4280 NEW ZEALAND GAZETTE No. 178

FIRST SCHEDULE

Ancillary Rights

The Grantee (including its contractors, servants, agents and invitees) shall have the following rights and licences but subject nevertheless to any restrictions or conditions contained in the Second Schedule.

1. Access: The right (in common with the Grantor and its contractors, servants, agents, invitees and Watercare), of access at all times to, over and from the Hunua Forest and over Access Roads with or without vehicles and machinery including without limitation Moumoukai Hill Road, Otau Mountain Road, and Orams Road.

The rights of use of Access Roads on land subject to the Lease are subject to the Grantee complying with its obligations under clause 4.5 and Watercare giving its consent to such right of access. The Grantor may restrict the right of use of such Access Roads where Watercare withholds its consents under the Lease on the basis that such right of access is likely to constitute a material risk to the stability or integrity of any structures situated on the Excluded Land.

2. Construction of buildings, roads etc: The right within the Hunua Forest to construct, install, alter, maintain and remove such buildings, roads, tracks, access ways, helicopter landing sites, fire breaks, bridges, culverts, water storage and all works related to the prevention detection or fighting of fire, tramways, skids, mills and machinery as the Grantee may reasonably consider necessary in the carrying on of its forestry operation.

3. Quarrying: The right to quarry, win, remove and use sand, shingle, metal, gravel, rock and clay from the existing quarry located in St Paul’s road in the North East corner of the Hunua Forest for the purposes of construction or maintenance of any roadway, track, access way, helicopter landing site, tramway or skid situated in the Hunua Forest or for access to it or other purposes incidental to the foregoing uses.

4. Further Agreements: The right to require the Grantor to enter into appropriate agreements with the Grantee for the siting of any additional structures within the Hunua Forest or for rights of entry which are additional to those granted under this instrument, and which are reasonably required for the purposes of the Grantee’s commercial forestry operation.

SECOND SCHEDULE

Terms and Conditions

1. Licence Fee and Review Provisions

1.1 For the purposes of clause 1 of the Second Schedule unless the context otherwise requires, the following terms shall have the following meanings:

(a) “Land Value” in relation to the Land as at the Commencement Date and any Review Date means the sum that the Land, if unencumbered by any mortgage or other charge thereon, might be expected to realise as at the Commencement Date or that Review Date (as the case may be) if offered for sale (and assuming such land is capable of being offered for sale) on such reasonable terms as a bona fide seller of the land might be expected to impose, but adjusted as may be necessary to take into account the terms and conditions of this Forestry Right including any restrictions imposed on the Grantee under the Forestry Right pursuant to the terms of the Lease to Watercare;

(b) “Land” means the Hunua Forest (but excludes all trees and other improvements), as delineated on the plan annexed hereto but does not include any areas returned to the Grantor under clauses 4.13 (b) or 4.14 (d).

1.2 (a) Notwithstanding the Grantor and the Grantee acknowledge and declare that they have entered into this Forestry Right in the belief that the plan annexed hereto correctly defines the productive and unproductive areas within the Hunua Forest, it is accepted that the said plan may not accurately reflect the true extent of such productive and unproductive land and no warranty as to the correctness of the plan annexed hereto is expressed or implied on the part of the Grantor and no liability shall attach to the Grantor in respect of any error or misdescription contained therein.

(b) If any dispute or difference shall arise between the parties as to the correctness or accuracy of the said plan, such dispute or difference shall be referred to arbitration in accordance with clause 7 hereof.

1.3 (a) The Grantee shall pay to the Grantor during the Term of this Forestry Right a forestry licence fee of an amount per annum calculated in the manner described in clause 1 payable by equal yearly instalments in advance. The annual forestry licence fee payable during the period from the Commencement Date up to the first Review Date shall be calculated as seven per cent (7%) of the Land Value. The Land Value as at the Commencement Date shall be determined by the agreement of the Grantor and the Grantee or failing their agreement they shall each appoint a valuer (being a member of the New Zealand Institute of Valuers or its successor) to jointly determine the Land Value as at the date.

(b) The annual forestry licence fee calculated in accordance with paragraph (a) above shall be paid within seven days of the forestry licence fee being determined by the agreement of the Grantor and the Grantee or by the determination of the valuers or their umpire and the amount so determined shall bear interest, compounded on quarterly rests and computed from the Commencement Date until the date on which the actual payment is made in full at a rate that is 2% above the FRA mid point 30 day bank bill rate as at 10.45 a.m. (on Reuters page BKBM or its successor page) on the business day immediately preceding the date on which such amount is paid.

1.4 The Grantee shall (in addition to any other payments) pay to the Grantor upon demand any taxes paid or payable by the Grantor or accountable by the Grantor pursuant to the provisions of the Goods and Services Tax Act 1985 (being the tax thereby imposed or any similar tax levied in substitution thereof) in respect of any payments paid or payable by the Grantee under this Forestry Right.

1.5 The forestry licence fee shall be reviewed on the 1st of July 1997 and every third successive anniversary thereafter (each such date being herein called a “Review Date”) in accordance with the following provisions so that the forestry licence fee payable for the next three (3) year period commencing on any Review Date will be 7% of the Land Value as at that date:

(a) At any time not earlier than three (3) months prior to each successive Review Date and no later than six (6) months after such Review Date the Grantor shall notify the Grantee in writing (“the Grantor’s Notice”) of the Grantor’s assessment of the Land Value as at that particular Review Date;

(b) In the event that the Grantee does not agree with the