periods presented in the financial statements.

	 	 
	 	
                (g)           Reports to Members. If requested by the Company, the Manager shall send to each of the Company’s members (“Members”), either by mail or by any other means agreed between the Manager and the Company, any or all
of the Company’s consolidated income statement, cash flow statement and balance sheet and a
statement of the percentage of interests held by each Member as of the date of the financial statements.
After consultation with, and with the concurrence of, the President, the Manager shall use commercially
reasonable efforts to provide to a Member such other information as is reasonably requested by such
Member for any purpose reasonably related to such Member’s interest as a member of the Company
to the extent that any such efforts do not impose any undue cost or burden on the Company or the
Manager, subject in each case to the Member’s obligations concerning the disclosure of confidential
information under the Company LLC Agreement.

                (h)           Taxes Records, Tax Returns and Tax Payments. Subject to any reasonable instructions from the Company that are not inconsistent with applicable
law or regulations, the Manager shall:

	 	 

		 	(i)	manage the Company’s tax records;
				 
		 	(ii)	prepare and execute the Company’s tax returns on the Company’s behalf;
				 
		 	(iii)	ensure that the taxes due from the Company are paid on time from the Company’s bank accounts;
				 
		 	(iv)	as soon as reasonably practicable after the end of each fiscal year, send to each person that was a
Member at any time during such fiscal year U.S. Internal Revenue Service Schedule K-1, “Partner’s
Share of Income, Credits, Deductions, Etc.,” or any successor schedule or form, for such Member;
and

	

6

		 	(v)	coordinate with any other person providing tax services to the Company.

	 	 
	 	
The Company shall promptly give the Manager copies of any tax statements sent directly to the Company
with regard to the Company’s taxes that the Manager would require to perform its duties under
this Section 1.1(h).

                (i)             Tax Allocations and other Tax Matters. Subject to any reasonable instructions from the Company Board not inconsistent with applicable law
or regulations, the Manager shall:

	 	 

		 	(i)	except as otherwise provided in the Company LLC Agreement, allocate the income, gains, losses, credits
and deductions recognized by the Company among the Members for U.S. federal, state and local income
tax purposes, to the extent permitted under the U.S. Internal Revenue Code (“Code”) and the Treasury Regulations, in proportion to Members’ respective interests in the Company;
				 
		 	(ii)	notwithstanding Section 1.1(i)(i), on a best efforts basis adjust such allocations as may be necessary
to maintain substantial economic effect, or to ensure that such allocations are in accordance with
the Members’ interests in the Company, in each case within the meaning of the Code and the Treasury
Regulations;
				 
		 	(iii)	allocate tax credits in good faith; and
				 
		 	(iv)	determine in good faith all matters concerning allocations for U.S. federal, state and local and non-U.S.
income tax purposes, including accounting procedures, not expressly provided for by the terms of
this Agreement.

	 	 
	 	
The Manager shall not cause the Company to elect to be treated as an association taxable as a corporation
for U.S. federal, state or local income tax purposes under Treasury Regulations section 301.7701-3(a)
or under any corresponding provision of state or local law.

                (j)             Cash Management. The Manager will collect and hold cash generated from the Tree Farms in a bank account or accounts
opened in the Company’s or the applicable Subsidiary’s name. The Manager shall pay the
Company’s and each Subsidiary’s accounts payable and all property related expenses out
of such accounts. The Manager shall deliver copies of the Company’s and Subsidiaries’ bank
statements to the President, together with a reconciliation prepared by the Manager, within 10 Business
Days after the Manager receives those statements. 

                (k)            Administering Distributions. At the Company’s request, the Manager shall assist the Company in making distributions of the
Company’s cash or other assets to the Members (including facilitating the transfer of the Company’s
cash or other assets to Members or to other Company bank accounts, and sending notices or information
to Members). 

	

7

	 	
                (l)             Insurance and Bonding. The Manager shall maintain in full force and effect, at the Manager’s cost, at least the following
minimum levels of insurance and fidelity bonds with financially stable insurance carriers rated
by A.M. Best “A-VI” or higher:

	 	 

		 	(i)	Minimum limits of $1,000,000 per occurrence, $2,000,000 aggregate for ongoing operations, Washington
Stop Gap (employer’s liability), and loggers broad form property damage. Insurance coverage
will be written on an insurance industry standard Commercial General Liability Insurance Policy (ISO
CG 00 01 or equivalent). 
				 
		 	(ii)	Minimum automobile liability coverage of $1,000,000 each accident, and coverage will use Symbol 1 (Any
Auto), or a combination of Symbols 2, 8, and 9 (Owned, Non-Owned, and Hired Autos). Insurance coverage
will be written on an industry standard Business Auto Coverage policy (BA 00 01 or equivalent).
				 
		 	(iii)	Workers’ Compensation Liability coverages required by law and Employer’s Liability Insurance
in the amount of $1,000,000. If commercially available, these policies shall contain a provision
under which the insurer waives any right of subrogation as against the Company and the Subsidiaries,
and its employees, agents or other representatives, to the fullest extent allowed by law.
				 
		 	(iv)	Umbrella or Excess Liability Insurance which will provide additional limits of coverage over the Commercial
General Liability, Employer’s Liability, and Business Auto Coverage in an amount of no less
than $4,000,000.
				 
		 	(v)	Fidelity bond, covering the Manager and the Manager’s employees and agents who handle or who are
responsible for handling the Company’s and the Subsidiaries’ monies, reasonably acceptable
to the Company, in the amount of $500,000.
				 
		 	(vi)	Professional Liability Coverage with a limit not less than $1,000,000.

	 	 
	 	
                The Manager shall cause the Company and its Subsidiaries to be added as additional insureds to the
above insurance policies (except the Professional Liability Coverage) per endorsement CG 2010 3/97
or equivalent. Before the Manager commences any activities under this Agreement, it shall give the
Company certificates of insurance (including the additional insured endorsement), in a form acceptable
to the Company, evidencing the above insurance policies.

	

8

	 	
                The above insurance policies will be primary to any insurance of the Company and its Subsidiaries.
At the Company’s request, the Manager will place any insurance of the Company and any of its
Subsidiaries, at the cost of the Company or Subsidiary, and give the Company certificates of insurance
in a form acceptable to the Company, evidencing such insurance policies.

                The Manager shall require and make reasonable efforts to verify that each contractor and subcontractor
the Manager hires to perform any work relating to the Company or any Subsidiary acquire and maintain
in full force and effect, at the contractor’s or subcontractor’s cost, at least the following
minimum levels of insurance with financially stable insurance carriers reasonably satisfactory to
the Company (except that the Manager may waive such insurance requirements, in whole or in part,
in emergency situations for the period of the emergency, and shall promptly notify the Company of
any such waivers):

	 	 

		 	(A)	Commercial general liability insurance insuring the contractor or subcontractor, as the case may be,
and the Company and the Subsidiaries against liability for bodily injury or property damage claimed
to have resulted from or be in any way connected with the contractor’s or subcontractor’s
operations in connection with this Agreement, in the amount of $1,000,000 for each occurrence and
$2,000,000 general aggregate. 
				 
		 	(B)          	Automobile liability insurance, including coverage for scheduled autos, hired autos and non-owned autos,
insuring the contractor or subcontractor, as the case may be, and the Company and the Subsidiaries
against any liability for bodily injury or property damage claimed to have resulted from or be in
any way connected with the contractor’s or subcontractor’s operations in connection with
this Agreement, in the amount of $1,000,000 for bodily injury per accident and $1,000,000 for property
damage.
				 
		 	(C)          	Workers’ Compensation Liability coverages required by law and Employer’s Liability Insurance
in the amount of $1,000,000. These policies shall contain a provision under which the insurer waives
any right of subrogation as against the Company and the Subsidiaries, and its employees, agents or
other representatives, to the fullest extent allowed by law.

	

9

	 	
                The insurance coverages and bonds required under this Section 1.1(l) shall contain a provision that
they are not subject to change or cancellation without at least 30 days’ prior written notice
by the insurer to the Company. The Manager shall give the Company evidence satisfactory to the Company
that the Manager, contractor or subcontractor, as the case may be, is maintaining such insurance
coverages and bonds. These insurance coverages and bonds are minimum requirements and do not limit
the Manager’s liability under this Agreement. 

                (m)           Lease and Contractual Obligations. The Company shall timely give the Manager pertinent information regarding lease and contractual agreements
on each Tree Farm or otherwise relating to the Company or the Subsidiaries. The Manager shall ensure
that lease or other contractual payments required to be made on the Company’s or a Subsidiary’s
behalf (including any payments required under contracts or other commitments entered into by the
Manager on the Company’s or a Subsidiary’s behalf in accordance with Section 1.7 and including
rent payments for offices leased by the Company or any Subsidiary) are made on time out of the funds
in the Company’s or applicable Subsidiary’s bank accounts. The Manager shall give the Company
proposed credit guidelines for vendors to the Company and the Subsidiaries and shall administer these
guidelines following Company approval.

                (n)            Licenses. The Manager shall obtain and maintain for the Company (at the Company’s cost) and the Subsidiaries
any licenses, permits or other governmental authorities (“Licenses”) that the Company or any Subsidiary needs in connection with its business or operating activities.

                (o)            Assets. The Manager shall have possession and control of the Company’s and the Subsidiaries’ owned
or leased assets. Furthermore: 

	 	 

		 	(i)	Subject to any instructions from the Company, the Manager shall arrange for and shall oversee the proposed
upgrade to the Tree Farms inventory scheduled for 2004-2005 (Stand Classification Cruise – High
Plot Intensity as described in the Manager’s “NewCo Inventory Proposal” dated August
25, 2004). Following the completion of the 2004-2005 Stand Classification Cruise, the Manager shall
oversee annual reinventory cruising. For 2006 and subsequent years, the Manager and the President
will jointly determine the recommended annual cruising target for each Tree Farm and will use the
results of the 2004-2005 re-cruise to establish the annual re-inventory acreage parameters.
				 
		 	(ii)	The Manager shall give the Company, by July 31 of each year and January 31 of the following year, semi-annual
cutout reports of timber harvested from each Tree Farm harvest unit compared to the inventory estimates
of the volume on each Tree Farm harvest unit.

	

10

		 	(iii)	The Manager shall fully support any third party appraisers conducting initial or updated annual appraisals
for each Tree Farm. The Manager shall supply the appraiser with merchantable inventory information
for each Tree Farm by age, species group, and product class, premerchantable acreage by age class,
and number and types of acreage comprising each Tree Farm. When requested by the Company, the Manager
shall give the Company feedback and critiques of the third-party appraisals.

	 	 
	 	
                (p)            Capital Expenditure. The Manager shall disburse funds from the Company’s or applicable Subsidiary’s bank account
for capital expenditures for silviculture and roads in accordance with the capital expenditure policies
and procedures approved by the Company and the amounts for capital expenditure approved in the Annual
Budget (subject to any variances permitted under Section 1.1(b))

                (q)            Establishing Offices. At the Company’s cost, the Manager shall establish and maintain offices or other support facilities
required for the efficient management of each Tree Farm.

                (r)             Harvest Plan. At least two months before the start of each fiscal year (or, in the case of the 2005 fiscal year,
within 30 days after the Effective Date), the Manager shall submit to the Company, for its approval,
the recommended monthly harvest plan for each Tree Farm for that fiscal year and, once approved by
the Company, cause timber to be harvested from each Tree Farm in accordance with the plan. On or
before the end of the first month in the following fiscal year, the Manager shall give the Company
a monthly analysis of harvest results versus the harvest plan for the fiscal year just completed.
The Manager may recommend, for the Company’s approval, changes to the harvest plan if market
conditions or other operating conditions change.

                (s)            Road Construction and Maintenance. The Manager shall be responsible for oversight of road construction and maintenance reasonably required
in connection with the Tree Farms (including activities required under Washington State’s Road
Maintenance and Abandonment Planning rules).

                (t)             Silvicultural Activities. The Manager shall be responsible for oversight of ongoing silvicultural operations and, at the Company’s
request, shall identify backlogs and recommend corrective actions for any backlogs.

                (u)            GIS Data Development and Maintenance. The Manager shall develop and maintain GIS data for the Tree Farms.

                (v)            Security and Surveillance. The Manager shall exercise reasonable efforts to maintain the security of the Tree Farms, including
conducting regular surveillance of the Tree Farms to detect weather damage, fire damage, insect infestation
and disease, timber trespass or any other detrimental occurrences.

	

11

	 	
                (w)           Timber or Log Marketing. Subject to any instructions from the President, the Manager shall:

	 	 

		 	(i)	oversee any mill supply agreements;
				 
		 	(ii)	determine the volume of the logs to be sold and manner of sale;
				 
		 	(iii)	advertise sales;
				 
		 	(iv)	process and handle bids;
				 
		 	(v)	ensure contract compliance;
				 
		 	(vi)	collect scale tickets;
				 
		 	(vii)	provide timber sale layout services; and
				 
		 	(viii)	establish and implement a log quality control program. 

	 	 
	 	
                (x)            Non-Timber Asset Management. The Manager shall, in a manner customary for timberlands management practices for the relevant locations,
manage and conduct the sale of the minerals, oil, rock, other forest products and gravel from the
Tree Farms including:

	 	 

		 	(i)	obtaining valuation opinions from appropriate consultants; 
				 
		 	(ii)	advertising, processing and handling bids; 
				 
		 	(iii)	controlling contract compliance, inspection of mining and gravel removal;
				 
		 	(iv)	collecting any relevant scale tickets; and 
				 
		 	(v)	accounting for contracted sales.

	 	 
	 	
                (y)            Public Access/Use Management. In accordance with the Company’s policies on public access or use that are notified to the Manager,
the Manager shall administer any hunting, grazing, camping and other leases or licenses generating
income for the Company or any Subsidiary or which affect the Tree Farms.

                (z)            Leases, Rights-of-Way and Easements. The Manager shall administer leases, rights-of-way and easements authorized or approved by the Company.

	

12

	 	
                (aa)          Property Records. The Manager shall maintain, on the Company’s and each Subsidiary’s behalf, accurate records
on each Tree Farm’s property, operation and management sufficient to satisfy ordinary and necessary
tax and accounting reporting requirements. The Company and its agents may have access on demand at
any reasonable time to these records as well as to the Manager’s other books and records relating
to the Tree Farms’ management and operations. On termination of this Agreement with respect
to any Tree Farm, the records kept by the Manager pertaining to that Tree Farm shall become the Company’s
property and the Manager shall promptly give them to the Company. However, the Manager may make and
retain copies of these records at the Company’s cost to the extent and for so long as is required
in connection with performing the Manager’s wind-down services under Section 4.4, defending
against any claim relating to the Manager’s management of the Tree Farms or otherwise required
by law. If, after the termination of this Agreement, a claim arises relating to the Manager’s
management of the Tree Farms, the Company shall grant access to, and allow the Manager to copy, the
records that the Manager requires to defend the claim.

                (bb)         Stewardship Projects. The Manager shall manage and implement stewardship projects as provided for in the Annual Budgets,
or as otherwise agreed.

                (cc)          Contractor Oversight. The Manager shall contract for and monitor the provision of Subcontract Services (as defined below),
including:

	 	 

		 	(i)	soliciting, receiving and awarding bids for Subcontract Services;
				 
		 	(ii)	entering into contracts for Subcontract Services on behalf of the Company, in the Company’s name
and at the Company’s cost, in a form acceptable to the Company, in conformity with budgetary
allocations and limits and in compliance with the requirements for subcontracting in this Agreement
(or with the Company’s prior written approval if outside the agreed upon form, budget or requirements);
and
				 
		 	(iii)	appropriately monitoring the Subcontract Services for contractor compliance with the contract. 

	 	 
	 	
                The Company shall pay for the Subcontract Services to the extent approved in the Annual Budget or otherwise
approved in writing by the Company. If the Manager considers that it is more feasible or economical
for the Manager’s employees or affiliates to perform any of the Subcontract Services, with the
Company’s prior written approval from the President, the Manager shall perform those Subcontract
Services and the Company shall pay the Manager for those services at the rate specified in the Company’s
written approval.

	

13

		 	The “Subcontract Services” are:
		 	 	 
		 	(A)	site preparation and planting;
				 
		 	(B)	road, bridge, gate and culvert construction and maintenance;
				 
		 	(C)	firebreak construction and maintenance;
				 

		 	(D)	property boundary line maintenance and surveys;
				 
		 	(E)	vegetation management;
				 
		 	(F)	prescribed burning;
				 
		 	(G)	hardwood control;
				 

		 	(H)	insect and disease control;
				 
		 	(I)	aerial surveillance, photography or mapping;
				 
		 	(J)	slash burning and fire suppression;
				 
		 	(K)	contract logging and trucking;
				 

		 	(L)	fertilization;
				 
		 	(M)	stocking control;
				 
		 	(N) 	animal control;
				 
		 	(O)	surveying for threatened and endangered species;
				 

		 	(P)	archaeological or other special surveys;
				 
		 	(Q)	timber marking;
				 
		 	(R)	stream surveys;
				 

		 	(S)	habitat assessment preparation;
				 
		 	(T)	annual re-inventory beginning in 2006; and
				 
		 	(U)	all other subcontract work incurred with the Company’s prior written approval.

	

14

	 	
                (dd)         Public and Government Relations. The Manager shall assist the Company in preparing and publishing press release in connection with
the Company’s and Subsidiaries’ formation and plan for assets or property sales, and in
managing the Company’s and Subsidiaries’ relationships with state timber regulatory authorities.

                (ee)          Legal Affairs. If and to the extent directed by the President, the Manager shall cooperate with outside legal counsel,
to be selected by the Company, with respect to claims and litigation in respect of events that occur
after the Effective Date relating to the Tree Farms. In general, litigation support for claims and
litigation in respect of events that occur before the Effective Date relating to the Tree Farms is
not within the scope of the Manager’s Services, although the Manager will provide de minimis
levels of support at the Company’s request.

                (ff)            Human Resources. The Manager shall provide personnel in sufficient number with appropriate levels of skill and experience
to undertake the Services. Such personnel shall be the Manager’s employees (as opposed to the
Company’s or any Subsidiary’s employees) and, subject to Section 2.3, the Manager will
be responsible for any compensation, benefits and related withholding or employment taxes to which
such personnel may be entitled or relating to such employees.

                (gg)          Membership Log. Unless instructed otherwise by the President, the Manager shall maintain the Company’s membership
log, which shall show each Member and, for each Member, the interest it holds in the Company and
its address. If requested by a Member, the Manager shall make the Membership Log available for review
by that Member.

	 	 

		 	(hh)	Information Technology. The Manager shall:
		 	 	 
		 	(i)	establish network infrastructure for centralized reporting; 
				 
		 	(ii)	facilitate workstation and application support with any third-party support for Company computers at
the Company’s cost; and 
				 
		 	(iii)	evaluate and update telecommunications links as appropriate. 

	 	 
	 	
The Manager shall ensure that the information and data for each Tree Farm is logically and physically
separated from, and not intermingled with, information and data for other Tree Farms or any other
aspect of the Company’s, a Subsidiary’s or the Manager’s businesses. The information
and data for the Tree Farms, the Company and the Subsidiaries belongs to the Company or the applicable
Subsidiary. On termination of this Agreement, the Manager shall give this information and data to
the Company in a format that the Company can readily use. However, the Manager may make and retain
copies of this information and data at the Company’s cost to the extent and for so long as is
required in connection with performing the Manager’s wind-down services under Section 4.4, defending
against any claim relating to the Manager’s management of the Tree Farms or otherwise required
by law. If, after the termination of this Agreement, a claim arises relating to the Manager’s
management of the Tree Farms, the Company shall grant access to, and allow the Manager to copy, the
records that the Manager requires to defend the claim.

	

15

	 	
                (ii)            Property Dispositions. To the extent requested by the Company, the Manager shall assist, cooperate and consult with the
Company and its appointed brokers or agents, and shall provide the following disposition services,
in respect of each proposed property disposition for each Tree Farm (and not including any brokerage
or marketing activities):

	 	 

		 	(i)	assess the feasibility of selling all or part of any Tree Farm and determine whether the Company needs
to reserve any interests in any land so sold, and assist in reserving such interests; 
				 
		 	(ii)	assess alternative uses for the land; 
				 
		 	(iii)	subject to the Company’s prior written approval and to obtaining appropriate confidentiality undertakings,
respond to and process due diligence and other information requests from potential buyers; 
				 
		 	(iv)	prepare and provide schedules for purchase and sale agreements; and
				 
		 	(v)	prepare and provide schedules for closing adjustments for revenues and expenses in connection with
property sales (including reconciliations of estimated revenues and expenses versus actual expenses
and revenues).

	 	 
	 	
To facilitate the dispositions, unless agreed otherwise with the buyer, the Manager shall not take
any action that could prevent or hinder a buyer of all or part of any Tree Farms employing or entering
into other service arrangements with any forester employed by the Manager who provided services in
respect of such Tree Farms before the disposition (except for (x) foresters employed by the Manager
before the Effective Date and (y) any additional persons employed as Tree Farm Managers for the Manager
at the time of disposition). Without limiting the generality of the foregoing, and unless agreed
otherwise with the buyer, the Manager shall take reasonable steps to encourage such foresters to
accept a buyer’s offer of employment or other provision of services and shall not solicit any
forester who accepts such an offer. 

                (jj)            Others.  The Manager shall provide any other services mutually agreed by the parties.

	

16

	 	
                1.2           Excluded Services. Unless the parties otherwise agree in writing, the Services do not include managing any extraordinary
transactions not contemplated by this Agreement (such as a large-scale land exchange).

                1.3           Use of Certain Company Assets. The Manager may use the Company’s and Subsidiaries’ personal property and equipment (including
vehicles) at no charge to the Manager. The Company, or applicable Subsidiary, will bear the depreciation,
leasing and replacement costs of these assets. Nothing in this Section 1.3 obligates the Company
or any Subsidiary to provide any particular assets, or assets of a particular nature or standard.
The Company makes no warranties about these assets, and disclaims any implied warranties about these
assets whether relating to quality, merchantability, fitness for a particular purpose or any other
matter. The Company and the Subsidiaries shall not be liable for any liabilities arising out of the
Manager’s use of these assets (including liability for personal injury). 

                1.4           Standard of Performance. Acting through its qualified employees and agents, the Manager shall perform its duties under this
Agreement, including generally managing, overseeing and supervising each Tree Farm (including the
forestry operations on or incidental to it) and providing or contracting for the labor, materials,
equipment, supplies and services needed to operate and maintain each Tree Farm. In performing its
duties under this Agreement, the Manager shall:

	 	 

		 	(i)	discharge its duties with the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent person acting in a similar capacity and familiar with such matters would use in managing
an enterprise of a similar character and with similar aims, using generally accepted and proper land
management and forestry practices and procedures acceptable to the Company; and
				 
		 	(ii)	act in accordance with federal, state, local and other governmental laws, rules, regulations and other
requirements applying to forestry and management operations; 
				 
		 	(iii)	act in accordance with the Company LLC Agreement; and
				 
		 	(iv)	act in good faith and with due care in selecting and employing reputable and qualified contractors
and subcontractors.
		 	 	 
		 	1.5	Governmental Compliance.

	 	 
	 	
                (a)            The Manager represents and warrants to the Company that the Manager has obtained the Licenses it needs
to perform its duties under this Agreement. The Manager shall maintain these Licenses, and obtain
and maintain any further Licenses it needs to perform its duties under this Agreement. 

	

17

	 	
                (b)            The Manager shall take, or timely recommend, such action needed to comply with the federal, state,
local and other governmental laws, rules, regulations and other requirements applying to the management
and forestry operations conducted under this Agreement. Whenever a report, application, notice or
other document (except for harvest permits and notices, and other normal course forestry operating
permits) is required to be filed or reported with any governmental agency in connection with the
Tree Farms or any forestry operations being conducted under this Agreement, the Manager shall immediately
notify the Company of this, and the Manager will prepare initial drafts of any report, application,
notice or other document for filing or reporting.

                (c)            The Manager shall exercise reasonable efforts to ensure that the contractors or subcontractors performing
services on or relating to the Tree Farms comply with the federal, state, local and other governmental
laws, rules, regulations and other requirements relating to them or the Tree Farms. 

                (d)            On request, the Manager shall give the Company evidence satisfactory to the Company of the Manager’s
compliance with this Section 1.5.

                1.6           Reporting. The Manager shall, in the normal course, report to the President. Where this Agreement requires the
Manager to notify the Company, such notification requirement shall be deemed satisfied by the Manager
notifying the President. If requested by the President or by the Company Board in respect of any
matter or under any circumstances, the Manager shall report directly to the Company Board.

                1.7           Independent Contractor Status. The Manager is an independent contractor under this Agreement. Nothing in this Agreement creates
a joint venture, partnership or employment arrangement. The Manager may, in consultation with, and
with the concurrence of, the President, enter into contracts or other commitments in the name of,
or on behalf of, the Company or any Subsidiary necessary or appropriate to perform the Services for
terms no longer than one year and total consideration payable by the Company and the Subsidiaries
over the term of the contract or commitment not exceeding $200,000. The Manager may enter into other
contracts or other commitments in the name of, or on behalf of, the Company or any Subsidiary with
the prior authorization of the Company Board.

	 	 

	2. 	Compensation
	 	 
	 	                2.1           Management Fee. As compensation for the Services the Company shall pay the Manager the fee for each Tree Farm specified in Exhibit B (“Management Fee”) each calendar month. 

	

18

	 	
                2.2           Credit for Interim Agreement. 50% of the fees paid to the Manager under the Interim Agreement (but not expenses reimbursed under
the Interim Agreement) will be credited against payment of the Management Fee, divided evenly over
the first six complete calendar months of the term of this Agreement.

                2.3           Reimbursement of Costs. In addition to the Management Fee, the Company shall reimburse the Manager for its actual out-of-pocket
costs relating to the field operations (“Reimbursable Costs”), including:

	 	 

		 	(i)	salaries, wages, future severance and benefits, and related withholding and employment taxes, for field
forestry, inventory/GIS, and administrative personnel (excluding the Manager’s area managers)
based at the field offices; 
				 
		 	(ii)	fees for temporary laborers and staff or other contract laborers performing field operations;
				 
		 	(iii)	operating costs for the Company’s vehicles used in field operations (excluding insurance premiums);
				 
		 	(iv)	field office rent, equipment, utilities, phone and communication expenses, and other administrative
costs specific to field operations;
				 
		 	(v)	Whidbey Island seed orchard management costs that the Manager pays to third parties; and
				 
		 	(vi)	as approved by the Company.

	 	 
	 	
The Manager shall, to the extent consistent with performing its duties under this Agreement, use its
reasonable best efforts to minimize the Reimbursable Costs and shall submit to the Company Board
annual projections of Reimbursable Costs as part of the Annual Budgets under Section 1.1(a). The
Manager shall also submit to the President, for the President’s prior approval, proposals to
hire any person for which the Manager will seek reimbursement under this Section 2.3. The Company
shall not be liable to reimburse the Manager under this Section 2.3 for any such persons in respect
of which the President has not granted approval. 

                2.4           Payment. 

                (a)            Each calendar month, the Manager shall give the Company (i) an invoice stating in reasonable detail
the amount payable for Services for the preceding calendar month and (ii) any other information that
the Company reasonably requests. The Company shall pay the invoiced amount by wire transfer of immediately
available funds to the bank account specified in the invoice within 10 Business Days after receiving
the invoice and any such additional information. 

	

19

	 	
                (b)            Before the start of each calendar month, the Manager shall give the Company a statement of estimated
Reimbursable Costs for that month. During that calendar month, the Manager may pay these Reimbursable
Costs from the Company’s or applicable Subsidiary’s bank account. Within 10 Business Days
after the end of the calendar month, the Manager shall give the Company an analysis of the variances,
if any, between estimated and actual Reimbursable Costs. On the Company’s request, the Manager
shall give the Company reasonable evidence of any Reimbursable Costs and any other information that
the Company reasonably requests. 

                (c)            If the Company considers at any time that a payment made from the Company’s or applicable Subsidiary’s
bank account under Section 2.4(b) is not a Reimbursable Cost, the Company shall promptly
notify the Manager of its determination and the parties shall seek to resolve the issue. At the Company’s
request, the Manager shall not make any further payments from the Company’s or applicable Subsidiary’s
bank account under Section 2.4(b) for such types of costs until the issue is resolved. If the parties
do not resolve the issue within 10 Business Days of the Company’s notification to the Manager,
either party may refer the issue to arbitration in accordance with Section 7.5. To the extent the
expense reimbursement is disallowed by the arbitrator, the Manager shall promptly repay such amount
to the Company (together with interest at the rate of interest most recently published by The Wall
Street Journal as the “prime rate” at large U.S. money center banks) or, if such repayment
is not made promptly, the Company may offset such amount from any amount payable to the Manager.
If expense reimbursements of that type are allowed by the arbitrator and the Company had requested
the Manager not to make further payments for such types of costs, the Manager may pay these withheld
Reimburseable Costs from the Company’s bank account (together with interest at the rate of interest
most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks).

                (d)            If the Effective Date is not the first day of a calendar month, (i) the Manager shall, in addition
to the invoices, statements of estimated Reimbursable Costs, analyses of variances and related information
for each calendar month, also give the Company such items in respect of the first partial calendar
month during which this Agreement is effective and the last partial calendar month during which this
Agreement is effective and (ii) the Management Fees for such partial calendar months, and for the
calendar months during which the Management Fee changes, shall be pro rated based on the number of
days in the applicable period divided by the number of days in the applicable calendar month.

                (e)            The Company may withhold from any payments taxes required to be withheld by law, governmental regulation
or ruling.

	

20

	3.	Term
	 	 
	 	The term of this Agreement commences on the Effective Date and continues through the second anniversary of the Effective Date (unless earlier terminated under Section 4). The Agreement automatically renews for additional one year terms on each subsequent anniversary unless either party gives notice to the other party not less than 30 days before such date that it intends to terminate this Agreement.
	 	 
	4.	 Termination
	 	 

		 	4.1 	Termination Generally. This Agreement may be terminated by:
		 	 	 
		 	(i)	the mutual agreement of the parties;
				 
		 	(ii)	either party, if the other party commits a material breach under it, and (if capable of cure) does
not cure this breach within 30 Business Days of receiving notice of the breach from the terminating
party; 
				 
		 	(iii)	the Company, if the Manager is otherwise not able to provide the Services for more than 30 calendar
days; 
				 
		 	(iv)	the Company, if the Manager sells all or substantially all of its assets, merges or consolidates with
an unaffiliated third party in such a manner that the Manager is not the survivor of the merger or
consolidation, or otherwise ceases to exist, or there is a change of control of the Manager; or
				 
		 	(v)	the Manager by notice to the Company and CPLP, or by the Company or CPLP by notice to the Manager,
at any time on or after June 1, 2005 if this Agreement has not at the time of notice become effective
as a result of the Plan not becoming effective before that date.

	 	 
	 	
                4.2           Automatic Termination of the Entire Agreement. This Agreement automatically terminates if: 

	 	 

		 	(i)	there are no Tree Farms with respect to which the Manager is providing Services; or 
				 
		 	(ii)	either party is adjudicated as insolvent or to be liquidated, files or consents to the filing against
it of a petition for relief or reorganization in bankruptcy (or under any similar law), consents
to the appointment of a receiver, trustee or similar officer with respect to it or with respect to
a substantial part of its property, or fails to dismiss within 30 days any petition or order seeking
to effect any of the foregoing.

	

21

	 	
                4.3           Automatic Termination of the Agreement with respect to a Tree Farm. This Agreement automatically terminates with respect to a given Tree Farm (or any part of a Tree
Farm) if and when that Tree Farm (or part of the Tree Farm) is sold or disposed of, and no longer
owned by the Company or its affiliates.

                4.4           Wind-Down Services. At the Company’s request, for up to 60 days following the termination of this Agreement, the
Manager shall provide the following services for a fee of $50,000 per month (to be pro rated for
any parts of a month):

	 	 

		 	(i)	preparing any monthly, quarterly and annual reports referred to in Sections 1.1(d), 1.1(e) and 1.1(f)
covering any period that begins before the termination of this Agreement, and sending such reports
to Members in the manner provided in Section 1.1(g); and
				 
		 	(ii)	providing the services related to taxes referred to in Sections 1.1(h) and 1.1(i) for any period that
begins before the termination of this Agreement.

	 	 
	 	
By mutual agreement, the parties may extend the wind-down period as required for the efficient and
complete wind-down of the Company’s affairs. Section 1.4 (Standard of Performance), Section
1.6 (Reporting) and Section 1.7 (Independent Contractor Status) shall continue to apply during this
wind-down period.

                4.5           Survival of Obligations. On termination of this Agreement, the Manager shall promptly deliver to the Company all assets of
the Company and its affiliates in the Manager’s possession or control, and take any steps reasonably
required by the Company to assign or effect the transfer to the Company of any such assets (including
balances in bank accounts, and contractual rights). Termination under Section 4.1, 4.2 or 4.3 does
not affect the parties’ rights and obligations incurred before the date of termination, and
this Section 4.5, Section 5, Section 6 and Section 7 remain in effect despite the termination. 

	 	 
	5.	Confidentiality
	 	 
	 	Except as otherwise provided in this Agreement, the Manager shall, and shall cause its affiliates, and the Manager’s and its affiliates’ respective officers, employees, accountants, counsel, consultants, agents and other representatives to whom the Manager or any other such person discloses such information (collectively, “Representatives”), to, keep confidential all information (including customer lists, trade secrets, pricing lists, property records, membership log, inventory data and appraisals) they have relating to the Company and its affiliates, and the Manager shall not, and shall cause its affiliates and the Representatives not to, use that information or disclose it to any person except as needed to perform the Services, except for information:

	

22

	
	 

		(i)	which is, or becomes, publicly available, other than through a breach of this Section 5 by the Manager,
any of its affiliates or a Representative;
			 
		(ii)	received from a third party not bound by any confidentiality agreement with, or other confidentiality
obligation owed to, the Company or any of its affiliates;
			 
		(iii)	required by applicable law to be disclosed by that party (after promptly notifying the Company and,
to the extent practicable, giving the Company a reasonable opportunity to prevent public disclosure);
or 
			 
		(iv)	necessary to establish such party’s rights under this Agreement (after promptly notifying the
Company and, to the extent practicable, giving the Company a reasonable opportunity to prevent public
disclosure).

	 	 
	6.	Liability of Manager; Indemnity Against Third Party Claims
	 	 

	 	 
	 	
                6.1           Limitation of Manager’s Liability; Indemnity by the Manager. Notwithstanding Section 1.4, the Manager shall not be liable to the Company or its affiliates, or
the Company’s and such affiliates’ directors, officers, employees, agents and other representatives,
(collectively, the “Company Indemnitees”) except for gross negligence, willful misconduct or fraud by the Manager (or any person acting
on its behalf) in providing the Services under this Agreement. If it is ultimately determined by
a final and unappeallable decision of a court or arbitrator that the Manager (or any person acting
on its behalf) has committed such gross negligence, willful misconduct or fraud,the Manager shall
indemnify, defend and hold harmless the Company Indemnitees against all claims, liabilities, damages,
losses or expenses (including reasonable attorneys’ fees and other litigation expenses) (collectively,
“Company Claims”), whether actual or alleged by a third party, that arise as a result of such gross negligence,
willful misconduct or fraud (except to the extent the Company Claims were caused by the gross negligence,
willful misconduct or fraud of the Company or any person acting on its behalf (except the Manager
or any person acting on its behalf)) and shall promptly and timely pay all the expenses incurred
by the Company Indemnitees in any proceedings for the Company Claims.

                6.2           Indemnity by Company. The Company shall indemnify, defend and hold harmless the Manager and its affiliates, and the Manager’s
and such affiliates’ directors, officers, employees, agents and other representatives (collectively,
the “Manager Indemnitees”), against all claims, liabilities, damages, losses or expenses (including reasonable attorneys’
fees and other litigation expenses) (collectively, “Manager Claims”), whether actual or alleged by a third party, that arise as a result of the Manager’s performance
of its duties in providing the Services (except to the extent the Manager Claims were caused by the
gross negligence, willful misconduct or fraud of the Manager (or any person acting on its behalf))
and shall promptly and timely pay all the expenses incurred by the Manager Indemnitees in any proceedings
for the Manager Claims as incurred and in advance of the final disposition of such proceedings, even
if it is alleged that the Manager (or any person acting on its behalf) has acted in a manner constituting
gross negligence, willful misconduct, or fraud. To the extent that it is ultimately determined by
a final and unappeallable decision of a court or arbitrator that the Manager (or any person acting
on its behalf) has acted in a manner constituting gross negligence, willful misconduct, or fraud,
the Manager shall be required to reimburse the Company for amounts advanced by the Company under
this Section 6.2.

	

23

	7. 	Miscellaneous.
	 	 

	 	
                7.1           Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to its subject matter.
This Agreement supersedes all promises, representations, understandings, arrangements and prior agreements
relating to this subject matter (including the Interim Agreement).

                7.2           Binding Effect. This Agreement binds, and inures to the benefit of, the parties and their respective successors and
permitted assigns. This Agreement does not confer rights or remedies on any person other than the
parties and their respective successors and permitted assigns except as provided in Section 6.

                7.3           Assignment. Except as provided in this Agreement neither party may assign any of its rights or obligations under
this Agreement without the other party’s written consent, except that the Company may assign
its rights and obligations under this Agreement on the transfer of all or substantially all of its
business or assets. 

                7.4           Governing Law. This Agreement is governed in all respects (including as to validity, interpretation and effect)
by the internal laws of the State of New York without giving effect to its conflict of laws rules
to the extent that they would require or permit the application of another jurisdiction’s law.

                7.5           Arbitration. The parties agree to submit any dispute, controversy or claim arising out of or relating to this
Agreement, or its breach, interpretation, termination or validity, to binding arbitration in San
Francisco in accordance with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered may be entered in any court having jurisdiction. The prevailing
party shall be entitled to recover all fees and expenses (including reasonable attorneys’ fees)
incurred in connection with such proceedings (including the enforcement of any award rendered).

                7.6           Amendments; Waivers. No provision of this Agreement may be modified, waived or discharged except in writing (and any modifications,
waivers or discharges affecting the Company’s rights or obligations are only effective if approved
by the Company Board or a person authorized by the Company Board). No waiver by a party of a
breach by the other party of, or compliance with, any provision of this Agreement shall constitute
a waiver of that provision at any other time, or of other provisions. 

	

24

	 	
                7.7           Severability. If any provisions of this Agreement are invalid, illegal or unenforceable in any circumstances or
jurisdiction, this shall not affect the validity, legality and enforceability of such provisions
in any other circumstances or jurisdictions or the other provisions in this Agreement.

                7.8           Notices. Notices or other communications required or permitted to be delivered under this Agreement shall
be in writing and delivered:

	 	 

		 	(i)	personally, and shall be deemed to have been received on the date of delivery if received during normal
business hours or else on the next Business Day;
				 
		 	(ii)	by nationally recognized overnight courier service, and shall be deemed to have been received on the
second Business Day after delivery to the courier service;
				 
		 	(iii)	by certified or registered mail (first-class postage prepaid and return receipt requested) and shall
be deemed to have been received on the fifth Business Day after mailing; or 
				 
		 	(iv)	by facsimile transmission and shall be deemed to have been received on the day of transmission if received
during normal business hours or else on the next Business Day, and

	 	 
	 	
addressed as follows (or to such other address as the party entitled to notice designates in accordance
with this Section 7.8):

if to the Company: 

	 	 

	 	 	Cascade Timberlands LLC
	 	 	c/o Olympic Resource Management LLC
	 	 	19245 Tenth Avenue NE
	 	 	Poulsbo, WA 98370
	 	 	Fax:  (360) 697-1476
	 	 	Attention:  Tom Ringo

	 	 
	 	
with copies to each of the Company’s directors at his or her address notified by the director
or the Company to the Manager in writing from time to time

	

25

	 	
if to the Manager:

	 	 

	 	 	Olympic Resource Management LLC
	 	 	19245 Tenth Avenue NE
	 	 	Poulsbo, WA 98370
	 	 	Fax:  (360) 697-1476
	 	 	Attention:  Tom Ringo

	 	 
	 	
with copy to: 

	 	 

	 	 	Davis Wright Tremaine LLP 
	 	 	2600 Century Square
	 	 	1501 Fourth Avenue
	 	 	Seattle, WA 98101-1688
	 	 	Fax:  (206) 628-7699
	 	 	Attention:  Greg F. Adams, Esq.

	 	 
	 	
                7.9           Counterparts. This Agreement may be executed in counterparts, both of which together shall constitute one and the
same instrument.

                7.10        Interpretation. The section and other headings in this Agreement are for convenience only and do not affect the meaning
of this Agreement. The word “including” is deemed to be followed by “without limitation.” A
“Business Day” means any day (other than a Saturday or Sunday) on which banks in Washington
and Oregon are open for business. An “affiliate” means, with respect to any specified person,
any other person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person (where “control” means the power to direct the
management and policies of such specified person, directly or indirectly, whether through ownership
of voting securities, by contract or otherwise and “controlling” and “controlled”
have corresponding meanings).

	

26

	 	
The parties have executed this Agreement as of the date first written above.

	 	 

	 	Cascade Timberlands LLC 
		 
		By:_________________________________ 
		      Name:
		      Title:
		 
		 
	 	Olympic Resource Management LLC
		 
		By: ________________________________
		      Name:
		      Title:

	

27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]