PURCHASE AND SALE AGREEMENT

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

DATED AS OF MAY 2, 2009

BETWEEN

FORESTAR (USA) REAL ESTATE GROUP INC.,
as Seller

AND

HANCOCK NATURAL RESOURCE GROUP, INC.
as Purchaser

Table of Contents

Table of Contents

Table of Contents

SCHEDULES AND EXHIBITS

PURCHASE AND SALE AGREEMENT

     THIS IS A PURCHASE AND SALE AGREEMENT (this “ Agreement ”) made as of the 2nd day of May, 2009 by and between FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware corporation (“ Seller ”), and HANCOCK NATURAL RESOURCE GROUP, INC., a Delaware corporation (“ Purchaser ”).

BACKGROUND STATEMENT

     WHEREAS, Seller is the owner of certain real property located in Alabama and Georgia that it wishes to sell, assign, transfer or convey, together with certain other assets, inventory and rights under certain continuing leases, contracts and other agreements, to Purchaser in accordance with the terms and subject to the conditions set forth in this Agreement;

     WHEREAS, Seller and Purchaser desire to enter into an outright sale of the timber growing, standing and lying on such real property; and

     WHEREAS, Purchaser wishes to acquire and accept such real property, timber and other assets being transferred to it in accordance with the terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of 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
PROPERTY; PURCHASE PRICE

     Section 1.1 Agreement to Purchase and Sell. Subject to and in accordance with the terms and provisions of this Agreement, and for the consideration stated herein, Seller agrees to sell the Property to Purchaser and Purchaser agrees to buy the Property from Seller.

     Section 1.2 Property. Subject to the terms and provisions of this Agreement and upon satisfaction of the conditions set forth in Article IX , Seller shall at the Closing sell, assign, transfer and convey to Purchaser, and Purchaser shall acquire, assume and accept from Seller, all right, title and interest to the following assets (collectively, the “ Property ”), free and clear of all Liens other than the Permitted Exceptions:

          (a) Land . The real property held by Seller in fee simple described in Section 1.2(a)(1) of Seller’s Disclosure Letter, together with ( i ) all buildings thereon, ( ii ) all roads, bridges and other improvements and fixtures thereon and ( iii ) all other privileges, appurtenances, easements (including the Purchaser Easements in respect thereof) and other rights appertaining thereto other than the Timber (the “ Land ”), subject to the Permitted Exceptions; provided , however , that Seller reserves for itself and its successors and assigns ( y ) the Reserved Easements

described in Section 1.2(a)(2) of Seller’s Disclosure Letter, and ( z ) the Reserved Mineral Interests and Rights.

          (b) Timber . All timber growing, standing or lying on the Land (the “ Timber ” and, together with the Land, the “ Timberlands ”).

          (c) Personal Property . The machinery, equipment, motor vehicles, appliances, tools, supplies, furnishings, and other tangible personal property, owned by Seller at the Effective Time and listed or described in Section 1.2(c) of Seller’s Disclosure Letter (collectively, the “ Personal Property ”).

          (d) Personal Property Leases . The rights of Seller with respect to the leases in effect at the Effective Time under which Seller is the lessee that relate to any machinery, equipment, motor vehicles, appliances, tools, supplies, furnishings, and other tangible personal property that are used exclusively by Seller in connection with the forest operations conducted on the Timberlands and described in Section 1.2(d) of Seller’s Disclosure Letter (collectively, the “ Personal Property Leases ”).

          (e) Licenses . To the extent transferable under applicable Law, the rights of Seller under the licenses, permits, authorizations, orders, registrations, certificates, variances, approvals, franchises and consents of Governmental Authorities or other Persons that are in effect at the Effective Time and are described in Section 1.2(e) of Seller’s Disclosure Letter (collectively, the “ Licenses ”).

          (f) Assumed Contracts . The rights of Seller under the Contracts in effect at the Effective Time that ( i ) are described in Section 1.2(f) of Seller’s Disclosure Letter or ( ii ) that relate solely to the Timberlands or the forest operations conducted on the Timberlands and are entered into prior to the Closing in compliance with Section 7.2 , but excluding the rights of Seller under any Ancillary Agreement, Real Property Lease or Personal Property Lease (collectively, the “ Assumed Contracts ”).

          (g) Real Property Leases . The rights of Seller with respect to the leases in effect at the Effective Time ( i ) that relate to all or any portion of the Timberlands to which Seller is a lessor and are described in Section 1.2(g) of Seller’s Disclosure Letter, including any lease under which Seller has granted to a third party hunting or other recreational rights with respect to the Timberlands (or, with respect to any recreational lease in respect of the Timberlands listed in Section 1.2(g) of Seller’s Disclosure Letter that expires prior to the Closing Date, any renewals of such recreational lease made in compliance with Section 7.2(c)), ( ii ) any new recreational lease entered into in compliance with Section 7.2(c) or ( iii ) under which a Seller is a lessee of facilities related to the forest operations on the Timberlands and listed in Section 1.2(g) of Seller’s Disclosure Letter (collectively, the “ Real Property Leases ”).

          (h) Assumed Condemnations . The interests of Seller in any Condemnation that exists on the date hereof or that arises between the date of this Agreement and the Closing Date, including the Condemnations listed in Section 1.2(h) of Seller’s Disclosure Letter (or if resolved prior to the Closing, the proceeds actually received therefrom, net of all costs incurred

by Seller to recover such proceeds) but only to the extent attributable to the Timberlands (collectively, the Condemnations described above, the “ Assumed Condemnations ”).

                (i) Books and Records . The Books and Records (as defined in Section 7.4 ).

Unless expressly identified or described in this Section 1.2 , no other assets of Seller, including accounts receivable in respect of sales of timber removed from the Timberlands prior to the Closing, shall be included within or constitute the Property.

     Section 1.3 Assumed Liabilities. Subject to the terms and provisions of this Agreement and upon satisfaction of the conditions set forth in Article IX , Seller shall at the Closing assign to Purchaser, and Purchaser shall assume from Seller, the liabilities and obligations of Seller under the Personal Property Leases, the Licenses, the Assumed Contracts and the Real Property Leases, to the extent such liabilities and obligations relate to the period of performance commencing on or after the Effective Time (collectively, the “ Assumed Liabilities ”).

     Section 1.4 Purchase Price; Deposit. The aggregate purchase price payable by Purchaser to Seller in consideration for the Property shall be the sum of One Hundred Twenty Million and No/100 Dollars ($120,000,000.00), subject to adjustment as provided in Section 1.6 (as so adjusted, the “ Purchase Price ”). The Purchase Price shall be allocated among (a) the Land and its appurtenances (including, without limitation, the Licenses, Assumed Contracts, Real Property Leases and Assumed Condemnations, but excluding the Timber), (b) the Timber (including both Pre-Merchantable Timber and Merchantable Timber), and (c) the Personal Property and Personal Property Leases, as set forth on Schedule A (as such allocation may be adjusted after the Closing by mutual agreement of the Seller and Purchaser to reflect any of the adjustments and substitutions made pursuant to Section 1.6). Simultaneously with the execution and delivery of this Agreement (or, if this Agreement is executed and delivered on a day other than a Business Day, on the first Business Day following the date of this Agreement), Purchaser shall deposit with the Title Company pursuant to the escrow agreement in the form of Exhibit A attached hereto (the “ Escrow Agreement ”), the sum of One Million and No/100 Dollars ($1,000,000.00) (together with any interest earned thereon, the “ Initial Deposit ”). Within twelve (12) days following the date of this Agreement, Purchaser shall deposit with the Title Company pursuant to the Escrow Agreement, the sum of Five Million and No/100 Dollars ($5,000,000.00) (together with any interest earned thereon, the “ Subsequent Deposit ” and, together with the Initial Deposit, the “ Deposit ”). The Deposit shall either be (i) delivered to Seller at the Closing and applied as a credit towards the Purchase Price or (ii) if the Closing does not occur, disbursed in accordance with Section 11.2 .

     Section 1.5 Permitted Exceptions . The Property shall be sold, transferred, assigned and conveyed to Purchaser subject to the following matters (collectively, the “ Permitted Exceptions ”):

          (a) Restrictions on the ability of Purchaser to build upon or use the Property imposed by any current or future development standards, building or zoning ordinances or any other Law;

          (b) To the extent a tract included in the Timberlands is bounded or traversed by a river, stream, branch or lake:

               (i) the rights of upper and lower riparian owners and the rights of others to navigate such river or stream;

               (ii) the right, if any, of neighboring riparian owners and the public or others to use any public waters, and the right, if any, of the public to use the beaches or shores for recreational purposes;

               (iii) any claim of lack of title to the Timberlands formerly or presently comprising the shores or bottomland of navigable waters or as a result of the change in the boundary due to accretion or avulsion; and

               (iv) any portion of the Timberlands which is sovereignty lands or any other land that may lie within the bounds of navigable rivers as established by Law;

          (c) To the extent any portion of the Timberlands 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 Timberlands that lies within such road or maintained right of way;

          (d) 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 Timberlands and the rights of railroad companies to any tracks, siding, ties and rails associated therewith;

          (e) Any restriction on the use of the Property due to Environmental Laws or conservation easements of record;

          (f) Subject to the apportionment provisions of Section 1.7 , all ad valorem property or other Taxes (other than Income Taxes) not yet due and payable in respect of the Property for the Tax period during which the Closing occurs and all subsequent Tax periods, and all other assessments and other charges of any kind or nature imposed upon or levied against or on account of the Property by any Governmental Authority, including any additional or supplemental Taxes that may result from a reassessment of the Timberlands, and any potential roll-back or greenbelt type Taxes related to any agricultural, forest or open space exemption that is subject to recapture pursuant to applicable Law;

          (g) Liens for Taxes not yet due and payable;

          (h) Easements, discrepancies or conflicts in boundary lines, shortages in area, vacancies, excesses, encroachments or any other facts that a current and accurate survey of the Timberlands would disclose other than those which individually or in the aggregate would have a material adverse effect on the use, value or enjoyment of the Timberlands;

          (i) All reservations by or conveyances to others of any Reserved Mineral Interests and Rights of any kind or character and any leases concerning any of such Reserved Mineral Interests and Rights in, on or under the Timberlands;

          (j) Rights, if any, relating to the construction and maintenance in connection with any public utility of wires, poles, pipes, conduits and appurtenances thereto, on, under, above or across the Timberlands;

          (k) Any matter affecting title to the Property that is disclosed in the Completed Title Commitments and is not objected to by Purchaser and any Title Objection that Purchaser has expressly waived or is deemed to have waived pursuant to Section 1.6(c) ;

          (l) The Reserved Easements granted to or reserved by Seller pursuant to any provision of this Agreement;

          (m) Rights of others under any of the Personal Property Leases, the Licenses, the Assumed Contracts or the Real Property Leases;

          (n) Any claim of lack of access rights to any portion of the Timberlands other than the HBU Compartments where (i) permission to access has been granted verbally or in writing or (ii) Seller has otherwise historically enjoyed access;

          (o) Any Condemnation in respect of the Timberlands;

          (p) Intentionally deleted;

          (q) The Reserved Mineral Interests and Rights; and

          (r) Any easement, covenant, use restriction, zoning restriction, boundary line dispute, encroachment or other third-party right affecting any of the Property not described in items (a) through (q) above and which, individually or in the aggregate, would not have a material adverse effect on the use, value or enjoyment of the Property or any parcel or portion of the Timberlands.

     Section 1.6 Certain Adjustments. The Purchase Price shall be subject to the following adjustments:

          (a) Inventory Verification .

               (i) Notice of Inventory Verification . As promptly as practical after the date hereof, Purchaser will complete its review of the inventory and acreage for the Timberlands. Not later than June 1, 2009, Purchaser may deliver a notice (the “ Timber Inventory Notice ”) informing Seller that Purchaser’s calculations indicate that the Verified Value (as defined below) is less than 95% of the Target Value (as defined below) (the “ Target Threshold ”), and including a copy of Purchaser’s calculation of the Verified Value. As used herein ( x ) “ Verified Value ” means the value of the Merchantable Timber and Pre-Merchantable Timber located on the Timberlands, in the

case of Merchantable Timber based on the volume by species and product of the Merchantable Timber on the Property and in the case of Pre-Merchantable Timber based on the applicable age and acres, and in each case based on the value tables set forth in Exhibit B (the “ Value Tables ”), and ( y ) “ Target Value ” means $44,881,726. At Seller’s request, the Parties will meet to review the calculations set forth in the Timber Inventory Notice, and discuss any mutually agreeable adjustment to the Purchase Price. Notwithstanding the foregoing, to the extent that any timber growing, standing or lying on the Timberlands has been harvested during the Timber Adjustment Period, then for all purposes of the inventory verification and the Timber Cruise under this Section 1.6(a) , such timber shall be treated as if still standing on the Timberlands (Purchaser acknowledging that it shall be compensated for any Merchantable Timber harvested from the Timberlands during the Timber Adjustment Period pursuant to Section 1.6(b) and Seller acknowledging that any such harvesting of Pre-Merchantable Timber will constitute a breach of Seller’s representation and warranty in Section 5.5(b) or Seller’s covenant in Section 7.2(a)(ii), as applicable). If Seller does not receive the Timber Inventory Notice by June 1, 2009, the Purchase Price shall not be adjusted pursuant to this Section 1.6(a) .

               (ii) Timber Cruise . If Purchaser delivers a Timber Inventory Notice and the Parties are unable to agree on an adjustment to the Purchase Price within 10 days thereafter, an independent third party consultant hired by Purchaser and reasonably acceptable to Seller (the “ Cruise Consultant ”) shall complete a timber cruise of the Property (the “ Timber Cruise ”) whereby the Cruise Consultant will determine the Verified Value (with the final calculations collectively referred to as the “ Timber Cruise Determinations ”). The scope of the Timber Cruise shall be planned and designed in a predetermined manner that is satisfactory to both Seller and Purchaser. The Timber Cruise Determinations by the Cruise Consultant shall be final and binding on the Parties. In connection with the Timber Cruise Determinations, the Cruise Consultant shall use the pricing, product, species, age and other specifications set forth in the Value Tables and the scope of the Timber Cruise shall be planned and designed in a manner that is satisfactory to both Seller and Purchaser. The costs and expenses of the Cruise Consultant shall be shared equally by Purchaser and Seller.

               (iii) Post-Closing Adjustment . Seller and Purchaser acknowledge that if Purchaser engages a Cruise Consultant to perform a Timber Cruise, the Timber Cruise Determinations will not be completed prior to the Closing. Therefore, within two (2) Business Days following the receipt of the Timber Cruise Determinations, Seller and Purchaser shall adjust the Purchase Price after the Closing in accordance with the following provisions. If the Cruise Consultant determines that the Verified Value of the Merchantable Timber and Pre-Merchantable Timber is below the Target Threshold, the Purchase Price shall be reduced by the amount of deficiency below the Target Threshold (the “ Timber Inventory Credit ”) and Seller shall, within two Business Days of such determination, pay the Timber Inventory Credit in cash by wire transfer of immediately available funds to the bank account or accounts designated by Purchaser. In the event that the Cruise Consultant determines that the Verified Value of the Merchantable Timber and Pre-Merchantable Timber is equal to or greater than the Target Threshold but less

than or equal to 105% of the Target Value (the “ Target Ceiling ”), there shall be no reduction in the Purchase Price pursuant to this Section 1.6(a) . If the Cruise Consultant determines that the Verified Value is greater than the Target Ceiling, the Purchase Price shall be increased by the amount by which the Verified Value exceeds the Target Ceiling, and Purchaser shall, within two (2) Business Days of such determination, pay the amount by which the Verified Value exceeds the Target Ceiling in cash by wire transfer of immediately available funds to the bank account or accounts designated by Seller.

          (b) Timber Harvest Adjustment .

               (i) Within 60 days after the Closing Date, Seller shall provide to Purchaser a harvest report (the “ Harvest Report ”) certifying ( x ) the volume, by Merchantable Timber Category, of Merchantable Timber that was actually removed from the Timberlands during the Timber Adjustment Period (the “ Harvest Amount ”) and ( y ) the amount of the Adjustment Value, calculated in accordance with Exhibit B , together with such supporting data as Purchaser may reasonably request. Purchaser shall have 30 days from the receipt of the Harvest Report to deliver to Seller written notice (an “ Objection Notice ”) of any objection to the calculation of any portion of such Harvest Amount or the proposed Adjustment Value, which Objection Notice shall request commencement of the procedure set forth in Section 1.6(b)(ii) . If Seller does not receive an Objection Notice prior to the expiration of such 30-day period, Purchaser shall have been deemed to have waived its right to object to Seller’s calculation of any portion of the Harvest Amount or the Proposed Adjustment Value.

               (ii) Within 15 days after receipt of an Objection Notice, Seller shall appoint a Forestry Consultant to act as a consultant with respect to the calculation of the Harvest Amount and the Adjustment Value. During the period following receipt of such Objection Notice, Seller and Purchaser shall negotiate in good faith to reach agreement on the Harvest Amount and the Adjustment Value. If Seller and Purchaser agree on the calculation of such amounts, then such amounts shall become final and binding on the Parties. If Seller and Purchaser are unable to agree on any of the disputed calculations within 30 days after receipt of the Objection Notice, the Parties shall refer outstanding matters relating to the calculation of the Harvest Amount and the Adjustment Value to the Forestry Consultant and each Party will, at a mutually agreed time within three days after referral of the matter to the Forestry Consultant, simultaneously submit to the Forestry Consultant their respective calculations of the disputed portions of the Harvest Amount and the Adjustment Value and any necessary supporting documentation. Within 30 days of such submissions, the Forestry Consultant will select one of the two submissions (and shall not select any other amount) as being most representative of the disputed portion of the Harvest Amount and the Adjustment Value, and the submission so selected shall be final and binding on the Parties. The costs and expenses of the Forestry Consultant in connection with the dispute resolution procedure set forth herein shall be paid by the non-prevailing Party.

               (iii) Upon a final determination of the Harvest Amount and the Adjustment Value, the Purchase Price shall be reduced by the greater of (A) the amount

of the Adjustment Value as determined in accordance with the provisions of Exhibit B , and (B) the actual proceeds realized by Seller from the sale of the Harvest Amount. Any such payment will be made within two Business Days by wire transfer of immediately available funds to an account or accounts designated by Purchaser.

               (iv) If Seller harvests any Timber on the Timberlands during the Timber Adjustment Period, the Parties will meet at least three Business Days prior to the Closing and agree on a preliminary adjustment. Each Party agrees to act reasonably in discussing any proposed adjustment, but if they fail to agree on a preliminary adjustment they will proceed to the Closing, subject to a complete adjustment post-Closing pursuant to the above provisions of this Section 1.6(b) . The Purchase Price paid at the Closing will reflect such preliminary adjustment. Any payment made pursuant to clause (iii) above will be adjusted to reflect any such preliminary adjustment.

          (c) Title Objections .

               (i) Title Objection Procedure . Purchaser shall have until the later of: (A) May 25, 2009, or (B) the twenty-fifth (25 ^th ) day after the date on which a Completed Title Commitment is made available to Purchaser (in each case, the “ Title Objection Period ”) to deliver to Seller written notice of any objection to matters reflected in such Completed Title Commitment, which in Purchaser’s commercially reasonable judgment, would either constitute a title defect or would materially adversely affect the use, value or enjoyment of any parcel or portion of the Timberlands (each, a “ Title Objection ” and collectively, the “ Title Objections ”). Notwithstanding the foregoing, Purchaser shall have no right to object to any Permitted Exception pursuant to this Section 1.6(c) and, for the purposes of this Agreement, such items will not be considered Title Objections. A Completed Title Commitment shall be deemed to have been made available to Purchaser when it is posted to the online data repository established and maintained by the Title Company for such purpose, and the Title Objection Period shall commence with respect to such Completed Title Commitment on the day following the day notice of such posting has been given by Seller or the Title Company to Purchaser by email at the email addresses set forth in Section 12.1 . Upon the receipt of Title Objections to a Completed Title Commitment, Seller may elect (but shall not be obligated) to cure or cause to be cured any such Title Objection, and Seller shall notify Purchaser in writing within ten (10) days after receipt of the Title Objections with respect to such Completed Title Commitment whether Seller elects to cure the same. Failure of Seller to respond in writing within such time period shall be deemed an election by Seller not to cure such Title Objections. Any Title Objection shall be deemed to be cured if Seller causes the Title Company to issue a Title Policy for the affected Timberlands affirmatively insuring over, or not raising as an exception to the Title Policy, such Title Objection ( provided , however , that notwithstanding the foregoing or any other provision of this Agreement to the contrary, Purchaser shall not be required to accept affirmative title insurance coverage as a cure for a Title Objection for access to HBU Compartments unless the HBU Compartment either ( i ) directly abuts a publicly maintained right of way or ( ii ) has direct recorded easement access to a publicly maintained right of way pursuant to a recorded easement satisfactory to Purchaser and which is affirmatively insured by the Title

Company). Notwithstanding the foregoing, Seller shall be obligated to cure, on or before the Closing Date, all Liens against the Timberlands evidencing monetary encumbrances (other than Liens for non-delinquent real estate Taxes or assessments) (“ Monetary Liens ”) created as a result of the acts or omissions of Seller or its Affiliates. If Seller does not receive written notice of the Title Objections for any objection to matters reflected in a particular Completed Title Commitment on or before the expiration of the relevant Title Objection Period, Purchaser shall be deemed to have waived its right to object to any and all matters reflected in such Completed Title Commitment and Purchaser shall be deemed to accept title to the Timberlands encompassed within such Completed Title Commitment subject to such matters. Any such Title Objection waived (or deemed waived) by Purchaser shall be deemed to constitute a Permitted Exception, and the Closing shall occur as herein provided without any reduction of the Purchase Price.

               (ii) Remedy for Title Failure . In the event of any Title Failure, Purchaser’s sole remedy, subject to the post-Closing cure provisions of Section 1.6(c)(v) and the Substitute Timberlands provisions of Section 1.6(f) , with respect to any such Title Failure shall be to adjust the Purchase Price by the fair market value of such Timberlands as determined in accordance with the provisions of Exhibit B and the Parties shall proceed to the Closing with those portions of the Timberlands that are subject to such Title Failure excluded from the Timberlands to be conveyed to Purchaser (a “ Title Failure Carveout ”). Notwithstanding the foregoing, each Title Failure Carveout in which Seller has an interest shall contain at least 40 acres and provide Seller with reasonable access to such Title Failure Carveout.

               (iii) Remedy for Title Objection . In the event Seller elects or is deemed to have elected not to cure any Title Objection (other than Monetary Liens or Title Failures), then Purchaser shall elect, by written notice delivered to Seller before the Closing Date, either (A) to waive such Title Objection and acquire at the Closing the portion of the Timberlands subject to such uncured Title Objection without adjustment to the Purchase Price, in which event such Title Objection shall become a Permitted Exception, or (B) exclude from the Timberlands to be conveyed to Purchaser the portion of the Timberlands subject to such uncured Title Objection (a “ Title Objection Carveout ”). Failure by Purchaser to timely deliver such notice of its election shall be deemed a waiver of such Title Objection pursuant to clause (A). If Purchaser elects to make a Title Objection Carevout pursuant to clause (B), then the Parties shall proceed to the Closing with those portions of the Timberlands that are subject to such uncured Title Objections excluded from the Timberlands to be conveyed to Purchaser, subject to the post-Closing cure provisions of Section 1.6(c)(v) and the Substitute Timberlands provisions of Section 1.6(f) ; provided , however , that each Title Objection Carveout with respect to a Title Objection affecting a portion or portions of the Timberlands shall contain at least 40 acres and provide Seller with reasonable access to such Title Objection Carveout.

               (iv) FMV Calculation . The fair market value of any portion of the Timberlands subject to any Title Failure Carveout or Title Objection Carveout shall be

calculated in accordance with Exhibit B . At the Closing, the Purchase Price shall be reduced by an amount equal to the aggregate fair market value of the Timberlands subject to such Title Failure Carveouts or Title Objection Carveouts, if any, as calculated in accordance with this Section 1.6(c)(iv) .

               (v) Post-Closing Cure . For a period of thirty (30) days from and after the Closing Date, Seller, at its option, may require Purchaser to accept title to any Title Failure Carveout or Title Objection Carveout (subject to the Permitted Exceptions affecting such Title Failure Carveout or Title Objection Carveout) for which Seller has cured or caused to be cured ( A ) all title defects affecting such Title Failure Carveout or ( B ) Title Objections affecting such Title Objection Carveout, and provided , however , that Seller delivers to Purchaser an updated Completed Title Commitment for such Property issued by the Title Company in a form reasonably acceptable to Purchaser. If Seller elects to transfer to Purchaser title to any Title Failure Carveout or Title Objection Carveout pursuant to this Section 1.6(c)(v) , then ( 1 ) Seller shall convey such Title Failure Carveout or Title Objection Carveout to Purchaser pursuant to an instrument of conveyance described in Section 2.2(a)(iv) , subject to the Permitted Exceptions, and ( 2 ) Purchaser shall pay Seller an amount in cash equal to the reduction in the Purchase Price for such Property that Purchaser received at the Closing. Any payment by Purchaser for the conveyance of any Title Failure Carveout or Title Objection Carveout shall be made, upon the transfer of such Title Failure Carveout or Title Objection Carveout from Seller to Purchaser, by wire transfer of immediately available funds to a bank account designated by Seller. Purchaser and its Affiliates shall cooperate in any effort that may be necessary for Seller to transfer title to any Title Failure Carveout or Title Objection Carveout or to establish, vest or confirm title to any Title Failure Carveout or Title Objection Carveout in Purchaser, including executing all documents pertaining to the Title Failure Carveout or Title Objection Carveout as are reasonably requested by Seller. Any sales, use, excise, documentary, stamp duty, registration, transfer, conveyance, economic interest, transfer or other similar Taxes related to the conveyance to Purchaser of any Title Failure Carveout or Title Objection Carveout pursuant to this Section 1.6(c)(v) shall be payable as Transfer Taxes in accordance with Section 2.3 . From and after the Closing, the portion of the Timberlands not conveyed to Purchaser pursuant to Title Failure Carveouts and Title Objection Carveouts, if any, shall no longer constitute part of the Timberlands for any purpose of this Agreement other than this Section 1.6(c)(v); provided , however , if any portion of such Timberlands is subsequently conveyed to Purchaser pursuant to this Section 1.6(c)(v), such portion shall thereafter constitute part of the Timberlands for all purposes of this Agreement.

          (d) Casualty Loss .

               (i) Notification of Casualty Loss . From the date of this Agreement until the Closing Date, Seller shall promptly give notice to Purchaser upon obtaining Seller’s Knowledge of any Casualty Loss occurring during the Timber Adjustment Period, together with a written estimate of the fair market value of the damaged or lost timber, as determined in good faith by Seller, resulting from such Casualty Loss. Purchaser shall have until the thirtieth (30 ^th ) day after the Closing Date to deliver to

Seller written notice of any Casualty Loss that occurred during the Timber Adjustment Period but was not identified by Seller in accordance with the previous sentence of this Section 1.6(d)(i) , together with a written estimate of the fair market value of the damaged or lost timber, as determined in good faith by Purchaser, resulting from such Casualty Loss. If Seller does not receive notice of such Casualty Loss from Purchaser prior to the expiration of such 30-day period, Purchaser shall be deemed to have waived its rights to receive an adjustment to the Purchase Price in respect of any such Casualty Loss pursuant to this Section 1.6(d) , apart from any adjustment to the Purchase Price for any portion of such Casualty Loss that was identified by Seller prior to the Closing pursuant to the first sentence of this Section 1.6(d)(i) , and Purchaser shall be deemed to accept the Timberlands subject to such Casualty Loss.

               (ii) Adjustment for Casualty Loss . If the aggregate fair market value, based on the values set forth on Exhibit B (but taking into account the salvage value of any damaged timber), of damaged or lost timber resulting from Casualty Losses identified in accordance with Section 1.6(d)(i) exceeds $300,000 (the “ Casualty Loss Basket ”), the Purchase Price shall be reduced by such amount, subject to the Substitute Timberlands provisions of Section 1.6(f) . If Purchaser objects to any of Seller’s calculations of the fair market value based on Exhibit B of the damaged or lost timber resulting from a Casualty Loss made by Seller prior to the Closing pursuant to Section 1.6(d)(i) or if Seller objects to any calculation of the fair market value based on Exhibit B of the damaged or lost timber resulting from a Casualty Loss made by Purchaser post-Closing pursuant to Section 1.6(d)(i) , Seller and Purchaser shall negotiate in good faith to determine by mutual agreement the calculation of the fair market value of the damaged or lost timber in accordance with Section 1.6(d)(iv) . If Seller and Purchaser agree on the amount of such value, then such value will become final and binding on the Parties. If Seller and Purchaser are unable to agree on the amount of such value within thirty (30) days of Purchaser’s delivery of a notice of objection to Seller’s pre-Closing calculation or Seller’s delivery of a notice of objection to Purchaser’s post-Closing calculation, Seller and Purchaser will refer the matter to a Forestry Consultant, and each will, at a mutually agreed time within three days after such referral, simultaneously submit to the Forestry Consultant their respective calculations of the fair market value of such damaged or lost timber based on the specifications and values set forth in Exhibit B . Within thirty (30) days of such submissions, the Forestry Consultant shall determine the fair market value of the damaged or lost timber in accordance with this Section 1.6(d) and shall select one of the two submissions of the Parties (and shall not select any other amount) as being most representative of the fair market value of such damaged or lost timber based on the specifications and values set forth in Exhibit B , and the submission so selected shall be final and binding on the Parties. The costs and expenses of the Forestry Consultant in connection with the dispute resolution procedure set forth herein shall be paid by the non-prevailing Party.

               (iii) Casualty Loss with FMV of less than the Casualty Loss Basket . If it is determined in accordance with this Section 1.6(d) that the damaged or lost timber in connection with Casualty Losses identified in accordance with Section 1.6(d)(i) on the Timberlands has an aggregate fair market value of less than the Casualty Loss Basket,

Purchaser shall be deemed to accept such Timberlands (and the timber thereon) in its condition as of the Closing Date, with no reduction in the Purchase Price.

               (iv) Determination of FMV of Timber Related to a Casualty Loss . For the purpose of determining the fair market value of the damaged or lost timber resulting from a Casualty Loss, the fair market value for damaged or lost timber shall be deemed to equal the value of the timber, determined in accordance with Exhibit B , net of the salvage value of such timber to Purchaser after deducting the cost of harvesting and delivering such timber.

          (e) Environmental Objections .

               (i) Environmental Objection Procedure . Purchaser acknowledges that Seller has delivered to Purchaser the Phase I Reports as described in Section 8.3 . Purchaser shall have until May 25, 2009 (the “ Environmental Review Period ”) (A) to review the Phase I Reports, and (B) to deliver to Seller written notice of the existence of a REC on any portion of the Timberlands (Purchaser acknowledging that its objection rights under this Section 1.6(e) are limited solely to the presence on the Timberlands of RECs).

               (ii) Remedy for Environmental Objection . In the event of the presence of any REC, Purchaser’s sole remedy, subject to the Substitute Timberlands provisions of Section 1.6(f) , with respect to any such REC, shall be to adjust the Purchase Price as described in Section 1.6(e)(iii) and the Parties shall proceed to the Closing with those portions of the Timberlands that are subject to such REC excluded from the Timberlands to be conveyed to Purchaser (an “ Environmental Carveout ”). Notwithstanding the foregoing, each Environmental Carveout in which Seller has an interest shall contain at least 40 acres and provide Seller with reasonable access to such Environmental Carveout.

               (iii) FMV Calculation . The fair market value of any portion of the Timberlands subject to any Environmental Carveout shall be calculated in accordance with Exhibit B . At the Closing, the Purchase Price shall be reduced by an amount equal to the aggregate fair market value of the Timberlands subject to such Environmental Carveouts, if any, as calculated in accordance with this Section 1.6(e)(iii) .

          (f) Substitute Timberlands .

               (i) Substitute Timberlands Notice . With respect to any Title Failure Carveouts, Title Objection Carveouts, Casualty Loss in excess of the Casualty Loss Basket, and Environmental Carveouts, Seller shall have the right to deliver notice to Purchaser at least five Business Days before the Closing of Seller’s intent to offer Substitute Timberlands to Purchaser in the place of all or a portion of such affected portions of the Timberlands (the “ Substitute Timberlands Notice ”). “ Substitute Timberlands ” shall be timberlands owned by Seller that are ( A ) not otherwise subject to this Agreement, ( B ) within the same geographical region as the affected portion of the Timberlands, ( C ) reasonably comparable to the affected portion of the Timberlands in

acreage and timber composition and ( D ) approved by Purchaser in its sole discretion. The Substitute Timberlands Notice shall include the identity of the affected portion of the Timberlands with respect to which Seller is offering Substitute Timberlands, and the location of the proposed Substitute Timberlands.

               (ii) Holdback . If Seller delivers a Substitute Timberlands Notice, the Closing shall proceed as otherwise required, subject to the following: (A) the applicable Title Failure Carveouts, Title Objection Carveouts, and Environmental Carveouts specified by Seller shall be excluded from the Timberlands conveyed at the Closing; (B) any applicable Timberlands affected by a Casualty Loss and with respect to which Seller offers Substitute Timberlands shall be excluded from the Timberlands conveyed at the Closing (a “ Casualty Carveout ”), and the Purchase Price shall be reduced by the fair market value of such Timberlands calculated in accordance with Exhibit B (and not reduced by the fair market value of the lost or damaged timber, notwithstanding Section 1.6(d)(ii) ); and (C) the aggregate amount by which the Purchase Price is reduced due to the applicable carveouts from the Timberlands (the “ Holdback Amount ”) shall be held by the Title Company in escrow pursuant to the Escrow Agreement until the resolution of the Substitute Timberlands procedures described in this Section 1.6(f) . Any portion of the Timberlands not conveyed at the Closing as provided above is referred to herein as a “ Carveout ”.

               (iii) Due Diligence . Within 14 days after receipt of a Substitute Timberlands Notice, Purchaser shall notify Seller as to whether the proposed Substitute Timberlands are acceptable to Purchaser, subject to completion of Purchaser’s environmental and title review as described below, completion of Purchaser’s review of the timber inventory and receipt and review of any required updates to Seller’s Disclosure Letter relating to such Substitute Timberlands (with any notice accepting the proposed Substitute Timberlands referred to as a “ Purchaser Acceptance Notice ”). Seller shall be responsible for delivering a Completed Title Commitment and Phase I Report and any proposed update to Seller’s Disclosure Letter to Purchaser with respect to the Substitute Timberlands within sixty (60) days following receipt of the applicable Purchaser Acceptance Notice. In addition, Seller shall be entitled to update Seller’s Disclosure Letter to reflect the deletion of the Carveouts from the Timberlands and the addition of such Substitute Timberlands to the Timberlands. Purchaser shall have until the latest of ( A ) twenty (20) days following receipt of the Completed Title Commitment, (B) twenty (20) days following receipt of the Phase I Report, and ( C ) thirty (30) days following the Closing (the “ Substitute Due Diligence Period ”) to (1) deliver to Seller written notice of any objection to matters other than the Permitted Exceptions reflected in such Completed Title Commitment, which in Purchaser’s commercially reasonable judgment, would either constitute a title defect or would materially adversely affect the use, value or enjoyment of any parcel or portion of the Timberlands (each, a “ Substitute Title Objection ” and collectively, the “ Substitute Title Objections ”), and (2) deliver to Seller written notice of any REC on the Substitute Timberlands (“ Substitute Environmental Objections ”). Seller shall respond within ten (10) days following its receipt of the Substitute Title Objections or Substitute Environmental Objections whether Seller shall cure such Substitute Title Objections or Substitute Environmental Objections

before the Substitute Closing. Failure by Seller to respond to such notice shall be deemed an election not to cure such Substitute Title Objections or Substitute Environmental Objections. If Purchaser rejects any proposed Substitute Timberlands, then Seller shall have the right to propose additional Substitute Timberlands, subject to the process described above. The Substitute Timberlands shall be subject to inventory verification in accordance with Section 1.6(a) and the Timber Harvest Adjustment pursuant to Section 1.6(b) .

               (iv) Purchaser’s Election . If Purchaser has not delivered notice of Substitute Title Objections or Substitute Environmental Objections before the expiration of the Substitute Due Diligence Period, or if Seller agrees to cure such Substitute Title Objections and Substitute Environmental Objections, and if Purchaser does not reject the Substitute Timberlands based on the timber inventory or the proposed updates to Seller’s Disclosure Letter before the end of the Substitute Due Diligence Period, the “ Substitute Closing ” shall occur with respect to all such Substitute Timberlands on a date determined by Purchaser and Seller but in no event later than fifteen (15) days following the expiration of the Substitute Due Diligence Period. If Purchaser receives actual or deemed notice that Seller will not cure any Substitute Title Objections or Substitute Environmental Objections, then at Purchaser’s sole election, Purchaser may either (A) waive such uncured objection and accept title to the affected portion of the Substitute Timberlands at the Substitute Closing, or (B) exclude the affected portion of the Substitute Timberlands from the Substitute Timberlands conveyed at the Substitute Closing and receive from the Title Company such portion of the Holdback Amount as corresponds to the fair market value, determined in accordance with Exhibit B , of the excluded portion of the Substitute Timberlands.

               (v) Substitute Closing . At the Substitute Closing, Seller shall convey to Purchaser title to the Substitute Timberlands by limited or special warranty deed, consistent with the forms of the Deeds delivered at the Closing, together with all easements and appurtenances thereto, and Purchaser shall instruct the Title Company to release to Seller the Holdback Amount allocable to such Substitute Timberlands in consideration therefor. Seller shall assign, and Purchaser shall assume, all post-transfer rights and obligations under all contracts, permits and licenses affecting the Substitute Timberlands, and Purchaser and Seller shall equitably apportion all income and expenses with respect to the Substitute Timberlands as of the date of the Substitute Closing. Seller and Purchaser shall execute and deliver at the Substitute Closing such affidavits and other instruments as are reasonably necessary to accomplish the purposes of this Section 1.6(f) . Upon completion of the Substitute Closing the Substitute Timberlands shall constitute part of the Timberlands for all purposes of this Agreement.

     Section 1.7 Apportionments . Except as provided in Section 2.3 and Section 7.7 , the following shall be apportioned between Purchaser and Seller as of the Effective Time (on a per diem basis) with the Closing Date being allocated to Purchaser: (i) rents due from Seller under Personal Property Leases; (ii) property and other non-Income Taxes and assessments in respect of the Property with respect to the Tax period in which the Effective Time occurs; (iii) revenue from the Real Property Leases, including hunting and other recreational lease revenue; and (iv)

payments, applying to the period beginning at the Effective Time, made by Seller in respect of any Personal Property Lease or Assumed Contract (collectively, “ Apportionments ”). Not later than sixty (60) days after the Closing Date, Seller and Purchaser shall determine the Apportionments, and the Purchase Price shall be increased or decreased, as applicable, by the aggregate amount of such Apportionments, except where any applicable Tax rates have not been fixed or the value assessments have not been made and finally determined with respect to all of the Timberlands for the applicable Tax periods in which the Effective Time occurs (Purchaser acknowledging that Seller has instituted or may, at its option, institute before the Closing protests of certain Taxes pursuant to certain Assumed Contracts, the final resolution of which protests may occur after the Closing) in which case the Apportionments will be completed promptly after resolution of the applicable issues. Any adjustment to be made pursuant to this Section 1.7 shall be made no later than three Business Days following the determination of the aggregate amount of the Apportionments. Seller and Purchaser agree to furnish each other with such documents and other records as may be reasonably requested in order to confirm all Apportionment calculations made pursuant to this Section 1.7 . Except for the adjustment set forth above, there shall not be any proration of property Taxes or other non-Income Taxes and assessments and, as between Purchaser and Seller, Purchaser agrees that Purchaser shall be solely responsible for all such property Taxes and other non-Income Taxes and assessments due and payable in respect of the Property for full or partial tax periods beginning after the Closing. If Seller and Purchaser cannot agree as to Apportionments, the dispute will be resolved pursuant to Section 7.5 .

     Section 1.8 Waiver Regarding Reserved Mineral Interests . In accordance with Section 1.2(a) and the Deeds, Seller is reserving the Reserved Mineral Interests and Rights, provided , however , that ( a ) Seller shall not reserve any Surface Rights and may obtain Surface Rights only with the consent of the surface estate owner, ( b ) Seller hereby expressly waives any right to any Surface Rights and ( c ) Seller shall be responsible for any damage to the surface (including any subsurface damage that affects the surface of the Timberlands), all as provided in the Deeds.

ARTICLE II
CLOSING

     Section 2.1 Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place, subject to the satisfaction, or waiver by the Party entitled to the benefit thereof, of the conditions set forth in Article IX , at the offices of Sutherland Asbill & Brennan LLP, 999 Peachtree Street, Atlanta, Georgia 30309, at 9:00 a.m., local time, on or as of the fifth day following the date on which all of the conditions set forth in Article IX have been satisfied, or waived by the Party entitled to the benefit thereof (other than those conditions that by their nature are to be satisfied at the Closing), in accordance with this Agreement or at such other time and date as the Parties shall agree in writing (the date on which the Closing occurs, the “ Closing Date ”), provided , that in no event shall the Closing Date occur prior to forty-five (45) days after the date hereof. Upon completion of the Closing, the transactions contemplated by this Agreement shall be deemed effective as of 12:01 a.m. Eastern Time on the Closing Date (the “ Effective Time ”). The Parties shall use their commercially reasonable efforts to cause the

Closing Date to occur on or before June 16, 2009. Except as specifically provided herein, time is of the essence for this Agreement for all purposes.

     Section 2.2 Closing Deliveries .

          (a) Closing Deliveries by Seller . Seller shall deliver the following items to Purchaser at the Closing:

               (i) a certificate from an officer of Seller attesting to the matters set forth in Sections 9.2(b) and 9.2(c) ;

               (ii) duly executed counterparts of the assignment and assumption agreements under which Seller assigns and Purchaser assumes all of Seller’s right, title and interest in and to the Personal Property Leases, the Assumed Contracts, the Licenses and the Assumed Condemnations, substantially in the form of Exhibit C-1 (the “ General Assignment and Assumption ”);

               (iii) duly executed counterparts of assignment and assumption agreements under which Seller assigns and Purchaser assumes all of Seller’s right, title and interest in and to the Real Property Leases in each case substantially in the form of Exhibit C-2 (each, an “ Assignment and Assumption of Real Property Leases ”);

               (iv) duly executed limited or special warranty deeds (or their local equivalent), warranting only against Persons claiming by, through or under Seller and subject only to the Permitted Exceptions, in each case substantially in the form of Exhibit D-1 (Alabama) or Exhibit D-2 (Georgia), as applicable, and such other Conveyance Instruments as are reasonably necessary to vest in Purchaser title to the Timberlands and the Purchaser Easements in respect thereof, excluding the Reserved Mineral Interests and Rights in respect thereof (collectively, the “ Deeds ”);

               (v) a bill of sale with respect to the Personal Property, substantially in the form of Exhibit E ;

               (vi) an affidavit stating the taxpayer identification number of Seller and that Seller is not a “foreign person” for purposes of Section 1445 of the Code and the Treasury Regulations thereunder;

               (vii) such title affidavits as are reasonably requested by the Title Company, substantially in the form of Exhibit F ;

               (viii) an affidavit of Georgia residence with respect to Seller, as required by O.C.G.A. § 48-7-128;

               (ix) releases of all Monetary Liens on the Property;

               (x) Letter of Reliance by SLR Corporation in favor of Purchaser, in the form of Exhibit I hereto (the “ Letter of Reliance ”);

               (xi) one or more easements substantially in the form of Exhibit H hereto, to the extent necessary to evidence the right of Purchaser, or such other Persons as shall be designated by Purchaser, to use the Purchaser Easements;

               (xii) a guaranty executed by Seller’s parent, Forestar Group Inc., a Delaware corporation, in the form of Exhibit J hereto (the “ Forestar Guaranty ”);

               (xiii) delivery of possession of the Property at the Closing, subject to the Permitted Exceptions;

               (xiv) releases of the Property (collectively, the “ Timber Releases ”) from all timber harvesting and supply agreements between Seller and TIN Inc.; and (ii) that certain Per Unit Timber Contract dated as of August 25, 2008, between Canal Wood LLC and Seller; and

               (xv) such assignments, bills of sale, certificates of title and other instruments of assignment and conveyance, all in form reasonably satisfactory to Purchaser, as are necessary to convey fully and effectively to Purchaser the Property in accordance with the terms hereof.

          (b) Closing Deliveries by Purchaser . At the Closing, Purchaser shall deliver the following items to Seller:

               (i) the Purchase Price;

               (ii) certificates of a duly authorized officer of Purchaser attesting to the matters set forth in Sections 9.3(b) and 9.3(c) ;

               (iii) duly executed counterparts of the General Assignment and Assumption and the Assignment and Assumption of Real Property Leases;

               (iv) any Conveyance Instruments in respect of the Property to which Purchaser is a party;

               (v) one or more easements substantially in the form of Exhibit H hereto, to the extent necessary to evidence the right of Seller, or such other Persons as shall be designated by Seller, to use the Reserved Easements; and

               (vi) all such other instruments of assumption necessary, in the reasonable opinion of Seller, for Purchaser to assume the Assumed Liabilities.

          (c) Other Closing Deliveries . The Parties shall each execute and deliver such other and further certificates, assurances and documents as may reasonably be required by the other Parties in connection with the consummation of the transactions contemplated by this Agreement.

     Section 2.3 Costs and Expenses . Each Party shall be responsible for its own attorneys’ fees and expenses. Seller shall prepare the Deeds at Seller’s expense. Purchaser shall pay all other costs associated with filing any documents, including the Deeds, to be recorded. Purchaser shall be responsible for any recapture, reassessment, roll-back Taxes or changes in Tax assessments in respect of the Property that in either case may become due and payable after the Effective Time caused by any action or inaction of Purchaser with respect to the removal of the Property after the Effective Time from their present classifications, including failure of Purchaser to apply for any continuation of their present classifications, or changes in use after the Effective Time. Seller shall be responsible for and shall pay, or reimburse Purchaser for, any roll-back Taxes that may become due and payable caused by any action or inaction of Seller (other than conveying title to the Property to Purchaser) with respect to the removal of the Property from their present classifications before the Effective Time. Purchaser and Seller shall each bear one-half of all sales, use, excise, documentary, stamp duty, registration, transfer, conveyance, economic interest transfer and other similar Taxes related to the conveyance of the Property from Seller to Purchaser arising in connection with the transactions contemplated by this Agreement (collectively, “ Transfer Taxes ”), and the Party having primary responsibility under applicable Law shall timely prepare and file Tax Returns in respect of such Transfer Taxes with the applicable Taxing Authority. All other costs shall be paid by the Party incurring such costs.

ARTICLE III
ACKNOWLEDGEMENTS BY PURCHASER

     Section 3.1 Disclaimer of Certain Representations . Purchaser acknowledges that, except as is specifically set forth in this Agreement, the Ancillary Agreements, the Deeds and the other conveyance instruments referred to in Article II , Seller has not made, does not make and has not authorized anyone else to make, any representation, warranty or promise of any kind, including as to: ( i ) the existence or non-existence of access to or from the Timberlands or any portion thereof; ( ii ) the location of the Timberlands or any portion thereof within any flood plain, flood prone area, watershed or the designation of any portion thereof as “wetlands”; ( iii ) the availability of water, sewer, electrical, gas or other utility services at or on the Timberlands; ( iv ) the number of acres or square footage in the Timberlands; ( v ) the present or future physical condition or suitability of the Property for any purpose; ( vi ) the actual amount and type of timber on the Timberlands, if any; or ( vii ) any other matter or thing affecting or relating to the Property or this Agreement.

     Section 3.2 General Disclaimers . PURCHASER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, THE ANCILLARY AGREEMENTS, THE DEEDS AND THE OTHER CONVEYANCE INSTRUMENTS REFERRED TO IN ARTICLE II : ( 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, INCLUDING WITH RESPECT TO PHYSICAL OR ENVIRONMENTAL CONDITION, HABITABILITY, QUANTITY OR QUALITY OF TIMBER, NURSERY STOCK OR SEEDLINGS, FUTURE FIBER GROWTH

OR HARVEST, FUTURE FINANCIAL RESULTS FROM THE SALE OF FIBER GROWN ON THE TIMBERLANDS OR FROM THE SALE OF THE TIMBERLANDS, 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 PROPERTY IN “AS IS, WHERE IS, AND WITH ALL FAULTS” CONDITION ON THE CLOSING DATE, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE ANCILLARY AGREEMENTS, THE DEEDS AND THE OTHER CONVEYANCE INSTRUMENTS REFERRED TO IN ARTICLE II .

     Section 3.3 Waiver and Release . UPON THE CLOSING, SUBJECT TO ARTICLE X , 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, SUBJECT TO ARTICLE X 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 PROPERTY. PURCHASER AGREES THAT, SUBJECT TO ARTICLE X , SHOULD ANY INVESTIGATION, CLEANUP, REMEDIATION, CORRECTIVE ACTION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ADVERSE ENVIRONMENTAL CONDITIONS ON THE TIMBERLANDS BE REQUIRED AFTER THE CLOSING, SUCH INVESTIGATION, CLEAN-UP, REMOVAL, CORRECTIVE ACTION OR REMEDIATION SHALL BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF PURCHASER.

     Section 3.4 No Reliance . Purchaser acknowledges that, except as provided in this Agreement or Seller’s Disclosure Letter, any materials provided to it, including any cost or other estimates, projections, acreage, and timber information, the Confidential Information Memorandum dated March 2009, any management presentations and any materials and information provided on data disks or in any on-line data rooms, are not and shall not be deemed representations or warranties by or on behalf of Seller or any other Person and are not to be relied upon by Purchaser.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER AS TO STATUS

     Except as otherwise disclosed to Purchaser in the disclosure letter (“ Seller’s Disclosure Letter ”) delivered to Purchaser by Seller on the date of this Agreement (except for those sections of Seller’s Disclosure Letter that contemplate delivery on a date other than the date of this Agreement), but subject to Section 7.8 of this Agreement, Seller represents and warrants to Purchaser, as of the date hereof and as of the Closing Date, as follows:

     Section 4.1 Organization . Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to: ( i ) own, lease and operate its properties and assets 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 such other agreements (the “ Ancillary Agreements ”); and ( iii ) perform its obligations and consummate the transactions contemplated hereby and by the Ancillary Agreements.

     Section 4.2 Qualification . Seller is qualified or registered as a foreign corporation for the transaction of business and is in good standing under the Laws of each jurisdiction in which the location of its properties makes such qualification necessary, other than those jurisdictions as to which the failure to be so qualified or registered would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect on Seller’s ability to perform its obligations under this Agreement and the Ancillary Agreements.

     Section 4.3 Authority . 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 corporate action, and no other corporate 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.

     Section 4.4 No Violation . 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 incorporation, bylaws or any standing resolution of its board of directors; ( ii ) any Contract to which Seller is a party or by which any of its assets are bound; ( iii ) any Law applicable to Seller or any of the Timberlands; or ( iv ) any permit, license, order, judgment or decree of any Governmental Authority by which Seller or the Timberlands is or may be bound, excluding from the foregoing clauses (ii), (iii) and (iv) such breaches, violations or defaults that would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect or a material adverse effect on Seller’s ability to perform its obligations under this Agreement and the Ancillary Agreements.

     Section 4.5 Consents and Approvals . There are no approvals, consents or registration requirements with respect to any Governmental Authority or any other Person that are or will be necessary for the valid execution and delivery by Seller of this Agreement and the Ancillary Agreements, or the consummation of the transactions contemplated hereby and thereby, other than ( i ) those described in Section 4.5 of Seller’s Disclosure Letter and ( ii ) those which ( A ) have been obtained, or ( B ) 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 or a material adverse effect on Seller’s ability to perform its obligations under this Agreement and the Ancillary Agreements.

     Section 4.6 Litigation .

          (a) Pending Matters . Except as set forth in Section 4.6(a) of Seller’s Disclosure Letter, there are no pending Claims or, to Seller’s Knowledge, threatened Claims that ( i ) either ( A ) seek to restrain or enjoin the execution and delivery of this Agreement or any Ancillary Agreement or the consummation of any of the transactions contemplated hereby or thereby, or ( B ) affect or relate to any of the Property, and ( ii ) would be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect or a material adverse effect on Seller’s ability to perform its obligations under this Agreement and the Ancillary Agreements.

          (b) Adverse Judgments . There are no judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a Governmental Authority or by an arbitrator) against Seller (or affecting any of the Timberlands) that prohibit or restrict or could reasonably be expected to result in any material delay of the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements.

     Section 4.7 Taxes . Except for such Liens as are reflected in the Title Commitments, there are no Liens or other encumbrances, other than the Permitted Exceptions, on any of the Property that arose in connection with any failure or alleged failure by Seller to timely pay any Tax. All material Taxes related to the Property required to be withheld and paid have been timely withheld and paid, except for ( i ) such Taxes the failure to pay which would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect and ( ii ) any Taxes being contested in good faith and listed in Section 4.7 of Seller’s Disclosure Letter.

     Section 4.8 Contracts . Section 4.8 of Seller’s Disclosure Letter contains a list, and Seller has made available to Purchaser copies, of: ( i ) each Assumed Contract and Personal Property Lease that is in effect on the date of this Agreement; (ii) the Real Property Leases in effect on the date of this Agreement; (iii) the Licenses in effect on the date of this Agreement; and (i v ) each material amendment, supplement, and modification in respect of any of the foregoing in effect on the date of this Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER RELATED
TO THE PROPERTY

     Except as otherwise disclosed to Purchaser in Seller’s Disclosure Letter delivered to Purchaser by Seller on the date of this Agreement (except for those sections of Seller’s Disclosure Letter that contemplate delivery on a date other than the date of this Agreement), but subject to Section 7.8 of this Agreement, Seller represents and warrants to Purchaser, as of the date hereof and as of the Closing Date, as follows:

     Section 5.1 Compliance with Laws . Seller holds, and Section 5.1 of Seller’s Disclosure Letter lists, all licenses, certificates, permits, franchises, approvals, exemptions, registrations and rights of any Governmental Authority that are necessary to conduct operations on the Timberlands as presently conducted, except for those licenses, certificates, permits, franchises, approvals, exemptions, registrations and rights the failure to hold which would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect. Seller is presently operating the Timberlands in substantial compliance with applicable Laws, other than Environmental Laws, which are expressly excluded from this Section 5.1 , and except for those violations, if any, that would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect.

     Section 5.2 Condemnations . Except as described in Section 1.2(g) of Seller’s Disclosure Letter, there are no Condemnations as of the date hereof and no Condemnations have been concluded between January 1, 2009 and the date hereof.

     Section 5.3 Assumed Contracts, Personal Property Leases, Licenses and Real Property Leases . Except as described in Section 5.3 of Seller’s Disclosure Letter, with respect to each Assumed Contract, Personal Property Lease, License and Real Property Lease, or except as would not be reasonably likely, individually or in the aggregate, to have a material adverse effect on the use and enjoyment of the Timberlands or any material portion thereof in accordance with the terms of such Assumed Contract, Personal Property Lease, License or Real Property Lease: ( i ) such Assumed Contract, Personal Property Lease, License or Real Property Lease is legal, valid, binding, enforceable and in full force and effect; ( ii ) the transactions contemplated by this Agreement or the Ancillary Agreements will not result in a breach or default under such Assumed Contract, Personal Property Lease, License or Real Property Lease, or otherwise cause such Assumed Contract, Personal Property Lease, License or Real Property Lease to cease to be legal, valid, binding, enforceable and in full force and effect on identical terms following the Closing; ( iii ) neither Seller, nor to Seller’s Knowledge, any other party to such Assumed Contract, Personal Property Lease, License or Real Property Lease is in breach or default under such Assumed Contract, Personal Property Lease, License or Real Property Lease; and ( iv ) no event has occurred or failed to occur or circumstances exist which, with the delivery of notice, the passage of time or both, would constitute a breach or default by Seller or, to Seller’s Knowledge, by any other party, under such Assumed Contract, Personal Property Lease, License or Real Property Lease or permit the termination, modification or acceleration of rent under such Assumed Contract, Personal Property Lease, License or Real Property Lease.

     Section 5.4 Ownership of Personal Property . Seller has title to all of the Personal Property, free and clear of any Liens, except for encumbrances that in the aggregate are not

substantial in amount, do not materially detract from the value of the assets subject thereto, and do not materially interfere with the present use thereof.

     Section 5.5 Replanting; Harvest; Conveyed Interests .

          (a) Seller has replanted all portions of the Timberlands that were clearcut, cleancut, or materially damaged on or after January 1, 2008, substantially consistent with Seller’s past practices.

          (b) Since January 1, 2009 to the date of this Agreement Seller has not harvested any Pre-Merchantable Timber on any of the Timberlands.

          (c) Since the applicable effective date stated in each applicable Completed Title Commitment to the date of this Agreement, Seller has not leased or otherwise conveyed any interest in the Reserved Mineral Interests and Rights.

     Section 5.6 Matters Relating to the Environmental Condition of the Timberlands . Seller has made available to Purchaser complete and correct copies of all of the Environmental Reports, subject to the provisions of Section 8.3 . Except as described in Section 5.6 of Seller’s Disclosure Letter or as set forth in the Environmental Reports, ( i ) to Seller’s Knowledge, there is no condition existing on the Timberlands that constitutes a material violation of any applicable Environmental Law, ( ii ) to Seller’s Knowledge, there is no existing Adverse Environmental Condition on the Timberlands, ( iii ) to Seller’s Knowledge Seller has and maintains, in full force and effect, all Environmental Permits as are required under Environmental Laws for the ownership, operation and use of the Timberlands, except for those Environmental Permits the failure of which woul