TRUST INDENTURE

TRUST INDENTURE

between

PRODUITS FORESTIERS CANADIEN PACIFIQUE LIMITEE -
CANADIAN PACIFIC FOREST PRODUCTS LIMITED

and

COMPAGNIE MONTREAL TRUST -
MONTREAL TRUST COMPANY

In respect of
10.85% Debentures Due 2014

Bearing formal date of December 12, 1989

CONTENTS

     THIS INDENTURE dated as of December 12, 1989 between PRODUITS FORESTIERS CANADIEN PACIFIQUE LIMITEE — CANADIAN PACIFIC FOREST PRODUCTS LIMITED, a corporation amalgamated under the Canada Business Corporations Act (herein called the “Corporation”) having its principal executive office at 1155 Metcalfe Street, Montreal, Quebec, H3B 2X1 and MONTREAL TRUST COMPANY — COMPAGNIE MONTREAL TRUST, a Quebec corporation duly authorized to carry on the business of a trust company (herein called the “Trustee”).

Recitals of the Corporation

     The Corporation has duly authorized the creation of an issue of its 10.85% Debentures Due 2014 of substantially the tenor and amount herein set forth, and to provide therefor the Corporation has duly authorized the execution and delivery of this Indenture.

     All things necessary to make the Securities, when executed by the Corporation and authenticated and delivered by the Trustee hereunder and duly issued by the Corporation, the valid obligations of the Corporation, and to make this Indenture a valid agreement of the Corporation, in accordance with their and its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the acquisition of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the benefit of all Holders of the Securities, as follows:

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ARTICLE ONE

Definitions and Other Provisions of
General Application

     Section 101. Definitions.

     (a) For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

     “This Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof.

     All references in this instrument to designated “Articles”, “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed. The words “herein”, “hereof”, “hereunder” and “herewith” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

     (b) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in Canada and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in Canada at the date or time of such computation;

     (c) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular.

          “Act” when used with respect to any Securityholder has the meaning specified in Section 103.

          “Acting jointly or in concert”, when used in relation to a Person, has the meaning assigned to such term in the Ontario Act.

          “Affiliate” of any Person has the meaning assigned to such term in the Ontario Act.

          “Associate” of any Person has the meaning assigned to such term in the Ontario Act.

          “Beneficial Owner” or “Beneficial Ownership”, when used in relation to shares, includes the meaning assigned to such terms in the Ontario Act.

          “Board of Directors” means the board of directors of the Corporation or, when the context otherwise permits, any duly authorized committee or member of the board.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Corporation or by another officer of the Corporation acceptable to the Trustee as having been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

          “Branch Security Register” and “Branch Security Registrar” have the respective meanings specified in Section 305.

          “Business Day”, when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close for the entire day.

          “CBRS” means Canadian Bond Rating Service Limited.

          “Canada Yield Price” shall mean, in effect, a price equal to the price of the Securities calculated to provide a yield to maturity equal to the Government of Canada Yield plus 0.50% on the business day preceding the date of the resolution authorizing the redemption or if such price is being calculated for the purpose of Section 1109, on the business day preceding the date of purchase.

          “Central Security Register” has the meaning specified in Section 305.

          “Continuing Director” at any date means an individual who is a member of the Board of Directors on such date and who either was a member of the Board of Directors on the date of this Indenture or shall have become a member thereof subsequent to such date (i) with the approval of at least a majority of the Continuing Directors then members of the Board of Directors or (ii) following the election of such member at an annual general meeting of shareholders to replace a director who has died or who has resigned or otherwise retired in the ordinary course, provided that the number of directors that may be so elected to replace a director who has resigned or otherwise retired, shall not exceed 20% of the number of directors in office immediately prior to the previous annual general meeting of shareholders.

          “Corporation” means the Person named as the “Corporation” in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Corporation” shall mean such successor corporation.

          “Corporation Request”, “Corporation Order” and “Corporation Consent” mean, respectively, a written request, order or consent delivered to the Trustee after having been signed in the name of the Corporation by its Chairman of the Board, President or a Vice-President, and by its Secretary, an Assistant Secretary, its Treasurer, an Assistant Treasurer, its Controller or an Assistant Controller or by any two officers of the Corporation duly authorized for the purpose by a Board Resolution and acceptable to the Trustee.

          “DBRS” means Dominion Bond Rating Service Limited.

          “Debt” means any undischarged indebtedness for money borrowed, whether or not evidenced by any note, bond, debenture or other instrument; provided, however, that Debt shall not include any Debt for the payment or redemption of which money in the necessary amount shall have been deposited in trust either at or before the maturity or redemption date thereof.

          “Designated Event” shall be deemed to have occurred each time:

          “Event of Default” has the meaning specified in Section 501.

          “Extraordinary Resolution” means any Act by the Holders of Securities which has been (a) signed by or for the Holders of not less than two-thirds in principal amount of the Outstanding Securities; or (b) adopted by the Holders of two-thirds in principal amount of the Outstanding Securities voting thereon at a meeting of the Holders of Securities duly held pursuant to the provisions of Article Nine.

          “Full Rating Category” means (i) with respect to CBRS, any of the following categories: B+, B, C++, C+ and C, (ii) with respect to DBRS, any of the following categories: BB, B, CCC, CC and C and (iii) with respect to any other Rating Agency, the equivalent of any such category of CBRS or DBRS used by such other Rating Agency. In determining whether the rating of the Securities has decreased by the equivalent of one Full Rating Category, gradation within Full Rating Categories (high and low for CBRS and for DBRS or the equivalent gradation for another Rating Agency) shall constitute one-third of a Full Rating Category. Thus, with respect to DBRS, a decline in a rating from BB (high) to B (high) will constitute a decline of one Full Rating Category, and a decline in a rating from BB (high) to BB or BB (low) will constitute a decline of less than one Full Rating Category.

          “Government of Canada Yield” on any date shall mean, in effect, the yield to maturity on such date compounded semi-annually which a non-callable Government of Canada Bond would carry if issued, in Canadian dollars in Canada, at 100% of its principal amount on such date with a term to maturity equal to the remaining term to maturity of the Securities; the Government of Canada Yield will

be provided by two Canadian investment dealers, RBC Dominion Securities Inc. and Wood Gundy Inc. or such other Canadian investment dealer or dealers as the Corporation may determine from time to time and as may be acceptable to the Trustee.

          “Holder” when used with respect to any Security means a Securityholder.

          “Interest Payment Date” means the Stated Maturity of an instalment of interest on the Securities.

          “Investment Grade” means B++ (low) or higher by CBRS or BBB (low) or higher by DBRS or the equivalent of such ratings by CBRS or DBRS or by any other Rating Agency.

          “Maturity” when used in respect to any Security means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

          “Mortgage” means any mortgage, hypothec, privilege, pledge, security interest, floating charge, conditional sale or other title retention agreement or other similar lien or encumbrance.

          “Officers’ Certificate” means a certificate signed by the Chairman of the Board, the President or a Vice-President, and by the Secretary, an Assistant Secretary, the Treasurer, an Assistant Treasurer, the Controller or an Assistant Controller of the Corporation (or by any two officers of the Corporation duly authorized for the purpose by a Board Resolution and acceptable to the Trustee), and delivered to the Trustee.

          “Ontario Act” means the Securities Act (Ontario), R.S.O. 1980, c. 466, as amended to the date of this Indenture.

          “Opinion of Counsel” means a written opinion of counsel, who may (except as otherwise expressly provided in this Indenture) be counsel for the Corporation (whether or not in the employ of the Corporation), and shall be appointed by Corporation Order and acceptable to the Trustee.

          “Outstanding”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

provided, however, that in determining which Persons are entitled to vote at a meeting of Holders of Securities or whether the Holders of the requisite principal amount of Outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Corporation, or any other obligor upon the Securities or any Affiliate of the Corporation, or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such determination as to the entitlement to vote, the presence of a quorum or upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Corporation or any other obligor upon the Securities or any Affiliate of the Corporation or such other obligor.

          “Parent Company” means the company which, on the date of this Indenture, owns all of the outstanding shares of the Corporation’s current majority shareholder.

          “Paying Agent” means any Person, which may be the Corporation, authorized by the Corporation to pay the principal of and interest on any Securities on behalf of the Corporation.

          “Person” means an individual, body corporate, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative.

          “Place of Payment” means any municipality referred to in Section 301.

          “Place of Registration” means and includes the principal office of the Trustee in each of the Cities of Halifax, Montreal, Toronto, Winnipeg, Calgary or Vancouver or any other office or agency appointed by the Corporation pursuant to Section 1002.

          “Predecessor Securities” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.

          “Principal Subsidiary” at any time means a Subsidiary:

provided, however, that no Subsidiary shall be a Principal Subsidiary unless it shall have been a Subsidiary for a period of at least 90 days, unless it has no voting shares traded on a stock exchange and unless its assets and liabilities are, on the basis of the accounting practice and principles applied by the Corporation’s auditors, consolidated with those of the Corporation for the purpose of the preparation from time to time of the Corporation’s balance sheet.

          “Purchase Money Obligation” means any indebtedness of the Corporation, of a Subsidiary or of or related to any joint venture, partnership or similar arrangement in which the Corporation or a Subsidiary has an interest, incurred in respect of the cost of acquisition of any property (including shares of capital stock or Debt) or of the cost of construction or improvement of any property acquired, constructed or improved after the date of this Indenture, which indebtedness existed at the time of acquisition or was created, issued,

incurred, assumed or guaranteed contemporaneously with the acquisition, construction or improvement or within 120 days after the completion thereof and includes any extension, renewal or refunding of any such indebtedness if the principal amount thereof outstanding on the date of such extension, renewal or refunding is not increased.

          “Put Price” on any date means a price equal to the price of the Securities calculated to provide a yield to maturity equal to the Government of Canada Yield plus 0.75% on the business day preceding such date.

          “Rating Agency” means CBRS and its successors or DBRS and its successors or, if CBRS or DBRS or both shall not make a rating on the Securities publicly available, a recognized securities rating agency or agencies, as the case may be, selected by the Corporation which shall be substituted for CBRS or DBRS or both, as the case may be.

          “Rating Date” means the date which is 120 days prior to public disclosure of the occurrence of a Designated Event.

          “Rating Decline” shall be deemed to have occurred if on any date within the 90-day period following public disclosure of the occurrence of a Designated Event (which period shall be extended so long as the rating of the Securities is under publicly announced consideration for possible downgrade by a Rating Agency):

          “Rating Decline Date” shall be the date on which a Rating Decline is deemed to have occurred after a Designated Event.

          “Rating Recovery” shall be deemed to have occurred if the rating of the Securities by each Rating Agency which has effected a Rating Decline is re-established to at least the rating existing at the Rating Date.

          “Record Date” for the interest payable on any Interest Payment Date means the date specified in Section 301.

          “Redeemable Share” means a share issued by the Corporation that the Corporation (a) may purchase or redeem on the demand of the Corporation or (b) is required by its articles to purchase or redeem at a specified time or on the demand of a shareholder.

          “Redemption Date” when used with respect to any Security to be redeemed means the date fixed for such redemption by or pursuant to this Indenture.

          “Redemption Price” when used with respect to any Security to be redeemed means the higher of (a) the Canada Yield Price and (b) 100% of the principal amount thereof, together in each case with accrued and unpaid interest to the Redemption Date.

          “Registered Holder” when used with respect to any Registered Security means the Person in whose name such Security is registered in the Central Security Register.

          “Registered Security” means any Security registered in the Central Security Register.

          “Repayment Date” shall be a date which is 120 days following a Rating Decline Date or, if the Corporation has given to the Securityholders a notice of increased interest rate on the Securities pursuant to paragraph (c) of Section 1007, the 30th day following the giving of such notice (or if either such date is not a Business Day at any Place of Payment, then the Business Day next succeeding such date).

          “Responsible Officer” when used with respect to the Trustee means the chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

          “Security” or “Securities” means any or all of the 10.85% Debentures Due 2014 authenticated and delivered pursuant to this Indenture.

          “Securityholder” means a Registered Holder of a Registered Security.

          “Security Registers” has the meaning specified in Section 305.

          “Stated Maturity” when used with respect to any Security or any instalment of interest thereon means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of interest is due and payable and includes the Redemption Date and the Repayment Date.

          “Subsidiary” means any corporation of which more than 50% of the Voting Shares is owned, directly or indirectly, by or for the Corporation or by or for any corporation in like relation to the Corporation and includes any corporation in like relation to a Subsidiary.

          “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.

          “Voting Shares” means shares of capital stock of any class or classes of a corporation having under all circumstances or under some circumstances that have occurred and are continuing the right to elect members of the board of directors of such corporation, and includes securities currently convertible into such shares and currently exercisable rights to acquire such shares or convertible securities, provided that, for the purposes hereof, shares which only carry the right to vote conditionally on the happening of an event which has not yet occurred shall not be considered Voting Shares nor shall any shares be deemed to cease to be Voting Shares solely by

reason of a right to vote accruing to shares of another class or classes by reason of the happening of such event.

     Section 102. Form of Documents Delivered to Trustee.

     In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Corporation may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Corporation stating that the information with respect to such factual matters is in the possession of the Corporation, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more applications, requests, con-

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sents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

     Section 103. Acts of Holders of Securities.

     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of Securities may be embodied in and evidenced by (1) one or more instruments of sub- stantially similar tenor signed by such Holders in person or by agent or proxy duly appointed in writing, (2) a resolution duly adopted by the Holders of Securities at a meeting of Holders of Securities duly called and held in accordance with the provisions of Article Nine. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or resolution are delivered to the Trustee and, where it is hereby expressly required, to the Corporation. Such instrument or instruments and resolution (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders of Securities signing such instrument or instruments or so voting on such resolution. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Corporation if made in the manner provided in this Section. Proof of the due adoption of any such resolution by the appropriate percentage of Holders of Securities at a meeting thereof shall be sufficient for any purpose of this Indenture if such resolution forms part of and its due adoption by such appropriate percentage is evident from the record of such meeting prepared, signed and verified in the manner provided in Section 906.

     (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by an officer of a corporation or a member of a partnership, on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority.

     (c) The fact and date of execution of any such instrument or writing may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section.

     (d) The holding of Registered Securities shall be proved by the Central Security Register.

     (e) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Corporation in reliance thereon, whether or not notation of such action is made upon such Security.

     Section 104. Notices, Etc., to Trustee and Corporation.

     Any request, demand, authorization, direction, notice, consent, waiver or Act of Securityholders or other document provided or permitted by this

Indenture to be made upon, given or furnished to, or filed with,

     (1) the Trustee by any Securityholder or by the Corporation shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its principal office in the City of Montreal or at any other address previously furnished by notice in writing to the Corporation by the Trustee and notified to the Securityholders in accordance with Section 105, or

     (2) the Corporation by the Trustee or by any Securityholder shall be sufficient for every purpose hereunder if in writing and either mailed, first-class postage prepaid, or telexed or telecopied and confirmed by first-class mail postage prepaid, to the Corporation addressed to it at the address of its principal office specified in the first paragraph of this instrument , to the attention of its Secretary, or at any other address or to the attention of any other Person previously furnished in writing to the Trustee by the Corporation and notified to the Securityholders in accordance with Section 105.

     Section 105. Notices to Securityholders; Waiver.

     Except as otherwise expressly provided herein, where this Indenture provides for notice to Securityholders of any event, such notice shall be sufficiently given to any Holder of Securities if in writing and mailed, first-class postage prepaid, to such Holder of such Security, at his address as it appears on the Central Security Register, not later than the latest date, and not earlier than

the earliest date, prescribed for the giving of such notice.

     In any case where notice to Holders of Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders of Securities given as provided above.

     In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by first-class postage prepaid mail, then such notification to Holders of Securities as shall be made with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder.

     Where this Indenture provides for notice to any Person in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Securityholders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

     Section 106. Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

     Section 107. Successors and Assigns.

     All covenants and agreements in this Indenture by the Corporation shall bind its successors and assigns, whether so expressed or not.

     Section 108. Separability Clause.

     In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

     Section 109. Benefits of Indenture.

     Nothing in this Indenture or in the Securities, express or implied, shall, except as may be required by any applicable law, give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

     Section 110. Governing Law.

     This Indenture and each of the Securities shall be construed in accordance with and governed by the laws of the Province of Quebec and the laws of Canada applicable therein. Any reference herein to a “trust”, an “express trust” or the “holding in trust” is to a trust validly created in accordance with the laws of any jurisdiction that recognizes that ownership of the property of the trust belongs irrevocably to the beneficiary of the trust.

     Section 111. Legal Holidays.

     In any case where any Interest Payment Date or date of Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal need not be made at such Place of Payment on such day, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on such Interest Payment Date or such date of Maturity, provided that if such payment is duly made on such next succeeding Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or such date of Maturity, as the case may be, to and including such next succeeding Business Day.

     Section 112. Language of Notices, Etc.

     Any request, demand, authorization, direction, notice, consent, election or waiver required or permitted under this Indenture shall be in the English or French language.

ARTICLE TWO

Security Forms

     Section 201. General.

     The Securities and the Trustee’s certificate of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers

or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their signing of the Securities. Any portion of the text of any Security may be set forth on the reverse thereof.

     Section 202. Form of Security

CANADIAN PACIFIC FOREST PRODUCTS LIMITED

10.85% Debenture Due 2014

     CANADIAN PACIFIC FOREST PRODUCTS LIMITED, a corporation incorporated under the Canada Business Corporations Act (hereinafter called the “Corporation”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to                                                              , or registered assigns, on November 30, 2014 the principal sum of                                           DOLLARS and to pay interest thereon from and including the later of December 12, 1989 and the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated and payable semiannually in arrears on May 31 and November 30 in each year commencing on May 31, 1990 (each such date being an “Interest Payment Date”), at the rate of 10.85% per annum. The interest so payable and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities, as defined in the Indenture) is registered at the close of business on the Record Date for such interest, which shall be the 15th day (whether or

not a business day) of the same calendar month as such Interest Payment Date. Payment of the principal of and interest on this Security will be made in lawful money of Canada at any branch in Canada of The Royal Bank of Canada, at the option of the Holder, or at such other place as may be designated by the Corporation for such purpose and approved by the Trustee. Payment of interest on this Security may be made at the option of the Corporation by warrant or cheque mailed to the address of the Person or Persons entitled thereto as such address shall appear on the Central Security Register. In the event that the Corporation is in default of its obligation to pay any amount of principal or interest, the Corporation shall pay interest on the amounts in default at the same rate, at the same places and on the same dates, to the extent such is permitted by law.

     This Security is one of a duly authorized issue of Securities of the Corporation designated as its 10.85% Debentures Due 2014 (herein called the “Securities”), limited in aggregate principal amount to $125,000,000, issued and to be issued under an indenture bearing formal date of December 12, 1989 (herein called the “Indenture”), between the Corporation and Compagnie Montréal Trust - Montreal Trust Company, Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Corporation, the Trustee and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. The Securities will be direct unsecured obligations of the Corporation and will rank pari passu with all other unsecured indebtedness of the Corporation.

     All terms used in this Security which are defined in the Indenture shall have the respective meanings assigned to them in the Indenture except as otherwise expressly provided or unless the context otherwise requires.

     The Securities will be redeemable, at the Corporation’s option, in whole at any time or in part from time to time, on not more than 60 and not less than 30 days’ prior notice, at the higher of the Canada Yield Price (as defined in the Indenture) and the principal amount thereof plus accrued and unpaid interest to the date fixed for redemption. Where less than all of the outstanding Securities are to be redeemed, the Securities so to be redeemed will be selected by the Trustee in such a manner as it shall deem equitable.

     The Corporation, commencing January 1, 1997, will make all reasonable efforts to purchase for cancellation in the open market during each calendar quarter, 1% of the aggregate principal amount of the Securities at prices below 100% of the principal amount thereof plus accrued and unpaid interest and costs of purchase. If in any of the first three calendar quarters of a calendar year, the Corporation is unable to purchase such principal amount of Securities for any reason, including the fact that the Securities did not trade below their principal amount, such purchase fund obligation for such quarter, to the extent unfulfilled, will be carried forward for the succeeding quarter or quarters of the said calendar year. All purchase fund obligations which the Corporation has been unable to fulfill during any calendar year shall become extinguished as at the end of such year. The Securities which the Corporation is obligated to purchase during any calendar quarter pursuant to this provision will be reduced by the aggregate principal amount of the Securities redeemed or purchased by the Corporation

in the same quarter otherwise than pursuant to this provision.

     When not in default under the Indenture, the Corporation shall also have the right to purchase for cancellation the Securities in the market, by tender or private contract, at any price. The Securities purchased or redeemed by the Corporation shall be cancelled and shall not be reissued.

     Upon the occurrence of both a Designated Event and a Rating Decline (as such terms are defined in the Indenture), each Holder of Securities may require the Corporation to purchase, on the Repayment Date (as defined in the Indenture), all or any portion of its Securities at a price equal to the Put Price (as defined in the Indenture) in effect on the 30th day preceding the Repayment Date, together with accrued interest to the Repayment Date. If, prior to the 30th day preceding a Repayment Date, a Rating Recovery (as defined in the Indenture) shall occur, the Holders of the Securities shall no longer have the right to require the Corporation to purchase their Securities on such Repayment Date. At any time prior to the 90th day following a Rating Decline Date (as defined in the Indenture), the Corporation shall have the right to increase the interest rate borne by the Securities and shall notify the Securityholders of such increased rate. Following the giving of such notice, each Securityholder shall have the right to require the Corporation to purchase, on the Repayment Date, all or any portion of its Securities at a price equal to the Put Price in effect on the date of such notice (which Put Price shall be set forth in the notice), together with accrued interest to such Repayment Date. If any Holder of Securities does not exercise its right to require the Corporation to so purchase its Securities, then its Securities shall bear interest at the increased rate set forth in such notice by

the Corporation, as and from the Rating Decline Date. If 90% or more in aggregate principal of the Securities outstanding on the 30th day preceding a Repayment Date have been tendered for purchase on such Repayment Date, the Corporation shall have the right to purchase all of the remaining Securities on such date at the Put Price, together with accrued interest to such date. The Indenture contains various notification provisions concerning the foregoing rights.

     If an Event of Default, as defined in the Indenture, shall occur, the principal of all the Securities may be declared due and payable prior to the Stated Maturity thereof in the manner and with the effect provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Corporation and the rights of the Holders of the Securities under the Indenture at any time by the Corporation with the consent of the Holders expressed by Extraordinary Resolution, as defined in the Indenture. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Corporation with certain provisions of the Indenture and of this Security and certain past defaults under the Indenture and under this Security and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Security.

     As provided in the Indenture and subject to certain limitations therein set forth, this Security is transferable by the registered Holder hereof on the Security Registers of the Corporation, upon surrender of this Security for transfer at the principal office of the Trustee in the Cities of Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Trustee or other Branch Security Registrar, if any, duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

     The Corporation, the Trustee and any agent of the Corporation or of the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes whether or not this Security be overdue.

     The Securities are issuable as fully registered Securities in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable at the principal office of the Trustee in the Cities above mentioned for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.

     Unless the certificate of authentication hereon has been executed by the Trustee by the manual signature of one of its authorized officers, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Corporation has caused this Security to be executed by its duly authorized officers.

Trustee’s Certificate of Authentication

     This is one of the Debentures referred to in the within-mentioned Indenture.

     Notice of Exercise of Put Right by Holder

     Pursuant to the within-mentioned Indenture, upon the occurrence of a Designated Event and a Rating Decline (as defined in the Indenture), the Holder of this Security hereby exercises the right to require the Corporation to purchase, on the applicable Repayment Date (as defined in the Indenture), the total principal amount hereof or the portion thereof indicated below (being a

multiple of $1,000), at the applicable Put Price (as defined in the Indenture), together with accrued interest to the said Repayment Date and hereby delivers this Security to the Trustee for such purpose, the whole subject to the Indenture.

principal amount.

DATE:

Paragraphe 202.      Formule des titres

PRODUITS FORESTIERS CANADIEN PACIFIQUE LIMITEE

Débenture 10,85 % échéant en 2014

     PRODUITS FORESTIERS CANADIEN PACIFIQUE LIMITEE, société constituée en vertu de la Loi sur les sociétés par actions (appelée dans les pré-sentes “Société”, terme qui comprend toute société remplasante aux termes de 1’acte de fiducie mentionné ci-aprés), contre valeur resue, promet par les présentes de payer à                                                                 , ou à ses ayants droit inscrits, le 30 novembre 2014 la somme en capital de                                                               DOLLARS et de payer les intérêts s’y rapportant a compter du 12 décembre 1989 ou à compter de la dernière date de paiement des intérêts à l’égard de laquelle des intérêts ont été versés ou dûment mis de côté, selon celle de ces dates qui tombera la dernière, et ce, calculés et payables semestriellement terme

échu le 31 mai et le 30 novembre de chaque année à compter du 31 mai 1990 (chacune de ces dates étant une “date de paiement des intérêts”), au taux annuel de 10,85%. Les intérêts ainsi payables, qui sont payés ponctuellement ou dûment mis de côté, à toute date de paiement des intérêts seront, tel qu’il est prévu dans l’acte de fiducie, versés à la personne au nom de laquelle le présent titre (ou un ou plusieurs titres remplacés, selon la définition de “Predecessor Securities” qui est donnée dans la version anglaise dudit acte de fiducie) est immatriculé à la fermeture des bureaux à la date de clôture des registres se rapportant à ces intérêts, laguelle est le 15e jour (qu’il s’agisse ou non d’un jour ouvrable) du même mois civil que celui de cette date de paiement des intérêts. Le paiement du capital et des intérêts sur le présent titre sera effectué en monnaie légale du Canada à toute succursale au Canada de La Banque Royale du Canada, au gré du porteur, ou à tout autre endroit que la Société peut désigner à cette fin et qui est approuvé par le fiduciaire. Le paiement des intérêts sur le présent titre peut être effectué, au gré de la Société, par mandat ou par chéque posté à l’adresse de la personne ou des personnes y ayant droit, telle que cette adresse apparait dans le registre central des porteurs de titres. Si la Société est en défaut aux termes de son obligation de payer une somme à l’égard du capital ou des intérêts, la Société paiera des intérêts sur les sommes en défaut, et ce, au même taux, aux mêmes endroits et aux mêmes dates, dans la mesure autorisée par la loi.

     Le présent titre est l’un des titres d’une émission dûment autorisée de titres de la Société désignés comme étant ses débentures 10,85 % échéant en 2014 (appelées dans les présentes “titres”), dont la somme en capital globale est limitée à 125 000 000 $, lesquelles sont ou doivent être émises en vertu d’un acte de fiducie portant la

date officielle du 12 décembre 1989 (appelé dans les présentes “acte de fiducie”) et passé entre la Société et Compagnie Montréal Trust — Montreal Trust Company, à titre de fiduciaire (appelée dans les présentes “fiduciaire”, terme qui comprend tout fiduciaire remplaçant aux termes de l’acte de fiducie); il y a lieu de se reporter à cet acte de fiducie et à tout acte de fiducie supplémentaire pour obtenir l’énoncé des droits respectifs que possèdent en vertu de ceux-ci la Société, le fiduciaire et les porteurs de titres, de même que l’énoncé des conditions selon lesquelles les titres sont et doivent être authentifiés et livrés. Les titres constitueront des obligations non garanties directes de la Société et seront d’un rang égal à celui de toutes les dettes non garanties de la Société.

     Tous les termes utilisés dans le présent titre qui sont la version française de termes anglais définis dans la version anglaise de l’acte de fiducie ont le sens qui est attribué à ces termes anglais dans ladite version anglaise de l’acte de fiducie, sauf si une disposition dans les présentes prévoit expressément le contraire ou si le contexte l’exige autrement.

     Les titres seront remboursables par anticipation, au gré de la Société, en totalité en tout temps ou en partie de temps à autre, sur préavis d’au plus 60 jours et d’au moins 30 jours, à un prix égal au plus éleve des montants suivants, à savoir le prix de rendement Canada (selon la définition de “Canada Yield Price” donnée dans la version anglaise de l’acte de fiducie) ou la somme en capital de ceux-ci plus les intérêts courus et impayés jusqu’à la date fixée pour le remboursement par anticipation. Si moins que la totalité des titres en circulation doivent être remboursés par anticipation, les titres devant etre ainsi

remboursés seront choisis par le fiduciaire d’une manière qu’il jugera équitable.

     La Société, à compter du l ^er Janvier 1997, fera tous les efforts raisonnables pour acheter à des fins d’annulation sur le marché libre, au cours de chaque trimestre civil, des titres représentant 1% de la somme en capital globale des titres, et ce, à des prix inférieurs à leur valeur nominale plus les intérêts courus et impayés et les frais d’achat. Si, au cours de l’un des trois premiers trimestres civils d’une année civile quelconque, la Société est dans l’impossibilité d’acheter des titres représentant cette somme en capital pour quelque raison que ce soit, y compris le fait que les titres ne se sont pas négociés à des prix inférieurs à leur valeur nominale, cette obligation à l’égard du fonds d’achat quant à ce trimestre, dans la mesure où elle n’aura pas été exécutée, sera reportée sur le ou les trimestres subséquents de l’année civile en question. Toutes les obligations à l’égard du fonds d’achat que la Société n’aura pu exécuter au cours de toute année civile s’éteindront à la fin d’une telle année. La somme en capital globale des titres que la Société remboursera par anticipation ou achètera autrement que conformément à cet engagement pendant un trimestre civil quelconque réduira d’autant l’obligation d’achat de la Société conformément à cet engagement à l’égard du trimestre civil en question.

     Si elle n’est pas en défaut aux termes de l’acte de fiducie, la Société a également le droit d’acheter à des fins d’annulation les titres sur le marché, par voie d’appel d’offres ou de gré à gré, et ce, à n’importe quel prix. Les titres achetés ou remboursés par anticipation par la Société seront annulés sans possibilité de réémission.

     Advenant la survenance d’un événement désigné et d’une baisse de la cote (selon la définition de “Designated Event” et de “Rating Decline” qui est donnée dans la version anglaise de l’acte de fiducie), chaque porteur de titres peut exiger que la Société lui rembourse, à la date de remboursement (selon la définition de “Repayment Date” qui est donnée dans la version anglaise de l’acte de fiducie), la totalité ou une partie de ses titres à un prix égal au prix de remboursement (selon la définition de “Put Price” qui est donnée dans la version anglaise de l’acte de fiducie) en vigueur le 30 ^e jour précédant la date de remboursement, majoré des intérêts courus jusqu’à la date de remboursement. Si, avant le 30 ^e jour précédant une date de remboursement, il se produit un rétablissement de la cote (selon la définition de “Rating Recovery” qui est donnée dans la version anglaise de l’acte de fiducie), les porteurs de titres n’auront plus le droit d’exiger que la Société leur rembourse leurs titres à cette date de remboursement . En tout temps avant le 90 ^e jour suivant une date de baisse de la cote (selon la définition de “Rating Decline Date” qui est donnée dans la version anglaise de l’acte de fiducie), la Société aura le droit d’augmenter le taux d’intérêt des titres et elle avisera les porteurs de titres d’une telle augmentation du taux. Lorsqu’un tel avis aura été donné, chaque porteur de titres aura le droit d’exiger que la Société lui rembourse, à la date de remboursement, la totalité ou une partie de ses titres à un prix égal au prix de remboursement en vigueur à la date de l’avis en question (ledit prix de remboursement devant être indiqué dans l’avis), majoré des intérêts courus jusqu’à cette date de remboursement. Si le porteur de titres n’exerce pas le droit qu’il a d’exiger que la Société lui rembourse ainsi ses titres, alors ses titres porteront intérêt au taux augmenté indiqué dans l’avis donné par la Société, et ce, à compter de la date de baisse de la cote. Si des titres

représentant au moins 90% de la somme en capital globale des titres en circulation le 30 ^e jour précédant une date de remboursement ont été déposés à des fins de remboursement à cette date de remboursement, la Société aura le droit d’acheter la totalité des autres titres à cette date, et ce, au prix de remboursement, moajoré des intêréts courus jusqu’à cette date. L’acte de fiducie contient des dispositions relativement aux avis à être donnés concernant les droits précités.

     S’il survient un cas de défaut, selon la définition de “Event of Default” qui est donnée dans la version anglaise de l’acte de fiducie, le capital de tous les titres peut être déclaré dû et payable avant l’échéance prévue de la maniére et avec l’effet prévus dans l’acte de fiducie.

     L’acte de fiducie permet, à quelques exceptions prés qui y sont prévues, la modification en tout temps par la Société dudit acte de fiducie, de même que des droits et des obligations de la Société et des droits des porteurs des titres, en vertu de l’acte de fiducie, avec le consentement des porteurs exprimê par voie de Résolution Extraordinaire, selon la définition de “Extraordinary Resolution qui est donnée dans la version anglaise de l’acte de fiducie. L’acte de fiducie comporte également des dispositions permettant aux porteurs de pourcentages spécifiés de la somme en capital globale des titres alors en circulation, au nom des porteurs de tous les titres, de renoncer à exiger que la Société se conforme à certaines dispositions de l’acte de fiducie et du présent titre, de renoncer à leurs recours à l’égard de certains cas de défaut antérieurs en vertu de l’acte de fiducie et du présent titre. Un tel consentement ou une telle renonciation de la part du porteur du présent titre sera concluant et liera ce porteur et tous les porteurs futurs du présent titre et de tout titre émis au moment du transfert du présent titre

ou en échange ou en remplacement de celui-ci, qu’un tel consentement ou qu’une telle renonciation soit ou non indiqué sur le présent titre.

     Comme il est prévu dans l’acte de fiducie et sous réserve de certaines restrictions qui y sont énoncées, le présent titre est transférable par le porteur inscrit dudit titre; l’inscription du transfert se fait dans les registres des porteurs de titres de la Société, sur remise du présent titre a des fins de transfert à l’un des bureaux principaux du fiduciaire dans les villes de Halifax, Montréal, Toronto, Winnipeg, Calgary et Vancouver; à cette fin, ledit titre doit étre dûment endossé par le porteur dudit titre ou par son fondé de pouvoir dûment autorisé par écrit, ou il doit étre accompagné d’un instrument de trans-fert écrit dont le libellé est acceptable par la Société et par le fiduciaire ou tout agent chargé de la tenue d’un registre local des porteurs de titres, dûment signé par le porteur du titre ou par son fondé de pouvoir dûment autorisé par écrit. Sur ce, un ou plusieurs nouveaux titres, en coupures autorisées et d’une somme en capital globale équivalente, seront émis au ou aux cession-naires désignés.

     La Société, le fiduciaire et tout autre mandataire de la Société ou du fiduciaire peuvent traiter la personne au nom de laquelle le présent titre est immatriculé comme le propriétaire dudit titre, et ce, à toutes fins, que le présent titre soit ou non échu.

     Les titres sont émissibles sous forme de titres immatriculés, capital et intérêts, en coupures de 1 000 $ et de multiples de cette somme. Comme il est prévu dans l’acte de fiducie et sous réserve de certaines restrictions qui y sont énoncées, les titres sont échangeables aux bureaux principaux du fiduciaire dans les villes

- 39 -

mentionnées ci-dessus contre des titres de coupures différentes autorisées d’une somme en capital globale équivalente, selon les instructions du porteur remettant un tel titre.

     A moins que l’attestation d’authenticité apparaissant sur les présentes n’ait été signée par le fiduciaire au moyen de la signature manuscrite de l’un de ses représentants autorisés, le présent titre ne donne droit a aucun avantage en vertu de l’acte de fiducie et il n’est ni valide ni obligatoire à quelque fin que ce soit.

     EN FOI DE QUOI, la Société a fait signer le present titre par ses dirigeants dûment autorisés.

Daté du 12 décembre 1989 PRODUITS FORESTIERS

   Attestation d’authenticité par le fiduciaire

     Le présent titre est l’une des débentures visées par l’acte de fiducie mentionné dans les présentes.

Avis d’exercice du droit au remboursement par anticipation du porteur

     Aux termes de l’acte de fiducie mentionné dans les présentes, advenant la survenance d’un événement désigné et d’une baisse de la cote (selon la définition de “Designated Event” et de “Rating Decline” qui est donnée dans la version anglaise de l’acte de fiducie), le porteur du présent titre exerce par les présentes le droit qu’il a d’exiger que la Société lui rembourse, à la date de remboursement pertinente (selon la définition de “Repayment Date” qui est donnée dans la version anglaise de l’acte de fiducie), la somme en capital globale des présentes ou la partie de celle-ci indiquée ci-dessous (soit un multiple de 1 000 $), et ce, au prix de remboursement pertinent (selon la définition de “Put Price” qui est donnée dans la version anglaise de l’acte de fiducie), majoré des intérêts courus jusqu’à la date de remboursement et à cette fin le porteur soussigné livre le présent titre au fiduciaire, le tout sous réserve des dispositions de l’acte de fiducie.

     Remboursement partiel: Somme en capital de                                          $.
(multiple de 1 000 $ seulement)

ARTICLE THREE

The Securities

     Section 301. Title and Terms.

     The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $125,000,000, except for Securities authenticated and delivered upon transfer of, or in exchange for, or in lieu of other Securities pursuant to Sections 304, 305, 306, 805 or 1108.

     The Securities shall be known and designated as the “10.85% DEBENTURES DUE 2014” of the Corporation. Their Stated Maturity shall be November 30, 2014 and they shall bear interest from and including the later of December 12, 1989 and the most recent Interest Payment Date to which interest has been paid or duly provided for, but excluding the date of their Stated Maturity, payable semi-annually in arrears on May 31 and November 30 in each year commencing on May 31, 1990, at the rate of 10.85% per annum until the principal thereof is paid or made available for payment, as more fully described in the form of Securities set forth in Section 202 of this Indenture.

     The principal of and interest on the Securities shall be payable at any branch in Canada of The Royal Bank of Canada, at the option of the Holder, or at such other place as may be designated by the Corporation for such purpose and approved by the Trustee (any municipality in which any such branch or place is located being herein called a “Place of Payment”).

     The Record Date referred to in Section 307 for the payment of the interest payable and punctually

paid or duly provided for on any Interest Payment Date in respect of the Securities shall be the 15th day (whether or not a business day) of the same calendar month as said Interest Payment Date.

     The Securities shall be redeemable as provided in Article Eleven.

     The Securities may be issued in denominations of $1,000 and integral multiples thereof.

     The Securities shall be executed on behalf of the Corporation by its Chairman of the Board, its President or one of its Vice-Presidents and by its Secretary or one of its Assistant Secretaries. Any such signature may be manual or printed or otherwise mechanically reproduced and may, but need not be, under or accompanied by the corporate seal of the Corporation or a reproduction thereof.

     Securities bearing the printed or otherwise mechanically reproduced signatures of any Person who was at any time the proper officer of the Corporation shall bind the Corporation, notwithstanding that such Person has ceased to hold such office prior to the authentication and delivery of such Securities.

     At any time and from time to time after the execution and delivery of this Indenture, the Corporation may deliver Securities executed by the Corporation to the Trustee, together with a Corporation Order for the authentication and delivery of such Securities; and the Trustee in accordance with

substitutions and other variations as the officers executing such Securities may determine, as evidenced by their signing of such Securities.

     If temporary Securities are issued, the Corporation will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any Place of Registration, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities (accompanied by any unmatured coupons appertaining thereto) the Corporation shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities, and interest thereon, when and as payable, shall be paid to the registered Holders of temporary Securities upon presentation thereof for notation of such payment thereon, unless such temporary Securities shall be Fully Registered Securities or shall bear coupons for such interest.

     The Corporation shall cause to be kept by the Trustee at its principal office in the City of Montreal (or at such other Place of Registration in Canada maintained by the Trustee as may be requested by the Corporation with the approval of the Trustee) a central Security register (herein referred to as the “Central Security Register”) and at each other Place of Registration, a branch Security register (herein collectively referred to

as the “Branch Security Registers” and the Branch Security Registers together with the Central Security Register are herein sometimes collectively referred to as the “Security Registers”) in which, subject to such reasonable regulations as it may prescribe, the Corporation shall provide for the registration of Securities and the registration of transfers of Securities. A Branch Security Register shall at least contain particulars of the registration of Securities and the registration of transfers of Securities made at the Place of Registration where such Branch Security Register is being maintained and the Central Security Register shall contain particulars of registrations of Securities and registrations of transfers of Securities made at all Places of Registration. The Trustee is hereby appointed registrar for the purpose of registering Securities and transfers of Securities as herein provided on the Central Security Register and a “Branch Security Registrar” for the purpose of registring Securities and transfers of Securities as herein provided on the Branch Security Registers expressly provided for on the date hereof. Each Branch Security Registrar (if other than the Trustee) shall provide the Trustee with the particulars of each registration of Securities and of transfers of Securities made on the Branch Security Register for which it has been appointed Branch Security Registrar immediately following any such registration.

     Any office or agency appointed pursuant to Section 1002 after the date hereof shall, by its appointment as such, also be deemed to have been appointed a “Branch Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided on the Branch Security Register for which it has been appointed Branch Security Registrar.

     Upon surrender for transfer of any Security at any Place of Registration, the Corporation shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of a like aggregate principal amount, all as requested by the transferor.

     At the option of the Holder, Securities may be exchanged for Securities in any other authorized denominations of a like aggregate principal amount, upon surrender of the Securities to be exchanged at any Place of Registration, and upon payment, if the Corporation shall so require, of the charges hereinafter provided. Whenever any Securities are so surrendered for exchange, the Corporation shall execute, and the Trustee shall authenticate and deliver, the Securities which the Securityholder making the exchange is entitled to receive.

     Every Security presented or surrendered for registration of transfer, shall (if so required by the Corporation or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Trustee or other Branch Security Registrar, if any, duly executed, by the Holder thereof or his attorney duly authorized in writing.

     All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Corporation, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

     The Corporation may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Securities.

     All Securities surrendered upon any exchange or transfer provided for in this Indenture shall be promptly cancelled by the Trustee and thereafter disposed of as directed by a Corporation Order.

     The Corporation shall not be required (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the date of any selection of Securities to be redeemed and ending at the close of business on the day of the mailing of the relevant notice of redemption, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part.

     If any mutilated Security is surrendered to the Trustee, the Corporation shall execute and the Trustee shall thereupon authenticate and deliver in exchange therefor a new Security of like principal amount, bearing a number not contemporaneously outstanding.

     If there be delivered to the Corporation and to the Trustee

     (i) evidence to their satisfaction of the destruction, loss or theft of any Security, and

     (ii) such security or indemnity as may be required by them to save each of them and any agent of each of them harmless,

then, in the absence of notice to the Corporation or the Trustee that such Security has been acquired by a bona fide purchaser, the Corporation shall execute and upon its request (in the form of a

Corporation Request) the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Security, a new Security of like principal amount, bearing a number not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Corporation in its discretion may, instead of issuing a new Security, pay such Security with accrued and unpaid interest thereon.

     Upon the issuance of any new Security under this Section, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

     Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Corporation, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

     Subject to Section 1007 and to Article Eleven, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Record Date for such interest.

     Each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

     Prior to due presentment of a Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of, and interest on, such Security and for all other purposes whatsoever (except the payment of interest payable on presentation of any temporary Security) whether or not such Security be overdue.

     All Securities surrendered for payment, exchange or redemption shall, if surrendered to the Corporation or any agent of the Corporation, be delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by it. The

Corporation may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder, which the Corporation may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Corporation Order.

     Forthwith upon the execution and delivery of this Indenture, or from time to time thereafter, Securities up to the aggregate principal amount provided for in Section 301 may be executed by the Corporation and delivered to the Trustee for authentication, and shall thereupon be authenticated and delivered by the Trustee upon Corporation Order, without any further action by the Corporation.

ARTICLE FOUR

Satisfaction and Discharge

     Subject as hereinafter in this Section provided, this Indenture shall cease to be of further effect and the Trustee, on demand of and at the expense of the Corporation, shall execute

proper instruments acknowledging satisfaction and discharge of this Indenture, when

     (1) either

     (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities money for whose payment has theretofore been deposited in trust or segregated and held in trust by the Corporation and thereafter repaid to the Corporation or discharged from such trust, as provided in