Document:

Exhibit 10.1

                              EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this "Agreement"), dated as of July 25, 2005, and
effective as of February 1, 2004 by and between Zone4Play (Israel) Ltd., an
Israeli corporation (the "Company"), and Shimon Citron (the "Executive").

WHEREAS, in recognition of the Executive's experience and abilities, the Company
desires to assure itself of the employment of the Executive in accordance with
the terms and conditions provided herein; and

WHEREAS, the Executive wishes to perform services for the Company in accordance
with the terms and conditions provided herein; and

NOW, THEREFORE, in consideration of the promises and the respective covenants
and agreements of the parties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to perform services for the Company, on the terms and
conditions set forth herein.

2. Term. This Agreement is for the three-year period (the "Term") commencing on
the date first written above, and terminating on the third anniversary of such
date, or upon the Executive's earlier death or other termination of employment
pursuant to Section 7 hereof; provided, however, that, the Term shall
automatically be extended for one additional year beyond its otherwise
expiration unless, not later than 90 days prior to any such anniversary, either
party hereto shall have notified the other party hereto in writing that such
extension shall not take effect.

3. Position. During the Term, the Executive shall serve as the President and
Chief Executive Officer of the Company.

4. Duties and Reporting Relationship. During the Term, Executive shall, on a
full time basis, use his skills and render services to the best of his
abilities, subject to the conditions set forth in paragraph 14 of this
Agreement. The Executive shall report directly to the Board of Directors of
Zone4Play, Inc., a Nevada corporation and parent of the Company (the "U.S.
Company"). So long as Executive shall remain an employee of the Company,
Executive agrees to devote his best efforts and substantially all his working
time, energy and skill to the performance of his duties hereunder.
Notwithstanding the foregoing, Executive may engage in charitable and civic
activities and may manage personal investments so long as they do not
unreasonably interfere with the carrying out of his duties and responsibilities
hereunder.

5. Place of Performance. The Executive shall perform his duties and conduct his
business at the offices of the Company, located in Tel Aviv, Israel, except for
required travel on the Company's business.

6. Compensation and Related Matters.

<PAGE>

     (a) The Company shall pay to the Executive an annual base salary (the "Base
Salary") which shall not exceed an average of one hundred eighty thousand
dollars ($180,000.00) per year during the Term. Such salary to be paid in
conformity with the Company's payroll policies relating to its senior executive
officers, but in any event not less than monthly. The Executive's monthly salary
shall be $ 8,000 unless increased as set forth below (the "Monthly Salary"):

     (i) In case that in a certain calendar quarter, the quarterly sales revenue
of the U.S. Company and its subsidiaries, on a consolidated basis, exceeds
$500,000 but is not more than $750,000, then the Monthly Salary as of the month
of publishing the quarterly financial report for such quarter onwards shall be $
10,000. In addition, the Company shall pay the Executive $ 2,000 for each month
of employment as of the commencement of the Term and until the months of
publishing the said financial reports.

     (ii) In case that in a certain quarter, the quarterly sales revenue of the
U.S. Company and its subsidiaries, on a consolidated basis, exceeds $750,000,
then the Monthly Salary as of the month of publishing the quarterly financial
report for such quarter onwards shall be $ 15,000. In addition, the Company
shall pay the Executive the balance between Executive's $15,000 and the
Executive Monthly Salary as of the commencement of the Term and until the months
of publishing the said financial reports.

     Notwithstanding the foregoing, the Executive shall have the option, until
January 1, 2007, to invoice the Company on a monthly basis for an amount equal
to the Monthly Salary, to be paid by the Company without withholding or
deduction. The Base Salary may, from time to time, be increased by the Board of
Directors of the U.S. Company; however, if the Executive's Base Salary is
increased, it shall not thereafter be decreased during the Term.

     (b) Compensation During Disability. During any period that the Executive
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness, the Company shall pay to the Executive the difference between
the Executive's regular wage and the benefits received from the Israel Social
Security Institute as well as other applicable employee benefits provided to
other senior executives of the Company, until his employment is terminated in
accordance with applicable law. Upon such termination the Company shall pay the
Executive (i) all unpaid amounts, if any, to which the Executive was entitled as
of the Date of Termination under paragraph 6(a) hereof and (ii) all unpaid
amounts to which the Executive was then entitled under the Benefit Plans, the
Pension Plans and any other unpaid employee benefits, perquisites or other
reimbursements (the amounts set forth in clauses (i) and (ii) above being
hereinafter referred to as the "Accrued Obligation").

     (c) Manager's Insurance. The Company shall obtain for the benefit of the
Executive a manager's insurance policy, a pension fund or a combination thereof
(the "Manager's Insurance Policy"), as determined by the Executive, in the name
of the Executive, and shall contribute to the Manager's Insurance Policy the
following amounts: 8.33% of the Executive's Monthly Salary will be allocated to
severance pay; 5% of the Executive's Monthly Salary shall be allocated to
pension fund payments, provided that the Executive contributes an additional 5%
of the Executive's Monthly Salary; and 2.5% of the Executive's Monthly Salary
shall be allocated to disability pension payments.

<PAGE>

If the Executive chooses a combination of manager's insurance and pension fund,
the contributions to the pension fund shall be as follows: 8.33% of the Monthly
Salary allocated to severance pay; 6% of the Monthly Salary contribution to the
providence fund by the Company; and 5.5% of the Monthly Salary contribution to
the providence fund by the Executive.

Contribution of the Company to the Manager's Insurance Policy shall offset
severance pay obligations.

Not later than seven days after each quarter, the Company will make the
necessary contributions to the Manager's Insurance Policy for purposes of
calculating the severance pay under law for the preceding quarter, as if the
Executive's employment had been terminated at the end of such quarter.

Contributions to the Manager's Insurance Policy shall be made as specified in
this Section 6(c) irrespective of whether such contributions are deductible by
the Company as expenses, and the Company shall bear any tax imposed on such
contributions.

The Company shall execute the customary appendix to the Manager's Insurance
Policy pursuant to which the Executive shall be entitled to a transfer of
ownership of such Manager's Insurance Policy for its full value or redemption of
such Manager's Insurance Policy for its full value (including severance
payments), after completion of payment of all premiums with respect to such
Manager's Insurance Policy, at the time of any termination of the employment
relationship between the Company and the Executive, other than termination by
the Company for willful gross misconduct by the Executive.

     (d) Automobile. The Executive shall be entitled to repayment by the Company
of expenses incurred by the Executive in connection with one automobile owned
and operated by the Executive. Such expenses shall include, without limitation,
the insurance (with coverage reasonably satisfactory to the Executive),
gasoline, oil, tires, warranty and routine service and other maintenance and
repairs for the automobile. Income tax imposed on the executive in connection
with the use of the vehicle shall be borne by the Company. The Executive shall
not be entitled to compensation for fines for traffic violations.

Upon termination of employment of the Executive by the Company or termination of
employment by the Executive under circumstances entitling the Executive to
severance payments, the Executive shall be entitled to continued use of the
vehicle until the end of the Employment Period or the Notice Period, as
applicable commencing employment with a new employer, but in any case not longer
than six months after ceasing to perform services for the Company.

Except as otherwise provided under this Section 6(d), upon termination of
employment by the Executive, the Executive shall be entitled to continued use of
the vehicle for a period of sixty days after ceasing to perform services for the
Company.

     (e) Laptop and Cellular Phone. The Company shall provide to the Executive a
laptop computer, at the Company's sole cost and expense (including usage fees
and Internet connection), and a cellular phone, as well as any additional income
tax imposed on the Executive in connection with the provision of the laptop
computer and cellular phone.

<PAGE>

     (h) Convalescence Payments. The Executive shall be entitled to annual
payments for convalescence for a period of 15 business days per year.

     (i) Vacation. The Executive shall be entitled to 30 business days of paid
vacation per year which shall include the convalescence period pursuant to
Section 7(h) above. Vacation days shall accrue and may be redeemed by the
Executive at any time. In the case of redemption of vacation days, such
redemption shall include any social benefits to which the Executive is entitled
hereunder.

     (j) Out of pocket expenses. The Executive shall be entitled to
reimbursement of expenses incurred in performing his duties hereunder, whether
in Israel or abroad, upon presentation to the Company of itemized accounts or
receipts. The Executive shall also be entitled to reimbursement for expenses for
a home telephone line dedicated to affairs of the Company, subscription to a
daily business newspaper and other expenses, in accordance with the policies of
the Company for senior executives.

     (k) Sick Leave. The Executive shall be entitled to the number of sick days
permitted by law. The Company shall pay the Executive his Full Salary with
respect to sick days. The Executive shall be permitted to declare in writing
that his absence was the consequence of sickness without corroborating
documentation.

     (l) Insurance. The Company shall obtain on behalf of the Executive officers
liability insurance and shall undertake to indemnify the Executive as permitted
under applicable law.

     (m) Withholding. All of the amounts stated in this Agreement are gross
amounts and the Company shall withhold the appropriate amounts for income tax
purposes as required by law.

     (n) Additional Benefits. The Executive shall be entitled to receive an
incentive bonus, options to purchase share of the U.S. Company and bonus in
event of acquisition as set forth in Appendix A attached hereto.

7. Termination. The Executive's employment hereunder may be terminated without
breach of this Agreement only under the following circumstances.

     (a) Death. The Executive's employment hereunder shall terminate upon his
death.

     (b) Cause. The Company may terminate the Executive's employment hereunder
for "Cause." For purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment hereunder (i) upon the Executive's
conviction for the commission of an act or acts constituting a felony under the
laws of Israel or the United States or any state thereof, or (ii) upon the
Executive's willful and continued failure to substantially perform his duties
hereunder (other than any such resulting from the Executive's incapacity due to
physical or mental illness), after written notice has been delivered to the
Executive by the Company, which notice specifically identifies the manner in
which the Executive has not substantially performed his duties, and the
Executive's failure to substantially perform his duties is not cured within
fifteen (15) business days after notice of such failure has been given to the
Executive, or in the event that the alleged failure to substantially perform
cannot be completely cured within fifteen (15) days, that the Executive has
taken all actions that were reasonably available to him within that period. For
purposes of this Section 7(b), no act, or failure to act, on the Executive's
part shall be deemed "willful," unless done, or omitted to be done by the
Executive not in good faith and without reasonable belief that the Executive's
act, or failure to act, was in the best interest of the Company.

<PAGE>

     (c) Termination by the Executive. The Executive may terminate his
employment hereunder for "Good Reason." "Good Reason" for termination by the
Executive of the Executive's employment shall mean the occurrence (without the
Executive's express written consent) of any one of the following acts by the
Company, or failure by the Company to act:

     (i) a material breach of this Agreement by the Company;

     (ii) any purported termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the requirement of
paragraph (d) below; for purposes of this Agreement, no such purported
termination shall be effective; or

     (iii) the Executive's job responsibilities are caused to be substantially
diminished by the Company.

     (d) Notice of Termination. Any termination of the Executive's employment by
the Company or by the Executive (other than termination under Section 7(a)
hereof) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 16 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
Further, a Notice of Termination for Cause issuing from the Company is required
to include a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board of Directors of the
U.S. Company at a meeting of such Board (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before such Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth in the definition of
Cause herein, and specifying the particulars thereof.

     (e) Date of Termination. "Date of Termination" shall mean, if the
Executive's employment is terminated by his death, the date of his death. If the
Executive's employment is terminated pursuant to paragraph (b)(i) above, the
Date of Termination shall be the date of the Executive's conviction as described
therein. If the Executive's employment is terminated pursuant to paragraph
(b)(ii) or (c) above, the Date of Termination shall be the date on which the
fifteen (15) day period specified in the Notice of Termination, as required by
paragraph (d) above, shall expire.

8. During the Term and thereafter, the parties agree that Executive will not,
except as necessary within the scope of employment with the Company (a) use any
Confidential Information, however acquired; (b) himself duplicate or replicate
or cause or permit others to duplicate or replicate any document or other
material in any medium embodying any Confidential Information except as
necessary in connection with the Scope of this Employment; or (c) disclose or
permit the disclosure of any Confidential Information to any person, without the
prior written consent of Company.

<PAGE>

     (a) "Confidential Information" means technical and business information
about the Company, its parent, subsidiaries and affiliates, and their respective
clients and customers that is not otherwise generally known or available to
persons unaffiliated with the Company and is learned by Executive in the course
of his employment with the Company (including, without limitation, all periods
of employment with Company prior to the Effective Date) including, without
limitation, any and all proprietary Inventions, customer and potential customer
names, product plans and designs, licenses and other agreements, marketing and
business plans, various other financial and businesses information of Company.
Executive acknowledges that such Confidential Information is specialized, unique
in nature and of great value to Company, and that such information gives Company
a competitive advantage.

9. Executive acknowledges that Company owns all right, title and interest in and
to the Confidential Information. Executive acquires hereunder no right, title or
interest in any Confidential Information.

10. Executive hereby represents and warrants that (i) Executive's performance of
the terms of this Agreement and as an employee of the Company will not breach
any confidentiality or other agreement which Executive entered into with former
Companies, and (ii) Executive is not bound by any agreement either oral or
written which conflicts with this Agreement.

11. Upon the termination or expiration of the Employment, Executive will return
to Company all tangible materials and all copies thereof, in whatever media,
then in Executive's possession or control, containing or employing any
Confidential Information, together with a written certification with the
foregoing.

12. Covenant Not to Compete. Executive hereby agrees that he shall not, either
as an employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate, directly invest in any publicly traded company
over the amount of five hundred thousand dollars ($500,000) or become employed
by any business that is in competition in any manner whatsoever with the
business of the Company in any of the United States or in Israel during the Term
and for a period of one year immediately following the termination of his
employment with Company, except upon express written consent of Company.

13. Executive agrees that, during the Term and for a period of two (2) years
thereafter, Executive shall not, directly or indirectly:

     (a) influence or attempt to influence customers or suppliers of Company, or
any of its parent, subsidiaries or affiliates, to divert their business to any
competitor of Company, and

<PAGE>

     (b) solicit or recruit any employee of Company for the purpose of being
employed by him or by a competitor of Company and that he will not convey any
confidential information about other employees of Company to any other person.

14. Executive hereby agrees that, during the Term of employment and for one (1)
year thereafter, Executive will not directly or indirectly disparage the Company
or disseminate, or cause or permit to be negative regarding Company or any other
employee, officer director or agent of Company. Notwithstanding the foregoing,
Executive is not hereby barred or restricted from exercising any right of speech
or expression protected by applicable law from restriction by Company.

15. Successors; Binding Agreement.

     (a) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid that executes and delivers the agreement provided for in this
paragraph 15 or that otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.

     (b) This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devises and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatees, or other designee or, if
there be no such designee, to the Executive's estate (any of which is referred
to herein as a "Beneficiary').

16. Notices. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:

     If to the Company:

Kiryat Atidim, Bldg 2, POBox 58070, Tel Aviv, Israel

<PAGE>

     If to the Executive:

4 Ovadia St. Ramat Gan , Israel

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

17. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and such officer of the Company as may be specifically
designated by the Board of Directors of the U.S. Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which is not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the state of
Israel without regard to its conflicts of law principles.

18. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

19. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

20. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
any and all other prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereof; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and canceled.

21. Remedies of the Company. Executive agrees that in the event of a breach by
Executive of this Agreement, the Company shall be entitled, if it so elects, to
institute and prosecute proceedings, at law or in equity, to obtain damages with
respect to such breach or to seek the specific performance of this Agreement by
Executive, or, to enjoin Executive form engaging in any activity in violation
thereof.

22. Representations. Executive has been advised to obtain independent counsel to
evaluate the terms, conditions and covenants herein set forth and he has been
afforded ample opportunity to obtain such independent advice and evaluation.
Executive warrants to the Company that he has relied upon such independent
counsel and not upon any representation (legal or otherwise), statement or
advice said or offered by the Company or the Company's counsel in connection
herewith.

<PAGE>

23. Executive's Status Under Agreement. The parties agree and acknowledge that
the Executive shall at all times act in the capacity of an employee under this
Agreement, and nothing in this Agreement shall be construed to create the
relationship of an independent contractor, partner, joint venture, or any other
relationship or status other than that of an employee.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

     Zone4Play (Israel) Ltd.

     By: /s/ Shlomo Rottman                 Date: July 25, 2005
     ----------------------
     Shlomo Rottman, Director

     By: /s/ Oded Zucker                    Date: July 25, 2005
     ----------------------
     Oded Zucker, Director

     EXECUTIVE

     /s/ Shimon Citron                      Date: July 25, 2005
     ----------------------
     Shimon Citron

<PAGE>

                                   APPENDIX A

1. Bonuses.

In addition to the compensation set forth in Section 6 of the Agreement, the
Executive shall be entitled to the following:

     (a) Incentive Bonus. The Executive shall be entitled to an annual cash
performance bonus (the "Cash Bonus") based on the Annual Net Profits of
Zone4Play, Inc., a Nevada corporation and parent of the Company (the "U.S.
Company") and its subsidiaries, on a consolidated basis. Within sixty (60) days
of the end of each calendar year during the Term (as defined in the Agreement),
the Company will pay Executive a Cash Bonus in an amount equal to three percent
(3%) of the Annual Net Profits of the U.S. Company and its subsidiaries, on a
consolidated basis, in excess of $2 million for such year. For purposes hereof,
the term "Annual Net Profits" shall mean, for a given year, the aggregate
worldwide revenues of the U.S. Company and its subsidiaries, on a consolidated
basis, calculated pre-tax, less expenses incurred or accrued in such year.

     (b) In addition, if, during the term of the Executive's employment
hereunder, and only at the first time, the U.S. Company's Market Capitalization
(as hereinafter defined) shall increase to an amount equal or greater than the
amounts set forth below, the Executive shall be entitled to a grant of a
one-time bonus option to purchase the cumulative amount of shares of the U.S.
Company set forth below at a price equal to $0.55 per share.

MARKET CAPITALIZATION                   CUMULATIVE OPTION AMOUNT
---------------------                   ------------------------
$50,000,000 but less than $75,000,000   1% of outstanding capital stock at such
                                        date

$75,000,000 but less than $100,000,000  2% of outstanding capital stock at such
                                        date

Over $100,000,000                       3% of outstanding capital stock at such
                                        date

     (c) In addition, if during the Term, and only at the first time, the U.S.
Company's Market Capitalization will be over $100,000,000, the Executive shall
be entitled to a grant of a one-time bonus option to purchase another 2% of the
outstanding capital stock of the U.S. Company at a price equal to $1.20 per
share.

<PAGE>

For purposes hereof, the term "Market Capitalization" shall mean the aggregate
dollar value determined by multiplying the number of shares of the U.S.
Company's capital stock then outstanding by the Fair Market Value (as
hereinafter defined) of such shares on the date in question; provided, however,
that if, on or prior to the Termination Date (as defined in the Agreement), the
U.S. Company shall have been wholly or partially liquidated or acquired, in
whole or in part, whether by merger, consolidation, sale of all or a substantial
portion of its assets, sale of all or a substantial portion of its capital stock
or otherwise, the Market Capitalization on the Termination Date shall be
increased to include the aggregate value of all cash, notes, securities and
other forms of consideration distributed to the stockholders of the Company upon
such liquidation or by reason of such acquisition, as determined in good faith
by the Board of Directors of the U.S. Company. As used in this Agreement, the
term "Fair Market Value" shall mean the average of the highest and lowest sale
prices of the U.S. Company's capital stock on the Bulletin Board on the date in
question or, if no sales were effected on such day, on the immediately preceding
trading day; provided, however, that if the U.S. Company's capital stock, or any
class or series thereof, is not traded on the Bulletin Board at such time, the
Fair Market Value thereof shall be determined in good faith by the Board of
Directors of the U.S. Company. Any bonus granted to the Executive hereunder
shall not be considered part of the Executive's salary for purposes of
calculating the Executive's social and other benefits under the Agreement.

     (d) In addition, in the event an Acquisition (as defined below) of the U.S.
Company is consummated for a Value (as defined below) equal to or exceeding $150
million, the Company shall pay the Executive a bonus consisting of cash equal to
5% of the Value. In the event an Acquisition of the U.S. Company is consummated
for a Value equal to or exceeding $175 million, the Company shall pay the
Executive a bonus consisting of cash equal to 10% of the acquisition value. An
"Acquisition" shall mean any of various transactions involving a change of
ownership of substantially all of the assets or shares of the U.S. Company.
"Value" shall mean the aggregate purchase price or other consideration paid to
the U.S. Company or its shareholders in any Acquisition including without
limitation (i) the amount of any cash or cash equivalents, (ii) the fair market
value of any stock or the stated principal amount of any securities issued in
the Acquisition, (iii) the stated principal amount of any debt issued or assumed
in connection with the Acquisition, and (iv) the fair market value of any other
property exchanged in connection with the Acquisition. The fair market value
shall be determined in good faith by the Board of Directors of the U.S. Company.MASTER SHAREHOLDER AGREEMENT

 Exhibit 10.38 
  
 MASTER SHAREHOLDER AGREEMENT IN RELATION TO MATARIKI FORESTS AUSTRALIA PTY LIMITED, MATARIKI FORESTRY GROUP AND MATARIKI FORESTS 

 
 Dated 15 July 2005 
  
 SAS Trustee Corporation 
  
 Deutsche Bank AG (Sydney Branch) 
  
 Deutsche Asset Management (Australia) Limited 
  
 Rayonier Canterbury LLC 
  
 Rayonier New Zealand Limited 
  
 Cameron and
Company Limited 
  
 Matariki Forests Australia Pty Limited 
  
 Matariki Forestry Group 
  
 and 
  
 Matariki Forests 

  
 CONTENTS 

 

					
	 1.
	  	INTERPRETATION	  	2
			
	 2.
	  	SUBSCRIPTION, ISSUE AND PAYMENT OF AUSCO SHARES	  	9
			
	 3.
	  	SUBSCRIPTION, ISSUE AND PAYMENT OF HOLDCO SHARES	  	11
			
	 4.
	  	SUBSCRIPTION, ISSUE AND PAYMENT OF TREECO SHARES	  	12
			
	 5.
	  	NON-SATISFACTION OF CHH SPA CONDITIONS	  	13
			
	 6.
	  	PROCEDURAL MATTERS FOLLOWING EXECUTION	  	14
			
	 7.
	  	REIMBURSEMENT AND INDEMNITY	  	14
			
	 8.
	  	GOVERNANCE	  	16
			
	 9.
	  	FUNDING	  	17
			
	 10.
	  	DEALING IN SHARES IN HOLDCO	  	18
			
	 11.
	  	FURTHER PROVISIONS REGARDING DEALING IN SHARES	  	23
			
	 12.
	  	WARRANTIES	  	25
			
	 13.
	  	COMPLIANCE WITH THIS AGREEMENT AND THE CONSTITUTION	  	25
			
	 14.
	  	DEFAULT IN RELATION TO HOLDCO	  	26
			
	 15.
	  	LIQUIDATION	  	27
			
	 18.
	  	GENERAL	  	28
		
	SCHEDULE ONE	  	35
		
	 SUBSCRIPTION DETAILS
	  	35
		
	SCHEDULE TWO	  	36
			
	 	  	GOVERNANCE OF AUSCO	  	36
		
	SCHEDULE THREE	  	39
			
	 	  	GOVERNANCE OF HOLDCO AND ITS SUBSIDIARIES	  	39
		
	SCHEDULE FOUR	  	44
			
	 	  	ADDRESS DETAILS OF THE PARTIES	  	44
		
	SCHEDULE FIVE	  	47
			
	 	  	FORM OF ACCESSION DEED	  	47
		
	SCHEDULE SIX	  	49
			
	 	  	UNDERWRITING ARRANGEMENTS	  	49

  

 i 

  
 AGREEMENT dated
                             2005 
  
 PARTIES 
  
 SAS TRUSTEE CORPORATION, a statutory corporation established under the Superannuation Administration Act 1987 (NSW) (under its former name State
Authorities Superannuation Board) and continued by the Superannuation Administration Act 1991 (NSW) and the Superannuation Administration Act 1996 (NSW) of c/- Level 21, 83 Clarence Street, Sydney, NSW 2000, Australia (STC); 
  
 DEUTSCHE BANK AG (SYDNEY BRANCH), having its registered office
at Level 18, 225 George Street, Sydney, NSW 2000 (DBAG); 
  
 DEUTSCHE ASSET MANAGEMENT (AUSTRALIA) LIMITED having its registered office at Level 21, 83 Clarence Street, Sydney, NSW 2000 (DAM); 
  
 RAYONIER CANTERBURY LLC, a limited liability company incorporated in Delaware (RCL); 
  
 RAYONIER NEW ZEALAND LIMITED, a limited liability company
incorporated in New Zealand having its registered office at Level 5, 49 Symonds Street, Auckland, New Zealand (RNZ); 
  
 CAMERON & COMPANY LIMITED, a limited liability company having its registered office at Level 12, HP tower, 171 Featherston Street, Wellington,
New Zealand (CAM); 
  
 MATARIKI FORESTS AUSTRALIA PTY
LIMITED, a limited liability company incorporated in Australia, having its registered office at C-RREEF Infrastructure, Level 21, 83 Clarence Street, Sydney NSW 2000, Australia (Ausco); 
  
 MATARIKI FOREST GROUP, an unlimited liability company incorporated in
New Zealand having its registered office at Level 5,49 Symonds Street, Auckland, New Zealand (Holdco); and 
  
 MATARIKI FORESTS, an unlimited liability company incorporated in New Zealand having its registered office at Level 5, 49 Symonds Street, Auckland,
New Zealand (Treeco). 
  
 BACKGROUND 
  

	(A)	STC is a client of RREEF Infrastructure (RREEF), the infrastructure business of DBAG. RCL is a Delaware incorporated limited liability company, wholly owned by Rayonier Inc
(Rayonier). RREEF and Rayonier have procured the establishment of Holdco, a New Zealand incorporated unlimited liability company, in which Rayonier, STC and one or more other clients of RREEF intend to invest, either directly or indirectly,
for the purpose of acquiring certain forestry assets currently owned by Carter Holt Harvey Limited (CHH Assets) and RNZ (RNZ Assets). CAM is a financial adviser to RREEF and RNZ. 

  

	(B)	STC will invest in Ausco, an Australian incorporated limited liability company. Rayonier will invest in Holdco through RCL. RCL will hold shares in Holdco directly. It has also
agreed to subscribe for shares in Ausco, but this obligation may be exchanged for an obligation to subscribe for further shares in Holdco. 

  

	(C)	 Pursuant to this agreement, STC, DBAG, RCL and CAM agree to subscribe for shares in Ausco in percentage proportions of 41.65%, 41.65% 16.21% and 0.49% respectively,

	 	 
and Ausco and RCL agree to subscribe for shares in Holdco in percentage proportions of 60% and 40% respectively. 

  

	(D)	Each of DBAG, CAM and RCL have agreed to subscribe for shares in Ausco in an underwriting capacity, with the intention of transferring those obligations, or Ausco Shares or Holdco
Shares issued pursuant to them, to new participants, who may be clients of RREEF. 

  

	(E)	Holdco has incorporated a wholly owned subsidiary (Treeco), a New Zealand incorporated unlimited liability company. Holdco shall subscribe for shares in Treeco. Treeco shall
purchase the CHH Assets and the RNZ Assets. The purchase of the CHH Assets and RNZ Assets by Treeco shall be funded as follows: 

  

	 	(i)	by the payment of subscription moneys by Holdco to Treeco; 

  

	 	(ii)	by investor loans advanced by each of the Ausco Shareholders and RCL to Treeco; and 

  

	 	(iii)	by bank debt. 

  

	(F)	The CHH Assets and RNZ Assets, once purchased by Treeco, shall be managed by RNZ, pursuant to the Management Agreement. 

  

	(G)	The parties wish to enter into this master shareholder agreement to record their respective rights and obligations in relation to Ausco, Holdco and Treeco, including arrangements as
to the sell down of DBAG, CAM and RCL’s subscription obligations in relation to Ausco, or the Ausco Shares or Holdco Shares resulting from such obligations. 

  
 IT IS AGREED as follows: 
  

	1.	INTERPRETATION 

  

	1.1	Definitions: In this agreement: 

  
 Acceptance Date has the meaning set out in clause 10.5. 
  

Accession Deed means a deed substantially in the form attached as schedule five. 
  
 Adjustment Amount has the meaning set out in clause 9.1(a)(i). 
  
 Adjustment Notice has the meaning set out in clause 9.1(a)(i).

  
 Aggregate First Ausco Subscription Amount means the
aggregate of the First Ausco Subscription Amounts payable by the Ausco Subscribers to Ausco in accordance with clause 2.3. 
  
 Aggregate First Holdco Subscription Amount means the aggregate of the First Holdco Subscription Amounts payable by the Holdco Subscribers to Holdco
in accordance with clause 3.3. 
  
 Aggregate Second Ausco
Subscription Amount means the aggregate of the Second Ausco Subscription Amounts payable by the Ausco Subscribers to Ausco in accordance with clause 2.5. 
  

Aggregate Second Holdco Subscription Amount means the aggregate of the Second Holdco Subscription Amounts payable by the Holdco Subscribers to
Holdco in accordance with clause 3.5. 
  

 2 

 Auditor means the auditor of Ausco or Holdco (or a subsidiary of Holdco) for the time being.
 
  
 Ausco Board means the board of
directors of Ausco for the time being. 
  
 Ausco
Constitution means the constitution of Ausco, as amended from time to time, and in the first instance means the Replaceable Rules, as that term is defined in the Corporations Act.  
  
 Ausco Share means any ordinary share in Ausco. 
  
 Ausco Subscribers means the parties listed in Part A of schedule one,
as amended in accordance with clause 5.7 of schedule 6. 
  
 Ausco Shareholders means the holders of Ausco Shares. 
  
 Ausco Subscription Shares means: 
  

	 	(a)	in relation to an Ausco Subscriber, the number of Ausco Shares for which it is subscribing pursuant to clauses 2.3 and 2.5; and 

  

	 	(b)	together, the Ausco Shares issued and allotted pursuant to this agreement. 

  
 Holdco Board means the board of directors of Holdco for the time being. 
  
 BNZ means Bank of New Zealand. 
  
 Business Day means any day (other than a Saturday) when banks in Auckland, New Zealand are open for the
transaction of normal business. 
  
 Buyer has the meaning
set out in clause 10.6. 
  
 CHH means Carter Holt Harvey
Limited. 
  
 CAM Transaction Fee means the transaction fee
payable to CAM (on a post tax basis) pursuant to the engagement letter between CAM, RREEF and RNZ dated 20 June 2005. 
  
 CHH Assets means the assets being transferred pursuant to the CHH SPA. 
  
 CHH SPA means the agreement for the sale and purchase of the CHH Assets between CHH and Treeco, in the form agreed by
CHH, RREEF and Rayonier. 
  
 Class means the Holdco Class
A Shares or the Holdco Class B Shares as the context requires. 
  
 Companies Act means the Companies Act 1993 (New Zealand). 
  
 Corporations Act means the Corporations Act 2001 (Australia). 
  
 Debt Commitment means, in relation to an Ausco Shareholder or RCL, that party’s Commitment under, and as defined in, the Investor Loan
Facility. 
  
 Deed of Indemnity means the deed of
indemnity to be executed by RNZ in favour of BNZ in relation to: 
  

	 	(a)	RNZ’s obligation to pay BNZ all amounts that BNZ is called on to pay CHH under the LC; and 

  

 3 

	 	(b)	LC Costs. 

  
 Defaulting Ausco Shareholder has the meaning set out in clause 7.2(b). 
  
 Defaulting Holdco Shareholder has the meaning set out in clause 14.1. 
  
 Drawdown Notice means a drawdown notice deliverable by Treeco to BNZ under the Senior Facility Agreement. 

 
 Equity Proportion means, at any time, in relation to an Ausco
Subscriber: 
  

	 	(a)	the percentage proportion of Ausco Shares for which that Ausco Subscriber is obliged to subscribe pursuant to clause 2; or 

  

	 	(b)	if the Ausco Subscription Shares have been issued by Ausco in accordance with clause 2, the percentage proportion of Ausco Shares that Ausco Shareholder holds,

  
 (such percentage proportion being, for the
purpose of this definition, that Ausco Subscriber’s Interest) 
  
 provided that so long as CAM is an Ausco Subscriber, its Interest shall be excluded from the calculation of any Ausco Subscriber’s Equity Proportion. 
  
 Event of Default has the meaning set out in clause 14.2. 
  
 Fair Value means fair market value, determined in accordance with
clause 10.17. 
  
 First Ausco Subscription Amount means,
in respect of an Ausco Shareholder, the dollar amount specified as the First Ausco Subscription Amount in the First Ausco Subscription Notice. 
  
 First Ausco Subscription Notice means the notice issued by the Ausco Board in accordance with clause 2.2. 
  
 First Ausco Subscription Satisfaction Date means the date specified
as such in the First Ausco Subscription Notice. 
  
 First
Ausco Subscription Satisfaction Notice means the notice issued by the Ausco Board in accordance with clause 2.3(b). 
  
 First Holdco Subscription Amount means: 
  

	 	(a)	in relation to Holdco Class A Shareholders, a sum equal to the Aggregate First Ausco Subscription Amount; and 

  

	 	(b)	in relation to Holdco Class B Shareholders, a sum (RCL First Subscription Amount) calculated in accordance with the following formula: 

  
 A = (B ÷ C) x D 
  
 Where: 
  
 A = RCL First Subscription Amount 
  
 B = Aggregate First Ausco Subscription Amount 
  
 C = 6 
  
 D = 4 
  

 4 

 First Holdco Subscription Satisfaction Notice means the notice issued by the Holdco Board in
accordance with clause 3.3(b). 
  
 First Treeco Subscription
Amount means a sum equivalent to the Aggregate First Holdco Subscription Amount. 
  
 Forestry Assets means the CHH Assets and the RNZ Assets collectively. 
  
 Forestry Rights means the forestry licences to be entered into by CHH and Treeco pursuant to the CHH SPA, in the form agreed by CHH, RREEF and
Rayonier. 
  
 Holdco Class A Directors means the directors
appointed to Holdco by the Holdco Class A Shareholders, in accordance with clause 2.1(a) of schedule three. 
  
 Holdco Class A Shares mean the ordinary shares in Holdco issued or to be issued to the Holdco Class A Subscribers. 
  
 Holdco Class A Shareholders means the holders of Holdco Class A
Shares from time to time. 
  
 Holdco Class A Subscribers
means the parties identified as such in Part B of schedule one. 
  
 Holdco Class B Directors means the directors appointed to Holdco by the Holdco Class B Shareholders, in accordance with clause 2.1(b) of schedule three. 
  
 Holdco Class B Shares mean the ordinary shares in Holdco issued or to be issued to the Holdco Class B Subscribers.

  
 Holdco Class B Shareholders means the holders of
Holdco Class B Shares from time to time. 
  
 Holdco Class B
Subscribers means the parties identified as such in Part B of schedule one. 
  
 Holdco Constitution means the constitution of Holdco, as amended from time to time. 
  
 Holdco Share means any ordinary share in Holdco, of whatever Class. 
  
 Holdco Shareholders means the holders of Holdco Shares from time to time. 
  
 Holdco Subscribers means the parties listed in Part B of schedule
one. 
  
 Holdco Subscription Shares means: 
  

	 	(a)	in relation to a Holdco Subscriber, the number of Holdco Shares for which it is subscribing pursuant to clauses 3.3 and 3.5, and 

  

	 	(b)	together, the Holdco Shares issued and allotted pursuant to this agreement. 

  

Intercreditor Deed means the intercreditor deed to be entered into between the parties to the Senior Facility Agreement, the Ausco Shareholders
and RCL. 
  

 5 

 Investment Agreement means any investment management agreement between RREEF and an Ausco
Shareholder or Holdco Shareholder, pursuant to which RREEF manages that party’s investment in Ausco or Holdco. 
  
 Investor Loan Facility means the investor loan facility agreement between the Ausco Subscribers, RCL and Treeco, dated on or around the date of
this agreement. 
  
 LC means the letter of credit for
$25,000,000 issued or to be issued by BNZ to CHH as security for certain obligations of Treeco under the CHH SPA. 
  
 LC Costs means all costs, losses, expenses and liabilities of any other kind payable by RNZ under the Deed of Indemnity, excluding the LC Fee.

  
 LC Fee means the initial fee of $10,000 payable by RNZ
to BNZ pursuant to clause 3(a) of the Deed of Indemnity, and any additional fee payable by RNZ to BNZ under the Deed of Indemnity. 
  
 LC Parties means the Ausco Subscribers (other than RCL), and LC Party means any one of them as the context requires. 
  
 Log Supply Agreements means the log supply agreements to be entered
into by Treeco and CHH pursuant to the CHH SPA, in the form agreed by CHH, RREEF and Rayonier. 
  
 Management Agreement means the management agreement in the form agreed between RREEF and Rayonier. 
  
 Memorandum of Understanding means the memorandum of understanding
entered into by RNZ and RREEF on 23 May 2005. 
  
 Non-Defaulting Holdco Shareholder has the meaning set out in clause 14.1. 
  
 Principal Completion Date means the date of Principal Completion under, and as defined in, the CHH SPA. 
  
 Regional Condition means the Regional Condition under, and as defined in, the CHH SPA. 
  
 Regional Unconditional Date means the date on which the Regional
Condition is waived or satisfied, in accordance with the terms of the CHH SPA. 
  
 Regional Completion Date means the date of Delayed Completion under, and as defined in, the CHH SPA. 
  
 Relevant Proportion means the percentage proportion of the interest that each of the Ausco Subscribers and RCL holds (directly or indirectly) in
Holdco from time to time, provided that so long as CAM is an Ausco Subscriber, its Interest shall be excluded from the calculation of any party’s Relevant Proportion. 
  
 RNZ Assets means the assets being transferred pursuant to the RNZ SPA. 
  
 RNZ Completion means Completion under, and as defined in, the RNZ
SPA. 
  
 RNZ GSA means the general security agreement to
be executed by RNZ, in favour of BNZ, to secure the Deed of Indemnity. 
  
 RNZ SPA means the agreement for the sale and purchase of the RNZ Assets between RNZ and Treeco, in the form agreed by RREEF and Rayonier. 
  

 6 

 RREEF Client means a client of RREEF who has signed or will sign an Investment Agreement, or a
member of the Deutsche Bank group. 
  
 Sale Notice has the
meaning set out in clause 10.4. 
  
 Sale Interest has the
meaning set out in clause 10.4. 
  
 Sale Shares has the
meaning set out in clause 10.17. 
  
 Second Ausco Subscription
Amount means, in respect of an Ausco Shareholder, the dollar amount specified as the Second Ausco Subscription Amount in the Second Ausco Subscription Notice. 
  
 Second Ausco Subscription Notice means the notice issued by the Ausco Board in accordance with clause 2.4.

  
 Second Ausco Subscription Satisfaction Date means the
date specified as such in the Second Ausco Subscription Notice. 
  
 Second Ausco Subscription Satisfaction Notice means the notice issued by the Ausco Board in accordance with clause 2.5(b). 
  
 Second Holdco Subscription Amount means: 
  

	 	(a)	in relation to Holdco Class A Shareholders, a sum equal to the Aggregate Second Ausco Subscription Amount; and 

  

	 	(b)	in relation to Holdco Class B Shareholders, a sum (RCL Second Subscription Amount) calculated in accordance with the following formula: 

  
 A = (B ÷ C) x D 
  
 Where: 
  
 A = RCL Second Subscription Amount 
  
 B = Aggregate Second Ausco Subscription Amount 

 
 C = 6 
  
 D = 4 
  
 Second Holdco Subscription Satisfaction Notice means the notice
issued by the Holdco Board in accordance with clause 3.5(b). 
  
 Second Treeco Subscription Amount means a sum equivalent to the Aggregate Second Holdco Subscription Amount. 
  
 Seller has the meaning set out in clause 10.4. 
  
 Senior Facility Agreement means the Senior Facility Agreement to be entered into between Treeco, BNZ and others. 
  
 Subscription Date means the First Ausco Subscription Satisfaction
Date. 
  
 Tag Along Notice has the meaning set out in
clause 10.16. 
  
 Tag Along Party has the meaning set out
in clause 10.16. 
  

 7 

 Transaction Conditions means the Transaction Conditions under, and as defined in, the CHH SPA.

  
 Transaction Unconditional Date means the date on which
the last of the Transaction Conditions are waived or satisfied, in accordance with the terms of the CHH SPA.  
  
 Treeco Board means the board of directors of Treeco for the time being. 
  
 Treeco Constitution means the constitution of Treeco, as amended from time to time. 
  
 Treeco GSA means the general security agreement to be executed by
Treeco, in favour of BNZ and others, to secure the Senior Facility Agreement. 
  
 Treeco Share means any ordinary share in Treeco. 
  
 Treeco Subscription Shares means the Treeco Shares for which Holdco is to subscribe pursuant to clause 4. 
  
 Tree Stock Supply Agreement means the tree stock supply agreement to be entered into by Treeco and CHH pursuant to the CHH SPA, in the form agreed
by CHH, RREEF and Rayonier. 
  
 Trustee means any person
that is at any time a party to this Agreement in its capacity as trustee of a trust, other than STC. 
  

	1.2	Interpretation: In this agreement, a reference to: 

  

	 	(a)	a subsidiary or holding company or related company shall be construed in accordance with sections 2(3) and 5 of the Companies Act; 

  

	 	(b)	the singular includes the plural and vice versa; 

  

	 	(c)	a statutory provision includes a reference to: 

  

	 	(i)	the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this agreement); and 

  

	 	(ii)	any subordinate legislation made under the statutory provision (whether before or after the date of this agreement); 

  

	 	(d)	persons includes a reference to any body corporate, unincorporated association or partnership; 

  

	 	(e)	a person includes a reference to that the person’s legal personal representatives or successors; 

  

	 	(f)	a clause or schedule, unless the context otherwise requires, is a reference to a clause or schedule to this agreement; 

  

	 	(g)	references to $ are to New Zealand dollars, unless otherwise specified. 

  

	1.3	Schedules: The schedules form part of this agreement and shall have the same force and effect as if set out in the body of this agreement, and references to this agreement
include the schedules. 

  

	1.4	Headings: The headings in this agreement shall not affect the interpretation of this agreement. 

  

 8 

	1.5	Trustee Limitation:  

  

	 	(a)	Subject to clause 1.5(c), no Trustee will be liable to pay or satisfy any obligations or liabilities under this Agreement other than out of assets of the relevant trust
(Trust) in respect of which that Trustee has entered into this Agreement and in no circumstances will that Trustee be called upon or liable to satisfy any of those obligations or liabilities out of its personal assets;

  

	 	(b)	Subject to clause 1.5(c), each party to this Agreement may only enforce its rights against a Trustee to the extent of that Trustee’s right of indemnity out of the assets held
by it in respect of the relevant Trust; and 

  

	 	(c)	The limitation of liability recorded in clauses 1.5(a) and (b) above shall not apply if and to the extent that the Trustee does not have or has lost (as a result of the
Trustee’s wilful breach of trust, fraud or gross negligence) a right of indemnity out of the assets held by it in respect of the relevant Trust. 

  

	1.6	STC Limitation of Liability: Each party to this agreement acknowledges that: 

  

	 	(i)	STC is a statutory entity constituted pursuant to the Superannuation Administration Act 1996 (NSW) (Act); and 

  

	 	(ii)	STC is entitled to the statutory indemnity and limitation of liability provided in the Act and in other Acts of Parliament referred to in the Act. 

  

	2.	SUBSCRIPTION, ISSUE AND PAYMENT OF AUSCO SHARES 

  

	2.1	Subscription for Ausco Shares: Each Ausco Subscriber agrees to subscribe for, and Ausco agrees to issue, the Ausco Subscription Shares: 

  

	 	(a)	in the percentage proportions set out in Part A of schedule one; and 

  

	 	(b)	in accordance with the terms of this agreement; and 

  

	 	(c)	otherwise on and subject to the terms set out in the Ausco Constitution. 

  

	2.2	First Ausco Subscription: As soon as is practicable following the Transaction Unconditional Date, Ausco shall issue each Ausco Subscriber with a notice (First Ausco
Subscription Notice), which notice shall specify: 

  

	 	(a)	the Australian dollar amount of the First Ausco Subscription Amount; 

  

	 	(b)	the number of Ausco Subcription Shares to be issued to that Ausco Subscriber (being one Ausco Share per Australian dollar payable pursuant to clause 2.2(a)); and

  

	 	(c)	the date by which the First Ausco Subscription Amount must be satisfied by the Ausco Subscribers, being the Business Day prior to the Principal Completion Date (First Ausco
Subscription Satisfaction Date). 

  

	2.3	Satisfaction of First Ausco Subscription Amount: 

  

	 	(a)	Subject to clause 2.8, each Ausco Subscriber shall satisfy the First Ausco Subscription Amount on or before the First Ausco Subscription Satisfaction Date, by payment in immediately
available funds to the bank account nominated by Ausco. 

  

 9 

	 	(b)	Upon receipt of the First Ausco Subscription Amount from each Ausco Subscriber, in accordance with clause 2.3(a), Ausco shall immediately: 

  

	 	(i)	notify the Holdco Subscribers and Holdco in writing that the First Ausco Subscription Amount has been paid (First Ausco Subscription Satisfaction Notice); and

  

	 	(ii)	issue and allot to each Ausco Subscriber the number of fully paid Ausco Subscription Shares specified in the First Ausco Subscription Notice. 

  

	2.4	Second Ausco Subscription: As soon as is practicable following the Regional Unconditional Date, Ausco shall issue each Ausco Subscriber with a notice (Second Ausco
Subscription Notice), which notice shall specify: 

  

	 	(a)	The Australian dollar amount of the Second Ausco Subscription Amount; 

  

	 	(b)	The number of Ausco Subcription Shares to be issued to that Ausco Subscriber (being one Ausco Share per Australian dollar payable pursuant to clause 2.4(a); and

  

	 	(c)	The date by which the Second Ausco Subscription Amount must be satisfied by the Ausco Subscribers, being the Business Day prior to the Regional Completion Date (Second Ausco
Subscription Satisfaction Date). 

  

	2.5	Satisfaction of Second Ausco Subscription Amount: 

  

	 	(a)	Subject to clause 2.8, each Ausco Subscriber shall satisfy the Second Ausco Subscription Amount on or before the Second Ausco Subscription Satisfaction Date, by payment in
immediately available funds to a bank account nominated by Ausco. 

  

	 	(b)	Upon receipt of the Second Ausco Subscription Amount from each Ausco Subscriber in accordance with clause 2.5(a), Ausco shall immediately: 

  

	 	(i)	notify Holdco and RCL in writing that the Second Ausco Subscription Amount has been paid (Second Ausco Subscription Satisfaction Notice); and 

  

	 	(ii)	issue and allot to each Ausco Subscriber the number of fully paid Ausco Subscription Shares specified in the Second Ausco Subscription Notice. 

  

	2.6	Regional Condition satisfied early: The Ausco Subscribers and Ausco acknowledge that the Regional Condition may be satisfied or waived, in accordance with the terms of the
CHH SPA, on or before the Transaction Unconditional Date, in which case the CHH SPA may be wholly unconditional on the Transaction Unconditional Date. If this occurs, the provisions of clause 2.4 and 2.5 shall not apply. 

  

	2.7	Issue of Ausco Shares: When Ausco is required to issue Ausco Subscription Shares to any party pursuant to this clause 2, Ausco will: 

  

	 	(a)	issue and allot those Ausco Subscription Shares as fully paid, in accordance with the Corporations Act; and 

  

	 	(b)	 ensure that each Ausco Subscriber is registered as the holder of its Ausco Subscription Shares, by procuring the Ausco Board to enter that Ausco 

  

 10 

	 	 
Shareholder’s name in the share register of Ausco in relation to its Ausco Subscription Shares. 

  

	2.8	Satisfaction of Ausco subscription moneys by CAM: To the extent that CAM is required to pay a sum to Ausco in accordance with clauses 2.3(a) or 2.5(a) (Subscription
Payment), upon that Subscription Payment becoming payable in accordance with clause 2.3(a) or 2.5(a), as the case may be, CAM shall be deemed to have satisfied that Subscription Payment, by RREEF and RNZ deducting an amount equal to that
Subscription Payment from the CAM Transaction Fee. 

  

	2.9	Acknowledgement regarding CAM: The parties to this agreement acknowledge that CAM is a lender under the Investor Loan Facility. To the extent that CAM is required to advance
a loan to Treeco under the Investor Loan Facility, CAM shall be deemed to have satisfied that obligation to advance, by RREEF and RNZ deducting an amount equal to that advance from the CAM Transaction Fee, and Treeco irrevocably acknowledges that
such deduction shall satisfy in full CAM’s obligation to advance under the Investor Loan Facility. 

  

	2.10	Buyback of initial Ausco Share: At the same time that Ausco issues Ausco Shares pursuant to clause 2.3(b)(ii), it shall buy back, for no consideration, the initial Ausco
Share held by RNZ. All Ausco subscribers unconditionally agree to consent to this buyback pursuant to relevant provisions of the Corporations Act and this agreement. 

  

	3.	SUBSCRIPTION, ISSUE AND PAYMENT OF HOLDCO SHARES 

  

	3.1	Subscription for Holdco Shares: Each Holdco Subscriber agrees to subscribe for, and Holdco agrees to issue the Holdco Subscription Shares: 

  

	 	(a)	in the percentage proportions set out in Part B of schedule one; 

  

	 	(b)	in accordance with the terms of this agreement; and 

  

	 	(c)	otherwise on and subject to the terms set out in the Holdco Constitution. 

  

	3.2	First Holdco Subscription Amount payable: The First Holdco Subscription Amount shall become payable by each Holdco Subscriber to Holdco on the First Ausco Subscription
Satisfaction Date. 

  

	3.3	Satisfaction of First Holdco Subscription Amount: 

  

	 	(a)	Ausco shall satisfy the First Holdco Subscription Amount by payment of immediately available funds to the bank account nominated by Holdco, immediately upon receipt of the First
Ausco Subscription Satisfaction Notice. 

  

	 	(b)	RCL shall satisfy the First Holdco Subscription Amount by payment of immediately available funds to the bank account nominated by Holdco immediately upon RNZ Completion occurring,
provided that if RNZ Completion has not occurred as a consequence of: 

  

	 	(i)	a breach of the RNZ SPA by RNZ, or 

  

	 	(ii)	a breach by BNZ under the Senior Facility Agreement 

  
 this clause 3.3(b) shall not apply to release RCL from its obligation to satisfy the First Holdco Subscription Amount. 
  

 11 

	 	(c)	Upon receipt of the First Holdco Subscription Amount from each Holdco Subscriber, Holdco shall immediately: 

  

	 	(i)	notify Treeco in writing that the First Holdco Subscription Amount has been paid (First Holdco Subscription Satisfaction Notice); and 

  

	 	(ii)	issue and allot to each Holdco Subscriber one fully paid Holdco Subscription Share for each dollar paid by it pursuant to clause 3.3(a) or 3.3(b), as the case may be.

  

	3.4	Second Holdco Subscription Amount payable: The Second Holdco Subscription Amount shall become payable by each Holdco Subscriber to Holdco on the Regional Completion Date.

  

	3.5	Satisfaction of Second Holdco Subscription Amount: 

  

	 	(a)	Each Holdco Subscriber shall satisfy the Second Holdco Subscription Amount by payment of immediately available funds to the bank account nominated by Holdco on the Regional
Completion Date. 

  

	 	(b)	Upon receipt of the Second Holdco Subscription Amount from each Holdco Subscriber, Holdco shall immediately: 

  

	 	(i)	notify Treeco in writing that the Second Holdco Subscription Amount has been paid (Second Holdco Subscription Satisfaction Notice); and 

  

	 	(ii)	issue and allot to each Holdco Subscriber one fully paid Holdco Subscription Share for each dollar payable by it pursuant to clause 3.5(a). 

  

	3.6	Regional Condition satisfied early: If clause 2.6 applies, clauses 3.4 and 3.5 shall not apply. 

  

	3.7	Issue of Holdco Shares: When Holdco is required to issue Holdco Subscription Shares to any party pursuant to this clause 3, Holdco will: 

  

	 	(a)	issue and allot those Holdco Subscription Shares fully paid in accordance with the Companies Act; and 

  

	 	(b)	ensure that each Holdco Subscriber is registered as the holder of its Holdco Subscription Shares, by procuring the Holdco Board to enter that Holdco Subscriber’s name in the
share register of Holdco in relation to its Holdco Subscription Shares. 

  

	4.	SUBSCRIPTION, ISSUE AND PAYMENT OF TREECO SHARES 

  

	4.1	Subscription for Treeco Shares: Holdco agrees to subscribe for, and Treeco agrees to issue the Treeco Subscription Shares: 

  

	 	(a)	in accordance with the terms of this agreement; and 

  

	 	(b)	otherwise on and subject to the terms set out in the Treeco Constitution. 

  

	4.2	 First Treeco Subscription Amount payable: The First Treeco Subscription Amount shall become due and payable by Holdco upon the receipt by Holdco of the First
Holdco 

  

 12 

	 	 
Subscription Amount from all Holdco Shareholders in accordance with clause 3.3(a) or 3.3(b) as the case may be. 

  

	4.3	Satisfaction of First Treeco Subscription Amount: Holdco shall satisfy the First Treeco Subscription Amount by payment of immediately available funds to the bank
account nominated by Treeco. Immediately upon receipt of the First Treeco Subscription Amount, Treeco shall issue and allot to Holdco one fully paid Treeco Subscription Share for each dollar payable by Holdco to Treeco pursuant to this clause 4.

  

	4.4	Second Treeco Subscription Amount payable: The Second Treeco Subscription Amount shall become due and payable by Holdco to Treeco upon the receipt by Holdco of the Second
Holdco Subscription Amount from all Holdco Shareholders in accordance with clause 3.5(a). 

  

	4.5	Satisfaction of Second Treeco Subscription Amount: Holdco shall satisfy the Second Treeco Subscription Amount by payment of immediately available funds to the bank
account nominated by Treeco. Immediately upon receipt of the Second Treeco Subscription Amount, Treeco shall issue and allot to Holdco one fully paid Treeco Subscription Share for each dollar payable by Holdco to Treeco pursuant to this clause.

  

	4.6	Regional Condition satisfied early: If clause 2.6 applies, clauses 4.4 and 4.5 shall not apply. 

  

	4.7	Issue of Treeco Subscription Shares: When Treeco issues Treeco Subscription Shares to Holdco pursuant to this clause four, Treeco will: 

  

	 	(a)	issue and allot those Treeco Subscription Shares fully paid in accordance with the Companies Act; and 

  

	 	(b)	ensure that Holdco is registered as the holder of its Treeco Subscription Shares, by procuring the Treeco Board to enter Holdco’s name in the share register of Treeco in
relation to its Treeco Subscription Shares. 

  

	5.	NON-SATISFACTION OF CHH SPA CONDITIONS 

  

	5.1	Process if CHH SPA not declared unconditional: If the Transaction Conditions are not satisfied or waived in accordance with the terms of the CHH SPA, and subject to
each of the Ausco Subscribers and Ausco having fully complied with any obligation it may have pursuant to clause 7, then: 

  

	 	(a)	each Ausco Shareholder shall sell, and Ausco shall purchase, its Ausco Subscription Shares, for no consideration; 

  

	 	(b)	each Holdco Shareholder shall sell, and Holdco shall purchase, its Holdco Subscription Shares, for no consideration; 

  

	 	(c)	Holdco shall sell, and Treeco shall purchase, its Treeco Subscription Shares, for no consideration, and 

  

	 	(d)	the Ausco Shares, Holdco Shares and Treeco Shares repurchased in accordance with clauses 5.1(a) to (c) shall be cancelled by Ausco, Holdco and Treeco respectively.

  

	5.2	Liquidation: Upon each of Ausco, Holdco and Treeco complying with its obligations under clause 5.1(d): 

  

	 	(a)	Holdco shall immediately procure the liquidation of Treeco; 

  

 13 

	 	(b)	the remaining Holdco Shareholders shall immediately procure the liquidation of Holdco; and 

  

	 	(c)	the remaining Ausco Shareholders shall immediately procure the liquidation of Ausco. 

  

	6.	PROCEDURAL MATTERS 

  

	6.1	Execution of documents: Immediately following execution of this agreement (for the avoidance of doubt, on the same day): 

  

	 	(a)	Treeco and RNZ shall execute the Management Agreement; 

  

	 	(b)	Treeco and RNZ shall execute the RNZ SPA; 

  

	 	(c)	Each of the Ausco Shareholders, RCL and Treeco shall execute the Investor Loan Facility and the Intercreditor Deed; 

  

	 	(d)	Treeco shall execute the CHH SPA, the Senior Facility Agreement the Treeco GSA, the Log Supply Agreements, the Tree Stock Supply Agreement and the Foresty Rights; and

  

	 	(e)	RNZ shall execute the the Deed of Indemnity and the RNZ GSA. 

  

	6.2	Issue of Drawdown Notice: Immediately upon receipt of the First Treeco Subscription Amount, Treeco shall issue a Drawdown Notice to BNZ, for such an amount as it requires to
complete the CHH SPA and RNZ SPA in accordance with the terms of those agreements. 

  

	7.	REIMBURSEMENT AND INDEMNITY 

  

	7.1	Indemnity: Subject to clause 7.2, 7.3 and 7.4, each Ausco Subscriber (excluding RCL and CAM): 

  

	 	(a)	shall pay to RNZ on demand an amount equal to its Relevant Proportion of the amount which RNZ is obliged to pay under or in connection with the Deed of Indemnity; and

  

	 	(b)	hereby indemnifies RNZ, in each case to the extent of its Relevant Proportion, from and against all amounts payable by RNZ under or in connection with the Deed of Indemnity.

  

	7.2	Proportionate liability under Deed of Indemnity: Each LC Party agrees that, if RNZ becomes obliged to pay an amount to BNZ under the Deed of Indemnity by reason of a
failure of Treeco to satisfy its obligation to complete the CHH SPA on the Principal Completion Date and that failure to complete: 

  

	 	(a)	was directly attributable to RCL failing to comply with: 

  

	 	(i)	its obligation pursuant to clause 3.3(b); and/or 

  

	 	(ii)	its obligation to advance money to Treeco on the date and otherwise on the terms set out in the Investor Loan Facility, 

  
 then RNZ shall be obliged to pay in full, without any recourse to any Ausco
Subscriber or any other party to this agreement, all amounts payable to BNZ under or in connection with the Deed of Indemnity; or 
  

 14 

	 	(b)	was directly attributable to one or more Ausco Subscribers (each a Defaulting Ausco Subscriber) failing to comply with: 

  

	 	(i)	its obligation pursuant to clause 2.3(a); and/or 

  

	 	(ii)	its obligations to advance money to Treeco on the date and otherwise on the terms set out in the Investor Loan Facility, 

  
 then that (or each, as the case may be) Defaulting Ausco Subscriber shall be
obliged to pay to RNZ on demand an amount equal to the result of the following formula: 
  

					
	 A =
	 	EP	 	x Y
	 	AEP	 

  
 where:

  

	 	A	is the amount payable by that Defaulting Ausco Subscriber to RNZ on demand; 

  

	 	EP	is the Equity Proportion of that Defaulting Ausco Subscriber; 

  

	 	AEP 	is the aggregate Equity Proportion of all Defaulting Ausco Subscribers; and 

  

	 	Y	is the amount payable by RNZ to BNZ under or in connection with the Deed of Indemnity. 

  

	 	(c)	was directly attributable to: 

  

	 	(i)	one or more Ausco Subscribers, (each a Defaulting Ausco Subscriber), failing to comply with: 

  

	 	(A)	its obligations pursuant to clause 2.3(a) and/or 

  

	 	(B)	its obligation to advance money to Treeco on the date and otherwise on the terms set out in the Investor Loan Facility, and 

  

	 	(ii)	RCL failing to comply with: 

  

	 	(A)	its obligations pursuant to clause 3.3(b); and/or 

  

	 	(B)	its obligation to advance money to Treeco on the date and otherwise on the terms set out in the Investor Loan Facility, 

  
 then that (or each, as the case may be) Defaulting Ausco Subscriber shall be
obliged to pay to RNZ on demand an amount equal to the result of the following formula: 
  

					
	 A=
	 	RP	 	x Y
	 	ARP	 

  
 where:

  

	 	A	is the amount payable by that Defaulting Ausco Subscriber to RNZ on demand; 

  

	 	RP	is the Relevant Proportion of that Defaulting Ausco Subscriber; 

  

	 	ARP 	is the aggregate Relevant Proportion of all Defaulting Ausco Subscribers and RCL; and 

  

	 	Y	is the amount payable by RNZ to BNZ under or in connection with the Deed of Indemnity. 

  

 15 

	7.3	Exclusion: If: 

  

	 	(a)	each Ausco Subscriber has complied with its obligations pursuant to clause 2.3(a); and 

  

	 	(b)	RCL has complied with its obligations 3.3(b), 

  
 but Ausco has failed to satisfy its obligation pursuant to clause 3.3(a), then Ausco shall pay to RNZ on demand an amount equal to the amount which RNZ is
obliged to pay under or in connection with the Deed of Indemnity and hereby indemnifies RNZ upon demand from and against all amounts payable under or in connection with the Deed of Indemnity. 
  

	7.4	Further indemnity: Without prejudice to clause 7.2, each Defaulting Ausco Subscriber hereby indemnifies RNZ from and against all costs, losses, expenses and
liabilities of any kind incurred by RNZ under or in connection with the Deed of Indemnity by reason of a failure by that Defaulting Ausco Subscriber to comply with its obligations under clause 7.2(b) or 7.2(c), as applicable. If this clause applies,
each Defaulting Ausco Subscriber shall be obliged to pay to RNZ an amount on demand equal to the result of the formula set out in clauses 7.2(b) or 7.2(c), as the case may be. 

  

	7.5	Certificate: A certificate of: 

  

	 	(a)	any officer of RNZ, certifying the amount which RNZ is required to pay BNZ under the Deed of Indemnity shall, in the absence of manifest error, be conclusive evidence of that
amount; and 

  

	 	(b)	any officer of Ausco, certifying any failure by an Ausco Subscriber to comply with any of the obligations referred to in clauses 7.2(b) or 7.2(c) shall, in the absence of manifest
error, be conclusive evidence of that failure. 

  

	7.6	Exclusion regarding CAM: For the avoidance of doubt, CAM may not be classified as a Defaulting Ausco Subscriber for the purpose of clause 7.2(b), 7.2(c) or 7.3.

  

	7.7	Delivery of certificate: Ausco shall, immediately upon becoming aware of any failure by an Ausco Subscriber to comply with the obligations referred to in clauses
7.2(b) or 7.2(c), send to RNZ and to each other Ausco Subscriber the certificate referred to in clause 7.5(b). 

  

	7.8	Obligations of Ausco Subscribers: The obligations of each Ausco Subscriber and RCL under this clause 7 shall be unconditional and shall not be subject to any
reduction, termination or other impairment by any set-off, deduction, counterclaim, agreement, defence or otherwise, and no Ausco Subscriber, nor RCL, shall be released from its obligations under this clause 7 for any reason whatsoever. The
liability of each Ausco Subscriber under this clause 7 shall be several. 

  

	7.9	Variation of LC: RNZ shall not agree to amend the terms of the LC or the LC Facility Letter without obtaining the prior written consent of Ausco and each Ausco
Subscriber. 

  

	8.	GOVERNANCE 

  

	8.1	Ausco governance: Ausco shall be governed in accordance with the provisions set out in schedule two, and otherwise in accordance with the Ausco Constitution.

  

 16 

	8.2	Holdco governance: Holdco shall be governed in accordance with the provisions set out in schedule three, and otherwise in accordance with the Holdco Constitution.

  

	8.3	Treeco governance: Treeco shall be governed in accordance with the provisions set out in schedule three, and otherwise in accordance with the Treeco Constitution.

  

	9.	FUNDING 

  

	9.1	Adjustment provisions under CHH SPA and RNZ SPA: The Ausco Shareholders, Holdco Shareholders and Holdco acknowledge that each of the RNZ SPA and the CHH SPA contain purchase
price adjustment provisions that may result in Treeco being required to pay further sums by way of purchase price adjustments, or apportionment adjustments, to CHH or RNZ (as the case may be), or CHH or RNZ (as the case may be) refunding a portion
of the purchase price or apportionments paid by Treeco. The Ausco Shareholders, Ausco, the Holdco Shareholders, Holdco and Treeco agree as follows: 

  

	 	(a)	If Treeco is required to make a payment to the Vendor as an adjustment to the purchase price under the SPA: 

  

	 	(i)	Treeco shall immediately give notice to Holdco and the Holdco Shareholders and the Ausco Shareholders (Adjustment Notice) of the amount required to be paid (Adjustment
Amount); 

  

	 	(ii)	Each Holdco Shareholder shall pay to Treeco, within 8 Business Days from the date of the Adjustment Notice, a portion of the Adjustment Amount pro rata in proportion to that Holdco
Shareholder’s Holdco Shares and Holdco shall as soon as is practicable issue further Holdco Shares to each Holdco Shareholder in consideration for such payment (on the basis of one share for each dollar amount payable) pro rata in proportion to
each Holdco Shareholder’s shareholding in Holdco; 

  

	 	(iii)	Following payment by each Holdco Shareholder in accordance with clause 9.1(a)(ii), Holdco shall immediately pay to Treeco the Adjustment Amount, and Treeco shall, as soon as is
practicable, issue further Treeco Shares to Holdco, in consideration for such payment; 

  

	 	(iv)	In order that Ausco can comply with subclause 9.1(a)(ii), each Ausco Shareholder shall, within 5 Business Days from the date of the Adjustment Notice, pay to Ausco a portion of the
Adjustment Amount payable by Ausco to Treeco (in accordance with clause 9.1(a)(ii)) pro rata in proportion to that Ausco Shareholder’s shareholding in Ausco and Ausco shall as soon as is practicable issue further Ausco Shares to each Holdco
Shareholder in consideration for such payment (on the basis of one share for each dollar payable) pro rata in proportion to each Ausco Shareholder’s shareholding in Ausco. 

  

	 	(b)	If Treeco receives a refund from the Vendor by way of an adjustment to the purchase price under the SPA, this sum shall be retained by Treeco and utilised as working capital.

  

	9.2	For the purpose of this clause 9.1, Vendor means CHH or RNZ, as the case may be, and SPA means the CHH SPA or RNZ SPA, as the case may be. 

  

 17 

	9.3	Satisfaction of Adjustment Amount by CAM: To the extent that CAM is required to make a payment to Ausco in accordance with clause 9.1(a)(iv), CAM shall be deemed to
have satisfied that payment, by RREEF and RNZ deducting an amount equal to that payment from the CAM Transaction Fee. 

  

	9.4	Further funding: Save as set out in clause 9.1: 

  

	 	(a)	No Ausco Shareholder shall be obligated to provide any further funding to Ausco upon complying with its obligations pursuant to clause 2.3(a) and (if applicable) 2.5(a).

  

	 	(b)	No Holdco Shareholder shall be obligated to provide any further funding to Holdco upon complying with its obligations pursuant to clause 3.3(a) or 3.3(b), as the case may be, and
(if applicable) 3.5(a). 

  

	9.5	Liability of CAM to pay cash: Notwithstanding anything in this agreement, CAM shall not, at any time, be obliged to make any cash payment to any party to this
agreement in relation to any matters contained in this agreement. 

  

	10.	DEALING IN SHARES IN HOLDCO 

  

	10.1	Grant of security, etc: No Holdco Shareholder shall, except with the prior written consent of the other Holdco Shareholders: 

  

	 	(a)	pledge, mortgage, charge or otherwise encumber any Holdco Share or any interest in any Holdco Share; 

  

	 	(b)	grant an option over any Holdco Share or any interest in any Holdco Share; or 

  

	 	(c)	enter into any agreement in respect of the votes attached to any Holdco Share. 

  

	10.2	Stand-down period: Subject to clauses 10.12 to 10.15, no Holdco Shareholder shall transfer or dispose of any Holdco Share or any interest in any Holdco Share for a
period of three years after the Issue Date, other than with the prior written consent of the other Holdco Shareholders. 

  

	10.3	Pre-emptive rights: Subject to clauses 10.12 to 10.15, following the expiry of the three year period referred to in clause 10.2, Holdco Shares may only be transferred
in accordance with clauses 10.4 to 10.11. 

  

	10.4	Sale notice: In order for any Holdco Shareholder (Seller) to sell, transfer or otherwise dispose of the legal or beneficial ownership of, or the control of, any of its
Holdco Shares, that Holdco Shareholder shall first give notice (Sale Notice) to Holdco and the other Holdco Shareholders specifying: 

  

	 	(a)	the total number of Holdco Shares it wishes to sell, and the corresponding proportion of its Debt Commitment (if any) that it is required to transfer with the relevant Holdco Shares
pursuant to clause 11.3 (Sale Interest); 

  

	 	(b)	the price which the Seller wishes to receive for the Sale Interest 

  

	 	(c)	each other Holdco Shareholder’s pro rata entitlement to that Sale Interest which must be offered pursuant to this clause 10; and 

  

	 	(d)	any other terms and conditions of the proposed sale of the Sale Interest (which shall be described sufficiently precisely to enable an acceptance of the offer in the Sale Notice to
constitute a binding contract). 

  

 18 

	10.5	Acceptance of Sale Notice: Each Holdco Shareholder other than the Seller may, not later than the date (Acceptance Date) 20 Business Days after giving of the Sale
Notice, give irrevocable notice to the Seller that that Holdco Shareholder wishes to acquire its pro rata entitlement and an indication that it will purchase a larger portion of the Sale Interest if other Holdco Shareholders do not purchase their
pro rata entitlement to the Sale Interest on the terms specified in the Sale Notice. For the avoidance of doubt, an acceptance given pursuant to this clause must relate to the entire pro rata entitlement of the accepting Holdco Shareholder to be
effective. 

  

	10.6	Terms of sale: A Holdco Shareholder which gives notice to the Seller in accordance with clause 10.5 (Buyer) that it wishes to acquire its pro rata entitlement to the
Sale Interest (Entitlement) shall be entitled and bound (subject to this clause 10.6 and clause 10.7) to acquire that Entitlement. If one of more Holdco Shareholders gives notice to the Seller that it does not wish to acquire its
Entitlement (such Holdco Shareholders being Non Responsive Parties), or does not give any notice within the 20 Business Day period referred to in clause 10.5, the aggregate Entitlements of the Non Responsive Parties shall be offered to those
Holdco Shareholders who accepted their Entitlement and who provided an indication that they would purchase a larger portion of the Sale Interest if other Holdco Shareholders declined to take up their Entitlement, pro rata to the number of Holdco
Shares they currently hold, so as to exhaust these pre-emptive rights. If Buyers have given acceptances in relation to the entire Sale Interest by the date 20 Business Days after the Acceptance Date (Final Acceptance Date), the purchase of
the Sale Interest shall be effected at the price, and on the terms and conditions, specified in the Sale Notice, and, subject to anything to the contrary in the Sale Notice, on the following terms: 

  

	 	(a)	The sale of the Sale Interest, whether to one or more Buyer(s), shall be conditional on the Seller or Buyer(s) obtaining any consents required pursuant to clause 10.7. By way of
example (without limitation) if there are two Buyers in respect of a Sale Interest, and one of those Buyers does not obtain a consent in accordance clause 10.7, then the Seller shall no longer be obliged to sell to the remaining Buyer and the
Affected Portion of the Sale Interest (as defined in clause 10.7) shall be re-offered in accordance with clause 10.4. 

  

	 	(b)	The purchase of the Sale Interest shall be settled on the date 10 Business Days after the Acceptance Date, or (if later), the Final Acceptance Date) if clause 10.7 applies, 10
Business Days after the last of the consents referred to in clause 10.7 is obtained. 

  

	 	(c)	If there is more than one Buyer, the purchase of the Sale Interest by all Buyers shall be settled simultaneously. 

  

	 	(d)	The Seller shall transfer to the Buyer good title to the Sale Interest free of any charge or encumbrance. 

  

	 	(e)	On settlement of the purchase of the Sale Interest the Buyer shall pay the purchase price to the Seller in cleared funds, and the Seller shall deliver to the Buyer a transfer of the
Sale Interest, including an assignment of the relevant proportion of its Debt Commitment (if any), in a form reasonably acceptable to the Buyer and the Seller. 

  

	 	(f)	The Holdco Shareholders shall take all necessary steps to procure the Holdco Board to cause the Buyer to be registered as holder of those Holdco Shares. 

  

	 	(g)	 The Seller will, upon settlement of the purchase of the Sale Interest, procure the removal of any Holdco director appointed by it (provided that if it is entitled
to appoint more than one director, and is selling some but not all of its Holdco 

  

 19 

	 	 
Shares, it shall be entitled to retain representation on the Holdco Board, to the extent permitted by schedule three). 

  

	10.7	Consents: The Buyer(s) and the Seller shall use their reasonable endeavours, with all due speed and diligence, to obtain all necessary consents to the sale and purchase of
any portion of the Sale Interest (Affected Portion) for which any such consent is required, including any consent required from any governmental or regulatory agency or authority. If any necessary consent is: 

  

	 	(a)	not granted within 60 Business Days from the Acceptance Date (or, if applicable, the Final Acceptance Date); or 

  

	 	(b)	granted on terms and conditions that are not reasonably acceptable to the party affected thereby, 

  
 the Seller or any Buyer may, by notice to all Holdco Shareholders, terminate the obligation to buy and sell the Affected
Portion created by clause 10.6, and the Affected Portion shall be re-offered in accordance with 10.4. 
  

	10.8	Sale to third parties: If the pre-emptive procedure set out in clauses 10.4 to 10.7 has been exhausted in relation to the Sale Interest and acceptances have not been received
for the entire Sale Interest, the Seller may, (subject to clauses 10.9, 10.10 and 11.2) within 100 Business Days of the Acceptance Date (or, if applicable, the Final Acceptance Date), transfer the Sale Interest to any other person for a price not
less than that, and on terms and conditions no more favourable than those, specified in the Sale Notice. For the purpose of this clause: 

  

	 	(a)	the terms and conditions on which the Sale Interest is sold to a third party shall not be construed as being more favourable than those in the Sale Notice solely because those terms
and conditions contain arms’ length warranties; and 

  

	 	(b)	each Holdco Shareholder shall provide such assistance as may reasonably be required by the Seller for the purposes of enabling the Seller to solicit offers for the Sale Interest
including: 

  

	 	(i)	allowing prospective purchasers and their advisers to carry out reasonable due diligence enquiries; 

  

	 	(ii)	allowing the Seller to complete any offering or sale document (including any information memorandum); and 

  

	 	(iii)	enabling completion of any such sale to take place. 

  

	10.9	Approval of purchaser by RCL: For so long as RCL (or any related company of RCL or Rayonier) remains a Holdco Shareholder, no other Holdco Shareholder shall transfer
shares in Holdco to any person (other than another Holdco Shareholder) unless that Holdco Shareholder has obtained the approval of RCL (or the relevant related company of RCL or Rayonier holding Holdco Shares). The approval of RCL to the proposed
transfer shall only be withheld if RCL (or the relevant related company of RCL or Rayonier holding Holdco Shares) concludes, acting reasonably and in good faith, that the proposed transferee’s business (or the business of any related company of
the proposed transferee) is the operation and/or management of forestry interests in competition with Rayonier. RCL shall respond to a request from the Seller for approval pursuant to this clause within 10 Business Days after receipt of that
request. If RCL fails to respond within that time, it shall be deemed to have approved the proposed purchaser. RCL’s response shall be in writing, and, if consent is withheld, shall include an explanation of, and reasons for, that decision.

  

 20 

	10.10 	Clause to apply again: If: 

  

	 	(a)	the obligation to buy and sell any Affected Portion is terminated pursuant to clause 10.7; or 

  

	 	(b)	the Seller proposes to sell, transfer, or otherwise dispose of the Sale Interest outside the period referred to in clause 10.8, or at a price, or on terms and conditions more
favourable than, specified in the Sale Notice; or 

  

	 	(c)	the Seller does not obtain the approval referred to in clause 10.9, 

  
 clauses 10.3 to 10.9 and this clause 10.10 shall again apply, with any necessary modifications. 
  

	10.11 	Change of control: If RCL and RNZ cease to be directly or indirect wholly owned subsidiaries of the same entity, then RCL shall immediately be deemed to have given a Sale
Notice offering to transfer all of its Holdco Shares at Fair Value, and clauses 10.3 to 10.8 shall, with the necessary modifications, apply. 

  

	10.12 	Transfer to related companies: Nothing in clauses 10.2 and 10.3 shall prevent any Holdco Shareholder (Transferring Shareholder) transferring all or some of its
Holdco Shares to any entity that is wholly owned (direct or indirectly) by the same parent company as the relevant Holdco Shareholder (Sister Company) provided: 

  

	 	(a)	where the transferor is a Holdco Shareholder other than RCL (or any related company of RCL), it must seek approval to such transfer in accordance with clause 10.9; and

  

	 	(b)	where the transferee ceases to be a Sister Company of the Transferring Shareholder, the transferee shall, and the Transferring Shareholder shall procure that, the transferee
forthwith transfers back to the Transferring Shareholder (or another Sister Company of the Transferring Shareholder) all Holdco Shares that it holds. 

  

	10.13 	Change of corporate trustee: Where a Holdco Shareholder is a corporate trustee or custodian of a pension fund, nothing in clauses 10.2 or clause 10.3 shall prevent the
Holdco Shares held by that Holdco Shareholder being transferred to a replacement corporate trustee or custodian of that pension fund. For the avoidance of doubt, consent pursuant to clause 10.9 is not required for any transfer pursuant to this
clause. 

  

	10.14 	Underwriting: Nothing in clause 10.2 or 10.3 shall prevent Ausco or RCL transferring Holdco Shares, or any interest in Holdco Shares, to any third party in accordance
with schedule 6, provided that if the transferring Holdco Shareholder is not RCL, it must seek approval of the third party purchaser pursuant to clause 10.9. 

  

	10.15 	Transfer to clients of RREEF: Except as expressly provided in this clause 10.15, nothing in clauses 10.2 and 10.3 shall prevent Ausco transferring Holdco Shares to a
third party, provided that: 

  

	 	(a)	the third party is a RREEF Client; and 

  

	 	(b)	the third party purchaser is approved by RCL pursuant to clause 10.9, 

  
 provided that if a proposed transfer of Ausco Shares or Holdco Shares would, if that transfer was completed, result in the aggregate Relevant Proportion
of RREEF Clients falling below 30% then that transfer shall not be effected without first complying with clause 10.3. 
  

 21 

	10.16 	Tag along right: If: 

  

	 	(a)	a Holdco Class A Shareholder gives a Sale Notice in respect of a number of Holdco Class A Shares that exceeds 67% of the total Holdco Class A Shares on issue; or

  

	 	(b)	a Holdco Class B Shareholder gives a Sale Notice in respect of a number of Holdco Class B Shares that exceeds 50% of the total Holdco Class B Shares on issue,

  
 then any other Holdco Shareholder (Tag Along
Party), may, within 10 Business Days of the Sale Notice being given, give irrevocable written notice (Tag Along Notice) to the Seller that it wishes the Seller to procure (if the Sale Interest is not purchased by the other Holdco
Shareholders) that any third party purchaser of the Sale Interest also purchases the Holdco Shares (and any corresponding Debt Commitment) held by that Tag Along Party. If a Seller receives a Tag Along Notice, the Seller shall not sell the relevant
Sale Interest to a third party unless the Seller procures that third party to purchase the relevant Holdco Shares (and any corresponding Debt Commitment) owned by the Tag Along Party, at a price and on terms no less favourable than those contained
in the Sale Notice. If a Tag Along Notice is given, reference in this agreement to Seller and Sale Interest shall be deemed to be amended accordingly. 
  

	10.17 	Fair Value: If it is necessary for any purpose of this agreement to determine the fair market value of the Holdco Shares held by a Holdco Shareholder (Sale
Shares), the following provisions shall apply: 

  

	 	(a)	All Holdco Shareholders shall, for a period of 10 Business Days after one Holdco Shareholder gives notice to the Holdco Shareholders requiring them to do so, endeavour to agree on
the fair market value of the Sale Shares. 

  

	 	(b)	If the Holdco Shareholders do not agree on the fair market value of the Sale Shares within the period of 10 Business Days referred to in clause 10.17(a), the fair market value shall
be determined by an independent valuer agreed upon by the Holdco Shareholders, or failing agreement on the valuer within 5 Business Days after the end of that period, appointed on the application of any Holdco Shareholders by the president for the
time being of the Institute of Chartered Accountants of New Zealand or his or her nominee. 

  

	 	(c)	The person appointed as valuer under clause 10.17(b) shall: 

  

	 	(i)	act as an expert and not as arbitrator; 

  

	 	(ii)	determine the fair market value of the Sale Shares as soon as possible, which valuation shall be conclusive. 

  

	 	(d)	In determining the fair market value of the Sale Shares, the valuer shall determine the fair market value of all of the Holdco Shares, and shall then determine the fair market value
of the Sale Shares in question as the appropriate percentage of the value of all Holdco Shares, so that no regard shall be had to the control of Holdco, or to any premium for control or discount for lack of control. 

  

	 	(e)	The Holdco Shareholders shall promptly and openly make available to the valuer all information in their possession or under their control relating to Holdco to enable the valuer to
proceed with the valuation on an informed basis as to the financial position, affairs, performance, and prospects of Holdco. In these circumstances, RNZ shall provide the valuer with all relevant information in this respect that it holds pursuant to
the Management Agreement. 

  

 22 

	 	(f)	The fees and expenses of the valuer shall be paid by the Holdco Shareholders pro rata in proportion to their holdings of Holdco Shares, or in such other manner as the valuer may
determine. 

  

	 	(g)	The valuer may require the parties to adhere to such adjustments to the time frames set out in clause 10 as may be appropriate to reflect the time taken to determine Fair Value.

  

	11.	FURTHER PROVISIONS REGARDING DEALING IN SHARES 

  

	11.1	Dealing in shares of Ausco: For the avoidance of doubt, subject to clauses 10.15, 11.2, 11.3 and 11.4 below and any restrictions set out in the Ausco Constitution and/or the
Corporations Act, there are no restrictions on dealing with Ausco Shares. 

  

	11.2	Accession Deed: If: 

  

	 	(a)	an Ausco Shareholder transfers the legal or beneficial ownership of any Ausco Shares to any party (other than to a party who has already signed this agreement or an Accession Deed);
or 

  

	 	(b)	a Holdco Shareholder transfers the legal or beneficial ownership of any Holdco Shares to any party (other than to a party who has already signed this agreement or an Accession
Deed), 

  
 that Holdco Shareholder or Ausco
Shareholder, as the case may be, shall procure that the relevant transferee validly executes an Accession Deed, and delivers a copy of that Accession Deed to each party to this agreement. 
  

	11.3	Stapling of interest under Investor Loan Facility: Subject to any variation of the terms below in the Investor Loan Facility: 

  

	 	(a)	no Ausco Shareholder shall transfer all or any of its Ausco Shares without transferring a corresponding proportion of its Debt Commitment, in accordance with clause 10.6 of the
Investor Loan Facility; and 

  

	 	(b)	no Holdco Shareholder shall transfer all or any of its Holdco Shares without transferring a corresponding proportion of its Debt Commitment, in accordance with clause 10.6 of the
Investor Loan Facility. 

  

	11.4	Approval of transferee of Ausco Shares: For so long as RCL (or any related party of RCL or Rayonier) remains a Holdco Shareholder, no Ausco Shareholder shall transfer
any of its Ausco Shares to any person (other than another Ausco Shareholder) unless that Ausco Shareholder has obtained the approval of RCL (or the relevant related party of RCL or Rayonier holding Holdco Shares). The approval of RCL to the proposed
transfer shall only be withheld if RCL (or the relevant related party of RCL or Rayonier holding Holdco Shares) concludes, acting reasonably and in good faith, that the proposed transferee’s business (or the business of any related company of
the proposed transferee) is the operation and/or management of forestry interests in competition with Rayonier. RCL shall respond to a request from an Ausco Shareholder for approval pursuant to this clause within 10 Business Days after receipt of
that request. If RCL fails to respond within that time, it shall be deemed to have approved the proposed purchaser. RCL’s response shall be in writing, and, if consent is withheld, shall include an explanation of, and reasons for, that
decision. 

  

 23 

	11.5	Registration of transfers: 

  

	 	(a)	The Ausco Shareholders shall procure that the Ausco Board does not register a transfer of Ausco Shares unless such transfer has been carried out in accordance with clause 11.2, 11.3
and 11.4, the requirements of the Corporations Act and the Ausco Constitution. 

  

	 	(b)	The Holdco Shareholders shall procure that the Holdco Board does not register a transfer of Holdco Shares unless such transfer has been carried out in accordance with clauses 10.2
to 10.16, clause 11.2 and clause 11.3, the requirements of the Companies Act and the Holdco Constitution. 

  

	11.6	Investment Agreements: For the avoidance of doubt, nothing in this agreement shall be construed to preclude an Ausco Shareholder or Holdco Shareholder entering into an
Investment Agreement with RREEF, or an investment management agreement with any other investment manager. 

  

	11.7	Liability of transferring shareholders: Except to the extent required by law, each Holdco Shareholder or Ausco Shareholder which transfers its entire holding of Holdco Shares
or Ausco Shares (as the case may be) to another party, in accordance with the terms of this agreement, shall be deemed released by all other parties hereto from all liability under this agreement from the date of that transfer, except in relation to
any prior breach of this agreement by the transferor. 

  

	11.8	Underwriting arrangements: Each of the parties agrees to be bound by the underwriting arrangements set out in schedule six. The Ausco Shareholders and Holdco
Shareholders agree to procure Ausco or Holdco, as the case may be, to co-operate with the Sales Co-ordinator (as defined in schedule six) to release all information necessary to facilitate the underwriting selldown process set out in schedule six.

  

	11.9	Consent to buyback of Ausco Shares: The Ausco Shareholders acknowledge that: 

  

	 	(a)	Additional RREEF Clients may wish to invest in Holdco. 

  

	 	(b)	While it is proposed that RREEF will facilitate the investment of RREEF Clients in Holdco by procuring that DBAG sells down some or all of its Ausco Shares, the individual needs of
some RREEF Clients may require direct investment in Holdco, rather than investment through Ausco. If a RREEF Client requires that its investment in Holdco is direct, Ausco will wish to procure the selective buyback by Ausco of such number of
DBAG’s Ausco Shares as will be required to preserve the current percentage proportion of the other Ausco Shareholders indirect interest in Holdco. 

  
 Accordingly, each of the Ausco Shareholders unconditionally agrees to grant its consent, pursuant to section 257D of the
Corporations Act, and this agreement, to any selective buyback by Ausco of the Ausco Shares held by DBAG and CAM pursuant to schedule six and this clause 11.9. 
  

	11.10 	Consent to buyback of Holdco Shares: The Holdco Shareholders and the Ausco Shareholders acknowledge that: 

  

	 	(a)	When RCL sells down shares in Holdco pursuant to schedule six, new participants may wish to invest in Holdco by purchasing shares in Ausco rather than directly in Holdco.

  

	 	(b)	 If a new participant who is taking an interest in Holdco pursuant to a sell down by RCL pursuant to schedule six seeks to invest via Ausco, the parties will effect
such sell down arrangement either by way of RCL transferring shares in Holdco to Ausco, or by Holdco buying back shares held by RCL and issuing 

  

 24 

	 	 
further shares to Ausco to reflect the new proportions of RCL and the Ausco Shareholders’ interests in Holdco. 

  
 Accordingly, each of the Ausco Shareholders and each of the Holdco
Shareholders unconditionally agrees to grant its consent under the Corporations Act or Companies Act (as the case may be) and under this agreement, to any selective buyback and/or issue of shares required to effect the sell down of shares by RCL
pursuant to schedule six and this clause 11.10. 
  

	12.	WARRANTIES 

  

	12.1	Warranties of each party: Each party to this agreement warrants to each other party as follows: 

  

	 	(a)	It is not aware of any circumstance which might reasonably be expected materially and adversely to affect its entry into this agreement. 

  

	 	(b)	It has the legal right and power to enter into this agreement and to consummate the transactions contemplated under this agreement on and subject to the terms and conditions of this
agreement. 

  

	 	(c)	The execution, delivery and performance of this agreement by it has been duly and validly authorised and this agreement is a valid and binding agreement of it enforceable in
accordance with its terms. 

  

	 	(d)	This agreement will not conflict with, or result in a breach of, the terms, conditions or provisions of its constitutional documents or any instrument or agreement to which it is a
party or by which it may be bound, or which constitutes (with or without the passage of time, the giving of notice, or both) a default under any such instrument or agreement, or results in the acceleration of any indebtedness or the imposition of
any penalty or charge. 

  

	 	(e)	No further authorisation, consent or approval of any person is required as a condition to the validity of this agreement or to give effect to the transactions contemplated under
this agreement. 

  

	12.2	Related party warranty: Each of the Ausco Shareholders and RCL warrants and represents to Treeco that (except as notified in writing to CHH pursuant to the CHH SPA), to the
best of its knowledge, having made due inquiry, it is not, and will not at the date of Principal Completion be: 

  

	 	(a)	a “Related Party” of CHH, as defined under clause 9.2.3 of the Listing Rules of New Zealand Exchange Limited; or 

  

	 	(b)	(in relation to CHH) an entity identified in clauses 10.1.1 to 10.1.5 of the Listing Rules of Australian Stock Exchange Limited. 

  

	13.	COMPLIANCE WITH THIS AGREEMENT AND THE CONSTITUTION 

  

	13.1	Ausco Shareholders: Each Ausco Shareholder undertakes to the other Ausco Shareholders that it shall: 

  

	 	(a)	 take all practicable steps including, without limitation, the exercise of votes it directly or indirectly controls at meetings of the Ausco Board and Ausco
Shareholder meetings of Ausco to ensure that the terms of this agreement are complied with and to procure that the Ausco Board and Ausco complies with its 

  

 25 

	 	 
obligations and that it shall do all such other acts and things as may be necessary or desirable to implement this agreement; 

 

	 	(b)	comply fully and promptly with the provisions of the Ausco Constitution so that each and every provision of the Ausco Constitution (subject to clause 18.1) shall be enforceable by
the Ausco Shareholders as between themselves in whatever capacity. 

  

	13.2	Holdco Shareholders: Each Holdco Shareholder undertakes to the other Holdco Shareholders that it shall: 

  

	 	(a)	take all practicable steps including, without limitation, the exercise of votes it directly or indirectly controls at meetings of the Holdco Board and Holdco Shareholder meetings of
Holdco to ensure that the terms of this agreement are complied with and to procure that the Holdco Board and Holdco complies with its obligations and that it shall do all such other acts and things as may be necessary or desirable to implement this
agreement; 

  

	 	(b)	comply fully and promptly with the provisions of the Holdco Constitution so that each and every provision of the Holdco Constitution (subject to clause 18.1) shall be enforceable by
the Holdco Shareholders as between themselves in whatever capacity. 

  

	14.	DEFAULT IN RELATION TO HOLDCO 

  

	14.1	Procedure on Event of Default: If an Event of Default occurs in relation to a Holdco Shareholder (Defaulting Holdco Shareholder), the non defaulting
Shareholders (Non-Defaulting Holdco Shareholders) may (if the Non-Defaulting Holdco Shareholders agree unanimously) require that: 

  

	 	(a)	If: 

  

	 	(i)	the breach or failure is capable of remedy, until the breach or failure is remedied; or 

  

	 	(ii)	the breach or failure is not capable or remedy, pending completion of the action contemplated by clauses 14.1(b) or 14.1(c), 

  
 the voting rights of the Defaulting Holdco Shareholder are deemed suspended;

  

	 	(b)	the Defaulting Holdco Shareholder shall be deemed to have given a Sale Notice in accordance with clause 10.3 in relation to all of its Holdco Shares, at Fair Value (in which case
the Holdco Board shall be authorised to give all notices and take all actions required in relation to that Sale Notice); or 

  

	 	(c)	Holdco is liquidated. 

  

	14.2	Definition: An Event of Default occurs in respect of a Holdco Shareholder if: 

  

	 	(a)	that Holdco Shareholder commits any material breach of or fails to observe any of the material obligations under this agreement and does not remedy that breach or failure within 20
Business Days of receiving written notice from the Non-Defaulting Shareholders specifying the breach or failure and the consequences of failing to remedy the breach or failure; 

  

	 	(b)	that Holdco Shareholder ceases or threatens to cease to carry on all or substantially all of its business or operations; 

  

 26 

	 	(c)	an order is made, or a resolution is passed, for the dissolution of that Holdco Shareholder; 

  

	 	(d)	an encumbrancer takes possession or a liquidator, provisional liquidator, trustee, receiver, receiver and manager, inspector appointed under any companies or securities legislation,
or similar official, is appointed in respect of that Holdco Shareholder; 

  

	 	(e)	any step is taken to appoint or with a view to appointing a statutory manager (including the making of any recommendation in that regard by the Securities Commission) under the
Corporations (Investigation and Management) Act 1989 in respect of that Holdco Shareholder, or it is declared at risk pursuant to that Act; 

  

	 	(f)	a distress, attachment or other execution is levied or enforced upon or commenced against any of the material assets of that Holdco Shareholder and is not discharged or stayed
within 10 Business Days; 

  

	 	(g)	that Holdco Shareholder is unable to pay its debts when due, or is deemed unable to pay its debts under any law, or enters into dealings with any of its creditors with a view to
avoiding or in expectation of insolvency, or makes a general assignment or an arrangement or composition with or for the benefit of any of its creditors, or stops or threatens to stop payments generally; or 

  

	 	(h)	anything analogous, or having a substantially similar effect, to anything referred to in paragraphs (b) to (g) inclusive occurs in relation to that Holdco Shareholder under the laws
of a jurisdiction other than New Zealand. 

  

	14.3	Other remedies: Clause 14.1 is without prejudice to any other right, power or remedy under this agreement, at law, or otherwise, that any Holdco Shareholder has in respect of
a default by any other Holdco Shareholder. 

  

	15.	LIQUIDATION 

  

	15.1	Procedure on liquidation: If pursuant to any provision of this agreement Holdco is required to be liquidated, the Holdco Shareholders shall without delay take all necessary
steps to ensure that a special resolution of shareholders of Holdco is passed appointing as liquidator of Holdco a person agreed by the Holdco Shareholders, or failing agreement, chosen on the application of any Holdco Shareholder by the president
for the time being of the Institute of Chartered Accountants of New Zealand or his or her nominee. 

  

	16.	TAX ELECTIONS AND ESTABLISHMENT OF LOG TRADING COMPANY 

  

	16.1	Acknowledgement: The Holdco Shareholders acknowledge that either Holdco, Treeco or the Holdco Shareholders will establish a limited liability company for the purposes
of conducting log trading associated with the Forestry Assets, such company to be called Matariki Forests Trading Limited (MFT). The Holdco Shareholders acknowledge and agree that they may be required by Rayonier to subscribe pro rata for
shares in MFT at a nominal value, provided that RNZ may subscribe for shares in MFT in substitution for RCL. No MFT shareholder shall transfer all or any of its MFT shares without transferring a corresponding proportion of its Holdco Shares and Debt
Commitment in accordance with clause 10. The Holdco Shareholders acknowledge that it is the intention of Holdco that MFT be governed in accordance with schedule three. 

  

	16.2	US tax election: The parties to this agreement shall use all reasonable endeavours to ensure that Holdco and Treeco elect to “check the box” for the purpose
of any US tax election so that Holdco and Treeco are treated as partnerships for the purposes of US taxation. 

  

 27 

	17.	NOTICES TO CHH AND RNZ 

  

	17.1	Notices and approvals: No party to this agreement will purport to give any notice (including confirmation of satisfaction of conditionality), or exercise any approval,
discretion or right of waiver, pursuant to the CHH SPA or the RNZ SPA (other than RNZ in its capacity as seller of the RNZ Assets), without the prior written approval of Rayonier and RREEF. This clause is intended to confer a benefit upon Rayonier
which may be enforced by Rayonier. 

  

	18.	GENERAL 

  

	18.1	Conflicting provisions: If there is any conflict or inconsistency between the provisions of this agreement and the Ausco Constitution, the Holdco Constitution or the Treeco
Constitution, as the case may be, this agreement shall prevail. 

  

	18.2	Termination: This agreement may be terminated upon the written agreement of all parties. 

  

	18.3	Payments free and clear: All amounts payable by one party to another pursuant to this agreement shall be paid free and clear of and, except to the extent required by
law, without any deduction or withholding on account of any tax. If any party is required by law to make any deduction or withholding from any amount it is required to pay pursuant to this agreement, then that party shall increase the relevant
payment to ensure that the recipient receives a net amount equal to the amount it would have received had no such deduction or withholding been made. 

  

	18.4	Confidentiality: Each party shall at all times keep confidential, treat as privileged, and not directly or indirectly make any disclosure or use, or allow any disclosure or
use to be made, of any provision of this agreement or of any information relating to any provision, or the subject matter, of this agreement, or any information directly or indirectly obtained from another party under or in connection with this
agreement, except to the extent: 

  

	 	(a)	required by law; 

  

	 	(b)	to satisfy the reporting requirements of any related company or other member of its group; 

  

	 	(c)	necessary to satisfy the requirements of any applicable stock exchange; or 

  

	 	(d)	necessary to obtain the benefit of, or to carry out obligations under, this agreement; 

  

	 	(e)	that the information is or becomes available in the public domain without breach by a party of its confidentiality obligations under this clause or at law; or

  

	 	(f)	that disclosure is made to a proposed third party purchaser of Holdco Shares or the Forestry Assets, which has entered into an appropriate confidentiality agreement to the
satisfaction of Holdco. 

  

	18.5	Liability: For the avoidance of doubt, the liability of each party to this agreement to any other party is limited (save as required by law) to the extent expressly provided
for in this agreement. 

  

 28 

	18.6	Variation: Subject to clause 5.7 of schedule six, no variation of this agreement shall be valid unless it is in writing and signed by or on behalf of each of the parties
hereto, provided as follows: 

  

	 	(a)	The Ausco Shareholders alone may, if a 80% majority of Ausco Shareholders agree, amend the provisions of schedule two, provided that such amendment does not impose an obligation on
any party save for Ausco, an Ausco Shareholder or the Ausco Board. If schedule two is amended pursuant to this clause, the amendment shall be deemed effective upon Ausco delivering the amended schedule to all parties to this agreement.

  

	 	(b)	The Holdco Shareholders alone may, if the Holdco Shareholders agree unanimously, amend the provisions of schedule three, provided that such amendment does not impose an obligation
on any party save for Holdco, a Holdco Shareholder or the Holdco Board. If schedule three is amended pursuant to this clause, the amendment shall be deemed effective upon Holdco delivering the amended schedule to all parties to this agreement.

  

	18.7	Requirements of Trustee: To the extent that any Trustee has any legal requirements, either by way of statute or a deed of trust, the parties to this agreement agree to
use reasonable endeavours to accommodate such legal requirements. 

  

	18.8	No waiver: The failure to exercise or delay in exercising a right or remedy under this agreement shall not constitute a waiver of the right or remedy or a waiver of any other
rights or remedies and no single or partial exercise of any right or remedy under this agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy. 

  

	18.9	Rights and remedies cumulative: The rights and remedies contained in this agreement are cumulative and not exclusive of any rights or remedies provided by law.

  

	18.10	Assignment: No party shall assign or transfer or purport to assign or transfer any of its rights or obligations under this agreement, except as expressly permitted herein.

  

	18.11	Full agreement: This agreement, and the provisions of clause 7 and 8 of the Memorandum of Understanding, contain a final and complete integration of all prior expressions by
the parties with respect to the subject matter of this agreement and constitute the entire agreement between the parties with respect to the subject matter of this agreement, superseding all prior oral or written understandings. For the avoidance of
doubt, the LC Fee shall be a third party bid cost for the purposes of clause 7 and 8 of the Memorandum of Understanding. 

  

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

  

	18.13	Counterparts: This agreement may be executed in any number of counterparts each of which when executed and delivered (including by way of facsimile) shall be an original, but
all the counterparts together shall constitute one and the same instrument. 

  

	18.14	Notices: Each notice, agreement and other communication (each a communication) to be given, delivered or made under this agreement is to be in writing but may be sent
by personal delivery, post (by airmail if to another country) or facsimile. Each communication is to be sent to the address of the relevant party set out below or to any other address from time to time designated for that purpose by at least five
working days’ prior notice to the other parties. The initial address details of the parties are set out in schedule four. 

  

 31 

	18.15	Service: A communication under this agreement will only be effective: 

  

	 	(a)	in the case of personal delivery, when delivered; 

  

	 	(b)	if posted locally or delivered to a document exchange, 3 Business Days in the place of receipt, after posting or delivery; 

  

	 	(c)	if posted or delivered overseas, 10 Business Days in the place of receipt, after posting by airmail; 

  

	 	(d)	if made by facsimile, upon production of a transmission report by the machine from which the facsimile was sent which indicates that the correct number of pages was sent to the
facsimile number of the recipient designated for the purpose of this agreement, 

  
 provided that any communication received or deemed received after 5pm or on a day which is not a Business Day in the place to which it is delivered, posted or sent shall be deemed not to have been received until the
next Business Day in that place. 
  

	18.16	Governing law: This agreement shall be governed by and construed and interpreted in accordance with the laws of New Zealand and each party submits to the exclusive
jurisdiction of the courts of New Zealand. Each party irrevocably waives any objection which it might at any time have to the courts of New Zealand being nominated as the forum to hear and determine any proceedings and to settle any disputes and
agrees not to claim that the courts of New Zealand are not a convenient or appropriate forum. 

  

 30 

  
 EXECUTION: 
  

					
	SIGNED by SAS TRUSTEE CORPORATION	 	 	 	 
	by its attorneys in the presence of:	 	 	 	 
			
	  	 	 	 	  
	 Signature of attorney
	 	 	 	 Signature of attorney

			
	  	 	 	 	  
	 Name of attorney
	 	 	 	 Name of attorney

			
	  	 	 	 	  
	 Signature of witness
	 	 	 	 
			
	  	 	 	 	  
	 Name of witness
	 	 	 	 
			
	  	 	 	 	  
	 Occupation
	 	 	 	 
			
	  	 	 	 	  
	 City/town of residence
	 	 	 	 

  

					
	SIGNED by DEUTSCHE BANK AG (SYDNEY BRANCH) by its attorneys in the presence of:	 	 	 	 
			
	  	 	 	 	  
	 Signature of attorney
	 	 	 	 Signature of attorney

			
	  	 	 	 	  
	 Name of attorney
	 	 	 	 Name of attorney

			
	  	 	 	 	  
	 Signature of witness
	 	 	 	 
			
	  	 	 	 	  
	 Name of witness
	 	 	 	 
			
	  	 	 	 	  
	 Occupation
	 	 	 	 
			
	  	 	 	 	  
	 City/town of residence
	 	 	 	 

  

 31 

					
	SIGNED by DEUTSCHE ASSET MANAGEMENT (AUSTRALIA) LIMITED by its attorneys in the presence of:	 	 	 	 
			
	  	 	 	 	  
	 Signature of attorney
	 	 	 	 Signature of attorney

			
	  	 	 	 	  
	 Name of attorney
	 	 	 	 Name of attorney

			
	  	 	 	 	  
	 Signature of witness
	 	 	 	 
			
	  	 	 	 	  
	 Name of witness
	 	 	 	 
			
	  	 	 	 	  
	 Occupation
	 	 	 	 
			
	  	 	 	 	  
	 City/town of residence
	 	 	 	 

  

					
	SIGNED by RAYONIER CANTERBURY LLC by:	 	 	 	 
			
	  	 	 	 	  
	 Signature of officer
	 	 	 	 Signature of officerdi

			
	  	 	 	 	  
	 Name of officer
	 	 	 	 Name of officer

  

					
	SIGNED by RAYONIER NEW ZEALAND LIMITED by:	 	 	 	 
			
	  	 	 	 	  
	 Signature of director
	 	 	 	 Signature of director

			
	  	 	 	 	  
	 Name of Director
	 	 	 	 Name of Director

  

 32 

					
	SIGNED by CAMERON & COMPANY LIMITED by its attorney in the presence of:	 	 	 	 
			
	  	 	 	 	  
	 	 	 	 	 Signature of attorney

			
	  	 	 	 	  
	 	 	 	 	 Name of attorney

			
	  	 	 	 	  
	 Signature of witness
	 	 	 	 
			
	  	 	 	 	  
	 Name of witness
	 	 	 	 
			
	  	 	 	 	  
	 Occupation
	 	 	 	 
			
	  	 	 	 	  
	 City/town of residence
	 	 	 	 

  

					
	SIGNED by MATARIKI FORESTS AUSTRALIA PTY LIMITED by:	 	 	 	 
			
	  	 	 	 	  
	 	 	 	 	 Signature of director

			
	  	 	 	 	  
	 	 	 	 	 Name of director

			
	  	 	 	 	  
	 Signature of witness
	 	 	 	 
			
	  	 	 	 	  
	 Name of witness
	 	 	 	 
			
	  	 	 	 	  
	 Occupation
	 	 	 	 
			
	  	 	 	 	  
	 City/town of residence
	 	 	 	 

  

					
	SIGNED by MATARIKI FORESTRY GROUP by:	 	 	 	 
			
	  	 	 	 	  
	 Signature of director
	 	 	 	 Signature of director

			
	  	 	 	 	  
	 Name of Director
	 	 	 	 Name of Director

  

 33 

					
	SIGNED by MATARIKI FORESTS by:	 	 	 	 
			
	  	 	 	 	  
	 Signature of director
	 	 	 	 Signature of director

			
	  	 	 	 	  
	 Name of Director
	 	 	 	 Name of Director

  

 34 

  
 SCHEDULE ONE

  
 SUBSCRIPTION DETAILS 
  
 PART A 
  
 AUSCO 
  

				
	 Ausco Subscribers

	  	Percentage of Ausco Subscription Shares

	 
	 DBAG
	  	41.65	%
	 RCL
	  	16.21	%
	 STC
	  	41.65	%
	 CAM
	  	0.49	%

  
 PART B 
  
 HOLDCO 
  

				
	 Holdco Subscribers

	  	Percentage of Holdco Subscription Shares

	 
	 AUSCO (for Holdco Class A Shares)
	  	60	%
	 RCL (for Holdco Class B Shares)
	  	40	%

  
 PART C 
  
 TREECO 
  

				
	 Treeco Subscriber

	  	Percentage Treeco Subscription Shares

	 
	 Holdco
	  	100	%

  

 35 

  
 SCHEDULE TWO

  
 GOVERNANCE OF AUSCO 
  

	1.	INTERPRETATION 

  

	1.1	Definitions: For the purpose of this schedule: 

  
 Board means the board of directors of Ausco. 
  
 Company means Ausco. 
  
 Directors means the directors of Ausco. 
  
 Shares means ordinary shares in Ausco. 
  
 Shareholder means a shareholder of Ausco. 
  

	2.	APPLICATION OF THIS SCHEDULE: 

  

	2.1	The provisions contained in this schedule shall apply from the Subscription Date. Prior to this, the following provisions shall apply in relation to the Company:

  

	 	(a)	The sole director shall be Martin Smith. 

  

	 	(b)	The Shareholder agrees that it shall not remove Martin Smith. 

  

	 	(c)	If for any reason Martin Smith ceases to be a director, RREEF shall nominate a replacement director, and the Shareholder agrees to appoint that nominated party.

  

	 	(d)	No board resolution shall be passed without the consent of the Shareholder. 

  

	3.	COMPOSITION AND PROCEEDINGS OF THE BOARD 

  

	3.1	Number of directors: Each Shareholder shall be entitled to appoint one Director, provided that Shareholder’s holding in the Company does not fall below 20%. The
maximum number of Directors shall be three, unless the Shareholders unanimously agree otherwise. 

  

	3.2	Removal of Directors appointed: A director may only be removed by its appointing Shareholder. 

  

	3.3	Board resolutions: Except as provided in this agreement, resolutions of the Board shall be deemed to be passed if approved by a majority of Directors voting thereon.

  

	3.4	Quorum: A quorum of any meeting of the Board must include at least two directors. 

  

	3.5	Adjournment: If within 30 minutes after the time appointed for a meeting of the Board a quorum is not present the meeting is adjourned for 14 days to the same time and place
unless otherwise agreed by all Directors. At least seven days notice of the adjourned meeting must be given, and the notice must include a statement that it is given pursuant to this clause. If at the adjourned meeting a quorum is not present within
30 minutes after the time appointed for the meeting the Director or Directors present are a quorum. 

  

	3.6	Directors’ voting rights: At a meeting of the Board, the Directors shall be entitled to exercise a percentage of the votes which may be cast at that meeting equal
to the percentage of the Shares in the Company held by that Director’s appointing Shareholder. 

  

 36 

	3.7	Interested Directors: Except as provided in this agreement, a Director who has a material personal interest in a transaction entered into or to be entered into by the Company
may not vote on any matter related to the transaction, but shall be included in the quorum of Directors considering the transaction. 

  

	3.8	Regularity of Board Meetings: Meetings of the Directors shall be held at regular intervals as shall be determined by the Board at such place or places as the Board may from
time to time determine. 

  

	3.9	Telephone meetings: Meetings of the Board may be held with one or more Directors participating by telephone. 

  

	3.10	Chairman: The Board shall appoint a chairman. A new chairman shall be elected on an annual basis. The chairman shall not have a casting vote. 

  

	3.11	Responsibility for management: The Board shall be responsible for the overall guidance and direction of the Company. Subject to complying with their duties as directors, when
exercising powers or performing duties, each Director may have regard to the interests of his/her appointing Shareholder. 

  

	3.12	Board responsible for all matters: Save to the extent that Shareholder approval is required by law, all decisions relating to the Company shall be made by the Board, by a
simple majority. 

  

	3.13	Exercise of votes at Holdco level: In voting the Company’s Holdco Shares in relation to a matter, the Board shall ensure that vote reflects proportionately the
votes of the Directors on that matter. By way of example (without limitation), if two Directors (appointed by Shareholders holding together 70% of the Shares in the Company) vote in favour of the matter at Board level, and the other Director
(appointed by the Shareholder holding the remaining 30% of the Shares in the Company) votes against, the Board shall ensure that 70% of the Company’s Holdco Shares are voted in favour of the matter, and 30% are voted against.

  

	3.14	Indemnity on removal of Director: Any Shareholder removing a director shall be responsible for and agrees with the Company and the other Shareholders to indemnify the other
Shareholders and the Company against all losses, liabilities and costs which the other Shareholders or the Company may incur arising out of, or in connection with, any claim by the director for wrongful or unfair dismissal or redundancy or other
compensation arising out of the director’s removal or loss of office. 

  

	4.	DISTRIBUTIONS 

  

	4.1	Profits to be distributed: Subject to the requirements of the Corporations Act, the full amount of the Company’s profits available for distribution shall be distributed
on a quarterly basis or as and when the Board determines fit. 

  

	5.	ENFORCEMENT OF COMPANY’S RIGHTS 

  

	5.1	Actions against Shareholders: Any right of action which the Company may have in respect of breach or alleged breach of any agreement between the Company and a Shareholder or
related company of a Shareholder shall be prosecuted by the Directors of the Company appointed by the Shareholder(s) which are not, or whose related company is not, responsible for the breach. Those Directors shall have full authority on behalf of
the Company to negotiate, litigate and settle any claim arising out of the breach or exercise any right of termination arising out of the breach and the Shareholders shall take all steps within their power to give effect to the provisions of this
clause. 

  

 37 

	6.	RECORDS AND FINANCIAL INFORMATION 

  

	6.1	Financial year: Each financial year of the Company shall end on 31 December unless otherwise determined by the Board. 

  

	6.2	Books and records: The Board shall procure the Company to maintain accurate and complete books, records, accounts, statements and documents of the operation business and
financial affairs of the Company, all of which shall be available to the Board for the purpose of inspection and making copies and taking extracts. 

  

	6.3	Financial statements: The Shareholders shall procure that the Board arranges for the preparation of audited annual financial statements. These financial statements,
accompanied by the report of the Auditors thereon, shall be prepared and delivered to each of the Shareholders as soon as is practicable after the end of each financial year of the Company, and in any case, within the time frame required by the
Corporations Act. 

  

	6.4	Additional financial information: The Company will prepare and deliver to each of the Shareholders such further or other reports and statements concerning the operation,
business and financial affairs of the Company as is required by the Corporations Act, or as the Board may from time to time consider necessary or advisable. 

  

 38 

  
 SCHEDULE THREE

  
 GOVERNANCE OF HOLDCO AND ITS SUBSIDIARIES

  

	1.	INTERPRETATION 

  

	1.1	Definitions: For the purpose of this schedule: 

  
 Board means the board of directors of Holdco, Treeco, or any other subsidiary of Holdco, as the case may be. 
  
 Company means Holdco or, Treeco, or any other subsidiary of Holdco,
as the case may be. 
  
 Directors means the directors of
Holdco, Treeco, or any other subsidiary of Holdco, as the case may be. 
  
 Shares means ordinary shares (of whatever Class) in Holdco, Treeco, or any other subsidiary of Holdco, as the case may be. 
  
 Shareholder means a shareholder of Holdco, Treeco or any other subsidiary of Holdco, as the case may be. 
  

	2.	COMPOSITION AND PROCEEDINGS OF THE BOARD 

  

	2.1	Number of directors: The number of directors of the Company shall be five. The directors shall be appointed as follows: 

  

	 	(a)	a majority of the Holdco Class A Shareholders shall be entitled to appoint three directors (Holdco Class A Directors); and 

  

	 	(b)	a majority of the Holdco Class B Shareholders shall be entitled to appoint two directors (Holdco Class B Directors). 

  

	2.2	Directors appointed: The Holdco Shareholders, Holdco and Treeco acknowledge that, the initial directors of the Company (being Holdco Class B Directors) are Timothy Brannon
and Paul Nicholls. The Holdco Class A Shareholders shall appoint the initial Holdco Class A Directors on the Subscription Date. 

  

	2.3	Board resolutions: Except as provided in this agreement, resolutions of the Board shall be deemed to be passed if approved by a majority of the votes of Directors voting
thereon. 

  

	2.4	Quorum: A quorum of any meeting of the Board must include at least one Holdco Class A Director and one Holdco Class B Director. 

  

	2.5	Adjournment: If within 30 minutes after the time appointed for a meeting of the Board a quorum is not present the meeting is adjourned for 14 days to the same time and place
unless otherwise agreed by all Directors. At least seven days notice of the adjourned meeting must be given, and the notice must include a statement that it is given pursuant to this clause. If at the adjourned meeting a quorum is not present within
30 minutes after the time appointed for the meeting the Director or Directors present are a quorum. 

  

	2.6	Directors’ voting rights: At a meeting of the Board, the Directors appointed by each Class, shall be entitled to exercise a percentage of the votes which may be
cast at that meeting equal to the percentage of the Shares held by the holders of the Shares in that Class. 

  

 39 

	2.7	Interested Directors: Except as provided in this agreement, a Director who is Interested (as defined in the Companies Act) in a transaction entered into or to be entered into
by the Company may vote on any matter related to the transaction, and shall be included in the quorum of Directors considering the transaction. 

  

	2.8	Regularity of Board Meetings: Meetings of the Directors shall be held at regular intervals as shall be determined by the Board but not less frequently than at two monthly
intervals at such place or places as the Board may from time to time determine, provided that for the first twelve months following the issue date Board meetings shall be held on a monthly basis. 

  

	2.9	Telephone meetings: Meetings of the Board may be held with one or more Directors participating by telephone. 

  

	2.10	Chairman: The chairman of the Board shall alternate annually between the Holdco Class A Directors and the Holdco Class B Directors. The chairman shall not have a casting
vote. 

  

	2.11	Responsibility for management: The Board shall be responsible for the overall guidance and direction of the Company. When exercising powers or performing duties, each
Director may act in what the director believes is in the best interests of his/her appointing Shareholder, even though it may not be in the best interests of the Company. 

  

	2.12	Indemnity on removal of Director: Any Holdco Shareholder removing a director shall be responsible for and agrees with the Company and the other Holdco Shareholders to
indemnify the other Shareholders and the Company against all losses, liabilities and costs which the other Shareholders or the Company may incur arising out of, or in connection with, any claim by the director for wrongful or unfair dismissal or
redundancy or other compensation arising out of the director’s removal or loss of office. 

  

	2.13	Matters requiring supermajority consent: Subject to clauses 2.14, 2.15 and 2.16 of this schedule three) any decision relating to any of the following matters of the Company
shall require the consent of a supermajority of the Board, being 80% of the votes to be cast by the Board: 

  

	 	(a)	the issue by the Company of any debenture or loan stock (whether secured or unsecured) or the creation of any mortgage, security interest, charge, lien, encumbrance or other third
party right over any of the Company’s assets or the giving by the Company of any guarantee or indemnity to or becoming surety for any third party; 

  

	 	(b)	any change in the capital structure of the Company, division, subdivision or consolidation of Shares or the creation of any options to subscribe for or acquire Shares; or;

  

	 	(c)	any change to the distribution policy set out in the agreement or any other distribution of the Company’s assets; 

  

	 	(d)	approval or amendment of annual operating plans or budgets or any activity outside the scope of the annual budget of the Company; 

  

	 	(e)	any change in the nature of the Company’s business; 

  

	 	(f)	the making of any loan by the Company or the creation, renewal or extension of any borrowings by the Company (other than normal trade credit); 

  

	 	(g)	the acquisition or construction or lease of items of tangible or intangible property; 

  

 40 

	 	(h)	any transaction by the Company with any Shareholder or any related Company of a Shareholder; 

  

	 	(i)	any obligation of the Company which could involve the payment by it, in cash or otherwise, of amounts in excess of amounts approved under the management agreement;

  

	 	(j)	the assignment, sale or other disposal in any 12 month period of any asset or related group of assets (other than stumpage and logs) of the Company having a net book value in
aggregate of NZD$1,000,000 or more; 

  

	 	(k)	any change in the accounting policies or the Company’s auditors, bankers, accounting reference date or bank mandates; 

  

	 	(l)	the granting or entering into any licence, agreement or arrangement concerning any part of the name of the Company or any of its intellectual property rights;

  

	 	(m)	the making, granting or allowing of any claim, disclaimer, surrender, election or consent for taxation purposes; 

  

	 	(n)	appointing any committee of the board or delegating any of the powers of the board to any committee; or 

  

	 	(o)	termination of the Management Agreement, other than for: 

  

	 	(i)	material breach in accordance with its terms; 

  

	 	(ii)	failure by RNZ to obtain approval for an assignment of the Management Agreement by RNZ; or 

  

	 	(iii)	pursuant to the Holdco’s automatic termination rights contained in clause 14.2 of the Management Agreement). 

  

	2.14	Management Agreement: Any decision relating to termination of the Management Agreement for: 

  

	 	(a)	material breach in accordance with its terms; 

  

	 	(b)	failure by RNZ to obtain approval for an assignment of the Management Agreement by RNZ or 

  

	 	(c)	pursuant to Holdco’s automatic termination rights contained in clause 14.2 of the Management Agreement, 

  
 including any decision to bring proceedings in respect of that material
breach or failure, or decision as to the conduct of such proceedings, shall require the consent of all Holdco Class A Directors. For the avoidance of doubt, the Holdco Class B Directors shall not be entitled to vote on any such decision. 

 

	2.15	Proceedings if Company is in financial distress: If an “Event of Default” (as defined in the Senior Facility Agreement) or “Event of Review”
(as defined only in paragraphs (a) and (b) of the definition in clause 19.3 of the Senior Facility Agreement), occurs, the Board shall be entitled to resolve, by a simple majority, to raise equity (on a pro-rata basis) amongst shareholders and
classes of shares already on issue, or to incur further debt on behalf of the Company, provided that the Board does not seek to issue, pursuant to this clause, an amount of equity that would, if RCL did not take up its entitlement to such equity,
dilute RCL’s Relevant Proportion to below 30%.  

  

 41 

	2.16	Shareholder approval: The following matters (which for the avoidance of doubt exclude any issue of securities) must be approved by 75% of Shareholders following
approval by a simple majority of the Board: 

  

	 	(a)	The acquisition of, or an agreement to acquire, whether contingent or not, assets the value of which is more than 20% of the value of the Company’s assets before the
acquisition; or 

  

	 	(b)	The disposition of, or an agreement to dispose of, whether contingent or not, assets the value of which is more than 20% of the value of the Company’s assets before the
disposition; or 

  

	 	(c)	A transaction that has or is likely to have the effect of the Company acquiring rights or interests or incurring obligations or liabilities, including contingent liabilities, the
value of which is more than 20% of the value of the Company’s assets before the transaction; or 

  

	 	(d)	any alteration to, or revocation of, the constitution; or 

  

	 	(e)	any arrangement for any joint venture or partnership; or 

  

	 	(f)	the merger, amalgamation, liquidation or winding up of the Company; or 

  

	 	(g)	any acquisition by the Company of any part of the issued share capital or of the assets and undertaking of another Company. 

  

	3.	DISTRIBUTIONS 

  

	3.1	Profits to be distributed: The full amount of the Company’s profits available for distribution (within the meaning of section 2 of the Companies Act) in respect of each
financial year during the term of this agreement after the provision of working capital and making such transfers to reserves and provisions as in the opinion of the Board ought reasonably to be made, shall be distributed by the Company to the
Shareholders by way of distributions on a quarterly basis, or as and when the Board determines fit. 

  

	4.	ENFORCEMENT OF COMPANY’S RIGHTS 

  

	4.1	Actions against Shareholders: Any right of action which the Company may have in respect of breach or alleged breach of any agreement between the Company and a Shareholder or
related company of a Shareholder (including, without limitation, the Management Agreement and the RNZ SPA) shall be prosecuted by the directors of the Company appointed by the Shareholder(s) which are not, or whose related company is not,
responsible for the breach. Those directors shall have full authority on behalf of the Company to negotiate, litigate and settle any claim arising out of the breach or exercise any right of termination arising out of the breach and the Shareholders
shall take all steps within their power to give effect to the provisions of this clause. 

  

	5.	RECORDS AND FINANCIAL INFORMATION 

  

	5.1	Financial year: Each financial year of the Company shall end on 31 December unless otherwise determined by the Board. 

  

	5.2	Books and records: The Board shall procure the Company to maintain accurate and complete books, records, accounts, statements and documents of the operation business and
financial affairs of the Company, all of which shall be available to the Board for the purpose of inspection and making copies and taking extracts. 

  

 42 

	5.3	Financial statements: The Shareholders shall procure that the Board will prepare and deliver to each of the Shareholders financial statements in respect of the Company
consisting of a balance sheet, statement of cash flows and statement of profit and loss, together with such other statements as are advisable, prepared in accordance with generally accepted accounting principles, as follows:

  

	 	(a)	unaudited monthly financial statements (which shall include a detailed balance sheet, a detailed statements of profit and loss, and cashflow statements, with comparison to budget
and forecast) shall be prepared and delivered to each of the Shareholders within 15 days after the end of each month; and 

  

	 	(b)	audited annual financial statements, accompanied by the report of the Auditors thereon, shall be prepared and delivered to each of the Shareholders within three months after the end
of each financial year of the Company; 

  
 provided
that all or any of the above requirements may, to the extent permitted byapplicable law, be waived by unanimous resolution of the Board. 
  

	5.4	Additional financial information: The Shareholders shall procure that the Company will prepare and deliver to each of the Shareholders such further or other reports and
statements concerning the operation, business and financial affairs of the Company as the Board may from time to time consider necessary or advisable, it being the intent of the Shareholders that each of them shall be kept fully and regularly
informed regarding the Company. 

  

 43 

  
 SCHEDULE FOUR

  
 ADDRESS DETAILS OF THE PARTIES 
  
 SAS TRUSTEE CORPORATION 
  

			
	Address:	  	 C/- RREEF
 Level 21, 83 Clarence Street
 PO Box N127 Grosvenor Place
 Sydney, NSW, 1220
 Australia

	Attention:	  	Martin Smith
	Facsimile:	  	+612 9249 9795
	Email:	  	martin.smith@db.com

  
 DEUTSCHE BANK AG (SYDNEY BRANCH)

  

			
	Address:	  	 C/- RREEF
 Level 21, 83 Clarence Street
 PO Box N127 Grosvenor Place
 Sydney, NSW, 1220
 Australia

	Attention:	  	Richard Hedley
	Facsimile:	  	+612 9249 9795
	Email:	  	richard.hedley@db.com

  
 DEUTSCHE ASSET MANAGEMENT
(AUSTRALIA) LIMITED 
  

			
	Address:	  	 C/- RREEF
 Level 21, 83 Clarence Street
 PO Box N127 Grosvenor Place
 Sydney, NSW, 1220
 Australia

	Attention:	  	Martin Smith
	Facsimile:	  	+612 9249 9795
	Email:	  	martin.smith@db.com

  
 CAMERON & COMPANY LIMITED

  

			
	Address:	  	 Level 16
 Vero Centre
 48 Shortland Street

	Attention:	  	Chris Simcock
	Facsimile:	  	+649 912 8591
	Email:	  	chris.simcock@cam.co.nz

  

 44 

 RAYONIER CANTERBURY LLC 
  

			
	Address:	  	 C/- RNZ
 Level 5
 Symonds Centre
 49 Symonds Street
 Auckland

	Attention:	  	The General Manager
	Facsimile:	  	+64 9 302 2318
	Email:	  	paul.nicholls@rayonier.com

  
 RAYONIER NEW ZEALAND LIMITED

  

			
	Address:	  	 C/- RNZ
 Level 5
 Symonds Centre
 49 Symonds Street
 Auckland

	Attention:	  	The General Manager
	Facsimile:	  	+64 9 302 2318
	Email:	  	paul.nicholls@rayonier.com

  
 MATARIKI FORESTS AUSTRALIA PTY
LIMITED 
  

			
	Address:	  	 C/- RREEF
 Level 21, 83 Clarence Street
 PO Box N127 Grosvenor Place
 Sydney, NSW, 1220
 Australia

	Attention:	  	Martin Smith
	Facsimile:	  	+612 9249 9795
	Email:	  	martin.smith@db.com

  
 MATARIKI FORESTRY GROUP

  

					
	Address:	  	C/- RNZ	  	C/- RREEF
	 	  	Level 5	  	Level 21, 83 Clarence Street
	 	  	Symonds Centre	  	PO Box N127 Grosvenor Place
	 	  	49 Symonds Street	  	Sydney, NSW, 1220
	 	  	Auckland	  	Australia
	Attention:	  	The General Manager	  	Martin Smith
	Facsimile:	  	+64 9 302 2318	  	+612 9249 9795
	Email:	  	paul.nicholls@rayonier.com	  	martin.smith@db.com

  

 45 

 MATARIKI FORESTS 
  

					
	Address:	  	C/- RNZ	  	C/- RREEF
	 	  	Level 5	  	Level 21, 83 Clarence Street
	 	  	Symonds Centre	  	PO Box N127 Grosvenor Place
	 	  	49 Symonds Street	  	Sydney, NSW, 1220
	 	  	Auckland	  	Australia
	Attention:	  	The General Manager	  	Martin Smith
	Facsimile:	  	+64 9 302 2318	  	+612 9249 9795
	Email:	  	paul.nicholls@rayonier.com	  	martin.smith@db.com

  

 46 

  
 SCHEDULE FIVE

  
 FORM OF ACCESSION DEED 
  
 DEED dated 
  

					
	PARTIES	  	[            ]	  	(Transferor)
	 	  	[            ]	  	(Transferee)

  
 INTRODUCTION 
  

	(A)	The Transferor is a party to the Master Shareholder Agreement in relation to [Ausco], Matariki Forestry Group and Matariki Forests dated
[    ](Shareholder Agreement). 

  

	(B)	The Transferor wishes to transfer to the Transferee [    ] shares in [Ausco / Holdco] (Shares). 

  

	(C)	Under clause 11.2 of the Shareholder Agreement the Transferee is required to execute this deed. 

  
 INTERPRETATION 
  
 In this deed, unless the context otherwise requires, terms defined in the Shareholder Agreement shall have the same meaning in this deed. 
  
 OPERATIVE PROVISIONS 
  

	1.	With effect from the date of this deed: 

  

	 	(a)	The Transferee becomes a .party to the
Shareholder Agreement as if it had been named as an [Ausco Shareholder / Holdco Shareholder] in the Shareholder Agreement and had executed it. 

  

	 	(b)	The Transferor transfers a corresponding proportion of its Debt Commitment, in accordance with clause 10.6 of the Investor Loan Facility. 

  

	2.	If the transfer contemplated by this deed requires approval under clauses 10.9 or 11.4 of the Shareholder Agreement, the Transferor represents and warrants to each of the
Transferee, Ausco and Holdco that it has obtained the consent of RCL as required by those clauses. 

  

	3.	The Transferee assumes all of the obligations of the Transferor under the Shareholder Agreement, however without limiting clause 11.7 of the Shareholder Agreement the Transferor is
not released from any liability to the remaining Holdco Shareholders and Ausco Shareholders existing as at the date of this deed and relating to the period prior to the date of transfer of the Shares (Remaining Shareholders).

  

	4.	The parties acknowledge that the matters agreed by them in this deed are for the benefit of, and may be relied on by, the Remaining Shareholders. 

  

 47 

	5.	Each of the Transferor and the Transferee represents and warrants to each of Ausco and Holdco that the Transferor will not be in breach of clause 10 or 11 of the Shareholder
Agreement following transfer of the Shares. 

  

	6.	The provisions of clauses 2 and 5 are for the benefit of, and are intended to be enforceable by, each of Ausco and Holdco under the Contracts (Privity) Act 1982.

  

	7.	This deed shall be governed by, and construed in accordance with, the laws of New Zealand, and the parties hereby submit to the exclusive jurisdiction of the courts of New Zealand.

  
 SIGNED AS A DEED 
  

									
	 	 	SIGNED by [TRANSFEROR] by:	 	 	 	 	 	 
					
	  	 	  	 	 	 	 	 	  
	 	 	 Signature of Director
	 	 	 	 	 	 Signature of Director

					
	  	 	  	 	 	 	 	 	  
	 	 	 Name of Director
	 	 	 	 	 	Name of Director
					
	 	 	SIGNED by [TRANSFEREE] by:	 	 	 	 	 	 
					
	  	 	  	 	 	 	 	 	  
	 	 	 Signature of Director
	 	 	 	 	 	Signature of Director
					
	  	 	  	 	 	 	 	 	  
	 	 	 Name of Director
	 	 	 	 	 	Name of Director

  

 48 

  
 SCHEDULE SIX

  
 UNDERWRITING ARRANGEMENTS 
  

	1.	DEFINITIONS 

  

	1.1	For the purposes of this schedule: 

  
 CAM Underwritten Obligations means: 
  

	 	(a)	CAM’s obligations to subscribe for Ausco Shares pursuant to clause 2.1 to 2.5 of this agreement and CAM’s Debt Commitment; and 

  

	 	(b)	following a Transfer of such obligations, the obligation to subscribe for Ausco Shares and CAMS’s Debt Commitment so remaining. 

  
 DBAG Additional Underwritten Obligations means: 
  

	 	(a)	DBAG’s Total Underwritten Obligations less DBAG’s Original Underwritten Obligations; and 

  

	 	(b)	following any Transfer of such obligations, the DBAG Additional Underwritten Obligations so remaining. 

  
 DBAG Original Underwritten Obligations means: 
  

	 	(a)	DBAG’s obligation to subscribe for Ausco Shares and advance its Debt Commitment in an aggregate amount of not more than the Australian dollar equivalent of 45,000,000 Euros;
and 

  

	 	(b)	following any Transfer of such obligations, the DBAG Original Underwritten Obligations so remaining. 

  
 DBAG Total Underwritten Obligations means: 
  

	 	(a)	DBAG’s obligation to subscribe for Ausco Shares pursuant to clauses 2.1 to 2.5 of this agreement and DBAG’s Debt Commitment; and 

  

	 	(b)	following any Transfer of such obligations, such obligation to subscribe for Ausco Shares and DBAG’s Debt Commitment so remaining. 

  
 PSS means Public Sector Superannuation Scheme. 
  
 RCL Underwritten Obligations means: 
  

	 	(a)	at any time prior to a Transfer of RCL Underwritten Obligations, RCL’s obligation to subscribe for Ausco Shares pursuant to clauses 2.1 to 2.5 of this agreement and 19.55% of
RCL’s Debt Commitment; and 

  

	 	(b)	following any Transfer of RCL Underwritten Obligations, such obligation to subscribe for Ausco Shares and RCL’s Debt Commitment so remaining. Sales Co-ordinator means
DAM 

  
 Sales Co-ordination Term means the
period from the date of this agreement to the date that is 9 months after the date of Principal Completion. 
  
 Specified RREEF Client means each of: 
  

	 	(a)	OPSEU Pension Trust; 

  

 49 

	 	(b)	clients of JANA Investment Advisers Pty Ltd (including, but not limited to, Retail Employees Superannuation Trust Pty Ltd and Super Investment Management Pty Ltd);

  

	 	(c)	clients of Sovereign Investment Research Pty Ltd (including, but not limited to, SunSuper and SunSuper Pty Ltd); 

  

	 	(d)	clients of Access Economics (including, but not limited to, Motor Trades Association of Australia Superannuation Fund (MTAA Super), Westscheme and Statewide Superannuation Trust);

  

	 	(e)	Australia Post Superannuation Scheme; and 

  

	 	(f)	Perpetual Investment Management Ltd. 

  
 Underwritten Obligations means, at any time, the CAM Underwritten Obligations, DBAG Original Underwritten Obligations, the DBAG Additional
Underwritten Obligations and the RCL Underwritten Obligations at that time, or any of them as the context may require. 
  

	1.2	The parties acknowledge that the Underwritten Obligations are intended to be transferred to third parties in accordance with the terms of this schedule. 

  

	1.3	The parties acknowledge that it is mutual beneficial to them that the sales process is conducted in a co-ordinated and orderly manner. 

  

	2.	TRANSFER OF UNDERWRITTEN OBLIGATIONS 

  

	2.1	CAM, RCL and DBAG each appoint the Sales Co-ordinator, for the Sales Co-ordination Term, to arrange the transfer (Transfer) of the Underwritten Obligations as soon as
reasonably practicable after the date of this agreement and otherwise in accordance with the terms set out in this schedule. The Sales Co-ordinator accepts this appointment for the Sales Co-ordination Term. 

  

	2.2	The Sales Co-ordinator shall: 

  

	 	(a)	use its reasonable endeavours to arrange the Transfer and shall perform its obligations under this schedule in an efficient and competent manner; and 

  

	 	(b)	be the sole point of contact for and on behalf of the parties to this agreement and any proposed transferee of Underwritten Obligations. 

  

	2.3	CAM and RCL each agree not to procure, solicity or arrange the transfer of its respective Underwritten Obligations during the Sales Co-ordination Term. 

  

	2.4	No CAM Underwritten Obligation or RCL Underwritten Obligation may be transferred without CAM’s or RCL’s respective prior approval (acting reasonably) to the terms of
transfer. 

  

	2.5	CAM and RCL each agree to co-operate with the Sales Co-ordinator in arranging the transfer of the Underwritten Obligations and to provide all assistance reasonably required by the
Sales Co-ordinator in the performance by it of its obligations under this schedule. 

  

	2.6	If all of the CAM Underwritten Obligations and the RCL Underwritten Obligations have not been Transferred by the expiry of the Sales Co-ordination Term then each of CAM, DBAG and
RCL shall: 

  

	 	(a)	be responsible for disposing of Underwritten Obligations then held by it; and 

  

 50 

	 	(b)	use reasonable endeavours to procure that any proposed transferee of those Underwritten Obligations also acquires the Underwritten Obligations then held by the other parties with
outstanding Underwritten Obligations, 

  
 provided
that the CAM Underwritten Obligation may not be transferred to a person without that person also taking a transfer of another Underwritten Obligation. 
  

	3.	TRANSFER PROCESS  

  

	3.1	CAM, RCL and the Sales Co-ordinator each agree that: 

  

	 	(a)	subject to clause 3.2 of this schedule, the CAM Underwritten Obligations shall be fully transferred before any DBAG Original Underwritten Obligations, DBAG Additional Underwritten
Obligations or RCL Underwritten Obligations are Transferred; 

  

	 	(b)	subject to clause 3.1(a) of this schedule, if the Transferee of the Underwritten Obligations is PSS then: 

  

	 	(i)	the RCL Underwritten Obligations and DBAG Additional Underwritten Obligations shall be fully Transferred prior to any amount of the DBAG Original Underwritten Obligations being
Transferred; and 

  

	 	(ii)	the RCL Underwritten Obligations and DBAG Additional Underwritten Obligations shall be transferred pro rata in the following proportions: 

  

	 	(A)	84.22% of the Underwritten Obligation Transferred to PSS shall be RCL Underwritten Obligations; and 

  

	 	(B)	15.78% of the Underwritten Obligation Transferred to PSS shall be DBAG Additional Underwritten Obligations; 

  

	 	(c)	subject to clause 3.1(a) of this schedule, if the Transferee of the Underwritten Obligations is a Specified RREEF Client then the DBAG Original Underwritten Obligations shall be
fully Transferred prior to any amount of the RCL Underwritten Obligations and DBAG Additional Underwritten Obligations being Transferred; 

  

	 	(d)	subject to clause 3.1(a) of this schedule, if the Transferee of the Underwritten Obligations is: 

  

	 	(i)	any person other than PSS or a Specified RREEF Client; or 

  

	 	(ii)	a Specified RREEF Client and all the DBAG Original Underwritten Obligations have been fully Transferred, 

  
 then: 
  

	 	(iii)	the RCL Underwritten Obligations and DBAG Total Underwritten Obligations shall be Transferred pro rata in the following proportions: 

  

	 	(A)	28.01% of the Underwritten Obligations Transferred shall be RCL Underwritten Obligations; and 

  

	 	(B)	71.99% of the Underwritten Obligations Transferred shall be DBAG Total Underwritten Obligations. 

  

	3.2	 The CAM Underwritten Obligations shall not be Transferred, and the Sales Co-ordinator shall not be required to arrange a Transfer of CAM Underwritten Obligations,
if such Transfer 

  

 51 

	 	 
would result in either of STC or DBAG holding 50% or more of the total issued Ausco Shares. 

  

	3.3	Underwritten Obligations may be transferred in whole or in part provided that that portion of part of an Underwritten Obligation transferred which comprises an obligation to
subscribe for Ausco Shares must be 40%, and the portion which comprises part of a Debt Commitment must be 60%, of the part transferred. 

  

	4.	FAILURE TO TRANSFER RCL UNDERWRITTEN OBLIGATIONS 

  

	4.1	Notwithstanding any other provision of this agreement, if all of the RCL Underwritten Obligations have not been transferred by the date on which RCL is first required to pay for
Ausco Shares pursuant to clause 2.1 to 2.5 of this Agreement, that portion of the RCL Underwritten Obligation then held by it which consists of the obligation to subscribe for Ausco Shares shall, without the need for any notice to be given,
automatically be exchanged for an obligation to subscribe for additional new Holdco Shares pursuant to clauses 3.1 to 3.6 of this agreement. 

  
 The number of new Holdco Shares to be subscribed for by RCL in such circumstances shall be calculated in accordance with the following formula:

  

							
	 N
	 	=	  	E	  	 
	 	  	F	  	 

  
 Where: 
  
 N is the number of additional Holdco Shares to be subscribed for by RCL

  
 E is the aggregate amount which would have been payable by
RCL for the relevant Ausco Shares 
  
 F is the issue price of
each Holdco Share to be issued pursuant to clause 3.3(b) or 3.5(b) of this agreement and for which RCL has, as at the date of this agreement, agreed to subscribe. 
  

	4.2	Upon RCL assuming the obligation to subscribe for additional Holdco Shares under clause 4.1 of this schedule, its obligation to subscribe for the corresponding Ausco Shares shall
automatically be extinguished. 

  

	5.	MISCELLANEOUS 

  

	5.1	Any transferee of Underwritten Obligations shall be required to execute an Accession Deed, with all necessary modifications. 

  

	5.2	If all of the Underwritten Obligations have not been transferred in accordance with this schedule prior to the date on which any share is issued pursuant to that Underwritten
Obligation, the provisions of this schedule shall continue to apply, as if references in this schedule: 

  

	 	(a)	to an obligation to subscribe for shares was a reference to any share issued pursuant to that obligation; and 

  

	 	(b)	references to Debt Commitment were references to the corresponding amount advanced by CAM, DBAG and RCL pursuant to its relevant Debt Commitment under the Investor Loan Agreement.

  

	5.3	 Notwithstanding any provision of this agreement, the provisions of clauses 10.2 and 10.3 of this agreement shall not apply to any transfer of Underwritten
Obligations or to any transfers 

  

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of Ausco Shares or Holdco Shares, subject to the transferor first complying with clause 10.9 and 11.4, if applicable. 

  

	5.4	Upon transfer of Underwritten Obligations in accordance with this schedule the relevant transferor shall be released from the Underwritten Obligations transferred.

  

	5.5	If for any purpose related to the implementation of the arrangements contained in this schedule it is necessary to convert New Zealand dollars into Australian dollars, that
conversion shall be made a the spot rate of exchange then applying for the relevant exchange. 

  

	5.6	Notwithstanding any provision of this schedule, it is agreed that the Transfer of any Underwritten Obligation may be effected in the manner referred to in clause 11.5 of this
agreement. 

  

	5.7	As soon as is practicable following any Transfer pursuant to this schedule six, the Sales Coordinator will procure an amendment to schedule one reflecting the consequential changes
to the identity and shareholdings of the shareholders of Holdco and/or Ausco (as the case may be) set out therein. Upon delivery of that amended schedule to all parties, the amended schedule shall be deemed to be a variation to this agreement.

  

 53

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