<PAGE>

                                                                    EXHIBIT 4.23

WOOD SUPPLY AGREEMENT

BETWEEN

UBS MANGAKAHIA FOREST VENTURE LTD

AND

FLETCHER CHALLENGE FORESTS INDUSTRIES LIMITED

                                                         [SIMPSON GRIERSON LOGO]

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Wood Supply Agreement                                                     Page i

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                   <C>
1.     INTERPRETATION...............................................................................   1
2.     AGREEMENT TO SELL AND PURCHASE...............................................................   6
3.     PRICE........................................................................................   7
4.     HARVEST PLANNING.............................................................................   9
5.     TRANSITIONAL ARRANGEMENTS....................................................................  11
6.     USE OF DAMAGED WOOD..........................................................................  12
7.     PAYMENT......................................................................................  13
8.     RISK AND TITLE...............................................................................  14
9.     HARVESTING OBLIGATIONS.......................................................................  14
10.    ACCESS.......................................................................................  15
11.    RELATIONSHIP MANAGEMENT......................................................................  15
12.    REVIEWS AND INSPECTION.......................................................................  15
13.    REPRESENTATIONS AND WARRANTIES...............................................................  16
14.    DAMAGE.......................................................................................  17
15.    LIABILITY AND INDEMNITY......................................................................  18
16.    FORCE MAJEURE................................................................................  19
17.    ASSIGNMENT...................................................................................  20
18.    RESOLUTION OF DISPUTES.......................................................................  20
19.    TERMINATION AND SUSPENSION...................................................................  21
20.    CONFIDENTIALITY..............................................................................  23
21.    SEVERABILITY.................................................................................  24
22.    LIMITED RECOURSE.............................................................................  24
23.    APPLICABLE LAW...............................................................................  25
24.    NOTICES......................................................................................  25
25.    COPIES OF NOTICES............................................................................  27
26.    THIRD PARTY NOTICES..........................................................................  27
27.    ENTIRE AGREEMENT.............................................................................  27
28.    MODIFICATION.................................................................................  27
29.    WAIVER.......................................................................................  28
30.    COUNTERPARTS.................................................................................  28
31.    FURTHER ASSURANCES...........................................................................  28
32.    NO MERGER....................................................................................  28
33.    COSTS........................................................................................  28
34.    NO PARTNERSHIP...............................................................................  28
35.    GOODS AND SERVICES TAX.......................................................................  29
</TABLE>

APPENDIX 1        Map of Supply Region
APPENDIX 2        Forestry Right

<PAGE>

THIS AGREEMENT is dated the                day of                           2003

BETWEEN           UBS MANGAKAHIA FOREST VENTURE LTD an incorporated company
                  having its registered office at Auckland ("UBS Mangakahia")

AND               FLETCHER CHALLENGE FORESTS INDUSTRIES LIMITED an incorporated
                  company having its registered office at Auckland ("FCF")

BACKGROUND

A.       FCF is a New Zealand registered company holding a leadership position
         in New Zealand's forest industries.

B.       UBS Mangakahia will acquire the Trees and the Forestry Right. UBS
         Mangakahia is exclusively advised and managed by UBS Timber Investors
         (a division of UBS Global Asset Management New York, Inc, a portion of
         the asset management division of UBS AG).

C.       FCF and Teal 4 Limited have entered into a Sale and Purchase Agreement
         under which FCF will sell the Trees to UBS Mangakahia (as Teal 4
         Limited's nominee under the Sale and Purchase Agreement) and create the
         Forestry Right over the Land to be registered pursuant to the Forestry
         Rights Registration Act 1983.

D.       On settlement of the Sale and Purchase Agreement FCF and UBS Mangakahia
         are required to execute and deliver this agreement, and the
         Infrastructure Agreement which will set out further arrangements
         between the parties in relation to the supply of certain Trees to FCF
         and access to the Land together with the Management Agreement relating
         to the management of the Trees by FCF on behalf of UBS Mangakahia.

E.       UBS Mangakahia will be granted rights to the Trees pursuant to the
         Forestry Right and has agreed to enter into a stumpage sale of certain
         of those Trees to FCF, on the terms set out herein.

THE PARTIES AGREE:

1.       INTERPRETATION

         In this agreement unless the context indicates otherwise:

         1.1      DEFINITIONS:

                  "AFFILIATE" of a person shall mean a person controlled by,
                  controlling or under common control with, such person and for
                  the purposes of this

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Wood Supply Agreement                                                     Page 2

                  definition Forestry Corporation of New Zealand Limited (In
                  Receivership) is not an Affiliate of any party;

                  "BILL RATE" means the average of the bill rates for 90-day
                  bank accepted bills of exchange, expressed as a percentage per
                  annum as quoted on Reuters page BKBM (subject to manifest
                  error) as fixed at 10:45 am on each Business Day following the
                  due date;

                  "BUSINESS DAY" means a day on which registered banks are open
                  for business in Auckland excluding Saturdays, Sundays and
                  public holidays;

                  "CPI" means the Consumer Price Index (All Groups) or any index
                  in substitution for it published by the Department of
                  Statistics or other government agency;

                  "COMMENCEMENT DATE" means the date of Settlement as that term
                  is defined in the Sale and Purchase Agreement being the date
                  of this agreement;

                  "CONFIDENTIAL INFORMATION" means any information:

                  (a)      relating to the terms of this agreement excluding
                           Working Block(s), PHI, price information and other
                           information related to sales of stumpage and logs
                           from the Stands; or

                  (b)      disclosed by either party to the other party on the
                           express basis that such information is confidential;

                  provided that, where information relates exclusively to one
                  party, nothing in this agreement will require the other party
                  to maintain confidentiality in respect of that information;

                  "DEFAULT INTEREST RATE" means interest calculated at the Bill
                  Rate plus 4% per annum;

                  "ENCUMBRANCE" means a mortgage, lien, charge, pledge, title
                  retention, caveat, option, right of pre-emption, tenancy,
                  third party right, or security interest of any kind;

                  "EXPIRY DATE" means the date on which the Forestry Right
                  terminates in respect of the last of the Harvest Areas;

                  "FORESTRY CONSULTANT" means a reputable forestry expert with
                  relevant experience;

                  "FORESTRY RIGHT" means the forestry right to be entered into
                  between UBS Mangakahia and FCF concurrently with this
                  agreement in accordance with

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Wood Supply Agreement                                                     Page 3

                  the Forestry Rights Registration Act 1983 and in relation to
                  certain identified Stands, a copy of which is attached as
                  Appendix 2;

                  "FOREST ROADS" has the meaning given to that term in the
                  Infrastructure Agreement;

                  "GST" means goods and services tax levied in accordance with
                  the GST Act and includes any tax levied in substitution for
                  such tax and excludes any penalties and interest;

                  "GST ACT" means the Goods and Services Tax Act 1985;

                  "HARVEST AREA" means those of the Working Blocks that FCF
                  wishes to purchase in accordance with clauses 4.2 and 5.1.2;

                  "HARVEST PERIOD" means the 12 Month period from 1 July in any
                  given year until 30 June in the following year;

                  "HARVEST PLAN" means the harvest plan for each Harvest Period
                  provided by UBS Mangakahia to FCF pursuant to clause 4.1;

                  "HARVEST PLAN MAP" means the map delineating the boundaries of
                  the Harvest Area for each Harvest Period prepared by UBS
                  Mangakahia;

                  "INFRASTRUCTURE AGREEMENT" means the infrastructure agreement
                  entered into between UBS Mangakahia and FCF concurrently with
                  this agreement in relation to the provision of certain
                  services by FCF;

                  "INSOLVENCY EVENT" means with respect to a company when:

                  (a)      an application is made to a court for an order and an
                           order is duly made appointing a liquidator,
                           provisional liquidator, interim liquidator, receiver,
                           manager, receiver and manager, administrator,
                           administrative receiver, trustee in administration,
                           statutory manager or similar officer in respect of
                           the company or one of them is appointed;

                  (b)      the members of the company pass a special resolution
                           or the board of the company resolves to appoint a
                           liquidator or formal notice of a proposed resolution
                           to do so is given or any other steps are taken
                           evidencing an intention to do so;

                  (c)      the company stops or threatens to stop payment of
                           creditors generally or is deemed to be unable to pay
                           its debts as they fall due, has a compromise proposed
                           in respect of it, commences negotiations with any one
                           or more of its creditors with a view to the general
                           readjustment or rescheduling of its indebtedness,
                           makes a

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Wood Supply Agreement                                                     Page 4

                           general assignment for the benefit of or a
                           composition with its creditors or proposes a
                           reorganisation, moratorium or other administration
                           involving them;

                  (d)      execution issued against the company in respect of a
                           judgment debt has been returned unsatisfied in whole
                           or in part;

                  (e)      a statutory demand is served on the company for an
                           amount exceeding 1% of its gross assets as shown in
                           the accounts of the company for the most recently
                           completed financial year of the company and expires
                           unremedied unless such statutory demand relates to an
                           amount which is the subject of a bona fide dispute by
                           the company; or

                  (f)      a creditor of the company, which creditor's rights
                           are intended to be subordinate to the obligations of
                           the company under this agreement, attempts to
                           exercise any rights or to gain any specific rights
                           which would impinge upon UBS Mangakahia's rights
                           under the Forestry Right;

                  other than where, in the case of any of the events referred to
                  in subclauses (a) to (f) above, such event takes place for the
                  purposes of and is followed by a reconstruction, amalgamation
                  or reorganisation (not involving or arising out of insolvency)
                  approved in writing by the other party which consent is not to
                  be unreasonably or arbitrarily withheld or delayed;

                  "LAND" means the land the subject of the Forestry Right and
                  more particularly comprised and described in the Forestry
                  Right;

                  "MANAGEMENT AGREEMENT" means the management agreement to be
                  entered into between UBS Mangakahia and FCF concurrently with
                  this agreement pursuant to which FCF will manage the Tauhara
                  forest;

                  "MONTH" means a calendar month;

                  "PHI" means a pre-harvest inventory, being the random sampling
                  of Stands using MARVL (or the equivalent) assessment
                  methodology to defined levels of precision using current
                  standard industry grades applicable to the Supply Region at
                  the time;

                  "PRUNED LOG" means a log where the branches were pruned at a
                  sufficiently young age to provide a sheath of clear wood (knot
                  free timber) in the log;

                  "PRUNED STAND" means a Stand containing 10% or more of the TRV
                  as Pruned Logs;

                  "PURCHASE WINDOW" means the period commencing on the
                  Commencement Date and terminating on the Expiry Date unless
                  extended by agreement;

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Wood Supply Agreement                                                     Page 5

                  "QUARTER" means a calendar quarter ending on 31 March, 30
                  June, 30 September and 31 December in each Harvest Period
                  during the Purchase Window;

                  "RELATED AGREEMENTS" means the Forestry Right, the
                  Infrastructure Agreement, the Sale and Purchase Agreement and
                  the Management Agreement;

                  "REMAINING STANDS" means those Stands which remain subject to
                  the Forestry Right, as determined in accordance with the
                  Forestry Right, at the end of each Quarter;

                  "SALE AND PURCHASE AGREEMENT" means the sale and purchase
                  agreement entered into between Teal 4 Limited and FCF on 15
                  January 2003 (as may be amended by any deed(s) of amendment)
                  pursuant to which FCF will sell the Trees to UBS Mangakahia
                  (as Teal 4 Limited's nominee under that agreement) and create
                  the Forestry Right;

                  "STAND" means those parts of the Land comprising specific
                  plantation areas of the age class, area and silvicultural
                  condition described in the Forestry Right;

                  "SUPPLY REGION" means the area shown on the map in Appendix 1;

                  "TREES" means those Pinus radiata trees growing, standing or
                  lying on the Stands as at the date of Settlement of the Sale
                  and Purchase Agreement and any logs or forest produce arising
                  from such trees;

                  "TRV" means the total recoverable volume of logs (measured in
                  cubic metres) that is estimated to be available for harvest
                  from a Stand as set out in any Harvest Plan;

                  "WORKING BLOCK" means those Trees in a Stand (or part of a
                  Stand) which UBS Mangakahia proposes to harvest or is
                  harvesting in any Harvest Period in accordance with a Harvest
                  Plan;

         1.2      PARTIES: references to parties are references to parties to
                  this agreement;

         1.3      PERSONS: references to persons shall be deemed to include
                  references to individuals, companies, corporations, firms,
                  partnerships, joint ventures, associations, organisations,
                  trusts, states or agencies of state, government departments
                  and municipal authorities or other regulatory bodies or
                  regulatory authorities in each case whether or not having
                  separate legal personality;

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Wood Supply Agreement                                                     Page 6

         1.4      DEFINED EXPRESSIONS: expressions defined in the main body of
                  this agreement bear the defined meaning in the whole of this
                  agreement including the recitals;

         1.5      CLAUSES AND BACKGROUND: references to clauses and the
                  background are references to clauses and the background to
                  this agreement unless otherwise indicated;

         1.6      HEADINGS: section, clause and other headings are for ease of
                  reference only and shall not be deemed to form any part of the
                  context or to affect the interpretation of this agreement;

         1.7      SINGULAR AND PLURAL: words importing the singular number shall
                  include the plural and vice versa;

         1.8      APPENDICES: the appendices to this agreement shall have the
                  same effect as if set out in the body of this agreement;

         1.9      NEGATIVE OBLIGATIONS: any obligation not to do anything shall
                  be deemed to include an obligation not to suffer, permit or
                  cause that thing to be done;

         1.10     GENDER: words importing one gender shall include the other
                  genders;

         1.11     STATUTES AND REGULATIONS: references to a statute include
                  references to regulations, orders or notices made under or
                  pursuant to such statute or regulations made under the statute
                  and references to a statute or regulation include references
                  to all amendments to that statute or regulation whether by
                  subsequent statute or otherwise and a statute or regulation
                  passed in substitution for the statute or regulation referred
                  to as incorporating any of the provisions; and

         1.12     NEW ZEALAND DOLLARS: all monetary amounts are payable in New
                  Zealand dollars.

2.       AGREEMENT TO SELL AND PURCHASE

         2.1      SALE AND PURCHASE: UBS Mangakahia agrees to sell and FCF
                  agrees to purchase all Trees on the Harvest Area and all Trees
                  referred to in clause 5, in each case during the Purchase
                  Window on the terms set out in this agreement.

         2.2      PURCHASE PRICE FOR TREES FIXED: The purchase price for the
                  Trees will be a lump sum amount for each Working Block which
                  shall be calculated as the sum of the multiplication of the
                  price for each log grade (as determined by a Forestry
                  Consultant in accordance with clause 3) by the total Working
                  Block volume for each log grade (being the sum of the PHI
                  volume adjusted for forest growth in accordance with clause 7
                  between the date of the PHI

<PAGE>

Wood Supply Agreement                                                     Page 7

                  and the first day of the relevant Quarter nominated for
                  harvesting). For the avoidance of doubt, the parties agree
                  that the lump sum amount for each Working Block, as set in
                  accordance with clauses 3, 7.1 and 7.2, is irrespective of log
                  grades actually extracted by FCF.

3.       PRICE

         3.1      PRINCIPLE OF AND PROCEDURE FOR CALCULATION: The principle on
                  which the price of the Trees to be paid by FCF to UBS
                  Mangakahia shall be that such price shall be determined as
                  equivalent to the stumpage price that UBS Mangakahia would
                  have received if the volume purchased by FCF had been sold on
                  the open market by UBS Mangakahia. Such price shall be
                  calculated each Quarter in accordance with the following
                  provisions:

                  3.1.1    SET MARKET STUMPAGE: On or before the first day of
                           the Month 2 Months prior to the start of each Quarter
                           a Forestry Consultant will be appointed jointly by
                           UBS Mangakahia and FCF or, failing agreement, a
                           Forestry Consultant will be appointed by the
                           Chairperson of the Consultants' Committee of the New
                           Zealand Institute of Forestry. On or before the 20th
                           of the Month 2 Months prior to the start of the
                           Quarter, the Forestry Consultant will set the market
                           stumpage price by log grade (as set out in the PHI)
                           for the Trees for each Working Block. The Forestry
                           Consultant will advise both parties in writing for
                           each log grade, of the details of the market mix and
                           associated pricing and, when applicable, costs of
                           cartage, logging and loading.

                  3.1.2    FACTORS FOR CONSIDERATION: In setting the market
                           stumpage price for the Trees for any particular
                           Quarter the Forestry Consultant shall have regard to:

                           (a)      SUBMISSIONS: open submissions from FCF and
                                    UBS Mangakahia on market prices, log
                                    quality, recoverable volume, relevant market
                                    conditions impacting on optimum grade
                                    recovery, relevant cartage costs, all
                                    relevant extraction costs and the costs of
                                    bring the product to market;

                           (b)      TREE SALES: actual arms length third party
                                    sales of Trees, including sales to FCF,
                                    supplied by UBS Mangakahia to the Forestry
                                    Consultant on a confidential basis;

                           (c)      MARKET INFORMATION: the Forestry
                                    Consultant's own market information;

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Wood Supply Agreement                                                     Page 8

                           (d)      VOLUME: the volume to be harvested and the
                                    relative proportions of different log grades
                                    as determined by the PHI's;

                           (e)      MARKET PRICES: the prevailing market prices
                                    for logs in the domestic and export markets
                                    and sourced from Supply Region forests,
                                    including prices paid by traders for supply
                                    to the export market; and

                           (f)      RISK FACTORS: the potential risk in terms of
                                    grade, volume and other cost variations.

                  3.1.3    COST OF FOREST ROADS WHERE FCF IS THE PROVIDER OF
                           INFRASTRUCTURE SERVICES: FCF acknowledges that the
                           Purchase Price under the Sale and Purchase Agreement
                           included an amount effectively representing a
                           prepayment for the cost of the provision of Forest
                           Roads. Accordingly, for so long as FCF is the
                           provider of Forest Roads, at its cost, pursuant to
                           clause 2.8 of the Infrastructure Agreement, there
                           shall be no deduction for the cost of FCF providing
                           such Forest Roads when deriving the market stumpage
                           price.

                  3.1.4    COST OF FOREST ROADS WHERE FCF IS NOT THE PROVIDER OF
                           INFRASTRUCTURE SERVICES: Where FCF is not the
                           provider of Forest Roads, at its cost, pursuant to
                           clause 2.8 of the Infrastructure Agreement, then the
                           costs to UBS Mangakahia of such Forest Roads
                           (provided such costs have been reasonably incurred
                           consistent with clauses 2.2 and 2.4 of the
                           Infrastructure Agreement) will be added to the market
                           stumpage price as derived in clauses 3.1.1, 3.1.2 and
                           3.1.3 above.

                  3.1.5    DECISION FINAL: The assessments made by the Forestry
                           Consultant shall be final and binding on the parties
                           and clause 18 shall not apply to such assessments.

         3.2      CALCULATION UNCOMPLETED: Notwithstanding clause 3.1.1, where a
                  calculation is uncompleted at the start of a Quarter, then:

                  3.2.1    PAYMENT AND PRICES: Pending completion of the
                           calculation, payment shall be made at prices by log
                           grade for the Quarter being the prices for those log
                           grades set by the Forestry Consultant at the previous
                           Quarter.

                  3.2.2    COMPLETION OF THE CALCULATION: On completion of the
                           Forestry Consultant's assessment, the Forestry
                           Consultant will advise the parties in writing of the
                           market stumpage price by log grade (as set out in the
                           PHI) for the Trees for each Working Block to apply
                           for

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Wood Supply Agreement                                                     Page 9

                           the particular Quarter. Within 10 Business Days of
                           being advised by the Forestry Consultant, UBS
                           Mangakahia shall undertake the calculation in
                           accordance with clauses 7.1 and 7.2 and advise FCF in
                           writing. Within 15 Business Days of such advice,
                           either UBS Mangakahia shall refund any over-payment
                           to FCF together with a credit note for any excess GST
                           previously paid by FCF or FCF shall pay any
                           deficiency to UBS Mangakahia and UBS Mangakahia will
                           forthwith issue a GST tax invoice for the deficiency.
                           Any such refund or payment shall bear interest
                           computed from the first day of the Quarter for which
                           the calculation was not completed until the date on
                           which such refund or payment is made in full.
                           Interest will be calculated daily:

                           (a)      BILL RATE: for the period from the first day
                                    of the Quarter until the date due for the
                                    payment, at the Bill Rate; and

                           (b)      DEFAULT INTEREST RATE: for the period from
                                    the day following the due date until the
                                    actual day of payment, at the Default
                                    Interest Rate and will be compounded
                                    monthly.

4.       HARVEST PLANNING

         4.1      CONFIRMATION OF WORKING BLOCKS: On or before 1 February in
                  each Harvest Period UBS Mangakahia shall provide to FCF a
                  Harvest Plan which shall notify FCF of those Working Blocks
                  which UBS Mangakahia proposes to harvest in the following
                  Harvest Period ("UBS Mangakahia's Notice") and which are
                  accordingly available for FCF to elect its Harvest Area.
                  Accompanying UBS Mangakahia's Notice shall be the PHI for
                  Working Block. To ensure that the sampled Trees can be
                  identified and audited UBS Mangakahia must make available to
                  FCF the plot data and plot locations used in calculating the
                  PHI to enable FCF to undertake an independent assessment of
                  the PHI. For the avoidance of doubt, the parties agree that
                  clause 18 does not apply to the PHI information referred to in
                  this sub-clause. Each Harvest Plan shall make available for
                  the relevant Harvest Period the following minimum volume:

                  UBS Mangakahia 4              Harvest Periods 1 and 2   No
                  minimum
                                  Harvest Periods 3 to 5       100,000m(3)
                                  Harvest Periods 6 plus       No minimum

                  By way of explanation Harvest Period 4 commences on 1 July
                  2006 and ends on 30 June 2007.

         4.2      FCF'S ELECTION: On or before 1 March in each Harvest Period
                  FCF shall notify UBS Mangakahia which of the Working Blocks
                  set out in UBS

<PAGE>

Wood Supply Agreement                                                    Page 10

                  Mangakahia's Notice it wishes to purchase in the following
                  Harvest Period and the (not less than two) Quarters in which
                  it proposes to harvest each such Working Block ("FCF's
                  Notice"). The parties acknowledge that the volume of Trees in
                  the Harvest Area, plus any road line salvage volume for the
                  same Harvest Period, will not exceed 50% (or such greater
                  percentage as is reasonably acceptable to UBS Mangakahia to
                  enable allocation to FCF of entire Working Blocks) of the
                  total volume of the Working Blocks set out in UBS Mangakahia's
                  Notice.

         4.3      HARVESTING BY FCF: FCF agrees that it shall not harvest a
                  Working Block in the Harvest Area in the following Harvest
                  Period unless and until it has paid for that Working Block in
                  full. UBS Mangakahia acknowledges that FCF is not obliged to
                  harvest any Working Block in the Harvest Area, either at any
                  particular time or at all.

         4.4      EQUAL RIGHTS OF PARTICIPATION: The balance of the Working
                  Blocks in UBS Mangakahia's Notice that are not included in
                  FCF's Notice must be made available to the market by UBS
                  Mangakahia by way of a competitive sales process within which
                  FCF shall have equal rights of participation with the other
                  bidders to buy all or any of the balance.

         4.5      CREATION OF HARVEST PLAN MAP: UBS Mangakahia shall make
                  available a Harvest Plan Map following receipt of FCF's Notice
                  and deliver to FCF a copy (in both electronic and paper form
                  if required by FCF) within twenty (20) Business Days of
                  receipt of FCF's Notice.

         4.6      ARRANGEMENTS FOR THE FINAL HARVEST PERIOD BOND: Unless the
                  parties agree otherwise, the following arrangements shall
                  apply in respect of the final Harvest Period under the
                  Forestry Right.

                  4.6.1    UBS MANGAKAHIA'S BOND: On the first day of the first
                           Quarter of the final Harvest Period UBS Mangakahia
                           will pay to FCF a completion bond equal to the sum of
                           $200,000 increased by the change in the CPI expressed
                           as a percentage calculated from the nearest Quarter
                           either preceding or following the Commencement Date
                           to the nearest quarter date either preceding or
                           following the first day of the first Quarter of the
                           final Harvest Period ("UBS Mangakahia's Bond").

                  4.6.2    REPAYMENT OF BOND BY FCF: By the later of twenty (20)
                           Business Days after completion of harvesting as
                           advised by UBS Mangakahia in accordance with clause
                           12.1.2 of the Forestry Right, or five (5) Business
                           Days after determination in accordance with clause
                           4.6.3 below, of any disputed amounts payable to FCF,
                           FCF shall repay UBS Mangakahia's Bond to UBS
                           Mangakahia less any amounts that have either been
                           agreed between the parties as due by UBS Mangakahia
                           to FCF under the Forestry Right or have been

<PAGE>

Wood Supply Agreement                                                    Page 11

                           determined to be owed by UBS Mangakahia to FCF
                           arising as a result of breaches of the Forestry
                           Right.

                  4.6.3    DISPUTES: If UBS Mangakahia disputes that an amount
                           is payable to FCF by UBS Mangakahia as a result of a
                           breach of the Forestry Right and the parties are
                           unable to reach agreement within five (5) Business
                           Days the determination is to be made by either the
                           award of an arbitrator or by court order (all rights
                           of appeal having either expired or been exhausted).

                  4.6.4    INTEREST: FCF will pay interest on the amount payable
                           to UBS Mangakahia (if any) at the Bill Rate
                           calculated daily from the first day of the first
                           Quarter of the final Harvest Period until the date of
                           payment in full.

                  4.6.5    UBS MANGAKAHIA'S BOND INSUFFICIENT: In the event that
                           UBS Mangakahia's Bond is insufficient to satisfy the
                           amounts due to FCF, UBS Mangakahia agrees to
                           forthwith pay to FCF the amount due to FCF together
                           with interest from the due date for payment until the
                           date of payment in full such interest to be
                           calculated in accordance with clause 7.5. The
                           provision of UBS Mangakahia's Bond is without
                           prejudice to all other rights available to FCF under
                           this agreement or at law.

         4.7      PRUNED STANDS: In any Harvest Period where the hectares of
                  Pruned Stands represent less than 80% of the total hectares of
                  the Harvest Plan for the Harvest Period, then the Harvest Area
                  that FCF shall be entitled to elect shall not contain more
                  than 50% of the hectares of the Pruned Stands within the
                  Harvest Plan for the relevant Harvest Period.

5.       TRANSITIONAL ARRANGEMENTS

         5.1      HARVEST PERIOD ONE: The parties agree that the following
                  transitional arrangements will apply in respect of harvest
                  planning for the Harvest Period beginning 1 July 2003 and
                  ending 30 June 2004 ("Harvest Period One").

                  5.1.1    CONFIRMATION OF WORKING BLOCKS: Within twenty (20)
                           days of Settlement (as defined in the Sale and
                           Purchase Agreement) UBS Mangakahia and FCF will meet
                           to discuss which of the Stands will be available as
                           Working Blocks for harvesting in Harvest Period One.
                           Within thirty-five (35) days of Settlement UBS
                           Mangakahia shall provide written confirmation to FCF
                           of the Working Blocks to be harvested in Harvest
                           Period One ("UBS Mangakahia's Transitional Notice").

                  5.1.2    FCF'S ELECTION: Within seventy five (75) days of
                           Settlement, FCF shall notify UBS Mangakahia which of
                           the Working Blocks

<PAGE>

Wood Supply Agreement                                                    Page 12

                           confirmed as being available for harvesting in UBS
                           Mangakahia's Transitional Notice it wishes to
                           purchase and the (not less than two) Quarters in
                           Harvest Period One in which it proposes to harvest
                           each such Working Block ("FCF's Transitional
                           Notice"). The parties acknowledge that the volume of
                           Trees in the Harvest Area, plus any road line salvage
                           volume in Harvest Period One, will not exceed 50% (or
                           such greater percentage as is reasonably acceptable
                           to UBS Mangakahia to enable allocation to FCF of
                           entire Working Blocks) of the total volume of the
                           Working Blocks set out in UBS Mangakahia's Notice.

                  5.1.3    HARVESTING BY FCF: Subject to clause 5.1.2, FCF
                           agrees that it shall not harvest a Working Block in
                           the Harvest Area in Harvest Period One unless and
                           until it has paid for that Working Block in full. UBS
                           Mangakahia acknowledges that FCF is not obliged to
                           harvest any Working Block in the Harvest Area, either
                           at any particular time or at all. The balance of the
                           Working Blocks in UBS Mangakahia's Transitional
                           Notice that are not included in FCF's Transitional
                           Notice must be made available to the market by UBS
                           Mangakahia by way of a competitive sales process
                           within which FCF shall have equal rights of
                           participation with the other bidders to buy all or
                           any of the balance.

                  5.1.4    CREATION OF HARVEST PLAN MAP: UBS Mangakahia shall
                           make available a Harvest Plan Map following receipt
                           of FCF's Transitional Notice in the manner set out in
                           clause 4.5.

         5.2      HARVEST PERIOD TWO: The parties agree that clause 4 above will
                  apply to harvest planning for the period beginning 1 July 2004
                  and ending 30 June 2005 ("Harvest Period Two").

6.       USE OF DAMAGED WOOD

         If all or any part of the Land or Trees are damaged by fire, wind,
         forest disease, flood or other cause the following shall apply.

         6.1      FCF AGREES TO ADVISE: Both FCF and UBS Mangakahia agree to
                  promptly consult and liaise with each other to agree an
                  appropriate action plan consistent with the objectives of this
                  agreement. For the avoidance of doubt this does not oblige
                  either party to purchase the damaged Trees or any of them.

         6.2      COMPETITIVELY OFFER WORKING BLOCKS: Following consultation
                  between the parties for a period of not less than ten (10)
                  Business Days, UBS Mangakahia may on whatever terms it
                  considers appropriate by way of a competitive sales process
                  offer any Working Blocks containing damaged Trees ("Damaged
                  Working Blocks") to the market. FCF will be entitled to

<PAGE>

Wood Supply Agreement                                                    Page 13

                  enter the competitive bidding process for those Trees but will
                  not be entitled to any fixed volume of Trees from Damaged
                  Working Blocks offered by UBS Mangakahia.

7.       PAYMENT

         7.1      TAX INVOICE: Not less than one Month prior to the start of the
                  Quarter nominated in FCF's Notice or FCF's Transitional Notice
                  for harvesting of a Working Block in the Harvest Area, UBS
                  Mangakahia shall prepare and send to FCF a GST invoice for the
                  Trees in that Working Block which shall include any GST
                  payable in respect of the sale and purchase of Trees. The
                  invoice amount for each Working Block in the Harvest Area
                  shall be calculated using the invoice calculated price for the
                  Quarter by the Forestry Consultant pursuant to clause 2.2 and
                  3 and the volumes as determined in the PHI for that Working
                  Block to which is added forest growth between the date of the
                  PHI and the first day of the Quarter in which FCF's Notice or
                  FCF's Transitional Notice has nominated it wishes to harvest
                  that Working Block as determined in clause 7.2.

         7.2      CALCULATION OF FOREST GROWTH: A Forestry Consultant, appointed
                  jointly by the parties in the manner set out in clause 3.1.1,
                  shall calculate forest growth for each Working Block in the
                  Harvest Area between the date of the PHI and the first day of
                  the Quarter referred to in clause 7.1 using the Y-T-Gen
                  methodology applicable to Tauhara forest using base data from
                  the PHI. The Forestry Consultant shall calculate the amount of
                  forest growth from which shall be deducted any event specific
                  loss since the date of the PHI, which loss must be
                  substantiated by FCF to the reasonable satisfaction of the
                  Forestry Consultant (after hearing submissions from UBS
                  Mangakahia) and shall be final and binding on the parties and
                  clause 18 shall not apply to such calculations.

         7.3      PAYMENT OF INVOICE: Subject to clause 3.2, FCF shall pay each
                  invoice for the Trees in a Working Block in the Harvest Area
                  rendered in terms of clause 7.1 by the first day of the
                  Quarter nominated for that Working Block in FCF's Notice or
                  FCF's Transitional Notice (as the case may be) issued pursuant
                  to clauses 4.2 and 5.1.2 respectively.

         7.4      NO CLAIM: FCF shall have no claim nor shall UBS Mangakahia
                  have any liability to FCF where FCF is subsequently prevented
                  from harvesting or using the then existing most practicable
                  and cost effective access route to harvest Trees (for whatever
                  reason including those matters set out in clause 5.15 of the
                  Forestry Right) which are the subject of FCF's Notice or FCF's
                  Transitional Notice as the context requires.

         7.5      PAYMENT IN CLEARED FUNDS: Receipt of a cheque, bill of
                  exchange or other negotiable instrument will not constitute
                  payment of any amount under this agreement until the amount
                  represented by that cheque, bill of exchange

<PAGE>

Wood Supply Agreement                                                    Page 14

                  or negotiable instrument has been received in full, in cleared
                  funds, by the intended payee.

         7.6      DEFAULT INTEREST: If any amount falls overdue for payment
                  under this agreement, the overdue amount will (without
                  prejudice to any other right or remedy under this agreement)
                  bear default interest from the date on which payment of that
                  amount falls overdue until the date on which payment of the
                  overdue amount is made in full. Default interest will be
                  calculated daily at the Default Interest Rate and will be
                  compounded monthly.

8.       RISK AND TITLE

         8.1      RISK: Risk in each Tree in a Harvest Area elected by FCF in
                  FCF's Notice or FCF's Transitional Notice passes to FCF as
                  from the date on which payment of the GST invoice for the
                  Trees in the relevant Working Block is due.

         8.2      TITLE: Title to a Tree in a Working Block in the Harvest Area
                  passes to FCF at the time of payment by FCF in full of the GST
                  invoice for that Working Block, pursuant to clause 7.3.

         8.3      WARRANTIES AND UNDERTAKINGS: UBS Mangakahia warrants and
                  undertakes to FCF as follows.

                  8.3.1    LEGAL OWNER: As at the date that title to a Tree
                           passes to FCF UBS Mangakahia is the legal and
                           beneficial owner of the relevant Trees.

                  8.3.2    TITLE: Title in the Trees will pass to FCF free from
                           any Encumbrances created by UBS Mangakahia.

         8.4      NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO SIZE: UBS
                  Mangakahia provides no warranty or representation to FCF with
                  respect to the size, quality or value of any Trees nor the
                  logging or other conditions that may exist in connection
                  therewith in the Harvest Areas.

         8.5      NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO QUANTITY: UBS
                  Mangakahia makes no warranty or representation as to the
                  actual quantity of timber in the Harvest Area, the log grade
                  mix, or the harvest and extraction costs that may apply.

9.       HARVESTING OBLIGATIONS

         9.1      HARVESTING: FCF must:

                  9.1.1    PURCHASE: only purchase the Trees during the Purchase
                           Window in accordance with this agreement;

<PAGE>

Wood Supply Agreement                                                    Page 15

                  9.1.2    REMOVAL: only remove Trees from the Harvest Area; and

                  9.1.3    PRE-HARVEST MEETING: meet with UBS Mangakahia at each
                           Working Block within the Harvest Area, for a
                           pre-harvest meeting before harvesting machinery is
                           used. The boundaries for the Harvest Area in any
                           Harvest Period shall be shown to a representative of
                           FCF by UBS Mangakahia. If the harvesting contractor
                           is changed before the completion of harvesting of the
                           Harvest Area or a new harvesting contractor is used,
                           FCF will advise UBS Mangakahia of the change in
                           harvesting contractor and take reasonable steps to
                           ensure the harvesting contractor understands the
                           boundaries of the Harvest Area.

         9.2      RESTRICT ACCESS: FCF shall have the right to restrict access
                  to the Harvest Area during harvesting in accordance with good
                  forestry industry practice.

10.      ACCESS

         Subject to the terms of the Forestry Right, UBS Mangakahia grants FCF
         and FCF's employees, agents and/or contractors, the right to enter and
         re-enter the Land to access the Harvest Area at any time during the
         term of this agreement, with or without vehicles, machinery and plant
         of any kind, for the purpose of harvesting the Trees and removing the
         timber from the Land.

11.      RELATIONSHIP MANAGEMENT

         If, in UBS Mangakahia's reasonable opinion, a person contracted to FCF
         or employed by FCF is not appropriate, given either UBS Mangakahia's
         responsibility to maximize its investment return from the Trees or its
         obligations under this agreement or any Related Agreement, then UBS
         Mangakahia shall advise FCF of its concerns. Thereafter the parties
         will consult in good faith with a view to addressing UBS Mangakahia's
         concerns. If after such consultation those concerns remain, in UBS
         Mangakahia's reasonable opinion, then UBS Mangakahia may direct FCF to
         end and FCF shall forthwith thereafter end the direct and indirect
         involvement with UBS Mangakahia of that person.

12.      REVIEWS AND INSPECTION

         12.1     OBSERVATION AND INSPECTIONS: Where UBS Mangakahia has
                  reasonable grounds to believe its interests could be adversely
                  affected UBS Mangakahia shall, subject to reasonable
                  consultation with FCF, have the right to inspect or
                  investigate, at reasonable times and on reasonable notice, any
                  forest operational matters relating to this agreement.

         12.2     PARTICIPATION AND REASONABLE ASSISTANCE: FCF shall provide all
                  reasonable assistance in respect of such investigations.

<PAGE>

Wood Supply Agreement                                                    Page 16

13.      REPRESENTATIONS AND WARRANTIES

         13.1     FCF'S REPRESENTATIONS AND WARRANTIES: FCF represents and
                  warrants as follows.

                  13.1.1   DULY INCORPORATED: FCF is a company duly incorporated
                           and validly existing under the laws of New Zealand.

                  13.1.2   AUTHORITY: The execution, delivery and performance by
                           FCF of this agreement have been duly authorised by
                           all necessary action on its part, do not contravene
                           any law binding on FCF, do not contravene the
                           incorporation documents of FCF and do not contravene
                           the provisions of or constitute a default under any
                           other agreement to which FCF may be a party or by
                           which any of its assets may be bound.

                  13.1.3   CONSENTS, APPROVALS AND AUTHORISATIONS: It has
                           obtained or made all consents, approvals,
                           authorisations or orders of any court or governmental
                           authority or agency required on its behalf to be
                           obtained or made on or prior to the date of execution
                           of this agreement in connection with the execution
                           and delivery of this agreement and the performance by
                           it of its obligations hereunder.

                  13.1.4   LEGALLY BINDING: This agreement has been duly
                           executed and delivered by FCF and constitutes the
                           legal, valid and binding obligations of FCF,
                           enforceable against FCF in accordance with its terms.

                  13.1.5   NO ACTIONS OR PROCEEDINGS: There is no action, suit
                           or proceeding before any court or governmental agency
                           or authority now pending or, to the knowledge of FCF,
                           threatened against FCF which might adversely affect
                           the ability of FCF to perform its obligations under
                           this agreement.

         13.2     UBS MANGAKAHIA'S REPRESENTATIONS AND WARRANTIES: UBS
                  Mangakahia represents and warrants as follows.

                  13.2.1   INCORPORATED COMPANY: UBS Mangakahia is a company
                           duly incorporated and validly existing under the laws
                           of the country of its incorporation.

                  13.2.2   AUTHORITY: The execution, delivery and performance by
                           UBS Mangakahia of this agreement have been duly
                           authorised by all necessary action on its part, do
                           not contravene any law binding on UBS Mangakahia, do
                           not contravene the incorporation documents of UBS
                           Mangakahia and do not contravene the provisions of or
                           constitute a default under any other agreement to
                           which UBS

<PAGE>

Wood Supply Agreement                                                    Page 17

                                Mangakahia may be a party or by which any of its
                                assets may be bound.

                     13.2.3     CONSENTS, APPROVALS AND AUTHORISATIONS: It has
                                obtained or made all consents, approvals,
                                authorisations or orders of any court or
                                governmental authority or agency required on its
                                behalf to be obtained or made on or prior to the
                                date of execution of this agreement in
                                connection with the execution and delivery of
                                this agreement and the performance by it of its
                                obligation hereunder.

                     13.2.4     LEGALLY BINDING: This agreement has been duly
                                executed and delivered by UBS Mangakahia and
                                constitutes the legal, valid and binding
                                obligation of UBS Mangakahia, enforceable
                                against UBS Mangakahia in accordance with its
                                terms.

                     13.2.5     NO ACTIONS OR PROCEEDINGS: There is no action,
                                suit or proceeding before any court or
                                governmental agency or authority now pending or,
                                to the knowledge of UBS Mangakahia, threatened
                                against UBS Mangakahia which might adversely
                                affect the ability of UBS Mangakahia to perform
                                its obligations under this agreement.

14.      DAMAGE

         14.1        PRESERVE TREES: Where FCF is not the manager under the
                     Management Agreement, UBS Mangakahia will use its best
                     endeavors to preserve the state and condition of the Trees
                     once FCF has made an election in accordance with FCF's
                     Notice and FCF's Transitional Notice in clauses 4.2 and
                     5.1.2 and before risk in the Trees passes to FCF pursuant
                     to clause 8.1 in the same state and condition as at the
                     date of FCF's Notice, subject only to incremental growth in
                     the Trees or any event specific loss. Where the price has
                     already been calculated for the Trees in FCF's Notice in
                     accordance with clause 3.1, that price shall be adjusted
                     according to clause 7.2. In addition to the adjustment in
                     the price, if any of the Trees in FCF's Notice are
                     materially damaged or destroyed prior to risk passing to
                     FCF in accordance with clause 8.1, then provided UBS
                     Mangakahia has sufficient uncommitted Trees in the current
                     or next succeeding Harvest Period, the parties shall
                     negotiate with a view to agreeing a replacement volume of
                     Trees of similar quality, age class and silvicultural
                     condition.

         14.2        DAMAGE BY FCF: If FCF damages or harvests Trees which are
                     not authorized to be harvested under this agreement then:

                     14.2.1     TREES BELONGING TO FCF: where the Trees belong
                                to FCF UBS Mangakahia has no liability; and

<PAGE>

Wood Supply Agreement                                                    Page 18

                  14.2.2   TREES BELONGING TO UBS MANGAKAHIA OR ANOTHER BUYER:
                           where the Trees belong either to UBS Mangakahia or to
                           another buyer FCF must pay UBS Mangakahia on demand
                           as liquidated damages, an amount equal to:

                           (a)      VOLUME: the volume of such logs that would
                                    have been obtained from the Trees damaged as
                                    estimated by UBS Mangakahia using generally
                                    accepted professional forestry procedures
                                    multiplied by

                           (b)      WEIGHTED AVERAGE: 2 times the weighted
                                    average stumpage rate applicable under this
                                    agreement during the Quarter when the damage
                                    occurs. The appropriate provisions of clause
                                    3 and 7 will apply to these Trees.

                  14.2.3   NO LIABILITY: FCF shall have no liability under this
                           clause 14.2 if it has relied on information provided
                           by UBS Mangakahia that is incorrect which has
                           resulted in FCF harvesting Trees it was not
                           authorised to harvest.

         14.3     DAMAGE BY UBS MANGAKAHIA OR ANOTHER BUYER: If UBS Mangakahia
                  or another third party buyer, authorised by UBS Mangakahia,
                  damages or harvests Trees which are not authorised to be
                  harvested under this agreement then:

                  14.3.1   TREES BELONGING TO UBS MANGAKAHIA: where the Trees
                           belong to UBS Mangakahia, FCF has no liability; and

                  14.3.2   TREES BELONGING TO FCF: where the Trees belong to
                           FCF, UBS Mangakahia must pay to FCF on demand as
                           liquidated damages, an amount calculated on the same
                           basis as in clause 14.2.2 above.

                  14.3.3   NO LIABILITY: UBS Mangakahia shall have no liability
                           under this clause 14.3 if it has relied on
                           information provided by FCF that is incorrect which
                           has resulted in UBS Mangakahia harvesting Trees it
                           was not authorised to harvest.

15.      LIABILITY AND INDEMNITY

         15.1     LIABILITY: Nothing expressed or implied in this agreement
                  shall confer any liability on either party (referred to in
                  this clause as the "First Party") in respect of any indirect,
                  consequential or special loss, damage, cost or expense,
                  including without limitation, loss of profits or savings of
                  any kind suffered or incurred by the other party as a direct
                  or indirect result of a breach by the First Party of any of
                  its obligations under this agreement.

<PAGE>

Wood Supply Agreement                                                    Page 19

         15.2     INDEMNITY: Subject to clause 15.1, each party (referred to in
                  this clause as the "First Party") shall at all times indemnify
                  the other party in respect of any loss, damage, cost or
                  expense, (including reasonable enforcement costs, whether
                  incurred on a solicitor and own client basis or otherwise)
                  directly suffered by the other party as a result of a breach
                  by the First Party of any of its obligations under this
                  agreement.

         15.3     MITIGATION: Each party will take all reasonable steps to
                  mitigate any costs, damages, fines, penalties, loss or
                  expense, it may suffer.

         15.4     NO DOUBLE CLAIMS: Neither party is entitled to claim more than
                  once in respect of any one matter giving rise to a claim under
                  this agreement or any of the Related Agreements.

16.      FORCE MAJEURE

         16.1     DELAY OR FAILURE TO PERFORM: No party shall be liable for
                  failure to perform or delay in performing hereunder if the
                  cause of such failure or delay is outside or beyond the
                  reasonable control of the party failing to perform (including
                  but without derogating from the generality of the foregoing:
                  fire, wind, flood, earthquake, volcanic eruption, public
                  disorders, riot, war, embargoes, transport restrictions and
                  forest fire prevention restrictions). For the purposes of this
                  clause the solvency of a party shall be deemed to be within
                  that party's reasonable control. Further nothing in this
                  section shall excuse payment of any money due or which becomes
                  due under this agreement where the obligation to pay arose
                  before the occurrence of the event of force majeure.

         16.2     SUSPENSION OF PERFORMANCE LIMITED: Any suspension of
                  performance by reason of this section shall be limited to the
                  period during which the force majeure exists.

         16.3     NOTICE: The party claiming force majeure shall as soon as
                  possible and in any event no later than five (5) Business Days
                  after the happening of the event causing the failure give
                  notice to the other of the happening of the event causing the
                  failure and shall furnish all available information detailing
                  the cause or event and give an estimate of the period of time
                  required to remedy the failure (if such remedy is deemed
                  practicable). Failure to give such notice shall prevent the
                  party from claiming that the event gives rise to force
                  majeure.

         16.4     PRIOR OBLIGATIONS: No situation of force majeure pursuant to
                  this section shall relieve either party of any duty or
                  obligation under this agreement which relates to a period
                  prior to the existence of the situation of force majeure and
                  had arisen or been incurred prior to the existence of the
                  situation of force majeure.

<PAGE>

Wood Supply Agreement                                                    Page 20

17.      ASSIGNMENT

         17.1     CONSENT: This agreement shall be binding on and inure to the
                  benefit of the parties, their respective successors and
                  permitted assigns. A party (the "Assignor") shall not transfer
                  or assign its right or interest in this agreement (in part or
                  whole) without the previous written consent of the other party
                  being had and obtained. Such consent is not to be arbitrarily
                  withheld.

         17.2     DEED: In the case of request for assignment or transfer the
                  Assignor shall obtain the execution by the proposed assignee
                  of a deed of covenant to be prepared by the other party's
                  solicitors at the Assignor's costs whereby the proposed
                  assignee covenants with the other party to observe and perform
                  all the terms and conditions of this agreement to be observed
                  and performed on the part of the assignor.

         17.3     FORESTRY RIGHT CONTEMPORANEOUS: For the avoidance of doubt,
                  the parties agree that if UBS Mangakahia transfers or assigns
                  its interest in the Forestry Right it must, contemporaneously
                  with that transfer or assignment, transfer or assign its
                  obligations under this agreement to that transferee or
                  assignee to ensure that FCF's rights under this agreement are
                  protected and to ensure that at all times the Forestry Right
                  and the obligations under this agreement are held by the same
                  party.

18.      RESOLUTION OF DISPUTES

         18.1     DISPUTE RESOLUTION: In the event of any dispute arising
                  between the parties in relation to this agreement, or any
                  matter arising from it the following provisions will apply.

                  18.1.1   NEGOTIATE: A party claiming that a dispute has arisen
                           concerning this agreement must give notice to the
                           other party specifying the matter in dispute. The
                           parties will use their best endeavours to resolve the
                           dispute by negotiation in good faith. The parties
                           will attend at least one meeting to discuss and
                           attempt to resolve the dispute as a condition
                           precedent to taking any other steps concerning the
                           dispute (including but not limited to commencing any
                           legal proceedings other than an application for
                           injunctive relief). The attendees at such meeting
                           will include the Managing Director of UBS Timber
                           Investors (or nominee) and the Chief Executive
                           Officer of Fletcher Challenge Forests Limited (or
                           nominee). All discussions will be without prejudice
                           and will not be referred to in any later proceedings.

                  18.1.2   ARBITRATION: If the dispute cannot be resolved in
                           accordance with clause 18.1.1 within ten (10)
                           Business Days after the date of the notice referred
                           to in clause 18.1.1 then any party may then require

<PAGE>

Wood Supply Agreement                                                    Page 21

                           (by written notice to the other party) the dispute to
                           be referred to arbitration. If this clause is invoked
                           then the following shall apply.

                           (a)      ARBITRATION ACT: The dispute will be
                                    referred to arbitration by a sole arbitrator
                                    under the provisions of the Arbitration Act
                                    1996. The arbitrator will be agreed upon
                                    between the parties within ten (10) Business
                                    Days of written notice, or failing
                                    agreement, by the President of the New
                                    Zealand Law Society or its successor body,
                                    or any nominee of the President. In either
                                    case, the arbitrator must not be a person
                                    who has participated in any informal dispute
                                    resolution procedure in respect of the
                                    dispute. Any party may request the
                                    appointment of an expert to sit with the
                                    arbitrator but any such expert shall have an
                                    advisory role only and shall not have the
                                    authority to make a binding decision. Each
                                    of the parties may make submissions to the
                                    arbitrator as to the relevant skills and
                                    expertise of an appropriate expert, but the
                                    selection of an appropriate expert is
                                    ultimately at the arbitrator's sole
                                    discretion.

                           (b)      ARBITRATION IN NEW ZEALAND: The arbitration
                                    will take place in New Zealand.

                           (c)      AWARD FINAL: The award in the arbitration
                                    including any award by the arbitrator of
                                    costs will be final and binding on the
                                    parties.

                           (d)      AWARD OF INTEREST: The arbitrator may award
                                    interest upon any amount due and payable
                                    under his or her award at such rate and for
                                    such period as he or she considers just,
                                    down to the date of the award.

         18.2     PARTIES TO CONTINUE TO PERFORM: Pending resolution of any
                  dispute or difference, the parties shall continue to perform
                  their respective obligations pursuant to the provisions of
                  this agreement.

         18.3     INJUNCTIVE RELIEF: Nothing in this clause 18 will prevent any
                  party commencing proceedings for injunctive relief.

19.      TERMINATION AND SUSPENSION

         19.1     TERMINATION: This agreement may be terminated at any time and
                  with immediate effect by written notice by either party
                  (referred to in this clause as the "First Party") to the other
                  party (referred to in this clause as the "Second Party") if:

<PAGE>

Wood Supply Agreement                                                    Page 22

                  19.1.1   BREACH: the Second Party breaches, and fails to
                           properly or promptly perform, any of its obligations
                           within twenty (20) Business Days after written notice
                           from the First Party specifying the breach and its
                           intention to terminate this agreement if such
                           obligation is not properly and promptly performed;

                  19.1.2   EVENT OF DEFAULT: if any one or more of the following
                           events occur:

                           (a)      DISTRESS: distress is levied or a judgment
                                    order or encumbrance is enforced, or becomes
                                    enforceable, or can be rendered so by the
                                    giving of notice, lapse of time or
                                    fulfilment of any condition, against
                                    substantially all of the Second Party's
                                    property;

                           (b)      INSOLVENCY EVENT: an Insolvency Event occurs
                                    in respect of the Second Party;

                           (c)      NOTICE FROM REGISTRAR: the Second Party
                                    receives notice from the Registrar of
                                    Companies (or a Deputy Registrar) under
                                    section 30 of the Corporations
                                    (Investigation and Management) Act 1989 or
                                    the Securities Commission makes a
                                    recommendation under section 38 of that Act
                                    in respect of the Second Party; or

                           (d)      OFFICIAL MANAGER: a person is appointed
                                    under either section 179 of the Act or the
                                    Corporations (Investigation and Management)
                                    Act 1989 to investigate any part of the
                                    affairs of the Second Party.

         19.2     CONSEQUENCES OF TERMINATION: Upon termination of this
                  agreement for any reason the provisions of clauses 15.1 to
                  15.4 (inclusive), 19.2 and 20.1 to 20.11 (inclusive), together
                  with those other provisions of this agreement which are
                  incidental to and required in order to give effect to those
                  clauses, shall remain in full force and effect.

         19.3     INJUNCTIVE RELIEF OR SPECIFIC PERFORMANCE: Each of the parties
                  acknowledges and agrees that in the event of a breach of this
                  agreement, damages alone will be an insufficient remedy.
                  Accordingly, each of the parties further acknowledge that the
                  other party may be entitled to equitable relief, including
                  injunctive relief or specific performance, in the event of any
                  breach, or threatened breach of this agreement, in addition to
                  any and all other remedies available to it at law.

         19.4     SUSPENSION: If any amounts have been determined to be owed by
                  FCF to UBS Mangakahia arising as a result of breaches of any
                  of the Sale and Purchase Agreement or the Related Agreements,
                  either by agreement

<PAGE>

Wood Supply Agreement                                                    Page 23

                  between the parties, or by the award of an arbitrator or by
                  court order (all rights of appeal having either expired or
                  been exhausted), UBS Mangakahia may suspend this agreement
                  provided UBS Mangakahia has first given FCF written notice and
                  FCF has failed to pay the amounts determined to be owed by FCF
                  within ten (10) Business Days. Such suspension shall continue
                  until the amounts determined to be owed by FCF have been paid
                  in full. Such suspension shall not excuse payment of any money
                  due or which becomes due under this agreement where the
                  obligation to pay arose before the suspension. Further such
                  suspension shall not relieve either party of any duty or
                  obligation under this agreement which relates to a period
                  prior to the suspension and had arisen or been incurred prior
                  to the suspension.

20.      CONFIDENTIALITY

         Each party will maintain as confidential at all times, and will not at
         any time, directly or indirectly:

         20.1     DISCLOSE: disclose or permit to be disclosed to any person;

         20.2     USE: use for itself; or

         20.3     USE TO DETRIMENT: use to the detriment of the other party;

         any Confidential Information except:

         20.4     LEGAL REQUIREMENT: subject to clause 20.10, as required by law
                  or regulatory body (including any stock exchange);

         20.5     PUBLIC KNOWLEDGE: as is already or becomes public knowledge,
                  otherwise than as a result of a breach by the party disclosing
                  or using that Confidential Information of any provision of
                  this agreement;

         20.6     AUTHORISED: as authorised in writing by the other party;

         20.7     LENDERS AND UNDERWRITERS: as required to communicate and make
                  disclosure to institutional lenders to and underwriters for,
                  or potential institutional lenders to and underwriters for,
                  FCF or UBS Mangakahia provided that the relevant party shall
                  ensure compliance by such persons with this clause 20 and
                  shall be liable for any breach of such obligations by such
                  persons and, in the case of potential institutional lenders or
                  underwriters, to procure the return of all such information if
                  the lending to or underwriting is not consummated;

         20.8     AFFILIATES AND ADVISERS: as required to communicate and make
                  disclosure to Affiliates of the parties or the parties' or the
                  Affiliates' respective advisers who have a legitimate need to
                  know the information in order to perform activities connected
                  with this agreement or the Related

<PAGE>

Wood Supply Agreement                                                    Page 24

                  Agreements, and provided that the relevant party shall ensure
                  compliance by such persons with this clause 20 and shall be
                  liable for any breach of such obligations by such persons;

         20.9     OTHER: to the extent reasonably required by this agreement
                  (and, without limiting the effect of this clause, a party may
                  disclose Confidential Information only to those of its
                  officers, employees or professional advisers, on a "need to
                  know" basis, as is reasonably required for the implementation
                  of this agreement).

         20.10    CONSULTATION: In the event that one party (the "First Party")
                  is required by law or stock exchange obligations to disclose
                  Confidential Information, such disclosure may be made only
                  after the other party (the "Second Party") has been notified
                  and, subject to timing obligations imposed by law or the
                  relevant stock exchange, has been given every reasonable
                  opportunity to consult with the First Party as to timing and
                  content of such disclosure. In consulting with the Second
                  Party, the First Party shall act in good faith and give
                  reasonable consideration to the Second Party's requests.

         20.11    FCF'S SAFEGUARDS: If requested, FCF will document to the
                  reasonable satisfaction of UBS Mangakahia the internal
                  safeguards it will put in place to meet its confidentiality
                  obligations under this clause 20.

21.      SEVERABILITY

         Any provision of this agreement which is prohibited or unenforceable in
         any jurisdiction shall be ineffective as to such jurisdiction to the
         extent of such prohibition or unenforceability without invalidating the
         remaining provisions of this agreement or affecting the validity or
         unenforceability of such provision in any other jurisdiction.

22.      LIMITED RECOURSE

         FCF undertakes and agrees as follows.

         22.1     UBS MANGAKAHIA'S ASSETS: FCF will look only to the assets held
                  by UBS Mangakahia or the benefit of any insurance maintained
                  by UBS Mangakahia to satisfy the obligations or liabilities of
                  UBS Mangakahia to FCF hereunder or otherwise.

         22.2     LIMITATION OF LIABILITY: None of the Affiliates of UBS
                  Mangakahia nor any of its respective officers, directors, or
                  employees, or holders of any securities or debt of UBS
                  Mangakahia shall be liable for the obligations of UBS
                  Mangakahia to FCF.

         22.3     NO ACTIONS OR PROCEEDINGS: FCF shall not commence any action
                  or proceeding against any of the persons referred to in
                  subclause 22.2 for the purpose of enforcing the obligations of
                  UBS Mangakahia.

<PAGE>

Wood Supply Agreement                                                    Page 25

23.      APPLICABLE LAW

         23.1     NEW ZEALAND LAW: The law applicable to this agreement
                  including all submissions to arbitration shall be the law of
                  New Zealand and the parties agree to submit to be bound by the
                  jurisdiction of the courts and tribunals of New Zealand.

         23.2     NON EXCLUSIVE JURISDICTION: The submission to jurisdiction in
                  clause 23.1 does not (and is not to be construed to) limit the
                  rights of a party to take proceedings against the other party
                  in another court of competent jurisdiction, nor is the taking
                  of proceedings in one or more jurisdictions to preclude the
                  taking of proceedings in another jurisdiction, whether
                  concurrently or not.

24.      NOTICES

         24.1     DELIVERY OF NOTICE: All notices and other communications
                  required or permitted under this agreement shall be in
                  writing. Any written notice under this agreement must be
                  signed by a duly authorised senior representative of any party
                  giving the notice and will be deemed validly given if:

                  24.1.1   PERSONAL DELIVERY: delivered personally;

                  24.1.2   DOMESTIC POST: sent by prepaid post; or

                  24.1.3   FACSIMILE: sent by facsimile transmission,

                  addressed to the recipient at the address or facsimile number
                  set out below (as applicable) or to any other address or
                  facsimile number that a party may notify to the other parties
                  by like notice.

                  UBS MANGAKAHIA: if to UBS Mangakahia to:

                  UBS Mangakahia Forest Venture Ltd
                  C/- UBS Warburg NZ Equities Limited
                  P O Box 45
                  Auckland 1000
                  Level 23 Qantas Building
                  191 Queen Street
                  Auckland
                  For:         Michael Edgar
                  Facsimile:   (09) 913 4751

                  With a copy to:

                  UBS Timber Investors
                  Trade Center, 4th Floor
                  24 Airport Road

<PAGE>

Wood Supply Agreement                                                    Page 26

                  West Lebanon
                  NH 03784
                  United States of America
                  For:         Peter Mertz
                  Facsimile:   (001) 603 298 7620

                  AND WITH COPY TO:

                  Foley Hoag LLP
                  155 Seaport Blvd
                  Boston, MA 02210
                  United States of America
                  For:         Jim Smith
                  Facsimile:   001 (617) 832 7000

                  FCF: if to FCF, to:

                  Fletcher Challenge Forests Industries Limited
                  8 Rockridge Avenue
                  Penrose
                  Private Bag 92036
                  Auckland Mail Centre
                  Auckland
                  For:         Company Secretary
                  Facsimile:   (09) 571 9872

                  With a copy to:

                  Phillips Fox
                  Phillips Fox Tower
                  209 Queen Street
                  PO Box 160
                  Auckland
                  For:         Carrie Follas
                  Facsimile:   (09) 303 2311

         24.2     TIME OF RECEIPT: No written communication will be effective
                  until received. Without limiting any other ways for a party to
                  prove that another party has received a notice, a notice or
                  other written communication under this agreement, will be
                  treated as received:

                  24.2.1   PERSONAL DELIVERY: if delivered personally, when left
                           with an apparently responsible person at the
                           recipient's address;

                  24.2.2   PREPAID POST: if sent by prepaid post three (3)
                           Business Days (if posted within New Zealand to an
                           address in New Zealand), or ten

<PAGE>

Wood Supply Agreement                                                    Page 27

                           (10) Business Days (if posted by prepaid airmail from
                           country to country) after the date of posting;

                  24.2.3   REGISTERED POST: if sent by registered post, on
                           acknowledgment of receipt by or on the recipient's
                           behalf;

                  24.2.4   AIR COURIER DELIVERY: if sent by air courier
                           delivery, on acknowledgment of receipt by or on the
                           recipient's behalf; or

                  24.2.5   FACSIMILE: if sent by facsimile, on the sender's
                           receipt of a transmission report indicating that the
                           facsimile was sent in its entirety to the recipient's
                           facsimile number,

                  but, if the delivery or receipt is not on a Business Day or
                  after 5.00pm (local time) on any Business Day, the notice will
                  be treated as received by the recipient at 9.00am (local time)
                  on the next Business Day.

25.      COPIES OF NOTICES

         If a party is required by any term of this agreement to give a copy of
         a notice or other communication to a third party, the failure to give
         the copy of it to the third party will not affect the effectiveness of
         that notice or communication to a party.

26.      THIRD PARTY NOTICES

         Each party shall promptly provide to the other party a copy of every
         notice it receives from a third party in respect of the Land to the
         extent that it is relevant to this agreement and/or Related Agreement
         or Trees or any part thereof. Notwithstanding the above, the provisions
         of this clause shall not apply to any notice received by any party from
         any Affiliate of such party.

27.      ENTIRE AGREEMENT

         This agreement together with the Sale and Purchase Agreement, Forestry
         Right, Infrastructure Agreement and Management Agreement contain the
         entire agreement between the parties in connection with the subject
         matter hereof and supersede and replace all prior negotiations,
         agreements or representations, whether oral or written, between them
         with respect thereto.

28.      MODIFICATION

         This agreement may not be amended or modified except by written
         agreement signed by the parties.

<PAGE>

Wood Supply Agreement                                                    Page 28

29.      WAIVER

         No provision of this agreement may be waived except in writing by the
         party granting the waiver and then only in the specific instance and
         for the specific purpose for which given.

30.      COUNTERPARTS

         30.1     GENERAL: This agreement may be executed in one or more
                  counterparts, each of which will be deemed to be an original,
                  but all of which together will constitute only one and the
                  same agreement.

         30.2     FACSIMILE EXCHANGE: The parties acknowledge that this
                  agreement may be executed on the basis of any exchange of
                  facsimile copies and confirm that their respective execution
                  of this agreement by such means shall be a valid and
                  sufficient execution. The parties acknowledge that any
                  execution of this agreement by facsimile will be followed by
                  execution of the engrossments of this agreement.

31.      FURTHER ASSURANCES

         The parties shall execute and deliver such further and other documents
         and instruments and do such other things as may be reasonably necessary
         to implement and carry out the intent and purpose of this agreement.

32.      NO MERGER

         The parties acknowledge that the covenants, representations,
         undertakings and agreements contained herein shall, to the extent that
         they are still applicable, not merge upon completion of harvesting of
         the Trees and that the same shall endure for the benefit of that party
         entitled thereto notwithstanding transfer or any other act pursuant to
         the provisions of this agreement.

33.      COSTS

         Except as expressly provided elsewhere in this agreement, each party is
         to bear its own costs in connection with the preparation, negotiation
         and execution of this agreement and the Related Agreements and any
         other documentation contemplated by this agreement.

34.      NO PARTNERSHIP

         None of the provisions of this agreement are deemed to constitute a
         partnership or joint venture between the parties and neither party has
         any authority to bind or to pledge the credit of the other party in any
         way except as expressly provided in this agreement.

<PAGE>

Wood Supply Agreement                                                    Page 29

35.      GOODS AND SERVICES TAX

         A party must pay GST on a taxable supply made to it under this
         agreement, in addition to any consideration (excluding GST) that is
         payable for that taxable supply. The party making the taxable supply
         must provide a valid tax invoice to the other party at or before the
         time that the other party is required to pay the GST. Excluding the
         term GST, terms used in this clause have the meaning given to them in
         the GST Tax Act 1985.

SIGNED by UBS MANGAKAHIA FOREST VENTURE LTD by:

_______________________________________    _____________________________________
Full name of attorney                      Signature of attorney

WITNESS:
(if other than two directors sign)

_______________________________________
Signature of witness

_______________________________________
Full name of witness

_______________________________________
Occupation of witness

_______________________________________
Address of witness

<PAGE>

Wood Supply Agreement                                                    Page 30

SIGNED by FLETCHER CHALLENGE FORESTS
INDUSTRIES LIMITED by:

__________________________________          ___________________________________
Full name of director/authorised            Signature of director/authorised
signatory                                   signatory
__________________________________          ___________________________________
Full name of director/authorised            Signature of director/authorised
signatory                                   signatory

WITNESS:
(if other than two directors sign)

____________________________________
Signature of witness

____________________________________
Full name of witness

____________________________________
Occupation of witness

____________________________________
Address of witness

<PAGE>

                                   APPENDIX 1
                              MAP OF SUPPLY REGION

                              [SUPPLY REGION MAP]

<PAGE>

                                   APPENDIX 2
                                 FORESTRY RIGHT