Exhibit 1.6
===========

                         LIMITED PARTNERSHIP AGREEMENT

THIS AGREEMENT is dated effective December 31, 2003

AMONG:

        DYNAMOTIVE CANADA INC.
        (the "General Partner")

AND:

        Such Persons who shall hereinafter subscribe for
        Partnership interests in the Partnership as provided for
        in this Agreement (or any assignee or transferee of such
        Person or any Limited Partner) and who is admitted as a
        Limited Partner and agrees in writing to be bound by this
        Agreement

        (who are collectively called "Limited Partners"; individually, a
        "Limited Partner").

THE PARTIES to this Agreement agree as follows:


                                        PART 1

                                      DEFINITIONS

Definitions

1.1     In this Agreement:

    (a) Affiliate of a particular Person means:

        (i)  an associate of such Person (except a Person, in his capacity as
        limited partner, who is a limited partner in a partnership in which
        such Person is a partner) or a Person who is affiliated with the
        first mentioned Person within the meaning of those terms under the
        Ontario Business Corporations Act in effect on the date of this
        Agreement;

        (ii)  a Person affiliated with another Person within the meaning of
        the Securities Act; and

        (iii)  a director or a senior officer of such Person or of any Person
        who is an affiliate or associate under S(i) and S(i);

    (b) Capital, at any time, means, with reference to a Partner, the amount
    paid in cash or the agreed value of property or services contributed by
    such Partner (or any predecessor in interest of such Partner) to the
    capital of the Partnership in respect of the Units held by such Partner
    (in the case of a Limited Partner) or the partnership interest as
    otherwise described of such Partner (in the case of the General Partner),
    less the amount of cash or the agreed value of property which has been
    returned to such Partner (or any predecessor in interest of such Partner)

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    out of the capital of the Partnership pursuant to the provisions hereof
    in respect of such Units or such partnership interest as otherwise
    described, as the case may be, at or before such time and, with reference
    to the Partnership, means the aggregate Capital of the Limited Partners
    and of the General Partner;

    (c) Certificate means the certificate filed under the Limited Partnership
    Act, by which the Partnership was formed pursuant to the Limited
    Partnership Act, and all amendments to the Certificate;

    (d) Class means either the Class A Units or the Class B Units as the
    context required;

    (e) Class A Unit Subscription Price means $100 per Class A Unit;

    (f) Class B Unit Subscription Price means $0.01 per Class B Unit;

    (g) Class A Units means the Class A Units as established in S6.1;

    (h) Class B Units means the Class B Units as established in S6.1;

    (i) Closing Date means the date determined by the General Partner for the
    completion of the purchase and sale of Units;

    (j) Commissioned means the operation of the Project at 75% of its rated
    capacity for 5 out of 5 consecutive days;

    (k) Distributable Cash has the meaning provided for in S10.5;

    (l) Distribution, distributed and like words refer to amounts paid or
    other property distributed to Partners in accordance with their
    respective rights pursuant to this Agreement, and, for greater certainty,
    do not include any amount paid by the Partnership to a Partner in any
    other capacity;

    (m) Fiscal Period means the fiscal period of the Partnership established
    pursuant to S2.6;

    (n) General Partner means Dynamotive Canada Inc. or any Person admitted
    to the Partnership as a successor to any General Partner;

    (o) General Partner's Advance Account has the meaning assigned in S11.8;

    (p) Holder means in respect of a Unit, the Person who is shown on the
    Register as the holder of such Unit at such time;

    (q) Income Tax Act means the Income Tax Act, R.S.C. 1985 c.1 (5th Supp.),
    as amended;

    (r) Limited Partner means a holder of Class A Units or Class B Units;

    (s) Limited Partnership Act means the Limited Partnership Act, R.S.O.
     1990, C.L. 16, as amended;

    (t) Net Asset Value means the net asset value of the Partnership on a
    particular date calculated by subtracting the total liabilities of the
    Partnership from the total assets of the Partnership on that date, such
    calculations to be made on the basis of generally accepted accounting
    principles consistently applied; and, for the purpose of determining the
    Net


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    Asset Value, cash and cash equivalents will be valued at current market
    price or value, and unrealized gains or losses on open positions in
    futures contracts, forward contracts, options on futures and cash
    currency transactions will be valued at current market value based on the
    settlement price for that position on the exchange or market on which the
    transaction is effected, or if there is no settlement price, on the most
    current closing quotation determined by the General Partner (or its
    agent);

    (u) Net Income or Net Loss, for any Fiscal Period, means, respectively,
    the net income (including capital gain) or net loss (including capital
    loss) of the Partnership, as determined by the General Partner in
    accordance with generally accepted accounting principles consistently
    applied and recorded in the accounts of the Partnership;

    (v) Ordinary Resolution means:

        (i) a resolution passed by Limited Partners holding, in the
        aggregate, not less than a simple majority of the aggregate number of
        Units held by those Limited Partners who being entitled to do so with
        respect to such resolution, vote in person or by proxy at a duly
        convened meeting of Partners, or any adjournment thereof, called in
        accordance with this Agreement; or

        (ii) a written resolution in one or more counterparts consented to in
        writing by Limited Partners holding, in the aggregate, not less than
        a simple majority of the aggregate number of Units held by those
        Limited Partners who are entitled to vote on the resolution;

    (w) Partner means the General Partner or any Limited Partner;

    (x) Partnership means the limited partnership formed pursuant to the
    Limited Partnership Act and this Agreement under the name "West Lorne
    BioOil Co-Generation Limited Partnership";

    (y) Person means an individual, corporation, body corporate, partnership,
    joint venture, association, syndicate, trust or unincorporated
    organization, or any trustee, executor, administrator or other legal
    representative;

    (z) Preferred Return in respect of a Class A Unit has the meaning set out
    in S10.6;

    (aa) Prime Rate means the annual rate of interest announced from time to
    time by the General Partner's Canadian chartered bank as a reference rate
    then in effect for determining interest rates on Canadian dollar
    commercial loans in Toronto, Ontario;

    (bb) Project means the West Lorne Bio-Oil Co-Generation project in West
    Lorne, Ontario which is the subject of a Consortium Master Agreement to
    which this Agreement is a schedule as defined in the UMA engineering
    report dated June 10,2003;

    (cc) Register means the register of Limited Partners maintained by the
    Partnership;

    (dd) Securities Act means The Securities Act (Ontario);

    (ee) Special Resolution means a resolution:


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        (i) a resolution passed by Limited Partners holding, in the
        aggregate, not less than 90% of the aggregate number of Units held by
        those Limited Partners who, being entitled to do so with respect to
        such resolution, vote in person or by proxy at a duly convened
        meeting of Partners, or any adjournment thereof, called in accordance
        with this Agreement; or

        (ii) a written resolution in one or more counterparts consented to in
        writing by Limited Partners holding, in the aggregate, not less than
        90% of the aggregate number of Units held by those Limited Partners
        who are entitled to vote on the resolution;

    (ff) Subscription Price means, in respect of a Unit, the amount to be
    contributed to the capital of the Partnership as a consideration for the
    issue of that Unit as determined by this Agreement and which is $100 per
    Class A Unit and $.01 per Class B Unit unless and until otherwise
    determined by Special Resolution;

    (gg) Tax Income or Tax Loss, in respect of any Fiscal Period, means,
    respectively, the income or loss of the Partnership for such period
    (including the taxable capital gains and allowable capital losses, as
    determined in accordance with the Income Tax Act;

    (hh) Unit means a Class A Unit, a Class B Unit or both, as the context
    requires.

Interpretation

1.2  For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

    (a) this "Agreement" or "Limited Partnership Agreement" means this
    Agreement of Limited Partnership as it may from time to time be
    supplemented, amended or restated, and includes the Schedules attached
    hereto;

    (b) all references in this Agreement to designated "Parts", S,
     "Schedules" and other subdivisions are to the designated Parts, S,
     Schedules and other subdivisions of this Agreement;

    (c)the words "herein", "hereof" and "hereunder" and other words of
    similar import refer to this Agreement as a whole and not to any
    particular Part, S, Schedule or other subdivision of this Agreement;

    (d) the table of contents and headings are for convenience only and do
    not form a part of this Agreement, nor are they intended to interpret,
    define or limit the scope, extent or intent of this Agreement or any of
    its provisions;

    (e) a general statement, term or matter when followed by the word
    "including", shall not be construed as limited to the specific items or
    matters set forth immediately following such word or to similar items or
    matters, whether or not language such as "without limitation, or "but not
    limited to" or words of similar import are used with reference thereto,
    but rather the general statement, term or matter shall be deemed to refer
    to all items and matters that could reasonably fall within the broadest
    possible scope of such general statement, term or matter;

    (f) all accounting terms not otherwise defined herein have the meanings
    assigned to them, and all calculations to be made hereunder are to be
    made, in accordance with generally accepted accounting principles
    applicable to the undertaking of the Partnership;


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    (g) any reference to a statute shall include and shall, unless otherwise
    set out herein, be deemed to be a reference to such statute and to the
    regulations made pursuant thereto, with all amendments made thereto and
    in force from time to time, and to any statute or regulations that may be
    passed which has the effect of supplementing or superseding such statute
    or such regulations;

    (h) any reference to a Person shall include and shall be deemed to be a
    reference to any Person that is a successor to such Person;

    (i) any reference to "approval", "authorization" or "consent" of the
    General Partner means the written approval, written authorization or
    written consent of the General Partner;

    (j) words importing the masculine gender include the feminine or neuter
    gender and words in the singular include the plural, and vice versa and,
    where applicable, a corporation; and

    (k) references to sums of money are references to lawful money of Canada.

Schedules


1.3 The following are the Schedules to this Agreement:

    Schedule 1  -  Subscription for Class A Units and Power of Attorney

    Schedule 2  -  Accounting Procedures

    Schedule 3  -  Persons Entitled to Subscribe for Class B Units


                                   PART 2


                         FORMATION OF THE PARTNERSHIP

Formation

2.1  The Partnership will be effective as a general partnership from and
after the date of this Agreement, and will be effective as a limited
partnership from the date that the Certificate is filed with the Registrar of
Companies in accordance with the Limited Partnership Act.

Name

2.2  The name of the Partnership is "West Lorne BioOil Co-Generation Limited
Partnership" or such other name as the General Partner may determine from
time to time.

Nature of Business

2.3  The business of the Partnership is developing the Project and businesses
ancillary thereto with a view to making a profit from such business and may
carry on any business and exercise all powers ancillary and incidental
thereto or in furtherance thereof.


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Restriction on Business

2.4  The Partnership will not carry on any business other than the business
referred to in S2.3 and any business which is incidental to it, and the
Partnership will not invest any of its funds except as provided for in this
Agreement.

Registered Office and Principal Place of Business

2.5  The registered office of the Partnership is Suite 2500 - 181 Bay Street,
BCE Place, Toronto, Ontario, M5J 2T7, but the General Partner may change the
registered office of the Partnership to another place situated in Canada upon
giving notice of the change to all Limited Partners.  The Partnership will
have its principal place of business at the Project.

Fiscal Period

2.6  The General Partner will be entitled to determine from time to time the
Fiscal Period for the Partnership, which shall be determined in accordance
with Canadian income tax and fiscal legislation.

Filing of Certificate

2.7  The General Partner will execute and file the Certificate, and any
amendment thereto, from time to time when required under the Limited
Partnership Act, and any other certificate, document or instrument required
under the laws of Ontario.  The General Partner, and each Limited Partner at
the request of the General Partner, will execute and deliver as promptly as
possible any document that may be necessary or desirable to comply with any
law or regulation of the Province of Ontario or any other jurisdiction for
the continuation, good standing and business of the Partnership.  The General
Partner will take all necessary action on the basis of information available
to it in order to maintain the status of the Partnership as a limited
partnership.



                                   PART 3


                      REPRESENTATIONS, WARRANTIES AND COVENANTS

Status of General Partner

3.1  The General Partner warrants and represents that:

     (a)  it is and will continue to be a valid and subsisting corporation
     under the laws of Canada or such other jurisdiction under which the
     General Partner may continue or under which a successor to the General
     Partner may be incorporated, amalgamated or continued, and is and will
     continue to be qualified to carry on business in, and to be a valid and
     subsisting corporation under, the laws of Canada and such other
     jurisdiction in which such qualification may be necessary;

     (b)  it has and will continue to have the legal capacity and authority
     to act as the General Partner under the laws of Ontario and to perform
     its obligations under this Agreement and that such obligations do not
     and will not conflict with or constitute a default under its constating
     documents, any law or any agreement by which it is bound; and



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    (c)  it will exercise its powers under this Agreement in pursuance of the
    business of the Partnership and shall devote the time and effort to the
    conduct of the affairs of the Partnership that may be reasonably required
    for the proper management of the affairs of the Partnership; and

    (d)  it holds and will maintain the registrations, licenses and permits
    necessary to conduct its business and the Project and the business of the
    Partnership in all jurisdictions where its activities as General Partner
    require such registration and licensing.

Status of Each Limited Partner

3.2  Each Limited Partner represents and warrants to and covenants with each
other Partner that such Limited Partner:

    (a)  is, and while a Holder will continue to be, a "resident" of Canada
    within the meaning of the Income Tax Act;

    (b)  has and will continue to have the capacity and competence to enter
    into and be bound by this Agreement; and

    (c)  will, at the request of the General Partner, from time to time,
    provide such evidence of compliance with such representations, warranties
    and covenants as the General Partner may require.

Effective Date and Term of Representations

3.3  Each party hereto warrants that the representations made by that party
in this Part will be valid at the time of the execution of this Agreement by
that party and will continue to be true until that party ceases to be a
Partner.


                                   PART 4

                FUNCTIONS, POWERS AND RESTRICTIONS OF THE PARTNERS

Restrictions on the Authority of Limited Partners

4.1  No Limited Partner in such Limited Partner's capacity as a Limited
Partner will or will be entitled to:

    (a)  take part in the control or management of the business of the
    Partnership;

    (b)  execute any document which binds or purports to bind the Partnership
    or any other Partner as such;

    (c)  purport to have the power or authority to bind the Partnership or
    any other Partner as such;

    (d)  have any authority to undertake any obligation or responsibility on
    behalf of the Partnership;



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    (e)  bring any action against any property of the Partnership, whether
    real or personal, or file or register, or permit any lien or charge to be
    filed or registered or remain undischarged, against any property of the
    Partnership in respect of the interest of such Partner in the
    Partnership; or

    (f)  compel a partition, judicial or otherwise, of any of the property of
    the Partnership or require any of the property of the Partnership to be
    distributed to the Partners in kind.

Limited Partner May Compete

4.2  A Limited Partner who participates or holds an interest in any other
business, venture, investment or activity similar to or competitive with the
business of the Partnership is not liable to account to the Partnership or
any Partner for profits made from that business, venture, investment or other
activity.

Functions and Powers of the General Partner

4.3  The General Partner has all the rights and powers vested in a general
partner by the Limited Partnership Act, and in accordance with the terms of
this Agreement, the General Partner has exclusive authority to bind, make all
business decisions of, and manage the operations and affairs of the
Partnership.

Business Opportunities


4.4  The General Partner or any Affiliate of the General Partner, may acquire
any property or pursue or engage in any other business or investment
opportunity for its own account and is not required to offer such property or
business opportunity to the Partnership.

No Breach of Fiduciary Duties

4.5  The pursuit or acquisition of any such property or business or
investment opportunity by the General Partner or any of its Affiliates, on
its own account even if competitive with the business of the Partnership,
will not be in breach of any fiduciary duties owed by the General Partner or
an Affiliate of the Limited Partners.

Limitations on the Authority of the General Partner

4.6  Notwithstanding S4.3 and Part 11, the General Partner, without the
written consent to the specific act by all the Limited Partners, has no
authority to:

    (a)  sell the undertaking of the Partnership or act so as to make it
    impossible to carry on the business of the Partnership, except as
    provided in Part 15;

    (b)  consent to a judgment against the Partnership;

    (c)  possess or deal with any property, or right in the property of the
    Partnership, for a purpose other than a purpose of the Partnership; or

    (d)  continue to act as General Partner after having become insolvent,
    bankrupt, or dissolved as a company.


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                                     PART 5


                           LIABILITIES OF THE PARTNERS

Limited Liability of Limited Partners

5.1  Subject to the provisions of the Limited Partnership Act, the liability
of a Limited Partner for the debts, liabilities and obligations of the
Partnership will be limited to the amount of the Capital for each Unit held
by such Limited Partner and a Limited Partner will not be liable for any
further claims, assessments or contributions to the Partnership except as
provided herein and except that if a Limited Partner is also the General
Partner it will be liable to third parties as such.

Unlimited Liability of General Partner for Debts

5.2  Except as provided in this Part, the General Partner will have unlimited
liability for all debts and other liabilities and obligations of the
Partnership.

Liability of General Partner to Limited Partners

5.3  The General Partner will be liable to and will indemnify and hold
harmless a Limited Partner only where a loss, liability, expense or damage is
suffered or incurred by that Limited Partner as a result of an act, omission
or error in judgment by the General Partner that:

     (a)  contravenes the duties of the General Partner set out in this
     Agreement; or

     (b)  results in the loss of limited liability by that Limited Partner.

Indemnity of Limited Partners

5.4  The General Partner will indemnify and hold harmless each present and
former Limited Partner against all losses, costs, expenses, or damages
resulting to that Limited Partner from the loss of limited liability, except
to the extent the loss of limited liability is caused by an act or omission
of the Limited Partner.


Indemnity of Partnership

5.5  The General Partner will indemnify and hold harmless the Partnership
from all loss, liability, expense or damage suffered or incurred by the
Partnership as a result of an act, omission or error in judgment of the
General Partner that:

     (a)  contravenes the duties of the General Partner described in this
     Agreement; or

     (b)  results in the loss of limited liability by a Limited Partner.

Indemnity of General Partner

5.6  If, and only if, the General Partner has acted as required by S11.5, the
Partnership will indemnify and hold harmless the General Partner from any
cost, damage, liability, expense or loss suffered or incurred by the General
Partner resulting from or arising out of any act or omission of the General
Partner on behalf of the Partnership or in furtherance of the business of the
Partnership.


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Other Activities of Limited Partners

5.7  Notwithstanding anything herein to the contrary, no Limited Partner may
do any act or purport to cause the Partnership to do any act which attempts
to avoid or frustrate the payment of any fees or amounts to the General
Partner and/or an Affiliate of the General Partner pursuant to any agreement
or contract with the Partnership entered into in accordance with the terms of
this Agreement.

Other Activities of General Partner

5.8  The General Partner, in acting as General Partner hereunder, will not be
required to devote its efforts or that of any of its officers or employees
exclusively to or for the benefit of the Partnership.  The General Partner
and its Affiliates may engage in or hold an interest in any other business,
venture, investment and activity as they consider appropriate whether or not
similar to or competitive with the business of the Partnership.  Neither the
Partnership nor any Partner will have any right by virtue of this Agreement
or the partnership relationship with the General Partner created hereby, in
or to such other businesses, ventures, investments or activities or to the
income, proceeds or profits derived therefrom, and the pursuit of such other
businesses, ventures, investments or activities, even if competitive with the
business of the Partnership, will not be wrongful or improper.  Neither the
General Partner nor its Affiliates will be required to offer or make
available to the Partnership any property or other business or investment
opportunity which the General Partner or its Affiliates may determine to
acquire or engage in for its separate account.

General Partner May Hold Units


The General Partner may subscribe for and acquire Units or purchase Units and
will be entered on the Register as a Limited Partner in respect of the number
of Units held by the General Partner from time to time and will be entitled
to a Unit Certificate specifying such number of Units.


                                      PART 6


                                       UNITS
Number of Units

6.1  The interest in the Partnership of the Limited Partners will be divided
into and represented by a maximum of 49,900 Class A Units and 30,000 Class B
Units.  No additional limited partner interests will be issued by the
Partnership unless this Agreement is first appropriately amended by Special
Resolution.

Rights and Restrictions

6.2  There will be attached to the Class A Units and the Class B Units the
various rights and restrictions expressly set out in this Agreement.  Except
as set so set out, the Class A Units and the Class B Units shall rank equally
in all respects.

Units are Personal Property

6.3  The interest in the Partnership of a Limited Partner represented by the
number of Units held by him is personal property.


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Rights Between Limited Partners

6.4  No holder of Units of a Class shall, as such, be entitled to any
privilege, priority, right, or preference over any other holder of Units of
that Class.

No Fractional Units

6.5  No Unit may be divided or split into fractions, and the General Partner
will not accept any subscription for, record any transfer or assignment of,
or otherwise recognize any interest in less than a whole Unit, except as
necessary to implement a subdivision of Units.

Additional Limited Partners

6.6  The General Partner is authorized, subject to the receipt of the
subscription and power of attorney referred to in S7.5 and subject to the
other terms and limits hereof, to admit, one or more Persons (the "Additional
Limited Partners") to the Partnership as Limited Partners and will admit the
Additional Limited Partners to the Partnership until all Units have been
subscribed for.  Upon the admission of such Additional Limited Partners, the
General Partner will amend the Register by showing the name of each
Additional Limited Partner, the residential address of Additional Limited
Partner or, in the case of a corporation, an address of the corporation in
Ontario (or elsewhere, provided local securities laws are complied with), and
the amount of Capital contributed or agreed to be contributed, and will make
such other filings and recordings as are required by law or this Agreement.



                                     PART 7


                                ISSUE OF UNITS

Offering of Class A Units

7.1  The General Partner may offer, issue and sell Class A Units by the
General Partner at the Class A Unit Subscription Price.  The General Partner
may determine the terms and conditions of any such sale, and the General
Partner may take all steps necessary to properly effect the sale of Class A
Units, including preparing and filing such documents as may be necessary or
desirable, paying the expenses of issue and contracting with any Person to
sell the Units for a commission or fee.  All things done by the General
Partner in regard to the foregoing provisions of S7.1 before the execution of
this Agreement are hereby ratified and confirmed.

Offering of Class B Units

7.2  The General Partner will offer Class B Units solely to those persons,
and in those amounts, set out in Schedule 3 upon Commissionings at the Class.

Closings

7.3  Class A Units will be issued at one or more Closing Dates at such times
as determined by the General Partner.


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Subscription Form

7.4  Subject as provided herein, a Person may subscribe for Class A Units or
Class B Units by delivering to the General Partner or to such other Person at
such address as the General Partner may prescribe, a subscription and power
of attorney in the form attached hereto as Schedule A, or such other form as
may be accepted by the General Partner, and such other instruments, including
powers of attorney, as the General Partner may request, all of which are to
be completed and executed in a manner acceptable to the General Partner.

Refusal of Subscriptions

7.5  The General Partner may, in its absolute discretion, refuse to accept a
subscription for Class A Units made by any Person.

Refund on Refusal

7.6  The General Partner will refund to a Person from the funds of the
Partnership the amount paid to it by that Person in respect of the Class A
Unit Subscription Price if the General Partner refuses to accept the
subscription.

Acceptance

7.7  The General Partner will be deemed to have accepted a subscription for
Units if the General Partner forwards to the Person subscribing for Units a
written acceptance of the subscription.

Admission to Partnership

7.8  A subscriber will be admitted to the Partnership as a Limited Partner
upon written consent of the General Partner and upon acceptance of the
subscription and payment of the Class A Unit Subscription Price or Class B
Unit Subscription Price, as applicable, in full, and the General Partner will
amend the Register by showing the name of such subscriber as a Limited
Partner, the number and Class of Units held by the Limited Partner as a
result of such subscription.  The General Partner hereby acknowledges its
intent to accept as Limited Partners the General Partner, Magellan Aerospace
and Ontario Power Generation or any of their designated affiliates, subject
to the Project agreements.

Issue Expenses

7.9  The General Partner will pay all reasonable costs, commissions,
disbursements, fees, and expenses incurred in connection with the
organization of the Partnership and any offering of Units (collectively
"Organizational and Offering Costs") but the Partnership will reimburse the
General Partner for such Organizational and Offering Costs out of the
proceeds of any offering of Class A Units.

Authority to Deduct Offering Fee

7.10  The General Partner has the authority to deduct and retain for its own
use such fees from the Subscription Price as may be permitted under
applicable securities legislation policies provided that the amount and terms
of payment of such fees are set out in the offering documents.


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Unit Certificates

7.11  Certificates representing the Units will be issued upon completion of a
subscription and the General Partner will send to each Limited Partner within
30 days of the date a Unit is purchased or redeemed by such Limited Partner a
confirmation in writing indicating the number of Units purchased or redeemed
and the number of Units held together with the Unit certificate.


                                        PART 8


                                 TRANSFER OF UNITS

Transfer

8.1  Except as provided in this Agreement, a Unit may not be transferred or
assigned.

Incapacity, Death, or Bankruptcy

8.2  Notwithstanding S8.1, where a Person becomes entitled to a Unit on the
death, incapacity, or bankruptcy of a Limited Partner or otherwise by
operation of law and, in addition to the requirements of this Part, that
Person:

     (a)  produces evidence of such entitlement reasonably satisfactory to
     the General Partner;

     (b)  acknowledges in writing that he is bound by this Agreement and has
     assumed the obligations of the Limited Partnership in respect of the
     Unit; and

     (c)  deliver any other such approvals, consents and evidence of such
     entitlement as the Registrar requires,

he will be recognized as a Limited Partner and his name will be entered in
the Register in respect of that Unit.

No Obligation to Recognize Trusts

8.3  Except as provided in S8.5, the General Partner will not be bound to
recognize or see to the execution of any express, implied, or constructive
trust or any charge, pledge or equity, to which any Unit or interest in a
Unit is subject, nor to recognize any Person as having any interest in a Unit
other than the Holder.

Pledge of Unit

8.4  A Limited Partner may mortgage, pledge, or hypothecate a Unit as
security for a loan to or an obligation of that Limited Partner.

Recognition of Pledge

8.5  If a Unit is mortgaged, pledged, or hypothecated, the General Partner
will, upon receipt of a written request from the Limited Partner, deliver to
the Person specified by the Limited Partner in the written request a written
acknowledgment of notice of the pledge, mortgage, or hypothecation and
confirmation that, upon receipt by the General Partner of a written order



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from that Person setting forth an address for payment in Canada, all
distributions by the General Partner in respect of the Unit thereafter will
be made to that Person at that address, or at another address in Canada as
that Person from time to time advises the General Partner in writing, until
that Person delivers to the General Partner a written release from such
acknowledgment and order.


Authorization to Make Distributions

8.6  The Limited Partner, by delivering the written request to the General
Partner under S8.5, authorizes the General Partner to make, and consents to
the making of, all distributions to that person.

Inspection of Register

8.7  Any Partner or an agent of any Partner duly authorized in writing may
inspect, and take extracts from, the Register during normal business hours.

Copies of Register

8.8  The Partnership will, within ten days of the receipt of a written
request by a Partner or an agent of the Partner duly authorized in writing,
deliver a copy of the Register to that Partner or agent.

Restrictions on Assignment of Less than One Unit

8.9  No assignment of less than one Unit may be made or will be recognized or
entered in the Register.

Ceasing to be Resident

8.10  If the holder of a Unit becomes a non-resident within the meaning of
the Income Tax Act, the holder will forthwith so advise the General Partner.


                                     PART 9

                           CAPITAL AND CURRENT ACCOUNTS

Capital Accounts

9.1  The General Partner will establish accounts on the books of the
Partnership for the General Partner's Capital and each Limited Partner's
Capital with respect to each Class to which contributions to Capital will be
credited and from which amounts distributed as a return of Capital will be
debited.

Contributions of Capital by Partners

9.2  The following contributions of Capital have been or will be made by the
Partners to the Partnership:

     (a)  the General Partner will make such contributions to the Partnership
     as are required to discharge its obligations under this Agreement; and


<PAGE>


                                      - 15 -


(b)  each Limited Partner will contribute as Capital the Class A Unit
Subscription Price or Class B Unit Subscription Price, as applicable, for
each Unit issued to him and subject to the provisions of the Limited
Partnership Act and this Agreement, will not be otherwise liable in his
capacity as Limited Partner to make any other contributions.

Current Accounts

9.3  The General Partner will establish current accounts on the books of the
Partnership for the General Partner and for each Limited Partner with respect
to each Class to which Net Income will be credited and from which Net Loss
and all distributions of Distributable Cash and all other distributions
(other than distributions of Capital) will be debited.

Restriction on Withdrawals

9.4  No Partner will have the right to withdraw any amount or receive any
distribution from the Partnership except as expressly provided in this
Agreement and as permitted by law, but all Partners agree to any withdrawal
or receipt of a distribution by any other Partner.

No Interest Payable on Accounts

9.5  No Partner will have the right to receive interest on any Capital
account or current account of the Partnership.

No Interest on Repaid Capital

9.6  Except as provided in the Limited Partnership Act and S9.8, no Partner
will be liable to pay interest to the Partnership on any Capital returned to
such Partner or on any authorized debit balance on any Capital or current
account of the Partnership.

Negative Balances in Accounts

9.7  The interest of a Partner in the Partnership will not terminate solely
by reason that there is a debit balance in one or more of his Capital or
current accounts.

Impairment of Capital

9.8  To the extent that a Limited Partner receives a distribution of Net
Income from the Partnership, which reduces the Capital of the Partnership,
the Limited Partner is liable to the Partnership to repay the Capital, with
interest at the Prime Rate, to the extent of the reduction.



                                      PART 10


    DISTRIBUTABLE CASH, NET INCOME AND NET LOSS, AND TAX INCOME AND TAX LOSS

Distributions and Allocations between General Partner and Limited Partners

10.1  Except as otherwise expressly herein provided, every distribution or
allocation of Distributable Cash, Net Income and Net Loss, and Tax Income and
Tax Loss, will be distributed or allocated as follows:


<PAGE>


                                      - 16 -


     (a)  0.01% to the General Partner; and

     (b)  99.99% to the Limited Partners, and as between the Classes will be
     allocated or distributed as provided in this Agreement.

Distribution Among Limited Partners Pro Rata within Class

10.2  Every distribution or allocation of Distributable Cash, Net Income and
Net Loss, and Tax Income and Tax Loss in respect of a Class will be allocated
or distributed among the Limited Partners of that Class rateably in the
proportions that the number of Units of that Class held by each Limited
Partner at the time of distribution or allocation is of the total number of
issued Units of that Class at that time.

Distributions of Distributable Cash

10.3  Distributable Cash shall be distributed as follows:

      (a)  100% of Distributable Cash to the Class A Units until Preferred
      Return has been paid in full; and

      (b)  thereafter,

           (i)  0.01% to the General Partner, and

           (ii)  99.99% rateably to the Limited Partners based on the total
           number of Units of either Class held by each Limited Partner.

Allocations of Net Income and Net Loss, and Tax Income and Tax Loss

10.4  Net Income and Net Loss, and Tax Income and Tax Loss, shall be
allocated as follows:

      (a)  100% to the Class A Units until the Preferred Return has been paid
      in full, and

      (b)  thereafter,

           (i)  0.01% to the General Partner, and

           (ii)  99.99% rateably to the Limited Partners based on the total
           number of Unis of either Class held by each Limited Partner.

Distributable Cash

10.5  Distributable Cash at any time means cash on hand of the Partnership at
that time after payment of or provision for all current expenses and debt
service (including, for greater certainty, the General Partner's Advance
Account), less the Capital of the Partnership at that time and such
reasonable reserve as is determined by the General Partner for operating and
capital requirements of the Partnership.

Preferred Return

The Preferred Return in respect of each Class A Unit means 10% annual non-
compounded return of the Class A Unit Subscription Price for that Unit.


<PAGE>


                                      - 17 -


Distribution to Non-Resident

10.7  The General Partner will not be required to make all or any part of any
distribution to a Partner whom the General Partner reasonably considers to be
a non-resident person within the meaning of the Income Tax Act, without
having first obtained a favourable legal opinion from its solicitors that a
distribution to such non-resident person will not adversely affect the other
Partners.  A distribution so withheld will be accumulated, held and invested
for and on behalf of such non-resident Partner.  The General Partner will be
entitled to apply any part of such funds and the income arising from the
investment thereof toward the payment of any tax exigible under the Income
Tax Act in respect of those funds.



                                      PART 11


                             MANAGEMENT OF PARTNERSHIP

Authority of the General Partner

11.1  The General Partner is exclusively authorized to carry on the business
of the Partnership, with full power and authority to administer, manage,
control and operate the business of the Partnership, and has all power and
authority to do any act, take any proceeding, make any decision and execute
and deliver any instrument, deed, agreement or document, under the seal of
the General Partner or otherwise, necessary for or incidental to carrying out
the business of the Partnership for and on behalf of and in the name of the
Partnership.  No Person dealing with the Partnership will be required to
inquire into the authority of the General Partner to do any act, take any
proceeding, make any decision or execute and deliver any instrument, deed,
agreement or document for and on behalf of and in the name of the
Partnership.

Powers of the General Partner

11.2  Without limiting the generality of S4.6 and S11.1, but subject to the
terms of this Agreement and always for the benefit of the business of the
Partnership, the General Partner has the power and authority on behalf of the
Partnership to:

      (a)  execute and carry out all transactions which require execution by
      or on behalf of the Partnership involving matters or transactions which
      are within the ordinary course of the Partnership's business;

      (b)  determine, to the extent permitted, the amount and date of any
      distribution by the Partnership;

      (c)  enter into one or more agreements for purchase or sale of assets
      of the Partnership, other than the sale of the undertaking of the
      Partnership;

      (d)  appoint and remove agents and grant and rescind powers of
      attorney;

      (e)  open and operate bank accounts in the name of the Partnership and
      name signing officers for these accounts;

      (f)  invest the surplus funds of the Partnership in government issued
      bonds and notes, money market instruments and interest bearing bank
      accounts;



<PAGE>


                                      - 18 -

      (g)  file such declarations and do such other acts as may be required
      to qualify and maintain the Partnership as a limited partnership where
      deemed appropriate;

      (h)  retain such legal counsel, accountants, experts, advisers, or
      consultants as the General Partner considers appropriate and to rely
      upon the advice of anyone so retained;

      (i)  pay expenses, capital expenditures, and other outlays of the
      Partnership including the fees of any Person to whom it delegates any
      of its authority under this Agreement;

      (j)  commence or defend any action or proceeding in connection with the
      Partnership;

      (k)  submit the Partnership to binding arbitration with respect to any
      issue arising in or concerning its business affairs;

      (l)  file returns required by any governmental or like authority;

      (m)  conclude agreements with third parties so that services may be
      rendered to the Partnership in the normal course of its affairs;

      (n)  make any and all elections, determinations, or designations under
      the Income Tax Act or any other taxation legislation in Canada or of
      any jurisdiction in Canada, in respect of a Limited Partner's interest
      in the Partnership, on behalf of that Limited Partner;

      (o)  execute any and all other deeds, documents, and instruments and
      any documents required to be filed with regulatory authorities and do
      all acts as may be necessary or desirable to carry on the business of
      the Partnership or to carry out the intent and purpose of this
      Agreement; or

      (p)  do anything that is in furtherance of or incidental to the
      business of the Partnership.

Delegation

11.3  The General Partner may contract with any other Person to carry out its
obligations under this Agreement and may delegate to such Person any of its
power and authority as General Partner, but no such contract or delegation
will relieve the General Partner of its obligations under this Agreement.

Title to Property

11.4  The General Partner may hold title to the property of the Partnership
in its own name, but it will execute declarations of trust in favour of the
Partnership in respect of that property and will file such declarations
whenever and wherever the General Partner considers advisable for the
protection of the interests of the Partnership.

Fiduciary Duties of General Partner

11.5  The General Partner will exercise its powers and discharge its duties
with fairness, good faith, and honesty and in the best interests of the
Partnership and Limited Partners and will apply the care, skill, and
diligence that a prudent qualified Person would apply in similar
circumstances to the exercise of its powers and discharge of its duties.



<PAGE>


                                      - 19 -


Protection of Limited Liability

11.6  The General Partner will ensure any material transaction entered into
by the Partnership that is not governed exclusively by the laws prevailing in
Ontario include express provisions to the effect that all other parties:


      (a)  will have no recourse against any Limited Partner except to the
      extent of his interest in the assets of the Partnership; and

      (b)  will indemnify all Limited Partners from and against any liability
      of the Limited Partners to any third party.

Reimbursement of General Partner

11.7  The General Partner may reimburse itself from the funds of the
Partnership for all reasonable costs actually incurred by it in the
performance of its duties under this Agreement, including but not limited to
Organizational & Offering Costs and other reasonable costs indirectly
incurred for the benefit of the Partnership and such portion of the
reasonable indirect and general office and administrative costs of the
General Partner as may be fairly allocated to the services rendered by the
General Partner under this Agreement, but specifically excluding expenses of
any action, suit, or other proceeding in which or in relation to which the
General Partner is adjudged to be in breach of any duty or responsibility
imposed on it by this Agreement.

General Partner's Advance Account

11.8  The General Partner will establish an account on the books of the
Partnership called the "General Partner's Advance Account" to which all
advances from time to time made by the General Partner to the Partnership to
pay expenses, capital expenditures and other outlays of the Partnership
including, but not limited to, Organizational and Offering Costs, or to
refund money so expended by the Partnership, will be credited, and to which
payments to the General Partner in satisfaction thereof will be debited.  The
unpaid balance of the General Partner's Advance Account shall be a liability
of the Partnership and the General Partner.

Interest on Advances

11.9  At the end of each month, the General Partner's Advance Account will be
credited with interest at the Prime Rate on the credit balance from time to
time outstanding on such account.

Repayment of Advances

11.10  The General Partner may pay itself from the funds of the Partnership
on account of the balance in the General Partner's Advance Account at any
time, and any payments will be debited from that account.

Commingling of Funds

11.11  The funds and assets of the Partnership will not be commingled with
the funds or assets of any other Person (including those of the General
Partner), will not be lent to the General Partner or any of its Affiliates
and will not be used by the General Partner or any of its Affiliates for its
own benefit.


<PAGE>


                                      - 20 -



                                      PART 12


                              ACCOUNT AND REPORTING

Fiscal Period

12.1  The Fiscal Period of the Partnership ends December 31 annually.

Books of Account

12.2  The General Partner will maintain proper, complete, and accurate books
of account and records of the business of the Partnership, and will fully and
accurately enter and record all transactions and other matters related to the
business and affairs of the Partnership in those books.

Access to Books and Records

12.3  The General Partner will permit a Limited Partner to examine the books
of account and records of the business of the Partnership, during normal
office hours and upon two business days advance written notice, after such
Limited Partner enters into a confidentiality agreement with the Partnership.

Appointment of Auditor

12.4  The General Partner will appoint Ernst and Young as auditor for the
Partnership to review and report to the Partners upon the financial
statements of the Partnership for and as at the end of each Fiscal Period.

Annual Report and Income Tax Information

12.5  Within 90 days of the end of each Fiscal Period the General Partner
will forward to each Person who was a Partner during or at the end of such
Fiscal Period an annual report for the Fiscal Period, including financial
statements and such other information in respect of the Partnership as may be
required by the Partners for income tax purposes.

                                    Part 13

                              PARTNERSHIP MEETINGS

Meetings Called by General Partner

13.1  The General Partner may, and the General Partner will from time to time
      at the request in writing of Limited Partners representing not less
      than 10% of the Units then outstanding, call a meeting of the Partners.

Meetings Called by Limited Partners

13.2  If the General Partner fails to call a meeting within 20 days of
      receipt of a written request to do so by the Limited Partners, the
      requisite number of Limited Partners may themselves call and hold such
      meeting.

<PAGE>

                                      - 21 -

Place of Meeting

13.3  Every Partnership meeting will be held in Toronto, Ontario.

Notice

13.4  At least 14 days' notice (but not more than 28 days' notice) specifying
      the place, date and hour of meeting and the general nature of the
      business to the transacted shall be given for any meeting of Partners,
      but it will not be necessary to specify in such notice the terms of any
      resolutions to be proposed.

Record Dates

13.5  The General Partner may from time to time but not more than 26 days in
      advance of a meeting, cause the Register to be closed for a period of
      time, not exceeding five days, for the purpose of determining the
      Holders of Units.  Any Partner who was shown as a Partner at the time
      so fixed will be treated as a Partner even though he has since that
      record date disposed of his Units, and no Partner becoming such after
      that date will be entitled to receive notice of and to vote at a
      meeting or any adjournment thereof or to be treated as a Partner of
      record for any purposes relating to such meeting.

Omission to Give Notice

13.6  The accidental omission to give notice of a meeting to any Limited
      Partner will not invalidate any resolution passed at that meeting.

Chairman

13.7  The President, or in his absence any officer, of the General Partner
      will be the chairman of a meeting of Partners if present thereat.  If
      neither the President nor any officer of the General Partner is present
      at a meeting of Partners, the Partners will appoint a chairman of such
      meeting by Ordinary Resolution.

Chairman Need Not Be Partner

13.8  The chairman of any meeting of Partners need not be a Partner.

Quorum

13.9  Subject to S13.10, the quorum for any meeting will be at least two
      Limited Partners present in person and holding or representing by proxy
      in the aggregate at least 25% of the outstanding Units.

Quorum-less Meeting

13.10 If a quorum of the Partners is not present within half an hour after
      the time fixed for the holding of any meeting, then, if called at the
      request of the Limited Partners, the meeting will be dissolved, but if
      called by the General Partner, the meeting will be adjourned to such
      time and place as shall be fixed by the General Partner, and, if at
      such adjourned meeting a quorum is not present, then the Limited
      Partners present or represented by proxy shall constitute a quorum for
      the transaction of business.  The General Partner will give three (3)
      days prior notice to all Limited Partners of the date of the
      reconvening of an adjourned meeting.

<PAGE>

                                      - 22 -

Show of Hands Unless Poll Demanded

13.11 Every question submitted to a meeting shall be decided in the first
      instance on a show of hands.

Demand of Poll

13.12 A poll shall be taken on every resolution and on every question
      submitted to a meeting if demanded by the chairman or by any Partner.

Procedure on Poll for Election of Chairman

13.13 If a poll is demanded on the election of a chairman, then it will be
      taken at once without adjournment.

Procedure on Other Polls

13.14 If a poll is demanded on any other question, then it shall be taken in
      such manner and either at once or after adjournment as the chairman
      directs.

Result of Poll
13.15 The result of a poll will be deemed to be the resolution of the meeting
      at which the poll was demanded.

Chairman's Declaration

13.16 A declaration by the chairman that a resolution has been carried, or
      carried unanimously, or by any particular majority, unless a poll is
      demanded or required, or lost or not carried by a particular majority,
      will be conclusive evidence of the fact.

Passage of Resolution

13.17 A resolution at a meeting of Partners will not pass or be deemed to
      have been passed unless it has been carried by the affirmative vote of
      a majority of the votes given either on a show of hands or on a poll,
      as the case may be.

Voting Rights of Limited Partners

13.18 At any meeting each Limited Partner is entitled on a show of hands to
      one vote only and, upon a poll, to one vote for each Unit held by the
      Limited Partner.

Joint Holders

13.19 A proxy given on behalf of joint Holders must be executed by all of
      them and may only be revoked by all of them, and if more than one of
      several joint Holders is present at a meeting and they do not agree
      which of them is to exercise any vote to which they are jointly
      entitled they will for the purposes of voting be deemed to be not
      present.

<PAGE>

                                      - 23 -

Voting Rights of General Partner

13.20 The General Partner will not as such be entitled to vote at any meeting
      of Partners, but if the General Partner is the Holder of a Unit, the
      General Partner will be entitled to vote in respect of that Unit.

Corporations

13.21 A Partner which is a corporation may appoint an officer, director, or
      other authorized individual as its representative to act on its behalf
      at meetings of Partners and may by a similar instrument revoke any such
      appointment, and for all purposes of meetings of Partners other than
      the giving of notice an individual so appointed will be deemed to be
      the Holder of every Unit held by the corporation he represents, and if
      the individual attends the meeting, the corporation will be deemed to
      be present in person.

Poll on Special Resolution

13.22 Every question submitted to a meeting of Partners which requires a
      Special Resolution will be decided by a poll, unless the chairman of
      the meeting determines otherwise.

Voting

13.23 Votes may be given in person or by proxy and a proxyholder need not be
      a Partner

Appointment of Proxy and Voting

13.24 A Partner may attend any meeting of Partners personally or may be
      represented thereat by proxy, and votes at meetings of Partners may be
      cast on a poll personally or by proxy.  The instrument appointing a
      proxy must be in writing under the hand of the appointor or his agent
      duly authorized in writing, or, if the appointor is a body corporate,
      under its seal or by an officer or agent thereof duly authorized and
      such instrument will cease to be valid one year after the date thereof.
      Any individual may be appointed a proxy, whether or not such individual
      is a Partner.  No proxy will be voted at any meeting unless it will
      have been placed or deposited with the General Partner for verification
      before the opening of the meeting at which such vote will be taken.

Form and Validity of Proxy

13.25 The instrument appointing a proxy may be in any general or usual form
      acceptable to the General Partner and to be effective must be deposited
      with the General Partner at any time before the commencement of the
      meeting.  An instrument appointing a proxy purporting to be executed by
      or on behalf of a Partner will be valid unless challenged at the time
      of or before its exercise and the Person challenging such instrument
      will have the burden of proving to the satisfaction of the chairman of
      the meeting of Partners at which such instrument is proposed to be used
      that such instrument is invalid, and any decision of the chairman of
      the meeting in respect of the validity of such instrument will be
      final.

Solicitation of Proxies

13.26 No Person will solicit proxies in respect of a meeting of Partners
      unless the Person making the solicitation, concurrently with or
      previously thereto, delivers or sends an information circular to each
      Partner whose proxy is solicited.  "Solicit" and "solicitation"
      includes any request for a proxy, whether or not to revoke a proxy, and
      the sending or delivery of a form of proxy or other communication to a
      Partner under circumstances reasonably intended or calculated to result

<PAGE>

                                      - 24 -

      in the procurement, withholding or revocation of a proxy, but does not
      include the sending or delivery of a form of proxy to a Partner with a
      notice of meeting or in response to an unsolicited request made by him
      or on his behalf.  The information circular required hereunder will
      conform, mutatis mutandis, to the form and content prescribed for
      information circulars by or pursuant to the Securities Act; for such
      purposes:  "management" shall mean the General Partner; "corporation"
      shall mean the Partnership; "director" and "senior officer" shall mean
      a director and senior officer of the General Partner, respectively;
      "equity share" or "share" shall mean Unit; and "shareholder" shall mean
      a Person who is a Holder of a Unit.

Adjournment of Meeting

13.27 The chairman of any meeting may, with the consent of such meeting,
      adjourn the meeting from time to time and no notice of such adjournment
      need be given to the Partners.

Resolutions in Writing

13.28 All powers exercisable by a meeting of the Partners by Ordinary
      Resolution or by Special Resolution may also be exercised without
      notice or a meeting at any time in writing by the Limited Partners
      representing a majority or 66-2/3%, respectively, of all the Units
      outstanding.

Resolutions Binding

13.29 Any resolution passed at a meeting of Partners duly convened and held
      in accordance with this Agreement and any assent duly given in writing
      in the manner set forth in this Agreement shall be binding upon all
      Partners whether or not present at such meeting or giving or joining in
      such assent, as the case may be, and as if those not voting in favour
      of such resolution or not giving or joining in such assets had
      concurred in the resolution.

Conduct of Meetings

13.30 Any rules and procedures for the conduct of a meeting of Partners not
      prescribed in this Agreement may be determined by the chairman at the
      meeting.

Minutes

13.31 The General Partner will cause minutes of all proceedings and
      resolutions at each meeting of Partners, and of all consent resolutions
      of the Partners, to be made and entered in books to be kept for that
      purpose and such minutes, when signed by the chairman of the meeting or
      by the chairman of the next succeeding meeting, will be conclusive of
      the matters stated in them and the meeting will be deemed to have been
      duly convened and held and all proceedings and resolutions in them will
      be deemed to have been duly passed and taken.

Powers Exercisable by Special Resolution

13.32 In addition to all other powers conferred on them by this Agreement,
      the Partners may by Special Resolution:
      (a)      admit a new General Partner to the Partnership in anticipation
               of and effective upon the resignation, removal, bankruptcy,
               insolvency, dissolution, liquidation, or winding up of the
               General Partner;

<PAGE>

                                      - 25 -

      (b)      remove the General Partner for breaches of its obligations
               under this Agreement;
      (c)      waive any default on the part of the General Partner on such
               terms as they may determine and release the General Partner
               from any claims in respect of that default;
      (d)      continue the Partnership if the Partnership is terminated by
               operation of law;
      (e)      approve any transaction proposed to be made outside the normal
               course of business of the Partnership;
      (f)      require the General Partner on behalf of the Partnership to
               enforce any obligation or covenant on the part of any Limited
               Partner;
      (g)      subdivide or consolidate or amend, modify or vary the
               provisions or the rights attaching to the Units;
      (h)      amend this Agreement as provided in 0;
      (i)      amend, modify, alter, or repeal any Special Resolution;
      (j)      change the business of the Partnership;
      (k)      change the end of the Fiscal Period; and
      (l)      approve the dissolution of the Partnership.

13.33 None of the actions in S13.32 may have the effect of adversely
      affecting the General Partner unless the General Partner consents or is
      in breach of this Agreement which breach has not been cured despite
      reasonable written notice from a Limited Partner.

                                    Part 14

CHANGE, RESIGNATION OR REMOVAL OF GENERAL PARTNER

Assignment of Interest of General Partner

14.1  The General Partner will not sell, assign, transfer, or otherwise
      dispose of its interest in the Partnership unless such sale,
      assignment, transfer or disposition is to an Affiliate of the General
      Partner, or is in connection with and ancillary to a merger or
      amalgamation of the General Partner resulting in a surviving or
      continuing corporation or body corporate which is then the General
      Partner.  The General Partner will provide written notice to the
      Limited Partners of any such assignment.

Resignation

14.2  The General Partner may resign as general partner on not less than 60
      days' written notice to all Limited Partners, such resignation to be
      effective upon the earlier of:

      (a)      60 days after notice is given; and
      (b)      the admission of a new general partner to the Partnership by
               Special Resolution.

<PAGE>

                                      - 26 -

Prohibition on Resignation

14.3  The General Partner will not resign if the effect of its resignation is
      to dissolve the Partnership.

Bankruptcy or Dissolution

14.4  The General Partner will be deemed to resign as general partner on the
      bankruptcy, insolvency, dissolution, liquidation, or winding-up of the
      General Partner (or the commencement of any act or proceeding in
      connection therewith which is not contested in good faith by the
      General Partner) or the appointment of a trustee, receiver, receiver-
      manager of the affairs of the General Partner, but the deemed
      resignation will not be effective until, and the General Partner will
      not cease to be the general partner until, the earlier of:

      the admission of a new general partner to the Partnership by Special
      Resolution; and

      60 days after notice of the occurrence of such event or appointment is
      given to the Limited Partners.

      Removal of General Partner

14.5  The General Partner may be removed as general partner providing it is
      in breach hereof and a new general partner may be appointed to replace
      the general partner being removed by a Special Resolution to that
      effect.

Transfer of Management

14.6  The new general partner will execute a counterpart to this Agreement
      and will assume the obligations and have the sole right to exercise all
      the rights of the General Partner as and from the date of appointment.

Action Required of Retiring General Partner

14.7  On the admission of a new general partner to the Partnership on the
      resignation or removal of the General Partner, the resigning or
      retiring general partner will do all things and take all steps to
      transfer the administration, management, control, and operation of the
      business of the Partnership and the books, records, and accounts of the
      Partnership to the new general partner and will execute and deliver all
      deeds, certificates, declarations, and other documents necessary or
      desirable to effect the transfer.

Transfer of Title

14.8  On the resignation or removal of the General Partner and the admission
      of a new general partner, the resigning or retiring general partner
      will, at the cost of the Partnership, transfer title to the
      Partnership's property held in its name to the new general partner and
      will execute and deliver all deeds, certificates, declarations, and
      other documents necessary or desirable to effect such transfer.

Release

14.9  On the resignation or removal of the General Partner, the Partnership
      will release and hold harmless the General Partner resigning or being
      removed from all actions, claims, costs, demands, losses, damages,

<PAGE>

                                      - 27 -

      liabilities, and expenses suffered or incurred by the General Partner
      as a result of or arising out of events occurring in relation to the
      Partnership after its resignation or removal, other than events
      resulting from any wilful act or omission by the General Partner.

New General Partner

14.10 A new General Partner will become a party to this Agreement by signing
      a counterpart hereof and by doing so will agree to be bound by all of
      the provisions hereof and to assume the obligations, duties and
      liabilities of the General Partner hereunder as and from the date the
      new General Partner becomes a party to this Agreement.  Concurrently
      with admission to the Partnership, a new General Partner will pay as a
      contribution of Capital by the new General Partner to the Partnership
      the amount of $10 and such contribution will be reflected in the new
      General Partner's Capital Account.  A new general partner will not be a
      "non-Canadian" as that expression is defined in the Investment Canada
      Act (Canada).

                                    Part 15

                           DISSOLUTION OF PARTNERSHIP

Term

15.1  The Partnership will terminate on the 20th anniversary hereof, unless
      it is dissolved earlier pursuant to this Part.

Triggering Events

15.2  The Partnership will be dissolved on the earliest of:

      (a)      the approval by the General Partner of dissolution and the
               authorization of such dissolution by Special Resolution; and

      (b)      60 days after the deemed resignation of the General Partner
               pursuant to S14.4 unless, within 60 days after such
               resignation, a new general partner is admitted to the
               Partnership.

Events Not Causing Dissolution

15.3  The Partnership will not be dissolved or terminated by the resignation,
      removal, death, incompetence, bankruptcy, insolvency, dissolution,
      liquidation, winding-up, or receivership of, or the admission,
      resignation, or withdrawal of, the General Partner or any Limited
      Partner.

General Partner as Receiver

15.4  In the course of dissolution of the Partnership other than pursuant to
      S15.2(b), the General Partner will act as the receiver (the
      "Receiver") or, if approved by Ordinary Resolution, as Receiver and
      manager of the Partnership.

<PAGE>

                                      - 28 -

Other Receiver

15.5  If the dissolution is pursuant to S15.2(b) or the General Partner is
      otherwise unable or is unwilling to act as the Receiver, the Partners,
      by Ordinary Resolution, may appoint an appropriate Person to act as the
      Receiver.

Distributions on Dissolution and Wind-Up

15.6 On dissolution and after provision has been made for the payment or
      other satisfaction of all other liabilities of the Partnership, the
      Receiver will distribute the net assets of the Partnership in cash or
      kind as follows:

      (a)      first to the General Partner in the amount of the General
               Partner's Advance Account;
      (b)      second, rateably to the Limited Partners in the amount of the
               Limited Partners' capital accounts;
      (c)      third, rateably to the Limited Partners in the amount of the
               Limited Partners' current accounts;
      (d)      fourth, to the General Partner in the amount of the General
               Partner's capital account;
      (e)      fifth, to the General Partner in the amount of the General
               Partner's current account; and
      (f)      thereafter, 0.01% to the General Partner and 99.99% rateably
               to the Limited Partners.

Notice of Dissolution

15.7  The Receiver will:

      (a)      give notice of the dissolution of the Partnership by
               publishing a notice in a newspaper which the General Partner
               deems appropriate and by mailing to each Limited Partner, and
               the Partnership's auditor, if any, such notice 21 days before
               the proposed dissolution; and
      (b)      take all steps required by the Limited Partnership Act to
               dissolve the Partnership and satisfy all requirements
               prescribed by the laws of other jurisdictions where the
               Partnership is registered.

Termination of Partnership

15.8  The Partnership will terminate when all of its assets have been
      disposed of and the net proceeds therefrom, after payment of or due
      provision for the payment of all debts, liabilities and obligations of
      the Partnership to creditors, have been distributed as provided in this

<PAGE>

                                      - 29 -

                                     Part 16

                                    AMENDMENT


Amendments Not Permitted

16.1  No amendment to this Agreement may be made which will:
      (a)      allow any Limited Partner to take part, as such, in the
               management of the business of the Partnership or to exercise
               control over the business of the Partnership;
      (b)      reduce any fee payable to the General Partner or reduce the
               share of the General Partner in the Net Income of the
               Partnership;
      (c)      reduce the interest in the Partnership of any Limited Partner;
      (d)      change the right of a Limited Partner to vote at any meeting;
               or
      (e)      change the Partnership from a limited partnership to a general
               partnership.

Amendment of Amendment Section

16.2  This part may only be amended with the unanimous consent of all.
      Partners

Amendments Adversely Affecting Limited Partners

16.3  If an amendment to this Agreement materially and adversely affects the
      rights or interests of the Limited Partners, this Agreement may only be
      so amended on the motion of the General Partner with the approval of
      the Holders of 75% or more of the Units held by Persons other than the
      General Partner and Affiliates of the General Partner.

Other Amendments

16.4  Except as provided in S16.1, S16.2, S16.3 and S16.5, this Agreement may
      be amended in any way on the motion of the General Partner with the
      consent of the Limited Partners given by Special Resolution.

Amendment by General Partner

16.5  The General Partner may, without reference to the Limited Partners,
      amend this Agreement:

      (a)      as necessary to reflect the admission, resignation, or
               withdrawal of any Limited Partner, or the assignment by any
               Limited Partner of the whole or any part of such Limited
               Partner's interest in the Partnership;
      (b)      to add any covenant, restriction, or provision which, in the
               opinion of legal counsel for the Partnership, is for the
               protection or benefit of the Limited Partners;
      (c)      to cure any ambiguity or to correct or supplement any
               provision contained in this Agreement which, in the opinion of
               legal counsel for the Partnership, may be defective or

                                      - 30 -

               inconsistent with any other provision of this Agreement, if,
               in the opinion of the General Partner and legal counsel for
               the Partnership, the amendment will not in any way adversely
               affect the rights of any Limited Partner;
      (d)      for the purpose of complying with any statute of Canada or of
               any province of Canada, or any order, rule or regulation made
               pursuant to such statute; or
      (e)      if necessary or desirable to overcome administrative
               difficulties arising in connection with the Partnership and
               such alteration, amendment, enlargement, or modification does
               not, in the opinion of the General Partner and legal counsel
               for the Partnership, adversely affect the rights of any
               Limited Partner.

Notification of Amendment

16.6  All Partners will be notified of the full details of any amendment to
      this Agreement within 30 days after the effective date of such
      amendment.

                                     Part 17

                                     NOTICES

Notices

17.1  Any notice, communication, payment, or demand required or permitted to
      be given or made by this Agreement will be sufficiently given or made
      for all purposes if delivered personally to the party or to an officer
      of the party to whom it is directed or if sent by ordinary first class
      mail within Canada, postage prepaid, or by facsimile, addressed as
      follows:

      (a)      if to the General Partner:

               Dynamotive Canada Inc.

               Attention:    President
               Facsimile:    (604) 267-6005

      (b)      if to a Holder of a Unit, to the address or facsimile number
               of the Holder as it appears on the Register.

Deemed Receipt

17.2  Except as provided in S17.3, a document sent by the General Partner by
      mail will be deemed to be received on the fourth business day after the
      day on which it is mailed, addressed as provided in S17.3 and sent by
      facsimile will be deemed to be received on the business day after it is
      sent.

Mail Disruption

17.3  In the event of any disruption, strike or interruption in the Canadian
      postal service after mailing and before the receipt or deemed receipt
      of a document, the document will be deemed to have been received on the
      sixth business day following full resumption of postal service.

                                      - 31 -

Change of Address

17.4  A Limited Partner may change his address by giving written notice of
      the change to the General Partner, and the General Partner may change
      its address by giving written notice of the change to each Limited
      Partner.

Accidental Omission

17.5  An accidental omission in the giving of, or failure to give, a notice
      required by this Agreement will not invalidate or affect in any way the
      legality of any meeting or other proceeding in respect of which such
      notice was or was intended to be given.

                                     Part 18

                                  MISCELLANEOU

Binding Effect

18.1  This Agreement is binding on and inures to the benefit of the
      respective heirs, executors, administrators and other legal
      representatives and, to the extent permitted in this Agreement, the
      respective successors and assigns of the parties.

Time of Essence

18.2  Time is of essence in this Agreement.

Severability

18.3  Each provision of this Agreement is intended to be severable, and if
      any provision is illegal or invalid in any jurisdiction, it will not
      affect the validity of that provision in any other jurisdiction or
      affect the validity of the remainder of this Agreement in that or any
      jurisdiction.

Governing Law

18.4  This Agreement and the interpretation and application of it will be
      governed by the laws of Ontario and the parties hereby atone to the
      courts of Ontario for the resolution of any disputes arising out of the
      interpretation or application of this Agreement.

Limited Partner Not Liable as a General Partner

18.5  Any provision of this Agreement which would have the effect of imposing
      on any Limited Partner any of the liabilities, obligations, or powers
      of a general partner will be of no effect to the extent of such
      imposition.










<PAGE>
                                  SCHEDULE 1

                    SUBSCRIPTION AND POWER OF ATTORNEY FORM
               WEST LORNE BIOOIL CO-GENERATION LIMITED PARTNERSHIP

Re:    Subscription for Class A Units

1.     Subscription

The undersigned (the "Subscriber") hereby subscribes for _____________ Class
A Unit(s) of the WEST LORNE BIOOIL CO-GENERATION LIMITED PARTNERSHIP (the
"Partnership") for a subscription price of $100 each (the "Subscription
Price").

2.     Conditions, Acceptance and Delivery

The Subscriber acknowledges and agrees that the issuance by the Partnership
to the Subscriber of the Class A Unit is subject to the acceptance of this
Subscription, in whole or in part, by the General Partner on behalf of the
Partnership in its sole and absolute discretion.

3.     Subscriber's Representations and Warranties

The Subscriber represents and warrants to the Partnership as representations
and warranties that are true as of the date of this Subscription and will be
true as of the date of acceptance that:

       (a)       if the Subscriber is a corporation, the Subscriber is a
                 valid and subsisting corporation, has the necessary
                 corporate capacity and authority to execute and deliver this
                 Subscription and to observe and perform its covenants and
                 obligations hereunder and has taken all necessary corporate
                 action in respect thereof, or, if the Subscriber is a
                 partnership, syndicate or other form of unincorporated
                 organization, the Subscriber has the necessary legal
                 capacity and authority to execute and deliver this
                 Subscription and to observe and perform its covenants and
                 obligations hereunder and has obtained all necessary
                 approvals in respect thereof, and, in either case, upon
                 acceptance by the Partnership and the General Partner, this
                 Subscription will constitute a legal, valid and binding
                 contract of the Subscriber enforceable against the
                 Subscriber in accordance with its terms;

       (b)       the Subscriber is a resident of the jurisdiction referred to
                 under "Name" and "Residential Address of Subscriber" below;

       (c)       the Subscriber is purchasing the Units as principal, for
                 investment only and not with a view to resale or
                 distribution; and

       (d)       the Subscriber has sought no advice in relation to the
                 investment of the Units from the General Partner or any of
                 its affiliates or associates and neither the General Partner
                 nor any of its affiliates or associates has provided any
                 advice to the Subscriber in relation to such purchase.

4.     Partnership Agreement

If this Subscription is accepted, the Subscriber acknowledges that it will
become a limited partner and agrees to be bound by the Limited Partnership
Agreement as amended from time to time.

<PAGE>

                                     - 2 -

5.     Power of Attorney

In consideration of the General Partner accepting this Subscription on behalf
of the Partnership and conditional thereon, the Subscriber hereby:

       (a)       agrees to be bound, as a party to the Partnership Agreement
       and as a Limited Partner in the Partnership, by the terms of the
       Partnership Agreement, as from time to time amended and in effect; and

       (b)       irrevocably constitutes and appoints under seal the General
       Partner with full power of substitution, as its agent and true and
       lawful attorney to act on behalf of and with full power and authority
       in the Subscriber's name, place and stead to execute, complete, swear
       to, acknowledge, deliver, record and file as and where required:

            (i)          the Partnership Agreement, the Certificate (as
                         defined in the Partnership Agreement), any amendment
                         to the Partnership Agreement and any Certificate and
                         any other instrument required to qualify, continue
                         and keep the Partnership in good standing as a
                         limited partnership in or otherwise to comply with
                         the laws of any jurisdiction in which the
                         Partnership is organized, may offer units of the
                         Partnership for sale or may carry on business or own
                         or lease property or in order to maintain the
                         limited liability of the Limited Partners and to
                         comply with the applicable laws of such
                         jurisdiction, including such amendments to the
                         Register (as defined in the Partnership Agreement)
                         and the Certificate as may be necessary to reflect
                         the admission to the Partnership of another Partner
                         or the assignment of a Unit;

            (ii)         any amendment to the Partnership Agreement permitted
                         thereunder and any instrument and any amendment to
                         the Register and the Certificate necessary to
                         reflect any amendment to the Partnership Agreement;

            (iii)        any instrument required in connection with the
                         dissolution and termination of the Partnership;

            (iv)         any instrument required in connection with any
                         election or filing that may be made under the Income
                         Tax Act (Canada) or other tax and fiscal legislation
                         of Canada or any province, or the income tax laws of
                         any jurisdiction applicable to the Partnership or
                         the partners including applications for tax
                         identification numbers and tax shelter registration;

            (v)          on behalf of the Partnership, any document which is
                         necessary or advisable in connection with carrying
                         on the business of the Partnership or the carrying
                         out fully of the provisions of the Partnership
                         Agreement, including any instrument required by a
                         governmental body in connection with the Partnership
                         or its business;

            (vi)         on behalf of the Partnership, any instrument or deed
                         which requires or provides for execution under seal;
                         and

            (vii)        on behalf of the Partnership, any agreement,
                         document or instrument in connection with the
                         acquisition, holding, development, operation,
                         financing or disposition of or investment in any
                         real property, directly or indirectly, including,
                         without limitation, any deed or transfer of title to
                         or an interest in any real property, any agreement,
                         easement or encumbrance required to be delivered in
                         connection with the development of any real property
                         and any note, deed of trust or mortgage or other
                         instrument of security or encumbrance charging title
                         to or an interest in any real property.

<PAGE>

                                     - 3 -

The power of attorney granted hereby is irrevocable, is made under seal and
is a power coupled with an interest and will survive the mental infirmity,
disability or legal incapacity of the Subscriber or the assignment by the
Subscriber of the whole or any part of the interest of the Subscriber in the
Partnership and extends to and is binding upon the heirs, executors,
administrators and other legal representatives and successors and assigns of
the Subscriber and, if the Subscriber is an individual, will survive the
death or disability or other legal incapacity of the Subscriber until notice
of such death or disability or other legal incapacity is delivered to the
General Partner.  The power of attorney granted herein may be exercised by
the General Partner on behalf of the Subscriber in executing any instrument
by listing the Limited Partners thereon and executing each instrument with a
single signature as attorney and agent for all of them or by executing such
instrument on behalf of the Partnership as General Partner.  The Subscriber
agrees to be bound by any representation or action made or taken by the
General Partner pursuant to this power of attorney and hereby waives any and
all defences which may be available to contest, negate or disaffirm the
action of the General Partner taken in good faith under this power of
attorney.  Each Subscriber hereby appoints the General Partner as his agent
with authority upon receipt of notice of the death or disability of the
Subscriber to transfer Units held by such Subscriber into the name of the
General Partner in trust for the estate of such Subscriber and thereafter to
transfer such Units into the name of the executor, administrator, committee
or personal representative of such Subscriber.

6.     Revocation

The Subscriber agrees that this Subscription is given for valuable
consideration and may not be withdrawn, cancelled, terminated or revoked by
the Subscriber for a period of 60 days after the date of receipt of this
Subscription by the General Partner.  The acceptance of this Subscription
will be effective upon receipt by the General Partner of the written consent
of each Limited Partner as at the date hereof and upon endorsement of
acceptance by the General Partner on behalf of the Partnership where
indicated below.

7.     Indemnity

The Subscriber agrees to indemnify and hold harmless the Partnership, the
General Partner and their directors, officers, employees, agents and
shareholders from and against any and all loss, liability, claim, damage and
expense whatsoever arising out of or based upon any representation or
warranty of the Subscriber contained herein or in any document furnished by
the Subscriber in connection with this Subscription being untrue in any
material respect or any breach or failure by the Subscriber to comply with
any covenant or agreement made by the Subscriber herein or in any document
furnished by the Subscriber to the General Partner in connection herewith.

8.     Notices

Any notice or communication which the General Partner or the Subscriber is
required or may desire to give or to make upon the other hereunder will be
effective and valid only if in writing, signed by or on behalf of the party
giving the notice or making the communication, and delivered personally to
the other party or sent by courier, delivery service or by registered or
certified mail, addressed, in the case of the General Partner, to its address
set forth on page 1 hereof, or, in the case of the Subscriber, to the address
set forth below (or, in either case, to such other address or Person of which
either party has given notice or made communication to the other in
accordance with the foregoing).

<PAGE>

                                     - 4 -

9.     Miscellaneous

The agreement resulting from the acceptance of this Subscription by the
General Partner on behalf of the Partnership contains the whole agreement
between the General Partner, the Partnership and the Subscriber in respect of
the subject matters hereof and there are no representations, warranties,
terms, conditions or collateral agreements, express, implied or statutory.
All representations, warranties, agreements and covenants made by the
Subscriber herein will survive the execution, delivery and acceptance of this
Subscription.  Neither this Subscription nor any of the rights arising
hereunder will be capable of assignment or transfer by the Subscriber in any
manner except with the written consent of the Partnership.  This Subscription
will enure to the benefit of and be binding upon the General Partner, the
Partnership and the Subscriber and their respective successors and permitted
assigns and heirs, administrators, executors and other legal representatives.
This Subscription and the rights and obligations of the parties hereunder
will be governed by and construed in accordance with the laws of the Province
of Ontario and any legal action or proceeding with respect therein or hereto
will be brought in the courts of the Province of Ontario.

10.   Income Tax Legislation

Since the provisions of the Income Tax Act (Canada) and any other legislation
imposing taxation consequences on the Subscriber are complex and since the
general effect of the aforesaid legislation (including their effect in the
event of the death of the Subscriber or the sale of a Unit by or to the
Subscriber) depends on the particular circumstances of each party, the
Subscriber does hereby expressly acknowledge that he has been advised to seek
independent professional advice on the taxation and investment aspects of the
Partnership and that neither the General Partner nor the Partnership make
representations with respect to matters of taxation and shall not be
responsible either for any taxation consequences, or without restricting the
generality of the foregoing and notwithstanding the terms hereof, for the
deductibility or reasonableness of any expenses, or for any loss, costs,
charges or expenses in respect thereof.

11.   Defined Terms

Capitalized terms herein shall, unless otherwise defined herein, have the
meanings ascribed to them in the Partnership Agreement.

Dated at --------------, this ------ day of -------------------,


[SUBSCRIBER]

Per:--------------------------

                                  ACCEPTANCE

DYNAMOTIVE CANADA INC. accepts the above Subscription on behalf of the
Partnership.

Dated at --------------, this ------ day of -------------------,







<PAGE>







                                   SCHEDULE 2

                              ACCOUNTING PROCEDURE

                                     PART 1

                                  INTERPRETATION

1.1   In this Appendix, except as otherwise expressly provided or as the
      context otherwise requires or as defined in the Agreement,

      (a)     "Agreement" means the Limited Partnership Agreement to which
              this Accounting Procedure is attached as Schedule 2,

      (b)     "Contributed Surplus" means [to be completed],

      (c)     "Count" means a physical inventory count,

      (d)     "Costs" means all expenditures and outlays of any kind which
              are made in connection with the Project, in accordance with the
              terms and conditions of the Agreement,

      (e)     "Deferred Project Costs" means [to be completed],

      (f)     "Employees" mean those employees of the General Partner and its
              Affiliates who are assigned to and directly engaged in the
              conduct of Project Operations, whether on a full-time or part-
              time basis,

      (g)     "Employee Benefits" means the General Partner's (and
              Affiliate's) cost of holiday, vacation, sickness, disability
              benefits, field bonuses, paid to employees and the General
              Partner's cost of established plans for employee's group life
              insurance, hospitalization, pension, retirement and other
              customary plans maintained for the benefit of employees and
              personnel, as the case may be, which costs may be charged as a
              percentage assessment on the salaries and wages of employees or
              personnel, as the case may be, on a basis consistent with the
              General Partner's cost experience, and in accordance with
              generally accepted accounting practices in Canada consistently
              applied,

      (h)     "Field Offices" means the necessary sub-office or sub-offices
              in each place where construction is being conducted or the
              Project is being operated,

      (i)     "Government Levies" means the costs or contributions made by
              the General Partner pursuant to assessments imposed by
              governmental authority which are applicable to the salaries or
              wages of employees or personnel, as the case may be,

      (j)     "Material" means the personal property, equipment and supplies
              acquired or held, at the direction or with the approval of the
              General Partner, for use in the Project Operations,

      (k)     "Operating Expenses" means [to be completed],

<PAGE>

                                     - 2 -

      (l)     "Personnel" means those management, supervisory,
              administrative, clerical and other personnel (but shall not
              include Employees) of the General Partner who are working on
              the Project (pro-rated for the time they expend on the
              Project),

      (m)     "Project Account" means the books of account maintained by the
              General Partner to record all costs, expenses, credits and
              other transactions arising out of or in connection with the
              Project Operations of the Partnership,

      (n)     "Project Operations" means [to be completed],

      (o)     "Reasonable Expenses" means the reasonable expenses of
              Employees or Personnel, as the case may be, for which those
              Employees or Personnel may be reimbursed under the General
              Partner's usual expense account practice; including, without
              limiting generality, any relocation expenses necessarily
              incurred in order to properly staff the Project Operations if
              the relocation is approved by the General Partner, and

      (p)     "Supervision Offices" means the General Partner's offices or
              departments within the General Partner's offices from which the
              Project Operations are generally supervised.

                                      PART 2

                            STATEMENTS AND BILLINGS

2.1   The General Partner will regularly invoice the Partnership for all
      Costs incurred by it.

2.2   The General Partner will deliver with each invoice rendered for Costs
      incurred a statement indicating

      (a)     all charges or credits to the Project Account relating to
              controllable material in detail, and

      (b)     all other charges and credits to the Project Account summarized
              by appropriate classifications indicative of the nature of the
              charges and credits.

2.3   The General Partner will deliver with each invoice for an advance of
      Costs a statement indicating

      (a)     the estimated Costs, the estimated cash disbursements, to be
              made during the next succeeding quarter,

      (b)     the addition thereto or subtraction therefrom, as the case may
              be, made in respect of Costs actually having been incurred in
              an amount greater or lesser than the advance which was made by
              the Partnership for the penultimate month preceding the month
              of the invoice, and

      (c)     the advance made by the General Partner and the Costs incurred
              to the end of the penultimate month preceding the month of the
              invoice.

                                    PART 3

                                 DIRECT CHARGES

3.1   The General Partner will charge the Project Account with the following
      items:

<PAGE>

                                     - 3 -

      (a)     Contractor's Charges.  All proper Costs relative to the Project
              Operations incurred under contracts entered into by the General
              Partner with third parties in accordance with the terms of the
              Agreement;

      (b)     Labour Charges.
              (i)            the salaries and wages of Employees in an amount
                             calculated by taking the full salary or wage of
                             each Employee multiplied by that fraction which
                             has as its numerator the total time for the
                             month that the Employees were directly engaged
                             in the conduct of Project Operations and as its
                             denominator the total normal working time for
                             the month of the Employee,

              (ii)           the Reasonable Expenses of the Employees, and

              (iii)          Employee Benefits and government contributions
                             in respect of the Employees in an amount
                             proportionate to the charge made to the Project
                             Account in respect to their salaries and wages;

      (c)     Office Maintenance.

              (i)            the cost or a pro rata portion of the cost, as
                             the case may be, of maintaining and operating
                             the offices, charged to the Project Account on
                             the following basis:

                   (A)               the expenses of maintaining and
                                     operating Field Offices, less any
                                     revenue therefrom; and

                   (B)               that portion of maintaining and
                                     operating the supervision offices which
                                     is equal to

                            (I)              the anticipated total operating
                                             expenses of the Supervision
                                             Offices for the year,

                                divided by

                            (II)             the anticipated total staff man-
                                             days for the Employees whether
                                             in connection with the Project
                                             Operations or not,

                                multiplied by

                            (III)            the actual time spent on the
                                             Project Operations by the
                                             Employee expressed in man-days,

              (ii)           without limiting generality, the anticipated
                             total Operating Expenses of the Supervision
                             Offices will include

                   (A)               the salaries and wages of the General
                                     Partner's Personnel which have been
                                     directly charged to those offices,

                   (B)               the reasonable expense of the Personnel,
                                     And

                   (C)               employee benefits and government
                                     contributions in respect of Personnel,

<PAGE>

                                     - 4 -

              (iii)          the General Partner will make an adjustment in
                             respect of the office maintenance cost forthwith
                             after the end of each Fiscal Period upon having
                             determined the actual total staff man-days
                             invoiced; and

              (iv)           Material.  Material purchased or furnished by
                             the General Partner for use on the Project;

      (d)     Transportation Charges.  The cost of transporting Employees and
              Material necessary for the Project Operations,

      (e)     Service Charges and Interest.

              (i)            cost of services and utilities procured from
                             outside sources,

              (ii)           use and service of equipment and facilities
                             furnished by the General Partner, and

              (iii)          any bank charges or interest on monies borrowed
                             by the General Partner for Project Operations,

      (f)     Damages and Losses to Joint Property.  All costs necessary for
              the repair or replacement of assets made necessary because of
              damages or losses incurred by fire, flood, storm, theft,
              accident or other causes.  The General Partner will furnish the
              Limited Partner with written particulars of the damages or
              losses incurred as soon as practicable after the damage or loss
              has been discovered.  The proceeds, if any, received on claims
              against any policies of insurance in respect of those damages
              or losses will be credited to the Project Account;

      (g)     Legal Expenses.  All costs of handling, investigating and
              settling litigation or recovering the assets, including,
              without limiting generality, attorney's fees, court costs,
              costs of investigation or procuring evidence and amounts paid
              in settlement or satisfaction of any litigation claims and for
              the services of the General Partner's outside solicitors in
              connection with the Project;

      (h)     Taxes.  All taxes, duties or assessments of every kind and
              nature (except income taxes) assessed or levied upon or in
              connection with a property, the Project Operations thereon, or
              the production therefrom, which have been paid by the General
              Partner for the benefit of the Partnership and the Limited
              Partners;

      (i)     Insurance.  Net premiums paid for

              (i)            such policies of insurance on or in connection
                             with the Project Operations as may be required
                             to be carried by law, and

              (ii)           such other policies of insurance as the General
                             Partner may carry for the protection of the
                             Partnership in accordance with the Agreement,
                             and

the applicable deductibles in the event of an insured loss,

      (j)     Rentals.  Fees, rentals and other similar charges required to
              be paid for acquiring, recording and undertaking and
              maintaining permits, mineral claims and mining leases and
              rentals and royalties which are paid as a consequent of the
              Project Operations;

<PAGE>

                                     - 5 -

      (k)     Permits.  Permit costs, fees and other similar charges which
              are assessed by various governmental agencies;

      (l)     Other Expenditures.  Such other costs and expenses which are
              not covered or dealt with in the foregoing provisions of this
              as are incurred with the approval of the Board of Directors of
              the General Partner for the necessary and proper conduct of the
              Project Operations or as may be contemplated in the Agreement.

                                      PART 4

                              PURCHASE OF MATERIAL

4.1   The General Partner will purchase all Materials and procure all
      services required in the Project Operations.

4.2   Material purchased and services procured by the General Partner
      directly for the Project Operations will be charged to the Project
      Account at the price paid by the General Partner less deduction for all
      discounts actually received.

4.3   So far as it is reasonably practical and consistent with efficient and
      economical operations, the General Partner will purchase, furnish or
      otherwise acquire only such Material and other assets as may be
      required for immediate use and the General Partner will attempt to
      minimize the accumulation of surplus stocks of Materials.

4.4   The General Partner will be entitled to supply for use in connection
      with the Project Operations equipment and facilities which are owned by
      the General Partner and charge the Project Account with such reasonable
      costs which is commensurate with the ownership and use thereof.

                                    PART 5

                              DISPOSAL OF MATERIAL

5.1   The General Partner may, from time to time, sell any material which has
      become surplus to the foreseeable needs of the Project Operations for
      the best price and upon the most favourable terms and conditions
      available.

5.2   Upon wind-up of the Partnership, the General Partner may approve the
      division of any Material held by the General Partner at that date
      between the Limited Partners in kind or the Material may be taken by a
      Limited Partner in lieu of a portion of its proportionate share of the
      net revenues received from the disposal of the assets and property.  If
      the distribution to the Limited Partner be in lieu of a cash
      distribution, it will be for such price and on such terms and
      conditions as the General Partner may approve.

5.3   The net revenues received from the sale of any material to third
      parties or to a Limited Party will be credited to the Project Account.

                                    PART 6

                                 INVENTORIES

6.1   The General Partner will maintain records of Material in detail.

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                                     - 6 -

6.2   The General Partner will perform counts from time to time at reasonable
intervals.

6.3   Forthwith after performing a Count, the General Partner will reconcile
      the Count with the Project Account and provide the Limited Partners
      with a statement listing the overages and shortages.  The General
      Partner will not be held accountable for any shortages of inventory
      except such shortages as may have arisen due to a lack of diligence on
      the part of the General Partner.

                                   PART 7

                             GOVERNMENT GRANTS

7.1   Government grants will be credited to the Partnership's Deferred
      Project Costs account and not accounted for as a capital contribution
      of any Partner.  If such grants exceed the debit balance in the
      Deferred Project Costs account or other capitalized asset account, the
      amount shall be credited to a quasi-liability account if the grant is
      conditionally repayable or to a contributed surplus account if it is
      not.

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                                SCHEDULE 3

               PERSONS ENTITLED TO SUBSCRIBE FOR CLASS B UNITS

Dynamotive Energy Systems Ltd.                             22,500
Magellan Aerospace Corp.                                    6,000
Ontario Power Generation                                    1,500
                                                          -------
                                                           30,000

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