<PAGE>

Execution Version Tauhara

                                                                    EXHIBIT 4.21

INFRASTRUCTURE AGREEMENT

BETWEEN

FLETCHER CHALLENGE FORESTS INDUSTRIES LIMITED

AND

UBS MANGAKAHIA FOREST VENTURE LTD

                                                         [SIMPSON GRIERSON LOGO]

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                                TABLE OF CONTENTS
<TABLE>
<S>                                                                             <C>
1.     INTERPRETATION                                                            1
2.     HARVEST SCHEDULING AND FOREST ROADING                                     6
3.     TRANSITIONAL PERIOD HARVEST SCHEDULING                                   17
4.     HEALTH AND SAFETY, CERTIFICATION AND ENVIRONMENTAL COMPLIANCE            17
5.     INSURANCE                                                                19
6.     REPRESENTATIONS, WARRANTIES AND STANDARD OF PERFORMANCE                  20
7.     INDEMNITY                                                                22
8.     FORCE MAJEURE                                                            24
9.     RESOLUTION OF DISPUTES                                                   25
10.    ASSIGNMENT                                                               26
11.    SEVERABILITY                                                             27
12.    APPLICABLE LAW                                                           27
13.    NOTICES                                                                  28
14.    COPIES OF NOTICES                                                        30
15.    THIRD PARTY NOTICES                                                      30
16.    ENTIRE AGREEMENT                                                         30
17.    MODIFICATION                                                             30
18.    WAIVER                                                                   30
19.    CONFIDENTIALITY                                                          30
20.    TERM OF AGREEMENT AND SUSPENSION                                         31
21.    COUNTERPARTS                                                             34
22.    FURTHER ASSURANCES                                                       35
23.    LIMITED RECOURSE                                                         35
24.    DEFAULT INTEREST                                                         35
25.    COSTS                                                                    35
26.    NO PARTNERSHIP                                                           35
27.    NO MERGER                                                                35
28.    NO DOUBLE CLAIMS                                                         36
</TABLE>

SCHEDULE ONE - FORESTRY RIGHT
SCHEDULE TWO - UNDERTAKING AND GUARANTEE

<PAGE>

THIS AGREEMENT is dated the                day of                           2003

BETWEEN  FLETCHER CHALLENGE FORESTS INDUSTRIES LIMITED of Auckland ("FCF")

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

BACKGROUND

A.       FCF is the registered proprietor and owner of the Land.

B.       UBS Mangakahia will acquire the Trees and the Forestry Right.

C.       FCF and UBS Mangakahia wish to enter into this agreement to record the
         terms and conditions by which FCF will provide certain infrastructure
         services to UBS Mangakahia in relation to the Forestry Right.

THE PARTIES AGREE:

1.       INTERPRETATION

         In this agreement unless the context indicates otherwise:

         1.1      DEFINITIONS:

                  "ACT" means the Companies Act 1993;

                  "AFFILIATE" of a person shall mean a person controlled by,
                  controlling or under common control with, such person and for
                  the purposes of this definition Forestry Corporation of New
                  Zealand Limited (In Receivership) is not an affiliate of any
                  party;

                  "BILL RATE" means the average of the bid 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 10.45am 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;

                  "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:

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Infrastructure Agreement                                                  Page 2

                  (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 that 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 interests of any kind;

                  "ENVIRONMENTAL GUIDELINES" means codes of practice and
                  guidelines issued from time to time by any competent authority
                  (including for the avoidance of doubt any relevant District or
                  Regional Plans or resource consents) or UBS Mangakahia, which
                  address in whole or in part the protection of the environment
                  and the Land;

                  "ENVIRONMENTAL LAW" means all applicable law relating to any
                  aspect of:

                  (a)      the environment;

                  (b)      the Land and Trees;

                  (c)      substances which may have an adverse effect on the
                           environment; and

                  (d)      the carrying on or permitting of activities which may
                           have an adverse effect on the environment;

                  whether pursuant to the Resource Management Act 1991, any
                  other statutes, under the common law or otherwise;

                  "ENVIRONMENTAL REQUIREMENTS" means Environmental Law and
                  Environmental Guidelines;

                  "FCF" means Fletcher Challenge Forests Industries Limited at
                  Auckland together with its successors and permitted assigns;

                  "FOREST ROADS" means all forestry roads, road works, landings
                  for harvest operations, landing formation works, skid sites,
                  gates and bridges on the Land necessary for the purposes of
                  access, harvesting and extracting logs from the Working
                  Block(s) scheduled for harvest;

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Infrastructure Agreement                                                  Page 3

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

                  "FORESTRY RIGHT" means the forestry right to be entered into
                  between FCF and UBS Mangakahia concurrently with this
                  agreement in accordance with the provisions of the Forestry
                  Rights Registration Act 1983 and in relation to certain
                  identified Stands and a copy of which is attached in Schedule
                  One;

                  "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 AREAS" means those of the Working Block(s) that FCF
                  elects to purchase from UBS Mangakahia in accordance with the
                  terms of the Wood Supply Agreement;

                  "HARVEST PERIOD" means a year commencing on 1 July and ending
                  on 30 June of the following year nominated as the period in
                  which certain Working Block(s) are designated for harvest
                  pursuant to the terms of this agreement;

                  "HARVEST PERIOD ONE" means the period commencing 1 July 2003
                  and ending on 30 June 2004;

                  "HARVEST PERIOD TWO" means the period commencing 1 July 2004
                  and ending on 30 June 2005;

                  "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 general assignment for the benefit of or a
                           composition

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Infrastructure Agreement                                                  Page 4

                           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 creditors rights are
                           intended to be subordinate to the obligations of the
                           company to 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 sub-clauses (a) to (f) above, such event takes place for
                  the purposes of and is followed by a reconstruction,
                  amalgamation or reorganization (not involving or arising out
                  of insolvency) approved in writing by UBS Mangakahia which
                  consent is not to be unreasonably or arbitrarily withheld or
                  delayed;

                  "LAND" means the land the subject of the Forestry Right 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
                  forests;

                  "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;

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

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

                  "RELATED COMPANY" has the meaning ascribed to that term by the
                  Companies Act 1993;

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Infrastructure Agreement                                                  Page 5

                  "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;

                  "SETTLEMENT" has the meaning ascribed to that term by the Sale
                  and Purchase Agreement;

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

                  "SUPPLY REGION" means the "SUPPLY REGION" as that term is
                  defined in the Wood Supply Agreement;

                  "TRANSITIONAL PERIOD" means the period incorporating Harvest
                  Period One and Harvest Period Two commencing 1 July 2003 and
                  ending on 30 June 2005;

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

                  "UBS MANGAKAHIA" means UBS Mangakahia Forest Venture Ltd at
                  Auckland together with its successors and permitted assigns;

                  "WOOD SUPPLY AGREEMENT" means the wood supply agreement to be
                  entered into between UBS Mangakahia and FCF concurrently with
                  this agreement under which UBS Mangakahia will supply certain
                  of the Trees to FCF;

                  "WORKING BLOCK(S)" means those Trees in a Stand (or part
                  thereof) designated by UBS Mangakahia for harvesting pursuant
                  to sub-clauses 2.1.1, 2.1.2 and 3.2 of this agreement; and

                  "YEAR" means a calendar year.

         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 in each
                  case whether or not having separate legal personality;

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

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Infrastructure Agreement                                                  Page 6

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

         1.6      CLAUSES, SCHEDULES AND BACKGROUND: references to clauses,
                  schedules and background are references to clauses, schedules
                  and background to this agreement unless otherwise indicated;

         1.7      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;

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

         1.9      SCHEDULES: the schedules to this agreement and the provisions
                  and conditions contained in such schedules shall have the same
                  effect as if set out in the body of this agreement;

         1.10     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;

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

         1.12     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;

         1.13     DISPOSAL: references to disposal include sale, exchange,
                  transfer, assignment, lease or parting with possession or
                  control of, and the word "dispose" means to make a disposal;
                  and

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

2.       HARVEST SCHEDULING AND FOREST ROADING

         2.1      HARVEST SCHEDULING: Subject to the specific procedures set out
                  in clause 3 relating to the Transitional Period, in each Year
                  during the term of this agreement the following provisions
                  will apply.

                  2.1.1    NOTIFICATION OF WORKING BLOCK(S): UBS Mangakahia will
                           give notice on 1 February to FCF designating the
                           Working Block(s) that UBS Mangakahia intends to
                           harvest in the Harvest Period commencing 1 July in
                           the following year ("UBS Mangakahia Notice"). (By way
                           of example, the first UBS

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Infrastructure Agreement                                                  Page 7

                           Mangakahia Notice given for harvesting to take place
                           after the Transitional Period will be given on
                           1_February 2004 and will designate the Working
                           Block(s) to be harvested during the period 1 July
                           2005 to 30 June 2006).

                  2.1.2    FCF HARVEST RECOMMENDATIONS: FCF may on or before the
                           20th of February, make any recommendations on the
                           harvesting sequence or otherwise as it considers
                           appropriate in relation to the harvest proposals. UBS
                           Mangakahia will in good faith give due consideration
                           to such recommendations and will confirm in writing
                           to FCF on or before the last day of February the
                           changes (if any) to be made to the Working Block(s)
                           designated pursuant to the UBS Mangakahia Notice. For
                           the avoidance of doubt, if no further notice relating
                           to the designation of Working Block(s) is presented
                           by UBS Mangakahia the particulars set out in the
                           original UBS Mangakahia Notice will apply.

                  2.1.3    APPOINTMENT OF FORESTRY CONSULTANT AND PRE-HARVEST
                           INVENTORY: Before 1 February in each Year UBS
                           Mangakahia shall appoint a Forestry Consultant to
                           complete a PHI of the Working Block(s) notified under
                           the UBS Mangakahia Notice (as amended pursuant to
                           sub-clause 2.1.2, if appropriate). Prior to making
                           each such appointment UBS Mangakahia shall consult
                           with FCF on UBS Mangakahia's proposed PHI methodology
                           and the appointment of the Forestry Consultant. The
                           Forestry Consultant must make available to FCF the
                           plot data and plot locations (to ensure that the
                           sampled Trees can be identified and audited by FCF.
                           For the avoidance of doubt the parties agree that
                           clause 9 will not apply to the PHI information
                           referred to in this sub-clause) used in calculating
                           the PHI to enable FCF to undertake an independent
                           assessment of the PHI.

         2.2      HARVEST PREPARATIONS: Following designation of the Working
                  Block(s) pursuant to sub-clauses 2.1.1 and 2.1.2, in each Year
                  (and pursuant to sub-clause 3.2 in relation to Harvest Period
                  One and Harvest Period Two) of this agreement FCF will do the
                  following.

                  2.2.1    HARVEST CONSENTS: To the extent that they are not
                           already held, apply for and obtain any resource
                           consents (required pursuant to the Resource
                           Management Act 1991), permits and licences that may
                           be necessary to harvest the Working Block(s) during
                           the relevant Harvest Periods ("Consents"). FCF
                           acknowledges that the Consents must be upon terms
                           such that any third party reasonably appointed by UBS
                           Mangakahia to harvest any of the Trees will be
                           legally entitled to do so under the authority of the
                           Consents. Where the relevant Consent is not a land
                           use consent FCF agrees that it will transfer and/or
                           assign the benefit of such Consents to any party (as
                           notified by UBS Mangakahia) harvesting the Trees in
                           the relevant Working Block(s). For the avoidance of
                           doubt the costs associated with

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Infrastructure Agreement                                                  Page 8

                           obtaining and assigning the benefit of any Consents
                           is to be incorporated in the fees payable pursuant to
                           sub-clause 2.13.2.

                  2.2.2    FOREST ROADS: Undertake all works necessary,
                           including road line salvage to prepare, maintain
                           and/or develop (as the case may be) any Forest Roads
                           required for the harvesting and extraction of wood
                           from the Working Block(s) in the relevant Harvest
                           Periods. FCF will be required to obtain all resource
                           consents and other relevant authorisations as are
                           necessary to prepare, maintain, develop and use such
                           Forest Roads to harvest the Working Block(s). In
                           undertaking such works FCF agrees to ensure that the
                           Forest Roads will be:

                           (a)      READY FOR USE: ready for use for the
                                    harvesting of the Working Block(s) during
                                    the relevant Harvest Period;

                           (b)      FORESTRY STANDARDS: of a standard consistent
                                    with good forestry practice so as to cope
                                    with the wood volumes expected to be
                                    extracted from the Working Block(s);

                           (c)      CAPACITY AND SAFETY: of suitable capacity
                                    and layout (applying good forestry
                                    management practice) to enable safe and
                                    efficient harvesting and extraction of wood
                                    from the Working Block(s); and

                           (d)      OTHER FCF USAGE: of suitable capacity and
                                    layout (applying good forestry practice) to
                                    handle any additional operational traffic
                                    associated with other harvesting and
                                    operations of FCF which FCF (and its
                                    personnel, contractors and invitees) may use
                                    the Forest Roads for during the period that
                                    UBS Mangakahia will be harvesting the
                                    relevant Working Block(s).

                  2.2.3    PUBLIC ROADS: Ascertain and ensure compliance with
                           all requirements of local or other proper authorities
                           for any special authority needed to exceed normal
                           road usage on public roads, and for other matters
                           within their lawful jurisdiction arising out of the
                           use of such roads for the harvesting of the Working
                           Block(s) in the relevant Harvest Period provided that
                           any request by UBS Mangakahia in this regard is
                           reasonable and accords with normal industry
                           standards. More particularly, the following terms
                           shall apply in relation to the use of, and access to,
                           public roads.

                           (a)      OBTAINING AUTHORISATIONS: Except as provided
                                    in sub-clause 2.2.3(b) FCF's obligation
                                    under this sub-clause extends only to
                                    identifying any relevant requirements and
                                    using all reasonable endeavours to acquire
                                    the necessary authority and does not extend
                                    to

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Infrastructure Agreement                                                  Page 9

                                    ensuring compliance by UBS Mangakahia, its
                                    employees, invitees, licensees and agents
                                    with the terms and conditions of any such
                                    authority or their actual usage of any
                                    public road. The parties acknowledge that
                                    this may include a requirement from any
                                    relevant authority to provide a bond or
                                    guarantee. If required to do so by any
                                    relevant authority, FCF and UBS Mangakahia
                                    will promptly put in place at their
                                    respective costs in all respects, such bond
                                    or guarantee as required by the relevant
                                    authority that reflects their proportionate
                                    use of such public roads during the relevant
                                    Harvest Period. For the avoidance of doubt
                                    FCF's share of costs is to be based on any
                                    usage by FCF arising from the balance of the
                                    Land not included in the Stands.

                           (b)      LIMITED ACCESS ROADS: Where conditions apply
                                    in relation to limited access road crossings
                                    giving access and egress from the Land to
                                    public roads, FCF must undertake such
                                    works/steps as may be required (including
                                    the construction of de-acceleration lanes
                                    and road widening where necessary) to comply
                                    with conditions imposed under the Transit
                                    New Zealand Act 1989 and/or imposed by any
                                    relevant regulatory authority. For the
                                    avoidance of doubt FCF will be responsible
                                    for all costs associated with complying with
                                    such limited access conditions.

                  2.2.4    HARVEST PLANNING SERVICES: Regularly (and not less
                           than every Quarter) provide UBS Mangakahia with a
                           written report on the readiness for harvesting of the
                           Working Block(s) (which will be discussed at the
                           Quarterly meetings held pursuant to the terms of the
                           Management Agreement), in relation to UBS
                           Mangakahia's harvest planning arrangements including
                           extraction sequences for scheduled Working Block(s),
                           harvest resource consents, the condition and layout
                           of Forest Road networks and the preparation of
                           landings/skid sites for harvest operations.

         2.3      ADDITIONAL FCF SERVICES: During the term of this agreement FCF
                  will at the reasonable request of UBS Mangakahia do the
                  following.

                  2.3.1    TRAINING: Provide induction training sessions for
                           those of UBS Mangakahia's personnel, contractors and
                           invitees who will be exercising access to the Land.
                           Such sessions are to be provided when reasonably
                           required and will cover applicable health and safety
                           work rules and procedures, any relevant Forest Road
                           use rules, fire prevention/safety requirements,
                           emergency procedures, and such other matters as
                           considered prudent by FCF for individuals entering
                           upon the Land and using the Forest Roads.

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Infrastructure Agreement                                                 Page 10

                  2.3.2    RADIO COMMUNICATIONS: Provide instructions to UBS
                           Mangakahia's personnel, contractors and invitees as
                           to the appropriate radio frequencies to be used to
                           access FCF's radio network. UBS Mangakahia's
                           personnel, contractors and invitees will be entitled
                           to use FCF's network for communications purposes when
                           exercising access to the Land during the term of this
                           agreement.

                  2.3.3    CONTROL ACCESS: Control access of other users to the
                           relevant parts of the Land during Harvest Periods to
                           ensure that the Forest Roads are not used in an
                           unsafe manner or congested during harvesting.

         2.4      FOREST ROADING MAINTENANCE: During the term of this agreement
                  FCF agrees to maintain the Forest Roads to a standard such
                  that:

                  2.4.1    HARVESTING ACCESS: UBS Mangakahia may harvest and
                           extract logs from Working Block(s) scheduled for
                           harvest pursuant to sub-clauses 2.1.1, 2.1.2, and
                           3.2; and

                  2.4.2    FORESTRY RIGHT ACCESS: UBS Mangakahia may enjoy full
                           access to the Land as contemplated by the Forestry
                           Right. UBS Mangakahia acknowledges and agrees that
                           the provisions of this sub-clause 2.4 does not
                           require FCF to maintain all Forest Roads at all times
                           throughout the term of this agreement. The relevant
                           Forest Roads will be maintained in accordance with
                           normal forestry practice where they are required for
                           harvesting the relevant Working Block(s), for access
                           to the public roads and the major access roads on the
                           Land.

         2.5      REPAIRS AND REINSTATEMENT: Following the completion of
                  harvesting and extraction of wood from the relevant Working
                  Block(s) the parties agree that where FCF has not been
                  responsible for harvesting the Trees, UBS Mangakahia will be
                  responsible for the repairing and reinstatement of any damage
                  caused to the Forest Roads (excluding skids and landings for
                  the purposes of this sub-clause) by the harvesting and
                  associated use by that party, its personnel, contractors and
                  invitees to a standard acceptable for the establishment of a
                  succeeding crop or as otherwise agreed.

         2.6      FOREST ROADS: In each Year of this agreement following
                  nomination of the Working Block(s) pursuant to sub-clauses
                  2.1.1, 2.1.2, and 3.2, FCF will provide UBS Mangakahia on or
                  before 1_March with a written infrastructure plan that will
                  include the following.

                  2.6.1    MAP: A map of the Working Block(s) and Land showing
                           the Forest Roads that will be used to harvest the
                           Trees within those Working Block(s) and for the
                           cartage of the harvested produce from the Working
                           Block(s) over the Land. Such map should also
                           delineate those Forest Roads that are existing and
                           those that

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Infrastructure Agreement                                                 Page 11

                           need to be constructed and/or upgraded for the
                           harvesting of the Working Block(s).

                  2.6.2    MEASUREMENTS: Details, including the specification
                           and length of roading and number of landings to be
                           constructed and/or upgraded for the harvesting of the
                           Working Block(s).

                  2.6.3    GEOTHERMAL BORES: Geographical Information Systems
                           data programmed with the location of geothermal bores
                           plotted on the Land.

                  2.6.4    PHYSICAL/LEGAL ACCESS ISSUES: Details of any physical
                           or legal access issues which may result in UBS
                           Mangakahia (or any third party purchaser of Trees
                           from UBS Mangakahia other than FCF) being unable to
                           harvest or access the relevant Trees for harvesting
                           using the then existing most practicable and cost
                           effective access route.

         2.7      RESPONSE TO INFRASTRUCTURE PLAN: Following receipt of the
                  infrastructure plan pursuant to sub-clause 2.6 the parties
                  will meet and discuss any issues arising from the
                  infrastructure plan and the parties will agree at that meeting
                  any changes to the plan. FCF will then provide an amended
                  infrastructure plan incorporating the agreed changes (if any)
                  within ten (10) Business Days.

         2.8      FOREST ROADING COSTS: 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 the avoidance of
                  doubt the parties agree that FCF will be responsible for the
                  costs associated with the provision of the Forest Roading
                  pursuant to sub-clauses 2.2.2 and 2.4, including but not
                  limited to provision of equipment, obtaining resource
                  consents, planning, labour, regulatory compliance and
                  materials but excluding any bond or guarantee payable under
                  subclause 2.2.3.

         2.9      DESIGNATION AND DETERMINATION OF ROAD LINE SALVAGE: Following
                  finalisation of the infrastructure plan, FCF shall mark out
                  the area of all landings and skid sites and the centre line of
                  all forest roading necessary to implement the infrastructure
                  plan agreed by FCF and UBS Mangakahia pursuant to sub-clause
                  2.7. Within thirty (30) days of receipt of FCF's request (and
                  in any event no earlier than thirty (30) days after agreement
                  is reached as to the infrastructure plan pursuant to
                  sub-clause 2.7), UBS Mangakahia will:

                  2.9.1    DESIGNATION: arrange for the outer boundaries of the
                           Trees to remain to be physically marked or designated
                           by such other means of demarcation as may be agreed
                           by the parties; and

                  2.9.2    APPOINT CONSULTANT: appoint a Forestry Consultant (
                           at UBS Mangakahia's cost) who will undertake a road
                           line salvage PHI (including the area of landings,
                           skid sites and road strips) to

<PAGE>

Infrastructure Agreement                                                 Page 12

                           estimate the grades and volumes of logs from the
                           Trees that will be extracted in order to implement
                           the infrastructure plan. UBS Mangakahia will consult
                           with FCF regarding the methodology to be applied in
                           undertaking the estimate. Within 3 Business Days of
                           completing the PHI, UBS Mangakahia must make
                           available to FCF the plot data and plot locations (to
                           ensure that the sampled Trees can be identified and
                           audited by FCF) used in calculating the grades and
                           volumes and the area calculation used in determining
                           the volume (as they are completed) to enable FCF to
                           undertake an independent assessment of the grades and
                           volumes. FCF must advise UBS Mangakahia and the
                           Forestry Consultant within 10 Business Days of
                           receiving that information whether it accepts or
                           rejects the estimate of grades and volumes. If FCF
                           rejects the estimate of grades and volumes, then UBS
                           Mangakahia and FCF will meet to agree what additional
                           measurements should be undertaken by the Forestry
                           Consultant in order for an acceptable estimate of the
                           grades and volumes to be determined. The Forestry
                           Consultant will at UBS Mangakahia's and FCF's joint
                           costs undertake such additional measurements and will
                           recalculate the grades and the volumes of logs to be
                           extracted from the road line salvage and advise the
                           parties accordingly.

         2.10     INVOICING OF ROAD LINE SALVAGE: Following determination
                  pursuant to sub-clause 2.9, of the grades and volumes of logs
                  for the Trees that will be extracted to implement the
                  infrastructure plan, UBS Mangakahia will issue a GST tax
                  invoice to FCF for the road line salvage Trees using the
                  prices determined pursuant to sub-clause 2.11, which invoice
                  will be payable by FCF by the first day of the relevant
                  Quarter in which the relevant road line salvage Trees are to
                  be harvested. In respect of the Trees designated for road line
                  salvage the following provisions will apply.

                  2.10.1   RISK: Risk in each Tree will pass to FCF as from the
                           date on which payment of the relevant GST tax invoice
                           for the Trees is due.

                  2.10.2   TITLE: Title to a Tree will pass to FCF at the time
                           of payment by FCF in full of the relevant GST tax
                           invoice.

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

                           (a)      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;

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

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Infrastructure Agreement                                                 Page 13

         2.11     PROCEDURE FOR CALCULATION OF ROAD LINE SALVAGE PRICES: The
                  price of the Trees that will be extracted for road line
                  salvage purposes shall be determined in accordance with the
                  following provisions.

                  2.11.1   APPOINTMENT: Within thirty (30) days of receipt of
                           the request under sub-clause 2.9 the parties will
                           jointly appoint a Forestry Consultant or, failing
                           agreement within ten (10) Business Days thereof, the
                           Chairperson of the Consultants' Committee of the New
                           Zealand Institute of Forestry will appoint a Forestry
                           Consultant to set the market stumpage price by log
                           grade (as set out in the PHI) for the road line
                           salvage Trees. 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.

                  2.11.2   CRITERIA: In setting the market price for the road
                           line salvage Trees the Forestry Consultant shall have
                           regard to those factors set out in clause 3.1.2 of
                           the Wood Supply Agreement insofar as they are
                           applicable to road line salvage Trees.

                  2.11.3   BINDING DECISION: The assessments made by the
                           Forestry Consultant shall be final and binding on the
                           parties and clause 9 shall not apply to such
                           assessments.

         2.12     CUTTING OF AGREED TREES ONLY: If FCF harvests any Trees not
                  designated for extraction pursuant to sub-clause 2.9.1 while
                  implementing the infrastructure plan agreed pursuant to
                  sub-clause 2.7, FCF must pay UBS Mangakahia on demand as
                  liquidated damages, an amount equal to:

                  2.12.1   VOLUME: the volume of such logs that would have been
                           obtained from the Trees felled as estimated by the
                           Forestry Consultant using procedures consistent with
                           sub-clause 2.11 multiplied by;

                  2.12.2   TWICE WEIGHTED AVERAGE: two (2) times the weighted
                           average road line salvage stumpage rate applicable
                           during the Quarter when harvested.

                  For the avoidance of doubt the parties record that FCF will
                  not be required to pay two (2) times the weighted average road
                  line salvage stumpage rate for Trees harvested outside the
                  marked road line salvage boundaries that need to be removed
                  for operational purposes or safety reasons consistent with
                  accepted forestry industry practice provided that:

                  2.12.3   NOTICE TO UBS MANGAKAHIA: FCF shall be required to
                           advise UBS Mangakahia in writing in relation to each
                           road line as to the additional volume of Trees that
                           have been harvested outside the marked road line
                           salvage boundaries together with
<PAGE>

Infrastructure Agreement                                                 Page 14

                           details as to why such harvesting was necessitated
                           for operational or safety reasons;

                  2.12.4   MATERIAL VOLUMES: FCF shall be required to give
                           advance written notice to UBS Mangakahia and obtain
                           UBS Mangakahia's prior written consent (such consent
                           not to be unreasonably withheld or delayed) where the
                           Trees to be harvested outside the marked road line
                           salvage boundaries for operational or safety reasons
                           equates to a material increase in the PHI volumes
                           estimated for the relevant road line salvage;

                  2.12.5   INVOICING OF ADDITIONAL ROAD LINE SALVAGE: UBS
                           Mangakahia will issue a GST tax invoice (with
                           subclauses 2.10.1 to 2.10.3 applying to such invoice
                           and Trees) to FCF for all Trees harvested outside the
                           marked road line salvage boundaries for operational
                           purposes or safety reasons on the basis that FCF will
                           be invoiced for the volume of such logs that would
                           have been obtained from the Trees felled as estimated
                           by the Forestry Consultant using the procedures
                           consistent with sub-clause 2.11. Such invoice will be
                           payable within 20 Business Days of the date of that
                           invoice.

         2.13     FEES FOR INFRASTRUCTURE SERVICES: In consideration of FCF
                  providing the infrastructure services other than Forest Roads
                  under this agreement, UBS Mangakahia shall pay FCF fees
                  calculated in accordance with the following:

                  2.13.1   FLAT FEE: $19,000 plus GST per Harvest Period with
                           payment due in advance on 1 July of each Harvest
                           Period following the issue of an appropriate GST tax
                           invoice by FCF. The flat fee is intended to cover
                           services to be provided by FCF which are intended to
                           be independent of the level of service provided
                           (eg, induction, training and access to communication
                           networks etc).

                  2.13.2   HARVEST PLANNING FEE: $35.00 plus GST per hectare
                           applying to the Working Block(s) to be harvested in
                           the relevant Harvest Period with payment due in
                           advance on 1 July of each Harvest Period following
                           the issue of an appropriate GST tax invoice by FCF.
                           The harvest planning fee is intended to cover the
                           costs of the harvest planning services provided by
                           FCF to enable the harvest of the relevant Working
                           Block(s) inclusive of all regulatory consents
                           including resource consents.

                  2.13.3   ROAD USAGE FEE: 12.5 cents plus GST per cubic metre
                           (excluding all road line salvage and Working Block(s)
                           purchased by FCF) based on the aggregate PHI volumes
                           from non FCF Working Block(s) harvested in the
                           relevant Harvest Period. Payment to be made by four
                           equal instalments with each instalment due on the
                           first day of the Quarter following the issue of an
                           appropriate GST tax invoice by FCF. The road usage

<PAGE>

Infrastructure Agreement                                                 Page 15

                           fee is intended as a royalty payment for the use of
                           the existing Forest Roads on the Land where FCF has
                           already incurred the capital expenditure on
                           constructing the relevant roads.

                  2.13.4   FEES REVIEW:

                           (a)      BIENNIAL REVIEW: The flat fee, harvest
                                    planning fee and road usage fee provided for
                                    in sub-clauses 2.13.1, 2.13.2 and 2.13.3
                                    respectively shall be reviewed biennially at
                                    the relevant April Quarterly meeting. At the
                                    time of such review the parties shall
                                    negotiate in good faith to determine the new
                                    flat fee, harvest planning fee and road
                                    usage fee to apply for the next two Year
                                    period taking into account the then current
                                    market rates for the services being provided
                                    by FCF under this agreement. Any
                                    disagreement over the level of such fees
                                    will be resolved under clause 9 of this
                                    agreement.

                           (b)      FEES TO APPLY: If the parties are unable to
                                    resolve any dispute over the fees before the
                                    commencement of the next two Year period
                                    then the relevant fees applicable to the
                                    previous two Year period will continue to
                                    apply and be payable by UBS Mangakahia until
                                    the dispute is resolved.

                           (c)      DISPUTE RESOLVED: Once the dispute has been
                                    resolved and:

                                    (i)      FEE INCREASE: the relevant fees
                                             have increased from the previous
                                             fee level, FCF will be entitled to
                                             be paid the difference between the
                                             two fee levels together with any
                                             additional GST; or

                                    (ii)     FEE DECREASE: the relevant fees
                                             have decreased from the fee level
                                             applicable for the previous period,
                                             then UBS Mangakahia will be
                                             entitled to the difference between
                                             the two fee levels together with a
                                             credit note for any overpaid GST;

                                    and the payment will be backdated to the
                                    start of the relevant two Year period and
                                    such payment is payable to the other party
                                    within ten (10) Business Days of the dispute
                                    being resolved. The party paying the
                                    difference shall forthwith pay such amount
                                    to the other party together with interest
                                    thereon at the Bill Rate calculated daily
                                    from the start of the relevant two Year
                                    period to the day ten (10) Business Days
                                    after the dispute has been resolved, and, if
                                    relevant, interest

<PAGE>

Infrastructure Agreement                                                 Page 16

                                    thereon at the Default Interest Rate
                                    calculated daily from the day eleven (11)
                                    Business Days after the dispute has been
                                    resolved to the date of payment of the
                                    balance to the other party and compounded
                                    monthly.

         2.14     DAMAGED WOOD: If all or any part of the Land or Trees are
                  damaged by fire, wind, forest disease, flood or other cause
                  the parties agree to consult over measures to protect UBS
                  Mangakahia's investment in the Trees through timely salvage of
                  the damaged Trees. The parties agree that such measures,
                  without limitation, may include the following:

                  2.14.1   POSTPONEMENT: Postponement of road line salvage on
                           Working Block(s) where works have not commenced, in
                           which case any payment for the relevant Trees made by
                           FCF will at UBS Mangakahia's option either be
                           promptly refunded or be credited to FCF to be offset
                           against further road line salvage Trees. Where UBS
                           Mangakahia elects to offset the payment, FCF will
                           also be credited interest on that payment at the Bill
                           Rate from the date that the payment was made to UBS
                           Mangakahia until the date that payment would have
                           been due to UBS Mangakahia for the subsequent road
                           line salvage Trees but for the off set.

                  2.14.2   COMPLETION OF ROAD LINE SALVAGE: Completion of road
                           line salvage on Working Block(s) where works have
                           commenced.

                  2.14.3   REDIRECTION OF CREWS: Redirection of road line
                           salvage crews to Stands that include the damaged
                           Trees to facilitate the early salvage of such Trees
                           in which case FCF will provide an infrastructure plan
                           for the Forest Roads required for the salvage as
                           contemplated by sub-clause 2.6. UBS Mangakahia will
                           respond to such infrastructure plan pursuant to the
                           terms of sub-clause 2.7 and the designation and
                           determination of the road line salvage will be
                           progressed in accordance with the terms of
                           sub-clauses 2.9 to 2.12 (inclusive).

                  2.14.4   NET STUMPAGE: Payment of the net stumpage amount
                           between the value of road line salvage postponed and
                           the value of the new road line salvage by either FCF
                           to UBS Mangakahia or UBS Mangakahia to FCF as
                           appropriate.

                  2.14.5   ROAD LINE SALVAGE CONSENTS: FCF will be required to
                           obtain all necessary resource consents, permits and
                           licenses that may be necessary to undertake such
                           emergency road line salvage works, Forest Roads
                           development and/or upgrading and harvesting.

                  2.14.6   NEW HARVEST PLAN: If the parties agree, FCF will
                           prepare a new harvest plan and FCF shall be entitled
                           to be paid an additional harvest planning fee in
                           accordance with clause 2.13.2

<PAGE>

Infrastructure Agreement                                                 Page 17

                           which additional fee will be payable by UBS
                           Mangakahia by the 20th of the Month following the
                           Month in which FCF issues an invoice for the
                           additional harvest planning fee.

         2.15     ROAD LINE SALVAGE SAMPLE: FCF, including its permitted
                  assigns, shall, if requested from time to time by UBS
                  Mangakahia, provide UBS Mangakahia with a small non-material
                  quantity of logs from road line salvage harvesting for
                  determination by UBS Mangakahia of quality data pertaining to
                  the logs, including pruned log index data. Such logs shall be
                  paid for by UBS Mangakahia on the basis consistent with
                  clauses 2.10 and 2.11 (except to the extent that the invoice
                  shall be issued after the relevant logs have been harvested
                  and provided to UBS Mangakahia and such invoice shall be
                  payable within 20 Business Days of the date of the invoice).

3.       TRANSITIONAL PERIOD HARVEST SCHEDULING

         During the Transitional Period the parties agree to co-operate and
         consult in good faith to ensure that the Forest Road services and other
         infrastructure services referred to in this agreement are provided in a
         timely and efficient manner to enable harvesting during Harvest Period
         One and Harvest Period Two. In particular the parties agree to do the
         following.

         3.1      CONSULTATION: Within twenty (20) days of Settlement UBS
                  Mangakahia and FCF will consult to consider which Trees will
                  be ready and suitable for harvesting during Harvest Period One
                  and Harvest Period Two. FCF will produce for the purpose of
                  such consultations its most up to date pre-harvest information
                  in relation to the Trees being considered for harvesting.

         3.2      NOMINATION OF TRANSITIONAL WORKING BLOCK(s): UBS Mangakahia
                  will verify the pre-harvest information provided by FCF and
                  will obtain its own PHI's in relation to the Trees considered
                  for harvesting during Harvest Period One. Within thirty five
                  (35) days of Settlement UBS Mangakahia will give notice to FCF
                  designating the Working Block(s) that UBS Mangakahia intends
                  to harvest during Harvest Period One and Harvest Period Two.

         3.3      FOREST ROADS: Within sixty (60) days of Settlement FCF will
                  provide UBS Mangakahia with the infrastructure plan required
                  under sub-clause 2.6 for the Working Block(s) to be harvested
                  during Harvest Period One and Harvest Period Two. On receipt
                  of such information the infrastructure plan will be agreed by
                  the parties in accordance with the provisions of sub-clause
                  2.7.

         3.4      HARVESTING PREPARATIONS: Following designation of the Working
                  Block(s) under sub-clause 3.2 FCF will provide the harvest
                  preparation services as contemplated by sub-clauses 2.2 to 2.5
                  (inclusive) for the Working Block(s) to be harvested during
                  Harvest Period One and Harvest Period Two.

<PAGE>

Infrastructure Agreement                                                 Page 18

4.       HEALTH AND SAFETY, CERTIFICATION AND ENVIRONMENTAL COMPLIANCE

         4.1      COMPLIANCE: FCF shall take all reasonably practicable steps to
                  ensure that no act or omission by it or its employees, agents,
                  contractors, subcontractors, invitees, visitors or licensees:

                  4.1.1    HAZARD: causes a hazard, significant hazard, harm or
                           serious harm to any employee of UBS Mangakahia or any
                           person lawfully on the Land; or

                  4.1.2    BREACH OF HSE ACT: is a breach of any duty or
                           obligation of FCF under the Health and Safety in
                           Employment Act 1992 ("HSE Act") and any regulations
                           or codes of practice made pursuant to the HSE Act; or

                  4.1.3    HSE ACT ENFORCEMENT: does or is likely to give rise
                           to the issue of an improvement or prohibition notice,
                           enforcement proceedings or a prosecution under the
                           HSE Act against FCF or UBS Mangakahia.

                  Provided FCF shall only be required to take all reasonably
                  practicable steps to enforce the requirements in this
                  sub-clause 4.1 in respect of its agents, contractors,
                  subcontractors, invitees, visitors or licensees.

         4.2      FURTHER OBLIGATIONS: Without limiting its general obligations
                  FCF shall:

                  4.2.1    RELEVANT RULES AND REGULATIONS: obtain and shall be
                           familiar with, all relevant rules, regulations,
                           standards and industry practices, applicable to the
                           provision of the services provided by FCF under this
                           agreement;

                  4.2.2    MAINTENANCE: in relation to FCF's duties under this
                           agreement, require that all plant, equipment,
                           machinery, vehicles and tools used are in a safe
                           working condition and subject to periodic checks to
                           ensure this standard is maintained and it shall
                           require that the use of equipment that is damaged or
                           does not meet accepted safety standards is not
                           permitted;

                  4.2.3    PROTECTIVE EQUIPMENT: in relation to FCF's duties
                           under this agreement, ensure that appropriate
                           protective equipment and clothing is supplied to, and
                           used by, all personnel, associated with the work;

                  4.2.4    INSTRUCTIONS: in relation to FCF's duties under this
                           agreement, observe any instructions by any competent
                           authority in relation to the maintenance of safe
                           working practices and accident prevention;

<PAGE>

Infrastructure Agreement                                                 Page 19

                  4.2.5    REPORT ACCIDENTS: in relation to FCF's duties under
                           this agreement, report to UBS Mangakahia all
                           accidents resulting in injuries to personnel in
                           accordance with prescribed procedures.

         4.3      INDEMNITY: FCF shall indemnify and keep indemnified UBS
                  Mangakahia from all costs, damages, fines, penalties, loss and
                  expense incurred or suffered by UBS Mangakahia in respect of
                  any breach of the HSE Act, or any conviction of or proceedings
                  instigated against any of them pursuant to the HSE Act
                  directly related to a breach by FCF of any of the provisions
                  set out in sub-clauses 4.1 and 4.2. Provided that this
                  indemnity will not apply where any claim under this indemnity
                  against FCF arises as a result of any act or omission by UBS
                  Mangakahia, or where FCF was acting consistently with any
                  requests of UBS Mangakahia or directions from UBS Mangakahia.
                  Each party will take all reasonable steps to mitigate their
                  costs, damages, fines, penalties, loss and expense.

         4.4      NOTIFICATION OF BREACH: If FCF becomes aware that it is or may
                  be in breach, or is likely to be in breach of any of the
                  provisions in sub-clauses 4.1 or 4.2, FCF shall promptly
                  notify UBS Mangakahia of such a breach or anticipated breach.
                  In relation to any breach or anticipated breach in connection
                  with any of the provisions in sub-clauses 4.1 or 4.2 FCF shall
                  follow the reasonable directions, if any, of UBS Mangakahia to
                  avoid, remedy or mitigate such breach or anticipated breach.

         4.5      INDUCTION: All of FCF's employees, agents, contractors,
                  subcontractors, invitees, visitors or licensees shall undergo
                  a safety induction and an adequate safety training programme
                  before commencing work on the Land. FCF shall promptly advise
                  UBS Mangakahia in writing of any major changes to any of its
                  safety policies and procedures. FCF shall be responsible for
                  ensuring that its affected employees, agents, contractors,
                  subcontractors, invitees, visitors or licensees are advised of
                  any such changes.

         4.6      FIRE TRAINING: FCF shall procure that any contractor engaged
                  by FCF in working in the forest shall make their personnel
                  available for fire training, suppression, and standby as may
                  be required by UBS Mangakahia, and at the cost of UBS
                  Mangakahia with such actual costs to be payable by UBS
                  Mangakahia within 15 Business Days of receipt of an
                  appropriate invoice.

         4.7      FOREST STEWARDSHIP CERTIFICATION: Unless the parties otherwise
                  agree, FCF will maintain and comply with (or require
                  compliance by its contractors, subcontractors, agents,
                  employees, invitees, visitors or licensees) Forest Stewardship
                  Council Certification in relation to the performance of its
                  obligations under this agreement.

         4.8      ENVIRONMENTAL COMPLIANCE: In performing its obligations under
                  this agreement FCF will at all times require compliance (or
                  require compliance by its contractors, subcontractors, agents,
                  employees, invitees, visitors or licensees) with the
                  Environmental Requirements.

<PAGE>

Infrastructure Agreement                                                 Page 20

5.       INSURANCE

         5.1      INSURANCE: FCF shall be permitted to self-insure its risks,
                  provided that if at any time during the term of this
                  agreement, the net assets of Fletcher Challenge Industries
                  Limited fall below $200 million, FCF shall promptly notify UBS
                  Mangakahia of the same and the provisions of the following
                  clauses will apply until the net assets of Fletcher Challenge
                  Industries Limited exceed $200 million. All calculations of
                  net assets required to be carried out pursuant to this clause
                  must be made using those accounting principles used for the
                  preparation of financial statements of Fletcher Challenge
                  Forests Limited.

                  5.1.1    PUBLIC LIABILITY INSURANCE: FCF shall obtain and
                           maintain, at its expense, public liability insurance
                           coverage, with an extension for fire fighting costs
                           and levies pursuant to the Forest and Rural Fires Act
                           1977, in respect of activities undertaken by it and
                           its subcontractors in performing its obligations
                           under this agreement in such amounts, on such terms
                           and with such insurers as a prudent forestry
                           contractor would insure for based on the risks and
                           liabilities attendant on the activities FCF has
                           contracted to provide to UBS Mangakahia with
                           confirmation in writing of the cover and that the
                           premiums are paid.

                  5.1.2    ADDITIONAL INSURED: UBS Mangakahia shall be named as
                           an additional insured on all insurance policies
                           providing such coverage.

                  5.1.3    CHANGE IN SCOPE: Any proposed material change in the
                           scope, insurer or amount of insurance coverage
                           maintained by FCF pursuant to this clause 5 shall be
                           promptly reported to UBS Mangakahia. FCF shall have
                           no obligation to insure under this agreement except
                           as specified in this clause 5.

         5.2      OTHER INSURANCE: FCF shall use reasonable endeavours to obtain
                  and maintain such insurance in respect of this agreement
                  (including, without limitation, insurance against fraud or
                  theft on the part of FCF's employees or contractors which
                  would cause loss to UBS Mangakahia), with such insurers and
                  coverage, and for such amount, as UBS Mangakahia shall
                  request. The cost of such insurance including any brokerage
                  fees and out of pocket expenses shall be for the account of
                  UBS Mangakahia. FCF will obtain written quote(s) for such
                  insurance including brokerage fees and out-of-pocket costs and
                  will not be under any obligation to place such insurance until
                  such time as it has received payment of the agreed quote in
                  full in cleared funds from UBS Mangakahia. Upon request, FCF
                  shall furnish to UBS Mangakahia, all certificates of the
                  insurances obtained and maintained pursuant to this sub-clause
                  5.2.

         5.3      UBS MANGAKAHIA INSURANCE: UBS Mangakahia may, at its sole and
                  absolute discretion and cost, obtain and maintain such other
                  insurances in

<PAGE>

Infrastructure Agreement                                                 Page 21

                  addition to any insurance obtained and maintained by FCF in
                  accordance with this clause 5, but without limiting FCF's
                  obligation to obtain and maintain insurance in accordance with
                  this clause 5.

         5.4      FCIL UNDERTAKING: In order to satisfy UBS Mangakahia of FCF's
                  credit worthiness in respect of its self insuring for the
                  above risks, FCF will provide UBS Mangakahia with a signed
                  undertaking from Fletcher Challenge Industries Limited in the
                  form set out in Schedule Two together with a guarantee from
                  Fletcher Challenge Industries Limited in the form attached to
                  Schedule Two on execution of this agreement.

6.       REPRESENTATIONS, WARRANTIES AND STANDARD OF PERFORMANCE

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

                  6.1.1    STANDING: UBS Mangakahia is a company duly
                           incorporated and validly existing under the laws of
                           New Zealand.

                  6.1.2    AUTHORITY TO ENTER INTO AGREEMENT: The execution,
                           delivery and performance by UBS Mangakahia of this
                           agreement had 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 Mangakahia may
                           be a party or by which any of its assets may be
                           bound.

                  6.1.3    CONSENTS, APPROVALS, ETC: 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.

                  6.1.4    VALID AGREEMENT: 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.

                  6.1.5    NO PROCEEDINGS: There is no action, suit or
                           proceedings 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.

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

<PAGE>

Infrastructure Agreement                                                 Page 22

                  6.2.1    STANDING: FCF is a company duly incorporated and
                           validly existing under the laws of New Zealand.

                  6.2.2    AUTHORITY TO ENTER INTO AGREEMENT: The execution,
                           delivery and performance by FCF of this agreement had
                           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.

                  6.2.3    CONSENTS, APPROVALS, ETC: 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.

                  6.2.4    VALID AGREEMENT: This agreement has been duly
                           executed and delivered by FCF and constitutes the
                           legal, valid and binding obligation of FCF,
                           enforceable against FCF in accordance with its terms.

                  6.2.5    NO PROCEEDINGS: There is no action, suit or
                           proceedings 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.

         6.3      FCF'S STANDARD OF PERFORMANCE: Subject to the specific
                  reasonable instructions or directions given to FCF pursuant to
                  this agreement by UBS Mangakahia, FCF shall undertake FCF's
                  obligations under this Agreement in good faith employing the
                  same degree of care and skill as:

                  6.3.1    FCF'S AFFAIRS: FCF employs in the conduct of its own
                           affairs; or

                  6.3.2    HIGHLY COMPETENT SERVICE PROVIDER: a highly competent
                           service provider with expertise in the provision of
                           equivalent services to those provided under this
                           agreement for large scale commercial plantation
                           forestry operations;

                  whichever is the higher standard. The parties acknowledge that
                  nothing in this clause 6.3 shall limit FCF's obligation to act
                  as a competent service provider to the standards required by
                  clauses 6.3.1 and 6.3.2 (meaning, for example, that in
                  briefing, advising or delivering services to UBS Mangakahia,
                  FCF must advise and/or deliver services to the standard
                  required, and if UBS Mangakahia issued FCF with an instruction
                  that a service provider conforming with the standard of

<PAGE>

Infrastructure Agreement                                                 Page 23

                  performance set out in this clause would find fault with, FCF
                  must inform UBS Mangakahia), nor shall it limit FCF's
                  obligation to discharge any instruction or direction from UBS
                  Mangakahia to the standard of performance set out in this
                  clause.

7.       INDEMNITY

         7.1      FCF'S DUTY TO INDEMNIFY: FCF shall indemnify UBS Mangakahia
                  and its respective officers, directors, employees and
                  Affiliates against any and all costs, expenses, claims,
                  damages and liabilities reasonably incurred whatsoever,
                  including reasonable legal expenses, arising as a direct
                  result of any breach by FCF of the provisions of this
                  agreement, except if, and only to the extent that, such
                  breach, act or omission, occurs as a result of:

                  7.1.1    SPECIFIC INSTRUCTIONS: FCF carrying out and
                           performing any specific instruction or direction
                           given to FCF pursuant to this agreement by UBS
                           Mangakahia; or

                  7.1.2    FAILURE BY UBS MANGAKAHIA: FCF, having met the
                           standard of a reasonable and prudent forestry
                           contractor, being unable to comply with any of its
                           duties under this agreement caused by the failure to
                           act by UBS Mangakahia.

         7.2      LIMITATION OF LIABILITY - FCF: FCF's liability under
                  sub-clauses 4.3 and 7.1 of this agreement and sub-clauses 8.1
                  and 11.3 of the Management Agreement cannot exceed in
                  aggregate $2 million (the "Cap").

         7.3      UBS MANGAKAHIA'S DUTY TO INDEMNIFY: UBS Mangakahia hereby
                  indemnifies FCF, its officers, directors, employees and
                  Affiliates, against any and all costs, expenses, claims,
                  damages and liabilities whatsoever, including reasonable legal
                  expenses, arising directly out of any breach by UBS Mangakahia
                  of the provisions of this agreement.

         7.4      LIMITATION OF LIABILITY - UBS MANGAKAHIA: UBS Mangakahia's
                  liability under sub-clause 7.3 of this agreement and
                  sub-clause 8.3 of the Management Agreement cannot exceed in
                  aggregate $2 million.

         7.5      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 of any
                  kind, including (but not limited to) loss of savings and
                  profit, 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.

         7.6      RIGHT TO DEFEND: If any action or proceeding is brought
                  against a party or parties indemnified under sub-clauses 7.1.
                  or 7.3 (the "Indemnified Party"), such Indemnified Party shall
                  promptly notify in writing the party or parties against whom
                  such indemnity may be sought (the

<PAGE>

Infrastructure Agreement                                                 Page 24

                  "Indemnifying Party"). The Indemnifying Party shall then be
                  entitled to assume the defence of the action or proceeding
                  with counsel reasonably satisfactory to the Indemnified Party
                  and shall pay the fees and expenses of such counsel. If the
                  Indemnifying Party has given written notice invoking the
                  provisions of clause 9 with respect to its obligation to
                  indemnify, the Indemnifying Party may assume such defence
                  subject to a reservation of rights against the Indemnified
                  Party in any such action or proceeding, any Indemnified Party
                  shall have the right to retain its own counsel, but the fees
                  and expenses of such counsel shall be at the expense of such
                  Indemnified Party unless:

                  7.6.1    BY MUTUAL AGREEMENT: the Indemnifying Party and the
                           Indemnified Party shall have mutually agreed to the
                           retention of such counsel; or

                  7.6.2    DIFFERING INTERESTS: the named parties to any such
                           proceedings (including the impleaded parties) include
                           both the Indemnifying Party and the Indemnified Party
                           and representation of both parties by the same
                           counsel would be inappropriate due to an actual or
                           potential conflict of interest between them.

                  Where there is any disagreement between the parties as to
                  whether there is an actual or potential conflict of interest
                  pursuant to sub-clause 7.6.2 such disagreement shall be
                  referred to the President of the New Zealand Law Society whose
                  determination shall be binding and the costs of obtaining such
                  determination shall be paid equally by the Indemnifying Party
                  and the Indemnified Party. It is understood and agreed by the
                  parties that the Indemnifying Party shall not, in connection
                  with any proceeding or related proceedings in the same
                  jurisdiction, be liable for the reasonable fees and expenses
                  of more than one separate firm for the Indemnified Party. The
                  Indemnifying Party shall not be liable for any settlement of
                  any proceeding effected without its written consent, but if
                  settled with such consent or if there is a final judgment for
                  the plaintiff, the Indemnifying Party agrees to indemnify the
                  Indemnified Party from and against any loss or liability by
                  reason of such settlement or judgment. No Indemnifying Party
                  shall, without the prior written consent of the Indemnified
                  Party, effect any settlement of any pending or threatened
                  proceeding in respect of which any Indemnified Party is or
                  could have been a party and indemnity could have been sought
                  pursuant to this clause 7 by such Indemnified Party.

8.       FORCE MAJEURE

         8.1      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

<PAGE>

Infrastructure Agreement                                                 Page 25

                  party shall be deemed to be within that party's reasonable
                  control. Further nothing in this clause 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.

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

         8.3      NOTICE: The party claiming force majeure shall as soon as
                  possible and in any event no later than five (5) Business Days
                  after it becomes aware of 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 reasonably
                  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 until notice has been given.

         8.4      PRIOR OBLIGATIONS: No situation of force majeure pursuant to
                  this clause 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.

         8.5      SUSPENSION AND TERMINATION:

                  8.5.1    SUSPENSION: If any event beyond FCF's reasonable
                           control prevents FCF from carrying out any
                           obligations under this agreement, UBS Mangakahia may
                           immediately suspend this agreement, on providing
                           written notice of such suspension to FCF, and appoint
                           a replacement to fulfil FCF's obligations under this
                           agreement. Such suspension shall continue until UBS
                           Mangakahia is satisfied, in its absolute discretion,
                           that FCF is capable of resuming its responsibilities
                           under this agreement. Notwithstanding that the
                           agreement has been suspended, the flat fee under
                           clause 2.13.1 and the road usage fee under clause
                           2.13.3 payable by UBS Mangakahia to FCF will continue
                           to be payable in full in accordance with the relevant
                           provisions of this agreement as if this agreement had
                           not been suspended.

                  8.5.2    TERMINATION - FCF: If an event beyond FCF's
                           reasonable control prevents FCF from carrying out any
                           obligation under this agreement for a continuous
                           period of twenty (20) Business Days, then UBS
                           Mangakahia may cancel this agreement immediately upon
                           providing written notice to FCF provided that prior
                           to termination UBS Mangakahia must pay to FCF
                           reasonable out-of-pocket costs arising from the early
                           termination of this agreement. FCF must take all
                           reasonable

<PAGE>

Infrastructure Agreement                                                 Page 26

                           steps to minimise such costs. In that case,
                           sub-clause 20.4 will apply.

                  8.5.3    TERMINATION - UBS MANGAKAHIA: If an event beyond UBS
                           Mangakahia's reasonable control prevents UBS
                           Mangakahia from carrying out any obligation under
                           this agreement for a continuous period of forty (40)
                           Business Days, then FCF may cancel this agreement by
                           giving ten (10) Business Days written notice to UBS
                           Mangakahia. In that case, clause 20 will apply.

9.       RESOLUTION OF DISPUTES

         In the event of a dispute arising between the parties in relation to
         this agreement, the following provisions will apply.

         9.1      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 and good
                  faith. The parties will attend at least one meeting to discuss
                  an 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 a
                  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.

         9.2      ARBITRATION: If the dispute cannot be resolved in accordance
                  with sub-clause 9.1 within ten (10) Business Days after the
                  date of the notice referred to in sub-clause 9.1, then either
                  party may then require (by written notice to the other party)
                  the dispute to be referred to arbitration. If this sub-clause
                  is invoked then the following shall apply.

                  9.2.1    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.

<PAGE>

Infrastructure Agreement                                                 Page 27

                  9.2.2    ARBITRATION IN NEW ZEALAND: The arbitration will take
                           place in New Zealand.

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

                  9.2.4    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.

         9.3      PARTIES TO CONTINUE TO PERFORM: Subject to the provisions of
                  clause 20, pending resolution of any dispute or difference,
                  the parties shall continue to perform their respective
                  obligations pursuant to the provisions of this agreement.

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

10.      ASSIGNMENT

         10.1     CONSENT: This agreement shall be binding upon and inure to the
                  benefit of the parties, their respective successors and
                  permitted assigns. The parties recognise that UBS Mangakahia
                  has contracted for FCF's services as provided in this
                  agreement because of certain special and unique abilities of
                  FCF and that FCF has agreed to provide such services due to
                  special and unique characteristics of UBS Mangakahia. For this
                  reason, a party may not assign its rights or transfer its
                  obligations under this agreement to any other person or entity
                  without the prior written consent of the other party. Such
                  consent is not to be unreasonably or arbitrarily withheld.

         10.2     DEED: In the case of request for assignment 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 of this
                  agreement to be observed and performed on the part of the
                  assignor.

         10.3     OTHER ACTIVITIES: UBS Mangakahia acknowledges that FCF owns
                  other plantation assets in New Zealand and is actively
                  involved in the business of managing such plantation assets
                  and harvesting and marketing forest products (as well as
                  managing plantation assets and harvesting and market forest
                  products owned by others) both in the domestic and export
                  markets. From time to time, FCF's acquisition and management
                  of plantation assets and harvesting and marketing of forest
                  products for its own account, or for a third party, may create
                  a conflict of interest with respect to the obligations of FCF
                  under this agreement.

<PAGE>

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         10.4     EFFECTS OF CONFLICT: In the event of a conflict of interest
                  (which the parties acknowledge could arise due to a change in
                  the effective control or management of FCF) UBS Mangakahia
                  shall have the right, following consultation with FCF, to
                  terminate this agreement without cause on thirty (30) Business
                  Days' notice in writing where the conflict of interest is
                  reasonably likely to cause FCF to be unable to comply in all
                  respects with its confidentiality obligations under this
                  agreement and thereby result in material adverse effect to UBS
                  Mangakahia.

11.      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.

12.      APPLICABLE LAW

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

         12.2     NON EXCLUSIVE JURISDICTION: The submission to jurisdiction in
                  sub-clause 12.1 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 jurisdiction to preclude
                  the taking of proceedings in another jurisdiction whether
                  concurrently or not.

13.      NOTICES

         13.1     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:

                  13.1.1   PERSONAL DELIVERY: delivered personally;

                  13.1.2   DOMESTIC POST: sent by prepaid post; or

                  13.1.3   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.

<PAGE>

Infrastructure Agreement                                                 Page 29

                  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 copies to:

                  UBS Timber Investors
                  Trade Center, 4th Floor
                  24 Airport Road
                  West Lebanon
                  NH 03784
                  United States of America
                  For:       Peter Mertz
                  Facsimile: (001) 603 298 7620

                  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:       Chief Executive Officer
                  Facsimile: (09) 571 9870

                  With a copy to:

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

<PAGE>

Infrastructure Agreement                                                 Page 30

         13.2     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:

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

                  13.2.2   PREPAID POST: if sent by prepaid post three (3)
                           Business Days (if posted within New Zealand to an
                           address in New Zealand), or ten (10) Business Days
                           (if posted by prepaid airmail from country to
                           country) after the date of posting;

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

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

                  13.2.5   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.

14.      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.

15.      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 use of the
         Forestry Roads and/or the Land to the extent that it is relevant to the
         agreement and/or the Related Agreements or any part thereof.
         Notwithstanding the above, the provisions of this clause shall not
         apply to any notice received by any party from any Related Company of a
         party.

<PAGE>

Infrastructure Agreement                                                 Page 31

16.      ENTIRE AGREEMENT

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

17.      MODIFICATION

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

18.      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.

19.      CONFIDENTIALITY

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

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

         19.2     USE: use for itself; or

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

         any Confidential Information except:

         19.4     LEGAL REQUIREMENT: subject to sub-clause 19.10, as required by
                  law or regulatory body (including any stock exchange);

         19.5     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;

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

         19.7     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 19 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;

<PAGE>

Infrastructure Agreement                                                 Page 32

         19.8     AFFILIATES AND ADVISERS: as required to communicate and make
                  disclosure to Affiliates of 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 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;

         19.9     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); or

         19.10    CONSULTATION: in the event that one party (the first party) is
                  required by law or stock exchange reporting 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 any 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 request.

         19.11    FCF'S SAFEGUARDS: If UBS Mangakahia reasonably requests, 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 19.

20.      TERM OF AGREEMENT AND SUSPENSION

         20.1     TERM: Unless this agreement is earlier terminated as set forth
                  in this clause 20, the term of this agreement shall be from
                  the Commencement Date until the termination of the Forestry
                  Right.

         20.2     EARLY TERMINATION: An early termination of this agreement
                  under this sub-clause 20.2 shall not be effective until the
                  date ten (10) Business Days after receipt of the notice of
                  termination by FCF. This agreement may be terminated prior to
                  the expiration of the period specified in sub-clause 20.1
                  either by notice from UBS Mangakahia to FCF if any of the
                  following events occur (in relation to sub-clause 20.2.2 and
                  20.2.4), or by notice from UBS Mangakahia or FCF to the other
                  party (in relation to sub-clauses 20.2.1 and 20.2.3).

                  20.2.1   MATERIAL BREACH: Either party breaches, and fails to
                           properly or promptly perform, any of its material
                           obligations within twenty (20) Business Days after
                           written notice from the other party specifying the
                           breach and its intention to terminate this agreement
                           if such obligation is not properly and promptly
                           performed provided that such breach is not disputed
                           by the
<PAGE>

Infrastructure Agreement                                                 Page 33

                           relevant party alleged to be in breach (in which case
                           sub-clauses 20.3.1 to 20.3.4 shall apply)

                  20.2.2   FCF'S FAILURE TO PERFORM ITS DUTIES: If, UBS
                           Mangakahia:

                           (a)      DUTIES: notifies FCF that it is in material
                                    breach of the performance of its duties
                                    under this agreement in any material
                                    respect; and

                           (b)      CAUSE: such failure is not caused by any
                                    specific instruction or direction given to
                                    FCF pursuant to this agreement by UBS
                                    Mangakahia and acted on by FCF nor is such
                                    failure caused by any failure to act by UBS
                                    Mangakahia.

                  20.2.3   EVENT OF DEFAULT: If any one or more of the following
                           events of default occur this agreement may be
                           terminated by the affected party prior to the
                           expiration of the period specified in sub-clause 20.1
                           by notice from the affected party to the other if any
                           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 FCF's property;

                           (b)      INSOLVENCY EVENT: an Insolvency Event occurs
                                    in respect of FCF;

                           (c)      NOTICE FROM REGISTRAR: FCF 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 FCF; 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 FCF.

                           An early termination of this agreement under this
                           sub-clause 20.2 shall not be effective until the date
                           ten (10) Business Days after receipt of the notice of
                           termination by FCF.

                  20.2.4   CAP EXCEEDED: If the amounts that have been
                           determined to be owed by FCF to UBS Mangakahia exceed
                           in aggregate the Cap (referred to in sub-clause 7.2)
                           where such amounts arise as a result of breaches of
                           either this agreement or the Management

<PAGE>

Infrastructure Agreement                                                 Page 34

                           Agreement and where such amounts are determined
                           either by agreement between the parties or by the
                           award of an arbitrator or by court order (all rights
                           of appeal having either expired or been exhausted),
                           irrespective of the time period over which the
                           liability for such amounts accrues.

         20.3     TERMINATION DISPUTES:

                  20.3.1   FCF DISPUTES BREACH HAS ARISEN: In the event that UBS
                           Mangakahia has notified FCF that it is in material
                           breach under this agreement in accordance with sub-
                           clause 20.2.2 and FCF disputes that termination
                           notice, or if the recipient of a termination notice
                           under sub-clause 20.2.1 disputes that termination
                           notice, then the dispute resolution procedure under
                           clause 9 shall apply.

                  20.3.2   SUSPENSION: Pending resolution of a dispute under
                           sub-clause 20.2.3 UBS Mangakahia may suspend this
                           agreement (or the relevant part of it where the
                           disputed breach is in relation to only part of the
                           services in this agreement and FCF is able to provide
                           the balance of FCF's services in this agreement) on
                           providing written notice of suspension (or partial
                           suspension) to FCF, and appoint an interim
                           replacement to fulfil FCF's obligations under this
                           agreement.

                  20.3.3   FEES: Notwithstanding that the agreement or part of
                           it has been suspended as provided in sub-clause
                           20.3.2, the road usage fee (pursuant to sub-clause
                           2.13.3) payable by UBS Mangakahia to FCF will
                           continue to be payable in full in accordance with the
                           relevant provisions of this agreement as if this
                           agreement (or part of it) had not been suspended,
                           pending determination of the dispute pursuant to
                           sub-clause 20.3.1.

                  20.3.4   DETERMINATION OF BREACH: If it is determined pursuant
                           to sub-clause 20.3.1 that there is not breach then
                           UBS Mangakahia must immediately reinstate FCF. If it
                           is determined that there is a breach, UBS Mangakahia
                           may immediately terminate this agreement and will
                           notify FCF in writing of the out-of-pocket costs
                           incurred by it as a result of the appointment of the
                           replacement contractors (including a statement of
                           such costs). FCF will pay such costs to UBS
                           Mangakahia within five (5) Business Days of receipt
                           of such notification.

                  20.3.5   CURABLE BREACH: If prior to referring the issue to
                           dispute resolution in accordance with this clause,
                           UBS Mangakahia and FCF can agree on a method and
                           period within which such failure is to be cured, and
                           FCF fails to cure such failure according to the
                           method and within the period agreed, then UBS
                           Mangakahia may terminate this agreement by notice to
                           FCF in writing and this agreement will terminate ten
                           (10) Business Days from the date of such notice.

<PAGE>

Infrastructure Agreement                                                 Page 35

         20.4     EFFECT OF TERMINATION:

                  20.4.1   SURVIVAL: The expiration or earlier termination of
                           this agreement will be without prejudice to the
                           rights and obligations of the parties prior to such
                           expiration or earlier termination becoming effective
                           and the obligations of the parties under clauses 7,
                           19 and 20 will survive the expiration or earlier
                           termination of this agreement.

                  20.4.2   RELATED AGREEMENTS: The expiration or earlier
                           termination of this agreement will be without
                           prejudice to the rights and obligations of the
                           parties under the Related Agreements.

         20.5     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.

21.      COUNTERPARTS

         21.1     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.

         21.2     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.

22.      FURTHER ASSURANCES

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

23.      LIMITED RECOURSE

         FCF undertakes and agrees as follows.

         23.1     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.

<PAGE>

Infrastructure Agreement                                                 Page 36

         23.2     LIMITATION OF LIABILITY: None of the Related Companies of UBS
                  Mangakahia, direct or indirect holders of securities or debt
                  of UBS Mangakahia, nor any of their respective officers,
                  directors, or employees, shall be liable for the obligations
                  of UBS Mangakahia to FCF.

         23.3     NO ACTIONS OR PROCEEDINGS: FCF shall not commence any action
                  or proceeding against any of the persons referred to in
                  sub-clause 23.2 for the purpose of enforcing the obligations
                  of UBS Mangakahia.

24.      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 is due down to the date on which the overdue amount is paid in
         full. Default interest will be calculated at the Default Interest Rate
         and will be compounded monthly.

25.      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.

26.      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.

27.      NO MERGER

         The parties acknowledge that the covenants, representations,
         undertakings and agreements contained herein shall not merge upon
         completion of upon 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.

28.      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 Related
         Agreement.

<PAGE>

Infrastructure Agreement                                                 Page 37

Signed as an agreement.

SIGNED on behalf of
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>

Infrastructure Agreement                                                 Page 38

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>

                                  SCHEDULE ONE

                                 FORESTRY RIGHT

<PAGE>

                                  SCHEDULE TWO

                            UNDERTAKING AND GUARANTEE

In consideration of UBS Mangakahia Forest Venture Ltd entering into the
Infrastructure Agreement ("the Agreement") with Fletcher Challenge Forests
Industries Limited, Fletcher Challenge Industries Limited agrees to grant a
guarantee to UBS Mangakahia Forest Venture Ltd of Fletcher Challenge Forests
Industries Limited's obligations and liability under the Agreement and the
Related Agreements in the form attached and undertakes to UBS Mangakahia Forest
Venture Ltd that during the term of the Forestry Right Fletcher Challenge
Industries Limited shall:

1.       ensure that Fletcher Challenge Industries Limited maintains net assets
         in any year of the Forestry Right in an amount not less than $200
         million;

2.       provide to UBS Mangakahia Forest Venture Ltd a copy of the audited
         financial statements of Fletcher Challenge Forests Limited and its
         group, as soon as they become available for release;

3.       provide to UBS Mangakahia Forest Venture Ltd a certificate from the
         Chief Financial Officer of Fletcher Challenge Forests Limited, issued
         no later than five months after the end of the financial year of
         Fletcher Challenge Forests Limited, confirming that as at the end of
         that financial year the net assets of Fletcher Challenge Industries
         Limited are no less than $200 million;

4.       no later than the end of December in each year provide to UBS
         Mangakahia Forest Venture Ltd a copy of the unaudited financial
         statements of Fletcher Challenge Industries Limited.

5.       Fletcher Challenge Industries Limited represents and warrants to UBS
         Mangakahia on execution and delivery of this undertaking and the
         guarantee given under this undertaking that this undertaking and the
         guarantee given under this undertaking:

         (a)      will have been validly authorised by all necessary action on
                  the part of Fletcher Challenge Industries Limited;

         (b)      will not contravene any law binding on it;

         (c)      will not contravene its incorporation documents;

         (d)      will not contravene the provisions of or constitute a default
                  under any other agreement to which it is a party;

         (e)      will constitute legal, valid and binding obligations
                  enforceable against Fletcher Challenge Industries Limited in
                  accordance with their respective terms;

         and that Fletcher Challenge Industries Limited will have and continue
         to have the necessary corporate powers to enter into this undertaking
         and the guarantee given

<PAGE>

                                                                          Page 3

         under this undertaking and perform its obligations under this
         undertaking and the guarantee given under this undertaking; and

All calculations of net assets required to be carried out pursuant to this
undertaking must be made using those accounting principles used for the
preparation of the financial statements of Fletcher Challenge Forests Limited

Capitalised terms have the meaning ascribed to them in the Agreement.

EXECUTED AS A DEED by Fletcher Challenge 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>

         DEED OF GUARANTEE AND INDEMNITY

         BETWEEN

         FLETCHER CHALLENGE INDUSTRIES LIMITED

         AND

         UBS MANGAKAHIA FOREST VENTURE LTD

                                                         [SIMPSON GRIERSON LOGO]

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                 <C>
1.     INTERPRETATION...........................................     1
2.     GUARANTEE................................................     2
3.     LIABILITY NOT TO BE AFFECTED.............................     3
4.     PAYMENTS.................................................     4
5.     SUSPENSION OF RIGHTS.....................................     5
6.     REPRESENTATIONS AND WARRANTIES...........................     6
7.     UNDERTAKINGS.............................................     6
8.     COSTS....................................................     7
9.     RELEASE..................................................     7
10.    SET-OFF..................................................     7
11.    NOTICES..................................................     7
12.    CURRENCY INDEMNITY.......................................     9
13.    GENERAL..................................................    10
14.    CONFIDENTIALITY..........................................    11
</TABLE>

<PAGE>

GUARANTEE AND INDEMNITY dated the                                           2003

PARTIES

1. FLETCHER CHALLENGE INDUSTRIES LIMITED ("Guarantor")

2. UBS MANGAKAHIA FOREST VENTURE LTD ("Beneficiary")

THIS DEED WITNESSES:

1.       INTERPRETATION

         In this Guarantee, unless the context indicates otherwise:

         1.1      DEFINITIONS:

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

                  "CONFIDENTIAL INFORMATION" means any information disclosed by
                  the Guarantor to the Beneficiary on the express basis that
                  such information is confidential;

                  "DEBTOR" means Fletcher Challenge Forests Industries Limited;

                  "DEFAULT INTEREST RATE" means default interest rate as that
                  term is defined in clause 1 of an agreement for sale and
                  purchase of trees between the Debtor and Teal 4 Limited dated
                  15 January 2003 ("Agreement");

                  "GUARANTEE" means this guarantee and indemnity;

                  "GUARANTEED MONEY" means all money which the Debtor presently
                  is, or at any time becomes, actually or contingently liable to
                  pay to the Beneficiary under the Agreement and any of the
                  Related Agreements;

                  "GUARANTEED OBLIGATIONS" means all obligations (whether
                  present or future) of the Debtor to the Beneficiary under the
                  Agreement and any of the Related Agreements;

         1.2      GENERAL:

                  (a)      words denoting the singular include the plural and
                           vice versa;

                  (b)      words denoting any gender includes all genders;

<PAGE>

                                                                          Page 2

                  (c)      references to any document (however described) will
                           include references to that document as modified,
                           varied, novated, supplemented or replaced from time
                           to time;

                  (d)      headings and the table of contents are for
                           convenience only and will not affect interpretation;
                           and

                  (e)      capitalised terms not defined in this Guarantee shall
                           have the meaning ascribed to them in the Agreement.

2.       GUARANTEE

         2.1      GUARANTEE: The Guarantor guarantees to the Beneficiary the due
                  and punctual payment by the Debtor of the Guaranteed Money and
                  the due and punctual performance of the Guaranteed
                  Obligations.

         2.2      PAYMENT ON DEFAULT: If the Debtor defaults in the due and
                  punctual payment of any of the Guaranteed Money, the Guarantor
                  will pay that money to the Beneficiary on demand.

         2.3      PRINCIPAL DEBTOR: The Guarantor's obligations under this
                  Guarantee are:

                  (a)      principal obligations and may be enforced against the
                           Guarantor without the Beneficiary being required to
                           exhaust any remedy it may have against the Debtor or
                           to enforce any security the Beneficiary may hold with
                           respect to the Guaranteed Money; and

                  (b)      unconditional and irrevocable.

         2.4      CONTINUING GUARANTEE: This Guarantee is a continuing guarantee
                  for the Guaranteed Money. It is not discharged by any payment
                  or anything else, and remains in full force until the
                  Beneficiary has executed and delivered a release to the
                  Guarantor.

         2.5      REINSTATEMENT: If any payment received by the Beneficiary on
                  any account of the Guaranteed Money is or may be avoided by
                  law (despite a release having been executed and delivered by
                  the Beneficiary):

                  (a)      the Guarantor's obligation to have made such payment
                           will be deemed not to have been affected or
                           discharged under this Guarantee or any other security
                           given to the Beneficiary; and

                  (b)      the Beneficiary and the Guarantor will, in any such
                           case, be deemed to be restored to the position in
                           which each would have been, and will be entitled to
                           exercise the rights they respectively would have had,
                           if that payment had not been made.

<PAGE>

                                                                          Page 3

3.       LIABILITY NOT TO BE AFFECTED

         The liability of the Guarantor under this Guarantee shall not be
         abrogated, prejudiced or affected by any of the following:

         3.1      GRANTING OF TIME ETC: the granting of time, credit or any
                  indulgence or other concession to the Debtor or the Guarantor
                  or any other guarantor of the Debtor or to any other person by
                  the Beneficiary;

         3.2      FAILURE TO DEMAND: any failure by the Beneficiary to present,
                  demand or give notice in respect of any negotiable instrument;

         3.3      COMPOUNDING ETC: any compounding, compromise, release,
                  abandonment, waiver, variation, relinquishment or renewal of
                  any agreements, securities, documents of title, assets, or of
                  the rights of the Beneficiary against the Debtor or the
                  Guarantor or any other person;

         3.4      ACTS OR OMISSIONS: anything done or omitted or neglected to be
                  done by the Beneficiary in exercise of the authorities, powers
                  and discretions vested in the Beneficiary by this Deed;

         3.5      SECURITY OR LAW: any security or law or any other dealing,
                  matter or thing which but for this provision might operate to
                  abrogate, prejudice or affect the Guarantee (it being the
                  intention of the parties that the Guarantee and obligations of
                  the Guarantor shall be absolute and unconditional in any and
                  all circumstances);

         3.6      OTHER LIABILITY CEASING: the liability of any other guarantor
                  of the Debtor or any other person ceasing from any cause
                  whatsoever (including release or discharge by the
                  Beneficiary);

         3.7      JOINT OR SIMILAR GUARANTEES: any other person joining in this
                  or giving any similar Guarantee and/or indemnity;

         3.8      LIQUIDATION OF DEBTORS ETC: the liquidation or bankruptcy of
                  the Debtor or any other guarantor of the Debtor or any other
                  person;

         3.9      INCOMPETENCE OF OTHERS ETC: any other guarantor of the Debtor
                  or any other person being incompetent to give any other
                  Guarantee or any collateral security or failing to become
                  legally bound in whole or in part under any of them
                  respectively;

         3.10     SECURITIES VOID ETC: any security from time to time held or
                  taken in respect of the indebtedness or obligations of the
                  Debtor or the Guarantor or any other guarantor of the Debtor
                  or any other person to the Beneficiary being void, defective
                  or informal or being released, partially released, discharged,
                  partially discharged or varied in any way;

         3.11     FAILURE TO PROVIDE SECURITY: failure of the Debtor or the
                  Guarantor or any other guarantor of the Debtor or any other
                  person to provide any security which has been stipulated by
                  the Beneficiary;

<PAGE>

                                                                          Page 4

         3.12     VARIATIONS: any variation of this Guarantee and Indemnity
                  and/or any other Guarantee and/or indemnity given in relation
                  to any of the Guaranteed Money and/or any of the Guaranteed
                  Obligations;

         3.13     FAILURE TO GUARANTEE ETC: any person intended to Guarantee
                  payment of the Guaranteed Money and/or performance of the
                  Guaranteed Obligations failing or refusing to do so;

         3.14     CLAIMS: any claim that the Beneficiary has not fully realised
                  all securities held by it in respect of the Guaranteed Money
                  and/or the Guaranteed Obligations or has not realised any of
                  such securities in a manner so as to maximise their realisable
                  value; or

         3.15     OTHER MATTERS: any other matter or thing whatsoever.

4.       PAYMENTS

         4.1      PAYMENT: The Guarantor will make each payment to the
                  Beneficiary under this Guarantee in funds which are freely
                  transferable and immediately available for disbursement on the
                  day of payment.

         4.2      NO DEDUCTIONS: All payments by the Guarantor to the
                  Beneficiary under this Guarantee will be made free of any
                  restriction or condition and, except to the extent required by
                  law, without deduction or withholding of any nature whether by
                  way of set-off, counterclaim or otherwise.

         4.3      GROSS UP: If:

                  (a)      the Guarantor is required by law to make any
                           deduction or withholding from any amount paid or
                           payable by it to the Beneficiary under this
                           Guarantee; or

                  (b)      the Beneficiary is required by law to make any
                           deduction, withholding, or payment on, or calculated
                           by reference to, any amount received or receivable by
                           it under this Guarantee for or on account of tax
                           (except on account of tax on overall net income of
                           the Beneficiary) or otherwise,

                  then the amount payable by the Guarantor in respect of which
                  such deduction, withholding or payment is required to be made
                  will be increased to the extent necessary to ensure that,
                  after the making of such deduction, withholding or payment,
                  the Beneficiary receives and retains (free from any liability
                  in respect of any such deduction, withholding or payment) a
                  net amount equal to the amount which it would have received
                  and so retained had no such deduction, withholding or payment
                  been required to be made.

<PAGE>

                                                                          Page 5

         4.4      NOTIFY BENEFICIARY: The Guarantor will:

                  (a)      notify the Beneficiary immediately if it is required
                           to make any deduction or withholding;

                  (b)      ensure that such deduction or withholding does not
                           exceed the legal minimum; and

                  (c)      pay the amount required to be deducted or withheld to
                           the applicable taxation or other authority before the
                           date on which penalties attach.

         4.5      TAX RECEIPTS: The Guarantor will deliver to the Beneficiary
                  promptly, on receipt, a copy of the receipt issued by the
                  applicable taxation or other authority or other evidence
                  satisfactory to the Beneficiary evidencing that such deduction
                  or withholding has been made.

         4.6      INTEREST: The Guarantor will pay to the Beneficiary on demand
                  interest on all amounts payable by the Guarantor from the due
                  date to the date of actual receipt by the Beneficiary. Such
                  interest will accrue and be calculated on a daily basis (after
                  as well as before judgment) at the Default Interest Rate.
                  Interest will be compounded at monthly intervals.

5.       SUSPENSION OF RIGHTS

         5.1      Until the Guaranteed Money has been paid and discharged in
                  full, the Guarantor will not, without the consent of the
                  Beneficiary:

                  (a)      take any steps to enforce a right or claim against
                           the Debtor in respect of any money paid by the
                           Guarantor to the Beneficiary under this Guarantee; or

                  (b)      have or exercise any rights in competition with the
                           Beneficiary (including any right of subrogation or
                           indemnity).

         5.2      BENEFICIARY AUTHORISED TO PROVE: Until the Beneficiary shall
                  have received one hundred cents in the dollar in respect of
                  the indebtedness of the Debtor in relation to the Guaranteed
                  Money, the Guarantor authorises the Beneficiary to:

                  (a)      prove or claim for all money which the Guarantor has
                           paid or are otherwise owing to the Guarantor and have
                           not been repaid by the Debtor or any other guarantor
                           of the Debtor or any other person; and

                  (b)      retain and to carry to a suspense account and
                           appropriate at the discretion of the Beneficiary any
                           amount received.

         5.3      GUARANTOR'S WAIVER OF RIGHTS: So far as is necessary to give
                  effect to anything contained or implied in this Guarantee and
                  to ensure that the whole of the Guaranteed Money and
                  Guaranteed Obligations are paid or

<PAGE>

                                                                          Page 6

                  satisfied or performed in full, the Guarantor waives in favour
                  of the Beneficiary all rights whatever against the
                  Beneficiary, the Debtor, any other guarantor of the Debtor or
                  any other person or their or its estate and assets. Such
                  waiver extends to and includes rights of subrogation,
                  contribution and marshalling.

6.       REPRESENTATIONS AND WARRANTIES

         6.1      REPRESENTATIONS: The Guarantor represents and warrants to the
                  Beneficiary that:

                  (a)      the Guarantor has taken all necessary corporate
                           action to authorise the performance of, and
                           compliance with, its obligations under this
                           Guarantee; and

                  (b)      the Guarantor has not taken any security interest or
                           benefit from the Debtor for or in consideration of
                           assuming the obligations contained under this
                           Guarantee or any part of them.

                  (c)      the Guarantor is solvent and able to pay the
                           Guarantor's indebtedness as it falls due.

         6.2      NO RELIANCE: The Guarantor confirms that it has not executed
                  this Guarantee as a result of or in reliance on any promise,
                  representation, statement or information of any kind or nature
                  whatever given by the Beneficiary.

         6.3      NO DISCLOSURE: Subject to the Agreement and the Related
                  Agreements, the Guarantor confirms that the Beneficiary was
                  not, before execution of this Guarantee and is not in the
                  future, liable to do anything (including disclosing any
                  information to the Guarantor) relating to the affairs of the
                  Debtor or any transactions of the Debtor with the Beneficiary.

         6.4      CONTINUING: The representations and warranties in this clause
                  6 will be deemed to be repeated continuously at all times
                  during which this Guarantee remains in effect by reference to
                  the facts and circumstances then existing.

7.       UNDERTAKINGS

         The Guarantor will:

         7.1      INFORMATION: provide the Beneficiary within five Business Days
                  of receiving a reasonable request from the Beneficiary with
                  such information relating to its financial condition,
                  business, assets or affairs as is relevant to the performance
                  of its obligations under this Guarantee provided however that
                  the Guarantor is under no obligation to provide information
                  that it considers, in its absolute discretion, disclosure of
                  which would be a breach of any applicable Stock Exchange
                  Listing Rules; and

<PAGE>

                                                                          Page 7

         7.2      PROCEEDINGS: give the Beneficiary prompt notice of any
                  litigation, or proceedings affecting it or any of its
                  business, assets or affairs.

8.       COSTS

         The Guarantor will pay the Beneficiary on demand for all reasonable
         costs and expenses (including reasonable legal costs) in connection
         with:

         8.1      ENFORCEMENT: the enforcement of this Guarantee; and

         8.2      AMENDMENT ETC: any amendment to, or any consent, waiver or
                  release of this Guarantee requested by the Guarantor.

9.       RELEASE

         The Beneficiary will not be obliged to execute a release of this
         Guarantee unless it is satisfied that:

         9.1      GUARANTEED MONEY PAID: all of the Guaranteed Money has been
                  paid; and

         9.2      NO PAYMENT AVOIDED: no payment affecting or relating to the
                  Guaranteed Money is or may be avoided under any law relating
                  to insolvency or otherwise.

10.      SET-OFF

         The Beneficiary is authorised to apply (without prior notice or demand)
         any credit balance of the Guarantor on any account or any money owed by
         the Beneficiary to the Guarantor towards satisfaction of the Guaranteed
         Money or any money due and unpaid by the Guarantor to the Beneficiary
         under this Guarantee.

11.      NOTICES

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

                  (a)      delivered personally;

                  (b)      sent by prepaid post; or

                  (c)      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.

<PAGE>

                                                                          Page 8

                           BENEFICIARY: If to the Beneficiary to:

                           UBS Mangakahia Forest Venture Ltd
                           C/- UBS Warburg New Zealand 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
                           West Lebanon
                           NH 03784
                           United States of America
                           For:       Peter Mertz
                           Facsimile: (001) 603 298 7620

                           And with a copy to:

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

                           GUARANTOR: If to the Guarantor, to:

                           Fletcher Challenge Industries Limited
                           8 Rockridge Avenue
                           Penrose
                           Private Bag 92036
                           Auckland Mail Centre
                           Auckland
                           For:       The Chief Executive Officer
                           Facsimile: (09) 571 9870

                           With a copy to:

                           Fletcher Challenge Industries Limited
                           8 Rockridge Avenue
                           Penrose
                           Private Bag 92036
                           Auckland Mail Centre
                           Auckland

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                                                                          Page 9

                           For: The Company Secretary
                           Facsimile: (09) 571 9872

         11.2     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 Guarantee, will be
                  treated as received:

                  (a)      if delivered personally, when left with an apparently
                           responsible person at the recipient's address;

                  (b)      if sent by prepaid post three (3) Business Days (if
                           posted within New Zealand to an address in New
                           Zealand), or ten (10) Business Days (if posted by
                           prepaid airmail from country to country) after the
                           date of posting;

                  (c)      if sent by registered post, on acknowledgment of
                           receipt by or on the recipient's behalf; or

                  (d)      if sent by air courier delivery, on acknowledgment of
                           receipt by or on the recipient's behalf; or

                  (e)      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.

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

12.      CURRENCY INDEMNITY

         If, at any time and for any reason, an amount payable by the Guarantor
         under or in respect of this Guarantee ("Relevant Amount") is converted
         into and received by the Beneficiary in a currency ("Payment Currency")
         other than the contractual currency of payment under the Agreement
         ("Contractual Currency") then the Guarantor will indemnify the
         Beneficiary and will hold the Beneficiary harmless against, and will
         pay the Beneficiary on demand the amount certified by the Beneficiary
         as being the amount required to compensate it for, the loss suffered as
         a result of any discrepancy between:

         12.1     CONTRACTUAL CURRENCY RECEIVED: the amount of the Contractual
                  Currency which the Lender receives on converting the amount it
                  receives in the Payment Currency into an amount in the
                  Contractual Currency in accordance with its usual practice;
                  and

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                                                                         Page 10

12.2     RELEVANT AMOUNT: the Relevant Amount in the Contractual Currency.

13.      GENERAL

         13.1     CERTIFICATE: The certificate of the Beneficiary as to any
                  amount or fact which might reasonably be expected to be within
                  the Beneficiary's knowledge will be prima facie evidence of
                  such matter or fact.

         13.2     SEVERABILITY: Any provision of this Guarantee 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 Guarantee or affecting the
                  validity or unenforceability of such provision in any other
                  jurisdiction.

         13.3     DELAY: No delay, grant of time, release, compromise,
                  forbearance (whether partial or otherwise) or other indulgence
                  by the Beneficiary in exercising all or any of its rights,
                  remedies and powers or concerning any breach of any of the
                  Guarantor's obligations under this Guarantee is to:

                  (a)      operate as a waiver of or prevent the subsequent
                           enforcement of any such rights, remedies, powers or
                           obligations; or

                  (b)      be deemed a delay, grant of time, release,
                           compromise, forbearance (whether partial or
                           otherwise) or other indulgence of, or a waiver of,
                           any subsequent or other breach.

         13.4     MODIFICATION: This Guarantee may not be amended or modified
                  except by written agreement signed by the parties.

         13.5     WAIVER: Any consent, waiver or acknowledgement by the
                  Beneficiary under this Guarantee must be in writing and any
                  such consent, waiver or acknowledgment shall only be effective
                  in the specific instance and for the specific purpose given.

         13.6     ADDITIONAL TO OTHER SECURITIES: This Guarantee is in addition
                  to and not in substitution for any other security, undertaking
                  or right which the Beneficiary may now or subsequently have in
                  respect of the Guaranteed Money and/or the Guaranteed
                  Obligations. This Guarantee may be enforced against the
                  Guarantor or any other Guarantor of the Debtor without first
                  having recourse to any such securities, undertaking or rights
                  and without taking any steps or proceedings against the
                  Debtor. It may be enforced notwithstanding that any other
                  security, undertaking or right may be in whole or in part
                  unenforceable by reason of any rule of law or equity and
                  notwithstanding any laches, acts, omissions or delays on the
                  part of the Beneficiary.

         13.7     APPLICABLE LAW:

                  (a)      The law applicable to this Guarantee shall be the law
                           of New Zealand and the parties irrevocably and
                           unconditionally agree to

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                                                                         Page 11

                           submit to and be bound by the jurisdiction of the
                           courts and tribunals of New Zealand.

                  (b)      The submission to jurisdiction in clause 13.7(a) does
                           not (and is not to be construed to) limit the rights
                           of the Beneficiary to take proceedings against the
                           Guarantor 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.

14.      CONFIDENTIALITY

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

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

         14.2     USE: use for itself; or

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

         any Confidential Information except:

         14.4     LEGAL REQUIREMENT: subject to clause 14.10, as required by law
                  or regulatory body (including any stock exchange);

         14.5     PUBLIC KNOWLEDGE: as is already or becomes public knowledge,
                  otherwise than as a result of a breach by the Beneficiary of
                  any provision of this deed;

         14.6     AUTHORISED: as authorised in writing by the Guarantor;

         14.7     LENDERS AND UNDERWRITERS: as required to communicate with and
                  make disclosure to institutional lenders to and underwriters
                  for, or potential institutional lenders to and underwriters
                  for the Beneficiary provided that the Beneficiary shall ensure
                  compliance by such persons with this clause 14 and shall be
                  liable for any breach of such obligations by such persons, and
                  in the case of potential institutional lenders or
                  underwriters, to return all such information if the lending to
                  or underwriting is not consummated;

         14.8     AFFILIATES AND ADVISERS: as required to communicate with and
                  make disclosure to Affiliates of the Beneficiary or the
                  Beneficiary's or the Affiliates' respective advisers who have
                  a legitimate need to know the information in order to perform
                  activities connected with this deed, the Agreement or the
                  Related Agreements, and provided that the relevant party shall
                  ensure compliance by such persons with this clause 14 and
                  shall be liable for any breach of such obligations by such
                  persons; or

         14.9     OTHER: to the extent reasonably required by this deed (and,
                  without limiting the effect of this clause, the Beneficiary
                  may disclose

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                                                                         Page 12

                  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
                  deed).

         14.10    CONSULTATION: In the event that the Beneficiary is required by
                  law or stock exchange reporting obligations to disclose
                  Confidential Information, such disclosure may be made only
                  after the Guarantor 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
                  Beneficiary as to timing and the content of any such
                  disclosure. In consulting with the Guarantor, the Beneficiary
                  shall act in good faith and give reasonable consideration to
                  the Guarantor's requests.

         14.11    THE BENEFICIARY'S SAFEGUARDS: If requested, the Beneficiary
                  will document to the reasonable satisfaction of the Guarantor
                  the internal safeguards it will put in place to meet its
                  confidentiality obligations under this clause 14.

Executed as a deed.

SIGNED by FLETCHER CHALLENGE
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

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                                                                         Page 13

SIGNED by UBS MANGAKAHIA
FOREST VENTURE LTD 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