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Exhibit 4.1  


Hydro-Québec  


 US$[    ] [    ]% [    ] Series [    ] due
[    ]  


 Guaranteed unconditionally by Québec  




 FORM OF FISCAL AGENCY AGREEMENT  






	 









 
 

FISCAL AGENCY AGREEMENT    
    


THIS AGREEMENT dated as of [    ]. 


A M O N G:



HYDRO-QUÉBEC, a body corporate duly incorporated and validly existing under the Hydro-Québec
Act, as issuer, 


("Hydro-Québec") 


-and
- 


QUÉBEC, as guarantor 


(the
"Guarantor") 


-and
- 


DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation with an office at 60 Wall Street, MS NYC 60-2515,
New York, New York 10005, as fiscal agent, registrar, transfer agent and principal paying agent, 



        (the
"Fiscal Agent") 



        WHEREAS pursuant to an underwriting agreement (the "Underwriting Agreement"), dated as of  [    ],
between Hydro-Québec, Québec (the
"Guarantor") and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston LLC, CIBC World Markets Corp., Citigroup
Global Markets Inc., J.P. Morgan Securities Inc., Putnam Lovell NBF Securities Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc.,
Hydro-Québec has agreed to create, issue and sell $[    ] in lawful money of the United States of America
("U.S. dollars" or "US$" or "$") aggregate
principal amount of [    ]% [    ]Series [    ] due [    ]
(herein collectively called the "Notes"), guaranteed unconditionally by the Guarantor as to payments of principal, [premium] and
interest and Additional Amounts, if any (the "Guarantee"); 


        WHEREAS the sale of the Notes pursuant to the Underwriting Agreement has taken place as described in a Prospectus Supplement dated
[    ], which contains a description of the Notes and the clearing and settlement procedures related thereto; 


        WHEREAS the Notes are issuable in the form of one or more fully registered global Notes as provided herein (such fully registered global
Notes and any fully registered global Notes issued upon any transfer or exchange thereof or in replacement therefor are hereinafter each referred to as a "Global
Note" and collectively referred to as the "Global Notes") and the Global Notes are to be registered in the name of
Cede & Co., as nominee of The Depository Trust Company, New York ("DTC"), and held by Deutsche Bank Trust Company Americas, as
custodian for DTC (the "Custodian"); 





 

        WHEREAS as long as DTC or its nominee is the registered holder of the Global Notes it shall be considered the absolute owner of the Notes
for all purposes notwithstanding any notice to the contrary, and none of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the
records of DTC, Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), or Clearstream Banking,
société anonyme ("Clearstream, Luxembourg") (collectively, the "Clearing
Systems") relating to or payments made by any of the Clearing Systems on account of beneficial interests in the Global Notes; 


        WHEREAS investors may hold interests in the Global Notes directly through any of the Clearing Systems if they are participants of such
systems, or indirectly through organizations which are participants in such systems; 



        WHEREAS all Notes are recorded in a register held by the Fiscal Agent (the "Register"),
and are registered in the name of Cede & Co., for the benefit of owners of beneficial interests in the Notes through DTC, Euroclear and Clearstream, Luxembourg; and 


        WHEREAS owners of beneficial interests in Notes are not, except in limited circumstances, entitled to receive Certificated Notes (as
hereinafter defined). 


        NOW THEREFORE it is hereby agreed as follows: 


1.     Definitions  


        Terms and expressions defined in the "Terms and Conditions" of the Notes contained in the form of Global Notes set
forth in Schedule A shall have the same meaning when used in this Agreement unless otherwise defined herein or unless the context otherwise requires. "Note
holders" or "holders of Notes" or "holders" or
"registered holders" refers to persons entered in the Register as registered holders of Notes. 


2.     Appointment  


        Hydro-Québec hereby appoints the Fiscal Agent as its registrar, fiscal agent, transfer agent and principal paying agent in respect of the Notes
upon and subject to the terms and conditions contained herein and in the Terms and Conditions of the Notes and the Fiscal Agent hereby accepts such appointments. The Fiscal Agent shall have the powers
and authority granted to and conferred upon it hereby and in the Notes and such further powers and authority to act on behalf of Hydro-Québec as Hydro-Québec may
hereafter grant to or confer upon it with the written concurrence of the Fiscal Agent. 


3.     Issue of the Notes  



	(1)
	The
Notes shall be issued in the form one or more Global Notes registered in the name of Cede & Co., as nominee of DTC, and shall be executed by
Hydro-Québec substantially in the form attached as Schedule A with such changes as may be agreed among Hydro-Québec, the Guarantor and the Fiscal Agent. The
Guarantee of the Guarantor shall be endorsed on the Global Notes. The aggregate principal amount of Notes to be issued and outstanding at any time whether in the form of the Global Notes or
Certificated Notes issued in accordance with Section 5, shall not exceed $[    ], except to the extent further Notes are issued in accordance with
Section 19. Forthwith after such execution, the Global Notes shall be delivered to the Fiscal Agent and shall be authenticated by the Fiscal Agent upon the written order of
Hydro-Québec (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of Hydro-Québec), and shall be held by the Fiscal Agent as
Custodian. 



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	(2)
	Owners
of beneficial interests in the Global Notes will not, except in the limited circumstances described in Section 5, be entitled to receive certificates representing Notes
(the "Certificated Notes") or to have Notes registered in their names, nor will they be considered owners or holders of Notes under this Agreement. The
Certificated Notes which may be issued in such limited circumstances will be in fully registered form and substantially in the form of the Global Notes, with the appropriate adjustments and changes
(and including the use of a summary of the Terms and Conditions of the Notes), consistent with the provisions of this Agreement, as may be agreed upon by Hydro-Québec, the Guarantor and
the Fiscal Agent. The Guarantee of the Guarantor shall be endorsed on the Certificated Notes.



	(3)
	The
Global Notes shall be issued and delivered only to or to the order of Cede & Co., as nominee for DTC, or its successor appointed by Hydro-Québec in
accordance with Subsection 5(2). The Global Notes shall be in the principal amount from time to time endorsed thereon.



	(4)
	So
long as Cede & Co., as nominee of DTC, with respect to the Global Notes, is the registered owner of the Global Notes, and subject to applicable law, DTC, or its
nominee, as the case may be, will be deemed to be, and will be treated as, the absolute owner of the Notes represented by the Global Notes for all purposes, notwithstanding any notice to the contrary.
None of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the records of the Clearing Systems relating to or payments made by
the Clearing Systems on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records of the Clearing Systems relating to such beneficial
ownership interests.



	(5)
	The
Global Notes and the Certificated Notes shall be signed (either manually or by facsimile signature), in the case of the Global Notes, by the Chief Financial Officer or the
Corporate Treasurer or the Director, Financial Operations or the Coordinator, Documentation of Hydro-Québec or any other authorized representative of Hydro-Québec and, in
the case of Certificated Notes, by two of the following authorized representatives: (i) either the President and the Chief Executive Officer, the Chief Financial Officer or the Corporate
Treasurer of Hydro-Québec and (ii) the Director, Financial Operations of Hydro-Québec, and shall be authenticated by the Fiscal Agent upon the written
authorization of Hydro-Québec (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of Hydro-Québec). The Guarantee shall be endorsed
on the Global Notes and on the Certificated Notes and shall be signed (either manually or by facsimile signature) by the Minister of Finance or any other authorized representative of the Guarantor
authorized to conclude and to sign on behalf of the Minister of Finance, any borrowings or any documents related thereto. 



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4.     The Register and Transfers  



	(1)
	The
Fiscal Agent, as registrar and transfer agent of Hydro-Québec, shall be responsible for (i) maintaining a record of the aggregate holdings of the Global
Notes of Cede & Co. in the Register; (ii) ensuring that payments of principal [, premium, if any,] and interest in respect of the Notes
received by the Fiscal Agent from Hydro-Québec are duly credited to Cede & Co.; (iii) transmitting to Hydro-Québec any notices from holders of Notes;
and (iv) maintaining at its principal office in The City of New York, New York (the "New York Office") a register for the
following: (a) registering transfers between holders of Notes, (b) registering and maintaining a record of any further issues of Notes pursuant to Section 19 and any
subsequent transfers thereof.



	(2)
	In
the event Certificated Notes are issued in exchange for the Global Notes under the limited circumstances described in Section 5, the Fiscal Agent shall (a) register
and maintain a record of holders of Certificated Notes and (b) register transfers of Notes among holders of Certificated Notes in accordance with such procedures as the Fiscal Agent shall deem
reasonable upon consultation with Hydro-Québec.



	(3)
	The
Fiscal Agent shall not be required to inquire into, or take any action in respect of transfers of beneficial ownership interests in the Global Notes (i) between DTC
participants, (ii) within Euroclear or Clearstream, Luxembourg, or (iii) between DTC, Euroclear and Clearstream, Luxembourg participants.



	(4)
	The
Fiscal Agent will not impose any fees in respect of the Notes, other than reasonable fees for the replacement of lost, stolen, mutilated or destroyed Notes as set out in
Section 5.



	(5)
	The
Register shall at all reasonable times be open for inspection by Hydro-Québec, the Fiscal Agent and any agent of Hydro-Québec or the Fiscal Agent. In
the event of any discrepancy between the principal amount of the Global Notes and the aggregate principal amount of Notes held by Cede & Co., as shown on the Register, the aggregate
principal amount of Notes as shown on the Register shall prevail.



	(6)
	Neither
Hydro-Québec nor the Fiscal Agent shall be required (i) to register the transfer or exchange of any Notes on any Interest Payment Date or during a period
commencing at the close of business of the New York Office of the Fiscal Agent on the 14th calendar day immediately preceding any such date and ending on such date; or (ii) to register
the transfer or exchange of any Notes during the period commencing at the close of business of the New York Office of the Fiscal Agent on the record date of any notice by
Hydro-Québec of any Notes to be redeemed or purchased through the date the notice of redemption or purchase is given; or (iii) to register the transfer or exchange of any Notes
called for redemption unless upon due presentation thereof such Notes called for redemption shall not be redeemed. 



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	(7)
	Subject
to applicable law, Hydro-Québec, the Fiscal Agent or any other agents of Hydro-Québec or the Fiscal Agent shall not be charged with notice of or
be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any Notes and may register the transfer of all or part of the Notes on the direction of the
holder thereof, whether named as trustee or otherwise, as though that person were the beneficial owner thereof. 




5.     Replacement, Exchange and Transfer of Notes  



	(1)
	The
Fiscal Agent, or an agent duly authorized by the Fiscal Agent, is hereby authorized from time to time, in accordance with the provisions of the Notes and of this Section, to
authenticate and deliver:



	(a)
	Notes
in exchange for or in lieu of Notes outstanding on the Register with the same maturity and of like form which have become mutilated, defaced, destroyed, stolen or lost, provided
that the applicant therefor shall have (i) paid such costs as may have been incurred in connection therewith; (ii) (in the case of a lost, stolen or destroyed Note) furnished the Fiscal
Agent with such evidence (including evidence as to the serial number of the Notes in question) and indemnity in respect thereof as Hydro-Québec and the Fiscal Agent may require; and
(iii) surrendered to the Fiscal Agent any mutilated or defaced Notes to be replaced; and



	(b)
	Notes
of an authorized form and denomination in exchange for a like aggregate principal amount of Notes. 








Each
new Note authenticated and delivered upon any registration of transfer or exchange for or in lieu of the whole or any part of any Note shall carry all the rights to interest, if any, accrued and
unpaid and to accrue which were carried by the whole or such part of such latter Note, and notwithstanding anything to the contrary herein contained, such new Note shall be dated the date of the
authentication of such Note. 



	(2)
	Hydro-Québec
will issue or cause to be issued Certificated Notes upon registration of transfer of, or in exchange for, Notes represented by the Global Notes if DTC
i) notifies Hydro-Québec that it is unwilling or unable to continue as depositary in connection with the Global Notes; ii) ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, at a time when it is required to be and a successor depository is not appointed by
Hydro-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered; or iii) acting on direct or indirect instructions of a one
or more holders of a Global Note or any beneficial owner of an interest in a Global Note, requests in writing from Hydro-Québec the exchange, in whole or in part, of such Global Note
for Certificated Notes, but only after an event of default entitling the holders to give Hydro-Québec written notice that such holders elect to declare the principal amount of the Notes
held by them and represented by such Global Note to be due and payable has occurred and is continuing; provided that if DTC is unwilling or does not
promptly make such request to Hydro- Québec, then any beneficial owner of an interest in such Global Note shall be entitled to make such request with respect to such interest. 



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	(3)
	Hydro-Québec
may also at any time and in its sole discretion notify the Fiscal Agent that all of the Notes held in the form of the Global Notes are to be exchanged for
Certificated Notes and, in such event, Hydro-Québec will issue or cause to be issued Certificated Notes upon registration of transfer of or in exchange for, such Global Notes.



	(4)
	In
respect of any such issuance of Certificated Notes, pursuant to Subsections 5(2) or 5(3) above, (i) Hydro-Québec shall promptly provide the
Fiscal Agent with a sufficient number of Certificated Notes in blank form to proceed with such issuance, (ii) DTC shall cause any such Global Notes to be delivered by the Custodian to the
Fiscal Agent and provide the Fiscal Agent with the necessary registration information for such Certificated Notes, (iii) the Fiscal Agent shall authenticate and deliver such Certificated Notes
in an aggregate principal amount equal to the principal amount of any such Global Notes to be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel any such Global Notes and
in the case of a partial exchange, issue and deliver to or to the order of DTC new Global Notes equal to the unexchanged portion of any such Global Notes partially exchanged for Certificated Notes and
(v) the Fiscal Agent shall reduce accordingly the holdings of the holders on the Register. Such Certificated Notes shall be delivered as directed by the persons in whose names such Certificated
Notes are to be registered. All Notes represented by Certificated Notes issued upon any such issuance in exchange for the Notes represented by the Global Notes, shall have the Guarantee of the
Guarantor endorsed thereon (which Guarantee shall be a valid obligation of the Guarantor), shall be a valid obligation of Hydro-Québec, shall be entitled to the same benefits under this
Agreement as the Global Notes, and shall be so exchanged without charge to the Fiscal Agent, DTC or the transferee. On or after any such exchange, the Fiscal Agent shall direct all payments in respect
of such Certificated Notes to the registered holders thereof, including when such exchange occurred after the record date for any payment and prior to the date of such payment.



	(5)
	Hydro-Québec
expressly acknowledges that if a Certificated Note is not promptly issued to a beneficial owner of an interest in a Global Note in accordance with the
terms of this Section 5, then such beneficial owner shall be entitled to pursue any remedy under this Agreement, the Notes or applicable law with respect to the portion of the Global Note that
represents such beneficial owner's interest therein as if such Certificated Note had been issued. 



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	(6)
	If
Certificated Notes are issued and the Notes are at such time listed on the Luxembourg Stock Exchange, and the rules of the Luxembourg Stock Exchange so require, then
Hydro-Québec will appoint and maintain a transfer agent in Luxembourg for as long as the Notes continue to be listed on the Luxembourg Stock Exchange. 




6.     Paying Agent  



	(1)
	The
Fiscal Agent shall act as the principal paying agent for Hydro-Québec in connection with the Notes. Hydro-Québec may appoint additional
co-paying agents or terminate the appointment of existing co-paying agents at any time. 




7.     Payments by Hydro-Québec to the Fiscal Agent  



	(1)
	Hydro-Québec
shall, on each date on which payment of principal [(and premium, if any)] or interest (and any Additional Amounts) in respect of
the Notes is due and payable as specified in the Terms and Conditions of the Notes under the headings "Interest" and "Maturity, Redemption and Purchases", transfer or cause to be transferred to the
corporate trust account in same-day funds in The City of New York, New York designated by the Fiscal Agent such amount in U.S. dollars as is necessary to make all
payments due with respect to the Notes on such due date as required by the terms of the Notes and the Fiscal Agent shall apply such monies to such payment.



	(2)
	All
monies paid to the Fiscal Agent pursuant to and for the payment of the amounts referred to in this Section 7 shall be received and held by the Fiscal Agent as agent for
Hydro-Québec and shall be applied to the payment of the appropriate U.S. dollar amounts at the time and in the manner provided in this Agreement and the Notes.



	(3)
	All
monies paid to the Fiscal Agent pursuant to this Agreement shall be held by the Fiscal Agent in a separate account, under arrangements agreed upon separately by
Hydro-Québec and the Fiscal Agent from the moment when such monies are received until the time of actual payment, for the benefit of the holders of the Notes to apply the said monies
for payment of principal [(and premium, if any)] and interest (and any Additional Amounts) due in respect of the Notes. If for any reason the amounts paid to the Fiscal Agent
pursuant to this paragraph are insufficient to satisfy all such claims for interest payable in respect of all Notes, the Fiscal Agent shall not be obliged to pay any such claims until the Fiscal Agent
has received the full amount of the moneys then due and payable. The Fiscal Agent shall, to the extent permitted by law, return to Hydro-Québec any funds transferred to it for payments
with respect to the Notes that are not so paid by the Fiscal Agent at the expiration of three years after the due date for payment thereof. 



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8.     Payment of Notes  



	(1)
	All
payments in respect of the Notes represented by the Global Notes will be made by the Fiscal Agent to the registered holder of the Global Notes as set forth in the Terms and
Conditions of the Notes.



	(2)
	Payments
of principal, [premium, if any,] interest [and Additional Amounts, if any,] in respect of Certificated Notes will be
made by the Fiscal Agent after receipt of such payment from Hydro-Québec as provided in Section 7 and as provided in the Terms and Conditions of the Notes. 





Neither
Hydro-Québec nor the Fiscal Agent shall have any responsibility or liability for any aspect of the records of the Clearing Systems relating to the payments made by such Clearing
Systems on account of beneficial interests in the Global Notes or for maintaining, supervising or reviewing any records of such Clearing Systems relating to such beneficial interests. 



	(3)
	Hydro-Québec
and the Guarantor shall have the right to require a holder of a Note, as a condition of payment of the principal of [and premium,
if any,] or interest [and any Additional Amounts] on a Note, to deliver to the Fiscal Agent a certificate in such form as Hydro-Québec
or the Guarantor may from time to time prescribe in order to enable Hydro-Québec or the Guarantor to determine its duties and liabilities with respect to (i) any taxes,
assessments or governmental charges which Hydro-Québec, the Guarantor or the Fiscal Agent may be required to deduct or withhold from payments in respect of such Note under any present
or future law of Canada or Québec or any regulation thereunder and (ii) any reporting or other requirements under such law or regulation. Hydro-Québec and the
Guarantor shall each be entitled to determine its duties and liabilities with respect to such deduction, withholding, reporting or other requirements on the basis of information contained in such
certificate or, if no certificate shall be presented, on the basis of any presumption created by any such law or regulation, and shall be entitled to act in accordance with such determination.



	(4)
	Subject
to applicable law and the terms hereof, Hydro-Québec, the Guarantor, the Fiscal Agent and any other agent of Hydro-Québec, the Guarantor or the
Fiscal Agent shall deem and treat the person whose name appears in the Register as the registered holder of a Note as the absolute owner thereof for all purposes whatsoever notwithstanding any notice
to the contrary and any payment in U.S. dollars of or on account of the principal of [and premium, if any,] and interest and any Additional Amounts on such
Note shall be made only to or to the order in writing of such holder, and such payment shall be valid and effectual to discharge the liability of Hydro-Québec, the Guarantor, the Fiscal
Agent and any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent on such Note to the extent of the sum or sums so paid. 



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	(5)
	The
registered holder of any Note shall be entitled to the payments of principal of [, premium, if any,] and interest [and any
Additional Amounts] on such Note, free from all rights of set-off or counterclaim between Hydro-Québec, the Guarantor and the original or any intermediate holder
thereof and all persons may act accordingly and a transferee of a Note shall, after the appropriate form of transfer is lodged with the Fiscal Agent or other agent of Hydro-Québec or
the Fiscal Agent for the purpose and upon compliance with all other conditions relating thereto required by this Agreement or by any conditions contained in such Note or by law, be entitled to be
entered on the Register as the owner of such Note free from all rights of set-off or counterclaim between Hydro-Québec, the Guarantor and his transferor or any previous
holder thereof, save in respect to rights of which Hydro-Québec is required to take notice by statute or by order of a court of competent jurisdiction. The delivery to
Hydro-Québec, the Guarantor or the Fiscal Agent by a holder of a Note or the receipt by such holder of the principal, [premium, if any,] interest
[and any Additional Amounts] in respect of such Note shall be a good discharge to Hydro-Québec, the Guarantor and the Fiscal Agent, which shall not be
bound to inquire into the title of such holder, save as ordered by a court of competent jurisdiction or as required by statute.



	(6)
	Where
a Note is registered in more than one name, the principal [premium, if any,] and interest [and any Additional
Amounts] from time to time payable in respect thereof shall be paid to or to the order of all the joint holders thereof, failing written instructions to the contrary from all such joint
holders, and such payment shall be a valid discharge to Hydro-Québec, the Guarantor or the Fiscal Agent and to any other agent of Hydro-Québec, the Guarantor or the
Fiscal Agent.



	(7)
	In
the case of the death of one or more joint holders, the principal of [and premium, if any,] and interest [and any Additional
Amounts] on any Notes registered in their names may, notwithstanding Section 8(4), be paid to the survivor or survivors of such holders whose receipt therefor shall constitute a
valid discharge to Hydro-Québec, the Guarantor or the Fiscal Agent and to any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent. 




9.     Cancellation of Notes  


        All Notes that are presented for replacement, exchange or transfer pursuant to Section 5 or repaid on maturity or upon redemption or purchased shall
upon such transfer, replacement, exchange, repayment or purchase being made, be cancelled by the Fiscal Agent. The Fiscal Agent shall, as soon as reasonably possible after the date of any such
transfer, replacement, exchange, repayment or purchase, furnish Hydro-Québec with a certificate or certificates stating: (i) the serial numbers and total number of Notes so
transferred, replaced, exchanged, redeemed, purchased or repaid; and (ii) the amount, if any, paid in respect of such Notes. All Notes canceled and retired by the Fiscal Agent pursuant to this
Section shall be destroyed from time to time in a manner consistent with the Fiscal Agent's securities destruction policy and applicable law and upon the issuance of a certificate of destruction of
the Notes, duly signed by a representative of the Fiscal Agent, to Hydro-Québec. 


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10.   Maturity, Redemption and Purchases  


        Unless previously redeemed for tax reasons as provided in the Terms and Conditions of the Notes, or purchased, the principal amount of the Notes shall be due and
payable on [    ] or, if [    ] is not a Business Day, on the next following Business Day. 


        [Add
any redemption provisions] 


        Upon
receipt of a written notice of intention to redeem, not less than 45 days prior to the date fixed for redemption, the Fiscal Agent shall cause to be given on behalf of
Hydro-Québec, in accordance with the provisions under the heading "Notices" in the Terms and Conditions of the Notes, a notice of redemption stating: (i) the date fixed for
redemption; (ii) the redemption price; and (iii) if applicable, the place or places of surrender of the Notes to be redeemed. 


        Hydro-Québec
may, if not in default under the Notes, at any time purchase Notes in any manner and at any price. [If purchases are made by tender,
tenders must be available to all holders of Notes alike.] 


11.   Financial Documents  


        For so long as any of the Notes are outstanding, (i) each of Hydro-Québec and the Guarantor, for its own part, agrees to supply, upon
request, the Fiscal Agent with printed copies of all documents required to be available by any stock exchange on which the Notes are for the time being listed, (ii) Hydro-Québec
agrees to supply, upon request, the Fiscal Agent with printed copies of the latest interim financial statements and annual reports of Hydro-Québec as filed on
Form 18-K and (iii) the Guarantor agrees to supply, upon request, the Fiscal Agent with printed copies of the Guarantor's latest consolidated statements of its revenues and
expenditures and annual budget as soon as practicable after the publication thereof for inspection by holders of Notes at the Fiscal Agent's New York Office. Notwithstanding anything herein
contained, the obligations of each of Hydro-Québec and the Guarantor under this Section will terminate on such date as all amounts required to be paid to the holders of Notes by
Hydro-Québec under the Notes have been paid in full. The Fiscal Agent, subject to its being provided with copies of the documents referred to above, undertakes to make them available to
holders of Notes at its New York Office during the term of the Notes. All financial documents of Hydro-Québec and the Guarantor referred to in this Section will also be made
available from the Electronic Document Gathering and Retrieval System, which is commonly known by the acronym EDGAR, through the Securities and Exchange Commission's website (http://www.sec.gov). 


12.   Fees  


        Hydro-Québec shall pay to the Fiscal Agent such fees for its services hereunder as are agreed upon separately by and between
Hydro-Québec and the Fiscal Agent. The obligations of Hydro-Québec pursuant to this Section shall survive the resignation or removal of the Fiscal Agent and the
satisfaction or termination of this Agreement and payment of the Notes. 


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   13.   Further Reports  


        Within 60 days after each May 15 beginning with May 15 following the date of this Agreement, the Fiscal Agent will provide to
Hydro-Québec and the Guarantor information regarding the financial servicing of the Notes expressed in such form as Hydro-Québec and the Guarantor may reasonably require.
The Fiscal Agent shall inform Hydro-Québec and the Guarantor promptly of any notice or other communication addressed to Hydro-Québec or the Guarantor in connection with
the Notes, including any notice of any legal action or proceeding which may be brought against Hydro-Québec or the Guarantor and of which the Fiscal Agent has notice. 


14.   Meetings of Holders of Notes  



	(1)
	The
Fiscal Agent shall, on receipt of a written request of Hydro-Québec or a written request signed in one or more counterparts by the holders of not less than 10% of
the principal amount of the Notes then outstanding and upon being indemnified to its reasonable satisfaction by Hydro-Québec or the holders of Notes signing such request against the
costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the holders of Notes for any lawful purpose affecting their interests. If the Fiscal Agent
fails to give notice convening such meeting within 30 days after receipt of such request and indemnity, Hydro-Québec or such holders of Notes, as the case may be, may convene
such meeting. Every such meeting shall be held in The City of New York, New York or such other place as may be approved or determined by the Fiscal Agent.



	(2)
	At
least 21 days' notice of any meeting shall be given to the holders of Global Notes or Certificated Notes, as the case may be, in the manner provided pursuant to the
provisions under the heading "Notices" in the Terms and Conditions of the Notes and a copy thereof shall be sent by post to the Fiscal Agent unless the meeting has been called by the Fiscal Agent, to
Hydro-Québec, unless the meeting has been called by Hydro-Québec, and to the Guarantor. Such notice shall state the day, time, place and purpose of the meeting and the
general nature of the business to be transacted thereat, and shall include a statement to the effect that, prior to 48 hours before the time fixed for the meeting, (i) in the limited
circumstances in which Certificated Notes have been issued, those holders of Certificated Notes who deposit such Notes with the Fiscal Agent or any other person authorized for such purpose by the
Fiscal Agent or Hydro-Québec or (ii) in the case of Notes being represented by a Global Note, those persons recorded in the Register, shall be entitled to obtain voting
certificates for appointing proxies, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed at such meeting or any other provisions. All notices of
meetings shall contain a requirement that the Clearing Systems must notify Clearing Systems participants and, if known, owners of beneficial interests in the Global Notes of the meeting in accordance
with procedures established from time to time by such Clearing Systems. The registered holders of Notes shall seek voting instructions on the matters to be raised at such meeting from the Clearing
Systems participants or, if known, from the owners of beneficial interests in Notes in accordance with the applicable procedure of the Clearing Systems. For greater certainty, it is acknowledged that
none of Hydro-Québec, the Fiscal Agent, any clearing agency or any intermediary or participant shall be required to comply with the time limits set out in the applicable procedure of
the Clearing Systems but shall use all reasonable efforts to otherwise comply with such procedure and attempt to provide non-registered holders of Notes with meeting materials and voting
rights as if such non-registered holders of Notes were registered holders thereof. 



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	(3)
	A
holder of Notes may appoint any person by instrument in writing as the holder's proxy in respect of a meeting of the holders of Notes or any adjournment of such meeting, and such
proxy shall have all rights of the holder of Notes in respect of such meeting.



	(4)
	A
person, who need not be a holder of Notes, nominated in writing by the Fiscal Agent shall be chairman of the meeting and if no person is so nominated or if the person so nominated
is not present within 15 minutes from the time fixed for the holding of the meeting, the holders of the Notes present in person or by proxy shall choose a person present to be chairman, and, failing
such choice, Hydro-Québec may appoint a chairman.



	(5)
	At
a meeting of holders of Notes, a quorum shall consist of two or more holders of Notes present in person or by proxy who represent at least a majority in aggregate principal amount
of the Notes at the time outstanding. If a quorum of the holders of Notes shall not be present within one-half hour after the time fixed for holding any meeting, the meeting, if convened
by or at the request of holders of Notes, shall be dissolved, but if otherwise convened the meeting shall stand adjourned without notice to the same day in the next week (unless such day is not a
business day in the place where the meeting is to take place in which case it shall stand adjourned until the next business day thereafter) at the same time and place unless the chairman shall appoint
some other place, day or time of which not less than 7 days' notice shall be given in the manner provided above. At any adjourned meeting called by Hydro-Québec or the Fiscal
Agent two or more holders of Notes present in person or by proxy shall constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not
represent at least a majority in aggregate principal amount of the Notes then outstanding.



	(6)
	The
chairman of any meeting at which a quorum of the holders of Notes is present may, with the consent of the holder(s) of a majority in aggregate principal amount of the Notes
represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.



	(7)
	Every
motion or question submitted to a meeting shall be decided by Extraordinary Resolution (as hereinafter defined) and in the first place by the votes given on a show of hands. At
any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not
carried by a particular majority shall be conclusive of the fact. On any question submitted to a meeting when ordered by the chairman or demanded by a show of hands by one or more holders of Notes
acting in person or by proxy and holding at least 2% in aggregate principal amount of the Notes then outstanding, a poll shall be taken in such manner as the chairman shall direct. 



12





 



	(8)
	On
a poll each holder of Notes present in person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of each US$1,000, or its
equivalent, principal amount of Notes then held by such holder. A proxy need not be a holder of Notes. In the case of Notes held jointly, any one of the joint holders present in person or by proxy may
vote in the absence of the other or others; but in case more than one of them be present in person or by proxy, only one of them may vote in respect of each US$1,000, or its equivalent, principal
amount of Notes of which they are joint holders.



	(9)
	Hydro-Québec,
the Fiscal Agent and the Guarantor, by their respective officers, directors and representatives, and the legal advisors of Hydro-Québec,
the Fiscal Agent and the Guarantor, may attend any meeting of the holders of Notes, but shall have no vote as such.



	(10)
	Subject
to Section 16 hereof, in addition to all other powers conferred upon them by any other provision of this Agreement or by law, holders of Notes at a meeting shall have
the following powers, any one or combination of which may be exercised from time to time by Extraordinary Resolution:



	(a)
	power
to confirm any modification or amendment of this Agreement or the terms and conditions of the Notes proposed by Hydro-Québec;



	(b)
	power
to direct or authorize the Fiscal Agent to exercise any power, right, remedy or authority given to it by this Agreement or the Notes in any manner specified in such
Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;



	(c)
	power
to waive and direct the Fiscal Agent to waive any default on the part of Hydro-Québec in complying with any provisions of this Agreement or the Notes or to waive
and direct the Fiscal Agent to waive future compliance with any provision or provisions of this Agreement or the Notes; and



	(d)
	power
to repeal, modify or amend any Extraordinary Resolution previously passed by the holders of Notes. 






Provided
however, that no such modification nor amendment to this Agreement or to the terms and conditions of the Notes or any other action taken may, without the consent of the holder of each such
Note affected thereby: (i) change the stated maturity or interest payment date of any such Note; (ii) reduce the principal amount of or rate of interest on any such Note;
(iii) change the currency of payment of any such Note; (iv) impair the right to institute suit for the enforcement of any payment on or with respect to such Note or the Guarantee;
(v) reduce the percentage of the holders of Notes necessary to modify or amend this Agreement or the terms and conditions of the Notes or reduce the percentage of votes required for the taking
of action or the quorum required at any meeting of holders of Notes; or (vi) reduce the percentage of outstanding Notes necessary to waive any future compliance or past default. 




13





 



	(11)
	All
actions that may be taken and all powers that may be exercised by the holders of Notes at a meeting held as hereinbefore provided may also be taken and exercised by the holders
of not less than 662/3 percent of the aggregate principal amount of the Notes at the time outstanding by an instrument in writing signed in one or more counterparts and the
expression "Extraordinary Resolution" when used in this Agreement shall include an instrument so signed.



	(12)
	The
term "Extraordinary Resolution" means a resolution proposed to be passed at a meeting of holders of Notes duly convened for the
purpose and held in accordance with the provisions of this Agreement, and passed by the affirmative vote of the holders of not less than 662/3 percent of the aggregate principal
amount of Notes represented at the meeting in person or by proxy, or as an instrument in writing signed by the holders of not less than 662/3 percent of the aggregate principal
amount of the outstanding Notes.



	(13)
	Minutes
of all resolutions and proceedings at every meeting of holders of Notes held in accordance with the provisions of this Agreement shall be made and entered in books to be from
time to time provided for that purpose by the Fiscal Agent at the expense of Hydro-Québec and any such minutes, if signed by the chairman of the meeting at which such resolutions were
passed or proceedings taken, or by the chairman of the next succeeding meeting of the holders of Notes, shall be prima facie evidence of the matters
therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all
resolutions passed and proceedings taken thereat to have been duly passed and taken.



	(14)
	Every
Extraordinary Resolution passed in accordance with the provisions of this Agreement at a meeting of holders of Notes shall be binding upon all the holders of Notes, whether
present at or absent from such meeting, and every instrument in writing signed by holders of Notes in accordance with Subsection 14(11) of this Agreement shall be binding upon all the holders
of Notes (whether or not a signatory). Subject to the provisions for its indemnity herein contained, the Fiscal Agent shall be bound to give effect accordingly to every such Extraordinary Resolution. 



14





 



	(15)
	The
Fiscal Agent, or Hydro-Québec with the approval of the Fiscal Agent, may from time to time make and from time to time vary such regulations as it shall deem fit:



	(a)
	for
the deposit of instruments appointing proxies at such place as the Fiscal Agent, Hydro-Québec or the holders of Notes convening a meeting, as the case may be, may
in the notice convening such meeting direct;



	(b)
	for
the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments
appointing proxies to be mailed or sent by any other means of recorded communication before the meeting to Hydro-Québec or to the Fiscal Agent at the place where the same is to be held
and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting. 






Any
regulation so made shall be binding and effective and votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only persons who shall be
entitled to vote at a meeting of holders of Notes shall be the holders thereof or their duly appointed proxies. 



	(16)
	The
powers and any combination of the powers in this Agreement stated to be exercisable by the holders of Notes by Extraordinary Resolution may be exercised from time to time and the
exercise of any one or more such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the holders of Notes to exercise such power or powers or combination
of powers then or any power or powers or combination of powers thereafter from time to time. 




15.   Indemnities  



	(1)
	Hydro-Québec
agrees to indemnify and hold harmless the Fiscal Agent against all claims, actions, demands, damages, suits, judgements costs and losses (including all
reasonable legal fees and expenses) arising out of or relating to the Fiscal Agent's duties as fiscal agent, registrar, transfer agent and principal paying agent for Hydro-Québec with
respect to the Notes, except such as may result from the Fiscal Agent's gross negligence, wilful misconduct or bad faith.



	(2)
	The
Fiscal Agent agrees to indemnify and hold harmless Hydro-Québec and the Guarantor against all claims, actions, demands, damages, suits, judgements, costs and losses
(including all reasonable legal fees and expenses) arising out of or relating to the Fiscal Agent's gross negligence, wilful misconduct or bad faith.



	(3)
	This
Section 15 shall survive the payment in full of all obligations of the Notes, whether by redemption, repayment or otherwise. 



15





 





16.   Modifications  


        This Agreement and the Notes may be amended by Hydro-Québec, the Guarantor and the Fiscal Agent without notice to or the consent of the holders of
Notes, for the purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing any defective provisions contained herein, (iii) effecting the issue of further Notes
of Hydro-Québec pursuant to Section 19 or (iv) in any other manner in which Hydro-Québec, the Guarantor and the Fiscal Agent, acting on the advice of
independent counsel, may deem necessary or desirable, which will not be inconsistent with this Agreement or the Notes and which, in the reasonable opinion of Hydro-Québec, the Guarantor
and the Fiscal Agent, will not adversely affect the interest of the holders of Notes. 


        This
Agreement may also be amended by Extraordinary Resolution of the holders of the Notes as specified in Section 14 of this Agreement and in the Terms and Conditions of the
Notes under the heading "Modifications." 



17.   The Fiscal Agent  



	(1)
	Subject
to Subsection 7(3), in acting under this Agreement and in connection with the Notes, the Fiscal Agent is acting solely as agent of Hydro-Québec and does
not assume any obligation or relationship of agency, administration of the property of others or trust with any of the holders of Notes, except that all amounts received and held by the Fiscal Agent
for payment in respect of the Notes shall be held in trust for the holders of the Notes in a separate account or accounts for payment to the holders of Notes as provided herein.



	(2)
	The
Fiscal Agent shall be protected and shall incur no liability for action taken or not taken, or suffered to be taken or not taken, with respect to all legal matters upon which it
has received advice from counsel in good faith and in accordance with the opinions and advice of such counsel.



	(3)
	The
Fiscal Agent and its officers, directors and employees may become the owners of, or acquire an interest in, any Notes, with the same rights that it or they would have if the
Fiscal Agent were not acting as agent hereunder, and may engage or be interested in any financial or other transaction with Hydro-Québec, and may act on behalf of, or as a depositary,
trustee or agent for, any committee or body of holders of Notes or holders of other obligations of Hydro-Québec as freely as if the Fiscal Agent were not acting as agent hereunder.



	(4)
	The
Fiscal Agent may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram,
facsimile transmission or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties and in particular, may rely and
shall be protected in acting on the basis of any such notice which is given in accordance with the provisions hereof. 



16





 





18.   Resignation or Replacement of Fiscal Agent  



	(1)
	Hydro-Québec
agrees that there shall at all times be a registrar, fiscal agent, transfer agent and principal paying agent hereunder until (i) all of the Notes
authenticated and delivered hereunder shall have been delivered to the Fiscal Agent for cancellation or become due and payable, and moneys sufficient to pay the principal of and interest on such Notes
shall have been made available for payment and either paid or returned to Hydro-Québec as provided herein or (ii) Hydro-Québec having established to the
satisfaction of the Fiscal Agent that Hydro-Québec may avail itself of defenses under all relevant laws for the prescription of actions in respect of any outstanding Notes.



	(2)
	The
Fiscal Agent may resign at any time by sending at least 90 days' written notice by registered mail to Hydro-Québec and the Guarantor. Upon receipt of such
notice, Hydro-Québec shall appoint another financial institution or institutions as successor registrar, fiscal agent, transfer agent and principal paying agent (the
"Successor Fiscal Agent") under this Agreement. Subject to the provisions hereof, Hydro-Québec may terminate the appointment of the
Fiscal Agent as registrar, fiscal agent, transfer agent and principal paying agent and appoint another financial institution or institutions as Successor Fiscal Agent under this Agreement;  provided that
it give the Fiscal Agent not less than 90 days' written notice of termination. Neither the resignation nor the termination of the
appointment of the Fiscal Agent as registrar, fiscal agent, transfer agent and principal paying agent shall take effect until the appointment of the Successor Fiscal Agent becomes effective. On the
effective date of the resignation of the Fiscal Agent or of the termination of its appointment as registrar, fiscal agent, transfer agent and principal paying agent, the Fiscal Agent shall deliver to
the Successor Fiscal Agent all funds of Hydro-Québec then held by it to the extent such funds relate to the appointment being transferred and all documents relating to the Notes to the
extent such documents relate to the appointment being transferred, and Hydro-Québec shall pay to the Fiscal Agent all amounts owed by Hydro-Québec to the Fiscal Agent
pursuant to this Agreement up to the said effective date. After the resignation or removal of the Fiscal Agent, the provisions of Section 17 hereof shall inure to its benefit as to any action
taken or omitted to be taken by it while it was the Fiscal Agent hereunder.



	(3)
	If
the Fiscal Agent shall be adjudged bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or
consents to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing of its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property shall be appointed or if any public officer shall have taken charge or control of it or of its property or affairs, for
the purposes of rehabilitation, conservation or liquidation, a Successor Fiscal Agent shall be appointed by Hydro-Québec. Upon such an appointment of a Successor Fiscal Agent, the
Fiscal Agent shall cease to be a registrar, fiscal agent, transfer agent and principal paying agent hereunder whether or not notice of such termination shall have been given. If no Successor Fiscal
Agent shall have been appointed by Hydro-Québec, any holder of a Note, on behalf of itself and all other holders of a Note, or the Fiscal Agent, may petition any court of competent
jurisdiction for the appointment of a Successor Fiscal Agent. 



17





 



	(4)
	Any
Successor Fiscal Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to Hydro-Québec an instrument accepting such appointment
hereunder, and thereupon such Successor Fiscal Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor, with like effect as if originally named as the Fiscal Agent hereunder, and such predecessor Fiscal Agent, upon payment of its charges and disbursements then unpaid,
shall thereunder become obligated to transfer, deliver and pay over, and such Successor Fiscal Agent shall be entitled to receive, all moneys, securities and other property on deposit with or held by
such predecessor Fiscal Agent hereunder. Hydro-Québec will give prompt written notice to each other agent named pursuant to Section 2 hereof of the appointment of a Successor
Fiscal Agent and shall give notice to holders of the Notes.



	(5)
	Any
corporation or bank into which the Fiscal Agent may be merged or converted or any corporation or bank with which the Fiscal Agent may be consolidated, or any corporation or bank
resulting from any merger, conversion or consolidation to which the Fiscal Agent shall be a party, or any corporation or bank to which the Fiscal Agent shall sell or otherwise transfer all or
substantially all of the corporate trust business of the Fiscal Agent shall be a Successor Fiscal Agent under this Agreement without the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided that such Successor Fiscal Agent shall be qualified as elsewhere provided in this Agreement. 




19.   Further Issues  


        Hydro-Québec may from time to time, without notice to or consent of the holders of the Notes, create and issue further notes ranking equally with
the Notes in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such further notes or except for the first payment of interest following the issue
date of such further notes) so that such further notes shall be consolidated and form a single series with the Notes and shall have the same terms as to status, redemption or otherwise as the
Notes. Any further notes shall be issued pursuant to an agreement supplemental to or amending this Agreement. 


18





 

20.   Prescription  


        Under current Québec law, Hydro-Québec's obligation to make any payment on the Notes shall be extinguished three years after the
date such payment is due unless such right to payment is judicially exercised prior to the expiration of such three-year period. 


21.   General  



	(1)
	Any
notice pursuant to this Agreement shall be deemed to have been duly given upon the dispatch of such notice by registered mail or telecopier (to be confirmed in writing by
registered mail), addressed to (a) Hydro-Québec, (b) the Guarantor or (c) the Fiscal Agent as follows: 



19





 






Hydro-Québec:


Hydro-Québec

75 René-Lévesque Boulevard West

6th Floor

Montréal (Québec)

CANADA H2Z 1A4 


Attention:
Corporate Treasurer

Telecopier No: (514) 289-5409

Telephone No: (514) 289-4284 


the Guarantor: 


Québec

Ministère des Finances

Direction de l'émission des emprunts

12, rue Saint-Louis

Québec (Québec)

CANADA G1R 5L3 


Attention:
Le directeur

Telecopier No: (418) 643-4700

Telephone No: (418) 643-8141 


Fiscal Agent:


Deutsche
Bank Trust Company Americas

60 Wall Street

MS NYC 60-2515

New York, New York 10005 


Attention:
Corporate Trust & Services Agency

Telecopier No: (212) 454-2223

Telephone No: (212) 454-4219 


or
to any other address or number of which either of the parties shall have notified the other in writing in accordance with this provision. 



	(2)
	THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF QUÉBEC AND THE LAWS OF CANADA APPLICABLE
THEREIN. 





Hydro-Québec
and the Guarantor hereby irrevocably consent to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of
any order or judgment) made or given in connection with any proceedings arising out of or in connection with this Agreement and the Notes; 




20





 



	(3)
	This
Agreement shall extend to and enure to the benefit of and be binding upon Hydro-Québec, the Guarantor and the Fiscal Agent and their respective successors and
assigns.



	(4)
	This
Agreement may be executed in separate counterparts, and each such counterpart, when so executed and delivered, shall be deemed to be an original. Such counterparts shall together
constitute one and the same agreement. 



21











  





        IN WITNESS WHEREOF, this Agreement has been executed in New York as of the date first above written. 



	 	 	HYDRO-QUÉBEC
	
 	
 	

 
	 	 	/s/
 Authorized Representative
	
 	
 	

 
	 	 	QUÉBEC
	
 	
 	

 
	 	 	/s/
 Authorized Representative
	
 	
 	

 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS
	
 	
 	

 
	 	 	/s/
 Authorized Officer




22





 
 
 

SCHEDULE A
  
    FORM OF GLOBAL NOTE    



        Unless
this Global Note is presented by an authorized representative of The Depository Trust Company, 55 Water Street, New York, New York, a New York corporation
("DTC"), to Hydro-Québec or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof,
Cede & Co., has an interest herein. 



	Series [        ]	 	Certificate No. [        ]
	 	 	





CUSIP [        ]




HYDRO-QUÉBEC



[        ]% Notes Series [        ]

due [        ]



Guaranteed unconditionally by Québec


        This
Global Note, registered in the name of Cede & Co., as nominee of DTC (the "Global Note"), is a permanent Global Note in
respect of the duly authorized issue of notes referred to above (the "Notes") of Hydro-Québec, a body corporate validly existing under
the Hydro-Québec Act, (Revised Statutes of Québec, Chapter H-5), payment of which is unconditionally
guaranteed subject to the guarantee given by Québec (the "Guarantee"), as guarantor (the
"Guarantor"), and which is issued pursuant to a fiscal agency agreement, dated as of [    ], among Hydro-
Québec, the Guarantor and Deutsche Bank Trust Company Americas as registrar, fiscal agent, transfer agent and principal paying agent (the "Fiscal
Agent" which term includes any successor registrar, fiscal agent, transfer agent and principal paying agent under the Fiscal Agency Agreement) as such agreement may be
supplemented or amended, as the case may be (the "Fiscal Agency Agreement"). This Global Note or any other Global Note in this form and so registered
may also represent any further notes which Hydro-Québec may issue, from time to time, pursuant to the Terms and Conditions hereof and Section 19 of the Fiscal Agency Agreement.
In the event such further notes are issued, the word "Notes" as defined above shall be deemed to also refer to such further notes. 


        This
Global Note and all the rights of the holder hereof are expressly subject to the Fiscal Agency Agreement, and this Global Note and the Fiscal Agency Agreement constitute a contract
to all of the terms and conditions of which the holder by acceptance hereof assents, is bound by and is deemed to have notice. All defined terms unless defined herein have the meaning ascribed to them
in the Fiscal Agency Agreement. Copies of the Fiscal Agency Agreement are available for inspection at the principal office of the Fiscal Agent and from the Electronic Document Gathering and Retrieval
System, which is commonly known by the acronym EDGAR, through the Securities and Exchange Commission's website (http://www.sec.gov). 


23





 

        This
is a fully registered Global Note without coupons attached. In certain limited circumstances, as described in Section 5 of the Fiscal Agency Agreement, it is exchangeable in
whole or in part, at the office of the Fiscal Agent, for Certificated Notes. 



        FOR VALUE RECEIVED, Hydro-Québec hereby promises to pay to Cede & Co. or its registered assigns in the manner
hereinafter mentioned on [    ] (or on such earlier date as the Principal Amount (as hereinafter defined) may become payable in accordance with the terms hereof) the
principal sum set forth in Schedule I hereto from time to time (the "Principal Amount") in lawful money of the United States of
America, on presentation and surrender of this Global Note, and to pay interest in arrears on the said Principal Amount at the rate of [    ]% per annum, from
[    ], or from the most recent Interest Payment Date to which interest has been paid or duly provided for, in [two equal
semi-annual] installments on [    ] and [    ] in each year (each an "Interest
Payment Date"), commencing [    ], until the Principal Amount is paid in full or duly made available for payment, in each case together with
such further sum, if any, as may be payable by way of Additional Amounts in accordance with the provisions set forth herein and should Hydro-Québec at any time default in the payment of
any of the Principal Amount [and premium, if any,] or interest on this Global Note or any Additional Amounts, to pay interest on the amount in default (before as well as after
judgment) at the same rate, in like money, on the same dates. References herein to principal [, premium, if any] and interest in respect of this Global Note or the Certificated
Notes shall be deemed also to refer to any Additional Amounts which may be payable concurrently therewith, unless the context otherwise requires. Interest will cease to accrue on this Global Note on
[    ], subject to a change of such date as hereinabove mentioned (or on such earlier date as the Principal Amount may become payable in accordance with the terms
hereof), unless, upon due presentation of this Global Note, payment of the Principal Amount or any [premium or] Additional Amounts is improperly withheld or refused. 


        This
Global Note shall not become valid and obligatory for any purpose unless and until this Global Note has been authenticated by the Fiscal Agent or its authorized representative. 


 
 

TERMS AND CONDITIONS    
    


Status of the Notes and Guarantee  


        The Notes will be direct, unsecured and unconditional obligations of Hydro-Québec. The Notes will rank equally among themselves and with all other
unsecured debt securities issued by Hydro-Québec and outstanding at the date hereof or issued thereafter. 


        The
Guarantor will unconditionally guarantee the due and punctual payment of the principal of [, premium, if any,] and interest and any Additional Amounts on the
Notes upon default in payment by Hydro-Québec, when and as the same shall respectively become due and payable, at maturity, upon call for redemption prior to maturity, by acceleration
or otherwise. The Guarantee will be endorsed on the certificates representing the Notes. Any funds required for the Guarantee shall be taken out of the Consolidated Revenue Fund of
Québec. The Guarantee will be a direct, unconditional and unsecured obligation of the Guarantor and will rank equally in right of payment with all other unsecured obligations for
borrowed money of the Guarantor outstanding at the date hereof or in the future. 


24





 

Form, Denomination and Registration  


        The Notes will be issued in the form of one or more fully registered Global Notes registered in the name of Cede & Co., as nominee of DTC, and held
by Deutsche Bank Trust Company Americas, as custodian for DTC (the "Custodian"). Beneficial interests in the Global Notes will be represented through
book-entry accounts of financial institutions acting on behalf of owners of such beneficial interests as direct and indirect participants in DTC, Euroclear Bank S.A./N.V., as
operator of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") (collectively, the Clearing Systems). The Clearing
Systems will be responsible for establishing and maintaining book-entry accounts for their participants having interests in the Notes. Owners of beneficial interests in Notes will not,
except in limited circumstances described herein, be entitled to receive certificates representing Notes ("Certificated Notes") or to have Notes
registered in their names, and will not be considered holders thereof under the Fiscal Agency Agreement. 


        The
Notes will only be sold in denominations of US$1,000 or integral multiples thereof. 


        The
Fiscal Agent will be responsible for (i) maintaining a record of the aggregate holdings of Notes, (ii) ensuring that payments of principal[,
premium] and interest in respect of the Notes received by the Fiscal Agent from Hydro-Québec are duly credited to DTC, and (iii) transmitting to
Hydro-Québec any notices from owners of beneficial interests in Notes. The Fiscal Agent will not impose any fees in respect of the Notes, other than reasonable fees for the replacement
of lost, stolen, mutilated or destroyed Notes. However, owners of beneficial interests in Notes may incur fees payable in respect of the maintenance and operation of the book-entry
accounts in which such Notes are held with the Clearing Systems. 


Certificated Notes  


        No owner of a beneficial interest in a Note will be entitled to receive a Certificated Note in definitive form except in the limited circumstances described
herein. 


        Hydro-Québec
will issue or cause to be issued Certificated Notes upon registration of, transfer of, or in exchange for Notes represented by this Global Note if DTC
(i) notifies Hydro-Québec that it is unwilling or unable to continue as depositary in connection with the Global Notes; (ii) ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, at a time when it is required to be and a successor depositary is not appointed by
Hydro-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered; or (iii) acting on direct or indirect instructions of one or
more registered holders of this Global Note or any beneficial owner of an interest in this
Global Note, requests in writing from Hydro-Québec the exchange, in whole or in part, of this Global Note for Certificated Notes, but only after an event of default entitling the
registered holders to give Hydro-Québec written notice that such holders elect to declare the principal amount of the Notes held by them and represented by this Global Note to be due
and payable has occurred and is continuing; provided that if DTC is unwilling or does not promptly make such request to Hydro-Québec,
then any beneficial owner of an interest in this Global Note shall be entitled to make such request with respect to such interest. Hydro-Québec may also at any time and in its sole
discretion notify the Fiscal Agent that all of the Notes held in the form of the Global Notes are to be exchanged for Certificated Notes and, in such event, Hydro-Québec will issue or
cause to be issued Certificated Notes upon registration of, transfer of, or in exchange for such Global Notes. If Certificated Notes are issued and the Notes are at such time listed on the Luxembourg
Stock Exchange, and the rules of the Luxembourg Stock Exchange so require, then Hydro-Québec will appoint and maintain a transfer agent in Luxembourg for so long as the Notes continue
to be listed on the Luxembourg Stock Exchange. A publication will be made in accordance with "Notices" below describing how payments on Certificated Notes will be made. 


25





 

        In
respect of any such issuance of Certificated Notes, (i) Hydro-Québec shall promptly provide the Fiscal Agent with a sufficient number of Certificated Notes in
blank form to proceed with such issuance, (ii) DTC shall cause this Global Note to be delivered by the Custodian to the Fiscal Agent and provide the Fiscal Agent with the necessary registration
information for such Certificated Notes, (iii) the Fiscal Agent shall authenticate and deliver such Certificated Notes in an aggregate principal amount equal to the principal amount of this
Global Note to be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel this Global Note and in the case of a partial exchange, issue and deliver to or to the order of DTC a
new Global Note equal to the unexchanged portion of this Global Note partially exchanged for Certificated Notes and (v) the Fiscal Agent shall reduce accordingly the holdings of the registered
holder on the Register. Such Certificated Notes shall be delivered as directed by the persons in whose names such Certificated Notes are to be registered. All Notes represented by Certificated Notes
issued upon any such issuance in exchange for the Notes represented by this Global Note shall have the Guarantee of the Guarantor endorsed thereon (which Guarantee shall be a valid obligation of the
Guarantor), shall be a valid obligation of Hydro-Québec, shall be entitled to the same benefits under the Fiscal Agency Agreement as the Global Notes, and shall be so exchanged without
charge to the Fiscal Agent, DTC or the transferee. On or after any such exchange, the Fiscal Agent shall direct all payments in respect of such Certificated Notes to the registered holders thereof,
including when such exchange occurred after the record date for any payment and prior to the date of such payment. 


        Hydro-Québec
expressly acknowledges that if a Certificated Note is not promptly issued to a beneficial owner of an interest in this Global Note as contemplated herein,
then such beneficial owner shall be entitled to pursue any remedy under the Fiscal Agency Agreement, the Notes or applicable law with respect to the portion of this Global Note that represents such
beneficial owner's interest therein as if such Certificated Note had been issued. 


Title  


        Subject to applicable law and the terms of the Fiscal Agency Agreement, Hydro-Québec, the Guarantor and the Fiscal Agent will deem and treat the
persons in whose name the Global Notes are registered, initially Cede & Co., as the absolute owners thereof for all purposes whatsoever notwithstanding any notice to the contrary. All
payments to or on the order of the registered holders shall be valid and effectual to discharge the liability of Hydro-Québec, the Guarantor and the Fiscal Agent on the Notes to the
extent of the sum or sums so paid. 


26





 

Interest  


        The Notes will bear interest from [        ] at a rate of [        ]% per annum, payable in
[two equal semi-annual] installments in arrears on [        ] and [        ], commencing
[            ]. Interest on the Notes will cease to accrue on the date fixed for redemption or repayment unless, upon due presentation of the Notes, payment of principal
[and premium, if any,] is improperly withheld or refused. 


        Whenever
it is necessary to compute any amount of interest in respect of the Notes, other than with respect to regular [semi-annual] payments, such
interest shall be calculated on the basis of a 360-day year of twelve 30-day months. The rate of interest specified in the Notes is a nominal rate and all interest payments and
computations are to be made without allowances or deductions for deemed reinvestment. 



        For
purposes of disclosure pursuant to the Interest Act (Canada), the rate of interest payable on any basis other than a full calendar
year may be determined by multiplying the applicable annual interest rate by a fraction the numerator of which is the actual number of days in the period for which interest is payable and the
denominator of which is 365 days or 366 days, as the case may be. 


Payments  


        Principal of [and premium, if any,] and interest and any Additional Amounts on the Notes are payable by Hydro-Québec in
lawful money of the United States of America ("U.S. dollars", "US$"  or "$") to the person registered at the close of business on the relevant record date in the register
held by the Fiscal Agent. The Fiscal Agent will act as Hydro-Québec's principal paying agent for the Notes pursuant to the Fiscal Agency Agreement. Neither Hydro-Québec
nor the Fiscal Agent will have any responsibility or liability for any aspect of the records of the Clearing Systems relating to or payments made by such Clearing Systems on account of beneficial
interests in the Global Notes or for maintaining, supervising or reviewing any records of such Clearing Systems relevant to such beneficial interests. 


        If
any date for payment in respect of any Notes is not a Business Day, the holder thereof shall not be entitled to payment until the next following Business Day, and no further interest
shall be paid in respect of the delay in such payment. In this paragraph, "Business Day" means a day on which banking institutions in The City of New York and in any other applicable place of
payment are not authorized or obligated by law or executive order to be closed. 


Record Date  


        The record date for purposes of payments of principal of [and premium, if any,] and interest and any Additional Amounts on the Notes will
be as of 5:00 p.m., New York time, on the fourteenth calendar day preceding the maturity date or any interest payment date, as applicable. 


27





 

[Payment of Additional Amounts  


        The principal of and [premium, if any, and] interest on the Notes will be paid to any holder, who as to Canada or any province, political
subdivision or taxing authority therein or thereof is a non-resident, without deduction for or on account of any present taxes or duties of whatsoever nature, imposed or levied by or
within Canada, or any province, political subdivision or taxing authority therein or thereof. If as a result of any change in, or amendment to, or in the official application of, the laws of Canada or
the regulations of any taxing authority therein or thereof or any change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to which
Canada is a party, Hydro-Québec or the Guarantor shall be required to withhold any taxes or duties from any payments due respectively under the Notes, Hydro-Québec or the
Guarantor will pay such additional amounts (the "Additional Amounts") as may be necessary in order that every net payment of the principal of and
[premium, if any, and] interest on the Notes to any such holder will be not less than the amount provided for in the Notes. Hydro-Québec or the Guarantor shall
not, however, be obliged to pay such Additional Amounts on account of any such taxes or duties to which any holder is subject otherwise than by reason of his ownership of Notes or the receipt of
income therefrom or which become payable as a result of any Note being presented for payment on a date more than ten days after the date on which the same becomes due and payable, or the date on which
payment thereof is duly provided for whichever is later.] 


        In
addition, Hydro-Québec and Québec shall also not be obliged to pay any Additional Amounts where such withholding or deduction is imposed on a payment to
an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of
26-27 November 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such Directive or presented for
payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the European Union. 


Maturity, Redemption and Purchases  


        Unless previously redeemed for tax reasons as provided below, or purchased, the Principal Amount (at par) of the Notes shall be due and payable on
[        ]. 


        [If
as a result of any change in, or amendment to, or in the official application of, the laws of Canada or the regulations of any taxing authority therein or thereof or any
change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to which Canada is a party, which change or amendment shall have become
effective after [        ], it is determined by Hydro-Québec or the Guarantor that Hydro-Québec or the Guarantor, as the case may be, would
be required at, or at any time prior to, maturity of the Notes to pay Additional Amounts as described above under the heading "Payment of Additional
Amounts", the Notes may be redeemed in whole but not in part at the option of Hydro-Québec on not less than 30 days', nor more than 45 days'
published notice in accordance with the provisions of the heading " Notices" below, at the principal amount thereof together with accrued
interest.] 


28





 

        Hydro-Québec
may, if not in default under the Notes, purchase Notes at any time, in any manner and at any price. 


Modifications  


        The Fiscal Agency Agreement and the Notes may be amended by Hydro-Québec, the Guarantor and the Fiscal Agent without notice to or the consent of
the holder of any Note, for the purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing any defective provisions contained therein, (iii) effecting the issue
of further notes as described below under "Further Issues" or (iv) in any other manner which Hydro-Québec, the Guarantor and the Fiscal Agent, acting
on the advice of independent counsel, may deem necessary or desirable and which will not be inconsistent with the Notes and which, in the reasonable opinion of Hydro-Québec, the
Guarantor and the Fiscal Agent, will not adversely affect the interest of the holders of Notes. 


        The
Fiscal Agency Agreement contains provisions for convening meetings of registered holders of Notes to modify or amend by Extraordinary Resolution the Fiscal Agency Agreement (except
as provided in the immediately preceding paragraph) and the Notes (including the terms and conditions thereof) or waive future compliance therewith or past default thereon by
Hydro-Québec. An Extraordinary Resolution duly passed at any such meeting shall be binding on all holders of Notes, whether present or not;  provided, however, that no such modification or amendment to the Fiscal Agency Agreement or to the terms
and conditions of the Notes or any other action taken may, without the consent of the holder of each such Note affected thereby, (i) change the stated maturity or interest payment date of any
such Note, (ii) reduce the principal amount of or rate of interest on any such Note, (iii) change the currency of payment of any such Note, (iv) impair the right to institute suit
for the enforcement of any payment on or with respect to such Note or the Guarantee, (v) reduce the percentage of the holders of Notes necessary to modify or amend the Fiscal Agency Agreement
or the terms and conditions of the Notes or reduce the percentage of votes required for the taking of action or the quorum required at any meeting of holders of Notes, or (vi) reduce the
percentage of outstanding Notes necessary to waive any future compliance or past default. 


Governing Law  


        The Fiscal Agency Agreement, the Notes and the Guarantee shall be construed in accordance with and governed by the laws of Québec and the laws of
Canada applicable in Québec. 


        Each
of Hydro-Québec and the Guarantor irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making
or enforcement of any order or judgment) made or given in connection with any proceedings arising out of or in connection with the Fiscal Agency Agreement, the Notes and the Guarantee. 


Events of Default  


        In the event that (a) Hydro-Québec shall default in the payment of any principal of or premium, interest or Additional Amounts, if any, on
the Notes, as the same shall become due and payable, and such default shall continue for a period of 30 days or (b) default shall be made in the due performance or observance by
Hydro-Québec of any covenant or agreement contained in the Notes, other than the payment of principal, [premium, if any,] interest or Additional Amounts, or in
the Fiscal Agency Agreement, and such default shall continue for a period of 60 days or (c) Hydro-Québec shall default in the payment of any principal of [or
premium, if any,] or interest or any Additional Amounts on any indebtedness (direct or under a guarantee) for borrowed money, other than the Notes, as the same shall become due and
payable, and such default shall continue for a period of 30 days, provided that the foregoing shall not be taken into account so long as the aggregate principal amount of all such indebtedness
(direct or under a guarantee) for borrowed money with respect to which the foregoing has occurred does not exceed US$50,000,000 (or its equivalent in other currencies), then at any time thereafter and
during continuance of such default, the registered holder of any Note (or its proxy) may deliver or cause to be delivered to Hydro-Québec at its registered office in
Montréal, Québec, Canada a written notice that such registered holder elects to declare the principal amount of the Notes held by him (the serial number or numbers of the
Notes which represent such Notes and the principal amount of the Notes owned by him and the subject of such declaration being set forth in such notice) to be due and payable and, in the cases falling
within either (a) or (c) above, on the fifteenth day after delivery of such notice, or, in the cases falling within (b) above, on the thirtieth day after delivery of such notice,
the principal of the Notes referred to in such notice plus accrued interest thereon shall become due and payable, unless prior to that time all such defaults theretofore existing shall have been
cured. 


29





 

Notices  


        All notices to the holders of Notes will be published (in English in London, England in the Financial Times, in
Luxembourg in the Luxemburger Wort (as long as the Notes are listed on the Luxembourg Stock Exchange)), in New York, New York in  The Wall Street Journal (and in Toronto, Ontario, in The Globe & Mail and in French in
Montréal, Québec, in La Presse). If at any time publication in any such newspaper is not practicable, notices will be
valid if published in an English language newspaper (or, if in Québec, a French language newspaper), with general circulation in the respective market regions which
Hydro-Québec, with the approval of the Fiscal Agent, shall determine. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once
or on different dates, on the first date on which publication is made. 


Further Issues  


        Hydro-Québec may from time to time without the consent of the holders of the Notes create and issue further notes ranking equally in all respects
(or in all respects save for the first payment of interest thereon) and such further notes shall be consolidated and form a single series with the outstanding Notes. Any further notes forming a
single series with the outstanding Notes shall be issued pursuant to an agreement supplemental to the Fiscal Agency Agreement. 


Prescription  


        Under current Québec law, Hydro-Québec's obligation to make any payment on the Notes shall be extinguished three years after the
date such payment is due unless such right to payment is judicially exercised prior to the expiration of such three-year period. 


30





 

        IN
WITNESS WHEREOF, HYDRO-QUÉBEC has caused this Global Note to be signed by its duly authorized Representative as of  [        ] in New York,
New York. 



	 	 	HYDRO-QUÉBEC
	
 	
 	

By:	
 	

/s/
 Authorized Representative





Authenticated by: 


DEUTSCHE
BANK TRUST COMPANY AMERICAS

(as Fiscal Agent) 



	
 By:	
 	

/s/
 Authorized Officer	
 	

 





Authentication Date: 


31





 

GUARANTEE BY QUÉBEC 


        By
virtue of the powers conferred by the Parlement du Québec and of the authorization of the Government of Québec by an Order in Council dated  [        ], Québec hereby irrevocably and unconditionally guarantees to the registered holder of this
Global Note and pledges its full faith and credit for the due and punctual payment, upon default in payment by Hydro-Québec, of the principal of this Global Note and the
[premium, if any, and] interest thereon together with Additional Amounts, if any, as and when the same shall respectively become due and payable (without taking into account
any applicable grace period or notice period set out in the terms and conditions of the Notes), whether at stated maturity or upon previous call for redemption or by acceleration or otherwise; and
hereby expressly waives the benefits of discussion and division and any prior notice or protest to, demand upon or action against Hydro-Québec or Québec. 


        This
Guarantee shall be construed in accordance with and governed by the laws of Québec and the laws of Canada applicable therein. 



        Québec
irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of any order or
judgment) made or given in connection with any proceedings arising out of or in connection with this Guarantee. 


        Dated
the [        ] day of [        ]. 


Executed
on behalf of Québec in New York, New York. 



	
 /s/
 Delegate General of Québec in New York	
 	

 




32





 
 
 

SCHEDULE ONE TO THE GLOBAL NOTE NO.                
    


          HYDRO-QUÉBEC



[        ]% Global Notes Series [        ] due [        ]



	Initial Principal Amount
 
	 	Additional Principal Amount
 
	 	Aggregate Principal Amount
 
	 	Authorization
 

	US$	 	
	 	US$	 	
	 	US$	 	
	 	

	 	 	 	 	US$	 	
	 	US$	 	
	 	

	 	 	 	 	US$	 	
	 	US$	 	
	 	





33









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FISCAL AGENCY AGREEMENT


SCHEDULE A FORM OF GLOBAL NOTE

TERMS AND CONDITIONS

SCHEDULE ONE TO THE GLOBAL NOTE NO.