SCHEDULE 4.11

                               FORM A56
                               DEBENTURE

Standard Forms of Conveyances Act, S.N.B. 1980, c. S-12.2, s.2

The parties to this debenture are:

REPAP NEW BRUNSWICK INC., a corporation incorporated under the laws of Canada,
having an office at 345 Curtis Road, in the City of Miramichi, in the Province
of New Brunswick, the "corporation"

- and -

BANKERS TRUST COMPANY, a New York banking corporation, having an office at Four
Albany Street, in the City of New York, in the State of New York, U.S.A. 10006,
in its capacity as Second Priority Note Trustee (as defined herein) and THE BANK
OF NEW YORK, a New York banking corporation, having an office at 101 Barclay
Street, Floor 21 West, in the City of New York, in the State of New York, U.S.A.
10286, in it capacity as Collateral Agent (as defined herein) for Bankers Trust
Company as Second Priority Note Trustee (as defined herein), the "lender"

The recitals attached hereto as Schedule "D" form part of this debenture.

For value received, the corporation promises to pay on demand to or to the order
of the lender the principal sum and interest as hereafter set out.

Principal Sum:    as set forth in Schedule "C"

Interest Rate:    as set forth in Schedule "C"

How Interest Calculated: as set forth in Schedule "C"

Place of Payment:   as set forth in Schedule "C"

As security for the payment of all money payable hereunder and the performance
of the covenants and conditions herein contained, the corporation grants,
mortgages and charges, as applicable, to and in favour of the lender:

(f)  in accordance with Schedule "F".

This debenture contains the covenants and conditions which are set out in:

(b)  Schedule "C" attached hereto.

DATED on April 24, 1995.

IN WITNESS WHEREOF the corporation has executed this debenture.


                            REPAP NEW BRUNSWICK INC.

                            by:   c.s.



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                             SCHEDULE "C"

1.01 Promise to Pay

     For value received, the Company hereby acknowledges itself indebted and
promises to pay on demand to or to the order of the Second Priority Note Trustee
for the benefit of the holders of the Second Priority Notes, all Obligations up
to the maximum principal sum of four hundred million dollars (U.S.$400,000,000)
in lawful money of the United States at the place and in the manner specified in
the Second Priority Note Indenture, and to pay interest thereon from the date
hereof at the rate of twenty-five percent (25%) per annum in like
money at the same place monthly on the last day of each month, both before and
after maturity and before and after default, with interest on overdue interest
at the rate aforesaid.

2.01 Mortgage and Charge

     (a)  As continuing security for the due payment and performance of the
          Obligations, the Company hereby:

          (i) grants, mortgages and charges as and by way of a second fixed and
              specific mortgage and charge to and in favour of the Collateral
              Agent, all right, title and interest, now existing or
              after-acquired, of the Company in and to:

              (A)  all freehold real property and all leaseholds of real
                   property, including, but not limited to, the freehold
                   and leasehold lands and premises described in Schedule
                   "A" hereto (the freehold real property subject to the
                   fixed mortgage and charge being collectively referred
                   to herein as the "Freehold Lands" and the leaseholds
                   of real property subject to the fixed mortgage and
                   charge being collectively referred to herein as
                   the "Leasehold Lands");

              (B)  all buildings, improvements, erections, structures and
                   fixtures now or hereafter constructed or placed on the
                   Freehold Lands or the Leasehold Lands (collectively, the
                   "Improvements");

              (C)  all of the Company's present and after-acquired
                   personal property (other than inventory, accounts
                   receivable arising from the sale or lease of, or
                   otherwise relating to, inventory, insurance in respect
                   of such inventory and accounts receivable, records
                   relating to such inventory, accounts receivable and
                   insurance, substitutions and replacements of, and
                   property derived from dealings with, such inventory,
                   accounts receivable, insurance and records and claims,
                   choses in action and security for such inventory,
                   accounts receivable, insurance, records and other
                   property);

              (D)  Crown Timber Licences Number 3 and Number 4 issued to the
                   Company pursuant to the Crown Lands and Forests Act of New
                   Brunswick (the "Crown Timber Licences");

              (E)  all replacements of, substitutions for and increases,
                   additions and accessions to any of the property described in
                   clauses (i)(A) to (i)(D) inclusive above; and

              (F)  all proceeds of any of the property described in
                   clauses (i)(A) to (i)(E) inclusive above stated to be
                   subject to the fixed and specific mortgage and charge
                   created hereby, in any form derived directly or indirectly
                   from any dealing with such property or that indemnifies or
                   compensates for the loss of or damage to such property
                   including, without limitation, proceeds of insurance, and
                   the right to collect and receive the same, and all awards
                   or other compensation including the interest payable


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                   thereon and the right to collect and receive the same,
                   heretofore and hereafter made with respect to the taking by
                   eminent domain, condemnation or otherwise of such property by
                   the Government of Canada, the government of any province, or
                   any municipality or other governmental authority.

          (ii) charges as and by way of a floating charge to and in favour
               of the Collateral Agent, all its undertaking, property and
               assets, both present and after-acquired, of whatsoever nature and
               kind and wheresoever situate (other than (A) inventory, accounts
               receivable arising from the sale or lease of, or otherwise
               relating to, inventory, insurance in respect of such inventory
               and accounts receivable, records relating to such inventory,
               accounts receivable and insurance, substitutions and replacements
               of, and property derived from dealings with, such inventory,
               accounts receivable, insurance and records and claims, choses in
               action and security for such inventory, accounts receivable,
               insurance, records and other property (B) such of the
               undertaking, property and assets of the Company that is
               effectively and validly subject to the fixed and specific
               mortgage and charge created under clause (i) above, and (C) the
               property that is excluded from the Security pursuant to Section
               2.01(b));

         (iii) assigns to the Collateral Agent all right, title and
               interest, now existing or after-acquired, of the Company as
               landlord or licensor, as the case may be, in (A) all leases,
               subleases or other agreements for the lease, use or occupancy of
               any of the Freehold Lands or the Leasehold Lands or any part
               thereof or space therein, whether written or oral, and as amended
               and renewed from time to time (collectively, the "Leases"), (B)
               all rents and other amounts owing from time to time under the
               Leases, and (C) every guarantee of the payment of the Rents or
               performance and observance of the covenants, conditions and
               agreements to be performed by any parties thereto other than the
               Company (such rents and other amounts and the benefit of all
               guarantees, conditions and agreements being hereinafter
               collectively referred to as the "Rents"); provided, that so long
               as no Event of Default has occurred and is continuing, the
               Company shall have the right to collect, sue for, recover and
               retain all Rents, give receipts therefor and to enforce payment
               thereof.



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     The fixed and specific mortgage and charge, floating charge and assignment
created by this Debenture are collectively referred to herein as the "Security"
and the property, both real and personal, subject to such fixed and specific
mortgage and charge, floating charge or assignment is collectively referred to
herein as the "Collateral".

     (b) The Security shall not apply to:

          (i)  any property or assets acquired by the Company after the date
               hereof to the extent that within 30 days after the date of
               acquisition the Company transfers such property or assets to a
               Person and then leases them back from such Person; and

          (ii) the last day of the term of any lease or any agreement therefore
               now held or hereafter acquired by the Company, provided that the
               Company shall stand possessed of the reversion remaining in the
               Company of any leasehold interest forming part of the Collateral
               upon trust to assign and dispose thereof as the Collateral Agent
               shall direct; and upon any sale or sales of such leasehold
               interest or any part thereof, the Collateral Agent, for the
               purpose of vesting the aforesaid reversion of such term or any
               renewal thereof in any purchaser or purchasers thereof, shall be
               entitled by deed or writing to appoint such purchaser or
               purchasers or any other person or persons a new trustee or
               trustees of the aforesaid reversion or any renewal thereof in the
               place of the Company and to vest the same accordingly in the new
               trustee or trustees so appointed, freed and discharged from any
               obligation respecting the same.

     (c)  This Debenture shall constitute and be a continuing security
          to the Collateral Agent for the payment and performance of all
          Obligations and shall not be considered as satisfied or discharged
          by any payment or performance of all or any part of the Obligations
          outstanding at any time; and the execution and delivery of this
          Debenture shall not act as a merger of any simple contract debt or
          suspend the fulfilment of, or affect the rights, remedies or powers
          of the Collateral Agent in respect of, any present or future debts,
          liabilities or obligations of the Company to the Collateral Agent
          or any security now or hereafter held by the Collateral Agent for
          the payment or fulfilment thereof; and notwithstanding the release
          or discharge of any of the Collateral, this Debenture shall
          continue to secure the full amount of the Obligations.

     (d)  The Collateral Agent shall not, by virtue of the assignment in Section
          2.01(a)(iii) or its receipt of any Rents become or be deemed a
          mortgagee in possession of the Freehold Lands or the Leasehold Lands.

     (e)  Notwithstanding any provisions of this Debenture, payment by the
          Company to the Second Priority Note Trustee of interest for any
          period in respect of the Obligations shall be deemed to be
          payment in satisfaction of the interest payment for the same
          period under this Debenture, and the Collateral Agent in
          realizing on the Security of the Debenture shall not claim under
          this Debenture for the benefit of the Second Priority Note
          Trustee any greater amount in the aggregate for principal and
          interest than the amount of the  Obligations.


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3.01 Definitions and Interpretations

     (a)  Unless otherwise defined herein, all capitalized terms used in this
          Debenture shall have the respective meanings defined in the Second
          Priority Note Indenture.

     (b)  In this Debenture, unless something in the context is inconsistent
          therewith, the following terms shall have the following meanings:

          "Alteration" has the meaning defined in Section 4.01(f);

          "Collateral" has the meaning defined in Section 2.01(a);

          "Collateral Agency Agreement" has the meaning defined
          in Recital D of Schedule "D";

          "Collateral Agent" means The Bank of New York, in its capacity as the
          collateral agent under the Collateral Agency Agreement for the Second
          Priority Note Trustee;

          "Company"  means Repap New Brunswick Inc.;

          "Contaminant" means any of the following: (i) any organic or inorganic
          matter in a solid, liquid or gaseous state including, without
          limitation, a fuel (such as petroleum or petroleum products, crude
          oil, natural gas, liquified natural gas, synthetic fuel or any
          combination of the above), resulting directly or indirectly from human
          activities that may cause an adverse effect on the Environment as
          defined in or pursuant to applicable Environmental Laws; (ii) any form
          of energy or combination of matter and energy including, without
          limitation, a sound, a vibration, a ray, heat, an odour or a radiation
          resulting, directly or indirectly, from human activities that may
          cause an adverse effect on the Environment as defined in or pursuant
          to applicable Environmental Laws, (iii) any matter, energy or of a
          combination of matter and energy including, without limitation, any
          nuclear materials, in any such case deemed toxic, hazardous, a
          pollutant or a contaminant resulting, directly or indirectly, from
          human activities that may cause an adverse effect on the Environment
          as defined in or pursuant to applicable Environmental Laws, or (iv)
          any substance or material that is or becomes prohibited, controlled or
          regulated by any government or governmental authority, whether
          federal, provincial or local, including, without limitation,
          pollutants, contaminants, dangerous goods or substances, toxic or
          hazardous substances or materials, hazardous wastes and nonhazardous
          wastes, all as defined in or pursuant to Environmental Laws;

          "Debenture" means this Debenture and all Schedules
          hereto, as amended or supplemented from time to time;

          "Default" means any condition or event which constitutes, or which,
          after notice or lapse of time or both, would constitute an Event of
          Default hereunder;



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          "Developed Premises" means each of the Freehold Lands (other than the
          Timber Lands) and each of the Leasehold Lands and the Improvements and
          the personal property situated on each of the Freehold Lands (other
          than the Timber Lands) or Leasehold Lands;

          "Environment" means all components of the natural environment
          including, without limitation, air that is open air (but not air that
          is enclosed in a building, structure, machine, chimney, stack or
          flue), land (and all surface and subsurface soil, and all land
          submerged under water) and water (and all surface and underground
          water), as defined in or pursuant to applicable Environmental Laws;

          "Environmental Laws" means all past, present or future statutes,
          regulations, ordinances, official directives, standards, by-laws,
          orders, judgments, approvals, certificates of approval, policies and
          guidelines having the force of law, permits and rules, of any
          government or governmental authority having jurisdiction in the
          Province of New Brunswick and any other jurisdictions in which the
          Company is doing business relating, in whole or in part, to the
          Environment or its protection, including, without limitation, (i) to
          any actual or threatened emission, deposit, discharge, release,
          spraying, injection, inoculation, dumping, throwing, pouring,
          spilling, emptying, placing, leaking, seeping, migration, exhausting,
          abandonment, burial, disposal or incineration of any Contaminant into
          the Environment; (ii) to the required notification to applicable
          governmental authorities of the event or occurrence referred to in
          clause (i) above; (iii) to preventive or remedial measures in
          connection with any event or occurrence referred to in clause (i)
          above; (iv) to the manufacturing, generation, processing, use,
          handling, packaging, labelling, sale, storage, recycling, disposal,
          destruction, incineration, burial or transportation of any
          Contaminant; (v) to any nuisance in connection with the Environment;
          or (vi) to any applicable common law.

          "Eminent domain" means the expropriation or confiscation of
          property by any government or governmental authority;

          "Event of Default" has the meaning defined in Section 8.01;

          "First Priority Debenture" has the meaning defined in
          Recital D of Schedule "D";

          "First Priority Fixed Rate Note Indenture" has the meaning
          defined in Recital B of Schedule "D";

          "First Priority Fixed Rate Note Trustee" has the meaning
          defined in Recital B of Schedule "D";

          "First Priority Fixed Rate Notes" has the meaning defined
          in Recital B of Schedule "D";

          "First Priority Floating Rate Note Indenture" has the
          meaning defined in Recital A of Schedule "D";



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          "First Priority Floating Rate Note Trustee" has the meaning
          defined in Recital A of Schedule "D";

          "First Priority Floating Rate Notes" has the meaning
          defined in Recital A of Schedule "D";

          "First Priority Note Indentures" has the meaning defined
          in Recital B of Schedule "D";

          "First Priority Note Trustees" has the meaning defined
          in Recital B of Schedule "D";

          "First Priority Notes" has the meaning defined in
          Recital B of Schedule "D";

          "Freehold Lands" has the meaning defined in Section
          2.01(a)(i)(A);

          "Impositions" has the meaning defined in Section 4.01(j);

          "Improvements" has the meaning defined in Section
          2.01(a)(i)(B);

          "Indentures" has the meaning defined in Recital C of
          Schedule "D";

          "Leasehold Lands" has the meaning defined in Section
          2.01(a)(i)(A);

          "Leases" has the meaning defined in Section 2.01(a)(iii);

          "Lien" has the meaning defined in the Second Priority
          Note Indenture;

          "Major Casualty or Condemnation Event" means any destruction of or
          damage to any Developed Premises by fire or any other casualty, or any
          condemnation or taking by eminent domain of any of the Developed
          Premises, with respect to which restoration, repair and replacement of
          the Developed Premises in accordance with Section 5.01(d), (i) cannot
          reasonably be completed within 240 days after the occurrence of such
          event, (ii) involves 50% or more of such Developed Premises or (iii)
          involves 50% or more of the estimated value of such Developed
          Premises, all as determined in the reasonable opinion of the Board of
          Directors of the Company as evidenced by an Officers' Certificate
          setting forth the actions of the Board of Directors;

          "Material Adverse Effect" means a material adverse effect on (a) the
          business, assets, liabilities (actual or contingent), operations or
          condition (financial or otherwise) of the Company in respect of any of
          the Developed Premises, (b) the ability of the Company to perform its
          obligations under this Debenture in respect of any of the Developed
          Premises, or (c) the validity or enforceability of this Debenture or
          the rights and remedies of the Collateral Agent hereunder in respect
          of any of the Developed Premises;



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          "Obligations" has the meaning defined in Recital E of
          Schedule "D";

          "Permitted Liens" has the meaning defined in the Second
          Priority Note Indenture;

          "Person" means any individual, corporation, company, partnership,
          unincorporated association, trust, joint venture, or any government or
          governmental body or governmental authority;

          "Personal property" has the meaning defined in the Personal Property
          Security Act (New Brunswick), as such statute was assented to on May
          7, 1993;

          "Rents" has the meaning defined in Section 2.01(a)(iii);

          "Required Licences" means all present and future federal, provincial
          and municipal consents, approvals, licenses, permits, authorizations,
          regulations, exemptions and certificates applicable to the Company or
          the Collateral and necessary for the operation of any of the
          Collateral;

          "Requirements of Law" means the certificate of incorporation and
          by-laws or other organizational or governing documents of the Company,
          and any law, treaty, rule, regulation, order, judgement, decree,
          injunction or requirement, or determination of an arbitrator or a
          court or government or governmental authority, applicable to or
          binding upon the Company or any of its property or to which the
          Company or any of its property is subject;

          "Second Priority Note Indenture" has the meaning defined in
          Recital C of Schedule "D";

          "Second Priority Notes" has the meaning defined in Recital
          C of Schedule "D";

          "Second Priority Note Trustee" has the meaning defined in
          Recital C of Schedule "D";

          "Security" has the meaning defined in Section 2.01(a);

          "Timber Lands" means the Freehold Lands described in Sections F, G, H
          and J in Schedule A hereto;

          "Total Taking" means a condemnation or taking by eminent domain of (i)
          all the Developed Premises or (ii) a substantial portion of the
          Developed Premises which renders the remaining portion of the
          Developed Premises unsuitable, in the reasonable judgment of the
          Collateral Agent, for continued use by the Company; and

          "Trust Moneys" has the meaning defined in the Second Priority
          Note Indenture.

     (c)  Words in the singular include the plural and words in the plural
          include the singular. Words importing any gender include all genders.
          The division of this Debenture into sections and subsections and the
          insertion of headings is


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          for convenience of reference only and does not affect the
          construction or the interpretation of this Debenture.

     (d)  In the event of any conflict between the provisions of this Debenture
          and the provisions of the Second Priority Note Indenture or the
          Collateral Agency Agreement, the provisions of the Second Priority
          Note Indenture or the Collateral Agency Agreement shall prevail.


4.01 Representations and General Covenants of the Company

     The Company hereby represents to and covenants with the Collateral Agent on
behalf of the Second Priority Note Trustee for the benefit of the holders of the
Second Priority Notes as follows:

     (a)  Corporate Existence and Authority.  The Company is a
          corporation duly incorporated and validly existing under the
          laws of Canada and has all necessary corporate power and
          authority to own its property and carry on its business as
          currently carried on, to execute and deliver this Debenture
          and to do all acts and execute and deliver all documents as
          are required hereunder to be done, observed or performed by
          it in accordance with the terms hereof and is duly licensed,
          registered or qualified in all jurisdictions where the
          character of its property owned or leased or the nature of
          the activities conducted by it requires such licensing,
          registration or qualification except where the failure to
          be so licensed, registered or qualified could not, in the
          aggregate, reasonably be expected to have a Material Adverse
          Effect.

     (b)  Valid and Enforceable.  The Company has taken all necessary
          corporate action to authorize the execution and delivery of
          this Debenture, the creation of the Security and the
          performance of its obligations hereunder.  This Debenture
          constitutes a legal, valid and binding obligation of the
          Company enforceable against the Company in accordance with
          its terms, except as enforceability may be limited by
          applicable bankruptcy, insolvency, reorganization, moratorium
          or similar laws affecting the enforcement of creditors'
          rights generally and by general equitable principles.  The
          mortgage and charge created in Section 2.01(a)(i) constitutes
          valid and (subject to the exceptions in the preceding sentence)
          enforceable second priority security over the Collateral
          expressed to be subject thereto, subject only to Permitted
          Liens.  The charge created in Section 2.01(a)(ii)
          constitutes a valid and (subject to the exceptions in the
          second preceding sentence) enforceable floating charge over
          the Collateral expressed to be subject thereto, subject only
          to Permitted Liens.  The assignment created in Section
          2.01(a)(iii) constitutes a valid and (subject to the exceptions
          in the third preceding sentence) enforceable assignment of the
          Leases and Rents, subject only to Permitted Liens.

     (c)  Permits and Approvals. The Company has obtained and possesses all
          Required Licences under all Requirements of Law, including, without
          limitation, Environmental Laws, to carry on its business as currently
          carried on and to own the Collateral or occupy the lands and premises
          currently occupied by it,


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          except where the failure to obtain or possess such Required Licences
          would not have a Material Adverse Effect. No consent or authorization
          of, filing with or other act by or in respect of any Person is
          required in connection with the execution, delivery, performance,
          validity or enforceability of this Debenture, other than that which
          has been obtained or made and other than any filing or registrations
          required under the laws of the Province of New Brunswick for the
          protection and perfection of the Security.

     (d)  The Collateral.  The Company represents that (i) it is the
          lawful owner of the Freehold Lands, (ii) it is the lawful
          tenant of the Leasehold Lands, (iii) it has full right, power
          and authority to mortgage and charge the Freehold Lands and
          the Leasehold Lands to the Collateral Agent in accordance
          with this Debenture, and (iv) subject only to Permitted Liens
          and the qualifications as to title to the Freehold Lands and
          the Leasehold Lands expressed in the opinion of counsel for
          the Company dated the date hereof and delivered to the
          Collateral Agent, it has good and marketable title to the
          Freehold Lands and good title to the Collateral other than
          the Freehold Lands, in each case free of all encumbrances.
          The Company represents that, upon the proper registration of
          this Debenture in the appropriate land registry offices in
          the Province of New Brunswick, this Debenture will constitute
          a valid second fixed and specific mortgage and charge on
          the Freehold Lands and the Company's leasehold interest in
          the Leasehold Lands, subject only to Permitted Liens, and
          that upon the registration of this Debenture or a financing
          statement in respect thereof, as the case may be, in the
          appropriate registration office in the Province of New
          Brunswick, this Debenture will constitute a valid second
          perfected fixed and specific mortgage and charge and a valid
          perfected floating charge of the Collateral that constitutes
          personal property and a valid assignment of the Leases and
          Rents, subject only to Permitted Liens.  The Company shall
          (i) preserve the validity and priority of the Security and
          its title to the Collateral and shall forever warrant and
          defend the same against the claims of all Persons whomsoever
          claiming or threatening to claim the same or any part
          thereof, (ii) make, execute, acknowledge and deliver all
          such further and other documents, instruments or assurances,
          and cause to be done all such further acts and things as may
          at any time hereafter be reasonably requested by the
          Collateral Agent to preserve, perfect and defend the
          Security and title to the Collateral and the right of the
          Collateral Agent therein against the claims of all Persons,
          subject only to Permitted Liens.  The Company shall do all
          such further acts and things and execute and deliver such
          mortgages, deeds of trust, security agreements, hypothecs,
          assignments, financing statements and other documents,
          instruments and assurances as shall be reasonably
          necessary to better assure, mortgage, charge and assign the
          Collateral unto the Collateral Agent and to vest in the
          Collateral Agent a valid and perfected mortgage, charge,
          assignment and security interest, as applicable, in any
          Material After-Acquired Property, subject only to Permitted
          Liens.  Notwithstanding the foregoing, any acknowledgment by
          the Collateral Agent herein or in the Second Priority Note
          Indenture as to any mortgages, charges, security interests,


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          encumbrances or other liens upon the Collateral or any part thereof
          shall not constitute an acknowledgment of the priority thereof over
          the Security or the subordination or postponement of the Security
          thereto except to the security created by the First Priority
          Debenture.

     (e)  Strict Compliance.  The Company shall duly and punctually
          pay or cause to be paid the principal, interest and other
          amounts at the times and places and in the manner specified
          in the Second Priority Notes and the Second Priority Note
          Indenture, and this Debenture, and shall observe and perform
          all the conditions, covenants and obligations (including the
          Obligations) on the part of the Company to be performed
          hereunder or thereunder.

     (f)  Alterations.  Except as otherwise provided in the Second
          Priority Note Indenture, the Company shall not, without the
          prior written consent of the Collateral Agent (which consent
          shall not be unreasonably withheld), make any addition,
          modification or change (each, an "Alteration"), structural
          or nonstructural, to the Developed Premises which could
          reasonably be expected to decrease, in any material respect,
          the value of such Developed Premises in the reasonable
          opinion of the Board of Directors of the Company.  Whether
          or not the Collateral Agent has consented to the making of any
          Alteration, the Company shall (i) complete each Alteration
          promptly, in a good and workmanlike manner and in compliance,
          in all material respects, with all applicable local laws,
          ordinances and requirements and (ii) pay when due all claims
          for labor performed and materials furnished in connection
          with such Alteration, unless contested by appropriate legal
          proceedings, but such rights shall not be deemed or construed
          in any way as relieving, modifying or extending the Company's
          covenants to pay when due such claims as provided in this
          Section 4.01(f) unless (a) the legal proceedings shall operate
          conclusively to prevent the sale or forfeiture of such
          Developed Premises, or any part thereof, for failure to pay
          such claims when due prior to final determination of such
          proceedings; (b) if during such contest, a Lien shall exist
          with respect to any of the Developed Premises for an amount
          in excess of Cdn.$7,500,000, the Company shall have provided
          the Collateral Agent with a good and sufficient bond from a
          surety company reasonably satisfactory to the Collateral Agent
          or other security reasonably satisfactory to the Collateral
          Agent in an amount equal to the aforesaid Lien; (c) the Company
          shall have set aside adequate reserves in accordance with
          generally accepted accounting principles for discharge of
          such Lien; and (d) the Collateral Agent shall not be subject
          either to civil or criminal liability for any failure by the
          Company to pay such claim during pendency of such contest
          (except, with respect to civil liability, for amounts bonded
          or secured in accordance with the above).




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     (g)  Proper Care and Use; Inspection.

          (i)  The Company shall:

               (A)  not commit or suffer waste with respect to the
                    Collateral;

               (B)  keep and maintain in all material respects, the
                    Improvements and all machinery and equipment in good
                    repair, working order and condition and in the state
                    of good operating efficiency, and make or cause to be
                    as and when the same shall become necessary, all
                    repairs, renewals and replacements necessary to that
                    end, ordinary wear and tear excepted, damage from
                    casualty and condemnation as more particularly set
                    forth in Section 5.01(d) hereof excepted and except
                    as may be otherwise set forth in the Second Priority
                    Note Indenture;

               (C)  not commit or suffer any act to be done in or upon the
                    Collateral which violates any law, ordinance or regulation
                    in any material respect;

               (D)  except as otherwise provided in the Second Priority Note
                    Indenture, the Developed Premises shall not be demolished
                    nor shall any material portion of the machinery and
                    equipment situated thereon be removed without the prior
                    written consent of the Collateral Agent, which consent shall
                    not be unreasonably withheld;

               (E)  comply in all material respects with all of its obligations
                    as lessee under all leases and shall not surrender any lease
                    or cause or allow the same to be terminated or forfeited or
                    agree to any amendment thereto, except where such
                    non-compliance, surrender, termination, forfeiture or
                    amendment would not have a Material Adverse Effect.

          (ii) The Collateral Agent and any persons authorized by the
               Collateral Agent shall have the right (but not the obligation) to
               enter upon any premises of the Company and inspect the Collateral
               at all reasonable times (which shall be deemed to be normal
               business hours) upon reasonable notice (which, in the absence of
               an Event of Default, shall be deemed to be at least two days'
               advance notice). If an Event of Default shall have occurred and
               be continuing, the Collateral Agent and any persons authorized by
               the Collateral Agent may (without being obligated to do so), upon
               not less than 10 days' prior written notice to the Company
               (except in the case of an Event of Default, which if left
               unremedied, would reasonably be expected to (i) affect the
               priority of the Security constituted by this Debenture or (ii)
               have a Material Adverse Effect, in which case no prior notice
               shall be necessary), it being understood that said notice may be
               given prior to a Default becoming an Event of Default, enter or
               cause entry to be made upon any premises of the Company and
               repair and/or maintain as the Collateral Agent may reasonably
               deem


                                       12

<PAGE>



               necessary, and may (without being obligated to do so) make such
               expenditures and outlays of money as the Collateral Agent may
               deem reasonably necessary for the preservation of the Collateral.
               All reasonable expenditures and outlays of money made by the
               Collateral Agent pursuant hereto, together with interest thereon
               from the date of payment at the interest rate applicable under
               the Second Priority Notes, shall be added to the Obligations. All
               such reasonable expenditures and outlays of money, together with
               all interest thereon as aforesaid, shall be (i) a charge on the
               Collateral prior to any right or title to, interest in, or claim
               upon any of the Collateral subordinate to the Security
               constituted by this Debenture, and (ii) payable on demand.

     (h)  Compliance.  The Company shall comply with any and all material
          obligations affecting the Developed Premises, including,
          without limitation, all material easements, rights-of-way,
          covenants, restrictions and conditions  and material agreements
          and Required Licenses affecting the Developed Premises.  The
          Company shall have the right, at the Company's sole cost and
          expense, to contest the validity of any such obligations
          affecting the Developed Premises by appropriate legal
          proceedings, but such right shall not be deemed or construed
          in any way as relieving, modifying or extending the Company's
          covenant to comply therewith as provided in this Section
          4.01(h) unless (a) the legal proceedings shall operate
          conclusively to prevent the sale or forfeiture of the Developed
          Premises, or any part thereof, for failure to comply with such
          obligations prior to the final determination of such
          proceedings, (b) if during such contest a Lien shall exist
          with respect to any of the Developed Premises for an
          amount in excess of Cdn.$7,500,000, the Company shall
          provide the Collateral Agent with a good and sufficient bond
          from a surety company reasonably satisfactory to the
          Collateral Agent or other security reasonably satisfactory
          to the Collateral Agent in an amount equal to the aforesaid
          Lien, (c) the Company shall have set aside adequate
          reserves in accordance with generally accepted accounting
          principles for the payment of such obligations, and (d)
          the Collateral Agent shall not be subject either to civil
          or criminal liability for any failure by the Company to
          comply with such obligations during the pendency of such
          contest (except, with respect to civil liability, for
          amounts bonded or secured in accordance with the above).

     (i)  Requirements of Law.  The Company, at the Company's sole
          cost and expense, shall, in all material respects, comply
          with, or cause to be complied with, and conform to all
          present and future Required Licences and Requirements of
          Law, including, without limitation, any applicable health,
          sanitary, zoning, building, fire, occupational health and
          safety, use, land use and other laws and regulations,
          Environmental Laws and any occupancy permits, which may
          be applicable to the Company or to any of the Collateral,
          or to the ownership, use, manner of use, occupancy,
          possession, operation, maintenance, alteration, repair or
          reconstruction of any of the Collateral.  The Company shall


                                       13

<PAGE>



          promptly notify the Collateral Agent of any material non-compliance
          with Environmental Laws relating to the Collateral upon becoming aware
          of such non-compliance. The Company shall have the right, at the
          Company's sole cost and expense, to contest or object to the validity
          of any Requirements of Law by appropriate legal proceedings, but such
          right shall not be deemed or construed in any way as relieving,
          modifying or extending the Company's covenant to comply therewith as
          provided in this Section 4.01(i) unless (a) the legal proceedings
          shall operate conclusively to prevent the sale or forfeiture of the
          Collateral, or any part thereof, or the termination or revocation of
          any Required Licence, for failure to comply with such Requirements of
          Law prior to final determination of such proceedings, (b) if during
          such contest a Lien shall exist with respect to any of the Collateral
          for an amount in excess of Cdn.$7,500,000, the Company shall provide
          the Collateral Agent with a good and sufficient bond from a surety
          company satisfactory to the Collateral Agent or other security
          reasonably satisfactory to the Collateral Agent in an amount equal to
          the aforesaid Lien, (c) the Company shall have set aside adequate
          reserves in accordance with generally accepted accounting principles
          for discharge of such Lien, and (d) the Collateral Agent shall not be
          subject either to civil or criminal liability for any failure by the
          Company to comply with such Requirements of Law during the pendency of
          such contest (except, with respect to civil liability, for amounts
          bonded or secured in accordance with the above). Not later than thirty
          (30) days prior to the expiration date of any Required Licence, the
          Company shall, if the Collateral Agent shall so request, deliver to
          the Collateral Agent (i) a copy of the renewal of such Required
          Licence or (ii) other evidence satisfactory to the Collateral Agent
          that such Required Licence will be renewed prior to its expiration;
          provided that, in the case of clause (ii), the Company shall deliver
          to the Collateral Agent the copy of the renewal of such Required
          Licence not later than the expiration date thereof.

     (j)  Payment of Impositions.

          (i)  The Company shall pay and discharge before the last
               date payment may be made without the imposition of
               interest or a penalty all taxes of every kind and nature
               (including, without limitation, all real, personal
               property, income, franchise, withholding, profits and
               gross receipts taxes), all charges for any easement or
               agreement maintained for the benefit of any of the
               Collateral, all general and special assessments, levies,
               permits, and inspection and licence fees, all utility
               charges for gas, electricity, water and sewer services
               and all other public charges whether of a like or
               different nature, even if unforeseen or extraordinary,
               imposed upon or assessed on or against the Collateral,
               together with any interest or penalties on any of the
               foregoing (all the foregoing being hereinafter
               collectively referred to as the "Impositions").  The
               Company shall have the right, at the Company's sole cost
               and expense, to contest or object to the amount or
               validity of any Impositions by appropriate legal
               proceedings, but such right shall not be deemed or


                                       14

<PAGE>



               construed in any way as relieving, modifying or extending the
               Company's covenant to pay such Impositions at the time and in the
               manner provided in this Section 4.01(j) unless (A) such legal
               proceedings shall operate conclusively to prevent the sale or
               forfeiture of the Collateral, or any part thereof, to satisfy
               such Impositions, or the termination or revocation of any
               Required Licence, prior to final determination of such
               proceedings, (B) if such Impositions are for an amount in excess
               of Cdn.$7,500,000, the Company shall furnish a good and
               sufficient bond from a surety company satisfactory to the
               Collateral Agent or other security reasonably satisfactory to the
               Collateral Agent in the amount of the Impositions which are being
               contested plus any interest and penalty which may be imposed
               thereon and which could become a Lien against the Collateral, (C)
               the Company shall have set aside adequate reserves in accordance
               with generally accepted accounting principles for the payment of
               such Impositions, and (D) the Collateral Agent shall not be
               subject either to civil or criminal liability for any failure by
               the Company to pay such Impositions (except with respect to civil
               liability, for amounts bonded or secured in accordance with the
               above). Subject to the foregoing, and if the Collateral Agent
               shall so request, the Company shall deliver to the Collateral
               Agent receipts evidencing the payment of all Impositions.

          (ii) The Collateral Agent shall have the right, after written demand
               to the Company, to pay any Imposition on or after the last date
               payment of such Imposition may be made without imposition of
               interest or a penalty (provided that the Company shall not be
               exercising its right to contest such Imposition as hereinbefore
               provided), and to add the amount so paid, together with interest
               thereon from the date of such payment at the interest rate
               applicable under the Second Priority Notes, to the Obligations
               and nothing herein contained shall affect such right and such
               remedy. Any sums paid by the Collateral Agent in discharge of any
               Impositions, together with all interest thereon as aforesaid,
               shall be (A) a charge on the Collateral secured hereby prior to
               any right or title to, interest in, or claim upon any of the
               Collateral subordinate to the Security constituted by this
               Debenture, and (B) payable on demand.

         (iii) If an Event of Default shall have occurred and be continuing, the
               Company, upon the Collateral Agent's written request therefore,
               shall pay to the Collateral Agent an amount equal to one twelfth
               of the (i) annual

               Impositions reasonably estimated by the Collateral Agent so that
               the Collateral Agent shall have sufficient funds to pay the
               Impositions on the first day of the month preceding the month in
               which they become due and (ii) estimated aggregate annual
               insurance premiums on all policies of insurance required by this
               Debenture on a specified date each month. In such event, the
               Company further agrees to cause all bills, statements or other
               documents relating to Impositions and insurance premiums


                                       15

<PAGE>



               to be sent or mailed directly to the Collateral Agent. Upon
               receipt of such bills, statements or other documents, and
               provided the Company has deposited sufficient funds with the
               Collateral Agent pursuant to this Section 4.01(j)(iii), the
               Collateral Agent shall pay such amounts as may be due thereunder
               out of the funds so deposited with the Collateral Agent in
               accordance with the Second Priority Note Indenture. If at any
               time and for any reason the funds deposited with the Collateral
               Agent shall be insufficient to pay such amounts as may then or
               subsequently be due, the Collateral Agent shall notify the
               Company and the Company shall immediately deposit an amount equal
               to such deficiency with the Collateral Agent. The Collateral
               Agent shall be deemed a trustee of said funds and shall hold,
               invest and disburse said funds in accordance with and pursuant to
               the terms of the Second Priority Note Indenture. If amounts
               collected by the Collateral Agent under this Section 4.01(j)(iii)
               exceed amounts necessary in order to pay Impositions or insurance
               premiums, as the case may be, the Collateral Agent may reserve
               for, and shall credit against the next due instalment(s) for,
               payment of Impositions or insurance premiums, as the case may be,
               such portion of such excess payments as the Collateral Agent in
               its reasonable discretion may deem proper, and, in accordance
               with the terms of the Second Priority Note Indenture, the
               remainder, if any, shall be promptly paid to the Company. Should
               the Company fail to deposit with the Collateral Agent sums
               sufficient to pay such Impositions or insurance premiums, as the
               case may be, in full at least 30 days before delinquency thereof,
               the Collateral Agent may, at the Collateral Agent's election and
               upon not less than ten (10) days' prior written notice to the
               Company, but without any obligation to do so, advance any amounts
               required to make up the deficiency. All such advances, together
               with interest thereon from the date of payment thereof at the
               interest rate applicable under the Second Priority Notes, shall
               be added to the Obligations. All such advances, together with
               interest thereon as aforesaid, shall be (i) a charge on the
               interest in, or claim upon any of the Collateral subordinate to
               the Security constituted by this Debenture and (ii) payable on
               demand.

     (k)  Compliance With Environmental Laws.  The Freehold Lands and
          the Leasehold Lands and all operations on the Freehold Lands
          and the Leasehold Lands are currently in compliance and in the
          last three years have been in compliance with all Environmental
          Laws and no Contaminants have been released or disposed at, on,
          from or under the Freehold Lands and the Leasehold Lands except
          to the extent that any such presence of Contaminants or
          non-compliance could not reasonably be expected to have a
          Material Adverse Effect.  The Company has not received any
          notice of violation, alleged violation, non-compliance,
          liability or potential liability regarding compliance with
          Environmental Laws with regard to the Freehold Lands, the
          Leasehold Lands or the business of the Company or with regard
          to any Person whose liabilities for environmental matters the
          Company has retained or assumed, in whole or in part,
          contractually, by operation of law or otherwise, which, in the
          aggregate, could reasonably be expected to have a Material


                                       16

<PAGE>



          Adverse Effect, nor does the Company have knowledge or reason to
          believe that any such notice will be received or is being threatened.
          Contaminants have not been transported or disposed of from the
          Freehold Lands or the Leasehold Lands, nor have Contaminants been
          generated, treated, stored or disposed of at, on or under any of the
          Freehold Lands or the Leasehold Lands in violation of any
          Environmental Law or in a manner that could reasonably give rise to
          liability under any Environmental Law, except to the extent that the
          foregoing, in the aggregate, could not reasonably be expected to have
          a Material Adverse Effect; nor does the Company reasonably believe
          that it has retained or assumed any liability, contractually, by
          operation of law or otherwise, with respect to the generation,
          treatment, storage or disposal of Contaminants, except to the extent
          that the foregoing, in the aggregate, could not reasonably be expected
          to have a Material Adverse Effect. No material judicial proceedings or
          governmental or administrative action is pending, or, to the knowledge
          of the Company, threatened under any Environmental Law to which the
          Company is or will be named a party with respect to the Freehold
          Lands, the Leasehold Lands, the business of the Company or any
          liabilities pursuant to Environmental Laws reasonably believed by the
          Company to be retained or assumed by the Company contractually, by
          operation of law or otherwise and there are no material decrees,
          consent orders, administrative orders or other orders, or other
          administrative or judicial requirements outstanding under any
          Environmental Law with respect to the Freehold Lands, the Leasehold
          Lands, the business of the Company or any liabilities pursuant to
          Environmental Laws reasonably believed by the Company to be retained
          or assumed by the Company contractually, by operation of law or
          otherwise. The provisions of this Section 4.01(k) shall not apply to
          matters disclosed in the prospectus of the Company dated April 13,
          1995, relating to the First Priority Notes and the Second Priority
          Notes or to matters arising from the alleged violation by the Company
          of the Clean Water Act (New Brunswick) referenced in the summons of
          the Provincial Court of New Brunswick to the Company dated March 27,
          1995.

     (l)  Change of Name. The Company shall not change its name without giving
          prior written notice to the Collateral Agent of the new name and the
          date upon which such change of name is to take affect, and in such
          connection shall cause to be made all filings and registrations
          necessary or appropriate to preserve the perfection and priority of
          the Security.

5.01  Covenant to Insure/Condemnation/Eminent Domain

      (a)  The Company shall maintain, with respect to the Collateral,
           insurance coverages with reputable insurers in such amounts and
           against such liabilities and hazards as may be deemed, after due
           inquiry, on a not less than annual basis, as to the customary
           standards of the industry in which the Company operates,
           commercially reasonable in the good faith, prudent, reasonable
           opinion of the Board of Directors of the Company.  Each insurance
           policy shall (i) be non-cancellable (which term shall include any
           reduction in the scope or limits of coverage) without at least 30
           days' prior written notice to the Collateral Agent, (ii) except
           in the case of comprehensive public liability insurance, be
           endorsed to name the Collateral Agent as an additional insured
           as its interest may appear, with loss payable to the Collateral


                                       17

<PAGE>



           Agent, without contribution, under a standard Insurance Bureau of
           Canada mortgage clause (or equivalent), and, in the case of
           comprehensive public liability insurance, be endorsed to name the
           Collateral Agent as an additional insured, and provide that all
           insurance proceeds for losses in excess of Cdn.$6,000,000 be adjusted
           only with participation by the Collateral Agent and the Company, and
           be payable in accordance with the terms and provisions of the Second
           Priority Note Indenture and that proceeds for losses less than
           Cdn.$6,000,000 be adjusted only by the Company and shall be payable
           directly to the Company, and (iii) contain an endorsement or
           agreement by the insurer that any loss shall be payable in accordance
           with the terms of such policy notwithstanding any act or negligence
           of the Company which might otherwise result in forfeiture of said
           insurance and the further agreement of the insurer waiving all rights
           of set-off, counterclaim, deduction or subrogation against the
           Company. If said insurance or any part thereof shall expire, be
           withdrawn, become void by breach of any condition thereof by the
           Company or by any lessee of any part of the Freehold Lands or
           otherwise, or become void by reason of the failure or impairment of
           the capital of any insurer, the Company shall obtain new or
           additional insurance complying with the requirements of this
           Debenture. The Company shall not take out any separate or additional
           insurance which is contributing in the event of loss unless it is
           properly compatible with all other insurance carried by the Company.

     (b)  The Company shall (i) pay as they become due all premiums for
          such insurance, and (ii) not later than ten (10) days prior to
          the expiration of each policy to be furnished pursuant to the
          provisions of this Section 5.01, deliver a valid certificate of
          insurance (or if such certificate is not then available, a
          renewal binder), evidencing a renewed policy or policies marked
          "premium paid", or accompanied by other evidence of payment
          reasonably satisfactory to the Collateral Agent.  Subject to the
          terms of the Collateral Agency Agreement, the Collateral Agent
          shall have no responsibility for determining compliance of such
          insurance with the terms of this Debenture.

     (c)  If the Company shall be in default of its obligations so to
          insure in accordance with paragraphs (a) and (b) above, then the
          Collateral Agent, at the Collateral Agent's option and upon not
          less than ten (10) days' prior written notice (provided, however,
          that, with respect to any material default of its obligation to
          obtain and maintain any of the policies required pursuant to this
          Section 5.01, no such notice shall be required), may reasonably
          effect such insurance for such year, and pay the premium or
          premiums therefore.  All such reasonable premiums, together with
          interest thereon from the date of payment thereof at the interest
          rate applicable under the Second Priority Notes, shall be added
          to the Obligations.  All such premiums, together with interest
          thereon as aforesaid, shall be (i) a charge on the Collateral
          secured hereby prior to any right or title to, interest in, or
          claim upon any of the Collateral subordinate to the Security
          constituted by this Debenture and (ii) payable on demand.

     (d)  If the Collateral, or any portion thereof, shall be destroyed or
          damaged by fire or any other casualty, the Company shall, except as
          provided below and provided that the insurance proceeds are made
          available to the Company in accordance with the terms of


                                       18

<PAGE>



          the Second Priority Note Indenture (provided that the Company agrees
          to use reasonable efforts to provide the Officers' Certificate
          described in Section 11.03(a) of the Second Priority Note Indenture
          and provided further that if the Company is unable, in the reasonable
          opinion of the Board of Directors of the Company, to provide the
          certification described at Section 11.03(a)(v) of the Second Priority
          Note Indenture, then the Company shall have no obligation hereunder to
          restore, repair or replace the property as to which the Company is
          unable to give such certification, without regard to the availability
          of insurance proceeds in connection therewith) and are sufficient
          therefor (provided, however, that if the Company elects on the
          insurable portions of the Collateral not to carry casualty insurance
          (including other hazards insured under the then standard "Special"
          Form Causes of Loss or equivalent) in the amount of full replacement
          cost, then the Company shall be required to contribute to the costs of
          such restoration, repair or replacement, the difference between the
          proceeds actually paid out as a result of a loss and the proceeds
          which reasonably would have been paid out if the Company had carried
          such casualty insurance at full replacement cost (the "Insurance
          Standard") unless the Collateral Agent shall have consented to a
          standard less than the Insurance Standard, which consent shall not be
          unreasonably withheld, as determined by an independent insurance
          consultant designated by the Company in its reasonable discretion and
          at its sole expense), commence, within a reasonable time thereafter,
          and diligently pursue to completion the restoration, repair and
          replacement of the Collateral, or such portion thereof so that, and in
          such manner that, the Collateral shall be restored to an economically
          viable facility in the reasonable judgment of the Board of Directors
          of the Company and so that the value of any Trust Moneys remaining
          after restoration and the value of the Collateral after restoration,
          in the aggregate, are reasonably equivalent to the value of the
          Collateral immediately prior to any such casualty as determined in the
          reasonable judgment of the Board of Directors of the Company. The
          Company shall give immediate notice to the Collateral Agent of any
          such destruction or damage resulting in a loss in excess of
          Cdn.$6,000,000, who, subject to the provisions of the Collateral
          Agency Agreement, may (but shall not be obligated to) make proof of
          loss if not promptly made by the Company, and each insurance company
          concerned is hereby authorized and directed to make payment for any
          loss directly to the Collateral Agent. The Collateral Agent and the
          Company shall be entitled (but not obligated) to participate at the
          Company's reasonable expense, in the adjustment of any such loss in
          excess of Cdn.$6,000,000 and available insurance proceeds, if any,
          shall be paid in accordance with the terms and provisions of the
          Second Priority Note Indenture. In the case of any such loss of less
          than Cdn.$6,000,000 and provided no Event of Default hereunder shall
          have occurred and be continuing, the Company shall have the right to
          adjust such loss independently of the Collateral Agent and all such
          proceeds shall be paid directly to the Company. If a Major Casualty or
          Condemnation Event occurs with respect to the Collateral, the Company
          may elect, in lieu of restoring the Collateral, to prepay or defease
          its obligations under the Second Priority Notes in accordance with the
          terms and provisions of the Second Priority Note Indenture. In the
          event of any prepayment pursuant to the immediately preceding
          sentence, the Collateral Agent shall make the insurance proceeds or
          any


                                       19

<PAGE>



          part thereof received by the Collateral Agent in accordance with the
          provisions of the Second Priority Note Indenture and the Collateral
          Agency Agreement available for such purpose.

     (e)  The insurance required by this Debenture may be effected by
          blanket and/or umbrella policies issued to the Company or an
          affiliate of the Company covering the Collateral and other
          properties (real and personal) owned or leased by the Company;
          provided that any such blanket policy shall specify, except in
          the case of public liability insurance, the sub-limit, if any,
          of the total coverage afforded under such policy that is
          available in respect of any occurrence on or about or casualty
          to the Collateral and shall in any case comply in all other
          respects with the requirements of this Section 5.01.  Subject to
          the terms of the Collateral Agency Agreement, the Collateral
          Agent shall have no responsibility for determining compliance
          of such insurance with the terms of this Debenture.

     (f)  Any transfer of the Collateral by mortgage sale shall transfer
          therewith all of the Company's interest, including any unearned
          premiums, in all insurance policies then in force covering the
          Collateral, subject, however, to the approval of the insurance company
          issuing any such policy.

     (g)  If, in the reasonable opinion of the Board of Directors of
          the Company, any insurance coverage required to be maintained
          by the Company hereunder (i) becomes unavailable except upon
          payment of extraordinary premiums or (ii) is no longer
          customarily required by institutional lenders and obtained by
          persons owning or using facilities comparable in class and
          quality to facilities comprising part of the Collateral, then
          such insurance coverage shall be maintained by the Company only
          to the extent that the conditions set forth in either clause
          (i) or (ii) above are inapplicable.  Subject to the terms of the
          Collateral Agency Agreement, the Collateral Agent shall have no
          responsibility for determining satisfaction of any conditions or
          requirements of this Section 5.01(g).

     (h)  All insurance and condemnation award proceeds held by the Collateral
          Agent and any additional amounts deposited with the Collateral Agent
          by the Company in connection with any restoration of the Improvements
          shall be invested in accordance with the terms and provisions of the
          Second Priority Note Indenture pending their disposition in accordance
          with the terms thereof.

     (i)  Immediately upon obtaining knowledge of the institution of any
          proceedings for the condemnation or taking by eminent domain of
          any of the Freehold Lands, Leasehold Lands or any Improvements
          thereon, or any portion thereof, the Company shall notify the
          Collateral Agent of the pendency of such proceedings.  Except in
          the case of a Total Taking, the Company shall be required, to the
          extent practicable and to the extent condemnation awards or
          proceeds are made available to the Company and are sufficient
          therefore, to restore the Developed Premises to the full extent
          provided by Section 5.01(d) in the case of casualty events.  The
          Collateral Agent shall be entitled (but not obligated) to
          participate, at the Company's reasonable expense, with the
          Company in any such proceedings where the amount in controversy
          exceeds Cdn.$6,000,000, and the Company shall from time to time


                                       20

<PAGE>



          deliver to the Collateral Agent all instruments requested by it to
          permit such participation. The Company shall, at its expense,
          diligently prosecute any such proceedings, as appropriate, and shall
          consult with the Collateral Agent, its attorneys and experts and shall
          cooperate with the Collateral Agent in any reasonable defense of any
          such proceedings. In any case, the award of compensation, if any,
          shall be paid to the Collateral Agent on behalf of the Second Priority
          Note Trustee or as otherwise provided pursuant to the Second Priority
          Note Indenture and shall be disbursed to the Company pursuant to the
          terms and provisions of the Second Priority Note Indenture.


6.01 Collateral Agent's Costs and Expenses

     Upon the occurrence of any Event of Default hereunder or if any action or
proceeding be commenced, to which action or proceeding the Collateral Agent is
or becomes a party or in which it becomes necessary to defend or uphold the
Security constituted by this Debenture or upon the occurrence and in connection
with any condemnation or eminent domain proceeding with respect to which the
Collateral Agent reasonably elects to participate or otherwise become involved,
all reasonable costs, expenses and fees incurred by the Collateral Agent in
connection therewith, including, without limitation, for the enforcement of the
Security and for the repossession, holding, repairing, processing, preparing for
disposition and disposing of any of the Collateral (including reasonable legal
fees and disbursements and the reasonable fees and disbursements of all other
professional advisors retained by the Second Priority Note Trustee or the
Collateral Agent), shall be paid or reimbursed by the Company and unless and
until so paid shall be added to the Obligations secured hereby. All such
amounts, together with interest thereon as aforesaid, shall be (i) secured by a
charge on the Collateral prior to any right or title to, interest in, or claim
upon any of the Collateral subordinate to the Security constituted by this
Debenture and (ii) payable on demand.

7.01 Collateral Agent's Right to Perform

     If any Event of Default hereunder shall have occurred and be continuing,
the Collateral Agent, without waiving or releasing the Company from any
obligation or default under this Debenture, may (without being obligated to do
so) upon at least ten (10) days' prior written notice to the Company (except in
the case of an Event of Default, which if left unremedied, would reasonably be
expected to (a) affect the priority of the Security or (b) materially and
adversely affect the value of any of the Developed Premises, in which case no
prior notice shall be necessary) it being understood that said notice may be
given prior to a Default becoming an Event of Default pursuant to the terms
hereof, perform the same, and the cost thereof, together with interest at the
interest rate applicable under the Second Priority Notes, shall be paid or
reimbursed by the Company and unless and until so paid shall be added to the
Obligations secured hereby. All such amounts, together with interest thereon as
aforesaid, shall be (i) secured by a charge on the Collateral prior to any right
or title to, interest in, or claim upon any of the Collateral subordinate to the
Security constituted by this Debenture and (ii) payable on demand. No payment or
advance of money by the Collateral Agent under this Section 7.01 shall be deemed
or construed to cure the Company's default or waive any right or remedy of the
Collateral Agent hereunder.



                                       21

<PAGE>



8.01 Events of Default

     The occurrence of an "Event of Default" as defined in the Second Priority
Note Indenture shall be an "Event of Default" hereunder. Notwithstanding
anything to the contrary contained herein, in the Second Priority Note
Indenture, the Collateral Agency Agreement or in any other document executed in
connection herewith, for purposes of determining whether an Event of Default
shall have occurred under the Second Priority Note Indenture, the Company's
failure to perform or comply with any of its agreements contained herein shall
not be deemed to continue past the 60-day grace period provided for in Section
6.01(5) of the Second Priority Note Indenture if any such failure cannot
reasonably be cured within such 60-day period and such failure does not affect
the priority of the Security constituted by this Debenture, so long as the
Company, upon receiving written notice with respect thereto under the Second
Priority Note Indenture, promptly commences and diligently pursues such cure to
completion. Notwithstanding anything to the contrary contained in this Section
8.01, it shall be an Event of Default hereunder if the Company fails, in any
material respect, to maintain the insurance coverage on the Collateral required
pursuant to Section 5.01 and after receiving written notice from the Collateral
Agent with respect thereto, fails within two (2) business days to cure such
failure.

9.01 Enforcement of Security

     Upon the occurrence of an Event of Default, the Collateral Agent may,
subject to the terms of the Collateral Agency Agreement and the Second Priority
Note Indenture, declare the Second Priority Notes and any amounts owing under
the Second Priority Note Indenture and this Debenture, or any part thereof, to
be immediately due and payable, whereupon the Security shall immediately become
enforceable and so long as it remains enforceable, the Collateral Agent may,
subject to provisions of the Second Priority Note Indenture and the Collateral
Agency Agreement and applicable law, exercise in its sole discretion the
following rights and remedies (which may be exercised either independently or
concurrently):

          (a)  Take Possession:  immediately enter upon and take possession
               of the Collateral or any part thereof and exclude the
               Company and all persons claiming under the Company
               therefrom; hold, operate and manage the Collateral and from
               time to time make all necessary repairs, alterations,
               additions and improvements thereto; collect, sue for,
               recover and receive the Rents, income and profits therefrom
               and use the same to pay all proper and reasonable costs and
               expenses of so taking, holding, operating and managing the
               Collateral, including the reasonable expenses and
               compensation of the Collateral Agent, its agents and
               solicitors, and any taxes, assessments and other charges
               which the Collateral Agent may, in its reasonable discretion,
               deem it wise to pay, and apply the remainder of the moneys so
               received as provided in the Collateral Agency Agreement and
               the Second Priority Note Indenture;

          (b)  Disposition: to the extent and in the manner permitted by
               applicable law (the power of sale and other powers conferred on
               the Collateral Agent by virtue of the Property Act (New
               Brunswick) as in force from time to time being incorporated
               herein by reference) (provided, however, that,


                                       22

<PAGE>



               in the event that any of the following provisions are more
               restrictive with respect to the exercise by the Collateral Agent
               of its rights pursuant thereto, then the following notice,
               provisions, limitations and other restrictions shall govern),
               sell, lease or otherwise dispose of the Collateral or any part
               thereof or interest therein at public auction or by public tender
               to the highest bidder for cash or upon credit or by private
               disposition or auction but only after demand and only upon not
               less than 30 days' prior written notice to the Company setting
               forth the date, time, place, and manner of disposition upon such
               terms as the Collateral Agent may, acting in a commercially
               reasonable manner, approve and whether or not the Collateral
               Agent has taken possession of the Collateral, and upon such
               disposition the Collateral Agent shall make and deliver to the
               purchaser or purchasers or lessee or lessees a good and
               sufficient deed or deeds (or other instrument or instruments of
               transfer or lease, as the case may be) for the same. The
               Collateral Agent is hereby irrevocably appointed the true and
               lawful attorney of the Company, in its name and stead, to make
               all necessary conveyances, assignments, leases and transfers of
               property thus disposed of; and for that purpose it may execute
               all necessary deeds, bills of sale, and instruments of
               assignment, lease and transfer, and may substitute one or more
               persons with like power, the Company hereby ratifying and
               confirming all that its said attorney, or such substitute or
               substitutes, shall lawfully do by virtue hereof. Nevertheless, if
               so requested by the Collateral Agent or any purchaser or lessee
               of the Collateral or any part thereof, the Company shall ratify
               and confirm any such disposition by executing and delivering to
               the Collateral Agent or such purchaser or lessee all proper
               conveyances, assignments, instruments of transfer, leases and
               releases as may be designated in any such request.

          (c)  Appointment of Receiver, Etc.:  by instrument in writing
               appoint any Person, whether an officer or employee of the
               Collateral Agent or not, to be a receiver (which term shall
               include a receiver and manager or receiver/manager) of the
               Collateral or of any part thereof and remove any receiver
               so appointed and appoint another in his stead; and, subject
               to the provisions of the instrument appointing such receiver,
               any such receiver so appointed shall have (to the extent
               permitted by law):

                    (i)  the same rights and powers as are conferred on the
                         Collateral Agent by law or pursuant to Sections 9.01(a)
                         and (b); and

                    (ii) the power to borrow money on the security of the
                         Collateral and in priority to this Debenture for the
                         purpose of the maintenance, preservation or protection
                         of the Collateral or any part thereof or for carrying
                         on all or any part of the business of the Company
                         relating to the Collateral (and in so doing the
                         receiver may issue certificates called "Receiver's
                         Certificates"). Receiver's Certificates may be payable
                         either to order or to bearer and may be payable at such
                         time or times as the receiver may think expedient


                                       23

<PAGE>



                         and shall bear interest as shall be stated therein and
                         the amounts from time to time payable by virtue of
                         Receiver's Certificates shall form a charge upon the
                         Collateral in priority to the Security of this
                         Debenture;

provided that such receiver shall be deemed the agent of the Company and not
that of the Collateral Agent and the Collateral Agent shall not be in any way
responsible for any misconduct, negligence or non-feasance of any such receiver,
his servants, agents or employees. To facilitate the foregoing powers, any such
receiver may, to the exclusion of all others, including the Company, enter upon,
use and occupy all premises owned or occupied by the Company wherein the
Collateral may be situate, maintain the Collateral upon such premises, borrow
money and use the Collateral directly in carrying on the Company's business or
as security for loans or advances to enable him to carry on the Company's
business or otherwise, as such receiver shall, in his discretion, determine.
Except as may be otherwise directed by the Collateral Agent, the net profits of
carrying on the said business and the net proceeds of sale shall be paid by the
receiver to the Collateral Agent to be held and distributed in accordance with
the provisions of the Collateral Agency Agreement and the Second Priority Note
Indenture;

          (d)  Further Rights:  exercise any of the other rights to
               which the Collateral Agent is entitled as holder of this
               Debenture, including the right to take proceedings in any
               court of competent jurisdiction for the appointment of a
               receiver and manager, for the sale of the Collateral or any
               part thereof and the right to take any other action, suit,
               remedy or proceeding authorized or permitted thereunder or
               by law or in equity in order to enforce the Security;

provided, that the Collateral Agent shall not be liable or accountable for any
failure to collect, enforce the Security or realize on any Collateral and shall
not be bound to institute proceedings for the purpose of collection, enforcing
the Security or realizing on the same for the purpose of preserving any right of
the Collateral Agent, the Company or any other Person in respect of the same,
and shall have no obligation to take any steps to preserve rights against prior
parties to any debt, instrument or chattel paper whether Collateral or the
proceeds thereof and whether or not in the Collateral Agent's possession and
shall not be liable or accountable for any delay in or failure to do so.

10.01     Proceeds of Disposition

     The proceeds of any disposition of the Collateral or any part thereof or
any interest therein, together with any other moneys at the time held by the
Collateral Agent as part of the Collateral, shall (except as otherwise provided
herein) be applied in accordance with the terms and provisions of the Second
Priority Note Indenture and the Collateral Agency Agreement except as required
by applicable law.




                                       24

<PAGE>



11.01     Deficiency

     If the proceeds of disposition of the Collateral and any other moneys held
by the Collateral Agent are insufficient to satisfy the Obligations in full, the
Company shall remain liable to pay any deficiency to the Collateral Agent on
behalf of the Second Priority Note Trustee for the benefit of the holders of the
Second Priority Notes forthwith on demand.

12.01     Discharge

     If the Company pays and performs the Obligations in full and the conditions
for the satisfaction and discharge of the Second Priority Note Indenture have
been satisfied, and otherwise observes and performs the terms and conditions
hereof, then the Collateral Agent shall, at the request and at the expense of
the Company, cancel and discharge the Security and execute and deliver to the
Company such deeds and other instruments that shall be requisite therefor;
provided that until such cancellation and discharge this Debenture shall remain
in full force and effect. Notwithstanding anything herein to the contrary, the
Collateral, or any part thereof, may only be, and shall be, released or
discharged from the terms of this Debenture only in accordance with the
provisions relating to the release or discharge of Collateral contained in the
Second Priority Note Indenture.

13.01     Waiver

     No waiver of any provision of this Debenture shall be effective unless it
is in writing, makes express reference to the provision affected thereby and is
signed by the Collateral Agent, and then such waiver shall be effective only in
the specific instance and for the specific purpose for which given. No waiver
shall be taken in any manner whatsoever to affect any subsequent breach of any
provision of the Debenture or the rights resulting therefrom.

14.01     Transfers, Subordinate Security

     Except as permitted in the Second Priority Note Indenture, the Company will
not, directly or indirectly, (i) sell, assign, convey, transfer or otherwise
dispose of legal or equitable title to any of the Collateral, or (ii) mortgage,
hypothecate or otherwise encumber or grant a security interest in any of the
Collateral.

15.01     Notices

     Any notice or demand required or permitted to be given or made by the
Collateral Agent to the Company shall be given and be deemed to be received in
the manner prescribed in the Collateral Agency Agreement.

16.01     Successors and Assigns

     This Debenture shall enure to the benefit of and be binding upon the Second
Priority Note Trustee, the Collateral Agent and the Company and their respective
successors and assigns.




                                       25

<PAGE>



17.01     Amendments

     No amendment of any provision of this Debenture shall be made except in
accordance with the provisions of the Second Priority Note Indenture and only by
a written agreement executed by the parties hereto.

18.01     Severability

     In the event that any provision of this Debenture, as amended from time to
time, shall be deemed invalid or void, in whole or in part, by any court of
competent jurisdiction, the remaining provisions of this Debenture shall remain
in full force and effect.

19.01     Governing Law

     This Debenture shall be governed in all respects by the laws of the
Province of New Brunswick and the laws of Canada applicable therein.

20.01     Receipt of Copy

     The Company acknowledges that it has received a true copy of this
Debenture.

21.01     Collateral Agent's Capacity and Disclaimers

     The Collateral Agent is acting hereunder in its capacity as the Collateral
Agent under the Collateral Agency Agreement and any duties and obligations of
the Collateral Agent hereunder are subject to all terms and provisions of the
Collateral Agency Agreement, which are incorporated herein by reference. The
Collateral Agent shall not be responsible for and makes no representation as to
the validity or adequacy of this Debenture, shall not be responsible for the use
by the Company of any funds payable to or retainable by the Company hereunder
and shall not be responsible for the accuracy of any statements, certifications
or other information provided to it by the Company or any other person pursuant
hereto. In the absence of bad faith, the Collateral Agent may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Collateral Agent
hereunder and conforming to the requirements hereof. Any reference herein to
knowledge of the Collateral Agent with respect to any circumstance, fact or
event shall mean the actual knowledge of a responsible officer in the Corporate
Trust Department of the Collateral Agent. The Collateral Agent undertakes to
perform such duties, and only such duties, as are specifically set forth herein,
in the Second Priority Note Indenture and in the Collateral Agency Agreement,
and no implied covenants or obligations shall be read into this Debenture
against the Collateral Agent.


                                       26

<PAGE>



     
                                  SCHEDULE "D"

                                    RECITALS

A.   The Company and The Bank of New York, as trustee (together with any
     successors and assigns in such capacity, the "First Priority Floating Rate
     Note Trustee") have entered into a certain indenture (as amended from time
     to time, the "First Priority Floating Rate Note Indenture") dated as of
     April 15, 1995, pursuant to which the Company has issued First Priority
     Floating Rate Senior Secured Notes Due 2000 (the "First Priority Floating
     Rate Notes") in the aggregate principal amount of U.S.$150,000,000.

B.   The Company and The Bank of New York, as trustee (together with any
     successors and assigns in such capacity, the "First Priority Fixed
     Rate Note Trustee", together with the First Priority Floating Rate
     Note Trustee, the "First Priority Note Trustees") have entered into
     a certain indenture (as amended from time to time, the "First
     Priority Fixed Rate Note Indenture" and, together with the First
     Priority Floating Rate Note Indenture, the "First Priority Note
     Indentures") dated as of April 15, 1995, pursuant to which the
     Company has issued 9 7/8% First Priority Fixed Rate Senior Secured
     Notes Due 2000 (the "First Priority Fixed Rate Notes" and, together
     with the First Priority Floating Rate Notes, the "First Priority
     Notes") in the aggregate principal amount of U.S.$150,000,000.

C.   The Company and Bankers Trust Company, as trustee (together with
     any successors and assigns in such capacity, the "Second Priority
     Note Trustee", together with the First Priority Note Trustees, the
     "Trustees") have entered into a certain indenture (as amended from
     time to time, the "Second Priority Note Indenture" and, together
     with the First Priority Note Indentures, the "Indentures") dated as
     of April 15, 1995, pursuant to which the Company has issued 10 5/8%
     Second Priority Senior Secured Notes Due 2005 (the "Second Priority
     Notes") in the aggregate principal amount of U.S.$350,000,000.

D.   Simultaneously with the execution and delivery of this Debenture,
     the Company, the Trustees and The Bank of New York, in its capacity
     as collateral agent (the "Collateral Agent"), have entered into a
     certain Collateral Agency and Intercreditor Agreement (as amended
     from time to time, the "Collateral Agency Agreement") dated as of
     April 15, 1995, providing, among other things, for the Collateral
     Agent to receive and hold in trust on behalf of the First Priority
     Floating Rate Note Trustee for the benefit of the holders of the
     First Priority Floating Rate Notes and in trust on behalf of the
     First Priority Fixed Rate Note Trustee for the benefit of the holders
     of the First Priority Fixed Rate Notes, mortgages, charges and
     assignments on or in respect of certain property of the Company as
     evidenced by a Debenture of the Company dated even date herewith
     (the "First Priority Debenture") as security for the First Priority
     Notes and to receive and hold in trust on behalf of the Second
     Priority Note Trustee for the benefit of the holders of the Second
     Priority Notes, mortgages, charges and assignments on or in respect
     of the same property of the Company as evidenced by this Debenture
     as security for the Second Priority Notes, which mortgages, charges
     and assignments of the First Priority Debenture shall be prior to
     this Debenture in accordance with the terms of the Indentures and
     the Collateral Agency Agreement.

E.   The mortgages, charges and assignments of this Debenture are given
     by the Company to secure (a) the repayment of all principal and
     payment of all interest, prepayment premiums, if any, and other
     amounts evidenced by the Second Priority Notes and all other sums
     due or to become due under the Second Priority Notes, and any
     renewals or extensions thereof, and the payment of all sums payable
     under this Debenture, the Collateral Agency Agreement (but only as
     it relates to the Second Priority Notes and the Second Priority Note
     Indenture) and the Second Priority Note Indenture, and (b) the


                                       27

<PAGE>



     performance of all covenants, agreements, obligations and liabilities of
     the Company under or pursuant to this Debenture, the Collateral Agency
     Agreement (but only as it relates to the Second Priority Notes and the
     Second Priority Note Indenture), the Second Priority Note Indenture or any
     other instruments or documents securing payment of the Second Priority
     Notes (collectively, the "Obligations").



                                       28

<PAGE>
                               SCHEDULE "F"

     (a)  As continuing security for the due payment and performance of the
          Obligations, the Company hereby:

          (i)  grants, mortgages and charges as and by way of a second fixed
               and specific mortgage and charge to and in favour of the
               Collateral Agent, all right, title and interest, now existing or
               after-acquired, of the Company in and to: 

               (A)  all freehold real property and all leaseholds of real
                    property, including, but not limited to, the freehold and
                    leasehold lands and premises described in Schedule "A"
                    hereto (the freehold real property subject to the fixed
                    mortgage and charge being collectively referred to herein as
                    the "Freehold Lands" and the leaseholds of real property
                    subject to the fixed mortgage and charge being collectively
                    referred to herein as the "Leasehold Lands"); 

               (B)  all buildings, improvements, erections, structures and
                    fixtures now or hereafter constructed or placed on the
                    Freehold Lands or the Leasehold Lands (collectively, the
                    "Improvements");

               (C)  all of the Company's present and after-acquired personal
                    property (other than inventory, accounts receivable arising
                    from the sale or lease of, or otherwise relating to,
                    inventory, insurance in respect of such inventory and
                    accounts receivable, records relating to such inventory,
                    accounts receivable and insurance, substitutions and
                    replacements of, and property derived from dealings with,
                    such inventory, accounts receivable, insurance and records
                    and claims, choses in action and security for such
                    inventory, accounts receivable, insurance, records and other
                    property); 

               (D)  Crown Timber Licences Number 3 and Number 4 issued to
                    the Company pursuant to the Crown Lands and Forests Act of
                    New Brunswick (the "Crown Timber Licences");
                  
               (E)  all replacements of, substitutions for and increases,
                    additions and accessions to any of the property described in
                    clauses (i)(A) to (i)(D) inclusive above; and 

               (F)  all proceeds of any of the property described in clauses
                    (i)(A) to (i)(E) inclusive above stated to be subject to the
                    fixed and specific mortgage and charge created hereby, in
                    any form derived directly or indirectly from any dealing
                    with such property or that indemnifies or compensates for
                    the loss of or damage to such property including, without
                    limitation, proceeds of insurance, and the right to collect
                    and receive the same, and all awards or other compensation
                    including the interest payable thereon and the right to
                    collect and receive the same, heretofore and hereafter made
                    with respect to the taking by eminent domain, condemnation
                    or otherwise of such property by the Government of Canada,
                    the government of any province, or any municipality or other
                    governmental authority;

     (ii) charges as and by way of a floating charge to and in favour of
          the Collateral Agent, all its undertaking, property and assets, both
          present and after-acquired, of whatsoever nature and kind and
          wheresoever situate (other than (A) inventory, accounts receivable
          arising from the sale or lease of, or otherwise relating to,
          inventory, insurance in respect of such inventory and accounts
          receivable, records relating to such inventory, accounts receivable
          and insurance, substitutions and replacements of, and property derived
          from dealings with, such inventory, accounts receivable, insurance and
          records and claims, choses in action and security for such inventory,
          accounts receivable, insurance, records and other property (B) such of
          the undertaking, property and assets of the Company that is
          effectively and validly subject to the fixed and specific mortgage and
          charge created under clause (i) above, and (C) the property that is
          excluded from the Security pursuant to paragraph (b) below);

    (iii) assigns to the Collateral Agent all right, title and interest, now
          existing or after-acquired, of the Company as landlord or licensor, as
          the case may be, in (A) all leases, subleases or other agreements for
          the lease, use or occupancy of any of the Freehold Lands or the
          Leasehold Lands or any part thereof or space therein, whether written
          or oral, and as amended and renewed from time to time (collectively,
          the "Leases"), (B) all rents and other amounts owing from time to time
          under the Leases, and (C) every guarantee of the payment of the Rents
          or performance and observance of the covenants, conditions and
          agreements to be performed by any parties thereto other than the
          Company (such rents and other amounts and the benefit of all
          guarantees, conditions and agreements being hereinafter collectively
          referred

                                       29

<PAGE>



          to as the "Rents"); provided, that so long as no Event of Default has
          occurred and is continuing, the Company shall have the right to
          collect, sue for, recover and retain all Rents, give receipts therefor
          and to enforce payment thereof.

    The fixed and specific mortgage and charge, floating charge and assignment
created by this Debenture are collectively referred to herein as the "Security"
and the property, both real and personal, subject to such fixed and specific
mortgage and charge, floating charge or assignment is collectively referred to
herein as the "Collateral".

     (b)  The Security shall not apply to:

          (i)  any property or assets acquired by the Company after the date
               hereof to the extent that within 30 days after the date of
               acquisition the Company transfers such property or assets to a
               Person and then leases them back from such Person; and

          (ii) the last day of the term of any lease or any agreement therefor
               now held or hereafter acquired by the Company, provided that the
               Company shall stand possessed of the reversion remaining in the
               Company of any leasehold interest forming part of the Collateral
               upon trust to assign and dispose thereof as the Collateral Agent
               shall direct; and upon any sale or sales of such leasehold
               interest or any part thereof, the Collateral Agent, for the
               purpose of vesting the aforesaid reversion of such term or any
               renewal thereof in any purchaser or purchasers thereof, shall be
               entitled by deed or writing to appoint such purchaser or
               purchasers or any other person or persons a new trustee or
               trustees of the aforesaid reversion or any renewal thereof in the
               place of the Company and to vest the same accordingly in the new
               trustee or trustees so appointed, freed and discharged from any
               obligation respecting the same.

Notwithstanding the Principal Sum as set out in this Debenture, the charges on
the Crown Timber Licenses under this Debenture shall be limited to the amount
set out in the Order of the Lieutenant Governor-in-Council of the Province of
New Brunswick dated April 6, 1995 being Order-in-Council 95-430 as amended by
Order-in-Council 95-433 dated April 13, 1995 namely the sum of three hundred
fifty million dollars (U.S.$350,000,000.00) in lawful money of the United
States. Provided however that in the event the said Order-in-Council is further
amended by increasing the said sum of three hundred fifty million dollars
(U.S.$350,000,000.00) in lawful money of the United States to the Principal Sum,
and the Minister of Natural Resources of the Province of New Brunswick gives his
written consent to such increase, the charges in this Debenture on the Crown
Timber Licenses shall thereafter be for the full Principal Sum.



                                       30