Town of Yarpeh

Monrovia

Liberia

06/10/2008

27/05/2009

The contract area is located within latitudes 5°36'0" - 5°48'0" north of the equator and longitudes 9°18'0" - 9°30'0" west of the Greenwich meridian

EJ & J Investment Corporation

Forest Management Contract Area B

The Contract is not renewable. Limited extensions are possible under Art. B8.5 (Force Majeure). Without an extension or written permission to delay performance of its obligations under the Contract, EJ & J Investment Corporation's failure to honour time-related obligations constitutes a breach of contract.

Timber

Managing Director, Forest Development Authority; Minister of Finance; Minister of Justice; President Ellen Johnson Sirleaf

General Manager

57,262 hectares

Forestry Development Authority

A period of 25 years from the Contract signing date (06/10/2008) until the termination date (05/10/2033) unless extended or shortened pursuant to the terms of the Contract.

Forest Management Contract

2008

Watercourse Protection: EJ & J Investment Corporation must comply with all requirements for watercourse protection contained in the Liberia Code of Forest Harvesting Practices; Erosion Prevention and Control: EJ & J Investment Corporation must conduct all operations so as to reasonably minimize soil erosion; Prevention of Pollution: EJ & J Investment Corporation must ensure the proper disposal of sawdust, mill, and other wastes so as to prevent pollution or contamination to the environment or to rivers, streams, and other waterways, and so as to prevent such wastes from becoming a nuisance or injurious to individuals, organizations, entities, and authorities or property. EJ & J Investment Corporation must take all reasonable precautions to prevent pollution of air, soil and water by EJ & J Investment Corporation's operations. EJ & J Investment Corporation must ensure all equipment operating on the contract area in good repair and free of abnormal leakage of lubricants, fuel, coolants, and hydraulic fluid. EJ & J Investment Corporation must remove and dispose of all contaminated organic and non-organic waste resulting from use, servicing, repair, or abandonment of equipment. If EJ & J Investment Corporation maintains storage facilities for oil or oil products in the contract area, EJ & J Investment Corporation must take appropriate preventative measures to ensure that any spillage does not enter any stream or other waters. If the total oil or oil products storage exceeds 5,000 litres, EJ & J Investment Corporation must prepare a Spill Prevention Control and Counter Measures Plan. EJ & J Investment Corporation must take whatever action may be safely accomplished to contain all spills; Fire Precautions and Control: EJ & J Investment Corporation must take all necessary measures to prevent and control fires and must notify the Forestry Development Authority of any fire that occurs.

EJ & J Investment Corporation 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 EJ & J Investment Corporation's operations and activities under the Contract, provided that EJ & J Investment Corporation does not deprive any lands, tribes, villages, towns, houses, or watering places for animals of a reasonable supply of water where this water has customarily been used for such purposes. EJ & J Investment Corporation must not interfere with the rights of water enjoyed by any individuals, organizations, entities, and authorities under the Land and Native Right Ordinance and must ensure that its use of water in no way results in environmental damage or other hazards.

Annual Compliance Audit: The Forestry Development Authority must convene an ad hoc Contract Audit Committee (the "Committee") to complete an annual contract audit, including an audit of each provision and a written report, in the first quarter of each fiscal year. The Forestry Development Authority will appoint up to 5 individuals to the Committee, including at least one representative from each of the following - the Forestry Development Authority, the Ministry of Finance, the Ministry of Justice, and a civil society group not affiliated with or controlled by EJ & J Investment Corporation. EJ & J Investment Corporation must appear before the Committee on request and demonstrate that EJ & J Investment Corporation is in full compliance with the Contract. Specifically, EJ & J Investment Corporation must present (i) a certificate issued by the Chain of Custody System Manager showing all forest taxation charges have been paid during the preceding fiscal year, (ii) a certificate issued by the Forestry Development Authority on the status of breaches of contract provisions and violations of forest laws and regulations for the preceding fiscal year, (iii) a certificate issued by the Ministry of Finance showing that all tax obligations have been discharged for the preceding fiscal year, (iv) a business certificate for the current fiscal year, (v) a copy of EJ & J Investment Corporation's audited accounts for the preceding fiscal year, and (vi) a copy of EJ & J Investment Corporation's forest certification (if applicable); Additional Audits: The Government reserves the right to allow unscheduled third party and civil society monitoring of EJ & J Investment Corporation's contract operations. Should EJ & J Investment Corporation fail to demonstrate compliance with the Contract, EJ & J Investment Corporation will be liable to the Forestry Development Authority for the cost of conducting additional field audits to measure compliance.

As a holder of a Forest Resource Licence, EJ & J Investment Corporation is subject to taxes, duties, and fees of general application under the Revenue Code of Liberia

Initial Performance Bond: Prior to the deadline specified in Forestry Development Authority Regulation 104-07, Section 61(b), EJ & J Investment Corporation must deposit with the Ministry of Finance an initial performance bond of USD $150,000.00; The Government must return the initial performance bond to EJ & J Investment Corporation promptly after EJ & J Investment Corporation deposits the first annual performance bond; Annual Performance Bond: The Forestry Development Authority will calculate the annual performance bond based on the formula in Regulation 104-07, Section 61(d), taking into account the land rental bid payment and log stumpage fee in estimating revenue. Within 30 days of the Forestry Development Authority approving each of EJ & J Investment Corporation's Annual Operational Plans, EJ & J Investment Corporation must deposit with the Ministry of Finance the annual performance bond. EJ & J Investment Corporation must not fell trees under an Annual Operational Plan before depositing the applicable performance bond. Should EJ & J Investment Corporation fall into arrears on any amount owed to the Government, fail to comply with contract terms, fail to pay monetary obligations under the Contract, or fail to obey applicable laws and regulations, then the Government and Forestry Development Authority may draw upon the performance bond to make the Government whole (including to pay any amount owed to the Government, replace loss revenues, pay for restoration of environmental damage, or to assure payment of compensation for third-party claims against EJ & J Investment Corporation). If the performance bond is drawn upon or loses value, EJ & J Investment Corporation must replace or restore it to the required value within 30 days, or otherwise must stop felling trees until the bond is replace or restored. All but the final annual performance bonds will be returned to EJ & J Investment Corporation following EJ & J Investment Corporation's satisfactory completion of all contractual obligations covered in the year's annual operational plan. The final annual performance bond will be returned to EJ & J Investment Corporation following EJ & J Investment Corporation's satisfactory completion of all obligations under the Contract; Other fees: EJ & J Investment Corporation must pay the Government an annual contract administration fee, annual area fees, an annual coupe inspection fee and forest product fees as required under the Forestry Development Authority Regulation 107-07.

EJ & J Investment Corporation must pay log stumpage fees to the Government in accordance with Forestry Development Authority Regulation 107-07 before any logs have been processed or exported.

Land Rental Bid: The land rental bid fee is US$5.06 per hectare payable annually for the duration of the Contract to the Government of Liberia; Land Rental Bid Payments: The Forestry Development Authority will calculate the annual land rental bid payment based on the bid provided in the bid opening ceremony multiplied by the surface area in hectares of the contract area (i.e. 57,262 ha). The amount will be increased to take into account the use of public lands outside the contract area [see Art. B4.12(e)]; Land Rental Fees: EJ & J Investment Corporation must pay an annual area fee to the Government as required under Section 33 of the Forestry Development Authority Regulation 107-07. For purposes of calculating the area fee, the land subject to the Contract is the adjusted area determined under Section B7.11(a).

EJ & J Investment Corporation must always consult with all potentially affected communities that are party to Social Agreements before requesting permission from the Forestry Development Authority to use public lands outside the contract area. EJ & J Investment Corporation must keep a written record of the time, place and general content of these consultations.

Social Agreements: Before the first annual operating season, EJ & J Investment Corporation must execute the first Social Agreements required by Forestry Development Authority Regulation 105-07 (the "Regulation"), which will be promptly reviewed and either confirmed or rejected in accordance with the Regulation; As required by the Regulation, EJ & J Investment Corporation must negotiate new Social Agreements (with a duration of 5 years) for the benefit of affected communities. EJ & J Investment Corporation must not fell trees under the Contract unless a Social Agreement for all affected communities is in force with respect to the area in which EJ & J Investment Corporation wishes to log; Five-Year Social Responsibility Review: The Forestry Development Authority will convene an ad hoc Social Responsibility Committee at intervals of not less than 5 years to review and prepare a written report on EJ & J Investment Corporation's relations with local communities and compliance with the Social Agreements. EJ & J Investment Corporation must cooperate with this review at the Committee's request.

In the selection of employees to conduct its operations under the Contract, EJ & J Investment Corporation must give preference to competent and qualified individuals living in and near the contract area, and particularly to those from communities benefiting from EJ & J Investment Corporation's Social Agreements. EJ & J Investment Corporation must not import unskilled labor from outside Liberia. EJ & J Investment Corporation must comply with all training and employment obligations required by law or regulation.

EJ & J Investment Corporation must employ internationally recognized, modern measures for protection of the general health and safety of its employees and all other individuals, organizations, entities, and authorities with legal access to the contract area, as well as comply with all Government-issued public health and safety instructions.

EJ & J Investment Corporation must allow the public to have access to the contract area provided it does not unduly prejudice nor interfere with EJ & J Investment Corporation's operations.

Minimum Diameter Limit: EJ & J Investment Corporation must not cut or fell for commercial use any growing tree with a diameter smaller than 60 cm at breast height (i.e. the midpoint on a tree 1.36 meters above ground or 30 cm above a buttress). The Forestry Development Authority officer responsible for administering the Contract may require or permit EJ & J Investment Corporation to remove any wood or portion of a tree from standing trees under certain conditions listed in Art. B6.22; Tree Clearing and Felling: EJ & J Investment Corporation must ensure that all tree clearing, felling and utilization activities comply with the requirements contained in the Liberia Code of Forest Harvesting Practices (the "Code"); Protection of Environment and Contract Area: EJ & J Investment Corporation must use only environmentally sound harvesting practices that conform to the Forest Management Guidelines, the Code and any applicable internationally accepted scientific principles and practices. EJ & J Investment Corporation must avoid waste, loss and damage of natural resources, and prevent pollution and contamination of the surrounding and wider environment; Damage to Trees: EJ & J Investment Corporation must harvest trees in a manner that avoids unnecessary damage and waste; Protection of Land Survey Monuments: EJ & J Investment Corporation must protect all survey monuments, witness corners, reference monuments, and bearing trees from destruction or damage during operations. In the case of any damage, EJ & J Investment Corporation must hire a land surveyor to reestablish or restore them at the same location; Protection Measures for Plants, Animals and Cultural Resources: EJ & J Investment Corporation must identify and describe areas requiring special measures for the protection of plants, animals and cultural resources in the Annual Operational Plan, and must protect these areas from damage or removal. If additional areas, resources or species are identified by either party during the contract term, the other party must immediately be notified and EJ & J Investment Corporation must stop all operations in affected areas if the relevant Forestry Development Authority officer determines there is a risk of damage from continued operations. EJ & J Investment Corporation may not operate wheeled or track-laying equipment in any area identified as requiring special measures (with the exception of roads, landings, tractor roads, or skid trails), and must not fell trees in any such area. EJ & J Investment Corporation must also immediately notify the Forestry Development Authority of a disturbance in any area identified as requiring special protection measures and stop operations in the vicinity until authorized in writing to continue. EJ & J Investment Corporation must pay for the cost of resource evaluation and restoration to such identified sites. Payment of such costs does not relieve EJ & J Investment Corporation of any civil or criminal liability otherwise provided by law; Wildlife Management and Protection: EJ & J Investment Corporation must must immediately close and block logging roads and skid trails in the contract area when they are no longer in use, or when the Contract terminates. No EJ & J Investment Corporation vehicle may be used for hunting or for the transport of hunters or the meat of wild animals. EJ & J Investment Corporation must prevent employees from hunting with snares, hunting in protected areas, hunting protected animals, and commercially selling the meat of wild animals in EJ & J Investment Corporation camps and worksites. Any breach by an employee may result in dismissal. Reforestation: EJ & J Investment Corporation must ensure that tree cover is reestablished with trees native to Liberia on every area for timber harvest identified in an Annual Operational Plan within 5 years of harvesting that area.

Five-Year Forest Management Plan: EJ & J Investment Corporation must ensure that the Five-Year Forest Management Plan (the "Five-Year Plan") provides for sustainable use and development of anything that may be of potential use to a human in the forest environment and that the Five-Year Plan conforms with the Forestry Development Authority's Guidelines for Forest Management Planning, the Liberia Code of Forest Harvesting Practices, and EJ & J Investment Corporation's Strategic Forest Management Plan.

EJ & J Investment Corporation must ensure that its Local Resident Manager and field supervisor receive Forestry Development Authority-approved training on the requirements of the Contract, other legal requirements, and environmental standards and guidelines before any operations begin.

All infrastructure and non-moveable assets revert to the Government upon termination of the Contract. EJ & J Investment Corporation must leave such facilities in a maintained and safe running order. EJ & J Investment Corporation must ensure that all non-movable assets and works installed in relation to the Contract comply with the Liberia Code of Forest Harvesting Practices and other applicable laws, and must also ensure that the installation and maintenance of these assets avoids unreasonable risk to safety, health, welfare, and the environment. EJ & J Investment Corporation must make a written request for approval from the Forestry Development Authority for construction or maintenance of major roads, building construction, erosion control projects, and any any other significant land-disturbing activity. The Forestry Development Authority will perform an inspection of this work within 15 days. Until EJ & J Investment Corporation obtains the Forestry Development Authority's acceptance for all non-movable assets and works installed, EJ & J Investment Corporation remains liable for repair and completion of this work, regardless of the time elapsed. Upon obtaining acceptance, EJ & J Investment Corporation will be relieved of further contractual obligations related to the inspected work, with the exception of erosion control devices (which EJ & J Investment Corporation must maintain for 5 years or until the contract termination date, 05/10/2033) and roads (which EJ & J Investment Corporation must repair for 3 years or until the contract termination date, 05/10/2033).

EJ & J Investment Corporation agrees to allow the Government and public to use, free of charge, any roads constructed and/ or maintained by EJ & J Investment Corporation provided this does not unduly prejudice or interfere with EJ & J Investment Corporation's operations. EJ & J Investment Corporation also agrees to allow the Government and public to use communication lines developed by EJ & J Investment Corporation within the contract area, subject to fair compensation and provided that this does not unduly prejudice or interfere with EJ & J Investment Corporation's operations

Contract Area: In the event of a resurvey, EJ & J Investment Corporation must promptly report to the Forestry Development Authority any discrepancy in the metes and bounds and/or contract area maps for appropriate action and adjustment; Use of Public Lands Outside Contract Area: EJ & J Investment Corporation must not use public land outside the contract area without the Forestry Development Authority's express permission to do so. The Forestry Development Authority must not unreasonably deny permission to use such land and agree to negotiate the terms and conditions under which an easement or other rights may be exercised. If EJ & J Investment Corporation occupies lands, the terms must include payment of area fees and an amount for land rental and the Land Rental Bid ratio. The right to use such land does not extend to the right to harvest timber, unless the timber is taken to clear land for a right-of-way or yarding area; Use of Private Lands: EJ & J Investment Corporation may use private land with the express, written permission of the land owner. If EJ & J Investment Corporation is unable to obtain permission, then EJ & J Investment Corporation is limited to rights of way; Annual Operational Plan: EJ & J Investment Corporation must disclose in the Annual Operational Plan all anticipated use of public or private land outside the contract area, and the Forestry Development Authority will not approve activities outside the contract area unless they are necessary to operations under the Contract.

Forest Management Plan: At least 90 days before the first annual operating season, EJ & J Investment Corporation must submit a Forest Management Plan (the "Plan") covering the entire contract term with sufficient forward-looking projects to demonstrate that EJ & J Investment Corporation's proposed operations will be sustainable. The Plan must include: a Strategic Forest Management Plan covering the entire contract term, a Five-Year Forest Management Plan (as described in Art. B6.15) a copy of any environmental impact study required by law, and the Business Plan required by Art. B3.13 of the Contract. The Forestry Development Authority will review, and then approve or deny, the Plan as provided by Section 52 of the Forestry Development Authority Regulation 105-07; Business Plan: As part of its Forest Management Plan, EJ & J Investment Corporation must include an up-to-date Business Plan demonstrating to the Forestry Development Authority's satisfaction that EJ & J Investment Corporation has the technical and financial capacity to manage the contract area sustainably.

Five-Year Forest Management Plan: EJ & J Investment Corporation must include in its Five-Year Forest Management Plan (the "Five-Year Plan") a Security Plan, which must include descriptions of the measures EJ & J Investment Corporation will take to prevent trespass and theft of any wood or portion of a tree and how it will measure, review and improve the effectiveness of its security efforts; Protection of Property and Use of Guards: EJ & J Investment Corporation must use reasonable means and measures to prevent encroachment into the contract area and prevent damage to the rights and property of the Government and third parties. EJ & J Investment Corporation must cooperate with the owners of any underground or overhead utility lines in their removal and/or rearrangement in order that these operations may progress in a reasonable manner, utility duplication or rearrangement work may be reduced to a minimum, and services must not be unnecessarily interrupted. EJ & J Investment Corporation must not conduct blasting or other dangerous operations within 750 meters of any public work, permanent building, village, or inhabited structure without written consent of the Forestry Development Authority.

EJ & J must invest a minimum of US$1,000,000 on processing facilities in the form of a sawmill, which must be installed within the first 2 years

Failure by EJ & J Investment Corporation to submit a claim for resolution within 60 days of the disputed action by the Forestry Development Authority will relinquish the Forestry Development Authority from any and all obligations whatsoever related to the dispute. Any claim arising under the Contract will be decided by the relevant Forestry Development Authority officer within 60 days after receipt of the claim. The decision of the Forestry Development Authority official will be final and conclusive if, within 45 days of receipt, EJ & J Investment Corporation fails to appeal the decision to an appropriate Liberian court.

EJ & J Investment Corporation must not assign or transfer the Contract or any interests, rights, privileges, or obligations under it without the prior written approval of the Government by and through the Ministry of Justice, Ministry of Finance and the Forestry Development Authority. The Forestry Development Authority will not consent to any assignment or transfer of the Contract, except in compliance with the requirements of Forestry Development Authority Regulation 104-07.

Failure to Execute Contract: The Forestry Development Authority officer responsible for administering the Contract will terminate the Contract in its entirety in the event that EJ & J Investment Corporation fails to submit an initial performance bond before the deadline set in Forestry Development Authority Regulation 104-07, Section 61(b). If EJ & J Investment Corporation fails to post the initial performance bond in a timely manner, EJ & J Investment Corporation must pay liquidated damages equivalent to the bond amount; Termination for Breach: the Forestry Development Authority officer responsible for administering the Contract may terminate the Contract in its entirety if EJ & J Investment Corporation commits any of the following breaches and fails to satisfactorily remedy them: fells trees prior to the Forestry Development Authority certifying that all pre-felling operations have been completed, fells trees not covered by a valid harvesting certified, fails to complete pre-felling operations within 1 year of the contract signing date (i.e. by 05/10/2009), abandons operations for 1 year or more, significantly fails to meet the requirements of an approved Annual Operational Plan, assigns any rights held under the Contract to a third party without the consent of the Forestry Development Authority, goes into bankruptcy or liquidation (or if a receiver is appointed), fails to remain a corporate entity lawfully able to do business in Liberia, fails to comply with any final decision of a Liberian court in a controversy between EJ & J Investment Corporation and the Government, fails to meet any contractual monetary obligations in a timely manner, fails to remedy a material breach of the Contract within the time limits stated in Art. B8.7, engages in a pattern of activity demonstrating flagrant disregard for the terms of the Contract, fails to meet the requirements of an annual contract audit, fails to comply with any laws or regulations, wilfully or intentionally wastes any forest product for financial gain, intentionally removes any timber or forest products or natural resources not included in the Contract without written approval from the relevant Forestry Development Authority officer, misrepresents to the Government any facts material to the issuance or use of the Contract, is convicted for any criminal or civil violation of environmental standards issued by a Government entity or subdivision, fails to comply with a Social Agreement, is convicted (or its senior officers are convicted) for violation of any criminal or civil offense indicating a lack of business integrity or honesty that seriously and directly affects the responsibility of EJ & J Investment Corporation.

The Contract is governed by the laws of the Republic of Liberia

Under the Contract, the term force majeure refers to any cause beyond the reasonable control of the parties, and which the parties could not foresee and/ or reasonably provide against, that prevents the parties from wholly or partially performing any of their duties under the Contract for 15 consecutive days or more. The rainy season is foreseeable and does not constitute a force majeure. Failure by either EJ & J Investment Corporation or the Government to fulfill any of their respective obligations under the Contract, other than EJ & J Investment Corporation's obligations to make payments of money that accrued before the commencement of the force majeure, will not be considered a breach of the Contract insofar as such failure arose by force majeure. If through force majeure fulfillment of obligations is delayed, the period of such 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 to the other party of the obligations affected and reason for failure within 30 days of occurrence. Any party failing in their obligations due to force majeure must, upon the ending of the force majeure, take all reasonable and timely steps to make good and resume compliance with those obligations.

Indemnification and Liability: EJ & J Investment Corporation agrees to 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 whatsoever arising out of EJ & J Investment Corporation's operations or activities under the Contract, or as a result of EJ & J Investment Corporation's failure to comply with any law or regulation. EJ & J Investment Corporation is liable for any damage, injury or loss caused by the acts or omissions of EJ & J Investment Corporation's employees and independent contractors; Holder's Agents: EJ & J Investment Corporation's use of employees and independent contractors does not excuse EJ & J Investment Corporation of any of its obligations or liabilities under the Contract.

Government Inspection: EJ & J Investment Corporation consents to the Government and its representatives conducting inspections of the contract area, premises within the contract area or any other offices held by EJ & J Investment Corporation (both inside and outside Liberia) to confirm compliance with the Contract and any applicable laws. Inspection may include inspection of activities, operations, office records, boundaries and delineation of the contract area, and any wood or portion of a tree to determine the quality, quantity and type of wood and trees harvested, transported, processed, and marketed by EJ & J Investment Corporation; Record Maintenance and Inspection (Generally): EJ & J Investment Corporation must keep all records necessary to demonstrate compliance with the Contract for the duration of the Contract and 5 years after its termination. An authorised Government representative may conduct annual audits of EJ & J Investment Corporation's operations and other reasonable inspections necessary to confirm compliance with the Contract and all applicable laws; Annual Reports: EJ & J Investment Corporation must, within 90 days of completing operations under each Annual Operational Plan, provide to the Forestry Development Authority and Ministry of Finance a written activity report that describes the previous year's operations, including a description of the activities listed in Art. B5.52(a). EJ & J Investment Corporation must at the same time provide a written security report that lists the number and type of illegal trespasses and thefts of any wood or portion of a tree detected in the contract area during the previous year, along with strategies for improving security; Other Reporting Requirements: EJ & J Investment Corporation must keep the Forestry Development Authority officer responsible for administering the Contract fully and regularly informed of operations and activities relating to the Contract. EJ & J Investment Corporation must comply with Revenue and Finance Law regarding reporting related to taxes and fees charged under Section 14.2 of the National Forestry Reform Law (2006). EJ & J Investment Corporation must, upon written request, provide all documents required by the Forestry Development Authority to determine compliance with contractual monetary obligations, and all information that the Government or its agents request to evaluate compliance with the Contract and any other legal obligations related to EJ & J Investment Corporation's operations; Holder to Provide Documents Free of Charge: EJ & J Investment Corporation agrees to provide documents and information required under the Contract or applicable laws at no cost to the Government; Board Public Access to Information: Subject to limited exceptions, the public must have free access to all documents and information related to the Contract and its administration, as provided for under Section 18.15 of the National Forestry Reform Law (2006).