Town of River Gbeh

Monrovia, Liberia

Liberia

9/17/2009

9/30/2009

The contract area is located in Grand Gedeh and River Gee counties within latitudes 5o6'0" - 5o4'0" north of the equator and longitudes 7o30'0" - 8o6'0" west of the Greenwich meridian

Euro Liberia Logging Company

Forest Management Contract Area F

The contract is not renewable. Limited extensions are possible under Art. B8.5 for force majeure events.

Timber (Wood)

Acting Managing Director, Forestry Development Authority; Minister of Finance, Government of Liberia; Minister of Justice, Government of Liberia

President/ CEO

253,670 hectares

Forestry Development Authority

A term of 25 years until 16/09/2034

Forest Management Contract (number 007)

Euro Liberia Logging Company shall identify in its annual operational plan any areas requiring special measures for the protection of cultural resources and shall implement these measures. Euro Liberia Logging Company shall also protect these areas from damage or removal. Euro Liberia Logging Company shall comply with all requirements for watercourse protection contained in the Liberia Code of Forest Harvesting Practices. Euro Liberia Logging Company must conduct all operations so as to reasonably minimize soil erosion. Euro Liberia Logging Company shall properly dispose of sawdust, mill and other wastes to prevent pollution or contamination to the environment or waterways, and to prevent such wastes from becoming a nuisance or injurious to individuals, organizations, entities, authorities, or property. Euro Liberia Logging Company shall take all reasonable precautions to prevent pollution of air, soil and water by its operations. Euro Liberia Logging Company shall maintain all equipment on the contract area in good condition and free of abnormal leakage of lubricants, fuels, coolants, and hydraulic fluid. Euro Liberia Logging Company shall not service equipment where this is likely to result in pollution to soil or water. Euro Liberia Logging Company shall remove all organic and non-organic waste resulting from use, service, repair, or abandonment of equipment. Euro Liberia Logging Company shall prevent any spillage of oil or oil products from entering any waters. If Euro Liberia Logging Company stores more than 5,000 liters of oil or oil product on the contract area, Euro Liberia Logging Company must prepare a plan for prevention and control of any spills, and must take whatever action may be safely accomplished to contain all spills. Euro Liberia Logging Company must take all necessary measures to prevent and control fires and must notify the Forestry Management Authority of any fire that occurs.

Subject to the written approval of the Government and conditions set by the social agreements (required by Authority Regulation 105-07), Euro Liberia Logging Company may use free of charge any water found within the contract area and in the public domain within 5 km of the contract area for purposes necessary or useful to its operations under the contract. Euro Liberia Logging Company shall not deprive any lands, tribes, villages, towns, houses, or watering places for animals of a reasonable supply of water where this has been customarily used for such purposes. Euro Liberia Logging Company shall not interfere with the rights of water held by any individuals, organizations, entities, or authorities under the Land and Native Right Ordinance, and Euro Liberia Logging Company shall ensure that its use of water in no way results in environmental damage or creates other hazards.

A contract audit committee shall, in the first quarter of each fiscal year, complete an annual contract audit and provide a written report on compliance with each provision of the contract. The Forestry Development Authority shall name up to 5 individuals to the contract audit committee (including at least 1 representative from the Forestry Development Authority, the Ministry of Finance, the Ministry of Justice, and a civil society group not affiliated with or controlled by Euro Liberia Logging Company). Euro Liberia Logging Company shall appear before the contract audit committee if requested, and shall demonstrate that it is in full compliance with the contract. Euro Liberia Logging Company shall in particular present the documents listed in Art. B8.81(b) to the contract audit committee in order to demonstrate compliance. The Government reserves the right to allow unscheduled third party and civil society monitoring of Geblo Logging’s operations. The Government reserves the right to allow unscheduled third party and civil society monitoring of Euro Liberia Logging Company’s operations. Monitoring organizations shall have access to all records, plans, and annual operations plans to facilitate monitoring. These organizations shall agree to not publish any confidential business information without the consent of Euro Liberia Logging Company. Euro Liberia Logging Company's operations are subject to regular and routine monitoring by Forestry Development Authority staff and accredited third-party independent monitoring organizations.

As a holder of a forest resource licence, Euro Liberia Logging Company must pay taxes, duties and fees under the Revenue Code of Liberia

Euro Liberia Logging Company shall pay the Government an annual contract administration fee, annual area fees, an annual coupe inspection fee, and forest product fees required by Authority Regulation 107-07

Euro Liberia Logging Company is to pay to the Government each year for the full duration of the contract: (i) a land rental bid payment, and (ii) an area fee. The bid is US$10.25 per hectare, payable yearly to the Government for the full duration of the contract (i.e. 25 years). The Forestry Development Authority will calculate the annual land rental bid payment based on the bid provided in the opening ceremony, multiplied by the surface area of the contract area in hectares (i.e. 253,670 hectares) plus (if applicable) any public lands outside the contract area used by Euro Liberia Logging Company. The annual area fee is required by section 33 of Forestry Development Authority Regulation 107-07, the area that is subject to the area fee is the same as the area used to calculate the land rental bid.

Before requesting the Forest Development Authority’s permission to use public lands outside the contract area, Euro Liberia Logging Company shall consult with all potentially affected communities that are party to its social agreements and keep a written record of the time, place and general content of these consultations

Euro Liberia Logging Company shall implement social agreements required by Authority Regulation 105-07 before the first annual operating season. Euro Liberia Logging Company shall negotiate new 5-year social agreements with affected communities, as required by Part 3 of Authority Regulation 105-07. The Forestry Development Authority will review and either confirm or reject these agreements. Euro Liberia Logging Company shall not fell trees unless a social agreement is in force for the relevant area. The Forestry Development Authority will convene an ad hoc review committee every 5 or more years to review and prepare a written report on Euro Liberia Logging Company’s relations with local communities and compliance with social agreements. Euro Liberia Logging Company shall cooperate in the review.

In employing individuals for its operations, Euro Liberia Logging Company shall give preference to competent and qualified individuals living in or near the contract area, especially those affected by its social agreements. Euro Liberia Logging Company shall not import unskilled labor from outside Liberia, and must comply with all training and employment obligations required by law or regulation.

Euro Liberia Logging Company shall employ internationally recognized modern health and safety measures, and shall comply with health and safety instructions given in writing by the Government

Euro Liberia Logging Company must allow the public to have access to the contract area, provided this does not unduly prejudice or interfere with Euro Liberia Logging Company's operations

Euro Liberia Logging Company shall ensure that the 5-year forest management plan provides for sustainable use and development of anything that may be of potential use to a human in the forest environment, and conforms with the Forest Development Authority’s Guidelines for Forest Management Planning, the Liberia Code of Forest Harvesting Practices, and Euro Liberia Logging Company's strategic forest management plan

Euro Liberia Logging Company shall ensure that its local resident manager and field supervisor receive Forestry Development Authority-approved training in the requirements under the contract, legal requirements, and environmental standards and guidelines before starting operations

Euro Liberia Logging Company shall ensure that all non-moveable assets and works installed under the Contract comply with the Liberia Code of Forest Harvesting Practices and other applicable laws, and shall ensure that the installation and maintenance of these assets avoids unreasonable risk to safety, health, welfare, and the environment. Euro Liberia Logging Company shall make a written request for approval from the Forestry Development Authority for certain completed installations, after which the Forestry Development Authority will perform an inspection within 15 days. Acceptance by the Forestry Development Authority of Euro Liberia Logging Company’s construction and maintenance of buildings, structures or surfaces relieves Euro Liberia Logging Company of further contractual obligations relating to that inspected work, with the exception of roads and erosion control devices. Euro Liberia Logging Company remains liable for repair and completion of the work until it obtains the Forestry Development Authority’s acceptance.

Euro Liberia Logging Company shall allow the Government and public to use, free of charge, any roads constructed and/ or maintained by Euro Liberia Logging Company, provided that this does not unduly prejudice or interfere with its operations. Euro Liberia Logging Company shall also allow the Government and public to use communications lines developed by it, subject to fair compensation, and provided that this does not unduly prejudice or interfere with Euro Liberia Logging Company's operations.

Euro Liberia Logging Company shall not use public land outside the contract area without written permission from the Forestry Development Authority. The Forestry Development Authority shall not unreasonably deny this permission and agrees to negotiate the terms and conditions under which an easement or other use rights may be exercised. If Euro Liberia Logging Company occupies lands, the terms must include payment of area fees and an amount for land rental at the land rental Bid rate. The right to use such land does not extend to the right to harvest timber, unless this is taken to clear a right-of-way or yarding area. Euro Liberia Logging Company may use private lands with the express, written permission of the land owner. If Euro Liberia Logging Company is unable to obtain permission, then Euro Liberia Logging Company’s use of the land is limited to rights of way. Euro Liberia Logging Company shall disclose in the annual operational plan all anticipated uses of land outside the contract area. The Forestry Development Authority will not approve these activities unless they are necessary to operations under the contract.

At least 90 days before the first annual operating season, Euro Liberia Logging Company shall submit a forest management plan covering the entire contract term that is sufficient to demonstrate that its operations will be sustainable. The forest management plan shall include: a strategic forest management plan, a 5-year forest management plan (described in Art. B6.15), a copy of any environmental impact study required by law, and a business plan (see Art. B3.13). the Forestry Development Authority will then either approve or deny the forest management plan in accordance with Section 52 of Authority Regulation 105-07. Euro Liberia Logging Company shall include in its forest management plan an up-to-date business plan demonstrating that it has the technical and financial capacity to manage the contract area sustainably.

Euro Liberia Logging Company shall include a security plan in its 5-year forest management plan, which must include a description of the methods and strategies that Euro Liberia Logging Company will use to prevent, detect, control, and respond to trespass and timber theft, and how Euro Liberia Logging Company will measure, review, and improve these efforts. Euro Liberia Logging Company shall use all reasonable means to prevent encroachment by unauthorized individuals, organizations, entities, and authorities into the contract area and to protect the rights and property of the Government and third parties, but shall in no case use guards armed with life-threatening weapons and must not threaten force on persons or property.

Euro Liberia Logging Company shall invest a minimum of €1,499,275.00 in a sawmill and plywood mill/vineer, to be installed in the first 2 years from the contract effective date (i.e. by 30/09/2011) and €166,480.00 on transportation, assembling and start up

In the case of a dispute regarding an action by the Forestry Development Authority, if Euro Liberia Logging Company does not submit a claim for resolution within 60 days of the disputed action, the Forestry Development Authority will be relieved from any obligations related to the dispute. Any claim arising under the contract will be decided by the contracting officer (the officer to whom the Forestry Development Authority has delegated the power and duty to administer the contract). The contracting officer’s decision will be final and conclusive, unless Euro Liberia Logging Company appeals the decision to an appropriate Liberian court within 45 days of receiving the written decision from the officer.

Euro Liberia Logging Company shall not assign or transfer the contract or any interests, rights, privileges, or obligations under the contract, without prior written approval of the Ministry of Justice, Ministry of Finance and the Authority. The Forestry Development Authority must not consent to any assignment or transfer, unless in compliance with Authority Regulation 104-07, Section 71.

The contracting officer (the officer to whom the Forestry Development Authority has delegated the power and duty to administer the contract) may terminate the contract in its entirety if Euro Liberia Logging Company fails to submit an initial performance bond before the deadline set in Forestry Development Authority Regulation 104-07, Section 61(b). The contracting officer may, with agreement from the Forestry Development Authority’s board of directors, terminate the contract in its entirety if Euro Liberia Logging Company commits any of the breaches contained in Art. B8.72 and fails to satisfactorily remedy them; these breaches include, amongst others: (b) felling trees not covered by an annual harvesting certificate, (c) failing to complete pre-felling operations within one year of the contract signing date (by 17/09/2010), (d) abandoning operations for a period of 1 year or more, (h) failing to comply with a final decision of a Liberian court regarding a controversy between Euro Liberia Logging Company and the Government, and (i) failure to pay any amounts due under the contract, and (r) failing to comply with a social agreement (required by Forestry Development Authority Regulation 105-07).

The parties understand that section 18.15 of the National Forestry Reform Law of 2006 guarantees to the public free access to all documents and information related to this contract and its administration, subject only to limited exceptions.

The contract is governed by Liberian law

Under the contract, the term force majeure refers to any cause beyond the reasonable control of the parties, which the parties could not foresee and/ or reasonably provide against, that prevents the parties from wholly or partially performing any duties under the contract for 15 consecutive days or more (excluding the rainy season). Failure by either Euro Liberia Logging Company or the Government to fulfill any obligations under the contract will not be considered a breach if this failure arose by force majeure, with the exception of Euro Liberia Logging Company’s obligations to make payments of money owed that accrued before the commencement of the force majeure. If fulfillment of obligations is delayed by force majeure, the period of such a delay will be added to the periods fixed in the contract. The party failing in its obligations due to force majeure must give written notice of the obligations affected and reasons for failure within 30 days of occurrence. Any party failing in its obligations due to force majeure must, when the force majeure ends, take all reasonable and timely steps to make good and resume compliance with those obligations.

Euro Liberia Logging Company agrees to at all times indemnify and hold the Government, its officers and agents harmless from all claims and liabilities for the death of or injury to individuals, organizations, entities, and authorities and for damage to property from any cause arising out of Euro Liberia Logging Company’s operations or activities under the contract, or as a result of Euro Liberia Logging Compan’s failure to comply with any law or regulation. Euro Liberia Logging Company is also liable for damage, injury or loss caused by the acts or omissions of its employees and independent contractors.

Euro Liberia Logging Company agrees to allow the Government and its designated representatives to conduct reasonable inspections of the contract area, any premises within the contract area and any other Euro Liberia Logging Company offices both inside and outside Liberia. Euro Liberia Logging Company shall keep all records necessary to demonstrate compliance with the contract for the full contract term and for 5 years after the contract terminates. The Government can conduct annual audits of Euro Liberia Logging Company’s operations and other reasonable inspections in order to confirm Euro Liberia Logging Company’s compliance with the contract and any applicable laws. Within 90 days of completing operations under each annual operational plan, Euro Liberia Logging Company shall provide the Forestry Development Authority and Ministry of Finance with a written activity report detailing the previous year’s operations, which shall include details regarding production and operations under the contract. Euro Liberia Logging Company shall at the same time present a written security report describing the number and type of illegal trespasses and timber thefts in the contract area, along with strategies for improving security. Euro Liberia Logging Company shall keep the contracting officer (the officer to whom the Forestry Development Authority has delegated the power and duty to administer the contract) fully and regularly informed of its operations and activities under the contract. Euro Liberia Logging Company shall, upon written request from the Forestry Development Authority, provide all documents and other information required by the Forestry Development Authority to determine compliance with the contract and any other applicable legal requirements. The parties understand that Section 18.15 of the National Forestry Reform Law of 2006 guarantees the public free access to all documents and information related to the contract and its administration, subject only to limited exceptions.

Prior to processing or exporting any portion of a tree, Euro Liberia Logging Company must pay log stumpage fees to the Government in the amounts and at the times established by Part II of Authority Regulation 107-07