The St. Joe Company 10Q 2011 Q1 Quarterly report | JOE Filing

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

Between

ST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C.,

as Seller

And

VULCAN TIMBERLANDS LLC,

as Purchaser

TABLE OF CONTENTS


Article I Definitions		1
Section 1.1 Definitions		1
Article II Agreement; Purchase Price; Earnest Money		3
Section 2.1 Agreement of Purchase and Sale		3
Section 2.2 Purchase Price		3
Section 2.3 Earnest Money		4
Article III Closing		4
Section 3.1 Closing		4
Section 3.2 Seller’s Closing Deliveries		4
Section 3.3 Purchaser’s Closing Deliveries		5
Article IV Title		5
Section 4.1 Conveyance		5
Section 4.2 Title Commitments		5
Section 4.3 Title Insurance		5
Section 4.4 Other Agreements		6
Article V Inspection; acknowledgments; HSR Act		6
Section 5.1 Inspection; Boundary Marking		6
Section 5.2 Acknowledgment		6
Section 5.3 HSR Act		7
Article VI Thinnings Supply Agreement		7
Section 6.1 Thinnings Supply Agreement		7
Article VII Condition of Timber; Damage; Condemnation		8
Section 7.1 Condition of Timber		8
Section 7.2 Casualty		8
Section 7.3 Condemnation		8
Article VIII Warranties, Representations, and Disclaimers		9
Section 8.1 Seller’s Representations		9
Section 8.2 Purchaser’s Representations		10
Section 8.3 Survival		11
Section 8.4 Disclaimers		11
Article IX Commissions; Taxes; Expenses		12
Section 9.1 Brokerage Commission		12
Section 9.2 Taxes		13
Section 9.3 Expenses		13
Article X Conditions		13
Section 10.1 Mutual Conditions		13
Section 10.2 Conditions to Purchaser’s Obligations		14
Section 10.3 Conditions to Seller’s Obligations		14
Article XI Default; Remedies		15
Section 11.1 Default by Purchaser		15
Section 11.2 Default by Seller		15


Article XII Intentionally Deleted		15
Article XIII Miscellaneous		15
Section 13.1 Assignment		15
Section 13.2 No Waiver		15
Section 13.3 Governing Law		15
Section 13.4 Notice		16
Section 13.5 Entire Agreement		17
Section 13.6 Captions		17
Section 13.7 Severability		17
Section 13.8 Counterparts		17
Section 13.9 Binding Effect		17
Section 13.10 Time of Essence		17
Section 13.11 No Survival		17
Section 13.12 Incorporation of Exhibits		17
Section 13.13 Confidentiality; Public Announcements		17
Section 13.14 Dispute Resolution		18
Section 13.15 Business Days		18
Section 13.16 Section 1031/1033 Exchange		18

INDEX OF EXHIBITS


A		Timber Stands
B		Legal Description of the Property
C		Form of Timber Deed
D		Form of Reliance Letter
E		Permitted Encumbrances
F		Form of Thinnings Supply Agreement

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT, made as of the 31^st day of March, 2011 (the “Effective Date”), by and betweenST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company (“Seller”); andVULCAN TIMBERLANDS LLC, a Delaware limited liability company (“Purchaser”).

STATEMENT OF BACKGROUND

A. Seller is the owner of all timber growing, standing and lying on that certain real property located in Calhoun and Gulf Counties, Florida, identified on the timber stand maps shown onExhibit Aattached hereto (the “Timber”).

B. The Timber is located on those certain parcels of real property located in Calhoun and Gulf Counties, Florida, which parcels are more particularly described onExhibit Battached hereto (the “Property”).

C. Purchaser desires to acquire from Seller title and certain rights in and to the Timber, and Seller desires to sell to Purchaser title and such rights in and to the Timber, all in accordance with the terms of, and subject to the conditions set forth in, this Agreement.

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of $10.00 in hand paid by Purchaser to Seller, the foregoing, their respective representations, warranties, covenants and agreements set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1Definitions.As used herein, the following terms will have the meanings ascribed thereto:

“Agreement” means this Purchase and Sale Agreement.

“Business Day” means any day which is not a Saturday, Sunday or any state or federal holiday for which financial institutions or post offices are generally closed in the State of Florida for observance thereof.

“Casualty Damage Value” means the amount of damage to the Timber resulting from a fire or other casualty, calculated as the pre-casualty value of the destroyed or damaged Timber less the salvage value of such destroyed or damaged Timber.

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Statement” has the meaning set forth in Section 3.2(e).

“Code” means the Internal Revenue Code of 1986, as amended.

“Disclosure Letter” means that certain Disclosure Letter dated as of the date hereof from Seller to Purchaser disclosing certain agreements affecting the Property and/or the Timber.

“Earnest Money” has the meaning set forth in Section 2.3.

“Effective Date” has the meaning set forth in the first paragraph of this Agreement.

“Exchange” has the meaning set forth in Section 13.16.

“Hazardous Substance” means any chemical, compound, constituent, material, waste, contaminant (including petroleum, crude oil or any fraction thereof) or other substance, defined as hazardous or toxic, or otherwise regulated by any of the following laws and regulations promulgated thereunder as amended from time to time prior to the Effective Date: (i) the Comprehensive Environmental Response, Compensation and Liability Act (as amended by the Superfund Amendments and Reauthorization Act), 42 U.S.C. § 9601et seq.; (ii) the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901et seq.; (iii) the Hazardous Materials Transportation Act, 49 U.S.C. § 1801et seq.; (iv) the Toxic Substances Control Act, 15 U.S.C. § 2601et seq.; (v) the Clean Water Act, 33 U.S.C. § 1251et seq.; (vi) the Clean Air Act, 42 U.S.C. § 1857et seq.; and (vii) all laws of the State of Florida that are based on, or substantially similar to, the federal statutes listed in clauses (i) through (vi) of this sentence.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Net Condemnation Proceeds” has the meaning set forth in Section 7.3.

“Permitted Encumbrances” has the meaning set forth in Section 4.1.

“Phase I Report” means that certain Phase I Environmental Site Assessment dated October 2010, Project No. 110.00235.00023, prepared by SLR International Corporation with respect to the Property and obtained by Seller, together with that certain “Addendum No. 1; Phase I Environmental Site Assessment Report; Tranche 1; Calhoun and Gulf Counties, Florida” dated January 19, 2011, by SLR International Corporation.

“Property” has the meaning set forth in the Statement of Background of this Agreement.

“Purchase Price” has the meaning set forth in Section 2.2.

“Purchaser” has the meaning set forth in the first paragraph of this Agreement.

“Purchaser Parties” means Purchaser and all of its officers, directors, shareholders, employees, partners, members, subsidiaries and other affiliated or related entities, representatives, consultants and agents, and Purchaser’s and each of the foregoing parties’ successors and assigns.

“Purchaser’s Release” has the meaning set forth in Section 5.2.

“Seller” has the meaning set forth in the first paragraph of this Agreement.

“Seller Parties” means Seller and all of Seller’s officers, directors, shareholders, employees, partners, members, subsidiaries and other affiliated or related entities, representatives, consultants and agents, and Seller’s and each of the foregoing parties’ successors and assigns.

“Seller’s Advisor” means Raymond James & Associates, Inc.

“Thinnings Supply Agreement” has the meaning set forth in Section 6.1.

“Threshold Amount” has the meaning set forth in Section 7.2.

“Timber” has the meaning set forth in the Statement of Background of this Agreement.

“Timber Deed” and “Timber Deeds” have the meaning set forth in Section 3.2(a).

“Title Commitment” and “Title Commitments” have the meaning set forth in Section 4.2.

“Title Company” means First American Title Insurance Company.

“Wood Fiber Supply Agreement” means that certain Wood Fiber Supply Agreement dated as of July 1, 2000, by and between Seller and Jefferson Smurfit Corporation (U.S.) d/b/a Smurfit-Stone Container Corporation, a Delaware corporation.

ARTICLE II
AGREEMENT; PURCHASE PRICE; EARNEST MONEY

Section 2.1Agreement of Purchase and Sale.Subject to the provisions of this Agreement, and for the consideration herein stated, Seller agrees to sell the Timber to Purchaser and Purchaser agrees to buy the same from Seller, together with the right to maintain, manage, store, cut, harvest and remove the Timber from the Property.

Section 2.2Purchase Price.The purchase price (the “Purchase Price”) to be paid by Purchaser for the Timber shall be the sum ofFIFTY-FIVE MILLION NINE HUNDRED THOUSAND and NO/100 Dollars ($55,900,000.00), less a credit for the Earnest Money and subject to adjustment as set forth in this Agreement.

Section 2.3Earnest Money.Pursuant to that certain letter of intent dated February 3, 2011, between Seller and RMS Forest Growth III, L.P. (an affiliate of Purchaser), RMS Forest Growth III, L.P., previously delivered to Seller for the benefit of Purchaser a payment equal toFOUR HUNDRED THOUSAND and NO/100 Dollars ($400,000.00). Notwithstanding anything in such letter of intent to the contrary, such $400,000 payment shall constitute the “Earnest Money” in accordance with the terms hereof. Seller shall continue to hold the Earnest Money. At the Closing, the Earnest Money shall be applied as a credit against the Purchase Price. If the Closing does not occur, the Earnest Money shall be retained by Seller or returned to Purchaser in accordance with the terms of this Agreement. Seller shall have no obligation to hold the Earnest Money in a separate account for the benefit of Purchaser. Any interest accrued on the Earnest Money shall be the property of Seller.

ARTICLE III
CLOSING

Section 3.1Closing.The execution and delivery of the documents and instruments for the consummation of the purchase and sale pursuant hereto (the “Closing”) shall take place on March 31, 2011 (the “Closing Date”), at 10:00 a.m. at the offices of Sutherland Asbill & Brennan LLP, 999 Peachtree Street, N.E., Atlanta, Georgia 30309, or through the escrow services of the Title Company upon the mutual agreement of Purchaser and Seller, or such earlier date and time, or such other location, as may be mutually agreeable to Purchaser and Seller. The Closing Date is subject to extension only as specifically provided in this Agreement.

Section 3.2Seller’s Closing Deliveries.At the Closing, Seller shall deliver the following items:

(a) one executed special warranty timber deed in the form ofExhibit Cattached hereto with respect to each county in Florida in which the Timber is located (each, a “Timber Deed,” and collectively the “Timber Deeds”), subject only to the Permitted Encumbrances (as defined below);

(b) an executed counterpart of the Thinnings Supply Agreement;

(d) an executed counterpart of a closing statement in form mutually agreeable to Seller and Purchaser in their reasonable discretion (the “Closing Statement”);

(e) a reliance letter substantially in the form ofExhibit Dattached hereto in favor of Purchaser and executed by SLR International Corp., with respect to the Phase I Report (as defined below); and

(f) such other certificates, affidavits (including an owner’s affidavit in favor of the Title Company), evidence of authority and instruments as may be reasonably necessary or desirable to consummate the purchase and sale contemplated hereby and to enable

Purchaser to obtain a title insurance policy insuring Purchaser’s title to the Timber, subject to the Permitted Encumbrances.

Section 3.3Purchaser’s Closing Deliveries.At the Closing, Purchaser shall deliver the following items:

(a) the Purchase Price, less a credit for the Earnest Money and subject to adjustment as set forth in this Agreement;

(b) executed counterparts of the Timber Deeds;

(d) an executed counterpart of the Closing Statement; and

(e) such other certificates, affidavits, evidence of authority and instruments as may be reasonably necessary or desirable to consummate the purchase and sale contemplated hereby and to enable Purchaser to obtain a title insurance policy insuring Purchaser’s title to the Timber, subject to the Permitted Encumbrances.

ARTICLE IV
TITLE

Section 4.1Conveyance.Seller agrees to convey to Purchaser title to the Timber by, and subject to the terms of, the Timber Deeds, free and clear of all liens, encumbrances, assessments, agreements, options and covenants, except for the Permitted Encumbrances set forth onExhibit E attached hereto (the “Permitted Encumbrances”).

Section 4.2Title Commitments.Purchaser acknowledges that (a) prior to the Effective Date, Purchaser has received, reviewed and approved commitments to insure Purchaser’s title to the Timber upon the Closing, together with copies of all documents, instruments, surveys and plats as referenced in the commitments and in any instruments referenced therein (each a “Title Commitment” and, collectively, the “Title Commitments”), issued by the Title Company, and (b) Purchaser waives any right to object to any matter disclosed by any of the Title Commitments, as the same may have been amended and/or modified, prior to the Effective Date, to satisfy any objections of Purchaser. Notwithstanding the foregoing, Seller shall be obligated (i) to cure, on or before the Closing Date, all liens, mortgages or financing statements encumbering the Timber and securing a monetary obligation which was created or suffered by Seller or any party claiming by, through or under Seller (other than liens for non-delinquent real estate taxes or assessments), and (ii) to obtain the release of the Timber, on or before the Closing Date, from the Wood Fiber Supply Agreement and any recorded memoranda related thereto.

Section 4.3Title Insurance.Purchaser shall purchase at the Closing an owner’s title insurance policy, based on the Title Commitments, as the same may have been amended and/or modified, prior to the Effective Date, to satisfy any objections of Purchaser, insuring Purchaser’s title to the Timber. Purchaser shall acquire such policy from the Title Company or another title insurance company selected by Purchaser, provided that the Closing

shall not be delayed as a result of Purchaser’s election of a title insurance company other than the Title Company.

Section 4.4Other Agreements.Until the occurrence of the Closing, Seller shall not, without the prior written consent of Purchaser, (i) lease, encumber or convey all or part of the Timber or the Property or any interest therein, or (ii) enter into any agreement granting to any person any right with respect to the Timber or any portion thereof; provided, however, Seller shall have the right, exercisable in its sole discretion, to enter into any agreement affecting the Property which agreement does not affect Purchaser’s title to or rights in and to the Timber.

ARTICLE V
INSPECTION; ACKNOWLEDGMENTS; HSR ACT

Section 5.1Inspection; Boundary Marking.

(a) Purchaser and its agents, representatives, employees, engineers and contractors shall have the right during the term of this Agreement to enter upon the Property to inspect, examine and survey the Property and the Timber as it may deem necessary or advisable; provided, however, that Purchaser shall obtain the written consent of Seller prior to conducting any core sampling, test borings or other invasive testing.

(b) Purchaser shall have the right to physically mark the boundaries of the Timber using contractors, methods and materials selected by Purchaser in cooperation with Seller, provided that Seller shall not unreasonably withhold, condition or delay its approval of any such contractor, method or material. The costs of such boundary marking shall be borne as set forth in Section 9.3.

(c) Purchaser and the contractors, representatives and agents of Purchaser who enter upon the Property shall maintain commercial general liability insurance, naming Seller as an additional insured, in an amount not less than $2,000,000 and, prior to any such entry upon the Property, shall provide Seller with written evidence of such insurance. Purchaser hereby agrees to indemnify and hold Seller harmless for any and all cost and expense resulting from claims or damages caused by said entry upon the Property and the inspections, examinations, tests and boundary markings. The foregoing indemnification shall survive any termination, cancellation or expiration of this Agreement or the Closing.

Section 5.2Acknowledgment.Notwithstanding the inspection rights provided in Section 5.1, Purchaser expressly acknowledges and agrees (a) that Purchaser has had the opportunity, prior to the Effective Date, to fully and carefully investigate and inspect the physical, structural and environmental condition of the Property and the Timber and to review and analyze documents and records related to the Property and the Timber, all matters of title related to the Property and the Timber, all laws, statutes, rules, regulations, ordinances and orders affecting the Property and the Timber, and all other materials and information affecting or in any manner relating to the Property and the Timber and the ownership, use, occupancy, management, operation and maintenance thereof, (b) that Purchaser has received and reviewed the Phase I Report, (c) that Purchaser has had the opportunity to inspect and review the materials with respect to the Property and the Timber available in the electronic data room maintained by

Seller’s Advisor, and (d) that Purchaser is satisfied with the results of such review, inspection and analysis. Purchaser, on behalf of the Purchaser Parties, hereby expressly waives, relinquishes and releases any and all rights, remedies and claims any of the Purchaser Parties may now or hereafter have, against the Seller Parties, whether known or unknown, arising from or related to (i) the physical condition, quality, quantity and state of repair of the Property or the Timber and the prior management and operation thereof; (ii) the failure of the Property or the Timber to comply with any federal, state or local laws, regulations, ordinances or orders, including, without limitation, those relating to health, safety, zoning, endangered species and the environment; or (iii) any past, present or future presence, alleged presence, release or alleged release of any Hazardous Substance in, on, under or about, or otherwise migrating to, from, across or under, the Property or the Timber (collectively, “Purchaser’s Release”). Purchaser’s Release shall survive any termination, cancellation or expiration of this Agreement or the Closing; provided, however, Purchaser’s Release does not include any and all rights, remedies and claims that the Purchaser Parties have or may have with respect to any release by Seller of any Hazardous Substance first occurring after the Closing Date in, on, under or about, or otherwise migrating to, from, across or under, the Property or the Timber.

Section 5.3HSR Act.If counsel for either Purchaser or Seller has a good faith reasonable belief that any closing of the transactions contemplated under this Agreement requires the filing of a pre-merger notification under the HSR Act, each of Purchaser and Seller shall promptly file any notification and report forms and related material that it may be required to file with the Federal Trade Commission or the Antitrust Division of the U.S. Department of Justice under the HSR Act, shall use its diligent, good faith efforts to obtain a waiver of the applicable waiting period, shall make any filings pursuant thereto that may be necessary, and shall cooperate and coordinate with the other party in connection with such filings and returns. Purchaser and Seller shall each pay one-half of any filing fees required in connection with any filings required by this Section 5.3. The Closing Date shall be extended to the extent necessary to permit the compliance with all procedures set forth in this Section 5.3, provided that if the parties have not received the applicable approvals, or if all applicable waiting periods have not expired, on or before April 29, 2011, then either Seller or Purchaser will have the right, exercisable at its sole election, to terminate this Agreement by delivering written notice to the other party, whereupon Seller will return the Earnest Money to Purchaser, and the parties hereto shall have no further rights or obligations hereunder (except as otherwise expressly provided herein).

ARTICLE VI
THINNINGS SUPPLY AGREEMENT

Section 6.1Thinnings Supply Agreement.At the Closing, Purchaser and Seller shall enter into a Thinnings Supply Agreement in the form ofExhibit Fattached hereto (the “Thinnings Supply Agreement”) pursuant to which Seller shall have the right and the obligation to acquire certain volumes of Timber from Purchaser, as more particularly described therein.

ARTICLE VII
CONDITION OF TIMBER; DAMAGE; CONDEMNATION

Section 7.1Condition of Timber.Seller agrees that at the Closing the Timber shall be in substantially the same condition as exists on the Effective Date, subject to natural wear and tear, the Permitted Encumbrances, condemnation, and casualties beyond Seller’s control. Subject to the provisions of this Article VII, all risk of loss to the Timber or any part thereof prior to the Closing shall be borne by Seller.

Section 7.2Casualty.If at any time on or after February 3, 2011, but prior to the Closing, the Timber or any part thereof is destroyed or damaged by fire or other casualty, Seller shall deliver to Purchaser, promptly following Seller’s discovery of such casualty, written notice of such damage along with the Casualty Damage Value, and the transactions contemplated by this Agreement shall be subject to the provisions of this Section 7.2. The Closing Date shall be extended to the extent necessary to permit the compliance with all procedures set forth in this Section 7.2.

(a) If the Casualty Damage Value does not exceed one percent (1%) of the Purchase Price (the “Threshold Amount”), then Purchaser shall be required to purchase the Timber in accordance with this Agreement without a reduction of the Purchase Price.

(b) If the Casualty Damage Value exceeds the Threshold Amount, then Purchaser shall be required to purchase the Timber in accordance with this Agreement, provided that the Purchase Price shall be reduced by an amount equal to the difference of (i) the Casualty Damage Value,minus(ii) the Threshold Amount.

(c) If Purchaser, by delivering written notice to Seller within ten (10) days following Seller’s delivery of written notice of the damage, disputes the Casualty Damage Value reported by Seller, Purchaser and Seller shall attempt in good faith to resolve such dispute and agree upon the Casualty Damage Value. If Purchaser and Seller are unable to agree as to the Casualty Damage Value on or before ten (10) days after Purchaser delivers to Seller written notice of its dispute, then such dispute shall be resolved in accordance with Section 13.14. The Closing Date shall be extended to the extent necessary to allow for the resolution of such dispute.

Section 7.3Condemnation.If at any time prior to the Closing, any action or proceeding is filed or threatened under which any portion of the Timber may be taken pursuant to any law, ordinance or regulation by condemnation or the right of eminent domain, Seller shall deliver to Purchaser prompt written notice thereof. In such event, Purchaser and Seller shall be required to consummate the transactions contemplated by this Agreement, and Purchaser shall receive a credit against the Purchase Price in the amount of all proceeds of any awards from such action or proceeding with respect to the Property that are attributable to the Timber, less any expenses incurred by Seller in securing such condemnation awards (the “Net Condemnation Proceeds”), or, if such amount is not known at the time of the Closing, the Purchase Price shall not be reduced and Seller shall assign to Purchaser at the Closing all of Seller’s right to the Net Condemnation Proceeds with respect to the Property that are attributable to the Timber.

ARTICLE VIII
WARRANTIES, REPRESENTATIONS, AND DISCLAIMERS

Section 8.1Seller’s Representations.Seller hereby warrants and represents to Purchaser, as of the Effective Date and as of the Closing Date, that:

(a) Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, is qualified to do business in the State of Florida and has all requisite corporate power and authority to: (i) own, lease and operate the Property and to carry on its business as now being conducted; (ii) execute this Agreement and all other agreements, instruments and documents to be executed by it in connection with the consummation of the transactions contemplated by this Agreement; and (iii) perform its obligations and consummate the transactions contemplated hereby.

(b) The execution, delivery and performance of this Agreement and the consummation of transactions contemplated hereby by Seller have been duly and validly authorized by all necessary company action, and no other company proceedings on the part of Seller are necessary for it to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller and, assuming due authorization, execution and delivery by Purchaser, is a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(c) The execution, delivery or performance of this Agreement by Seller will not result in a breach or violation of, or default under, (i) the terms, conditions or provisions of Seller’s certificate of organization, operating agreement or any other governing documents; (ii) any law applicable to Seller or any portion of the Timber; or (iii) any permit, license, order, judgment or decree of any governmental authority by which Seller or the Timber is or may be bound, excluding from the foregoing clauses (ii) and (iii) such breaches, violations or defaults that would not be reasonably likely, individually or in the aggregate, to have an adverse effect on the Timber or on Seller’s ability to perform its obligations under this Agreement.

(d) There are no approvals, consents or registration requirements with respect to any governmental authority that are or will be necessary for the valid execution and delivery by Seller of this Agreement, or the consummation of the transactions contemplated hereby, other than those which (i) have been obtained, or (ii) are of a routine nature and not customarily obtained or made prior to execution of purchase and sale agreements in transactions similar in nature and size to those contemplated hereby and where the failure to obtain the same would not, individually or in the aggregate, have a material adverse effect on the Timber or on Seller’s ability to perform its obligations under this Agreement.

(e) There is no pending or, to Seller’s knowledge, threatened action or proceeding (including, but not limited to, any condemnation or eminent domain action or proceeding) before any court, governmental agency or arbitrator which may materially adversely affect Seller’s ability to perform this Agreement or which may materially adversely affect the

Timber. For purposes of this Section 8.1(e), “Seller’s knowledge” shall mean the actual knowledge, without any duty on the part of such individuals to investigate or inquire into any particular matter, of (i) William Sonnenfeld, Senior Vice President — Forestry and Land Sales; and (ii) David Harrelson, Vice President — Timberland.

(f) Seller (which for this purpose includes Seller’s partners, members, principal stockholders and any other constituent entities) (i) has not been designated as a “specifically designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, <http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf> or at any replacement website or other replacement official publication of such list and (ii) is currently in compliance with and will at all times during the term of this Agreement remain in compliance with the regulations of the Office of Foreign Asset Control of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto.

Section 8.2Purchaser’s Representations.Purchaser hereby warrants and represents to Seller, as of the Effective Date and as of the Closing Date, that:

(a) Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to: (i) own the Timber and to carry on its business as now being conducted; (ii) execute this Agreement; and (iii) perform its obligations and consummate the transactions contemplated hereby.

(b) The execution, delivery and performance of this Agreement and the consummation of transactions contemplated hereby by Purchaser have been duly and validly authorized by all necessary company action, and no other company proceedings on the part of Purchaser are necessary for it to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Purchaser and, assuming due authorization, execution and delivery by Seller, is a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(c) The execution, delivery, and performance by Purchaser of this Agreement will not result in a breach or violation of, or default under, the terms, conditions or provisions of its articles of incorporation, bylaws or any standing resolution of its board of directors, members or managers (as the case may be) or any other corporate document.

similar in nature and size to those contemplated hereby and where the failure to obtain the same would not, individually or in the aggregate, have a material adverse effect on Purchaser’s ability to perform its obligations under this Agreement.

(e) There is no pending or, to Purchaser’s knowledge, threatened action or proceeding before any court, governmental agency or arbitrator which may materially adversely affect Purchaser’s ability to perform this Agreement.

(f) Purchaser has the financial capacity, or is diligently using its best efforts to obtain the financial capacity, to pay the Purchase Price payable at the Closing and all expenses and fees incurred by Purchaser pursuant to or in connection with the transactions contemplated by this Agreement.

(g) Purchaser (which for this purpose includes Purchaser’s partners, members, principal stockholders and any other constituent entities) (i) has not been designated as a “specifically designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, <http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf> or at any replacement website or other replacement official publication of such list and (ii) is currently in compliance with and will at all times during the term of this Agreement remain in compliance with the regulations of the Office of Foreign Asset Control of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto.

Section 8.3Survival.The representations and warranties contained in Section 8.1 and Section 8.2 shall survive the Closing for six (6) months.

Section 8.4Disclaimers.

(a) PURCHASER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT OR IN THE DOCUMENTS TO BE DELIVERED AT THE CLOSING: (i) NO REPRESENTATIONS, WARRANTIES OR PROMISES, EXPRESS OR IMPLIED, HAVE BEEN OR ARE BEING MADE BY OR ON BEHALF OF SELLER OR ANY OTHER PERSON WITH RESPECT TO THE PROPERTY OR THE TIMBER, INCLUDING WITH RESPECT TO THE PHYSICAL OR ENVIRONMENTAL CONDITION, HABITABILITY, QUANTITY OR QUALITY OF THE TIMBER, NURSERY STOCK OR SEEDLINGS, FUTURE FIBER GROWTH OR HARVEST, FUTURE FINANCIAL RESULTS FROM THE SALE OF THE TIMBER, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SELLER HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED RELATING TO ANY OF THE FOREGOING MATTERS, AND (ii) IN ENTERING INTO THIS AGREEMENT, PURCHASER HAS NOT RELIED AND DOES NOT RELY ON ANY SUCH REPRESENTATION, WARRANTY OR PROMISE, EXPRESS OR IMPLIED, BY OR ON BEHALF OF SELLER OR ANY OTHER PERSON. PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER SHALL TAKE THE TIMBER IN “AS IS, WHERE IS, AND WITH ALL FAULTS” CONDITION ON THE

CLOSING DATE,EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN THE DOCUMENTS TO BE DELIVERED AT THE CLOSING.

(b) UPON THE CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING ADVERSE ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY SELLER’S OR PURCHASER’S INVESTIGATION, AND UPON THE CLOSING, PURCHASER SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER AT ANY TIME BY REASON OF OR ARISING OUT OF PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE TIMBER OR THE PROPERTY. PURCHASER AGREES THAT SELLER SHALL HAVE NO LIABILITY OR RESPONSIBILITY TO PURCHASER FOR ANY INVESTIGATION, CLEAN-UP, REMEDIATION, CORRECTIVE ACTION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ADVERSE ENVIRONMENTAL CONDITIONS ON THE PROPERTY OR AFFECTING THE TIMBER AFTER THE CLOSING.

(c) Purchaser acknowledges that all information with respect to the Property and the Timber delivered or made available by Seller to Purchaser under this Agreement is for informational purposes only and, except as expressly set forth to the contrary in this Agreement, is given without representation or warranty of any kind.

(d) Radon is a naturally occurring radioactive gas which, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon which exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from the county public health unit.

(e) The disclaimers, acknowledgments and waivers in this Section 8.4 shall survive the Closing without limitation.

ARTICLE IX
COMMISSIONS; TAXES; EXPENSES

Section 9.1Brokerage Commission.Seller warrants and represents to Purchaser that, other than with respect to the services of Seller’s Advisor, Seller has not incurred any liability for any brokerage fee or commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, and the payment of Seller’s Advisor shall be the sole obligation of Seller. Purchaser warrants and represents to Seller that Purchaser has not incurred any liability for any brokerage fee or commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. Seller and Purchaser each agree to

indemnify and hold harmless the other from any and all damage, loss, liability, expense and claim (including but not limited to attorneys’ fees and court costs) arising with respect to any such fee or commission which may be suffered by the indemnified party by reason of any action or agreement of the indemnifying party. This Section 9.1 shall survive the termination, cancellation or expiration of this Agreement.

Section 9.2Taxes.Ad valorem real property taxes and special assessments against the Property and the Timber shall be paid by the Seller during the term of the Timber Deed, and Seller shall indemnify and hold Purchaser harmless from any claim of payment of ad valorem real property taxes and assessments against the Property and/or the Timber during said period of time. The obligations of this Section 9.2 shall survive the Closing.

Section 9.3Expenses.

(a) Purchaser shall pay all costs in connection with the recording of the Timber Deeds, all costs of purchasing a title insurance policy and any endorsements thereto, all costs of Purchaser’s due diligence, all costs of Purchaser’s legal representation, one-half (1/2) of all transfer taxes, one-half (1/2) of all escrow expenses of the Title Company and one-half (1/2) of the reasonable third-party costs of marking the boundaries of any portions of the Timber that are adjacent to timber stands retained by Seller (provided that Purchaser shall bear all costs of marking any boundary lines of any other portion of the Timber, including portions adjacent to roads, rights of way, streamside management zones, bodies of water or other property owners).

(b) Seller shall pay all costs of Seller’s Advisor, all costs of Seller’s legal representation, all costs of searching title and preparing the Title Commitments, all costs of the Phase I Report, one-half (1/2) of all transfer taxes, one-half (1/2) of all escrow expenses of the Title Company and one-half (1/2) of the cost of marking the boundaries of any portions of the Timber that are adjacent to timber stands retained by Seller (provided that Purchaser shall bear all costs of marking any boundary lines of any other portion of the Timber, including portions adjacent to roads, rights of way, streamside management zones, bodies of water or other property owners).

ARTICLE X
CONDITIONS

Section 10.1Mutual Conditions.The obligations of each of Seller and Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction or waiver, on or before the Closing Date, of the following conditions:

(a) Subject to Section 5.3, all waiting periods (and any extension thereof) under laws applicable to the transactions contemplated by this Agreement (including the HSR Act, if applicable) shall have expired or been earlier terminated.

(b) There shall be no injunction, restraining order or decree of any nature of any court or governmental authority that is in effect that restrains or prohibits the

consummation of the transactions contemplated by this Agreement or imposes conditions on such consummation not otherwise provided for herein.

(c) Neither Purchaser nor Seller shall have been advised by any United States federal or state government agency, commission, department or authority (which advisory has not been officially withdrawn on or prior to the Closing Date) that such government entity is investigating the transactions contemplated by this Agreement to determine whether to file or commence any litigation that seeks or would seek to enjoin, restrain or prohibit the consummation of the transactions contemplated by this Agreement.

In the event any of the above conditions is not satisfied on or before the Closing, either Seller or Purchaser will have the right, exercisable at its sole election, to terminate this Agreement by delivering written notice to the other party before the Closing, whereupon Seller will return the Earnest Money to Purchaser, and the parties hereto shall have no further rights or obligations hereunder (except as otherwise expressly provided herein); provided, however, if any such condition is not satisfied on or before the Closing as a result of a breach of a representation or warranty by Purchaser or Seller hereunder or as a result of any other default hereunder by Purchaser or Seller, then this Section 10.1 shall not apply and such breach or other default shall be governed by Article XI.

Section 10.2Conditions to Purchaser’s Obligations.Unless waived by Purchaser, the obligations of Purchaser under this Agreement are expressly made subject to the fulfillment in all respects of the following conditions precedent:

(a) the truth and accuracy as of the Closing Date, in all material respects, of each and every warranty and representation herein made by Seller;

(b) Seller’s timely performance of and compliance with, in all material respects, each and every term, condition, agreement, restriction and obligation to be performed and complied with by Seller under this Agreement; and

(c) Seller’s obtaining of all company approvals, consents and authorizations as may be required for Seller to consummate the transaction contemplated by this Agreement.

In the event any of the above conditions is not satisfied on or before the Closing, Purchaser will have the right, exercisable at Purchaser’s sole election, to exercise the remedies described in Section 11.2.

Section 10.3Conditions to Seller’s Obligations.Unless waived by Seller, the obligations of Seller under this Agreement are expressly made subject to the fulfillment in all respects of the following conditions precedent:

(a) the truth and accuracy as of the Closing Date, in all material respects, of each and every warranty and representation herein made by Purchaser;

(b) Purchaser’s timely performance of and compliance with, in all material respects, each and every term, condition, agreement, restriction and obligation to be performed and complied with by Purchaser under this Agreement; and

(c) Purchaser’s obtaining of all company approvals, consents and authorizations as may be required for Purchaser to consummate the transaction contemplated by this Agreement.

In the event any of the above conditions is not satisfied on or before the Closing, Seller will have the right, exercisable at Seller’s sole election, to exercise the remedies described in Section 11.1.

ARTICLE XI
DEFAULT; REMEDIES

Section 11.1Default by Purchaser.If the purchase and sale of the Timber contemplated hereby is not consummated because of a default by Purchaser under this Agreement, then Seller shall retain the Earnest Money as full liquidated damages and not as a penalty and as Seller’s sole and exclusive remedy against Purchaser for a default by Purchaser under this Agreement (Purchaser and Seller acknowledging that Seller’s damages as a result of such default are not capable of exact ascertainment and that said liquidated damages are fair and reasonable).

Section 11.2Default by Seller.If the purchase and sale of the Timber contemplated hereby is not consummated because of a default by Seller then Purchaser shall be entitled either to a refund of the Earnest Money or to sue Seller for specific performance, Purchaser hereby acknowledging that the foregoing shall be its sole and exclusive remedies against Seller for a default by Seller under this Agreement.

ARTICLE XII
INTENTIONALLY DELETED

ARTICLE XIII
MISCELLANEOUS

Section 13.1Assignment.Except as otherwise expressly contemplated by this Agreement, neither party shall assign its rights or obligations hereunder, in whole or in part, without the prior written consent of the other party, given or withheld in its sole discretion.

Section 13.2No Waiver.No action or failure to act by any party shall constitute a waiver of any right or duty afforded to such party under this Agreement, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach of this Agreement except as may be specifically agreed in writing.

Section 13.3Governing Law.This Agreement shall be governed in all respects, including validity, construction, interpretation and effect, by the laws of the State of Florida, without giving effect to its principles or rules of conflicts of law to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.

Section 13.4Notice.Any and all notices required or permitted under this Agreement shall be made or given in writing and shall be delivered in person or sent by postage, pre-paid, United States Mail, certified or registered, return receipt requested, or by a recognized overnight carrier, or by facsimile or e-mail, to the applicable party or at the addresses set forth below, or such other address as may be furnished by notice in accordance with this Section 13.4; provided, however, if any delivery is made by facsimile or e-mail, such delivery shall be deemed delivered only if the party giving such notice obtains a confirmation of receipt and delivers such notice by hand delivery, United States mail or recognized overnight carrier for next day delivery. All notices shall be deemed given and effective upon the earliest to occur of: (i) the confirmed facsimile or e-mail transmission or hand delivery of such notice to the address for notices; (ii) one Business Day after the deposit of such notice with an overnight courier service by the time deadline for next day delivery addressed to the address for notices; or (iii) three Business Days after depositing the notice in the United States mail.


Seller:		St. Joe Timberland Company of Delaware, L.L.C.
		133 South WaterSound Parkway
		WaterSound, FL 32413
		Attention: William Sonnenfeld
		Fax: 850-588-2307
		Email:william.sonnenfeld@joe.com

with a copy to:		St. Joe Timberland Company of Delaware, L.L.C.
		133 South WaterSound Parkway
		WaterSound, FL 32413
		Attention: Reece B. Alford, Esq.
		Fax: 850-588-2310
		Email:reece.alford@joe.com

and to:		Sutherland Asbill & Brennan LLP
		999 Peachtree Street, N.E.
		Atlanta, Georgia 30309
		Attention: Victor P. Haley, Esq.
		Fax: 404-853-8806
		Email:victor.haley@sutherland.com

Purchaser:		Vulcan Timberlands LLC
		Attn: Resource Management Services, LLC
		its Manager
		31 Inverness Center Parkway, Suite 360
		Birmingham, AL 35242
		Fax: (205) 991-2807
		Email: esweeten@resourcemgt.com


with a copy to:		Martin Snow, LLP
		Attn: Wendell L. Bowden
		240 Third Street (31201)
		PO Box 1606 (31202-1606)
		Macon, GA
		Fax: (478) 743-4204
		Email: wlbowden@martinsnow.com

Section 13.5Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and cannot be amended or supplemented except by a written agreement signed by the parties hereto.

Section 13.6Captions. The captions of sections in this Agreement are for convenience and reference only and are not part of the substance hereof.

Section 13.7Severability. In the event that any one or more of the provisions, sections, words, clauses, phrases or sentences contained in this Agreement, or the application thereof in any circumstance is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision, section, word, clause, phrase or sentence in every other respect and of the remaining provisions, sections, words, clauses, phrases or sentences of this Agreement, shall not be in any way impaired, it being the intention of the parties hereto that this Agreement shall be enforceable to the fullest extent permitted by law.

Section 13.8Counterparts. This Agreement may be executed in several counterparts, each of which may be deemed an original, and all of such counterparts together shall constitute one and the same Agreement. This Agreement may be executed by each party hereto upon a separate copy and attached to another copy in order to form on or more counterparts.

Section 13.9Binding Effect. This Agreement shall bind the parties hereto and their respective heirs, legal representatives, successors and assigns.

Section 13.10Time of Essence. Time is of the essence of this Agreement.

Section 13.11No Survival. Except as may otherwise expressly be provided herein, the provisions of this Agreement shall not survive the Closing and shall be merged into the delivery of the Timber Deeds and other documents and the payment of all monies pursuant hereto.

Section 13.12Incorporation of Exhibits. All exhibits referred to in this Agreement are hereby incorporated herein by this reference.

Section 13.13Confidentiality; Public Announcements. The terms and conditions of the transactions contemplated in this Agreement shall remain confidential, except that either Purchaser or Seller and their respective affiliates may disclose the terms and provisions of this Agreement (i) to the extent that such party is required by applicable law (including the rules and regulations promulgated by the SEC or any stock exchange) to make

public disclosure, or (ii) in any legal proceeding, including any audit, to the extent necessary to enforce any rights under this Agreement, provided that, in either case, the disclosing party shall provide the other party with prior notice of such disclosure and the content thereof. This Section 13.13 shall survive any termination, cancellation or expiration of this Agreement or the Closing.

Section 13.14Dispute Resolution. If Purchaser and Seller are unable to agree as to the Casualty Damage Value under Section 7.2, then either of Seller or Purchaser shall have the right to invoke the procedures of this Section 13.14 by delivering written notice to the other party. Seller and Purchaser each shall appoint an independent forestry consultant within five (5) days following the delivery of such written notice, each of which may be a consultant previously engaged by the appointing party, and such two consultants will in turn select a third independent forestry consultant within five (5) days to act with them in a panel to determine the appropriate value. A majority of the panel of consultants will reach a binding decision within fifteen (15) days of the selection of the third consultant, and the decision of the panel of consultants will be final as to (i) the Casualty Damage Value, and (ii) the designation of the prevailing and non-prevailing parties. The non-prevailing party will bear the cost of all consultants.

Section 13.15Business Days. If any date set forth in this Agreement for the performance of any obligation by any party hereto, or for the delivery of any instrument or notice as herein provided, should be a day other than a Business Day, the compliance with such obligation or delivery shall be deemed acceptable on the next Business Day.

Section 13.16Section 1031/1033 Exchange.Either Seller or Purchaser may consummate the sale or purchase of the Timber, as applicable, as part of a so-called like kind exchange (an "Exchange”) pursuant to, and to the extent permitted by, Section 1031 or Section 1033 of the Code, provided that: (a) the Closing shall not be delayed or affected by reason of an Exchange nor shall the consummation or accomplishment of an Exchange be a condition precedent or condition subsequent to Purchaser’s or Seller’s obligations under this Agreement; (b) Seller or Purchaser, as applicable, shall effect an Exchange through an assignment of its rights under this Agreement (other than with respect to any reimbursement obligations, and any representations or warranties made by the other party, which shall not be assigned and shall in all events be deemed to have been made to the participating party only) to a qualified intermediary pursuant to an assignment agreement in form reasonably satisfactory to the non-participating party; (c) to the extent Seller participates in an Exchange, Purchaser shall not be required to acquire, take title to or obtain an equitable interest in any real property other than the Timber; (d) to the extent Purchaser participates in an Exchange, Seller shall not be required to acquire, take title to or obtain an equitable interest in any real property; and (e) Seller’s or Purchaser’s assignment of its rights hereunder, as applicable, to a qualified intermediary in connection with an Exchange shall not limit or modify in any manner whatsoever any of the covenants, obligations, agreements, representations or warranties of such participating party set forth in this Agreement, all of which shall remain in full force and effect and shall constitute the primary liability of such participating party in all events. Neither Purchaser nor Seller shall by this Agreement or acquiescence to an Exchange by the other party (i) have such non-participating party’s rights, obligations or liabilities under this Agreement modified, expanded or diminished in any manner, or (ii) be responsible for compliance or be deemed to have warranted to the participating party that the participating party’s Exchange in fact complies with Section 1031 or

Section 1033 of the Code. Any increased costs arising from an Exchange shall be borne by the party participating in such Exchange.

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IN WITNESS WHEREOF, this Agreement has been duly executed, sealed and delivered by the parties hereto as of the Effective Date.


SELLER: ST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company
By:	/s/ William Sonnenfeld
	Name:	William Sonnenfeld
	Its: SVP — Timberland & Rural Sales

(Purchaser’s Signature Page to Purchase and Sale Agreement)


PURCHASER: VULCAN TIMBERLANDS LLC, a Delaware limited liability company
By:	/s/ Phillip Woods
	Name:	Phillip Woods
	Its: Vice President & Secretary

Exhibit A

Timber Stands

The Timber is located within (i) those certain cross-hatched timber stands in Calhoun County, Florida, shown onExhibit A-1attached hereto and made a part hereof; and (ii) those certain cross-hatched timber stands in Gulf County, Florida, shown onExhibit A-2attached hereto and made a part hereof.

[remainder of page intentionally left blank]

Exhibit A

Exhibit A-1

Calhoun County Timber Stand Maps

[attached]

Exhibit A

Note:With respect to the map of the Timber Stands shown on the following page in Section 29, Township 2 South, Range 9 West, to the best of the knowledge of the parties hereto, the portion of the Timber Stand shown as lying in the Southeast¹/4 of the Northeast¹/4 of said Section 29 is incorrectly shown as lying within Section 29 due to a mapping error, and that such portion of the timber actually lies in Section 28, Township 2 South, Range 9 West.

Note:With respect to the map of the Timber Stands shown on the following page in Section 32, Township 2 South, Range 10 West, to the best of the knowledge of the parties hereto, the portion of the Timber Stand shown as lying in the Southwest¹/4 of said Section 32 is incorrectly shown as lying within Section 32 due to a mapping error, and that such portion of the timber actually lies in Section 5, Township 3 South, Range 10 West.

Exhibit A-2

Gulf County Timber Stand Maps

[attached]

Exhiibt A

Note: With respect to the map of the Timber Stands shown on the following page in Section 12, Township 5 South, Range 10 West, to the best of the knowledge of the parties hereto:

(i)the portion of the Timber Stand shown as lying in a narrow strip along the western boundary of the Southwest¹/4 of the Northwest¹/4 and the Northwest¹/4 of the Southwest¹/4 of said Section 12 is incorrectly shown as lying within Section 12 due to a mapping error, and that such portion of the timber actually lies in Section 11, Township 5 South, Range 10 West; and

(ii) the portion of the Timber Stand shown as lying in the South¹/2 of the Southwest¹/4 of said Section 12 is incorrectly shown as lying within Section 12 due to a mapping error, and that such portion of the timber actually lies in Section 13, Township 5 South, Range 10 West.

Exhibit B

Legal Description of the Property

The Property consists of (i) that certain real property located in Calhoun County, Florida, more particularly described onExhibit B-1attached hereto and made a part hereof; and (ii) that certain real property located in Gulf County, Florida, more particularly described onExhibit B-2 attached hereto and made a part hereof.

[remainder of page intentionally left blank]

Exhibit B

Exhibit B-1

Legal Description of the Property — Calhoun County

TOWNSHIP 2 SOUTH, RANGE 11 WEST, CALHOUN COUNTY, FLORIDA:

Section 1: All;

Section 2: All, less those portions deeded for road rights of way and less that portion conveyed to Gulf Power Company in Deed Book G-2, Page 45 and Deed Book 74, Page 364;

Section 3: All, less those portions deeded for road rights of way and less that portion conveyed to Gulf Power Company in Deed Book G-2, Page 45 and Deed Book 74, Page 364;

Section 4: All;

Section 9: All, less those portions deeded for road rights of way and less that portion conveyed to Gulf Power Company in Deed Book G-2, Page 45 and Deed Book 74, Page 364;

Section 10: All, less those portions deeded for road rights of way and less and exception that portion conveyed to Gulf Power Company in Deed Book G-2, Page 43 and Deed Book 74, Page 355, and less the Southeast¹/4;

Section 11: The North¹/2; and the Southeast¹/4;

Section 12: All;

Section 13: The East 1/2; the Northwest¹/4 of the Northwest¹/4; the East¹/2 of the Northwest¹/4; the Southwest¹/4 of the Southwest¹/4, less road right of way and less and except that portion conveyed to the State of Florida in Deed Book D-2, Page 527;

Section 14: The North¹/2 of the Northeast¹/4; the Southwest¹/4 of the Northeast¹/4; the Southeast¹/4 of the Northwest¹/4; the Northeast¹/4 of the Southwest¹/4; and the South¹/2 of the South¹/2;

Section 17: All, less those portions deeded for road rights of way and less that portion conveyed to Gulf Power Company in Deed Book G-2, Page 45 and Deed Book 74, Page 364;

Section 20: All;

Section 21: All;

Section 22: All;

Section 23: All;

Exhibit B

Section 24: All;

Section 25: All;

Section 26: All;

Section 27: The East¹/2 of the Southeast¹/4;

Section 35: All; and

Section 36: All.

TOWNSHIP 3 SOUTH, RANGE 11 WEST, CALHOUN COUNTY, FLORIDA;

Section 1: All;

Section 2: All;

Section 11: All;

Section 12: All;

Section 13: All;

Section 14: All;

Section 23: All; and

Section 24: All.

TOWNSHIP 3 SOUTH, RANGE 10 WEST, CALHOUN COUNTY, FLORIDA:

Section 1: All, less the West¹/2 of the Northwest¹/4 and less that portion lying South and West of Chipola River;

Section 3: The West¹/2 of the Southwest¹/4, the West¹/2 of the Southeast¹/4 lying South of State Road No. 73; the West 565 feet of the South 1155 feet of the Southeast¹/4 of the Southwest¹/4, a portion of the Northeast¹/4 of the Southwest¹/4 described as follows: Begin at the northeast corner of the Northeast¹/4 of the Southwest¹/4 of Section 3, Township 3 South, Range 10 West, and run thence South 495 feet, run thence West 1320 feet, run thence North 495 feet, run thence East 1320 feet to the point of beginning, and the Northwest¹/4 lying South and West of State Road No. 73 less and except a parcel described as follows: Begin at the Southeast corner of said Northwest¹/4 of said Section 3, and run thence North 420 feet, thence West 420 feet, thence South 420 feet, thence East 420 feet to the point of beginning;

Exhibit B

Section 4: The Northeast¹/4, the East¹/2 of the Southeast¹/4, the Northwest¹/4 of the Southeast¹/4, the East¹/2 of the Northwest¹/4, the East¹/2 of the West¹/2 of the Northwest¹/4, and the West¹/2 of the Southwest¹/4;

Section 5: The Southwest¹/4 of the Northeast¹/4, the West¹/2 of the Northwest¹/4, the Southeast¹/4 of the Northwest¹/4, and the South¹/2;

Section 6: All;

Section 7: All;

Section 8: All;

Section 9: The North¹/2, the Southwest¹/4, and the South¹/2 of the Southeast¹/4;

Section 10: The North¹/2 of the Northeast¹/4, the Northwest¹/4 of the Northwest¹/4, the South¹/2 of the North¹/2, the Southwest¹/4 of the Southwest¹/4, the East¹/2 of the Southwest¹/4, and the Southeast¹/4 less and except that parcel containing approximately 3.6 acres described in OR Book 235, Page 248;

Section 11: The West¹/2 of the West¹/2 lying westerly of State Road 73;

Section 14: The West¹/2 of the West¹/2;

Section 15: All;

Section 16: All;

Section 17: All;

Section 18: All;

Section 19: All;

Section 20: All;

Section 21: All;

Section 22: The North¹/2, the Southwest¹/4 of the Southeast¹/4, the North¹/2 of the Southeast¹/4, the West¹/2 of the Southwest¹/4, the Northeast¹/4 of the Southwest¹/4, and the North¹/2 of the Southeast¹/4 of the Southwest¹/4;

Section 23: The West¹/2 of the Northwest¹/4, the Southwest¹/4 of the Southeast¹/4, the Southeast¹/4 of the Southwest¹/4, and the West¹/2 of the Southwest¹/4.

Exhibit B

TOWNSHIP 1 NORTH, RANGE 9 WEST, CALHOUN COUNTY, FLORIDA:

Section 31: The East¹/2 of the Southeast¹/4; the Southwest¹/4 of the Southeast¹/4; the Southeast¹/4 of the Northeast¹/4; and that portion of the East¹/2 of the Southwest¹/4 lying South of State Road 20.;

Section 32: The West¹/2 of the Southwest¹/4 and the Southwest¹/4 of the Northwest¹/4 less and except (i) any portion of the property conveyed to Calhoun County for right of way as recorded in Official Record Book 285, Page 171, and (ii) Parcel 1 as described in Special Warranty Deed from St. Joe Timberland Company of Delaware, L.L.C. to Kenneth B. Jones, dated July 19, 2004 and recorded in Official Record Book 289, Page 366.

TOWNSHIP 1 SOUTH, RANGE 9 WEST, CALHOUN COUNTY, FLORIDA:

Section 6: All, less and except the Northwest¹/4 of the Northwest¹/4 of the Northwest¹/4 and less that portion lying South of State Road 20 and East of Chipola River;

Section 7: All, less and except that portion north and east of the Chipola River;

Section 8: All that portion of the Northwest¹/4 and the South¹/2 lying west of the Chipola River;

Section 17: All lying West of Chipola River;

Section 18: All;

Section 19: All;

Section 20: The North¹/2 of the Northwest¹/4; and the remainder of the Section lying West of Chipola River;

Section 29: All lying West of Chipola River;

Section 30: All;

Section 31: The East¹/2 of the Northeast¹/4;

Section 32: The Northwest¹/4 of the Northeast¹/4 lying South and West of the Chipola River, the Southwest¹/4 of the Northeast¹/4, the Northwest¹/4, the East¹/2 of the Southwest¹/4, and the Southeast¹/4; and

Section 33: That portion of the Southwest¹/4 of the Southwest¹/4 lying South and West of Chipola River.

Exhibit B

TOWNSHIP 2 SOUTH, RANGE 9 WEST, CALHOUN COUNTY, FLORIDA:

Section 4: The Southwest¹/4 of the Southwest¹/4 lying West of the Chipola River;

Section 5: All, less and except the Southeast¹/4 of the Southeast¹/4;

Section 6: All;

Section 7: All;

Section 8: All;

Section 9: All lying West of Chipola River;

Section 17: All;

Section 18: All;

Section 19: All, less and except that portion conveyed to the State of Florida, for the Use and Benefit of the State Road Department of Florida in Deed Book 74, Page 289;

Section 20: All, less and except the Southwest¹/4 of the Southeast¹/4 of the Southwest¹/4 and less and except that portion conveyed to the State of Florida, for the Use and Benefit of the State Road Department of Florida in Deed Book 74, Page 289;

Section 21: All lying West of Chipola River, less and except the Southwest¹/4 of the Southwest¹/4 and less and except any portion within Lees Road Right of Way;

Section 28: All lying North and West of Chipola River, less and except right of way for State Road 71 and less and except any portion of the Southwest¹/4 of the Southeast¹/4 lying West of Chipola River as conveyed in Official Record Book 246, Page 64 and less and except that portion conveyed to the State of Florida, for the Use and Benefit of the State Road Department of Florida in Deed Book 74, Page 289;

Section 29: The South¹/2 of the South¹/2; and that part of the Northeast¹/4 of the Southeast¹/4 lying South and East of State Road 71, less and except that portion deeded in Official Record Book 321, Page 283; and the East¹/2 of the Northeast¹/4 of the Northeast¹/4 less and except that portion conveyed to the State of Florida, for the Use and Benefit of the State Road Department of Florida in Deed Book 74, Page 289;

Section 30: All, less and except that portion conveyed to the State of Florida, for the Use and Benefit of the State Road Department of Florida in Deed Book 74, Page 289;

Section 31: All, less right of way of State Route 71 and less that certain parcel containing 32.50 acres conveyed in Official Record Book 264, Page 160;

Exhibit B

Section 32: All lying North and West of Chipola River less and except that portion, if any, deeded in Official Record Book 321, Page 283, and less right of way of State Route 71; and

Section 33: The North¹/2 of the Northwest¹/4 lying North and West of River; the Northwest¹/4 of the Northeast¹/4 lying North and West of River, less and except that portion deeded in Official Record Book 321, Page 283.

TOWNSHIP 3 SOUTH, RANGE 9 WEST, CALHOUN COUNTY, FLORIDA:

Section 5: All lying West of Chipola River;

Section 6: All;

Section 7: That portion of the North 1/2 lying North of Chipola River; and

Section 8: That portion located in the Northwest¹/4 of the Northwest¹/4 lying North of Chipola River.

TOWNSHIP 1 SOUTH, RANGE 10 WEST, CALHOUN COUNTY, FLORIDA:

Section 1: All lying East of State Road 73, less the Southeast¹/4 of the Southwest¹/4; less and except that portion deeded in Official Record Book 265, Page 62; less and except one (1) acre square lying in the Northwest corner of the Northeast¹/4 of the Northeast¹/4; and less and except that portion deeded to Clarksville Baptist Church in Official Record Book 249, Page 371;

Section 11:

Exhibit B

Begin at a Terra Cotta monument marking the Southeast corner of Section 11, Township 1 South, Range 10 West, Calhoun County, Florida and thence run North 88 degrees 08 minutes 41 seconds West, along the South boundary of said Section 11, 2687.19 feet to an iron rod, thence run North 03 degrees 25 minutes 02 seconds East 22.53 feet to an iron rod, thence run North 87 degrees 47 minutes 50 seconds West 320.50 feet to a concrete monument on the Easterly Right-Of-Way of State road 73, thence run North 23 degrees 55 minutes 07 seconds East, along said Easterly Right-Of-Way, 1395.79 feet to a concrete monument, thence departing said Easterly Right-Of-Way run South 87 degrees 24 minutes 58 seconds East 583.58 feet to a concrete monument, thence run North 89 degrees 28 minutes 27 seconds East 524.92 feet to a concrete monument marking the Southwest corner of the Northeast¹/4 of the Southeast¹/4 of said Section 11, thence run North 04 degrees 39 minutes 06 seconds East 884.09 feet to a concrete monument, thence run South 88 degrees 25 minutes 11 seconds East 1290.36 feet to a concrete monument on the East boundary of said Section 11, thence run South 00 degrees 47 minutes 25 seconds West, along said East boundary, 2222.04 feet to the Point of Beginning. Containing 109.95 acres, more or less.

Section 12:

All, less and except the West³/4 of the Northwest¹/4 of the Northeast¹/4, less the Northeast¹/4 of the Northwest¹/4, and less the Northwest¹/4 of the Northwest¹/4 thereof;

Section 13: All;

Section 24: All;

Section 25: All; and

Section 26:

Exhibit B

Begin at a concrete monument marking the Northeast corner of Section 26, Township 1 South, Range 10 West, Calhoun County, Florida and run South 00 degrees 59 minutes 45 seconds West, along the East boundary line of said Section 26, 5334.14 feet to a concrete monument marking the Southeast corner of said Section 26, thence run North 87 degrees 42 minutes 42 seconds West, along the South boundary line of said Section 26, 3166.05 feet to a concrete monument at the intersection of said South boundary line with the Easterly right of way line of State Road 73, thence departing said South boundary line run North 08 degrees 56 minutes 52 seconds West, along said Easterly right of way line, 1238.58 feet to a concrete monument, thence departing said Easterly right of way line run South 87 degrees 42 minutes 42 seconds East 1494.12 feet to an iron rod, thence run North 75 degrees 20 minutes 46 seconds East 169.97 feet to an iron rod, thence run North 83 degrees 39 minutes 48 seconds East 301.78 feet to an rod, thence run North 76 degrees 20 minutes 51 seconds East 571.49 feet to an iron rod, thence run North 66 degrees 00 minutes 51 seconds East 122.65 feet to an iron rod, thence run North 07 degrees 45 minutes 40 seconds East 231.59 feet to an iron rod, thence run North 02 degrees 33 minutes 15 seconds East 535.67 feet to an iron rod, thence North 03 degrees 00 minutes 06 seconds West 344.91 feet to an iron rod, thence run North 06 degrees 46 minutes 14 seconds West 413.23 feet to an iron rod, thence run North 16 degrees 37 minutes 20 seconds West 233.67 feet to an iron rod, thence run North 22 degrees 39 minutes West 414.41 feet to an iron rod, thence run North 31 degrees 26 minutes 52 seconds West 307.44 feet to an iron rod, thence North 00 degrees 00 minutes 10 seconds West 1447.98 feet to a concrete monument on the North boundary line of the Northeast¹/4 of said Section 26, thence run South 87 degrees 29 minutes 53 seconds East, along said North boundary line, 1224.0 feet to the POINT OF BEGINNING. Containing 185.02 acres, more or less.

Exhibit B

Exhibit B-2

Legal Description of the Property — Gulf County

TOWNSHIP 3 SOUTH, RANGE 10 WEST, GULF COUNTY, FLORIDA:

Section 26: The Northwest¹/4 of the Northeast¹/4; the South¹/2 of the Northeast¹/4 lying West of State Route 71; the Southeast¹/4 lying West of State Route 71; the North¹/2 of the Northwest¹/4; the Southeast¹/4 of the Northwest¹/4; and the Southwest¹/4 less 6 acres in the Northwest corner of the Northeast¹/4 of the Southwest¹/4 of Section 26;

Section 27: All, less the North¹/2 of the Northeast¹/4 of the Northeast¹/4 and less one (1) acre deeded to Gulf County in Official Record Book 24, Page 941;

Section 28: All;

Section 29: All;

Section 30: All;

Section 31: All;

Section 32: The North¹/2;

Section 33: The East¹/2 and the Northwest¹/4;

Section 34: All;

Section 35: The West¹/2 and the Southwest¹/4 of the Southeast¹/4.

TOWNSHIP 4 SOUTH, RANGE 10 WEST, GULF COUNTY, FLORIDA:

Section 6: All;

Section 7: All, less and except the right of way of State Road 22;

Section 8: The Southwest¹/4 of the Northwest¹/4; the West¹/2 of the Southwest¹/4 less and except 10 acres described as follows: Begin at the Southwest corner of Section 8, Township 4, Range 10 West, and run North 660 feet, thence East 660 feet, thence South 660 Feet, thence West 660 feet to the point of beginning;

Section 16: The Northwest¹/4 lying South of State Road 22; the Southwest¹/4; the West¹/2 of the Southeast¹/4 and the Southeast¹/4 of the Southeast¹/4;

Section 17: The South¹/2, and the East¹/2 of the Northeast¹/4 lying South of State Road 22;

Exhibit B

Section 18: All, less and except the right of way of State Road 22;

Section 27: That portion of the West¹/4 lying westerly of the center of a drainage ditch and southerly of the center of a woods road as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1;

Section 28: All, less and except that portion of the North¹/4 lying Northerly of the center of a woods road and less and except that portion of the East¹/2 lying Easterly of the center of drainage ditch as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1;

Section 29: All, less and except that portion of the North¹/4 lying Northerly of the center of a woods road as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1;

Section 30: All, less and except that portion of the North¹/4 lying northerly of the center of a woods road as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1;

Section 31: All;

Section 32: All;

Section 33: All, less and except that portion of the East¹/4 lying Easterly and Northerly of the center of a ditch as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1; and

Section 34: That portion of the South¹/2 lying Southerly of the center of a drainage ditch and the Easterly extension thereof, said center and the extension thereof bearing North 84 degrees 53 minutes 09 seconds East as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1.

TOWNSHIP 5 SOUTH, RANGE 10 WEST, GULF COUNTY, FLORIDA:

Section 1: The South¹/2 of the Southwest¹/4;

Section 2: The South¹/2 of the Southeast¹/4; the East¹/2 of the Southwest¹/4, and the Southwest¹/4 of the Southwest¹/4;

Section 3: All, less and except the right of way of County Road Number 386;

Section 4: All, less and except the right of way of County Road Number 386;

Exhibit B

Section 5: All, less and except that portion of the Southeast¹/4 lying South of the center of a drainage ditch as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1;

Section 6: All;

Section 7: All lying north of Little Creek.

Section 8: That portion of Section 8 lying Northwesterly of the center of a drainage ditch (Little Creek) as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989; that portion of the Northeast¹/4 lying Easterly of the center of a drainage ditch as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1; and that portion of Section 8 lying south of State Road 386;

Section 9: All, less and except the right of way of County Road Number 386 and less and except that portion of the Southwest¹/4 of the Northwest¹/4 lying North of the right of Way of County Road Number 386 and West of the center of a drainage ditch as shown on the specific purpose survey prepared by Buchanan & Harper, Inc., dated December 6, 1989, a copy of which is attached hereto as Attachment 1;

Section 10: All;

Section 11: All;

Section 12: The West¹/2, less and except that portion deeded to the Gulf County Board of County Commissioners as described in Book 487, Page 830;

Section 13: The West¹/2 and the West¹/2 of the East¹/2;

Section 14: All;

Section 15: All;

Section 16: All;

Section 17: All, less and except all that part of Section 17 lying North of the centerline of State Road 386, as the same now runs, and less and except that portion of the West¹/2 of the West¹/2 of Section 17 conveyed to RGK Investments, Inc. and Kerrigan Family Limited Partnership by Special Warranty Deed dated September 11, 2003 and recorded in Official Records Book 317, Page 918;

Section 20: All, less and except that portion of the West¹/2 of the West¹/2 of Section 20 conveyed to RGK Investments, Inc. and Kerrigan Family Limited Partnership by Special Warranty Deed dated September 11, 2003 and recorded in Official Records Book 317, Page 918;

Exhibit B

Section 21: All;

Section 22: All;

Section 23: All;

Section 24: All;

Section 25: All;

Section 26: All;

Section 27: All;

Section 28: All;

Section 29: All, less and except that portion of the West¹/2 of the West¹/2 of Section 29 conveyed to RGK Investments, Inc. and Kerrigan Family Limited Partnership by Special Warranty Deed dated September 11, 2003 and recorded in Official Records Book 317, Page 918;

Section 31: All;

Section 32: All;

Section 33: All;

Section 34: All;

Section 35: All; and,

Section 36: All.

TOWNSHIP 4 SOUTH, RANGE 11 WEST, GULF COUNTY, FLORIDA:

Section 1: All;

Section 2: That portion lying East of Wetappo Creek and East of an unnamed branch, which branch lies in the West¹/2 of the Northwest¹/4 running north to south and flowing into Wetappo Creek;

Section 11: That portion of the North¹/2 lying North and East of Wetappo Creek; and that portion of the Southeast¹/4 of the Southeast¹/4 lying east of Jarrott Daniels Road;

Section 12: The Northeast¹/4; the West¹/2 of the West¹/2, less and except that portion lying

Exhibit B

West of Wetappo Creek and North of State Route 22; the Southeast¹/4 of the Southwest¹/4; the East¹/2 of the Southeast¹/4; the Southwest¹/4 of the Southeast¹/2, less and except the right of way for State Road 22 deeded to Gulf County, Florida at Book 62, Page 362, and less .75 acres for State Road 22 right of way deeded to Gulf County, Florida at Book 471, Page 512; and

Section 13: All, less and except 241.745 acres to Wetappo Farms as described in Book 279, Page 188, less and except the right of way for State Road 22 deeded to Gulf County, Florida at Book 471, Page 512, and less and except the property conveyed to Mallory Williams by deed recorded in Book 484, Page 692;

Section 14: That portion lying East of Jarrott Daniels Road;

Section 24: All lying East of Jarrott Daniels Road, less and except that portion of the North¹/2 of Section 24 lying both (i) North and East of Wetappo Creek and (ii) North and West of Sandy Branch;

Section 25: All lying East of Wetappo Creek; and

Section 36: All lying East of Wetappo Creek.

TOWNSHIP 5 SOUTH, RANGE 11 WEST, GULF COUNTY, FLORIDA:

Section 1: All lying East of Wetappo Creek, less and except that portion, if any, deeded in Official Record Book 83, Page 645;

Section 12: All lying East of Wetappo Creek and North of Little Creek, less and except the Southeast¹/4 of the Southwest¹/4 and the Southwest¹/4 of the Southeast¹/4, and less and except the west 1/2 of the Southeast¹/4 of the Southeast 1/4;

Section 35: The East¹/2; and

Section 36: All.

TOWNSHIP 6 SOUTH, RANGE 9 WEST, GULF COUNTY, FLORIDA:

Section 5: All lying West of State Road 71;

Section 6: All;

Section 7: All;

Section 8: All lying West of State Road 71;

Section 18: All lying West of State Road 71; and

Exhibit B

Section 19: All lying West of State Road 71.

TOWNSHIP 6 SOUTH RANGE 11 WEST, GULF COUNTY, FLORIDA:

Section 1: All, less and except any right of way of State Road 386;

Section 2: All, less and except any portion lying North of State Road 386;

Section 3: All, less and except that portion lying North of State Road 386;

Section 4: All, less and except the North¹/2 of the Northeast¹/4 and less that portion lying west of the Florida Power Corporation easement recorded in Official Records Book 15, Page 97;

Section 5: All of the Southeast¹/4 lying East of the Florida Power Corporation easement recorded in Official Records Book 15, Page 97;

Section 8: All lying East of the Florida Power Corporation easement recorded in Official Records Book 15, Page 97;

Section 9: All;

Section 10: All, less and except 1.66 acres for Gas Line Easement recorded in Official Records Book 9, Page 238;

Section 11: All, less and except property conveyed for Gas Line Easement recorded in Official Records Book 9, Page 238;

Section 12: All;

Section 13: All;

Section 14: All, less and except the West¹/2 of the Southwest¹/4;

Section 15: All lying North of the Intracoastal Waterway canal;

Section 16: All lying North of the Intracoastal Waterway canal;

Section 17: All lying North of the Intracoastal Waterway canal and East of Florida Power Corporation Easement recorded in Official Records Book 15, Page 97.

Section 23: All lying North and East of the Intracoastal Waterway canal;

Section 24: All lying North and East of the Intracoastal Waterway canal;

Section 25: All lying North and East of the Intracoastal Waterway canal; and

Exhibit B

Section 36: All lying North and East of the Intracoastal Waterway canal.

TOWNSHIP 7 SOUTH, RANGE 10 WEST, GULF COUNTY, FLORIDA:

Section 2: All lying west of State Road 71;

Section 3: All;

Section 4: All;

Section 5: All lying North of the Intracoastal Waterway canal;

Section 6: All lying North of the Intracoastal Waterway canal;

Section 8: All lying North of the Intracoastal Waterway canal;

Section 9: All lying North of the Intracoastal Waterway canal;

Section 10: All lying North of the Intracoastal Waterway canal, less and except the Southeast¹/4 of the Southeast¹/4 and less that portion deeded to Gulf County recorded in Official Records Book 88, Page 1019;

Section 11: All the Northwest¹/4 lying West of State Road 71, formerly State Road No. 6 and North of Beaty Avenue, as shown by plat of Beaty Subdivision of White City in Gulf County, Florida, recorded in Plat Book 1, Page 23, in office of the Clerk of Circuit Court of Gulf County, less and except a rectangular tract in the Southwest corner thereof with a frontage of 600 feet on the West side of State Road 71, formerly State Road No. 6, and 1,020 feet on the North side of the hereinbefore mentioned Beaty Avenue.

TOWNSHIP 6 SOUTH, RANGE 10 WEST, GULF COUNTY, FLORIDA:

Section 1: All;

Section 2: All;

Section 3: All;

Section 4: All;

Section 5: All;

Section 6: All;

Section 7: All;

Exhibit B

Section 8: All;

Section 9: All;

Section 10: All;

Section 11: All;

Section 12: All;

Section 13: All;

Section 14: All;

Section 15: All;

Section 16: All;

Section 17: All;

Section 18: All;

Section 19: All;

Section 20: All;

Section 21: All;

Section 22: All;

Section 23: All;

Section 24: All;

Section 25: All lying West of State Road 71, less and except that portion lying within Section 25 described in deed recorded in Official Records Book 475, Page 641;

Section 26: All;

Section 27: All;

Section 28: All;

Section 29: All;

Section 30: All;

Exhibit B

Section 31: All lying North of Intracoastal Waterway canal;

Section 32: All;

Section 33: All;

Section 34: All;

Section 35: All lying West of County Road 71; and

Section 36: All lying West of County Road 71.

Exhibit B

Attachment 1

[attached]

Exhibit B

Exhibit C

Form of Timber Deed

[attached]

Exhibit C

This instrument prepared by:

Victor P. Haley
Sutherland Asbill & Brennan LLP
999 Peachtree St NE
Atlanta, GA 30309-3996

After recording return to:

First American Title Insurance Company
National Commercial Services
Six Concourse Parkway
Suite 2000
Atlanta, Georgia 30328
Attention: Vicky Griffin

TIMBER DEED

THIS TIMBER DEED(the “Timber Deed”) is made this day of , 2011 (the “Effective Date”), betweenST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company (together with its successors and assigns, “Grantor”) with an address of 133 South WaterSound Parkway, WaterSound, Florida 32413, Attention: Legal Department, andVULCAN TIMBERLANDS LLC, a Delaware limited liability company (together with its successors and assigns, “Grantee”), with an address of Attn: Resource Management Service, LLC, its Manager, 31 Inverness Center Parkway, Suite 360, Birmingham, Alabama 35242.

W I T N E S S E T H:

That Grantor, for and in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant, bargain, sell, alien, remise, release, convey and confirm unto Grantee all its rights, title and interest in and to all the timber, including straw produced therefrom, growing, lying or standing, as of the Effective Date, on that certain real property located in County, Florida, identified on the timber stand maps shown onExhibit Aattached hereto and made a part hereof (each, a “Timber Stand,” and all such timber, including straw produced therefrom, in such Timber Stands being, collectively, the “Timber”), subject to the terms, covenants, conditions and agreements set forth in this Timber Deed.

Exhibit Battached hereto and made a part hereof contains the legal description of certain parcels of real property containing the Timber and certain existing roads with respect to which Grantee has certain easement rights, as more particularly described herein (such real property, exclusive of the Timber, the “Property”).

This Timber Deed is made and accepted subject to the following terms, covenants, conditions and agreements:

Exhibit C

1. Rights to Maintain and Harvest the Timber. Grantor hereby grants to Grantee the right to maintain, manage, store, cut, harvest and remove the Timber from the Property subject to the provisions of this Timber Deed (collectively, the “Timber Rights”) until the earlier to occur of (i) the date that is twenty (20) years after the Effective Date, and (ii) the date upon which all of the Property has been released from this Timber Deed in accordance with the terms of this Timber Deed (such earlier date being the “Termination Date”), after which time said Timber Rights shall permanently expire. Any part of the Timber not severed and removed by Grantee from the Property before the Termination Date shall be deemed abandoned by Grantee and shall become the property of Grantor, and Grantee shall have no further rights with regard to the Timber.

2. Grantor’s Reserved Rights. Grantor hereby reserves, for the benefit of Grantor and its successors and assigns (including all lessees and licensees of Grantor), all rights in and to the Property not expressly granted to Grantee in this Timber Deed, provided that Grantor’s exercise of its retained rights shall not unreasonably interfere with the Timber Rights. Grantor’s reserved rights shall include, without limitation, (a) the right to use or lease the Property for hunting or other recreational purposes, (b) the right to access the Property, (c) the right to use and develop Grantor’s adjacent property and the portions of the Property that do not contain the Timber, (d) the right to use the existing roads on the Property, and (e) the right to grant easements and to develop and extract oil, gas and other minerals in, on and under the Property in accordance with Section 9. Any actions or uses of the Property by Grantor and its successors and assigns (including all lessees and licensees of Grantor) that would be reasonably foreseeable to result in damage or destruction of the Timber and/or the existing roads on the Property are not reserved rights of Grantor.

3. Partial Releases. Any portion of the Property shall be released from the Timber Rights upon the earliest to occur of the following events with respect to such portion of the Property (each such portion being “Released Property”), and the Timber Rights shall expire with respect to such Released Property: (a) such portion of the Property contains a Timber Stand that has reached thirty-six (36) years of age, which age is determined by (i) the ages of each Timber Stand as of the Effective Date, as set forth onExhibit Cattached hereto and made a part hereof, and (ii) increasing such ages by one (1) year on each January 1 following the Effective Date; (b) thirty (30) months following the delivery by Grantee to Grantor of a notice of commencement of final harvest operations on such portion of the Property pursuant to Section 8; and (c) the completion of harvesting of Timber from such portion of the Property, such that immediately after such harvest operation the average residual basal area of standing trees six inches (6”) diameter at breast height (“dbh”) and greater is less than forty (40) square feet per acre for said harvested portion of the Property, provided that Grantee shall have up to sixty (60) days following the completion of such harvesting to remove its equipment from the harvested Timber Stands, even if such sixty (60) day period extends beyond the Termination Date, but provided further that in no case shall the presence of Grantee’s equipment and removal of same unreasonably interfere with Grantor’s activities on the Released Property, including site preparation and replanting. Not later than sixty (60) days following the date upon which such portion of the Property becomes Released Property pursuant to this Section 3, Grantee shall execute and deliver to Grantor a release of such Released Property in the form ofExhibit D attached hereto and made a part hereof (and such other instruments as may be reasonably

Exhibit C

requested by Grantor to evidence such release), such release reserving, however, access over existing roads located on such Released Property that are reasonably necessary to access and harvest the remaining Timber, all in accordance with the terms and conditions of this Timber Deed (provided that the provisions of such form of release reserving access shall be deleted where not applicable). In addition, upon the reasonable request of Grantor, subject to the consent of Grantee, not to be unreasonably withheld, conditioned or delayed, Grantee agrees to execute and deliver to Grantor a release in the form ofExhibit D(provided that the provisions of such form of release reserving access shall be deleted), and such other instruments as may be reasonably requested by Grantor to evidence such release, with respect to portions of the Property that do not contain Timber and that are no longer reasonably necessary to access or harvest the remaining Timber, which portions of the Property shall become Released Property upon delivery of such release.

4. Risk of Loss; Casualty. All risk of loss to the Timber shall pass from Grantor to Grantee concurrently with the execution and delivery of this Timber Deed. Following a casualty that causes the average residual basal area of standing trees six inches (6”) dbh and greater to be less than thirty (30) square feet per acre for any portion of the Property (the “Casualty Property”), Grantee shall have the right to salvage or otherwise remove the Timber from such Casualty Property if Grantee provides Grantor with written notice, within thirty (30) days following the occurrence of such casualty, of Grantee’s intent to salvage or otherwise remove the Timber. If Grantee has timely delivered such notice of intent, (a) Grantee shall have twelve (12) months following the occurrence of such casualty to salvage or otherwise remove the Timber from such Casualty Property, provided that if Grantee’s salvage operations are delayed by inclement weather, Grantee shall have the right, by delivering written notice to Grantor, to extend such deadline by a period of time equivalent to the length of such delay, not to exceed six (6) months; and (b) upon the expiration of such twelve (12) month period (as may be extended pursuant to clause (a)), the Timber Rights shall terminate with respect to such Casualty Property, and such Casualty Property shall be released from the Timber Rights and shall become Released Property. If Grantee has not timely delivered such notice of intent to Grantor, then upon the expiration of such thirty (30) day period, the Timber Rights shall terminate with respect to such Casualty Property, and such Casualty Property shall be released from the Timber Rights and shall become Released Property. Not later than the expiration of either such thirty (30) day notice period or twelve (12) month salvage period (as may be extended pursuant to clause (a)), as applicable, Grantee shall execute and deliver to Grantor a release of such Casualty Property in the form ofExhibit D(and such other instruments as may be reasonably requested by Grantor to evidence such release), such release reserving, however, access over existing roads located on such Casualty Property that are reasonably necessary to access and harvest the remaining Timber, all in accordance with the terms and conditions of this Timber Deed (provided that the provisions of such form of release reserving access shall be deleted where not applicable).

5. Access Rights; Roads; Gates.

(a) Grantor hereby grants to Grantee the rights of ingress and egress to and from the Property over roads now existing and as may be constructed on the Property by Grantor, but only for the purpose of exercising the Timber Rights and the removal of Grantee’s equipment following the completion of harvesting activities. No right whatsoever vests in

Exhibit C

Grantee with respect to, and Grantee is prohibited from, creating or constructing permanent new roads on the Property; provided, however, Grantee shall have the right, at its sole cost, to construct and maintain temporary roads and trails on the Timber Stands in connection with the exercise of any of its Timber Rights, but only to the extent that such temporary roads can be successfully replanted. Grantee shall only install ditches or culverts adjacent to any such temporary roads or trails with the prior written consent of Grantor, which consent shall not be unreasonably withheld, conditioned or delayed. Grantee shall comply with all laws and regulations applicable to the installation, use and maintenance of such culverts or ditches, including the requirements of the Northwest Florida Water Management District.

(b) Grantor and its lessees and licensees, in addition to their right to use the existing roads on the Property, shall have the right to use all such temporary roads and trails constructed by Grantee.

(c) Grantee’s use of the Property shall be at Grantee’s own risk. Grantor shall not be liable for any latent defect in any roadway or other condition existing on the Property or on any of Grantor’s other property to which Grantor permits Grantee access (the “Access Property”), nor shall Grantor be liable for any damages or injuries sustained by Grantee, Grantee’s agents, employees, contractors, assigns or any other individual or entity acting by, for or under Grantee hereunder, arising out of or resulting from the use of said roadways or of the Property or the Access Property, except damages or injury due to the gross negligence or willful misconduct of Grantor, Grantor’s agents, employees, contractors, assigns or any other individual or entity acting by, for or under Grantor.

(d) Grantor currently maintains locked gates on access points, and hereby retains the right to install additional locked gates at such access points as it chooses, to limit trespass and protect the Property from abuse, provided that Grantor shall provide Grantee with keys or combinations, as applicable, to such locked gates. So long as Grantor provides Grantee with keys or combinations, as applicable, to such locked gates, Grantee shall lock such gates overnight during Grantee’s operations on the Property.

(e) Grantee shall repair all fences, gates or structures damaged by its operations and shall maintain and leave all roads, ditches, culverts, bridges and other infrastructure on the Property (or on the Access Property) used or affected by it to substantially the same condition as pre-existed Grantee’s operational use, less and except any use and damage arising from any party other than Grantee or its agents, employees, contractors or assigns. Grantee shall secure gates and entrance roads at the completion of harvest operations on the Property. Grantee shall be liable to Grantor for all damage to the Property, the Access Property or any other property of Grantor arising from Grantee’s failure to comply with this Section 5.

6. Grantee’s Operations.

(a) Grantee shall conduct no activity on the Property other than those activities necessary to exercise its Timber Rights. In connection with Grantee’s management of the Timber, there shall be no construction or placing of permanent buildings, mobile homes, radio, cell, or other communication towers, advertising signs, billboards, or other advertising material on the Property, nor shall there be any construction or placing of docks, bridges, piers or

Exhibit C

other structures, except those temporary bridges, culverts or other structures necessary for Grantee to exercise its Timber Rights. The maintenance and replacement of existing structures may occur only if it is necessary for Grantee to exercise its Timber Rights.

(b) Grantee shall conduct all activity on the Property permitted hereunder (i) in accordance with the then-current Silviculture Best Management Practices (“BMPs”) for harvesting timber, fertilization and other silvicultural prescriptions and activities, as promulgated or amended by the Florida Department of Agriculture and Consumer Services from time to time, including mandatory adherence to recommended streamside management zone (SMZ) guidelines near all creeks, streams, rivers, seepage streams and steephead ravine systems; and (ii) in a manner that meets the minimum requirements for compliance with the standards of the Sustainable Forestry Initiative, 2010-2014, of the American Forest and Paper Association or such other management guidelines as Grantor and Grantee may approve in writing from time to time (the “SFI Standards”).

(c) No right whatsoever vests in Grantee with respect to, and Grantee is prohibited from, planting or replanting any trees, shrubs, grasses or other vegetation on the Property, except where expressly agreed to in writing by Grantor. There shall be no intentional planting, introduction, release, or broadcast on the Property of any non-native, invasive plant species. The foregoing prohibitions in this Section 6(c) shall not apply to any natural regeneration occurring on the Property, and Grantee shall have no responsibility, liability or obligation whatsoever with respect to any such natural regeneration.

(d) No right whatsoever vests in Grantee with respect to, and Grantee is prohibited from, any use of chemicals or mechanical site preparation for operations, except as expressly agreed in writing by Grantor and as required under BMPs or SFI Standards (as defined below). Grantee is, however, authorized to use fertilizers or herbicides as approved by Grantor in writing, which approval shall not be unreasonably withheld. Within thirty (30) days following any such application of fertilizer or herbicide, Grantee shall deliver written certification to Grantor of the amount, method, location and date of application of such fertilizer or herbicide, together with reasonable supporting documentation.

(e) Except as expressly permitted in this Timber Deed or as reasonably necessary for Grantee to exercise any of its Timber Rights, Grantee shall not fill, excavate, dredge, mine, or drill; remove topsoil, sand, gravel, rock, peat, minerals, or other materials; dump ashes, trash, garbage, machinery filters or components; or change the topography of the land in any material and adverse manner other than what is reasonable and customary as part of commercial timber management and harvest operations.

(f) Except for products, including fuel and oil used in commercially reasonable quantities for operating and maintaining equipment necessary to conduct harvesting operations and silvicultural activities, Grantee shall not, without Grantor’s prior written consent given or withheld in its sole discretion, generate, handle, manufacture, treat, store or use any hazardous or toxic substances (as defined by applicable federal or state laws and regulations), during its operations or activities on the Property or on the Access Property. All of Grantee’s operations or activities hereunder shall be in all respects in compliance with all applicable laws then governing hazardous or toxic substances. Any spills of oil, hydraulic fluids, other

Exhibit C

petroleum products, or other hazardous materials caused by Grantee or its agents, employees, contractors or assigns, shall be cleaned up and remediated by Grantee in accordance with applicable laws, and Grantee shall notify Grantor in writing of such remediation.

(g) Grantee shall not dredge, ditch, construct or drain ponds or dikes, or manipulate natural water courses or other water bodies on the Property or on the Access Property except as necessary to comply with BMPs or to maintain access on established roads or to establish new roads or trails in accordance with Section 5.

(h) Grantee shall exercise the Timber Rights in a commercially reasonable manner, using generally accepted silvicultural and harvesting procedures and practices to protect and preserve in a commercially reasonable manner the Property, the Access Property and any other adjoining timber and property of Grantor.

(i) Trees shall be cut as low as commercially practical to the ground.

(j) Grantee shall have the right to split any existing Timber Stand containing more than fifty (50) acres into multiple timber stands for harvesting purposes, provided that each subdivided portion of such split Timber Stand shall contain not less than twenty-five (25) acres. Grantee shall have no right to split into smaller timber stands for harvesting purposes any existing Timber Stand that does not contain more than fifty (50) acres, unless Grantee is splitting a Timber Stand to comply with SFI Standards for clear cut size with green-up requirements.

(k) Grantee shall not, under any circumstances, bury any material whatsoever underground.

(l) Grantee shall leave all fire breaks, property lines, running streams and drainage ditches clear of logs, timber, limbs and debris resulting from Grantee’s operations. All oil drums, cans, bottles, cartons, limbing bars, abandoned equipment and other trash and debris brought by Grantee or its agents, employees or contractors onto the Property or on the Access Property shall be removed at Grantee’s expense upon completion of each period of Grantee’s harvesting operations. If Grantee does not remove and clear such debris promptly within forty-five (45) days after notice to Grantee, Grantor may undertake such removal for Grantee’s account and Grantee shall be responsible for the payment for any reasonable expenses actually incurred by Grantor in repairing or removing same within thirty (30) days of Grantee’s receipt of a detailed invoice (and relevant documentation).

(m) Grantee acknowledges that a higher degree of care is required when the Property or the Access Property is abnormally wet and the soils are saturated and unable to support adequately the weight and operation of Grantee’s equipment. Grantee acknowledges that such conditions may require Grantee to stop or temporarily interrupt its operations hereunder. In such event, Grantor will notify Grantee of such abnormally wet conditions and the parties will mutually develop a plan to address how soil conditions will be maintained, how rutting will be limited, and under what wet-weather conditions harvesting or hauling would not occur or would cease if weather conditions change during harvesting.

Exhibit C

(n) Grantee shall exercise due care and not intentionally start any fire on the Property or the Access Property other than controlled burns on the Property administered by burners certified by the Florida Department of Agriculture & Consumer Services, Division of Forestry, provided that Grantee shall deliver to Grantor ten (10) days prior written notice of any such controlled burn. Any such controlled burns shall comply with all applicable laws and regulations, including regulations governing the management of smoke. Grantee shall be liable to Grantor for all damage to the Property, the Access Property or any other property of Grantor arising from Grantee’s failure to comply with this Section 6(n). Grantee shall use all reasonable precautions to prevent fires on the Property (other than such controlled burns), the Access Property or any other property of Grantor and to prevent the spreading of any fires that may occur thereon. If a fire burns on the Property, on the Access Property, on any other property of Grantor, or on adjacent lands that may spread to the Property, to the Access Property or to any other property of Grantor, Grantee agrees promptly to notify Grantor of such fire, and to have its employees or agents, who might be carrying on operations on these lands, control or assist in controlling such fire. Grantor reserves the right to stop or interrupt Grantee’s operations hereunder if conditions are such that, in Grantor’s reasonable determination, continued operations are likely to start forest fires.

(o) Grantor shall exercise due care and not intentionally start any fire on the Property or any of Grantor’s property adjacent to the Property (the “Adjacent Property”) other than controlled burns and site preparation burns on the Property or the Adjacent Property administered by burners certified by the Florida Department of Agriculture & Consumer Services, Division of Forestry, provided that Grantor shall deliver to Grantee ten (10) days prior written notice of any such controlled burn. Any such controlled burns or site preparation burns shall comply with all applicable laws and regulations, including regulations governing the management of smoke. Grantor shall be liable to Grantee for all damage to the Timber on the Property arising from Grantor’s failure to comply with this Section 6(o). Grantor shall use all reasonable precautions to prevent fires on the Property and the Adjacent Property (other than such controlled burns or site preparation burns) and to prevent the spreading of any fires that may occur thereon. If a fire burns on the Property or the Adjacent Property that may spread to the Timber on the Property, Grantor agrees promptly to notify Grantee of such fire, and to have its employees or agents, who might be carrying on operations on these lands, control or assist in controlling such fire. Grantee reserves the right to stop or interrupt Grantor’s operations hereunder if conditions are such that, in Grantee’s reasonable determination, continued operations are likely to start forest fires that may endanger the Timber.

(p) Grantee shall deliver written notice to Grantor if Grantee discovers on the Property (i) any non-native or invasive plant species, including, without limitation, cogon grass, kudzu and Japanese climbing fern, or (ii) any threatened or endangered plant or animal species protected by applicable law, including the federal Endangered Species Act of 1973; provided, however, Grantor hereby expressly waives, relinquishes and releases any and all rights, remedies or claims Grantor may now have or hereafter have against the Grantee for failure to deliver any such written notice to Grantor. Grantor shall have the right, but not the obligation, to manage the Property to control the impact on the Property of any such non-native or invasive plant species, or any such threatened or endangered species, provided that such management does not unreasonably interfere with the Timber Rights or Grantee’s operations hereunder.

Exhibit C

7. Condition of Timber. Except as otherwise provided herein, Grantee represents and warrants that it has thoroughly inspected and reviewed the condition, location, and quality of the Timber and hereby approves and accepts the Timber in all respects AS IS, WHERE IS, AND WITH ALL FAULTS. Grantor disclaims any implied warranties with respect to the Timber, including, without limitation, warranties of merchantability and fitness for a particular purpose. Grantor makes no warranties or representations whatsoever as to the suitability, quality or quantity of the Timber or the logging conditions that may be encountered on the Property or the Access Property or that may be required to harvest the Timber. Notwithstanding the above, the parties acknowledge that Grantee is relying upon the records furnished by Grantor in determining which stands of timber have been thinned and those which have not been thinned. If prior to commencing timber harvesting operations on the Property, Grantee determines that Timber Stands identified by Grantor before the Effective Date as not being thinned have in fact been thinned and the inventory data provided by Grantor to Grantee before the Effective Date did not reflect reduced volume due to such thinning, Grantee will deliver written notice of same to Grantor. If Grantor agrees with Grantee’s determination, in Grantor’s reasonable discretion, Grantor will replace the thinned Timber with timber of comparable age, size and acreage.

8. Notice of Activity; Right of Inspection. Grantee shall deliver written notification by e-mail or facsimile transmission to Grantor of the commencement (or re-commencement, in the case of a previous suspension of operations) of harvest operations on any portion of the Property no more than ten (10) days and no less than twenty-four (24) hours prior to commencing harvest operations. Such notification shall indicate whether the harvest operations involve a thinning or a final harvest and shall include a map showing the affected Timber. Grantee shall deliver to Grantor, on or before September 15 of each year, Grantee’s harvest plan for the Timber for the next calendar year, including the anticipated timing and location of harvesting of Timber and indicating whether the harvest operations will involve a thinning or a final harvest. Such harvest plan shall be delivered for informational purposes only and shall not bind Grantee. Grantor shall have the right to inspect Grantee’s operations hereunder, including the application of fertilizers and herbicides and any prescribed burning, to determine whether Grantee is conducting such operations in accordance with the terms and conditions of this Timber Deed. If Grantor determines that Grantee is not conducting such operations in compliance with the terms and conditions of this Timber Deed, Grantor shall notify Grantee of such non-compliance in writing, describing such non-compliance with reasonable specificity. Upon receipt of such written notice of non-compliance, Grantee shall correct its operations within forty-eight (48) hours so that the same will comply with the terms and provisions hereof and shall provide written notice to Grantor of the steps taken to achieve such compliance.

9. Easements; Minerals.

(a) Grantor shall have the right to grant to third parties easements burdening the Property for rights-of-way, access, pipelines, utilities or other purposes, provided that (i) Grantor shall deliver to Grantee not less than ninety (90) days prior written notice of such easement identifying the proposed location of such easement (the “Easement Area”), and (ii) Grantee shall have the right, exercisable by delivering to Grantor written notice not later than thirty (30) days following Grantee’s receipt of Grantor’s notice of the Easement Area, to remove and dispose of any Timber located within the Easement Area within such ninety (90) day period.

Exhibit C

If Grantee fails to deliver such notice of its intent within such thirty (30) day period, or if Grantee timely delivers such notice but unharvested Timber remains on the Easement Area following the expiration of such ninety (90) day period, then (A) all Timber not removed from such Easement Area within such thirty (30) or ninety (90) day period, as applicable, shall be deemed abandoned by Grantee, (B) Grantor or the easement holder shall have the right to remove and dispose of such Timber in its sole discretion, and (C) Grantor shall pay or cause the easement holder to pay Grantee an amount equal to the fair market value of such Timber. As used in this Section 9, the “fair market value“ of such Timber shall equal the proceeds of such Timber actually received by Grantor or the easement holder resulting from commercially reasonable efforts to sell such Timber.

(b) Grantor shall have the right to enter into leases or other agreements to develop or extract the oil, gas or other minerals in, on or under the Property, provided that (i) Grantor shall deliver to Grantee a copy of such executed lease or other agreement, (ii) Grantor or its lessee shall deliver to Grantee not less than ninety (90) days prior written notice of any mineral activity pursuant to such lease or other agreement, identifying the proposed location of such mineral activity (the “Mineral Activity Area”), and (iii) Grantee shall have the right, exercisable by delivering to Grantor written notice not later than thirty (30) days following Grantee’s receipt of Grantor’s notice of the Mineral Activity Area, to remove and dispose of any Timber located within the Mineral Activity Area within such ninety (90) day period. If Grantee fails to deliver such notice of its intent within such thirty (30) day period, or if Grantee timely delivers such notice but unharvested Timber remains on the Mineral Activity Area following the expiration of such ninety (90) day period, then (A) all Timber not removed from such Mineral Activity Area within such ninety (90) day period shall be deemed abandoned by Grantee, (B) Grantor or its lessee shall have the right to remove and dispose of such Timber in its sole discretion, and (C) Grantor shall pay or cause its lessee to pay Grantee an amount equal to the net present value of such Timber. As used in this Section 9, “net present value“ of such Timber shall equal the estimated value of such Timber at the estimated date of the planned harvest of such Timber, discounted to its present value using a mutually acceptable discount rate, all determined in the reasonable discretion of Grantor and Grantee. Any disputes with respect to the determination of net present value shall be resolved in accordance with Section 9(f).

(c) If Grantor defaults in its obligations to deliver notice as required under Section 9(a), Grantor shall pay or cause the easement holder to pay to Grantee the fair market value (as defined in Section 9(a)) of any Timber damaged or removed by the easement holder that Grantee was not reasonably able to harvest after Grantee received actual notice of such activity. Such payment by Grantor shall be Grantee’s exclusive remedy hereunder for any such default by Grantor.

(d) If Grantor defaults in its obligations to deliver notice as required under Section 9(b), Grantor shall pay or cause the mineral rights holder to pay to Grantee the net present value (as defined in Section 9(b)) of any Timber damaged or removed by the mineral rights holder that Grantee was not reasonably able to harvest after Grantee received actual notice of such activity. Such payment by Grantor shall be Grantee’s exclusive remedy hereunder for any such default by Grantor. Any disputes with respect to the determination of net present value shall be resolved in accordance with Section 9(f).

Exhibit C

(e) For the avoidance of doubt, Grantee has accepted title to the Timber and the Timber Rights subject to the Permitted Encumbrances (as defined below), and Grantor shall have no obligations under this Section 9 with respect to any Permitted Encumbrances.

(f) Any dispute or controversy arising with respect to the determination of net present value under Section 9(b) or Section 9(d) shall be resolved by binding arbitration under the rules of the American Arbitration Association to be conducted in the State of Florida, provided that the arbitration proceeding shall be conducted by a panel of three (3) arbitrators. Each party shall appoint an arbitrator, and the appointed arbitrators shall jointly select a third arbitrator, which third arbitrator shall be the chairman of the panel. The decision of a majority of the panel of arbitrators shall bind the parties. Both parties agree to cooperate in the expeditious conduct of any such arbitration. It shall be the obligation of the aggrieved party to seek such arbitration forthwith upon the failure of the other party to accede to the demands of the aggrieved party or the failure of the parties to reach a mutually acceptable resolution. The non-prevailing party shall bear all costs of the arbitration and both parties’ reasonable attorneys’ fees. Notwithstanding anything to the contrary in Section 14, this Section 9(f) shall exclusively govern the resolution of disputes regarding the determination of net present value under Section 9(b) or Section 9(d).

10. Indemnification. Each of Grantor and Grantee (each, as applicable, an “Indemnifying Party”) shall defend, indemnify and hold harmless the other party, its affiliates and their assignees, contractors, members, shareholders, directors, officers, managers, partners, employees, agents and consultants (each, as applicable, an “Indemnitee”), from and against all claims and causes of action, pending or threatened, of any kind or nature, by third parties, related to or arising out of any bodily injury to, or death of, any person, or any physical damage to tangible property, resulting from or due to the activities, operations or omissions of said Indemnifying Party, its contractors, agents and employees, on the Property or on any other property of Grantor, except to the extent such injury or damage also results in part from the grossly negligent or intentionally wrongful act or omission of any Indemnitee. The Indemnifying Party shall indemnify any Indemnitee for any incidental, consequential or punitive damages that such Indemnitee is required to pay to any third party resulting from or due to the activities, operations or omissions of said Indemnifying Party, its contractors, agents and employees on the Property or on any other property of Grantor. The provisions of this Section 10 shall survive the termination of this Timber Deed.

11. Insurance.

(a) Grantee, and any contractors and agents engaged by or on behalf of Grantee, will keep in effect until the Termination Date, at its sole expense, the following insurance coverages with insurers satisfactory to Grantor, in addition to any other insurance required by law:

(i) To be maintained by Grantee and by any contractors or agents retained by Grantee under any logging contracts and vendor contracts with respect to the Timber or the Property which include machinery use and transport (including logging, prescribed burn — ground, mechanical site preparation, road work, drainage, machine planting, and ground applications):

Exhibit C

(A) Worker’s Compensation policy meeting at least statutory requirements and Employer’s Liability Insurance with limits not less than $500,000 fully covering all employees and supervisors participating in Grantee’s or such contractor’s operations hereunder. Grantee or such contractor must deliver a certificate of insurance to Grantor stating that Workmen’s Compensation coverage includes a waiver of subrogation against Grantor. The policy shall cover owners, partners and executives of Grantee or such contractor and shall include waiver of subrogation against Grantor.

(B) Commercial General Liability policy on a broad form basis to cover all operations of Grantee and its contractors and agents under this Timber Deed. Levels of coverage shall be at least $2,000,000 per occurrence with a $2,000,000 aggregate limit. Coverage shall include personal injury, products/completed operations, comprehensive general liability, loss due to accidental overcut and damage due to fire. The policy shall contain an endorsement showing contractual liability coverage as to any indemnity of Grantee hereunder. Such policy must include protection in the event a logging contractor cuts across the harvest line (for Grantee and for logging contractors only).

(C) Vehicle Liability policy upon all owned, hired and non-owned motor vehicles or any motor vehicle used in the performance of the obligations or operations of Grantee, its contractors or agents under this Timber Deed. Levels of coverage shall be at least $1,000,000 for bodily injury and property damage combined single limit in any one accident. The policy shall contain a specific endorsement affording coverage to all “non-owned and hired“ vehicles used by Grantee or the contractor or agent in conducting operations under this Timber Deed.

(D) Commercial General Liability and Vehicle Liability insurance policies shall name Grantor and (for so long as Vulcan Timberlands LLC remains Grantee hereunder) Resource Management Service, LLC as additional insured.

(E) Commercial umbrella liability insurance to provide excess coverage above the limits of the other insurance policies described in this Section 11(a)(i), with limits not less than $5,000,000 per occurrence and $5,000,000 in the aggregate.

(ii) To be maintained by any contractors retained by Grantee with respect to the Timber or the Property, other than contractors governed by Section 11(a)(i), including, without limitation, contracts for timber cruising/marking, backpack herbicide/fertilizer application, surveying, boundary line maintenance, and GPS work:

Exhibit C

contractor’s operations hereunder. Such contractor must deliver a certificate of insurance to Grantor stating that Workmen’s Compensation coverage includes a waiver of subrogation against Grantor. The policy shall cover owners, partners and executives of such contractor and shall include waiver of subrogation against Grantor.

(B) Commercial General Liability policy on a broad form basis to cover all operations of such contractor. Levels of coverage shall be at least $1,000,000 per occurrence with a $1,000,000 aggregate limit. Coverage shall include personal injury, products/completed operations, comprehensive general liability, loss due to accidental overcut and damage due to fire. The policy shall contain an endorsement showing contractual liability coverage as to any indemnity of such contractor.

(C) Vehicle Liability policy upon all owned, hired and non-owned motor vehicles or any motor vehicle used in the performance of the obligations or operations of such contractor. Levels of coverage shall be at least $1,000,000 for bodily injury and property damage combined single limit in any one accident. The policy shall contain a specific endorsement affording coverage to all “non-owned and hired” vehicles used by such contractor in conducting operations on behalf of Grantee.

(b) Such policies shall name Grantor as an additional insured by endorsements to the policies, as if the additional insured were the named insured, without restrictions. Grantee shall provide Grantor with certificates of insurance throughout the term of this Timber Deed, as requested, providing that such insurance shall not be canceled without thirty (30) days’ prior written notice. Should Grantee or its contractors or agents fail to furnish to Grantor current evidence upon demand of any insurance required hereunder, or in the event of cancellation or adverse material change in any such insurance, Grantor may, at its option, suspend operations under this Agreement until insurance is obtained.

(c) Grantor may, at Grantor’s option and upon no less than ninety (90) days advance written notice to the other party, amend the coverages and policy limits set forth in this Section 11 without the consent of Grantee, provided that such new coverages and policy limits shall be consistent with the coverage requirements imposed generally in the commercial forestry industry in the Southern region of the United States.

12. Compliance with Laws. Grantee shall comply with all federal, state and local laws, rules, and regulations applicable to Grantee’s operations on the Property or the Access Property pursuant to this Timber Deed, including, without limitation, environmental laws and regulations, workmen’s compensation laws and regulations, and the securing by Grantee of all necessary licenses and permits incidental to said operations. Grantee covenants and agrees that it

Exhibit C

will not conduct its operations in a manner which could cause Grantor to be in violation of any federal, state or local law, rule or regulation or any SFI Standards. Grantor covenants and agrees that it will not use or operate the Property or the Access Property, or conduct any activities on the Property or the Access Property, which could cause Grantee to be in violation of any federal, state or local law, rule or regulation.

13. Taxes. Grantor shall pay all ad valorem property taxes assessed against the Property and the Timber. Grantee shall pay all severance taxes and assessments assessed against the Timber harvested by Grantee as may now or hereafter be required to be paid by the laws of the State of Florida or of the United States. This Section 13 shall survive the termination of this Timber Deed.

14. Remedies.

(a)Notice of Violation and Corrective Action. If either party determines that a violation of the terms of this Timber Deed has occurred or is imminently threatened, that party shall give written notice to the other party of such violation and demand corrective action or damages sufficient to cure the violation; provided, however, if the violation involves injury to the Property or any other property of Grantor resulting from Grantee’s exercise of its Timber Rights, to restore the portion of the Property or such other property of Grantor so injured to its prior condition, to the extent reasonably practicable, in accordance with a plan reasonably approved by Grantor.

(b)Injunctive Relief. If the offending party fails to cure the violation within thirty (30) days after receipt of notice thereof from the complaining party, or under circumstances where the violation cannot reasonably be cured within a thirty (30) day period, the offending party fails to begin curing such violation within the thirty (30) day period, or fails to continue diligently to cure such violation until finally cured, the complaining party may bring an action at law or in equity, in a court of competent jurisdiction to enforce the terms of this Timber Deed, to enjoin the violation, by temporary or permanent injunction, and to require the restoration of the Property or other property of Grantor to the condition that existed prior to any such injury, to the extent reasonably practicable. Notwithstanding the foregoing, if in the reasonable determination of the complaining party, a violation by the offending party threatens irreparable damage to the complaining party, the complaining party shall have the right to undertake such cure, in which event the offending party shall be responsible for the payment for any reasonable expenses actually incurred by the complaining party in connection with such cure within thirty (30) days after the offending party’s receipt of a detailed invoice (and relevant documentation).

(c)Damages. Either party is entitled, in an action filed in a court of competent jurisdiction for a breach or violation of this Timber Deed, to seek recovery of damages, including, without limitation, reasonable attorneys’ fees, costs and fines.

(d)Forbearance. Forbearance by any party hereto to exercise its rights under this Timber Deed in the event of any breach of any term of this Timber Deed by the other party hereto, shall not be deemed or construed to be a waiver by the non-breaching party of such term or of any subsequent breach of the same or any other term of this Timber Deed or of such non-

Exhibit C

breaching party’s rights under this Timber Deed. No delay or omission by a party hereto in the exercise of any of its rights or remedies upon any breach by the other party hereto shall impair such right or remedy or be construed as a waiver.

(e)Third Party Violations. Each party has the right, separately or collectively with the other party, to pursue all legal remedies available against any third party responsible for any injury or damage to the Property, the Timber or any other property of Grantor. Grantor and Grantee each agree to promptly notify the other in the event of notice or actual knowledge that injury or damage has occurred, is occurring, or will occur in the future to the Property, the Timber or any other property of Grantor as a result of any activity by a third party, including any violation of this Timber Deed. If one party pursues such legal proceedings, the other may, in its discretion, elect to join in such legal proceedings at its own expense. In the event of a monetary recovery from the third party, all expenses and legal fees reasonably incurred by both Grantor and Grantee in connection with the action shall be paid out of the amount recovered.

(f)Acts Beyond A Party’s Control. Nothing contained in this Timber Deed shall be construed to entitle any party to bring any action against another party for any injury to or change in the Property, the Timber or any other property of Grantor resulting from causes beyond such party’s control, including without limitation, fire (subject to Section 6(n)), flood, storm, earth movement, insect infestation, disease, acid rain, airborne pollutants introduced by third parties, acts of third parties, or from any prudent action taken by a party under emergency conditions to prevent, abate, or mitigate significant injury to the Property, the Timber or any other property of Grantor resulting from such causes.

(g)Payment for Unauthorized Cutting and Damage to Trees. If Grantee or its employees, agents, or contractors cut or materially damage any trees (whether merchantable or pre-merchantable) on the Property or on any other property of Grantor (other than the Timber, and except as permitted by this Timber Deed), or if Grantor or its employees, agents, or contractors cut or materially damage any Timber (except as permitted by this Timber Deed), the party causing such damage shall pay to the other, as liquidated damages and not as a penalty (Grantor and Grantee acknowledging that actual damages would be difficult to ascertain and that such amount represents a reasonable estimate of such damages), an amount equal to three (3) times the value of such trees or Timber, as applicable, immediately prior to such damage (as valued on the date of the cutting or material damage). The value of such trees or Timber, as applicable, shall be based upon the then-current market value for such trees or Timber, as applicable, as calculated using recognized industry standards for the region in which such trees or Timber, as applicable, were damaged. If the parties are unable to agree upon a mutually acceptable recognized standard and/or value, the parties shall hire a mutually acceptable consultant to appraise such trees or Timber, as applicable, whose decision shall be binding.

(h)Survival. The enforcement of rights and remedies by either party under this Section 14 shall survive the expiration or termination of this Timber Deed.

Exhibit C

United States Postal Service with postage paid for certified delivery with return receipt requested; (iii) when sent by next day business commercial service delivery; or (iv) when delivered by e-mail or facsimile transmission. All notices shall be sent to the addresses set forth below, or to such other address or addresses as any party may from time to time, upon five (5) business days’ advance written notice to the other party, designate as to itself.

	Grantor:		St. Joe Timberland Company of Delaware, L.L.C. 133 South WaterSound Parkway WaterSound, FL 32413 Attention: David Harrelson Vice President of Timberlands Fax: (850) 588-1961 Email:dharrelson@joe.com

	with a copy to:		St. Joe Timberland Company of Delaware, L.L.C. 133 South WaterSound Parkway WaterSound, FL 32413 Attention: Reece B. Alford, Esq. Fax: (850) 588-2310 Email:reece.alford@joe.com

	Grantee:		Vulcan Timberlands LLC 5605 Woodbine Rd Pace, FL 32571 Attention: Tom Cathey Fax 850 994 3806 Email:tcathey@resourcemgt.com

16. Assignment; Successors and Assigns. The Timber and the Timber Rights created hereunder shall be freely assignable by Grantee, subject to the terms of this Timber Deed, provided that Grantee has delivered prior written notice to Grantor of any transfer, in whole or in part, of the Timber Rights. Nothing herein shall restrict Grantor’s right to transfer, in whole or in part, its rights in and to the Property, provided that any such transfer (other than transfers of rights in and to any portion of the Released Property) prior to the expiration of the Timber Rights shall be subject to this Timber Deed. Except as otherwise provided herein, the provisions of this Timber Deed shall inure to the benefit of, and shall be binding upon, the parties, their heirs, successors, representatives and assigns.

17. Relationship. Neither party shall in any respect be deemed to be or represent itself to be an agent of the other party. Furthermore, no relationship of employer-employee or master and servant is intended, nor shall it be construed, to exist between the parties, or between any party and any servant, agent, contractor, customer, employee and/or supplier of any other party, by reason of this Timber Deed. Each party shall select and pay its own servants, agents, contractors, customers, employees and/or suppliers and neither party nor its servants, agents, contractors, customers, employees, or suppliers shall be subject to any orders, supervision or

Exhibit C

control of the other party. The parties are neither partners nor joint venturers, and this Timber Deed shall not be construed as creating any type of partnership or joint venture.

18. Severability. Whenever possible, each provision in this Timber Deed shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Timber Deed is held to be prohibited or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Timber Deed.

19. Attorney’s Fees. If arbitration, mediation, litigation or any other proceeding of any nature whatsoever (including any proceeding under the U.S. Bankruptcy Code) is instituted or appealed in connection with any controversy arising out of this Timber Deed or to interpret or enforce any rights, the prevailing party shall be entitled to recover its attorneys’, paralegals’, accountants’, and other experts’ fees and all other fees, costs, and expenses actually incurred, as determined to be reasonable by the arbitrator(s) or court(s), in addition to all other amounts provided by law. The prevailing party will be deemed to be the party to have won on the issues with the greatest value as determined by the arbitrator(s) or court(s).

20. Time of Essence. Time is of the essence of this Timber Deed.

21. Governing Law. This Timber Deed will be governed by, and construed in accordance with, the laws of the State of Florida, without giving effect to the conflicts of law principles thereof.

TO HAVE AND TO HOLD the Timber, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantee, until the Termination Date, at which time this Timber Deed shall expire (other than any provisions of this Timber Deed that expressly survives such termination or expiration) and all rights granted to Grantee shall revert to, and shall automatically vest in, Grantor, its successors and assigns, without the necessity of any further deed or instrument.

AND THE SAID Grantor will warrant and defend the right, title and interest to the Timber unto Grantee, its successors and assigns, against the lawful claims of all persons claiming by, through or under Grantor, but not otherwise, subject, however, to (i) the provisions of this Timber Deed, and (ii) the “Permitted Encumbrances” set forth onExhibit Eattached hereto and made a part hereof.

[remainder of page intentionally left blank; signatures begin on the following page]

Exhibit C

IN WITNESS WHEREOF, Grantor and Grantee have caused this Timber Deed to be executed as of the date first above written.


Witnesses:						GRANTOR:

						ST. JOE TIMBERLAND COMPANY

Name:						OF DELAWARE, L.L.C., a Delaware

						limited liability company


Name:						By:

						Name:

						Title:


STATE OF


COUNTY OF

The foregoing instrument was acknowledged before me this _____ day of ______________________, 2011, by ____________________, as _______________ of St. Joe Timberland Company of Delaware, L.L.C., a Delaware limited liability company, on behalf of said limited liability company. He/Sheo is personally known to me oro has produced ______________________ as identification.


		NOTARY PUBLIC:

		Sign:

		Print:

		My Commission Expires:

		[NOTARY SEAL]

[signatures continue on following page]

Exhibit C


Witnesses:	GRANTEE:

	VULCAN TIMBERLANDS LLC, a

Name:	Delaware limited liability company


	By:	Resource Management Service,
		LLC, an Alabama limited

Name:		liability company, its Manager


		By:

		Name:

		Title:


STATE OF


COUNTY OF

The foregoing instrument was acknowledged before me this _____ day of ______________________, 2011, by ____________________, as _______________ of Resource Management Service, LLC, an Alabama limited liability company, the Manager of Vulcan Timberlands LLC, a Delaware limited liability company, on behalf of said company. He/Sheo is personally known to me oro has produced ______________________ as identification.

		��
		NOTARY PUBLIC:

		Sign:

		Print:

		My Commission Expires:

		[NOTARY SEAL]

Exhibit C

Exhibit A to Form of Timber Deed

Location of Timber

Exhibit C

Exhibit B to Form of Timber Deed

Legal Description of Property

Exhibit C

Exhibit C to Form of Timber Deed

Age of Timber Stands

Exhibit C

Exhibit D to Form of Timber Deed

Form of Release


This instrument prepared by:







After recording return to:

PARTIAL RELEASE OF TIMBER DEED

THIS PARTIAL RELEASE OF TIMBER DEED(this “Partial Release”) is executed by ___________________________, a __________________ (the “Releasing Party”), with an address of ____________________________.

W I T N E S S E T H:

WHEREAS, the Releasing Party obtained certain rights in and to the timber located on the real property more particularly described onExhibit Aattached hereto and made a part hereof (the “Released Property”), pursuant to that certain Timber Deed dated as of _________, 2011, between the Releasing Party and St. Joe Timberland Company of Delaware, L.L.C. (the “Released Party”), and recorded in the public records of ___________ County, Florida, in Book ___, Page ___ (the “Timber Deed”); and

WHEREAS, the Releasing Party has completed harvesting of Timber, or has otherwise abandoned its rights to harvest Timber, pursuant to the Timber Deed on the Released Property.

NOW, THEREFORE, the Releasing Party hereby surrenders and releases the Released Property, including all Timber and Timber Rights located thereon or derived therefrom (each as defined in the Timber Deed), to the Released Party; provided, however, the Releasing Party reserves rights of ingress and egress over existing roads located on the Released Property that are reasonably necessary to access and harvest the remaining Timber on portions of the Property (as defined in the Timber Deed) other than the Released Property, all in accordance with the terms and conditions of the Timber Deed. The Released Party shall have no further obligations under the Timber Deed to the Releasing Party with respect to the Released Property, and the Releasing Party shall have no further rights in or to the Released Property except for access rights over existing roads herein reserved.

[remainder of page intentionally left blank; signatures appear on following page]

Exhibit C

IN WITNESS WHEREOF, the Releasing Party has caused this Partial Release to be executed as of the date first above written.


Witnesses:	RELEASING PARTY:
		,a

Name:


	By:

Name:	Name:

	Title:


STATE OF

COUNTY OF

The foregoing instrument was acknowledged before me this _____ day of ______________________, 20__, by ____________________, as _______________ of_________________________, a _______________________, on behalf of said ______________________. He/Sheo is personally known to me oro has produced ______________________ as identification.


		NOTARY PUBLIC:

		Sign:

		Print:

		My Commission Expires:

		[NOTARY SEAL]

Exhibit C

Exhibit E to Form of Timber Deed

Permitted Encumbrances

Each of the following is a “Permitted Encumbrance” to Grantor’s special warranty of title given in this Timber Deed, to the extent the same may affect the Timber and the Timber Rights:

1. Building or zoning ordinances;

2. Riparian rights of third parties and governmental entities to the extent a tract included in the Property is bounded or traversed by a river, stream, branch or lake, and claims of third parties and governmental entities to any portion of the Property formerly or presently comprising the shores or bottom of navigable waters;

3. To the extent any portion of the Property is bounded or traversed by a public road or maintained right of way, the rights of others (whether owned in fee or by easement) in and to any portion of the Property that lies within such road or maintained right of way;

4. Railroad tracks and related facilities, if any (whether owned in fee or by easement), and related railroad easements or railroad rights of way, if any, traversing the Property and the rights of railroad companies to any tracks, siding, ties and rails associated therewith;

5. Intentionally Omitted;

6. Easements, discrepancies or conflicts in boundary lines, shortages in area, encroachments or any other facts that a current and accurate survey of the Property would disclose;

7. Rights to and/or interests in all oil, gas and other minerals or other substances of any kind or character as may have been previously reserved by or conveyed to others and any leases concerning any of such oil, gas, other minerals or other substances in, on or under the Property;

8. Rights, if any, relating to the construction and maintenance in connection with any public utility of existing wires, poles, pipes, conduits and appurtenances thereto, on, under, above or across the Property;

9. All matters of record;

10. Rights of others in and to the Property and the Timber under any unrecorded agreements disclosed by Grantor to Grantee in that certain Disclosure Letter delivered by Grantor to Grantee before the Effective Date;

11. Intentionally Omitted; and

12. Cemeteries and burial grounds on any portion of the Property.

Exhibit C

Exhibit D

Form of Reliance Letter

[date]

[Assignee]

Re: Letter of Reliance for Phase I Environmental Site Assessment

Dear [Assignee]:

SLR International Corp (SLR) performed a Phase I Environmental Site Assessment (ESA), dated [date], of the [property description] in accordance with ASTM Practice E 2247-08, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property. SLR has been engaged in and is qualified to conduct a Phase I ESA of real property with respect to environmental risks associated with the ownership and operation of such property, based on data and information accessible to SLR.

At the request of [client], this Letter of Reliance is hereby furnished to [Assignee] (“Recipient”), allowing Recipient to rely upon the above-referenced Phase I ESA including the findings and conclusions presented therein subject to the limitations set forth in the Phase I ESA. However, by accepting this offer of reliance, Recipient agrees that any use or reliance placed on the ESA shall be limited by the terms and conditions contained in SLR’s Proposal for Environmental Due Diligence Services dated [date] (copy attached) and the Professional Services Agreement between SLR and [client] dated [date]. Further, we note that the actual site conditions may change with time and that hidden conditions not discoverable at the time the assessment was performed, or within the scope of the assessment, may exist at the site. The site conditions as noted in the Phase I ESA are representative of those on the days the site reconnaissance was performed and SLR makes no representations regarding current conditions or compliance.

SLR represents to [Assignee] that the Phase I ESA meets the “All Appropriate Inquiry” standard set forth in 40 C.F.R. Section 312. SLR makes no other representations to Recipient except that it has used the degree of care and skill ordinarily exercised by environmental consultants in performing the services described in the Phase I ESA.

Very truly yours,

SLR International Corp

Eugene T. Watson, P.G.
Principal

Exhibit D

Exhibit E

Permitted Encumbrances

Each of the following is a Permitted Encumbrance to the extent the same may affect the Timber:

1. Building or zoning ordinances;

5. All ad valorem real property taxes with respect to the Timber for the year 2011 and subsequent years not yet due and payable;

6. Easements, discrepancies or conflicts in boundary lines, shortages in area, encroachments or any other facts that a current and accurate survey of the Property would disclose;

9. All matters of record;

10. Rights of others in and to the Property and the Timber under the Thinnings Supply Agreement and those certain unrecorded agreements described in the Disclosure Letter;

11. Intentionally Omitted; and

12. Cemeteries and burial grounds on any portion of the Property.

Exhibit E

Exhibit F

Form of Thinnings Supply Agreement

[attached]

Exhibit F

THINNINGS SUPPLY AGREEMENT

ThisTHINNINGS SUPPLY AGREEMENT, dated as of the ___ day of __________________, 2011 (this “Agreement”), is betweenVULCAN TIMBERLANDS LLC, a Delaware limited liablity company (“Owner”), andST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company (“St. Joe”).

A. Pursuant to those certain Timber Deeds dated on or about the date hereof between St. Joe and Owner (the “Timber Deeds”), Owner has purchased certain standing timber and other rights from St. Joe, the location of which timber is more particularly described onExhibit Aattached hereto (the “Timber”).

B. In connection with the sale of the Timber, Owner has agreed to enter into this Agreement to sell to St. Joe not less than eighty-five percent (85%) of all Thinnings (as defined herein) offered for sale by Owner and St. Joe has agreed to purchase from Owner not less than eighty-five (85%) percent of all First Thinnings offered for sale by Owner.

NOW, THEREFORE, in consideration of the terms and conditions set out herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Offers to St. Joe.

(a) If Owner decides, in its sole discretion, to harvest or offer for sale First Thinnings in any given year, Owner hereby agrees to offer to sell to St. Joe all of such First Thinnings, and St. Joe agrees to purchase not less than eighty-five percent (85%) of such First Thinnings, in accordance with the procedures of this Section 1 and the terms and conditions of this Agreement. For purposes of this Agreement, “First Thinnings” means the volume of pulpwood, chip-n-saw and sawtimber derived from the first cutting and removal, as directed by Owner, of some portion of the standing trees from the Timber then owned by Owner, being done as a silvicultural process to improve the quality of the residual stand, and commonly known in the timber industry as “first thinnings.” First Thinnings will not include any “second thinnings,” or clear-cuts, but only volumes from stands being entered to be thinned for the first time.

(b) On or before each September 15 during the Term (as defined below) (other than the final September 15 of the Term), Owner shall deliver to St. Joe a written offer (each, an “Offer”) identifying and setting forth (i) all First Thinnings that Owner intends to harvest or offer for sale during the following calendar year (the “Annual Plan”), (ii) the estimated volume, expressed in tons, of the First Thinnings identified in the Annual Plan (the “Offered Volume”); (iii) the tracts on which all such First Thinnings are located, and (iv) the prescription for thinning all such First Thinnings (the “Prescription”), which Prescription (A) shall be commercially reasonable, commercially practicable and economically feasible, (B) shall include, in addition to the Offered Volume, a list of all compartments and stands within the tracts and the intended residual basal area and trees per acre, and (C) shall designate for removal not less than

twenty (20) tons per acre. If St. Joe determines in its reasonable discretion that any Prescription does not satisfy the criteria specified in clause (iv) above, St. Joe shall have the right to object to the volume subject to such Prescription (not to exceed fifteen percent (15%) of the Offered Volume) by delivering written notice to Owner within twenty (20) days following St. Joe’s receipt of such Prescription, and the parties shall use good faith efforts to agree upon a revised Prescription acceptable to both parties in their reasonable discretion; provided, however, in the event that within ten (10) days after St. Joe’s objection to the fifteen percent (15%) or less of the Offered Volume the parties are unable to agree upon a revised Prescription, said portion of the Offered Volume objected to by St. Joe shall be removed from the Prescription and the Offered Volume (such deleted portion being the “Objected Volume”) and Owner shall be authorized to sell such Objected Volume on the open market to any third party in accordance with Section 2. The Objected Volume shall be deemed for all purposes of this Agreement not to constitute a part of the Offered Volume, and St. Joe shall have no obligation to purchase any portion of the Objected Volume. If Owner desires to harvest or offer for sale any First Thinnings not previously described in an Offer, Owner shall first deliver a new Offer to St. Joe with respect to such additional First Thinnings, which Offer shall be subject to the procedures of this Section 1 and the terms and conditions of this Agreement. The parties acknowledge that in each Offer, Owner is offering to sell the First Thinnings on the timber stands described in an Offer, and that the volumes described in an offer are estimates for planning purposes only.

(c) St. Joe shall be obligated to accept not less than eighty-five percent (85%) of the Offered Volume described in any Offer (provided, however, that the total Offered Volume shall be reduced by any Objected Volume before calculating such eighty-five percent (85%)). St. Joe shall have a period of 30 days after receipt of an Offer (the “Offer Period”) to notify Owner in writing of the portion of the Offered Volume that St. Joe desires to purchase, which may be all but not less than eighty-five percent (85%) of the Offered Volume. St. Joe shall accept an Offer on a tract-by-tract basis, designating in its acceptance the tracts from which St. Joe agrees to purchase the Offered Volume. The portion of the Offered Volume accepted by St. Joe (the “Accepted Volume”) shall be purchased and sold hereunder in accordance with the terms of the applicable Offer and this Agreement. If St. Joe fails to deliver written notice to Owner accepting an Offer before the expiration of the Offer Period, such failure shall be deemed an acceptance to purchase (85%) of the Offered Volume described in such Offer, and the parties shall agree in their reasonable discretion as to the tracts described in the Offer from which St. Joe will purchase the First Thinnings.

(d) Within thirty (30) days following St. Joe’s acceptance or deemed acceptance of an Offer, Owner and St. Joe shall enter into a Pay-As-Cut Timber Sales Agreement in the form ofExhibit Battached hereto with respect to all Accepted Volume (each a “Timber Sales Agreement”). Each Timber Sales Agreement shall be effective as of the immediately following January 1, provided that any Timber Sales Agreement entered into with respect to an Offer made in accordance with the final sentence of Section 1(b) shall be effective as of the date that St. Joe and Owner enter into such

Timber Sales Agreement. Owner shall make available and sell, and St. Joe shall harvest and acquire, the Accepted Volume in accordance with the Timber Sales Agreement and this Agreement.

(e) The price, by product, for all Accepted Volume shall equal the average reported price for the most recent four quarters for the applicable product expressed on a $/ton basis in Florida Region 2, as published in Timber Mart-South as of the date that St. Joe and Owner enter into the applicable Timber Sales Agreement.

2. Offers to Other Parties.Owner shall have the right to harvest or offer for sale to any third party any Objected Volume under Section 1(b) and the portion of the Offered Volume rejected or deemed rejected by St. Joe under Section 1(c) (collectively, the “Unrestricted Volume”), after the earlier to occur of (i) the expiration of the Offer Period with respect to such Offer, and (ii) the rejection by St. Joe of a portion of the Offered Volume described in such Offer. Owner shall have the right to harvest or sell the Unrestricted Volume on any terms, provided that harvest or sale of the Unrestricted Volume shall occur in compliance with the Prescription described in the applicable Offer. If (a) Owner changes the Prescription with respect to any portion of the Unrestricted Volume, or (b) Owner has not harvested any portion of the Unrestricted Volume or has not entered into a binding agreement to sell any portion of the Unrestricted Volume on or before the date that is one year following the delivery of the Offer that originally described such Unrestricted Volume, then such portion of the Unrestricted Volume shall again become subject to the provisions of paragraph 1. Provided that Unrestricted Volume is sold to a third party in compliance with this Agreement, no such third party purchaser of Unrestricted Volume shall be subject to this Agreement, and such third party purchaser may sell or dispose of such Unrestricted Volume without regard to any restrictions imposed by this Agreement.

3. Audit Rights.St. Joe shall have the right to audit Owner’s compliance with the terms of this Agreement, which terms require Owner to offer to sell to St. Joe all First Thinnings offered by Owner in any given year, by delivering written notice to Owner of St. Joe’s exercise of such right. Owner shall provide St. Joe or its representative with access during normal business hours to all records and other information necessary to complete such audit as are commercially reasonable. Furthermore, St. Joe shall have the right to access and inspect the Timber for purposes of monitoring the performance of Owner’s obligations pursuant to the terms herein; provided, however, in no case shall St. Joe unreasonably interfere with the business of Owner. St. Joe shall provide to Owner, upon request, all findings and supporting documentation of St. Joe following such audit. St. Joe shall be responsible for all costs of any such audit.

4. Term.The term of this Agreement (the “Term”) shall commence on the date of execution hereof and shall expire at 11:59 p.m. on December 31, 2020.

5. Assignment and Termination.

(a) Except as otherwise provided herein, no party may assign this Agreement without the prior written consent of the other party.

(b) Owner may transfer ownership of all or any portion of the Timber at any time at Owner’s sole discretion, subject to the terms of the Timber Deeds, provided that the Timber shall remain subject to this Agreement following such transfer.

6. Taxes.Owner agrees to pay, or cause to be paid, all severance taxes or other levies upon or incident to the production and delivery of Accepted Volume hereunder which will or may constitute a lien thereon or on any products manufactured therefrom. In no case shall Owner be liable for any ad valorem real property taxes attributable to the Accepted Volume.

7. Remedies. If Owner fails to comply with any of its obligations hereunder, St. Joe shall have all rights available to it at law or in equity, including the right to enjoin the harvest or sale of any First Thinnings not in compliance herewith, and the right of specific performance. Likewise, if St. Joe fails to comply with any of its obligations hereunder, Owner shall have all rights available to it at law or in equity, including the right to enjoin the harvest of any First Thinnings not in compliance herewith or not in compliance with the Pay-As-Cut Timber Sale Agreement attached asExhibit B, and the right of specific performance.

8. Notices.All notices required or permitted to be given hereunder shall be in writing, signed by the party giving such notice or its legal counsel, and shall be deemed to be delivered, whether or not actually received, (i) when personally delivered by commercial courier service or other messenger; (ii) three (3) days after being deposited with the United States Postal Service with postage paid for certified delivery with return receipt requested; (iii) when sent by next day business commercial service delivery, or (iv) when transmitted by e-mail evidenced by a confirmatory response e-mail or by facsimile evidenced by a confirmed receipt, with a copy sent by any of the means permitted by clauses (i), (ii) or (iii) above on the same day the e-mail or facsimile transmission is sent by the party giving such notice. For purposes of notice, the addresses of the parties are as follows:


		Owner:		Vulcan Timberlands LLC Attention: Tom Cathey 5605 Woodbine Rd. Pace, FL 32571 Fax: (850) 994-3806 Emailtcathey@resourcemgt.com

		St. Joe:		St. Joe Timberland Company of Delaware, L.L.C. 133 South WaterSound Parkway WaterSound, FL 32413 Attention: David Harrelson, Vice President of Timberlands Facsimile: (850) 588-1961 E-mail: dharrelson@joe.com

or to such other address or addresses as any party may from time to time, upon five (5) business days’ advance written notice to the other party, designate as to itself.

9. Complete Agreement. This Agreement, including any exhibits hereto, constitutes the entire contractual relationship between the parties relating to the purchase and sale of First Thinnings, and all previous negotiations, contracts and representations have been merged herein. This Agreement may be amended only by a written instrument signed by all of the parties hereto.

10. Recording.The parties agree to record a memorandum of this Agreement in the form ofExhibit Cattached hereto in each county in which the Timber is located.

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

12. Governing Law.This Agreement shall be construed and enforced in accordance with the laws of the State of Florida, without regard to the principles of conflict of laws thereof.

(The remainder of this page is left blank intentionally)

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written set out.


	ST. JOE: ST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company
	By:
		Name:
		Title:

	OWNER: VULCAN TIMBERLANDS LLC, a Delaware limited liability company
	By:	Resource Management Service, LLC, an Alabama
		limited liability company, its Manager


	By:
		Name:
		Its:

Exhibit A

Location of Timber

The timber is located within (i) those certain cross-hatched timber stands in Calhoun County, Florida, shown onExhibit A-1attached hereto and made a part hereof; and (ii) those certain cross-hatched timber stands in Gulf County, Florida, shown onExhibit A-2attached hereto and made a part hereof.

The timber stands described onExhibit A-1andExhibit A-2are located on (i) that certain real property located in Calhoun County, Florida, more particularly described onExhibit A-3 attached hereto and made a part hereof; and (ii) that certain real property located in Gulf County, Florida, more particularly described onExhibit A-4attached hereto and made a part hereof.

[remainder of page intentionally left blank]

Exhibit A to Thinnings Supply Agreement

Exhibit A-1

Calhoun County Timber Stand Maps

[attached]

Exhibit A to Thinnings Supply Agreement

Exhibit A-2

Gulf County Timber Stand Maps

[attached]

Exhibit A to Thinnings Supply Agreement

Exhibit A-3

Legal Description of the Property — Calhoun County

[attached]

Exhibit A to Thinnings Supply Agreement

Exhibit A-4

Legal Description of the Property — Gulf County

[attached]

Exhibit A to Thinnings Supply Agreement

Exhibit B

Form of Timber Sales Agreement

PAY-AS-CUT TIMBER SALES AGREEMENT

THIS PAY-AS-CUT TIMBER SALES AGREEMENT(this “Agreement”), is made effective as of ________________________ , by and betweenVULCAN TIMBERLANDS LLC, a Delaware limited liability company (“Owner”), andST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company (“St. Joe”).

A. St. Joe and Owner are parties to that certain Thinnings Supply Agreement dated as of ______________, 2011 (the “TSA”).

B. St. Joe has exercised the right to acquire certain Accepted Volume, as defined in the TSA.

C. St. Joe and Owner desire to enter into this Agreement with respect to the purchase and sale of such Accepted Volume.

NOW, THEREFORE, in consideration of the mutual undertakings of the parties set forth in this Agreement and of other valuable considerations, the receipt and sufficiency of which the parties hereby acknowledge and agree as follows:

1. TSA. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the TSA. To the extent this Agreement conflicts with any provision of the TSA, the TSA shall control.

2. Timber to be Purchased. Owner is the owner of the timber (the “Timber”) located on that certain tract of land containing approximately _________ acres, as more particularly described onExhibit Aattached hereto and by this reference incorporated herein. Under the terms of this Agreement, Owner hereby agrees to make available, sell, assign and convey to St. Joe, and St. Joe agrees to harvest and purchase from Owner, all First Thinnings included within the Timber to be first thinned in accordance with the Prescription attached hereto asExhibit B(the “Timber Sale Volume”).

3. Purchase Price. St. Joe shall pay Owner for each ton (defined as 2,000 pounds) of Timber Sale Volume harvested at the following rates for each product, which product classifications shall be determined by the specifications of the applicable delivery point of the Timber Sale Volume:

(a) Pulpwood: $__________ per ton

(b) Chip-n-saw: $__________ per ton

Exhibit B to Thinnings Supply Agreement
Page 1

4. Stumpage Reporting; Settlement; Security Practices.

(a) St. Joe shall weigh, or cause to be weighed, each load of Timber Sale Volume on certified scales. St. Joe shall pay Owner for such Timber Sale Volume on a weekly basis, not later than the second Monday after the week (Monday through Sunday) in which St. Joe delivers the Timber Sale Volume to the applicable delivery point. By way of example only, for Timber Sale Volume delivered between Monday, November 15, 2010 and Sunday, November 21, 2010, St. Joe would pay Owner not later than Monday, November 29, 2010. Throughout the period of this Agreement, St. Joe shall make a weekly accounting to Owner as to the product, species, and weight of the Timber Sale Volume cut and delivered hereunder. St. Joe shall send the stumpage check made payable to Owner along with the haul summary sheets, electronic scale ticket listing, and a summary settlement sheet to Owner c/o Resource Management Service, LLC, 5605 Woodbine Road, Pace, FL 36507.

(b) Owner has the right, at Owner’s sole cost, to employ security contractors to conduct security measures, including setting up and installing security monitors (cameras). Owner agrees to share with St. Joe the results of any monitoring conducted by the Owner or its representatives. St. Joe agrees to share with Owner the results of any audit conducted by or on behalf of St. Joe of the Owner’s security measures that pertain to any stands of Timber sold to St. Joe; and St. Joe agrees to share with the Owner the results of any audits by St. Joe of its loggers and/or contractors harvesting the Timber.

5. Term. The term of this Agreement shall commence on the date hereof and shall terminate at 12:00 a.m. on the first anniversary of the date hereof (the “Term”). In the event that St. Joe’s harvesting operations are delayed by inclement weather, floods, acts of God, strikes at mills with which St. Joe is dealing, strikes in the woods, or strikes with carriers, including without limitation, railway carriers, or in the event marketing conditions curtail the harvest, delivery or sale of the Timber Sale Volume, St. Joe shall have the right, by delivering written notice to Owner, to extend the Term by a period of time equivalent to the length of such delay, not to exceed six (6) months, in order for St. Joe to harvest the Timber Sale Volume.

6. Harvesting Procedures; Thinning Management; Post-Thin Assessments. All Timber Sale Volume purchased by St. Joe shall be harvested in a modern workmanlike manner, in accordance with good logging practices, the Prescription and the terms and conditions set forth below.

(a)Debris. St. Joe agrees to remove all tops and logging debris from all roads, firebreaks, fields, streams, canals, ditches or other open areas. If trees, tops, or other logging debris falls into firebreaks, fields, streams, canals or ditches or other open areas, St. Joe agrees to immediately remove such trees, tops, or other logging debris.

Exhibit B to Thinnings Supply Agreement

(b)Stump Height. St. Joe will cut the stumps as low as feasible, stump height not to exceed six inches where possible.

(c)Harvesting Notification. St. Joe agrees to notify Owner at least twenty-four (24) hours prior to the beginning of harvesting of the Timber Sale Volume and, in the event harvesting is discontinued for more than two (2) weeks, St. Joe agrees to notify Owner at least twenty-four (24) hours before resumption of the harvesting.

(d)Thinning Management. Owner shall have the right to observe the thinning process, including the progress of thinning, sorting and quality of trees being harvested, the quality of residual stands, and merchandising. Owner and St. Joe agree to have representatives of each meet twice monthly to review and discuss any issues raised by either party concerning any of said matters above referenced. Any issues raised by either party would be discussed at such meetings and documented. If any issues raised by either party are not addressed in future thinnings, either party shall have the option and right to make a formal complaint to the other party, and both parties shall promptly attempt to resolve such issue(s). If the parties are unable to resolve any issue raised within a one week period, either party may direct that the harvesting be stopped, in which event the parties will each appoint an independent forestry consultant, each of which may be a consultant previously engaged by the appointing party with respect to the TSA, and such two consultants will in turn select a third independent forestry consultant to act with them in a panel to determine whether there is an issue that needs to be resolved and how to resolve such issue. A majority of the panel of consultants will reach a binding decision within fifteen (15) days of the selection of the third consultant, and the decision of the panel of consultants as to the resolution of the issue will be final. Each party will bear the cost of its respective consultant and one-half (¹/2) of the cost of the third consultant.

(e)Post-thin Assessments. Basal area should be plus or minus ten (10) square feet per acre of the contract Prescription for each stand. For the avoidance of doubt, and by way of example only, if a Prescription requires a residual basal area of 70 square feet per acre, a residual basal area between 60 square feet and 80 square feet per acre shall be deemed to comply with such Prescription. St. Joe shall use commercially reasonable efforts to comply with the following guidelines, to the extent the same are commercially practical:

(i) Remaining trees should be uniformly distributed through out the stand with no large holes created in the canopy.

(ii) Stem damage, where the cambium is exposed over more than one-fourth (¹/4) of the circumference, should not exceed five (5%) percent of the total number of residual stems.

(iii) Ruts should not be greater than six (6”) inches in depth in access corridors.

Exhibit B to Thinnings Supply Agreement

(iv) Residual trees should be sawtimber or potential sawtimber trees.

(v) All damaged, diseased, forked and non-merchantable trees should be harvested.

7. Management Practices. St. Joe agrees to fully comply with (i) all applicable federal, state, and local laws, rules and regulations including, without limitation all environmental laws, rules, or regulations, (ii) the procedures and practices known as “Silviculture Best Management Practices” for harvesting timber, as promulgated or amended by the Florida Department of Agriculture and Consumer Services from time to time, and (iii) the standards of the Sustainable Forestry Initiative, 2010-2014, of the American Forest and Paper Association. St. Joe shall not allow any leakage, spillage, sampling or release of any hazardous waste, materials, or substances on the real property on which the Timber is located. In the event of such spillage, St. Joe shall promptly contain such spill and will be responsible for cleanup and disposal. St. Joe will promptly notify Owner of any such spill and remediation. St. Joe will perform all operations in compliance with OSHA standards.

8. Employees and Independent Contractors. St. Joe shall harvest the Timber Sale Volume using its own employees or using independent contractor(s) and, as such, will be responsible for any and all obligations for labor, insurance, and other expenses incurred with respect to the harvesting and hauling of the Timber Sale Volume.

9. Liability. St. Joe agrees to protect, defend, indemnify, save and hold Owner harmless from any and all liabilities, judgments, orders, decrees, awards, costs, expenses, including attorneys’ fees, settlements, and claims, for property damage or personal injury, including death to any person, arising out of or connected with St. Joe’s performance of this Agreement, except to the extent any such liabilities arise out of the negligence or willful misconduct of Owner. For the avoidance of doubt, Owner shall not be liable to St. Joe as the “Grantor” under the Timber Deeds (as defined below) for any damage to the property of St. Joe arising out of or connected with St. Joe’s performance of this Agreement, except to the extent any such liabilities arise out of the negligence or willful misconduct of Owner.

10. Insurance.

(a) St. Joe, and any contractors and agents engaged by or on behalf of St. Joe, will keep in effect during the Term, at its sole expense, the following insurance coverages, in addition to any other insurance required by law:

(i) Comprehensive general liability insurance with limits not less than $2,000,000 for bodily injury to one person, $2,000,000 for bodily injury to any group of persons as a result of one occurrence, and $2,000,000 for property damage; provided, however St. Joe’s contractors’ policies shall provide coverage for general liability with limits not less than $1,000,000 per occurrence bodily injury liability and property damage liability combined and $1,000,000 in the aggregate;

Exhibit B to Thinnings Supply Agreement

(ii) Worker’s compensation insurance, covering all employees, including owners, partners and executive officers, with limits no less than the statutory limits of the State of Florida. Such worker’s compensation policy shall be endorsed to waive all rights of subrogation against Owner and all subsidiaries thereof where permitted by law, and policies shall include excess and stop-gap worker’s compensation coverage for all contractors and subcontractors of the insured party.

(iii) Commercial auto liability insurance with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate insuring “Any Auto” or “All Owned Autos,” “Hired Autos” and “Non-owned Autos;”

(iv) Commercial umbrella liability insurance to provide excess coverage above the limits of the other insurance policies described in this Section 10(a), with limits not less than $5,000,000 per occurrence and $5,000,000 in the aggregate (provided that this Section 10(a)(iv) shall apply only to St. Joe, and not to St. Joe’s contractors and agents).

(b) Such policies shall name Owner as an additional insured by endorsements to the policies, as if the additional insured were the named insured, without restrictions. St. Joe shall provide Owner with certificates of insurance throughout the Term, as requested, providing that such insurance shall not be canceled without thirty (30) days’ prior written notice.

(c) Owner may, at Owner’s option and upon no less than ninety (90) days advance written notice to St. Joe, amend the coverages and policy limits set forth in this Section 10 without the consent of Owner, provided that such new coverages and policy limits shall be consistent with the coverage requirements imposed generally in the commercial forestry industry in the Southern region of the United States.

11. Damage. Notwithstanding anything to the contrary set forth in the Timber Deeds (as defined below), if St. Joe or its agents, contractors or employees damage timber belonging to Owner in connection with St. Joe’s performance of this Agreement, St. Joe shall pay to Owner the fair market value of the pre-merchantable and merchantable timber that was impaired or destroyed by St. Joe’s activities, to the extent such destruction or impairment was not paid for under the terms of this Agreement.

12. Access. Owner grants to St. Joe the right of ingress and egress over the real property on which the Timber is located, together with any other access rights that Owner has to any adjacent property, to perform the harvesting of the Timber Sale Volume pursuant to this Agreement. St. Joe agrees to use existing roads where possible and shall be responsible for routine scraping and motor grading to keep the roads passable. St. Joe shall be responsible for and agrees that it shall maintain all existing bridges and culverts used by St. Joe during the Term in a condition that will allow St. Joe to safely haul the Timber. At the conclusion of harvest, St. Joe shall leave all roads used during its operations in equal or better condition than when harvesting began.

Exhibit B to Thinnings Supply Agreement

13. Disputes. Except for those matters addressed by Section 6(d), any dispute or controversy arising with respect to any provision of this Agreement, or the interpretation or implementation hereof, shall be resolved by binding arbitration under the rules of the American Arbitration Association to be conducted in the State of Florida, provided that the arbitration proceeding shall be conducted by a panel of three (3) arbitrators. Each party shall appoint an arbitrator, and the appointed arbitrators shall jointly select a third arbitrator, which third arbitrator shall be the chairman of the panel. The decision of a majority of the panel of arbitrators shall bind the parties. Both parties agree to cooperate in the expeditious conduct of any such arbitration. It shall be the obligation of the aggrieved party to seek such arbitration forthwith upon the failure of the other party to accede to the demands of the aggrieved party or the failure of the parties to reach mutually acceptable resolution. The non-prevailing party shall bear all costs of the arbitration and both parties’ reasonable attorneys’ fees. Notwithstanding said provisions for binding arbitration, nothing herein shall be deemed to prevent or restrict the right of either party to seek to enforce the provisions of this Agreement or enjoin a breach or threatened breach hereof by an action for specific performance or by restraining order or injunction obtained in a court of law or equity.

14. Representations.

(a) St. Joe’s Representations.

(i) St. Joe is an entity organized and in good standing under the laws of the State of Delaware and is authorized to transact business in the State of Florida.

(ii) St. Joe’s execution and delivery of this Agreement to Owner and its purchase of the Timber Sale Volume provided for herein, have been authorized by St. Joe in accordance with applicable law, and all other actions required to be taken to authorize execution of this Agreement and St. Joe’s performance of all obligations undertaken by it under its terms, have been duly and regularly taken.

(iii) There are no actions, suits or proceedings pending or to the knowledge of St. Joe threatened against or affecting St. Joe that would impede or otherwise impair its ability to perform its obligations under this Agreement.

(b) Owner’s Representations.

(i) Owner is a limited liability company organized and in good standing under the laws of the State of Delaware and authorized to transact business in the State of Florida.

(ii) Owner’s execution and delivery of this Agreement to St. Joe and its sale of the Timber Sale Volume provided for herein have been authorized by Owner in accordance with applicable law, and all other actions required to be taken to

Exhibit B to Thinnings Supply Agreement

authorize execution of this Agreement and Owner’s performance of all obligations undertaken by it under its terms, have been duly and regularly taken.

(iii) There are no actions, suits or proceedings pending or to the knowledge of Owner threatened against or affecting Owner or the Timber that would impede or otherwise impair its ability to perform its obligations under this Agreement.

(iv) Owner has good and marketable title to the Timber Sale Volume, and Owner is legally entitled to sell the Timber Sale Volume to St. Joe free from all liens and encumbrances.

15. Notices. All notices required or permitted to be given hereunder shall be in writing, signed by the party giving such notice or its legal counsel, and shall be deemed to be delivered, whether or not actually received, (i) when personally delivered by commercial courier service or other messenger; (ii) three (3) days after being deposited with the United States Postal Service with postage paid for certified delivery with return receipt requested; (iii) when sent by next day business commercial service delivery, or (iv) when transmitted by e-mail evidenced by a confirmatory response e-mail or by facsimile evidenced by a confirmed receipt, with a copy sent by any of the means permitted by clauses (i), (ii) or (iii) above on the same day the e-mail or facsimile transmission is sent by the party giving such notice. For purposes of notice, the addresses of the parties are as follows:


Owner:		Vulcan Timberlands LLC
		Attention: Tom Cathey
		5605 Woodbine Rd.
		Pace, FL 32571
		Fax: (850) 994-3806
		Email tcathey@resourcemgt.com

St. Joe:		St. Joe Timberland Company of Delaware, L.L.C.
		133 South WaterSound Parkway
		WaterSound, FL 32413
		Attention: David Harrelson, Vice President of Timberlands
		Facsimile: (850) 588-1961
		E-mail: dharrelson@joe.com

16. Miscellaneous.

(a) This Agreement shall be governed by the laws of the State of Florida.

(b) No party may assign this Agreement without the prior written consent of the other party. This Agreement shall be binding upon the parties hereto and their successors and permitted assigns.

Exhibit B to Thinnings Supply Agreement

(c) If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity of the other terms of this Agreement shall in no way be affected thereby.

(d) No amendment or waiver of any provision of this Agreement will in any event be effective unless the same shall be in writing and signed by both parties. Subject to Section 17, this Agreement and the TSA constitute the full and complete understanding of the parties with respect to the purchase and sale of the Timber Sale Volume and supersede all prior and contemporaneous agreements and understandings, both oral and written, between the parties with respect thereto.

(e) Time is of the essence of this Agreement.

(f) All provisions of this Agreement have been negotiated at “arm’s length” and with full representation of legal counsel, and neither Owner nor St. Joe shall be deemed to be the drafter of this Agreement. If this Agreement is ever construed by a court of law or by a board of arbitrators, such court or board shall not construe this Agreement or any provisions of this Agreement against either Owner or St. Joe as the drafter of this Agreement.

(g) The headings used in this Agreement are for reference purposes only and shall not be deemed to limit or affect in any way the meaning or interpretation of any of the terms and provisions herein.

17. Waiver Regarding Timber Deeds.The rights and obligations of Owner and St. Joe hereunder are distinct from the rights and obligations of Owner and St. Joe under those certain Timber Deeds dated _______________ (the “Timber Deeds”) and recorded in the public records of Calhoun and Gulf Counties, Florida (as “Grantor” and “Grantee” therein, respectively) pursuant to which Owner acquired title to the Timber from St. Joe. Except as provided in Section 9, this Agreement and the Timber Deeds shall be interpreted independently of each other. Notwithstanding anything to the contrary herein, no default by St. Joe or Owner under this Agreement, in and of itself, shall constitute or give rise to a default under any Timber Deed, and no default by St. Joe or Owner under any Timber Deed (as “Grantor” and “Grantee” therein, respectively), in and of itself, shall constitute or give rise to a default under this Agreement; provided, however, the circumstances giving rise to a default hereunder may independently give rise to a default under a Timber Deed as provided for therein, and the circumstances giving rise to a default under a Timber Deed may independently give rise to a default hereunder. Owner hereby waives its right to allege or pursue any remedy or cause of action with respect to any conflict of interest that St. Joe may have in its dual capacities hereunder and as “Grantor” under the Timber Deeds, and Owner agrees that any exercise by St. Joe of its rights under the Timber Deeds, in its capacity as “Grantor” therein, shall not constitute or give rise to a breach of St. Joe’s obligations to Owner hereunder.

Exhibit B to Thinnings Supply Agreement

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set below their respective signatures.


	ST. JOE: ST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company
	By:
		Name:
		Title:

	OWNER: VULCAN TIMBERLANDS LLC, a Delaware limited liability company
	By: Resource Management Service, LLC, an
		Alabama limited liability company, its Manager


	By:
		Name:
		Its:

Exhibit B to Thinnings Supply Agreement

Exhibit C

Form of Memorandum of Agreement

This instrument prepared by:

____________________________________
____________________________________
____________________________________

After recording return to:

____________________________________
____________________________________
____________________________________

MEMORANDUM OF AGREEMENT

THIS MEMORANDUM OF AGREEMENT(this “Memorandum”) is made this ___ day of _______________, 2011 (the “Effective Date”), betweenST. JOE TIMBERLAND COMPANY OF DELAWARE, L.L.C., a Delaware limited liability company (together with its successors and assigns, “St. Joe”) with an address of 133 South WaterSound Parkway, WaterSound, Florida 32413, Attention: Legal Department, andVULCAN TIMBERLANDS LLC, a Delaware limited liability company (together with its successors and assigns, “Owner”), with an address of Attn: Resource Management Service, LLC, its Manager, 31 Inverness Center Parkway, Suite 360, Birmingham, Alabama 35242.

A. St. Joe and Owner have entered into that certain Thinnings Supply Agreement (the “Agreement”) on or about the date hereof, with respect to certain timber owned by Owner, as more particularly described inExhibit Aattached hereto (the “Timber”).

B. St. Joe and Owner desire to record this Memorandum in the public land records to evidence the existence of the Agreement including, but not limited to, those specific terms of the Agreement set forth herein.

St. Joe and Owner hereby covenant, represent and agree as follows:

1. St. Joe and Owner have entered into the Agreement with respect to the Timber.

2. Pursuant to the Agreement, St. Joe has the right to harvest and acquire certain thinnings of the Timber, as more particularly described in the Agreement.

3. The Agreement is for a term ending on December 31, 2020.

Exhibit C to Thinnings Supply Agreement

4. For additional terms of the Agreement, reference is made to the Agreement, which is incorporated herein by reference and an original of which is in the possession of each of St. Joe and Owner.

IN WITNESS WHEREOF, St. Joe and Owner have caused this Memorandum to be executed as of the date first above written.


Witnesses:						ST. JOE:

						ST. JOE TIMBERLAND COMPANY

Name:						OF DELAWARE, L.L.C., a Delaware

						limited liability company


Name:						By:____________________________________________________

						Name:_________________________________________________
						Title:___________________________________________________

STATE OF_____________________________

COUNTY OF___________________________


		NOTARY PUBLIC:

		Sign:____________________________________________________
		Print:____________________________________________________
		My Commission Expires:__________________________________

		[NOTARY SEAL]

[signatures continue on following page]

Exhibit C to Thinnings Supply Agreement


Witnesses:						OWNER:

						VULCAN TIMBERLANDS LLC, a

Name:						Delaware limited liability company


						By: Resource Management Service,
						LLC, an Alabama limited

Name:						liability company, its Manager


						By:____________________
						Name: ________________
						Title: ________________

STATE OF_____________________________

COUNTY OF___________________________


		NOTARY PUBLIC:

		Sign:___________________________________________________
		Print:___________________________________________________
		My Commission Expires:_________________________________

		[NOTARY SEAL]

Exhibit C to Thinnings Supply Agreement

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Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

The St. Joe Company (JOE) 10-Q2011 Q1 Quarterly report

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