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

 

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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

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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

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PURCHASE AND SALE AGREEMENT
     THIS PURCHASE AND SALE AGREEMENT, made as of the 31st day of March, 2011
(the “Effective Date”), by and between ST. JOE TIMBERLAND COMPANY OF DELAWARE,
L.L.C., a Delaware limited liability company (“Seller”); and VULCAN 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 on Exhibit A attached 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 on Exhibit B attached 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 1.1 Definitions. 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.

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     “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. § 9601 et seq.; (ii) the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq.; (iii) the
Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq.; (iv) the Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq.; (v) the Clean Water Act, 33
U.S.C. § 1251 et seq.; (vi) the Clean Air Act, 42 U.S.C. § 1857 et 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.

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     “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 2.1 Agreement 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 2.2 Purchase Price. The purchase price (the “Purchase Price”) to be
paid by Purchaser for the Timber shall be the sum of FIFTY-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.

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     Section 2.3 Earnest 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 to FOUR 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 3.1 Closing. 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 3.2 Seller’s Closing Deliveries. At the Closing, Seller shall
deliver the following items:
          (a) one executed special warranty timber deed in the form of Exhibit C
attached 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;
          (c) an executed affidavit as to the non-foreign status of Seller;
          (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 of Exhibit D attached
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

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Purchaser to obtain a title insurance policy insuring Purchaser’s title to the
Timber, subject to the Permitted Encumbrances.
     Section 3.3 Purchaser’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;
          (c) an executed counterpart of the Thinnings Supply Agreement;
          (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 4.1 Conveyance. 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 on Exhibit E attached hereto (the
“Permitted Encumbrances”).
     Section 4.2 Title 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 4.3 Title 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

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shall not be delayed as a result of Purchaser’s election of a title insurance
company other than the Title Company.
     Section 4.4 Other 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 5.1 Inspection; 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 5.2 Acknowledgment. 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

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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 5.3 HSR 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 6.1 Thinnings Supply Agreement. At the Closing, Purchaser and
Seller shall enter into a Thinnings Supply Agreement in the form of Exhibit F
attached 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.

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ARTICLE VII
CONDITION OF TIMBER; DAMAGE; CONDEMNATION
     Section 7.1 Condition 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 7.2 Casualty. 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 7.3 Condemnation. 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.

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ARTICLE VIII
WARRANTIES, REPRESENTATIONS, AND DISCLAIMERS
     Section 8.1 Seller’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

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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 8.2 Purchaser’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.
          (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 Purchaser 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

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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 8.3 Survival. The representations and warranties contained in
Section 8.1 and Section 8.2 shall survive the Closing for six (6) months.
     Section 8.4 Disclaimers.
          (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

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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 9.1 Brokerage 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

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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 9.2 Taxes. 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 9.3 Expenses.
          (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).
          (c) Except as set forth in this Agreement, all other costs shall be
borne by the party incurring them.
ARTICLE X
CONDITIONS
     Section 10.1 Mutual 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

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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 10.2 Conditions 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 10.3 Conditions 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;

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          (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 11.1 Default 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 11.2 Default 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 13.1 Assignment. 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 13.2 No 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 13.3 Governing 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.

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     Section 13.4 Notice. 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

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     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 13.5 Entire 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 13.6 Captions. The captions of sections in this Agreement are for
convenience and reference only and are not part of the substance hereof.
     Section 13.7 Severability. 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 13.8 Counterparts. 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 13.9 Binding Effect. This Agreement shall bind the parties hereto
and their respective heirs, legal representatives, successors and assigns.
     Section 13.10 Time of Essence. Time is of the essence of this Agreement.
     Section 13.11 No 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 13.12 Incorporation of Exhibits. All exhibits referred to in this
Agreement are hereby incorporated herein by this reference.
     Section 13.13 Confidentiality; 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

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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 13.14 Dispute 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 13.15 Business 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 13.16 Section 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

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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   

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(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   

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

 

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Exhibit A-1
Calhoun County Timber Stand Maps
[attached]
Exhibit A

 

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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
Southeast 1/4 of the Northeast 1/4 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.

 

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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
Southwest 1/4 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.

 

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Exhibit A-2
Gulf County Timber Stand Maps
[attached]
Exhiibt A

 

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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 Southwest 1/4 of the Northwest 1/4 and the Northwest 1/4
of the Southwest 1/4 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 South 1/2 of the
Southwest 1/4 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.

 

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Exhibit B
Legal Description of the Property
     The Property consists of (i) that certain real property located in Calhoun
County, Florida, more particularly described on Exhibit B-1 attached hereto and
made a part hereof; and (ii) that certain real property located in Gulf County,
Florida, more particularly described on Exhibit B-2 attached hereto and made a
part hereof.
[remainder of page intentionally left blank]
Exhibit B

 

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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 Southeast 1/4;
Section 11: The North 1/2; and the Southeast 1/4;
Section 12: All;
Section 13: The East 1/2; the Northwest 1/4 of the Northwest 1/4; the East 1/2
of the Northwest 1/4; the Southwest 1/4 of the Southwest 1/4, 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 North 1/2 of the Northeast 1/4; the Southwest 1/4 of the
Northeast 1/4; the Southeast 1/4 of the Northwest 1/4; the Northeast 1/4 of the
Southwest 1/4; and the South 1/2 of the South 1/2;
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

 

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Section 24: All;
Section 25: All;
Section 26: All;
Section 27: The East 1/2 of the Southeast 1/4;
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 West 1/2 of the Northwest 1/4 and less that portion
lying South and West of Chipola River;
Section 3: The West 1/2 of the Southwest 1/4, the West 1/2 of the Southeast 1/4
lying South of State Road No. 73; the West 565 feet of the South 1155 feet of
the Southeast 1/4 of the Southwest 1/4, a portion of the Northeast 1/4 of the
Southwest 1/4 described as follows: Begin at the northeast corner of the
Northeast 1/4 of the Southwest 1/4 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 Northwest
1/4 lying South and West of State Road No. 73 less and except a parcel described
as follows: Begin at the Southeast corner of said Northwest 1/4 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

 

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Section 4: The Northeast 1/4, the East 1/2 of the Southeast 1/4, the Northwest
1/4 of the Southeast 1/4, the East 1/2 of the Northwest 1/4, the East 1/2 of the
West 1/2 of the Northwest 1/4, and the West 1/2 of the Southwest 1/4;
Section 5: The Southwest 1/4 of the Northeast 1/4, the West 1/2 of the Northwest
1/4, the Southeast 1/4 of the Northwest 1/4, and the South 1/2;
Section 6: All;
Section 7: All;
Section 8: All;
Section 9: The North 1/2, the Southwest 1/4, and the South 1/2 of the Southeast
1/4;
Section 10: The North 1/2 of the Northeast 1/4, the Northwest 1/4 of the
Northwest 1/4, the South 1/2 of the North 1/2, the Southwest 1/4 of the
Southwest 1/4, the East 1/2 of the Southwest 1/4, and the Southeast 1/4 less and
except that parcel containing approximately 3.6 acres described in OR Book 235,
Page 248;
Section 11: The West 1/2 of the West 1/2 lying westerly of State Road 73;
Section 14: The West 1/2 of the West 1/2;
Section 15: All;
Section 16: All;
Section 17: All;
Section 18: All;
Section 19: All;
Section 20: All;
Section 21: All;
Section 22: The North 1/2, the Southwest 1/4 of the Southeast 1/4, the North 1/2
of the Southeast 1/4, the West 1/2 of the Southwest 1/4, the Northeast 1/4 of
the Southwest 1/4, and the North 1/2 of the Southeast 1/4 of the Southwest 1/4;
Section 23: The West 1/2 of the Northwest 1/4, the Southwest 1/4 of the
Southeast 1/4, the Southeast 1/4 of the Southwest 1/4, and the West 1/2 of the
Southwest 1/4.
Exhibit B

 

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TOWNSHIP 1 NORTH, RANGE 9 WEST, CALHOUN COUNTY, FLORIDA:
Section 31: The East 1/2 of the Southeast 1/4; the Southwest 1/4 of the
Southeast 1/4; the Southeast 1/4 of the Northeast 1/4; and that portion of the
East 1/2 of the Southwest 1/4 lying South of State Road 20.;
Section 32: The West 1/2 of the Southwest 1/4 and the Southwest 1/4 of the
Northwest 1/4 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 Northwest 1/4 of the Northwest 1/4 of the
Northwest 1/4 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 Northwest 1/4 and the South 1/2 lying west of
the Chipola River;
Section 17: All lying West of Chipola River;
Section 18: All;
Section 19: All;
Section 20: The North 1/2 of the Northwest 1/4; 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 East 1/2 of the Northeast 1/4;
Section 32: The Northwest 1/4 of the Northeast 1/4 lying South and West of the
Chipola River, the Southwest 1/4 of the Northeast 1/4, the Northwest 1/4, the
East 1/2 of the Southwest 1/4, and the Southeast 1/4; and
Section 33: That portion of the Southwest 1/4 of the Southwest 1/4 lying South
and West of Chipola River.
Exhibit B

 

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TOWNSHIP 2 SOUTH, RANGE 9 WEST, CALHOUN COUNTY, FLORIDA:
Section 4: The Southwest 1/4 of the Southwest 1/4 lying West of the Chipola
River;
Section 5: All, less and except the Southeast 1/4 of the Southeast 1/4;
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 Southwest 1/4 of the Southeast 1/4 of the
Southwest 1/4 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 Southwest 1/4
of the Southwest 1/4 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 Southwest 1/4 of
the Southeast 1/4 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 South 1/2 of the South 1/2; and that part of the Northeast 1/4
of the Southeast 1/4 lying South and East of State Road 71, less and except that
portion deeded in Official Record Book 321, Page 283; and the East 1/2 of the
Northeast 1/4 of the Northeast 1/4 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

 

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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 North 1/2 of the Northwest 1/4 lying North and West of River;
the Northwest 1/4 of the Northeast 1/4 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 Northwest 1/4 of the Northwest 1/4 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 Southeast 1/4 of the
Southwest 1/4; 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 Northeast 1/4 of the Northeast 1/4; and less and except that portion deeded
to Clarksville Baptist Church in Official Record Book 249, Page 371;
Section 11:
Exhibit B

 

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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 Northeast 1/4 of the Southeast 1/4 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 West 3/4 of the Northwest 1/4 of the Northeast 1/4,
less the Northeast 1/4 of the Northwest 1/4, and less the Northwest 1/4 of the
Northwest 1/4 thereof;
Section 13: All;
Section 24: All;
Section 25: All; and
Section 26:
Exhibit B

 

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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
Northeast 1/4 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

 

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Exhibit B-2
Legal Description of the Property — Gulf County
TOWNSHIP 3 SOUTH, RANGE 10 WEST, GULF COUNTY, FLORIDA:
Section 26: The Northwest 1/4 of the Northeast 1/4; the South 1/2 of the
Northeast 1/4 lying West of State Route 71; the Southeast 1/4 lying West of
State Route 71; the North 1/2 of the Northwest 1/4; the Southeast 1/4 of the
Northwest 1/4; and the Southwest 1/4 less 6 acres in the Northwest corner of the
Northeast 1/4 of the Southwest 1/4 of Section 26;
Section 27: All, less the North 1/2 of the Northeast 1/4 of the Northeast 1/4
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 North 1/2;
Section 33: The East 1/2 and the Northwest 1/4;
Section 34: All;
Section 35: The West 1/2 and the Southwest 1/4 of the Southeast 1/4.
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 Southwest 1/4 of the Northwest 1/4; the West 1/2 of the Southwest
1/4 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 Northwest 1/4 lying South of State Road 22; the Southwest 1/4;
the West 1/2 of the Southeast 1/4 and the Southeast 1/4 of the Southeast 1/4;
Section 17: The South 1/2, and the East 1/2 of the Northeast 1/4 lying South of
State Road 22;
Exhibit B

 

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Section 18: All, less and except the right of way of State Road 22;
Section 27: That portion of the West 1/4 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 North 1/4 lying Northerly
of the center of a woods road and less and except that portion of the East 1/2
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 North 1/4 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 North 1/4 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 East 1/4 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 South 1/2 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 South 1/2 of the Southwest 1/4;
Section 2: The South 1/2 of the Southeast 1/4; the East 1/2 of the Southwest
1/4, and the Southwest 1/4 of the Southwest 1/4;
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

 

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Section 5: All, less and except that portion of the Southeast 1/4 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
Northeast 1/4 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 Southwest 1/4 of the Northwest 1/4 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 West 1/2, less and except that portion deeded to the Gulf County
Board of County Commissioners as described in Book 487, Page 830;
Section 13: The West 1/2 and the West 1/2 of the East 1/2;
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 West 1/2 of the West 1/2 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 West 1/2 of the West 1/2 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

 

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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 West 1/2 of the West 1/2 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 West 1/2 of the Northwest 1/4 running north to
south and flowing into Wetappo Creek;
Section 11: That portion of the North 1/2 lying North and East of Wetappo Creek;
and that portion of the Southeast 1/4 of the Southeast 1/4 lying east of Jarrott
Daniels Road;
Section 12: The Northeast 1/4; the West 1/2 of the West 1/2, less and except
that portion lying
Exhibit B

 

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West of Wetappo Creek and North of State Route 22; the Southeast 1/4 of the
Southwest 1/4; the East 1/2 of the Southeast 1/4; the Southwest 1/4 of the
Southeast 1/2, 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 North 1/2 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 Southeast 1/4 of the Southwest 1/4 and the Southwest 1/4 of the
Southeast 1/4, and less and except the west 1/2 of the Southeast 1/4 of the
Southeast 1/4;
Section 35: The East 1/2; 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

 

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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 North 1/2 of the Northeast 1/4 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 Southeast 1/4 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 West 1/2 of the Southwest 1/4;
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

 

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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 Southeast 1/4 of the Southeast 1/4 and less that portion deeded to Gulf
County recorded in Official Records Book 88, Page 1019;
Section 11: All the Northwest 1/4 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

 

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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

 

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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

 

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Attachment 1
[attached]
Exhibit B

 

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(GRAPHIC) [b85484b85484199.gif]

 

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Exhibit C
Form of Timber Deed
[attached]
Exhibit C

 

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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”), between ST. 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, and VULCAN
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
on Exhibit A attached 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 B attached 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

 

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     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 on Exhibit C attached 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 of Exhibit D attached
hereto and made a part hereof (and such other instruments as may be reasonably
Exhibit C

 

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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 of Exhibit 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
of Exhibit 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

 

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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
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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
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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.
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          (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.
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     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.
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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).
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          (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):
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          (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:
          (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 such
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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.
          (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.
          (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
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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-
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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.
     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 same-day commercial courier or messenger service;
(ii) three (3) days after being deposited with the
Exhibit C

 

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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

 

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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 on Exhibit E attached hereto and made a part
hereof.
[remainder of page intentionally left blank; signatures begin on the following
page]
Exhibit C

 

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     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/She o
is personally known to me or o has produced ______________________ as
identification.

                      NOTARY PUBLIC:        
 
               
 
  Sign:                          
 
  Print:                               My Commission Expires:      
 
         
 
        [NOTARY SEAL]    

[signatures continue on following page]
Exhibit C

 

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                      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/She o is personally known to me
or o has produced ______________________ as identification.

                      NOTARY PUBLIC:        
 
               
 
  Sign:                          
 
  Print:                               My Commission Expires:      
 
         
 
        [NOTARY SEAL]    

Exhibit C

 

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Exhibit A to Form of Timber Deed
Location of Timber
Exhibit C

 

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Exhibit B to Form of Timber Deed
Legal Description of Property
Exhibit C

 

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Exhibit C to Form of Timber Deed
Age of Timber Stands
Exhibit C

 

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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 on Exhibit A attached
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

 

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     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/She o is personally known to me or o has produced
______________________ as identification.

                      NOTARY PUBLIC:    
 
               
 
  Sign:                          
 
  Print:                               My Commission Expires:    
 
         
 
        [NOTARY SEAL]    

Exhibit C

 

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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

 

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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

 

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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;
     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. 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;
     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 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

 

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Exhibit F
Form of Thinnings Supply Agreement
[attached]
Exhibit F

 

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THINNINGS SUPPLY AGREEMENT
     This THINNINGS SUPPLY AGREEMENT, dated as of the ___ day of
__________________, 2011 (this “Agreement”), is between VULCAN TIMBERLANDS LLC,
a Delaware limited liablity company (“Owner”), and ST. 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 on Exhibit A attached 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

1

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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 of Exhibit B attached 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

2

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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.

3

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          (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 as Exhibit 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
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

4

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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 of Exhibit C attached 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)

5

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     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:     

6

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Exhibit A
Location of Timber
     The timber is located within (i) those certain cross-hatched timber stands
in Calhoun County, Florida, shown on Exhibit A-1 attached hereto and made a part
hereof; and (ii) those certain cross-hatched timber stands in Gulf County,
Florida, shown on Exhibit A-2 attached hereto and made a part hereof.
     The timber stands described on Exhibit A-1 and Exhibit A-2 are located on
(i) that certain real property located in Calhoun County, Florida, more
particularly described on Exhibit A-3 attached hereto and made a part hereof;
and (ii) that certain real property located in Gulf County, Florida, more
particularly described on Exhibit A-4 attached hereto and made a part hereof.
[remainder of page intentionally left blank]
Exhibit A to Thinnings Supply Agreement

 

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Exhibit A-1
Calhoun County Timber Stand Maps
[attached]
Exhibit A to Thinnings Supply Agreement

 

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Exhibit A-2
Gulf County Timber Stand Maps
[attached]
Exhibit A to Thinnings Supply Agreement

 

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Exhibit A-3
Legal Description of the Property — Calhoun County
[attached]
Exhibit A to Thinnings Supply Agreement

 

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Exhibit A-4
Legal Description of the Property — Gulf County
[attached]
Exhibit A to Thinnings Supply Agreement

 

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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 between VULCAN TIMBERLANDS
LLC, a Delaware limited liability company (“Owner”), and ST. 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 on Exhibit A attached 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
as Exhibit 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

 

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          (c) Sawtimber: $__________ per ton
     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

 

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          (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

 

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               (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

 

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               (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

 

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     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

 

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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

 

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          (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

 

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     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

 

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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”), between ST. 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, and VULCAN
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 in Exhibit A attached
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___________________________
     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/She o is personally
known to me or o has produced ______________________ as identification.

     
 
  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___________________________
     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/She o is personally known to me or o has produced
______________________ as identification.

     
 
  NOTARY PUBLIC:
 
   
 
  Sign:___________________________________________________
 
  Print:___________________________________________________
 
  My Commission Expires:_________________________________
 
   
 
  [NOTARY SEAL]

Exhibit C to Thinnings Supply Agreement