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                                                                      EXHIBIT 15

                         AGGREGATE REPRICING AGREEMENT

This Agreement is made as of the 14th day of May, 2003

BETWEEN                 NORSKE SKOG CANADA FINANCE LIMITED
                                  ("NSCFL")

AND                     ROYAL BANK OF CANADA
                        HSBC BANK CANADA
                        THE TORONTO-DOMINION BANK
                        CANADIAN IMPERIAL BANK OF COMMERCE
                        BANK OF AMERICA, N.A., CANADA BRANCH
                        as "Hedging Parties'"

AND                     ROYAL BANK OF CANADA
                        as "Group Valuation Agent"

WHEREAS NSCFL and the Hedging Parties or their affiliates are party to a credit
agreement dated as of July 19, 2002 (as amended, supplemented, restated or
replaced from time to time, the "Credit Agreement");

AND WHEREAS the terms and conditions of the Credit Agreement permit NSCFL to
enter into Hedging Transactions with one or more of the Hedging Parties;

AND WHEREAS the Credit Agreement requires that Hedging be parties Parties to
this Aggregate Repricing Agreement if they enter into Special Derivatives NSCFL
with and permits, into but does not require, Hedging Parties to be parties if
they are only entering Hedging Transactions that are not Special Derivatives;

AND WHEREAS NSCFL has agreed to the repricing arrangements as more fully
described herein;

AND WHEREAS the terms and conditions of each ISDA Agreement may NSCFL to
reprice, terminate or transfer Hedging Transactions in accordance with the
repricing arrangements set forth in such ISDA Agreement;

AND WHEREAS the parties hereto agree that the Group Valuation Agent will perform
certain calculations and reporting on behalf of the Hedging Parties;

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
representations, warranties and covenants contained herein and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by each of the parties), the parties hereto agree as follows:

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1.    DEFINED TERMS AND INTERPRETATION

(a)   Hedging Transactions and Hedging Parties. Unless otherwise expressly
indicated in this Aggregate Repricing Agreement, all references to Hedging
Transactions and Hedging Parties apply to all Hedging Transactions and Hedging
Parties, whether or not the relevant Hedging Parties are parties hereto. While
Hedging Parties who are not parties hereto may agree in the Credit Agreement to
specific terms of this Aggregate Repricing Agreement that are incorporated by
reference in the Credit Agreement, they are not bound by this Aggregate
Repricing Agreement.

(b)   Calculation. The purpose of this Aggregate Repricing Agreement is, in
part, to address amounts payable by NSCFL to Hedging Parties in respect of
Hedging Transactions, i.e. amounts by which NSCFL is "out of the money." Amounts
payable by NSCFL shall be expressed as positive numbers in this Aggregate
Repricing Agreement, while amounts payable by Hedging Parties to NSCFL
(i.e. where NSCFL is "in the money")shall be expressed as negativenumbers.
Negative numbers shall be netted against positive numbers in determining
aggregate amounts owing by NSCFL to individual Hedging Parties in respect of
multiple Hedging Transactions(any aggregate amount being expressed as a negative
number if NSCFL is "in the money" on an aggregate basis with an individual
Hedging Party) and in determining aggregate amounts owing by NSCFL to all
Hedging Parties. For example, in calculating the Hedging Transaction Exposure
for a Hedging Party, if it was party to two Hedging Transactions and NSCFL owed
CAD 5,100,000 in respect of one Hedging Transaction and was owed CAD 2,700,000
in respect of the other,the Hedging Transaction Exposure would be CAD 5,100,000
minus CAD 2,700,000 or CAD 2,400,000. If another Hedging Party was a party to
one Hedging Transaction and owed NSCFL CAD 1,300,000 in respect of that Hedging
Transaction, its Hedging Transaction Exposure would be negative CAD 1,300,000.
If there were only those two Hedging Parties, the Aggregate Hedging Transaction
Exposure would be CAD 2,400,000 minus CAD 1,300,000 or CAD 1,100,000 and the
Aggregate Positive Hedging Transaction Exposure would be CAD 2,400,000.

(c)   Defined Terms. All capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to them in the ISDA Agreement. In addition,

      "Administration Agent" means the "Agent" under the Credit Agreement.

      "Aggregate Hedging Transaction Exposure" means, as of any Valuation Date,
      the net amount calculated in accordance with Section 1(b) above by
      aggregating all Hedging Parties' Hedging Transaction Exposures.

      "Aggregate Positive Hedging Transaction Exposure" means, as of any
      Valuation Date, the sum of all Positive Hedging Transaction Exposures
      under each ISDA Agreement.

      "Aggregate Positive Special Derivative Exposure" means, as of any
      Valuation Date, the sum of all Positive Special Derivative Exposures.

      "Aggregate Special Derivative Exposure" means as of any Valuation Date,
      the net amount calculated in accordance with Section 1(b) above by
      aggregating all Hedging Parties' Special Derivative Exposures.
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      "Excess Credit Agreement Exposure Amount" means the amount, as determined
      by the Administration Agent pursuant to Section 7.7.2 of the Credit
      Agreement, by which the Aggregate Hedging Transaction Exposure needs to be
      reduced in order to satisfy the requirements under Section 7.7.2 of the
      Credit Agreement.

      "Excess Hedging Transaction Exposure" means (subject to Section 5(e)
      below) the Aggregate Hedging Transaction Exposure minus CAD 135,000,000.

      "Excess Special Derivative Exposure" means the Aggregate Special
      Derivative Exposure minus the Permitted Special Derivative Exposure plus
      CAD 15,000,000.

      "Floating Rate Transaction" means any interest rate swap Hedging
      Transaction under which the obligation of NSCFL is to pay a floating
      interest rate.

      "Hedging Party" means each person that enters into a Hedging Transaction
      with NSCFL.

      "Hedging Transaction" means any transaction entered into by NSCFL that is
      an "Other Secured Obligation" as defined in Section 1.1.79 of the Credit
      Agreement, and, for greater certainty, includes without limitation all
      Special Derivatives.

      "Hedging Transaction Exposure" means, with respect to a Hedging Party on
      any Valuation Date, the estimated net amount that would be payable to or
      by that Hedging Party pursuant to Section 6(e)(ii)(2)(A)of an ISDA
      Agreement to which it is a party as if such ISDA Agreement and all Hedging
      Transactions thereunder were being terminated; provided that, in
      estimating the amount that would be payable, the Group Valuation Agent
      shall use its estimates at mid-market of the amounts that would be paid
      for Replacement Transactions (as defined within the definition of "Market
      Quotation" in the ISDA Agreement) in respect of all Hedging Transactions.
      In addition, if any Hedging Transaction is terminated other than as
      required by this Aggregate Repricing Agreement, it shall be considered not
      to have been terminated for the purposes of calculating the Hedging
      Transaction Exposure until any amount payable by NSCFL to the Hedging
      Party as a result of the termination has been paid.

      "ISDA Agreement" means the 1992 ISDA Master Agreement entered into between
      the relevant Hedging Party and NSCFL in respect of one or more Hedging
      Transactions, except that, for the purposes of this Aggregate Repricing
      Agreement, any Hedging Transaction shall be deemed to be governed by the
      1992 ISDA Master Agreement in the form attached hereto if the relevant
      Hedging Party has not entered into a 1992 ISDA Master Agreement and to the
      extent that there is a relevant difference between the 1992 ISDA Master
      Agreement entered into and the form attached hereto.

      "Oil and Gas Transaction" means any Hedging Transaction under which the
      obligations of the parties are derived from the price of oil or natural
      gas.

      "Permitted Special Derivative Exposure" means (subject to Sections 5(e)
      and 6(b) below), as of any Valuation Date, an amount determined by the
      following formula:

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            CAD 135,000,000-(an aggregate amount determined by adding the
            amounts calculated by multiplying the notional amount of each
            Special Derivative outstanding on such Valuation Date, subject to
            the adjustments referred to immediately below, by the volatility
            factor for that type of Special Derivative established in accordance
            with the attached Schedule A and Section 6(b) below)

      For the purpose of the foregoing formula, the notional amount shall be the
      notional amount specified in the terms of the relevant Special Derivative,
      converted to Canadian dollars if necessary using the Group Valuation
      Agent's mid rate (i.e. the average of the Group Valuation Agent's spot
      buying and selling rates) at the relevant time. If the notional amount is
      expressed in units of a commodity rather than in currency, the notional
      amount shall be determined by multiplying the notional amount expressed in
      units by the fixed price per unit to be paid to or received by NSCFL for
      the commodity under the relevant Special Derivative. In addition, in
      determining the notional amount of Special Derivatives for the purpose of
      the foregoing formula:

            (A)   the Group Valuation Agent shall net commodity purchase Special
                  Derivatives entered into by NSCFL against commodity sale
                  Special Derivatives entered into by NSCFL (whether or not with
                  the same Hedging Party), where (a) the commodities that are
                  the subject of the relevant Special Derivatives are determined
                  by the Group Valuation Agent to be the same in all material
                  respects and (b) either (i) the settlement dates of both the
                  commodity sale Special Derivatives and the commodity purchase
                  Special Derivatives to be netted are at least 45 days after
                  the Valuation Date or (ii) the settlement dates of the
                  commodity sale Special Derivatives and the commodity purchase
                  Special Derivatives to be netted are within five Local
                  Business Days of each other, and the Group Valuation Agent
                  shall apply the volatility factor to the net notional amount
                  and include only the resulting amount in the foregoing
                  formula; and

            (B)   if NSCFL has entered into other Special Derivatives that do
                  not fall within item (A) above, but relate to commodities of
                  the same type (each of Oil and Gas Transactions, Pulp and
                  Paper Transactions, and other types established under section
                  6(b) below being deemed to be the same type), the Group
                  Valuation Agent shall add the notional amounts of those
                  Special Derivatives of each type in which NSCFL's role is
                  seller and those in which its role is buyer and shall not
                  apply the volatility factor to, or include in the foregoing
                  formula, those Special Derivatives of each type having the
                  smaller sum of notional amounts. For example, if the aggregate
                  notional amount of Pulp and Paper Transactions that do not
                  fall within item (A) above where NSCFL is seller is smaller
                  than the aggregate notional amount of those Pulp and Paper
                  Transactions where NSCFL is buyer, and the aggregate notional
                  amount of Oil and Gas Transactions that do not fall within
                  item (A) above where NSCFL is buyer is smaller than the
                  aggregate notional amount of those Oil and Gas Transactions
                  where NSCFL is seller, the Group Valuation Agent shall not
                  apply the respective volatility factors to, or include in the
                  foregoing formula, the Pulp and Paper Transactions that do not
                  fall within item (A) above where NSCFL is seller or the Oil
                  and Gas Transactions that do not fall within item (A) above
                  where NSCFL is buyer.

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      "Positive Hedging Transaction Exposure" means, as of any Valuation Date,
      the amount that would be payable, if any, to a Hedging Party (but not by a
      Hedging Party) as a result of the calculation of the Hedging Transaction
      Exposure of such Hedging Party.

      "Positive Special Derivative Exposure" means, as of any Valuation Date,
      the amount that would be payable, if any, to a Hedging Party (but not by a
      Hedging Party) as a result of the calculation of the Special Derivative
      Exposure of such Hedging Party.

      "Pro Rata Excess Credit Agreement Exposure Amount" means, in respect of a
      Hedging Party, the amount determined by the following formula, rounded up
      to the nearest integral multiple of CAD 100,000:

            Excess Credit Agreement Exposure Amount X (the Positive Hedging
            Transaction Exposure applicable to such Hedging Party / the
            Aggregate Positive Hedging Transaction Exposure)

      "Pro Rata Hedging Transaction Exposure Reduction Amount" means, in respect
      of a Hedging Party, the amount determined by the following formula,
      rounded up to the nearest integral multiple of CAD 100,000:

            Excess Hedging Transaction Exposure X (the Positive Hedging
            Transaction Exposure applicable to such Hedging Party / the
            Aggregate Positive Hedging Transaction Exposure)

      "Pro Rata Special Derivative Exposure Reduction Amount" means, in respect
      of a Hedging Party the amount determined by the following formula, rounded
      up to the nearest integral multiple of CAD 100,000:

            Excess Special Derivative Exposure X (the Positive Special
            Derivative Exposure applicable to such Hedging Party / the Aggregate
            Positive Special Derivative Exposure)

      "Pulp and Paper Transaction" means any Hedging Transaction under which the
      obligations of the parties are derived from the price of pulp or paper.

      "Special Derivative" means a Hedging Transaction described in Sections
      1.1.79(c), 1.1.79(d) and 1.1.79(e) of the Credit Agreement and entered
      into by NSCFL, and "Special Derivatives" means all such Hedging
      Transactions.

      "Special Derivative Exposure" means, with respect to a Hedging Party on
      any Valuation Date, the estimated net amount that would be payable to or
      by that Hedging Party pursuant to Section 6(e)(ii)(2)(A) of the ISDA
      Agreement as if such ISDA Agreement and all Special Derivatives thereunder
      (but no other Hedging Transactions) were being terminated; provided that,
      in estimating such amount that would be payable, the Group Valuation Agent
      shall use its estimates at mid-market of the amounts that would be paid
      for Replacement Transactions in respect of all Special Derivatives. In
      addition, if any Special Derivative is terminated other than as required
      by this Aggregate Repricing Agreement, it shall be considered not to have
      been terminated for the purposes of

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      calculating the Special Derivative Exposure until any amount payable by
      NSCFL to the Hedging Party as a result of the termination has been paid.

      "Valuation Date" means daily beginning on 14 May 2003 except that,
      if the then-current Aggregate Hedging Transaction Exposure and Aggregate
      Special Derivative Exposure are low in comparison to the maximum amounts
      permitted herein, the Group Valuation Agent may from time to time
      establish the Valuation Date as occurring not less frequently than
      monthly.

(d)   Interpretation. In the event of any inconsistency between the provisions
of this Aggregate Repricing Agreement and any ISDA Agreement the terms of this
Aggregate Repricing Agreement will prevail.

2.    EXPOSURE REDUCTION PAYMENT AND AMENDMENTS

(a)   Right to Demand Pro Rata Exposure Reduction Amount. The Group Valuation
Agent will, promptly following. (A) a Valuation Date on which the Aggregate
Hedging Transaction Exposure is greater than or equal to CAD 150,000,000 or (B)
a Valuation Date on which the Aggregate Special Derivative Exposure is greater
than the Permitted Special Derivative Exposure or (C) its receipt of a notice
from the Administration Agent that there is an Excess Credit Agreement Exposure
Amount,notify NSCFL of the Pro Rata Hedging Transaction Exposure Reduction
Amount, the Pro Rata Special Derivative Exposure Reduction Amount, or the Pro
Rata Excess Credit Agreement Exposure Amount, in each case, as applicable to
each Hedging Party. The Group Valuation Agent agrees to promptly notify the
Hedging Parties of any such notification to NSCFL.

(b)   Election. Within three (3) Local Business Days of receiving the notice
described in Section 2(a), NSCFL will consult with each Hedging Party having a
Pro Rata Hedging Transaction Exposure Reduction Amount, Pro Rata Special
Derivative Exposure Reduction Amount, or Pro Rata Excess Credit Agreement
Exposure Amount, as applicable (taking into account any reduction of up to CAD
1,000,000 referred to below),and determine whether it will (A) terminate Hedging
Transactions with the Hedging Party, (B) reprice certain Hedging Transactions
with the Hedging Party on the basis described in Section 2(d), and/or (C)
transfer NSCFL's obligations in respect of Hedging Transactions to a third party
acceptable to the Hedging Party in its sole discretion that will assume NSCFL's
obligations. Such actions shall be taken so that the Hedging Transaction
Exposure or the Special Derivative Exposure, as applicable, with respect to such
Hedging Party is reduced by an amount at least equal to the Pro Rata Hedging
Transaction Exposure Reduction Amount and the Pro Rata Special Derivative
Exposure Reduction Amount, respectively, applicable to such party or, if the
notice under Section 2(a) relates to an Excess Credit Agreement Exposure Amount,
so that the Hedging Transaction Exposure is reduced by an amount equal to or
greater than the Pro Rata Excess Credit Agreement Exposure Amount. However, the
Hedging Transaction Exposure or the Special Derivative Exposure, as applicable,
with respect to any particular Hedging Party may be reduced by up to CAD
1,000,000 less than the amount required by the preceding sentence if the Excess
Credit Agreement Exposure Amount, the Excess Hedging Transaction Exposure or the
Excess Special Derivative Exposure, as applicable, is entirely liminated as a
result of reductions with other Hedging Parties being greater than the required
minimums. If NSCFL chooses to

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terminate or transfer Hedging Transactions, it will, after consultation with the
applicable Hedging Party, provide the Hedging Party with a list of those Hedging
Transactions that will be terminated and/or transferred. Any amounts payable as
a result of the termination of Hedging Transactions will be calculated in
accordance with the Loss method of calculation and payments shall be made in
accordance with the Second Method. For that purpose, references to the
Defaulting Party and Non-Defaulting Party will be deemed to be references to
NSCFL and the applicable Hedging Party, respectively.

(c)   Proposal. Within one (1) Local Business Day of finalizing NSCFL's election
under Section 2(b),if NSCFL has decided to reprice Hedging Transactions with a
Hedging Party, such Hedging Party will make a proposal to NSCFL (a "Proposal"),
with a copy to the Group Valuation Agent, outlining the amendments to an
existing Hedging Transaction or Hedging Transactions in accordance with Section
2(d) below, which Proposal shall be drafted based on the consultation with NSCFL
in Section 2(b)above.

(d)   Content of Proposal. The Proposal will provide for the payment of the Pro
Rata Hedging Transaction Exposure Reduction Amount, the Pro Rata Special
Derivative Exposure Reduction Amount or the Pro Rata Excess Credit Agreement
Exposure Amount, as applicable, by NSCFL to that Hedging Party (less amounts
paid to that Hedging Party as a result of termination of Hedging Transactions,
less reductions resulting from the transfer of Hedging Transactions and subject
to the adjustments of up to CAD 1,000,000 permitted under Section 2(b)above)and
will identify the Hedging Transaction or Hedging Transactions to be amended and
the proposed amendments. Subject to amounts paid and reductions as a result of
termination or transfer of Hedging Transactions and subject to the adjustments
permitted under Section 2(b) above, any amendments (A) will be variations of the
applicable reference rates effective from the date that payment of each Pro Rata
Hedging Transaction Exposure Reduction Amount, each Pro Rata Special Derivative
Exposure Reduction Amount or each Pro Rata Excess Credit Agreement Exposure
Amount, as applicable, is received by that Hedging Party, (B) are to reflect
current market and banking practices, (C) if applicable, are to create a
portfolio of Hedging Transactions between NSCFL and such Hedging Party that
results in a Hedging Transaction Exposure that is equal to the Hedging
Transaction Exposure as it existed prior to the payment of the Pro Rata Hedging
Transaction Exposure Reduction Amount minus the Pro Rata Hedging Transaction
Exposure Reduction Amount, (D) if applicable, are to create a portfolio of
Special Derivatives between NSCFL and such Hedging Party that results in a
Special Derivative Exposure that is equal to the Special Derivative Exposure as
it existed prior to the payment of the Pro Rata Special Derivative Exposure
Reduction Amount minus the Pro Rata Special Derivative Exposure Reduction
Amount, (E) if applicable, are to create a portfolio of Hedging Transactions
between NSCFL and such Hedging Party that results in a Hedging Transaction
Exposure that is equal to the Hedging Transaction Exposure as it existed prior
to the payment of the Pro Rata Excess Credit Agreement Exposure Amount minus the
Pro Rata Excess Credit Agreement Exposure. Amount and (F) will be calculated
using the Hedging Party's estimates at mid-market of the amounts that would be
paid for Replacement Transactions (as defined within the definition of "Market
Quotation" in the ISDA Agreement) in respect of the relevant Hedging
Transactions. Any Proposal that is in accordance with the foregoing requirements
shall be implemented by NSCFL.

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(e)   Timing for Payment or Transfer. If NSCFL has chosen to transfer or
terminate any Hedging Transactions, such transfer or termination and any
termination payment will be made by the fifth (5th) Local Business Day following
the receipt by NSCFL of notice under Section 2(a). If NSCFL has chosen to
reprice certain Hedging Transactions and if the Proposal is received by NSCFL by
11:00 am, Toronto time, on a Local Business Day, then the relevant payments to
the Hedging Party will be made by the later of (A) close of business on the next
Local Business Day and (B) the fifth (5th) Local Business Day following the
receipt by NSCFL of notice under Section 2(a). If the Proposal is received by
NSCFL after 11:00 Toronto time on a Local Business Day, the relevant payments
will be made by the later of (X) the second (2nd) Local Business Day thereafter
and (Y) the fifth (5th) Local Business Day following the receipt by NSCFL of
notice under Section 2(a).

(f)   Non-Signatory Hedging Parties. To the extent that NSCFL is unable or does
not wish to implement the provisions of Sections 2(b) to 2(e) inclusive with any
Hedging Party that is not a party hereto, NSCFL shall entirely eliminate the
Excess Credit Agreement Exposure Amount or the Excess Hedging Transaction
Exposure, as applicable, by reductions with other Hedging Parties in excess of
the minimums required by this Aggregate Repricing Agreement.

(g)   Confirmations. Upon settlement of any amendments to Hedging Transactions
in accordance with the Proposals, NSCFL and each Hedging Party will promptly
execute a replacement Confirmation evidencing each such amended Hedging
Transaction.

(h)   Calculations. Unless otherwise specified, all calculations of Hedging
Transaction Exposure, Special Derivative Exposure, Excess Hedging Transaction
Exposure and Excess Special Derivative Exposure will be made by the Group
Valuation Agent in accordance with current market and banking practices. When
those calculations are to be made as of a particular day, they may be made
either at or around noon, Toronto time on such Valuation Date or as of the close
of business in the city of the Group Valuation Agent on the immediately
preceding Local Business Day. For greater certainty, the Group Valuation Agent
shall not be responsible for calculating the Excess Credit Agreement Exposure
Amount, but shall be responsible for calculating each Hedging Party's Pro Rata
Excess Credit Agreement Exposure Amount.

3.    REPORTING REQUIREMENTS

(a)   On the next Local Business Day after NSCFL enters into a Hedging
Transaction with a Hedging Party, NSCFL shall notify and provide the particulars
of such Hedging Transaction to the Group Valuation Agent; provided that, if
NSCFL enters into a Hedging Transaction with a Hedging Party and NSCFL has
actual notice that it will be syndicated to some or all of the other Hedging
Parties, NSCFL shall notify the Group Valuation Agent of such Hedging
Transaction on the next Local Business Day after the relevant Hedging Parties
have been notified of their portion of the Hedging Transaction. NSCFL further
agrees to deliver a copy of the relevant trade confirmation(s) to the Group
Valuation Agent promptly upon request.

(b)   NSCFL shall, on the next Local Business Day, notify the Group Valuation
Agent and provide the particulars of any amendment of a Hedging Transaction that
could reasonably be expected to affect the calculation of any Hedging
Transaction Exposure or Special Derivative Exposure.

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(c)   Upon request by the Group Valuation Agent, each Hedging Party agrees to
promptly provide trade details of any Hedging Transaction that may be required
by the Group Valuation Agent to facilitate its calculations under this
Agreement. Each Hedging Party agrees to promptly notify the Group Valuation
Agent of any Event of Default or Potential Event of Default known to it under
that Hedging Party's ISDA Agreement.

(d)   Where either NSCFL or any Hedging Party exercises an optional early
termination provision under any Hedging Transaction or otherwise terminates or
cancels any Hedging Transaction (including voluntary unwinding of any such
Hedging Transaction), NSCFL agrees to notify and provide the particulars of such
Hedging Transaction and the termination or unwinding thereof to the Group
Valuation Agent on the next Local Business Day after such termination,
cancellation or unwinding is effective.

(e)   Upon request by NSCFL, any Hedging Party or the Administration Agent, on
any Local Business Day, the Group Valuation Agent agrees to provide a statement
of its calculations hereunder for the previous Valuation Date. The Group
Valuation Agent shall also confirm, on request, that any particular Hedging
Transaction has been reported to it by NSCFL. The Group Valuation Agent shall,
at the request of any Hedging Party, advise that Hedging Party of each valuation
and calculation by the Group Valuation Agent in respect of each Hedging
Transaction between that Hedging Party and NSCFL.

(f)   If the then-current Aggregate Hedging Transaction Exposure and Aggregate
Special Derivative Exposure are low in comparison to the maximum amounts
permitted herein, the Group Valuation Agent may permit NSCFL to reduce its
reporting frequency to not less frequently than once each week (in respect of
Special Derivatives) or once each month (in respect of other Hedging
Transactions), but the Group Valuation Agent may revoke any such permission at
any time. In any event, NSCFL shall report to the Group Valuation Agent at least
weekly or monthly, respectively, including by "nil" report if applicable.

(g)   Each Hedging Party shall provide NSCFL by the fourth (4th) Local Business
Day of each month with a listing of its Hedging Transactions as of the end of
the preceding month and NSCFL shall provide the Group Valuation Agent by the
fifth (5th) Local Business Day of each month with copies of those listings. The
Group Valuation Agent shall, by the eighth (8th) Local Business Day of each
month provide each Hedging Party with its calculations as of the end of the
preceding month in respect of each Hedging Transaction between that Hedging
Party and NSCFL. Each Hedging Party shall promptly compare the Group Valuation
Agent's calculations with similar calculations by the Hedging Party and, if
there is any material discrepancy, shall promptly contact the Group Valuation
Agent to reconcile the discrepancy.

4.    ADDITIONAL HEDGING TRANSACTIONS

      NSCFL agrees that, so long as the Credit Agreement remains in effect, it
will not enter into any transaction of the kind described in Section 1.1.79 of
the Credit Agreement with any entity other than a Hedging Party under which it
agrees to provide security over its property. NSCFL may provide letters of
credit issued under the Credit Agreement to entities other than Hedging Parties
with whom it enters into transactions of the kind described in Section 1.1.79 of
the Credit Agreement.

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5.    EVENT OF DEFAULT AND CLOSE-OUT OF HEDGING TRANSACTIONS

(a)   Hedging Transaction Exposure Amount and Excess Credit Agreement Exposure
Amount. For purposes of the ISDA Agreement between NSCFL and each Hedging Party,
an Event of Default will exist with respect to NSCFL if NSCFL fails to make,
when due, any payment in respect of the Excess Hedging Transaction Exposure or
the Excess Credit Agreement Exposure Amount required to be made by it or to
otherwise comply with the provisions of Section 2(b)or 2(e) above in relation to
the Excess Hedging Transaction Exposure or the Excess Credit Agreement Exposure
Amount and such failure to pay or comply continues for one (1) Local Business
Day after notice of that failure is given to NSCFL by such Hedging Party.

(b)   Special Derivative Exposure Amount. The ISDA Agreement between NSCFL and
each Hedging Party is hereby amended to provide that (i) an Additional
Termination Event will exist with NSCFL as the Affected Party and the Affected
Transactions shall be deemed to be all Special Derivatives entered into between
NSCFL and each Hedging Party if NSCFL fails to make, when due, any payment in
respect of the Excess Special Derivative Exposure required to be made by it or
to otherwise comply with the provisions of Section 2(b) or 2(e) above in
relation to the Excess Special Derivative Exposure and (ii) an Event of Default
will exist with respect to NSCFL if NSCFL fails to make, when due, any payment
in respect of the Excess Special Derivative Exposure required to be made by it
or to otherwise comply with the provisions of Section 2(b) or 2(e)above in
relation to the Excess Special Derivative Exposure, and such failure to pay or
comply continues for one Local Business Day after notice of that failure is
given to NSCFL by such Hedging Party.

(c)   Immediate Terminations of Special Derivatives. The Group Valuation Agent
shall immediately notify each Hedging Party as soon as the Aggregate Special
Derivative Exposure is equal to or exceeds CAD 135,000,000 (or any lower amount
established in accordance with Section 5(e) below). If the Aggregate Special
Derivative Exposure at any time is equal to or exceeds CAD 135,000,000 (or the
lower amount), notwithstanding any provision herein to the contrary, there shall
be an automatic termination (on the date that the Group Valuation Agent
determines the Aggregate Special Derivative Exposure is equal to or exceeds CAD
135,000,000 (or the lower amount)) of those Special Derivatives necessary to
equal or exceed the Excess Special Derivative Exposure, beginning with the
Special Derivatives (regardless of the respective Hedging Parties involved) that
have the largest individual Positive Special Derivative Exposures (i.e. the
Positive Special Derivative Exposure calculated as if each Special Derivative
was the only Special Derivative entered into by a particular Hedging Party). For
purposes of such termination, an Additional Termination Event shall be deemed to
have occurred with NSCFL as the Affected Party and the Hedging Party as the
Non-Affected Party, and the Special Derivatives that are designated as being
terminated by the preceding sentence shall be deemed to be Affected
Transactions. The Loss method of calculation shall be used in determining the
amount payable and the Second Method shall apply for the purposes of Section
6(e) of the ISDA Agreement. The Group Valuation Agent shall immediately confirm
to NSCFL, each Hedging Party and the Administration Agent the identity of the
Special Derivatives that have been automatically terminated. Each Hedging Party
shall immediately notify the Group Valuation Agent, NSCFL and the Administration
Agent of the amount payable by NSCFL in respect of the automatically terminated
Special Derivatives to which it is a party, the Administration Agent shall
immediately notify NSCFL, the Group Valuation Agent and each Hedging Party as to
whether or not an

<PAGE>

                                       11

advance may be made under the Credit Agreement equal to those amounts and NSCFL
shall pay those amounts not later than the second (2nd) Local Business Day after
such notice is given by the Hedging Party. If NSCFL fails to make any payment
when due as required by this Section 5(c), or if the Administration Agent has
notified NSCFL, the Group Valuation Agent and the Hedging Parties that an
advance is not available under the Credit Agreement, then without further notice
there shall be an automatic termination of all remaining Special Derivatives
effective on the date that the Administration Agent gives notice that an advance
is not available, or on the second (2nd) Local Business Day if payment is not
made, whichever is earlier. For purposes of such termination, an Event of
Default shall be deemed to have occurred with NSCFL as the Defaulting Party. The
Loss method of calculation shall be used in determining the amount payable and
the Second Method shall apply for the purposes of Section 6(e) of the ISDA
Agreement. Each Hedging Party shall immediately notify the Group Valuation
Agent, NSCFL and the Administration Agent of the amount payable by or to NSCFL
in respect of any further automatically terminated Special Derivatives to which
it is a party. The ISDA Agreement between NSCFL and each Hedging Party is hereby
amended to incorporate this Section 5(c).

(d)   Limit on Liability Under Special Derivatives. The ISDA Agreement between
NSCFL and each Hedging Party is hereby amended to incorporate this Section 5(d).
Notwithstanding any other terms of this Aggregate Repricing Agreement but in all
other respects subject to the terms hereof, for as long as the 1999 Notes, the
2001 Notes or any Similar Notes (each as defined in the Credit Agreement) are
outstanding and do not expressly permit the incurrence of Special Derivatives,
the liability of the Restricted Parties (as defined in the Credit Agreement)in
respect of all Special Derivatives outstanding at any time with all Hedging
Parties is limited to an aggregate amount of CAD 150,000,000. The foregoing
limitation shall not, however, in any way limit the liability of the Restricted
Parties in respect of Hedging Transactions other than Special Derivatives, nor
shall it prevent the Hedging Parties from recovering interest on unpaid amounts
owing by the Restricted Parties in respect of terminated Special Derivatives,
nor shall it apply to any derivative transaction that would have been a Special
Derivative but for it not being reported to the Group Valuation Agent as
required by this Aggregate Repricing Agreement. The aggregate liability of the
Restricted Parties for the purpose of this Section 5(d) shall be calculated at
any time using the methods described in Section 5(c) in respect of all Special
Derivatives that have then been terminated and in respect of which there are
unpaid amounts outstanding, by netting amounts payable by Hedging Parties to
NSCFL against amounts payable by NSCFL to Hedging Parties, in each case under
such terminated Special Derivatives. The agreement of the Hedging Parties to
limit the liability of NSCFL is conditional upon such netting occurring. In
order to effect the netting, any net amount payable by a Hedging Party to NSCFL
(taking into account all terminated Special Derivatives between that Hedging
Party and NSCFL) shall instead be paid to the Group Valuation Agent and
distributed by it to the Hedging Parties to whom net amounts are payable by
NSCFL in respect of Special Derivatives, pro rata in accordance with the
respective net amounts payable to them. If, following such netting, the
aggregate liability of the Restricted Parties in respect of Special Derivatives
would exceed CAD 150,000,000 but for the limitation established in this Section
5(d), the excess shall be borne by the Hedging Parties to whom amounts are
payable by NSCFL in respect of Special Derivatives, pro rata in accordance with
the respective net amounts that would have been payable to them but for the
limitation.

(e)   Amendment to Limit on Liability Under Special Derivatives. NSCFL may from
time to time reduce the CAD 150,000,000 limit specified in Section 5(d), and
thereafter increase it, in

<PAGE>

                                       12

accordance with the following: (A) the limit shall never be less than CAD
25,000,000 or more than CAD 150,000,000, (B) the references to CAD 135,000,000
in the definition of "Permitted Special Derivative Exposure" and in Section 5(c)
and the reference to CAD 15,000,000 in the definition of "Excess Special
Derivative Exposure" shall each be automatically reduced or increased by the
same percentage that the CAD 150,000,000 limit specified in Section 5(d) is
reduced or increased, (C) any change in the limit must not result in there being
a positive Excess Credit Agreement Exposure Amount or Excess Special Derivative
Exposure, taking into account the changes in (B), (D) no amendment may be made
within thirty (30) days of the preceding amendment, and (E) NSCFL shall give the
Group Valuation Agent at least ten (10) Local Business Days' notice of the
proposed amendment and the Group Valuation Agent shall promptly notify each of
the Hedging Parties of the amendment. For greater certainty, references in this
Section 5(e) to particular CAD amounts specified in other sections or
definitions are to the current amounts specified in those sections or
definitions and, following any amendment pursuant to this section, references to
those amounts shall be interpreted having regard to the previous amendment(s).

6.    RESTRICTED PAYMENTS/TRANSACTIONS

(a)   Restricted Payments. Upon any Early Termination Date occurring with
respect to a Hedging Transaction or any Hedging Transactions being terminated
prior to the stated maturity, in each case, if the Hedging Party or Hedging
Parties (for the purposes of this provision, the "Payers") are required to make
a payment to NSCFL in accordance with the settlement obligations under such
Hedging Transaction(s), such payment shall be made to NSCFL provided that
immediately after such payment and termination (i) the Aggregate Hedging
Transaction Exposure does not exceed CAD 150,000,000, (ii) the Aggregate Special
Derivative Exposure does not exceed the Permitted Special Derivative Exposure
and (iii) there is no Excess Credit Agreement Exposure Amount. The Payers,NSCFL
and the Administration Agent shall consult the Group Valuation Agent to
determine if the Aggregate Hedging Transaction Exposure will exceed CAD
150,000,000 or if the Aggregate Special Derivative Exposure will exceed the
Permitted Special Derivative Exposure or if there will be any Excess Credit
Agreement Exposure Amount. In the event that the Aggregate Hedging Transaction
Exposure will exceed CAD 150,000,000 or in the event that the Aggregate Special
Derivative Exposure will exceed the Permitted Special Derivative Exposure or in
the event that there will be any Excess Credit Agreement Amount, in each case,
immediately after such payment and termination, NSCFL agrees that the Payers may
withhold the applicable payment, and such failure to pay will not be a default
under any ISDA Agreement, until the Excess Hedging Transaction Exposure or the
Excess Special Derivative Exposure or the Excess Credit Agreement Amount, as
applicable, that would have been created if the withheld payment had been made
is reduced in accordance with this Agreement and any payments made by NSCFL
hereunder to reduce the Excess Hedging Transaction Exposure or the Excess
Special Derivative Exposure or the Excess Credit Agreement Exposure Amount, as
applicable, may be set off against amounts owed to NSCFL by the Payers.

(b)   Restricted Transactions. Each of the parties hereto agrees that it shall
not enter into any Special Derivative other than a Floating Rate Transaction, an
Oil and Gas Transaction, a Pulp and Paper Transaction or a Special Derivative of
a type previously dealt with under this Section 6(b) without giving at least ten
(10) Local Business Days' notice to the Group Valuation Agent

<PAGE>

                                       13

and without receiving the subsequent notice from the Group Valuation Agent that
is referred to below. The parties agree that, upon any such notice being given
to the Group Valuation Agent, the Group Valuation Agent and the Administration
Agent, after consulting NSCFL, shall establish a volatility factor for the
additional type of Special Derivative. The Group Valuation Agent shall then
notify all parties of the volatility factor that has been established.

7.    FURNISH SPECIFIED INFORMATION

      Section 4(a)(ii) of each ISDA Agreement between NSCFL and a Hedging Party
that is a party hereto is deemed to be amended to read as follows:

"(ii) any other documents specified in the Schedule, any Confirmation or the
Aggregate Repricing Agreement dated as of 14 May, 2003 as amended, restated or
replaced from time to time, entered into between, among others, Party B and
Party A as a Hedging Party thereto; and"

8.    REPRESENTATIONS AND WARRANTIES

      Each party hereto represents and warrants to the other parties as follows:

(a)   it has full power and authority to execute and deliver this Aggregate
Repricing Agreement and to perform and observe the provisions hereof;

(b)   the execution, delivery and performance of this Aggregate Repricing
Agreement either have been or will be duly authorized by all necessary corporate
action and do not and will not contravene any requirement of law, its charter or
by-laws or any contractual restriction or agreement binding on or affecting such
party or its assets; and

(c)   this Aggregate Repricing Agreement has been duly and properly executed and
delivered by such party and constitutes and will constitute the legal, valid and
binding obligation of such party enforceable in accordance with its terms.

9.    NOTICES

      Unless otherwise specified, all notices and other communications to be
given to a party hereunder shall be given to the address, facsimile (confirmed
if requested) or telephone number and to the individual or department specified
by such party on Schedule B hereto or such other address, facsimile or telephone
number as such party may hereafter specify for the purpose by notice given in
accordance with this section. Unless otherwise specified, any notice,
instruction or other communication shall be effective upon receipt if given in
accordance with this section.

10.   AMENDMENTS

(a)   No amendment, modification, supplement or waiver in respect of this
Aggregate Repricing Agreement will be effective unless in writing and signed by
each of the parties intended to be bound thereby.

(b)   If the Credit Agreement is amended in accordance with the terms thereof,
the parties shall in good faith negotiate and enter into any amendments hereof
which are reasonably required as a result of such amendment of the Credit
Agreement.

<PAGE>

                                       14

(c)   Any person that is not a party hereto and is otherwise entitled to be a
party to an Other Secured Obligation (as defined in the Credit Agreement) may
become a Hedging Party hereunder and agree to be bound hereby by executing such
instrument or agreement as the Group Valuation Agent may reasonably prescribe in
order to evidence its accession hereto. Any ISDA agreement entered into between
NSCFL and such person shall have substantially the same terms and conditions as
the ISDA Agreement. In particular, each ISDA agreement shall continue to be
based on the 1992 ISDA Master Agreement notwithstanding any subsequent form of
ISDA Master Agreement being issued.

11.   GROUP VALUATION AGENT

(a)   The Group Valuation Agent shall have no duties or obligations other than
as expressed herein, and without limitation, the Group Valuation Agent does not
undertake, and the Hedging Parties relieve the Group Valuation Agent from, any
implied duties (including fiduciary duties) and there shall not be construed
against the Group Valuation Agent any implied covenants or terms. The Group
Valuation Agent may execute or perform, and may delegate the execution and
performance of, any of its duties hereunder through or to any of its own
employees or to a recognized dealer designated by it. References herein or in
any of the other agreements to the Group Valuation Agent shall include
references to any such employees or recognized dealers to whom the Group
Valuation Agent shall have delegated any of its duties.

(b)   The Group Valuation Agent shall not be obliged to incur or subject itself
to any cost or expenditure in connection herewith unless it is first indemnified
or furnished with security by the Hedging Parties on a rateable basis, in form
and substance satisfactory to it (which may include further agreements of
indemnity or the deposit of funds or security or other suitable measure).

(c)   Neither the Group Valuation Agent nor its directors, officers, agents or
employees shall be liable to NSCFL or any Hedging Party for any action taken or
omitted to be taken by it or them under or in connection with this Aggregate
Repricing Agreement except for its or their own gross negligence or wilful
misconduct. Without limiting the generality of the foregoing, the Group
Valuation Agent (i) makes no warranty or representation to NSCFL nor any Hedging
Party (except as set out in section 8 above) and shall not be responsible to
NSCFL or any Hedging Party for the form, substance, accuracy or completeness of
this Aggregate Repricing Agreement or any other documents, information or
financial data made available to the parties hereto, or for any statements,
warranties or representations made by others in or in connection with this
Aggregate Repricing Agreement; (ii) shall not have any duty to ascertain or to
inquire as to the existence of an Event of Default or Potential Event of Default
or the performance or observance of any of the terms or conditions of this
Aggregate Repricing Agreement on the part of NSCFL or any Hedging Party; (iii)
shall not be responsible to NSCFL nor any Hedging Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Aggregate Repricing Agreement other than the representations and warranties made
herein with respect to the Group Valuation Agent; and (iv) shall incur no
liability under or in respect of this Aggregate Repricing Agreement by acting
upon any notice, consent, certificate or other instrument or writing (which may
have been sent by facsimile transmission, by telex or by hand) believed by it in
good faith to be genuine and signed or sent by the proper party or parties.

(d)   With respect to Hedging Transactions between Royal Bank of Canada ("RBC")
and NSCFL, RBC has the same rights and powers under this Aggregate Repricing
Agreement as any

<PAGE>

                                       15

other Hedging Party hereunder and may exercise the same as though it were not
the Group Valuation Agent and the term "Hedging Party" or "Hedging Parties"
shall, unless otherwise expressly indicated, include it in its individual
capacity. RBC and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with
NSCFL and its affiliates or any person who may do business with or own
securities of NSCFL, all as if it were not the Group Valuation Agent, and
without any duty to account therefor to the Hedging Parties.

12.   REPLACEMENT OF GROUP VALUATION AGENT

      In the event that: (A) the Group Valuation Agent resigns (which
resignation shall be given in writing to the parties hereto with at least five
(5) Business Days notice); (B) the Group Valuation Agent materially breaches its
duties hereunder; or (C) NSCFL or the other Hedging Parties notify the other
parties to this Aggregate Repricing Agreement on at least five (5) Business Days
notice that they wish to replace the Group Valuation Agent, NSCFL will appoint a
replacement Group Valuation Agent who is a Hedging Party with the consent of
such successor and the consent of the remaining Hedging Parties, which consent
shall not be unreasonably withheld. The successor Group Valuation Agent shall
succeed to and become vested with all the rights, powers and duties of the Group
Valuation Agent as described herein and the retiring Group Valuation Agent shall
be discharged from its duties and obligations in its capacity as Group Valuation
Agent.

13.   GOVERNING LAW AND SEVERABILITY

      This Aggregate Repricing Agreement shall be construed in accordance with
and governed by the laws of the Province of British Columbia without reference
to choice of law doctrine. Wherever possible each provision of this Aggregate
Repricing Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Aggregate Repricing
Agreement shall be prohibited by or be invalid or unenforceable under such law,
such provision shall be ineffectiveto the extent of such prohibition, invalidity
or unenforceability without otherwise affecting the validity or enforceability
of such provision or the remaining provisions of this Aggregate Repricing
Agreement.

14.   COUNTERPARTS

      This Aggregate Repricing Agreement (and any amendment hereto) may be
executed and delivered in counterparts (including by facsimile transmission),
each of which will be deemed an original.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Aggregate Repricing
Agreement to be duly executed by their respective authorized officers as of the
date first above written.

NORSKE SKOG CANADA FINANCE LIMITED           ROYAL BANK OF CANADA, as a
                                             Hedging Party and Group Valuation
                                             Agent

By: /s/ R. Leverton                           By:  /s/ Susan Heard
   ---------------------                          ----------------------------
Name: Ralph Leverton                         Name: SUSAN HEARD
Title: President                                   MANAGING DIRECTOR
                                             Title: RBC DOMINION SECURITIES INC.

By: /s/ Peter M. Staiger                     By: _____________________________
    --------------------
Name: Peter M.Staiger                        Name:
Title: Treasurer                             Title:

[NOTE: ADD OTHER SIGNATURE BLOCKS AS REQUIRED]

                                      -17-

<PAGE>

                                               THE TORONTO-DOMINION
                                               BANK, as a Hedging Party

                                               By: /s/ Henry Scheppat
                                                   ---------------------------
                                               Name: HENRY SCHEPAT
                                                     VICE PRESIDENT & DIRECTOR
                                               Title: TREASURY CREDIT

                                               By: ___________________________
                                               Name:
                                               Title:

[signature page for Aggregate Repricing Agreement dated as of 14 May, 2003
relating to Norske Skog Canada Finance Limited et al]

<PAGE>

                                           HSBC BANK CANADA, as a Hedging
                                           Party

                                           By: /s/ Dean Stewart
                                               -------------------------
                                           Name: DEAN STEWART
                                                 ASSISTANT VICE PRESIDENT
                                           Title: COMMERCIAL FINANCIAL SERVICES

                                           By: /s/ G. J. Sprung
                                               -------------------------
                                           Name: G. J. Sprung
                                           Title: Vice President

[signature page for Aggregate Repricing Agreement dated as of 14 May, 2003
relating to Norske Skog Canada Finance Limited et al]

<PAGE>

                                               BANK OF AMERICA, N.A.
                                               CANADA BRANCH, as a Hedging Party

                                               By: /s/ Mindi Schuman
                                                   ----------------------
                                               Name: MINDI SCHUMAN
                                               Title: PRINCIPAL

[signature page for Aggregate Repricing Agreement dated as of 14 May, 2003
relating to Norske Skog Canada Finance Limited et al]
<PAGE>

                                        CANADIAN IMPERIAL BANK OF
                                        COMMERCE, as a Hedging Party

                                        By: /s/ Mark Chandler
                                           ----------------------------
                                        Name: Mark Chandler
                                        Title: Executive Director

                                        By: /s/ Bill Wolfe
                                           ----------------------------
                                        Name: Bill Wolfe
                                        Title: Executive Director

[signature page for Aggregate Repricing Agreement dated as of 14 May, 2003
relating to Norske Skog Canada Finance Limited et al]

<PAGE>

                                   SCHEDULE A

                               VOLATILITY FACTORS

The volatility factors for the currently contemplated types of Special
Derivatives are as follows:

Floating Rate Transactions - nil

Oil and Gas Transactions - 0.25

Pulp and Paper Transactions - 0.10

<PAGE>

                                   SCHEDULE B

                               ADDRESSES FOR NOTICE

NORSKE SKOG CANADA FINANCE LIMITED
16TH FLOOR
250 HOWE STREET
VANCOUVER, BRITISH COLUMBIA
V6C 3R8

ATTENTION: TREASURER

FACSIMILE NO.: (604) 654-4254
TELEPHONE NO.: (604) 654-4372

HSBC BANK CANADA
SUITE 500, 885 WEST GEORGIA STREET
VANCOUVER, BRITISH COLUMBIA
V6C 3E9

ATTENTION: HEAD OF TREASURY - WESTERN
           CANADA


FACSIMILE NO.: (604) 641-1841
TELEPHONE NO.: (604) 641-1935

CANADIAN IMPERIAL BANK OF COMMERCE
199 BAY STREET, COMMERCE COURT WEST-6
TORONTO, ONTARIO
M5L 1A2

ATTENTION: SENIOR MANAGER
           TRADING & SECURITIZATION CREDIT
           RISK MANAGEMENT

FACSIMILE NO.: (416) 594-8230
TELEPHONE NO.: (416) 594-8003
[NOTE: ADD ADDITIONAL ADDRESSES; MULTIPLE
CONTACTS SHOULD BE PROVIDED IF POSSIBLE]

ROYAL BANK OF CANADA
2ND FLOOR, ROYAL BANK PLAZA
200 BAY STREET
TORONTO, ONTARIO
M5J 2W7

ATTENTION: MANAGING DIRECTOR
           GLOBAL MIDDLE OFFICE

FACSIMILE NO.: (416) 842-4334
TELEPHONE NO.: (416) 842-6656

THE TORONTO-DOMINION BANK
6TH FLOOR, TD TOWER
66 WELLINGTON STREET WEST
TORONTO, ONTARIO
M5K 1A2

ATTENTION: VICE-PRESIDENT
           MARGINED ACCOUNTS

FACSIMILE NO.: (416)-307-1222
TELEPHONE NO.: (416)-308-7000

BANK OF AMERICA, N.A.
SAN FRANCISCO PORTFOLIO MANAGEMENT OFFICE
MAIL CODE CA5-705-12-12
555 CALIFORNIA STREET
SAN FRANCISCO, CA 94104-1503

FACSIMILE NO.: (415) 622-4585
<PAGE>

(Multicurrency-Cross Border)

                                     ISDA(R)

                 International Swap, Dealers Association, Inc.

                                MASTER AGREEMENT

                          dated as of August 20, 2001

           ROYAL BANK OF CANADA AND NORSKE SKOG CANADA FINANCE LIMITED

have entered and/or anticipate entering into one or more transactions (each a
Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:-

1.    INTERPRETATION

(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2.    OBLIGATIONS

(a)   GENERAL CONDITIONS.

      (i) Each party will make each payment or delivery specified in each
      Confirmation to be made by it, subject to the other provisions of this
      Agreement.

      (ii) Payments under this Agreement will be made on the due date for value
      on that date in the place of the account specified in the relevant
      Confirmation or otherwise pursuant to this Agreement, in freely
      transferable funds and in the manner customary for payments in the
      required currency. Where settlement is by delivery (that is, other than by
      payment), such delivery will be made for receipt on the due date in the
      manner customary for the relevant obligation unless otherwise specified in
      the relevant Confirmation or elsewhere in this Agreement.

      (iii) Each obligation of each party under Section 2(a)(i) is subject to
      (1) the condition precedent that no Event of Default or Potential Event of
      Default with respect to the other party has occurred and is continuing,
      (2) the condition precedent that no Early Termination Date in respect of
      the relevant Transaction has occurred or been effectively designated and
      (3) each other applicable condition precedent specified in this Agreement.

                                       1
<PAGE>

(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the Scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c) NETTING. If on any date amounts would otherwise be payable:-

      (i)   in the same currency; and

      (ii)  in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by Specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d) DEDUCTION OR WITHHOLDING FOR TAX.

      (i) GROSS-UP. All payments under this Agreement will be made without any
      deduction or withholding for or on account of any Tax units such deduction
      or withholding is required by any applicable law, as modified by the
      practice of any relevant governmental revenue authority, then in effect.
      If a party is so required to deduct or withhold, then that party ("X")
      will:-

            (1) promptly notify the other party ("Y") of such requirement;

            (2) pay to the relevant authorities the full amount required to be
            deducted or withheld (including the full amount required to be
            deducted or withheld from any additional amount paid by X to Y under
            this Section 2(d)) promptly upon the earlier of determining that
            such deduction or withholding is required or receiving notice that
            such amount has been assessed against Y;

            (3) promptly forward to Y an official receipt (or a certified copy),
            or other documentation reasonably acceptable to Y, evidencing such
            payment to such authorities; and

            (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
            the payment to which Y is otherwise entitled under this Agreement,
            such additional amount as is necessary to ensure that the net amount
            actually received by Y (free and clear of Indemnifiable Taxes,
            whether assessed against X or Y) will equal the full amount Y would
            have received had no such deduction or withholding been required.
            However, X will not be required to pay any additional amount to Y to
            the extent that it would not be required to be paid but for:-

                  (A) the failure by Y to comply with or perform any agreement
                  contained in Section 4(a)(i),4(a)(iii) or 4(d);or

                  (B) the failure of a representation made by Y pursuant to
                  Section 3(f) to be accurate and true unless such failure would
                  not have occurred but for (I) any action taken by a taxing
                  authority, or brought in a court of competent jurisdiction, on
                  or after the date on which a Transaction is entered into
                  (regardless of whether such action is taken or brought with
                  respect to a party to this Agreement) or (II) a Change in Tax
                  Law.

                                       2
<PAGE>

      (ii) Liability. If:-

            (1) X is required by any applicable law, as modified by the practice
            of any relevant governmental revenue authority, to make any
            deduction or withholding in respect of which X would not be required
            to pay an additional amount to Y under Section 2(d)(i)(4);

            (2) X does not so deduct or withhold; and

            (3) a liability resulting from such Tax is assessed directly against
            X.

      then, except to the extent Y has satisfied or then satisfies the liability
      resulting from such Tax, Y will promptly pay to X the amount of such
      liability (including any related liability for interest, but including any
      related liability for penalties only if Y has failed to comply with or
      perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3. REPRESENTATIONS

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-

(a) BASIC REPRESENTATIONS.

      (i) STATUS. It is duly organized and validly existing under the laws of
      the jurisdiction of its organization or incorporation and, if relevant
      under such laws, in good standing;

      (ii) POWERS. It has the power to execute this Agreement and any other
      documentation relating to this Agreement to which it is a party, to
      deliver this Agreement and any other documentation relating to this
      Agreement that it is required by this Agreement to deliver and to perform
      its obligations under this Agreement and any obligations it has under any
      Credit Support Document to which it is a party and has taken all necessary
      action to authorize such execution, delivery and performance;

      (iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance
      do not violate or conflict with any law applicable to it, any provision of
      its constitutional documents, any order or judgment of any court or other
      agency of government applicable to it or any of its assets or any
      contractual restriction binding on or affecting it or any of its assets;

      (iv) CONSENTS. All governmental and other consents that are required to
      have been obtained by it with respect to this Agreement or any Credit
      Support Document to which it is a party have been obtained and are in full
      force and effect and all conditions of any such consents have been
      complied with; and

      (v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
      Credit Support Document to which it is a party constitute its legal, valid
      and binding obligations, enforceable in accordance with their respective
      terms (subject to applicable bankruptcy, reorganization, insolvency,
      moratorium or similar laws affecting creditors' rights generally and
      subject, as to enforceability, to equitable principles of general
      application (regardless of whether enforcement is sought in a proceeding
      in equity or at law)).

                                       3
<PAGE>

(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.

(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.

(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

4. AGREEMENTS

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-

(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-

      (i) any forms, documents or certificates relating to taxation specified in
      the Schedule or any Confirmation;

      (ii) any other documents specified in the Schedule or any Confirmation,
      and

      (iii) upon reasonable demand by such other party, any form or document
      that may be required or reasonably requested in writing in order to allow
      such other party or its Credit Support Provider to make a payment under
      this Agreement or any applicable Credit Support Document without any
      deduction or withholding for or on account of any Tax or with such
      deduction or withholding at a reduced rate (so long as the completion,
      execution or submission of such form or document would not materially
      prejudice the legal or commercial position of the party in receipt of such
      demand), with any such form or document to be accurate and completed in a
      manner reasonably satisfactory to such other party and to be executed and
      to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(c) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporate,

                                       4
<PAGE>

organized, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

5. EVENTS OF DEFAULT AND TERMINATION EVENTS

(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:-

      (i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due, any
      payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
      required to be made by it if such failure is not remedied on or before the
      third Local Business Day after notice of such failure is given to the
      party;

      (ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform
      any agreement or obligation (other than an obligation to make any payment
      under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
      notice of a Termination Event or any agreement or obligation under Section
      4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
      in accordance with this Agreement if such failure is not remedied on or
      before the thirtieth day after notice of such failure is given to the
      party:

      (iii) CREDIT SUPPORT DEFAULT.

            (1) Failure by the party or any Credit Support Provider of such
            party to comply with or perform any agreement or obligation to be
            complied with or performed by it in accordance with any Credit
            Support Document if such failure is continuing after any applicable
            grace period has elapsed;

            (2) the expiration or termination of such Credit Support Document or
            the failing or ceasing of such Credit Support Document to be in full
            force and effect for the purpose of this Agreement (in either case
            other than in accordance with its terms) prior to the satisfaction
            of all obligations of such party under each Transaction to which
            such Credit Support Document relates without the written consent of
            the other party; or

            (3) the party or such Credit Support Provider disaffirms, disowns,
            repudiates or rejects, in whole or in part, or challenges the
            validity of, such Credit Support Document;

      (iv) MISREPRESENTATION. A representation (other than a representation
      under Section 3(e) or (f)) made or repeated or deemed to have been made or
      repeated by the party or any Credit Support Provider of such party in this
      Agreement or any Credit Support Document proves to have been incorrect or
      misleading in any material respect when made or repeated or deemed to have
      been made or repeated;

      (v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
      Provider of such party or any applicable Specified Entity of such party
      (1) defaults under a Specified Transaction and, after giving effect to any
      applicable notice requirement or grace period, there occurs a liquidation
      of, an acceleration of obligations under, or an early termination of, that
      Specified Transaction, (2) defaults, after giving effect to any applicable
      notice requirement or grace period, in making any payment or delivery due
      on the last payment delivery or exchange date of, or any payment on early
      termination of, a Specified Transaction (or such default continues for at
      least three Local Business Days if there is no applicable notice
      requirement or grace period) or (3) disaffirms, disclaims, repudiates or
      rejects, in whole or in part, a Specified Transaction (or such action is
      taken by any person or entity appointed or empowered to operate it or act
      on its behalf);

      (vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
      applying to the party, the occurrence or existence of (1) a default, event
      of default or other similar condition or event (however

                                       5
<PAGE>

      described) in respect of such party, any Credit Support Provider of such
      party or any applicable Specified Entity of such party under one or more
      agreements or instruments relating to Specified Indebtedness of any of
      them (individually or collectively) in an aggregate amount of not less
      than the applicable Threshold Amount (as specified in the Schedule) which
      has resulted in such Specified Indebtedness becoming, or becoming capable
      at such time of being declared, due and payable under such agreements or
      instruments, before it would otherwise have been due and payable or (2) a
      default by such party, such Credit Support Provider or such Specified
      Entity (individually or collectively) in making one or more payments on
      the due date thereof in an aggregate amount of not less than the
      applicable Threshold Amount under such agreements or instruments (after
      giving effect to any applicable notice requirement or grace period);

      (vii) BANKRUPTCY. The party, any Credit Support Provider of such party or
      any applicable Specified Entity of such party:-

             (1)  is dissolved (other than pursuant to a consolidation,
             amalgamation or merger); (2) becomes insolvent or is unable to pay
             its debts or fails or admits in writing its inability generally to
             pay its debts as they become due; (3) makes a general assignment,
             arrangement or composition with or for the benefit of its
             creditors; (4) institutes or has instituted against it a proceeding
             seeking a judgment of insolvency or bankruptcy or any other relief
             under any bankruptcy or insolvency law or other similar law
             affecting creditors' rights, or a petition is presented for its
             winding-up or liquidation, and, in the case of any such proceeding
             or petition instituted or presented against it, such proceeding or
             petition (A) results in a judgment of insolvency or bankruptcy or
             the entry of an order for relief or the making of an order for its
             winding-up or liquidation or (B) is not dismissed, discharged,
             stayed or restrained in each case within 30 days of the institution
             or presentation thereof; (5) has a resolution passed for its
             winding-up, official management or liquidation (other than pursuant
             to a consolidation, amalgamation or merger); (6) seeks or becomes
             subject to the appointment of an administrator, provisional
             liquidator, conservator, receiver, trustee, custodian or other
             similar official for it or for all or substantially all its assets;
             (7) has a secured party take possession of all or substantially all
             its assets or has a distress, execution, attachment, sequestration
             or other legal process levied, enforced or sued on or against all
             or substantially all its assets and such secured party maintains
             possession, or any such process is not dismissed, discharged,
             stayed or restrained, in each case within 30 days thereafter; (8)
             causes or is subject to any event with respect to it which, under
             the applicable laws of any jurisdiction, has an analogous effect to
             any of the events specified in clauses (1) to (7) (inclusive); or
             (9) takes any action in furtherance of, or indicating its consent
             to, approval of, or acquiescence in, any of the foregoing acts; or

      (viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support Provider
      of such party consolidates or amalgamates with, or merges with or into, or
      transfers all or substantially all its assets to, another entity and, at
      the time of such consolidation, amalgamation, merger or transfer:-

             (1)  the resulting, surviving or transferee entity fails to assume
             all the obligations of such party or such Credit Support Provider
             under this Agreement or any Credit Support Document to which it or
             its predecessor was a party by operation of law or pursuant to an
             agreement reasonably satisfactory to the other party to this
             Agreement; or

             (2)  the benefits of any Credit Support Document fail to extend
             (without the consent of the other party) to the performance by
             such resulting, surviving or transferee entity of its obligations
             under this Agreement,

(b)   TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event

                                       6
<PAGE>

Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:-

      (i)   ILLEGALITY. Due to the adoption of, or any change in, any applicable
      law after the date on which a Transaction is entered into, or due to the
      promulgation of, or any change in the interpretation by any court,
      tribunal or regulatory authority with competent jurisdiction of any
      applicable law after such date, it becomes unlawful (other than as a
      result of a breach by the party of Section 4(b)) for such party (which
      will be the Affected Party):-

            (1)   to perform any absolute or contingent obligation to make a
            payment or delivery or to receive a payment or delivery in respect
            of such Transaction or to comply with any other material provision
            of this Agreement relating to such Transaction; or

            (2)   to perform, or for any Credit Support Provider of such party
            to perform, any contingent or other obligation which the party (or
            such Credit Support Provider) has under any Credit Support Document
            relating to such Transaction;

      (ii)  TAX EVENT. Due to (x) any action taken by a taxing authority, or
      brought in a court of competent jurisdiction, on or after the date on
      which a Transaction is entered into (regardless of whether such action is
      taken or brought with respect to a party to this Agreement) or (y) a
      Change in Tax Law, the party (which will be the Affected Party) will, or
      there is a substantial likelihood that it will, on the next succeeding
      Scheduled Payment Date (1) be required to pay to the other party an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6 (d)(ii) or
      6(e) or (2) receive a payment from which an amount is required to be
      deducted or withheld for or on account of a Tax (except in respect of
      interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
      required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
      than by reason of Section 2(d)(i)(4)(A) or (B));

      (iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the next
      succeeding Scheduled Payment Date will either (1) be required to pay an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
      6(e) or (2) receive a payment from which an amount has been deducted or
      withheld for or on account of any Indemnifiable Tax in respect of which
      the other party is not required to pay an additional amount (other than by
      reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
      party consolidating or amalgamating with, or merging with or into, or
      transferring all or substantially all its assets to, another entity (which
      will be the Affected Party) where such action does not constitute an event
      described in Section 5(a)(viii);

      (iv)  CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger "is specified
      in the Schedule as applying to the party, such party ("X"), any Credit
      Support Provider of X or any applicable Specified Entity of X consolidates
      or amalgamates with, or merges with or into, or transfers all or
      substantially all its assets to, another entity and such action does not
      constitute an event described in Section 5(a)(viii) but the
      creditworthiness of the resulting, surviving or transferee entity is
      materially weaker than that of X, such Credit Support Provider or such
      Specified Entity, as the case may be, immediately prior to such action
      (and, in such event, X or its successor or transferee, as appropriate,
      will be the Affected Party); or

      (v)   ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
      is specified in the Schedule or any Confirmation as applying, the
      occurrence of such event (and, in such event, the Affected Party or
      Affected Parties shall be as specified for such Additional Termination
      Event in the Schedule or such Confirmation).

(c)   EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

                                       7
<PAGE>

6.  EARLY TERMINATION

(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party) may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)   RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

      (i) NOTICE. If a Termination Event occurs, an Affected Party will,
      promptly upon becoming aware of it, notify the other party, specifying the
      nature of that Termination Event and each Affected Transaction and will
      also give such other information about that Termination Event as The other
      party may reasonably require.

      (ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
      Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
      Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
      Affected Party, the Affected Party will, as a condition to its right to
      designate an Early Termination Date under Section 6(b)(iv), use all
      reasonable efforts (which will not require such party to incur a loss,
      excluding immaterial, incidental expenses) to transfer within 20 days
      after it gives notice under Section 6(b)(i) all its rights and obligations
      under this Agreement in respect of the Affected Transactions to another of
      its Offices or Affiliates so that such Termination Event ceases to exist.

      If the Affected Party is not able to make such a transfer it will give
      notice to the other party to that effect within such 20 day period,
      whereupon the other party may effect such a transfer within 30 days after
      the notice is given under Section 6(b)(i).

      Any such transfer by a party under this Section 6(b)(ii) will be subject
      to and conditional upon the prior written consent of the other party,
      which consent will not be withheld if such other party's policies in
      effect at such time would permit it to enter into transactions with the
      transferee on the terms proposed.

      (iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(l) or a
      Tax Event occurs and there are two Affected Parties, each party will use
      all reasonable efforts to reach agreement within 30 days after notice
      thereof is given under Section 6(b)(i) on action to avoid that Termination
      Event.

      (iv) RIGHT TO TERMINATE. If:-

            (1) a transfer under Section 6(b)(ii) or an agreement under Section
            6(b)(iii), as the case may be, has not been effected with respect to
            all Affected Transactions within 30 days after an Affected Party
            gives notice under Section 6(b)(i); or

            (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
            Merger or an Additional Termination Event occurs, or a Tax Event
            Upon Merger occurs and the Burdened Party is not the Affected Party,

      either party in the case of an Illegality, the Burdened Party in the case
      of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
      or an Additional Termination Event if there is more than one Affected
      Party, or the party which is not the Affected Party in the case of a
      Credit Event Upon Merger or an Additional Termination Event if there is
      only one Affected Party may, by not more than 20 days notice to the other
      party and provided that the relevant Termination Event is then

                                       8
<PAGE>

      continuing, designate a day not earlier than the day such notice is
      effective as an Early Termination Date in respect of all Affected
      Transactions.

(c)   EFFECT OF DESIGNATION.

      (i) If notice designating an Early Termination Date is given under Section
      6(a) or (b), the Early Termination Date will occur on the date so
      designated, whether or not the relevant Event of Default or Termination
      Event is then continuing.

      (ii) Upon The occurrence or effective designation of an Early Termination
      Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
      respect of the Terminated Transactions will be required to be made, but
      without prejudice to the other provisions of this Agreement. The amount,
      if any, payable in respect of an Early Termination Date shall be
      determined pursuant to Section 6(e).

(d)   CALCULATIONS.

      (i) STATEMENT. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (1) showing, in reasonable detail,
      such calculations (including all relevant quotations and specifying any
      amount payable under Section 6(e)) and (2) giving details of the relevant
      account to which any amount payable to it is to be paid. In the absence of
      written confirmation from the source of a quotation obtained in
      determining a Market Quotation, the records of the party obtaining such
      quotation will be conclusive evidence of the existence and accuracy of
      such quotation.

      (ii) PAYMENT DATE. An amount calculated as being due in respect of any
      Early Termination Date under Section 6(e) will be payable on the day that
      notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated or occurs as a result of an Event of
      Default) and on the day which is two Local Business Days after the day on
      which notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated as a result of a Termination Event).
      Such amount will be paid together with (to the extent permitted under
      applicable law) interest thereon (before as well as after judgment) in the
      Termination Currency, from (and including) the relevant Early Termination
      Date to (but excluding) the date such amount is paid, at the Applicable
      Rate. Such interest will be calculated on the basis of daily compounding
      and the actual number of days elapsed.

(e)   PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

      (i)   EVENTS OF DEFAULT. If the Early Termination Date results from an
      Event of Default:-

            (1) First Method and Market Quotation. If the First Method and
            Market Quotation apply, the Defaulting Party will pay to the
            Non-defaulting Party the excess, if a positive number, of (A) the
            sum of the Settlement Amount (determined by the Non-defaulting
            Party) in respect of the Terminated Transactions and the Termination
            Currency Equivalent of the Unpaid Amounts owing to the Non-
            defaulting Party over (B) The Termination Currency Equivalent of the
            Unpaid Amounts owing to the Defaulting Party.

            (2) First Method and Loss. If the First Method and Loss apply, the
            Defaulting Party will pay to the Non-defaulting Party, if a positive
            number, the Non-defaulting Party's Loss in respect of this
            Agreement.

            (3) Second Method and Market Quotation. If the Second Method and
            Market Quotation apply, an amount will be payable equal to (A) The
            sum of the Settlement Amount (determined by the

                                       9
<PAGE>

            Non-defaulting Party) in respect of the Terminated Transactions and
            the Termination Currency Equivalent of the Unpaid Amounts owing to
            the Non-defaulting Party less (B) the Termination Currency
            Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
            that amount is a positive number, the Defaulting Party will pay it
            to the Non-defaulting Party; if it is a negative number, the
            Non-defaulting Party will pay the absolute value of that amount to
            the Defaulting Party.

            (4) Second Method and Loss. If the Second Method and Loss apply, an
            amount will be payable equal to the Non-defaulting Party's Loss in
            respect of this Agreement. If that amount is a positive number, the
            Defaulting Party will pay it to the Non-defaulting Party; if it is
            a negative number, the Non-defaulting Party will pay the absolute
            value of that amount to the Defaulting Party.

      (ii) TERMINATION EVENTS. If the Early Termination Date results from a
      Termination Event:-

            (1) One Affected Party. If there is one Affected Party, the amount
            payable will be determined in accordance with Section 6(e)(i)(3), if
            Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
            except that, in either case, references to the Defaulting Party and
            to the Non-defaulting Party will be deemed to be references to the
            Affected Party and the party which is not the Affected Party,
            respectively, and, if Loss applies and fewer than all the
            Transactions are being terminated, Loss shall be calculated in
            respect of all Terminated Transactions.

            (2) Two Affected Parties. If there are two Affected Parties:-

                  (A) if Market Quotation applies, each party will determine a
                  Settlement Amount in respect of the Terminated Transactions,
                  and an amount will be payable equal to (I) the sum of (a)
                  one-half of the difference between the Settlement Amount of
                  the party with the higher Settlement Amount ("X") and the
                  Settlement Amount of the party with the lower Settlement
                  Amount ("Y") and (b) the Termination Currency Equivalent of
                  the Unpaid Amounts owing to X less (II) the Termination
                  Currency Equivalent of the Unpaid Amounts owing to Y; and

                  (B) if Loss applies, each party will determine its Loss in
                  respect of this Agreement (or, if fewer than all the
                  Transactions are being terminated, in respect of all
                  Terminated Transactions) and an amount will be payable equal
                  to one-half of the difference between the Loss of the party
                  with the bigger Loss ("X") and the Loss of the party with the
                  lower Loss ("Y").

            If the amount payable is a positive number, Y will pay it to X, if
            it is a negative number, X will pay the absolute value of that
            amount to Y.

      (iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
      Termination Date occurs because "Automatic Early Termination" applies in
      respect of a party, the amount determined under this Section 6(e) will be
      subject to such adjustments as are appropriate and permitted by law to
      reflect any payments or deliveries made by one party to the other under
      this Agreement (and retained by such other party) during the period from
      the relevant Early Termination Date to the date for payment determined
      under Section 6(d)(ii).

      (iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an
      amount recoverable under this Section 6(e) is a reasonable pre-estimate of
      loss and not a penalty. Such amount is payable for the loss of bargain and
      the loss of protection against future risks and except as otherwise
      provided in this Agreement neither party will be entitled to recover any
      additional damages as a consequence of such losses.

                                       10
<PAGE>

7. TRANSFER

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-

(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(c).

Any purported transfer that is not in compliance with this Section will be void.

8. CONTRACTUAL CURRENCY

(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds. The amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

                                       11
<PAGE>

9. MISCELLANEOUS

(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e) COUNTERPARTS AND CONFIRMATIONS.

      (i) This Agreement (and each amendment, modification and waiver in respect
      of it) may be executed and delivered in counterparts (including by
      facsimile transmission), each of which will be deemed an original.

      (ii) The parties intend that they are legally bound by the terms of each
      Transaction from the moment they agree to those terms (whether orally or
      otherwise). A Confirmation shall be entered into as soon as practicable
      and may be executed and delivered in counterparts (including by facsimile
      transmission) or be created by an exchange of telexes or by an exchange of
      electronic messages on an electronic messaging system, which in each case
      will be sufficient for all purposes to evidence a binding supplement to
      this Agreement. The parties will specify therein or through another
      effective means that any such counterpart, telex or electronic message
      constitutes a Confirmation.

(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10. OFFICES; MULTIBRANCH PARTIES

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11. EXPENSES

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document

                                       12
<PAGE>

to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.

12. NOTICES

(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-

      (i) if in writing, and delivered in person or by courier, on the date it
      is delivered;

      (ii) if sent by telex, on the date the recipient's answerback is received;

      (iii) if sent by facsimile transmission, on the date that transmission is
      received by a responsible employee of the recipient in legible form (it
      being agreed that the burden of proving receipt will be on the sender and
      will not be met by a transmission report generated by the sender's
      facsimile machine);

      (iv) if sent by certified or registered mail (airmail, if overseas) or the
      equivalent (return receipt requested), on the date that mail is delivered
      or its delivery is attempted; or

      (v) if sent by electronic messaging system, on the date that electronic
      message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following, day that is a Local Business Day.

(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13. GOVERNING LAW AND JURISDICTION

(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-

      (i) submits to the jurisdiction of the English courts, if this Agreement
      is expressed to be governed by English law, or to the non-exclusive
      jurisdiction of the courts of the State of New York and the United States
      District Court located in the Borough of Manhattan in New York City, if
      this Agreement is expressed to be governed by the laws of the State of New
      York; and

      (ii) waives any objection which it may have at any time to the laying of
      venue of any Proceedings brought in any such court, waives any claim that
      such Proceedings have been brought in an inconvenient forum and further
      waives the right to object, with respect to such Proceedings, that such
      court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any Other jurisdiction.

(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

(d) WAILER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with

                                       13
<PAGE>

respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of
injunction, order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v) execution or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction and
irrevocably agrees, to the extent permitted by applicable law, that it will not
claim any such immunity in any Proceedings.

14. DEFINITIONS

As used in this Agreement:-

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means:-

(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, The Non-default
Rate; and

(d) in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1 % per annum.

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without

                                       14
<PAGE>

limitation, a connection arising from such recipient or related person being or
having been a citizen or resident of such jurisdiction, or being or having been
organized, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in
such jurisdiction, but excluding a connection arising solely from such recipient
or related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial center, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of The earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference Market
maker to enter into a transaction (the "Replacement Transaction") that would
have the effect of preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may in good faith, agree. The party making the determination (or its agent) will
request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(c), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the biggest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

                                       15
<PAGE>

"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

"OFFICE" means a branch or office of a party, which may be such party's head or
home office.

"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the biggest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, The sum of:-

(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"SPECIFIED ENTITY" has the meaning specified in the Schedule.

"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

"STAMP TAX" means any stamp, registration, documentation or similar tax.

"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

                                       16
<PAGE>

"TAX EVENT" has the meaning specified in Section 5(b).

"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).

"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market.

value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

ROYAL BANK OF CANADA                         NORSKE SKOG CANADA FINANCE LIMITED

By: ________________________                 By: /s/ R. Leverton
                                                 ---------------------

                                       17
<PAGE>

    Name:                                        Name: Ralph Leverton
    Title:                                       Title: Director
    Date:                                        Date: August 20, 2001

By: __________________________               By: /s/ Peter M. Staiger
                                                 --------------------------
    Name:                                        Name: Peter  M. Staiger
    Title:                                       Title: Director
    Date:                                        Date: August 20, 2001

                                       18
<PAGE>

value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

ROYAL BANK OF CANADA                          NORSKE SKOG CANADA FINANCE LIMITED

By:  /s/ Karen Haist                          By: ______________________________
   ---------------------------
   Name:                                          Name:

   Title:                                         Title:

   Date:                                          Date:

                                              NORSKE SKOG CANADA FINANCE LIMITED

                                              By: ______________________________

                                                  Name:

                                                  Title:

                                                  Date:

                                       18
<PAGE>

                                                                  Execution Copy

                                      ISDA
             INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.

                                    SCHEDULE
                                     TO THE
                                MASTER AGREEMENT

                           DATED AS OF AUGUST 20, 2001

                                     BETWEEN

                              ROYAL BANK OF CANADA
                                   ("PARTY A")

                                       AND

                       NORSKE SKOG CANADA FINANCE LIMITED
                                   ("PARTY B")

PART 1. TERMINATION PROVISIONS.

(a)   "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-

      Section 5(a)(v),        None
      Section 5(a)(vi),       None
      Section 5(a)(vii),      None
      Section 5(b)(iv),       None

      in relation to Party B for the purpose of:-

      Section 5(a)(v),       None
      Section 5(a)(vi),      None
      Section 5(a)(vii),     None
      Section 5(b)(iv),      None

(b)   "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
      this Agreement.

(c)   The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party A
      and will apply to Party B, provided that the words ", or becoming capable
      at such time of being declared", appearing on the seventh line thereof
      shall be deleted therefrom;

      If such provisions apply:-

      The "." at the end of the definition of "SPECIFIED INDEBTEDNESS" in
      Section 14 of this Agreement shall be deleted and replaced by the
      following: ", except that such term shall not include obligations in
      respect of deposits received in the ordinary course of Party A's banking
      business, if any."

                                      -19-
<PAGE>

      "THRESHOLD AMOUNT" means in relation to Party A, 2.5% of its shareholders'
      equity (as disclosed in its most recent financial statements) and Party B,
      CAD 25,000,000 or the equivalent in any other currency.

(d)   The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply
      to Party A and will apply to Party B.

(e)   The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
      to Party A and will not apply to Party B.

(f)   PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
      Agreement:-

      (i) Market Quotation will apply.

      (ii) the Second Method will apply.

      "TERMINATION CURRENCY" means Canadian Dollars.

(h)   ADDITIONAL TERMINATION EVENT will not apply.

PART 2. TAX REPRESENTATIONS.

(a)   PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
      Party A will make the following representation and Party B will not make
      the following representation:

      It is not required by any applicable law, as modified by the practice of
      any relevant governmental revenue authority, of any Relevant Jurisdiction
      to make any deduction or withholding for or on account of any Tax from any
      payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
      Agreement) to be made by it to the other party under this Agreement. In
      making this representation, it may rely on (i) the accuracy of any
      representations made by the other party pursuant to Section 3(f) of this
      Agreement, (ii) the satisfaction of the agreement contained in Section
      4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
      of any document provided by the other party pursuant to Section 4(a)(i) or
      4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
      the other party contained in Section 4(d) of this Agreement, provided that
      it shall not be a breach of his representation where reliance is placed on
      clause (ii) and the other party does not deliver a form or document under
      Section 4(a)(iii) by reason of material prejudice to its legal or
      commercial position.

(b)   PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this Agreement,
      Party A and Party B make the representations specified below, if any:

      (i) The following representation will not apply to Party A and will apply
      to Party B if Party A is not acting out of its Toronto office:-

      It is fully eligible for the benefits of the "Business Profits" or
      "Industrial and Commercial Profits" provision, as the case may be, the
      "Interest" provision or the "Other Income" provision (if any) of the
      Specified Treaty with respect to any payment described in such provisions
      and received or to be received by it in connection with this Agreement and
      no such payment is attributable to a trade or business carried on by it
      through a permanent establishment in the Specified Jurisdiction.

If such representation applies, then:-

"SPECIFIED TREATY" means with respect to Party A not applicable.

"SPECIFIED JURISDICTION" means with respect to Party A not applicable.

                                      -20-
<PAGE>

"SPECIFIED TREATY" means with respect to Party B the income tax convention or
treaty, if any, between the Government of Canada and the Government of the
jurisdiction in which Party A's office is located for the purpose of the
Transaction.

"SPECIFIED JURISDICTION" means with respect to Party B the country in which is
located the office through which Party A is acting for the purpose of the
Transaction.

(ii) Other Payee Representations:-

      (a) Party A is not a non-resident of Canada for purposes of the Income Tax
          Act (Canada).

      (b) Party B is not a non-resident of Canada for purposes of the Income Tax
          Act (Canada).

PART 3. AGREEMENT TO DELIVER DOCUMENTS.

For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:-

(a) Tax forms, documents or certificates to be delivered are:-

<TABLE>
<CAPTION>
PARTY REQUIRED
  TO DELIVER                   FORM/DOCUMENT/                  DATE BY WHICH
   DOCUMENT                     CERTIFICATE                   TO BE DELIVERED
--------------   -----------------------------------------    ----------------
<S>              <C>                                          <C>
Party A and      Any form or document,accurately completed    Promptly upon
Party B          and in a manner reasonably satisfactory      request of other
                 to the  other party, that may be             party
                 required or reasonably requested
                 in order to allow the other party to make
                 a payment under this Agreement without any
                 deduction or withholding for or on account
                 of any Tax or with such deduction at a
                 reduced rate
</TABLE>

(b) Other documents to be delivered are:-

<TABLE>
<CAPTION>
                                                                                     COVERED BY
PARTY REQUIRED TO                                              DATE BY WHICH TO     SECTION 3(d)
DELIVER DOCUMENT          FORM/DOCUMENT CERTIFICATE              BE DELIVERED      REPRESENTATION
-----------------    ------------------------------------     -----------------    --------------
<S>                  <C>                                      <C>                  <C>
Party A              Power of Attorney and Certificate of     Upon execution of          Yes
                     Incumbency                               this Agreement,
                                                              and, if requested,
                                                              each Confirmation

Party A              Copy of extract of resolutions with      Upon execution of          Yes
                     respect to execution of agreements       this Agreement

Party B              Copies of the incorporating documents    Upon execution of          Yes
                     and by-laws (or other equivalent or      this Agreement
                     analogous rules) of Party B certified
                     as at the date hereof as true and in
                     full force and effect
</TABLE>

                                      -21-
<PAGE>

<TABLE>
<S>                      <C>                                            <C>                            <C>
Party B                  Certified copies of all resolutions           Upon execution of               Yes
                         required to authorize the signing,            this Agreement,
                         delivery and performance of this              and, if requested,
                         Agreement by Party B and appointing           each Confirmation
                         and empowering individuals with specimens
                         of their respective signatures for and on
                         behalf of Party B to sign and deliver
                         this Agreement and sign under seal or
                         otherwise and deliver all agreements,
                         documents and instruments, and give all
                         instructions, in connection herewith

Party B                  Opinion of legal advisors to Party B in       Upon execution of               No
                         form and.substance satisfactory to Party      this Agreement
                         A

Party A and Party B      Annual and/or quarterly financial             Promptly upon                   Yes
                         - statements                                  request of the other
                                                                       party
</TABLE>

PART 4. MISCELLANEOUS.

(a)   ADDRESS FOR NOTICES. For the purpose of Section 12(a) of this Agreement:-

Address for notices or communications to Party A with respect to this Agreement
shall be given to it at the following address:

          Address:            Royal Bank of Canada
                              2nd Floor
                              Royal Bank Plaza
                              200 Bay Street
                              Toronto, Ontario
                              CANADA M5J 2W7

          Attention:          Managing Director, Global Middle Office

          Facsimile No.:      (416) 842-4334

Unless otherwise provided herein, address for notices or communications to Party
A relating to a particular Swap Transaction including FX Transactions and
Currency Option Transactions concluded with its Toronto office, shall be given
to it at the following address:

<TABLE>
<CAPTION>
        SWAP TRANSACTION                         FX AND CURRENCY OPTION TRANSACTIONS
-------------------------------------     ------------------------------------------------
<S>                                       <C>
Royal Bank of Canada                      Royal Bank of Canada
5th Floor, North Tower                    5th Floor, North Tower
Royal Bank Plaza                          Royal Bank Plaza
200 Bay Street                            200 Say Street
Toronto, Ontario                          Toronto, Ontario
CANADA M5J 2W7                            CANADA M5J 2W7
-------------------------------------     ------------------------------------------------
                                          Attention: FX Settlement (FX Transaction)
Attention: Manager, Capital Market                   Financial Engineering (Currency
           Products Operations                       Option Transaction)
-------------------------------------     ------------------------------------------------
Facsimile No.: (416) 842-4303 or          Facsimile: (416) 842-4307 / (416) 842-4308 (FX
-------------------------------------     ------------------------------------------------
</TABLE>

                                      -22-
<PAGE>

<TABLE>
<S>                                                         <C>
                                                                       Transaction)
                                                                       (416) 842-4314 (Currency Option
              (416)842-4304                                            Transaction)
-------------------------------------------                 -------------------------------------------
Electronic Messaging System: Not Applicable                 Electronic Messaging System: ROYCCAT3IMM
</TABLE>

Address for notices or communications to Party A relating to a particular Swap
Transaction including FX Transactions and Currency Option Transactions concluded
with its Tokyo Office, shall be given to it at the following address:-

<TABLE>
<CAPTION>
         SWAP TRANSACTION            FX AND CURRENCY OPTION TRANSACTIONS.
----------------------------------- ---------------------------------------
<S>                                  <C>
Royal Bank of Canada                 Royal Bank of Canada
Treasury Department                  Treasury Department
32nd Foor, ARK Mori Building         32nd Floor, ARK Mori Building
12-32, Akasaka, 1-chome              12-32, Akasaka, 1-chome
Minato-ku, Tokyo 107                 Minato-ku, Tokyo 107
JAPAN                                JAPAN
----------------------------------- ---------------------------------------
Attention: Manager, Capital Markets  Attention: Manager, Operations
----------------------------------- ---------------------------------------
Telex: J26636 Answerback: ROYTOK     Telex: N/A
----------------------------------- ---------------------------------------
Facsimile No.: (03) 5572-1791        Facsimile: (03) 5572-1791
----------------------------------- ---------------------------------------
Electronic Messaging System: N/A     Electronic Messaging System: ROYC JPJT
----------------------------------- ---------------------------------------
</TABLE>

Addresses for notices or communications to Party A relating to a particular Swap
Transaction including FX and Currency Option Transactions concluded with its
Sydney Office shall be given to it at the following address:

<TABLE>
<CAPTION>
           SWAP TRANSACTION                     FX AND CURRENCY OPTION TRANSACTIONS
---------------------------------------       ---------------------------------------
<S>                                           <C>
Royal Bank of Canada                          Royal Bank of Canada
Level 18                                      Level 18
167 Macquarie Street                          167 Macquarie Street
Sydney NSW 2000, Australia                    Sydney NSW 2000, Australia
---------------------------------------       ---------------------------------------
Attention: Manager, Operations                Attention: Manager, Operations
---------------------------------------       ---------------------------------------
Facsimile: 612 9221 1526                      Facsimile: 612 9221 1526
---------------------------------------       ---------------------------------------
Telex: AA20060 Answerback: RBC SYD            Telex: AA20060 Answerback: RBC SYD
---------------------------------------       ---------------------------------------
Electronic Messaging System: ROYC AU 21       Electronic Messaging System: ROYC AU 21
---------------------------------------       ---------------------------------------
</TABLE>

Address for notices or communications to Party A relating to a particular Swap
Transaction including FX Transactions and Currency Option Transactions concluded
with its London Office, shall be given to it at the following address:-

<TABLE>
<CAPTION>
          SWAP TRANSACTION                           FX AND CURRENCY OPTION TRANSACTIONS
----------------------------------------        ----------------------------------------------
<S>                                             <C>
Royal Bank of Canada                            Royal Bank of Canada
71/71 A Queen Victoria Street                   71/71A Queen Victoria Street
London EC4V 4DE                                 London EC4V 4DE
ENGLAND                                         ENGLAND
----------------------------------------        ----------------------------------------------
                                                Attention: FX Settlement (FX Transaction)
                                                           Capital Market Operations (Currency
Attention: Derivative Product Operations                   Option Transaction)
----------------------------------------        ----------------------------------------------
Telex: 92 6933 Answerback: RBCSWP G
----------------------------------------        ----------------------------------------------
                                                Facsimile: 207-329-61 44 (FX Transaction)
                                                           207-248-1423 (Currency Option
Facsimile No.: 44-207-329-6156                             Transaction)
----------------------------------------        ----------------------------------------------
Electronic Messaging System: N/A                Electronic Messaging System: ROYC GB 2L
----------------------------------------        ----------------------------------------------
</TABLE>

                                      -23-
<PAGE>

Address for notices or communications to Party A relating to a particular Swap
Transaction (excluding FX Transactions or Currency Option Transactions)
concluded with its New York Office, shall be given to it at the following
address:-

<TABLE>
<CAPTION>
          SWAP TRANSACTION                  FX AND CURRENCY OPTION TRANSACTIONS
--------------------------------------      ------------------------------------
<S>                                         <C>
Royal Bank of Canada                        N/A
New York Branch
One Liberty Plaza, 2nd Floor
165 Broadway
New York, New York
10006-1404
U.S.A
--------------------------------------      ------------------------------------
Attention: RBC DS Global Markets            N/A
           Capital Markets Group
--------------------------------------      ------------------------------------
Telex: 420464 Answerback: RBOC              N/A
--------------------------------------      ------------------------------------
Facsimile No.: 212-428-3018                 N/A
--------------------------------------      ------------------------------------
Electronic Messaging System: N/A            N/A
--------------------------------------      ------------------------------------
</TABLE>

Address for notices or communications to Party A relating to a particular Swap
Transaction including FX Transactions and Currency Option Transactions concluded
with its Singapore Office, shall be given to it at the following address:-

<TABLE>
<CAPTION>
          SWAP TRANSACTION                        FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------      ---------------------------------------
<S>                                             <C>
Royal Bank of Canada                            Royal Bank of Canada
20 Raffles Place                                20 Raffles Place
#27-03/08 Ocean Towers                          #27-03/08 Ocean Towers
Singapore, 048620                               Singapore, 048620
Republic of Singapore                           Republic of Singapore
------------------------------------------      ---------------------------------------
Attention: Head, Treasury Operations, Asia      Attention: Manager, Operations
------------------------------------------      ---------------------------------------
Telex: RS 23451 Answerback: ROYSPO              Telex: RS 23451 Answerback: ROYSPO
------------------------------------------      ---------------------------------------
Facsimile: 65-532-3469                          Facsimile: 65-532-3469
------------------------------------------      ---------------------------------------
Electronic Messaging System: N/A                Electronic Messaging System: ROYC SG SG
------------------------------------------      ---------------------------------------
</TABLE>

      Address for notices or communications to Party B with respect to this
      Agreement and any Transactions shall be given to it at the following
      address:

      Address:    Norske Skog Canada Finance Limited
                  9th Floor, 700 West Georgia Street
                  Vancouver, BC Canada V7Y 1J7

      Attention:  Treasurer
      Fax:        (604) 654-4254

(b)   PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:-

      Party A appoints as its Process Agent - None

      Party B appoints as its Process Agent - None

(c)   OFFICES. The provisions of Section 10(a) will apply to Party A and Party
      B; provided, however, that without in any way limiting the effect of the
      foregoing, each party agrees to deal first with the Office of the other
      party specified in the Confirmation rather than such party's head or home
      office with respect to resolving any default that results solely from wire
      transfer difficulties or an error or omission of an administrative or
      operational nature. Notwithstanding the foregoing, a party (the

                                      -24-
<PAGE>

      "Owed Party") may seek payment from the head or home office of the other
      party (the "Owing Party") with respect to this Agreement in the event that
      an amount payable to the Owed Party by the Owing Party pursuant to this
      Agreement as a result of the designation of an Early Termination Date has
      not been paid in full when due.

(d)   MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:-

      Party A is a Multibranch Party and may act through the following offices:

      (i) for the purposes of FX Transactions and Currency Options entered into
      hereunder, Toronto, London, Singapore, Sydney and Tokyo; and

      (ii) for the purposes of all other Transactions entered into hereunder,
      Toronto, New York, London, Singapore, Sydney and Tokyo.

      Party B is not a Multibranch Party.

(e)   CALCULATION AGENT. The Calculation Agent is Party A unless otherwise
      specified in a Confirmation in relation to the relevant Transaction. With
      respect to Section 5(a)(ii) of the Agreement, if a party hereto is
      designated as the Calculation Agent for any Transaction, then Section
      5(a)(ii) shall not include any failure by that party to comply with its
      obligations as Calculation Agent and the sole remedy of the other party
      for such failure shall be the right, upon notice to the Calculation Agent,
      to designate itself or a third party as a replacement Calculation Agent.

(f)   CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:- Credit
      Agreement and any document providing for Security (as defined in the
      Credit Agreement)

(g)   CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
      Party B:- "Restricted Parties" (as defined in the Credit Agreement)

(h)   GOVERNING LAW. This Agreement will be governed by and construed in
      accordance with the laws of the Province of Ontario and the federal laws
      of Canada applicable therein.

(i)   NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
      will apply to all Transactions.

(j)   "AFFILIATE" will have the meaning specified in Section 14 of this
      Agreement except in respect of Party B it will mean any Restricted Party
      and for the purpose of Section 3(c) it will mean for each party any
      Specified Entity or Credit Support Provider designated for the purpose of
      Sections 5(a)(v), (vi) or (vii).

PART 5. OTHER PROVISIONS.

1.    DEFINITIONS. This Agreement, each Confirmation, and each Transaction are
      subject to the 2000 ISDA Definitions (the "Definitions"), as published by
      the International Swaps and Derivatives Association, Inc., and will be
      governed in all respects by the provisions set forth in the Definitions
      with references to "Swap Transaction" therein being a reference to
      "Transaction" for purposes of this Agreement. The provisions of the
      Definitions are incorporated by reference in, and made part of, this
      Agreement as if set forth in full in this Agreement and each Confirmation.
      In the event of any inconsistency between (i) (A) the provisions of this
      Schedule and the Master Agreement of which it is a part; and (B) the
      Definitions, the provisions set forth in this Schedule will prevail; and
      (ii) in the event of any inconsistency between (A) the provisions of a
      Confirmation, and (B) any of this Schedule, the Master Agreement or the
      Definitions, the provisions set forth in the Confirmation will prevail.

2.    OBLIGATIONS BINDING. For purposes of Section 3(a)(v) the representation as
      to enforceability of such obligation shall also be subject to the fact
      that judgments awarded by Canadian courts may only be

                                      -25-

<PAGE>

      in Canadian dollars and that such judgments may be awarded based on a rate
      of exchange in existence on a day other than the day of payment.

3.    ILLEGALITY. For purposes of Section 5(b)(I), the obligation of Party A to
      comply with any official directive issued or given by any government
      agency or authority with competent jurisdiction which has the result
      referred to in Section 5(b)(i) will be deemed to be an "Illegality".

4.    PAYMENTS ON EARLY TERMINATION - EVENTS OF DEFAULT - SECOND METHOD.

      Section 6 of this Agreement is amended by the inclusion of the following
      Section 6(f):

      "(f) CONDITIONS TO CERTAIN PAYMENTS. Notwithstanding the provisions of
      Section 6(e)(i)(3) and (4), as applicable, if the amount referred to
      therein is a positive number, the Defaulting Party will pay such amount to
      the Non-defaulting Party, and if the amount referred to therein is a
      negative number, the Non-defaulting Party shall have no obligation to pay
      any amount thereunder to the Defaulting Party unless and until the
      conditions set forth in (i) and (ii) below have been satisfied at which
      time there shall arise an obligation of the Non-defaulting Party to pay to
      the Defaulting Party an amount equal to the absolute value of such
      negative number less any and all amounts which the Defaulting Party may be
      obligated to pay under Section 11:

      (i)   the Non-defaulting Party shall have received confirmation
            satisfactory to it in its sole discretion (which may include an
            unqualified opinion of its counsel) that (x) no further payments or
            deliveries under Section 2(a)(i) or 2(e) in respect of Terminated
            Transactions will be required to be made in accordance with Section
            6(c)(ii) and (y) each Specified Transaction shall have terminated
            pursuant to its specified termination date or through the exercise
            by a party of a right to terminate and all obligations owing under
            each such Specified Transaction shall have been fully and finally
            performed; and

      (ii)  all obligations (contingent or absolute, matured or unmatured) of
            the Defaulting Party and any Affiliate of the Defaulting Party to
            make any payment or delivery to the Non-defaulting Party or any
            Affiliate of the Non-defaulting Party shall have been fully and
            finally performed."

5.    EXECUTION. Section 9(e)(ii) of this Agreement is deleted and replaced in
      its entirety with the following provision:

      "(ii) Execution of Transactions. For the purposes of this Agreement, the
      parties intend that they are legally bound by the terms of each
      Transaction from the moment they agree to those terms (whether orally or
      otherwise) with respect to each Transaction. A Confirmation shall be
      entered into by the parties and may be executed and delivered in
      counterparts including by facsimile transmission which will be sufficient
      for all purposes to evidence a binding supplement to this Agreement.
      Unless a Transaction has been or will be confirmed by way of an electronic
      messaging system: (a) Party A will, on or promptly after entering into
      each Transaction, send to Party B by facsimile transmission a Confirmation
      in the form utilized by Party A; (b) Party B will promptly thereafter
      confirm by facsimile the accuracy of or request the correction of such
      Confirmation; and (c) upon such confirmation by Party B, such facsimile
      transmissions shall be deemed to constitute a legally binding supplement
      to this Agreement upon the particular terms stated therein."

6.    SERVICE OF PROCESS. With respect to the provisions of Section 13(c) of the
      Agreement, the reference therein to Section 12 to the contrary
      notwithstanding, no consent is given by either party to service of process
      by telex, facsimile transmission or electronic messaging system.

7.    EQUIVALENCY CLAUSE. For the purpose of disclosure pursuant to the Interest
      Act (Canada), the yearly rate of interest to which any rate of interest
      payable under this Agreement that is to be calculated on any basis other
      than a full calendar year is equivalent may be determined by multiplying
      such rate by a fraction the numerator of which is the actual number of
      days in the calendar year in which such yearly rate of interest is to be
      ascertained and the denominator of which is the number of days comprising
      such other basis.

                                      -26-

<PAGE>

8.    SET-OFF. Without affecting the provisions of this Agreement requiring the
      calculation of certain net payment amounts, all payments under this
      Agreement will be made without setoff or counterclaim; provided, however,
      that upon the designation or deemed designation of any Early Termination
      Date, in addition to and not in limitation of any other right or remedy
      (including any right to setoff, counterclaim, or otherwise withholding
      payment) under any agreement or applicable law , rule or regulation, the
      Non-defaulting Party or the party which is not the Affected Party (in
      either case, "X") shall at its option have the right, at any time and from
      time to time, without prior notice to the Defaulting Party or the Affected
      Party (in either case "Y") to setoff any sum or obligation (whether or not
      arising under this Agreement and whether matured or unmatured) owed or due
      by Y to X against any sum or obligation (whether or not arising under this
      Agreement and whether matured or unmatured) owed or due by X or any
      Affiliate of X (the "Original Obligation") to Y, and, for this purpose,
      may convert one currency into another at the rate of exchange stipulated
      by Party A for the purchase of such other currency from time to time. Any
      such setoff shall automatically satisfy and discharge the Original
      Obligation to Y and, if the Original Obligation exceeds the sum or
      obligation to be set off against, the Original Obligation shall be novated
      and replaced by an obligation to pay to Y only the excess of the Original
      Obligation over such sum or obligation. Y authorizes X and its Affiliates,
      on behalf of and in the name of Y, to do all such acts and to execute all
      such documents as may be required to effect such application.

9.    JURISDICTION. In substitution for the provisions of Section 13 (b)(i),
      each party agrees that any suit, action or proceeding arising out of or
      relating to this Agreement against it or any of its assets may be brought
      in Province of Ontario and hereby attorns to the non-exclusive
      jurisdiction of such courts over the subject matter of any such suit,
      action or proceeding.

10.   COVENANTS. Party B agrees with and confirms to Party A that all covenants
      and amendments, and replacements thereto from time to time (the
      "Covenants") on the part of Party B contained in the CDN$700,000,000
      Credit Facility of August 14, 2001 between Party A and Party B as may be
      amended, restated, supplemented, modified or replaced from time to time
      (the "Credit Agreement"), shall be incorporated in this Agreement by
      reference and form a part of this Agreement with references to the Credit
      Agreement and Borrowings deemed references to this Agreement and
      obligations under this Agreement respectively. Party B agrees and confirms
      that if the Credit Agreement shall expire, be cancelled or terminated, the
      Covenants then existing in the Credit Agreement at the time of such
      expiration, cancellation or termination shall remain in full force and
      effect and be the Covenants which form a part of this Agreement.

11.   CREDIT EVENT. In addition to any other rights of Party A herein contained
      and notwithstanding anything to the contrary in this Agreement, upon the
      expiration, cancellation or termination of the Credit Agreement, or if
      Party A shall cease to be a Lender under the Credit Agreement, Party A may
      upon giving two (2) Business Days notice to Party B, which shall be the
      Affected Party, terminate this Agreement and all Transactions thereunder
      in accordance with the terms and conditions hereof. Notwithstanding the
      foregoing, in the event that the Credit Agreement is not terminated but
      Party A ceases to be a Lender under the Credit Agreement, within one
      Business Day of receiving notice of termination from Party A hereunder,
      Party B may notify Party A that within five Business Days it will either
      (A) provide security to cover all Transactions hereunder that ranks pari
      passu with the Security (as defined in the Credit Agreement) or (B)
      provide an assignment agreement under which Party A will assign the
      Transactions to another entity. If the Transactions are not covered by
      adequate security or assigned as provided herein. Party A will have the
      right to terminate this Agreement and all Transactions.

12.   RELATIONSHIP BETWEEN PARTIES. Each party will be deemed to represent to
      the other party on the date on which it enters into a Transaction that
      (absent a written agreement between the parties that expressly imposes
      affirmative obligations to the contrary for the Transaction):

      (a) Non Reliance. It is acting for its own account, and it has made its
      own independent decisions to enter into that Transaction and as to whether
      that Transaction is appropriate or proper for it based upon its own
      judgment and upon advice from such advisors as it has deemed necessary. It
      is not relying on any communication (written or oral) of the other party
      as investment advice or as a recommendation to enter into that
      Transaction; it being understood that information and explanations

                                      -27-

<PAGE>

      related to the terms and conditions of a Transaction shall not be
      considered investment advice or a recommendation to enter into that
      Transaction. No communication (written or oral) received from the other
      party shall be deemed to be an assurance or guarantee as to the expected
      results of that Transaction.

      (b) Assessment and Understanding. It is capable of assessing the merits of
      and understanding (on its own behalf or through independent professional
      advice), and understands and accepts, the terms, conditions and risks of
      that Transaction. It is also capable of assuming and assumes, the risks of
      that Transaction.

      (c) Status of Parties. The other party is not acting as a fiduciary for or
      as an advisor to it in respect of that Transaction.

13.   ELECTRONIC CONFIRMATIONS. Transactions may be confirmed in accordance with
      this subpart, notwithstanding anything to the contrary herein. Where a
      Transaction is confirmed by means of an electronic messaging system
      (including without limitation, circumstances where such electronic message
      is printed and faxed or otherwise delivered by one party to the other
      party) that the parties have elected to use to confirm such Transaction,

      (i)   such confirmation will constitute a 'Confirmation' as referred to in
            this Agreement even where not so specified in the Confirmation, and

      (ii)  such Confirmation will supplement, form part of, and be subject to
            this Agreement and all provisions in this Agreement will govern the
            Confirmation except as modified therein.

14    ELECTRONIC SIGNATURES. Party A confirms, and Party B acknowledges, that
      Party A uses a computer-based system to execute certain Confirmations and
      that each such Confirmation executed by Party A by means of an
      electronically-produced signature shall have the same legal effect as if
      such signature had been manually written on such Confirmation and that
      each such Confirmation shall be deemed to have been signed for the
      purposes of any statute or rule of law that requires such Confirmation to
      be signed. The parties acknowledge that in any legal proceedings between
      them respecting or in any way relating to this Agreement, each party
      expressly waives any right to raise any defence or waiver of liability
      based upon the execution of a Confirmation by Party A by means of an
      electronically-produced signature. This provision shall apply to all
      Confirmations outstanding as of the date hereof and executed by Party A by
      means of an electronically-produced signature, and to all Confirmations in
      respect of Transactions entered into between Party A and Party B after the
      date hereof.

15.   CONSENT TO RECORDING. The parties agree that each may electronically
      record all telephonic conversations between their trading and marketing
      personnel and that any such tape recordings may be submitted in evidence
      in any Proceedings relating to the Agreement. In the event of any dispute
      between the parties as to the terms of any Transaction governed by this
      Agreement, the parties may use the electronic recordings as the preferred
      evidence of the terms of the Transaction, notwithstanding the existence of
      any writing to the contrary.

16.   QUALIFIED PARTY REPRESENTATION. Each party represents to the other party
      (which representations will be deemed to be repeated by each party on each
      date on which a Transaction is entered into) that it is a Qualified Party
      as such term is defined in any securities act, order, rule, decree or
      regulation which is applicable to such party.

17    REPRICING, TERMINATION OR ASSIGNMENT. The parties hereto acknowledge that
      they will enter into an aggregate repricing or termination agreement with
      each other and with other hedge providers of Party B and that such
      agreement (the "Aggregate Repricing Agreement") may require the parties
      hereto to reprice, transfer or assign certain Transactions hereunder in
      order to comply with the mark to market cap provisions of the Aggregate
      Repricing Agreement.

18    TRANSACTIONS WITH AFFILIATES. Party B agree that all transactions of the
      type described in the definition of Specified Transaction between Party A
      and any of Party B's Affiliates will be transferred

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<PAGE>

      from such Affiliate or Affiliates to Party B within thirty days of the
      date of this Agreement. Party A hereby consents to any such transfer.

PART 6. FOREIGN EXCHANGE AND CURRENCY OPTION TRANSACTIONS

1.    SCOPE/DEFINITIONS/INCONSISTENCY

      The terms and conditions of this Part 6 shall apply only to a Transaction
      entered into between the offices specified by the parties in Part 4(d) of
      this Schedule which are also Designated Offices and which is described in
      the related Confirmation as a Currency Option or FX Transaction. Any such
      Transaction shall constitute a "Transaction" for the purposes of this
      Agreement and this Schedule, but shall be referred to in this Part 6 as a
      "Currency Option" or "FX Transaction".

      The definitions and provisions contained in the 1998 FX and Currency
      Option Definitions (the "FX Definitions") as published by the
      International Swaps and Derivatives Association, Inc., the Emerging
      Markets Traders Association and The Foreign Exchange Committee are
      incorporated by reference into, and made part of, this Part 6 and any
      Confirmation of a Currency Option or FX Transaction.

      In the event of any inconsistencies, the parts of this Agreement shall
      rank as follows and the relevant term in the highest ranking document
      shall prevail:

                        (i)   the Confirmation;

                        (ii)  this Part 6 of this Schedule;

                        (iii) the remainder of this Schedule;

                        (iv)  the printed form of Agreement;

                        (v)   the FX Definitions; and

                        (vi)  the Definitions,

      provided that, in the event that the FX Definitions or the Definitions are
      incorporated by reference into a Confirmation, any amendments to the FX
      Definitions or the Definitions made herein will prevail unless further
      amended in the Confirmation.

2.    PAYMENT INSTRUCTIONS

      All payments to be made hereunder in respect of FX Transactions and
      Currency Options shall be made in accordance with standing payment
      instructions exchanged by the parties (or as otherwise agreed or specified
      in a Confirmation or other written communication signed by the relevant
      party and delivered to the other party in accordance with Part 4 of this
      Schedule).

3.    PREMIUM PAYMENTS

      Article 3 of the FX Definitions is amended by the addition of the
      following as a new Section 3.9:

      "Section 3.9. Terms Relating to Payment of Premium.

      (a)   PAYMENT OF PREMIUM. Unless otherwise agreed in writing by the
            parties hereto, the Buyer shall be obligated to pay the Premium
            related to a Currency Option no later than its Premium Payment Date.

      (b)   LATE PAYMENT OR NON-PAYMENT OF PREMIUM. If a Premium is not received
            on or before the Premium Payment Date, the Seller may elect: (i) to
            accept a late payment of such Premium; (ii) to give written notice
            of such non-payment and, if such payment shall not be received
            within two (2) Local Business Days of such notice, treat the related
            Currency Option as void; or (iii) to give written notice of such
            non-payment and, if such payment shall not be received within two
            (2) Local Business Days of such notice, treat such non-payment as an
            Event of Default under Section 5(a)(i). If the Seller elects to act
            under clause (i) of the preceding

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<PAGE>

            sentence, the Buyer shall pay interest on such Premium from and
            including the Premium Payment Date to but excluding the late payment
            date in the same currency as such Premium at overnight LIBOR. If the
            Seller elects to act under clause (ii) or (iii) above, the Buyer
            shall pay all out-of-pocket costs and actual damages incurred in
            connection with such unpaid Premium or void Currency Option,
            including, without limitation, interest on such Premium from and
            including the Premium Payment Date to but excluding the late payment
            date in the same currency as such Premium at overnight LIBOR and any
            other losses, costs or expenses incurred by the Seller in connection
            with such terminated Currency Option, for the loss of its bargain,
            its cost of funding, or the loss incurred as a result of
            terminating, liquidating, obtaining or re-establishing a delta hedge
            or related trading position with respect to such Currency Option.

4. TERMINATION AND DISCHARGE OF CURRENCY OPTIONS; NETTING OF OPTION PREMIUMS AND
OTHER AMOUNTS

      Section 2(c) of the Agreement shall not apply to Currency Options and
      instead the following shall apply to Currency Options.

      (a)   DISCHARGE AND TERMINATION. Unless otherwise agreed in writing by the
            parties, any Call Option or any Put Option written by a party will
            automatically be terminated and discharged, in whole or in part, as
            applicable, against a Call Option or a Put Option, respectively,
            written by the other party, such termination and discharge to occur
            automatically upon the payment in full of the last Premium payable
            in respect of such Currency Options; provided that such termination
            and discharge may only occur in respect of Currency Options:

            (i)   each being with respect to the same Put Currency and the same
                  Call Currency:

            (ii)  each having the same Expiration Date and Expiration Time;

            (iii) each being of the same style, i.e., either both being American
                  Style Options or both being European Style Options;

            (iv)  each having the same Strike Price;

            (v)   each being transacted by the same pair of Designated Offices
                  of Buyer and Seller;

            (vi)  neither of which shall have been exercised by delivery of a
                  Notice of Exercise; and

            upon the occurrence of such termination and discharge, neither party
            shall have any further obligation to the other party in respect of
            the relevant Currency Options or, as the case may be, parts thereof
            so terminated and discharged. Such termination and discharge shall
            be effective notwithstanding that either party may fail to record
            such termination and discharge on its books. In the case of a
            partial termination and discharge (i.e. where the relevant Currency
            Options are for different amounts of the Currency Pair), the
            remaining portion of the Currency Option which is partially
            discharged and terminated shall continue to be a Currency Option for
            all purposes of this Agreement.

      (b)   NETTING OF CURRENCY OPTIONS - PREMIUMS. If, on any date, and unless
            otherwise mutually agreed by the parties, Premiums would otherwise
            be payable hereunder in the same currency between the same
            respective pair of Currency Option Netting Offices of the parties,
            then, on such date, each party's obligation to make payment of any
            such Premium will be automatically satisfied and discharged and, if
            the aggregate Premium(s) that would otherwise have been payable by
            such Currency Option Netting Office of one party exceeds the
            aggregate Premium(s) that would otherwise have been payable by such
            Currency Option Netting Office of the other party, replaced by an
            obligation upon the party by whom the larger

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<PAGE>

            aggregate Premium(s) would have been payable to pay the other party
            the excess of the larger aggregate Premium(s) over the smaller
            aggregate Premium(s) and, if the aggregate Premiums are equal, no
            payment shall be made.

      (c)   NETTING OF CURRENCY OPTIONS - OTHER AMOUNTS. If, on any date, and
            unless otherwise mutually agreed by the parties, amounts other than
            Premium payments would otherwise be payable under the Agreement in
            the same currency between the same respective pair of Currency
            Option Netting Offices of the parties, then, on such date, each
            party's obligation to make payment of any such amount will be
            automatically satisfied and discharged and, if the aggregate amount
            that would otherwise have been payable by such Currency Option
            Netting Office of one party exceeds the aggregate amount that would
            otherwise have been payable by such Currency Option Netting Office
            of the other party, replaced by an obligation upon the party by whom
            the larger aggregate amount would have been payable to pay the other
            party the excess of the larger aggregate amount over the smaller
            aggregate amount and, if the aggregate amounts are equal, no payment
            shall be made.

5. NETTING OF FX TRANSACTIONS

      Section 2(c) of the Agreement shall not apply to FX Transactions and
      instead the following shall apply to FX Transactions.

      (a)   PAYMENT NETTING. If on any date, more than one delivery of a
            particular currency is to be made between a pair of FX Payment
            Netting Offices, then each party shall aggregate the amounts of such
            currency deliverable by it and only the difference between these
            aggregate amounts shall be delivered by the party owing the larger
            aggregate amount to the other party, and, if the aggregate amounts
            are equal, no delivery of the currency shall be made.

      (b)   NOVATION NETTING. If the parties enter into an FX Transaction
            through a pair of Novation Netting Offices giving rise to a Currency
            Obligation for the same Settlement Date and in the same currency as
            a then existing Currency Obligation between the same pair of
            Novation Netting Offices, then immediately upon entering into such
            FX Transaction, each such Currency Obligation shall automatically
            and without further action be individually cancelled and
            simultaneously replaced by a new Currency Obligation for such
            Settlement Date determined as follows: the amounts of such currency
            that would otherwise have been deliverable by each party on such
            Settlement Date shall be aggregated and the party with the larger
            aggregate amount shall have a new Currency Obligation to deliver to
            the other party the amount of such currency by which its aggregate
            amount exceeds the other party's aggregate amount, provided that if
            the aggregate amounts are equal, no new Currency Obligation shall
            arise. This section shall not affect any other Currency Obligation
            of a party to deliver any different currency on the same Settlement
            Date.

      (c)   INAPPLICABILITY OF PARTS 6 (4)(b) AND (c) AND (5)(a) AND (5)(b)
            ABOVE. The provisions of Parts 6 (4)(b) and (c) and (5)(a) and (b)
            shall not apply if an Early Termination Date has been designated or
            been deemed to be designated under the Agreement or if any of the
            circumstances described in Section 5(a)(vii)(3), (4), (5), (6), (7)
            or (8) (in the case of (8), so far as the analogy is with the
            aforementioned sub-paragraphs) have occurred without being dismissed
            in relation to either party.

      (d)   FAILURE TO RECORD. The provisions of Part 6 (5)(b) above shall apply
            notwithstanding that either party may fail to record the new
            Currency Obligations in its books.

      (e)   CUT OFF DATE AND TIME. The provisions of Part 6 (5)(b) above are
            subject to any cut-off date and cut-off time agreed between the
            applicable Novation Netting Offices of the parties.

6.    AMENDMENTS TO THE FX DEFINITIONS

      The following amendments are made to the FX Definitions:

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<PAGE>

      (a)   Section 3.1 is amended by the addition of the following definitions:

            CURRENCY OBLIGATION. "Currency Obligation" means the obligation of a
            party to deliver currency under the Agreement

            DESIGNATED OFFICE. "Designated Office" means in respect of a party,
            those offices specified both below and in Part 4(d) of this
            Schedule:

                  Party A          Toronto, London, Singapore, Sydney, Tokyo
                  Party B          Vancouver

            NOVATION NETTING OFFICE. "Novation Netting Office" means in respect
            of a party, those offices specified both below and in Part 4(d) of
            this Schedule:

                  Party A          None
                  Party B          None

            CURRENCY OPTION NETTING OFFICE. "Currency Option Netting Office"
            means in respect of a party, those offices specified both below and
            in Part 4(d) of this Schedule:

                  Party A          Toronto
                  Party B          Vancouver

            FX PAYMENT NETTING OFFICE. "FX Payment Netting Office" means in
            respect of a party, those offices specified both below and in Part
            4(d) of this Schedule:

                  Parry A          Toronto, London
                  Party B          Vancouver

      (b)   Section 3.6(a) is amended by the deletion of the final sentence
            thereof and the addition of the following two sentences at the end
            thereof:

            "A Currency Option may be exercised in whole or in part. If a
            Currency Option is exercised in part, the unexercised portion of the
            Currency Option shall continue to be a Currency Option for all
            purposes of this Agreement."

7.    PRIOR AGREEMENT

      The parties acknowledge that any FX Transactions and Currency Obligations
      entered into between the offices specified by the parties in Part 4(d) of
      this Schedule which are also Designated Offices and before this Agreement
      was signed are Transactions governed by and forming part of this
      Agreement. This applies notwithstanding any statement to the contrary
      contained in the relevant Confirmations exchanged between the parties.

      ROYAL BANK OF CANADA                    NORSKE SKOG CANADA FINANCE LIMITED

      By: /s/ Karen Haist                     By: /s/ R. Leverton
          -------------------------               ------------------------------
      Name:                                   Name: RALPH LEVERTON
      Title:                                  Title: DIRECTOR

      By:__________________________           By: /s/ Peter M. Staiger
                                                  ------------------------------
      Name:                                   Name: PETER M. STAIGER
      Title:                                  Title: DIRECTOR

                                      -32-

<PAGE>

                                                                  Execution Copy

                                    AMENDMENT

      AMENDMENT dated as of April 11, 2003 to the ISDA MASTER AGREEMENT dated as
of August 20, 2001 (the "Agreement") between ROYAL BANK OF CANADA (herein called
"Party A") and NORSKE SKOG CANADA FINANCE LIMITED (herein called "Party B").

                              W I T N E S S E T H:

      WHEREAS the parties hereto desire to amend the Agreement to reflect the
foregoing and certain other changes to the Agreement as described herein;

      NOW THEREFORE, in consideration of the mutual agreements herein and in the
Agreement contained, the parties hereto agree as follows:

1.    Part 4(a) of the Schedule to the Agreement with respect to Party A only is
      amended by inclusion of the following:

      "Unless otherwise provided herein, address for notices or communications
      to Party A relating to a particular Commodity Transaction concluded with
      its TORONTO office, shall be given to it at the following address:

                             COMMODITY TRANSACTIONS

                             Royal Bank of Canada
                             5th Floor, North Tower
                             Royal Bank Plaza
                             200 Bay Street
                             Toronto, Ontario
                             CANADA M5J 2W7

                             Attention: Financial Engineering
                                        Operations

                             Facsimile: (416) 842-4314

                             Electronic Messaging System:
                             ROYCCAT3IMM"

2.    The following is added as Part 7 to the Schedule to the Agreement:

      "PART 7 COMMODITY TRANSACTIONS

      1. SCOPE. The terms and conditions of this Part 7 shall apply only to a
      Transaction which is described in the related Confirmation as: (a) a
      transaction that is a commodity swap transaction, cross-commodity swap
      transaction, commodity cap transaction, commodity floor transaction,
      commodity collar

                                       -1-

<PAGE>

                                                                  Execution Copy

      transaction, commodity option transaction or any other similar transaction
      (including any Option with respect to any of these transactions), (b) a
      combination of these transactions and (c) any other transactions
      identified as a Commodity Transaction in the related Confirmation. Any
      such Transaction shall constitute a "Transaction" for the purposes of this
      Agreement and this Schedule, but shall be referred to in this Part 7 as a
      "Commodity Transaction".

      2. DEFINITIONS. The definitions and provisions contained in the 1993 ISDA
      Commodity Derivatives Definitions, as supplemented by the 2000 Supplement
      to the 1993 ISDA Commodity Derivatives Definitions, as published by the
      International Swaps and Derivatives Association, Inc. (the "Commodity
      Definitions") are incorporated by reference into, and made part of, this
      Part 7 and any Confirmation of a Commodity Transaction.

      3. INCONSISTENCY RELATING TO COMMODITY TRANSACTIONS. In the event of any
      inconsistencies, the parts of this Agreement shall rank as follows and the
      relevant term in the highest ranking document shall prevail:

                        (i)   the Confirmation;

                        (ii)  this Part 7 of this Schedule;

                        (iii) the remainder of this Schedule;

                        (iv)  the printed form of Agreement;

                        (v)   the Commodity Definitions; and

                        (vi)  the Definitions.

      4. DELIVERY. It is specifically agreed by the parties hereto that no
      physical delivery of any Commodity or any product derived from a
      Commodity, other than a Futures Contract, shall be permitted or made in
      any Confirmation or in any Transaction under this Agreement.

      5. MARKET DISRUPTION EVENTS. The following Market Disruption Events shall
      apply to Commodity Transactions between the parties:

                        (a)   Price Source Disruption

                        (b)   Trading Suspension

                        (c)   Disappearance of Commodity Reference Price

                        (d)   Material Change in Formula

                        (e)   Material Change in Content

                        (f)   Trading Limitation

                                       -2-

<PAGE>

                                                                  Execution Copy

      6.    DISRUPTION FALLBACKS.

            (a)   Postponement

            (b)   Negotiated Fallback

            (c)   No Fault Termination

      7.    ROUNDING. Rounding of Payments Only."

3. Except as modified herein, the Agreement is ratified and confirmed in all
respects by both Party A and Party B.

      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

      ROYAL BANK OF CANADA                    NORSKE SKOG CANADA
                                              FINANCE LIMITED

      By: /s/ Karen Haist                     By: /s/ David K. Ure
          -------------------                     ------------------------------
      Name: Karen Haist                       Name: David K. Ure
      Title: Vice President                   Title: Controler
             RBC Dominion Securities Inc.

                                              By: /s/ Peter M. Staiger
                                                  ------------------------------
                                              Name: Peter M. Staiger
                                              Title: Treasurer

                                       -3-