Document:

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         TRUST DEED dated for reference 9 August 2001

B E T W E E N:

                           NORSKE SKOG CANADA LIMITED
          a corporation amalgamated under the laws of British Columbia
                               (the "CORPORATION")

                                     - and -

                            THE CANADA TRUST COMPANY
              a trust company amalgamated under the laws of Canada
                                 (the "TRUSTEE")

RECITALS:

A. The  Corporation  has stated that it wishes to raise money for its  corporate
purposes and/or secure certain of its  obligations,  and with a view to doing so
wishes to create and issue Debentures in the manner provided in this Deed.

B. The Corporation has stated that all necessary resolutions of the directors of
the  Corporation  have been duly  enacted,  passed  and/or  confirmed  and other
proceedings taken and conditions complied with to make the creation and issue of
the Debentures  proposed to be issued  hereunder and this Deed and the execution
thereof legal,  valid and binding on the Corporation in accordance with the laws
relating to the Corporation.

         THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:

1.       FORM AND ISSUE OF DEBENTURES

1.1      LIMITATION AND TERMS OF ISSUE

         The  Debentures to be issued under and secured by this Deed are limited
to  an   aggregate   principal   amount  of  five   billion   Canadian   dollars
(Cdn.$5,000,000,000)  at any time and may be issued in one or more  series.  The
Debentures shall be designated as "Series A Debentures",  "Series B Debentures",
and so on if two or more series are issued,  but the  designation  of  different
series of Debentures  need not be  consecutive  so that,  for example,  Series C
Debentures may be issued without Series B Debentures having been issued.  Except
with respect to the letter A, series of Debentures  may also be designated  with
two or more letters, such as "Series BB Debentures" and "Series CCC Debentures".
Debentures of all series shall be designated  collectively as  "DEBENTURES"  and
shall be subject to the terms and conditions of this Deed.

         Each series of Debentures  designated by one or more letters may have a
corresponding  series which is  designated  as  "Ratable" so that,  for example,
there may be "Series A  Debentures,"  "Series BB  Debentures"  and  "Series  CCC
Debentures" and corresponding  "Series A Ratable Debentures," "Series

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BB Ratable  Debentures"  and  "Series  CCC  Ratable  Debentures,"  respectively.
Debentures  in  series  that  are   designated  as  "Ratable"  are  referred  to
collectively as "RATABLE DEBENTURES."

         Each series of Debentures  issued under this Deed shall rank in respect
of their entitlement to payment in priority  according to the alphabetical order
of their respective  series.  Accordingly,  all Series A Debentures and Series A
Ratable  Debentures,  whenever  issued or  certified,  shall have  priority over
Series B Debentures  and Series B Ratable  Debentures,  which shall in turn have
priority  over Series C Debentures  and Series C Ratable  Debentures  and so on.
Series of Debentures  designated with different numbers of the same letter shall
rank in priority  according to the number of letters in the designation so that,
for  example,   Series  BBB  Debentures  shall  have  priority  over  Series  BB
Debentures.  Debentures within a series and within any  corresponding  series of
Ratable  Debentures  (for  example,  Series B  Debentures  and  Series B Ratable
Debentures) shall rank pari passu with respect to entitlement to payment without
discrimination,  preference  or  priority of one  Debenture  of such series over
another or over the corresponding  Ratable  Debentures.  The Holders (as defined
below) of  Debentures of any series and of any  corresponding  series of Ratable
Debentures  shall be secured  equally and rateably  according  to the  principal
amount and interest  from time to time owing with  respect to each  Debenture of
such series,  provided that the principal amount and interest owing with respect
to any Debenture  shall be limited to the Pledge  Obligations (as defined below)
secured by such  Debenture,  rather than the principal  amount and interest rate
specified on the face of any such Debenture  pledged in accordance  with Section
1.3,  regardless of their  respective  dates of issue or  certification  of each
Debenture  of such  series.  In addition to the series of  Debentures  described
above,  there may be a series designated as "Series AB Debentures" which will be
treated  as Series A  Ratable  Debentures  so long as there  are no  issued  and
outstanding  Series B  Ratable  Debentures,  but if  there  are any  issued  and
outstanding  Series B  Ratable  Debentures,  the  Series AB  Debentures  will be
treated as Series B Ratable Debentures.

         The Holders of Ratable Debentures shall,  however,  only be entitled to
limited  voting  privileges  as specified in this Deed and voting  rights shall,
except as specified  in this Deed,  be exercised by the Holders of the series of
Debentures  having the  highest  priority of payment for the time being that are
not Ratable Debentures (the Holders of such Debentures being referred to in this
Deed as the "VOTING  HOLDERS" and the Debentures  held by the Voting Holders are
referred to in this Deed as the "VOTING DEBENTURES").

         The  priorities of the Debentures  contained  herein shall apply in all
events and circumstances regardless of:

         (a)      the date that any loan,  advance,  or other  accommodation  is
                  made to the  Corporation or any debt,  liability or obligation
                  is incurred by the Corporation; or

         (b)      the date of any default by the Corporation; or

         (c)      any priority granted by any principle of law or any statute;
                  or

         (d)      any other factor of legal relevance other than this Deed.

         No power  that is  exercised  by the  Holders,  or any of  them,  shall
detract from the rights of the other Holders  under the terms of the  respective
Pledge  Obligations  in the  case  of  Debentures  that  have  been  pledged  in
accordance with Section 1.3.

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         The  Debentures  may be issued to such  persons,  in such  amounts  not
exceeding the maximum amount set forth in this Section less the principal amount
of Debentures  outstanding (which, for greater certainty,  shall not include any
Debentures  previously  delivered to the Trustee for cancellation or discharge),
for such consideration and on such terms as the directors of the Corporation may
determine.  Further  Debentures  in any series  may be issued  from time to time
despite the issuance of Debentures in a subsequent series.

         No Debenture  may be issued  without the prior  written  consent of the
Voting  Holders,  such consent to be  conditional  on the Voting  Holders  being
satisfied, in their sole and absolute discretion,  with the terms and conditions
of the Pledge Agreement (as defined below) relating to such Debenture.

1.2      FORMS, TERMS AND PLACE OF PAYMENT

         Each Debenture shall be substantially in the form set out in Schedule A
to this Deed, shall be dated the date of certification by the Trustee,  shall be
payable,  subject to the terms of any agreement pursuant to which such Debenture
shall have been pledged in accordance  with Section 1.3 (a "PLEDGE  AGREEMENT"),
on demand in lawful  money of Canada at the  address  of the  holder or  holders
specified in the Debenture (the "HOLDERS",  which shall mean one or more persons
in whose name or names one or more Debentures are registered) and the Debentures
shall bear interest from their  respective  dates at the rate of twenty-five per
cent  (25%)  per  annum,  or at such  other  rate as may be  agreed  upon by the
Corporation and the Holders from time to time, payable,  subject to the terms of
any applicable Pledge Agreement,  on demand,  both before and after maturity and
default, with interest on overdue interest at the same rate. Each Debenture may,
but need  not,  be under  the seal of the  Corporation,  shall be  signed by any
officer or director of the Corporation and shall be certified by the Trustee and
delivered by the Trustee to or to the order of the  Corporation  upon receipt by
the  Trustee of an order in writing  signed by any  officer or  director  of the
Corporation.  The  Certificate  of  the  Trustee  shall  not be  construed  as a
representation  or warranty of the Trustee as to the validity or security of the
Deed or the Debentures.

1.3      PLEDGE OF DEBENTURES

         Each Debenture shall be pledged, hypothecated, issued or charged by the
Corporation  as security for payment by the  Corporation of certain or all debts
and  liabilities,  including debts and  liabilities in any currency,  present or
future,  direct or  indirect,  absolute  or  contingent,  matured or not,  for a
current or running  account or not, at any time owing by the  Corporation to the
Holder  thereof or any other person or persons for whose  benefit the Holder may
hold one or more Debentures  (collectively,  the "BENEFICIAL  HOLDERS",  each, a
"BENEFICIAL  HOLDER", and any reference to the "Beneficial Holders" herein shall
be  interpreted  as  referring  to "the  Beneficial  Holders or any of them") or
remaining  unpaid by the  Corporation  to the Holder  thereof or the  Beneficial
Holders,  whether  arising  from  dealings  between  the  Holder  thereof or the
Beneficial Holders and the Corporation or from any other dealings or proceedings
by which the Holder  thereof or the  Beneficial  Holders may be or become in any
manner  whatever a creditor  of the  Corporation,  and  wherever  incurred,  and
whether incurred by the Corporation alone or with another or others, and whether
as principal or surety, including expenses and all interest,  commissions, legal
and other  costs,  charges and  expenses  (the  "PLEDGE  OBLIGATIONS",  it being
understood  and agreed that the term "Pledge  Obligations"  as used in this Deed
shall mean,  as the context may require,  such  obligations  of the  Corporation
owing to a particular Holder, Holders or the Beneficial Holders hereunder or the
aggregate of such obligations of the Corporation owing to all the Holders or the
Beneficial Holders hereunder from time to time).

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1.4      REGISTRATION AND TRANSFER

         The Corporation  shall cause to be kept by the Trustee at its office in
the City of Toronto in the  Province  of  Ontario a register  in which  shall be
entered the names and  addresses  of the Holders  and  principal  amount of each
Debenture.  No  transfer  of a  Debenture  shall  be valid  unless  made on such
register by the  registered  holder or its successors or assigns or its or their
attorney  duly  appointed by an  instrument  in writing,  in form and  execution
satisfactory   to  the  Trustee,   and  upon  compliance  with  such  reasonable
requirements as the Trustee may prescribe. The ownership of the Debentures shall
be proved by such register. The registered Holders shall be considered to be the
owners  thereof  for all  purposes  of this  Deed and shall be  entitled  to the
principal monies and interest  evidenced by the Debentures without regard to any
set-off, counterclaim,  equities or compensation between the Corporation and the
Holders' transferors or any previous holders thereof.

1.5      CANCELLATION, RETIREMENT ETC. OF DEBENTURES

         Any Holder may deliver to the Trustee  from time to time one or more of
the Debentures  issued pursuant to this Deed and held by it for  cancellation or
retirement,  or  replacement,  consolidation  or  subdivision,  or to evidence a
reduction of the principal amount  outstanding from time to time. Subject to the
limitation  set forth in Section  1.1,  upon  receipt of such  Debentures  and a
resolution of the Holder  delivering such  Debentures  evidencing its intentions
with  respect  to  such  cancellation,   retirement,   replacement,   reduction,
subdivision or consolidation, the Trustee shall forthwith notify the Corporation
and the  Corporation  upon receipt of such  Debentures  shall forthwith issue in
accordance  with  the  terms  and  conditions  of this  Deed  such  replacement,
subdivided or consolidated  Debentures as may be requested by the Holders in the
aforesaid resolution (which replacement,  subdivided or consolidated  Debentures
may be delivered by the  Corporation  to the  applicable  Holder  subject to the
terms  and  conditions  contained  in  the  Pledge  Agreement  relating  to  the
previously issued  Debentures  returned by the Holder to the Trustee pursuant to
this Section 1.5),  or the Trustee may endorse any Debenture  with a notation of
the  reduction  of the  amount  thereof.  Upon  issuance  of  such  replacement,
subdivided  or  consolidated  Debentures,  or  endorsement  of  reduction of any
existing Debenture, as appropriate,  the Corporation shall cause to be made such
entries in the  register  provided  for in  Section  1.4 and the  Trustee  shall
certify such Debentures, subject to receipt of such documentation as the Trustee
may require, acting reasonably.

         In addition, if at any time all Debentures of a particular series other
than  Ratable  Debentures  are  delivered  to the  Trustee for  cancellation  or
retirement without issuance of additional or replacement  Debentures of the same
series,  the  cancellation  or retirement  does not result from payment with the
proceeds  of  realization  of  security  under  this  Deed,  and  there  are  no
outstanding  Debentures  that rank  subordinate  in  priority  of payment to the
Debentures  being cancelled or retired,  the  Corporation  may, at its option by
written   notice  to  the  Trustee,   cancel  all  Ratable   Debentures  of  the
corresponding  series then  outstanding,  without payment to the Holders of such
Ratable  Debentures but without prejudice to the Pledge  Obligations  secured by
the  Ratable  Debentures.  Any  series of  Debentures  cancelled  or  retired in
accordance with this Section 1.5 may be reissued in accordance with Section 1.1.

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2.       CHARGING PROVISIONS

2.1      FIXED AND FLOATING CHARGES AND SECURITY INTEREST

         In  consideration  of  the  premises  and  of one  dollar  ($1)  to the
Corporation now paid by the Trustee (receipt whereof is hereby acknowledged) and
for the  purpose of securing  the due  payment in lawful  money of Canada of the
Debentures  and of interest  thereon  and the  payment of all other  present and
future  debts,  liabilities  and  obligations  of the  Corporation  under  or in
connection with this Deed and the  Debentures,  including but not limited to all
Pledge  Obligations  and all  amounts  from  time to time due  hereunder  to the
Trustee  (collectively,  the "TRUST DEED OBLIGATIONS"),  but subject to Sections
2.2 and 2.3, the Corporation hereby:

         (a)      grants, conveys, assigns,  mortgages,  pledges and charges, as
                  and by way of a first specific mortgage, pledge and charge, to
                  and in favour of the Trustee and its  successors in the trust,
                  as Trustee for the benefit and security of the Holders all its
                  presently  owned  and  hereafter  acquired  or held  real  and
                  immovable property and rights and interests therein whether in
                  fee,  leasehold  or of a lesser  estate  (collectively,  "REAL
                  PROPERTY")  and all  interests in and rights  relating to land
                  and all  commons,  ways,  profits,  easements,  rights-of-way,
                  privileges, benefits, licenses,  improvements,  immunities and
                  rights whether connected  therewith or appurtenant  thereto or
                  separately  owned  or  held  and  all  structures,  buildings,
                  plants,  fixed machinery,  fixtures,  appurtenances  and other
                  assets belonging,  affixed or appurtenant  thereto,  including
                  without  departing  from the  generality  of the foregoing the
                  property  and  rights  and  interests   therein  described  in
                  Schedule B hereto, or created by any modifications or renewals
                  of the leases or other  instruments  described  in  Schedule B
                  from  time to time  and any  right or  option  to renew or any
                  option or right of first  refusal to lease or to purchase that
                  may be contained in any of the foregoing or held in connection
                  therewith,  together  with all leases and  agreements  entered
                  into from time to time  superseding  or  replacing  any of the
                  foregoing;

         (b)      assigns,  transfers,  sets over and grants to the  Trustee and
                  its  successors in the trust,  for the benefit and security of
                  the Holders, any and all rents or other moneys (collectively ,
                  the "RENTS")  due or accruing due or at any time  hereafter to
                  become due under any and all leases,  agreements  to lease and
                  tenancy agreements whether written or verbal, now or hereafter
                  existing, with respect to the Real Property (collectively, the
                  "LEASES")  and all benefits and  advantages to be derived from
                  the Leases,  and all guarantees of and security for payment of
                  amounts due under the Leases and all covenants of the tenants,
                  guarantors,  covenantors and indemnifiers  therein  contained,
                  and the right to  collect  and  receive  payment of the Rents,
                  together  with  all  the  right,  title  and  interest  of the
                  Corporation,  as  landlord,  in the  Leases  and any  renewals
                  thereof  and  options  to lease or  purchase,  if any  therein
                  contained;

         (c)      mortgages,  charges,  assigns and transfers to the Trustee and
                  its  successors in the trust,  for the benefit and security of
                  the  Holders  and  grants,  in favour of the  Trustee  and its
                  successors  in the trust,  for the benefit and security of the
                  Holders,  a security interest in all the Corporation's  right,
                  title and interest in and to all  presently  owned or held and
                  hereafter   acquired   or  held   personal   property  of  the
                  Corporation   (including   such  as  may  be  returned  to  or
                  repossessed by the Corporation),  of whatsoever nature or kind
                  and

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                  wheresoever    situate   and   all   proceeds   thereof,
                  substitutions   therefor  and  accretions  thereto  including,
                  without limiting the generality of the foregoing:

                  (i)      all   contractual   rights,   insurance   claims  and
                           licenses, patents, trademarks, trade names, goodwill,
                           copyrights  and  other  industrial  property  of  the
                           Corporation,  all  other  choses  in  action  of  the
                           Corporation  or every  kind  which now are,  or which
                           may,  at any  time  hereafter,  be due or owing to or
                           owned by the  Corporation  and all  other  intangible
                           property of the  Corporation  which is not Book Debts
                           (as  defined  below),  chattel  paper,   instruments,
                           documents of title, securities or money;

                  (ii)     all present and after-acquired licences (as such term
                           is  defined in THE  PERSONAL  PROPERTY  SECURITY  ACT
                           (British Columbia));

                  (iii)    all  debts,  accounts,   choses  in  action,  claims,
                           demands and monies now due or owing or  accruing  due
                           or which  may  hereafter  become  due or owing to the
                           Corporation,    including,   without   limiting   the
                           generality of the foregoing, claims against the Crown
                           in right of Canada or of any  Province,  monies which
                           may become  payable  under any policy of insurance in
                           respect of any loss by fire or other  cause which has
                           been   or  may  be   incurred   by  the   Corporation
                           (collectively  the "BOOK  DEBTS"),  together with all
                           contracts,  securities,  bills,  notes,  lien  notes,
                           judgements,  chattel  mortgages,  mortgages  and  all
                           other rights, benefits and documents now or hereafter
                           taken,  vested  in or  held  by  the  Corporation  in
                           respect of or as security  for the Book Debts  hereby
                           assigned or intended so to be or any part thereof and
                           the  full  benefit  and  advantage  thereof,  and all
                           rights  of   action,   claim  or  demand   which  the
                           Corporation now has or may at any time hereafter have
                           against any person or persons, firm or corporation in
                           respect thereof;  and all of the Corporation's deeds,
                           documents,  writings,  papers,  books of account  and
                           other books  relating  to or being  records of debts,
                           chattel  paper or documents of title or by which such
                           are  or  may   hereafter   be   secured,   evidenced,
                           acknowledged or made payable;

                  (iv)     all   present   and   after-acquired   chattel
                           paper, instruments, documents of title and
                           securities;

                  (v)      all present and after-acquired equipment,  including,
                           without  limiting the  generality  of the  foregoing,
                           machinery, tools, fixtures,  furniture,  furnishings,
                           chattels, motor vehicles, vessels, and other tangible
                           personal  property  that  is not  inventory,  and all
                           parts,    components,    attachments,    accessories,
                           accessions,  replacements,  substitutions,  additions
                           and improvements to any of the foregoing;

                  (vi)     all goods and chattels  now or hereafter  forming the
                           inventory of the Corporation,  of whatsoever kind and
                           wheresoever located, including,  without limiting the
                           generality of the foregoing, all goods,  merchandise,
                           raw materials,  work in progress,  finished goods and
                           chattels held for sale, lease or resale, or furnished
                           or to be  furnished  under  contracts  for service or
                           used or consumed in the business of the Corporation;

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                  (vii)    all cash,  instruments  and securities  that may from
                           time to time be deposited with or held by the Trustee
                           pursuant to this Trust Deed; and

                  (viii)   all of the Corporation's property in any form derived
                           directly or  indirectly  from any use or dealing with
                           any  of   the   above-described   personal   property
                           including,  without  limiting the  generality  of the
                           foregoing,  accounts  receivable,  bills of exchange,
                           insurance proceeds, chattel paper, intangibles, motor
                           vehicles,  and  all  other  after-required   property
                           constituting   proceeds   or  that   indemnifies   or
                           compensates  for  mortgaged   property  destroyed  or
                           damaged.

         (d)      charges as and by way of a floating charge to and in favour of
                  the Trustee for the benefit of the Holders,  and grants to the
                  Trustee for the benefit of the Holders a security  interest in
                  all of the present and  after-acquired  property,  undertaking
                  and assets of the  Corporation  for the time being,  both real
                  and personal,  movable and immovable of whatsoever  nature and
                  kind now owned or hereafter acquired (except such property and
                  assets as are validly and effectively subject to any fixed and
                  specific mortgages and charges created hereby),  including its
                  goodwill and uncalled capital.

         Without the  necessity  of any further  act of the  Corporation  or the
Trustee, the mortgages,  charges and security interests constituted hereby shall
automatically extend to and include:

         (e)      any and all renewals, replacements, substitutions, accessions,
                  proceeds,  products,  additions,  amendments,   modifications,
                  extensions or  consolidations of or to the assets and property
                  heretofore described;

         (f)      any and all  right,  title  and  interest  of the  Corporation
                  hereafter  acquired in or to any real or personal  property or
                  asset of any nature whatsoever; and

         (g)      any  and  all of the  Corporation's  right,  title,  interest,
                  property,  claims,  demands,  judgments,  awards, proceeds and
                  settlements or payments,  including interest thereon,  and the
                  right to  receive  the  same,  at law as well as in  equity or
                  otherwise, as a result of or by way of: (i) insurance proceeds
                  payable under all  insurance  policies of the  Corporation  or
                  (ii) any  injury or damage  to or any  taking,  expropriation,
                  requisitioning,   conversion  (voluntary  or  involuntary)  or
                  decrease  in  the  value  of  any  property  or  asset  of the
                  Corporation of any nature whatsoever.

         The Corporation's  undertaking and all its property and assets, present
and future, are herein called the "MORTGAGED PROPERTY".

2.2      RESERVATION OF LAST DAY OF LEASEHOLD TERMS

         The charge of the mortgaged property contained in Section 2.1 shall not
extend or apply to the last day of the term of any lease of real property or any
agreement therefor now held or hereafter acquired by the Corporation, but should
such charge become  enforceable the Corporation shall thereafter stand possessed
of such last day and shall  hold it in trust to  assign  the same to any  person
acquiring such term or the part thereof charged in the course of any enforcement
of the charge or any realization of the subject matter thereof.

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2.3      CONTRACTS, RIGHTS OR LICENSES

         The charge of the mortgaged property contained in Section 2.1 shall not
extend or apply to any  contract,  right,  license or other  property of similar
nature of the  Corporation,  if pursuant to the terms of such  contract,  right,
license or other  property  (i) such  charge  requires  the consent of the other
party thereto or the grantor  thereof and such consent has not yet been obtained
or (ii) such contract,  right,  license or other  property  would  automatically
terminate if it was part of the  mortgaged  property,  or would be terminable at
the option of the other  party to or of the  grantor  thereof,  but should  such
charge become  enforceable,  the Corporation shall thereafter stand possessed of
such  contract,  right,  license or other property and shall hold it in trust to
assign  the  same or  dispose  of the same to any  person  as  requested  by the
Trustee.  In order that the full value of all such contracts,  rights,  licenses
and  other  property  may be  realized  for  the  benefit  of the  Holders,  the
Corporation  shall at its expense and at the request of the Trustee from time to
time, request all such consents as may, in the reasonable opinion of the Trustee
(with advice of counsel as the Trustee considers  appropriate),  be necessary or
proper in order that all such  contracts,  rights,  licenses and other  property
shall  enure  to the  benefit  of the  Holders  and,  to the  extent  reasonably
possible, become subject to the charge constituted by this Deed.

2.4      CHARGE VALID IRRESPECTIVE OF ADVANCE

         The security constituted hereby or intended so to be shall be effective
whether the monies hereby  secured or any part thereof shall be advanced  before
or after or at the same time as the  execution  and delivery of this Deed or the
issue or certification of any of the Debentures.

2.5      ATTACHMENT

         The  Corporation   acknowledges  that  value  has  been  given  to  the
Corporation by the Holders in connection  with the  Corporation's  execution and
delivery  of this  Deed.  The  Corporation  and the  Holders  have not agreed to
postpone the time for  attachment  of the security  constituted  hereby which is
intended to attach, as to all of the mortgaged property in which the Corporation
has an interest at the time of the execution of this Deed, at such time,  and as
to all of the mortgaged  property in which the Corporation  acquires an interest
after the  execution of this Deed,  at the time the  Corporation  acquires  such
interest.

2.6      EXTENT OF SECURITY INTEREST

         The Corporation acknowledges that it has granted a security interest in
all of its present and after acquired property.

2.7      DEALING WITH ASSIGNMENT OF RENTS

         The Corporation  shall be permitted to collect and receive the Rents as
and when they shall become due and payable according to the terms of the Leases,
unless and until the security  constituted  hereby becomes  enforceable in which
case the Trustee (upon the  direction of the Voting  Holders) may give notice in
writing to the tenant, sub-tenant,  occupier,  licensee or guarantor advising of
any such event. In such event the Corporation  hereby  irrevocably  directs such
tenant,  sub-tenant,  occupier,  licensee or guarantor  to make  payments of the
Rents to the  Trustee  or as the  Trustee  (upon  the  direction  of the  Voting
Holders)  may  direct,  upon  being  furnished  with a copy of this Deed and the
aforesaid

                                     - 8 -
<PAGE>

notice in writing,  without any further direction or authority being required by
such tenant, sub-tenant, occupier, licensee or guarantor.

         Neither  the  execution  and  delivery  of  this  Deed,  including  the
assignment contained in Section 2.1(b) (the "ASSIGNMENT"),  nor anything done by
virtue  hereof shall render the Trustee a mortgagee in  possession or in any way
accountable  or liable as such;  nor shall the Trustee be or be deemed to be, or
to have  assumed  the status of a  landlord  by virtue of the  Assignment  or of
anything done by virtue hereof.

3.       COVENANTS

         The  Corporation  hereby  covenants and agrees with the Trustee for the
benefit of each Holder as follows:

3.1      PAYMENT

         It will pay or cause to be paid, when due, the Trust Deed Obligations.

3.2      NOT TO ENCUMBER

         It will not,  without the prior written  approval of the Voting Holders
(which may be evidenced  from time to time by a resolution of the Voting Holders
or, for any particular Voting Holder, by the terms of any agreement to which the
Voting  Holder and the  Corporation  are  parties  that  relates to the terms of
Pledge  Obligations  secured by a pledge of a Debenture in favour of that Voting
Holder),  create  or  permit  to exist any  mortgage,  hypothec,  charge,  lien,
encumbrance or other security  interest or lease upon or affecting the mortgaged
property or any part thereof.

3.3      COMPLY WITH ENVIRONMENTAL LAW

         It shall observe and comply in all material  respects at all times with
the  provisions  of all  applicable  laws  intended to protect  the  environment
("ENVIRONMENTAL LAWS").

3.4      INSURANCE

         It will cause all its property which is of a character  usually insured
by businesses  operating  properties of a similar nature to be properly  insured
and kept insured with reputable insurers against loss or damage by fire or other
hazards of the nature and to the extent that such properties are usually insured
by businesses  operating  properties of a similar  nature in the same or similar
localities  and shall  maintain such  insurance  with loss if any payable to the
Trustee and shall deliver to the Trustee evidence of such insurance satisfactory
to the Trustee and to the Voting  Holders.  Any proceeds of insurance under such
policies paid to the Trustee shall be  distributed by the Trustee as directed by
the Voting Holders.

3.5      TAXES AND OTHER CHARGES

         It shall pay (i) all  taxes,  levies,  imposts,  stamp  taxes,  duties,
deductions,  withholdings,  rents,  rates,  assessments,  fees,  dues and  other
similar governmental impositions payable, levied, collected,  withheld,  imposed
or  assessed  in  respect  of  the  mortgaged   property  or  any  part  thereof
(collectively "TAXES") and (ii) all charges, liens and other encumbrances on the
mortgaged  property  (collectively

                                     - 9 -
<PAGE>

"CHARGES")  as and when the same shall  become due and  payable  unless they are
being  contested  in good  faith  by  appropriate  proceedings  and it has  made
adequate  provision for payment of the contested amount. If the Corporation does
not pay any  Taxes or  Charges  as  contemplated  in the  immediately  preceding
sentence,  the Trustee may, but is not obligated to, at its option, elect to pay
any such amounts and charge to the Corporation all amounts so paid as additional
amounts secured under this Deed, together with interest thereon from the date of
payment by the Trustee of any such amounts at the rate of 3% per annum above the
prime lending rate of The  Toronto-Dominion  Bank (or other  Canadian  chartered
bank designated by the Trustee) from time to time in effect.

3.6      INFORMATION

         It will furnish to the Trustee (i) a certificate  of compliance as soon
as  practicable  and in any event  within  90 days  after the end of each of its
fiscal years and (ii) such  information  with respect to the mortgaged  property
and the insurance  thereon as the Trustee or the Voting Holders may from time to
time reasonably  require. A certificate of compliance means a certificate signed
by the  president,  a  vice-president  or the  chief  financial  officer  of the
Corporation,  confirming compliance with the covenants set forth in this Article
3 and  specifically  that (i) no event of default as described in Section 4.1 of
this  Deed has  occurred  and is  continuing  and no event has  occurred  and is
continuing  which,  with the passage of time or giving of notice, or both, would
be an event of default, or, if that is not the case, the particulars of any such
event of default or other event,  and (ii) all the covenants of the  Corporation
contained in this Article 3 and all of the conditions  contained in this Deed to
be complied with by the  Corporation  have been fully  complied with to the date
thereof,  or, if that is not the case,  the  particulars  of any  failure of the
Corporation to comply with any such covenants or conditions.  The obligations of
the  Corporation  under this Section 3.6 are in addition to its  obligations  to
provide  information and evidence of compliance to the Trustee under  applicable
law.

3.7      EXPENSES, REMUNERATION AND INDEMNITY

         The  Corporation  shall pay to the Trustee  upon demand both before and
after default the amount of all reasonable costs, charges, borrowings, expenses,
disbursements,  advances and fees of the Trustee incurred in connection with the
administration  of this Deed including  without  limitation  expenses arising in
connection with Section 8.1, the repossession,  holding, repairing,  processing,
preparing  for  disposition  and  disposing  of any of  the  mortgaged  property
(including without  limitation  reasonable legal expenses on a solicitor and his
own client basis and other  expenses  including  expenses  arising in connection
with Section 8.1), together with interest from the date of demand at the rate 3%
per annum above the prime  lending rate of The  Toronto-Dominion  Bank (or other
Canadian  chartered bank designated by the Trustee) from time to time in effect.
All amounts owing to the Trustee under or in connection  with this Deed shall be
secured  by the  mortgages  and  charges  created in this Deed and be payable in
priority to amounts secured by the Debentures.

         The  Corporation  hereby   indemnifies  the  Trustee,   its  directors,
officers, employees,  representatives and agents, and any successors and assigns
against any loss, expense,  claim, damage,  penalty,  action, suit, demand, levy
cost, disbursement, liability or asserted liability (including strict liability)
suffered by, imposed on, incurred by or asserted against the Trustee as a result
of the  administration of the trust created hereby,  the exercise by the Trustee
of any rights  hereunder,  the  performance of any remediation by the Trustee or
its agent  for  bodily  injury,  property  damage,  abatement,  or  remediation,
environmental  damage  or  impairment  or any  other  injury  or  damage  or any

                                     - 10 -
<PAGE>

diminution  in value  of the  mortgaged  property  resulting  from or  relating,
directly or indirectly, to: (i) the presence or release of any contaminants,  by
any means or for any reason, on the mortgaged  property,  whether or not release
or presence of the  contaminants was under the control care or management of the
company, or of a previous owner, or of a tenant, or (ii) any contaminant present
on or released from any contiguous property to the mortgaged property,  or (iii)
the breach or alleged breach of any Environmental Laws by the Corporation,  save
and except that the Trustee shall only be responsible for its own negligence and
wilful misconduct.

         In addition to and without limiting any other protection of the Trustee
hereunder  or otherwise by law, the  Corporation  shall  indemnify  and hold the
Trustee  harmless  from and against  any and all  liabilities,  losses,  claims,
damages,  penalties,  actions,  suits,  demands,  levies,  costs,  expenses  and
disbursements  including  any and all  reasonable  legal  and  adviser  fees and
disbursements  of whatever  kind or nature which may at any time be suffered by,
imposed on, incurred by or asserted against the Trustee,  whether  groundless or
otherwise,  howsoever  arising from or out of any act,  omission or error of the
Trustee in connection with its acting as Trustee  hereunder  unless arising from
the  gross  negligence  or  wilful  misconduct  on  the  part  of  the  Trustee.
Notwithstanding  any other  provision  hereof,  this indemnity shall survive the
removal,  or resignation of the Trustee,  discharge of this Deed and termination
of any trust created thereby.

3.8      REGISTRATIONS AND DELIVERIES

         The Corporation agrees that:

         (a)      forthwith  after  the  execution  of this  Deed and  after the
                  execution of each instrument supplemental or ancillary hereto,
                  it  shall  register,  file  or  record  the  same  and/or,  if
                  applicable,   a  financing   statement  or  other   prescribed
                  statement  in  respect  thereof  as  may  from  time  to  time
                  reasonably  be required  by the Trustee or the Voting  Holders
                  where such registration,  filing or recording may be necessary
                  or desirable  in  preserving,  protecting  or  perfecting  the
                  security constituted by this Deed;

         (b)      from time to time,  on receipt of the  written  request of the
                  Trustee  or any  Holder,  it shall  renew  such  registration,
                  filing or  recording  as  required to  maintain  the  security
                  constituted hereby as valid and effective security;

         (c)      promptly  after  such  registration,   filing,   recording  or
                  renewal,  the  Corporation  shall cause to be delivered to the
                  Trustee  certificates or other evidence of such  registration,
                  filing,  recording or renewal and opinions of counsel required
                  by  and  satisfactory  to  the  Trustee,   acting  reasonably,
                  evidencing  that the  provisions of this Section 3.8 have been
                  complied with in respect of this Deed or such  supplemental or
                  ancillary instrument, as the case may be;

         (d)      forthwith  after  the  execution  of this  Deed and  after the
                  execution of each instrument supplemental or ancillary hereto,
                  it shall  deliver to the Trustee  such other  documents as may
                  reasonably  be required by the Trustee  upon  direction by the
                  Voting  Holders  to be  delivered  to  preserve,  protect  and
                  perfect the  security  constituted  hereby  including  without
                  limitation documents of title, security certificates and other
                  documents; and

                                     - 11 -
<PAGE>

         (e)      in the event  that the  security  constituted  hereby  becomes
                  enforceable  as herein  provided and the Trustee  shall become
                  bound to enforce the same, the  Corporation  will from time to
                  time execute all such assurances and do all such things as the
                  Trustee   may   reasonably   require  for   facilitating   the
                  realization of the mortgaged  property of the  Corporation and
                  for exercising all of the powers,  authorities  and discretion
                  conferred on the Trustee and for  confirming  to any purchaser
                  of such mortgaged  property or any part thereof,  whether sold
                  by the Trustee herein or by judicial proceedings, the title to
                  the  property  so  sold,  and it will  give  all  notices  and
                  directions  which  the  Trustee  may  consider   necessary  or
                  expedient.

         In the event of the  amalgamation  of the  Corporation,  this Deed, the
Debentures  and all other  security  delivered by the  Corporation in connection
with this Deed shall be binding on the  amalgamated  corporation  and charge its
present and future undertaking, property and assets to secure present and future
debts,  liabilities  and  obligations of the  Corporation and of the amalgamated
corporation  to  the  Trustee  and  the  Holders,  all  as  if  the  amalgamated
corporation had originally executed and delivered those documents.

         The  Corporation  shall not change its name or amalgamate  with another
corporation   without  giving  prior  written  notice  to  the  Trustee  of,  as
applicable,  the new  name  and the  date  upon  which  such  change  of name or
amalgamation  is  to  take  effect.   Promptly  after  the  change  of  name  or
amalgamation,  the Corporation shall (i) provide the Trustee with a true copy of
the articles of amendment or articles of  amalgamation  effecting  the change of
name,  (ii) execute and deliver to the Trustee all  instruments  supplemental or
ancillary  to this  Deed  required  by the  Trustee,  acting  reasonably,  (iii)
execute,  deliver or cause to be  delivered to the Trustee any items of the type
described in Section 3.8 (a), (b), (c) (d) but addressing such change of name or
amalgamation and such supplemental or ancillary instruments that are required by
the Trustee,  acting  reasonably  and (iv) provide a certificate  confirming the
correct name of the Corporation and that all appropriate registrations,  filings
or recordings  have been made on behalf of the Trustee to fully and  effectively
maintain the perfection and priority of the security created hereby.

4.       DEFAULT

4.1      EVENTS OF DEFAULT

         The security hereby  constituted shall immediately  become  enforceable
and the floating charge created pursuant to Section 2.1(c) hereof shall become a
fixed and specific mortgage, charge, pledge,  assignment,  security interest and
hypothec on the property charged thereby if:

         (a)      payment of part or all of the Pledge Obligations  secured by a
                  pledge of a Voting  Debenture is demanded in  accordance  with
                  any agreement to which the  Corporation is a party relating to
                  such Pledge Obligations, and payment is not made on demand;

         (b)      the  Corporation  makes  default  of  any  other  covenant  or
                  condition  of this Deed for the benefit of the Voting  Holders
                  or the Trustee and default  continues  for a period of 30 days
                  after the Trustee sends notice to the  Corporation  to correct
                  the default;

                                     - 12 -
<PAGE>

         (c)      the Holders of Debentures  other than the Voting  Holders (the
                  "OTHER  HOLDERS",  where  Debentures held by the Other Holders
                  are the "OTHER DEBENTURES") proceed in accordance with Section
                  5.1(b) of this Deed; or

         (d)      the   Corporation   becomes   a   bankrupt   (voluntarily   or
                  involuntarily);  or becomes subject to any proceeding  seeking
                  liquidation,   arrangement,   relief  of   creditors   or  the
                  appointment  of a receiver or trustee over, or any judgment or
                  order which has or might have a material  and  adverse  effect
                  on, any  material  part of the  mortgaged  property,  and such
                  proceeding,  if instituted  against the  Corporation,  or such
                  judgment or order, is not contested diligently,  in good faith
                  and on a timely basis and  dismissed or stayed  within 30 days
                  of its commencement or issuance.

4.2      WAIVER

         The  Trustee  (on the  direction  of the Voting  Holders) or the Voting
Holders may by notice to the Corporation  pursuant to a resolution of the Voting
Holders waive any default of the Corporation on such terms and conditions as the
Voting  Holders may  determine,  but no such waiver shall be taken to affect any
subsequent  default or the rights of the Voting  Holders  arising  therefrom nor
shall it  detract  from the  rights of any Other  Holder  under the terms of any
agreement  relating to its Pledge  Obligations with respect to such default.  No
waiver of any default by an Other  Holder  shall in any way affect the rights of
the Voting Holders with respect to such default.

5.       REMEDIES IN CASE OF DEFAULT

5.1      DEMAND PAYMENT

         (a)      If the security  hereby  constituted  becomes  enforceable  as
                  provided in Sections  4.1(a) or (b), the Trustee upon being so
                  directed by  resolution  of the Voting  Holders  shall  demand
                  payment of the principal amount of and interest accrued on all
                  Debentures   (or  such  lesser   amounts  owing  under  or  in
                  connection with the Pledge  Obligations in accordance with the
                  Pledge  Agreements   relating  thereto)  and  the  same  shall
                  forthwith become immediately due and payable to the Trustee.

         (b)      If (i) an event of default occurs under any agreement to which
                  the  Corporation  is a party  (including  but not limited to a
                  pledge  of  an  Other   Debenture   relating   to  any  Pledge
                  Obligations  secured by a pledge of an Other Debenture),  (ii)
                  payment of part or all of those Pledge Obligations is required
                  or  demanded  as a  result,  (iii)  prior  to  commencing  any
                  proceeding to recover payment of those Pledge Obligations,  an
                  Other Holder gives written notice of the requirement or demand
                  for payment to the Trustee (who shall immediately give written
                  notice to the Voting  Holders  and all of the Other  Holders),
                  (iv)  such  Other   Holder   obtains   judgment   against  the
                  Corporation  for  payment of the Pledge  Obligations  of which
                  payment has been required or demanded, and the judgment is not
                  stayed or appealed within applicable time limits,  and (v) the
                  judgment  is not  satisfied  within 30 days  after  such Other
                  Holder  gives  written  notice of the  judgment to the Trustee
                  (who  shall  immediately  give  written  notice to the  Voting
                  Holders and all of the Other  Holders),  then the Trustee upon
                  being so directed by  resolution  of such Other  Holder  shall
                  demand payment of the principal amount of and interest accrued
                  on  the

                                     - 13 -
<PAGE>

                  Debentures and the same shall forthwith become immediately due
                  and payable to the Trustee.

         (c)      In the event that the Voting Holders have duly exercised their
                  rights  under  Section  5.1(a)  hereof and an Other Holder has
                  duly exercised its rights under Section  5.1(b) hereof,  it is
                  agreed that:

                  (i)      the Trustee shall have regard to the instructions and
                           directions  of the Voting  Holders only in exercising
                           rights and remedies under this Deed and shall have no
                           duty or  obligation  hereunder  to act in  accordance
                           with the  instructions  or  directions  of any  other
                           Holder; and

                  (ii)     in giving the Trustee  instructions and directions in
                           pursuance  of its rights under  paragraph  (i) above,
                           the Voting  Holders shall act in good faith,  and not
                           with  the  sole  purpose  of   defeating,   delaying,
                           hindering or otherwise  impeding the repayment of the
                           Other Holders,  but nothing in this Deed shall impose
                           on the Voting  Holders any greater  duty to the Other
                           Holders or the  Corporation  than is owed by a senior
                           creditor  to a junior  creditor or to a debtor in the
                           absence of any express provision.

         (d)      In the event that an Other Holder (or an agent duly authorized
                  by an Other Holder) has duly exercised its rights  pursuant to
                  Section  5.1(b)  hereof and no Voting Holder has exercised its
                  rights under Section 5.1(a) hereof, then (but for so long only
                  as no Voting  Holder has  exercised  its rights under  Section
                  5.1(a) hereof):

                  (i)      the Trustee shall have regard to the instructions and
                           directions  of the Other  Holder  only in  exercising
                           rights and remedies under this Deed and shall have no
                           duty or  obligation  hereunder  to act in  accordance
                           with the  instructions  or  directions  of any  other
                           Holder;

                  (ii)     in giving the Trustee  instructions and directions in
                           pursuance  of its rights under  paragraph  (i) above,
                           the Other Holder shall act in good faith; and

                  (iii)    while nothing  shall prevent the Voting  Holders from
                           exercising  their rights under Section  5.1(a) hereof
                           if  they  are  entitled  to  do  so  as  between  the
                           Corporation and themselves,  until they have done so,
                           the Voting  Holders shall not do any of the following
                           without  the  consent  of  the  Other  Holders:  give
                           instructions  and directions to the Trustee  relating
                           to the exercise of those  rights and  remedies  being
                           exercised  by the Other  Holders in  accordance  with
                           this Section 5.1(d),  direct the Trustee to waive any
                           defaults  pursuant  to  Section  4.2  of  this  Deed,
                           approve of the Corporation creating or permitting any
                           mortgage,   hypothec,  charge,  lien  encumbrance  or
                           security   interest  or  lease  upon  the   mortgaged
                           property or any part thereof, pursuant to Section 3.2
                           of this Deed,  unreasonably  withhold  or delay their
                           consent to the  appointment of a replacement  Trustee
                           requested  by the Other  Holders,  or exercise any of
                           the rights set out in Sections  9.1(a),  (b), (e) and
                           (f) of this Deed.

                                     - 14 -
<PAGE>

5.2      REMEDIES

         If the  security  hereby  constituted  becomes  enforceable  as  herein
provided,  and the  Corporation  has failed to pay to the  Trustee on demand the
principal  amount of and  interest  accrued on the  Debentures  (or such  lesser
amounts owing under or in connection  with the Pledge  Obligations in accordance
with the Pledge Agreements relating thereto):

         (a)      the Trustee upon the direction of the Voting  Holders may take
                  possession of the whole or any part of the mortgaged  property
                  and  carry  on  all  or  any  part  of  the  business  of  the
                  Corporation  relating  to the  mortgaged  property  and borrow
                  money on the security of the mortgaged property in priority to
                  the security  hereby  created for the purpose of  maintenance,
                  preservation  or protection  of the mortgaged  property or for
                  the  carrying  on of all or any  part of the  business  of the
                  Corporation  relating  to  the  mortgaged  property  and in so
                  acting  the  Trustee  shall  have  the  power to  exclude  the
                  Corporation,  its  servants  and  agents  from  the  mortgaged
                  property;

         (b)      whether or not the  Trustee  has  exercised  any or all of its
                  rights under Section  5.2(a),  the Trustee may sell,  lease or
                  otherwise  dispose  of the whole or any part of the  mortgaged
                  property at public auction, by private tender or private sale,
                  either  for  cash or upon  credit  and  upon  such  terms  and
                  conditions as the Trustee may  determine,  and the Trustee may
                  execute and deliver to any purchaser of the mortgaged property
                  or any part thereof good and  sufficient  deeds and  documents
                  for the same, and,  without limiting the powers granted to the
                  Trustee,  the Trustee is irrevocably  constituted the attorney
                  of the Corporation for the purpose of making any such sale and
                  executing such deeds and documents (which  appointment,  being
                  coupled with an interest,  shall survive the bankruptcy of the
                  Corporation);

         (c)      the Trustee may also exercise any of the other rights to which
                  the Trustee or the Holders are entitled including the right to
                  take  proceedings in any court of competent  jurisdiction  for
                  the appointment of a receiver and manager, for the sale of the
                  mortgaged property or any part thereof or for foreclosure, and
                  the right to take any other action, suit, remedy or proceeding
                  authorized or permitted under this Deed or by law or in equity
                  in order to enforce the security constituted by this Deed; and

         (d)      the  Trustee  may also by  instrument  in  writing  appoint  a
                  receiver or receiver and manager of the mortgaged  property or
                  of any part  thereof and may remove any  receiver so appointed
                  and  appoint  another  in his  stead,  and  such  receiver  or
                  receiver and manager  shall have the same  rights,  powers and
                  authorities  as are  conferred  on the Trustee by this Section
                  5.2.

         In the exercise of their rights, powers and authorities hereunder,  the
Trustee and any receiver or receiver and manager  appointed by the Trustee shall
be the agent of the Corporation, and the Trustee and the Holders shall not be in
any way  responsible  for any  misconduct  or negligence of any such receiver or
receiver and manager,  nor shall the Holders be in any way  responsible  for any
wilful misconduct or negligence of the Trustee.

                                     - 15 -
<PAGE>

5.3      PUBLIC SALE

         The Trustee,  the Holders or any agent or representative  thereof,  may
become  purchasers  at any public sale of the mortgaged  property,  whether made
under a power  of  sale  provided  for in this  Deed  or  pursuant  to  judicial
proceedings.

5.4      APPLICATION OF PROCEEDS OF REALIZATION OF SECURITY

         Except as  otherwise  provided  in this  Deed,  by law or by order of a
court or by any  resolution of the Holders,  any and all monies arising from the
enforcement of any remedy provided for herein,  including,  without  limitation,
the  carrying  on of the  business  of the  Corporation  and the  sale or  other
realization  of the whole or any part of the mortgaged  property,  whether under
any sale by the Trustee or by judicial process or otherwise,  shall be paid over
to the Trustee, shall be held by the Trustee and, together with any other monies
then or thereafter in the hands of the Trustee available for the purpose,  shall
be applied by the Trustee as follows:

         (a)      firstly,  if and to the extent that the Trustee  deems that it
                  is in the  interest of the Holders  generally  and the same is
                  not inconsistent with any resolution of the Voting Holders, to
                  pay all charges and liens on the  mortgaged  property  ranking
                  (or  capable  of   ranking)   in  priority  to  the   security
                  constituted  by this Deed or to keep in good standing any such
                  prior lien;

         (b)      secondly,  to pay all amounts  due to the  Trustee  hereunder,
                  including  without  limitation,  costs,  charges and  expenses
                  referred to in Section 3.7;

         (c)      thirdly,  to pay the Pledge Obligations  secured by the Voting
                  Debentures and by any Ratable  Debentures ranking equally with
                  the Voting Debentures (collectively, the "SENIOR DEBENTURES"),
                  with payment to be made rateably and  proportionately,  having
                  regard to the amount of the Pledge Obligations  secured by the
                  Senior  Debentures,  as specified in writing by the Holders of
                  the Senior Debentures, rather than their face amount;

         (d)      fourthly, after indefeasible payment of all Pledge Obligations
                  secured by, and  cancellation  of, all Senior  Debentures,  to
                  pay,  in order as they  succeed  to  being  Senior  Debentures
                  (either by becoming the Voting  Debentures or by being Ratable
                  Debentures  ranking equally with the Voting  Debentures),  all
                  Pledge Obligations secured by each series of Other Debentures,
                  as   specified  in  writing  by  the  Holders  of  such  Other
                  Debentures, in the same manner as in Section 5.4 (c) above;

         (e)      fifthly,  in payment of all other amounts at any time and from
                  time to time remaining outstanding and unpaid under this Deed;
                  and

         (f)      sixthly,  the surplus,  if any, of such money shall be paid to
                  the Corporation or its assigns or otherwise in accordance with
                  applicable law.

5.5      DUTY TO INQUIRE

         No person  dealing  with the  Trustee,  its agents or any  receiver  or
receiver  manager  appointed  pursuant  hereto (or pursuant to any  agreement to
which the  Corporation  and one or more of the  Holders

                                     - 16 -
<PAGE>

are parties) shall be concerned to inquire whether the powers which the Trustee,
its agents or any receiver or receiver  manager  appointed  pursuant  hereto (or
pursuant  to any  agreement  to  which  the  Corporation  and one or more of the
Holders are  parties) is  purporting  to exercise  have become  enforceable,  or
whether any money remains due upon the security  constituted by this Deed, or as
to the necessity or expediency of the  stipulations  and  conditions  subject to
which any sale shall be made,  or otherwise as to the propriety or regularity of
any sale or any other dealing by the Trustee with the mortgaged  property or any
part thereof or to see to the application of any money paid to the Trustee; and,
in the  absence  of fraud on the part of such  person,  such  dealings  shall be
deemed to be within  the powers  conferred  on the  Trustee  and to be valid and
effective accordingly.

6.       DISCHARGE

6.1      Subject to Section 7, this Deed and the rights  hereby  granted  (other
than the Trustee's rights under Section 3.7 above) shall cease, determine and be
void, and the Trustee shall at the request and expense of the Corporation cancel
and discharge the mortgages and charges of this Deed,  including the  additional
security provided for in Section 10 (the "ADDITIONAL SECURITY"), and execute and
deliver to the Corporation such deeds or other instruments as shall be requisite
therefor,  if the  Corporation  first satisfies the Trustee that it has paid the
principal  amount and interest secured by the Debentures (or such lesser amounts
owing under or in connection with the Pledge  Obligations in accordance with the
Pledge Agreements relating thereto) and has otherwise observed and performed the
terms and conditions of this Deed and the Additional  Security and has otherwise
satisfied  all  Pledge  Obligations,  or that all of the  Debentures  have  been
validly cancelled as contemplated in Section 1.5.

6.2      The  registrar  of  any  registration  division in  which any mortgaged
property is situate shall discharge and cancel the registration of any mortgage,
pledge or charge,  or  transfer or  giving  in  payment created hereby or by the
Additional  Security or hereafter  created under the  provisions hereof upon the
registration  of any  discharge,  release or document to that  effect  signed by
the  Trustee, without  being  obliged to see that any of the  conditions of this
Deed or of the Additional Security have been fulfilled.

7.       CONTINUING AND ADDITIONAL SECURITY

         The Debentures and the security created by this Deed shall be effective
whether or not any monies or  liabilities  secured by this Deed are  advanced or
incurred  before or after the date of this Deed,  and shall not be considered as
satisfied or discharged by any intermediate  payment of the whole or part of the
Pledge  Obligations  secured by the pledges of the Debentures  issued under this
Deed but shall  constitute  and be a  continuing  security  to the Holders for a
current or running  account and shall be in addition to and not in  substitution
for any other  security now or hereafter held by the Holders or any of them. The
remedies  of the  Trustee  under  this Deed may be  exercised  from time to time
separately or in combination and are in addition to and not in substitution  for
any other rights of the Trustee or the Holders however created.

8.       TRUSTEE

8.1      ACCEPTANCE BY TRUSTEE

         The Trustee  hereby  accepts the trusts  declared  and provided in this
Deed and agrees to  perform  the trusts  upon the terms and  conditions  of this
Deed, subject to the following:

                                     - 17 -
<PAGE>

         (a)      the Trustee may appoint  such agents and employ or retain,  in
                  relation to this Deed, such lawyers,  accountants,  valuators,
                  engineers, architects, appraisers, or such other experts as it
                  may  reasonably  require  in the  circumstances  and  for  the
                  purpose  of  discharging  its  duties  hereunder  and shall be
                  entitled  to pay  reasonable  compensation  for the  advice or
                  assistance so obtained, but nevertheless the Trustee shall not
                  be obliged to act on any advice or assistance so obtained. The
                  Trustee may act and rely and shall be  protected in acting and
                  relying  in good  faith on the  opinion  or the  advice  of or
                  information   obtained  from  any  counsel   (including  where
                  appropriate counsel acting for the Corporation or any Holder),
                  accountant,  valuator, engineer, architect, appraiser or other
                  expert or advisor,  in each case selected by the Trustee using
                  reasonable   care,  in  relation  to  any  matter  arising  in
                  connection with the administration of this Deed;

         (b)      if at any time in the  performance  of its  duties  under this
                  Deed,  it shall  be  necessary  for the  Trustee  to  receive,
                  accept,  act or rely upon any  certificate,  notice,  request,
                  waiver, consent, receipt, direction,  resolution, affidavit or
                  other  paper,   writing  or  document   furnished  to  it  and
                  purporting to have been executed or issued by the  Corporation
                  or the Holders or their authorized officers or attorneys,  the
                  Trustee shall be entitled to rely and act upon the genuineness
                  and authenticity of any such writing submitted to it. It shall
                  not be necessary  for the Trustee to ascertain  whether or not
                  the persons who have  executed,  signed or  otherwise  issued,
                  authenticated or receipted such papers,  writings or documents
                  have  authority  so to do or that  they are the  same  persons
                  named  therein or  otherwise to pass upon any  requirement  of
                  such papers,  writing or documents  that may be essential  for
                  their  validity  or   effectiveness  or  upon  the  truth  and
                  acceptability of any information  contained  therein which the
                  Trustee in good faith believes to be genuine;

         (c)      the Trustee shall be accountable only for reasonable diligence
                  in respect of the trusts  hereby  conferred  upon it and shall
                  not be  accountable  for any act or  default  of any  agent or
                  other person engaged by the Trustee for the performance of any
                  duty or duties  hereunder  (except  employees of the Trustee),
                  provided the Trustee  shall have selected such agent or person
                  with reasonable care;

         (d)      subject  to any  resolution  of the  Holders  (or  the  Voting
                  Holders  where  specified in this Deed),  the Trustee shall as
                  regards all the trusts,  powers,  authorities  and  discretion
                  vested in it have absolute and  uncontrolled  discretion as to
                  the exercise thereof,  whether in relation to the manner or as
                  to the  mode and time  for the  exercise  thereof,  and in the
                  absence of fraud, negligence or wilful misconduct, it shall in
                  no  way  be  responsible  for  any  loss,  costs,  damages  or
                  inconvenience   that  may   result   from  the   exercise   or
                  non-exercise thereof;

         (e)      the  Trustee  shall not be bound to take any steps to  enforce
                  any of the covenants on the part of the Corporation  contained
                  in the Debentures,  except insofar as it may be required to do
                  so by the Voting  Holders  (or the Other  Holders  pursuant to
                  Section  5.1(b))  in  writing  upon  being  furnished  with an
                  indemnity reasonably satisfactory to the Trustee;

         (f)      the obligation of the Trustee to commence or continue any act,
                  action  or  proceedings  for  the  purpose  of  realizing  the
                  collateral  or  for  the   enforcement   of  any  covenant  or
                  obligation  under  or  arising  out of these  presents  or the
                  Debentures shall, at the option of

                                     - 18 -
<PAGE>

                  the Trustee, be conditional upon the Holders furnishing,  when
                  requested  in  writing  by the  Trustee,  sufficient  funds to
                  commence  or  continue  such  action  or  proceedings  and  an
                  indemnity  satisfactory  to the  Trustee to  protect  and hold
                  harmless the Trustee  against costs,  charges and expenses and
                  liabilities to be incurred  thereby and any loss and damage it
                  may sustain by reason thereof;

         (g)      the Trustee  may,  but shall not  obliged  to,  enter onto the
                  mortgaged  property to take such actions as the Trustee may in
                  its sole  discretion  deem necessary or advisable to clean up,
                  remediate,  encapsulate,  remove,  resolve,  or  minimize  the
                  impact  of,  or  otherwise  deal  with,  any  contaminants  or
                  breaches of  Environmental  Laws which could in the opinion of
                  the Trustee  jeopardize the security interest in the mortgaged
                  property created by this Deed;

         (h)      the Trustee shall have no  responsibility to supervise or have
                  control  over the conduct of the  Corporation's  environmental
                  practices,  nor shall any action or inaction by the Trustee be
                  construed as exercising  care,  control or management over the
                  mortgaged property;

         (i)      nothing  in this  Deed  shall be  deemed  to make the  Trustee
                  responsible for failure to obtain or maintain  adequate or any
                  insurance  coverage  for the  mortgaged  property or to ensure
                  that  such   insurance  is  obtained  and  maintained  by  the
                  Corporation,  or for any loss  arising from any defects in any
                  policy or because of the failure of any insurer to pay for any
                  loss or  damage  insured  against,  and the  Trustee  shall be
                  entitled to request,  and rely absolutely  upon, a certificate
                  of an officer of the Corporation that the insurance carried by
                  the  Corporation  from time to time is in compliance  with all
                  relevant requirements of this Deed; and

         (j)      the  Trustee  may from time to time in  performing  its duties
                  hereunder  request from the Holders  information  and evidence
                  satisfactory  to it of the  amount of the  Pledge  Obligations
                  owing to any Holder.

8.2      TRUSTEE NOT REQUIRED TO GIVE SECURITY

         The  Trustee  shall not be  required  to give any bond or  security  in
respect of the  execution  of the trusts and powers of this Deed or otherwise in
respect of this Deed.

8.3      PROTECTION OF TRUSTEE

         By way of  supplement  to the  provisions of any law for the time being
relating to trustees, it is expressly declared and agreed as follows:

         (a)      the  Trustee  shall  not be  liable  for or by  reason  of any
                  failure  or  defect  of title to,  or  encumbrance  upon,  the
                  mortgaged property;

         (b)      the  Trustee  shall  not be  liable  for or by  reason  of any
                  statements  of  fact  or  recitals  in  this  Deed,  or in the
                  Debentures  (except in the Certificate of the Trustee thereon)
                  or  in  any  document  ancillary  or  supplemental  hereto  or
                  thereto,  or  required  to  verify  the  same,  but  all  such
                  statements  or recitals  are and shall be deemed to be made by
                  the Corporation;

                                     - 19 -
<PAGE>

         (c)      nothing  herein  or  in  the   Debentures   shall  impose  any
                  obligation  on  the  Trustee  or any  Holders  to see to or to
                  require  evidence of the  registration or filing or renewal of
                  this  Deed,  any of the  Debentures  or any  other  instrument
                  ancillary or supplemental  hereto or thereto or any other deed
                  or writing by way of  mortgage  or charge  upon the  mortgaged
                  property or any part thereof or to procure any further,  other
                  or  additional  instrument  of further  assurance or to do any
                  other  act for  the  continuance  of the  security  hereof  or
                  encumbrance  or for  giving  notice of the  existence  of such
                  security or for extending or supplementing the same;

         (d)      the Trustee shall not be bound to give notice to any person or
                  persons of the  execution  hereof or the security  constituted
                  hereby  or in any way to  interfere  with the  conduct  of the
                  business  of the  Corporation,  unless and until the  security
                  hereby  constituted  shall  have  become  enforceable  and the
                  Trustee shall have become bound to enforce the same;

         (e)      the Trustee  shall not incur any  liability or  responsibility
                  whatever  in   consequence  of  permitting  or  suffering  the
                  Corporation,  its  successors  or assigns,  to retain or be in
                  possession  of any part of its  mortgaged  property and to use
                  and  enjoy  the  same  unless  herein  or  in  the  Debentures
                  expressly  otherwise  provided;  nor shall the  Trustee  be or
                  become    responsible   or   liable   for   any   destruction,
                  deterioration,  loss,  injury or  damage  which may be done or
                  occur to the mortgaged property by the Corporation, its agents
                  or  servants,  or  by  any  other  person  or be  in  any  way
                  responsible for the  consequences of any breach on the part of
                  the  Corporation  of  any of the  covenants  herein  or in the
                  Debentures  contained or of any acts of the agents or servants
                  of the Corporation;

         (f)      unless  otherwise  required by law,  the Trustee  shall not be
                  liable by reason of any entry into possession of the mortgaged
                  property  or any part  thereof  to  account  as  mortgagee  in
                  possession or for anything except actual receipts or be liable
                  for any loss on realization or for any default or omission for
                  which a mortgagee in  possession  might be liable save such as
                  may be caused by its own negligence or wilful misconduct; and

         (g)      the  Trustee on its own behalf or in any other  capacity,  may
                  buy,  lend upon and deal in shares in the capital stock of the
                  Corporation   and   generally  may  contract  and  enter  into
                  financial  transactions  with the  Corporation  without  being
                  liable to account for any profit made thereby.

8.4      TRUSTEE'S OBLIGATION TO ACT

         Unless and until the  Trustee is  required  to do so under the terms of
this Deed, the Trustee shall not be bound to give any notice or to take any act,
action or proceeding by virtue of the powers  conferred on it by this Deed;  nor
shall the Trustee be  required to take notice of an event of default  under this
Deed,  other than in payment of any monies required by any provisions  hereof to
be paid to it. Unless and until notified in writing of such events of default or
such default and in the absence of any such notice,  the Trustee may assume that
the  Corporation  is not in default  hereunder and that no default has been made
with respect to the payment of principal or interest  under the Debentures or in
the observance of performance or any of the covenants,  agreements or conditions
contained herein.

                                     - 20 -
<PAGE>

         The right and obligation of the Trustee to commence or continue an act,
action or  proceeding  for the purpose of enforcing any rights of the Trustee or
the Holders hereunder shall be conditional on the Trustee receiving a resolution
from the Voting  Holders  (or the Other  Holders  (or an agent on their  behalf)
pursuant to Section 5.1(b) exercised in accordance with Section 5.1(d)).

8.5      RESIGNATION OF TRUSTEE

         The Trustee or any replacement  trustee appointed pursuant to the terms
of this  Section  8.5,  may at any time resign  office by not less than 30 days'
notice  in  writing  to  the  Corporation  or by  such  shorter  notice  as  the
Corporation  may be willing to accept.  The Corporation  may,  subject as herein
provided,  at any time remove the existing  Trustee and appoint in writing a new
Trustee or new  Trustees  hereof  (subject  to the prior  approval of the Voting
Holders) in the place of any Trustee so resigning  or desiring to be  discharged
from the trusts  hereof,  or being  removed,  dissolved  or wound up or becoming
bankrupt or going into liquidation or otherwise  becoming incapable of acting or
unfit to act;  and,  in the  event  of the  Corporation  failing  to  appoint  a
replacement  trustee after being  requested to do so by the Voting Holders or if
after default a vacancy occurs in the office of Trustee or the Trustee ceases to
act, such  appointment  shall be made by the Voting  Holders by an instrument in
writing.  Failing the appointment of a replacement trustee by the Corporation or
the Voting Holders, the Trustee, at the expense of the Corporation, may apply to
a court of competent jurisdiction for the appointment of a replacement trustee.

8.6      POWERS OF NEW TRUSTEE

         Any  new  Trustee  appointed  hereunder  shall  execute  an  instrument
accepting  such  appointment  hereunder and deliver one  counterpart or notarial
copy thereof to the  Corporation and one counterpart or notarial copy thereof to
the Trustee last in office and the Holders shown on the Trustee's register,  and
thereupon such new Trustee without further act, deed or conveyance  shall become
vested  with  all  estates,  properties,   rights,  powers  and  trusts  of  its
predecessor in the trusts hereunder,  with like effect as if originally named as
Trustee  herein;  but  nevertheless,  upon the written  request of the successor
Trustee or of the  Corporation  at the expense of the  Corporation,  the Trustee
ceasing to act shall execute and deliver an instrument or instruments  assigning
and transferring to such successor  Trustee,  upon the trusts herein  expressed,
all the said  property  and  assets  and all  rights,  powers  and trusts of the
Trustee so ceasing to act,  and shall duly  assign,  transfer  and  deliver  all
property and money held by such Trustee to the successor Trustee so appointed in
its place.  Should  any deed,  conveyance  or  instrument  in  writing  from the
Corporation be required by any new Trustee for more fully and certainly  vesting
in and  confirming to it such estates,  properties,  rights,  powers and trusts,
then any and all such deeds,  conveyances  and  instruments in writing shall, on
request of said new Trustee,  be made,  executed,  acknowledged and delivered by
the Corporation.

8.7      CORPORATE REORGANIZATION OF TRUSTEE

         Any  company  into which the Trustee may be merged or with which it may
be  consolidated  or  amalgamated,  or any  company  resulting  from any merger,
consolidation  or amalgamation  to which the Trustee shall be a party,  shall be
the successor Trustee under this Deed without the execution of any instrument or
any further act.

                                     - 21 -
<PAGE>

9.       RESOLUTIONS OF HOLDERS

9.1      POWERS OF THE HOLDERS

         The powers of the Holders shall be  exercisable  by the Voting  Holders
only,  except (i) as  expressly  provided in Sections  5.1(b) and 5.1(d) of this
Deed,  and (ii) as to matters  set forth in  paragraphs  (c),  (d) and (e) below
which  shall  be also  exercisable  by  Other  Holders  as  described  in  those
paragraphs,  and include but are not limited to the following powers exercisable
from time to time by resolution of the Voting Holders:

         (a)      the power to require the Trustee to refrain from enforcing any
                  covenant on the part of the  Corporation  herein or to refrain
                  from  exercising  any of  the  powers  set  forth  herein  and
                  conferred on the Trustee or to direct the Trustee to waive any
                  default or  defaults  on the part of the  Corporation  on such
                  terms as may be deemed  advisable or to cancel any declaration
                  or waiver previously made by the Trustee under this Deed;

         (b)      power to remove a Trustee from office and to appoint a new
                  Trustee;

         (c)      power to assent to any judgment,  compromise or arrangement by
                  the  Corporation  with  any  creditor,  creditors  or class or
                  classes of  creditors  or with the  holder(s) of any shares or
                  securities  of the  Corporation,  which shall also require the
                  approval  of the  Holders of each  series of Other  Debentures
                  which  is  affected  by  any  such  judgment,   compromise  or
                  arrangement affecting their respective Debentures;

         (d)      power  to  assent  to  any  modification  of or  change  in or
                  addition to or deletion  from the rights of the Holders or the
                  provisions  contained in this Deed or any instrument ancillary
                  or  supplementary  hereto or thereto or any agreement  forming
                  part of the  mortgaged  property  which shall be agreed by the
                  Corporation  and to  authorize  the  Trustee  to concur in and
                  execute  any  indenture  supplemental  to  this  Deed  or  any
                  agreement  supplemental  to any instrument  embodying any such
                  modification,  change, addition,  deletion or to concur in and
                  execute any deeds,  documents,  or writings authorized by such
                  resolution,  which  shall also  require  the  approval  of the
                  Holders of each series of Other  Debentures  which is affected
                  by  any  such  modification,   change,  addition  or  deletion
                  affecting their respective Debentures;

         (e)      power to approve  the  release of the  Corporation  and of the
                  whole or any part of the mortgaged  property from the security
                  constituted  hereby,  which shall also require the approval of
                  the  Holders  of each  series of Other  Debentures  except for
                  Ratable Debentures; and

         (f)      power to  authorize  the Trustee to execute  and deliver  such
                  form of priority  agreement as may  reasonably be requested by
                  the  Corporation  to evidence  the  priority of any  permitted
                  liens  which  are  permitted  by the  terms of any  agreements
                  entered  into  with all of the  Holders  to rank  prior to the
                  security constituted hereby.

         The powers of the Holders shall be deemed to be several and  cumulative
and not  dependent  on each  other and the  exercise  of any one or more of such
powers,  or in any combination of such powers,  from time to time,  shall not be
deemed to exhaust the rights of the Holders to exercise such power or powers, or
combination of powers thereafter from time to time.

                                     - 22 -
<PAGE>

9.2      RESOLUTIONS OF THE HOLDERS

         The powers  specified in Section 9.1 of this Deed and every other power
conferred  upon the  Voting  Holders  or Other  Holders  of any  series of Other
Debentures, as the case may be, by any provisions of this Deed or the Debentures
or any agreement  ancillary or supplemental hereto or thereto shall be exercised
by resolution passed in the following manner:

         (a)      the  substance  of any  resolution  shall  be  embodied  in an
                  instrument in writing and such  resolution  shall be deemed to
                  have been passed when such instrument has been executed by the
                  Voting Holders or Other  Holders,  as the case may be, to whom
                  are owed or who hold on behalf of  Beneficial  Holders to whom
                  are  owed  an  aggregate  of more  than 66 2/3% of the  Pledge
                  Obligations  relating to all of the outstanding  Debentures in
                  the  relevant  series held by the Voting  Holders or the Other
                  Holders, as the case may be;

         (b)      any such  instrument,  and any requisition or other instrument
                  to be  executed by any Holders  under any  provisions  of this
                  Deed,  may be in any number of concurrent  instruments  of the
                  same tenor and effect and any of the  Holders  may execute the
                  same in  person or by agent or  attorney  duly  authorized  in
                  writing;

         (c)      at the request of the Trustee,  the date and  execution by any
                  of the Holders or agent or attorney of any such instrument and
                  the  execution  by any of the Holders of any power of attorney
                  shall be proved by the  certificate  of any notary public that
                  the  person  signing  the  same  has  acknowledged  to him the
                  execution thereof, by affidavit or statutory  declaration of a
                  witness to such  execution,  or by the signature of the Holder
                  as witnessed by any officer of any bank or trust company; such
                  proof shall be conclusive in favour of the Trustee with regard
                  to any action  taken or  suffered  by the  Trustee  under such
                  instrument.  No  such  instrument  shall  be  effective  until
                  delivery thereof to the Trustee; and

         (d)      the  Trustee   shall  give  notice  to  all  Holders  of  each
                  resolution of the Voting  Holders or Other  Holders  passed as
                  aforesaid and delivered to the Trustee.

9.3      EFFECT OF RESOLUTIONS OF HOLDERS

         Any resolution  passed as provided in Section 9.2 shall be binding upon
the Holders and each of them, and the Trustee (subject to the provisions for its
indemnity, if any, set forth in this Deed) shall be bound to give effect thereto
accordingly.

10.      ADDITIONAL SECURITY

         To more effectively secure the due payment in lawful money of Canada of
the Trust Deed  Obligations,  the Corporation shall issue for the benefit of the
Holders and as additional security such pledges of shares, deeds of hypothec and
other security  documents as may be agreed to by the Corporation,  in a form and
substance  to be  agreed  by  the  Corporation  and  the  Voting  Holders.  Such
additional security documents shall be in favour of the Trustee,  who shall hold
the same for and on behalf of the Holders from time to time.  The  provisions of
this Deed,  including without  limitation,  Sections 3.7, 3.8, 7, 8 and 9, shall
apply with respect to such  additional  security  documents.  For the

                                     - 23 -
<PAGE>

purpose of effecting any registrations required by Section 3.8, this Deed or any
additional security may be prepared in an alternate version, but in the event of
any conflict between the terms of this Deed or such additional  security and the
terms of the alternate  version of this Deed or such  additional  security,  the
provisions of this Deed or such  additional  security shall govern to the extent
necessary to remove the conflict.

11.      NOTICE

         Any  notices to be given  under this Deed shall be given to the parties
at the addresses set out below, or to the Holders at the addresses  specified in
the Trustee's  records.  Notice shall be deemed to have been  effectually  given
when  such  notice  is  delivered  personally  to the  addressee  by  hand or by
facsimile  transmission  with  receipt  confirmed  (provided  such  delivery  by
facsimile  transmission  is made on a  business  day during  business  hours and
otherwise  shall be deemed to be given and received on the next business day) or
on the third business day after such notice is mailed by prepaid registered mail
to the  addressee.  Subject to the right of each party to change its  address by
notice to the other parties from time to time,  the addresses of the parties are
as follows:

         Norske Skog Canada Limited
         700 West Georgia Street
         9th Floor
         Vancouver, British Columbia
         V7Y 1J7

         Attention:        Chief Financial Officer
         Fax No.:          604-654-4070

         with a copy to:

         Lawson Lundell Lawson & McIntosh
         1600 Cathedral Place
         925 West Georgia Street
         Vancouver, British Columbia
         V6C 3L2

         Attention:        David J. Smith
         Fax No.:          604-669-1620

         The Canada Trust Company
         Corporate Trust Services
         Canadian Pacific Tower
         100 Wellington Street West
         4th Floor
         Toronto, Ontario
         M5K 1A2

         Attention:        Vice President, Corporate Trust & Registered Plan
                           Trust Services
         Fax No.:          416-983-2044

                                     - 24 -
<PAGE>

12.      DATE OF DEED

         This Deed may be  referred  to as bearing  the formal  date of 9 August
2001, notwithstanding the actual date of its execution.

13.      EFFECT OF HEADINGS

         The  headings  and  marginal  notes of the  Sections  in this  Deed are
inserted  for   convenience   of  reference   only  and  shall  not  affect  the
interpretation of this Deed.

14.      GOVERNING LAW

         The Deed shall be governed by and construed in accordance with the laws
of the Province of British  Columbia  and the federal laws of Canada  applicable
therein.

15.      MISCELLANEOUS

15.1     No  land  which is  charged or  mortgaged  under this Deed is farm land
within  the  definition of  subsection 1(1) of  the  FARM  LANDS  OWNERSHIP  ACT
(Manitoba).

15.2     The Corporation hereby agrees that THE LAND CONTRACTS  (ACTIONS) ACT of
the  Province of Saskatchewan shall have no application to any action, as in THE
LAND  CONTRACTS  (ACTIONS)  ACT defined, with respect to the within Deed or with
respect to  any  mortgage,  charge or other  security  given by the  Corporation
pursuant to this  Deed or to any indenture, instrument or agreement entered into
by the  Corporation at any time  hereafter,  supplemental or  ancillary to or in
implement of  this  Deed  and all of the  benefits of the  said  Act are  hereby
waived.

15.3     THE LIMITATION OF CIVIL RIGHTS ACT of the Province of Saskatchewan
         shall have no application to:

         (a)      this Deed;

         (b)      any  mortgage,  charge or other  security  for the  payment of
                  money made, given or created by this Deed;

         (c)      any   agreement  or   instrument   renewing  or  extending  or
                  collateral to this Deed or renewing or extending or collateral
                  to any  mortgage,  charge  or other  security  referred  to or
                  mentioned in subparagraph (b) of this Section; or

         (d)      the rights,  powers or remedies of the Trustee under this Deed
                  or  any  mortgage,   charge,  other  security,   agreement  or
                  instrument referred to or mentioned in subparagraph (b) or (c)
                  of this Section.

15.4     For purposes of Section 198.1 of the LAND TITLE ACT (British Columbia),
the floating charge created by Section 2.1(c) on any  present or future  real or
immovable  property or interest  therein  (for  purposes  of this  Section  15.4
collectively  referred to as the "REAL  PROPERTY") will become a fixed charge on
such Real Property upon the earlier of (a) the occurrence of an event  described
in Section 4.1, and (b) the  occurrence of any other event which by operation of
law  would  result  in such  floating  charge  becoming  a fixed  charge on real
property.

                                     - 25 -
<PAGE>

15.5     The Corporation acknowledges receipt of a true copy of this Deed.

15.6     The Corporation  expressly  waives the right to  receive  a copy of any
financing  statement or  confirmation  statement or financing  change  statement
which may be  registered  by the  Trustee  in  connection  with this Deed or any
verification  statement  issued with  respect  thereto  where such waiver is not
otherwise prohibited by law.

16.      ENUREMENT

         The  Deed  shall  enure  to the  benefit  of and be  binding  upon  the
Corporation,  the Trustee and their respective  successors and assigns. The Deed
and any benefits under this Deed may not be assigned by the  Corporation and the
obligations of the Corporation hereunder may not be assumed by a third party.

17.      REFERENCES

         References to "this Deed", "hereof", "herein", "hereto", "hereunder" or
similar  expressions mean this Trust Deed and any Schedules  hereto, as amended,
supplemented, restated and replaced from time to time.

18.      COUNTERPARTS

         For the purposes of registration  of this Deed in the British  Columbia
Land Title Office a Form B pursuant to the LAND TITLE ACT (British Columbia) may
be attached to some  copies of this Deed and  executed by only the  Corporation.
The copies of this Deed with the Form B, whether or not executed by the Trustee,
and without the Form B shall be deemed to be counterparts of the same document.

         THE PARTIES  REQUIRE THAT THIS DEED,  THE  DEBENTURES  AND ALL NOTICES,
DOCUMENTS AND ACTIONS  GIVEN,  DELIVERED OR INSTITUTED  PURSUANT TO THIS DEED BE
DRAWN IN ENGLISH.  LES PARTIES  EXIGENT QUE LE PRESENT ACTE, LES  OBLIGATIONS ET
TOUS LES AVIS,  DOCUMENTS,  OU ACTIONS  DONNES,  PASSES OU  INTENTES EN VERTU DU
PRESENT ACTE SOIENT REDIGES EN ANGLAIS.

IN WITNESS OF WHICH the parties have signed this Deed.

                                       NORSKE SKOG CANADA LIMITED

                                       By:  /s/ P. Staiger
                                          -------------------------------------
                                            PETER STAIGER,
                                            Treasurer Controller
                                                                            c/s

                                       By:  /s/ R. Leverton
                                          -------------------------------------
                                            RALPH LEVERTON,
                                            Vice-President, Finance

                                     - 26 -
<PAGE>

                                       THE CANADA TRUST COMPANY

                                       By: /s/ K. Thorpe
                                          -------------------------------------
                                           Name: Kathryn T. Thorpe
                                           Title: Authorized Signatory
                                                                            c/s

                                       By: /s/ B. Noble
                                          -------------------------------------
                                           Name: Bruce Noble
                                           Title: ETO

                                     - 27 -
<PAGE>

                                   SCHEDULE A

SERIES - [RATABLE] NO. -      - % DEBENTURE              $ -

         NORSKE SKOG CANADA  LIMITED (the  "CORPORATION"),  for value  received,
promises  to pay on demand to,  [INSERT  NAME],  the  registered  holder of this
Debenture at - , - DOLLARS ($ - ) in lawful money of Canada, and to pay interest
thereon  from  the  date  hereof  at  the  same  place in like money at the rate
of - per cent ( - %)  per  annum, calculated monthly and payable on demand, both
before and after maturity and default,  with interest on overdue interest at the
same rate.

         This  Debenture  is issued  under and secured by a Trust Deed dated for
reference 9 August 2001 (the "TRUST DEED") executed by the Corporation in favour
of The Canada  Trust  Company as Trustee,  and this  Debenture is subject to the
terms and provisions of the Trust Deed.

         This Debenture is not a negotiable instrument and may be transferred by
the holder only in accordance  with the pledge  agreement dated for reference 14
August 2001 by the  Corporation  and others (the  "PLEDGE  AGREEMENT")  and upon
compliance with the provisions of Section 1.4 of the Trust Deed. In the event of
any  conflict  between the terms of the Pledge  Agreement  and the terms of this
Debenture, the terms of the Pledge Agreement shall prevail.

         This Debenture shall not become a binding obligation of the Corporation
until it shall have been certified by the Trustee under the Trust Deed.

         IN WITNESS OF WHICH the  Corporation  has caused this  Debenture  to be
signed by its duly  authorized  signing  officer and to be dated as of 14 August
2001.

                                       NORSKE SKOG CANADA LIMITED

                                                                            c/s

                                       By:
                                           ------------------------------------
                                           PETER STAIGER,
                                           Treasurer Controller

                                       By:
                                           ------------------------------------
                                           RALPH LEVERTON,
                                           Vice-President, Finance

                              TRUSTEE'S CERTIFICATE

This Debenture is a Debenture issued under the Trust Deed within-mentioned.

Dated as of 14 August 2001.

                                       THE CANADA TRUST COMPANY

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                     - i -
<PAGE>

                                   SCHEDULE B

FREEHOLD
--------

        (PID)                           (LEGAL DESCRIPTION)

                                        VICTORIA LAND TITLE OFFICE
                                        --------------------------

        024-662-666                     Lot 1 of  Sections 4, 5, and 6, Range 10
                                        Chemainus District Plan VIP69811

        024-663-018                     Lot 3 of Sections 2, 3, and 4, Ranges 10
                                        and 11, and District  Lot 107  Chemainus
                                        District,  and of District  Lots 141 and
                                        145 Cowichan District, Plan VIP69811

        013-194-976                     That part of Section 5,  Ranges 8, 9 and
                                        10 and  Section  4,  Range 8,  Chemainus
                                        District  Shown  Outlined  in  Red in DD
                                        27614

        013-194-470                     That part of  Sections 4 and 5, Range 8,
                                        Chemainus District Shown Outlined in Red
                                        on Plan attached to DD 24931

        013-194-381                     That  part  of   Section   4,  Range  8,
                                        Chemainus District Shown Outlined in Red
                                        on Plan attached to DD 23242

        013-143-123                     That part of Sections 5 and 6, Range 10,
                                        and  that  Part  of  the   Foreshore  of
                                        District  Lot  172,  Chemainus  District
                                        Shown  Coloured  Red on  Plan  deposited
                                        under DD 14529I

        009-922-431                     That  part  of   Section  1,  Range  11,
                                        Chemainus District Lying to the North of
                                        the Northerly Boundary of Chaplin Street
                                        as said  Street is Shown on Plan 739 and
                                        the  Production  Easterly  of  the  said
                                        Northerly  Boundary,   Except  Parts  in
                                        Plans 4257 and 23431

        009-920-145                     That  Part  of   Section   5,  Range  9,
                                        Chemainus District,  Lying Northerly and
                                        Westerly of Plan 5803,  Except  Parts in
                                        Plans 4302 and 9775

        009-925-431                     District Lot 4, Chemainus District

        009-921-168                     That Part of  Section  2,  Ranges 10 and
                                        11,  Chemainus  District,   in  Plan  DD
                                        8239I,  Containing  31.7 Acres,  more or
                                        less, Except Part in Plan 856 BL

        009-862-021                     District Lot 8, Chemainus District

        005-852-293                     Lot  1,   District   Lot  7,   Chemainus
                                        District, Plan 6538

        009-034-595                     District  Lot  7,  Chemainus   District,
                                        Except Part in Plan 6538

        009-861-998                     District Lot 6, Chemainus District

        004-627-938                     Lot 3, Chemainus District

                                     - i -
<PAGE>

        FREEHOLD
        --------

        009-926-887                     District  Lot 172,  Chemainus  District,
                                        Except  that Part  included in the Right
                                        of  Way  of the  Esquimalt  and  Nanaimo
                                        Railway Company

        006-116-981                     That part of Lot 1, Section 1, Range 10,
                                        Chemainus  District,  Plan  4357,  Shown
                                        Outlined in Red on Plan 815 R

        000-167-886                     Lot A,  Section  4,  Range 9,  Chemainus
                                        District, Plan 32612

        004-169-948                     Lot 1,  Section 4,  Range 10,  Chemainus
                                        District, Plan 15020

        000-573-736                     Lot 1,  Section 4,  Range 10,  Chemainus
                                        District, Plan 5180, Except Part in Plan
                                        15020

        006-116-965                     That Part of Lot 1, Section 1, Range 10,
                                        Chemainus District,  Plan 4357, Lying to
                                        the North of a Boundary  Parallel to the
                                        Northerly   Boundary  of  said  Lot  and
                                        Extending  from a Point on the  Easterly
                                        Boundary of said Lot Distant  1.515 CHS.
                                        from the North East Corner of said Lot.

        006-116-973                     That Part of Lot 1, Section 1, Range 10,
                                        Chemainus  District,  Plan  4357,  Lying
                                        South  of a  Boundary  Parallel  to  the
                                        Northern   Boundary   of  said  Lot  and
                                        Extending  from a Point on the  Easterly
                                        Boundary thereof Distant 1.515 CHS. from
                                        the  North  East  Corner  of  said  Lot,
                                        Except that Part thereof Shown  Outlined
                                        in Red on Plan 815R.

        006-066-551                     Lot 1,  Section 1,  Range 11,  Chemainus
                                        District, Plan 4257

        009-921-958                     That  Part  of   Section  6,  Range  10,
                                        Chemainus  District,  Lying to the North
                                        of the Right of Way of the Esquimalt and
                                        Nanaimo Railway Company

        009-920-196                     Section 6, Range 9, Chemainus  District,
                                        Except Parts in Plans 4302 and 5803

        009-920-803                     Section 4, Range 9, Chemainus  District,
                                        Except  the West 30  Chains  and  Except
                                        Parts in Plans 925 RW, 13072,  22398 and
                                        32612

        009-920-064                     That  Part  of   Section   5,  Range  8,
                                        Chemainus  District,  Lying  Easterly of
                                        the Centre Line of Tsussie  Creek (which
                                        is the  Easterly  Boundary of Plan 4302)
                                        and  to  the  North  of  the   Northerly
                                        Boundary  of  the  Right  of  Way of the
                                        Esquimalt  and Nanaimo  Railway  Company
                                        Shown on Plan DD 27614,  Except Parts in
                                        Plans 5803 and 9775

        024-662-674                     Lot 2 of  Sections 2, 3, and 4 Ranges 10
                                        and  11,  Chemainus  District,   and  of
                                        Sections  5 and  6  Range  10  Chemainus
                                        District  and of  District  Lots 141 and
                                        475 Cowichan District Plan VIP69811

                                     - ii -
<PAGE>

        FREEHOLD
        --------

        024-663-115                     Lot  5   Section  2  Ranges  10  and  11
                                        Chemainus District Plan VIP69811

        005-932-092                     Those  Parts of Lot 2,  Section 5, Range
                                        9, Chemainus  District,  Plan 5803 Shown
                                        Outlined in Red on Plan 925 RW

        007-388-004                     Lot 1,  Section 3,  Range 10,  Chemainus
                                        District,  Plan  1471,  Except  Parts in
                                        Plans 11613, 13731 and 16471

        009-024-212                     That  Part of  Parcel C (DD  36578I)  of
                                        Section 2, Range 7, Chemainus  District,
                                        Outlined in Red on Plan 920 RW

        005-419-239                     That Part of Lot 1,  Section 2, Range 7,
                                        Chemainus  District,  Plan  8697 in Plan
                                        920 RW

        009-024-174                     That  Part of  Parcel B (DD  99604I)  of
                                        Section 5, Range 10, Chemainus District,
                                        Outlined in Red on Plan 925 RW

        005-932-190                     That Part of Lot 2,  Section 5, Range 9,
                                        Chemainus  District,  Plan 5803 Lying to
                                        the  South  East of the  South  Easterly
                                        Boundary of Plan 925 RW

        009-024-336                     That  Part  of   Section   3,  Range  8,
                                        Chemainus  District,  Outline  in Red on
                                        Plan 920 RW

        009-024-310                     That  Part  of   Section   4,  Range  9,
                                        Chemainus  District,  Outlined in Red on
                                        Plan 925 RW

        009-024-379                     That  Part of Parcel E (DD  141335I)  of
                                        Section 4, Range 8, Chemainus  District,
                                        Outlined in Red on Plan 920 RW

        009-024-417                     That  Part of  Parcel D (DD  65699I)  of
                                        Section 4, Range 9, Chemainus  District,
                                        Outlined in Red on Plan 920 RW

        009-044-132                     That  Part of Parcel D (DD  118337I)  of
                                        Section  4 and  5,  Range  8,  Chemainus
                                        District, Outlined in Red on Plan 920 RW
                                        and Lying wholly within Section 4

        005-968-585                     That  Portion  of  that  Part  of Lot 3,
                                        Section 1, Range 7, Chemainus  District,
                                        Plan  5467,  Lying  to the  West  of the
                                        Westerly  Boundary  of Plan 645 RW Shown
                                        Outlined  in  Red  on  Plan  911  RW and
                                        Containing 1.27 Acres more or less

        009-739-637                     Section 8, Range 9, Chemainus District

        009-739-611                     Section 7, Range 9, Chemainus District

        009-739-718                     Those  Parts  of  Section  9,  Range  8,
                                        Chemainus  District,  Lying  East of the
                                        Chemainus River, Including all that Part
                                        of a Strip of Land 33 Feet Wide as Shown
                                        Coloured Purple and Green on Plan 16 BL,
                                        known as Mainguy Road

                                    - iii -
<PAGE>

        FREEHOLD
        --------

        009-739-688                     Those  Parts  of  Section  8,  Range  8,
                                        Chemainus  District,  Lying  East of the
                                        Chemainus River, including all that Part
                                        of a Strip of Land 33 Feet Wide as Shown
                                        Coloured Purple and Green on Plan 16 BL,
                                        known as Mainguy Road

        009-739-653                     Those  Parts  of  Section  7,  Range  8,
                                        Chemainus  District,  Lying  East of the
                                        Chemainus River, including all that Part
                                        of a Strip of Land 33 Feet Wide as Shown
                                        Coloured Purple and Green on Plan 16 BL,
                                        known as Mainguy Road

        009-739-785                     Lot 2A, Chemainus District

        009-739-777                     Lot 2, Chemainus District

        003-982-840                     Lot 1,  Section 3,  Range 10,  Chemainus
                                        District, Plan 16471

        004-798-619                     Lot 1,  Section  1,  Range 7,  Chemainus
                                        District, Plan 12696

        004-979-087                     Lot 1,  Sections  3 and 4,  Ranges 9 and
                                        10, Chemainus District, Plan 12168

        006-244-637                     Lot 2,  Section 4,  Range 10,  Chemainus
                                        District, Plan 3198

        009-956-069                     Section 3, Range 9, Chemainus  District,
                                        Except Parts in Plans 920 RW and 921 RW

        009-573-488                     That Part of Section 5, Renfrew District
                                        (Situate in Cowichan  Lake  District) as
                                        Shown Outlined in Red on Plan 457 BL

        006-912-524                     Lot  3,  Block  3,  Section  5,  Renfrew
                                        District,   (Situate  in  Cowichan  Lake
                                        District), Plan 1750

        006-912-516                     Lot  2,  Block  3,  Section  5,  Renfrew
                                        District,   (Situate  in  Cowichan  Lake
                                        District), Plan 1750

        008-768-820                     District Lot 101, Cowichan Lake District

        006-912-567                     Lot  4,  Block  3,  Section  5,  Renfrew
                                        District,   (Situate  in  Cowichan  Lake
                                        District), Plan 1750

        006-912-494                     Lot  1,  Block  3,  Section  5,  Renfrew
                                        District,   (Situate  in  Cowichan  Lake
                                        District), Plan 1750

        006-912-451                     Lot  1,  Block  2,  Section  5,  Renfrew
                                        District,   (Situate  in  Cowichan  Lake
                                        District), Plan 1750

        007-655-517                     Block 3, District Lot 12,  Cowichan Lake
                                        District, Plan 1231, Except Part in Plan
                                        31221

        005-145-473                     Lot 1, District Lot 12, Cowichan Lake
                                        District, Plan 11206

                                     - iv -
<PAGE>

        FREEHOLD
        --------

        007-663-544                     That Part of District  Lot 12,  Cowichan
                                        Lake  District,  Being  that  Portion of
                                        Fern Road  Dedicated  by Plan 1231,  and
                                        Closed  by  Order-In-Council  No.  1754,
                                        Dated  16th day of July  1956,  as Shown
                                        Outlined in Red on Plan 458 BL

        018-195-326                     Lot 2,  Section 20,  Range 4,  Quamichan
                                        District, Plan VIP56262

        005-338-859                     That Part of Lot 1, Section 17, Range 4,
                                        Quamichan  District,  Plan 9537 Shown in
                                        Red on Plan 903 RW

        009-662-481                     That  Part of  Parcel G (DD  36290I)  of
                                        Sections 18 and 19,  Range 4,  Quamichan
                                        District,  Shown Outlined in Red on Plan
                                        903 RW,  and  Containing  0.08 Acres and
                                        0.30 Acres more or less

        009-662-278                     That  Part of  Parcel P (DD  76080I)  of
                                        Sections   17,  18  and  19,   Range  4,
                                        Quamichan  District,  Shown  Outlined in
                                        Red on Plan 903 RW,  and Lying  Entirely
                                        in Section 18

        006-360-564                     That Part of Lot 10, Sections 17 and 18,
                                        Range 4, Quamichan District,  Plan 2785,
                                        Shown in Red on Plan 903 RW

        006-738-567                     That Part of Lot 4, Block 1, Section 20,
                                        Range 4, Quamichan  District,  Plan 1908
                                        Shown Outlined in Red on Plan 903 RW

        006-738-524                     That Part of Lot 3, Block 1, Section 20,
                                        Range 4, Quamichan District,  Plan 1908,
                                        Shown Outlined in Red on Plan 903 RW

        006-738-354                     That Part of Lot 2, Block 1, Section 20,
                                        Range 4, Quamichan District,  Plan 1908,
                                        Shown Outlined in Red on Plan 903 RW

        006-360-742                     That Part of Lot 11,  Section 17,  Range
                                        4, Quamichan  District,  Plan 2785 Shown
                                        in Red on Plan 903 RW

        006-157-971                     That Part of Lot 1, Section 19, Range 4,
                                        Quamichan District,  Plan 3853, Outlined
                                        in Red on Plan 903 RW

        009-668-314                     That  Part of Parcel D (DD  106367I)  of
                                        Section 19, Range 4, Quamichan District,
                                        Shown Outlined in Red on Plan 903 RW

        006-068-065                     That Part of Lot 1, Section 19, Range 4,
                                        Quamichan District,  Plan 4134, Shown in
                                        Red on Plan 903 RW

        004-680-499                     Lot A,  Section 19,  Range 4,  Quamichan
                                        District, Plan 12945

        005-586-445                     Lot 6,  Section 17,  Range 5,  Quamichan
                                        District, Plan 8636

        005-586-437                     Lot 5,  Section 17,  Range 5,  Quamichan
                                        District, Plan 8636

        005-586-429                     Lot 4,  Section 17,  Range 5,  Quamichan
                                        District, Plan 8636

                                     - v -
<PAGE>

        FREEHOLD
        --------

        006-442-382                     That Part of Lot 9, Section 10, Range 4,
                                        Somenos   District,   Plan  2196,  Shown
                                        Outlined in Red on Plan 910 RW

        008-162-794                     That Part of Lot 4, Block 1,  Section 1,
                                        Range 4,  Somenos  District,  Plan  972,
                                        Shown Outlined in Red on Plan 903 RW

        009-797-807                     That  Part  of  Section  20,   Range  7,
                                        Somenos  District,  Outlined  in  Red on
                                        Plan 911 RW and  Containing  0.66  Acres
                                        more or less

        009-797-939                     That  Part  of  Section  19,   Range  7,
                                        Somenos District, Lying West of Parcel A
                                        (DD 43540I)  Outlined in Red on Plan 911
                                        RW and  Containing  0.67  Acres  more or
                                        less

        009-744-495                     That  Part  of  the  East  70  Acres  of
                                        Section 17, Range 6,  Somenos  District,
                                        Shown Outlined in Red on Plan 911 RW

        006-406-891                     That Part of Lot 2,  Section 2, Range 4,
                                        Somenos   District,   Plan  2825,  Shown
                                        Outlined in Red on Plan 902 RW

        006-405-754                     That Part of Lot 1,  Section 2, Range 4,
                                        Somenos   District,   Plan  2825   Shown
                                        Outlined in Red on Plan 902 RW

        005-557-755                     Lot  5,  Section  1,  Range  4,  Somenos
                                        District, Plan 9162

        007-104-057                     That Part of Lot 1, Block 1,  Section 6,
                                        Range 4,  Somenos  District,  Plan 1599,
                                        Shown Outlined in Red on Plan 902 RW

        008-162-760                     That Part of Lot 3, Block 1,  Section 1,
                                        Range 4,  Somenos  District,  Plan  972,
                                        Shown Outlined in Red on Plan 903 RW

        005-934-389                     That Part of Lot 3, Section 16, Range 6,
                                        Somenos   District,   Plan  5814,  Shown
                                        Outlined in Red on Plan 911 RW

        009-796-649                     That  Part of Parcel A (DD  43540I),  of
                                        Sections  19 and 20,  Range  7,  Somenos
                                        District,   Lying  within   Section  19,
                                        included in Plan 911 RW

        009-772-995                     That  Part of  Parcel A (DD  42185I)  of
                                        Section 12, Range 5,  Somenos  District,
                                        Shown Outlined in Red on Plan 910 RW

        009-773-398                     That  Part  of  Section  13,   Range  5,
                                        Somenos  District,  Outlined  in  Red on
                                        Plan 910 RW

        005-934-354                     That Part of Lot 2, Section 16, Range 6,
                                        Somenos   District,   Plan  5814,  Shown
                                        Outlined in Red on Plan 911 RW

        008-162-824                     That Part of Lot 5, Block 1,  Section 1,
                                        Range 4,  Somenos  District,  Plan  972,
                                        Shown Outlined in Red on Plan 903 RW

        007-105-045                     That Part of Lot 4, Block 1,  Section 6,
                                        Range 4,  Somenos  District,  Plan  1599
                                        Shown Outlined in Red on Plan 902 RW

                                     - vi -
<PAGE>

        FREEHOLD
        --------

        009-773-185                     That  Part  of  Section  12,   Range  5,
                                        Somenos District,  Lying to the South of
                                        Parcel A (DD 42185I)  Shown  Outlined in
                                        Red on Plan 910 RW

        009-774-483                     Those  Parts of Parcel A (DD  89348I) of
                                        Sections  14 and 15,  Range  5,  Somenos
                                        District,  Outlined  in Red on Plans 910
                                        RW and 911 RW Except Part in Plan 15076

        006-248-110                     That Part of Lot 3,  Sections 15 and 16,
                                        Range 5,  Somenos  District,  Plan 3313,
                                        Shown  Outlined  in  Red  on  Plan  827R
                                        included within Plan 911 RW

        006-441-980                     That Part of Lot 8,  Sections  9 and 10,
                                        Range 4,  Somenos  District,  Plan 2196,
                                        Shown Outlined in Red on Plan 910 RW

        006-246-541                     That Part of Lot 1,  Sections 15 and 16,
                                        Range 5,  Somenos  District,  Plan 3313,
                                        Shown  Outlined  in Red on  Plan  911 RW
                                        Except that Part in Plan 15076

        009-744-517                     That  Part  of  the  West  50  Acres  of
                                        Section  18,  Range 7 Somenos  District,
                                        Shown Outlined in Red on Plan 911 RW

        009-744-444                     That Part of Parcel B (DD 77714I) of Lot
                                        82, Somenos District,  Shown Outlined in
                                        Red on Plan 911 RW

        009-744-509                     That  Part  of  the  West  50  Acres  of
                                        Section 17, Range 7,  Somenos  District,
                                        Shown  Outlined in Red on Plan Deposited
                                        Under DD 23410, Included in Plan 911 RW

        009-744-487                     Those  Parts of Parcel A (DD  77714I) of
                                        Section 16, Range 6,  Somenos  District,
                                        Shown Outlined in Red on Plan 911 RW

        006-582-311                     That Part of Lot B,  Section 7, Range 4,
                                        Somenos   District,   Plan  2457,  Shown
                                        Outlined in Red on Plan 902 RW

        006-568-556                     That Part of Lot 7,  Section 2, Range 3,
                                        Somenos  District,  Plan 2461,  Shown in
                                        Red on Plan 902 RW

        009-872-906                     That Part of the South 1/2 of Section 8,
                                        Range   4,   Somenos   District,   Shown
                                        Outlined in Red on Plan 902 RW

        006-441-505                     That  Part of Lot 5,  Sections  8 and 9,
                                        Somenos   District,   Plan  2196   Shown
                                        Outlined in Red on Plan 902 RW

        006-563-643                     That Part of Lot 1,  Section 4, Range 4,
                                        Somenos   District,   Plan  2458,  Shown
                                        Outlined in Red on Plan 902 RW

        006-609-007                     That Part of Lot D,  Section 7, Range 4,
                                        Somenos   District,   Plan  2457,  Shown
                                        Outlined in Red on Plan 902 RW

                                    - vii -
<PAGE>

        FREEHOLD
        --------

        006-246-851                     That Part of Lot 2, Section 15, Range 5,
                                        Somenos   District,   Plan  3313,  Shown
                                        Outlined  in Red on Plan  911 RW  Except
                                        that Part in Plan 15076

        006-442-641                     That Part of Lot 16,  Section 11,  Range
                                        5, Somenos  District,  Plan 2196,  Shown
                                        Outlined in Red on Plan 910 RW

        006-442-561                     That Part of Lot 10,  Section 10,  Range
                                        4, Somenos  District,  Plan 2196,  Shown
                                        Outlined in Red on Plan 910 RW

        005-576-695                     That  Part  of  Section  11,   Range  4,
                                        Somenos District,  Shown Outlined in Red
                                        on Plan 910 RW

        009-759-492                     That Part of Section 4, Range 3, Somenos
                                        District  Shown  Outlined in Red on Plan
                                        902 RW

        006-407-234                     That Part of Lot 4,  Section 2, Range 4,
                                        Somenos   District,   Plan  2825,  Shown
                                        Outlined in Red on Plan 902 RW

        009-774-939                     That  Part of Parcel C (DD  174586I)  of
                                        Section 14, Range 5,  Somenos  District,
                                        Outlined in Red on Plan 910 RW

        006-581-684                     That Part of Lot A,  Section 7, Range 4,
                                        Somenos   District,   Plan  2457,  Shown
                                        Outlined in Red on Plan 902 RW

        006-608-787                     That Part of Lot C,  Section 7, Range 4,
                                        Somenos   District,   Plan  2457,  Shown
                                        Outlined in Red on Plan 902 RW

        009-764-151                     That Part of Section 5, Range 4, Somenos
                                        District,  Shown Outlined in Red on Plan
                                        902 RW

        005-576-571                     That Part of Lot 2,  Section 1, Range 4,
                                        Somenos District, Plan 8611 Shown in Red
                                        on Plan 903 RW

        006-440-347                     That Part of Lot 3,  Section 9, Range 4,
                                        Somenos   District,   Plan  2196,  Shown
                                        Outlined in Red on Plan 910 RW

        007-104-375                     That Part of Lot 2, Block 1,  Section 6,
                                        Range 4,  Somenos  District,  Plan 1599,
                                        Shown Outlined in Red on Plan 902 RW

        006-406-939                     That Part of Lot 3,  Section 2, Range 4,
                                        Somenos   District,   Plan  2825,  Shown
                                        Outlined in Red on Plan 902 RW

        007-104-936                     That Part of Lot 3, Block 1,  Section 6,
                                        Range 4,  Somenos  District,  Plan 1599,
                                        Shown Outlined in Red on Plan 902 RW

        006-373-968                     That Part of Lot 2,  Section 3, Ranges 3
                                        and  4,  Somenos  District,  Plan  2794,
                                        Shown in Red on Plan 902 RW

        006-383-025                     That Part of Lot 1,  Section 3, Range 3,
                                        Somenos   District,   Plan  2776   Shown
                                        Outlined in Red on Plan 902 RW

                                    - viii -
<PAGE>

        FREEHOLD
        --------

        005-576-539                     Lot  1,  Section  1,  Range  4,  Somenos
                                        District, Plan 8611

        003-733-998                     Lot  1,  Section  9,  Range  4,  Somenos
                                        District, Plan 19355

        007-388-209                     Lot 15,  Section 3, Range 10,  Chemainus
                                        District, Plan 1471, Except Part in Plan
                                        11574

        024-663-034                     Lot 4 of  Sections 2, 3, and 4, Range 10
                                        Plan VIP69811

        OTHER
        -----

                                        NEW WESTMINSTER/VANCOUVER LAND TITLE
                                        ------------------------------------
                                        OFFICE
                                        ------

        As to Lease No. BM250814

        004-501-110                     Lot 14, DL 9, 10 and 11, Gp 2, NWD, Plan
                                        41612

        009-523-197                     Lot 1 of the  Bed of the  Fraser  River,
                                        NWD, Plan 76570

        023-512-512                     Lot 1,  DL 12 and 13,  Gp 2,  and of the
                                        Bed  of  the  Fraser  River,  NWD,  Plan
                                        LMP29318

                                        VICTORIA LAND TITLE OFFICE
                                        --------------------------
        As to Lease No. 143648G
        (PID)                           (LEGAL DESCRIPTION)

        009-589-392                     Section 44 Renfrew  District except that
                                        part in the Right of Way of the Canadian
                                        Northern  Pacific  Railway  Company,  as
                                        shown on Location Plan 726F

        As to Equitable Interest
        No. 230620G
        (PID)                           (LEGAL DESCRIPTION)

        008-412-481                     Block 8A Cowichan Lake District Plan 775

        008-413-223                     Block 9 Cowichan  Lake District Plan 775
                                        except that part shown  coloured  red on
                                        Plan "D" Deposited DD 25837I

        As to Timber Assignment
        No. 237673G
        (PID)                           (LEGAL DESCRIPTION)

        009-378-022                     Block 1035 Malahat District

        As to Right of Way
        No. 302504G
        (PID)                           (LEGAL DESCRIPTION)

        000-880-957                     That Part of Section 42 Renfrew District
                                        (situate  in  Cowichan  Lake   District)
                                        shown outlined in red on Plan 1102 RW

                                     - ix -
<PAGE>

       OTHER
       -----

        As to Undersurface Rights
        No. B44699
        (PID)                           (LEGAL DESCRIPTION)

        004-621-131                     Lot 1 Section 29 Sooke District Plan
                                        13674

        As to Undersurface Rights
        No. B44701
        (PID)                           (LEGAL DESCRIPTION)

        009-374-671                     Section 32 Sooke District

        As to Statutory Right of Way
        No. ED110387
        (PID)                           (LEGAL DESCRIPTION)

        010-380-302                     That part of  Sections 3, 4 and 5, Range
                                        7, Chemainus  District,  being a portion
                                        of the  Halalt  Indian  Reserve #2 shown
                                        outlined in red on Plan 2035 OS

        As to Possibility of Reverter
        No. EF74311
        (PID)                           (LEGAL DESCRIPTION)

        017-832-951                     That  part of Lot 3  Section 3 Ranges 10
                                        and  11  Chemainus  District  Plan  3161
                                        included within Plan VIP54480

        As to Option to Purchase
        No. EF74314
        (PID)                           (LEGAL DESCRIPTION)

        017-832-951                     That  part of Lot 3  Section 3 Ranges 10
                                        and  11  Chemainus  District  Plan  3161
                                        included within Plan VIP54480

        As to Statutory Right of Way
        No. EK140688
        (PID)                           (LEGAL DESCRIPTION)

        000-849-871                     District Lot 52 Sayward  District Except
                                        parts in Plans 659RW, 42194 and VIP57724

        As to Statutory Right of Way
        No. EK91743
        (PID)                           (LEGAL DESCRIPTION)

        024-015-636                     Lot  C  Section  4  Range  8   Chemainus
                                        District  Plan  VIP66593  Except part in
                                        Plan VIP66952

                                     - x -
<PAGE>

        OTHER
        -----

        As to Option to Purchase
        No. EK91746
        (PID)                           (LEGAL DESCRIPTION)

        024-015-636                     Lot  C  Section  4  Range  8   Chemainus
                                        District  Plan  VIP66593  Except part in
                                        Plan VIP66952

        As to Right of First Refusal
        No. EL30326
        (PID)                           (LEGAL DESCRIPTION)

        009-596-569                     District Lot 566 Cowichan District

        009-862-030                     District Lot 9 Chemainus District

        As to Right of Way
        No. J44403
        (PID)                           (LEGAL DESCRIPTION)

        008-959-251                     The Fractional South West 1/4 of Section
                                        8 Township 2 Comox District Plan 552A

        008-959-595                     The Fractional North East 1/4 of Section
                                        9 Township 2 Comox District Plan 552A

        008-960-020                     The Fractional North West 1/4 of Section
                                        9 Township 2 Comox District Plan 552A

        008-962-863                     That  part  of  the  North  West  1/4 of
                                        Section 8 Township 2 Comox District Plan
                                        552A, Lying West of Quinsam Lake

        008-962-880                     That part of the  Fractional  South East
                                        Quarter  1/4 of  Section  8  Township  2
                                        Comox District Plan 552A, Lying South of
                                        Quinsam Lake

        008-965-374                     Section 16 Township 2 Comox District
                                        Plan 552A

        008-965-633                     The North East 1/4 of the North East 1/4
                                        of Section 17 Township 2 Comox  District
                                        Plan 552A

        009-004-921                     The  West 1/2 of the  South  East 1/4 of
                                        Section  33  Township  2 Comox  District
                                        Plan 552A

        009-004-891                     The South East 1/4 of the South West 1/4
                                        of Section 33 Township 2 Comox  District
                                        Plan 552A

        009-004-823                     The  North   East  1/4  of   Section  33
                                        Township  2  Comox  District  Plan  552A
                                        except   part   within  Lot  48  Sayward
                                        District

        009-000-950                     The South East 1/4 of the North East 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

                                     - xi -
<PAGE>

        OTHER
        -----

        009-000-925                     The South East 1/4 of the South West 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

        009-000-895                     The South West 1/4 of the South West 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

        009-000-852                     The South East 1/4 of the North West 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

        009-000-780                     The North East 1/4 of the North West 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

        009-000-747                     The  South   East  1/4  of   Section  28
                                        Township  2  Comox  District  Plan  552A

        009-000-704                     The  West  1/2 of the  North East 1/4 of
                                        Section  28  Township 2  Comox  District
                                        Plan 552A

        009-000-593                     The North  1/2 of the South  East 1/4 of
                                        Section  27  Township  2 Comox  District
                                        Plan 552A

        009-000-500                     The  South   West  1/4  of   Section  27
                                        Township  2  Comox  District  Plan  552A

        009-000-411                     The  North 1/2  of Section 27 Township 2
                                        Comox  District  Plan  552A

        008-996-661                     The South East 1/4 of the North West 1/4
                                        of Section 12 Township 2 Comox  District
                                        Plan 552A

        008-996-725                     The South  1/2 of the North  East 1/4 of
                                        Section  14  Township  2 Comox  District
                                        Plan 552A

        008-996-768                     The North West 1/4 of the North West 1/4
                                        of Section 14 Township 2 Comox  District
                                        Plan 552A

        008-996-784                     The South East 1/4 of the North West 1/4
                                        of Section 14 Township 2 Comox  District
                                        Plan 552A

        008-996-857                     The  West 1/2 of the  South  West 1/4 of
                                        Section  14  Township  2 Comox  District
                                        Plan 552A

        008-996-881                     The North East 1/4 of the South East 1/4
                                        of Section 14 Township 2 Comox  District
                                        Plan 552A

        008-996-938                     The  North   East  1/4  of   Section  21
                                        Township  2  Comox  District  Plan  552A

                                    - xii -
<PAGE>

        OTHER
        -----

        008-996-971                     The  North 1/2 of the  North West 1/4 of
                                        Section  21  Township 2  Comox  District
                                        Plan 552A

        008-997-012                     The South East 1/4 of the North West 1/4
                                        of Section 21 Township 2 Comox  District
                                        Plan 552A

        008-997-039                     The South East 1/4 of the South West 1/4
                                        of Section 21 Township 2 Comox  District
                                        Plan 552A

        008-997-063                     The South West 1/4 of the South West 1/4
                                        of Section 21 Township 2 Comox  District
                                        Plan 552A

        008-997-071                     The North East 1/4 of the South West 1/4
                                        of Section 21 Township 2 Comox  District
                                        Plan 552A

        008-997-080                     The  South   East  1/4  of   Section  21
                                        Township  2  Comox  District  Plan  552A

        008-996-491                     The North East 1/4 of the North West 1/4
                                        of Section 12  Township 2 Comox District
                                        Plan 552A

        008-996-539                     The North East 1/4 of the North East 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

        008-996-563                     The North West 1/4 of the North West 1/4
                                        of Section 28 Township 2 Comox  District
                                        Plan 552A

        008-965-064                     The North West 1/4 of the North West 1/4
                                        of Section 12 Township 2 Comox  District
                                        Plan 552A

        008-969-507                     The South East 1/4 of the South East 1/4
                                        of Section 14 Township 2 Comox  District
                                        Plan 552A

        008-969-442                     The South West 1/4 of the North West 1/4
                                        Section  14  Township  2 Comox  District
                                        Plan 552A

        008-969-388                     The North East 1/4 of the North East 1/4
                                        of Section 11 Township 2 Comox  District
                                        Plan 552A

        008-962-111                     The South West 1/4 of the North East 1/4
                                        of Section 11 Township 2 Comox  District
                                        Plan 552A

        008-958-874                     The South  1/2 of the South  East 1/4 of
                                        Section  18  Township  2 Comox  District
                                        Plan 552A

        008-958-793                     The South East 1/4 of the South West 1/4
                                        of Section 18 Township 2 Comox  District
                                        Plan 552A

                                    - xiii -
<PAGE>

        OTHER
        -----

        008-957-479                     The South West 1/4 of the South West 1/4
                                        of Section 18 Township 2 Comox  District
                                        Plan 552A

        008-957-398                     The  South   East  1/4  of   Section  15
                                        Township 2 Comox District Plan 552A

        008-957-321                     The  North   East  1/4  of   Section  15
                                        Township 2 Comox District Plan 552A

        008-957-240                     The  North   West  1/4  of   Section  15
                                        Township 2 Comox District Plan 552A

        008-957-185                     The South West 1/4 of Section 7 Township
                                        2 Comox District Plan 552A

        008-957-096                     The  Fractional  South  East  1/4 of the
                                        Fractional  South  East 1/4 of Section 7
                                        Township 2 Comox District Plan 552A

        008-956-961                     The Fractional North East 1/4 of Section
                                        7 Township 2 Comox District Plan 552A

        008-956-855                     The North West 1/4 of Section 7 Township
                                        2 Comox District Plan 552A

        008-951-683                     The Fractional South West 1/4 of Section
                                        3 Township 2 Comox District Plan 552A

        008-945-748                     The North East 1/4 of the South East 1/4
                                        of Section 6  Township 2 Comox  District
                                        Plan 552A

        008-945-691                     The South East 1/4 of the North East 1/4
                                        of Section 6  Township 2 Comox  District
                                        Plan 552A

        008-945-659                     The North East 1/4 of the North East 1/4
                                        of Section 6  Township 2 Comox  District
                                        Plan 552A

        008-945-632                     The South East 1/4 of Section 5 Township
                                        2 Comox District Plan 552A

        008-945-608                     The South West 1/4 of Section 5 Township
                                        2 Comox District Plan 552A

        008-945-519                     The North East 1/4 of the North West 1/4
                                        of Section 5  Township 2 Comox  District
                                        Plan 552A

        008-945-586                     The North East 1/4 of Section 5 Township
                                        2 Comox District Plan 552A

                                    - xiv -
<PAGE>

        OTHER
        -----

        008-945-454                     The South East 1/4 of Section 3 Township
                                        2 Comox District Plan 552A

        008-945-373                     The North East 1/4 of Section 3 Township
                                        2 Comox District Plan 552A

        008-945-276                     The North West 1/4 of Section 3 Township
                                        2 Comox District Plan 552A

        008-944-971                     The South West 1/4 of the South East 1/4
                                        of Section 2  Township 2 Comox  District
                                        Plan 552A

        008-944-849                     The North West 1/4 of the South East 1/4
                                        of Section 2  Township 2 Comox  District
                                        Plan 552A

        008-944-679                     The South West 1/4 of Section 2 Township
                                        2 Comox District Plan 552A

        008-944-563                     The South East 1/4 of the North West 1/4
                                        of Section 2  Township 2 Comox  District
                                        Plan 552A

        008-944-504                     The South West 1/4 of the North East 1/4
                                        of Section 2  Township 2 Comox  District
                                        Plan 552A

        008-938-415                     The South East 1/4 of the South West 1/4
                                        of Section 14 Township 2 Comox  District
                                        Plan 552A

        008-938-318                     The North West 1/4 of the North East 1/4
                                        of Section 11 Township 2 Comox  District
                                        Plan 552A

        008-938-181                     The  South   East  1/4  of   Section  11
                                        Township 2 Comox District Plan 552A

        008-938-075                     The Fractional South West 1/4 of Section
                                        11 Township 2 Comox District Plan 552A

        008-938-016                     Fractional  North West 1/4 of Section 11
                                        Township 2 Comox District Plan 552A

        008-937-893                     The Fractional South East 1/4 of Section
                                        10 Township 2 Comox District Plan 552A

        008-937-397                     The South West 1/4 of the North West 1/4
                                        of Section 2  Township 2 Comox  District
                                        Plan 552A

        008-937-150                     The North  1/2 of the North  West 1/4 of
                                        Section 2 Township 2 Comox District Plan
                                        552A

                                     - xv -
<PAGE>

        OTHER
        -----

        008-936-889                     The North West 1/4 of the North East 1/4
                                        of Section 2  Township 2 Comox  District
                                        Plan 552A

        008-951-209                     The  South  West  1/4 of the  Fractional
                                        South  East 1/4 of  Section 7 Township 2
                                        Comox District Plan 552A

        008-951-136                     The   Fractional   North   1/2   of  the
                                        Fractional  South  East 1/4 of Section 7
                                        Township 2 Comox District Plan 552A

        008-951-012                     The South East 1/4 of the South East 1/4
                                        of Section 6  Township 2 Comox  District
                                        Plan 552A

        008-950-911                     The  North  West  1/4 of the  Fractional
                                        North  West 1/4 of  Section 5 Township 2
                                        Comox District Plan 552A

        008-950-784                     The South 1/2 of  Fractional  North West
                                        1/4  of   Section  5  Township  2  Comox
                                        District Plan 552A

        008-950-652                     The North East 1/4 of  Fractional  South
                                        East 1/4 of  Section 2  Township 2 Comox
                                        District Plan 552A

        008-969-582                     The  South   West  1/4  of   Section  34
                                        Township 2 Comox District Plan 552A

        009-000-321                     Section 22 Township 2 Comox  District
                                        Plan 552A

        008-937-681                     The  Fractional  Section  4  Township  2
                                        Comox District Plan 552A

        008-473-820                     Block 42 Comox District Plan 789

        009-551-981                     District Lot 252 Comox District as shown
                                        outlined in Red on Plan deposited  under
                                        DD 10063N

        007-687-826                     Block 25 Comox District Plan 691D except
                                        part in District Lot 48 Sayward District

        As to the following Water
        Lot Leases:
        (PID)                           (LEGAL DESCRIPTION)

                                        NEW WESTMINSTER/VANCOUVER LAND TITLE
                                        ------------------------------------
                                        OFFICE
                                        ------

        N/A                             Waterlot Lease  Agreement No. 05020 made
                                        the  15th  day of  June,  1999,  between
                                        North  Fraser  Harbour  Commission,   as
                                        lessor and Elk Falls  Forest  Industries
                                        Limited,  as  lessee,  and  subsequently
                                        assigned to the  Mortgagor,  which Lease
                                        is in

                                    - xvi -
<PAGE>

        OTHER
        -----

                                        respect of Lot 6044,  Group 1, New
                                        Westminster District,  containing in the
                                        aggregate of 0.8065 Hectares

                                        VICTORIA LAND TITLE OFFICE
                                        --------------------------

        N/A                             Waterlot Lease Agreement No. 101412 made
                                        the 23rd day of December,  1986, between
                                        Her  Majesty  the  Queen in Right of the
                                        Province     of    British     Columbia,
                                        represented  by the  Minister of Forests
                                        and Lands,  as lessor and the  Mortgagor
                                        as lessee,  which Lease is in respect of
                                        Block B of Lot 161, Cowichan District

        N/A                             Waterlot Lease Agreement No. 102130 made
                                        the 23rd day of November,  1987, between
                                        Her  Majesty  the  Queen in Right of the
                                        Province     of    British     Columbia,
                                        represented  by the  Minister of Forests
                                        and Lands,  as lessor and the  Mortgagor
                                        as lessee,  which Lease is in respect of
                                        Block D of Lot 107G, Chemanius District,
                                        containing 13.72 hectares

        N/A                             Waterlot Lease Agreement No. 102653 made
                                        the 23rd day of December,  1988, between
                                        Her  Majesty  the  Queen in Right of the
                                        Province     of    British     Columbia,
                                        represented by the Minister  Responsible
                                        for  Crown  Lands,  as  lessor  and  the
                                        Mortgagor  as lessee,  which Lease is in
                                        respect of Blocks A & B of District  Lot
                                        107G,   Chemanius   District   as  shown
                                        outlined in red on plan attached to this
                                        waterlot lease agreement

        N/A                             Waterlot Lease Agreement No. 106051 made
                                        the 1st day of February,  1998,  between
                                        Her  Majesty  the  Queen in Right of the
                                        Province     of    British     Columbia,
                                        represented    by   the    Minister   of
                                        Environment,  Lands and Parks, as lessor
                                        and the Mortgagor as lessee, which Lease
                                        is in  respect  of  Block E of  District
                                        Lots   565,676   and   2008,    Cowichan
                                        District,   shown   outlined  on  sketch
                                        attached   to   this   waterlot    lease
                                        agreement, containing 57.30 hectares

        N/A                             Waterlot Lease Agreement No. 101447 made
                                        the 17th day of November,  1993, between
                                        Her  Majesty  the  Queen in Right of the
                                        Province     of    British     Columbia,
                                        represented    by   the    Minister   of
                                        Environment,  Lands and Parks, as lessor
                                        and  Crown  Forest  Industries  Ltd.  as
                                        lessee, and subsequently assigned to Elk
                                        Falls  Forest  Industries   Limited  and
                                        further assigned to the Mortgagor, which
                                        Lease  is in  respect  of Block A of Lot
                                        1504, Sayward District

                                    - xvii -
<PAGE>

        OTHER
        -----

        N/A                             Waterlot Lease Agreement No. 100785 made
                                        the 17th day of  November, 1993, between
                                        Her  Majesty  the  Queen in Right of the
                                        Province     of    British     Columbia,
                                        represented    by   the    Minister   of
                                        Environment,  Lands and Parks, as lessor
                                        and  Crown  Forest  Industries  Ltd.  as
                                        lessee, and subsequently assigned to Elk
                                        Falls  Forest  Industries   Limited  and
                                        further assigned to the Mortgagor, which
                                        Lease is in respect of Lot 411 and Block
                                        B of Lot 1516, Sayward District

                                        END OF DOCUMENT

                                   - xviii -

<PAGE>

                  THIS  SUPPLEMENTAL  TRUST DEED dated for reference 1 September
2001.

BETWEEN:

                           NORSKE SKOG CANADA LIMITED,  a
                           corporation  amalgamated under the laws of Canada

                           (the "CORPORATION")

                                     - and -

                           THE CANADA TRUST COMPANY,  a trust
                           company  amalgamated under the laws of Canada

                           (the "TRUSTEE")

                  WHEREAS by a trust deed dated for  reference 9 August 2001, as
amended,  supplemented,  restated and replaced  from time to time,  made between
Norske Skog Canada Limited (the "PREDECESSOR  CORPORATION") and the Trustee (the
"TRUST  DEED"),  a copy of which is attached as Schedule A to this  Supplemental
Trust Deed, the Predecessor Corporation did grant and charge to and in favour of
the  Trustee  its  interest in certain  property  and assets of the  Predecessor
Corporation  including,  without  limitation,  its  interest  in all present and
future Real Property of the Predecessor Corporation;

                  AND WHEREAS the  Corporation is the successor by  amalgamation
(the "AMALGAMATION") to the Predecessor Corporation and Pacifica Papers Inc. and
has executed and  delivered to the Trustee a  Confirmation  dated as of the date
hereof with respect to the  obligations of the  Corporation  and the Predecessor
Corporation under the Trust Deed and with respect to the Trust Deed Obligations;

                  AND  WHEREAS  pursuant  to Article 10 of the Trust  Deed,  the
Corporation shall, from time to time, issue for the benefit of the Holders,  and
as additional security, such other security documents as may be agreed to by the
Corporation;

                  AND WHEREAS as a result of the  Amalgamation,  the Corporation
now  owns  certain  additional  Real  Property  and has  agreed  to  grant  this
Supplemental Trust Deed in order to register the Trust Deed against the title to
the Real Property;

                  AND WHEREAS all necessary  resolutions of the Directors of the
Corporation have been duly enacted and passed and all the necessary  matters and
things  have  been  done  and  performed  to  authorize  the  execution  of this
Supplemental  Trust Deed and to make this Supplemental  Trust Deed legal,  valid
and binding upon the parties hereto;

                                      - 1 -
<PAGE>

                  NOW THEREFORE THIS AGREEMENT  WITNESSES that in  consideration
of the  premises,  of one dollar  ($1.00) now paid by each of the parties to the
other and other good and valuable  consideration (the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto) and for the purpose
of  securing  the due  payment  in lawful  money of  Canada  of the  Trust  Deed
Obligations, it is hereby covenanted, agreed and declared as follows:

1. All  capitalized  terms  used  herein  (including,  without  limitation,  the
Recitals  hereto)  and not herein  defined  shall have the  respective  meanings
defined in the Trust Deed.

2. With effect on and from the date of this  Supplemental  Trust Deed, the Trust
Deed  is  amended  by  deleting  Schedule  B  attached  to the  Trust  Deed  and
substituting therefor Schedule B attached to this Supplemental Trust Deed.

3. Without  limitation to or derogation from any provision of the Trust Deed and
subject to Section 2.2 of the Trust, the Corporation hereby:

         (a)      grants, conveys, assigns,  mortgages,  pledges and charges, as
                  and by way of a first specific mortgage, pledge and charge, to
                  and in favour of the Trustee and its  successors in the trust,
                  as Trustee for the benefit and security of the Holders all its
                  presently  owned and hereafter  acquired or held Real Property
                  and all  interests  in and  rights  relating  to land  and all
                  commons, ways, profits, easements, rights-of-way,  privileges,
                  benefits,  licenses,   improvements,   immunities  and  rights
                  whether   connected   therewith  or  appurtenant   thereto  or
                  separately  owned  or  held  and  all  structures,  buildings,
                  plants,  fixed machinery,  fixtures,  appurtenances  and other
                  assets belonging,  affixed or appurtenant  thereto,  including
                  without  departing  from the  generality  of the foregoing the
                  property  and  rights  and  interests   therein  described  in
                  Schedule B hereto, or created by any modifications or renewals
                  of the leases or other  instruments  described  in  Schedule B
                  from  time to time  and any  right or  option  to renew or any
                  option or right of first  refusal to lease or to purchase that
                  may be contained in any of the foregoing or held in connection
                  therewith,  together  with all leases and  agreements  entered
                  into from time to time  superseding  or  replacing  any of the
                  foregoing; and

         (b)      assigns,  transfers,  sets over and grants to the  Trustee and
                  its  successors in the trust,  for the benefit and security of
                  the  Holders,  any and all Rents due or accruing due or at any
                  time  hereafter to become due under any and all Leases and all
                  benefits and advantages to be derived from the Leases, and all
                  guarantees  of and  security  for payment of amounts due under
                  the  Leases  and all  covenants  of the  tenants,  guarantors,
                  covenantors and indemnifiers therein contained,  and the right
                  to collect and receive payment of the Rents, together with all
                  the right, title and interest of the Corporation, as landlord,
                  in the Leases and any renewals thereof and options to lease or
                  purchase, if any therein contained.

4. Save as specifically  amended by Section 2 of this  Supplemental  Trust Deed,
the Trust Deed shall continue in full force and effect.  For greater  certainty,
the charge and grant of

                                     - 2 -
<PAGE>

security  contained  in Section 3 of this  Supplemental Trust Deed supplements
and does not amend the provisions of the Trust Deed.

5. The Trust Deed, as amended by this  Supplemental  Trust Deed, and the charges
and security  created and provided  thereby are in all  respects  confirmed  and
preserved.

6. The Trust Deed, as amended by this  Supplemental  Trust Deed,  shall enure to
the  benefit of and be  binding  upon the  Corporation,  the  Trustee  and their
respective   successors  and  assigns.  The  Trust  Deed,  as  amended  by  this
Supplemental Trust Deed, and any benefits  thereunder may not be assigned by the
Corporation and the obligations of the Corporation  hereunder may not be assumed
by a third party.

7. The  Corporation  hereby  acknowledges  receipt of an  executed  copy of this
Supplemental Trust Deed. The Corporation expressly waives the right to receive a
copy of any financing  statement or confirmation  statement or financing  change
statement  which  may be  registered  by the  Trustee  in  connection  with this
Supplemental  Trust  Deed or any  verification  statement  issued  with  respect
thereto where such waiver is not otherwise prohibited by law.

8. For the purpose of effecting any registrations  required with respect to this
Supplemental  Trust  Deed,  this  Supplemental  Trust Deed may be prepared in an
alternate  version,  but in the event of any conflict  between the terms of this
Supplemental  Trust  Deed  and  the  terms  of the  alternate  version  of  this
Supplemental  Trust Deed, the provisions of this  Supplemental  Trust Deed shall
govern to the extent necessary to remove the conflict. Without limitation to the
foregoing,  for the purposes of registration of this Supplemental  Trust Deed in
the British Columbia Land Title Office a Form B or a Form C pursuant to the LAND
TITLE ACT (British Columbia) may be attached to some copies of this Supplemental
Trust Deed and executed by only the Corporation. The copies of this Supplemental
Trust  Deed  with the  Form B or the  Form C,  whether  or not  executed  by the
Trustee, and without the Form B or the Form C shall be deemed to be counterparts
of the same document.

                                     - 3 -
<PAGE>

9. This Supplemental Trust Deed shall be governed by and construed in accordance
with the laws of the Province of British Columbia and the federal laws of Canada
applicable therein.

                  IN WITNESS  WHEREOF THE  PARTIES  HERETO  have  executed  this
Supplemental  Trust Deed under their respective  corporate seals in the hands of
their respective proper officers duly authorized in that behalf.

                                       NORSKE SKOG CANADA LIMITED

                                       By: /s/ R. Leverton
                                           ------------------------------------
                                           RALPH LEVERTON,
                                           Vice-President, Finance, Chief
                                           Financial Officer and Secretary

                                                                            c/s

                                       By: /s/ Peter Staiger
                                           ------------------------------------
                                           PETER M. STAIGER,
                                           Treasurer

                                       THE CANADA TRUST COMPANY

                                       By: /s/ K. Thorpe
                                           ------------------------------------
                                           Name: Kathryn T. Thorpe
                                           Title: Authorized Signatory
                                                                            c/s

                                       By: /s/ G. Sadduch
                                           ------------------------------------
                                           Name: Guy Sadduch
                                           Title: Trust Officer

                                     - 4 -
<PAGE>

                                   SCHEDULE A

                      [ATTACH COPY OF ORIGINAL TRUST DEED.]

                                     - i -

<PAGE>

                                   SCHEDULE B

                                 END OF DOCUMENT
                                 ---------------

                                     - i -<PAGE>

                            OMNIBUS PLEDGE AGREEMENT

TO:      THE  TORONTO-DOMINION  BANK in its  capacity  as  administrative  agent
         for and on  behalf of and for the benefit of the Secured Parties
         (as defined below)
         Corporate and Investment Banking
         66 Wellington Street West, 38th Floor
         Toronto-Dominion Bank Tower
         Toronto, Ontario
         M5K 1A2

         (the "PLEDGEE")

DATED for reference 14 August 2001.

         Each Pledgor refers to its Trust Deed dated for reference 9 August 2001
(together with any additional security relating thereto, each referred to herein
as a "TRUST  DEED" and  collectively  as the  "TRUST  DEEDS")  executed  by such
Pledgor in favour of The Canada Trust Company, as Trustee (the "TRUSTEE").

         Each  Pledgor  also  refers  to  the  following   debentures  (each,  a
"DEBENTURE",  collectively,  the "DEBENTURES")  which each has issued under, and
which are secured by its Trust Deed:

         (a)      a 25%  Debenture  designated as Series A No. 1 of such Pledgor
                  in   the   principal    amount   of   ONE   BILLION    DOLLARS
                  ($1,000,000,000)  in lawful  currency of Canada dated as of 14
                  August 2001, payable on demand and in fully registered form in
                  the name of the Pledgee;

         (b)      a 25%  Debenture  designated as Series A No. 2 of such Pledgor
                  in   the   principal    amount   of   ONE   BILLION    DOLLARS
                  ($1,000,000,000)  in lawful  currency of Canada dated as of 14
                  August 2001, payable on demand and in fully registered form in
                  the name of the Pledgee; and

         (c)      a 25%  Debenture  designated as Series B No. 1 of such Pledgor
                  in the  principal  amount  of  FIVE  HUNDRED  MILLION  DOLLARS
                  ($500,000,000)  in lawful  currency  of Canada  dated as of 14
                  August 2001, payable on demand and in fully registered form in
                  the name of the Pledgee.

Any reference to the  "Debentures"  herein shall be  interpreted as referring to
"the Debentures or any of them".

         Each of the Pledgors  jointly and severally  agrees with the Pledgee as
follows:

1.       In this Pledge  Agreement,  unless something in the subject matter or
context is inconsistent therewith:

                                      - 1 -
<PAGE>

         (a)      "SYNDICATED CREDIT AGREEMENT" means the credit agreement dated
                  for  reference  14 August 2001 between the Pledgors and others
                  as Restricted Parties (as defined therein,  each a "RESTRICTED
                  PARTY"),  the Lenders (as defined  therein)  from time to time
                  party  thereto  and the  Pledgee,  as  amended,  supplemented,
                  restated or replaced  from time to time.  Any reference to the
                  "Restricted  Parties" herein shall be interpreted as referring
                  to "the Restricted Parties or any of them";

         (b)      "EVENT OF DEFAULT"  means (i) the  occurrence  of an "event of
                  default"  or a  "termination  event" as  defined in any of the
                  Secured  Agreements  or (ii) the  occurrence  of any  event by
                  which the Obligations Secured (or any of them) have become due
                  and  payable  by  reason of (1) any  default  under any of the
                  Secured  Agreements or (2) any demand for payment validly made
                  by any creditor pursuant to any Secured Agreement which is not
                  met in  accordance  with the terms of the demand or within any
                  applicable grace period;

         (c)      "PLEDGORS" means any one or more of Norske Skog Canada Finance
                  Limited,  Norske Skog Canada Limited,  Norske Skog Canada Pulp
                  Operations Limited, Norske Skog Canada Pulp Sales Inc., Norske
                  Skog Canada Sales Inc., Norske Skog Paper Company, Norske Skog
                  Canada (Japan) Ltd.,  Norske Skog Pulp Sales (Japan) Ltd., Elk
                  Falls Pulp and Paper Limited,  and NSCL Holdings Inc., jointly
                  and  severally,  and "PLEDGOR"  means any one of them, and any
                  reference to the  "Pledgors"  herein shall be  interpreted  as
                  referring to "the Pledgors or any of them";

         (d)      "OBLIGATIONS  SECURED"  means,  collectively,  the obligations
                  secured by this Pledge  Agreement as described in paragraphs 2
                  and 3 below.

         (e)      "SECURED AGREEMENTS" means:

                  (i)      the Syndicated Credit Agreement; and

                  (ii)     the agreements under which the Restricted Parties, or
                           any of  them,  from  time to time owe  Other  Secured
                           Obligations  (as  defined  in the  Syndicated  Credit
                           Agreement)  including  all  amendments,  supplements,
                           restatements and replacements thereto or thereof from
                           time to time.

                  Any reference to the "Secured Agreements" herein shall include
                  any one or more of them.

         (f)      "SECURED PARTIES" means:

                  (i)      all persons from time to time being  "Lenders" or the
                           "Agent"  as those  terms  are  understood  under  the
                           Syndicated Credit Agreement; and

                  (ii)     the Lenders under the Syndicated  Credit Agreement to
                           whom the  Restricted  Parties,  or any of them,  from
                           time to time owe Other Secured Obligations.

                                     - 2 -
<PAGE>

                  Any  reference  to  the  "Secured  Parties"  herein  shall  be
                  interpreted  as referring  to "the  Secured  Parties or any of
                  them".

         Capitalized  terms  that  are  used  but not  defined  in  this  Pledge
Agreement have the meanings defined in the Syndicated Credit Agreement.

2. Each Pledgor hereby assigns,  pledges and  hypothecates  to the Pledgee,  and
grants to the  Pledgee  for and on behalf of and for the  benefit of the Secured
Parties a security interest in, its Debentures  designated as Series A No. 1 and
Series B No. 1 as general and continuing collateral security for the payment and
performance by such Pledgor of all obligations of the Pledgor to the Lenders (as
defined in the  Syndicated  Credit  Agreement)  under or in connection  with the
Syndicated Credit Agreement, including but not limited to all debts, liabilities
and obligations in any currency, present or future, direct or indirect, absolute
or  contingent,  choate or  inchoate,  matured or not,  at any time owing by the
Pledgor to the Lenders or remaining  unpaid by the Pledgor to the Lenders  under
or in connection  with the Syndicated  Credit  Agreement,  whether  arising from
dealings  between  the  Lenders  and the  Pledgor or from any other  dealings or
proceedings  by which the  Lenders  may be or become in any  manner  whatever  a
creditor  of the  Pledgor  under or in  connection  with the  Syndicated  Credit
Agreement,  and wherever incurred,  and whether incurred by the Pledgor alone or
with  another  or  others  under or in  connection  with the  Syndicated  Credit
Agreement,  and whether as  principal  or surety  (including  but not limited to
debts,  liabilities  and obligations  under or in connection  with  guarantee(s)
delivered  by the Pledgor  under or in  connection  with the  Syndicated  Credit
Agreement),  and all  interest,  commissions,  reasonable  legal and other costs
(including  reasonable  legal fees as between a solicitor  and its own  client),
charges  and  expenses  relating  thereto  or  under or in  connection  with the
Syndicated  Credit Agreement or this Pledge Agreement.  In this paragraph,  "the
Lenders" shall be interpreted as "the Lenders, or any of them."  Notwithstanding
the  foregoing  description  of the  obligations  secured  by the pledge of each
Series A No. 1 Debenture and each Series B No. 1 Debenture,  if the  Acquisition
is completed,  (i) the pledge of each Series A No. 1 Debenture shall only secure
those  obligations to the extent that they do not exceed the "Threshold  Amount"
as defined in and calculated in accordance with the Syndicated  Credit Agreement
and (ii) the pledge of each  Series B No. 1 Debenture  shall only  secure  those
obligations to the extent that they do exceed the Threshold Amount.

3. Each Pledgor hereby assigns, pledges and hypothecates to the Pledgee, and
grants to the Pledgee for and on behalf of and for the benefit of the Secured
Parties a security interest in, its Debenture designated as Series A No. 2 as
general and continuing collateral security for the payment and performance by
such Pledgor of all "Other Secured Obligations" of the Pledgor as defined in the
Syndicated Credit Agreement. (For greater certainty, the pledge of each Series A
No. 2 Debenture shall continue to secure the Other Secured Obligations
notwithstanding the termination of the Syndicated Credit Agreement for any
reason.)

4.  Notwithstanding  that the Debentures are held by the Pledgee as pledgee, the
Pledgors  acknowledge that,  subject to the provisions of this Pledge Agreement,
the Pledgee  shall have and be entitled  to exercise  all the rights,  remedies,
powers,  privileges,  security and recourses of a holder of the Debentures under
the Trust  Deeds in the same manner and to the same extent as though it were the
absolute  owner of the  Debentures,  and that the Trustee  under the Trust Deeds

                                     - 3 -
<PAGE>

shall act on the instructions and directions of the Pledgee as the holder of the
Debentures on the basis set forth in the Trust Deeds.

5.  Notwithstanding  that the  Debentures are expressed to be payable on demand,
the  Pledgee  shall be  entitled  to demand  payment of the  Debentures  and the
Debentures and the Obligations  Secured shall immediately become payable and the
security  constituted by the Trust Deeds shall  immediately  become  enforceable
only if an Event of Default occurs, is continuing and has not been waived and as
a result  payment or performance  of part or all of the  Obligations  Secured is
required or demanded.

6.  The  Pledgors  shall  pay to the  Pledgee  upon  demand  the  amount  of all
reasonable  expenses  incurred by the Pledgee or the Trustee in  recovering  any
Obligations  Secured or in  enforcing  this Pledge  Agreement or the Trust Deeds
(including reasonable legal expenses on a solicitor and his own client basis and
other  expenses)  with  interest  thereon from the date of the incurring of such
expenses   at  the  rate  of  3.0%  per  annum  above  the  prime  rate  of  The
Toronto-Dominion  Bank from time to time in  effect.  For the  purposes  of this
Pledge  Agreement,  "PRIME  RATE"  means the  interest  rate per annum  publicly
announced from time to time by The Toronto-Dominion  Bank as being its reference
rate  then in effect  for  determining  interest  rates on  commercial  loans in
Canadian dollars made by it in Canada.

7.  Notwithstanding the terms of the Debentures  relating to interest,  interest
shall not be  calculated  or payable at a rate greater than that provided for in
connection with the Obligations Secured in the Secured Agreements.

8. If the Debentures and the Obligations Secured become payable and the security
constituted by the Trust Deeds becomes  enforceable in accordance with paragraph
5 above, the Pledgee, without notice,  advertisement,  demand for payment or any
other  formality (all of which are hereby waived by the Pledgors),  (and without
limiting the  Pledgee's  right  referred to in paragraph 4 above) may retain or,
subject to paragraph 10 hereof, sell by public or private sale or otherwise deal
with the Debentures in such manner as the Pledgee thinks fit and the Pledgee may
hold the  proceeds in lieu of the  Debentures  if realized and  appropriate  the
proceeds  on account  of all or any of the  Obligations  Secured as the  Pledgee
thinks fit.

9. The security  constituted by this Pledge Agreement shall not be considered as
satisfied or discharged by any intermediate  payment of the whole or part of the
Obligations  Secured but shall  constitute  and be a  continuing  security for a
current or running  account and shall be in addition to and not in  substitution
for any other security now or hereafter held to secure the Obligations  Secured.
The remedies of the Pledgee under this Pledge  Agreement  may be exercised  from
time to time  separately  or in  combination  and are in  addition to and not in
substitution  for any other rights of the Pledgee however  created.  The Pledgee
may grant extensions of time or other indulgences,  take and give up securities,
accept  compositions  from and grant releases and discharges to the Pledgors and
otherwise  deal  with  the  Pledgors  and with the  other  parties,  guarantors,
sureties or  securities  held by the Trustee or the Pledgee as security  for the
Obligations  Secured,  all as the  Trustee or the  Pledgee  may see fit  without
prejudices to the rights of the Pledgee hereunder.

                                     - 4 -
<PAGE>

10.  The  Pledgee  acknowledges  that the  Debentures  have  been  executed  and
delivered  subject to this Pledge  Agreement and as collateral  security for the
Obligations Secured and, accordingly, agrees that, in any realization proceeding
in respect of the Debentures or the Trust Deeds, the Pledgee shall not claim and
the Pledgors shall not be liable to pay the Pledgee or any subsequent  holder of
the Debentures any greater amount than the  Obligations  Secured and the Pledgee
shall only be entitled to sell,  assign,  transfer  or  otherwise  deal with the
Debentures  subject to and  together  with this  Pledge  Agreement  and upon any
assignee or  transferee  acknowledging  and agreeing in writing that it shall be
bound by the provisions of this Pledge Agreement as Pledgee.

11. This Pledge  Agreement shall be construed in accordance with the laws of the
Province of British Columbia and the laws of Canada  applicable in such Province
and shall be treated in all respects as a British Columbia contract. The parties
hereto irrevocably submit to the non-exclusive jurisdiction of the courts of the
Province of British Columbia and all courts competent to hear appeals therefrom.

12. This Pledge  Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and, with respect to the Pledgee,
its assigns.  The Pledgee may only assign its interest in this Pledge  Agreement
in  accordance  with its right to assign its interest in the  Syndicated  Credit
Agreement  and upon the  assignee  agreeing in writing that it shall be bound by
the  provisions  of this Pledge  Agreement as Pledgee.  None of the Pledgors may
assign any benefit or obligation under this Pledge Agreement.

13. This Pledge Agreement may be executed in any number of counterparts, each of
which when  executed and delivered  shall be deemed to be an original,  and such
counterparts  together  shall  constitute  one and the same  agreement.  For the
purposes of this  paragraph,  the  delivery  of a facsimile  copy of an executed
counterpart of this Pledge  Agreement  shall be deemed to be valid execution and
delivery of this Pledge Agreement,  but each Pledgor delivering a facsimile copy
shall deliver the original executed counterpart of this Pledge Agreement as soon
as possible after delivering the facsimile copy.

14. This Pledge Agreement may be referred to as being dated 14 August 2001 or as
of 14 August 2001, notwithstanding the actual date of execution.

         IN WITNESS  WHEREOF the corporate  seal of each of the Pledgors  (other
than Norske Skog Canada  (Japan) Ltd. and Norske Skog Pulp Sales  (Japan)  Ltd.)
has been affixed in the presence of, and this Pledge Agreement has been executed
by, its duly authorized  officer(s) or  director(s),  executing in such capacity
and not in their personal capacity, as of the date first set forth above.

NORSKE SKOG CANADA FINANCE LIMITED

                                                     c/s

By: /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Secretary

                                     - 5 -
<PAGE>

    NORSKE SKOG CANADA LIMITED

                                                     c/s

By: /s/ P. Staiger
    ---------------------------------
    PETER STAIGER,
    Treasurer Controller

By: /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Vice-President, Finance

NORSKE SKOG CANADA PULP OPERATIONS LIMITED

                                                     c/s

By: /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Vice-President, Finance

NORSKE SKOG CANADA PULP SALES INC.

                                                     c/s

By: /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Vice-President, Finance

NORSKE SKOG CANADA SALES INC.

                                                     c/s

By:  /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Vice-President, Finance

NORSKE SKOG PAPER COMPANY

                                                     c/s

By:  /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Vice-President, Finance

                                     - 6 -
<PAGE>

NORSKE SKOG CANADA (JAPAN) LTD.

By: /s/ J. Armitage
    ---------------------------------
    JAMES E. ARMITAGE,
    Director

NORSKE SKOG PULP SALES (JAPAN) LTD.

By: /s/ P. Simkin
    ---------------------------------
    PAUL D. SIMKIN,
    Director

ELK FALLS PULP AND PAPER LIMITED

                                                     c/s

By: /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    President

NSCL HOLDINGS INC.

                                                     c/s

By: /s/ R. Leverton
    ---------------------------------
    RALPH LEVERTON,
    Vice-President, Finance

Acknowledged and agreed to as of the date first set forth above.

THE TORONTO-DOMINION BANK,
as Agent

By: /s/ F. Scott
    ---------------------------------
    Name: Frazer Scott
    Title: Vice President

                                     - 7 -
<PAGE>

By:
    ---------------------------------
    Name:
    Title:

                                     - 8 -

<PAGE>

                            OMNIBUS PLEDGE AGREEMENT

TO:      THE  TORONTO-DOMINION  BANK in its  capacity  as  administrative  agent
         for and on  behalf of and for the benefit of the Secured Parties
         (as defined below)
         Corporate and Investment Banking
         66 Wellington Street West, 38th Floor
         Toronto-Dominion Bank Tower
         Toronto, Ontario
         M5K 1A2

         (the "PLEDGEE")

DATED for reference 1 September 2001.

         Each Pledgor  refers to its Trust Deed dated for  reference 1 September
2001 (together with any additional  security relating thereto,  each referred to
herein as a "TRUST DEED" and collectively as the "TRUST DEEDS") executed by such
Pledgor in favour of The Canada Trust Company, as Trustee (the "TRUSTEE").

         Each  Pledgor  also  refers  to  the  following   debentures  (each,  a
"DEBENTURE",  collectively,  the "DEBENTURES")  which each has issued under, and
which are secured by its Trust Deed:

         (a)      a 25%  Debenture  designated as Series A No. 1 of such Pledgor
                  in   the   principal    amount   of   ONE   BILLION    DOLLARS
                  ($1,000,000,000)  in lawful  currency of Canada  dated as of 1
                  September 2001, payable on demand and in fully registered form
                  in the name of the Pledgee;

         (b)      a 25%  Debenture  designated as Series A No. 2 of such Pledgor
                  in   the   principal    amount   of   ONE   BILLION    DOLLARS
                  ($1,000,000,000)  in lawful  currency of Canada  dated as of 1
                  September 2001, payable on demand and in fully registered form
                  in the name of the Pledgee; and

         (c)      a 25%  Debenture  designated as Series B No. 1 of such Pledgor
                  in the  principal  amount  of  FIVE  HUNDRED  MILLION  DOLLARS
                  ($500,000,000)  in lawful  currency  of  Canada  dated as of 1
                  September 2001, payable on demand and in fully registered form
                  in the name of the Pledgee.

Any reference to the  "Debentures"  herein shall be  interpreted as referring to
"the Debentures or any of them".

         Each of the Pledgors  jointly and severally  agrees with the Pledgee as
follows:

1. In this Pledge  Agreement,  unless something in the subject matter or context
is inconsistent therewith:

                                     - 1 -
<PAGE>

         (a)      "SYNDICATED CREDIT AGREEMENT" means the credit agreement dated
                  for  reference  14 August  2001  between  Norske  Skog  Canada
                  Finance  Limited and others as Restricted  Parties (as defined
                  therein,  each a "RESTRICTED  PARTY"), the Lenders (as defined
                  therein) from time to time party  thereto and the Pledgee,  as
                  amended, supplemented, restated or replaced from time to time,
                  including  as   supplemented   by  the  Supplement  to  Credit
                  Agreement  dated 1 September  2001 between the Pledgee and the
                  Pledgors whereby the Pledgors became Restricted  Parties.  Any
                  reference  to  the   "Restricted   Parties"  herein  shall  be
                  interpreted as referring to "the Restricted  Parties or any of
                  them";

         (b)      "EVENT OF DEFAULT"  means (i) the  occurrence  of an "event of
                  default"  or a  "termination  event" as  defined in any of the
                  Secured  Agreements  or (ii) the  occurrence  of any  event by
                  which the Obligations Secured (or any of them) have become due
                  and  payable  by  reason of (1) any  default  under any of the
                  Secured  Agreements or (2) any demand for payment validly made
                  by any creditor pursuant to any Secured Agreement which is not
                  met in  accordance  with the terms of the demand or within any
                  applicable grace period;

         (c)      "PLEDGORS"  means  any one or more of  Pacifica  Papers  Sales
                  Ltd.,  Pacifica  Papers  Sales  Inc.,  Pacifica  Papers  K.K.,
                  Pacifica  Papers U.S. Inc.,  Pacifica  Poplars Ltd.,  Pacifica
                  Poplars Inc.,  and Pacifica  Papers Co.  Limited  Partnership,
                  jointly and  severally,  and "PLEDGOR"  means any one of them,
                  and  any   reference  to  the   "Pledgors"   herein  shall  be
                  interpreted as referring to "the Pledgors or any of them";

         (d)      "OBLIGATIONS  SECURED"  means,  collectively,  the obligations
                  secured by this Pledge  Agreement as described in paragraphs 2
                  and 3 below.

         (e)      "SECURED AGREEMENTS" means:

                  (i)      the Syndicated Credit Agreement; and

                  (ii)     the agreements under which the Restricted Parties, or
                           any of  them,  from  time to time owe  Other  Secured
                           Obligations  (as  defined  in the  Syndicated  Credit
                           Agreement)  including  all  amendments,  supplements,
                           restatements and replacements thereto or thereof from
                           time to time.

                  Any reference to the "Secured Agreements" herein shall include
                  any one or more of them.

         (f)      "SECURED PARTIES" means:

                  (i)      all persons from time to time being  "Lenders" or the
                           "Agent"  as those  terms  are  understood  under  the
                           Syndicated Credit Agreement; and

                                     - 2 -
<PAGE>

                  (ii)     the Lenders under the Syndicated  Credit Agreement to
                           whom the  Restricted  Parties,  or any of them,  from
                           time to time owe Other Secured Obligations.

                  Any  reference  to  the  "Secured  Parties"  herein  shall  be
                  interpreted  as referring  to "the  Secured  Parties or any of
                  them".

         Capitalized  terms  that  are  used  but not  defined  in  this  Pledge
Agreement have the meanings defined in the Syndicated Credit Agreement.

2. Each Pledgor hereby assigns,  pledges and  hypothecates  to the Pledgee,  and
grants to the  Pledgee  for and on behalf of and for the  benefit of the Secured
Parties a security interest in, its Debentures  designated as Series A No. 1 and
Series B No. 1 as general and continuing collateral security for the payment and
performance by such Pledgor of all obligations of the Pledgor to the Lenders (as
defined in the  Syndicated  Credit  Agreement)  under or in connection  with the
Syndicated Credit Agreement, including but not limited to all debts, liabilities
and obligations in any currency, present or future, direct or indirect, absolute
or  contingent,  choate or  inchoate,  matured or not,  at any time owing by the
Pledgor to the Lenders or remaining  unpaid by the Pledgor to the Lenders  under
or in connection  with the Syndicated  Credit  Agreement,  whether  arising from
dealings  between  the  Lenders  and the  Pledgor or from any other  dealings or
proceedings  by which the  Lenders  may be or become in any  manner  whatever  a
creditor  of the  Pledgor  under or in  connection  with the  Syndicated  Credit
Agreement,  and wherever incurred,  and whether incurred by the Pledgor alone or
with  another  or  others  under or in  connection  with the  Syndicated  Credit
Agreement,  and whether as  principal  or surety  (including  but not limited to
debts,  liabilities  and obligations  under or in connection  with  guarantee(s)
delivered  by the Pledgor  under or in  connection  with the  Syndicated  Credit
Agreement),  and all  interest,  commissions,  reasonable  legal and other costs
(including  reasonable  legal fees as between a solicitor  and its own  client),
charges  and  expenses  relating  thereto  or  under or in  connection  with the
Syndicated  Credit Agreement or this Pledge Agreement.  In this paragraph,  "the
Lenders" shall be interpreted as "the Lenders, or any of them."  Notwithstanding
the  foregoing  description  of the  obligations  secured  by the pledge of each
Series A No. 1 Debenture and each Series B No. 1 Debenture,  if the  Acquisition
is completed,  (i) the pledge of each Series A No. 1 Debenture shall only secure
those  obligations to the extent that they do not exceed the "Threshold  Amount"
as defined in and calculated in accordance with the Syndicated  Credit Agreement
and (ii) the pledge of each  Series B No. 1 Debenture  shall only  secure  those
obligations to the extent that they do exceed the Threshold Amount.

3. Each Pledgor hereby assigns,  pledges and  hypothecates  to the Pledgee,  and
grants to the  Pledgee  for and on behalf of and for the  benefit of the Secured
Parties a security  interest in, its  Debenture  designated as Series A No. 2 as
general and continuing  collateral  security for the payment and  performance by
such Pledgor of all "Other Secured Obligations" of the Pledgor as defined in the
Syndicated Credit Agreement. (For greater certainty, the pledge of each Series A
No.  2  Debenture  shall  continue  to  secure  the  Other  Secured  Obligations
notwithstanding  the  termination  of the  Syndicated  Credit  Agreement for any
reason.)

                                     - 3 -
<PAGE>

4.  Notwithstanding  that the Debentures are held by the Pledgee as pledgee, the
Pledgors  acknowledge that,  subject to the provisions of this Pledge Agreement,
the Pledgee  shall have and be entitled  to exercise  all the rights,  remedies,
powers,  privileges,  security and recourses of a holder of the Debentures under
the Trust  Deeds in the same manner and to the same extent as though it were the
absolute  owner of the  Debentures,  and that the Trustee  under the Trust Deeds
shall act on the instructions and directions of the Pledgee as the holder of the
Debentures on the basis set forth in the Trust Deeds.

5.  Notwithstanding  that the  Debentures are expressed to be payable on demand,
the  Pledgee  shall be  entitled  to demand  payment of the  Debentures  and the
Debentures and the Obligations  Secured shall immediately become payable and the
security  constituted by the Trust Deeds shall  immediately  become  enforceable
only if an Event of Default occurs, is continuing and has not been waived and as
a result  payment or performance  of part or all of the  Obligations  Secured is
required or demanded.

6.  The  Pledgors  shall  pay to the  Pledgee  upon  demand  the  amount  of all
reasonable  expenses  incurred by the Pledgee or the Trustee in  recovering  any
Obligations  Secured or in  enforcing  this Pledge  Agreement or the Trust Deeds
(including reasonable legal expenses on a solicitor and his own client basis and
other  expenses)  with  interest  thereon from the date of the incurring of such
expenses   at  the  rate  of  3.0%  per  annum  above  the  prime  rate  of  The
Toronto-Dominion  Bank from time to time in  effect.  For the  purposes  of this
Pledge  Agreement,  "PRIME  RATE"  means the  interest  rate per annum  publicly
announced from time to time by The Toronto-Dominion  Bank as being its reference
rate  then in effect  for  determining  interest  rates on  commercial  loans in
Canadian dollars made by it in Canada.

7.  Notwithstanding the terms of the Debentures  relating to interest,  interest
shall not be  calculated  or payable at a rate greater than that provided for in
connection with the Obligations Secured in the Secured Agreements.

8. If the Debentures and the Obligations Secured become payable and the security
constituted by the Trust Deeds becomes  enforceable in accordance with paragraph
5 above, the Pledgee, without notice,  advertisement,  demand for payment or any
other  formality (all of which are hereby waived by the Pledgors),  (and without
limiting the  Pledgee's  right  referred to in paragraph 4 above) may retain or,
subject to paragraph 10 hereof, sell by public or private sale or otherwise deal
with the Debentures in such manner as the Pledgee thinks fit and the Pledgee may
hold the  proceeds in lieu of the  Debentures  if realized and  appropriate  the
proceeds  on account  of all or any of the  Obligations  Secured as the  Pledgee
thinks fit.

9. The security  constituted by this Pledge Agreement shall not be considered as
satisfied or discharged by any intermediate  payment of the whole or part of the
Obligations  Secured but shall  constitute  and be a  continuing  security for a
current or running  account and shall be in addition to and not in  substitution
for any other security now or hereafter held to secure the Obligations  Secured.
The remedies of the Pledgee under this Pledge  Agreement  may be exercised  from
time to time  separately  or in  combination  and are in  addition to and not in
substitution  for any other rights of the Pledgee however  created.  The Pledgee
may grant extensions of time or other indulgences,  take and give up securities,
accept  compositions  from and grant releases and

                                     - 4 -
<PAGE>

discharges  to the  Pledgors and  otherwise  deal with the Pledgors and with the
other  parties,  guarantors,  sureties or securities  held by the Trustee or the
Pledgee as  security  for the  Obligations  Secured,  all as the  Trustee or the
Pledgee may see fit without prejudices to the rights of the Pledgee hereunder.

10.  The  Pledgee  acknowledges  that the  Debentures  have  been  executed  and
delivered  subject to this Pledge  Agreement and as collateral  security for the
Obligations Secured and, accordingly, agrees that, in any realization proceeding
in respect of the Debentures or the Trust Deeds, the Pledgee shall not claim and
the Pledgors shall not be liable to pay the Pledgee or any subsequent  holder of
the Debentures any greater amount than the  Obligations  Secured and the Pledgee
shall only be entitled to sell,  assign,  transfer  or  otherwise  deal with the
Debentures  subject to and  together  with this  Pledge  Agreement  and upon any
assignee or  transferee  acknowledging  and agreeing in writing that it shall be
bound by the provisions of this Pledge Agreement as Pledgee.

11. This Pledge  Agreement shall be construed in accordance with the laws of the
Province of British Columbia and the laws of Canada  applicable in such Province
and shall be treated in all respects as a British Columbia contract. The parties
hereto irrevocably submit to the non-exclusive jurisdiction of the courts of the
Province of British Columbia and all courts competent to hear appeals therefrom.

12. This Pledge  Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and, with respect to the Pledgee,
its assigns.  The Pledgee may only assign its interest in this Pledge  Agreement
in  accordance  with its right to assign its interest in the  Syndicated  Credit
Agreement  and upon the  assignee  agreeing in writing that it shall be bound by
the  provisions  of this Pledge  Agreement as Pledgee.  None of the Pledgors may
assign any benefit or obligation under this Pledge Agreement.

13. This Pledge Agreement may be executed in any number of counterparts, each of
which when  executed and delivered  shall be deemed to be an original,  and such
counterparts  together  shall  constitute  one and the same  agreement.  For the
purposes of this  paragraph,  the  delivery  of a facsimile  copy of an executed
counterpart of this Pledge  Agreement  shall be deemed to be valid execution and
delivery of this Pledge Agreement,  but each Pledgor delivering a facsimile copy
shall deliver the original executed counterpart of this Pledge Agreement as soon
as possible after delivering the facsimile copy.

14. This Pledge  Agreement may be referred to as being dated 1 September 2001 or
as of 1 September 2001, notwithstanding the actual date of execution.

         IN WITNESS  WHEREOF the corporate  seal of each of the Pledgors  (other
than  Pacifica  Papers K.K.  and Norske Skog Canada  Limited in its  capacity as
general partner of Pacifica Papers Co. Limited  Partnership) has been affixed in
the  presence  of, and this  Pledge  Agreement  has been  executed  by, its duly
authorized  officer(s)  or  director(s),  executing in such  capacity and not in
their personal capacity, as of the date first set forth above.

                                     - 5 -
<PAGE>

PACIFICA PAPERS SALES LTD.

                                        c/s

By: /s/ R. Leverton
    ----------------------------------------
    RALPH LEVERTON,
    Vice-President, Finance, Chief Financial
    Officer and Secretary

                                     - 6 -
<PAGE>

PACIFICA PAPERS SALES INC.

                                        c/s

By: /s/ R. Leverton
    ----------------------------------------
    RALPH LEVERTON,
    Secretary

PACIFICA PAPERS K.K.

By: /s/ P. Staiger
    ----------------------------------------
    PETER M. STAIGER,
    Director

PACIFICA PAPERS U.S. INC.

                                        c/s

By: /s/ R. Leverton
    ----------------------------------------
    RALPH LEVERTON,
    Secretary

PACIFICA POPLARS LTD.

                                        c/s

By: /s/ R. Leverton
    ----------------------------------------
    RALPH LEVERTON,
    Vice-President, Finance, Chief Financial
    Officer and Secretary

PACIFICA POPLARS INC.

                                        c/s

By: /s/ R. Leverton
    ----------------------------------------
    RALPH LEVERTON,
    Secretary

                                     - 7 -
<PAGE>

PACIFICA PAPERS CO. LIMITED PARTNERSHIP
By its General Partner:

         NORSKE SKOG CANADA LIMITED

         By: /s/ R. Leverton
             ----------------------------------------
             RALPH LEVERTON,
             Vice-President, Finance, Chief Financial
             Officer and Secretary

         By: /s/ P. Staiger
             ----------------------------------------
             PETER M. STAIGER,
             Treasurer

Acknowledged and agreed to as of the date first set forth above.

THE TORONTO-DOMINION BANK,
as Agent

By: /s/ F. Scott
    ---------------------------------
    Name: Frazer Scott
    Title: Vice President

By:
    ---------------------------------
    Name:
    Title:

                                     - 8 -

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