Document:

SALES CONTRACT

 

 

By and Between

 

ROBERTS PROPERTIES RESIDENTIAL, L.P.,

a Georgia limited partnership,

 

as Seller,

 

and

 

BRADLEY PARK APARTMENTS, LLC,

a Georgia limited liability company

 

as Purchaser.

 

 

January 26, 2015

 

 

Property Located At:

 

Land Lots 205 and 206 of the 2nd
District, 1st Section, Forsyth County, Georgia

 

    	 

    	 

    

TABLE OF
CONTENTS

	ARTICLE I -- PROPERTY TO BE CONVEYED	1
	ARTICLE II -- PURCHASE PRICE	1
	ARTICLE III – TITLE AND SURVEY	4
	ARTICLE IV -- ITEMS TO BE DELIVERED BY SELLER AT CLOSING	5
	ARTICLE V -- ITEMS TO BE DELIVERED BY PURCHASER AT CLOSING	6
	ARTICLE VI -- TIME AND PLACE OF CLOSING AND CLOSING COSTS	7
	ARTICLE VII -- APPORTIONMENTS	8
	ARTICLE VIII -- EMINENT DOMAIN	8
	ARTICLE IX -- PURCHASER’S CONDITION PRECEDENT	8
	ARTICLE X -- REPRESENTATIONS AND WARRANTIES OF SELLER	9
	ARTICLE XI -- DEFAULT AND REMEDIES	11
	ARTICLE XII -- NOTICES	11
	ARTICLE XIII -- ACCESS	13
	ARTICLE XIV -- BROKERS	13
	ARTICLE XV -- MISCELLANEOUS	13
	ARTICLE XVI – OFFER AND ACCEPTANCE	15

 

    	 

    	 

    

SALES CONTRACT

 

 

THIS AGREEMENT is made and
entered into this day 26th of January, 2015 (the “Effective Date”), by and between ROBERTS PROPERTIES RESIDENTIAL,
L.P., a Georgia limited partnership (hereinafter referred to as the “Seller”), and BRADLEY PARK APARTMENTS,
LLC, a Georgia limited liability company (hereinafter referred to as the “Purchaser”).

 

ARTICLE I -- PROPERTY TO BE CONVEYED

 

A.      Seller shall sell to Purchaser, and
Purchaser shall purchase from Seller, upon the terms and conditions hereinafter set forth: (i) that certain parcel of land described
on Exhibit B attached hereto and by this reference incorporated herein (hereinafter referred to as the “Land”,
or the “Property”); and (ii) Seller’s right, title and interest in all engineering and architectural materials,
intellectual property, third party reports, design drawings and surveys relating to the Property.

 

B.      The Land consists of approximately
22.03 acres of unimproved real property and is located in Land Lots 205 and 206 of the 2nd District, 1st
Section, Forsyth County, Georgia.

 

ARTICLE II -- PURCHASE PRICE

 

The purchase price (hereinafter
referred to as the “Purchase Price”) for the Property shall be Three Million Three Thousand and No/100 Dollars
($3,003,000.00). Subject to all prorations and adjustments provided herein, the Purchase Price shall be paid as follows:

 

A.      Concurrently
with the full execution of this Agreement, Purchaser shall pay to Commonwealth Land Title Insurance Company, Atlanta, Georgia
office (the “Escrow Agent”) the sum of Ten Thousand and No/100 Dollars ($10,000.00) (such amount together with
all interest earned thereon is hereinafter referred to as the “Initial Deposit”), by check subject to collection
or by wire-transfer, such amount to be deposited in an interest-bearing account with a national bank whose deposits are insured
by the FDIC. If Purchaser does not send the Notice to Proceed (as hereinafter defined) to Seller prior to the Hard Date (as hereinafter
defined), the Initial Deposit shall be returned to Purchaser. If Purchaser does send the Notice to Proceed to Seller on or before
the Hard Date, Purchaser shall within three (3) business days after the Hard Date pay to the Escrow Agent an additional Fifteen
Thousand and No/100 Dollars ($15,000.00) (such amount, together with all interest earned thereon, is hereinafter referred to as
the “Subsequent Deposit”), by check subject to collection or by wire transfer, which will be deposited in the
same interest-bearing account as was deposited the Initial Deposit. The Initial Deposit and the Subsequent Deposit are herein
collectively referred to as the “Deposit”. The Deposit shall be applied toward the Purchase Price due at Closing
(as hereinafter defined) if the closing contemplated herein is consummated as herein provided, or shall otherwise be applied as
elsewhere provided in this Agreement.

 

Bradley
Park Sales Contract

    	 

    	 

    

Exhibit 10.1

 

B.      At
the Closing, Escrow Agent shall pay the Deposit to Seller to be applied against the Purchase Price, and the balance of the Purchase
Price shall be paid by Purchaser to Seller at Closing by wire-transfer of funds immediately available to Seller.

 

C.      (i)
The Escrow Agent joins in the execution of this Agreement solely for the purpose of acknowledging and agreeing to the provisions
of this Section II C.

 

 (ii) The duties of the Escrow
Agent shall be as follows:

 

(a)      During the term of this Agreement,
the Escrow Agent shall hold and disburse the Deposit in accordance with the terms and provisions of this Agreement.

 

(b)      The
Escrow Agent shall pay the Deposit in accordance with the joint written instructions of Seller and Purchaser in any of the following
events: (i) if this Agreement shall be terminated by the mutual written agreement of Seller and Purchaser, or (ii) if the Escrow
Agent shall be unable to determine at any time to whom the Deposit should be paid, or (iii) if a dispute shall develop between
Seller and Purchaser concerning to whom the Deposit should be paid. In the event that such written instructions shall not be received
by the Escrow Agent within ten (l0) days after the Escrow Agent has served a written request for instructions upon Seller and
Purchaser, then the Escrow Agent shall have the right to pay the Deposit into any court of competent jurisdiction and interplead
Seller and Purchaser in respect thereof, and thereupon the Escrow Agent shall be discharged of any obligations in connection with
this Agreement.

 

(c)      Subject
to Section II C (ii) (k) hereof, if costs or expenses are incurred by the Escrow Agent in its capacity as Escrow Agent because
of litigation or a dispute between the Seller and Purchaser arising out of the holding of the Deposit in escrow, Seller and Purchaser
shall each pay the Escrow Agent one-half of such reasonable costs and expenses. Except for such costs or expenses, no fee or charge
shall be due or payable to the Escrow Agent for its services as Escrow Agent.

 

(d)      By
joining herein, the Escrow Agent undertakes only to perform the duties and obligations imposed upon the Escrow Agent under the
terms of this Agreement and expressly does not undertake to perform any of the other covenants, terms and provisions incumbent
upon the Seller and the Purchaser hereunder.

 

(e)      Purchaser
and Seller hereby agree and acknowledge that the Escrow Agent assumes no liability in connection herewith except for negligence
or willful misconduct; that the Escrow Agent shall never be responsible for the validity, correctness or genuineness of any document
or notice referred to under this Agreement; and that in the event of any dispute under this Agreement, the Escrow Agent may seek
advice from its own counsel and shall be fully protected in any action taken by it in good faith in accordance with the opinion
of its counsel.

 

Bradley
Park Sales Contract

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Exhibit 10.1

 

(f)      All
investments by Escrow Agent will be made in the regular course of business. To be entitled to same day investment (assuming good
funds are provided), the Deposit must be received by noon; otherwise, such funds will be deposited on the next business day. All
investments shall be subject to the rules, regulations, policies and procedures of the bank depository in which such monies are
deposited.

 

(g)      Purchaser
hereby certifies to Escrow Agent that Purchaser’s Federal tax identification number is 47-1711578.

 

(h)      The
Deposit may be processed for collection in the normal course of business by Escrow Agent, but immediately thereafter the Deposit
shall be deposited in a segregated escrow account and shall not be commingled with funds of others, such segregated escrow funds
being at a bank of Escrow Agent’s choosing (the “Depository”). Escrow Agent shall not be accountable
for any incidental benefit which may be attributable to the funds so deposited. Escrow Agent shall not be liable for any loss
caused by the failure, suspension, bankruptcy or dissolution of the Depository.

 

(i)       Escrow
Agent shall not be liable for loss or damage resulting from:

 

(i) any good faith act or
forbearance of Escrow Agent;

 

(ii) any default, error,
action or omission of any party, other than Escrow Agent;

 

(iii) any defect in the
title to any property;

 

(iv) the expiration of
any time limit or other delay which is not solely caused by the failure of Escrow Agent to proceed in its ordinary course of business,
and in no event where such time limit is not disclosed in writing to the Escrow Agent;

 

(v) the lack of authenticity
of any writing delivered to Escrow Agent or of any signature thereto, or the lack of authority of the signatory to sign such writing;

 

(vi) Escrow Agent’s
compliance with all attachments, writs, orders, judgments, or other legal process issued out of any court;

 

(vii) Escrow Agent’s
assertion or failure to assert any cause of action or defense in any judicial or administrative proceedings; or

 

(viii) any loss or damage
which arises after the Deposit has been disbursed in accordance with the terms of this Agreement.

 

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Park Sales Contract

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Exhibit 10.1

 

(j)      Escrow
Agent shall be fully indemnified by the parties hereto for all of its expenses, costs, and reasonable attorney’s fees incurred
in connection with any interpleader action which Escrow Agent may file to resolve any dispute as to the Deposit, or which may
be filed against the Escrow Agent. Such costs, expenses or attorney’s fees may be deducted from the Deposit.

 

(k)      If
Escrow Agent is made a party to any judicial, non-judicial or administrative action, hearing or process based on acts of any of
the other parties hereto and not on the malfeasance and/or negligence of Escrow Agent in performing its duties hereunder, the
expenses, costs and reasonable attorney’s fees incurred by Escrow Agent in responding to such action, hearing or process
may be deducted from the funds held hereunder and the party/parties whose alleged acts are a basis for such proceedings shall
indemnify, save and hold Escrow Agent harmless from said expenses, costs and fees so incurred.

 

ARTICLE III – TITLE
AND SURVEY

 

A.      Within five (5)
business days after the Effective Date, Seller agrees to provide Purchaser a current updated survey of the Property at Seller’s
expense (the “Survey”). Purchaser shall have the right to obtain any survey of the Property desired by Purchaser.
The legal description contained in the Deed (hereinafter defined in Section IV A hereof) shall be that set forth on Exhibit
B attached hereto. However, if requested by Purchaser, at Closing, Seller shall execute a Quit-Claim Deed in favor of Purchaser
which will contain a legal description based upon the Survey.

 

B.      Purchaser shall
obtain within fifteen (15) days after the Effective Date an owner’s title insurance commitment (the “Commitment”)
from Commonwealth Land Title Insurance Company (the “Title Company”), together with legible copies of all
matters referred to therein as exceptions to title. Prior to forty (40) days after the Effective Date, Purchaser shall deliver
to Seller a statement of any objections to Seller’s title to the Property and any objections as to matters disclosed by the Survey
or any other survey obtained by Purchaser. Seller shall have until forty-five (45) days after the Effective Date to cure any such
objections, but Seller shall have no obligation to cure any such objections. In the event Seller fails or refuses to cure such
objections on or before forty-five (45) days after the Effective Date, then Purchaser shall elect by written notice to Seller on
or before the Hard Date, to either (i) terminate this Agreement and receive a full refund of so much of the Deposit as is
then held by Escrow Agent, and thereafter this Agreement shall be null and void and of no further force or effect, and neither
Purchaser nor Seller shall have any further rights, duties, liabilities or obligations to the other by reason hereof except for
the Inspection Indemnity (defined in Section XIII A below); or (ii) waive such objections and consummate the transaction contemplated
herein without reduction of the Purchase Price. If Purchaser does not provide Seller written notice of Purchaser’s election as
above provided, then Purchaser shall be deemed to have waived such objections as provided in the aforesaid item (ii). Seller shall
not be obligated to cure any objections. All matters as to which Purchaser has agreed to accept title subject to in accordance
with this Section III B are hereinafter referred to as the “Permitted Exceptions”.

 

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Park Sales Contract

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Exhibit 10.1

 

C.      Purchaser shall
have the right to have the Commitment and Survey updated until the Closing Date (hereinafter defined), and if any such update discloses
any new title exceptions or survey matters as to which Purchaser has an objection and which were not of record as of the date of
the Commitment, as to title matters, or which were not shown on the Survey, as to survey matters (any such new matter being referred
to as a “new objection”), Purchaser shall deliver to Seller a statement of any such new objections and Seller
shall have until the Closing Date to cure all such new objections. In the event that Seller fails to cure such new objections on
or before the Closing Date (i) Purchaser may terminate this Agreement by written notice to Seller given on or before the Closing
Date, whereupon Purchaser shall receive a full refund of so much of the Deposit as is then held by Escrow Agent, and thereafter
this Agreement shall be null and void and of no further force or effect, and neither Purchaser nor Seller shall have any further
rights, duties, liabilities or obligations to the other by reason hereof except for the Inspection Indemnity, or (ii) Purchaser
may cure such new objections created or suffered by Seller and deduct the reasonable cost thereof from the Purchase Price otherwise
payable by Purchaser at Closing; or (iii) Purchaser may waive such objections and consummate the transaction contemplated
herein without reduction of the Purchase Price.

 

ARTICLE IV -- ITEMS TO BE DELIVERED BY SELLER AT CLOSING

 

At Closing Seller agrees
to deliver the following items to Purchaser. Drafts of all documents to be delivered at Closing as specified in this Agreement
shall be prepared by Purchaser’s counsel and submitted to Seller’s counsel for review and approval not later than three (3) days
prior to the Closing Date.

 

A.      Title
to the Property shall be conveyed by a limited warranty deed (herein called the “Deed”) which will (i) contain
a limited warranty of title to the effect that Seller will warrant title to the Purchaser as against any claim by any person owning,
holding or claiming by, through or under Seller, but not otherwise; and (ii) be subject to the Permitted Exceptions.

 

B.      A
Seller’s Title Affidavit (in a form customarily utilized in Atlanta, Georgia) showing that all debts for labor and materials
in respect of the Land have been paid in full.

 

C.      A
duly executed Certification of Non-Foreign Status that pursuant to Section 1445 of the Internal Revenue Code, Seller is not a
foreign person, foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations).

 

D.      A
duly executed IRS Form 1099-S, a duly executed Designation of Reporting Agent Agreement and a duly executed Transferor Identification
Certificate.

 

Bradley
Park Sales Contract

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Exhibit 10.1

 

E.      A
duly executed Affidavit of Seller’s Residence that pursuant to O.C.G.A. §48-7-128, no withholding from the proceeds
of the transaction contemplated herein is required.

 

F.      Such
evidence as is required by the Title Company to delete any and all security deeds encumbering the Land from the Commitment to
be marked at Closing.

 

G.      Evidence
acceptable to Purchaser and acceptable to the Title Company that those acting for Seller have full authority to consummate the
transaction contemplated in this Agreement.

 

H.      A
duly executed Closing Statement evidencing the prorations between Seller and Purchaser and disbursements made in connection with
this transaction.

 

I.        A
duly executed assignment of all of Seller’s right, title and interest in and to all engineering and architectural materials,
intellectual property, third party reports of any kind or nature, design drawings and surveys relating to the Property, if any
and to the extent assignable, obtained by Seller within the twelve (12) months prior to the Effective Date.

 

J.       Duly
executed assignments from Seller to Purchaser of all architectural, engineering and other contracts, licenses, permits, bonds
and approvals obtained by Seller with respect to the Property, together with any required consents to such assignments from the
other parties to such contracts.

 

K.      Any
other documents referred to or specified in this Agreement or deemed reasonably appropriate by Purchaser’s and Seller’s
counsel.

 

ARTICLE V -- ITEMS TO BE DELIVERED BY PURCHASER AT CLOSING

 

At Closing, Purchaser agrees
to deliver the following items to Seller:

 

A.      The
Purchase Price as required by and in the manner specified in Section II B hereof.

 

B.      Evidence
reasonably acceptable to Seller that those acting for Purchaser have full authority to consummate the transaction contemplated
in this Agreement.

 

C.      A
duly executed Closing Statement evidencing the prorations between Seller and Purchaser and disbursements made in connection with
this transaction.

 

D.      Any
other documents referred to or specified in this Agreement or deemed reasonably appropriate by Seller’s and Purchaser’s
counsel.

 

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Park Sales Contract

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Exhibit 10.1

 

ARTICLE VI -- TIME AND PLACE OF CLOSING AND CLOSING COSTS

 

A.      The consummation of the transaction
contemplated herein shall take place through an escrow closing conducted by the Escrow Agent commencing at 10:00 A.M. on any business
day specified by Purchaser in a notice given to Seller at least three (3) days prior to the specified business day, which business
day is on or before the day sixty (60) days after the Hard Date and Seller’s receipt of the Notice to Proceed; provided,
however, the foregoing notwithstanding, Purchaser shall have the right to extend the time for consummation of the transaction contemplated
herein for an additional sixty (60) days, provided that, together with a copy of such extension notice sent to Seller by Purchaser
(with a copy to Escrow Agent), no later than the day sixty (60) days after the Hard Date, Purchaser deposits with Escrow Agent
a Twenty Thousand and No/100 Dollars ($20,000.00) additional earnest money deposit, which upon receipt by Escrow Agent shall be
invested in the same interest-bearing account as was deposited the Deposit, and which upon receipt by Escrow Agent shall be included
within the definition of and shall be a part of the Deposit. The consummation of the transaction contemplated herein is herein
referred to as the “Closing”, and the date the Closing occurs is herein referred to as the “Closing Date”.

 

B.      At Closing, Seller shall pay the
transfer tax and the recording fee incident to the Deed. At Closing, Purchaser shall pay all other closing expenses with respect
to the closing of the transaction contemplated herein, including, without limitation, the cost of any survey obtained by Purchaser,
all other recording fees, title examination cost and the premium incident to any title insurance policy to be issued to Purchaser,
except that Seller and Purchaser will each pay their own attorney’s fees.

 

C.      At Closing, Purchaser shall pay to
Seller Four Hundred Thousand and No/100 Dollars ($400,000.00) for reimbursement of development costs and as consideration for the
exclusive right to own and use all of Seller’s plans, surveys, reports, permits, approvals, specifications, intellectual property,
and bonds relating to the Property as further described on Exhibit A attached hereto. In addition, Seller shall assign to Purchaser
any and all contracts or consulting agreements relating to the abovementioned items and Purchaser agrees to accept and assume said
assignment.

 

D.      At Closing, Purchaser shall pay to
Seller, in addition to the Purchase Price, Seven Hundred Seventy-Five Thousand and No/100 Dollars ($775,000.00) to reimburse Seller
for all the prepaid sanitary sewer tap fees appurtenant to the Property, and Seller will transfer and assign to Purchaser all of
Seller’s right, title and interest in and to such sanitary sewer tap fees.

 

E.      Possession of the Property will be
delivered by Seller to Purchaser on the Closing Date.

 

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Park Sales Contract

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Exhibit 10.1

 

ARTICLE VII -- APPORTIONMENTS

 

The following items shall
be apportioned at Closing and as of the Closing Date:

 

A.      All real property taxes, including
the current installment for any assessment (special, bond, or otherwise), based on the amount of such taxes for the year during
which the Closing occurs. In the event current year’s taxes are not available at the time of Closing, such proration shall be based
upon the amount of such taxes for the previous year, and in the event there is a difference between the current year’s taxes and
the taxes for the previous year based upon which the proration was effected, the amount of such taxes shall be reprorated immediately
upon demand being made therefor by one party upon the other. Seller shall be entitled to receive all income in respect of the Property
and shall be obligated to pay all expenses in respect of the Property for all time periods prior to and including the day prior
to the Closing Date. Purchaser shall be entitled to receive all such income and shall be obligated to pay all such expenses for
all time periods commencing with the Closing Date. In the event that any income or any expense item relating to the period prior
to the Closing Date is received or appears after the Closing, such item(s) shall be adjusted between the Seller and the Purchaser
within ten (10) days after such is discovered. This Section VII A shall survive the Closing of the transaction contemplated herein,
but only for a period of thirty (30) days after which all prorations and adjustments shall be final as between Seller and Purchaser,
except for the agreement to reprorate property taxes in the event the proration at Closing is based upon the previous year’s taxes.

 

ARTICLE VIII -- EMINENT DOMAIN

 

A.      If, prior to the Closing Date, all,
or such a material portion of the Land as would make it difficult or impossible for Purchaser to construct its proposed development
on the Land, is taken by condemnation or eminent domain or same is pending, or Seller has been given notice of such an intended
taking, so much of the Deposit as is held by Escrow Agent shall be returned by Escrow Agent to Purchaser, and upon such return
this Agreement shall terminate and be null and void and of no further force or effect and neither Purchaser nor Seller shall have
any further rights, duties, liabilities or obligations to the other hereunder except for the Inspection Indemnity (hereinafter
defined). If, prior to the Closing Date, there shall be any condemnation or eminent domain proceedings instituted or pending against
less than such a material portion of the Land as would make it difficult or impossible for Purchaser to construct Purchaser’s proposed
development on the Land, the Closing shall take place as provided herein without abatement of the Purchase Price, and there shall
be assigned to the Purchaser at the Closing, all interest of the Seller in and to any condemnation awards which may be payable
to the Seller on account of such occurrence. Seller shall notify Purchaser in writing of any notice of contemplated condemnation
received by Seller prior to the Closing Date.

 

ARTICLE IX -- PURCHASER’S CONDITION PRECEDENT

 

Purchaser shall not be required
to purchase the Property unless the following condition precedent has been satisfied on or before the Closing Date:

 

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Park Sales Contract

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Exhibit 10.1

 

A.      On or before sixty (60) days after
the Effective Date (the “Hard Date”), Purchaser may, but shall have no obligation to, among other things, obtain
soil borings, engineering reports, topographical surveys, evidence of the availability of utilities in sufficient capacities to
serve Purchaser’s proposed development of the Property, and confirmation from Purchaser’s engineers that the topography, soil and
subsurface conditions of the Property are suitable for the development contemplated by Purchaser without the imposition of impact
fees, cash proffers or unacceptable conditions as determined by Purchaser in its sole discretion. Seller shall permit Purchaser
to make the foregoing investigations. Regardless of whether or not Purchaser obtains such tests and studies by the Hard Date, Purchaser
shall determine on or before the Hard Date, in its sole discretion, whether or not the condition of the Property is satisfactory.
If Purchaser determines the Property is satisfactory, Purchaser shall, on or before the Hard Date, notify Seller and Escrow Agent
that the Property is satisfactory and this condition precedent has been satisfied (which notice is hereinafter referred to as “Notice
to Proceed”), and Purchaser shall deliver the Subsequent Deposit to Escrow Agent within three (3) business days after
the Hard Date. If Purchaser fails to send to Seller the Notice to Proceed before the Hard Date, or if Purchaser fails to pay to
Escrow Agent the Subsequent Deposit within three (3) business days after the Hard Date, Escrow Agent shall return the Initial Deposit
to Purchaser and thereafter this Agreement shall terminate and be null and void and of no further force or effect and neither Purchaser
nor Seller shall have any further rights, duties, liabilities or obligations to the other by reason hereof except for those matters
that specifically survive such termination.

 

ARTICLE X -- REPRESENTATIONS
AND WARRANTIES OF SELLER

 

Seller hereby represents
and warrants to Purchaser, to the best of Seller’s knowledge, as follows:

 

A.      Seller has the right, power and authority
to enter into this Agreement and to sell the Property in accordance with the terms hereof, and Seller has granted no option or
right of first refusal to any person or entity to purchase the Property and has not entered into any other contract to sell the
Property; and

 

B.      There are no parties in possession
of the Property or entitled to possession thereof other than Seller.

 

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Park Sales Contract

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Exhibit 10.1

 

ANYTHING
TO THE CONTRARY CONTAINED IN THIS AGREEMENT NOTWITHSTANDING, IT IS UNDERSTOOD AND AGREED THAT THE PROPERTY IS BEING SOLD AND CONVEYED
HEREUNDER, “AS IS, WHERE IS, AND WITH ALL FAULTS” WITH NO RIGHT OF SETOFF OR DEDUCTION TO THE PURCHASE PRICE AND WITHOUT
ANY REPRESENTATION OR WARRANTY BY SELLER EXCEPT AS EXPRESSLY SET FORTH HEREIN. SELLER HAS NOT MADE AND IS NOT MAKING ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION
OR WARRANTY REGARDING THE SUITABILITY OF THE PROPERTY FOR ANY PARTICULAR PURPOSE OR RELATING IN ANY WAY TO HAZARDOUS SUBSTANCES
OR ANY ENVIRONMENTAL MATTERS, SUITABILITY OF SOIL OR GEOLOGY, ABSENCE OF DEFECTS OR HAZARDOUS OR TOXIC SUBSTANCES OR WASTE. PURCHASER
ACKNOWLEDGES AND REPRESENTS THAT PURCHASER IS ENTERING INTO THIS AGREEMENT WITHOUT RELYING UPON ANY SUCH STATEMENT, REPRESENTATION
OR WARRANTY MADE BY SELLER OR BY ANY AGENT OR ANY OTHER PERSON AND BASED SOLELY UPON PURCHASER’S OWN INSPECTIONS AND INVESTIGATIONS
OF THE PROPERTY. PURCHASER, FOR PURCHASER AND ITS SUCCESSORS AND ASSIGNS, HEREBY RELEASES SELLER FROM AND WAIVES ALL CLAIMS AND
LIABILITY AGAINST SELLER IN CONNECTION WITH OR ARISING OUT OF ANY PHYSICAL OR ENVIRONMENTAL CONDITION IN, AT, ABOUT OR UNDER THE
PROPERTY AND FURTHER RELEASES SELLER FROM AND WAIVES ALL CLAIMS AND LIABILITY AGAINST SELLER ATTRIBUTABLE TO THE PHYSICAL AND ENVIRONMENTAL
CONDITION AND QUALITY OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE PRESENCE, DISCOVERY OR REMOVAL OF ANY HAZARDOUS WASTE,
HAZARDOUS OR TOXIC SUBSTANCES, AS THOSE TERMS ARE DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY
ACT, THE TOXIC SUBSTANCES CONTROL ACT, AND THE RESOURCE CONSERVATION AND RECOVERY ACT, IN EACH CASE, AS AMENDED, AND AS MAY BE
FURTHER AMENDED FROM TIME TO TIME, OR ANY OTHER FEDERAL OR STATE LAWS OR REGULATIONS RELATING TO ENVIRONMENTAL MATTERS IN, AT,
ABOUT OR UNDER THE PROPERTY. AS BETWEEN PURCHASER AND SELLER, PURCHASER ASSUMES RESPONSIBILITY AND LIABILITY FOR ALL OBLIGATIONS
ARISING SUBSEQUENT TO CLOSING AND ATTRIBUTABLE TO ANY HAZARDOUS SUBSTANCES IN, AT, ABOUT OR UNDER THE PROPERTY, AND AGREES TO INDEMNIFY
SELLER FROM ANY LIABILITY RESULTING FROM THE PRESENCE ON, OR RELEASE FROM, THE PROPERTY OF ANY HAZARDOUS WASTE OR HAZARDOUS OR
TOXIC SUBSTANCES ARISING SUBSEQUENT TO CLOSING AND OCCURRING DURING THE PURCHASER’S OWNERSHIP OF THE PROPERTY. ANYTHING HEREIN
TO THE CONTRARY NOTWITHSTANDING, THE AGREEMENTS OF PURCHASER SET FORTH IN THIS PARAGRAPH SHALL SURVIVE THE CLOSING AND SHALL BE
ENFORCEABLE AT ANY TIME.

 

As used herein, the words “to the best
of Seller’s knowledge” or words of similar import shall mean and refer to the actual and not constructive knowledge, without
investigation, of Charles S. Roberts, the President of Roberts Realty Investors, Inc., the general partner of Roberts Properties
Residential, L.P., and not anything which he should have known but did not actually know.

 

Anything contained in this Agreement to the
contrary notwithstanding, the representations and warranties of Seller contained in this Article X shall survive the Closing for
a period of six (6) months only and shall not be merged in the Deed or in any of the other documents executed and delivered at
Closing. Purchaser must file any lawsuit respecting a violation or breach of any of Seller’s warranties or representations contained
in this Agreement within six (6) months after the Closing Date, and in the event that Purchaser does not file such a lawsuit within
six (6) months after the Closing Date, Seller’s warranties and representations, and Purchaser’s rights in respect thereto, shall
be terminated, null and void and of no further force or effect.

 

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Park Sales Contract

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Exhibit 10.1

 

ARTICLE XI -- DEFAULT AND REMEDIES

 

A.      In the event that the transaction
contemplated herein is not closed and consummated because of Purchaser’s failure or breach to perform its obligations hereunder,
as Seller’s sole remedy Escrow Agent shall pay the Deposit to Seller as Seller’s liquidated damages, and not as a penalty, it being
otherwise difficult or impossible to determine Seller’s actual damages. Seller and Purchaser acknowledge that it is impossible
to estimate the actual damages Seller would suffer from Purchaser’s breach of this Agreement, but that the liquidated damages provided
herein represent a reasonable pre-estimate of such damages and Seller and Purchaser therefore intend to provide for liquidated
damages as herein specified, and that the agreed upon liquidated damages are not punitive or penalties and are just, fair and reasonable,
all in accordance with O.C.G.A. §13-6-7. The foregoing sentence shall in no form or fashion affect Seller’s rights and remedies
against Purchaser in connection with the Inspection Indemnity.

 

B.      In the event that the transaction
contemplated herein is not closed and consummated because of Seller’s failure or breach to perform its obligations hereunder, Purchaser
shall have the right only (i) to terminate this Agreement by giving notice thereof to Seller and Escrow Agent, and upon receipt
of such notice Escrow Agent shall return so much of the Deposit as is then held by Escrow Agent to Purchaser and thereafter this
Agreement shall terminate and be null and void and of no further force or effect, and neither Seller nor Purchaser shall have any
further rights, duties, liabilities or obligations to the other hereunder, or (ii) to sue Seller for specific performance of Seller’s
obligations under this Agreement; which remedies specified in (i) and (ii) shall be in lieu of any other rights or remedies for
Purchaser, including, without limitation, any right or claim for damages; provided, however, in the event that the remedy of specific
performance is not available to Purchaser because Seller has voluntarily conveyed or encumbered the Property after the date of
this Agreement, Purchaser shall have the right to sue Seller for the damages occasioned thereby to Purchaser. If Purchaser consummates
the transaction contemplated in this Agreement it shall be conclusively deemed to have waived any breach by Seller of any covenant,
representation or warranty under this Agreement (but not under any of the documents executed at Closing which shall continue in
accordance with their terms) which the Purchaser knew or should have known existed prior to the Closing.

 

ARTICLE XII -- NOTICES

 

A.      Whenever any notice, demand, or request
is required or permitted hereunder, such notice, demand or request shall be in writing and shall be hand-delivered in person or
sent by FedEx or similar expedited overnight delivery service, all charges prepaid, to the addresses set forth below:

 

Bradley
Park Sales Contract

    	-11-

    	 

    

Exhibit 10.1

 

To Seller:

 

Roberts Properties
Residential, L.P.

375 Northridge
Road

Suite 330

Atlanta, Georgia
30350

Attention:
Mr. Anthony Shurtz

 

With a
copy to:

 

Mr. Bobby
Gellert

c/o Avenue
Capital Group

AIII Manager,
LLC

399 Park
Avenue

New York,
New York 10022

 

To Purchaser:

 

Bradley Park
Apartments, LLC

c/o Roberts Properties,
Inc.

375 Northridge
Road

Suite 330

Atlanta, Georgia
30350

Attention: David
Phillips

 

With a copy
to:

 

Holt Ney Zatcoff
& Wasserman, LLP

100 Galleria
Parkway

Suite 1800

Atlanta, Georgia
30339

Attention:
Sanford H. Zatcoff, Esq.

 

To Escrow
Agent:

 

Commonwealth Land
Title Insurance Company

4170 Ashford
Dunwoody Road, NE

Suite 460

Atlanta, Georgia
30319

Attention: Susan
Vander Meer

 

Any notice, demand, or request which
shall be served upon any of the parties in the manner aforesaid shall be deemed sufficiently given for all purposes hereunder (i)
at the time such notice, demand or request is hand-delivered in person, or (ii) on the day such notice, demand or request is deposited
with FedEx or similar overnight delivery service in accordance with the preceding portion of this Article XII. Any party hereto
shall have the right from time to time to designate by written notice to the other such other person or persons and at such other
places in the United States as Purchaser or Seller desires written notices, demands, or requests to be delivered or sent in accordance
herewith; provided, however, at no time shall either party be required to send more than an original and two (2) copies of any
such notice, demand or request required or permitted hereunder. Notices from Seller may be executed and delivered by Seller’s counsel.

 

Bradley
Park Sales Contract

    	-12-

    	 

    

Exhibit 10.1

 

ARTICLE XIII -- ACCESS

 

A.      Purchaser and its agents
and representatives shall have the right to enter upon the Property at any reasonable time prior to the Closing Date, for any lawful
purpose, including, without limitation, investigations, tests and studies, and survey purposes; provided, however, Purchaser shall
pay for all such work performed on the Property and shall not permit the creation of any lien in favor of any contractor, subcontractor,
materialman, mechanic, surveyor, architect or laborer, and Purchaser hereby expressly agrees to indemnify and hold Seller harmless
with respect thereto; and provided further, however, that Purchaser hereby expressly agrees to indemnify and hold Seller harmless
against any claim, damage or injury to either persons or property arising out of Purchaser’s or its agent’s, employees’ or representatives’
actions under this Article XIII. Prior to entering upon the Land, Purchaser shall deliver to Seller evidence that Purchaser has
in effect a broad-form public liability insurance policy having a minimum combined single-limit coverage of $1,000,000.00, and
that Purchaser has named Seller as an additional insured, and Purchaser shall deliver to Seller a Certificate of Insurance to the
foregoing effect, naming Seller as an additional insured. The indemnification and hold harmless provisions contained in this Article
XIII are herein collectively referred to as the “Inspection Indemnity”. This Article XIII shall survive the Closing
of the transaction contemplated herein or any other termination of this Agreement.

 

ARTICLE XIV -- BROKERS

 

A.      Purchaser and Seller hereby
represent to each other that no real estate broker or agent was involved in negotiating the transaction contemplated herein. In
the event any claim(s) for real estate commissions, fees or compensation arise in connection with this Agreement and the transaction
contemplated herein, the party so incurring or causing such claim(s) shall indemnify, defend and hold harmless the other party
from any loss, claim or damage which the other party suffers because of said claim(s). This Article XIV shall survive the Closing
of the transaction contemplated herein or any termination of this Agreement.

 

ARTICLE XV -- MISCELLANEOUS

 

A.      This Agreement constitutes
the entire agreement between the parties hereto and cannot be changed or modified other than by a written agreement executed by
both Purchaser and Seller.

 

Bradley
Park Sales Contract

    	-13-

    	 

    

Exhibit 10.1

 

B.      If Seller desires, Purchaser
shall cooperate with Seller in Seller’s effort to effect a tax-free exchange of the Property for other property of like kind pursuant
to Internal Revenue Code §1031, and the regulations promulgated thereunder; provided, however, Seller shall bear all costs
and expenses associated with any such exchange.

 

C.      Irrespective
of the place of execution or performance, this Agreement shall be governed by and construed in accordance with the laws of the
State of Georgia. This Agreement shall be construed without regard to any presumption or other rule requiring construction against
the party causing this Agreement to be drafted. If any words or phrases in this Agreement shall have been stricken out or otherwise
eliminated, whether or not any other words or phrases have been added, this Agreement shall be construed as if the words or phrases
so stricken out or otherwise eliminated were never included in this Agreement and no implication or inference shall be drawn from
the fact that said words or phrases were so stricken out or otherwise eliminated. All terms and words used in this Agreement regardless
of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context
may require.

 

D.      This Agreement may be executed
in more than one counterpart, each of which shall be deemed an original.

 

E.      The captions of this Agreement
are inserted for convenience or reference only and do not define, describe or limit the scope or intent of this Agreement or any
of the terms hereof.

 

F.      Time is of the essence of
this Agreement and each term and provision hereof. In the event that time for performance of any matter hereunder falls on a Saturday,
Sunday or legal holiday, the time for performance shall automatically be extended to the next business day.

 

G.      If any term, covenant or
condition of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement and the application of such terms, covenants and conditions to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant and condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.

 

H.      All rights, powers and privileges
conferred hereunder upon the parties unless otherwise provided shall be cumulative and not restricted to those given by law.

 

I.        No failure of any party
to exercise any power given such party hereunder or to insist upon strict compliance by any other party to its obligations hereunder,
and no custom or practice of the parties in variance with the terms hereof, shall constitute a waiver of any party’s right to demand
exact compliance with the terms hereof.

 

Bradley
Park Sales Contract

    	-14-

    	 

    

Exhibit 10.1

 

J.       Purchaser shall have the
right to waive any condition or contingency herein in Purchaser’s favor and Seller shall have the right to waive any condition
or contingency herein in Seller’s favor.

 

K.      Anything contained in this
Agreement to the contrary notwithstanding, except as specifically set forth in this Agreement to the contrary, the terms and provisions
of this Agreement shall not survive Closing and shall be merged into the Deed.

 

L.      The provisions of this Agreement
shall extend to, bind and inure to the benefit of the parties hereto and their respective successors, assigns and the legal representatives
of their estates.

 

M.     This Agreement may be assigned
by Purchaser without the consent of Seller or approval of Seller.

 

ARTICLE XVI – OFFER
AND ACCEPTANCE

 

This Agreement
has been executed first by Seller and shall be deemed a continuing offer by Seller to sell until 5:00 p.m. on January 26, 2015.
If an executed and unaltered acceptance hereof is not returned to Seller at the address specified herein for notices to Seller,
no later than 5:00 p.m. on January 26, 2015, such offer to sell shall be deemed withdrawn.

 

[Executions begin on next page]

 

Bradley
Park Sales Contract

    	-15-

    	 

    

Exhibit 10.1

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed, sealed and delivered the day and year first above written.

 

 

	 	
        SELLER:

         

        ROBERTS PROPERTIES RESIDENTIAL, L.P.,
        

a Georgia limited partnership

         

        By:    Roberts
        Realty Investors, Inc., a Georgia corporation, its general partner

         

         

              By:       /s/ Anthony Shurtz            

        Anthony Shurtz

        Chief Financial Officer

         

         

	 	 

 

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Bradley
Park Sales Contract

    	-16-

    	 

    

Exhibit 10.1

 

	 	
         

        PURCHASER:

         

        BRADLEY PARK APARTMENTS, LLC, 

a Georgia limited liability
        company

         

        By:    Roberts Bradley, LLC, a Georgia

        limited liability company, its sole

        member and manager

         

        By:  Roberts Properties, Inc., a

                Georgia corporation, its sole member

                and manager

         

         

        By:    /s/ David M. Phillips          

            David M. Phillips

            Vice President of Development

         

         

	 	 

 

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Bradley
Park Sales Contract

    	-17-

    	 

    

Exhibit 10.1

 

Escrow Agent joins
in the execution of this Agreement for the purpose of acknowledging the agreements set forth in this Agreement as to the holding
of the Deposit.

 

 

	 	
        ESCROW AGENT:

         

        COMMONWEALTH LAND TITLE INSURANCE COMPANY

         

         

        By:    /s/ Susan Vander Meer                

                 Name:
        Susan Vander Meer

                 Title:
        Escrow Manager

         

	 	 

 

Bradley
Park Sales Contract

    	-18-

    	 

    

Exhibit 10.1

 

EXHIBIT “A”

BRADLEY PARK APARTMENTS

Development and Construction Costs Reimbursed
to Seller

 

 

At Closing, Purchaser shall pay to Seller Four
Hundred Thousand and No/100 Dollars ($400,000.00) for reimbursement of development costs and as consideration for the exclusive
right to own and use all of Seller’s plans, surveys, reports, permits, approvals, specifications, intellectual property, and bonds
relating to the Property. In addition, Seller shall assign to Purchaser any and all contracts or consulting agreements relating
to the abovementioned items and Purchaser agrees to accept and assume said assignment, which includes, but is not limited to, the
architectural contract with Pieper O’Brien Herr Architects dated July 21, 2014 for Bradley Park Apartments.

 

Bradley
Park Sales Contract

    	 

    	 

    

Exhibit 10.1

 

exhibit B

LEGAL DESCRIPTION

 

All that tract or parcel of land lying and being in Land Lots 205
and 206 of the 2nd District, 1st Section, Forsyth County, Georgia and being more particularly described as
follow:

 

Commencing at the Southern end of the mitered intersection of the
southerly right of way of Hutchinson Road (having a right of way width that varies) with the westerly right of way of State Route
No. 9 (having a right of way width that varies); thence proceeding along the southerly right of way of Hutchinson Road, North 27
degrees 26 minutes 07 seconds West a distance of 14.43 feet to a point; thence North 72 degrees 04 minutes 13 seconds West a distance
of 25.30 feet to a point; thence following a counterclockwise curve with an arc distance of 321.59 feet, having a radius of 1857.86
feet, subtended by a chord bearing and distance of North 77 degrees 01 minutes 45 seconds West, 321.19 feet to a point; thence
North 07 degrees 59 minutes 44 seconds East a distance of 12.00 feet to a point; thence following a counterclockwise curve with
an arc distance of 82.05 feet, having a radius of 1869.86 feet, subtended by a chord bearing and distance of North 83 degrees 15
minutes 42 seconds West a distance of 82.05 feet to a concrete marker found being the POINT OF BEGINNING; thence from said
POINT OF BEGINNING as thus established, leaving the right of way of Hutchinson Road, South 20 degrees 51 minutes 00 seconds
West a distance of 12.92 feet to a 3⁄4 inch crimp top found; thence South 20 degrees 42 minutes 13 seconds West a distance
of 198.00 feet to 3⁄4 inch crimp top found; thence South 13 degrees 10 minutes 46 seconds West a distance of 429.07 feet to
an iron pin set; thence proceeding along the property now or formerly owned by New South Holdings, LLC, North 88 degrees 47 minutes
41 seconds West a distance of 1352.10 feet to an iron pin set on the land lot line dividing land lots 204 and 205; thence along
the lots of Manchester Park Subdivision, North 00 degrees 01 minutes 00 seconds East a distance of 1024.78 feet to an iron pin
set; thence North 71 degrees 33 minutes 45 seconds East a distance of 51.86 feet to a concrete monument found on the southwesterly
right of way of Hutchinson Road; thence along said right of way, following a counterclockwise curve with an arc distance of 283.21
feet, having a radius of 756.20, subtended by a chord bearing and distance of South 33 degrees 11 minutes 24 seconds East, 281.56
feet to a concrete monument found; thence continuing along said right of way, South 23 degrees 38 minutes 24 seconds West a distance
of 102.15 feet to a concrete monument found; thence South 65 degrees 38 minutes 24 seconds East a distance of 30.01 feet to a concrete
monument found; thence North 23 degrees 38 minutes 03 seconds East a distance of 90.88 feet to a point; thence following a counterclockwise
curve with an arc distance of 605.58 feet, having a radius of 756.20 feet, subtended by a chord bearing and distance of South 69
degrees 17 minutes 57 seconds East, 589.53 feet to a point; thence North 87 degrees 45 minutes 32 seconds East a distance of 419.18
feet to a concrete monument found; thence South 02 degrees 14 minutes 28 seconds East a distance of 13.00 feet to a concrete monument
found; thence North 87 Degrees 45 minutes 32 seconds East a distance of 34.02 feet to a concrete monument found; thence North 02
degrees 14 minutes 28 seconds West a distance of 13.00 feet to a concrete monument found; thence North 86 degrees 55 minutes 18
seconds East a distance of 41.21 feet to concrete monument found; thence following a clockwise curve with an arc distance of 252.58
feet, having a radius of 2008.92 feet, subtended by a chord bearing and distance of South 88 degrees 14 minutes 17 seconds East,
252.41 feet to a concrete monument found being the POINT OF BEGINNING.

 

The above described property is shown on an Alta/Acsm Land Title
Survey For:

Roberts Properties Residential, L.P. Highway Nine Investor, LLC,

Commonwealth Land Title Insurance Company as Tract I, containing
959,542 Square Feet/22.03 Acres prepared by Travis Pruitt & Associates, Inc., dated August 1, 2005.

 

Bradley
Park Sales ContractProvince of Quebec - Exhibit 4.1 - Filed by newsfilecorp.com

Exhibit 4.1

January 30, 2015

Citibank, N.A., 
    388 Greenwich Street,

        14th Floor,

            New York,
New York 10013. 

Dear Sirs: 

                
     We are addressing this letter to you in your
capacity as Fiscal Agent under the Fiscal Agency Agreement dated May 30, 2002,
between Québec and yourselves, as may be amended or supplemented from time to
time (the “Fiscal Agency Agreement”). 

                      Pursuant
to the Fiscal Agency Agreement, you are authorized to authenticate and deliver
Medium-Term Notes, Series A, Due Nine Months or More from Date of Issue of
Québec (the “Notes”) up to U.S. $5,000,000,000 (or the equivalent thereof in
other currencies or currency units) aggregate initial offering price at any one
time outstanding (authorized pursuant to its Order in Council No. 1056-2012
dated November 14, 2012) upon receipt from Québec of a telecopy of settlement
information as set forth in the Amended and Restated Public Medium-Term Note
Administrative Procedures for Fixed and Floating Rate Notes, dated as of
December 11, 2003. The Notes shall be substantially in the form as set forth in
Exhibits A (“Fixed Rate Notes”), B (“Floating Rate Notes”), C (“Global Security
representing Fixed Rate Notes”) and D (“Global Security representing Floating
Rate Notes”) hereto. The Notes shall be duly executed by the proper
representatives of Québec and delivered to you from time to time, as provided in
the Fiscal Agency Agreement. The Notes shall be delivered outside Québec. The
Notes to be authenticated and delivered by you shall be in such denominations
and contain such other terms as are specified in said settlement information.

	Citibank, N.A. 	–2– 

                      Please
acknowledge your receipt of this Order by signature below. By such
acknowledgement, you undertake to perform such duties and only such duties as
are specifically set forth in the Fiscal Agency Agreement and in the aforesaid
Administrative Procedures. 

Yours truly,

QUÉBEC 

By:
_____________________________________________
      
Name:
       Title:

Acknowledged: 

CITIBANK, N.A.

By:
_____________________________________________
      
Name:
       Title:

EXHIBIT A

	REGISTERED 	REGISTERED 
	No. FXR 	$ 

QUÉBEC 
MEDIUM-TERM NOTE
SERIES A

(Fixed Rate) 

                      Issue
of up to U.S.$5,000,000,000 Medium-Term Notes, Series A (or the equivalent
thereof in other currencies), Due Nine Months or More from Date of Issue. 

                      The
following summary of terms is subject to the information set forth on the
reverse hereof. 

PRINCIPAL AMOUNT:

SPECIFIED CURRENCY: 
ISSUE DATE: 
INTEREST RATE:

INTEREST PAYMENT DATE(S): 
RECORD DATE(S):

STATED MATURITY: 
EXCHANGE RATE AGENT:

REDEMPTION DATE(S): 
MINIMUM DENOMINATION TO BE REDEEMED
(IF OTHER THAN U.S.$1,000): 
INITIAL REDEMPTION PERCENTAGE:

ANNUAL REDEMPTION PERCENTAGE REDUCTION: 
OPTIONAL REPAYMENT
DATE(S): 
MINIMUM DENOMINATION TO BE REPAID (IF OTHER THAN
U.S.$1,000): 
ORIGINAL ISSUE DISCOUNT (“OID”)
NOTE:
     TOTAL AMOUNT OF OID:

     YIELD TO MATURITY:

     INITIAL ACCRUAL PERIOD OID: 
OTHER
PROVISIONS:

A-1

                      QUÉBEC,
for value received, hereby promises to pay to ___________________or registered
assigns, the Principal Amount specified above (any currency other than U.S.
dollars being hereinafter referred to as a “Foreign Currency”) at the Stated
Maturity specified above and to pay interest thereon at a rate per annum equal
to the Interest Rate specified above until the principal hereof is paid or duly
made available for payment, in each case togetherwith such further sum, if any, as may be payable by way of
Additional Amounts in accordance with the provisions set forth herein.
References herein to principal and interest in respect of this Note shall be
deemed also to refer to any Additional Amounts which may be payable concurrently
therewith, unless the context otherwise requires. Interest on this Note will
accrue from, and including, the immediately preceding Interest Payment Date
specified above in respect of which interest has been paid or duly provided for
or, if no interest has been paid, from the Issue Date specified above to, but
excluding, the next succeeding Interest Payment Date or, in respect of any part
of the Principal Amount due on a Maturity Date (as defined below), such Maturity
Date, as the case may be. Except as provided herein, Québec will pay interest on
the Interest Payment Date(s) specified above and in respect of any part of the
Principal Amount due on a Maturity Date, on such Maturity Date commencing on the
first Interest Payment Date next succeeding the Issue Date, unless the Issue
Date occurs between a Record Date (as defined below) and the Interest Payment
Date to which such Record Date pertains, in which case commencing on the
Interest Payment Date following the next succeeding Record Date to the Holder
(as defined below) on such next succeeding Record Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will be
paid to the person in whose name this Note (or one or more predecessor Notes) is
registered (the “Holder”) in the register of the names and addresses of Holders
of Notes (the “Note Register”) maintained by Québec at the corporate trust
office of the Fiscal Agent (as defined on the reverse hereof) at the close of
business on the date fifteen calendar days prior to an Interest Payment Date
(whether or not a Business Day (as defined on the reverse hereof)) (a “Record
Date”); provided, however, that interest payable on a Maturity Date will
be payable to the person to whom the part of the Principal Amount due on such
Maturity Date shall be payable. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and may either be paid to the person in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on a special
record date for the payment of such defaulted interest to be fixed by the Fiscal
Agent, notice whereof shall be given to Holders of Notes of this series not less
than ten days prior to such special record date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which this Note may be listed, and upon such notice as may be
required by such exchange. 

A-2

                      Upon
presentation of this Note on a Maturity Date at the corporate trust office of
the Fiscal Agent maintained for that purpose in The City of New York, or at such
other office or agency of Québec maintained by it in The City of New York for
the purpose of making such payments, payment of the principal of this Note and
premium, if any, and interest and Additional Amounts, if any, dueon such Maturity Date will be made to the Holder of this Note
on such Maturity Date in immediately available funds or, if such payment is to
be made in a Foreign Currency, by wire transfer to a bank account maintained by
the Holder hereof, as designated by the Holder of this Note as provided on the
reverse hereof. Payments of interest, other than on a Maturity Date, on this
Note are to be made by wire transfer to the Holder’s bank account, as designated
by the Holder of this Note as provided on the reverse hereof. A Holder of
U.S.$10,000,000 or more in aggregate principal amount of Notes (whether having
identical or different terms and provisions) shall be entitled to receive
payments of interest, other than on a Maturity Date, by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received by the Fiscal Agent not less than ten days prior to the applicable
Interest Payment Date. As more fully provided on the reverse hereof, payment of
the principal of and premium, if any, and interest and Additional Amounts, if
any, on this Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, unless the Specified Currency indicated above is a Foreign
Currency (a “Foreign Currency Note”), in which case payment shall be made in
such Foreign Currency. 

                      REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
IF SET FORTH AT THIS PLACE. 

                      Unless
the certificate of authentication hereon has been executed by the Fiscal Agent
by manual signature, this Note shall not be entitled to any benefit under the
Fiscal Agency Agreement or be valid or obligatory for any purpose. 

A-3

SIGNED ON BEHALF OF QUÉBEC. 

Dated: ____________________

____________________________
Authorized Official 

 

 

 

FISCAL AGENT’S CERTIFICATE 

  OF AUTHENTICATION

This is one of the Notes referred to in the

within-mentioned Fiscal Agency Agreement. 

CITIBANK, N.A., as Fiscal Agent 

 

___________________________ 
Authorized Officer 

A-4 

QUÉBEC 
MEDIUM-TERM NOTE
SERIES A

FIXED RATE 

General

This Note is one of a duly authorized
issue of Medium-Term Notes, Series A (the “Notes”), Due Nine Months or More from
Date of Issue, as selected by the purchaser and agreed to by Québec. The Notes
are issuable in a single series under a fiscal agency agreement, dated as of May
30, 2002, as may be amended or supplemented from time to time (the “Fiscal
Agency Agreement”), among Québec and Citibank, N.A., as fiscal agent (the
“Fiscal Agent”, which term shall include, unless the context otherwise requires,
its successors and assigns), in an aggregate initial offering price of up to
U.S.$5,000,000,000 at any one time outstanding, or the equivalent thereof in
other currencies at the Market Exchange Rate (as defined below) on the
applicable settlement dates in the case of Notes denominated in a Foreign
Currency. The foregoing limit, however, may be increased by Québec if in the
future it determines that it may wish to sell additional Notes. The Fiscal
Agency Agreement may be amended or supplemented from time to time in accordance
with the terms thereof, but any such amendment or supplement will not affect the
rights of the Holder hereunder. 

As used herein, “Maturity Date”, when
used with respect to this Note, means the date on which the Principal Amount of
this Note or any part thereof becomes due and payable, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.

Payments

General 

Interest payments for this Note will be
computed and paid on the basis of a 360-day year of twelve 30-day months. For
purposes of disclosure under the Interest Act (Canada), the yearly rate of
interest which is equivalent to the rate of interest payable on this Note is the
Interest Rate specified on the face hereof multiplied by the number of days in
the year and divided by 360. 

In the case where an Interest Payment
Date or a Maturity Date does not fall on a Business Day, any payment of
principal, premium or interest or Additional Amounts otherwise payable on such
day need not be madeon such day, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date or Maturity Date and no interest shall accrue for the
period from and after such Interest Payment Date or Maturity Date to such next
succeeding Business Day. As used herein, “Business Day” means any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law, regulation or executive
order to close in The City of New York; provided, however, that (i) with respect
to Foreign Currency Notes the payment of which is to be made in a Foreign
Currency other than euros, such day is also a day on which banking institutions
are not authorized or required by law, regulation or executive order to close in
the Principal Financial Center of the country of the Foreign Currency; and (ii)
with respect to Foreign Currency Notes the payment of which is to be made in
euros, such day is also a day on which the Trans-European Automated Real-Time
Gross Settlement Express Transfer (TARGET) system, or any successor system, is
open for business. 

A-5

“Principal Financial Center”, as used
for the purpose of the definition of “Business Day”, shall be the capital city
of the country of the applicable Foreign Currency, except that with respect to
Canadian dollars, euros and Swiss francs, the Principal Financial Center shall
be Montréal, Brussels and Zurich, respectively. 

Payment of Additional
Amounts

All payments of principal and interest
by Québec to any holder who, as to Canada or any province, political subdivision
or taxing authority therein is a non-resident, will be made without withholding
or deduction for, or on account of, any present or future taxes, duties,
assessments or charges of whatever nature imposed or levied by or on behalf of
the Government of Canada or any province, territory or political division
thereof or any authority or agency therein or thereof having power to tax,
unless the withholding or deduction of such taxes, duties, assessments or
charges is required by law or by the interpretation or administration thereof.
In that event, Québec will, subject to its redemption rights pursuant to the
Fiscal Agency Agreement and the Notes, pay to the holder of the Notes such
additional amounts (the “Additional Amounts”) as may be necessary in order that
the net amounts receivable by the beneficial holder of the Notes after such
withholding or deduction shall equal the respective amounts of principal or
interest which would have been receivable in respect of the Notes in the absence
of such withholding or deduction; except that no suchAdditional Amount shall be payable with
respect to any Note: (i) to, or to a third party on behalf of, a holder or a
beneficial holder who is liable to such taxes, duties, assessments or charges in
respect of such Note by reason of that person having some connection with Canada
other than the mere holding or use outside Canada, or ownership as a nonresident
of Canada, of such Note; or (ii) presented for payment more than 30 days after
the Relevant Date (as defined below) except to the extent that the holder
thereof would have been entitled to such Additional Amounts on presenting the
same for payment on or before such thirtieth day. As used herein, “Relevant
Date” means: (A) the date on which such payment first becomes due; or (B) if the
full amount of the moneys payable has not been received by the fiscal agent on
or prior to such date, the date on which, the full amount of such moneys having
been so received, notice to that effect is duly given to the holders of the
Notes in accordance with the notice procedures described under “Notices” below. 

A-6

Original Issue Discount
Note

If this Note is designated on the face
hereof as an Original Issue Discount Note, then, notwithstanding anything to the
contrary contained in this Note, upon the redemption, repayment or acceleration
of the Stated Maturity of this Note there shall be payable, in lieu of the
Principal Amount due at the Stated Maturity hereof, an amount equal to the
Amortized Face Amount of this Note. The “Amortized Face Amount” shall be the
amount equal to (i) the Issue Price (as defined below) of this Note, plus (ii)
that portion of the difference between the Issue Price and the Principal Amount
of this Note that has been amortized at the Stated Yield (as defined below) of
this Note (computed in accordance with generally accepted United States bond
yield computation principles) at the date as of which the Amortized Face Amount
is calculated, but in no event shall the Amortized Face Amount exceed the
Principal Amount of this Note. As used in the previous sentence “Issue Price”
means the Principal Amount of this Note less the Total Amount of OID of this
Note specified on the face hereof and the “Stated Yield” of this Note means the
Yield to Maturity specified on the face hereof (or if not so specified, the
Yield to Maturity compounded semi-annually and computed in accordance with
generally accepted United States bond yield computation principles) for the
period from the Issue Date of this Note to the Stated Maturity hereof on the
basis of its Issue Price and Principal Amount. 

A-7

Foreign Currency
Payments

If this Note is a Foreign Currency
Note, the principal and premium, if any, and interest and Additional Amounts, if
any, on this Note are payable by Québec in the Foreign Currency shown on the
face hereof. Payment of principal and premium, if any, and interest and
Additional Amounts, if any, will be made in the Foreign Currency by wire
transfer to the Holder’s bank account and the Holder will not have the option to
elect payment in U.S. dollars. 

If the Foreign Currency is not
available for the payment of principal and premium, if any, and interest and
Additional Amounts, if any, with respect to this Note due to the imposition of
exchange controls or other circumstances beyond the control of Québec, Québec
will be entitled to satisfy its obligations to the Holder of this Note by making
such payment in U.S. dollars (i) on the basis of the Market Exchange Rate (as
defined below) on the date of the payment, or (ii) if the Market Exchange Rate
is not then available, on the basis of the most recently available Market
Exchange Rate, or (iii) as the case may be, as otherwise specified in “Other
Provisions” on the face hereof. 

In order for any Holder of this Note to
receive payments of principal and premium, if any, and interest and Additional
Amounts, if any, in the Foreign Currency by wire transfer, such Holder shall
designate an appropriate bank account by filing the appropriate information with
the Fiscal Agent at its corporate trust office in The City of New York on or
prior to the applicable Record Date or at least sixteen days prior to the
applicable Maturity Date, as the case may be. The Fiscal Agent will, subject to
applicable laws and regulations and until it receives notice to the contrary,
make such payment and all succeeding payments to such Holder by wire transfer to
the designated account. If a payment cannot be made by wire transfer because the
required information has not been received by the Fiscal Agent on or before the
requisite date, a notice will be mailed to the Holder of this Note at its
registered address requesting such information and until such information has
been received, no additional interest will accrue. 

Québec will pay all administrative
costs imposed by banks in connection with making payments by wire transfer, but
any tax, assessment or governmental charge imposed upon such payments will be
borne by the Holder of this Note. 

A-8

The “Market Exchange Rate” with respect
to any Foreign Currency shall be the noon dollar buying rate in The City of New
York for cable transfers for such Foreign Currency as certified for customs
purposes by the Federal Reserve Bank of New York. 

Redemption at the Option of Québec

If one or more Redemption Dates (or
ranges of such dates) is specified on the face hereof, this Note is subject to
redemption upon not less than thirty days’ and not more than sixty days’ prior
notice by mail, on any such date (or during any such range) as a whole, or from
time to time in part, in increments of U.S.$1,000 or such other minimum
denomination specified on the face hereof (provided that any remaining Principal
Amount hereof shall be at least U.S.$1,000 or such other minimum denomination),
at the election of Québec, at the Redemption Price (as defined below) together
with accrued interest to the Redemption Date; but any interest payment due on an
Interest Payment Date falling on or prior to the Redemption Date will be payable
to the Holder hereof (or one or more predecessor Notes) of record at the close
of business on the Record Date pertaining to such Interest Payment Date. If
applicable, the “Redemption Price” for any such redemption shall be equal to the
Initial Redemption Percentage specified on the face hereof (as adjusted by the
Annual Redemption Percentage Reduction specified on the face hereof, if
applicable) multiplied by the portion of the Principal Amount hereof (or, if
this Note is an Original Issue Discount Note, the portion of the Amortized Face
Amount hereof) to be redeemed; provided, however, that in no event shall
the Redemption Price be less than 100% of the portion of the Principal Amount
hereof (or, if this Note is an Original Issue Discount Note, the portion of the
Amortized Face Amount hereof) to be redeemed. 

Notice of redemption having been given
as aforesaid, this Note (or the portion of the Principal Amount hereof so to be
redeemed) shall, on the Redemption Date, become due and payable at the
Redemption Price herein specified, and from and after such date (unless Québec
shall default in the payment of the Redemption Price and accrued interest) shall
cease to bear interest. 

In the case of any partial redemption
at the election of Québec of Notes, the Notes of a particular tenor to be
redeemed shall be selected by the Fiscal Agent not more than sixty days prior to
the Redemption Date by such method as the Fiscal Agent shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the Principal Amount of Notes. In the event
of any redemption of this Note in part only, a new Note or Notes of like tenor
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof, provided that such unredeemed portion shall
be an authorized denomination for Notes of this series. 

A-9

Repayment at the Option of
Holder

If one or more Optional Repayment Dates
(or ranges of such dates) is specified on the face hereof, this Note is subject
to repayment on any such date (or during any such range) or, if such date is not
a Business Day, on the first Business Day following such date, as a whole or
from time to time in part, in increments of U.S.$1,000 or such other minimum
denomination specified on the face hereof (provided that any remaining Principal
Amount hereof shall be at least U.S.$1,000 or such other minimum denomination),
at the election of the Holder hereof at the Repayment Price (as defined below)
together with accrued interest thereon to the Optional Repayment Date, but any
interest payment due on an Interest Payment Date falling on or prior to the
Optional Repayment Date will be payable to the Holder hereof of record at the
close of business on the Record Date pertaining to such Interest Payment Date.
Such election shall be effected by the Holder hereof delivering to Québec at the
corporate trust office of the Fiscal Agent in The City of New York not less than
thirty nor more than sixty days prior to the date on which this Note is to be
repaid, or during such other notice period specified on the face hereof, a
notice requesting such repayment in the form prescribed below and specifying the
date upon which this Note is to be repaid. Any notice given by a Holder pursuant
to this paragraph shall consist of this Note with the form entitled “Option to
Elect Repayment” set forth of the end of this Note duly completed. Exercise of
the repayment option by the Holder hereof will be irrevocable. Unless otherwise
specified on the face hereof, the “Repayment Price” for any such repayment shall
be 100% of the portion of the Principal Amount hereof (or, if this Note is an
Original Issue Discount Note, the portion of the Amortized Face Amount hereof)
to be repaid. 

Status of the Notes

The Notes shall rank equally among
themselves and with the other debt securities of Québec outstanding on the date
of this Note or issued hereafter. 

A-10

Form, Denomination and Registration

The Notes are fully registered, without
coupons, in authorized denominations of U.S.$1,000 and any integral multiple of
U.S.$1,000 in excess thereof, or, in the case of Notes denominated in a Foreign
Currency, the equivalent in the Foreign Currency (rounded to an integral
multiple of 1,000 units of such Foreign Currency) or such larger amount of such
Foreign Currency as may be specified on the face hereof. The Fiscal Agent has
been appointed registrar for the Notes, and Québec will cause the Fiscal Agent
to maintain at its corporate trust office in The City of New York a Note
Register for the registration and transfer of Notes. 

This Note may be transferred at the
aforesaid office of the Fiscal Agent by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form approved by Québec and
duly executed by the Holder hereof in person or by the Holder’s attorney duly
authorized in writing, and thereupon the Fiscal Agent shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes in an
equal aggregate Principal Amount and in authorized denominations, subject to the
terms and conditions set forth herein. The Notes are exchangeable at said office
for other Notes of like tenor in other authorized denominations and in an equal
aggregate Principal Amount. All such exchanges of Notes will be free of charge,
but Québec may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. The date of registration of any
Note delivered upon any exchange or transfer of Notes shall be such that no gain
or loss of interest results from such exchange or transfer. The Fiscal Agent
shall not be required to make any transfers, registrations or exchanges of Notes
for a period of fifteen days preceding any Interest Payment Date. 

In the event of any redemption of Notes
at the election of Québec, the Fiscal Agent shall not be required to (i) issue,
register the transfer of or exchange Notes of like tenor during a period
beginning at the opening of business fifteen days before any selection of Notes
to be redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption, or (ii) register the transfer of or exchange any
Note, or portion thereof, called for redemption, except the unredeemed portion
of any Note being redeemed in part. Following the exercise of any repayment
option by the Holder hereof, the Fiscal Agent shall not be required to issue, register the
transfer of or exchange that portion of this Note with respect to which such
option has been exercised. 

A-11

Events of Default

In the event that (i) Québec shall
default in the payment of principal of or premium or interest or Additional
Amounts on this Note as and when the same shall be due and payable, and such
default shall continue for a period of 45 days, or (ii) default shall be made in
the due performance or observance by Québec of any covenant or agreement
contained in the Notes, other than the payment of principal, premium or interest
or Additional Amounts, or in the Fiscal Agency Agreement, and such default shall
continue for a period of 60 days, or (iii) Québec shall default in the payment
of any principal of or premium or interest or Additional Amounts on any
indebtedness (direct or under a guarantee) for borrowed money, other than the
Notes, as and when the same shall be due and payable, and such default shall
continue for a period of 45 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 U.S.$50,000,000 (or its
equivalent in other currencies), then at any time thereafter and during the
continuance of such default the Holder of this Note (or its proxy) may deliver
or cause to be delivered to Québec (with a copy to the Fiscal Agent) a written
notice that such Holder elects to declare the principal of the Note or Notes
held by him (the serial number or numbers and the denomination or denominations
of which shall be set forth in such notice) to be due and payable and, in the
cases falling within either (i) or (iii) above, on the 15th day after delivery
of such notice, or, in the cases falling within (ii) above, on the 30th day
after delivery of such notice, the principal of the Note or Notes referred to in
such notice plus any premium and accrued interest and Additional Amounts thereon
shall become due and payable at the places for payment herein specified, unless
prior to that time all such defaults theretofore existing shall have been cured.

Modification

The Fiscal Agency Agreement contains
provisions with respect to modifying or amending said Agreement either without
notice to, or the consent of, the holder of any Note or with the approval of the
holders of Notes. 

A-12

Future Holders

Any action by the Holder of this Note
shall bind all future Holders of this Note, and of any Note issued in exchange
or substitution herefor or in place hereof, in respect of anything done or
permitted by Québec or by the Fiscal Agent in pursuance of such action. 

Notices

All notices to the Holders of Notes
will be published in English 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 as 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. 

Office or Agency of Québec

So long as this Note shall be
outstanding, Québec will maintain an office or agency for the payment of the
principal of and premium, if any, and interest, and Additional Amounts, if any,
on this Note as herein provided in The City of New York, and an office or agency
in The City of New York for the registration, transfer and exchange as aforesaid
of the Notes. Québec may designate other agencies for the payment of said
principal and premium, if any, and interest and Additional Amounts, if any, at
such place or places (subject to applicable laws and regulations) as Québec may
decide. So long as there shall be a Fiscal Agent, Québec shall keep the Fiscal
Agent advised of the names and locations of such agencies, if any are so
designated. 

No recourse under or upon any covenant
contained in this Note or because of the creation of the indebtedness
represented hereby shall be had against any official or other representative,
past, present or future, as such, of Québec whether by virtue of any statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, it
being expressly agreed and understood that this Note is solely the obligation of
Québec and that no personal liability whatsoever shall attach to or be incurred
by any such officials or other representatives, as such, because of the
execution of this Note. 

A-13

Prescription

Under current Québec law, an action to
enforce a right to payment under the Notes may be prescribed if it is not
brought within three years of the date the payment is due.

Governing Law

The Notes shall be construed in
accordance 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, enforcement or execution against any property of any
order or judgment) made or given in connection with any proceedings arising out
of or in connection with the Fiscal Agency Agreement and the Notes. 

U.S. Dollars

Reference in this Note to “U.S.
dollars” is to the currency of the United States of America. 

A-14

OPTION TO ELECT REPAYMENT 

The undersigned hereby irrevocably
requests and instructs Québec to repay the within Note (or portion thereof
specified below) pursuant to its terms at the Repayment Price, to the
undersigned at: 

_________________________

_________________________ 

_________________________ 

_________________________ 

_________________________ 

(PLEASE PRINT OR TYPEWRITE NAME AND
ADDRESS INCLUDING POSTAL ZIP CODE OF THE UNDERSIGNED) If less than the entire
Principal Amount of the within Note is to be repaid, specify the portion thereof
which the Holder elects to have repaid:
_________________________________________________________ _______; and specify
the denomination or denominations (which shall not be less than the minimum
authorized denomination) of the Notes to be issued to the Holder for the portion
of the within Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid):
_________________________________________________________ _______. 

Dated:_______________

	 	 
	 	
      NOTICE: This signature on this Option to Elect Repayment
      must correspond with the name as written upon the face of the within
      instrument in every particular without alteration or enlargement.
  

A-15 

EXHIBIT B

	REGISTERED 	REGISTERED 
	No. FLR 	$ 

QUÉBEC 
MEDIUM-TERM NOTE
SERIES A

(Floating Rate) 

                      Issue
of up to U.S.$5,000,000,000 Medium-Term Notes, Series A (or the equivalent
thereof in other currencies), Due Nine Months or More from Date of Issue. 

                      The
following summary of terms is subject to the information set forth on the
reverse hereof. 

PRINCIPAL AMOUNT:

SPECIFIED CURRENCY: 
ISSUE DATE: 
INTEREST RATE
BASIS: 
SPREAD: 
SPREAD MULTIPLIER: 
INITIAL
INTEREST RATE: 
MAXIMUM INTEREST RATE: 
MINIMUM INTEREST
RATE: 
INTEREST PAYMENT DATE(S): 
INTEREST PAYMENT PERIOD:

INTEREST RESET DATE(S): 
INTEREST RATE RESET PERIOD:

INTEREST DETERMINATION DATE(S): 
CALCULATION DATE(S):

INDEX MATURITY:
CALCULATION AGENT: 
RECORD
DATE(S): 
STATED MATURITY: 
REDEMPTION DATE(S):

MINIMUM DENOMINATION TO BE REDEEMED (IF OTHER THAN
U.S.$1,000): 
INITIAL REDEMPTION PERCENTAGE: 
ANNUAL
REDEMPTION PERCENTAGE REDUCTION: 
OPTIONAL REPAYMENT DATE(S):

      MINIMUM DENOMINATION TO BE REPAID (IF OTHER THAN U.S.$1,000):

     EXCHANGE RATE AGENT: 
     ORIGINAL ISSUE DISCOUNT (“OID”)
NOTE:
TOTAL AMOUNT OF OID: 

B-1

YIELD TO MATURITY: 

  INITIAL
ACCRUAL PERIOD OID:
OTHER PROVISIONS: 

QUÉBEC, for value received,
  hereby promises to pay to ___________________ or registered assigns, the
  Principal Amount specified above (any currency other than U.S. dollars being
  hereinafter referred to as a “Foreign Currency”) at the Stated Maturity
  specified above and to pay interest thereon at a rate per annum equal to the
  Initial Interest Rate specified above until the first Interest Reset Date
  specified above following the Issue Date specified above and thereafter at a
  rate determined in accordance with the provisions on the reverse hereof under
  the heading “Determination of CD Rate”, “Determination of CMT Rate”,
  “Determination of Commercial Paper Rate”, “Determination of Federal Funds Rate”,
  “Determination of LIBOR”, “Determination of EURIBOR”, “Determination of Prime
  Rate” or “Determination of Treasury Rate”, depending upon whether the Interest
  Rate Basis specified above is CD Rate, CMT Rate, Commercial Paper Rate, Federal
  Funds Rate, LIBOR, EURIBOR, Prime Rate or Treasury Rate, until the principal
  hereof is paid 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. References herein to principal
  and interest in respect of this Note shall be deemed also to refer to any
  Additional Amounts which may be payable concurrently therewith, unless the
  context otherwise requires. Interest on this Note will accrue from, and
  including, the immediately preceding Interest Payment Date specified above in
  respect of which interest has been paid or duly provided for or, if no interest
  has been paid, from the Issue Date specified above to, but excluding, the next
  succeeding Interest Payment Date or, in respect of any part of the Principal
  Amount due on a Maturity Date (as defined below), such Maturity Date, as the
  case may be, except that the interest payment on a Maturity Date will include
  interest accrued to but excluding such date. Except as provided herein, Québec
  will pay interest monthly, quarterly, semi-annually or annually as specified
  above under “Interest Payment Period”, commencing with the first Interest
  Payment Date specified above next succeeding the Issue Date, unless the Issue
  Date occurs between a Record Date and the Interest Payment Date to which such
  Record Date pertains, in which case commencing on the Interest Payment Date
  following the next succeeding Record Date and in respect of any part of the
  Principal Amount due on a Maturity Date, on such Maturity Date. The interest so
  payable, and punctually paid or duly provided for,
on any Interest Payment Date will be paid to the person in whose name this Note
(or one or more predecessor Notes) is registered (the “Holder”) in the register
of the names and addresses of Holders of Notes (the “Note Register”) maintained
by Québec at the corporate trust office of the Fiscal Agent (as defined on the
reverse hereof) at the close of business on the date fifteen calendar days prior
to an Interest Payment Date (whether or not a Business Day (as defined on the
reverse hereof)) (a “Record Date”); provided, however, that
interest payable on a Maturity Date will be payable to the person to whom the
part of the Principal Amount due on such Maturity Date shall be payable. Any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Record Date and may either be paid to the
person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Fiscal Agent, notice whereof shall be
given to Holders of Notes of this series not less than ten days prior to such
special record date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this Note
may be listed, and upon such notice as may be required by such exchange. 

B-2

Upon presentation of this Note on a
Maturity Date at the corporate trust office of the Fiscal Agent maintained for
that purpose in The City of New York, or at such other office or agency of
Québec maintained by it in The City of New York for the purpose of making such
payments, payment of the principal of this Note and premium, if any, and
interest and Additional Amounts, if any, due on such Maturity Date will be made
to the Holder of this Note on such Maturity Date in immediately available funds
or, if such payment is to be made in a Foreign Currency, by wire transfer to a
bank account maintained by the Holder hereof, as designated by the Holder of
this Note as provided on the reverse hereof. Payments of interest, other than on
a Maturity Date, on this Note are to be made by wire transfer to the Holder’s
bank account, as designated by the Holder of this Note as provided on the
reverse hereof. A Holder of U.S.$10,000,000 or more in aggregate principal
amount of Notes (whether having identical or different terms and provisions)
shall be entitled to receive payments of interest, other than on a Maturity
Date, by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received by the Fiscal Agent not less than ten
days prior to the applicable Interest Payment Date. As more fully provided on
the reverse hereof, payment of the principal of and premium, if any, and
interest and Additional Amounts, if any, on this Note will be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public or private debts, unless the Specified Currency
indicated above is a Foreign Currency (a “Foreign Currency Note”), in which case
payment shall be made in such Foreign Currency. 

B-3

REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE. 

Unless the certificate of
authentication hereon has been executed by the Fiscal Agent by manual signature,
this Note shall not be entitled to any benefit under the Fiscal Agency Agreement
or be valid or obligatory for any purpose. 

B-4

SIGNED ON BEHALF OF QUÉBEC. 

Dated: ____________________

____________________________
Authorized Official 

 

 

 

FISCAL AGENT’S CERTIFICATE 

  OF AUTHENTICATION

This is one of the Notes referred to in the

within-mentioned Fiscal Agency Agreement. 

CITIBANK, N.A., as Fiscal Agent 

 

___________________________ 
Authorized Officer 

B-5 

QUÉBEC 
MEDIUM-TERM NOTE
SERIES A

FLOATING RATE 

General

This Note is one of a duly authorized
issue of Medium-Term Notes, Series A (the “Notes”), Due Nine Months or More from
Date of Issue, as selected by the purchaser and agreed to by Québec. The Notes
are issuable in a single series under a fiscal agency agreement, dated as of May
30, 2002, as may be amended or supplemented from time to time (the “Fiscal
Agency Agreement”), among Québec and Citibank, N.A., as fiscal agent (the
“Fiscal Agent”, which term shall include, unless the context otherwise requires,
its successors and assigns), in an aggregate initial offering price of up to
U.S.$5,000,000,000 at any one time outstanding, or the equivalent thereof in
other currencies at the Market Exchange Rate (as defined below) on the
applicable settlement dates in the case of Notes denominated in a Foreign
Currency. The foregoing limit, however, may be increased by Québec if in the
future it determines that it may wish to sell additional Notes. The Fiscal
Agency Agreement may be amended or supplemented from time to time in accordance
with the terms thereof, but any such amendment or supplement will not affect the
rights of the Holder hereunder.

Pursuant to the Calculation Agency
Agreement, dated December 11, 2003, between Québec and the Fiscal Agent, and the
Fiscal Agency Agreement, the Fiscal Agent has been appointed as the calculation
agent to determine the interest rate on the Floating Rate Notes (the
“Calculation Agent”, which term shall include, unless the context otherwise
requires, its successors and assigns).

As used herein, “Maturity Date”, when
used with respect to this Note, means the date on which the Principal Amount of
this Note or any part thereof becomes due and payable, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.

Interest 

General

Commencing with the first Interest
Reset Date specified on the face hereof following the Issue Date, the rate at
which interest on this Note is payable shall be adjusted daily, weekly, monthly,
quarterly, semi-annually or annually as specified on
the face hereof under “Interest Rate Reset Period”; provided,
however, that the interest rate in effect for the period from the Issue
Date to the first Interest Reset Date will be the Initial Interest Rate. If any
Interest Reset Date would otherwise be a day that is not a Business Day (as
defined below), such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that in the case the Interest Rate
Basis is LIBOR or EURIBOR, as specified on the face hereof, if such Business Day
is in the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. Subject to applicable provisions of law and
except as specified herein, on each Interest Reset Date, the rate of interest on
this Note shall be calculated by reference to the applicable Interest Rate Basis
and the Spread or a Spread Multiplier, if any. The calculation agent will
determine the interest rate for each subsequent Interest Reset Date on the basis
of the applicable Interest Rate Basis as follows: 

B-6

Determination of CD
Rate. The CD Rate for each Interest Reset Date will be determined
as of the second Business Day prior to the Interest Reset Date (a “CD Rate
Interest Determination Date”). 

The CD Rate will be the rate on the CD
Rate Interest Determination Date for negotiable U.S. dollar certificates of
deposit having the Index Maturity specified on the face hereof as published in
H.15(519) (as defined below) under the heading “CDs (secondary market)” or, if
not so published by 3:00 P.M., New York City time, on the related Calculation
Date (as defined below), the rate on such CD Rate Interest Determination Date
for negotiable U.S. dollar certificates of deposit of the Index Maturity
specified on the face hereof, as published in H.15 Daily Update (as defined
below), or such other recognized electronic source used for the purpose of
displaying such rate, under the caption “CDs (secondary market)”. If such rate
is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the CD Rate on such CD Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such CD
Rate Interest Determination Date, of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York (which may include
the Agents or their affiliates) selected by the Calculation Agent, after
consultation with Québec, for negotiable U.S. dollar certificates of deposit of
major United States money center banks with a remaining maturity closest to the
Index Maturity specified on the face hereof, in an amount that is
representative for a single transaction in that market at that time; provided,
however, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the CD Rate determined as of such CD Rate
Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.

B-7

“H.15(519)” means the weekly
statistical release designated as such, published by the Board of Governors of
the Federal Reserve System and available on their website at
http://www.federalreserve.gov/releases/h15/current, or any successor site or
publication. 

“H.15 Daily Update” means the daily
update of H.15(519), available through the worldwide web site of the Board of
Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication. 

Determination of CMT
Rate. The CMT Rate for each Interest Reset Date will be
determined as of the second Business Day prior to the Interest Reset Date (a
“CMT Rate Interest Determination Date”), and will equal: 

(A) If “Reuters Page FRBCMT” (as
defined below) is specified on the face hereof: 

(a)           a
rate equal to the yield for United States Treasury securities at constant
maturity having the Designated CMT Maturity Index (as defined below) specified
on the face hereof, as published in H.15(519) under the caption “Treasury
constant maturities”, as the yield is displayed on Reuters (or any successor
service) on page FRBCMT under the caption “Treasury constant maturities” (or any
other page as may replace the specified page on that service) (“Reuters Page
FRBCMT”), on the particular CMT Rate Interest Determination Date, or 

(b)           if
the rate referred to in clause (a) does not so appear on the Reuters Page
FRBCMT, the rate equal to the yield for United States Treasury securities at
constant maturity having the particular Designated CMT Maturity Index and for
the particular CMT Rate Interest Determination Date as published in H.15(519)
under the caption “Treasury constant maturities”, or

B-8

(c)           if
the rate referred to in clause (b) does not so appear in H.15(519), the rate on
the particular CMT Rate Interest Determination Date for the period of the
particular Designated CMT Maturity Index as may then be published by either the
Board of Governors of the Federal Reserve System or the United States Department
of the Treasury that the Calculation Agent determines to be comparable to the
rate which would otherwise have been published in H.15(519), or 

(d)           if
the rate referred to in clause (c) is not so published, the rate on the
particular CMT Rate Interest Determination Date calculated by the Calculation
Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on that CMT
Rate Interest Determination Date of three leading primary United States
government securities dealers in The City of New York (which may include the
Agents or their affiliates) (each, a “Reference Dealer”), selected by the
Calculation Agent from five Reference Dealers, selected by the Calculation
Agent, and eliminating the highest quotation, or, in the event of equality, one
of the highest, and the lowest quotation or, in the event of equality, one of
the lowest, for United States Treasury securities with an original maturity
approximately equal to the particular Designated CMT Maturity Index, a remaining
term to maturity no more than one year shorter than that Designated CMT Maturity
Index and in a principal amount that is representative for a single transaction
in the securities in that market at that time, or 

(e)           if
fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on the particular CMT Rate Interest
Determination Date calculated by the Calculation Agent based on the arithmetic
mean of the bid prices obtained and neither the highest nor the lowest of the
quotations shall be eliminated, or 

(f)           if
fewer than three prices referred to in clause (d) are provided as requested, the
rate on the particular CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the
secondary market bid prices as of approximately 3:30 P.M., New York City time,
on that CMT Rate Interest Determination Date of three Reference Dealers from
five Reference Dealers, selected by the Calculation Agent, and eliminating the
highest quotation or, in the event of equality, one of the highest and the lowest quotation
or, in the event of equality, one of the lowest, for United States Treasury
securities with an original maturity greater than the particular Designated CMT
Maturity Index, a remaining term to maturity closest to that Designated CMT
Maturity Index and in a principal amount that is representative for a single
transaction in the securities in that market at that time, or 

B-9

(g)           if
fewer than five but more than two prices referred to in clause (f) are provided
as requested, the rate on the particular CMT Rate Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the quotations will be
eliminated, or 

(h)           if
fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on the particular CMT Rate Interest Determination Date, or

(i)           if
two such United States Treasury securities with an original maturity greater
than the Designated CMT Maturity Index have remaining terms to maturity equally
close to such Designated CMT Maturity Index, the quotes for the Treasury
security with the shorter original term to maturity will be used.

(B) If the “Reuters Page FEDCMT” (as
defined below) is specified on the face hereof: 

(a)         
 the rate equal to the one-week or one-month, as specified on the face
hereof, average yield for United States Treasury securities at constant maturity
having the Designated CMT Maturity Index, as published in H.15(519) opposite the
caption “Treasury constant maturities”, as the yield is displayed on Reuters on
page FEDCMT under the caption “Treasury constant Maturities” (or any other page
as may replace the specified page on that service) (“Reuters Page FEDCMT”), for
the one-week or one-month, as applicable, ended immediately preceding the week
or month, as applicable, in which such CMT Rate Interest Determination Date
falls, or 

(b)           if
the rate referred to in clause (a) does not so appear on the Reuters Page
FEDCMT, the rate equal to the one-week or one-month, as applicable, average
yield for United States Treasury securities at constant maturity having the
particular Designated CMT Maturity Index for the week or month, as applicable,
preceding such CMT Rate Interest Determination Date
as published in H.15(519) opposite the caption “Treasury constant maturities,”
or 

B-10

(c)           if
the rate referred to in clause (b) does not so appear in H.15(519), the one-week
or one-month, as applicable, average yield for United States Treasury securities
at constant maturity having the particular Designated CMT Maturity Index as
otherwise announced by the Federal Reserve Bank of New York for the one-week or
one-month, as applicable, ended immediately preceding the week or month, as
applicable, in which such CMT Rate Interest Determination Date falls, or 

(d)           if
the rate referred to in clause (c) is not so published, the rate on the
particular CMT Rate Interest Determination Date calculated by the Calculation
Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on that CMT
Rate Interest Determination Date of three Reference Dealers from five Reference
Dealers, selected by the Calculation Agent, and eliminating the highest
quotation, or, in the event of equality, one of the highest, and the lowest
quotation or, in the event of equality, one of the lowest, for United States
Treasury securities with an original maturity approximately equal to the
particular Designated CMT Maturity Index, a remaining term to maturity no more
than one year shorter than that Designated CMT Maturity Index and in a principal
amount that is representative for a single transaction in such securities in
that market at that time, or 

(e)           if
fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on the particular CMT Rate Interest
Determination Date calculated by the Calculation Agent based on the arithmetic
mean of the bid prices obtained and neither the highest nor the lowest of the
quotations will be eliminated, or 

(f)           if
fewer than three prices referred to in clause (d) are provided as requested, the
rate on the particular CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the
secondary market bid prices as of approximately 3:30 P.M., New York City time,
on that CMT Rate Interest Determination Date of three Reference Dealers from
five Reference Dealers, selected by the Calculation Agent, and eliminating the
highest quotation or, in the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for United States Treasury
securities with an original maturity greater than the particular Designated CMT
Maturity Index, a remaining term to maturity closest to that Designated CMT
Maturity Index and in a principal amount that is representative for a single
transaction in the securities in that market at the time, or 

B-11

(g)           if
fewer than five but more than two prices referred to in clause (f) are provided
as requested, the rate on the particular CMT Rate Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest or the lowest of the quotations will be
eliminated, or 

(h)           if
fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on that CMT Rate Interest Determination Date, or 

(i)           if
two such United States Treasury securities with an original maturity greater
than the Designated CMT Maturity Index have remaining terms to maturity equally
close to such Designated CMT Maturity Index, the quotes for the United States
Treasury security with the shorter original term to maturity will be used.

“Designated CMT Maturity Index” means
the original period to maturity of the U.S. Treasury securities (either 1, 2, 3,
5, 7, 10, 20 or 30 years) specified on the face hereof with respect to which the
CMT Rate will be calculated. If no maturity date is specified on the face
hereof, the Designated CMT Maturity Index will be 2 years. 

Determination of Commercial Paper
Rate. The Commercial Paper Rate for each Interest Reset Date will be
determined as of the Business Day prior to the Interest Reset Date (a
“Commercial Paper Rate Interest Determination Date”), and will be the Money
Market Yield (as defined below) on that date of the rate for commercial paper
having the Index Maturity specified on the face hereof, as published in
H.15(519) under the caption “Commercial Paper—Nonfinancial” or, if not so
published by 3:00 P.M., New York City time, on the related Calculation Date, the
Money Market Yield on such Commercial Paper Rate Interest Determination Date for
commercial paper having the Index Maturity specified on the face hereof, as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption “Commercial
Paper—Nonfinancial”. If such rate is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00
P.M., New York City time, on such Calculation Date, then the Commercial Paper
Rate on such Commercial Paper Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the Money Market Yield of the
arithmetic mean of the offered rates at approximately 11:00 A.M., New York City
time, on such Commercial Paper Rate Interest Determination Date of three leading
dealers of U.S. dollar commercial paper in The City of New York (which may
include the Agents or their affiliates) selected by the Calculation Agent, after
consultation with Québec, for commercial paper having the Index Maturity
specified on the face hereof, placed for industrial issuers whose bond rating is
“Aa”, or the equivalent, from a nationally recognized statistical rating
organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.

B-12

“Money Market Yield” will be a yield
(expressed as a percentage) calculated in accordance with the following formula:

	  	  	D × 360 × 100 
	Money 	Market 	360 – (D × 
	Yield = 	  	M) 

where “D” refers to the applicable per
annum rate for commercial paper quoted on a bank discount basis and expressed as
a decimal and “M” refers to the actual number of days in the Interest Payment
Period for which interest is being calculated. 

Determination of
EURIBOR. EURIBOR for each Interest Reset Date will be determined
as of the second TARGET Settlement Day (as defined below) prior to the Interest
Reset Date (a “EURIBOR Interest Determination Date”). 

EURIBOR on each EURIBOR Interest
Determination Date will be the rate for deposits in euro as sponsored,
calculated and published jointly by the European Banking Federation and ACI—The
Financial Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, having the Index Maturity
as specified on the face hereof, commencing on the applicable Interest Reset
Date, that appears on Reuters on page EURIBOR#01 (or any other page as may
replace such page on such service) (“Reuters Page EURIBOR#01”) as of 11:00 A.M.,
Brussels time, on such EURIBOR Interest Determination Date; or if no such rate
so appears, EURIBOR on such EURIBOR Interest Determination Date will be
determined in accordance with the provisions described in the paragraphs
below.

B-13

With respect to a EURIBOR Interest
Determination Date on which no rate appears on the Reuters Page EURIBOR#01 as
specified in the paragraph above, the Calculation Agent will request the
principal Euro-zone office of each of four major reference banks (which may
include the Agents or their affiliates) in the Euro-zone interbank market, as
selected by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in euro for the period of the Index Maturity
specified on the face hereof, commencing on the applicable Interest Reset Date,
to prime banks in the Euro-zone interbank market at approximately 11:00 A.M.,
Brussels time, on such EURIBOR Interest Determination Date and in a principal
amount not less than the equivalent of US$1,000,000 in euros that is
representative for a single transaction in euro in such market at such time. If
at least two such quotations are so provided, then EURIBOR on such EURIBOR
Interest Determination Date will be the arithmetic mean of such quotations.

If fewer than two such quotations are
so provided, then EURIBOR on such EURIBOR Interest Determination Date will be
the arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels
time, on such EURIBOR Interest Determination Date by four major banks (which may
include Agents or their affiliates) in the Euro-zone selected by the Calculation
Agent for loans in euro to leading European banks, having the Index Maturity
specified on the face hereof, commencing on that Interest Reset Date and in a
principal amount not less than the equivalent of US$1,000,000 in euros that is
representative for a single transaction in euro in such market at such time.

If the banks so selected by the
Calculation Agent are not quoting as mentioned in the foregoing paragraph,
EURIBOR determined as of such EURIBOR Interest Determination Date will be
EURIBOR in effect on such EURIBOR Interest Determination Date.

“Euro-zone” means the region comprised
of member states of the European Union that have adopted the single currency in
accordance with the Treaty on European Union signed at Maastricht on February 7,
1992. 

B-14

“TARGET Settlement Day” means a day on
which the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) system, or any successor system, is open for business. 

Determination of Federal Funds
Rate. The Federal Funds Rate for each Interest Reset Date will be
determined as of the Business Day prior to the Interest Reset Date (a “Federal
Funds Rate Interest Determination Date”) and will be the rate with respect to
such date for U.S. dollar federal funds as published in H.15(519) opposite the
heading “Federal funds (effective)” and that appears on Reuters (or any
successor service) on Reuters Page FEDFUNDS1 (or any other page as may replace
such page on such service) under the heading “EFFECT” or, if such rate does not
appear on Reuters Page FEDFUNDS1 or is not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate with respect to such
Federal Funds Rate Interest Determination Date for U.S. dollar federal funds as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, opposite the caption “Federal funds
(effective)”. If such rate does not appear on Reuters Page FEDFUNDS1 or is not
yet published in H.15(519), H.15 Daily Update or another recognized electronic
source by 3:00 P.M., New York City time, on the related Calculation Date, then
the Federal Funds Rate with respect to such Federal Funds Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight U.S. dollar
federal funds arranged by three leading brokers of U.S. dollar federal funds
transactions in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent, after consultation with Québec
prior to 9:00 A.M., New York City time, on the Business Day following such
Federal Funds Rate Interest Determination Date; provided, however, that if the
brokers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date. 

Determination of LIBOR.
LIBOR will be the London interbank offered rate for deposits in the index
currency specified on the face hereof. LIBOR for each Interest Reset Date will
be determined as of the second London Business Day prior to the Interest Reset
Date (a “LIBOR Interest Determination Date”) and will be determined in
accordance with the following provisions:

B-15

(A) LIBOR will be the rate for deposits
in the Designated LIBOR Currency for a period of the Index Maturity specified on
the face hereof, commencing on the applicable Interest Reset Date, that appears
on the Designated LIBOR Page as of 11:00 A.M., London time, on that LIBOR
Interest Determination Date, or if no such rate so appears, LIBOR on such LIBOR
Interest Determination Date will be determined in accordance with the provisions
described in clause (B) below.

(B) With respect to a LIBOR Interest
Determination Date on which no rate appears on the Designated LIBOR Page as
specified in clause (A) above, the Calculation Agent will request the principal
London offices of each of four major reference banks (which may include the
Agents or their affiliates) in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered quotation
for deposits in the Designated LIBOR Currency for the period of the Index
Maturity specified on the face hereof, commencing on the applicable Interest
Reset Date, to prime banks in the London interbank market at approximately 11:00
A.M., London time, on such LIBOR Interest Determination Date and in a principal
amount that is representative for a single transaction in the Designated LIBOR
Currency in such market at that time. If at least two quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of those quotations. If fewer than two quotations are so
provided, then LIBOR on that LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on such LIBOR Interest Determination Date
by three major banks (which may include the Agents or their affiliates) in such
Principal Financial Center selected by the Calculation Agent for loans in the
Designated LIBOR Currency to leading European banks, having the Index Maturity
specified on the face hereof, commencing on that Interest Reset Date and in a
principal amount that is representative for a single transaction in the
Designated LIBOR Currency in such market at that time; provided, however, that
if the banks so selected by the Calculation Agent are not quoting as mentioned
in this sentence, LIBOR determined as of that LIBOR Interest Determination Date
will be LIBOR in effect on that LIBOR Interest Determination Date. 

“Designated LIBOR Currency” means the
currency specified on the face hereof, as to which LIBOR will be calculated or,
if no such currency is specified on the face hereof, US dollars.

B-16

“Designated LIBOR Page” means the
display on Reuters on page LIBOR01 or LIBOR02, as specified on the face hereof
(or any other page as may replace such page on such service), for the purpose of
displaying the London interbank rates of major banks (which may include the
Agents or their affiliates) for the Designated LIBOR Currency.

“Principal Financial Center” as used
herein shall be the capital city of the country of the Index Currency specified
on the face hereof, except that with respect to Canadian dollars, euros, Swiss
francs and United States dollars, the Principal Financial Center shall be
Montréal, Brussels, Zurich and The City of New York, respectively. 

Determination of Prime
Rate. The Prime Rate for each Interest Reset Date will be
determined on the Business Day prior to the Interest Reset Date (a “Prime Rate
Interest Determination Date”) and, unless otherwise specified on the face
hereof, will be the rate on such date as such rate is published in H.15(519)
opposite the caption “Bank prime loan” or, if not published prior to 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on that Prime Rate
Interest Determination Date as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate,
opposite the caption “Bank prime loan”. If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Prime Rate
shall be the arithmetic mean, as determined by the Calculation Agent, of the
rates of interest publicly announced by each bank that appears on Reuters on
page USPRIME1 (or any other page as may replace such page on such service for
the purpose of displaying prime rates or base lending rates of major United
States banks) (“Reuters Page USPRIME1”) as that bank’s prime rate or base
lending rate as of 11:00 A.M., New York City time, on such Prime Rate Interest
Determination Date. If fewer than four such rates so appear on Reuters Page
USPRIME1 for that Prime Rate Interest Determination Date by 3:00 P.M., New York
City time on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean calculated by the Calculation Agent of the prime rates or base
lending rates (quoted on the basis of the actual number of days in the year
divided by a 360-day year) as of the close of business on such Prime Rate
Interest Determination Date by three major banks (which may include the Agents
or their affiliates) in The City of New York selected by the Calculation Agent,
after consultation with Québec; provided, however, that if the banks so selected
by the Calculation Agent are not quoting as mentioned in this sentence,
the Prime Rate determined as of such Prime Rate Interest Determination Date will
be the Prime Rate in effect on such Prime Rate Interest Determination Date. 

B-17

Determination of Treasury
Rate. The Treasury Rate for each Interest Reset Date will be the rate
from the auction held on the Treasury Rate Interest Determination Date (the
“Auction”) of direct obligations of the United States (“Treasury Bills”) having
the Index Maturity specified on the face hereof, under the caption “INVEST RATE”
on the display on Reuters (or any successor service) on page USAUCTION10 (or any
other page as may replace such page on such service) (“Reuters Page
USAUCTION10”) or page USAUCTION11 (or any other page as may replace such page on
such service) (“Reuters Page USAUCTION11”) or, if not so published by 3:00 P.M.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
(as defined below) of the auction rate of those Treasury Bills as announced by
the U.S. Department of the Treasury. In the event that the auction rate of
Treasury Bills having the Index Maturity specified on the face hereof, is not so
announced by the U.S. Department of the Treasury, or if no such Auction is held,
then the Treasury Rate will be the Bond Equivalent Yield of the rate on that
Treasury Rate Interest Determination Date of Treasury Bills having the Index
Maturity specified on the face hereof, as published in H.15(519) under the
caption “U.S. Government securities/Treasury bills (secondary market)” or, if
not yet published by 3:00 P.M., New York City time, on the related Calculation
Date, the rate on that Treasury Rate Interest Determination Date of such
Treasury Bills as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
caption “U.S. Government securities/Treasury bills (secondary market)”. If that
rate is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the Treasury Rate will be calculated by the Calculation Agent and
will be the Bond Equivalent Yield of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 P.M., New York City time, on that Treasury
Rate Interest Determination Date, of three leading primary U.S. government
securities dealers (which may include the Agents or their affiliates) selected
by the Calculation Agent after consultation with Québec, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity specified
on the face hereof; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate determined as of that Treasury Rate Interest Determination
Date will be the Treasury Rate in effect on that Treasury Rate Interest
Determination Date.

B-18

“Bond Equivalent Yield” will be a yield
(expressed as a percentage) calculated according to the following formula: 

	Bond Equivalent Yield 	= 	D × N
      × 100 
	  	  	360 – (D × M) 

where “D” refers to the applicable per
annum rate for Treasury Bills quoted on a bank discount basis and expressed as a
decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the
actual number of days in the Interest Payment Period for which interest is being
calculated. 

Maximum/Minimum Interest
Rate

Notwithstanding the foregoing, the
interest rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, specified on the face
hereof. The Calculation Agent shall calculate the interest rate hereon in
accordance with the foregoing on or before each Calculation Date. The interest
rate on this Note will in no event be higher than the maximum rate permitted by
New York law, as the same may be modified by United States law of general
application. 

Interest Calculations

The Calculation Date, if applicable,
pertaining to any Interest Determination Date is the earlier of (i) the tenth
calendar day after such Interest Determination Date or if any such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity Date,
as the case may be. 

At the request of the Holder hereof,
the Calculation Agent will provide to the Holder hereof the interest rate hereon
then in effect and, if determined, the interest rate which will become effective
as of the next Interest Reset Date. 

Accrued interest hereon shall be an
amount calculated by multiplying the Principal Amount as specified on the face
hereof by an accrued interest factor, expressed as a decimal. Such accrued
interest factor is computed by adding the interest factor calculated for each
day from the Issue Date, or from the last date to
which interest has been paid or duly provided for, to but excluding the date for
which accrued interest is being calculated. The interest factor for each such
day is computed by dividing the interest rate applicable to such day by 360 if
the Interest Rate Basis is CD Rate, Commercial Paper Rate, Federal Funds Rate,
LIBOR, EURIBOR or Prime Rate, as specified on the face hereof, or by the actual
number of days in the year if the Interest Rate Basis is CMT Rate or Treasury
Rate, as specified on the face hereof. For purposes of disclosure under the
Interest Act (Canada), the yearly rate of interest which is equivalent to the
rate of interest payable on this Note, except if the Interest Rate Basis of this
Note is the CMT Rate or Treasury Rate, is the interest rate payable from time to
time multiplied by the number of days in the year and divided by 360. 

B-19

Rounding

All percentages resulting from any
calculation on this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards (e.g., 9.876545% (or 0.09876545) being
rounded to 9.87655% (or 0.0987655)), and all dollar amounts used in or resulting
from such calculation on this Note will be rounded to the nearest cent or, if
this Note is denominated in a Foreign Currency, the nearest unit (with one half
cent or unit being rounded upwards). 

Payments

General 

In the case where an Interest Payment
Date or a Maturity Date does not fall on a Business Day, any payment of
principal, premium or interest or Additional Amounts otherwise payable on such
day need not be made on such day, but may be made on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment
Date or Maturity Date and no interest shall accrue for the period from and after
such Interest Payment Date or Maturity Date to such next succeeding Business
Day, except that, in the case of payments of interest other than on the Maturity
Date, if the Interest Rate Basis of this Note is LIBOR or EURIBOR, as specified
above and such next Business Day falls in the next calendar month, such payment
shall be made on the immediately preceding Business Day with the same force and
effect as if made on such Interest Payment Date. As used herein, “Business Day”
means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions are authorized or required by law, regulation or
executive order to close in The City of New York; provided, however, that (i)
with respect to Notes as to which LIBOR is the applicable Interest Rate Basis,
such day is also a “London Business Day”; (ii) with respect to Foreign Currency
Notes the payment of which is to be made in a Foreign Currency other than euros,
such day is also a day on which banking institutions are not authorized or
required by law, regulation or executive order to close in the Principal
Financial Center of the country of the Foreign Currency; and (iii) with respect
to Foreign Currency Notes the payment of which is to be made in euros, such day
is also a TARGET Settlement Day. 

B-20

“London Business Day” means a day on
which commercial banks are open for business (including dealings in the Foreign
Currencies) in London, England. 

“Principal Financial Center”, as used
for the purpose of the definition of “Business Day”, shall be the capital city
of the country of the applicable Foreign Currency, except that with respect to
Canadian dollars, euros and Swiss francs, the Principal Financial Center shall
be Montréal, Brussels and Zurich, respectively. 

Payment of Additional
Amounts

All payments of principal and interest
by Québec to any holder who, as to Canada or any province, political subdivision
or taxing authority therein is a non-resident, will be made without withholding
or deduction for, or on account of, any present or future taxes, duties,
assessments or charges of whatever nature imposed or levied by or on behalf of
the Government of Canada or any province, territory or political division
thereof or any authority or agency therein or thereof having power to tax,
unless the withholding or deduction of such taxes, duties, assessments or
charges is required by law or by the interpretation or administration thereof.
In that event, Québec will, subject to its redemption rights pursuant to the
Fiscal Agency Agreement and the Notes, pay to the holder of the Notes such
additional amounts (the “Additional Amounts”) as may be necessary in order that
the net amounts receivable by the beneficial holder of the Notes after such
withholding or deduction shall equal the respective amounts of principal or
interest which would have been receivable in respect of the Notes in the absence
of such withholding or deduction; except that no such Additional Amount shall be
payable with respect to any Note: (i) to, or to a third party on behalf of, a
holder or a beneficial holder who is liable to such taxes, duties, assessments or
charges in respect of such Note by reason of that person having some connection
with Canada other than the mere holding or use outside Canada, or ownership as a
nonresident of Canada, of such Note; or (ii) presented for payment more than 30
days after the Relevant Date (as defined below) except to the extent that the
holder thereof would have been entitled to such Additional Amounts on presenting
the same for payment on or before such thirtieth day. As used herein, “Relevant
Date” means: (A) the date on which such payment first becomes due; or (B) if the
full amount of the moneys payable has not been received by the fiscal agent on
or prior to such date, the date on which, the full amount of such moneys having
been so received, notice to that effect is duly given to the holders of the
Notes in accordance with the notice procedures described under “Notices” below. 

B-21

Original Issue Discount
Note

If this Note is designated on the face
hereof as an Original Issue Discount Note, then, notwithstanding anything to the
contrary contained in this Note, upon the redemption, repayment or acceleration
of the Stated Maturity of this Note there shall be payable, in lieu of the
Principal Amount due at the Stated Maturity hereof, an amount equal to the
Amortized Face Amount of this Note. The “Amortized Face Amount” shall be the
amount equal to (i) the Issue Price (as defined below) of this Note, plus (ii)
that portion of the difference between the Issue Price and the Principal Amount
of this Note that has been amortized at the Stated Yield (as defined below) of
this Note (computed in accordance with generally accepted United States bond
yield computation principles) at the date as of which the Amortized Face Amount
is calculated, but in no event shall the Amortized Face Amount exceed the
Principal Amount of this Note. As used in the previous sentence “Issue Price”
means the Principal Amount of this Note less the Total Amount of OID of this
Note specified on the face hereof and the “Stated Yield” of this Note means the
Yield to Maturity specified on the face hereof (or if not so specified, the
Yield to Maturity compounded semi-annually and computed in accordance with
generally accepted United States bond yield computation principles) for the
period from the Issue Date of this Note to the Stated Maturity hereof on the
basis of its Issue Price and Principal Amount. 

B-22

Foreign Currency
Payments

If this Note is a Foreign Currency
Note, the principal and premium, if any, and interest and Additional Amounts, if
any, on this Note are payable by Québec in the Foreign Currency shown on the
face hereof. Payment of principal and premium, if any, and interest and
Additional Amounts, if any, will be made in the Foreign Currency by wire
transfer to the Holder’s bank account and the Holder will not have the option to
elect payment in U.S. dollars. 

If the Foreign Currency is not
available for the payment of principal and premium, if any, and interest and
Additional Amounts with respect to this Note due to the imposition of exchange
controls or other circumstances beyond the control of Québec, Québec will be
entitled to satisfy its obligations to the Holder of this Note by making such
payment in U.S. dollars (i) on the basis of the Market Exchange Rate (as defined
below) on the date of the payment, or (ii) if the Market Exchange Rate is not
then available, on the basis of the most recently available Market Exchange
Rate, or (iii) as the case may be, as otherwise specified in “Other Provisions”
on the face hereof. 

In order for any Holder of this Note to
receive payments of principal and premium, if any, and interest and Additional
Amounts, if any, in the Foreign Currency by wire transfer, such Holder shall
designate an appropriate bank account by filing the appropriate information with
the Fiscal Agent at its corporate trust office in The City of New York on or
prior to the applicable Record Date or at least sixteen days prior to the
applicable Maturity Date, as the case may be. The Fiscal Agent will, subject to
applicable laws and regulations and until it receives notice to the contrary,
make such payment and all succeeding payments to such Holder by wire transfer to
the designated account. If a payment cannot be made by wire transfer because the
required information has not been received by the Fiscal Agent on or before the
requisite date, a notice will be mailed to the Holder of this Note at its
registered address requesting such information and until such information has
been received, no additional interest will accrue. 

Québec will pay all administrative
costs imposed by banks in connection with making payments by wire transfer, but
any tax, assessment or governmental charge imposed upon such payments will be
borne by the Holder of this Note. 

B-23

The “Market Exchange Rate” with respect
to any Foreign Currency shall be the noon dollar buying rate in The City of New
York for cable transfers for such Foreign Currency as certified for customs
purposes by the Federal Reserve Bank of New York. 

Redemption at the Option of
Québec

If one or more Redemption Dates (or
ranges of such dates) is specified on the face hereof, this Note is subject to
redemption upon not less than thirty days’ and not more than sixty days’ prior
notice by mail, on any such date (or during any such range) as a whole, or from
time to time in part, in increments of U.S.$1,000 or such other minimum
denomination specified on the face hereof (provided that any remaining Principal
Amount hereof shall be at least U.S.$1,000 or such other minimum denomination),
at the election of Québec, at the Redemption Price (as defined below) together
with accrued interest to the Redemption Date; but any interest payment due on an
Interest Payment Date falling on or prior to the Redemption Date will be payable
to the Holder hereof (or one or more predecessor Notes) of record at the close
of business on the Record Date pertaining to such Interest Payment Date. If
applicable, the “Redemption Price” for any such redemption shall be equal to the
Initial Redemption Percentage specified on the face hereof (as adjusted by the
Annual Redemption Percentage Reduction specified on the face hereof, if
applicable) multiplied by the portion of the Principal Amount hereof (or, if
this Note is an Original Issue Discount Note, the portion of the Amortized Face
Amount hereof) to be redeemed; provided, however, that in no event shall
the Redemption Price be less than 100% of the portion of the Principal Amount
hereof (or, if this Note is an Original Issue Discount Note, the portion of the
Amortized Face Amount hereof) to be redeemed. 

Notice of redemption having been given
as aforesaid, this Note (or the portion of the Principal Amount hereof so to be
redeemed) shall, on the Redemption Date, become due and payable at the
Redemption Price herein specified, and from and after such date (unless Québec
shall default in the payment of the Redemption Price and accrued interest) shall
cease to bear interest. 

In the case of any partial redemption
at the election of Québec of Notes, the Notes of a particular tenor to be
redeemed shall be selected by the Fiscal Agent not more than sixty days prior to
the Redemption Date by such method as the Fiscal Agent shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the Principal Amount of Notes. In the event
of any redemption of this Note in part only, a new Note or Notes of like tenor
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof, provided that such unredeemed portion shall
be an authorized denomination for Notes of this series. 

B-24

Repayment at the Option of Holder

If one or more Optional Repayment Dates
(or ranges of such dates) is specified on the face hereof, this Note is subject
to repayment on any such date (or during any such range) or, if such date is not
a Business Day, on the first Business Day following such date, as a whole or
from time to time in part, in increments of U.S.$1,000 or such other minimum
denomination specified on the face hereof (provided that any remaining Principal
Amount hereof shall be at least U.S.$1,000 or such other minimum denomination),
at the election of the Holder hereof at the Repayment Price (as defined below)
together with accrued interest thereon to the Optional Repayment Date, but any
interest payment due on an Interest Payment Date falling on or prior to the
Optional Repayment Date will be payable to the Holder hereof of record at the
close of business on the Record Date pertaining to such Interest Payment Date.
Such election shall be effected by the Holder hereof delivering to Québec at the
corporate trust office of the Fiscal Agent in The City of New York not less than
thirty nor more than sixty days prior to the date on which this Note is to be
repaid, or during such other notice period specified on the face hereof, a
notice requesting such repayment in the form prescribed below and specifying the
date upon which this Note is to be repaid. Any notice given by a Holder pursuant
to this paragraph shall consist of this Note with the form entitled “Option to
Elect Repayment” set forth of the end of this Note duly completed. Exercise of
the repayment option by the Holder hereof will be irrevocable. Unless otherwise
specified on the face hereof, the “Repayment Price” for any such repayment shall
be 100% of the portion of the Principal Amount hereof (or, if this Note is an
Original Issue Discount Note, the portion of the Amortized Face Amount hereof)
to be repaid. 

Status of the Notes

The Notes shall rank equally among
themselves and with the other debt securities of Québec outstanding on the date
of this Note or issued hereafter. 

B-25

Form, Denomination and Registration

The Notes are fully registered, without
coupons, in authorized denominations of U.S.$1,000 and any integral multiple of
U.S.$1,000 in excess thereof, or, in the case of Notes denominated in a Foreign
Currency, the equivalent in the Foreign Currency (rounded to an integral
multiple of 1,000 units of such Foreign Currency) or such larger amount of such
Foreign Currency as may be specified on the face hereof. . The Fiscal Agent has
been appointed registrar for the Notes, and Québec will cause the Fiscal Agent
to maintain at its corporate trust office in The City of New York a Note
Register for the registration and transfer of Notes. 

This Note may be transferred at the
aforesaid office of the Fiscal Agent by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form approved by Québec and
duly executed by the Holder hereof in person or by the Holder’s attorney duly
authorized in writing, and thereupon the Fiscal Agent shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes in an
equal aggregate Principal Amount and in authorized denominations, subject to the
terms and conditions set forth herein. The Notes are exchangeable at said office
for other Notes of like tenor in other authorized denominations and in an equal
aggregate Principal Amount. All such exchanges of Notes will be free of charge,
but Québec may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. The date of registration of any
Note delivered upon any exchange or transfer of Notes shall be such that no gain
or loss of interest results from such exchange or transfer. The Fiscal Agent
shall not be required to make any transfers, registrations or exchanges of Notes
for a period of fifteen days preceding any Interest Payment Date. 

In the event of any redemption of Notes
at the election of Québec, the Fiscal Agent shall not be required to (i) issue,
register the transfer of or exchange Notes of like tenor during a period
beginning at the opening of business fifteen days before any selection of Notes
to be redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption, or (ii) register the transfer of or exchange any
Note, or portion thereof, called for redemption, except the unredeemed portion
of any Note being redeemed in part. Following the exercise of any repayment
option by the Holder hereof, the Fiscal Agent shall not be required to issue, register the
transfer of or exchange that portion of this Note with respect to which such
option has been exercised. 

B-26

Events of Default

In the event that (i) Québec shall
default in the payment of principal of or premium or interest or Additional
Amounts on this Note as and when the same shall be due and payable, and such
default shall continue for a period of 45 days, or (ii) default shall be made in
the due performance or observance by Québec of any covenant or agreement
contained in the Notes, other than the payment of principal, premium or interest
or Additional Amounts, or in the Fiscal Agency Agreement, and such default shall
continue for a period of 60 days, or (iii) Québec shall default in the payment
of any principal of or premium or interest or Additional Amounts on any
indebtedness (direct or under a guarantee) for borrowed money, other than the
Notes, as and when the same shall be due and payable, and such default shall
continue for a period of 45 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 U.S.$50,000,000 (or its
equivalent in other currencies), then at any time thereafter and during the
continuance of such default the Holder of this Note (or its proxy) may deliver
or cause to be delivered to Québec (with a copy to the Fiscal Agent) a written
notice that such Holder elects to declare the principal of the Note or Notes
held by him (the serial number or numbers and the denomination or denominations
of which shall be set forth in such notice) to be due and payable and, in the
cases falling within either (i) or (iii) above, on the 15th day after delivery
of such notice, or, in the cases falling within (ii) above, on the 30th day
after delivery of such notice, the principal of the Note or Notes referred to in
such notice plus any premium and accrued interest and Additional Amounts thereon
shall become due and payable at the places for payment herein specified, unless
prior to that time all such defaults theretofore existing shall have been cured.

Modification

The Fiscal Agency Agreement contains
provisions with respect to modifying or amending said Agreement either without
notice to, or the consent of, the holder of any Note or with the approval of the
holders of Notes. 

B-27

Future Holders

Any action by the Holder of this Note
shall bind all future Holders of this Note, and of any Note issued in exchange
or substitution herefor or in place hereof, in respect of anything done or
permitted by Québec or by the Fiscal Agent in pursuance of such action. 

Notices

All notices to the holders of Notes
will be published in English 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 as 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. 

Office or Agency of Québec

So long as this Note shall be
outstanding, Québec will maintain an office or agency for the payment of the
principal of and premium, if any, and interest and Additional Amounts, if any,
on this Note as herein provided in The City of New York, and an office or agency
in The City of New York for the registration, transfer and exchange as aforesaid
of the Notes. Québec may designate other agencies for the payment of said
principal and premium, if any, and interest and Additional Amounts, if any, at
such place or places (subject to applicable laws and regulations) as Québec may
decide. So long as there shall be a Fiscal Agent, Québec shall keep the Fiscal
Agent advised of the names and locations of such agencies, if any are so
designated. 

No recourse under or upon any covenant
contained in this Note or because of the creation of the indebtedness
represented hereby shall be had against any official or other representative,
past, present or future, as such, of Québec whether by virtue of any statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, it
being expressly agreed and understood that this Note is solely the obligation of
Québec and that no personal liability whatsoever shall attach to or be incurred
by any such officials or other representatives, as such, because of the
execution of this Note. 

B-28

Prescription

Under current Québec law, an action to
enforce a right to payment under the Notes may be prescribed if it is not
brought within three years of the date the payment is due.

Governing Law

The Notes shall be construed in
accordance 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, enforcement or execution against any property of any
order or judgment) made or given in connection with any proceedings arising out
of or in connection with the Fiscal Agency Agreement and the Notes. 

U.S. Dollars

Reference in this Note to “U.S.
dollars” is to the currency of the United States of America. 

B-29

OPTION TO ELECT REPAYMENT 

The undersigned hereby irrevocably
requests and instructs Québec to repay the within Note (or portion thereof
specified below) pursuant to its terms at the Repayment Price, to the
undersigned at: 

_________________________

_________________________

_________________________

_________________________

_________________________

(PLEASE PRINT OR TYPEWRITE NAME AND
ADDRESS INCLUDING POSTAL ZIP CODE OF THE UNDERSIGNED) If less than the entire
Principal Amount of the within Note is to be repaid, specify the portion thereof
which the Holder elects to have repaid:
_________________________________________________________ _______; and specify
the denomination or denominations (which shall not be less than the minimum
authorized denomination) of the Notes to be issued to the Holder for the portion
of the within Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid):
_________________________________________________________ _______. 

Dated: _______________

	 	 
	 	
      NOTICE: This signature on this Option to Elect Repayment
      must correspond with the name as written upon the face of the within
      instrument in every particular without alteration or enlargement.
  

B-30 

EXHIBIT C

This Note is a Global Note within the
meaning of the Fiscal Agency Agreement hereinafter referred to and is registered
in the name of a Depositary or a nominee thereof. This Global Note may not be
exchanged in whole or in part for a Note registered, and no transfer of this
Global Note in whole or in part may be registered, in the name of any Person
other than such Depositary or a nominee thereof except in the limited
circumstances described in the Fiscal Agency Agreement. 

Unless this certificate is presented by
an authorized representative of The Depository Trust Company, a New York
corporation (“DTC”), to Québec or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or 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. 

	REGISTERED 	REGISTERED 
	No. GFXR 	$ 
	CUSIP 	  

QUÉBEC 
GLOBAL MEDIUM-TERM NOTE
SERIES A

(Fixed Rate) 

                      Issue
of up to U.S.$5,000,000,000 Medium-Term Notes, Series A (or the equivalent
thereof in other currencies), Due Nine Months or More from Date of Issue. 

                      The
following summary of terms is subject to the information set forth on the
reverse hereof. 

PRINCIPAL
AMOUNT:
SPECIFIED CURRENCY: 
ISSUE DATE: 
INTEREST
RATE: 
INTEREST PAYMENT DATE(S): 
RECORD DATE(S):

STATED MATURITY: 
PAYMENTS OF PRINCIPAL AND PREMIUM, IF
ANY, AND INTEREST
AND ADDITIONAL AMOUNTS, IF ANY:

     [  ] U.S. dollars (if held by Cede & Co.)

C-1

     [ 
 ] Foreign Currency (if not held by Cede & Co.): 
EXCHANGE RATE
AGENT: 
REDEMPTION DATE(S): 
MINIMUM DENOMINATION TO BE
REDEEMED (IF OTHER THAN U.S.$1,000): 
INITIAL REDEMPTION
PERCENTAGE: 
ANNUAL REDEMPTION PERCENTAGE REDUCTION:

OPTIONAL REPAYMENT DATE(S): 
MINIMUM DENOMINATION TO BE
REPAID (IF OTHER THAN U.S.$1,000): 
ORIGINAL ISSUE DISCOUNT
(“OID”) NOTE:
     TOTAL AMOUNT OF OID: 
     YIELD TO MATURITY:

     INITIAL ACCRUAL PERIOD OID:
OTHER PROVISIONS:

QUÉBEC, for value received,
hereby promises to pay to Cede & Co., as nominee of The Depository Trust
Company (“DTC” or the “Depositary”) or registered assigns, or in accordance with
the instructions of the Depositary as provided on the reverse hereof, the
Principal Amount specified above (any currency other than U.S. dollars being
hereinafter referred to as a “Foreign Currency”) at the Stated Maturity
specified above and to pay interest thereon at a rate per annum equal to the
Interest Rate specified above until the principal hereof is paid 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. References herein to principal and interest in respect of this
Global Note shall be deemed also to refer to any Additional Amounts which may be
payable concurrently therewith, unless the context otherwise requires. Interest
on this Global Note will accrue from, and including, the immediately preceding
Interest Payment Date specified above in respect of which interest has been paid
or duly provided for or, if no interest has been paid, from the Issue Date
specified above to, but excluding, the next succeeding Interest Payment Date or,
in respect of any part of the Principal Amount due on a Maturity Date (as
defined below), such Maturity Date, as the case may be. Except as provided
herein, Québec will pay interest on the Interest Payment Date(s) specified above
and in respect of any part of the Principal Amount due on a Maturity Date, on
such Maturity Date commencing on the first Interest Payment Date next succeeding
the Issue Date, unless the Issue Date occurs between a Record Date (as defined
below) and the Interest Payment Date to which such Record Date pertains, in
which case commencing on the Interest Payment Date following the next succeeding Record
Date to the Holder (as defined below) on such next succeeding Record Date. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will be paid to the person in whose name this Global Note (or one
or more predecessor Global Notes) is registered (the “Holder”) in the register
of the names and addresses of Holders of Notes (the “Note Register”) maintained
by Québec at the corporate trust office of the Fiscal Agent (as defined on the
reverse hereof) at the close of business on the date fifteen calendar days prior
to an Interest Payment Date (whether or not a Business Day (as defined on the
reverse hereof)) (a “Record Date”), or in accordance with the instructions of
the Depositary as provided on the reverse hereof; provided,
however, that interest payable on a Maturity Date will be payable to the
person to whom the part of the Principal Amount due on such Maturity Date shall
be payable. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and may either
be paid to the person in whose name this Global Note (or one or more predecessor
Global Notes) is registered at the close of business on a special record date
for the payment of such defaulted interest to be fixed by the Fiscal Agent,
notice whereof shall be given to Holders of Notes of this series not less than
ten days prior to such special record date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Global Note may be listed, and upon such notice as may be required
by such exchange. 

C-2 

Upon presentation of this Global Note
on a Maturity Date at the corporate trust office of the Fiscal Agent maintained
for that purpose in The City of New York, or at such other office or agency of
Québec maintained by it in The City of New York for the purpose of making such
payments, payment of the principal of this Global Note and premium, if any, and
interest and Additional Amounts, if any, due on such Maturity Date will be made
to the Holder of this Global Note on such Maturity Date in immediately available
funds or, if such payment is to be made in a Foreign Currency, by wire transfer
to the bank account or accounts designated by the Depositary as provided on the
reverse hereof. If payments of interest, other than on a Maturity Date, on this
Global Note are to be made in U.S. dollars, such payments will be made by check
mailed to the address of such Holder as it appears in the Note Register, or, if
such payments are to be made in a Foreign Currency as provided on the reverse
hereof, by wire transfer to the Holder’s bank account, as designated by the
Holder of this Global Note by written notice to the Fiscal Agent on or prior to
the applicable Record Date. A Holder of U.S.$10,000,000 or more in aggregate
principal amount of Notes (whether having identical or different terms and
provisions) shall be entitled to receive payments of interest, other than on a
Maturity Date, by wire transfer of immediately available funds if appropriate
wire transfer instructions have been received by the Fiscal Agent not less than
ten days prior to the applicable Interest Payment Date. As more fully provided
on the reverse hereof, payment of the principal of and premium, if any, and
interest and Additional Amounts, if any, on this Global Note will be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public or private debts, unless the Specified
Currency indicated above is a Foreign Currency (a “Foreign Currency Note”) and
payment is to be made in such Foreign Currency as provided on the reverse
hereof, in which case payment shall be made in such Foreign Currency. 

C-3

REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS GLOBAL NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE. 

Unless the certificate of
authentication hereon has been executed by the Fiscal Agent by manual signature,
this Global Note shall not be entitled to any benefit under the Fiscal Agency
Agreement or be valid or obligatory for any purpose. 

C-4

SIGNED ON BEHALF OF QUÉBEC. 

Dated: ____________________

____________________________
Authorized Official 

 

 

 

 

FISCAL AGENT’S CERTIFICATE 
OF AUTHENTICATION

This is one of the Notes referred to in the

within-mentioned Fiscal Agency Agreement. 

CITIBANK, N.A., as Fiscal Agent 

 

 

___________________________ 
Authorized Officer 

C-5 

QUÉBEC 
GLOBAL MEDIUM-TERM NOTE 
SERIES A

FIXED RATE 

General 

This Global Note is one of a duly
authorized issue of Medium-Term Notes, Series A (the “Notes”), Due Nine Months
or More from Date of Issue, as selected by the purchaser and agreed to by
Québec. The Notes are issuable in a single series under a fiscal agency
agreement, dated as of May 30, 2002, as may be amended or supplemented from time
to time (the “Fiscal Agency Agreement”), among Québec and Citibank, N.A., as
fiscal agent (the “Fiscal Agent”, which term shall include, unless the context
otherwise requires, its successors and assigns), in an aggregate initial
offering price of up to U.S.$5,000,000,000 at any one time outstanding, or the
equivalent thereof in other currencies at the Market Exchange Rate (as defined
below) on the applicable settlement dates in the case of Notes denominated in a
Foreign Currency. The foregoing limit, however, may be increased by Québec if in
the future it determines that it may wish to sell additional Notes. The Fiscal
Agency Agreement may be amended or supplemented from time to time in accordance
with the terms thereof, but any such amendment or supplement will not affect the
rights of the Holder hereunder. 

As used herein, “Maturity Date”, when
used with respect to this Global Note, means the date on which the Principal
Amount of this Note or any part thereof becomes due and payable, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise. 

Payments 

General 

Interest payments for this Global Note
will be computed and paid on the basis of a 360-day year of twelve 30-day
months. For purposes of disclosure under the Interest Act (Canada), the yearly
rate of interest which is equivalent to the rate of interest payable on this
Global Note is the Interest Rate specified on the face hereof multiplied by the
number of days in the year and divided by 360. 

In the case where an Interest Payment
Date or a Maturity Date does not fall on a Business Day, any payment of
principal, premium, interest or Additional Amounts otherwise payable on
such day need not be made on such day, but may be made on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment
Date or Maturity Date and no interest shall accrue for the period from and after
such Interest Payment Date or Maturity Date to such next succeeding Business
Day. As used herein, “Business Day” means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that (i) with respect to
Foreign Currency Notes the payment of which is to be made in a Foreign Currency
other than euros, such day is also a day on which banking institutions are not
authorized or required by law, regulation or executive order to close in the
Principal Financial Center of the country of the Foreign Currency; and (ii) with
respect to Foreign Currency Notes the payment of which is to be made in euros,
such day is also a day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer (TARGET) system, or any successor system, is open
for business. 

C-6 

“Principal Financial Center”, as used
for the purpose of the definition of “Business Day”, shall be the capital city
of the country of the applicable Foreign Currency, except that with respect to
Canadian dollars, euros and Swiss francs, the Principal Financial Center shall
be Montréal, Brussels and Zurich, respectively. 

Payment of Additional
Amounts

All payments of principal and interest
by Québec to any holder who, as to Canada or any province, political subdivision
or taxing authority therein is a non-resident, will be made without withholding
or deduction for, or on account of, any present or future taxes, duties,
assessments or charges of whatever nature imposed or levied by or on behalf of
the Government of Canada or any province, territory or political division
thereof or any authority or agency therein or thereof having power to tax,
unless the withholding or deduction of such taxes, duties, assessments or
charges is required by law or by the interpretation or administration thereof.
In that event, Québec will, subject to its redemption rights pursuant to the
Fiscal Agency Agreement and the Global Notes, pay to the holder of the Notes
such additional amounts (the “Additional Amounts”) as may be necessary in order
that the net amounts receivable by the beneficial holder of the Notes after such
withholding or deduction shall equal the respective amounts of principal or
interest which would have been receivable in respect of the Global Notes in the absence of such
withholding or deduction; except that no such Additional Amount shall be payable
with respect to any Global Note: (i) to, or to a third party on behalf of, a
holder or a beneficial holder who is liable to such taxes, duties, assessments
or charges in respect of such Global Note by reason of that person having some
connection with Canada other than the mere holding or use outside Canada, or
ownership as a non-resident of Canada, of such Global Note; or (ii) presented
for payment more than 30 days after the Relevant Date (as defined below) except
to the extent that the holder thereof would have been entitled to such
Additional Amounts on presenting the same for payment on or before such
thirtieth day. As used herein, “Relevant Date” means: (A) the date on which such
payment first becomes due; or (B) if the full amount of the moneys payable has
not been received by the fiscal agent on or prior to such date, the date on
which, the full amount of such moneys having been so received, notice to that
effect is duly given to the holders of the Global Notes in accordance with the
notice procedures described under “Notices” below. 

C-7

Original Issue Discount
Note

If this Global Note is designated on
the face hereof as an Original Issue Discount Note, then, notwithstanding
anything to the contrary contained in this Global Note, upon the redemption,
repayment or acceleration of the Stated Maturity of this Global Note there shall
be payable, in lieu of the Principal Amount due at the Stated Maturity hereof,
an amount equal to the Amortized Face Amount of this Global Note. The “Amortized
Face Amount” shall be the amount equal to (i) the Issue Price (as defined below)
of this Global Note, plus (ii) that portion of the difference between the Issue
Price and the Principal Amount of this Global Note that has been amortized at
the Stated Yield (as defined below) of this Global Note (computed in accordance
with generally accepted United States bond yield computation principles) at the
date as of which the Amortized Face Amount is calculated, but in no event shall
the Amortized Face Amount exceed the Principal Amount of this Global Note. As
used in the previous sentence “Issue Price” means the Principal Amount of this
Global Note less the Total Amount of OID of this Global Note specified on the
face hereof and the “Stated Yield” of this Global Note means the Yield to
Maturity specified on the face hereof (or if not so specified, the Yield to
Maturity compounded semi-annually and computed in accordance with generally
accepted United States bond yield computation principles) for the period from
the Issue Date of this Global Note to the Stated
Maturity hereof on the basis of its Issue Price and Principal Amount. 

C-8

Foreign Currency Note

If this Global Note is a Foreign
Currency Note, the principal and premium, if any, and interest and Additional
Amounts, if any, on this Global Note are payable by Québec in the Foreign
Currency shown on the face hereof. If the box under the heading “Payments of
Principal and Premium, if any, and Interest and Additional Amounts” shown on the
face hereof marked “U.S. dollars” has been checked, Citibank, N.A., in its
capacity as exchange rate agent, or such other person as shall be appointed by
Québec (the “Exchange Rate Agent”, which term shall include, unless the context
otherwise requires, its successors and assigns), will convert all payments of
principal and premium, if any, and interest and Additional Amounts, if any, on
this Global Note to U.S. dollars, unless an owner of a beneficial interest in
this Global Note elects to receive such payments in the Foreign Currency as
described below. Any U.S. dollar amount to be received by a Holder of this
Global Note will be based on either a bid quotation that the Exchange Rate Agent
or any of its affiliates quotes, which shall be a competitive quotation in the
market at that time for such a transaction, or a bid quotation from a leading
foreign exchange bank in The City of New York selected by the Exchange Rate
Agent, at 11:00 a.m., New York City time, on the second Business Day preceding
the applicable payment date for purchase by the Exchange Rate Agent of the
Foreign Currency for U.S. dollars for settlement on such payment date in the
aggregate amount of the Foreign Currency due to all Holders of Notes scheduled
to receive U.S. dollar payments. All currency exchange risks and costs will be
borne by the Holder of this Global Note by deductions from such payments.
Notwithstanding the above, the owner of a beneficial interest in this Global
Note may elect to receive payment of the principal of and premium, if any, and
interest and Additional Amounts, if any, on this Global Note in the Foreign
Currency by transmitting a written request for such payment (and designating at
the same time the appropriate bank account to which the payment will be made) to
the participant through which its interest is held on or prior to the applicable
Record Date or at least fifteen days prior to the applicable Maturity Date, as
the case may be. Such participant must notify the Depositary of such election
and designated bank account on or prior to the third Business Day after the
applicable Record Date or at least ten days prior to the applicable Maturity
Date, as the case may be. Such Depositary must notify the Fiscal Agent of such
election and designated bank account on or prior to the fifth Business Day after the
applicable Record Date or at least ten days prior to the applicable Maturity
Date, as the case may be. Such request may be mailed or hand delivered or sent
by facsimile transmission. The owner of a beneficial interest in this Global
Note may elect to receive payment in the Foreign Currency for all principal,
premium and interest and Additional Amounts payments and need not file a
separate election for each payment. Such election will remain in effect until
revoked by written notice to the Fiscal Agent, but written notice of any such
revocation must be received by the Fiscal Agent on or prior to the applicable
Record Date or at least sixteen days prior to the applicable Maturity Date, as
the case may be. 

C-9

If the box under the heading “Payments
of Principal and Premium, if any, and Interest and Additional Amounts, if any”
shown on the face hereof marked “Foreign Currency” has been checked, payment of
principal and premium, if any, and interest and Additional Amounts, if any, will
be made in the Foreign Currency and an owner of a beneficial interest in this
Global Note will not have the option to elect payment in U.S. dollars. 

If the Foreign Currency is not
available for the payment of principal and premium, if any, and interest and
Additional Amounts, if any, with respect to this Global Note due to the
imposition of exchange controls or other circumstances beyond the control of
Québec, Québec will be entitled to satisfy its obligations to the Holder of this
Global Note by making such payment in U.S. dollars (i) on the basis of the
Market Exchange Rate (as defined below) on the date of the payment, or (ii) if
the Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate, or (iii) as the case may be, as
otherwise specified in “Other Provisions” on the face hereof. 

The Fiscal Agent will, subject to
applicable laws and regulations, make all payments in the Foreign Currency with
respect to this Global Note by wire transfers to the appropriate bank accounts
of which DTC or any other depositary through which this Global Note is held, as
the case may be, notifies the Fiscal Agent which shall be, where such payment is
made as a result of an election by an owner of a beneficial interest in this
Global Note as provided above, the accounts designated as provided above. 

In order for any Holder of this Global
Note entitled to receive payments of principal and premium, if any, and
interest, and Additional Amounts, if any, in the Foreign Currency to receive
such payments by wire transfer, such Holder shall designate an
appropriate bank account. Such designation shall be made by filing the
appropriate information with the Fiscal Agent at its corporate trust office in
The City of New York on or prior to the applicable Record Date or at least
sixteen days prior to the applicable Maturity Date, as the case may be. The
Fiscal Agent will, subject to applicable laws and regulations and until it
receives notice to the contrary, make such payment and all succeeding payments
to such Holder by wire transfer to the designated account. If a payment cannot
be made by wire transfer because the required information has not been received
by the Fiscal Agent on or before the requisite date, a notice will be mailed to
the Holder of this Global Note at its registered address requesting such
information and until such information has been received, no additional interest
will accrue. 

C-10

Québec will pay all administrative
costs imposed by banks in connection with making payments by wire transfer, but
any tax, assessment or governmental charge imposed upon such payments will be
borne by the Holder of this Global Note. 

The “Market Exchange Rate” with respect
to any Foreign Currency shall be the noon dollar buying rate in The City of New
York for cable transfers for such Foreign Currency as certified for customs
purposes by the Federal Reserve Bank of New York. 

Redemption at the Option of Québec

If one or more Redemption Dates (or
ranges of such dates) is specified on the face hereof, this Global Note is
subject to redemption upon not less than thirty days’ and not more than sixty
days’ prior notice by mail, on any such date (or during any such range) as a
whole, or from time to time in part, in increments of U.S.$1,000 or such other
minimum denomination specified on the face hereof (provided that any remaining
Principal Amount hereof shall be at least U.S.$1,000 or such other minimum
denomination), at the election of Québec, at the Redemption Price (as defined
below) together with accrued interest to the Redemption Date; but any interest
payment due on an Interest Payment Date falling on or prior to the Redemption
Date will be payable to the Holder hereof (or one or more predecessor Notes) of
record at the close of business on the Record Date pertaining to such Interest
Payment Date. If applicable, the “Redemption Price” for any such redemption
shall be equal to the Initial Redemption Percentage specified on the face hereof
(as adjusted by the Annual Redemption Percentage Reduction specified on the face
hereof, if applicable) multiplied by the portion of the Principal Amount hereof
(or, if this Global Note is an Original Issue Discount Note, the portion of the
Amortized Face Amount hereof) to be redeemed; provided, however, that in no
event shall the Redemption Price be less than 100% of the portion of the
Principal Amount hereof (or, if this Global Note is an Original Issue Discount
Note, the portion of the Amortized Face Amount hereof) to be redeemed. 

C-11

Notice of redemption having been given
as aforesaid, this Global Note (or the portion of the Principal Amount hereof so
to be redeemed) shall, on the Redemption Date, become due and payable at the
Redemption Price herein specified, and from and after such date (unless Québec
shall default in the payment of the Redemption Price and accrued interest) shall
cease to bear interest. 

In the case of any partial redemption
at the election of Québec of Notes, the Notes of a particular tenor to be
redeemed shall be selected by the Fiscal Agent not more than sixty days prior to
the Redemption Date by such method as the Fiscal Agent shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the Principal Amount of Notes. In the event of any redemption of this Global
Note in part only, a new Note or Notes of like tenor for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof, provided that such unredeemed portion shall be an authorized
denomination for Notes of this series. 

Repayment at the Option of
Holder

If one or more Optional Repayment Dates
(or ranges of such dates) is specified on the face hereof, this Global Note is
subject to repayment on any such date (or during any such range) or, if such
date is not a Business Day, on the first Business Day following such date, as a
whole or from time to time in part, in increments of U.S.$1,000 or such other
minimum denomination specified on the face hereof (provided that any remaining
Principal Amount hereof shall be at least U.S.$1,000 or such other minimum
denomination), at the election of the Holder hereof at the Repayment Price (as
defined below) together with accrued interest thereon to the Optional Repayment
Date, but any interest payment due on an Interest Payment Date falling on or
prior to the Optional Repayment Date will be payable to the Holder hereof of
record at the close of business on the Record Date pertaining to such Interest
Payment Date. Such election shall be effected by the Holder hereof delivering to
Québec at the corporate trust office of the Fiscal Agent in The City of New York not less than
thirty nor more than sixty days prior to the date on which this Global Note is
to be repaid, or during such other notice period specified on the face hereof, a
notice requesting such repayment in the form prescribed below and specifying the
date upon which this Global Note is to be repaid. Any notice given by a Holder
pursuant to this paragraph shall consist of this Global Note with the form
entitled “Option to Elect Repayment” set forth of the end of this Global Note
duly completed. Exercise of the repayment option by the Holder hereof will be
irrevocable. Unless otherwise specified on the face hereof, the “Repayment
Price” for any such repayment shall be 100% of the portion of the Principal
Amount hereof (or, if this Global Note is an Original Issue Discount Note, the
portion of the Amortized Face Amount hereof) to be repaid. 

C-12

Status of the Notes

The Notes shall rank equally among
themselves and with the other debt securities of Québec outstanding on the date
of this Global Note or issued hereafter. 

Form, Denomination and Registration

The Notes are fully registered, without
coupons, in authorized denominations of U.S.$1,000 and any integral multiple of
U.S.$1,000 in excess thereof, or, in the case of Notes denominated in a Foreign
Currency, the equivalent in the Foreign Currency (rounded to an integral
multiple of 1,000 units of such Foreign Currency) or such larger amount of such
Foreign Currency as may be specified on the face hereof. The Fiscal Agent has
been appointed registrar for the Notes, and Québec will cause the Fiscal Agent
to maintain at its corporate trust office in The City of New York a Note
Register for the registration and transfer of Notes. 

This Note is a Global Note registered
in the name of a nominee of the Depositary. This Global Note is exchangeable for
certificated Notes in definitive form (“Certificated Notes”) registered in the
name of a person other than the Depositary or its nominee only in the limited
circumstances hereinafter described. Unless and until it is exchanged in whole
or in part for Certificated Notes, this Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee
of the Depositary to the Depositary or another nominee of the Depositary, or by
the Depositary or the nominee of the Depositary to a successor of the
Depositary or a nominee of such successor. 

C-13

The Notes represented by this Global
Note are exchangeable for Certificated Notes of like tenor as such Notes in
denominations of U.S.$1,000 and integral multiples thereof only (i) if the
Depositary notifies Québec that it is unwilling or unable to continue as
Depositary for this Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and a successor Depositary is not appointed by Québec within 90 days
after receiving the notice or becoming aware that the Depositary is no longer
registered as the Depositary, or (ii) if Québec, in its sole discretion at any
time, determines not to have any of the Notes represented by the Global Notes,
or (iii) upon request to the Fiscal Agent by the Depositary, acting on direct or
indirect instructions of a Holder or any owner of a beneficial interest in this
Global Note, after an event of default entitling the Holders to accelerate the
Stated Maturity of the Notes represented by this Global Note has occurred and is
continuing, provided that if the Depositary is unwilling or does not
promptly make such request to the Fiscal Agent, then any owner of a beneficial
interest in this Global Note shall be entitled to make such request with respect
to such interest. If the exchange is made pursuant to clause (iii), then the
Notes represented by this Global Note may be exchangeable for Certificated Notes
in whole or in part. If the Notes represented by this Global Note become
exchangeable as provided above, Québec shall issue or cause to be issued
Certificated Notes upon registration of transfer of, or in exchange for, Notes
represented by this Global Note. All such exchanges will be free of charge, but
Québec may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. The date of registration of any
Certificated Note delivered upon any exchange or transfer of a Global Note shall
be such that no gain or loss of interest results from such exchange or transfer.
The Fiscal Agent shall not be required to make any transfers, registrations or
exchanges of Global Notes for a period of fifteen days preceding any Interest
Payment Date. 

In respect of any such issuance of
Certificated Notes, (i) Québec shall promptly provide the Fiscal Agent with a
sufficient number of Certificated Notes in blank form to proceed with such
issuance, (ii) the Depositary shall cause this Global Note to be delivered 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 the Depositary a new Global
Note in an aggregate principal amount equal to the unexchanged portion of this
Global Note and (v) the Fiscal Agent shall reduce accordingly the holdings of
the Holder on the Register. The Fiscal Agent shall have at least 30 days from
the date of its receipt of Certificated Notes and registration information to
authenticate and deliver such Certificated Notes. Such Certificated Notes shall
be registered in such names and in such denominations as DTC, pursuant to
instructions from its direct or indirect participants, shall direct and 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 be
valid obligations of Québec and shall be entitled to the same benefits under the
Fiscal Agency Agreement as the Global Notes. 

C-14

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

In the event of any redemption of Notes
represented by this Global Note at the election of Québec, the Fiscal Agent
shall not be required to (i) issue, register the transfer of or exchange Global
Notes of like tenor during a period beginning at the opening of business fifteen
days before any selection of such Notes to be redeemed and ending at the close
of business on the day of mailing of the relevant notice of redemption, or (ii)
register the transfer of or exchange this Global Note, or, except in the case of
a partial redemption, the unredeemed portion of this Global Note. Following the
exercise of any repayment option by the Holder hereof, the Fiscal Agent shall
not be required to issue, register the transfer of or exchange that portion of
this Global Note with respect to which such option has been exercised. 

Subject to the foregoing, this Global
Note is not exchangeable, except for a Global Note or Global Notes in an equal
aggregate Principal Amount to be registered in the name of the Depositary or its
nominee. 

C-15

Events of Default

In the event that (i) Québec shall
default in the payment of principal of or premium or interest or Additional
Amounts on this Global Note as and when the same shall be due and payable, and
such default shall continue for a period of 45 days, or (ii) default shall be
made in the due performance or observance by Québec of any covenant or agreement
contained in the Global Notes, other than the payment of principal, premium or
interest or Additional Amounts, or in the Fiscal Agency Agreement, and such
default shall continue for a period of 60 days, or (iii) Québec shall default in
the payment of any principal of or premium or interest or Additional Amounts on
any indebtedness (direct or under a guarantee) for borrowed money, other than
the Global Notes, as and when the same shall be due and payable, and such
default shall continue for a period of 45 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 U.S.$50,000,000
(or its equivalent in other currencies), then at any time thereafter and during
the continuance of such default the Holder of this Global Note (or its proxy)
may deliver or cause to be delivered to Québec (with a copy to the Fiscal Agent)
a written notice that such Holder elects to declare the principal of the Note or
Notes held by him (the serial number or numbers of the Global Note representing
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 (i) or (iii) above, on the 15th day after
delivery of such notice, or, in the cases falling within (ii) above, on the 30th
day after delivery of such notice, the principal of the Note or Notes referred
to in such notice plus any premium and accrued interest and Additional Amounts
thereon shall become due and payable at the places for payment herein specified,
unless prior to that time all such defaults theretofore existing shall have been
cured. 

Modification

The Fiscal Agency Agreement contains
provisions with respect to modifying or amending said Agreement either without
notice to, or the consent of, the holder of any Note or with the approval of the
holders of Notes. 

C-16

Future Holders

Any action by the Holder of this Global
Note shall bind all future Holders of this Global Note, and of any Note issued
in exchange or substitution herefor or in place hereof, in respect of anything
done or permitted by Québec or by the Fiscal Agent in pursuance of such action.

Notices

All notices to the Holders of Global
Notes will be given in writing mailed, first-class postage prepaid, to each
Holder at each Holder’s address as it appears in the Note Register. Any such
notice shall be deemed to have been given on the date of such mailing. 

However, when Certificated Notes are
outstanding, all notices to the Holders of Notes will be published in English 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 as 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. 

Office or Agency of Québec

So long as this Global Note shall be
outstanding, Québec will maintain an office or agency for the payment of the
principal of and premium, if any, and interest and Additional Amounts, if any,
on this Global Note as herein provided in The City of New York, and an office or
agency in The City of New York for the registration, transfer and exchange as
aforesaid of the Notes. Québec may designate other agencies for the payment of
said principal and premium, if any, and interest and Additional Amounts, if any,
at such place or places (subject to applicable laws and regulations) as Québec
may decide. So long as there shall be a Fiscal Agent, Québec shall keep the
Fiscal Agent advised of the names and locations of such agencies, if any are so
designated. 

No recourse under or upon any covenant
contained in this Global Note or because of the creation of the indebtedness
represented hereby shall be had against any official or other representative,
past, present or future, as such, of Québec whether by
virtue of any statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, it being expressly agreed and understood that this Global
Note is solely the obligation of Québec and that no personal liability
whatsoever shall attach to or be incurred by any such officials or other
representatives, as such, because of the execution of this Global Note. 

C-17

Prescription

Under current Québec law, an action to
enforce a right to payment under the Notes may be prescribed if it is not
brought within three years of the date the payment is due.

Governing Law

The Notes shall be construed in
accordance 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, enforcement or execution against any property of any
order or judgment) made or given in connection with any proceedings arising out
of or in connection with the Fiscal Agency Agreement and the Notes. 

U.S. Dollars

Reference in this Global Note to “U.S.
dollars” is to the currency of the United States of America. 

C-18

OPTION TO ELECT REPAYMENT 

The undersigned hereby irrevocably
requests and instructs Québec to repay the within Global Note (or portion
thereof specified below) pursuant to its terms at the Repayment Price, to the
undersigned at: 

_________________________ 

_________________________ 

_________________________ 

_________________________ 

_________________________ 

(PLEASE PRINT OR TYPEWRITE NAME AND
ADDRESS INCLUDING POSTAL ZIP CODE OF THE UNDERSIGNED) If less than the entire
Principal Amount of the within Global Note is to be repaid, specify the portion
thereof which the Holder elects to have repaid:
_________________________________________________________ _______; and specify
the denomination or denominations (which shall not be less than the minimum
authorized denomination) of the Notes to be issued to the Holder for the portion
of the within Global Note not being repaid (in the absence of any such
specification, one such Global Note will be issued for the portion not being
repaid): _________________________________________________________ _______. 

Dated: _______________

	 	 
	 	
      NOTICE: This signature on this Option to Elect Repayment
      must correspond with the name as written upon the face of the within
      instrument in every particular without alteration or enlargement.
  

C-19 

EXHIBIT D

This Note is a Global Note within the
meaning of the Fiscal Agency Agreement hereinafter referred to and is registered
in the name of a Depositary or a nominee thereof. This Global Note may not be
exchanged in whole or in part for a Note registered, and no transfer of this
Global Note in whole or in part may be registered, in the name of any Person
other than such Depositary or a nominee thereof except in the limited
circumstances described in the Fiscal Agency Agreement. 

Unless this certificate is presented
by an authorized representative of The Depository Trust Company, a New York
corporation (“DTC”), to Québec or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or 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. 

	REGISTERED 	REGISTERED 
	No. GFLR 	$ 
	CUSIP 	  

QUÉBEC 
GLOBAL MEDIUM-TERM NOTE
SERIES A

(Floating Rate) 

Issue of up to U.S.$5,000,000,000
Medium-Term Notes, Series A (or the equivalent thereof in other currencies), Due
Nine Months or More from Date of Issue. 

                      The
following summary of terms is subject to the information set forth on the
reverse hereof. 

PRINCIPAL
AMOUNT:
SPECIFIED CURRENCY: 
ISSUE DATE: 
INTEREST
RATE BASIS:
SPREAD: 
SPREAD MULTIPLIER:
INITIAL
INTEREST RATE:
MAXIMUM INTEREST RATE:
MINIMUM INTEREST
RATE:

INTEREST PAYMENT
DATE(S):
INTEREST PAYMENT PERIOD:
INTEREST RESET
DATE(S):
INTEREST RATE RESET PERIOD:
INTEREST DETERMINATION
DATE(S):
CALCULATION DATE(S): 
INDEX
MATURITY:
CALCULATION AGENT:
RECORD DATE(S):

STATED MATURITY:
REDEMPTION DATE(S): 
MINIMUM
DENOMINATION TO BE REDEEMED (IF OTHER THAN U.S.$1,000):

INITIAL REDEMPTION PERCENTAGE: 
ANNUAL REDEMPTION
PERCENTAGE REDUCTION: 
OPTIONAL REPAYMENT DATE(S): 
MINIMUM
DENOMINATION TO BE REPAID (IF OTHER THAN U.S.$1,000): 
PAYMENTS
OF PRINCIPAL AND PREMIUM, IF ANY, AND INTEREST 
AND ADDITIONAL
AMOUNTS, IF ANY: 
     [   ] U.S. dollars
(if held by Cede & Co.) 
     [   ] Foreign
Currency (if not held by Cede & Co.): 
EXCHANGE RATE AGENT:

ORIGINAL ISSUE DISCOUNT (“OID”)
NOTE:
     TOTAL AMOUNT OF
OID:
     YIELD TO
MATURITY:
     INITIAL ACCRUAL PERIOD
OID:
OTHER PROVISIONS:

D-2

QUÉBEC, for value received,
hereby promises to pay to Cede & Co., as nominee of The Depository Trust
Company (“DTC” or the “Depositary”) or registered assigns, or in accordance with
the instructions of the Depositary as provided on the reverse hereof, the
Principal Amount specified above (any currency other than U.S. dollars being
hereinafter referred to as a “Foreign Currency”) at the Stated Maturity
specified above and to pay interest thereon at a rate per annum equal to the
Initial Interest Rate specified above until the first Interest Reset Date
specified above following the Issue Date specified above and thereafter at a
rate determined in accordance with the provisions on the reverse hereof under
the heading “Determination of CD Rate”, “Determination of CMT Rate”,
“Determination of Commercial Paper Rate”, “Determination of Federal Funds Rate”,
“Determination of LIBOR”, “Determination of EURIBOR”, “Determination of Prime
Rate” or “Determination of Treasury Rate”, depending upon whether
the Interest Rate Basis specified above is CD Rate, CMT Rate, Commercial Paper
Rate, Federal Funds Rate, LIBOR, EURIBOR, Prime Rate or Treasury Rate, until the
principal hereof is paid 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. References herein to
principal and interest in respect of this Global Note shall be deemed also to
refer to any Additional Amounts which may be payable concurrently therewith,
unless the context otherwise requires. Interest on this Global Note will accrue
from, and including, the immediately preceding Interest Payment Date specified
above in respect of which interest has been paid or duly provided for or, if no
interest has been paid, from the Issue Date specified above to, but excluding,
the next succeeding Interest Payment Date or, in respect of any part of the
Principal Amount due on a Maturity Date (as defined below), such Maturity Date,
as the case may be, except that the interest payment on a Maturity Date will
include interest accrued to but excluding such date. Except as provided herein,
Québec will pay interest monthly, quarterly, semi-annually or annually as
specified above under “Interest Payment Period”, commencing with the first
Interest Payment Date specified above next succeeding the Issue Date, unless the
Issue Date occurs between a Record Date and the Interest Payment Date to which
such Record Date pertains, in which case commencing on the Interest Payment Date
following the next succeeding Record Date and in respect of any part of the
Principal Amount due on a Maturity Date, on such Maturity Date. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the person in whose name this Global Note (or one or more
predecessor Global Notes) is registered (the “Holder”) in the register of the
names and addresses of Holders of Notes (the “Note Register”) maintained by
Québec at the corporate trust office of the Fiscal Agent (as defined on the
reverse hereof) at the close of business on the date fifteen calendar days prior
to an Interest Payment Date (whether or not a Business Day (as defined on the
reverse hereof)) (a “Record Date”), or in accordance with the instructions of
the Depositary as provided on the reverse hereof; provided,
however, that interest payable on a Maturity Date will be payable to the
person to whom the part of the Principal Amount due on such Maturity Date shall
be payable. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and may either
be paid to the person in whose name this Global Note (or one or more predecessor
Global Notes) is registered at the close of business on a special record date
for the payment of such defaulted interest to befixed by the Fiscal Agent, notice
whereof shall be given to Holders of Notes of this series not less than ten days
prior to such special record date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Global Note may be listed, and upon such notice as may be required by
such exchange. 

D-3

Upon presentation of this Global Note
on a Maturity Date at the corporate trust office of the Fiscal Agent maintained
for that purpose in The City of New York, or at such other office or agency of
Québec maintained by it in The City of New York for the purpose of making such
payments, payment of the principal of this Global Note and premium, if any, and
interest and Additional Amounts, if any, due on such Maturity Date will be made
to the Holder of this Global Note on such Maturity Date in immediately available
funds or, if such payment is to be made in a Foreign Currency, by wire transfer
to the bank account or accounts designated by the Depositary as provided on the
reverse hereof. If payments of interest, other than on a Maturity Date, on this
Global Note are to be made in U.S. dollars, such payments will be made by check
mailed to the address of such Holder as it appears in the Note Register, or, if
such payments are to be made in a Foreign Currency as provided on the reverse
hereof, by wire transfer to the Holder’s bank account, as designated by the
Holder of this Global Note by written notice to the Fiscal Agent on or prior to
the applicable Record Date. A Holder of U.S.$10,000,000 or more in aggregate
principal amount of Notes (whether having identical or different terms and
provisions) shall be entitled to receive payments of interest, other than on a
Maturity Date, by wire transfer of immediately available funds if appropriate
wire transfer instructions have been received by the Fiscal Agent not less than
ten days prior to the applicable Interest Payment Date. As more fully provided
on the reverse hereof, payment of the principal of and premium, if any, and
interest and Additional Amounts, if any, on this Global Note will be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public or private debts, unless the Specified
Currency indicated above is a Foreign Currency (a “Foreign Currency Note”) and
payment is to be made in such Foreign Currency as provided on the reverse
hereof, in which case payment shall be made in such Foreign Currency. 

REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS GLOBAL NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE. 

D-4

Unless the certificate of
authentication hereon has been executed by the Fiscal Agent by manual signature,
this Global Note shall not be entitled to any benefit under the Fiscal Agency
Agreement or be valid or obligatory for any purpose. 

D-5

SIGNED ON BEHALF OF QUÉBEC. 

Dated: ____________________

____________________________
Authorized Official 

 

 

 

 

FISCAL AGENT’S CERTIFICATE 
OF AUTHENTICATION

This is one of the Notes referred to in the

within-mentioned Fiscal Agency Agreement. 

CITIBANK, N.A., as Fiscal Agent 

 

___________________________ 
Authorized Officer 

D-6 

QUÉBEC 
GLOBAL MEDIUM-TERM NOTE 
SERIES A

FLOATING RATE 

General 

This Global Note is one of a duly
authorized issue of Medium-Term Notes, Series A (the “Notes”), Due Nine Months
or More from Date of Issue, as selected by the purchaser and agreed to by
Québec. The Notes are issuable in a single series under a fiscal agency
agreement, dated as of May 30, 2002, as may be amended or supplemented from time
to time (the “Fiscal Agency Agreement”), among Québec and Citibank, N.A., as
fiscal agent (the “Fiscal Agent”, which term shall include, unless the context
otherwise requires, its successors and assigns), in an aggregate initial
offering price of up to U.S.$5,000,000,000 at any one time outstanding, or the
equivalent thereof in other currencies at the Market Exchange Rate (as defined
below) on the applicable settlement dates in the case of Notes denominated in a
Foreign Currency. The foregoing limit, however, may be increased by Québec if in
the future it determines that it may wish to sell additional Notes. The Fiscal
Agency Agreement may be amended or supplemented from time to time in accordance
with the terms thereof, but any such amendment or supplement will not affect the
rights of the Holder hereunder. 

Pursuant to the Calculation Agency
Agreement, dated December 11, 2003, between Québec and the Fiscal Agent, and the
Fiscal Agency Agreement, the Fiscal Agent has been appointed as the calculation
agent to determine the interest rate on the Floating Rate Notes (the
“Calculation Agent”, which term shall include, unless the context otherwise
requires, its successors and assigns).

As used herein, “Maturity Date”, when
used with respect to this Global Note, means the date on which the Principal
Amount of this Note or any part thereof becomes due and payable, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise. 

Interest 

D-7 

General 

Commencing with the first Interest
Reset Date specified on the face hereof following the Issue Date, the rate at
which interest on this Global Note is payable shall be adjusted
daily, weekly, monthly, quarterly, semi-annually or annually as specified on the
face hereof under “Interest Rate Reset Period”; provided, however,
that the interest rate in effect for the period from the Issue Date to the first
Interest Reset Date will be the Initial Interest Rate. If any Interest Reset
Date would otherwise be a day that is not a Business Day (as defined below),
such Interest Reset Date shall be postponed to the next succeeding day that is a
Business Day, except that in the case the Interest Rate Basis is LIBOR or
EURIBOR, as specified on the face hereof, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date, the rate of interest on this
Global Note shall be calculated by reference to the applicable Interest Rate
Basis below and the Spread or a Spread Multiplier, if any. The Calculation Agent
will determine the interest rate for each subsequent Interest Reset Date on the
basis of the applicable Interest Rate Basis as follows: 

Determination of CD
Rate. The CD Rate for each Interest Reset Date will be determined
as of the second Business Day prior to the Interest Reset Date (a “CD Rate
Interest Determination Date”). 

The CD Rate will be the rate on the CD
Rate Interest Determination Date for negotiable U.S. dollar certificates of
deposit having the Index Maturity specified on the face hereof as published in
H.15(519) (as defined below) under the heading “CDs (secondary market)” or, if
not so published by 3:00 P.M., New York City time, on the related Calculation
Date, the rate on such CD Rate Interest Determination Date for negotiable U.S.
dollar certificates of deposit of the Index Maturity specified on the face
hereof, as published in H.15 Daily Update (as defined below), or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption “CDs (secondary market)”. If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent, after consultation with Québec,
for negotiable U.S. dollar certificates of deposit of major United States money
center banks with a remaining maturity closest to the Index Maturity
specified on the face hereof, in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the dealers
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.

D-8

“H.15(519)” means the weekly
statistical release designated as such, published by the Board of Governors of
the Federal Reserve System and available on their website at
http://www.federalreserve.gov/releases/h15/current, or any successor site or
publication. 

“H.15 Daily Update” means the daily
update of H.15(519), available through the worldwide web site of the Board of
Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication. 

Determination of CMT
Rate. The CMT Rate for each Interest Reset Date will be
determined as of the second Business Day prior to the Interest Reset Date (a
“CMT Rate Interest Determination Date”), and will equal: (A) If “Reuters Page
FRBCMT” (as defined below) is specified on the face hereof: 

(a)           a
rate equal to the yield for United States Treasury securities at constant
maturity having the Designated CMT Maturity Index (as defined below) specified
on the face hereof, as published in H.15(519) under the caption “Treasury
constant maturities”, as the yield is displayed on Reuters (or any successor
service) on page FRBCMT under the caption “Treasury constant maturities” (or any
other page as may replace the specified page on that service) (“Reuters Page
FRBCMT”), on the particular CMT Rate Interest Determination Date, or 

(b)           if
the rate referred to in clause (a) does not so appear on the Reuters Page
FRBCMT, the rate equal to the yield for United States Treasury securities at
constant maturity having the particular Designated CMT Maturity Index and for
the particular CMT Rate Interest Determination Date as published in H.15(519)
under the caption “Treasury constant maturities”, or

D-9

(c)           if
the rate referred to in clause (b) does not so appear in H.15(519), the rate on
the particular CMT Rate Interest Determination Date for the period of the
particular Designated CMT Maturity Index as may then be published by either the
Board of Governors of the Federal Reserve System or the United States Department
of the Treasury that the Calculation Agent determines to be comparable to the
rate which would otherwise have been published in H.15(519), or 

(d)           if
the rate referred to in clause (c) is not so published, the rate on the
particular CMT Rate Interest Determination Date calculated by the Calculation
Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on that CMT
Rate Interest Determination Date of three leading primary United States
government securities dealers in The City of New York (which may include the
Agents or their affiliates) (each, a “Reference Dealer”), selected by the
Calculation Agent from five Reference Dealers, selected by the Calculation
Agent, and eliminating the highest quotation, or, in the event of equality, one
of the highest, and the lowest quotation or, in the event of equality, one of
the lowest, for United States Treasury securities with an original maturity
approximately equal to the particular Designated CMT Maturity Index, a remaining
term to maturity no more than one year shorter than that Designated CMT Maturity
Index and in a principal amount that is representative for a single transaction
in the securities in that market at that time, or 

(e)           if
fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on the particular CMT Rate Interest
Determination Date calculated by the Calculation Agent based on the arithmetic
mean of the bid prices obtained and neither the highest nor the lowest of the
quotations shall be eliminated, or 

(f)           if
fewer than three prices referred to in clause (d) are provided as requested, the
rate on the particular CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the
secondary market bid prices as of approximately 3:30 P.M., New York City time,
on that CMT Rate Interest Determination Date of three Reference Dealers from
five Reference Dealers, selected by the Calculation Agent, and eliminating the
highest quotation or, in the event of equality, one of the highest and the lowest quotation
or, in the event of equality, one of the lowest, for United States Treasury
securities with an original maturity greater than the particular Designated CMT
Maturity Index, a remaining term to maturity closest to that Designated CMT
Maturity Index and in a principal amount that is representative for a single
transaction in the securities in that market at that time, or

D-10

 (g)         
 if fewer than five but more than two prices referred to in clause (f) are
provided as requested, the rate on the particular CMT Rate Interest
Determination Date calculated by the Calculation Agent based on the arithmetic
mean of the bid prices obtained and neither the highest nor the lowest of the
quotations will be eliminated, or 

(h)           if
fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on the particular CMT Rate Interest Determination Date, or

(i)           if
two such United States Treasury securities with an original maturity greater
than the Designated CMT Maturity Index have remaining terms to maturity equally
close to such Designated CMT Maturity Index, the quotes for the Treasury
security with the shorter original term to maturity will be used.

(B) if the “Reuters Page FEDCMT” (as
defined below) is specified on the face hereof:

(a)         
 the rate equal to the one-week or one-month, as specified on the face
hereof, average yield for United States Treasury securities at constant maturity
having the Designated CMT Maturity Index, as published in H.15(519) opposite the
caption “Treasury constant maturities”, as the yield is displayed on Reuters on
page FEDCMT under the caption “Treasury constant Maturities” (or any other page
as may replace the specified page on that service) (“Reuters Page FEDCMT”), for
the one-week or one-month, as applicable, ended immediately preceding the week
or month, as applicable, in which such CMT Rate Interest Determination Date
falls, or 

(b)           if
the rate referred to in clause (a) does not so appear on the Reuters Page
FEDCMT, the rate equal to the one-week or one-month, as applicable, average
yield for United States Treasury securities at constant maturity having the
particular Designated CMT Maturity Index for the week or month, as applicable,
preceding such CMT Rate Interest Determination Date
as published in H.15(519) opposite the caption “Treasury constant maturities,”
or 

D-11

(c)           if
the rate referred to in clause (b) does not so appear in H.15(519), the one-week
or one-month, as applicable, average yield for United States Treasury securities
at constant maturity having the particular Designated CMT Maturity Index as
otherwise announced by the Federal Reserve Bank of New York for the one-week or
one-month, as applicable, ended immediately preceding the week or month, as
applicable, in which such CMT Rate Interest Determination Date falls, or 

(d)           if
the rate referred to in clause (c) is not so published, the rate on the
particular CMT Rate Interest Determination Date calculated by the Calculation
Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on that CMT
Rate Interest Determination Date of three Reference Dealers from five Reference
Dealers, selected by the Calculation Agent, and eliminating the highest
quotation, or, in the event of equality, one of the highest, and the lowest
quotation or, in the event of equality, one of the lowest, for United States
Treasury securities with an original maturity approximately equal to the
particular Designated CMT Maturity Index, a remaining term to maturity no more
than one year shorter than that Designated CMT Maturity Index and in a principal
amount that is representative for a single transaction in such securities in
that market at that time, or 

(e)           if
fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on the particular CMT Rate Interest
Determination Date calculated by the Calculation Agent based on the arithmetic
mean of the bid prices obtained and neither the highest nor the lowest of the
quotations will be eliminated, or 

(f)           if
fewer than three prices referred to in clause (d) are provided as requested, the
rate on the particular CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the
secondary market bid prices as of approximately 3:30 P.M., New York City time,
on that CMT Rate Interest Determination Date of three Reference Dealers from
five Reference Dealers, selected by the Calculation Agent, and eliminating the
highest quotation or, in the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for United States Treasury
securities with an original maturity greater than the particular Designated CMT
Maturity Index, a remaining term to maturity closest to that Designated CMT
Maturity Index and in a principal amount that is representative for a single
transaction in the securities in that market at the time, or 

D-12

(g)           if
fewer than five but more than two prices referred to in clause (f) are provided
as requested, the rate on the particular CMT Rate Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest or the lowest of the quotations will be
eliminated, or 

(h)           if
fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on that CMT Rate Interest Determination Date, or 

(i)           if
two such United States Treasury securities with an original maturity greater
than the Designated CMT Maturity Index have remaining terms to maturity equally
close to such Designated CMT Maturity Index, the quotes for the United States
Treasury security with the shorter original term to maturity will be used.

“Designated CMT Maturity Index” means
the original period to maturity of the U.S. Treasury securities (either 1, 2, 3,
5, 7, 10, 20 or 30 years) specified on the face hereof with respect to which the
CMT Rate will be calculated. If no maturity date is specified on the face
hereof, the Designated CMT Maturity Index will be 2 years. 

Determination of Commercial Paper
Rate. The Commercial Paper Rate for each Interest Reset Date will be
determined as of the Business Day prior to the Interest Reset Date (a
“Commercial Paper Rate Interest Determination Date”), and will be the Money
Market Yield (as defined below) on that date of the rate for commercial paper
having the Index Maturity specified on the face hereof, as published in
H.15(519) under the caption “Commercial Paper—Nonfinancial” or, if not so
published by 3:00 P.M., New York City time, on the related Calculation Date, the
Money Market Yield on such Commercial Paper Rate Interest Determination Date for
commercial paper having the Index Maturity specified on the face hereof, as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption “Commercial
Paper—Nonfinancial”. If such rate is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00
P.M., New York City time, on such Calculation Date, then the Commercial Paper
Rate on such Commercial Paper Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the Money Market Yield of the
arithmetic mean of the offered rates at approximately 11:00 A.M., New York City
time, on such Commercial Paper Rate Interest Determination Date of three leading
dealers of U.S. dollar commercial paper in The City of New York (which may
include the Agents or their affiliates) selected by the Calculation Agent, after
consultation with Québec, for commercial paper having the Index Maturity
specified on the face hereof, placed for industrial issuers whose bond rating is
“Aa”, or the equivalent, from a nationally recognized statistical rating
organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.

D-13

“Money Market Yield” will be a yield
(expressed as a percentage) calculated in accordance with the following formula:

	  	  	D ×
      360 × 100 
	Money 	Market 	360 – (D × 
	Yield = 	  	M) 

where “D” refers to the applicable per
annum rate for commercial paper quoted on a bank discount basis and expressed as
a decimal and “M” refers to the actual number of days in the Interest Payment
Period for which interest is being calculated. 

Determination of
EURIBOR. EURIBOR for each Interest Reset Date will be determined
as of the second TARGET Settlement Day (as defined below) prior to the Interest
Reset Date (a “EURIBOR Interest Determination Date”). 

EURIBOR on each EURIBOR Interest
Determination Date will be the rate for deposits in euro as sponsored,
calculated and published jointly by the European Banking Federation and ACI—The
Financial Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, having the Index Maturity
as specified on the face hereof, commencing on the applicable Interest Reset
Date, that appears on Reuters on page EURIBOR#01 (or any other page as may
replace such page on such service) (“Reuters Page EURIBOR#01”) as of 11:00 A.M.,
Brussels time, on such EURIBOR Interest Determination Date; or if no such rate
so appears, EURIBOR on such EURIBOR Interest Determination Date will be
determined in accordance with the provisions described in the paragraphs
below.

D-14

With respect to a EURIBOR Interest
Determination Date on which no rate appears on the Reuters Page EURIBOR#01 as
specified in the paragraph above, the Calculation Agent will request the
principal Euro-zone office of each of four major reference banks (which may
include the Agents or their affiliates) in the Euro-zone interbank market, as
selected by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in euro for the period of the Index Maturity
specified on the face hereof, commencing on the applicable Interest Reset Date,
to prime banks in the Euro-zone interbank market at approximately 11:00 A.M.,
Brussels time, on such EURIBOR Interest Determination Date and in a principal
amount not less than the equivalent of US$1,000,000 in euros that is
representative for a single transaction in euro in such market at such time. If
at least two such quotations are so provided, then EURIBOR on such EURIBOR
Interest Determination Date will be the arithmetic mean of such quotations.

If fewer than two such quotations are
so provided, then EURIBOR on such EURIBOR Interest Determination Date will be
the arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels
time, on such EURIBOR Interest Determination Date by four major banks (which may
include Agents or their affiliates) in the Euro-zone selected by the Calculation
Agent for loans in euro to leading European banks, having the Index Maturity
specified on the face hereof, commencing on that Interest Reset Date and in a
principal amount not less than the equivalent of US$1,000,000 in euros that is
representative for a single transaction in euro in such market at such time.

If the banks so selected by the
Calculation Agent are not quoting as mentioned in the foregoing paragraph,
EURIBOR determined as of such EURIBOR Interest Determination Date will be
EURIBOR in effect on such EURIBOR Interest Determination Date.

“Euro-zone” means the region comprised
of member states of the European Union that have adopted the single currency in
accordance with the Treaty on European Union signed at Maastricht on February 7,
1992. 

D-15

“TARGET Settlement Day” means a day on
which the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) system, or any successor system, is open for business. 

Determination of Federal Funds
Rate. The Federal Funds Rate for each Interest Reset Date will be
determined as of the Business Day prior to the Interest Reset Date (a “Federal
Funds Rate Interest Determination Date”) and will be the rate with respect to
such date for U.S. dollar federal funds as published in H.15(519) opposite the
heading “Federal funds (effective)” and that appears on Reuters (or any
successor service) on Reuters Page FEDFUNDS1 (or any other page as may replace
such page on such service) under the heading “EFFECT” or, if such rate does not
appear on Reuters Page FEDFUNDS1 or is not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate with respect to such
Federal Funds Rate Interest Determination Date for U.S. dollar federal funds as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, opposite the caption “Federal funds
(effective)”. If such rate does not appear on Reuters Page FEDFUNDS1 or is not
yet published in H.15(519), H.15 Daily Update or another recognized electronic
source by 3:00 P.M., New York City time, on the related Calculation Date, then
the Federal Funds Rate with respect to such Federal Funds Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight U.S. dollar
federal funds arranged by three leading brokers of U.S. dollar federal funds
transactions in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent, after consultation with Québec
prior to 9:00 A.M., New York City time, on the Business Day following such
Federal Funds Rate Interest Determination Date; provided, however, that if the
brokers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date. 

Determination of LIBOR.
LIBOR will be the London interbank offered rate for deposits in the index
currency specified on the face hereof. LIBOR for each Interest Reset Date will
be determined as of the second London Business Day prior to the Interest Reset
Date (a “LIBOR Interest Determination Date”) and will be determined in
accordance with the following provisions:

D-16

(A) LIBOR will be the rate for deposits
in the Designated LIBOR Currency for a period of the Index Maturity specified on
the face hereof, commencing on the applicable Interest Reset Date, that appears
on the Designated LIBOR Page as of 11:00 A.M., London time, on that LIBOR
Interest Determination Date, or if no such rate so appears, LIBOR on such LIBOR
Interest Determination Date will be determined in accordance with the provisions
described in clause (B) below.

(B) With respect to a LIBOR Interest
Determination Date on which no rate appears on the Designated LIBOR Page as
specified in clause (A) above, the Calculation Agent will request the principal
London offices of each of four major reference banks (which may include the
Agents or their affiliates) in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered quotation
for deposits in the Designated LIBOR Currency for the period of the Index
Maturity specified on the face hereof, commencing on the applicable Interest
Reset Date, to prime banks in the London interbank market at approximately 11:00
A.M., London time, on such LIBOR Interest Determination Date and in a principal
amount that is representative for a single transaction in the Designated LIBOR
Currency in such market at that time. If at least two quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of those quotations. If fewer than two quotations are so
provided, then LIBOR on that LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on such LIBOR Interest Determination Date
by three major banks (which may include the Agents or their affiliates) in such
Principal Financial Center selected by the Calculation Agent for loans in the
Designated LIBOR Currency to leading European banks, having the Index Maturity
specified on the face hereof, commencing on that Interest Reset Date and in a
principal amount that is representative for a single transaction in the
Designated LIBOR Currency in such market at that time; provided, however, that
if the banks so selected by the Calculation Agent are not quoting as mentioned
in this sentence, LIBOR determined as of that LIBOR Interest Determination Date
will be LIBOR in effect on that LIBOR Interest Determination Date. 

“Designated LIBOR Currency” means the
currency specified on the face hereof, as to which LIBOR will be calculated or,
if no such currency is specified on the face hereof, US dollars.

D-17

“Designated LIBOR Page” means the
display on Reuters on page LIBOR01 or LIBOR02, as specified on the face hereof
(or any other page as may replace such page on such service), for the purpose of
displaying the London interbank rates of major banks (which may include the
Agents or their affiliates) for the Designated LIBOR Currency.

“Principal Financial Center” as used
herein shall be the capital city of the country of the Index Currency specified
on the face hereof, except that with respect to Canadian dollars, euros, Swiss
francs and United States dollars, the Principal Financial Center shall be
Montréal, Brussels, Zurich and The City of New York, respectively. 

Determination of Prime
Rate. The Prime Rate for each Interest Reset Date will be
determined on the Business Day prior to the Interest Reset Date (a “Prime Rate
Interest Determination Date”) and, unless otherwise specified on the face
hereof, will be the rate on such date as such rate is published in H.15(519)
opposite the caption “Bank prime loan” or, if not published prior to 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on that Prime Rate
Interest Determination Date as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate,
opposite the caption “Bank prime loan”. If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Prime Rate
shall be the arithmetic mean, as determined by the Calculation Agent, of the
rates of interest publicly announced by each bank that appears on Reuters on
page USPRIME1 (or any other page as may replace such page on such service for
the purpose of displaying prime rates or base lending rates of major United
States banks) (“Reuters Page USPRIME1”) as that bank’s prime rate or base
lending rate as of 11:00 A.M., New York City time, on such Prime Rate Interest
Determination Date. If fewer than four such rates so appear on Reuters Page
USPRIME1 for that Prime Rate Interest Determination Date by 3:00 P.M., New York
City time on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean calculated by the Calculation Agent of the prime rates or base
lending rates (quoted on the basis of the actual number of days in the year
divided by a 360-day year) as of the close of business on such Prime Rate
Interest Determination Date by three major banks (which may include the Agents
or their affiliates) in The City of New York selected by the Calculation Agent,
after consultation with Québec; provided, however, that if the banks so selected
by the Calculation Agent are not quoting as mentioned in this sentence,
the Prime Rate determined as of such Prime Rate Interest Determination Date will
be the Prime Rate in effect on such Prime Rate Interest Determination Date. 

D-18

Determination of Treasury
Rate. The Treasury Rate for each Interest Reset Date will be the rate
from the auction held on the Treasury Rate Interest Determination Date (the
“Auction”) of direct obligations of the United States (“Treasury Bills”) having
the Index Maturity specified on the face hereof, under the caption “INVEST RATE”
on the display on Reuters (or any successor service) on page USAUCTION10 (or any
other page as may replace such page on such service) (“Reuters Page
USAUCTION10”) or page USAUCTION11 (or any other page as may replace such page on
such service) (“Reuters Page USAUCTION11”) or, if not so published by 3:00 P.M.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
(as defined below) of the auction rate of those Treasury Bills as announced by
the U.S. Department of the Treasury. In the event that the auction rate of
Treasury Bills having the Index Maturity specified on the face hereof, is not so
announced by the U.S. Department of the Treasury, or if no such Auction is held,
then the Treasury Rate will be the Bond Equivalent Yield of the rate on that
Treasury Rate Interest Determination Date of Treasury Bills having the Index
Maturity specified on the face hereof, as published in H.15(519) under the
caption “U.S. Government securities/Treasury bills (secondary market)” or, if
not yet published by 3:00 P.M., New York City time, on the related Calculation
Date, the rate on that Treasury Rate Interest Determination Date of such
Treasury Bills as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
caption “U.S. Government securities/Treasury bills (secondary market)”. If that
rate is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the Treasury Rate will be calculated by the Calculation Agent and
will be the Bond Equivalent Yield of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 P.M., New York City time, on that Treasury
Rate Interest Determination Date, of three leading primary U.S. government
securities dealers (which may include the Agents or their affiliates) selected
by the Calculation Agent after consultation with Québec, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity specified
on the face hereof; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate determined as of that Treasury Rate Interest Determination
Date will be the Treasury Rate in effect on that Treasury Rate Interest
Determination Date.

D-19

“Bond Equivalent Yield” will be a yield
(expressed as a percentage) calculated according to the following formula: 

	Bond Equivalent Yield 	= 	D × N
      × 100 
	  	  	360 – (D × M) 

where “D” refers to the applicable per
annum rate for Treasury Bills quoted on a bank discount basis and expressed as a
decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the
actual number of days in the Interest Payment Period for which interest is being
calculated. 

Maximum/Minimum Interest
Rate

Notwithstanding the foregoing, the
interest rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, specified on the face
hereof. The Calculation Agent shall calculate the interest rate hereon in
accordance with the foregoing on or before each Calculation Date. The interest
rate on this Global Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application. 

Interest Calculations

The Calculation Date, if applicable,
pertaining to any Interest Determination Date is the earlier of (i) the tenth
calendar day after such Interest Determination Date or if any such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity Date,
as the case may be. 

At the request of the Holder hereof,
the Calculation Agent will provide to the Holder hereof the interest rate hereon
then in effect and, if determined, the interest rate which will become effective
as of the next Interest Reset Date. 

Accrued interest hereon shall be an
amount calculated by multiplying the Principal Amount as specified on the face
hereof by an accrued interest factor, expressed as a decimal. Such accrued
interest factor is computed by adding the interest factors calculated for each
day from the Issue Date, or from the last date
to which interest has been paid or duly provided for, to but excluding the date
for which accrued interest is being calculated. The interest factor for each
such day is computed by dividing the interest rate applicable to such day by 360
if the Interest Rate Basis is CD Rate, Commercial Paper Rate, Federal Funds
Rate, LIBOR, EURIBOR or Prime Rate, as specified on the face hereof, or by the
actual number of days in the year if the Interest Rate Basis is CMT Rate or
Treasury Rate, as specified on the face hereof. For purposes of disclosure under
the Interest Act (Canada), the yearly rate of interest which is equivalent to
the rate of interest payable on this Global Note, except if the Interest Rate
Basis of this Global Note is the CMT Rate or Treasury Rate, is the interest rate
payable from time to time multiplied by the number of days in the year and
divided by 360. 

D-20

Rounding

All percentages resulting from any
calculation on this Global Note will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards (e.g., 9.876545% (or 0.09876545) being
rounded to 9.87655% (or 0.0987655)), and all dollar amounts used in or resulting
from such calculation on this Note will be rounded to the nearest cent or, if
this Note is denominated in a Foreign Currency, the nearest unit (with one half
cent or unit being rounded upwards). 

Payments

General 

In the case where an Interest Payment
Date or a Maturity Date does not fall on a Business Day, any payment of
principal, premium or interest or Additional Amounts otherwise payable on such
day need not be made on such day, but may be made on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment
Date or Maturity Date and no interest shall accrue for the period from and after
such Interest Payment Date or Maturity Date to such next succeeding Business
Day, except that, in the case of payments of interest other than on the Maturity
Date, if the Interest Rate Basis of this Note is LIBOR or EURIBOR, as specified
above and such next Business Day falls in the next calendar month, such payment
shall be made on the immediately preceding Business Day with the same force and
effect as if made on such Interest Payment Date. As used herein, “Business Day”
means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions are authorized or required by law, regulation or
executive order to close in The City of New York; provided,
however, that (i) with respect to Notes as to which LIBOR is the
applicable Interest Rate Basis, such day is also a “London Business Day”; (ii)
with respect to Foreign Currency Notes the payment of which is to be made in a
Foreign Currency other than euros, such day is also a day on which banking
institutions are not authorized or required by law, regulation or executive
order to close in the Principal Financial Center of the country of the Foreign
Currency; and (iii) with respect to Foreign Currency Notes the payment of which
is to be made in euros, such day is also a TARGET Settlement Day. 

D-21

“London Business Day” means a day on
which commercial banks are open for business (including dealings in the Foreign
Currencies) in London, England. 

“Principal Financial Center”, as used
for the purpose of the definition of “Business Day”, shall be the capital city
of the country of the applicable Foreign Currency, except that with respect to
Canadian dollars, euros and Swiss francs, the Principal Financial Center shall
be Montréal, Brussels and Zurich, respectively. 

Payment of Additional
Amounts

All payments of principal and interest
by Québec to any holder who, as to Canada or any province, political subdivision
or taxing authority therein is a non-resident, will be made without withholding
or deduction for, or on account of, any present or future taxes, duties,
assessments or charges of whatever nature imposed or levied by or on behalf of
the Government of Canada or any province, territory or political division
thereof or any authority or agency therein or thereof having power to tax,
unless the withholding or deduction of such taxes, duties, assessments or
charges is required by law or by the interpretation or administration thereof.
In that event, Québec will, subject to its redemption rights pursuant to the
Fiscal Agency Agreement and the Global Notes, pay to the holder of the Notes
such additional amounts (the “Additional Amounts”) as may be necessary in order
that the net amounts receivable by the beneficial holder of the Notes after such
withholding or deduction shall equal the respective amounts of principal or
interest which would have been receivable in respect of the Global Notes in the
absence of such withholding or deduction; except that no such Additional Amount
shall be payable with respect to any Global Note: (i) to, or to a third party on
behalf of, a holder or a beneficial holder who is liable to such taxes,
duties, assessments or charges in respect of such Global Note by reason of that
person having some connection with Canada other than the mere holding or use
outside Canada, or ownership as a non-resident of Canada, of such Global Note;
or (ii) presented for payment more than 30 days after the Relevant Date (as
defined below) except to the extent that the holder thereof would have been
entitled to such Additional Amounts on presenting the same for payment on or
before such thirtieth day. As used herein, “Relevant Date” means: (A) the date
on which such payment first becomes due; or (B) if the full amount of the moneys
payable has not been received by the fiscal agent on or prior to such date, the
date on which, the full amount of such moneys having been so received, notice to
that effect is duly given to the holders of the Global Notes in accordance with
the notice procedures described under “Notices” below. 

D-22

Original Issue Discount
Note

If this Global Note is designated on
the face hereof as an Original Issue Discount Note, then, notwithstanding
anything to the contrary contained in this Global Note, upon the redemption,
repayment or acceleration of the Stated Maturity of this Global Note there shall
be payable, in lieu of the Principal Amount due at the Stated Maturity hereof,
an amount equal to the Amortized Face Amount of this Global Note. The “Amortized
Face Amount” shall be the amount equal to (i) the Issue Price (as defined below)
of this Global Note, plus (ii) that portion of the difference between the Issue
Price and the Principal Amount of this Global Note that has been amortized at
the Stated Yield (as defined below) of this Global Note (computed in accordance
with generally accepted United States bond yield computation principles) at the
date as of which the Amortized Face Amount is calculated, but in no event shall
the Amortized Face Amount exceed the Principal Amount of this Global Note. As
used in the previous sentence “Issue Price” means the Principal Amount of this
Global Note less the Total Amount of OID of this Global Note specified on the
face hereof and the “Stated Yield” of this Global Note means the Yield to
Maturity specified on the face hereof (or if not so specified, the Yield to
Maturity compounded semi-annually and computed in accordance with generally
accepted United States bond yield computation principles) for the period from
the Issue Date of this Global Note to the Stated Maturity hereof on the basis of
its Issue Price and Principal Amount. 

D-23

Foreign Currency Note

If this Global Note is a Foreign
Currency Note, the principal and premium, if any, and interest and Additional
Amounts, if any, on this Global Note are payable by Québec in the Foreign
Currency shown on the face hereof. If the box under the heading “Payments of
Principal and Premium, if any, and Interest and Additional Amounts, if any”
shown on the face hereof marked “U.S. dollars” has been checked, Citibank, N.A.,
in its capacity as exchange rate agent, or such other person as shall be
appointed by Québec (the “Exchange Rate Agent”, which term shall include, unless
the context otherwise requires, its successors and assigns), will convert all
payments of principal and premium, if any, and interest and Additional Amounts,
if any, on this Global Note to U.S. dollars, unless an owner of a beneficial
interest in this Global Note elects to receive such payments in the Foreign
Currency as described below. Any U.S. dollar amount to be received by a Holder
of this Global Note will be based on either a bid quotation that the Exchange
Rate Agent or any of its affiliates quotes, which shall be a competitive
quotation in the market at that time for such a transaction, or a bid quotation
from a leading foreign exchange bank in The City of New York selected by the
Exchange Rate Agent, at 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date for purchase by the Exchange Rate
Agent of the Foreign Currency for U.S. dollars for settlement on such payment
date in the aggregate amount of the Foreign Currency due to all Holders of Notes
scheduled to receive U.S. dollar payments. All currency exchange risks and costs
will be borne by the Holder of this Global Note by deductions from such
payments. Notwithstanding the above, the owner of a beneficial interest in this
Global Note may elect to receive payment of the principal of and premium, if
any, and interest and Additional Amounts, if any, on this Global Note in the
Foreign Currency by transmitting a written request for such payment (and
designating at the same time the appropriate bank account to which the payment
will be made) to the participant through which its interest is held on or prior
to the applicable Record Date or at least fifteen days prior to the applicable
Maturity Date, as the case may be. Such participant must notify the Depositary
of such election and designated bank account on or prior to the third Business
Days after the applicable Record Date or at least ten days prior to the
applicable Maturity Date, as the case may be. Such Depositary must notify the
Fiscal Agent of such election and designated bank account on or prior to the
fifth Business Day after the applicable Record Date or at least ten days prior
to the applicable Maturity Date, as the case may be. Such request may be mailed
or hand delivered or sent by facsimile transmission. The owner of a beneficial
interest in this Global Note may elect to receive payment in the Foreign
Currency for all principal, premium and interest and Additional Amounts payments
and need not file a separate election for each payment. Such election will
remain in effect until revoked by written notice to the Fiscal Agent, but
written notice of any such revocation must be received by the Fiscal Agent on or
prior to the applicable Record Date or at least sixteen days prior to the
applicable Maturity Date, as the case may be. 

D-24

If the box under the heading “Payments
of Principal and Premium, if any, and Interest and Additional Amounts, if any”
shown on the face hereof marked “Foreign Currency” has been checked, payment of
principal and premium, if any, and interest and Additional Amounts, if any, will
be made in the Foreign Currency and an owner of a beneficial interest in this
Global Note will not have the option to elect payment in U.S. dollars. 

If the Foreign Currency is not
available for the payment of principal and premium, if any, and interest and
Additional Amounts, if any, with respect to this Global Note due to the
imposition of exchange controls or other circumstances beyond the control of
Québec, Québec will be entitled to satisfy its obligations to the Holder of this
Global Note by making such payment in U.S. dollars (i) on the basis of the
Market Exchange Rate (as defined below) on the date of the payment, or (ii) if
the Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate, or (iii) as the case may be, as
otherwise specified in “Other Provisions” on the face hereof. 

The Fiscal Agent will, subject to
applicable laws and regulations, make all payments in the Foreign Currency with
respect to this Global Note by wire transfers to the appropriate bank accounts
of which DTC or any other depositary through which this Global Note is held, as
the case may be, notifies the Fiscal Agent which shall be, where such payment is
made as a result of an election by an owner of a beneficial interest in this
Global Note as provided above, the accounts designated as provided above. 

In order for any Holder of this Global
Note entitled to receive payments of principal and premium, if any, and interest
and Additional Amounts, if any, in the Foreign Currency to receive such payments
by wire transfer, such Holder shall designate an appropriate bank account. Such
designation shall be made by filing the appropriate information with the Fiscal
Agent at its corporate trust office in The City of New York on or prior to the applicable Record Date or
at least sixteen days prior to the applicable Maturity Date, as the case may be.
The Fiscal Agent will, subject to applicable laws and regulations and until it
receives notice to the contrary, make such payment and all succeeding payments
to such Holder by wire transfer to the designated account. If a payment cannot
be made by wire transfer because the required information has not been received
by the Fiscal Agent on or before the requisite date, a notice will be mailed to
the Holder of this Global Note at its registered address requesting such
information and until such information has been received, no additional interest
will accrue. 

D-25

Québec will pay all administrative
costs imposed by banks in connection with making payments by wire transfer, but
any tax, assessment or governmental charge imposed upon such payments will be
borne by the Holder of this Global Note. 

The “Market Exchange Rate” with respect
to any Foreign Currency shall be the noon dollar buying rate in The City of New
York for cable transfers for such Foreign Currency as certified for customs
purposes by the Federal Reserve Bank of New York. 

Redemption at the Option of
Québec

If one or more Redemption Dates (or
ranges of such dates) is specified on the face hereof, this Global Note is
subject to redemption upon not less than thirty days’ and not more than sixty
days’ prior notice by mail, on any such date (or during any such range) as a
whole, or from time to time in part, in increments of U.S.$1,000 or such other
minimum denomination specified on the face hereof (provided that any remaining
Principal Amount hereof shall be at least U.S.$1,000 or such other minimum
denomination), at the election of Québec, at the Redemption Price (as defined
below) together with accrued interest to the Redemption Date; but any interest
payment due on an Interest Payment Date falling on or prior to the Redemption
Date will be payable to the Holder hereof (or one or more predecessor Notes) of
record at the close of business on the Record Date pertaining to such Interest
Payment Date. If applicable, the “Redemption Price” for any such redemption
shall be equal to the Initial Redemption Percentage specified on the face hereof
(as adjusted by the Annual Redemption Percentage Reduction specified on the face
hereof, if applicable) multiplied by the portion of the Principal Amount hereof
(or, if this Global Note is an Original Issue Discount Note, the portion of the
Amortized Face Amount hereof) to be redeemed; provided, however, that in no
event shall the Redemption Price be less than 100% of
the portion of the Principal Amount hereof (or, if this Global Note is an
Original Issue Discount Note, the portion of the Amortized Face Amount hereof)
to be redeemed. 

D-26

Notice of redemption having been given
as aforesaid, this Global Note (or the portion of the Principal Amount hereof so
to be redeemed) shall, on the Redemption Date, become due and payable at the
Redemption Price herein specified, and from and after such date (unless Québec
shall default in the payment of the Redemption Price and accrued interest) shall
cease to bear interest. 

In the case of any partial redemption
at the election of Québec of Notes, the Notes of a particular tenor to be
redeemed shall be selected by the Fiscal Agent not more than sixty days prior to
the Redemption Date by such method as the Fiscal Agent shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the Principal Amount of Notes. In the event of any redemption of this Global
Note in part only, a new Note or Notes of like tenor for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof, provided that such unredeemed portion shall be an authorized
denomination for Notes of this series. 

Repayment at the Option of
Holder

If one or more Optional Repayment Dates
(or ranges of such dates) is specified on the face hereof, this Global Note is
subject to repayment on any such date (or during any such range) or, if such
date is not a Business Day, on the first Business Day following such date, as a
whole or from time to time in part, in increments of U.S.$1,000 or such other
minimum denomination specified on the face hereof (provided that any remaining
Principal Amount hereof shall be at least U.S.$1,000 or such other minimum
denomination), at the election of the Holder hereof at the Repayment Price (as
defined below) together with accrued interest thereon to the Optional Repayment
Date, but any interest payment due on an Interest Payment Date falling on or
prior to the Optional Repayment Date will be payable to the Holder hereof of
record at the close of business on the Record Date pertaining to such Interest
Payment Date. Such election shall be effected by the Holder hereof delivering to
Québec at the corporate trust office of the Fiscal Agent in The City of New York
not less than thirty nor more than sixty days prior to the date on which this
Global Note is to be repaid, or during such other notice period specified on the
face hereof, a notice requesting such repayment in the form prescribed
below and specifying the date upon which this Global Note is to be repaid. Any
notice given by a Holder pursuant to this paragraph shall consist of this Global
Note with the form entitled “Option to Elect Repayment” set forth of the end of
this Global Note duly completed. Exercise of the repayment option by the Holder
hereof will be irrevocable. Unless otherwise specified on the face hereof, the
“Repayment Price” for any such repayment shall be 100% of the portion of the
Principal Amount hereof (or, if this Global Note is an Original Issue Discount
Note, the portion of the Amortized Face Amount hereof) to be repaid. 

D-27

Status of the Notes

The Notes shall rank equally among
themselves and with the other debt securities of Québec outstanding on the date
of this Global Note or issued hereafter. 

Form, Denomination and Registration

The Notes are fully registered, without
coupons, in authorized denominations of U.S.$1,000 and any integral multiple of
U.S.$1,000 in excess thereof, or, in the case of Notes denominated in a Foreign
Currency, the equivalent in the Foreign Currency (rounded to an integral
multiple of 1,000 units of such Foreign Currency) or such larger amount of such
Foreign Currency as may be specified on the face hereof. The Fiscal Agent has
been appointed registrar for the Notes, and Québec will cause the Fiscal Agent
to maintain at its corporate trust office in The City of New York a Note
Register for the registration and transfer of Notes. 

This Note is a Global Note registered
in the name of a nominee of the Depositary. This Global Note is exchangeable for
certificated Notes in definitive form (“Certificated Notes”) registered in the
name of a person other than the Depositary or its nominee only in the limited
circumstances hereinafter described. Unless and until it is exchanged in whole
or in part for Certificated Notes, this Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee
of the Depositary to the Depositary or another nominee of the Depositary, or by
the Depositary or the nominee of the Depositary to a successor of the Depositary
or a nominee of such successor. 

D-28

The Notes represented by this Global
Note are exchangeable for Certificated Notes of like tenor as such Notes in
denominations of U.S.$1,000 and integral multiples thereof only (i) if the
Depositary notifies Québec that it is unwilling or unable to continue as
Depositary for this Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and a successor Depositary is not appointed by Québec within 90 days
after receiving the notice or becoming aware that the Depositary is no longer
registered as the Depositary, or (ii) if Québec executes and delivers to the
Fiscal Agent a written notice that all Global Notes representing Notes shall be
exchangeable, or (iii) upon request to the Fiscal Agent by the Depositary,
acting on direct or indirect instructions of a Holder or any owner of a
beneficial interest in this Global Note, after an event of default entitling the
Holders to accelerate the Stated Maturity of the Notes represented by this
Global Note has occurred and is continuing, provided that if the
Depositary is unwilling or does not promptly make such request to the Fiscal
Agent, then any owner of a beneficial interest in this Global Note shall be
entitled to make such request with respect to such interest. If the exchange is
made pursuant to clause (iii), then the Notes represented by this Global Note
may be exchangeable for Certificated Notes in whole or in part. If the Notes
represented by this Global Note become exchangeable as provided above, Québec
shall issue or cause to be issued Certificated Notes upon registration of
transfer of, or in exchange for, Notes represented by this Global Note. Such
Certificated Notes shall be registered in such names as the Depositary shall
direct. All such exchanges will be free of charge, but Québec may require
payment of a sum sufficient to cover any tax or other governmental charge in
connection therewith. The date of registration of any Certificated Note
delivered upon any exchange or transfer of a Global Note shall be such that no
gain or loss of interest results from such exchange or transfer. The Fiscal
Agent shall not be required to make any transfers, registrations or exchanges of
Global Notes for a period of fifteen days preceding any Interest Payment Date.

In respect of any such issuance of
Certificated Notes, (i) Québec shall promptly provide the Fiscal Agent with a
sufficient number of Certificated Notes in blank form to proceed with such
issuance, (ii) the Depositary shall cause this Global Note to be delivered 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 the Depositary a new
Global Note in an aggregate principal amount equal to the unexchanged portion of
this Global Note and (v) the Fiscal Agent shall reduce accordingly the holdings
of the Holder on the Register. The Fiscal Agent shall have at least 30 days from
the date of its receipt of Certificated Notes and registration information to
authenticate and deliver such Certificated Notes. Such Certificated Notes shall
be registered in such names and in such denominations as DTC, pursuant to
instructions from its direct or indirect participants, shall direct and 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 be
valid obligations of Québec and shall be entitled to the same benefits under the
Fiscal Agency Agreement as the Global Notes. 

D-29

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

In the event of any redemption of Notes
represented by this Global Note at the election of Québec, the Fiscal Agent
shall not be required to (i) issue, register the transfer of or exchange Global
Notes of like tenor during a period beginning at the opening of business fifteen
days before any selection of such Notes to be redeemed and ending at the close
of business on the day of mailing of the relevant notice of redemption, or (ii)
register the transfer of or exchange this Global Note, or, except in the case of
a partial redemption, the unredeemed portion of this Global Note. Following the
exercise of any repayment option by the Holder hereof, the Fiscal Agent shall
not be required to issue, register the transfer of or exchange that portion of
this Global Note with respect to which such option has been exercised. 

Subject to the foregoing, this Global
Note is not exchangeable, except for a Global Note or Global Notes in an equal
aggregate Principal Amount to be registered in the name of the Depositary or its
nominee. 

D-30

Events of Default

In the event that (i) Québec shall
default in the payment of principal of or premium or interest or Additional
Amounts on this Global Note as and when the same shall be due and payable, and
such default shall continue for a period of 45 days, or (ii) default shall be
made in the due performance or observance by Québec of any covenant or agreement
contained in the Global Notes, other than the payment of principal, premium or
interest or Additional Amounts, or in the Fiscal Agency Agreement, and such
default shall continue for a period of 60 days, or (iii) Québec shall default in
the payment of any principal of or premium or interest or Additional Amounts on
any indebtedness (direct or under a guarantee) for borrowed money, other than
the Global Notes, as and when the same shall be due and payable, and such
default shall continue for a period of 45 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 U.S.$50,000,000
(or its equivalent in other currencies), then at any time thereafter and during
the continuance of such default the Holder of this Global Note (or its proxy)
may deliver or cause to be delivered to Québec (with a copy to the Fiscal Agent)
a written notice that such Holder elects to declare the principal of the Note or
Notes held by him (the serial number or numbers of the Global Note representing
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 (i) or (iii) above, on the 15th day after
delivery of such notice, or, in the cases falling within (ii) above, on the 30th
day after delivery of such notice, the principal of the Note or Notes referred
to in such notice plus any premium and accrued interest and Additional Amounts
thereon shall become due and payable at the places for payment herein specified,
unless prior to that time all such defaults theretofore existing shall have been
cured. 

Modification

The Fiscal Agency Agreement contains
provisions with respect to modifying or amending said Agreement either without
notice to, or the consent of, the holder of any Note or with the approval of the
holders of Notes. 

D-31

Future Holders

Any action by the Holder of this Global
Note shall bind all future Holders of this Global Note, and of any Note issued
in exchange or substitution herefor or in place hereof, in respect of anything
done or permitted by Québec or by the Fiscal Agent in pursuance of such action.

Notices

All notices to the Holders of Global
Notes will be given in writing mailed, first-class postage prepaid, to each
Holder at each Holder’s address as it appears in the Note Register. Any such
notice shall be deemed to have been given on the date of such mailing. 

However, when Certificated Notes are
outstanding, all notices to the Holders of Notes will be published in English 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 as 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. 

Office or Agency of Québec

So long as this Global Note shall be
outstanding, Québec will maintain an office or agency for the payment of the
principal of and premium, if any, and interest and Additional Amounts, if any,
on this Global Note as herein provided in The City of New York, and an office or
agency in The City of New York for the registration, transfer and exchange as
aforesaid of the Notes. Québec may designate other agencies for the payment of
said principal and premium, if any, and interest, and Additional Amounts, if
any, at such place or places (subject to applicable laws and regulations) as
Québec may decide. So long as there shall be a Fiscal Agent, Québec shall keep
the Fiscal Agent advised of the names and locations of such agencies, if any are
so designated. 

No recourse under or upon any covenant
contained in this Global Note or because of the creation of the indebtedness
represented hereby shall be had against any official or other representative,
past, present or future, as such, of Québec whether by
virtue of any statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, it being expressly agreed and understood that this Global
Note is solely the obligation of Québec and that no personal liability whatever
shall attach to or be incurred by any such officials or other representatives,
as such, because of the execution of this Global Note. 

D-32

Prescription

Under current Québec law, an action to
enforce a right to payment under the Notes may be prescribed if it is not
brought within three years of the date the payment is due.

Governing Law

The Notes shall be construed in
accordance 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, enforcement or execution against any property of any
order or judgment) made or given in connection with any proceedings arising out
of or in connection with the Fiscal Agency Agreement and the Notes. 

U.S. Dollars

Reference in this Global Note to “U.S.
dollars” is to the currency of the United States of America. 

D-33

OPTION TO ELECT REPAYMENT 

The undersigned hereby irrevocably
requests and instructs Québec to repay the within Global Note (or portion
thereof specified below) pursuant to its terms at the Repayment Price, to the
undersigned at: 

_________________________ 

_________________________ 

_________________________ 

_________________________ 

_________________________ 

(PLEASE PRINT OR TYPEWRITE NAME AND
ADDRESS INCLUDING POSTAL ZIP CODE OF THE UNDERSIGNED) If less than the entire
Principal Amount of the within Global Note is to be repaid, specify the portion
thereof which the Holder elects to have repaid:
_________________________________________________________ _______; and specify
the denomination or denominations (which shall not be less than the minimum
authorized denomination) of the Notes to be issued to the Holder for the portion
of the within Global Note not being repaid (in the absence of any such
specification, one such Global Note will be issued for the portion not being
repaid): _________________________________________________________ _______. 

Dated: _______________

	 	 
	 	
      NOTICE: This signature on this Option to Elect Repayment
      must correspond with the name as written upon the face of the within
      instrument in every particular without alteration or enlargement.
  

D-34

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