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                                                                    EXHIBIT 4.25

                 PRINCIPAL TERMS OF NEW SAWLOG SUPPLY AGREEMENT

<TABLE>
<S>                                 <C>
PARTIES:                            Fletcher Challenge Forests Industries Ltd (FCF) - Purchaser Central North
                                    Island Forest Partnership (CNIFP) - Vendor Fletcher Challenge Forests Limited
                                    (FFS) - Guarantor Michael Stiassny and Grant Graham - Receivers

TERM:                               Evergreen, subject to termination clause. Commencement date will be 1 July 2003
                                    ("Commencement Date").

SAWLOG COMPONENT OF TASMAN          The sawlog component of the Tasman Contracts will sit in abeyance while the new
CONTRACTS:                          sawlog supply agreement, the principal terms of which are set forth in this
                                    terms sheet, ("Sawlog Agreement") is in effect. The right of FCF and any other
                                    relevant FCF group company to call for sawlogs under the Tasman Contracts will
                                    only revive if the Sawlog Agreement is terminated for any reason. The
                                    respective obligations of FCF and CNIFP in respect of the supply by CNIFP of
                                    pulpwood under the Tasman Contracts will continue to be determined in
                                    accordance with the Tasman Contracts, subject to the provisions of the
                                    Transition Deed.

                                    The arrangements described in this terms sheet are to be on a "without
                                    prejudice" basis to any of the parties' rights as at the date of signing this
                                    terms sheet and neither CNIFP nor the Receivers will be required, in any way,
                                    to ratify or confirm or adopt the Tasman Contracts or will be deemed to have
                                    ratified, confirmed or adopted the Tasman Contracts by this terms sheet or by
                                    the entry by CNIFP and/or the Receivers into a formal agreement incorporating
                                    the principal terms set out in this terms sheet, or by performance of any
                                    obligations of either or both of them under this terms sheet or such formal
                                    agreement.

SUPPLY SOURCE:                      Preference will be given to supply from the Vendor's own CNIFP forest estates.
                                    Supply from other sources will be permitted under exceptional circumstances
                                    with the Purchaser's consent (which shall not be unreasonably withheld).

UTILISATION:                        Use of sawlogs supplied under the Sawlog Agreement will be restricted to use at
                                    domestic mills. No sawlogs shall be exported in unprocessed form by either the
                                    Purchaser or any third party to whom the Purchaser may on-sell sawlogs
                                    purchased from the Vendor. The Purchaser's obligations to the Vendor in respect
                                    of third parties to whom it on-sells sawlogs will be limited to obtaining a
                                    written contractual commitment from such third party not to export such sawlogs
                                    in unprocessed form which commitment either (a) the Purchaser shall undertake
                                    to the Vendor to take all commercially reasonable steps to enforce if breached
                                    by the third party or (b) shall be expressed to be enforceable by the Vendor
                                    pursuant to the Contracts (Privity) Act 1982.

AVAILABLE VOLUME:                   The annual offtake volume set out below, split into the following SOP grades
                                    (or the equivalent grades in the event log specifications are amended in
                                    accordance with the Sawlog Agreement) will be available to be supplied by CNIFP
                                    to the Purchaser.

                                    The volume will be supplied on a reasonably even and consistent basis
                                    throughout the year, subject to normal seasonal fluctuations, and in accordance
                                    with the "SOP Planning" section and the "Delivery Programme" section of this
                                    terms sheet.
</TABLE>

                                        1
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<TABLE>
<CAPTION>
SOP GRADES                                           VOLUME (M(3))
                                                     (per annum)
<S>                                                  <C>
Pruned (all grades)                                    150,000
Structural (all S grades)                              180,000
Large Utility           M30 grade                       90,000
                        A grade *                       60,000
Roundwood               R3 grade                        20,000
-------------------------------------------------
Total                                                  500,000
</TABLE>

* Maximum LED 50cm

<TABLE>
<S>                                 <C>
LENGTH MIX:                         The following log lengths will apply to logs supplied under the Sawlog Agreement.

                                    Pruned           4.35m
                                                     4.95m
                                                     5.6m (maximum 10% of total monthly volume in m(3))
                                                     2.65m (maximum 10% of total monthly volume in m(3))

                                    Structural       4.9m
                                                     5.5m
                                                     6.1m
                                                     3.7m
                                                     4.3m

                                                     (Maximum 15 % of monthly volume in m(3) in aggregate
                                                     for 3.7m and 4.3m lengths)

                                    M30 grade        4.9m
                                                     5.5m
                                                     6.1m
                                                     3.7m
                                                     4.3m

                                                     (Maximum 15% of monthly volume in m(3) in aggregate
                                                     for 3.7m and 4.3m lengths)

                                    A grade          3.7m
                                                     4.3m

                                    R3 grade         to be confirmed during SOP planning

FSC CERTIFICATION:                  The Vendor will use reasonable endeavours to obtain FSC certification prior to
                                    the Commencement Date or as soon as possible thereafter and to maintain FSC
                                    certification during the term of the Sawlog Agreement. FCF will cooperate with
                                    the Vendor during the transition period to assist in this process.

SOP PLANNING:                       For planning and budgeting purposes a specific volume plan will be set for each
                                    SOP grade as follows:

                                    1.       The Purchaser shall at all times be required to draw volume, both
                                             within a week and within a month, on a reasonably even and consistent
                                             basis, subject to normal seasonal fluctuations.

                                    2.       The Purchaser will advise by no later than 15 May 2003 the volume, by
                                             SOP grade, to be purchased under the Sawlog Agreement, for each of the
                                             first 6 months from the Commencement Date to 31 December 2003 ("FORWARD
                                             SUPPLY Plan").
</TABLE>

                                                                               2
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<TABLE>
<S>                                 <C>
                                    3.       Thereafter the Purchaser will update the Forward Supply Plan no later
                                             than 4 weeks prior to the start of each calendar month (the first such
                                             update to be completed by 3 June 2003) by written notice to the Vendor.

                                    4.       When updating the Forward Supply Plan the Purchaser may only adjust the
                                             volume set forth in the previous Forward Supply Plan in accordance with
                                             the following rules:

                                             a.      The new month 6 will be subject only to 1 above.

                                             b.      The new months 4 and 5 may only be adjusted +/- 10% of volume
                                                     for that grade in m(3) for any one or more grades.

                                             c.      The new months 1, 2 and 3 will be the same as the old months
                                                     2, 3 and 4 and may not be otherwise adjusted.

TAKE OR PAY:                        The Purchaser shall be required to "take or pay" for all sawlogs
                                    contracted for in the Forward Supply Plan (as updated from time to time),
                                    subject to the Purchaser's ability to amend the volume in accordance with the
                                    "SOP Planning" section above.

                                    For the avoidance of doubt, "take or pay" means that if the Purchaser does not
                                    take delivery (either at the Purchaser's mills or any third party mill or off
                                    site storage) of any sawlogs it has committed to purchase in accordance with the
                                    Forward Supply Plan (as updated from time to time) ("Unclaimed Sawlogs") in any
                                    relevant period, the Purchaser shall nevertheless pay the Vendor for such
                                    Unclaimed Sawlogs on the date on which payment for such sawlogs is due.

                                    In addition, the Purchaser shall be required to purchase on an annual basis the
                                    annually contracted volumes of sawlogs specified in the "Available Volume"
                                    section above. The annual volumes purchased under the Sawlog Agreement will be
                                    tested quarterly in arrears, by calculating the total purchases for the previous
                                    12 months per SOP grade. The parties acknowledge that, due to the size of the
                                    annual Available Volume of sawlogs, achieving a purchased annual volume per SOP
                                    Grade equal to the contracted annual volume per SOP Grade may be practically
                                    difficult and therefore the purchased annual volume per SOP Grade may be up to
                                    5% less than the contracted volume per SOP Grade. In the event that in any SOP
                                    Grade the purchased volume is less than 95% of the contracted volume the
                                    Purchaser will pay to the Vendor on the anniversary of the Commencement Date and
                                    quarterly thereafter the difference between 95% of the contracted volume and the
                                    purchased volume over the relevant preceding 12 month period, at the average
                                    purchase price over the relevant 12 month period.

                                    For the purposes of calculating total purchases and the Purchaser's annual take
                                    or pay volume:

                                    (a)      If the Purchaser has been required to "pay" for Unclaimed Sawlogs, that
                                             volume shall be included in the annual volume calculation, as if it had
                                             been purchased; and

                                    (b)      The annual volume commitment shall be reduced by the volume of any
                                             sawlogs which the Vendor has not been able to deliver in accordance
                                             with its delivery commitments.
</TABLE>

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<TABLE>
<S>                                 <C>
                                    If the Vendor fails to gain FSC certification by the Commencement Date or at any
                                    time during the currency of the Sawlog Agreement the Vendor ceases to hold FSC
                                    certification, then from the date the Vendor's FSC certification ceases or,
                                    where the Vendor has not obtained FSC certification by the Commencement Date,
                                    from the Commencement Date, the Purchaser shall have no "take or pay"
                                    obligations in respect only of any volume of pruned, structural, M30 or A grade
                                    logs. The suspension of the "take or pay" obligations in respect of any volume
                                    of pruned, structural , M30 or A grade logs described in this paragraph shall
                                    not apply where the Purchaser has failed to assist the Vendor in obtaining FSC
                                    Certification as required by the Transition Deed and the "FSC Certification"
                                    section above

                                    Immediately upon the Vendor gaining or regaining FSC certification, the
                                    Purchaser's "take or pay" obligations in respect of pruned, structural, M30 or A
                                    grade logs shall revive for so long as the Vendor continues to hold FSC
                                    certification.

                                    The Purchaser's liability in respect of failure to take delivery of any sawlogs
                                    which the Purchaser is committed to purchase shall be limited to its "take or
                                    pay" obligations as set out in this "Take or Pay" section.

LOG SPECIFICATION:                  The log grade specifications applicable to logs to be supplied by the Vendor
                                    under the Sawlog Agreement as at the Commencement Date shall be the log grade
                                    specifications attached as Annex A.

                                    In the event that either party wishes to change the existing log grade
                                    specifications that party shall first consult with and obtain the consent of the
                                    other party, such consent not to be unreasonably withheld.

PRICE DETERMINATION:                Prices will be fixed quarterly, by SOP Grade, by length, and by mill. The price
                                    of each grade and length to be determined in accordance with the following
                                    paragraph shall be the open market price reflecting domestic and export prices
                                    in the Central North Island for sawlogs of substantially the same grade and
                                    length mix. "Central North Island" shall mean the Central North Island as
                                    defined in Schedule 1.1B of the Implementation Agreement dated 19 December 1995.

                                    Prices will be determined by direct negotiation between the parties, to be
                                    completed prior to the commencement of each quarter. Where the parties fail to
                                    agree prices prior to the commencement of a quarter an independent expert will
                                    set the price and normal dispute resolution procedures under the Sawlog
                                    Agreement will not apply. While a price dispute is being determined, the
                                    Purchaser shall continue to pay the previous quarter's prices, with an
                                    adjustment to be promptly paid to the Vendor by the Purchaser or to the
                                    Purchaser by the Vendor (as the case may be) once the new price is determined.

SALE POINT:                         Sale point will be "at mill gate" and prices will be "at mill gate" in NZ$ per
                                    tonne. Prices will vary from mill to mill (i.e. an "at mill gate" price will be
                                    negotiated for each mill, by grade).
</TABLE>

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<TABLE>
<S>                                 <C>
PAYMENT:                            (a)      Payment shall be made on the 20th day of the month following delivery.
                                             Invoices shall be Purchaser generated and the Vendor shall not be
                                             required to issue any GST invoices for the sale of sawlogs.

                                    (b)      Subject to paragraph (c) immediately below, if any payment by the
                                             Purchaser is overdue by 10 or more working days, the Vendor may recover
                                             and/or re-sell (by entering the Purchaser's premises if necessary) any
                                             sawlogs in respect of which payment has not been made or any products
                                             in which such sawlogs have been incorporated.

                                    (c)      The provisions of paragraph (b) immediately above shall not apply to
                                             any payment or portion of any payment to be made by the Purchaser where
                                             such payment or portion thereof is subject to a bona fide dispute
                                             between the Vendor and the Purchaser, provided such dispute does not
                                             relate to circumstances where the Purchaser is obliged to make the
                                             payment under other terms of this terms sheet.

                                    (d)      The parties will complete monthly reconciliations of volume and loads
                                             delivered in the month prior.

RISK & TITLE:                       Risk in the sawlogs will pass from the Vendor to the Purchaser at the point of
                                    delivery. The point of delivery shall be at mill gate. Title is retained by the
                                    Vendor until payment is received in full. Until payment in full for any sawlogs
                                    is received by the Vendor:

                                    (i)      the Purchaser shall hold such sawlogs as bailee for the Vendor;

                                    (ii)     the Purchaser will not interfere with or remove any labelling or
                                             branding on the sawlogs prior to processing;

                                    (iii)    where the sawlogs are mixed with / incorporated in any other goods,
                                             title to the mixed goods shall be held by the Vendor and the Purchaser
                                             shall hold the mixed goods as bailee for the Vendor; and

                                    (iv)     subject to an exception for ordinary course of business dealings, the
                                             Purchaser shall not be permitted to deal with the sawlogs or mixed
                                             goods without the prior written approval of the Vendor.

                                    The Vendor warrants that at the point title in the sawlogs passes to the
                                    Purchaser in accordance with this "Risk & Title" section, the Purchaser will
                                    receive good and unencumbered title to the sawlogs.

VOLUME CALCULATION:                 Sawlog volumes in cubic metres will be derived from the weight in tonnes of
                                    sawlogs measured by a weighbridge independently certified as accurate, using
                                    assessed conversion factors (for conversion from tonnes to cubic metres)
                                    supplied by the Vendor. The assessed conversion factors may be audited by a
                                    mutually agreed independent expert at the option and cost of the Purchaser. The
                                    conversion factors shall be adjusted to capture seasonal variation in wood
                                    condition. The volume amount calculated by conversion of the weight in tonnes
                                    purchased by the Purchaser to cubic metres shall be used to calculate the annual
                                    volume purchased by the Purchaser for the purposes of the "Available Volume" and
                                    "Take or Pay" sections above.

DELIVERY PROGRAMME:                 The Purchaser will advise the Vendor seven days prior to the start of
                                    each delivery week of the quantities and grades of sawlog it requires the Vendor
                                    to deliver to the Purchaser's mills in that relevant delivery week. This process
                                    will be repeated on a weekly basis for the duration of the Sawlog Agreement.
</TABLE>

                                                                               5
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<TABLE>
<S>                                 <C>
                                    If the Purchaser does not have sufficient room at the wood yards at the mills to
                                    store any delivery of sawlogs, the Vendor and the Purchaser will arrange for the
                                    delivery to be measured on a weighbridge and stored off-site, the extra cost of
                                    such measurement and storage being met wholly by the Purchaser and goods being
                                    stored solely at the risk of the Purchaser.

DELIVERY SHORTFALL:                 If the Vendor is unable to supply the volume set forth in any current Forward
                                    Supply Plan in any month the Purchaser may, at its option, purchase sawlogs from
                                    an alternative supplier to make up the shortfall. The Vendor will compensate the
                                    Purchaser for any loss arising as the result of a delivery shortfall in
                                    accordance with statutory and common law rights and remedies.

QUALITY:                            The Vendor shall warrant to the Purchaser that the sawlogs supplied to the
                                    Purchaser will conform to the prescribed specifications and tolerances agreed by
                                    the parties. The Purchaser shall have the right within the first 5 working days
                                    from the date of delivery of any sawlogs ("Rejection Period") to reject any such
                                    sawlogs which do not conform to agreed specifications and tolerances.

                                    At any time after the Rejection Period, or if the sawlogs are processed within
                                    the Rejection Period, the Purchaser shall be deemed to have examined and be
                                    satisfied with relevant sawlogs and as from such date shall waive all rights and
                                    claims it might otherwise have in relation to contesting the quality or
                                    condition of such sawlogs.

                                    For the avoidance of doubt, sawlogs may only be rejected on the basis of defects
                                    present on the date of delivery of such sawlogs and not on the basis of defects
                                    which manifest themselves after such date.

                                    Where the Purchaser rejects sawlogs in the Rejection Period, the Vendor shall
                                    deliver replacement sawlogs to the Purchaser conforming to agreed specifications
                                    and tolerances in the delivery week following the week in which rejection occurs
                                    or, where replacement sawlogs cannot be so delivered for any reason, the
                                    provisions of the "Delivery Shortfall" section above shall apply mutatis
                                    mutandis.

                                    Other than as is expressly stated in this terms sheet, no warranty, condition or
                                    description as to sawlogs to be supplied by the Vendor to the Purchaser may be
                                    implied on the part of the Vendor by this terms sheet or from anything said or
                                    written in negotiations between the Vendor and the Purchaser or their
                                    representatives.

                                    The Purchaser acknowledges that it has entered into this terms sheet solely in
                                    reliance on its own judgment and, except as expressly set out in the terms
                                    sheet, not in reliance on statements or representations (if any) made to the
                                    Purchaser or its representatives by the Vendor or its representatives.

                                    The Vendor will compensate the Purchaser for any loss arising as the result of
                                    delivery of defective sawlogs in accordance with statutory and common law rights
                                    and remedies.

WEIGHING:                           All sawlogs shall be weighed prior to delivery to the Purchaser at a weighbridge
                                    independently certified as accurate.

                                    On delivery, a delivery docket shall be issued to the Purchaser identifying the
                                    quantity and type of sawlogs supplied on each load.

ASSIGNMENT:                         Either party may assign its obligations under the Sawlog Agreement with the
                                    prior written consent of the other party, provided that the Vendor may only
                                    assign its obligations to a purchaser of all or substantially all of the CNIFP
                                    estate. Such consent shall not be unreasonably withheld if the third party is a
                                    solvent person who is able to financially comply with all of the obligations of
                                    the assignor under the Sawlog Agreement.
</TABLE>

                                                                               6
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<TABLE>
<S>                                 <C>
FORCE MAJEURE:                      Normal provisions, for the benefit of both parties including provisions to the
                                    effect that neither party shall be in breach of any obligation under the Sawlog
                                    Agreement (including without limitation in the case of (a) the Purchaser, its
                                    "Take or Pay" obligations and (b) the Vendor, its obligations relating to the
                                    availability of sawlogs, delivery of sawlogs, quality of sawlogs and remediation
                                    of delivery of defective sawlogs) if that party is prevented from performing
                                    that obligation by reasons of force majeure.

                                    All obligations of both the Vendor and Purchaser which may be suspended as a
                                    result of force majeure will revive immediately upon such force majeure coming
                                    to an end.

DISPUTE RESOLUTION:                 The Sawlog Agreement will include a mechanism by which any disputes other than
                                    those relating to pricing will first be addressed through a party-to-party
                                    dispute resolution process (such process to be completed within 5 business days)
                                    and if remaining unresolved, if both parties agree will be referred to
                                    arbitration, or if the parties do not agree to an arbitration the parties may
                                    revert to court action.

                                    Price disputes will be resolved under the separate independent expert mechanism
                                    described in the "Price Determination" section above.

TERMINATION CLAUSE:                 Either party may terminate the Sawlog Agreement if:

                                    (a)      it gives the other party six months notice of termination, such notice
                                             to be given at the end of any calendar month;

                                    (b)      the Sawlog Agreement is materially breached by the other party and is
                                             not remedied within 30 days of notice requiring remedy of such material
                                             breach; or

                                    (c)      the other party becomes insolvent, bankrupt, or suffers a similar
                                             consequence as a result of indebtedness (provided however that the
                                             current receivership and insolvency of the Vendor is excluded for these
                                             purposes).

SET OFF                             Set off will be governed by the general law rules of legal and equitable set
                                    off.

LIABILITY OF RECEIVERS:             No personal liability for the Receivers.

GUARANTEE:                          FFS will unconditionally and irrevocably guarantee the due performance by the
                                    Purchaser of all of its obligations under the Sawlog Agreement.

LEGAL EFFECT:                       The agreement created by this terms sheet is intended to be legally binding on
                                    the parties from the date that this terms sheet is signed by the parties and
                                    will form the basis of a full, formal agreement to be entered into by the
                                    parties prior to the Commencement Date incorporating the terms of this terms
                                    sheet, together with such other terms as the parties may subsequently agree
                                    ("Formal Agreement"). The Formal Agreement to be entered into between the
                                    parties will replace the agreement contained in this terms sheet from the date
                                    the parties enter into the Formal Agreement and will constitute the Sawlog
                                    Agreement referred to herein. In the event that a dispute arises in relation to
                                    the content of the Formal Agreement, either:

                                    1.       if the parties so agree, the dispute shall be resolved by arbitration
                                             and the provisions of the Arbitration Act 1996 shall apply; or

                                    2.       failing such agreement, the parties may revert to court action.
</TABLE>

                                                                               7
<PAGE>

EXECUTED by:

FORESTRY CORPORATION OF NEW ZEALAND LIMITED (IN
RECEIVERSHIP)
by:
                                                  ______________________________
                                                  Signature of joint receiver

_________________________________________         ______________________________
Signature of witness                              Name of joint receiver

_________________________________________
Name of witness

_________________________________________
Occupation of witness

_________________________________________
City/town of residence

Forestry Corporation of New Zealand
c/- Michael Stiassny/Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

CITIC NEW ZEALAND LIMITED (BVI) (IN RECEIVERSHIP)
by:

                                    ____________________________________________
                                    Signature of joint receiver, as its attorney

________________________________    ____________________________________________
Signature of witness                Name of joint receiver

________________________________
Name of witness

________________________________
Occupation of witness

________________________________
City/town of residence

Citic New Zealand Limited (BVI)
c/- Michael Stiassny/Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

                                                                               8
<PAGE>

MICHAEL PETER STIASSNY AND GRANT ROBERT GRAHAM by:
                                                  ______________________________
                                                  Signature of joint receiver

                                                  ______________________________
                                                  Name of joint receiver

                                                  ______________________________
                                                  Signature of joint receiver

                                                  ______________________________
                                                  Name of joint receiver

_________________________________________
Signature of witness

_________________________________________
Name of witness

_________________________________________
Occupation of witness

_________________________________________
City/town of residence

Michael Stiassny and Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

FLETCHER CHALLENGE FORESTS INDUSTRIES LIMITED by:
                                                  ______________________________
                                                  Signature of director

                                                  ______________________________
                                                  Name of director

                                                  ______________________________
                                                  Signature of director

                                                  ______________________________
                                                  Name of director

Chief Executive/General Counsel
8 Rockridge Avenue
Penrose
Auckland
Private Bag 92036
Ph: (09) 571 9800
Fax: (09) 571 9801

                                                                               9
<PAGE>

FLETCHER CHALLENGE FORESTS LIMITED by:
                                                  ______________________________
                                                  Signature of authorised person

_________________________________________         ______________________________
Signature of witness                              Name of authorised person

_________________________________________
Name of witness

_________________________________________
Occupation of witness

_________________________________________
City/town of residence

AND by:
                                                  ______________________________
                                                  Signature of authorised person

_________________________________________         ______________________________
Signature of witness                              Name authorised person

_________________________________________
Name of witness

_________________________________________
Occupation of witness

_________________________________________
City/town of residence

Chief Executive/General Counsel
8 Rockridge Avenue
Penrose
Auckland
Private Bag 92036
Ph: (09) 571 9800
Fax: (09) 571 9801

                                                                              10

<PAGE>

                                    ANNEX A
                            LOG GRADE SPECIFICATIONS

                                                                              11<PAGE>

                                                                    EXHIBIT 4.26

                   FORESTRY CORPORATION OF NEW ZEALAND LIMITED
                         (IN RECEIVERSHIP) AND CITIC NEW
                     ZEALAND LIMITED (BVI) (IN RECEIVERSHIP)
                    BEING THE PARTNERS OF THE CENTRAL NORTH
                            ISLAND FOREST PARTNERSHIP

                         RED STAG WOOD PRODUCTS LIMITED
                               (IN RECEIVERSHIP)

                  RED STAG MOULDINGS LIMITED (IN RECEIVERSHIP)

                     MICHAEL PETER STIASSNY AND GRANT ROBERT
                                     GRAHAM

                      FLETCHER CHALLENGE FORESTS INDUSTRIES
                                    LIMITED

                FLETCHER CHALLENGE FORESTS MANUFACTURING LIMITED

                   FLETCHER CHALLENGE FORESTS FINANCE LIMITED

                       FLETCHER CHALLENGE FORESTS LIMITED

                        TIMBER MANAGEMENT COMPANY LIMITED

                    ---------------------------------------

                                 TRANSITION DEED

                    ---------------------------------------

[MINTERELLISONRUDDWATTS LAWYERS LOGO]

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
                                                                                                              PAGE NO.
<S>                                                                                                           <C>
1.   INTERPRETATION......................................................................................         1

2.   ROADING INFRASTRUCTURE..............................................................................         8

3.   RADIO COMMUNICATIONS................................................................................        12

4.   FIRE PROTECTION.....................................................................................        14

5.   WAIOTAPU PREMISES...................................................................................        16

6.   VEHICLE LEASES......................................................................................        17

7.   BUSINESS AND OTHER ASSETS...........................................................................        17

8.   CNIFP PLANTS........................................................................................        18

9.   OTHER SURPLUS ASSETS................................................................................        22

10.  TE NGAE NURSERY.....................................................................................        22

11.  MURUPARA RAILHEAD ISSUES............................................................................        22

12.  EXPORT RELATED ISSUES...............................................................................        23

13.  CNIFP INFORMATION, IT AND DATA......................................................................        23

14.  RETURN OF CNIFP WORKING CAPITAL.....................................................................        25

15.  INFORMATION CENTRE..................................................................................        27

16.  OTHER TRANSITIONAL MATTERS..........................................................................        27

17.  COMPLIANCE WITH STATUTES AND OTHER REQUIREMENTS.....................................................        31

18.  RIGHT TO ASSIGN AND BENEFIT TO RUN WITH THE LAND....................................................        32

19.  ACKNOWLEDGMENT......................................................................................        32

20.  CONFIDENTIALITY.....................................................................................        33

21.  DISPUTE RESOLUTION..................................................................................        34

22.  NOTICES.............................................................................................        35

23.  NO WAIVERS..........................................................................................        36

24.  ENTIRE AGREEMENT....................................................................................        36

25.  WRITTEN VARIATIONS..................................................................................        36

26.  SEVERABILITY........................................................................................        36

27.  FURTHER ASSURANCES..................................................................................        36
</TABLE>

                                Transition Deed                                i
<PAGE>

<TABLE>
<S>                                                                                                              <C>
28.  COUNTERPARTS........................................................................................        36

29.  OWN COSTS...........................................................................................        36

30.  GOVERNING LAW AND JURISDICTION......................................................................        37

31.  MANAGEMENT AGREEMENT................................................................................        37

32.  LIMITATION OF LIABILITY OF RECEIVERS................................................................        37

33.  FCF LIABILITY.......................................................................................        38

SCHEDULE 1...............................................................................................        44

SCHEDULE 2...............................................................................................        45

SCHEDULE 3...............................................................................................        46

SCHEDULE 4...............................................................................................        47

SCHEDULE 5...............................................................................................        48

SCHEDULE 6...............................................................................................        50

SCHEDULE 7...............................................................................................        55

SCHEDULE 8...............................................................................................        59
</TABLE>

                                Transition Deed                               ii
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DEED dated                                                                  2003

PARTIES

         FORESTRY CORPORATION OF NEW ZEALAND LIMITED (IN RECEIVERSHIP) ("FCNZ")
         AND CITIC NEW ZEALAND LIMITED (BVI) (IN RECEIVERSHIP) ("CITIC") BEING
         THE PARTNERS OF THE CENTRAL NORTH ISLAND FOREST PARTNERSHIP ("CNIFP")

         RED STAG WOOD PRODUCTS LIMITED (IN RECEIVERSHIP) ("RSW")

         RED STAG MOULDINGS LIMITED (IN RECEIVERSHIP) ("RSM")

         MICHAEL PETER STIASSNY AND GRANT ROBERT GRAHAM AS JOINT RECEIVERS OF
         CNIFP (EACH A "RECEIVER" AND TOGETHER THE "RECEIVERS")

         FLETCHER CHALLENGE FORESTS INDUSTRIES LIMITED (FORMERLY FLETCHER
         CHALLENGE FORESTS LIMITED) ("FCF")

         FLETCHER CHALLENGE FORESTS MANUFACTURING LIMITED ("FCM")

         FLETCHER CHALLENGE FORESTS FINANCE LIMITED ("FCFL")

         FLETCHER CHALLENGE FORESTS LIMITED ("FCL")

         TIMBER MANAGEMENT COMPANY LIMITED ("TMC")

BACKGROUND

A.       All of the parties to this deed other than TMC, RSW and RSM are parties
         together with Kaingaroa Holdings Limited, Bank of New Zealand and CNI
         Forest Nominees Limited to the Settlement Agreement. The Settlement
         Agreement provides, inter alia, for termination of the Management
         Agreement.

B.       This deed records the agreement and understanding of the parties in
         relation to certain transitional and longer term arrangements in
         relation to or arising from the termination of the Management
         Agreement.

COVENANTS

1.       INTERPRETATION

1.1      DEFINITIONS: In this deed, unless the context otherwise requires:

         "AFFILIATE" means any person that, directly or indirectly through one
         or more intermediaries, is controlled by, is under common control with,
         or is in control of, a party to this deed. A person will be deemed to
         control another person for the purposes of this definition if the first
         such person possesses, directly or indirectly, the power to appoint a
         majority of the directors of the second person, or to otherwise direct
         or cause the direction of the management or policies of the second
         person, whether through the ownership of voting securities, by contract
         or otherwise, provided

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         however that, for the purposes of this definition, FCNZ is deemed not
         to be an Affiliate of any member of the FCF Group or any Affiliate of
         any member of the FCF Group;

         "ANNIVERSARY DATE" means the date which is 12 months after the
         Operational Date;

         "BUSINESS" means the forestry and processing operations and activities
         (including growing and harvesting forests, selling wood in New Zealand
         and overseas, and processing of wood at the CNIFP Plants) carried on by
         FCNZ and CITIC as the partners of CNIFP;

         "BUSINESS DAY" means any day (other than a Saturday or a Sunday) on
         which registered banks are open for business in Auckland;

         "CHARGED ASSETS" means all those assets of FCNZ and CITIC at the
         relevant time charged pursuant to a first charge debenture dated 27
         September 1996 (as amended on 16 December 1996) executed by each of
         FCNZ and CITIC (among others) in favour of the Bank of New Zealand as
         security trustee;

         "CNIFP INFORMATION" means:

         (a)      all information held by, or under the control of, FCF for the
                  collection of CNIFP debtors, both domestic and export;

         (b)      the forest stand record database, inventory data, yield tables
                  and spatial (GIS) data, and production, maintenance and
                  financial data, records, and database and spreadsheet
                  printouts held by, or under the control of, FCF for the
                  Business;

         (c)      harvest plans (including historic, current and harvest ready
                  plans), including those relating to clearfell and production
                  thinning, held by, or under the control of, FCF for the
                  Business;

         (d)      forest tending plans, including those relating to thinning,
                  pruning and spraying held by, or under the control of, FCF for
                  the Business;

         (e)      copies of all books and records of account maintained by FCF
                  for the Business;

         (f)      all data, information, records, reports and/or statements
                  (including environmental records and data) in relation to the
                  CNIFP forest estate for the purpose of obtaining and/or
                  maintaining FSC accreditation held by, or under the control
                  of, FCF;

         (g)      Intellectual Property that is site specific and used
                  specifically for the management or operations of the CNIFP
                  Plants (but not including the SAP, JMC, SIRS, SRMFS,
                  Smartstream and OEE systems and interfaces used at or in
                  relation to such CNIFP Plants and the Numetrix models);

         (h)      Data held by, or under the control of, FCF; and

         (i)      without limiting the generality of sub-clauses (a) to (h)
                  (inclusive) above, the data and information listed in schedule
                  7 to the extent held by, or under the control of, FCF;

         "CNIFP IT" means all IT that is site specific and used specifically for
         supporting the management or operations at any of the CNIFP Plants, but
         does not include:

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         (a)      SAP, JMC, SIRS, SRMFS, Smartstream and OEE systems and
                  interfaces used at or in relation to such CNIFP Plants or the
                  Numetrix models;

         (b)      any CNIFP Information or Data;

         (c)      the items of computer and telephone equipment listed in
                  schedule 8; and

         (d)      the assets and equipment of FCF's IT applications group,
                  located at the CNIFP Plant at Waipa;

         "CNIFP MONEYS" means all moneys (whether in NZ$ or otherwise) held or
         received by FCF on account or in respect of the Business;

         "CNIFP PLANTS" means each of KPP and the Relevant Processing Plants;

         "CNIFP WORKING CAPITAL" means:

         (a)      all bush log stocks, log and chip stocks at Murupara, KPP and
                  the Relevant Processing Plants, and other log and chip stocks
                  (including any log and chip stocks at any port facility,
                  marshalling yard or storage facility) sourced from the CNIFP
                  forest estate that are in the possession or under the control
                  of FCF;

         (b)      all processed forest products (whether finished or
                  unfinished), together with all stock and other materials
                  comprising work in progress, at the Relevant Processing
                  Plants; and

         (c)      all stocks of consumable goods and products owned by CNIFP
                  that are located within the CNIFP forest estate, Murupara, KPP
                  and the Relevant Processing Plants or otherwise in the
                  possession or under the control of FCF;

         "CONFIDENTIAL INFORMATION" means this deed and all information acquired
         or received by a party ("Recipient") from another party ("Discloser")
         under or in connection with this deed and includes without limitation:

         (a)      all know-how, technical information and data, including
                  formulations, specifications and applications;

         (b)      details of methodologies, manufacturing techniques or
                  manufacturing processes;

         (c)      all written or computerised data, designs, sketches,
                  photographs, plans, drawings, samples, articles, prototypes,
                  costings, studies, findings, inventions, developments and
                  forecasts;

         (d)      information in any form concerning the business and operations
                  of the Discloser;

         (e)      the financial position and state of affairs of the Discloser;

         (f)      all technical and market initiatives undertaken or to be
                  undertaken by the Discloser; and

         (g)      any information designated confidential by the Discloser,

         but does not include information which:

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         (h)      the Recipient had knowledge of prior to the date of receipt of
                  such information (other than by reason of it having been
                  acquired directly or indirectly from a third party under an
                  obligation of confidence to that third party); or

         (i)      is or becomes general public knowledge through no fault of the
                  Recipient; or

         (j)      the parties agree in writing that such information is not or
                  will be deemed not to be confidential information;

         "CROWN FORESTRY LICENCES" means the crown forestry licences specified
         in schedule 6 hereto;

         "DATA" means all existing data and other information (whether
         Confidential Information or otherwise) relating to the Business,
         howsoever generated, collected, derived and/or otherwise arising, and
         whether by, for or through FCF, CNIFP, TMC or any other person but does
         not include Intellectual Property of the FCF Group, or data or
         information held by the FCF Group in its capacity as lender to, or
         shareholder of, the partners of CNIFP or FCNZ;

         "EXTENSION PERIOD" has the meaning given to that term in clause 8.2;

         "FCF GROUP" means FCF, FCM, FCFL and FCL and their Affiliates;

         "GANTRIES" means the gantries owned by any of the parties as described
         in schedule 1;

         "GST" means goods and services tax levied under the Goods and Services
         Tax Act 1985;

         "INFRASTRUCTURE" means the Roading Infrastructure, Radio Communications
         Infrastructure and the parties' respective lookout towers referred to
         in clause 4.4;

         "INTELLECTUAL PROPERTY" means all statutory and other proprietary
         rights in respect of know-how, layout designs, copyright works,
         designs, inventions, plant varieties, trade marks and all other rights
         as defined by Article 2 of the Convention of July 1967 establishing the
         World Intellectual Property Organisation (including applications for
         such rights) as may exist anywhere in the world;

         "IT" means all computer and database systems, hardware, software,
         programs, and other information technology (including all related user
         documentation and support material);

         "KPP" means the Kaingaroa Processing Plant;

         "MANAGEMENT AGREEMENT" means the agreement dated 27 September 1996
         between Fletcher Challenge Forests Limited (now FCF) as manager and the
         partners of CNIFP and the memorandum of agreement dated 12 February
         1999 between CITIC, Fletcher Challenge Limited (now FCL) and FCF, as
         amended and varied from time to time;

         "NZ$" means the lawful currency of New Zealand;

         "OPERATING COSTS" has the same meaning given to that term in the
         Management Agreement with the reference in that definition to the then
         applicable management plan being, for the purposes of this deed, the
         draft management plan as prepared by

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         FCF and presented to CNIFP on 28 May 2002 ("Management Plan"), but for
         the avoidance of doubt:

         (a)      except to the extent that any amount constitutes "SG&A"
                  contemplated in subclause (b) below, does not include any
                  amounts payable in respect of or in connection with the
                  termination of the Management Agreement; and

         (b)      includes costs currently classified as "Sales, General and
                  Administration" ("SG&A") and as determined by reference to the
                  SG&A calculation and allocation methodology, as set out in or
                  contemplated by the Management Plan, regardless of whether the
                  services by the relevant FCF employees, personnel or
                  contractors (for which SG&A is charged) are provided under the
                  Management Agreement or this deed;

         "OPERATIONAL DATE" means 4.00 pm on 30 June 2003;

         "OWNER PARTY" means, in relation to any item of Infrastructure, any
         party to this deed which owns, or has exclusive rights to use, or is
         entitled to permit a User Party to use, such item of Infrastructure;

         "RADIO COMMUNICATIONS INFRASTRUCTURE" means the radio communications
         system, together with related infrastructure, owned by any of the FCF
         Group and used in the management of the Business as at the Transitional
         Date;

         "RELEVANT PROCESSING PLANTS" means:

         (a)      the sawmill and remanufacturing plant known as "Waipa Sawmill
                  and Remanufacturing Plant"; and

         (b)      the remanufacturing plant and storage facilities known as "Mt
                  Maunganui Remanufacturing Plant";

         "ROADING INFRASTRUCTURE" means the Roads, Weighbridges and Gantries;

         "ROADS" means arterial roads described in, and marked or highlighted on
         the roading plans attached to, schedule 1;

         "RPP HANDOVER DATE" has the meaning given to that term in clause 8.2;

         "SETTLEMENT AGREEMENT" means the settlement agreement entered or to be
         entered into contemporaneously with this deed by the parties to this
         deed (other than TMC, RSW and RSM) together with Kaingaroa Holdings
         Limited, Bank of New Zealand and CNI Forest Nominees Limited;

         "TASMAN CONTRACTS" has the meaning given to that term in the Management
         Agreement;

         "TRANSITIONAL DATE" means the date of execution of this deed;

         "TRANSITIONAL PERIOD" means the period commencing on the Transitional
         Date and ending on the Operational Date;

         "US$" means the lawful currency of the United States of America;

         "USER PARTY" means, in relation to any item of Infrastructure, any
         party to this deed which does not own or have a right to use such item
         of Infrastructure but is granted rights to use such item of
         Infrastructure by an Owner Party in accordance with this

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         deed, including, where such User Party is CNIFP, any person authorised
         by CNIFP to use such Infrastructure in connection with the management
         of the Business and where such party is a member of the FCF Group, any
         person authorised by FCF to use such Infrastructure in connection with
         the management of the FCF Group's own forest estate; and

         "WEIGHBRIDGES" means the weighbridges and associated buildings owned by
         any of the parties, as described in schedule 1.

1.2      In this deed, unless the context otherwise requires:

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

         (b)      one gender shall include the other genders;

         (c)      words denoting persons shall include any individual,
                  principal, corporation, partnership, joint venture,
                  association, organisation, trust, state, agency of a state,
                  municipal authority, government or any statutory body in each
                  case whether or not having separate legal identity;

         (d)      any covenant or agreement on the part of two or more persons
                  shall bind those persons jointly and severally;

         (e)      reference to anything of a particular nature following upon a
                  general statement shall not in any way derogate from or limit
                  the application of the general statement unless the particular
                  context requires such derogation or limitation;

         (f)      any reference to "month" or "monthly" shall mean respectively
                  calendar month or calendar monthly;

         (g)      references to sections, clauses and schedules are references
                  to sections, clauses and schedules in this deed;

         (h)      the section headings and clause headings have been inserted
                  for convenience and are a guide to the provisions of this deed
                  and shall not form part of this deed or affect its
                  interpretation in any way;

         (i)      references to this deed or any document or statement (however
                  described) shall include references to that document as
                  modified, novated, supplemented, varied or replaced from time
                  to time;

         (j)      reference to any statute, regulation, ordinance or bylaw shall
                  be deemed to extend to all statutes, regulations, ordinances
                  or bylaws amending, consolidating or replacing the same;

         (k)      where any consent or approval is required pursuant to any
                  provision of this deed such consent or approval shall be
                  required for each separate occasion notwithstanding any prior
                  consent or approval obtained for the like purpose on any prior
                  occasion; and

         (l)      "dollars" or "$" means (unless otherwise stated) the lawful
                  currency of New Zealand.

1.3      The parties acknowledge and agree that:

         (a)      the process, timetable and associated plans for the transition
                  of the management of the Business to the CNIFP and/or TMC
                  ("Transition Process") has been established by the CNIFP
                  including the setting of the Operational

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                  Date, the setting of the RPP Handover Date, the length of the
                  Transitional Period, and the length of the Extension Period
                  and the nature and scope of the activities to be undertaken by
                  the FCF Group under this deed as part of the Transition
                  Process. FCF was, at a time prior to this deed, aware of the
                  intention to change the manager of the Business but it was,
                  and remains, unaware of the full details of the Transition
                  Process other than any part thereof which is set out in this
                  deed or otherwise disclosed by CNIFP, TMC or any of its
                  Affiliates to any member of the FCF Group as part of the
                  performance by the parties of their obligations under this
                  deed;

         (b)      CNIFP, the Receivers, RSW, RSM and TMC accept that they have
                  not sought any advice from any member of the FCF Group on the
                  creation of the Transition Process. Correspondingly, the FCF
                  Group has no responsibility or liability for the creation of
                  the Transition Process or its implementation, except to the
                  extent that the implementation of any part thereof constitutes
                  an obligation of any member of the FCF Group under this deed
                  and the FCF Group gives no assurance, representation or
                  warranty that the Transition Process will be able to completed
                  by the Operational Date or, in relation to the transfer of the
                  management of the Relevant Processing Plants, the RPP Handover
                  Date or that it will result in the effective transfer of the
                  management of the Business from FCF to CNIFP or TMC by the
                  Operational Date or, in relation to the transfer of the
                  management of the Relevant Processing Plants, the RPP Handover
                  Date; and

         (c)      in anticipation of the termination of the Management
                  Agreement, FCF will commence winding down its forest and
                  processing plant management capability effective the
                  Operational Date (or the RPP Handover Date in relation to
                  management of the Relevant Processing Plants) and, partly as a
                  result of this position, except to the extent specifically set
                  out in this deed or as the parties may separately agree in
                  writing, the FCF Group will not be required to provide
                  management services or transitional services in respect of the
                  Business following the Operational Date or, in respect of the
                  management of the Relevant Processing Plants, following the
                  RPP Handover Date.

1.4      FCF and CNIFP acknowledge and agree that:

         (a)      FCF shall, during the Transitional Period, use all reasonable
                  endeavours to fully perform all its obligations under the
                  Management Agreement to the same standard and level of service
                  required of FCF under the Management Agreement;

         (b)      to the extent that, after using all reasonable endeavours, FCF
                  is unable to fully perform any of its obligations under the
                  Management Agreement to the same standard or level of service
                  required of FCF under the Management Agreement (whether
                  arising as a result of FCF employees previously employed in
                  providing services associated with the management of the
                  Business having terminated their employment with FCF and
                  accepted offers of employment with TMC and/or CNIFP (where
                  such termination of employment with FCF has had a direct
                  material adverse effect on FCF's ability to fully perform such
                  obligation to such standard or level of service), or
                  otherwise):

                  (i)      FCF shall in full consultation with CNIFP provide
                           reasonable cooperation to minimise any adverse effect
                           such non performance or reduced standard or level of
                           service may have on the Business; and

                  (ii)     provided that FCF has complied with subclause (i)
                           above, FCF shall not be liable for any failure to
                           fully perform any of its obligations under the

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                           Management Agreement to the same standard and level
                           of service required of FCF under the Management
                           Agreement.

1.5      The parties acknowledge and agree that, where a member of the FCF Group
         is required to use its "reasonable endeavours" to meet an obligation
         under this deed or to comply with a reasonable request of CNIFP made
         under this deed or to reasonably co-operate under this deed, in
         determining what is reasonable the following factors are to be taken
         into account:

         (a)      that the member of the FCF Group is not required to hire
                  additional staff or third party contractors in order to meet
                  that obligation or to purchase additional assets (other than
                  of a minimal nature) in order to meet that obligation;

         (b)      that the FCF Group's ability to meet that obligation may be
                  adversely affected as a result of FCF employees previously
                  employed in providing services associated with the management
                  of the Business or in the provision of services under this
                  deed having terminated their employment with FCF and accepted
                  offers of employment with TMC and/or CNIFP and the FCF Group
                  shall be under no obligation to replace such staff in order to
                  meet that obligation;

         (c)      that, effective no earlier than the Operational Date (or the
                  RPP Handover Date in relation to staff involved in the
                  management of the Relevant Processing Plants), FCF is
                  proposing to downsize its forest and processing plant
                  management capability including making redundant staff
                  previously involved in the management of the Business or the
                  provision of services under this deed that are to be performed
                  in the period up to the Operational Date or the RPP Handover
                  Date in relation to the Relevant Processing Plants; and

         (d)      that the availability of any employee of the relevant member
                  of the FCF Group to meet such obligation, comply with such
                  request or provide such co-operation is subject to that
                  employee performing, as a priority, that employee's tasks and
                  functions in respect of the day to day operation and
                  management of the Business and the FCF Group's forestry
                  business provided that such priority may be altered where FCF
                  and CNIFP have agreed, acting reasonably, on such alteration
                  of priority),

         and to the extent that, after using all reasonable endeavours, such
         party is not, or will not be, able to fully perform any of such
         obligations, such party shall as soon as it becomes aware of the same
         notify CNIFP accordingly and in full consultation with CNIFP provide
         reasonable cooperation to minimise any adverse effect such inability to
         fully perform such obligation may have on the Business or the
         Transition Process (as that term is defined in clause 1.3(a) above),
         such reasonable co-operation to include such party providing CNIFP, its
         agents and/or subcontractors with reasonable access to the business
         premises of such party, all relevant records and information of such
         party (to the extent it is required to do so under this deed), and to
         use all reasonable endeavours to make available all things (to the
         extent it is required to do so under this deed) in each case as
         reasonably requested by CNIFP, its agents and/or subcontractors for the
         purpose of minimising any adverse effects such inability to perform
         such obligation may have on the Business or the Transition Process (as
         that term is defined in clause 1.3(a) above), and provided that such
         party has complied with this clause 1.5, such party shall not be liable
         for any failure to fully perform such obligation in the manner required
         under this deed.

2.       ROADING INFRASTRUCTURE

2.1      During the period from the Operational Date until the earlier of the
         date that the Infrastructure Sharing Deed (as defined in clause 2.4) is
         executed by all parties to that deed and becomes operational and the
         expiry of a notice period relating to any

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         relevant termination notice given by an Owner Party under clause 2.5 or
         subclause (a)(iii) below:

         (a)      to the extent they are lawfully able to do so, all Owner
                  Parties shall grant each User Party rights of access to Roads
                  passing through their respective forests on the basis that:

                  (i)      the User Party shall be entitled to use the Roads of
                           the Owner Party for the purpose of managing and
                           safeguarding the User Party's forest business and
                           forest assets and for the carriage of that User
                           Party's goods, including wood, chips and lumber;

                  (ii)     there will be no charge for such use; and

                  (iii)    any Owner Party may, following the Anniversary Date,
                           terminate all rights of access to all its Roads under
                           this clause 2.1 by giving not less than six months'
                           written notice of termination to each relevant User
                           Party affected by such termination in which case
                           clause 2.6 shall apply;

         (b)      the Owner Party shall be entitled to on charge to the User
                  Party on a cost recovery basis by reference to actual Road
                  usage, such tolls, levies, fees, charges or calls payable by
                  the Owner Party to third parties in respect of the relevant
                  Roads, whether under any Crown Forestry Licence, underlying
                  land ownership right, or otherwise, reasonably incurred by the
                  Owner Party in respect of the continued use of the Roads,
                  based on the extent of actual Road usage by the User Party as
                  a proportion of the actual Road usage by all users of the
                  Roads (including the Owner Party);

         (c)      each Owner Party shall be liable for the maintenance of all
                  its Roads to a reasonable standard and condition except where
                  damage (other than fair wear and tear) shall have been caused
                  to any Road of an Owner Party by a User Party in which case
                  the User Party alone shall be responsible for the repair and
                  reinstatement of such Road to the same standard and condition
                  that such Road was in at the time immediately prior to such
                  damage and all costs incidental thereto to the reasonable
                  satisfaction of the Owner Party, including as to timing. If
                  the User Party fails to repair the damaged Road within a
                  reasonable time, the Owner Party may itself repair that damage
                  and the User Party will indemnify the Owner Party against all
                  reasonable costs, expenses, charges and losses incurred in
                  relation to such repair (to the extent of repairing such
                  damaged Road to the same standard and condition required of
                  the User Party under this clause);

         (d)      each Owner Party acknowledges and agrees that, other than as
                  referred to in (c) above, they will be responsible for any
                  cost of a capital expenditure nature, whether in relation to
                  the reconstruction or replacement of any part or all of the
                  Roads or any major refurbishment or upgrading of any part or
                  all of the Roads and no contribution shall be required from
                  any User Party;

         (e)      the User Party acknowledges and agrees that, subject to clause
                  19, it has no entitlement to, and shall not, grant to any
                  third party (not including any agent or subcontractor) any
                  right or entitlement to use the Roads of the Owner Party which
                  is derivative of that User Party's right and entitlement to
                  use such Roads under this deed or the Infrastructure Sharing
                  Deed (as defined in clause 2.4) (as the case may be). The
                  Owner Parties acknowledge and agree to cooperate and work
                  together in good faith with a view to agreeing the reasonable
                  usage of their respective Roads by third parties;

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         (f)      each Owner Party shall make available to the User Party
                  without charge such bypass access over its other roads and
                  access ways as is necessary from time to time to enable the
                  User Party to retain the benefit of the use of the Roads in
                  the event that access over or the use of any part or all of
                  such Roads is impeded or restricted for any reason whatsoever;

         (g)      each User Party shall when using the Roads comply with the
                  Owner Party's reasonable road user rules including all
                  reasonable health and safety directions and restrictions, and
                  will procure all its agents and subcontractors do the same.

2.2      During the period from the Operational Date until the earlier of the
         date that the Infrastructure Sharing Deed (as defined in clause 2.4) is
         executed by all parties to that deed and becomes operational and the
         expiry of the notice period relating to any relevant termination notice
         given by an Owner Party under clause 2.5:

         (a)      to the extent they are lawfully able to do so, all Owner
                  Parties shall grant each User Party rights to use Weighbridges
                  provided that:

                  (i)      the Owner Party of a Weighbridge shall provide
                           weighing services on such Weighbridge, ensure such
                           Weighbridge is accessible for weighing services to
                           User Parties during the usual hours of operation for
                           that Weighbridge (being the same hours as that
                           Weighbridge was operating during the three month
                           period immediately preceding the Transition Date) and
                           shall maintain such Weighbridge to a reasonable
                           standard including undertaking regular assizing of
                           such Weighbridge;

                  (ii)     the Owner Party of a Weighbridge shall, after
                           consultation with the User Party of any such
                           Weighbridge and after obtaining such User Party's
                           consent, (such consent not to be unreasonably
                           withheld), have the right to relocate or close any
                           such Weighbridge; and

                  (iii)    the Owner Party of a Weighbridge shall use its
                           reasonable endeavours to ensure that the results of
                           weigh-ins are in an industry standard format so that
                           all User Parties are reasonably able to
                           electronically download such results of weigh-ins of
                           that Weighbridge;

         (b)      the User Party of a Weighbridge shall pay a reasonable fee to
                  the Owner Party for the use of such Weighbridge, such fee to
                  be reasonably assessed on a cost recovery basis and calculated
                  by reference to the actual wood volume transported by the User
                  Party over the relevant Weighbridge. The Owner Party shall use
                  its reasonable endeavours to keep all costs associated with
                  such Weighbridge as low as possible;

         (c)      each Owner Party shall be liable for the maintenance and
                  operation of all its Weighbridges, except where damage (other
                  than fair wear and tear) shall have been caused to any
                  Weighbridge of an Owner Party by a User Party, in which case
                  the User Party alone shall be responsible for the repair of
                  such Weighbridge and all costs incidental thereto to the
                  reasonable satisfaction of the Owner Party including as to
                  timing. If the User Party fails to repair the damaged
                  Weighbridge within a reasonable time, the Owner Party may
                  itself repair that damage and the User Party will indemnify
                  the Owner Party against all reasonable costs, expenses,
                  charges and losses incurred in relation to such repair.

2.3      During the period from the Operational Date until the earlier of the
         date that the Infrastructure Sharing Deed (as defined in clause 2.4) is
         executed by all parties to that

                                Transition Deed                               10
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         deed and becomes operational and the expiry of the notice period
         relating to any relevant termination notice given by an Owner party
         under clause 2.5:

         (a)      to the extent they are lawfully able to do so, all Owner
                  Parties shall grant each User Party rights to use Gantries
                  provided that:

                  (i)      the Owner Party of a Gantry shall provide services on
                           such Gantry, ensure such Gantry is accessible to User
                           Parties 24 hours a day, seven days a week and shall
                           maintain such Gantry to a reasonable standard; and

                  (ii)     the Owner Party of a Gantry shall, after consultation
                           with the User Party of any such Gantry and after
                           obtaining such User Party's consent, (such consent
                           not to be unreasonably withheld), have the right to
                           relocate or close any such Gantry;

         (b)      the User Party of a Gantry shall pay a reasonable fee to the
                  Owner Party for the use of such Gantry, such fee to be
                  reasonably assessed on a cost recovery basis and calculated by
                  reference to the usage by the User Party of the relevant
                  Gantry. The Owner Party shall use its reasonable endeavours to
                  keep all costs associated with such Gantry as low as possible.
                  The Owner Party and User Party agree to offset fees payable to
                  each other in respect of the use of Gantries and Weighbridges
                  such that a net payment only is required to be made;

         (c)      each Owner Party shall be liable for the maintenance and
                  operation of all its Gantries, except where damage (other than
                  fair wear and tear) shall have been caused to any Gantry of an
                  Owner Party by a User Party, in which case the User Party
                  alone shall be responsible for the repair of such Gantry and
                  all costs incidental thereto to the reasonable satisfaction of
                  the Owner Party including as to timing. If the User Party
                  fails to repair the damaged Gantry within a reasonable time,
                  the Owner Party may itself repair that damage and the User
                  Party will indemnify the Owner Party against all reasonable
                  costs, expenses, charges and losses incurred in relation to
                  such repair; and

         (d)      the parties acknowledge that, as at the Operational Date, the
                  Gantries will be operated and maintained under contract by
                  Forest Distribution Limited for the Owner Parties.

2.4      The parties acknowledge and agree that, as soon as practicable and in
         any event by no later than the Anniversary Date, the relevant members
         of the FCF Group and CNIFP shall negotiate in good faith with a view to
         entering into a roading, weighbridge and gantries infrastructure usage
         sharing deed ("INFRASTRUCTURE SHARING DEED") to provide for the ongoing
         sharing of usage of Roading Infrastructure as between the parties
         including the parties' access to each other's lookout towers as
         contemplated in clause 4.4 and FCF's access through CNIFP's Murupara
         log yard as contemplated in clause 11.1. On execution of the
         Infrastructure Sharing Deed, the provisions of the Infrastructure
         Sharing Deed shall supersede and replace clauses 2.1, 2.2, 2.3, 4.4
         and/or 11.1 and all other parts of this deed which relate to Roading
         Infrastructure.

2.5      Notwithstanding the good faith efforts of the parties under clause 2.4
         if the relevant members of the FCF Group and CNIFP have not entered
         into the Infrastructure Sharing Deed (as defined in clause 2.4) prior
         to or on the Anniversary Date, each Owner Party under clauses 2.1, 2.2,
         2.3, 4.4 and/or 11.1 shall be entitled to terminate the arrangements
         set out in clauses 2.1, 2.2, 2.3, 4.4 and/or 11.1 which relate to the
         Infrastructure by giving not less than six months' written notice of
         termination to each relevant User Party affected by such termination in
         which case clause 2.6 will apply.

                                Transition Deed                               11
<PAGE>

2.6      The parties acknowledge and agree that for so long as clauses 2.1, 2.2
         and 2.3 and all other parts of this deed which relate to Roading
         Infrastructure are in effect the arrangements affecting roading,
         weighbridges, gantries or similar infrastructure which are set out in
         the Tasman Contracts shall be suspended and shall not bind the parties
         to the Tasman Contracts whilst so suspended.

3.       RADIO COMMUNICATIONS

3.1      From the Transitional Date, FCF will license or otherwise make
         available to CNIFP the following radio frequencies:

         (a)      Pukehina Lookout: E149 (Ch27)
                  Rainbow Mt: E141 (Ch31)
                  Taupiri Lookout: E161 (Ch32)
                  Moerangi: E163 (Ch33)
                  Galatea Lookout: E165 (Ch34)
                  Wairango: E145 (Ch37)

                  (identified by E number identifiers assigned by the Ministry
                  of Economic Development in use at such site);

         (b)      such shared frequencies and simplex channels where access is
                  reasonably required for accident, emergency, transport
                  co-ordination and dispatch purposes (and in the case of
                  simplex channels where access is also reasonably required for
                  the management and operations of the Business),

         (the "FREQUENCIES") and the use of FCF's radio communication network
         (which shall for the purposes of this clause 3 but subject to clause
         3.3, include the underlying Radio Communications Infrastructure) in the
         Central North Island for use solely in the management or operations of
         CNIFP's forest estate. The parties agree that the dedicated frequencies
         comprising the Frequencies (as contemplated in subclause (a) above) are
         licensed to CNIFP on an exclusive basis and shall not be used by FCF
         and/or authorised by FCF for use by any other person during the term of
         this licence.

3.2      FCF and CNIFP will enter into a licence and service level agreement in
         respect of the use of the Frequencies and FCF's radio communication
         network in the Central North Island by CNIFP ("LICENCE AGREEMENT"), the
         Licence Agreement to be on the following terms:

         (a)      to be for a perpetual term terminable by either party on 12
                  months' notice given at any time after the Anniversary Date;

         (b)      to provide for an annual licence fee based on appropriate
                  market rates in respect of comparable licence arrangements,
                  the licence fee for the first 3 month period to be $150,000
                  plus GST and $10,000 per month plus GST for each month
                  thereafter. The licence fee shall be renegotiated at each
                  anniversary of the execution of the Licence Agreement for the
                  following 12 month period. If no agreement is reached on the
                  new licence fee to apply to any 12 month period, then the fee
                  shall be determined by a person mutually agreed by CNIFP and
                  FCF or, failing agreement, nominated by the chairperson at the
                  relevant time of the Auckland District Law Society, such
                  person to act as an expert, and not an arbitrator, and whose
                  decision shall be final and binding on the parties. The costs
                  of such expert determination shall be shared and paid equally
                  by FCF and CNIFP;

         (c)      the licence fee is to be payable quarterly in advance with the
                  first payment of $150,000 plus GST being due on the
                  Operational Date;

                                Transition Deed                               12
<PAGE>

         (d)      the Frequencies and FCF's radio communication network in the
                  Central North Island are to be used only by the CNIFP (and its
                  agents and/or contractors) for management of the CNIFP forest
                  estate;

         (e)      the dedicated frequencies comprising the Frequencies (as
                  contemplated by clause 3.1(a)) are licensed to CNIFP on an
                  exclusive basis and shall not be used by FCF and/or authorised
                  by FCF for use by any other person during the term of the
                  Licence Agreement;

         (f)      FCF shall not be liable to CNIFP for any loss of profits,
                  indirect, special or consequential losses, damages,
                  liabilities, costs and/or expenses sustained, suffered and/or
                  incurred by CNIFP as a result of any breach by FCF of the
                  Licence Agreement;

         (g)      CNIFP shall be entitled to assign, novate or otherwise
                  transfer all of its rights and obligations arising under or in
                  respect of the Licence Agreement to any purchaser of all or
                  substantially all of the CNIFP forest estate;

         (h)      the Licence Agreement is to otherwise contain usual provisions
                  contained in similar licence and service level agreements and
                  if the parties are unable to agree on any provisions of the
                  Licence Agreement within a period of 10 Business Days of the
                  dispute arising, the dispute shall be determined by a person
                  mutually agreed by CNIFP and FCF or, failing agreement,
                  nominated by the chairperson at the relevant time of the
                  Auckland District Law Society, such person to act as an
                  expert, and not an arbitrator, and whose decision shall be
                  final and binding on the parties. The costs of such expert
                  determination shall be shared and paid equally by CNIFP and
                  FCF.

3.3      CNIFP acknowledges to FCF that the Licence Agreement shall only relate
         to the use of the Frequencies and FCF's radio communication network in
         the Central North Island, and FCF shall not provide any other
         infrastructure (such as portable transmitters and receivers comprising
         radio handsets (other than those installed or contained in surplus FCF
         leased vehicles assigned to or used by CNIFP under clause 6)) which may
         be required by CNIFP to operate the radio communications system.

3.4      CNIFP grants to FCF a licence for the continued access to, and use,
         maintenance and operation of, the fire control centre, generator and
         related equipment owned by FCF ("Control Centre"), as located in its
         current position at the Waiotapu premises, for a period of three months
         commencing on the Operational Date on the following terms and
         conditions:

         (a)      FCF shall have unlimited access to the Control Centre at any
                  time in the event of an emergency requiring FCF personnel to
                  be present at the Control Centre. At all other times and for
                  all other purposes (including regular maintenance of the
                  Control Centre), FCF shall be entitled to reasonable access to
                  the Control Centre during normal business hours;

         (b)      CNIFP shall not be entitled to charge FCF any licence fee in
                  relation to the licence contemplated in this clause 3.4;

         (c)      notwithstanding that FCF has a licence for the continued
                  access to, and use, maintenance and operation of, the Control
                  Centre in the manner and during the licence period
                  contemplated in this clause 3.4, and has operational control
                  of the Control Centre during such licence period, CNIFP shall
                  be entitled to utilise the Control Centre on a "no charge"
                  basis at any time during such licence period as part of its
                  management or operations of the Business, subject to CNIFP
                  complying with the reasonable directions of FCF relating to
                  the use of the Control Centre; and

                                Transition Deed                               13
<PAGE>

         (d)      at the expiry of the licence period set out in this clause,
                  FCF will transfer ownership of the Control Centre to CNIFP for
                  the sum of $1. CNIFP acknowledges that FCF gives no warranty
                  as to the fitness for purpose of the Control Centre.

3.5      The parties acknowledge and agree that, as soon as practicable and in
         any case promptly after the date that the Licence Agreement is executed
         by the parties to it, they shall enter into good faith discussions with
         a view to establishing a special purpose joint venture entity ("RCJV")
         as the owner and operator of the Radio Communications Infrastructure
         and its functions, such RCJV to be established on the following
         principles:

         (a)      each Owner Party shall, to the fullest extent it is lawfully
                  able to do so, transfer, assign and/or license to, or
                  otherwise make available for use by, the RCJV all Radio
                  Communications Infrastructure and radio frequencies which it
                  owns, or has rights in relation to, at fair and equitable
                  transfer costs to be agreed as between the parties to the
                  RCJV;

         (b)      the sole purpose of the RCJV is to own, operate, maintain and,
                  if necessary, replace and upgrade, for the benefit of all RCJV
                  participants, the Radio Communications Infrastructure and
                  radio frequencies;

         (c)      the RCJV will provide radio communications capability,
                  functions and services to the RCJV participants on a cost
                  recovery basis, which will be apportioned pro rata by
                  reference to the size of each RCJV participant's aggregate
                  forest estate in the Central North Island which benefits from
                  the provision of such capability, functions and services; and

         (d)      the RCJV participants shall jointly control the management and
                  operation of the RCJV.

3.6      If, notwithstanding the good faith efforts of the parties under clause
         3.5, the RCJV is not established prior to or on the Anniversary Date,
         the FCF Group or CNIFP shall be entitled, upon either of them giving
         written notice to the other, to:

         (a)      discontinue all further discussions regarding the
                  establishment of the RCJV; and

         (b)      subject to clauses 3.1 and 3.2, deal with the radio
                  communications infrastructure which it owns, or has rights in
                  relation to, in such manner as it deems fit, and the
                  provisions of clause 3.5 shall be at an end.

4.       FIRE PROTECTION

4.1      CNIFP shall have the right to purchase certain surplus fire equipment
         from FCF ("SURPLUS FIRE EQUIPMENT") on the following terms:

         (a)      within 5 Business Days of the Transitional Date, FCF will give
                  CNIFP a list of the Surplus Fire Equipment and its assessment
                  of the fair value for each item of Surplus Fire Equipment;

         (b)      FCF shall allow CNIFP reasonable opportunity (at such times as
                  are mutually convenient to both parties) to assess the
                  condition of the Surplus Fire Equipment during the period of
                  10 Business Days from the date that FCF gives CNIFP the list
                  of the Surplus Fire Equipment under subclause (a) above. CNIFP
                  acknowledges that FCF gives no warranty as to the fitness for
                  purpose of such Surplus Fire Equipment;

                                Transition Deed                               14
<PAGE>

         (c)      within 2 Business Days of the expiry of the 10 Business Days
                  period specified in subclause (b) above, CNIFP shall notify
                  FCF in writing of all items of Surplus Fire Equipment which
                  CNIFP wishes to purchase, the relevant purchase price being
                  the value for each relevant item of Surplus Fire Equipment set
                  out in the list provided under subclause 4.1(a) (or such other
                  purchase price as the parties may otherwise agree); and

         (d)      completion of any sale of the Surplus Fire Equipment shall
                  occur on the date which is four months after the Operational
                  Date. CNIFP shall make payment of the purchase price in full
                  on that date, and FCF shall transfer free and clear title to
                  the relevant Surplus Fire Equipment purchased by CNIFP under
                  this clause upon payment of the purchase price in full by
                  CNIFP.

4.2      FCF and CNIFP will as soon as practicable after the Transitional Date
         enter into a data provision and service level agreement in respect of
         the supply by FCF to CNIFP of data from FCF's weather station network
         which covers CNIFP's forests ("DATA SUPPLY AGREEMENT") as from the
         Operational Date, the Data Supply Agreement to be on the following
         terms:

         (a)      to be for a perpetual term terminable by either party on 12
                  months' notice;

         (b)      to provide for an annual licence fee based on appropriate
                  market rates for the provision of a comparable service, the
                  licence fee for the first 12 month period to be $2,000 per
                  month plus GST. The licence fee shall be renegotiated at each
                  anniversary of the execution of the Data Supply Agreement for
                  the following 12 month period. If no agreement is reached on
                  the new licence fee to apply to any 12 month period, then the
                  fee shall be determined by a person mutually agreed by CNIFP
                  and FCF or, failing agreement, nominated by the chairperson at
                  the relevant time of the Auckland District Law Society, such
                  person to act as an expert, and not an arbitrator, and whose
                  decision shall be final and binding on the parties. The costs
                  of such expert determination shall be shared and paid equally
                  by FCF and CNIFP;

         (c)      the licence fee is to be payable quarterly in advance with the
                  first payment being due on the Operational Date; and

         (d)      the Data Supply Agreement to otherwise contain usual
                  provisions contained in similar data supply and service level
                  agreements and if the parties are unable to agree on any
                  provisions of the Data Supply Agreement within a period of 10
                  Business Days of the dispute arising, the dispute shall be
                  determined by a person mutually agreed by CNIFP and FCF or,
                  failing agreement, nominated by the chairperson at the
                  relevant time of the Auckland District Law Society who shall
                  act as an expert, not an arbitrator, and whose decision shall
                  be final and binding on the parties. The costs of such expert
                  determination shall be shared and paid equally by FCF and
                  CNIFP.

4.3      During the period of four months from the Operational Date, FCF will
         provide to CNIFP, in respect of CNIFP's forest estate, the same level
         of fire protection services that FCF is currently providing to CNIFP
         under the Management Agreement on the following basis:

         (a)      FCF shall be entitled to use at no charge all of CNIFP's fire
                  protection infrastructure and equipment as part of an
                  integrated fire protection service for the forest estates of
                  both CNIFP and FCF;

         (b)      CNIFP will pay to FCF a fee of $100,000 (plus GST) for the
                  provision of such fire protection services for the relevant
                  four month period and reimburse FCF

                                Transition Deed                               15
<PAGE>

                  for all direct third party costs and expenses incurred by FCF
                  in providing such fire protection services during that period;

         (c)      FCF shall bear no liability or responsibility for any costs,
                  losses, expenses or any other amounts incurred by CNIFP
                  directly or indirectly as a consequence of, or related to, any
                  fire which occurs in the CNIFP forest estate whilst FCF is
                  providing these fire protection services and FCF disclaims all
                  such liability or responsibility to the maximum extent
                  permitted by law; and

         (d)      FCF shall fully discuss with CNIFP its fire protection plans
                  for the CNIFP forest estate, and will use its reasonable
                  endeavours to accommodate any reasonable request by CNIFP to
                  vary or modify any aspect of such fire protection plan and its
                  implementation.

4.4      During the period from the Operational Date until the earlier of the
         date that the Infrastructure Sharing Deed (as defined in clause 2.4) is
         executed by all parties to that deed and becomes operational and the
         expiry of the notice period relating to any relevant termination notice
         given by CNIFP or FCF under subclause 2.1(a)(iii) or clause 2.5 (each
         in its capacity as an Owner Party in respect of its respective lookout
         towers), each of CNIFP and FCF (as an Owner Party) agrees to grant to
         the other party (as a User Party) access to all its lookout towers
         located within its respective forest estates in the Central North
         Island on the following basis:

         (a)      each User Party shall, when accessing an Owner Party's lookout
                  towers, comply with the Owner Party's reasonable rules
                  relating to such lookout towers, including all health and
                  safety restrictions and requirements, and will procure all its
                  agents and subcontractors to do the same;

         (b)      each Owner Party shall allow the User Party reasonable access
                  over those portions of the Owner Party's forest estate
                  necessary to provide access to the relevant lookout towers;

         (c)      the Owner Party shall not be responsible for manning any
                  lookout towers for the benefit of the User Party; and

         (d)      there shall be no charge to the User Party for such access.

5.       WAIOTAPU PREMISES

5.1      FCF acknowledges and agrees that, subject to clause 5.3 and in relation
         to staff required to stay on-site or access the site under clause 3.4,
         it will vacate ("VACATION"), and give vacant possession to, the
         premises owned by CNIFP at Waiotapu ("PREMISES") by no later than the
         Operational Date.

5.2      The parties acknowledge and agree that, prior to Vacation, CNIFP,
         and/or any person authorised by it, shall at all times be entitled to
         full access to the Premises for the purposes of assessing the condition
         of the Premises and its usage options, and preparing the Premises for
         eventual occupation by CNIFP, and/or other persons authorised by it,
         provided that (subject to clause 5.3) such access shall not
         unreasonably interfere with FCF's continued use of the Premises until
         Vacation and reasonable prior notice is given to FCF.

5.3      Notwithstanding anything in clause 5.2, FCF agrees to relinquish the
         use of that part of the Premises occupied by Central North Island
         Forest Managers Limited (CNIFML) as at the Transitional Date ("Interim
         Space") as soon as reasonably possible but in any case by no later than
         the date which is one month after the Transitional Date to enable
         CNIFP, and/or any person authorised by it, to occupy and use the
         Interim Space. FCF acknowledges and agrees that (subject to clause 5.5)
         all fixtures, fittings

                                Transition Deed                               16
<PAGE>

         and office equipment contained within the Interim Space, including all
         telecommunications cabling and lines and other communication
         infrastructure (except the links to the FCF Group's network) within the
         Interim Space utilised by its current occupants, shall not be removed
         but remain in place for use by CNIFP, and/or any person authorised by
         it, upon FCF relinquishing the use of the Interim Space in the manner
         contemplated in this clause.

5.4      FCF acknowledges, on behalf of itself and all occupants of the
         Premises, that (subject to clause 5.5) all fixtures, fittings and
         office equipment within the Premises (including all wiring,
         telecommunication and data cabling and lines but excluding the links,
         if any, to the FCF Group's network) are the sole property of CNIFP and
         shall, upon Vacation, remain within the Premises.

5.5      CNIFP acknowledges that:

         (a)      the fixtures, fittings and equipment contained within the
                  Interim Space owned by CNIFML may be removed by CNIFML from
                  the Interim Space, provided that such removal occurs by no
                  later than the date of vacation of the Interim Space by
                  CNIFML; and

         (b)      the PABX system owned by FCF contained within the Premises may
                  be removed by FCF, provided that such removal occurs by no
                  later than the Operational Date.

6.       VEHICLE LEASES

6.1      The parties acknowledge and agree that some of FCF's leased vehicles as
         set out in schedule 3 will become surplus to FCF's requirements by
         reason of the transition of the management of the Business from FCF to
         CNIFP and/or TMC. Accordingly, as any leased vehicle described in
         schedule 3 becomes surplus to FCF's requirements, FCF will notify CNIFP
         of the same as soon as practicable thereafter. CNIFP shall, within five
         Business Days of receiving such notice from FCF, notify FCF as to
         whether it wishes to use such surplus leased vehicle.

6.2      Upon receiving notice from CNIFP under clause 6.1 that it wishes to use
         a surplus leased vehicle, FCF shall, as soon as practicable, assign to,
         or otherwise procure for continued usage by, CNIFP the leased vehicles
         specified in the notice from CNIFP under clause 6.1 to the extent FCF
         is legally able to do so. From the relevant date of assignment of (or,
         if incapable of assignment, from the date of first usage of) such
         vehicles by CNIFP, CNIFP shall be responsible for all costs and
         expenses incurred relating to such vehicles (including all leasing
         costs and the costs of transfer) provided that FCF shall remain liable
         for all costs relating to such vehicles incurred prior to the relevant
         date of assignment or first usage by CNIFP (as the case may be).

7.       BUSINESS AND OTHER ASSETS

7.1      FCF shall transfer to CNIFP free and clear title (but without warranty
         as to fitness for purpose) to all surplus FCF business assets
         comprising computer equipment set out in the surplus FCF business asset
         register, attached as schedule 2 on or prior to the Operational Date.
         CNIFP and FCF shall cooperate and work together in good faith with a
         view to facilitate the passing of control and possession of all such
         surplus FCF business assets from FCF to CNIFP by no later than the
         Operational Date.

7.2      CNIFP shall, at any time within 2 weeks from the Transitional Date, be
         entitled to commence an asset verification exercise in respect of the
         items listed in the Business assets register attached as schedule 4 and
         ownership of the Weighbridges and the Gantries. FCF and CNIFP shall
         cooperate and work together in good faith with a view to conducting
         this asset verification exercise with a view to identifying the
         Business

                                Transition Deed                               17
<PAGE>

         assets to be transferred out of the control and/or possession of FCF to
         CNIFP on the Operational Date and ownership of the Weighbridges and the
         Gantries. CNIFP acknowledges that FCF gives no warranty as to the
         accuracy and completeness of the Business asset register attached as
         schedule 4.

8.       CNIFP PLANTS

8.1      The parties acknowledge that, as at the Transitional Date, KPP is owned
         by CNIFP but is managed and operated by FCF on behalf of CNIFP. In
         order to facilitate the orderly transition of the management and
         operations of KPP from FCF to CNIFP and completion of such orderly
         transition by the Operational Date:

         (a)      CNIFP shall at all times be entitled to full access to KPP
                  prior to the Operational Date in order to assess the operating
                  condition of KPP and options for ongoing operations of KPP
                  subsequent to the Operational Date, provided that such access
                  shall not unreasonably interfere with FCF's ongoing management
                  of KPP until the Operational Date and reasonable prior notice
                  is given to FCF;

         (b)      FCF shall use its reasonable endeavours to provide or make
                  available to CNIFP within 5 Business Days after the
                  Transitional Date, full details regarding KPP which are held
                  by, or under the control of, FCF (including all KPP staff
                  details (including all employment contracts and other
                  employment terms), operational reports such as health and
                  safety reports, operation manuals, maintenance records,
                  production and financial reports, records, and spreadsheet and
                  database printouts, and any other relevant information
                  regarding KPP (including any CNIFP Information relating to
                  KPP));

         (c)      FCF shall use its reasonable endeavours to take all action
                  reasonably requested by CNIFP to assist it with the migration
                  of staff at KPP from FCF to CNIFP as at the Operational Date.
                  CNIFP and FCF shall cooperate and consult with each other in
                  relation to all dealings with staff at KPP, and all
                  communication to such staff, insofar as such communication
                  relates to any migration of staff at KPP from FCF to CNIFP
                  and/or any of the obligations of any member of the FCF Group
                  under this deed, shall be agreed (acting reasonably) and/or
                  issued jointly by CNIFP and FCF. CNIFP will indemnify the FCF
                  Group against all redundancy compensation payable under the
                  relevant terms of employment of staff at KPP that is incurred
                  by the FCF Group in connection with any claims or demands by a
                  staff member at KPP for redundancy compensation resulting from
                  the termination of their employment with the FCF Group,
                  whether such staff member accepts a job offer from CNIFP or
                  otherwise;

         (d)      FCF acknowledges and agrees that all CNIFP IT, CNIFP
                  Information and Data (including all operational manuals and
                  procedures relating to the operation of KPP) relating to KPP
                  is owned by CNIFP and shall remain with or at KPP (as the case
                  may be) except to the extent that:

                  (i)      they contain Confidential Information or Intellectual
                           Property of the FCF Group in which case CNIFP shall
                           not own such Confidential Information or Intellectual
                           Property but rather FCF shall grant to CNIFP a
                           perpetual, royalty free licence to use the same
                           solely for the operation of KPP, such licence to be
                           non-transferable (including by way of sublicence)
                           except to a purchaser of all or substantially all of
                           CNIFP's forest estate; or

                  (ii)     ownership of such CNIFP IT, CNIFP Information or Data
                           may be subject to any third party rights in respect
                           of it; and

                                Transition Deed                               18
<PAGE>

         (e)      the FCF Group will use its reasonable endeavours to do all
                  things reasonably requested by CNIFP to ensure the smooth and
                  efficient transfer of KPP and its operations from FCF to CNIFP
                  on the Operational Date.

8.2      The parties acknowledge that, as at the Transitional Date, the Relevant
         Processing Plants are owned by CNIFP but are managed and operated by
         FCF on behalf of CNIFP. In order to facilitate the orderly transition
         of the management and operations of the Relevant Processing Plants from
         FCF to CNIFP and completion of such orderly transition on 4.00 pm on 30
         September 2003 ("RPP HANDOVER DATE"):

         (a)      CNIFP shall at all times be entitled to full access to the
                  Relevant Processing Plants in order to assess the operating
                  condition of the Relevant Processing Plants and options for
                  ongoing operations of the Relevant Processing Plants
                  subsequent to the RPP Handover Date, provided that such access
                  shall not unreasonably interfere with FCF's ongoing management
                  of the Relevant Processing Plants until the RPP Handover Date
                  and (in respect of the Transitional Period only) reasonable
                  prior notice is given to FCF;

         (b)      FCF shall use its reasonable endeavours to provide or make
                  available to CNIFP within 10 Business Days after the
                  Transitional Date, full details regarding the Relevant
                  Processing Plants which are held by or under the control of
                  FCF (including the Relevant Processing Plants staff details
                  (including all employment contracts and other employment
                  terms), operational reports such as health and safety reports,
                  operation manuals, maintenance records, production and
                  financial reports, records, and spreadsheet and database
                  printouts, and any other relevant information regarding the
                  Relevant Processing Plants (including any CNIFP Information
                  relating to the Relevant Processing Plants));

         (c)      Notwithstanding termination of the Management Agreement on the
                  Operational Date under the Settlement Agreement, FCF shall,
                  during the 3 month period between the Operational Date and the
                  RPP Handover Date ("EXTENSION PERIOD"), continue to manage and
                  operate the Relevant Processing Plants on behalf of CNIFP on
                  substantially the same basis that it manages and operates the
                  Relevant Processing Plants during the Transitional Period, and
                  in this regard FCF and CNIFP further acknowledge and agree
                  that:

                  (i)      during the Extension Period, CNIFP shall indemnify
                           the FCF Group against all fees, costs, losses,
                           demands and charges incurred by the FCF Group in
                           respect of the management and operation of the
                           Relevant Processing Plants, such fees, costs, losses,
                           demands and charges to be calculated and charged to
                           CNIFP on the same basis as fees, costs, losses,
                           demands and charges were charged to CNIFP during the
                           Transitional Period as Operating Costs (including,
                           for the avoidance of doubt, the recharge of "SG&A"
                           costs as defined in the definition of Operating
                           Costs). FCF shall be entitled to deduct from any
                           receipts received by it in respect of or on account
                           of the Business, including the Relevant Processing
                           Plants, payments due from CNIFP under this clause;

                  (ii)     during the Extension Period, subject to demand for
                           the same by the Relevant Processing Plants, FCF shall
                           supply the Relevant Processing Plants with two thirds
                           of the volume of each grade (other than "R" grade) of
                           forest products, and in relation to "R" grade, half
                           of the volume of that grade, supplied by FCF to the
                           Relevant Processing Plants during the three month
                           period preceding the Transitional Date ("Supply
                           Period") and shall use its reasonable endeavours
                           (having regard to the

                                Transition Deed                               19
<PAGE>

                           FCF Group's harvest volumes out of its forest estates
                           and the operational requirements of the FCF Group's
                           mills) to supply the Relevant Processing Plant with
                           the remaining one third of the volume of the forest
                           products supplied by FCF to the Relevant Processing
                           Plants during the Supply Period. To the extent that
                           there are any material changes in market demand for
                           processed forest products produced by the Relevant
                           Processing Plants, FCF and CNIFP will consult and
                           reasonably cooperate to mitigate any effect which
                           such material changes may have on the Relevant
                           Processing Plants. The price payable by CNIFP for
                           forest products supplied by FCF (in relation to
                           supplies from the FCF Group forest estates) to the
                           Relevant Processing Plants shall be the average
                           transfer price paid by the Relevant Processing Plants
                           for equivalent grades of forest products to FCF
                           during the three month period preceding the
                           Operational Date (the transfer price for each such
                           month as determined in accordance with the transfer
                           price mechanism existing as at the Transitional Date)
                           and the price payable by CNIFP for forest products
                           procured by FCF from third parties for supply to the
                           Relevant Processing Plant shall be the price payable
                           by FCF to such third parties;

                  (iii)    the wood volumes and grade mix of forest products
                           supplied to the Relevant Processing Plants during the
                           Extension Period shall be processed by the Relevant
                           Processing Plants in substantially the same manner as
                           during the Transitional Period. FCF shall use its
                           reasonable endeavours to accommodate any reasonable
                           request by CNIFP to process, by way of sample
                           batch(es)/product lines (for sale by CNIFP), forest
                           products of a different type or grade mix from that
                           currently processed by the Relevant Processing Plants
                           (such type or grade mix to be specified by CNIFP)
                           provided that to do so only requires the use of
                           existing resources at the Relevant Processing Plants;

                  (iv)     during the Extension Period, CNIFP, its agents and
                           subcontractors shall be entitled to full access to
                           the Relevant Processing Plants and the location of
                           staff, assets and equipment at the Relevant
                           Processing Plants, so as to facilitate the smooth and
                           efficient transfer of the operations of the Relevant
                           Processing Plants from FCF to CNIFP on the RPP
                           Handover Date provided that such access shall not
                           unreasonably interfere with FCF's ongoing management
                           of the Relevant Processing Plants until the RPP
                           Handover Date;

                  (v)      during the Extension Period, FCF shall, in
                           consultation with CNIFP, use its reasonable
                           endeavours to secure forward sales of processed
                           forest products from the Relevant Processing Plants
                           for delivery within one month after the RPP Handover
                           Date, and to use its reasonable endeavours to
                           otherwise maintain ongoing sales relationships
                           existing as at the Transitional Date (other than with
                           the FCF Group), in each case in substantially the
                           same manner as FCF has provided equivalent services
                           during the Transitional Period. Any orders or forward
                           sales planned by FCF under this clause for delivery
                           after the RPP Handover Date shall be the
                           responsibility of CNIFP and the FCF Group shall have
                           no responsibility to meet such orders;

         (d)      FCF shall use its reasonable endeavours to take all action
                  reasonably requested by CNIFP to assist it with the migration
                  of staff at the Relevant Processing Plants from FCF to CNIFP
                  as at the RPP Handover Date. CNIFP and FCF shall cooperate and
                  consult with each other in relation to all dealings with staff
                  at the Relevant Processing Plants, and all communication to
                  such

                                Transition Deed                               20
<PAGE>

                  staff, insofar as such communication relates to any migration
                  of staff at the Relevant Processing Plants from FCF to CNIFP
                  and/or any of the obligations of any member of the FCF Group
                  under this deed, shall be agreed (acting reasonably) and/or
                  issued jointly by CNIFP and FCF. CNIFP will indemnify the FCF
                  Group against all redundancy compensation payable under the
                  relevant terms of employment of staff at the Relevant
                  Processing Plants that is incurred by the FCF Group in
                  connection with any claims or demands by a staff member at the
                  Relevant Processing Plants for redundancy compensation
                  resulting from the termination of their employment with the
                  FCF Group, whether such staff member accepts a job offer from
                  CNIFP or otherwise;

         (e)      FCF acknowledges and agrees that all CNIFP IT, CNIFP
                  Information and Data (including all operational manuals and
                  procedures relating to the operation of a Relevant Processing
                  Plant) relating to a Relevant Processing Plant is owned by
                  CNIFP and shall remain with or at that Relevant Processing
                  Plant (as the case may be) except to the extent that:

                  (i)      they contain Confidential Information or Intellectual
                           Property of the FCF Group in which case CNIFP shall
                           not own such Confidential Information or Intellectual
                           Property but rather FCF shall grant to CNIFP a
                           perpetual, royalty free licence to use the same
                           solely for the operation of the Relevant Processing
                           Plant, such licence to be non-transferable (including
                           by way of sublicence) except to a purchaser of the
                           Relevant Processing Plant; or

                  (ii)     ownership of such CNIFP IT, CNIFP Information or Data
                           may be subject to any third party rights in respect
                           of it;

         (f)      the FCF Group will use its reasonable endeavours to do all
                  things reasonably requested by CNIFP to ensure the smooth and
                  efficient transfer of the Relevant Processing Plants and their
                  operations from FCF to CNIFP on the RPP Handover Date; and

         (g)      the parties agree:

                  (i)      that FCF shall be entitled, following the
                           Transitional Date but prior to the RPP Handover Date,
                           to remove its equipment and material located in the
                           research and planning workshop at the Relevant
                           Processing Plant at Waipa; and

                  (ii)     to negotiate and enter into a licence for FCF to
                           occupy and access the relevant parts of the Relevant
                           Processing Plant at Waipa for a period of up to nine
                           months after the RPP Handover Date, at a licence fee
                           of $2,000 (plus GST) per month, in order to
                           facilitate the orderly transfer of FCF's IT
                           applications group and associated facilities to an
                           FCF site; and

         (h)      the parties agree that a SOP process will be undertaken in
                  respect of the Relevant Processing Plants in order to manage
                  the obligations of the parties under this clause 8.2.

8.3      CNIFP acknowledges that FCF shall not, in relation to any CNIFP Plant,
         be obliged to supply any feed stocks to CNIFP, or provide any marketing
         operations, at any time after the Operational Date (or after the RPP
         Handover Date in relation to marketing CNIFP stock produced at the
         Relevant Processing Plants) except as agreed between the parties on
         normal commercial terms.

                                Transition Deed                               21
<PAGE>

9.       OTHER SURPLUS ASSETS

9.1      FCF and CNIFP shall, no later than 20 Business Days after the
         Transitional Date, meet to discuss in good faith whether CNIFP wishes
         to purchase any assets considered by FCF to be surplus to its
         requirements following the Operational Date and to establish the basis
         upon which any sale of such assets would take place.

10.      TE NGAE NURSERY

10.1     The parties acknowledge and agree that, as soon as practicable
         following the Transitional Date, FCF and CNIFP shall cooperate and work
         together in good faith to procure Trees and Technology Limited ("T&T")
         to separate the current order for nurseries stock and seedlings for the
         2003 planting season placed by FCF with T&T in relation to both the
         CNIFP and FCF forest estates into two independent orders, one for CNIFP
         in respect of the CNIFP forest estate and the other for FCF in respect
         of the FCF forest estate.

10.2     FCF acknowledges and agrees that, as from the Transitional Date, in
         order to facilitate the 2003 planting season and subsequent planting
         seasons, CNIFP shall be entitled to deal directly with T&T or any other
         nursery services provider in respect of all operational dealings
         relating to the Te Ngae Nursery in order to facilitate the smooth
         transfer of nursery operations from FCF to CNIFP.

10.3     The FCF Group will use its reasonable endeavours to do all things
         reasonably requested by CNIFP, to ensure the smooth and efficient
         transfer of the Te Ngae Nursery and its operations from FCF to CNIFP by
         the Operational Date.

11.      MURUPARA RAILHEAD ISSUES

11.1     The parties acknowledge and agree that there are two separate log yards
         at the Murupara Railhead, one relating to the FCF forest estate and the
         other relating to the CNIFP forest estate, but only the CNIFP log yard
         has direct off-road access. Accordingly, CNIFP agrees to grant to FCF
         off-road access through its Murupara log yard to enable FCF to access
         its Murupara log yard on the following basis:

         (a)      in respect of the roading comprising the off-road access
                  granted by CNIFP to FCF under this clause, but subject to
                  subclauses (b) and (c) below, FCF shall not be required to pay
                  any charge to CNIFP for use of such off-road access;

         (b)      in respect of any use of or access to any rail crossing to
                  enable FCF to gain access to the FCF Murupara log yard, FCF
                  shall be responsible for payment of all costs incurred in
                  respect of the continued use, operation and maintenance of
                  such rail crossing; and

         (c)      CNIFP may, following the Anniversary Date, terminate all
                  rights of off-road access by FCF through CNIFP's Murupara log
                  yard by giving not less than 6 months' written notice of
                  termination to FCF.

11.2     FCF and CNIFP further agree to cooperate and work together in good
         faith with the view to establishing a commercially sensible operational
         structure for their respective log yards at the Murupara Railhead.

11.3     CNIFP and FCF agree to cooperate and work together in good faith with a
         view to jointly establishing systems and procedures (including rail
         scheduling) for the efficient use of the rail capacity from the
         Murupara Railhead and the Kawerau Railhead, the primary objective being
         the efficient transportation of wood from the Murupara Railhead and the
         Kawerau Railhead. If at any time FCF and CNIFP are unable to reasonably
         allocate available rail capacity so that they are each able to
         transport all

                                Transition Deed                               22
<PAGE>

         their wood from the Murupara Railhead and the Kawerau Railhead to their
         required destination(s) to meet their respective delivery timeframes,
         the parties acknowledge and agree that such rail capacity shall be
         allocated as between the parties by reference to the relative wood
         volumes transported by FCF and CNIFP respectively from the Murupara
         Railhead and the Kawerau Railhead during the preceding quarter.

12.      EXPORT RELATED ISSUES

12.1     FCF acknowledges that CNIFP has entered into an export joint venture
         with Carter Holt Harvey Limited relating to the export of CNIFP forest
         products from New Zealand. FCF and CNIFP acknowledge and agree that
         they have established CNIFP forest product export protocols and
         principles ("Export Protocols"), as set out in schedule 5, to
         facilitate the export of CNIFP forest products under such export joint
         venture arrangements for the period referred to in the Export
         Protocols. FCF and CNIFP shall use their respective reasonable
         endeavours to comply with the Export Protocols. The parties agree that,
         to the extent that the Export Protocols are directly inconsistent with
         the provisions of the Management Agreement, the Export Protocols will
         override the provisions of the Management Agreement in respect of the
         export of CNIFP forest products after the Transitional Date.

12.2     FCF agrees to request Port of Tauranga to re-allocate port storage
         space on the basis of forecast export log volumes of Port of Tauranga's
         users, including CNIFP.

13.      CNIFP INFORMATION, IT AND DATA

13.1     Subject to and in accordance with clauses 13.2 to 13.5 (inclusive) and
         16.2, the parties hereby agree that during, and where relevant after,
         the Transitional Period FCF shall use its reasonable endeavours to
         promptly transfer all CNIFP Information then held by, or under the
         control of, FCF to CNIFP in the form that such CNIFP Information is
         held by, or under the control of, FCF except where it is necessary for
         FCF to retain such information in order to meet its obligations under
         the Management Agreement or this deed in which case FCF shall where
         reasonably possible provide CNIFP with copies of such CNIFP Information
         and in any case shall transfer the relevant CNIFP Information promptly
         after it becomes no longer necessary for FCF to retain such
         information.

13.2     FCF acknowledges that, from the Transitional Date, CNIFP will be
         establishing its IT and associated systems ("New IT Systems") so that
         CNIFP is able to functionally operate all necessary IT functions and
         systems for the smooth and efficient running of the Business from the
         Operational Date. FCF agrees to use its reasonable endeavours to do all
         things reasonably requested by CNIFP during the Transitional Period,
         and (in relation to all necessary IT functions and systems for the
         smooth and efficient running of CNIFP's forestry business) for a
         further period of 3 months after the Operational Date, to assist in
         such establishment of the New IT Systems, such assistance to include
         the following:

         (a)      providing CNIFP with all CNIFP Information and Data in each
                  case held by, or under the control of, FCF to facilitate the
                  establishment of the New IT Systems (in the form that such
                  CNIFP Information or Data is held by, or under the control of,
                  FCF);

         (b)      to promptly, upon request by CNIFP, provide CNIFP with details
                  regarding the existing GIS systems and layers used by FCF in
                  respect of the Business, the Data comprised in the relevant
                  GIS database (in a format reasonably agreed as between the
                  parties) and, if requested by CNIFP, provide CNIFP with the
                  current GIS AML codes (or codes of a similar nature) for use
                  as part of the New IT Systems (which, for the avoidance of
                  doubt, does not include any assistance to acquire any other
                  GIS software);

                                Transition Deed                               23
<PAGE>

         (c)      during the months of May and June 2003, FCF will pass CNIFP
                  Information and Data then held by, or under the control of,
                  FCF from the existing IT systems operated by FCF to CNIFP or
                  TMC as required for the reconciliation of such CNIFP
                  Information and Data with the corresponding information and
                  data generated by the New IT Systems.

         Subject to clause 13.5, CNIFP acknowledges that:

         (d)      where CNIFP considers that it requires the assistance of FCF
                  as contemplated in this clause 13.2 (in relation to all
                  necessary IT functions and systems for the smooth and
                  efficient running of CNIFP's forestry business) during the 3
                  month period following the Operational Date, CNIFP will give
                  FCF written notice of the same within 15 Business Days of the
                  Transitional Date together with notice of the number of full
                  time employees currently engaged to provide IT related
                  services in respect of the Business that CNIFP considers as
                  being necessary to provide such assistance. FCF shall use all
                  reasonable endeavours to procure the necessary number of such
                  employees for the required period of assistance (such period
                  not to exceed 3 months from the Operational Date), provided
                  that FCF shall only be obliged to procure such employees and
                  to provide the required assistance if CNIFP meets all costs of
                  such employees incurred by FCF during the relevant period of
                  assistance;

         (e)      FCF has no liability or responsibility for any aspect of New
                  IT Systems and FCF disclaims any liability or responsibility
                  to the maximum extent permitted by law; and

         (f)      FCF shall be entitled to, prior to the Operational Date (or
                  the RPP Handover Date in relation to hardware at the Relevant
                  Processing Plants), delete from any hardware device that forms
                  part of the CNIFP IT all communications and records (other
                  than CNIFP Information and Data) stored on such device that
                  are not related to the management or operation of the CNIFP
                  Plants, including correspondence confidential to the FCF Group
                  not needed to manage or operate the CNIFP Plants or directly
                  relevant to such management or operation and any third party
                  software on such hardware device that CNIFP does not, as at
                  the Operational Date or the RPP Handover Date (as the case may
                  be), have a licence or other right or entitlement to use. The
                  process and protocols relating to the undertaking of deletions
                  by FCF under this subclause shall constitute a data transfer
                  issue and be as agreed between the members of the data
                  transfer working group in the manner contemplated in clause
                  13.5.

13.3     FCF agrees to grant to CNIFP a perpetual, royalty-free licence to
         utilise all Intellectual Property in any IT comprising the "Sonics
         Program" (including but without limitation all relevant software,
         operations manuals and other related IT infrastructure supporting the
         "Sonics Program" and the portable sonics units used at Murupara) solely
         for use in the Business such licence to be transferable (including by
         way of sublicence) by CNIFP only to a purchaser of all or substantially
         all of CNIFP's forest estate.

13.4     FCF acknowledges and agrees that, as between FCF and CNIFP, all Data
         held by, or under the control of, FCF is the sole property of CNIFP and
         FCF shall have no right to or interest in any such Data. FCF shall
         ensure that all Data utilised by it, or which is generated, collected,
         derived or otherwise arises and is held, or controlled, by it, in
         relation to or in connection with any part or all of the Business
         during the Transitional Period:

         (a)      is properly kept and maintained in electronic (and where
                  relevant, hard copy) form in an industry standard format that
                  is capable of being easily downloaded for removal, amended,
                  modified, updated and/or deleted; and

                                Transition Deed                               24
<PAGE>

         (b)      is properly protected from unauthorised access, use and/or
                  damage, and kept in a secure manner (including but not limited
                  to ensuring data back up integrity and the updating of
                  anti-virus software).

13.5     The parties acknowledge and agree that the transition of management
         functions from FCF to CNIFP will involve the significant transfer of
         CNIFP Information and Data from FCF to CNIFP. Accordingly, the parties
         agree to facilitate the smooth and efficient transfer of such CNIFP
         Information and Data on the following basis:

         (a)      a data transfer working group shall be established by FCF and
                  CNIFP within 5 Business Days from the Transitional Date, such
                  working group to be comprised of two nominated representatives
                  of CNIFP and two nominated representatives of FCF;

         (b)      the data transfer working group shall, unless otherwise agreed
                  as between the parties, meet regularly on a weekly basis;

         (c)      either of the nominated representatives of CNIFP shall be
                  entitled to request FCF (through either of its nominated
                  representatives) to provide details regarding CNIFP
                  Information and Data held by, or under the control of, FCF
                  from time to time, and to request the transfer of such CNIFP
                  Information and Data from FCF to CNIFP in accordance with
                  clauses 13.1 and 13.2; and

         (d)      the process for the actual transfer of such CNIFP Information
                  and Data shall be as agreed between the nominated
                  representatives of CNIFP and FCF provided that this process
                  shall not require any party to incur obligations or perform
                  activities that are inconsistent with the provisions of this
                  deed.

13.6     Notwithstanding anything contained elsewhere in this deed, FCF agrees
         that, in relation to any transfer or provision of CNIFP Information
         and/or Data to CNIFP under this deed by way of electronic means, such
         CNIFP Information and/or Data shall be transferred or provided to CNIFP
         in a generic industry standard format (including, by way of example but
         not limited to CSV, Microsoft Word and Microsoft Excel).

14.      RETURN OF CNIFP WORKING CAPITAL

14.1     Subject to clauses 14.2, 14.3 and 14.4, FCF shall on the Operational
         Date, or on the RPP Handover Date in relation to CNIFP Working Capital
         held at or arising from or in connection with the Relevant Processing
         Plants:

         (a)      return all CNIFP Working Capital to CNIFP by relinquishing
                  possession of such CNIFP Working Capital to CNIFP, such that
                  CNIFP acquires possession and control of the CNIFP Working
                  Capital existing as at the Operational Date or the RPP
                  Handover Date, as the case may be; and

         (b)      transfer to CNIFP, without set-off, deduction and/or other
                  withholding, all CNIFP Moneys as at the Operational Date or
                  the RPP Handover Date, as the case may be.

14.2     CNIFP will fully and effectively indemnify FCF in respect of:

         (a)      the Operating Costs incurred by FCF prior to, but which remain
                  unpaid by FCF as at, the Operational Date and any costs,
                  demands, losses or claims payable or received by FCF after the
                  Operational Date arising out of or in connection with FCF's
                  management of the Business prior to the Operational Date, to
                  the extent the same comprise Operating Costs;

                                Transition Deed                               25
<PAGE>

         (b)      all fees, costs, losses, demands and charges which CNIFP is
                  required to indemnify the FCF Group under clause 8.2(c)(i)
                  that are incurred by any member of the FCF Group prior to, but
                  which remain unpaid by that member of the FCF Group as at, the
                  RPP Handover Date and any fees, costs, demands, losses or
                  claims payable or received by the FCF Group after the RPP
                  Handover Date arising out of or in connection with FCF's
                  management of the Relevant Processing Plants during the
                  Extension Period which CNIFP is required to indemnify the FCF
                  Group under clause 8.2(c)(i);

         (c)      all additional costs (other than those set out in clause
                  8.2(c)(i)) required to be incurred by the FCF Group directly
                  in order to provide services to CNIFP, the Receivers or TMC
                  under this deed (except in relation to services for which
                  specific arrangements as to payments of any costs, fees,
                  charges or amounts have been provided for under this deed,
                  costs which are Operating Costs properly recoverable under the
                  Management Agreement, any costs, fees, charges or amounts
                  payable in respect of or in connection with the termination of
                  the Management Agreement and any amounts payable under the
                  Settlement Agreement) provided that the FCF Group shall not
                  incur any item of additional cost in excess of $5,000, and the
                  aggregate of all such items not separately approved by CNIFP
                  shall not exceed $60,000 per month, without receiving CNIFP's
                  prior approval to do so. If and to the extent that CNIFP does
                  not approve any item of additional cost being incurred, then
                  the FCF Group will not be responsible for the failure to
                  perform any corresponding obligation under this deed, and
                  shall not be liable for any related breach of this deed, which
                  is a direct consequence of FCF not incurring such additional
                  cost.

         FCF will give not less than 5 Business Days' notice in writing of
         expected creditor or other payments (such notice to itemise the
         relevant expected payments, the relevant amounts of each such item and
         the date for such payments, and FCF to also make available for
         inspection by CNIFP all supporting invoices and other relevant
         documentation), and CNIFP will pay to FCF the amounts payable in
         respect of the indemnities in this clause 14.2 no later than the date
         specified in that notice.

14.3     FCF shall promptly collect all outstanding debts and moneys owing on
         account or in respect of the Business, and, subject to its rights under
         clause 8.2(c)(i), immediately transfer to CNIFP all further CNIFP
         Moneys received by it subsequent to the RPP Handover Date by depositing
         in full and without deduction into the bank account(s) designated by
         CNIFP for such purpose, as notified by CNIFP to FCF from time to time.

14.4     If and to the extent that parts of the CNIFP Working Capital existing
         on the Operational Date or the RPP Handover Date, as the case may be,
         are not capable of separate identification on that date, FCF's
         obligation to return such CNIFP Working Capital shall be to deliver to
         CNIFP assets of an equivalent volume and specification so far as is
         reasonably practicable, or where it is not reasonably practicable to do
         so, pay to CNIFP (by depositing in full and without deduction into the
         bank account(s) designated by CNIFP for such purpose and notified by
         CNIFP to FCF) the equivalent cash value of such assets, such cash value
         to be based on the market price payable for such assets.

14.5     For the avoidance of doubt, nothing in this clause 14 requires FCF to
         provide CNIFP with any cash receipts from debtors until FCF has
         collected those receipts or to sell any CNIFP Working Capital
         consisting of stock on the Operational Date other than in accordance
         with clause 12.1 and other than stock arising from the Relevant
         Processing Plants under clause 8.2(c)(v)). FCF shall have no obligation
         to sell any CNIFP Working Capital consisting of stock at the Relevant
         Processing Plants as from the RPP Handover Date.

                                Transition Deed                               26
<PAGE>

15.      INFORMATION CENTRE

15.1     The parties acknowledge and agree that they shall use their reasonable
         endeavours to obtain the consent of the Rotorua District Council to the
         transfer of the management agreement for the Redwood Grove Information
         Centre located at Long Mile Road, Rotorua ("Information Centre")
         managed by FCF to CNIFP effective on the Operational Date, such
         transfer to be effected on the following basis:

         (a)      FCF shall provide to CNIFP full details regarding the
                  Information Centre (including all staff details (including all
                  employment contracts and other employment terms), recreational
                  permit schedules and any other relevant information regarding
                  the Information Centre) within 5 Business Days of the
                  Transitional Date;

         (b)      during the Transitional Period, FCF shall not without the
                  prior consent of CNIFP issue any recreational permit where the
                  relevant usage period arises after the Operational Date. FCF
                  shall also consult with CNIFP in respect of all recreational
                  permits to be issued in respect of usage during the
                  Transitional Period; and

         (c)      if the consent of the Rotorua District Council is obtained,
                  CNIFP shall use its reasonable endeavours to do all things
                  reasonably necessary, and FCF shall use its reasonable
                  endeavours to do all acts reasonably requested by CNIFP, to
                  ensure the smooth and efficient transfer of the management
                  agreement for the Information Centre from FCF to CNIFP by the
                  Operational Date, such transfer to be effected without charge
                  to CNIFP.

15.2     The parties acknowledge and agree that from the date on which FCF's
         management agreement in relation to the Information Centre is assigned
         or otherwise transferred to CNIFP, CNIFP shall be responsible for all
         costs and expenses incurred in relation to the Information Centre
         provided that FCF shall remain liable for all costs and expenses
         incurred prior to the relevant date of assignment or transfer.

16.      OTHER TRANSITIONAL MATTERS

16.1     FCF agrees promptly from the Transitional Date to use its reasonable
         endeavours to facilitate an interim accreditation arrangement for CNIFP
         forest estate (but not for the Relevant Processing Plants) with the
         Forest Stewardship Council ("FSC"), such arrangement to subsist until
         CNIFP has obtained FSC certification in its own right.

16.2     FCF agrees to use its reasonable endeavours to do all things reasonably
         requested by CNIFP to assist TMC to assume the management
         responsibilities formerly held by FCF under the Management Agreement on
         the Operational Date or the RPP Handover Date (in relation to
         management of the Relevant Processing Plants), including, without
         limitation:

         (a)      if requested and subject to clause 16.3, assigning or
                  novating, in a manner and form reasonably requested by CNIFP
                  and at CNIFP's sole cost, licences for the Intellectual
                  Property of third parties used in relation to the Business to
                  CNIFP (or at the request of CNIFP, TMC) and providing all
                  reasonable assistance to the relevant person to obtain the
                  consent of Intellectual Property owners or licensors to such
                  assignments or novations;

         (b)      if requested and subject to clause 16.3, assigning or
                  novating, in a manner and form reasonably requested by CNIFP
                  and at CNIFP's sole cost, any contract, resource consent,
                  permit, licence, consent and approval related to the Business
                  (irrespective of whether such contract, resource consent,
                  permit, licence and approval are in the name of FCF); and

                                Transition Deed                               27
<PAGE>

         (c)      as soon as practicable after the Transitional Date, providing
                  copies of the records and books of account maintained for the
                  Business including:

                  (i)      CNIFP sales information;

                  (ii)     information relating to relevant employees and
                           independent contractors;

                  (iii)    administration details;

                  (iv)     information relating to the Business such as planting
                           programmes, harvesting, forest description, stand
                           records, maintenance and logging; and

                  (v)      trial balances, financial statements, other
                           accounting and stand valuation statements and
                           records, and management and other reports, relating
                           to or for the Business and which would otherwise have
                           been provided by FCF to CNIFP under the terms of the
                           Management Agreement, for the period up to the
                           Operational Date.

16.3     The parties acknowledge and agree that to the extent that any contract,
         resource consent, permit, licence, consent or approval entered into by
         FCF as principal or as agent of CNIFP is not able to be assigned or
         novated to CNIFP as contemplated in clause 16.2(a) or 16.2(b) (as the
         case may be), whether due to it being combined with contracts, permits,
         licences, consents or approvals entered into by, or granted to, FCF in
         its own right or on behalf of any third parties, or otherwise (each
         being an "UNASSIGNABLE CONTRACT"), FCF will use its reasonable
         endeavours to notify CNIFP of the same and will hold the benefit of
         that part of each Unassignable Contract which relates to the Business
         on trust for CNIFP (including any proceeds relating to that part of the
         Unassignable Contract), and CNIFP shall bear all costs and liabilities
         in respect of that part of the Unassignable Contract which relates to
         the Business but provided that:

         (a)      FCF shall not be required to hold an Unassignable Contract on
                  trust for CNIFP at any time following any failure by CNIFP to
                  pay any cost or meet any liability under that Unassignable
                  Contract which relates to the Business before FCF is required
                  to pay such cost or meet such liability; and

         (b)      FCF shall not be required to incur any cost or liability under
                  any Unassignable Contract which relates to the Business unless
                  FCF is satisfied, acting reasonably, that CNIFP will pay that
                  cost or liability.

         CNIFP acknowledges and agrees FCF's holding of any Unassignable
         Contract on trust for CNIFP shall not prevent or restrict FCF dealing
         with such Unassignable Contract in connection with the operation of its
         own business (which may include amending or terminating such contract)
         provided that FCF will give CNIFP reasonable prior notice before making
         any change in relation to an Unassignable Contract. FCF shall use its
         reasonable endeavours to provide all reasonable assistance (but without
         being required to provide any guarantee or make any payment to any
         other contractual party) requested by CNIFP from time to time to enable
         CNIFP to replace any Unassignable Contract with a new contract with the
         relevant contractual party or parties. FCF and CNIFP shall otherwise
         take all reasonable steps and shall cooperate with each other to secure
         the separation of such Unassignable Contract as soon as practicable.

16.4     The parties acknowledge and agree that, as from the Transitional Date,
         CNIFP and/or any person authorised by it shall at all times be entitled
         to full access to the CNIFP forest estate provided that such access
         shall not unreasonably interfere with FCF's continued management under
         the Management Agreement until the Operational Date

                                Transition Deed                               28
<PAGE>

         and CNIFP and/or all persons authorised by it so accessing the CNIFP
         forest estate shall comply with all reasonable directions of FCF in
         relation to any health and safety or other requirements.

16.5     FCF shall use its reasonable endeavours to provide to CNIFP all
         management reports held by it, or under its control, which it is
         required to provide to CNIFP under the Management Agreement for the
         relevant reporting periods up to and including the Operational Date,
         all trial balances for accounting periods up to and including the
         Operational Date, and all other historic accounting records (including
         working capital accounts) held by it, or under its control, for periods
         up to and including the Operational Date, notwithstanding that the
         provision of such information by FCF may extend beyond the Operational
         Date. FCF shall not be required to prepare any annual management plan
         and/or budget under the Management Agreement in relation to the
         2003/2004 period but this shall not release FCF from its obligation to
         provide any working data already prepared by it under the Management
         Agreement in respect of the Business for the 2003/2004 period as at the
         Transitional Date.

16.6     FCF agrees, in respect of any FCF employee who applies for, and is
         successful in obtaining, employment with TMC (any such person, a
         "Relevant Employee") to waive any restrictive covenant or similar term
         (but not including any obligations of confidentiality or ownership of
         property including Intellectual Property) contained in any existing
         employment contract of such Relevant Employee with FCF or any of its
         subsidiaries ("FCF Employment Contract") which would or could arguably
         prevent or unreasonably delay such Relevant Employee from promptly
         commencing employment with TMC.

16.7     The parties acknowledge and agree that the transition of management
         functions from FCF to TMC will involve the significant transfer of
         roles, functions, operations and/or responsibilities from FCF to TMC.
         Accordingly, the parties agree to facilitate the smooth and efficient
         transfer of such roles, functions, operations and responsibilities
         (subject to clause 13) on the following basis:

         (a)      a transition management working group shall be established by
                  FCF and CNIFP within 5 Business Days from the Transitional
                  Date, such working group to be comprised of two nominated
                  representatives of CNIFP or TMC and two nominated
                  representatives of FCF;

         (b)      the transition management working group shall, unless
                  otherwise agreed as between the parties, meet regularly on a
                  weekly basis;

         (c)      the transition management working group shall deal with all
                  day-to-day matters arising in relation to the performance by
                  the various parties of the various transition matters the
                  subject of this deed, and shall cooperate and work together in
                  good faith with a view to facilitate the smooth and efficient
                  performance of the relevant matters arising under this deed.

16.8     Each of CNIFP and TMC acknowledges and agrees for the benefit of the
         FCF Group that it shall not (and shall procure that none of its
         Affiliates), during the period from the Transitional Date until the
         Anniversary Date, take any steps to induce or solicit any employee or
         group of employees of any member of the FCF Group to terminate his, her
         or their employment and/or enter into any employment with CNIFP and/or
         TMC or their Affiliates, provided that nothing in this clause shall
         preclude CNIFP and/or TMC from dealing with any such employee or group
         of employees who is or are responding to any advertisement for
         positions of employment with CNIFP and/or TMC or from dealing with any
         such employee or group of employees who has or have, without inducement
         or solicitation by CNIFP and/or TMC, approached CNIFP and/or TMC
         regarding employment at CNIFP and/or TMC. Each member of the FCF Group

                                Transition Deed                               29
<PAGE>

         acknowledges and agrees that in the event that any of its employees
         wishes to commence employment with CNIFP and/or TMC (as the case may
         be), it shall not (and shall procure that none of its Affiliates),
         during the period from the Transitional Date until the Anniversary
         Date, offer or attempt to offer any such relevant employee any
         inducement to remain in its employment and/or that of any of its
         Affiliates provided that, for the avoidance of doubt, this shall not
         prevent any member of the FCF Group from undertaking normal annual
         remuneration reviews or increasing employee remuneration commensurate
         with corresponding increases in employee responsibilities.

16.9     None of CNIFP, the Receivers, RWS and RSM has any rights, entitlement
         or interest in or to any Intellectual Property relating to, or
         connected with, FCF's management of its own and CNIFP's forest estate
         and associated forestry operations (which shall not include, for the
         avoidance of doubt, Intellectual Property which forms part of CNIFP
         Information or any "Red Stag", "Stag" and/or associated logos, brands,
         trade marks, devices and/or similar markings) and except to the extent
         of CNIFP's entitlement to use FCF's log grade names where its
         specification is the same or substantially the same as FCF's
         specification and as otherwise provided in or contemplated under this
         deed, none of them shall have any right, entitlement or interest in or
         to such Intellectual Property whether by way of title, licence or
         sub-licence under this deed, the Management Agreement or otherwise.

16.10    The parties will reasonably co-operate with each other to:

         (a)      endeavour to manage effectively and efficiently the supply of
                  pulp wood fibre by the FCF Group under the back-up agreement
                  dated 28 July 2000 as varied by the variation agreement dated
                  19 December 2000 (the "BACK-UP AGREEMENT"), and the supply of
                  pulp wood fibre by CNIFP under the Tasman Contracts; and

         (b)      seek to effect either a novation of the pulp wood fibre supply
                  arrangements in the Back-up Agreement from the FCF Group to
                  CNIFP (other than insofar as the Back-up Agreement relates to
                  any of the Inter-Division Agreement, the Tarawera Agreement
                  and the Matahina Agreement (as such agreements are defined in
                  the Back-up Agreement)), or a replacement pulp wood fibre
                  supply agreement between CNIFP and Norske Skog Tasman Limited,
                  that releases the FCF Group from its obligations under the
                  Back-up Agreement provided however that any such novation or
                  replacement agreement must incorporate provisions whereby
                  CNIFP is released from all obligations to supply any pulp wood
                  fibre to any member of the FCF Group under the Tasman
                  Contracts.

         FCF agrees that, for the duration of the Back-up Agreement, it will not
         require CNIFP to provide a greater volume of pulp wood fibre under the
         Tasman Contracts at any time than FCF is required to deliver to Norske
         Skog Tasman Limited at that time under the Back-up Agreement. For the
         avoidance of doubt, the parties acknowledge and agree that no member of
         the FCF Group shall have any entitlement to the supply of any pulp wood
         fibre under the Tasman Contracts after 31 March 2020.

16.11    Other than to the extent set out in paragraph 16 of schedule 5, none of
         CNIFP, TMC, the Receivers, RWS and RSM shall, as from the Operational
         Date, be entitled to use any FCF Group brand, logo, trade mark or other
         similar right. CNIFP and TMC will use their reasonable endeavours to
         remove all such FCF Group logos, brands, trade marks or similar
         markings from all sites and equipment of the Business as soon as
         reasonably practicable following the Operational Date and in any event
         within six months of that date.

                                Transition Deed                               30
<PAGE>

16.12    Notwithstanding anything else contained in this deed, no member of the
         FCF Group shall be required to transfer or deliver to any party under
         this deed the following information:

         (a)      subject to clause 16.2(c)(i), customer information including
                  marketing plans;

         (b)      customer profiles;

         (c)      sales contacts;

         (d)      Intellectual Property relating to forestry operations;

         (e)      information relating to FSC "chain of custody" at the Relevant
                  Processing Plants; and

         (f)      any information the disclosure of which would result in the
                  relevant member of the FCF Group breaching any of its valid
                  and binding confidentiality obligations, in respect of which
                  the relevant member of the FCF Group shall promptly notify
                  CNIFP of the same and use its reasonable endeavours to
                  co-operate with CNIFP with a view to procuring from the
                  relevant third party all necessary consents to the transfer or
                  delivery of such information to CNIFP under the terms of this
                  deed or otherwise making such information available in a
                  manner which would not breach such confidentiality
                  obligations.

16.13    FCF shall use all reasonable endeavours to provide such reasonable
         information, cooperation and assistance (including reasonably making
         available employees as witnesses and using reasonable endeavours to
         liaise with relevant third parties and former employees) as CNIFP may
         reasonably require in order to prosecute the claim brought by (inter
         alia) CNIFP against (inter alia) the Crown in the High Court of New
         Zealand, Wellington Registry (CP 39/03). CNIFP shall pay all reasonable
         costs and expenses (including all reasonable legal costs) incurred by
         FCF in performing its obligations under this clause.

17.      COMPLIANCE WITH STATUTES AND OTHER REQUIREMENTS

17.1     Each party shall comply with all relevant statutes, regulations and
         other enactments, permits, notices, requirements and requisitions
         affecting the use of the Infrastructure and the provision of fire
         protection services as from the Operational Date for so long as and to
         the extent that the relevant parts of clauses 2 to 4 inclusive apply.
         Without limiting the generality of the foregoing:

         (a)      each party shall notify the relevant other parties of any
                  hazards discovered by it and of any accidents in terms of the
                  Health and Safety in Employment Act 1992;

         (b)      each party shall comply with the Forest and Rural Fires Act
                  1977;

         (c)      if any party receives notice from any statutory, territorial
                  or other authority having jurisdiction or control with respect
                  to the Infrastructure or the provision of fire protection
                  services or any part thereof, it shall forthwith advise the
                  relevant other parties of such notice. Each party shall
                  perform and observe the matters required of it and contained
                  in such notice (subject to any rights it may have to object or
                  otherwise lawfully resist the effect of such notice).

17.2     As from the Operational Date, for so long as and to the extent that the
         relevant parts of clauses 2 to 4 inclusive apply, each party uses the
         Infrastructure or part thereof at its own risk and to the fullest
         extent permitted by law and to the extent that any claims, damages
         and/or costs whatsoever shall not have arisen as a result of the wilful
         or

                                Transition Deed                               31
<PAGE>

         negligent act or omission of the relevant other parties, releases the
         relevant other parties from all claims, damages or costs whatsoever in
         connection with its use of the Infrastructure or any part thereof.

18.      RIGHT TO ASSIGN AND BENEFIT TO RUN WITH THE LAND

18.1     The parties acknowledge and agree that:

         (a)      where one party owns the land on which any part of the Roading
                  Infrastructure is located, then such party shall ensure that
                  the right for any other party hereto to use that Roading
                  Infrastructure shall run with the land and shall bind all
                  successors in title to the land (to the extent such right
                  persists); and

         (b)      as, pursuant to the Crown Forestry Licences, CNIFP is licensee
                  only of the land on which its forests are planted, any right
                  to use any part of its Roading Infrastructure or lookout
                  towers on such land shall be subject to the terms of the Crown
                  Forestry Licences and to CNIFP or its successors in title to
                  its forests continuing as licensees under the Crown Forestry
                  Licences, and/or subject to CNIFP being reasonably able to
                  procure the necessary rights for the use of such part of the
                  Roading Infrastructure or the relevant lookout towers on terms
                  satisfactory to CNIFP (acting reasonably).

18.2     To the extent that it is not prevented by law, each party
         ("Encumbrancer") agrees to encumber the Encumbrancer's estate or
         interest in the land on which the Roading Infrastructure is located in
         favour of the relevant other party/parties ("Encumbrancee(s)") to
         secure to the Encumbrancee(s) the Encumbrancer's compliance with its
         obligations under this deed with respect to access to Roading
         Infrastructure. Such encumbrance shall be registered against the title
         to the Encumbrancer's estate or interest in the land, to provide notice
         to the world of the existence of this deed and the parties' agreement
         herein with respect to access to Roading Infrastructure. To the extent
         that the consent of any chargee, mortgagee or other third party ("THIRD
         PARTY") is required prior to the Encumbrancer being able to comply with
         its obligations under this clause, the Encumbrancer and the
         Encumbrancee(s) shall co-operate and use their reasonable endeavours to
         seek and procure the necessary consent of such Third Party to the grant
         and registration of all relevant encumbrances as contemplated in this
         clause.

18.3     Neither FCF nor CNIFP (as forest owners) shall, in the case of CNIFP,
         sell or otherwise dispose of any part or all of its forests or, in the
         case of FCF, sell or dispose of the relevant parts of its forests
         without first procuring from the purchaser or other disposee of such
         forests a deed of covenant in favour of the relevant other
         party/parties whereby the purchaser or disposee covenants to be bound
         by and to perform and observe all the terms of this deed with respect
         to access to Roading Infrastructure that have not expired or been
         performed.

19.      ACKNOWLEDGMENT

19.1     The parties acknowledge and agree that:

         (a)      in respect of any benefit conferred to CNIFP under this deed,
                  CNIFP shall be entitled to require any other relevant party to
                  this deed to confer the relevant benefit(s) to TMC or any
                  other manager or purchaser of all or any substantial part of
                  the Business, (each Relevant Processing Plant being deemed to
                  be a substantial part of the Business) as if TMC, such
                  purchaser and/or such manager was (and hereby is deemed to be)
                  CNIFP under the relevant provision(s) of this deed. The
                  relevant provision(s) of this deed setting out such benefit(s)
                  so conferred by CNIFP on TMC, such purchaser and/or such
                  manager shall be enforceable by TMC, such purchaser and/or
                  such manager

                                Transition Deed                               32
<PAGE>

                  as if TMC, such purchaser and/or such manager (as the case may
                  be) is CNIFP under the relevant provision(s) of this deed;

         (b)      in respect of any benefit conferred to the FCF Group under
                  this deed, the FCF Group shall be entitled to require any
                  other relevant party to this deed to confer the relevant
                  benefit(s) to any other manager or purchaser of all or any
                  substantial part of its forest estate as if such manager or
                  purchaser was (and hereby is deemed to be) the FCF Group under
                  the relevant provision(s) of this deed. The relevant
                  provision(s) of this deed setting out such benefit(s) so
                  conferred by the FCF Group on such manager or purchaser shall
                  be enforceable by such manager or purchaser as if such manager
                  or purchaser was named as the relevant member of the FCF Group
                  under the relevant provision(s) of this deed;

         (c)      in respect of any obligation of CNIFP under this deed, CNIFP
                  may perform or fulfil such obligation through TMC or any other
                  person on behalf of CNIFP, in each case as advised by CNIFP to
                  FCF from time to time. Such performance or fulfilment by TMC
                  or such other person shall be deemed the performance or
                  fulfilment of the relevant obligation by CNIFP; and

         (d)      in respect of any obligation expressed to be an obligation of
                  FCF under this deed, such obligation shall be deemed to be the
                  obligation of any Affiliate of FCF which has the relevant
                  right, power, entitlement and/or authority to perform or
                  fulfil such obligation, and where the relevant Affiliate of
                  FCF is not a party to this deed but is deemed by virtue of
                  this subclause to have an obligation under this deed, FCF
                  shall procure such of its Affiliate to fulfil and perform the
                  relevant obligation under this deed.

20.      CONFIDENTIALITY

20.1     Subject to clauses 20.2 and 20.3, each party shall:

         (a)      during the continuance of this deed and after its termination,
                  treat as confidential and privileged the terms of this deed,
                  all Confidential Information supplied to it by any of the
                  other parties or their Affiliates whether before or after
                  execution of this deed;

         (b)      not use any Confidential Information to the detriment of the
                  party from whom that party obtained the Confidential
                  Information or to the detriment of any other party in any way
                  whatsoever at any time except as may be required by law
                  (including without limitation any order of a court of
                  competent jurisdiction) or the rules of any recognised stock
                  exchange or governmental or other regulatory body;

         (c)      use all reasonable commercial endeavours to ensure that each
                  of its Affiliates (and in the case of CNIFP, any and all
                  prospective purchasers of the assets of CNIFP), who are at any
                  time in possession of any Confidential Information, comply
                  with that party's obligations under this clause, and otherwise
                  does not disclose or permit the disclosure or detrimental use
                  of such Confidential Information.

20.2     Notwithstanding anything in clause 20.1,

         (a)      CNIFP and/or the Receivers will be entitled at all times to
                  fully disclose the terms of this deed and any other related
                  information to:

                  (i)      the Bank of New Zealand (as security agent or as
                           financier under the first ranking debenture dated 27
                           September 1996 granted by (amongst

                                Transition Deed                               33
<PAGE>

                           others) FCNZ and CITIC (formerly known as Citifor
                           Limited) in favour of Bank of New Zealand as the
                           security trustee, as amended on 16 December 1996
                           ("DEBENTURE")) and each holder of the Debenture;

                  (ii)     any potential manager and/or potential purchaser of
                           all or any substantial part of the Business (each
                           Relevant Processing Plant being deemed to be a
                           substantial part of the Business), subject to that
                           potential manager and/or purchaser agreeing to
                           reasonable confidentiality undertakings; and/or

                  (iii)    their advisers, auditors or financiers; and

         (b)      each of FCF, FCM, FCFL and FCL may disclose the terms of this
                  deed and any related information to:

                  (i)      any potential purchaser (directly or indirectly) of
                           all or any substantial part of that party's forestry
                           assets (subject to that potential purchaser agreeing
                           to reasonable confidentiality undertakings); and

                  (ii)     its advisers, auditors or financiers.

20.3     Notwithstanding anything in clause 20.1:

         (a)      subject to subclause (b), if any party and/or its Affiliates
                  is required by law or court order or regulatory authority
                  having jurisdiction over that party to disclose any
                  Confidential Information of any other party, disclosure may be
                  made only after the relevant other party has been notified and
                  has had a reasonable opportunity to oppose such disclosure on
                  reasonable grounds;

         (b)      if any party and/or its Affiliates is required by the listing
                  rules of any stock exchange to disclose any Confidential
                  Information of any other party based on a legal opinion from
                  appropriately qualified legal counsel, or if any party and/or
                  its Affiliates is required to disclose any Confidential
                  Information of any other party pursuant to the continuous
                  disclosure provisions under the NZSE Listing Rules and/or the
                  Securities Markets Act 1988, the ASX Listing Rules or the NYSE
                  Listing Rules based on a legal opinion from appropriately
                  qualified legal counsel, such disclosure may (subject to
                  clause 20.4) be made immediately (if necessary) provided that
                  the relevant other party is notified as soon as is practicable
                  following the disclosing party becoming aware of such
                  requirement to disclose.

         The provisions of this clause shall not affect the right of any party
         to institute proceedings against the disclosing party for any
         pre-existing breach of this deed by the disclosing party and/or its
         Affiliates.

20.4     The disclosing party agrees that any of the other parties and/or any of
         its Affiliates may suffer damage as a result of any unauthorised
         disclosure of the Confidential Information. The disclosing party
         further agrees that any of the other parties and/or any of its
         Affiliates shall be entitled to equitable relief, including an
         injunction and an order for specific performance, in the event of any
         breach of the provisions of this deed.

21.      DISPUTE RESOLUTION

21.1     Any dispute which may arise between the parties out of or in connection
         with this deed, including any alleged breach by any party of any of the
         terms of this deed or any dispute as to the existence or validity of
         this deed ("DISPUTE"), shall be resolved in the following manner:

                                Transition Deed                               34
<PAGE>

         (a)      a party may give to the other party/parties a written notice
                  ("DISPUTE NOTICE") stating the subject matter and details of
                  the Dispute and requesting the commencement of good faith
                  negotiations by their respective nominated representatives (or
                  either of the Receivers in the case of CNIFP);

         (b)      the nominated representatives of the disputing parties (or
                  either of the Receivers in the case of CNIFP) will negotiate
                  in good faith to resolve the Dispute within 5 Business Days of
                  receipt of the Dispute Notice by the receiving party/parties;

         (c)      if the Dispute is not resolved within 5 Business Days of
                  receipt of the Dispute Notice, the Dispute shall be referred
                  to the chief executive officers of the disputing parties and
                  either of the Receivers in the case of CNIFP, who will then
                  negotiate in good faith to resolve the Dispute;

         (d)      if the Dispute is not resolved within 10 Business Days of
                  receipt of the Dispute Notice, the Dispute shall:

                  (i)      if agreed to by the disputing parties, be referred to
                           the mediation of one mediator, to be jointly
                           appointed by the disputing parties. The referral to
                           mediation shall commence when a party gives written
                           notice ("MEDIATION NOTICE") to the other
                           party/parties requesting the commencement of such
                           mediation within 5 Business Days of receipt of the
                           Dispute Notice. If the disputing parties cannot agree
                           on the appointment of a mediator within 3 Business
                           Days of the date of the Mediation Notice, the
                           mediator shall be appointed at the request of a party
                           by the chairperson or any other office holder for the
                           time being of the New Zealand chapter of LEADR, or
                           the nominee of such chairperson or other office
                           holder; or

                  (ii)     otherwise be resolved through ordinary court
                           proceedings.

21.2     If the disputing parties exercise their option to refer the Dispute to
         the mediation of one mediator as contemplated in clause 21.1(d) and the
         Dispute is not resolved within 10 Business Days from the date of
         appointment of the mediator under clause 21.1(d), the Dispute shall:

         (a)      if the disputing parties agree, be referred to determination
                  by an expert appointed by the disputing parties on such terms
                  and conditions of expert determination as the disputing
                  parties may jointly determine, the expert's determination
                  being binding on the disputing parties; or

         (b)      otherwise be resolved through ordinary court proceedings.

22.      NOTICES

22.1     Each notice or other communications under this deed is to be in
         writing, is to be made by facsimile, personal delivery or by post to
         the addressee at the facsimile number or address, and is to be marked
         for the attention of the person or office holder (if any) from time to
         time designated for the purpose by the addressee in writing to the
         other parties. The initial phone number, facsimile number, address and
         relevant person or office holder of each party is set out under its
         name at the end of this deed.

22.2     No communication is to be effective until received. A communication
         will, however, be deemed to be received by the addressee:

         (a)      in the case of a facsimile, on the Business Day on which it is
                  despatched or, if despatched after 5pm (in the place of
                  receipt) on a Business Day or if

                                Transition Deed                               35
<PAGE>

                  despatched on a non-Business Day, on the next Business Day
                  after the date of dispatch;

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

         (c)      in the case of a letter, on the third Business Day after
                  posting by airmail.

23.      NO WAIVERS

23.1     No delay, grant of time, release, compromise, forbearance (whether
         partial or otherwise) or other indulgence by a party in respect of any
         breach of any other party's obligations under this deed is to:

         (a)      operate as a waiver or prevent the subsequent enforcement of
                  that obligation; or

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

24.      ENTIRE AGREEMENT

24.1     This deed, the Settlement Agreement and the wood supply agreement
         referred to in the Settlement Agreement shall constitute the entire
         understanding and agreement of the parties relating to the transactions
         contemplated by these documents.

25.      WRITTEN VARIATIONS

25.1     No amendment to this deed will be effective unless it is in writing and
         signed by all the parties hereto.

26.      SEVERABILITY

26.1     Any unlawful or voidable provision in this deed shall be read down as
         to be valid and enforceable or, if it cannot be read down, will be
         severed from this deed without affecting the validity, legality or
         enforceability of the remaining provisions, provided the reading down
         or severing does not materially affect the purpose of or frustrate this
         deed.

27.      FURTHER ASSURANCES

27.1     Each party shall:

         (a)      take all steps reasonably required to give full effect to the
                  terms of this deed; and

         (b)      use all reasonable endeavours to ensure the observance of the
                  terms of this deed.

28.      COUNTERPARTS

28.1     This deed may be executed in two or more counterparts each of which
         will be deemed an original, but all of which together will constitute
         one and the same instrument.

29.      OWN COSTS

29.1     Unless otherwise specified in this deed, each party will bear its own
         costs in relation to the negotiation, preparation and execution of this
         deed.

                                Transition Deed                               36
<PAGE>

30.      GOVERNING LAW AND JURISDICTION

30.1     This deed is governed by the laws of New Zealand.

30.2     The parties submit to the exclusive jurisdiction of the courts of New
         Zealand in relation to all disputes arising out of or in connection
         with this deed.

31.      MANAGEMENT AGREEMENT AND TASMAN CONTRACTS

31.1     The parties acknowledge and agree that the Receivers do not, by this
         deed (including, without limitation, clause 1.4), their execution of
         this deed, the performance by them or by any of FCNZ, CITIC or CNIFP of
         any obligations of any of them under this deed, by the consultation,
         co-operation or undertaking of any other thing contemplated by clause
         1.4, or by any reference to the Management Agreement and/or the Tasman
         Contracts anywhere in this deed, adopt, or otherwise become personally
         liable under or in relation to, the Management Agreement and/or the
         Tasman Contracts.

31.2     Without derogating from clause 31.1 above, each and every member of the
         FCF Group waives, and fully releases the Receivers from, any claim such
         member has as at the date of this deed or subsequently may have that
         the Receivers have (by any action or omission whatsoever, whether
         occurring prior to, by means of, or subsequent to their execution of
         this deed) adopted, or otherwise become personally liable under or in
         relation to, the Management Agreement.

31.3     The Receivers agree not to enter into any agreement to sell all or any
         substantial part of the CNIFP forest estate, other than an agreement
         which provides for the rights and obligations of CNIFP under the Tasman
         Contracts to be assigned and/or novated to the purchaser under that
         agreement, unless the Receivers have first given FCF not less than
         seven Business Days prior written notice of their intention to enter
         the agreement. The Receivers and FCF agree that this clause 31.3
         supersedes the arrangements between them concerning the same matter
         recorded in a letter dated 10 December 2001 written by Bradbury & Muir
         to Bell Gully (and the arrangements recorded in that letter are hereby
         terminated). Subject to the arrangements and agreements between the
         parties recorded in this deed and in the Settlement Agreement and the
         wood supply agreement referred to in the Settlement Agreement, the
         agreement in this clause 31.3 is without prejudice to the respective
         positions of the parties in relation to the Tasman Contracts.

32.      LIMITATION OF LIABILITY OF RECEIVERS

32.1     The liability of the Receivers by virtue of section 32(1)(a) of the
         Receiverships Act 1993 for the obligations of CNIFP under clause 14.2
         shall:

         (a)      be limited in extent to the obligation of CNIFP to make
                  payments to FCF in respect of the indemnities set out in
                  clauses 8.1(c), 8.2(c)(i), 8.2(d) and 14.2; and

         (b)      be limited in amount, in respect of each of the indemnity
                  amount payable by CNIFP to FCF under clauses 8.1(c),
                  8.2(c)(i), 8.2(d) and 14.2, to an amount not exceeding the net
                  realisable value of the Charged Assets in the hands of the
                  Receivers and available to them pursuant to their indemnity
                  from Charged Assets at the relevant time ("Relevant Time"),
                  being the time such indemnity amount becomes due and payable
                  under clause 8.1(c), clause 8.2(c)(i), clause 8.2(d) or clause
                  14.2.

32.2     No party shall have recourse to either or both of the Receivers'
         personal assets (other than their right to be indemnified from the
         Charged Assets whether pursuant to section 32(9) of the Receiverships
         Act 1993 or otherwise), nor shall any party petition

                                Transition Deed                               37
<PAGE>

         or otherwise seek adjudication for bankruptcy of either or both of the
         Receivers, in respect of any liability, claim or judgment thereon
         under, pursuant to, or in connection with clause 8.1(c), clause
         8.2(c)(i), clause 8.2(d) or clause 14.2 of this deed or any other
         provision of this deed. Any recourse by any party against the Receivers
         in respect of clause 8.1(c), clause 8.2(c)(i), clause 8.2(d) or clause
         14.2 shall at all times be limited solely to the Charged Assets for the
         time being of FCNZ and CITIC in the hands of the Receivers and
         available to them pursuant to their indemnity from Charged Assets at
         the Relevant Time.

32.3     Each member of the FCF Group acknowledges and agrees that this deed has
         been signed on behalf of FCNZ and CITIC (as the partners of CNIFP) by
         its joint Receivers, and that, other than (subject to the limitations
         in clauses 32.1 and 32.2) in respect of the obligations of CNIFP under
         clause 8.1(c), clause 8.2(c)(i), clause 8.2(d) or clause 14.2, the
         Receivers and their agents and employees shall not be personally liable
         for any of the obligations of FCNZ and CITIC (as the partners of CNIFP)
         arising under or pursuant to this deed, nor shall the Receivers or
         their agents or employees be liable for any statements, actions,
         representations or other events leading up to the formation of this
         deed, nor any claims arising consequent upon formation of this deed,
         including any causes of action which may arise at any time after this
         deed.

32.4     Other than (subject to the limitation as to the extent and as to the
         amount in clauses 32.1 and 32.2) in respect of the obligations of CNIFP
         under clause 8.1(c), clause 8.2(c)(i), clause 8.2(d) or clause 14.2 of
         this deed, the Receivers shall have no personal liability under or in
         respect of this deed and if any member of the FCF Group is entitled to
         exercise any rights of action pursuant to this deed, each member of the
         FCF Group agrees that such rights must be exercised against FCNZ and
         CITIC (as the partners of CNIFP) alone and not the Receivers or their
         agents or employees.

32.5     If, notwithstanding the provisions of clauses 32.3 and 32.4, other than
         (subject to the limitation in clauses 32.1 and 32.2) in respect of the
         obligations of CNIFP under clause 8.1(c), clause 8.2(c)(i), clause
         8.2(d) or clause 14.2 of this deed, a court of competent jurisdiction
         shall hold the Receivers or their agents or employees personally liable
         in respect of any matters, other than (subject to the limitation in
         clauses 32.1 and 32.2) in respect of the obligations of CNIFP under
         clause 8.1(c) or clause 14.2 of this deed, arising under or incidental
         to this deed, such liability shall be limited to the lesser of US$1
         million or the net realisable value of the assets for the time being of
         FCNZ and CITIC (as the partners of CNIFP) in the hands of and available
         to the Receivers at the time when judgment is entered or execution
         thereon is issued.

33.      FCF LIABILITY

         The total liability of the FCF Group in respect of any and all defaults
         by any member of the FCF Group of any of its or their obligations under
         this deed shall be limited to $10 million in aggregate, except for
         liability resulting from the wilful default by any relevant member of
         the FCF Group in respect of an obligation under this deed.

                                Transition Deed                               38
<PAGE>

EXECUTED AS A DEED

FORESTRY CORPORATION OF NEW
ZEALAND LIMITED (IN RECEIVERSHIP)
by:

                                               _________________________________
                                               Signature of joint receiver

                                               _________________________________
                                               Name of joint receiver

______________________________________
Signature of witness

______________________________________
Name of witness

______________________________________
Occupation of witness

______________________________________
City/town of residence

Forestry Corporation of New Zealand
c/- Michael Stiassny/Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

CITIC NEW ZEALAND LIMITED (BVI) (IN
RECEIVERSHIP) by:

                                    ____________________________________________
                                    Signature of joint receiver, as its attorney

______________________________      ____________________________________________
Signature of witness                Name of joint receiver

______________________________
Name of witness

______________________________
Occupation of witness

______________________________
City/town of residence

Citic New Zealand Limited (BVI)
c/- Michael Stiassny/Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

                                Transition Deed                               39
<PAGE>

TIMBER MANAGEMENT COMPANY LIMITED
by:
                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

Timber Management Company Limited
C/- Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

RED STAG WOOD PRODUCTS LIMITED
(IN RECEIVERSHIP) by:
                                               _________________________________
                                               Signature of joint receiver

                                               _________________________________
                                               Name of joint receiver

______________________________________
Signature of witness

______________________________________
Name of witness

______________________________________
Occupation of witness

______________________________________
City/town of residence

Red Stag Wood Products Limited
c/- Michael Stiassny/Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

                                Transition Deed                               40
<PAGE>

RED STAG MOULDINGS LIMITED (IN
RECEIVERSHIP) by:
                                               _________________________________
                                               Signature of joint receiver

                                               _________________________________
                                               Name of joint receiver
______________________________________
Signature of witness

______________________________________
Name of witness

______________________________________
Occupation of witness

______________________________________
City/town of residence

Red Stag Mouldings Limited
c/- Michael Stiassny/Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

MICHAEL PETER STIASSNY AND GRANT
ROBERT GRAHAM by:
                                               _________________________________
                                               Signature of joint receiver

                                               _________________________________
                                               Name of joint receiver
                                               _________________________________
                                               Signature of joint receiver
                                               _________________________________
                                               Name of joint receiver
______________________________________
Signature of witness

______________________________________
Name of witness

______________________________________
Occupation of witness

______________________________________
City/town of residence

Michael Stiassny and Grant Graham
Ferrier Hodgson
Level 16
Tower Centre
45 Queen Street
PO Box 982
Auckland 1
Ph: (09) 307 7865
Fax: (09) 377 7794

                                Transition Deed                               41
<PAGE>

FLETCHER CHALLENGE FORESTS
MANUFACTURING LIMITED by:
                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

Chief Executive/General Counsel
8 Rockridge Avenue
Penrose
Auckland
Private Bag 92036
Ph: (09) 571 9800
Fax: (09) 571 9801

FLETCHER CHALLENGE FOREST INDUSTRIES LIMITED by:

                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

Chief Executive/General Counsel

8 Rockridge Avenue
Penrose
Auckland
Private Bag 92036
Ph:  (09) 571 9800
Fax:  (09) 571 9801

                                Transition Deed                               42
<PAGE>

FLETCHER CHALLENGE FORESTS FINANCE
LIMITED by:

                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

                                               _________________________________
                                               Signature of director

                                               _________________________________
                                               Name of director

Chief Executive/General Counsel
8 Rockridge Avenue
Penrose
Auckland
Private Bag 92036
Ph:  (09) 571 9800
Fax:  (09) 571 9801

FLETCHER CHALLENGE FORESTS LIMITED  by :
                                               _________________________________
                                               Signature of authorised person

______________________________________         _________________________________
Signature of witness                           Name of authorised person

______________________________________
Name of witness

______________________________________
Occupation of witness

______________________________________
City/town of residence

AND  by :
                                               _________________________________
                                               Signature of authorised person

______________________________________         _________________________________
Signature of witness                           Name of authorised person

______________________________________
Name of witness

______________________________________
Occupation of witness

______________________________________
City/town of residence

Chief Executive/General Counsel
8 Rockridge Avenue
Penrose
Auckland
Private Bag 92036
Ph: (09) 571 9800
Fax: (09) 571 9801

                                Transition Deed                               43
<PAGE>

                                   SCHEDULE 1

                             ROADING INFRASTRUCTURE

1.       ROADS

         All roads highlighted on the roading plans attached to this schedule 1,
         being roads, bridges and supporting infrastructure located on land
         owned or occupied by FCF or CNIFP in the central North Island which at
         the Transitional Date are used in connection with the forestry
         operations of either FCF or CNIFP and which either:

         (a)      FCF or CNIFP has access to or a right to use; or

         (b)      FCF or CNIFP owns,

         but only to the extent each party is lawfully able to share such roads
         and access thereto.

2.       WEIGHBRIDGES

<TABLE>
<CAPTION>
LOCATION OF WEIGHBRIDGE           OWNER OF WEIGHBRIDGE*
-------------------------------------------------------
<S>                               <C>
KPP - stems                             CNIFP
-------------------------------------------------------
Murupara - Logs                         FCF
-------------------------------------------------------
Waimihia                                CNIFP
-------------------------------------------------------
Waipa                                   CNIFP
-------------------------------------------------------
Kawerau                                 FCF
-------------------------------------------------------
Kawerau - stems                         FCF
-------------------------------------------------------
KPP - logs                              CNIFP
-------------------------------------------------------
Murupara - Stems                        FCF/CNIFP
-------------------------------------------------------
Rainbow Mt                              FCF
-------------------------------------------------------
Mobile                                  FCF
-------------------------------------------------------
Tauhara                                 FCF
-------------------------------------------------------
</TABLE>

3.       GANTRIES

<TABLE>
<CAPTION>
LOCATION OF GANTRY           OWNER OF GANTRY*
---------------------------------------------
<S>                          <C>
Webb                              CNIFP
---------------------------------------------
Murupara                          FCF
---------------------------------------------
Waipa                             CNIFP
---------------------------------------------
Kawerau                           FCF
---------------------------------------------
</TABLE>

         * Subject to any asset verification exercise undertaken pursuant to
         clause 7.2.

                                Transition Deed                               44
<PAGE>

                                   SCHEDULE 2

                      SURPLUS FCF BUSINESS ASSETS REGISTER

                                Transition Deed                               45
<PAGE>

                                   SCHEDULE 3

                           SURPLUS FCF LEASED VEHICLES

                                Transition Deed                               46
<PAGE>

                                   SCHEDULE 4

                         CNIFP BUSINESS ASSETS REGISTER

                                Transition Deed                               47
<PAGE>

                                   SCHEDULE 5

                                EXPORT PROTOCOLS

1.       From 1 July 2003, ExportCo will operate a two month "soft transition
         start up" (the "START-UP PERIOD") where CNIFP can continue to produce
         product for planned and scheduled FCF sales/commitments ("FCF SALES")
         made for July and August 2003.

2.       CNIFP will, by no later than 15 May 2003, provide to FCF an indication
         in writing of the likely export grades and quantities of each grade
         that CNIFP expects will be available for FCF to sell to export markets
         during July 2003 and August 2003.

3.       FCF will, within 5 Business Days of receiving CNIFP's written
         indication under clause 2 of this schedule, advise CNIFP in writing of
         the volumes and grades of forest products that FCF considers it will
         require to meet the forecasted FCF Sales, together with an indicative
         delivery schedule (setting out indicative delivery times by month by
         week and by volume) and proposed shipping dates.

4.       CNIFP shall, within 5 Business Days of receiving FCF's written advice
         under clause 3 of this schedule, confirm to FCF in writing the volumes
         and grades of forest products which CNIFP is prepared to supply to FCF
         to meet the forecasted FCF Sales.

5.       FCF shall ensure that all confirmed volume and grade of logs as advised
         by CNIFP to FCF under clause 4 of this schedule for FCF Sales and
         delivered by CNIFP to FCF under clause 6 of this schedule shall be sold
         and shipped by FCF as soon as reasonably practicable following delivery
         and in any case by no later than 30 September 2003. CNIFP acknowledges
         that FCF may, in making export sales under these protocols, combine the
         logs owned by CNIFP with other logs owned or managed by FCF or its
         Affiliates, provided such combination will not adversely affect the
         price or other terms of sale of the logs. FCF acknowledges and agrees
         that, when selling the forest products supplied by CNIFP to FCF as
         contemplated in this schedule:

         (a)      FCF shall treat the sale of such CNIFP forest products as if
                  they were FCF forest products of equivalent lengths and
                  grades; and

         (b)      if FCF wishes to regrade any forest products so supplied by
                  CNIFP, FCF shall not do so without first consulting with
                  CNIFP.

6.       FCF will provide to CNIFP a weekly delivery schedule (that has been
         prepared in a manner consistent with the indicative delivery schedule
         and is otherwise consistent with clauses 3 and 4 of this schedule,
         except to the extent that FCF and CNIFP, acting reasonably, otherwise
         agree) 2 weeks in advance, and CNIFP will use its reasonable endeavours
         to deliver to that schedule. CNIFP will be responsible for using its
         reasonable endeavours to deliver forest products produced for FCF Sales
         to the Port of Tauranga and in this regard CNIFP shall deal directly
         with FCF. FCF will use all reasonable endeavours to assist CNIFP with
         its transport obligations in respect of the supply of CNIFP forest
         products to meet FCF Sales so long as this does not adversely affect
         FCF's business.

7.       If CNIFP is unable to supply the confirmed volume and grade of logs as
         advised by CNIFP to FCF under clause 4 of this schedule for FCF Sales
         CNIFP will promptly notify FCF of such inability. CNIFP may, at its
         option and upon advice to FCF, purchase logs of equivalent grades from
         an alternative supplier to make up the shortfall. If CNIFP does not so
         notify FCF within 5 Business Days of its original notice of inability
         to supply under this clause, FCF may purchase logs from an alternative
         supplier to make up the shortfall. CNIFP will indemnify FCF for any
         cost, expense or

                                Transition Deed                               48
<PAGE>

         loss actually incurred on such purchase. Likewise, if FCF incurs a
         loss, cost or expense through short shipment to a customer from such a
         delivery shortfall by CNIFP, CNIFP will indemnify FCF for any such
         loss, cost or expense actually incurred.

8.       FCF will pay all proceeds of sale due to CNIFP in respect of its supply
         of forest products to meet FCF Sales directly to CNIFP immediately upon
         receipt, subject to FCF first being allowed to deduct from the relevant
         sales proceeds all direct and indirect costs associated with each
         relevant sale, including for this purpose any amounts payable to FCF
         under clause 7 above in relation to that or any other FCF Sale. In no
         circumstances will FCF be entitled to charge CNIFP a fee of any kind,
         nor a sales margin, in respect of the making of FCF Sales other than
         the pro rata recovery of indirect costs.

9.       Subject to any advice to the contrary from CNIFP to FCF under clause 4
         of this schedule, CNIFP shall in no circumstances be required, at any
         time after 31 August 2003, to supply or make available to FCF any CNIFP
         forestry products in FCF grades.

10.      FCF will use all reasonable endeavours to procure that the price and
         delivery terms of FCF Sales are no less favourable than such equivalent
         price and delivery terms that FCF has itself committed to sell its own
         exported forest products in the relevant months.

11.      In accounting for the sales, FCF shall provide CNIFP with all
         reasonable details of the terms of the relevant FCF Sales, including
         details regarding grade, market, price, payment terms and customer
         identity (but not other customer details).

12.      CNIFP and FCF will work together in good faith to coordinate the
         supply, payment and documentation of the volume produced to meet FCF
         Sales.

13.      Any surplus production and unallocated volume produced from 1 July 2003
         will be cut to ExportCo grades. No FCF grades will be cut post 31
         August 2003 - however, practicably it is expected that the cut off will
         likely to be earlier eg 20 August 2003.

14.      Where practical, FCF/CNIFP/ExportCo will cooperate on operational
         issues. However, the general principle is that both FCF and ExportCo
         will manage their own operations independently.

15.      FCF will allow CNIFP volume arriving by train to the Port of Tauranga
         to use the current FCF rail siding during the Start-up Period.

16.      During the Start-up Period, CNIFP can continue to use for product
         committed to FCF Sales FCF log specifications and grades, stencils and
         identification markings relating to export forest products which FCF,
         as at the Transitional Date, utilises in respect of forest products
         sourced from the CNIFP forest estate which are exported by FCF.

                                Transition Deed                               49
<PAGE>

                                   SCHEDULE 6

                            CROWN FORESTRY LICENCES

A.       ROTOEHU FOREST

         1.       (a) CFL: CT 52D/550, East Block

                  (b) Variation: B 371196.24

                  (c) Variation: B 371196.25

                  (d) Variation: B 371196.27

                  (e) Variation: B 558475.13

         2.       (a) CFL: CT 58A/550, WEST BLOCK

                  (b) Variation: B 371196.60

                  (c) Variation: B 371196.61

                  (d) Variation: B 371196.63

                  (e) Variation: B 558475.27

B.       WHAKAREWAREWA FOREST

         1.       (a) CFL: CT 60D/750 WHAKA BLOCK

                  (b) Variation: B 475395.12

                  (c) Variation: B 475395.13

                  (d) Variation: B 475395.15

                  (e) Variation: B 558475.29

         2.       (a) CFL: CT 67D/322 HIGHLANDS BLOCK

                  (b) Variation: 1 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                  (c) Variation: 2 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                  (d) Variation: 3 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                  (e) Variation: 4 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                                Transition Deed                               50
<PAGE>

         3.       (a) CFL: CT 55A/50 WAIMANGU BLOCK

                  (b) Variation: B 371196.28

                  (c) Variation: B 371196.29

                  (d) Variation: B 371196.31

                  (e) Variation: B 558475.39

C.       KAINGAROA FOREST

         1.       (a) CFL: CT 60D/550 NORTH BOUNDARY

                  (b) Variation: B 475395.7

                  (c) Variation: B 475395.8

                  (d) Variation: B 475395.10

                  (e) Variation: B 558475.47

         2.       (a) CFL: CT 52D/400 TOTARA BLOCK

                  (b) Variation: B 371196.12

                  (c) Variation: B 371196.13

                  (d) Variation: B 371196.15

                  (e) Variation: B 558475.15

         3.       (a) CFL: CT 52D/450 HEADQUARTERS BLOCK

                  (b) Variation: B 371196.16

                  (c) Variation: B 371196.17

                  (d) Variation: B 371196.19

                  (e) Variation: B 558475.33

         4.       (a) CFL: CT 57A/750 REPOROA BLOCK

                  (b) Variation: B 475395.2

                  (c) Variation: B 475395.3

                  (d) Variation: B 475395.5

                  (e) Variation: B 558475.31

                                Transition Deed                               51
<PAGE>

         5.       (a) CFL: CT 39C/764 CAVE

                  (b) Variation: B 371196.64

                  (c) Variation: B 371196.65

                  (d) Variation: B 371196.67

                  (e) Variation: B 558475.49

         6.       (a) CFL: CT 55B/450 WAIRAPUKAO

                  (b) Variation: B 371196.36

                  (c) Variation: B 371196.37

                  (d) Variation: B 371196.39

                  (e) Variation: B 558475.17

         7.       (a) CFL: CT 55B/500 FLAXY CREEK

                  (b) Variation: B 371196.40

                  (c) Variation: B 371196.41

                  (d) Variation: B 371196.43

                  (e) Variation: B 558475.35

                  (f) Deed Granting Right of Way dated 8 September 1998 relating
                      to Flaxy Creek and Whirinaki

         8.       (a) CFL: CT 52D/500 WAIMAROKE

                  (b) Variation: B 371196.20

                  (c) Variation: B 371196.21

                  (d) Variation: B 371196.23

                  (e) Variation: B 558475.23

         9.       (a) CFL: CT 57B/1 MATEA BLOCK

                  (b) Variation: B 371196.56

                  (c) Variation: B 371196.57

                                Transition Deed                               52
<PAGE>

                  (d) Variation: B 371196.59

                  (e) Variation: B 558475.45

         10.      (a) CFL: CT 56D/50 PUKURIRI BLOCK

                  (b) Variation: B 371196.44

                  (c) Variation: B 371196.45

                  (d) Variation: B 371196.47

                  (e) Variation: B 558475.31

                  (f) Memorandum of Consent relating to an error in the land
                      area recorded in the licence.

D.       WHIRINAKI - KAINGAROA FOREST

         1.       (a) CFL: CT 57A/60 WHIRINAKI BLOCK

                  (b) Variation: B 371196.52

                  (c) Variation: B 371196.53

                  (d) Variation: B 371196.55

                  (e) Variation: B 558475.41

                  (f) Compensation Certificate: B457481.1

                  (g) Deed Granting Right of Way dated 8 September 1998 relating
                      to Flaxy Creek and Whirinaki.

E.       HOROHORO FOREST

         1.       (a) CFL: CT 70B/81

                  (b) Variation: 1 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                  (c) Variation: 2 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                  (d) Variation: 3 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

                  (e) Variation: 4 (EXECUTED VARIATION BUT NOT IN REGISTRABLE
                      FORM)

F.       CRATER FOREST

         1.       (a) CFL: CT 51D/850

                  (b) Variation: B 371196.2

                                Transition Deed                               53
<PAGE>

                  (c) Variation: B 371196.3

                  (d) Variation: B 371196.7

                  (e) Variation: B 558475.25

G.       MAROTIRI FOREST

         1.       (a) CFL: CT 51D/900

                  (b) Variation: B 371196.8

                  (c) Variation: B 371196.9

                  (d) Variation: B 371196.11

                  (e) Variation: B 558475.19

                  (f) Right Of Way Easement 55D/138

H.       WAIMIHIA FOREST

         1.       (a) CFL: CT 56D/200 NORTH BLOCK

                  (b) Variation: B 371196.48

                  (c) Variation: B 371196.49

                  (d) Variation: B 371196.51

                  (e) Variation: B 558475.43

         2.       (a) CFL: CT 55A/100 SOUTH BLOCK

                  (b) Variation: B 371196.32

                  (c) Variation: B 371196.33

                  (d) Variation: B 371196.35

                  (e) Variation: B 558475.21

                                Transition Deed                               54
<PAGE>

                                   SCHEDULE 7

                                CNIFP INFORMATION

<TABLE>
<CAPTION>
    BUSINESS AREA             Process         MASTER DATA                                 DESCRIPTION
---------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>               <C>                <C>
 1  Environmental                          Monitoring data    Stream  Assessments,   Kaingaroa   Streamside   management  policy,
                                                              Assessments and monitoring  results of indigenous   remnants,
                                                              Archaeological survey results, Recreation use, non wood products
---------------------------------------------------------------------------------------------------------------------------------
 2  Environmental                                              Flora and Fauna surveys.
---------------------------------------------------------------------------------------------------------------------------------
 3  Environmental                                             Historic   protected sites and any   authorisations to modify,
                                                              (Authority, and conditions, Other documentation referred to in
                                                              the application.
---------------------------------------------------------------------------------------------------------------------------------
 4  Environmental                          Resource           All resource consents and associated documents and correspondence
                                           Consents           relating to CNIFP Forests
---------------------------------------------------------------------------------------------------------------------------------
 5  Environmental                          Stakeholders       Agreements and accords with Iwi, ODC, Fish and Game, QEII,
                                                              Transpower, Transit NZ, District Road Authorities, Recreation
                                                              users, Other stakeholders
---------------------------------------------------------------------------------------------------------------------------------
 6  Environmental                          Stakeholders       Organisation, Names, Contact Details, Consultation notes, Agreement
                                                              with Stakeholders.
---------------------------------------------------------------------------------------------------------------------------------
 7  Environmental                          Encumbrances       Details of any encumbrances
---------------------------------------------------------------------------------------------------------------------------------
 8  Environmental                          Information        and Alternative species, Chemicals, Operational techniques, H&S
                                           results  of        Trialsinitiatives, Sustainability, (inter rotational soil studies,
                                           undertaken         on compaction studies), Other trials with social or environmental
                                           CNIFP estate       ramifications.
---------------------------------------------------------------------------------------------------------------------------------
 9  Finance              Billing, AR       Customer           current balances relating to CNIFP sales
---------------------------------------------------------------------------------------------------------------------------------
10  Finance              Accounts Payable  Suppliers          Contracts, address, phone, contacts, current balances
---------------------------------------------------------------------------------------------------------------------------------
11  Finance              Accounts Payable  History            Transactions for the past 2 years
---------------------------------------------------------------------------------------------------------------------------------
12  Finance              Accounts          History            Transactions for the past 2 years for sales analysis
                         Receivable
---------------------------------------------------------------------------------------------------------------------------------
13  Finance              Accounts Payable  Transport Rates    Distance from Harvest area to Weighbridge and Customers.
                                                              Weighbridge to Customer. classification on/off highway,
                                                              singles/doubles/binwood/stems, rate, , rate model,
---------------------------------------------------------------------------------------------------------------------------------
14  Finance              Accounts payable  Transport Rates    Rail rate schedule
---------------------------------------------------------------------------------------------------------------------------------
15  Finance              Accounts Payable  Harvesting rates   Harvest Rate schedule, Contract Rates Agreements valid at 1st
                                                              Jul 03
---------------------------------------------------------------------------------------------------------------------------------
16  Finance              Accounts Payable  Loading Rates      Rate
                                           for cold deck
                                           operations
---------------------------------------------------------------------------------------------------------------------------------
17  Finance              Accounts Payable  Other rates        Rate ID Rate
                                           (hourly)
---------------------------------------------------------------------------------------------------------------------------------
18  Finance              Accounts Payable  Roading            Rate schedule
---------------------------------------------------------------------------------------------------------------------------------
19  Finance              Accounts Payable  Forestry           Manday rates, Costings programmes, machinery rates by operation
                                           Operation rates    type
---------------------------------------------------------------------------------------------------------------------------------
20  Finance/Sales        & Invoice         History            SRMFS data. Can be separated by source. Deliveries.
    Distribution         transactions
---------------------------------------------------------------------------------------------------------------------------------
21  Financial            General           Financial Year     Detailed & Summary Trial Balance.
                                           and period
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                Transition Deed                               55
<PAGE>

<TABLE>
<CAPTION>
   BUSINESS AREA          Process         MASTER DATA                                 DESCRIPTION
---------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>               <C>                <C>
22  Financial           Fixed Assets      Assets              Asset register, classes depreciation rates.
---------------------------------------------------------------------------------------------------------------------------------
23  Forestry            Management        Plans               Contorta control plan, stand/operational level data to support F04
                                                              management plan.
---------------------------------------------------------------------------------------------------------------------------------
24  Forestry            Management        Stands              ID, treatment, history, regime, normal stand data, includes all
                                                              GIS layers relevant to CNIFP estate.
---------------------------------------------------------------------------------------------------------------------------------
25  Forestry            Management        Constraints         Catchments
---------------------------------------------------------------------------------------------------------------------------------
26  Forestry            Management        Constraints         PSPs, locations and data service agreement
---------------------------------------------------------------------------------------------------------------------------------
27  Forestry            Management        Constraints          Utilities - power/gas/canals, location and agreements for
                                                               management
---------------------------------------------------------------------------------------------------------------------------------
28  Forestry            Inventory         Heighting/Block     Location, standID, data, rules for collection, plot locations
                                                              Check
---------------------------------------------------------------------------------------------------------------------------------
29  Forestry            Inventory         Post Operation      Location, standID, data, plot location, data collection rules,
                                          Inspection          summary results.
---------------------------------------------------------------------------------------------------------------------------------
30  Forestry            Inventory         Mid rotation        Location, standID, data, quality code dictionary, cutting
                                                              strategy, plot location
---------------------------------------------------------------------------------------------------------------------------------
31  Forestry            Inventory         PHA                 Location, standID, data, cutting strategy, quality code
                                                              dictionary, plot location
---------------------------------------------------------------------------------------------------------------------------------
32  Forestry            Inventory         Cutting strategies  ID, Description, Purpose, quality code dictionaries
---------------------------------------------------------------------------------------------------------------------------------
33  Forestry            Management        Yield tables        Formulae, values, applications, stand linkages to croptype
---------------------------------------------------------------------------------------------------------------------------------
34  Forestry                                                  Obtain all Records of Land Privileges, Access Rights, Grazing
                                                              Licences, Covenant Areas and Restricted Areas
---------------------------------------------------------------------------------------------------------------------------------
35  Forestry                                                  Crown Forest Licences and JV agreements for PokoPoko, Nursery, and
                                                              Spirit of NZ Joint Venture at Rotoehu.
---------------------------------------------------------------------------------------------------------------------------------
36  Forestry                                                  Obtain Valuation and Rating Records.
---------------------------------------------------------------------------------------------------------------------------------
37  Forestry                                                  Obtain GIS Spatial and Attribute Data
---------------------------------------------------------------------------------------------------------------------------------
38  Forestry            Fire protection   Fire Plan           Fire Plan
---------------------------------------------------------------------------------------------------------------------------------
39  Finance             Management                            Capitalised cost schedule
---------------------------------------------------------------------------------------------------------------------------------
40  Forestry            Management        Stand maps          Paper based stand maps and operational data.
---------------------------------------------------------------------------------------------------------------------------------
41  Forestry            Management        Aerial Photographs  Historic aerial photos
---------------------------------------------------------------------------------------------------------------------------------
42  Harvesting                            Ahead Position      FRD File
---------------------------------------------------------------------------------------------------------------------------------
43  Harvesting          History           Daily crew          Crew, weekly production figures prev 6 months.
                                          production from
                                          CNIFP forests
---------------------------------------------------------------------------------------------------------------------------------
44  Harvesting                            Harvesting plan     Three year cutting plan clearfell
---------------------------------------------------------------------------------------------------------------------------------
45  Harvesting                                                Five Year Thinning Plan
---------------------------------------------------------------------------------------------------------------------------------
46  Harvesting                                                F04 thinning schedule and yield estimates
---------------------------------------------------------------------------------------------------------------------------------
47  Harvesting                                                Future Harvest Planning Notes Including Resource Consents
---------------------------------------------------------------------------------------------------------------------------------
48  Harvesting                                                Historic Harvest planning Notes including resource consents
---------------------------------------------------------------------------------------------------------------------------------
49  Harvesting                                                F03 Contractor Allocation and Rate Schedule
---------------------------------------------------------------------------------------------------------------------------------
50  Harvesting                                                Aerial Photographs for Operations Purposes.
---------------------------------------------------------------------------------------------------------------------------------
51  S&OP                S&OP                                  Crew location and details on Operational date
---------------------------------------------------------------------------------------------------------------------------------
52  S&OP                S&OP              SOP round for       Production by Harvest area down to the block ID and SOP Grade
                                          Budget              level for F04
---------------------------------------------------------------------------------------------------------------------------------
53  Sales &             Inventory         Product Details     Product ID, description, rates, type, length grade, treatment,
    Distribution                                              marketing specification [knots, weep, SED, LED error ovality,
                                                              density] Agespec, for sales to FCF and Export  sales via FCF and
                                                              stock as at Operational date.
---------------------------------------------------------------------------------------------------------------------------------
54  Sales &             &Inventory        Stocks              Product ID, Location, Units, Quantity Age
    Distribution
---------------------------------------------------------------------------------------------------------------------------------
55  Sales &             &Dispatch         Weighbridges        ID, operator contracts
    Distribution
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                Transition Deed                               56
<PAGE>

<TABLE>
<CAPTION>
  BUSINESS AREA             Process         MASTER DATA                                 DESCRIPTION
---------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>               <C>                <C>
 56 Sales &              Dispatch          Trucks & trailers  , Tare weight by truck,
    Distribution
---------------------------------------------------------------------------------------------------------------------------------
 57 Sales &              S&OP              Conversion         From  nits, to units, basis, date applicable for 12 months
    Distribution                           factors            historic.
---------------------------------------------------------------------------------------------------------------------------------
 58 Sales &              S&OP              Sonic standards    Parameters, grade
    Distribution
---------------------------------------------------------------------------------------------------------------------------------
 59 Sales &              S&OP              SOP Family         Product details vs SOP Family
    Distribution
---------------------------------------------------------------------------------------------------------------------------------
 60 KPP / Staff          HR                Personnel          Existing Employment Agreement Terms/Conditions
---------------------------------------------------------------------------------------------------------------------------------
 61 KPP / Staff          HR                Personnel          Job Descriptions
---------------------------------------------------------------------------------------------------------------------------------
 62 KPP / Staff          HR                Personnel          Employee/Position/Remuneration
---------------------------------------------------------------------------------------------------------------------------------
 63 KPP / Staff          HR                Personnel          Allowances
---------------------------------------------------------------------------------------------------------------------------------
 64 KPP / Staff          HR                Personnel          Service length
---------------------------------------------------------------------------------------------------------------------------------
 65 KPP / Staff          HR                Personnel          Leave records/status
---------------------------------------------------------------------------------------------------------------------------------
 66 KPP / Staff          HR                Personnel          Special leave
---------------------------------------------------------------------------------------------------------------------------------
 67 KPP / Staff          HR                Personnel          Employee benefits
---------------------------------------------------------------------------------------------------------------------------------
 68 KPP / Staff          HR                Personnel          Contact details
---------------------------------------------------------------------------------------------------------------------------------
 69 KPP / Staff          HR                Personnel          Next of Kin etc
---------------------------------------------------------------------------------------------------------------------------------
 70 KPP / Staff          HR                Personnel          Medical records etc
---------------------------------------------------------------------------------------------------------------------------------
 71 KPP / Staff          HR                Personnel          H&S records
---------------------------------------------------------------------------------------------------------------------------------
 72 KPP / Staff          HR                Personnel          ACC & work related accident/incidents
---------------------------------------------------------------------------------------------------------------------------------
 73 KPP / Staff          HR                Personnel          Performance info: Skill/Competency
---------------------------------------------------------------------------------------------------------------------------------
 74 KPP / Staff          HR                Personnel          Training records
---------------------------------------------------------------------------------------------------------------------------------
 75 KPP / Staff          HR                Personnel          Personnel files
---------------------------------------------------------------------------------------------------------------------------------
 76 KPP / Staff          Staff H&S/ops                        Process performance and safety information
---------------------------------------------------------------------------------------------------------------------------------
 77 KPP / Staff          Staff H&S/ops                        Manufacturing process information
---------------------------------------------------------------------------------------------------------------------------------
 78 KPP / Staff          Staff H&S/ops                        Machine set-up/run parameters
---------------------------------------------------------------------------------------------------------------------------------
 79 KPP / Staff          Staff H&S/ops                        Standard operating procedures
---------------------------------------------------------------------------------------------------------------------------------
 80 KPP / Staff          Staff H&S/ops                        Production sheets
---------------------------------------------------------------------------------------------------------------------------------
 81 KPP                  Ops                                  Yard contracts, Maintenance contracts.
---------------------------------------------------------------------------------------------------------------------------------
 82 KPP                  Ops                                  Maintenance history, and plans.
---------------------------------------------------------------------------------------------------------------------------------
 83 KPP / Staff          Staff H&S/ops                        Material Safety Data Sheets
---------------------------------------------------------------------------------------------------------------------------------
 84 Waipa/MT             HR                Personnel          Existing Employment Agreement Terms/Conditions
---------------------------------------------------------------------------------------------------------------------------------
 85 Waipa/MT             HR                Personnel          Job Descriptions
---------------------------------------------------------------------------------------------------------------------------------
 86 Waipa/MT             HR                Personnel          Employee/Position/Remuneration
---------------------------------------------------------------------------------------------------------------------------------
 87 Waipa/MT             HR                Personnel          Allowances
---------------------------------------------------------------------------------------------------------------------------------
 88 Waipa/MT             HR                Personnel          Service length
---------------------------------------------------------------------------------------------------------------------------------
 89 Waipa/MT             HR                Personnel          Leave records/status
---------------------------------------------------------------------------------------------------------------------------------
 90 Waipa/MT             HR                Personnel          Special leave
---------------------------------------------------------------------------------------------------------------------------------
 91 Waipa/MT             HR                Personnel          Employee benefits
---------------------------------------------------------------------------------------------------------------------------------
 92 Waipa/MT             HR                Personnel          Contact details
---------------------------------------------------------------------------------------------------------------------------------
 93 Waipa/MT             HR                Personnel          Next of Kin etc
---------------------------------------------------------------------------------------------------------------------------------
 94 Waipa/MT             HR                Personnel          Medical records etc
---------------------------------------------------------------------------------------------------------------------------------
 95 Waipa/MT             HR                Personnel          H&S records
---------------------------------------------------------------------------------------------------------------------------------
 96 Waipa/MT             HR                Personnel          ACC & work related accident/incidents
---------------------------------------------------------------------------------------------------------------------------------
 97 Waipa/MT             HR                Personnel          Performance info: Skill/Competency
---------------------------------------------------------------------------------------------------------------------------------
 98 Waipa/MT             HR                Personnel          Training records
---------------------------------------------------------------------------------------------------------------------------------
 99 Waipa/MT             HR                Personnel          Personnel files
---------------------------------------------------------------------------------------------------------------------------------
100 Waipa/MT             Staff H&S/ops                        safety information
---------------------------------------------------------------------------------------------------------------------------------
101 Waipa/MT             Staff H&S/ops                        Machine set-up/run parameters
---------------------------------------------------------------------------------------------------------------------------------
102 Waipa/MT             Staff H&S/ops                        Standard operating procedures
---------------------------------------------------------------------------------------------------------------------------------
103 Waipa/MT             Staff H&S/ops                        Production sheets
---------------------------------------------------------------------------------------------------------------------------------
104 Waipa/MT             Ops                                  Yard contracts, Maintenance contracts.
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                Transition Deed                               57
<PAGE>

<TABLE>
<CAPTION>
 BUSINESS AREA             Process           MASTER DATA                             DESCRIPTION
---------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>               <C>                <C>
105 Waipa/MT             Ops                                  Maintenance history, and plans.
---------------------------------------------------------------------------------------------------------------------------------
106 Waipa/MT             Staff H&S/ops                        ACC history and status
---------------------------------------------------------------------------------------------------------------------------------
107 Waipa/MT             Staff H&S/ops                        Material Safety Data Sheets
---------------------------------------------------------------------------------------------------------------------------------
108 Waipa/MT             Sales             Sales order data   Current sales orders by product by customer by delivery date
---------------------------------------------------------------------------------------------------------------------------------
109 Waipa/MT             Sales             Forward orders     Forward sales orders by product by customer by delivery date
---------------------------------------------------------------------------------------------------------------------------------
110 Waipa/MT             Sales             Sales History      Historic sales by customer by product by date
---------------------------------------------------------------------------------------------------------------------------------
111 Waipa/MT             Sales             Claims             Claims history
---------------------------------------------------------------------------------------------------------------------------------
112 Waipa/MT             Sales             Claims             Current claims
---------------------------------------------------------------------------------------------------------------------------------
113 Waipa/MT             Sales             Claims             Outstanding claims
---------------------------------------------------------------------------------------------------------------------------------
114 Waipa/MT             Ops               Maintenance        Preventative maintenance system documentation
---------------------------------------------------------------------------------------------------------------------------------
115 Waipa/MT             Ops               Maintenance        Preventative maintenance master data
---------------------------------------------------------------------------------------------------------------------------------
116 Waipa/MT             Ops               Maintenance        Preventative maintenance transaction data
---------------------------------------------------------------------------------------------------------------------------------
117 Waipa/MT             Finance           Financial
                                           templates          Eg return to log calculation template
---------------------------------------------------------------------------------------------------------------------------------
118 Waipa/MT             Ops               Production         Production reports in electronic form
                                           reporting
---------------------------------------------------------------------------------------------------------------------------------
119 Waipa/MT             Ops               Production         Spreadsheets
                                           templates
---------------------------------------------------------------------------------------------------------------------------------
120 Waipa/MT             Finance           Procurement        Central procurement master data - Relating to CNIFP Plants
---------------------------------------------------------------------------------------------------------------------------------
121 Waipa/MT             Finance           Procurement        Central procurement transaction data - Relating to CNIFP Plants
---------------------------------------------------------------------------------------------------------------------------------
122 Waipa/MT             Ops               RAYOX              Plant details and history requirements
---------------------------------------------------------------------------------------------------------------------------------
123 Waipa/MT             Finance           Working capital    Working capital procedures
---------------------------------------------------------------------------------------------------------------------------------
124 Waipa/MT             Ops               Legal Agreements   All legal agreements necessary for the continuous operation of the
                                                              plant
---------------------------------------------------------------------------------------------------------------------------------
125 Waipa/MT             Ops               Claims             Claims to third parties
---------------------------------------------------------------------------------------------------------------------------------
126 Waipa/MT             Finance           Fixed assets       Tax and book versions
---------------------------------------------------------------------------------------------------------------------------------
127 Waipa/MT             Finance           Debtors            Debtors claims process and details
---------------------------------------------------------------------------------------------------------------------------------
128 Waipa/MT             Staff H&S/ops     Payroll            Master file and transactions Chris data - relating CNIFP Plants
---------------------------------------------------------------------------------------------------------------------------------
129 Waipa/MT             Staff H&S/ops     Policies           HR policies and procedures
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                Transition Deed                               58
<PAGE>

                                   SCHEDULE 8

                             EXCLUSION FROM CNIFP IT

<TABLE>
<CAPTION>
    MAKE                    MODEL          SERIAL NUMBER     BIOS/DATE    BIOS/MANUFACTURER           DESKTOP/
                                                                                                      NOTEBOOK
<S>                    <C>                 <C>               <C>          <C>                         <C>
Dell Computer          OptiPlex GX260         HB8Q61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          OptiPlex GX260         HB8Q61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          OptiPlex GX260         HB8Q61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          OptiPlex GX260         HB8Q61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          OptiPlex GX260         HB8Q61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          OptiPlex GX260         BC9W61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          OptiPlex GX260         HB8Q61S        09/24/2002      Dell Computer             Desktop
Corporation                                                                  Corporation

Dell Computer          Latitude C510          GRZ761S        08/17/2002      Dell Computer             Notebook
Corporation                                                                  Corporation

Dell Computer          Latitude C610          JL9R61S        11/05/2002      Dell Computer             Notebook
Corporation                                                                  Corporation

Dell Computer          Latitude C510          GRZ761S        08/17/2002      Dell Computer             Notebook
Corporation                                                                  Corporation

Dell Computer          Latitude C610          16RZ61S        11/05/2002      Dell Computer             Notebook
Corporation                                                                  Corporation

Dell Computer          Latitude C610          16RZ61S        11/05/2002      Dell Computer             Notebook
Corporation                                                                  Corporation

Dell Computer          Latitude C600          G1KX21S        4/12/2001       Dell Computer             Notebook
Corporation                                                                  Corporation
</TABLE>

Waipa Mill, Meridian phone system, 15 keyphones, 100
extension capability
KPP, NEC phone system, 24 extension capacity,
2 keyphones
Mt Processing, 5 keyphones, 24
extension capacity
15 Teklogix Handheld terminals, 6
teklogix base station

together with any software loaded on the devices identified above

                                Transition Deed                               59

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]