7.500% NOTES DUE 2021 SUPPLEMENTAL INDENTURE

Exhibit 4.1

7.500% NOTES DUE 2021

SUPPLEMENTAL INDENTURE

between

INTERNATIONAL PAPER COMPANY

and

THE BANK OF NEW YORK MELLON

(FORMERLY KNOWN AS THE BANK OF NEW YORK)

Dated as of August 10, 2009

TABLE OF CONTENTS

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SUPPLEMENTAL INDENTURE, dated as of August 10, 2009 (the “ Supplemental Indenture ”), between International Paper Company, a New York corporation (the “ Company ”), and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee (the “ Trustee ”), under the Indenture, dated as of April 12, 1999, between the Company and the Trustee (the “ Indenture ”).

WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide, among other things, for the future issuance of the Company’s unsecured Securities to be issued from time to time in one or more series as might be determined by the Company under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture;

WHEREAS, Section 9.1 of the Indenture provides for various matters with respect to any series of Securities issued under the Indenture to be established in an indenture supplemental to the Indenture;

WHEREAS, Section 9.1(7) of the Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the Indenture to establish the form or terms of Securities of any series as provided by Sections 2.1 and 3.1 of the Indenture;

WHEREAS, the Board of Directors of the Company has duly adopted resolutions authorizing the Company to execute and deliver this Supplemental Indenture;

WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 7.500% Notes due 2021 (the “ Notes ”), the form and substance of such Notes and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture;

WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture and all requirements necessary to make (i) this Supplemental Indenture a valid instrument in accordance with its terms, and (ii) the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been performed, and the execution and delivery of this Supplemental Indenture have been duly authorized in all respects;

NOW THEREFORE, in consideration of the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Notes and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definition of Terms . Unless the context otherwise requires:

(a) a term defined in the Indenture has the same meaning when used in this Supplemental Indenture unless the definition of such term is amended and supplemented pursuant to this Supplemental Indenture;

(b) a term defined anywhere in this Supplemental Indenture has the same meaning throughout;

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

(d) a reference to a Section or Article is to a Section or Article in this Supplemental Indenture;

(e) headings are for convenience of reference only and do not affect interpretation;

(f) the following terms have the meanings given to them in this Section 1.01(f):

“ Business Day ” shall have the meaning set forth in Section 3.01(c).

“ Change of Control ” shall have the meaning set forth in Section 3.03(e).

“ Change of Control Offer ” shall have the meaning set forth in Section 3.03(a).

“ Change of Control Payment ” shall have the meaning set forth in Section 3.03(a).

“ Change of Control Payment Date ” shall have the meaning set forth in Section 3.03(b).

“ Change of Control Triggering Event ” shall have the meaning set forth in Section 3.03(e).

“ Comparable Treasury Issue ” shall have the meaning set forth in Section 3.01(c).

“ Comparable Treasury Price ” shall have the meaning set forth in Section 3.01(c).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Global Note ” shall have the meaning set forth in Section 2.04(a).

“ Independent Investment Banker ” shall have the meaning set forth in Section 3.01(c).

“ Interest Payment Date ” shall have the meaning set forth in Section 2.07(a).

“ Investment Grade ” shall have the meaning set forth in Section 3.03(e).

“ Issue Date ” means August 10, 2009, the date of initial issuance of the Notes.

“ Moody’s ” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.

“ Notes ” shall have the meaning set forth in the recitals above.

“ Optional Redemption Price ” shall have the meaning set forth in Section 3.01(a).

“ Person ” means any individual, corporation, partnership, limited liability company, business trust, association, joint-stock company, joint venture, trust, incorporated or unincorporated organization or government or any agency or political subdivision thereof.

“ Rating Agency ” shall have the meaning set forth in Section 3.03(e).

“ Reference Treasury Dealer ” shall have the meaning set forth in Section 3.01(c).

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“ Reference Treasury Dealer Quotations ” shall have the meaning set forth in Section 3.01(c).

“ Remaining Life ” shall have the meaning set forth in Section 3.01(c).

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

“ Substitute Rating Agency ” shall have the meaning set forth in Section 2.07(c)(ix).

“ Supplemental Indenture ” shall have the meaning set forth in the recitals above.

“ Treasury Rate ” shall have the meaning set forth in Section 3.01(c).

“ Voting Stock ” shall have the meaning set forth in Section 3.03(e).

ARTICLE 2

TERMS AND CONDITIONS OF THE NOTES

Section 2.01. Designation and Principal Amount . There is hereby authorized a series of Securities designated the “ 7.500% Notes due 2021 ” initially issued in the aggregate principal amount of $1,000,000,000, which amount shall be as set forth in a Company Order for the authentication and delivery of such Notes pursuant to Section 3.3 of the Indenture.

Section 2.02. Maturity . The Notes will mature on August 15, 2021.

Section 2.03. Depository . The Depository Trust Company shall be the initial Depository for the Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depository” shall mean or include such successor.

Section 2.04. Form; Denomination

(a) The Notes shall be issued initially in the form of one or more permanent Global Notes in registered form, without coupons, substantially in the form herein below recited (each, a “ Global Note ” and collectively, the “ Global Notes ”), deposited with the Trustee, as custodian for the Depository, duly executed by the Company and authenticated by the Trustee as herein provided.

The aggregate principal amount of each Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository or its nominee, as provided in Section 2.3 of the Indenture.

(b) The Notes shall be issuable only in registered form, without coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Notes shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the officers of the Company executing the same may determine with the approval of the Trustee.

Section 2.05. Legend . Each Global Note shall bear the following legend on the face thereof:

UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK

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CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

Section 2.06. Special Transfer Provisions .

(a) A Global Note may be transferred, in whole but not in part, only to the Depository, to a nominee of the Depository, or to a successor Depository selected or approved by the Company or to a nominee of such successor Depository.

(b) If at any time the Depository for the Notes notifies the Company that it is unwilling or unable to continue as Depository or if at any time the Depository for the Notes shall no longer be registered or in good standing under the Exchange Act or other applicable statute or regulation, and a successor Depository for the Notes is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, the Company will execute, and, subject to Article 3 of the Indenture, the Trustee, upon written notice from the Company, will authenticate and make available for delivery the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Note in exchange for the Global Note. In addition, the Company may (subject to the procedures of the Depository) at any time determine that the Notes shall no longer be represented by a Global Note. In such event the Company will execute, and subject to Section 3.5 of the Indenture, the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver, the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Note in exchange for the Global Note. Upon the exchange of the Global Note for the Notes in definitive registered form without coupons, in authorized denominations, the Global Note shall be cancelled by the Trustee. Such Notes in definitive registered form issued in exchange for the Global Note shall be registered in such names and in such authorized denominations as the Depository, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to the Depository for delivery to the Persons in whose names such Notes are so registered. Notes represented by Global Notes will be exchangeable for Notes in definitive registered form if an Event of Default shall have occurred and be continuing.

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Section 2.07. Interest .

(a) The Notes will bear interest at the rate of 7.500% per annum, subject to adjustment as set forth in Section 2.07(c), from the most recent Interest Payment Date to which interest has been paid or duly provided for or, if no interest has been paid, from the Issue Date until the principal thereof becomes due and payable, payable semi-annually in arrears on February 15 and August 15 of each year (each, an “ Interest Payment Date ”), commencing on February 15, 2010, to the Person in whose name such Note or any Predecessor Security is registered, at the close of business on the Regular Record Date for such interest installment, which shall be the close of business on the February 1 or August 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date, and at the foregoing respective rates on overdue principal.

(b) The amount of interest payable for any period less than a full interest period will be computed on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period. In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date such payment was originally payable.

(c) The interest rate payable on the Notes shall be subject to adjustment from time to time if either Moody’s or S&P (or, in either case, any Substitute Rating Agency thereof) downgrades (or subsequently upgrades) the debt rating assigned to the Notes in the manner described below:

(i) If the rating from Moody’s (or any Substitute Rating Agency thereof) of the Notes is decreased to a rating set forth in the immediately following table, the interest rate payable on the Notes will increase from the interest rate payable on the Notes on the Issue Date by the percentage points set forth opposite that rating:

(ii) If the rating from S&P (or any Substitute Rating Agency thereof) of the Notes is decreased to a rating set forth in the immediately following table, the interest rate payable on the Notes will increase from the interest rate payable on the Notes on the Issue Date by the percentage points set forth opposite that rating:

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(iii) If at any time the interest rate on the Notes has been adjusted upward and either Moody’s or S&P (or, in either case, a Substitute Rating Agency thereof), as the case may be, subsequently increases its rating of the Notes to any of the threshold ratings set forth above, the interest rate on the Notes will be decreased such that the interest rate for the Notes equals the interest rate payable on the Notes on the Issue Date plus the percentage points set forth opposite the ratings from the tables above in effect immediately following the rating increase. If Moody’s (or any Substitute Rating Agency thereof) subsequently increases its rating of the Notes to Baa3 (or its equivalent, in the case of a Substitute Rating Agency) or higher and S&P (or any Substitute Rating Agency thereof) increases its rating to BBB- (or its equivalent, in the case of a Substitute Rating Agency) or higher, the interest rate on the Notes will be decreased to the interest rate payable on the Notes on the Issue Date. In addition, the interest rates on the Notes will permanently cease to be subject to any adjustment pursuant to this Section 2.07(c) (notwithstanding any subsequent decrease in the ratings by either or both such rating agencies) if the Notes become rated A3 (stable or better) and A- (stable or better) (or the equivalent of either such rating, in the case of a Substitute Rating Agency) or higher by Moody’s and S&P (or, in either case, any Substitute Rating Agency thereof), respectively (or one of these ratings if the Notes are only rated by one such rating agency).

(iv) Each adjustment required by any decrease or increase in a rating set forth above, whether occasioned by the action of Moody’s or S&P (or, in either case, any Substitute Rating Agency thereof), shall be made independent of any and all other adjustments. In no event shall (1) the interest rate on the Notes be reduced to below the interest rate payable on the Notes on the Issue Date or (2) the total increase in the interest rate on the Notes exceed 2.00 percentage points above the interest rate payable on the Notes on the Issue Date.

(v) No adjustments in the interest rate of the Notes shall be made solely as a result of a rating agency ceasing to provide a rating of the Notes. If at any time less than two rating agencies provide a rating of the Notes for a reason beyond the Company’s control, the Company will use its commercially reasonable efforts to obtain a rating of the Notes from a Substitute Rating Agency, to the extent one exists, and if a Substitute Rating Agency exists, for purposes of determining any increase or decrease in the interest rate on the Notes pursuant to the tables above, (a) such Substitute Rating Agency will be substituted for the last rating agency to provide a rating of the Notes but which has since ceased to provide such rating, (b) the relative ratings scale used by such Substitute Rating Agency to assign ratings to senior unsecured debt will be determined in good faith by an independent investment banking institution of national standing appointed by the Company and, for purposes of determining the applicable ratings included in the applicable table above with respect to such Substitute Rating Agency, such ratings will be deemed to be the

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equivalent ratings used by Moody’s or S&P, as applicable, in such table and (c) the interest rate on the Notes will increase or decrease, as the case may be, such that the interest rate equals the interest rate payable on the Notes on the Issue Date plus the appropriate percentage points, if any, set forth opposite the rating from such Substitute Rating Agency in the applicable table above (taking into account the provisions of clause (b) above) (plus any applicable percentage points resulting from a decreased rating by the other rating agency). For so long as only one rating agency provides a rating of the Notes, any subsequent increase or decrease in the interest rate of the Notes necessitated by a reduction or increase in the rating by the agency providing the rating shall be twice the percentage points set forth in the applicable table above. For so long as none of Moody’s, S&P or a Substitute Rating Agency provides a rating of the Notes, the interest rate on the Notes will increase to, or remain at, as the case may be, 2.00 percentage points above the interest rate payable on the Notes on the Issue Date.

(vi) Any interest rate increase or decrease described above will take effect from the Interest Payment Date immediately preceding a rating change which requires an adjustment in the interest rate.

(vii) Promptly after any change in the interest rate borne by the Notes as provided above, the Company shall give the Trustee an Officers’ Certificate to the effect that the interest rate borne by the Notes has changed in accordance with this Section 2.07(c) and setting forth the amount of the related increase or decrease and the new interest rate borne by the Notes.

(viii) If the interest rate payable on the Notes is increased pursuant to this Section 2.07(c), the term “interest,” as used in the Indenture with respect to the Notes, as supplemented by this Supplemental Indenture, will be deemed to include any such additional interest unless the context otherwise requires. If the Company defeases or discharges the Indenture in accordance with Section 4.1 of the Indenture, or the Notes or certain obligations related thereto in accordance with Sections 4.3 and 10.11 of the Indenture and Section 2.10 hereof, there will be no further adjustment in the interest rate on the Notes after such defeasance or discharge.

(ix) The following term has the meaning given to it in this Section 2.07(c)(ix):

“ Substitute Rating Agency ” means a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company (as certified by a resolution of the board of directors of the Company and delivered to the Trustee) as a replacement agency for Moody’s, S&P or another Substitute Rating Agency, or all of them, as the case may be.

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Section 2.08. Consolidation, Merger and Sale of Assets . For purposes of the Notes, Section 8.1 of the Indenture is amended to add “limited liability company,” immediately after “corporation,” and immediately before “partnership or trust” in clause (1) thereof.

Section 2.09. Place of Payment . The Place of Payment where Notes may be presented or surrendered for p