Exhibit 3.1  Québec  CERTIFICATE OF AMALGAMATION  Part 1A
of the Companies Act (R.S.Q., C.
C-38)   I certify by these presents that the
companies mentioned in the articles of amalgamation enclosed herewith have
amalgamated on DECEMBER 30, 2003, in
accordance with Part IA of the Companies Act, into one company under the
corporate name of   CASCADES INC.   As indicated in the articles of amalgamation enclosed herewith.   Filed in the Register on January 10, 2004under Registration No. 1141741828Government of QuebecInspector general of financialinstitutions(original signed) Jean St-GelaisInspector General of Financial InstitutionsR020Z18I28C11JA


Form 6Inspector general of financialinstitutions
  
  ARTICLES OF AMALGAMATIONCompanies
  Act, Part IA
  (L.R.Q. chapter C-38)  1  Name of the
  company created by the amalgamation
  1.1CASCADES INC.
  ý
  Simplified
  amalgamation2Quebec judicial district of the
  company head office
  
  Drummond
  3Precise number or minimum and
  maximum number of directors
  
  Minimum. : 1         -Maximum. :
  25
  4Effective date if later than that on which
  the articles are filed
  
  2003-12-305 Description of the authorized capital stock
  
  The Schedule 1 attached hereto is incorporated
  in this form.6 
  Restrictions on the transfer of shares, if applicable
  
  Not applicable.7  Limits on
  activity, if applicable
  
  Not applicable.8  Other
  provisions
  
  The Schedule 2 attached hereto is incorporated
  in this form.Name of each of the 
  amalgamating companies
  Signature of an
  authorized directorCascades Inc.
  (S) Laurent Lemaire9135-2591 Quebec Inc
  (S) Robert F. Hall  If the space provided is not sufficient, include an appendix, in two
copies.  Reserved for administration
  C-216 (Rev. 2002-06)


CASCADES INC.  SCHEDULE 1  DESCRIPTION
OF SHARE CAPITAL  1.The share capital of the Company
will be composed of:  1.1an unlimited number of Common Shares without
par value;  1.2an unlimited number of Class A Preferred
Shares without par value which may be issued in series; and  1.3an unlimited number of Class B Preferred
Shares without par value which may be issued in series.  2.The rights, privileges, conditions
and restrictions attaching to the Common Shares, the Class A Preferred Shares
and the Class B Preferred Shares are hereinafter described.  COMMON SHARES  3.The holders of common shares shall
be entitled to the right:  VOTE  3.1To vote on the basis of one vote per share at
any meetings of shareholders except for any meeting where only the holders of a
specific class of shares have the right to vote.  DIVIDENDS  3.2Subject to the rights of holders of other
classes of shares, to receive dividends as declared by the Company.  LIQUIDATION  3.3To share in the remaining assets in the event
of a liquidation of the Company.  CLASS A AND CLASS B
PREFERRED SHARES  4.The rights, privileges, conditions
and restrictions attached to the Class A and Class B Preferred Shares of
the Company are as follows:


ISSUANCE IN SERIES  4.1The Class A and Class B Preferred Shares
are issuable in series as provided for hereinafter and rank equally within
their respective classes as to dividends and capital.  4.2Subject to the provisions of the Companies Act and the following
provisions, which apply to all series of Class A and Class B Preferred
Shares, and to all conditions pertaining to any series of outstanding Class A
or Class B Preferred Shares, the directors of the Company are entitled to
determine, by way of resolution duly passed prior to the issue of Class A or Class
B Preferred Shares of each series and with no requirement to pass by-laws
ratified by shareholders, to divide into series the Class A or Class B
Preferred Shares and to determine the number of shares per series as well as
the designation, rights, privileges, restrictions and conditions of each series
of Class A or Class B Preferred Shares, including, without limiting the
generality of the foregoing, the rate, amount or calculation method and the
terms of payment of the dividends, whether cumulative or not, as well as the
redemption, retraction, purchase or conversion or redemption or sinking fund
provisions.  4.3The directors must, prior to issuing Class A
or Class B Preferred Shares of any series, amend the articles of the Company
in order to set forth therein, as the case may be, the number and designation
as well as the rights, privileges, conditions and restrictions determined for
the Class A or Class B Preferred Shares of such series.  DIVIDENDS  4.4Registered holders of any series of Class A
or Class B Preferred Shares shall be entitled to receive, in each fiscal year
of the Company or on any other basis, cumulative or non-cumulative preferred
dividends payable at the time, at the rates and for such amounts and at the
place or places determined by the directors with respect to each series prior
to the issuance of any Class A or Class B Preferred Shares of such series.  4.5No dividend may be declared and paid or set
aside for payment in a fiscal year on the Class B Preferred Shares, Common
Shares or shares of any other class in the share capital of the Company ranking
junior to the Class A Preferred Shares unless the current dividend and all
accrued but unpaid dividends on all series of cumulative Class A Preferred
Shares then outstanding and all dividends on all series of non-cumulative Class
A Preferred Shares then outstanding have been declared and paid or set aside
for payment.  2


4.6No dividend may be declared and paid or set
aside for payment in a fiscal year on the Common Shares or shares of any other
class in the share capital of the Company ranking junior to the Class B
Preferred Shares unless the current dividend and all accrued but unpaid
dividends on all series of cumulative Class B Preferred Shares then
outstanding and all dividends on all series of non-cumulative Class B
Preferred Shares then outstanding have been declared and paid or set aside for
payment.  4.7Dividends on any series of cumulative Class A
or Class B Preferred Shares shall start accruing as of a date falling within
six (6) months following the respective date of issuance of each series to
be determined, upon each issuance, by the directors prior to the issuance of
the Class A and Class B Preferred Shares of such series and in the event
such a date would not be determined, such dividend shall start accruing as of
the date of issuance.  4.8Holders of Class A and Class B Preferred
Shares shall not be entitled to any additional or extra dividend other than the
specific preferred dividends determined with respect to each series in the
rights, privileges, restrictions and conditions attached to the Class A and Class
B Preferred Shares of such series.  LIQUIDATION, WINDING-UP OR DISSOLUTION  4.9In the event of the liquidation, winding-up or
dissolution of the Company or any other distribution of its assets to its
shareholders, the holders of Class A and Class B Preferred Shares shall be
entitled to receive, out of the assets of the Company, the amount paid in
consideration of each share held by them and, in the case of a series of
cumulative Class A or Class B Preferred Shares, of all dividends then
accrued thereon but unpaid and, in the case of a series of non-cumulative Class
A or Class B Preferred Shares, of all dividends then declared thereon but
unpaid, plus any other amount determined by the directors with respect to each
series prior to the issuance of any Class A or Class B Preferred Shares of
such series. After receiving payment of the amounts to which they are entitled
pursuant to the above provisions, the holders of Class A or Class B
Preferred Shares shall no longer be entitled to share in any other distribution
of assets.  4.10The holders of Class A Preferred Shares shall
be entitled to receive the amounts mentioned above prior to the holders of Class
B Preferred Shares, Common Shares and shares of any other class in the share
capital of the Company ranking junior to the Class A Preferred Shares. The
holders of Class B Preferred Shares shall have the same rights over the
holders of Common Shares and shares of any other class in the share capital of
the Company ranking junior to the Class B Preferred Shares.  3


4.11If the assets of the Company is insufficient to
pay in full the amount payable to the holders of Class A and Class B
Preferred Shares, such assets shall be prorated between the holders of Class A
Preferred Shares then outstanding, in accordance with their respective rights,
prior to the holders of Class B Preferred Shares.  4.12If the assets of the Company is sufficient to
pay in full the amount payable to the holders of Class A Preferred Shares but
insufficient to pay in full the amount payable to the holders of Class B
Preferred Shares, any remaining property of the Company shall be prorated
between the holders of Class B Preferred Shares then outstanding, in
accordance with their respective rights.  VOTING RIGHTS  4.13The holders of Class A Preferred Shares shall
not be entitled as such to receive notice of or to attend or to vote at any
meetings of shareholders, unless the Company has failed to pay a total of eight
(8) quarterly cumulative or non cumulative dividends, to the holders of
the Class A Preferred Shares, on the date provided for in the articles of
continuance and any amendments thereto, regardless of the declaration of said
dividends.  The conditions regarding the
voting rights will be specifically stated in the restrictions, conditions,
privileges and rights pertaining to the Class A Preferred Shares, Series 1,
as may be amended from time to time.  The
holders of the Class B Preferred Shares of the Company shall not be entitled
as such to receive notice of nor to attend nor to vote at any meetings of
shareholders of the Company.  CREATION OR ISSUANCE OF SHARES RANKING SENIOR
OR EQUAL  4.14The Company shall not, without the prior
consent of the holders of Class A Preferred Shares as a class given as
provided for hereinafter (but always subject to any other requirement of the Companies Act), create shares of other
classes ranking prior or equal to the Class A Preferred Shares. The Company
shall not, without the prior consent of the holders of Class A Preferred
Shares as a class given as provided for hereinafter (but always subject to any
other requirement of the Companies Act),
issue additional series of Class A Preferred Shares or shares of any other
classes ranking prior or equal to the Class A Preferred Shares, unless at the
date of such issuance all cumulative dividends up to and including the payment
of dividends for the last completed period for which such cumulative dividends
are payable have been declared and paid or set aside for payment with respect
to each series of cumulative Class A Preferred Shares then issued and
outstanding and unless any declared but unpaid non-cumulative dividend have
been paid or set aside for payment with respect to each series of non-cumulative
Class A Preferred Shares then issued and outstanding.  4


4.15The Company shall not, without the prior
consent of the holders of Class B Preferred Shares as a class given as
provided for hereinafter (but always subject to any other requirement of the Companies Act), create shares of other
classes ranking prior or equal to the Class B Preferred Shares, except for
any Class A Preferred Shares of any series which the directors are authorized
to issue. The Company shall not, without the prior consent of the holders of Class
B Preferred Shares as a class given as provided for hereinafter (but always
subject to any other requirement of the Companies
Act), issue additional series of Class B Preferred Shares or
shares of any other classes ranking prior or equal to the Class B Preferred
Shares unless at the date of such issuance all cumulative dividends up to and
including the payment of dividends for the last completed period for which such
cumulative dividends are payable have been declared and paid or set aside for
payment with respect to each series of cumulative Class B Preferred Shares
then issued and outstanding and unless any declared but unpaid non-cumulative
dividend shall have been paid or set aside for payment with respect to each
series of non-cumulative Class B Preferred Shares then issued and
outstanding.  AMENDMENTS AND APPROVAL BY THE HOLDERS OF CLASS
A AND CLASS B PREFERRED SHARES  4.16The specific provisions hereof relating to Class
A and Class B Preferred Shares as classes and those of paragraphs 4.16
to 4.21 inclusively, shall not be deleted, amended or supplemented, in whole or
in part, without the approval of the holders of Preferred Shares of the
relevant class given as provided for hereinafter.  4.17The approval of the holders of Class A and Class
B Preferred Shares with respect to any matter mentioned above may be given in
writing by the holders of all of the Preferred Shares of the relevant class
then outstanding or by a resolution duly passed by at least 2/3 of the votes
cast by or on behalf of the holders of Preferred Shares of the relevant class
at a shareholders meeting duly held to examine such matter. At that meeting,
the holders of the majority of the Preferred Shares of the relevant class
outstanding must be present or represented by proxy.  4.18If, however, at the meeting as originally
called, the holders of the majority of the Preferred Shares of the relevant
class are not present or represented by proxy within thirty (30) minutes
following the time appointed for the holding of the meeting, the meeting shall
then be adjourned to a date, time and place determined by the chairman of the
meeting and at least fifteen (15) days later. At this adjourned meeting,
the holders of Preferred Shares of the relevant class present or represented by
proxy, whether or not they hold the majority of the Preferred Shares of the
relevant class then outstanding, shall be entitled to deal with any matters for
which the original meeting had been called and a resolution duly  5


passed by at least 2/3 of the votes cast at
that meeting shall then constitute the approval by the holders of the Preferred
Shares of the relevant class mentioned above.  4.19Notice of the original meeting of the holders
of Preferred Shares of the relevant class must be given at least fifteen
(15) days prior to the date appointed for the holding of the meeting and
describe the nature of the matters to be transacted and the text of any special
resolution to be submitted to the meeting. In the event the meeting is
adjourned for less than thirty (30) days, no notice other than the
announcement made at the meeting shall be necessary. If the meeting is adjourned
for more than thirty (30) days, a notice of the adjourned meeting shall be
given pursuant to the by-laws of the Company. The procedure to be followed with
respect to notices of meeting, whether original meetings or adjourned meetings,
as well as the holding thereof shall be those prescribed by the by-laws of the
Company pertaining to shareholders meetings.  4.20If any provisions are deleted, amended or
supplemented such as to particularly affect the rights of the holders of Class A
or Class B Preferred Shares of any series differently from the way the rights
of the holders of Class A or Class B Preferred Shares of any other series
are affected, such deletions, amendments and supplements shall then require, in
addition to being approved by the holders of Class A or Class B Preferred
Shares as indicated above, the approval of the holders of the Class A or Class
B Preferred Shares of the series so affected. This approval may be given in
writing by the holders of all of the Class A or Class B Preferred Shares of
such series or by a resolution passed by at least 2/3 of the votes cast at a
meeting of the holders of the Class A or Class B Preferred Shares of such
series, and the provisions with respect to the holding of such meeting as
described above shall apply, mutatis
mutandis.  4.21At any meeting of the holders of Class A or Class
B Preferred Shares held with or without series distinction, each holder shall
be entitled to one vote for each Class A or Class B Preferred Share held by
him.  RECORD DATE FOR THE PAYMENT OF
DIVIDENDS  5.The directors may determine in
advance, within thirty (30) days preceding the payment of dividends, the
ultimate record date to determine the shareholders entitled to receive
dividends. Only shareholders registered on the record date shall be entitled to
receive payment of such dividends notwithstanding any transfer of shares which
may be made in the books of the Company after that date.  6


PROVISIONS
ATTACHING TO THE CUMULATIVE
REDEEMABLE CLASS A PREFERRED SHARES SERIES 1  6.The first series of the Class A
Preferred Shares will consist of 2,100,000 Cumulative Redeemable Class A
Preferred Shares Series 1 (the Class A Preferred Shares Series 1)
and, in addition to the rights, privileges, restrictions and conditions
attaching to the Class A Preferred Shares of the Company as a class, the Class A
Preferred Shares Series 1 shall also be subject to the following rights,
privileges, restrictions and conditions:  DIVIDENDS  6.1The holders of Class A Preferred Shares Series 1
will be entitled to receive and the Company shall pay thereon cumulative
preferential cash dividends, as and when declared by the Board of Directors of
the Company, payable quarterly on or about the 1st day of January,
April, July and October in each year (the Dividend Payment Date) at
a quarterly rate of $0.46875 per share. 
The initial dividend shall be deemed to accrue from the date of issue of
the Class A Preferred Share Series 1, and, if declared, shall be
payable on October 1, 1992.  6.2If on any Dividend Payment Date the dividend
payable on such date is not paid in full on all the Class A Preferred
Shares Series 1 then issued and outstanding, such dividend or the unpaid
par thereof shall be paid on a subsequent date or dates determined by the Board
of Directors of the Company, on which the Company shall have sufficient monies
properly applicable to the payment thereof. 
The holders of the Class A Preferred Shares Series 1 shall not
be entitled as such to any other dividends in excess of the preferential
dividends for which provision is expressly made herein.  Cheques of the Company payable in lawful
money of Canada at par at any branch of the companys bankers in Canada, at
such time, shall be issued in respect of the said dividends (less any tax
required to be deducted) and payment thereof shall satisfy such dividends.  REDEMPTION  6.3The Class A Preferred Shares Series 1
will not be redeemable prior to September 1, 1997.  On and after September 1, 1997, but
subject to the provisions of the Companies
Act (Québec) and to the provisions described under Restrictions on
Dividends and Retirement of Shares below, the Company may redeem at any time
all or from time to time, any part of the outstanding Class A Preferred
Shares Series 1, at the Companys option, by either:  (a)the payment of an amount in cash of $25.00 for
each such share so redeemed, together with accrued and unpaid dividends thereon
to the date fixed for redemption; or  7


(b)subject to the prior approval of the Montreal
and Toronto Stock Exchange, the conversion of each Class A Preferred Share
Series 1 to be redeemed into that whole number of fully paid and freely
tradable common shares of the Company (the Common Shares2) to be determined by
dividing $25.00, together with accrued and unpaid dividends thereon to the date
fixed for redemption, by the greater of $2.00 and 95% of the weighted average
trading price of such Common Shares on The Montreal Exchange for the 20 trading
days ending on the last trading day ending on or immediately prior to the
fourth day prior to the date specified for redemption.  6.4Notice of any redemption will be given by the
Company not more than 60 days and not less than 35 days prior to the date fixed
for redemption.  6.5Where a part only of the then outstanding Class A
Preferred Shares Series 1 is at any time to be redeemed, the Class A
Preferred Shares Series 1 to be redeemed shall be selected by lot in such
manner as the Board of Directors of the Company determines or, if the Board of
Directors of the Company so decides, may be redeemed pro rata, disregarding
fractions.  6.6The notice of redemption shall set out whether the redemption shall
be in the form of cash or by conversion into Common Shares, the redemption
price or the number of Common Shares, as the case may be, the place at which
the redemption is to be made and the date on which redemption is to take place,
and, if less than all of the shares are to be redeemed, the number thereof so
to be redeemed.  If the redemption is to
be made in cash, on or before the date so specified for redemption, the Company
shall deposit the redemption price of the shares to be redeemed with the
transfer agent and registrar for the Class A Preferred Shares Series 1
to be paid without interest to or to the order of the respective holders of
such shares upon presentation and surrender to such agent of the certificates
representing the same.  If the redemption
is to be made by conversion into Common Shares, the Company shall deposit
certificates representing an appropriate number of Common Shares with the
transfer agent and registrar for the Class A Preferred Shares Series 1
to be issued to or to the order of the respective holders of such shares upon
presentation and surrender to such agent of the certificates representing the
same.  Provided such deposit shall have
been made, such shares so called for redemption shall, on the date specified
for redemption, be and be deemed to be redeemed and no longer outstanding.  If a part only of the shares represented by
any certificate are to be redeemed, a new certificate for the part not redeemed
shall be issued at the expense of the Company. 
Provided such deposit shall have been made, the shares so called for
redemption shall from and after the date specified for redemption cease to be
entitled to dividends, and the holders shall not be entitled to exercise any of
the other rights of shareholders in respect thereof, and their rights shall be
limited to  8


receiving, without interest, their proportionate part of the total
redemption price so deposited against presentation and surrender of the
certificates held by them respectively. 
If the deposit as aforesaid shall not have been made, the rights of the
holders of the shares so called for redemption shall remain unaffected.  6.7On any redemption of Class A Preferred
Shares Series 1 by way of conversion into Common Shares, the share
certificate representing the Common Shares resulting therefrom shall be issued
in the name of the holder of the Class A Preferred Shares Series 1
converted.  The right of the Company to
redeem the Class A Preferred Shares Series 1 shall be deemed to have
been exercised, and the holder of Class A Preferred Shares Series 1
to be converted shall be deemed to have become a holder of Common Shares for
all purposes, on the relevant conversion date, notwithstanding any delay in the
delivery of the certificate representing the Common Shares into which such Class A
Preferred Shares Series 1 have been converted.  6.8A redemption of Class A Preferred Share Series 1
will be effected by the holder depositing certificates representing the Class A
Preferred Shares Series 1 to be redeemed at the principal transfer office
of Fiducie Desjardins Inc. in Montreal, or at the principal transfer office of
Montreal Trust Company in Toronto, Regina, Calgary or Vancouver.  Fractional shares will not be issued on any
redemption but in lieu thereof, the Company will make cash payments.  CONVERSION INTO COMMON SHARES AT OPTION OF
HOLDER  6.9On and after September 1, 1997, each Class A
Preferred Share Series 1 will be convertible at the option of the holder
on the lst day of each of January, April, July and October in each
year on at least 45 days written notice before the date fixed for conversion
into that number of fully paid and freely tradable Common Shares determined by
dividing $25.00, together with accrued and unpaid dividends thereon to the date
of conversion, by the greater of $2.00 and 95% of the weighted average trading
price of such Common Shares on The Montreal Exchange for the 20 trading days
ending on the last trading day ending on or immediately prior to the fourth day
prior to the date of conversion.  6.10The conversion privilege herein provided for
may be exercised by notice in writing given to the transfer agent for the
Common Shares at least 45 days prior to the conversion date, accompanied by the
certificate or certificates representing the Class A Preferred Shares Series 1
in respect of which the holder thereof desires to exercise such conversion
privilege; such notice shall specify the number of Class A Preferred
Shares Series 1 which the holder desires to have converted; if less than
all the Class A Preferred Shares Series 1 represented by any
certificate or certificates accompanying any such notice are to be converted,
the holder shall be entitled to receive, at the expense of the Company, a new
certificate representing  9


the Class A Preferred Shares Series 1
comprised in the certificate or certificates surrendered as aforesaid which are
not to be converted.  On any conversion
of Class A Preferred Shares Series 1, the share certificate
representing the Common Shares resulting therefrom shall be issued in the name
of the holder of the Class A Preferred Shares Series 1 converted.  6.11The right of a holder of Class A Preferred
Shares Series 1 to convert the same into Common Shares shall be deemed to
have been exercised, and the holder of Class A Preferred Shares Series 1
to be converted shall be deemed to have become a holder of Common Shares for
all purposes, on the relevant conversion date, notwithstanding any delay in the
delivery of the certificate representing the Common Shares into which such Class A
Preferred Shares Series 1 have been converted.  6.12The Company, subject to the provisions of the Companies Act (Québec) and the provisions
described under Restrictions on Dividends and Retirement of Shares, as
applicable, may, by notice given not later than the 24th business
day prior to the date fixed for conversion to all holders who have given a
conversion notice, either: (i) redeem on the day fixed for conversion all
but not less than all of the Class A Preferred Shares Series 1
forming the subject matter of the conversion notices; or (ii) cause the
holders of such Class A Preferred Shares Series 1 to sell on the day
fixed for conversion such Class A Preferred Shares Series 1 to
another purchaser or purchasers if a purchaser or purchasers willing to
purchase all but not less than all of such Class A Preferred Shares Series 1
is or are found.  Any such redemption or
purchase shall be made by the payment of an amount inc ash of $25.00 per share,
together with accrued and unpaid dividends thereon to the date fixed for
redemption or purchaser.  The Class A
Preferred Shares Series 1 to be redeemed or purchased shall not be
converted on the date set forth in the conversion notice.  6.13A conversion of Class A Preferred Shares Series 1
will be effected by the holder depositing certificates representing the Class A
Preferred Shares Series 1 to be converted at the principal transfer office
of Fiducie Desjardins Inc. in Montreal, or at the principal transfer office of
Montreal Trust Company in Toronto, Regina, Calgary or Vancouver.  Fractional Common Shares will not be issued
on any conversion of Class A Preferred Shares Series 1 but in lieu
thereof the Company will make cash payments.  CONVERSION INTO ANOTHER SERIES OF P REFERRED
SHARES AT OPTION OF THE HOLDER  6.14The Company may by notice given at least 45
days prior to September 1, 1997, advise the holders of the class A
Preferred Shares Series 1 of their right to convert, at their option, on September 1,
1997, their Class A Preferred Shares  10


Series 1 into fully paid and
non-assessable new first preferred shares (the New Preferred Shares) on a
share for share basis.  The Company will
ensure that such New Preferred Shares will not, if issued, be or be deemed to
be term preferred shares within the meaning of the Income Tax Act (Canada).  6.15The notice shall be sent by prepaid first-class
mail or delivered to each person who at a record date fixed by the Board of
Directors is a registered holder of Class A Preferred Shares Series 1
and be sent to each stock exchange on which the Class A Preferred Shares Series 1
are then listed and posted for trading. 
The notice shall (i) specify the manner in which the conversion
right may be exercised, and (ii) contain a summary of the attributes of
the New Preferred Shares into which the Class A Preferred Shares Series 1
may be converted.  Holders of the Class A
Preferred Shares Series 1 electing to covert such shares will be required
to complete a conversion election accompanying the conversion notice and to
deposit the completed conversion election and shares to be converted at the
principal office of Fiducie Desjardins Inc. in Montreal, or at the principal
transfer office of Montreal Trust Company in Toronto, Regina, Calgary or
Vancouver on or before a date 30 days prior to the conversion date set out in
the conversion notice.  CONVERSION UPON EXERCISE OF A COMMON SHARE
PURCHASE WARRANT  6.16The holders of Class A Preferred Shares Series 1
have the right, at any time up to and including August 31, 1997, upon the
exercise of a Common Share Purchase Warrant (the Warrant) issued under the
Warrant Indenture between the Company and Fiducie Desjardins Inc., as warrant
agent, and in lieu of paying the entire exercise price of the Warrant in cash,
to convert Class A Preferred Shares Series 1 into Common Shares in
the following manner.  The number of Class A
Preferred Shares Series 1 which may be so converted upon the exercise of
Warrants shall be equal to the number obtained by dividing (i) the
aggregate exercise price of the Warrants to be exercised in connection with
such conversion by (ii) an amount equal to $25.00 plus any accrued and
unpaid dividends per Class A Preferred Share Series 1.  A conversion of Class A Preferred Shares
Series 1 will be effected by the holder depositing certificates
representing the Warrants and the appropriate number of Class A Preferred
Shares Series 1 to be converted with the transfer agent at the principal
transfer office of Fiducie Desjardins Inc. in Montreal, or at the principal
transfer office of Montreal Trust Company in Toronto, Regina, Calgary or
Vancouver.  No fractional common Share
will be issued on such conversion.  No
cash payment will be made by the Company should the aggregate value of the Class A
Preferred Shares Series 1 so converted exceed the aggregate exercise
price.  Should the aggregate exercise
price exceed the aggregate value of the Class A Preferred Shares Series 1
so converted, the holder shall make a cash payment for such difference.  11


6.17On any conversion of Class A Preferred
Shares Series 1 in connection with the exercise of a Warrant, the share
certificate representing the Common Shares resulting therefrom shall be issued
in the name of the holder of the Class A Preferred Shares Series 1
converted.  The right of a holder of Class A
preferred Shares Series 1 to convert the same into Common Shares upon the
exercise of the Warrants shall be deemed to have been exercised, and the holder
of Class A Preferred Shares Series 1 to be converted shall be deemed
to have become a holder of Common Shares for all purposes, on the relevant
conversion date, notwithstanding any delay in the delivery of the certificate
representing the Common Shares into which such Class A Preferred Shares Series 1
have been converted.  RETRACTION UPON EXERCISE OF A COMMON SHARE
PURCHASE WARRANT  6.18Subject to the provisions of the Companies Act (Québec), a holder of
Preferred Shares Series 1 who exercises a Warrant during the period
between August 13, 1997 and August 31, 1997, inclusively, shall be
entitled to require the Company to purchase that number of Preferred Shares Series 1
specified by the holder in order to pay, in cash, the exercise price of the
Warrant, as hereinafter set out.  A
holder of Preferred Shares Series 1 wishing to exercise this right must,
simultaneously with the exercise of the Warrant between August 13, 1997
and August 31, 1997, deposit the certificates representing the Warrants
and the appropriate number of Preferred Shares Series 1 to be retracted at
the principal transfer office of Fiducie Desjardins Inc. in Montreal, or at the
principal transfer office of Montreal Trust Company in Toronto, Regina, Calgary
or Vancouver.  The deposit of such
certificates shall be in lieu and instead of a retraction notice to the
Company.  The retraction price for the
Preferred Shares Series 1 shall be $25.00 per share plus accrued and
unpaid dividends thereon to the date of the notice of retraction.  The maximum number of Preferred Shares Series 1
which may be so retracted shall be equal to the number obtained by dividing (i) the
aggregate exercise price of the Warrants exercised in connection with such
retraction by (ii) an amount equal to $25.00 per share plus all accrued
and unpaid dividends thereon to the date of the notice of retraction.  The cash proceeds from the retraction of such
Preferred Shares Series 1 shall be applied by the warrant agent, for and
on behalf of the said holder of Preferred Shares Series 1, exclusively to
the payment of the aggregate exercise price of the Warrants.  Should the aggregate exercise price exceed
the aggregate value of the Preferred Shares Series 1 so retracted, the
holder shall make a cash payment for such difference.  No fractional Common Share shall be issued
upon such retraction and no cash payment will be made to the holder by the
Company should the aggregate value of the Preferred Shares Series 1 so
retracted exceed the aggregate exercise price of the Warrants.  12


6.19On any retraction of Class A Preferred
Shares Series 1 in connection with the exercise of a Warrant as set forth
above, the share certificate representing the Common Shares resulting therefrom
shall be issued in the name of the holder of the Class A Preferred Shares Series 1
retracted.  The right of retraction of a
holder of Class A Preferred Shares Series 1 shall be deemed to have
been exercised, and the holder of Class A Preferred Shares Series 1
which have been retracted shall be deemed to have become a holder of Common
Shares for all purposes on the relevant retraction date, notwithstanding any
delay in the delivery of the certificate representing the Common Shares.  PURCHASE FOR CANCELLATION  6.20Subject to the Companies
Act (Québec), the Company may at any time purchase for cancellation
any Class A Preferred Share Series 1 by private contract or in the
market or by tender at a price or prices to be determined by the Board of
Directors of the Company but not exceeding $25.000 per share plus an amount
equal to all accrued and unpaid dividends thereon.  RIGHTS ON LIQUIDATION  6.21In the event of the liquidation, dissolution or
winding-up of the Company, the holders of the Class A Preferred Shares Series 1
shall be entitled to receive $25.00 per Class A Preferred Share Series 1,
together with all accrued and unpaid dividends thereon to and including the
date of payment, before any amount shall be paid or any assets of the Company
distributed to the holders of the Common Shares of the Company or to the
holders of any shares ranking junior to the Class A Preferred Shares Series 1.  The holders of Class A Preferred Shares Series 1
shall not be entitled to share in any further distribution of the assets of the
Company.  RESTRICTIONS ON DIVIDENDS AND RETIREMENT OF
SHARES  6.22As long as any of the Class A Preferred
Shares Series 1 are outstanding, the Company shall not, without the prior
approval of the holders of such Class A Preferred Shares Series 1
given as specified under Shareholder Approvals:  (a)declare or pay or set aside for payment any
dividends on any shares of any class of shares of the Company ranking junior to
the Class A Preferred Shares Series 1 (other than stock dividends on
shares ranking junior to the Class A Preferred Shares Series 1);  (b)call for redemption or redeem, call for
purchase or purchase, or otherwise retire or reduce or make any return of
capital in respect of shares of any class of shares of the Company ranking
junior to the Class A Preferred Shares Series 1; or  13


(c)otherwise retire or reduce or make any return
of capital in respect of any shares of any class of shares of the Company
ranking pari passu with the Class A
Preferred Shares Series 1, except in satisfaction of an obligation to
purchase or obligation in respect of a sinking fund, of a right of retraction
or of any other mandatory redemption provision of any given series of any
preferred shares,  unless all dividends accrued up to and
including the dividend payment date for the last completed period for which
dividends shall be payable shall have been declared and paid or set aside for
payment in respect of each series of cumulative Class A Preferred Shares
(including the Class A Preferred Shares Series 1) then issued and
outstanding and on all other shares entitled to cumulative dividends and ranking
on a parity with the Class A Preferred Shares and there shall have been
paid or set aside for payment all declared dividends in respect of each series
of non-cumulative Class A Preferred Shares then issued and outstanding and
on all other non-cumulative shares ranking on a parity with the Class A
Preferred Shares.  AMENDMENTS TO THE CLASS A PREFERRED SHARES
SERIES 1  6.23The Company will not without, but may from time
to time with the approval of the holders of the Class A Preferred Shares Series 1
given as specified under Shareholder Approvals below, delete or vary any
rights, privileges, restrictions and conditions attaching to the Class A
Preferred Shares Series 1.  SHAREHOLDER APPROVALS  6.24The approval of any amendments to the rights,
privileges, restrictions and conditions attaching to the Class A Preferred
Shares Series 1 may be given by a resolution carried by the affirmative
vote of not less than 66 2/3% of the votes cast at a meeting of holders of Class A
Preferred Shares Series 1 at which a majority of the outstanding Class A
Preferred Shares Series 1 at which a majority of the outstanding Class A
Preferred Shares Series 1 is represented or, if no quorum is present at
such meeting, at any adjourned meeting at which no quorum would apply.  At any meeting of the holders of the Class A
Preferred Shares Series 1, each holder will be entitled to one vote in
respect of each Class A Preferred Shares Series 1 held.  ELECTION UNDER PART VI.1 OF THE INCOME TAX
ACT (CANADA)  6.25The Company will make the necessary election
under Part VIA of the Income Tax Act(Canada)
so that corporate holders of Class A Preferred Shares Series 1 will
not be subject to tax under Part IV.1 of the Income Tax Act (Canada) on dividends paid (or deemed to be
paid) by the Company on the Class A Preferred Shares Series 1.  14


ENTITLEMENT TO REPRESENTATION ON THE BOARD OF
DIRECTORS IN THE EVENT OF DEFAULT OF PAYMENT OF DIVIDENDS  6.26In the event that the Company fails to pay an aggregate
of eight quarterly dividends, whether or not consecutive, on its Class A
Preferred Shares Series 1, on the dates on which such dividends should
have been paid under the Companys Articles of continuance and any amendments
thereto, whether declared or not, the holders of the Class A Preferred
Shares Series 1, shall then be entitled, so long as such dividend arrears
(the Dividend Arrears) are not paid in full, to be represented by one person
on the board of directors of the Company (the Preferred Shareholder
Representative).  Within 30 days
following the reception of the name of the Preferred Shareholder
Representative, in the manner hereinafter described, the Company shall create
one new position on the board of directors and the new director shall be deemed
to take office at the time of such creation.  6.27The selection of the Preferred Shareholder
Representative shall be made by the holders of the Class A Preferred
Shares Series 1, by a resolution duly passed by a majority of all of the
holders of such shares and expressed at a meeting of such holders called by the
Company for such purpose.  The meeting
shall take place at the Companys regularly scheduled annual meeting following
the Companys failure to pay an aggregate of eight quarterly dividends, whether
consecutive or not, and at which at least 15% of the holders of outstanding Class A
Preferred Share, Series 1 shall be represented, I person or by proxy.  The meeting shall be called and conducted
according to the by-laws of the Company with respect to the meetings of the
holders of the voting shares of the Company.  6.28Until such time that the Company has paid the
Dividend Arrears, the Preferred Shareholders Representative shall remain on the
board of directors of the Company.  At
such time that the Company has paid the Dividend Arrears, the right of the
holders of Class A Preferred Shares Series 1, to be represented on
the board of directors shall be extinguished and the Preferred Shareholder
Representative shall resign immediately after being presented with a
certificate from the Companys auditors that the Dividend Arrears have been
paid in full.  PROVISIONS
ATTACHED TO THE CUMULATIVE CLASS B
PREFERRED SHARES SERIES 1  7.The first series of the Class B
Preferred Shares will consist of 2,700,000 Cumulative Class B Preferred
Shares Series 1 (the Class B Preferred Shares Series 1) and,
in addition to the rights, privileges, restrictions and conditions attaching to
the Class B Preferred Shares of the Company as a class, the Class B
Preferred Shares Series 1 shall also be subject to the following rights,
privileges, restrictions and conditions:  15


DEFINITIONS  7.1In this section setting out the rights,
privileges and conditions attached to the Class B Preferred Shares Series 1,
the following words and phrases shall have the following meanings:  (a)accrued redemption amount of a Class B
Preferred Share Series 1 means the redemption amount of a Class B
Preferred Share Series 1 plus an amount equal to all dividends declared or
accrued thereon up to and including the immediately preceding dividend payment
date which were not paid on or before such immediately preceding dividend
payment date (if any);  (b)Act means the Companies Act (Québec), as amended from
time to time;  (c)Business Day means a day other than a
Saturday, Sunday or any other day treated as a holiday in the municipality in
Canada in which the Companys registered office is then situated;  (d)dividend payment date means the first
day of March, June, September and December in each year;  (e)holder in respect of any Class B
Preferred Share Series 1 means the registered holder thereof;  (f)redemption amount of a Class B
Preferred Share Series 1 means $25.00 per Class B Preferred Share Series 1;  (g)redemption price of a Class B
Preferred Share Series 1 means the redemption amount of a Class B
Preferred Share Series 1 plus an amount equal to all dividends which have
at the relevant time been declared or accrued thereon but which have not then
paid (if any); and  (h)retraction date means the dates
specified in Section 7.21 on which the Class B Preferred Shares Series 1
are redeemable at the option of the holder.  7.2If any day on which any dividend on the Class B
Preferred Shares Series 1 is payable on or by which any other action is
required to be taken hereunder is not a Business Day, then such dividends shall
be payable or such other action shall be required to be taken on the next
succeeding day that is a Business Day.  16


RANK  7.3The Class B Preferred Shares Series 1
shall rank junior to the Class A Preferred Shares with respect to the
payment of dividends and the distribution of assets of the Company in the event
of the liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary, or any other distribution of assets of the Company among its
shareholders for the purpose of winding-up its affairs.  7.4The Class B Preferred Shares Series 1
shall be entitled to preference over the Common Shares and any other shares
issued by the Company ranking junior to the Class B Preferred Shares Series 1
with respect to the payment of dividends and the distribution of assets of the
Company in the event of the liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary, or any other distribution of assets
of the Company among its shareholders for the purpose of winding-up its
affairs.  DIVIDENDS  7.5Dividends on the Class B Preferred Shares Series 1
shall accrue on a day-to-day basis at the rate of 4% per annum (calculated by
reference to the accrued redemption amount) from and including the date of
issue thereof, up to and including December 1, 1995 and shall be payable on
each retraction date, rateably in accordance with the percentage of Class B
Preferred Shares Series 1 being retracted on such retraction date, to the
holders of record at the close of business on the tenth business day preceding
such retraction date.  In addition,
dividends on the Class B Preferred Shares Series 1 shall accrue on a
day-to-day basis at the rate of 1% per annum (calculated by reference to the
accrued redemption amount) from and including the date of issue thereof u to
and including December 1, 1995 and shall be payable on each dividend
payment date to the holders of record at the close of business on the tenth
business day preceding such dividend payment date.  Accordingly, on each dividend payment date up
to and including December 1, 1995, the holders of the Class B
Preferred Shares Series 1 shall be entitled to receive and the Company
shall pay thereon, as and when declared by the board of directors out of monies
of the Company properly applicable to the payment of dividends, fixed cumulative
preferential cash dividends in the amount per Class B Preferred Share Series 1
equal to 0.25% of the accrued redemption amount for such dividend payment date,
the first of such dividends to become payable on March 1, 1993.  Commencing on December 2, 1995,
dividends on the Class B Preferred Shares Series 1 shall accrue on a
day-to-day basis at the rate of 5% per annum (calculated by reference to the
accrued redemption amount) and shall be payable on each dividend payment date
to the holders of record at the close of business on the tenth business day
preceding such dividend payment date. 
Accordingly, on each dividend payment date after December 1, 1995,
the holders of the Class B Preferred Shares Series 1 shall be
entitled to receive and the  17


Company shall pay thereon, as and when declared
by the board of directors out of monies of the Company properly applicable to
the payment of dividends, fixed cumulative preferential cash dividends in the
amount per Class B Preferred Share Series 1 equal to 1.25% of the
accrued redemption amount for such dividend payment date, the first of such
dividends to become payable on March 1, 1996.  7.6Subject to Section 7.7, for the purposes
of calculating an amount measured by reference to accrued but unpaid dividends,
the amount of any accrued but unpaid dividend in respect of any Class B
Preferred Share Series 1 from the immediately preceding dividend payment
date to any particular date shall e an amount equal to 1.25 per cent of the
accrued redemption amount on the date of calculation multiplied by a fraction
the numerator of which is the number of days from and including such dividend
payment date to but excluding such particular date and the denominator of which
is the number of days from and including such dividend payment date to but
excluding the next succeeding dividend payment data.  7.7The amount of the dividend accrued and payable
on March 1, 1993 on each Class B Preferred Share Series 1 shall
be an amount equal to 0.25 per cent of the redemption amount multiplied by a
fraction the numerator of which is the number of days from and including the
date of issue to but excluding March 1, 1993 and the denominator of which
is the number of days from and including December 1, 1992 to but excluding
March 1, 1993.  7.8The dividend payable on any dividend payment
date to any holder of Class B Preferred Shares Series 1 shall be
calculated by multiplying the amount of the dividend payable on such date on
each such share then held by such holder by the total number of Class B
Preferred Shares Series 1 so held by such holder and rounding to the
nearest $0.01.  The board of directors of
the company shall be entitled to declare part of the preferential cumulative
cash dividend for any fiscal year notwithstanding that such dividend for such
fiscal year may not be declared in full, but for greater certainty no dividend
shall be declared or set aside or paid on the Common Shares, Class B
Preferred Shares or any shares ranking junior to the Class B Preferred
Shares Series 1 unless and until all preferential cumulative cash
dividends on the Class B Preferred Shares Series 1 have been duly
declared and paid.  7.9Dividends shall be paid by cheque drawn on the
Companys bankers or one of them and payable at par at any branch in Canada of
such bank or by electronic funds transfer to a bank account specified by the
holder of shares in respect of which the dividend has been declared.  Any such cheque shall be mailed at least
three Business Days before the applicable dividend payment date and any
electronic funds transfer shall take place before 12:00 noon (Toronto
time).  The mailing of such cheques or
the crediting of the bank account as aforesaid shall satisfy and discharge all
liability for such dividends to the extent of the sums  18


represented thereby, unless, in the case of
cheques, such cheques are not paid on due presentation.  If on any dividend payment date dividends
payable on such date are not paid in full on all the Class B Preferred
Shares Series 1 then issued and outstanding, such dividends or the unpaid
part thereof shall be paid on a subsequent date or dates as determined by the
directors.  The holders of the Class B
Preferred Shares Series 1 shall not be entitled to any dividends other
than or in excess of the cash dividends herein provided for.  A dividend which is represented by a cheque
which has not been presented for payment within 6 years after such cheque was
issued or that otherwise remains unclaimed for a period of 6 years from the
dame on which the dividend was declared to be payable and asset apart for
payment shall be forfeited to the Company.  DISSOLUTION  7.10In the event of the liquidation, dissolution or
winding-up of the Company, whether voluntary or involuntary, or any other
distribution of assets of the Company among its shareholders for the purpose of
winding-up its affairs, the holders of the Class B Preferred Shares Series 1
shall be entitled to receive from the assets and property of the Company an
amount equal to the redemption price for each Class B Preferred Share Series 1
held by them before any amount shall be paid or any assets or property of the
Company distributed to the holders of Common Shares or any other shares issued
by the Company ranking junior to the Class B Preferred Shares Series 1.  Upon payment of the amount so payable to
them, the holders of Class B Preferred Shares Series 1 shall not be
entitled to share in ay further distributions of assets of the Company.  VOTING RIGHTS  7.11Except as otherwise provided herein or by the
Act, the holders of Class A Preferred Shares shall not be entitled as such
to receive notice of or to attend or to vote at any meeting of shareholders of
the Corporation.  REDEMPTION
BY THE COMPANY  7.12Subject to the provisions of the Act, the
Company may form time to time at its option upon giving notice or upon the
waiver of such notice, as hereinafter provided, redeem at any time the whole or
from time to time any part of the then outstanding Class B Preferred
Shares Series I, on payment for each share to be redeemed of the
redemption price therefore.  7.13Subject to the provisions of the Act, all Class B
Preferred Shares Series 1 issued and outstanding on November 30, 2003
shall be redeemed by the Company on that date.  19


7.14In the case of any redemption of Class B
Preferred Shares Series 1, unless all the holders of the Class B
Preferred Shares Series 1 to be redeemed shall have waived notice of such
redemption by a written waiver specifying the date on which such redemption is
to take place, the Company shall, at least 30 days before the date fixed for
redemption, mail to each person who, at the date of mailing, is a holder of Class B
Preferred Shares Series 1 to be redeemed, a notice in writing of the
redemption by the Company of such Class B Preferred Shares Series 1.  Such notice shall be mailed by registered
letter, postage prepaid, addressed to each such holder at its address as it
appears on the books of the Company or, in the event of the address of any such
holder not so appearing, then to the last address of such holder known to the
Company; provided, however, that accidental failure or omission in giving such notice
to one or more such holders shall not affect the validity of such
redemption.  Such notice shall also set
out the redemption price of the Class B Preferred Shares Series 1 and
the date on which redemption is to take place and, if part only of the Class B
Preferred Shares Series 1 held by the person to whom it is addressed is to
be redeemed, the number thereof to be redeemed.  7.15On the date so specified for redemption in an y
notice of redemption or waiver of notice, as the case may be, as referred to in
Section 7.14 above, the Company shall pay or cause to be paid to or to the
order of the holders of the Class B Preferred Shares Series 1so
called for redemption at the registered office of the Company, the head office
of the transfer agent for the Class B Preferred Shares Series 1 or
any other place or places in Canada designated in such notice.  Such payment shall be made by cheque payable
in lawful money of Canada at par at any branch in Canada of one of the Companys
bankers for the time being.  7.16In case a part only of the Class B
Preferred Shares Series 1 is at any time to be redeemed, the shares to be
redeemed shall, unless the holders of the Class B Preferred Shares Series 1
otherwise unanimously agree in writing in respect of a particular redemption,
be redeemed pro rata, disregarding fractions, and the directors of the Company
may provide for such adjustments as may be necessary to avoid the redemption of
fractional shares.  If a part only of the
Class B Preferred Shares Series 1 represented by any certificate
shall be redeemed, a new certificate for the balance shall be issued at the
expense of the Company.  7.17From and after the date specified for
redemption in any notice of redemption or waiver of notice, as the case may be,
as referred to in Section 7.14 above, Class B Preferred Shares Series 1
called for redemption shall cease to be entitled to dividends and the holders
thereof shall not be entitled to exercise any of the rights of shareholders in
respect thereof unless payment of the redemption price of the Class B
Preferred Shares Series 1 shall not be made upon presentation of the
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected.  20


7.18The Company shall have the right and in the
case of a redemption pursuant to Section 7.13 shall be required, at any
time after the mailing of notice of its intention to redeem any Class B
Preferred Shares Series 1 or the obtaining of the waiver referred to in Section 7.14
above, to deposit the redemption price of the Class B Preferred Shares Series 1
so called for redemption or such of the said shares represented by certificates
which have not at the date of such deposit been surrendered by the holders
thereof in connection with such redemption, to a special account at any
chartered bank or trust company in Canada named in such notice to be paid
without interest to or to the order of the respective holders of such Class B
Preferred Shares Series 1 called for redemption upon presentation and
surrender to such bank or trust company of the certificates representing the
same, and upon such deposit being made or upon the date specified for
redemption in such notice or waiver, whichever is the later, the Class B
Preferred Shares Series 1 in respect of which such deposit shall have been
made shall be redeemed and the rights of the holders thereof after such deposit
or redemption date, as the case may be, shall be limited to receiving, without
interest, their proportionate part of the total redemption price of the Class B
Preferred Shares Series 1 so deposited against presentation and surrender
of the said certificates held by them respectively.  Any interest allowed on such deposit or
deposits shall belong to the Company.  7.19If the Company is not permitted to redeem all
of the Class B Preferred Shares Series 1 eligible for redemption
pursuant to the mandatory redemption requirement provided in Section 7.13
by virtue of the provisions of the act, the Company shall redeem only the
maximum number of Class B Preferred Shares Series 1 which the
directors of the Company determine the Company is then permitted to
redeem.  Such redemption will be made pro
rata (disregarding fractions of shares) according to the number of Class B
Preferred Shares Series 1 eligible for redemption.  The Company shall pay the redemption price to
each holder of Class B Preferred Shares Series 1 which tendered its
shares for redemption in accordance with Section 7.15 and shall deposit in
accordance with Section 7.18 the redemption price in respect of holders
who did not tender their share certificates. 
The Company shall issue and deliver to each holder whose Class B
Preferred Shares Series 1 have not been redeemed in full a new share
certificate, at the expense of the Company, representing the Class B
Preferred Shares Series 1 not redeemed by the Company.  7.20If the Company fails to redeem, because of the
provisions of the Act, all of the Class B Preferred Shares Series 1
duly tendered pursuant to the mandatory redemption requirement provided in Section 7.13
that were then eligible for redemption, the Company shall redeem on each
dividend payment date thereafter the lesser of (i) the number of Class B
Preferred Shares Series 1 issued and outstanding and (ii) the number
of Class B Preferred Shares Series 1 which the directors of the
Company determine the Company is then permitted to redeem as  21


selected pro rata from each holder of Class B
Preferred Shares Series 1 on the basis of the number of Class B
Preferred Shares Series 1 eligible for redemption.  The Company shall advise holders of Class B
Preferred Shares Series 1 of this mandatory redemption requirement at
least 30 days and no more than 45 days prior to the dividend payment date and
shall make payment to holders of Class B Preferred Shares Series 1
which tender in accordance with Section 7.15 and shall deposit in
accordance with Section 7.18 the redemption price payable to holders who
did not tender their share certificates. 
The Company shall issue and deliver to a holder whose Class B
Preferred Shares Series 1 have not been redeemed in full a new share
certificate, at the expense of the Company, representing the Class B
Preferred Shares Series 1 not redeemed by the Company.  REDEMPTION AT THE
OPTION OF THE HOLDERS OF CLASS B PREFERRED SHARES SERIES 1  7.21Subject to the provisions of the Act, the
holders of Class B Preferred Shares Series 1 may, at their option and
in the manner hereinafter provided, require the Company to redeem upon payment
for each share to be redeemed of the redemption price therefore, (i) on November 30,
2000 up to 800,000 Class B Preferred Shares Series 1 and (ii) on
November 30, 2001 up to that number of Class B Preferred Shares Series 1
equal to the number of shares eligible for but not tendered for redemption on November 30,
2000 plus another 800,000 Class B Preferred Shares Series 1 and (iii) on
November 30, 2002, up to that number of Class B Preferred Shares Series 1
equal to the number of shares eligible for but not tendered for redemption on November 30,
2001 plus another 800,000 Class B Preferred Shares Series 1 and (iv) on
November 30, 2003, the remaining Class B Preferred Shares Series 1
issued and outstanding.  7.22The Company shall on or before October 31
in each year in which Class B Preferred Shares Series 1 are
redeemable at the option of the holder, mail or deliver to each holder of Class B
Preferred Shares Series 1, a notice in writing stating the total number of
Class B Preferred Shares Series 1 that may be redeemed pursuant to Section 7.21
in that year and the place or places within Canada at which holders of Class B
Preferred Shares Series 1 may present and surrender their shares for
redemption and the date provided for in Section 7.23 by which holders of Class B
Preferred Shares Series 1 must present and surrender their shares for
redemption if they wish such shares redeemed.  7.23A holder of shares wishing to have such shares redeemed
shall tender to the Company as its registered office or at the head office of
the transfer agent for the Class B Preferred Shares Series 1 at least
ten days prior to the retraction date a request in writing specifying (i) that
such holder desires to have the whole or any part of the Class B Preferred
Shares Series 1 registered in such holders name redeemed by the Company
and (ii) the retraction date, together with the share  22


certificate, if any, representing the Class B
Preferred Shares Series 1 which the registered holder desires to have the
Company redeem.  7.24In the event that more Class B Preferred
Shares Series 1 are tendered for redemption than are eligible for
redemption pursuant to Section 7.21 hereof the shares to be redeemed shall
be redeemed pro rata, disregarding fractions, and the directors of the Company
may provide for such adjustments as may be necessary to avoid the redemption of
fractional shares.  If a part only of the
Class B Preferred Shares Series 1 represented by any certificate
shall be redeemed, then a new certificate for the balance shall be issued at
the expense of the Company.  7.25If the Company is not permitted to redeem all
of the Class B Preferred Shares Series 1 duly tendered pursuant to
the optional redemption right provided to in Sections 7.21 to 7.29 by virtue of
the provisions of the Act, the Company shall redeem only the maximum number of Class B
Preferred Shares Series 1 which the directors of the Company determine the
Company is then permitted to redeem. 
Such redemption will be made pro rata (disregarding fractions of shares)
from each holder of tendered Class B Preferred Shares Series 1
according to the number of Class B Preferred Shares Series 1 tendered
for redemption by each such holder and the Company shall issue and deliver to
each such holder a new share certificate, at the expense of the Company,
representing the Class B Preferred Shares Series 1 not redeemed by
the Company.  7.26If the Company fails to redeem, because of the
provisions of the Act, all of the Class B Preferred Shares Series 1
duly tendered pursuant to the optional redemption right provided for in
Sections 7.21 to 7.29 that were then eligible for redemption, then the Company
shall redeem on each dividend payment date thereafter from the Class B
Preferred Shares Series 1 tendered by the holders thereof on or before the
10th day preceding such dividend payment date for redemption in the same manner
as set forth in Section 7.23, the lesser of (i) the number of Class B
Preferred Shares Series 1 so tendered and (ii) the number of Class B
Preferred Shares Series 1 which the directors of the Company determine the
Company is then permitted to redeem as selected pro rata from each holder of Class B
Preferred Shares Series 1 so tendered according to the number of Class B
Preferred Shares Series 1 so tendered by each such holder.  The Company shall be under no obligation to
give any notice to the holder of Class B Preferred Shares Series 1 in
respect of the redemptions provided for in this Section 7.26.  7.27Upon receipt of a request for redemption and
share certificates, the Company shall, on the retraction date or dividend
payment date, as the case may be, redeem the number of shares to be redeemed
determined in accordance with Sections 7.21 to 7.29 by paying to such holder an
amount per share equal to the redemption price thereof.  Such payment shall be made by cheque payable
in lawful money of  23


Canada at par at any branch in Canada of one of
the Companys bankers for the time being.  7.28All Class B Preferred Shares Series 1
tendered for redemption and required to be redeemed in accordance with Sections
7.21 to 7.29 shall be redeemed on the retraction date or on the dividend
payment date, as the case may be, and after payment of the redemption price for
such shares, such shares shall cease to be entitled to dividends and the
holders thereof shall be not be entitled to exercise any of the rights of
shareholders in respect thereof, unless payment of the redemption price is not
made on the retraction date or dividend payment date, as the case may be, in
which case the rights of the holders of such shares shall remain unaffected.  7.29The number of Class B Preferred Shares Series 1
shall not be subdivided or consolidated or otherwise changed into a greater or
lesser number unless, contemporaneously therewith, the numbers of Class B
Preferred Shares Series 1 which the Company may be required to redeem in
accordance with Section 7.21 to 7.21 are subdivided, consolidated, or
otherwise changed in the same proportion and in the same manner.  NO OTHER PURCHASES  7.30Except as permitted under Sections 7.12 to 7.29
of this section of the articles, the Company shall not purchase or
otherwise acquire any Class B Preferred Shares Series 1 without first
obtaining the prior written consent of all holders of the Class B
Preferred Shares Series 1 to such purchase or acquisition.  NOTICES AND INTERPRETATION  7.31Subject to Section 7.32, and except where
otherwise expressly provided for herein, any notice, cheque or other
communication from the Company herein provided for shall be sufficiently given
if delivered or if sent by ordinary unregistered mail, postage prepaid or, in
the case of a notice of redemption, by prepaid registered mail, to the holders
of the Class B Preferred Shares Series 1 at their respective
addresses appearing on the books of the Company or, in the event of the address
of any of such holders not so appearing, then at the last address of such
holder known to the Company.  Accidental
failure to give any such notice or other communication to one or more holders
of the Class B Preferred Shares Series 1 shall not affect the
validity of the notices or other communications properly given or any action
taken pursuant to such notice or other communication but, upon such failure
being discovered; the notice or other communication, as the case may be, shall
be sent forthwith to such holder or holders.  24


7.32If there exists any actual or apprehended
disruption of mail services in any jurisdiction in which there are holders of Class B
Preferred Shares Series 1 whose addresses appear on the books of the
Company to be in such jurisdiction, notice may (but need not) be given to the
holders in such jurisdiction by means of publication once in each of two
successive weeks in a newspaper of general circulation published or distributed
in the jurisdiction or if the Company maintains a register of transfers for the
Class B Preferred Shares Series 1 in such jurisdiction, then in the
city in such jurisdiction where the register of transfers is maintained.  Notice given by publication shall be deemed
for all purposes to be proper notice.  7.33Notice given by mail shall be deemed to be
given on the day upon which it is mailed unless on the day of or the day
following such mailing an actual disruption of mail services has occurred in
the jurisdiction in or to which such notice is mailed.  Notice given by publication shall be deemed
to be given on the day on which the first publication is completed in any city
in which notice is published.  25


CASCADES INC.  SCHEDULE 2  AMENDMENTS
AND DESCRIPTION OF SHARE CAPITAL OF THE COMPANY  1.On October 26, 1982, the share
capital of Cascades Inc. was amended as follows:  1.1By cancelling three thousand two hundred and
ninety-seven (3,297) authorized but unissued Common Shares having a par value
of ten dollars ($10) each;  1.2By cancelling seven hundred and sixty (760)
previously authorized and fully issued and redeemed Class A Shares having a
par value of one hundred dollars ($100) each, as well as the privileges and
restrictions attached to such Class A Shares;  1.3By cancelling one hundred thousand (100,000)
authorized but unissued Class B Shares having a par value of one dollar ($1)
each, and one hundred and fifty thousand (150,000) previously authorized and
fully issued and redeemed Class B Shares having a par value of one dollar
($1) each, as well as the privileges and restrictions attached to such Class B Shares;  1.4By increasing the number of Common Shares such
that the number of Common Shares in the authorized share capital of the Company
becomes unlimited;  1.5By changing the Common Shares having a par
value of ten dollars ($10) each in the authorized share capital of the Company
into Common Shares having no par value;  1.6By increasing the amount of the share capital of
the Company to provide that such amount, which is currently three hundred and
sixty-seven thousand dollars ($367,000), become unlimited;  1.7By creating an unlimited number of Class A
Preferred Shares with no par value, issuable in series;  1.8By creating an unlimited number of Class B
Preferred Shares with no par value, issuable in series; and  1.9By subdividing the eight hundred and three
(803) Common Shares with no par value in the share capital of the Company
currently issued and outstanding into four million (4,000,000) Common Shares
with no par value in the share capital of the Company.


2.On July 5, 1984, Cascades Inc.
amended its articles as follows:  2.1Each of the issued and outstanding 5,000,000
Common Shares with no par value of the share capital of the Company at the
close of business at the registered office of the Company on July 5, 1984,
is subdivided into two Common Shares with no par value of the share capital of
the Company, bringing the total number of issued and outstanding Common Shares
of the share capital of the Company to 10,000,000 at the close of business at
the registered office of the Company on July 5, 1984.  3.On September 16, 1985, Cascades
Inc. amended its articles as follows:  3.1Each of the issued and outstanding 11,250,112
Common Shares with no par value of the share capital of the Company at the
close of business at the registered office of the Company on September 16,
1985, is subdivided into two Common Shares with no par value of the share
capital of the Company, bringing the total number of issued and outstanding
Common Shares of the share capital of the Company to 22,500,024 at the close of
business at the registered office of the Company on September 16, 1985.  4.On May 13, 1986, Cascades Inc.
amended its articles as follows:  4.1Each of the issued and outstanding 24,100,024
Common Shares with no par value of the share capital of the Company at the
close of business at the registered office of the Company on May 13, 1986,
is subdivided into two Common Shares with no par value of the share capital of
the Company, bringing the total number of issued and outstanding Common Shares
of the share capital of the Company to 48,200,048 at the close of business at
the registered office of the Company on May 13, 1986.  2