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EXHIBIT
1.2
  APPROVED
/s/ [ILLEGIBLE] 
 ARTICLES
 Inc.
No: 443863Translation names: N/A OF
 AINSWORTH LUMBER CO. LTD.
 PART 1
 INTERPRETATION




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SHARES AND SHARE CERTIFICATE
 
  (i)
    
    is worn out or defaced, the Company shall, upon production to
it of the said certificate and upon such other terms, if any, as the Directors
prescribe, order the said certificate to be cancelled and shall issue a new
certificate in replacement thereof; or




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(ii)
    
    is lost, stolen or destroyed, then, upon proof thereof to the
satisfaction of the Directors and upon such indemnity, if any, as the
Directors deem adequate being given, a new share certificate in lieu thereof
shall be issued to the person entitled to such lost, stolen or destroyed
certificate.
     ISSUE OF SHARES




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SHARE REGISTERS




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TRANSFER AND TRANSMISSION OF SHARES




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ALTERATION OF CAPITAL
  (i)
    
    creating shares with par value or shares without par value, or both;(ii)
    
    increasing the number of shares with par value or shares without par value,
or both; or(iii)
    
    increasing the par value of a class of shares with par value, if no shares
of that class are issued.




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PURCHASE AND REDEMPTION OF SHARES




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BORROWING POWERS
  (i)
    
    borrow money in such manner and amounts, on such security, or
without security, from such sources and upon such terms and conditions as they
think fit;(ii)
    
    guarantee the repayment of money by any other person or the
performance of any obligation of any other person;(iii)
    
    issue debt obligations, or other evidences of
obligations or indebtedness, either outright or
as security for any liability or obligation of the Company or any other
person;




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(iv)
    
    mortgage, charge, whether by way of
specific or floating charge, or both, or give other security on the
undertaking, or on the whole or any part of the property and assets,
of the Company (both present and future); and(v)
    
    for the purposes of the Special Corporate
Powers Actof the Province of Quebec and without in any way limiting
the powers conferred upon the Company and the Directors by the
foregoing or by any other provisions of these Articles, or by the
Memorandum, or by the Company Act, for the purpose of securing any
notes, bonds, debentures or debenture stock which it is by law
entitled to, issue, hypothecate, mortgage or pledge, and cede and
transfer, any property, moveable or immovable, present or future,
which it may own in the Province of Quebec.




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GENERAL MEETINGS




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PROCEEDINGS AT GENERAL MEETINGS
  (i)
    
    a special general meeting other than the
conduct of and voting at, such meeting; and(ii)
    
    an annual general meeting, with the
exception of the conduct of, and voting at, such meeting, the
consideration of the financial statement and of the respective
reports of the Directors and Auditor, fixing or changing the number
of Directors, electing Directors, appointing the Auditor, fixing the
remuneration of the Auditor and the Directors if applicable, and such
business as by these Articles or the Company Act may be transacted at
a general meeting without




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prior notice thereof being given to the members and any
business which is brought under consideration by the report of the
Directors.




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VOTES OF MEMBERS




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(i)
    
    executed by the member giving the same or by his attorney
authorized in writing or, where the member is a corporation, by a duly
authorized officer or attorney of the corporation; and(ii)
    
    delivered either at the registered office of the Company at
any time up to and including the last business day preceding the day of the
meeting, or any adjournment thereof at which the proxy is to be used, or to
the chairman of the meeting on the day of the meeting or any adjournment
thereof before any vote in respect of which the proxy is to be used shall have
been taken,
  DIRECTORS




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ELECTION AND REMOVAL OF DIRECTORS




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(i)
    
    resigns his office by notice in writing delivered to the
registered office of the Company; or(ii)
    
    is convicted of an
indictable offence and the other Directors shall have
resolved to remove him; or(iii)
    
    ceases to be qualified to
act as a Director pursuant to the Company Act.
  (i)
    
    the Director who appointed
him at any time or by notice to the Company revokes his
appointment; or(ii)
    
    he resigns by notice to the
Company; or(iii)
    
    the Director who appointed
him ceases for any reason to be a Director; or(iv)
    
    he is convicted of an
indictable offence and the other Directors shall have
resolved to remove him; or(v)
    
    he ceases to hold the
qualifications necessary for a Director pursuant to the
Company Act; or(vi)
    
    the term of his
appointment, if any, expires.
  POWERS AND DUTIES OF DIRECTORS




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DISCLOSURE OF INTEREST OF DIRECTORS
  (i)
    
    is, in any way, directly or
indirectly interested in an existing or proposed contract or
transaction with the Company; or(ii)
    
    holds any office or
possesses any property whereby, directly or indirectly, a
duty or interest may be created to conflict with his duty or
interest as a Director,




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PROCEEDINGS OF DIRECTORS




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EXECUTIVE AND OTHER COMMITTEES




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- 26 -   OFFICERS




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- 27 -    DIRECTORS, OFFICERS AND EMPLOYEES
   (i)
    
    any officer or former officer (but in the case of an officer of
a corporation other than a subsidiary of the Company only if he acted as such
at the request of the Company); and(ii)
    
    any employee, former employee or agent or former agent
designated by the Directors,




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- 28 -    (i)
    
    any person who is or was serving as a Director or officer of the
Company or as a director or officer of a corporation which is or was a
subsidiary of the Company or (if he acted as such at the request of the
Company) of any other corporation of which the Company is or was a shareholder;
and(ii)
    
    any person designated by the Directors who is or was serving as
an employee or agent of the Company or of such corporation; and(iii)
    
    any person in respect of whom the Company is or may be
obligated to indemnify pursuant to this Part 19,




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- 29 -   DIVIDENDS AND RESERVES




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- 30 -       DOCUMENTS, RECORDS AND REPORTS




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- 31 -     NOTICES




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- 32 -   RECORD DATES
    SEAL
  (i)
    
    the President or the Secretary;(ii)
    
    any two Directors of the Company;




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- 33 - (iii)
    
    one of the Chairman of the Board, the President, a Director or the
Vice-President together with any one of the Secretary, an Assistant
Secretary, the Treasurer, the Secretary-Treasurer, an Assistant Treasurer
and an Assistant Secretary-Treasurer; or(iv)
    
    such person or persons as the Directors may from time to time by
resolution appoint,




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- 34 -    RESTRICTIONS AND PROHIBITIONS
  (a)
    
    no shares shall be transferred without the previous consent of the Directors
expressed by a resolution of the Board and the Directors may in their absolute
discretion decline to approve any transfer of shares and shall not be required to
disclose their reasons therefor;(b)
    
    the number of members, exclusive of
 (i)
    
    employees of the Company, and(ii)
    
    former employees of the Company who, while employed by the
Company, became members of the Company and who, since the termination of their
employment, have continued to be members of the Company
  (c)
    
    any invitation to the public to subscribe for any securities of the Company is
prohibited.




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- 35 -  SPECIAL RIGHTS AND RESTRICTIONS
  (a)
    
    The Preferred Shares as a class shall have attached thereto the
special rights and restrictions specified in this Article 26.1.(b)
    
    Preferred Shares may at any time and from time to time be issued
in one or more series. The Directors may from time to time by resolution passed
before the issue of any Preferred Shares of any particular series, alter the
Memorandum of the Company to fix the number of Preferred Shares in, and to
determine the designation of the Preferred Shares of, that series and alter the
Memorandum or the Articles to create, define and attach special rights and
restrictions to the Preferred Shares of that series, including, but without in
any way limiting or restricting the generality of the foregoing, the rate or
amount of dividends, whether cumulative, non-cumulative or partially
cumulative, the dates, places and currencies of payment thereof, the
consideration for, and the terms and conditions of, any purchase for
cancellation or redemption thereof, including redemption after a fixed term or
at a premium, conversion or exchange rights, the terms and conditions of any
share purchase plan or sinking fund, the restrictions respecting payment of
dividends on, or the repayment of capital in respect of, any other shares of the
Company and voting rights and restrictions; but no special right or
restriction so created, defined or attached shall contravene the
provisions of subclauses (c) and (d) of this Article 26.1.Amended by Special Resolution filed with the Registrar of Companies the 29th day of May, 1995(c)
    
    Holders of Preferred Shares shall be entitled, on the distribution of assets of the company
or on the liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary,
or on any other distribution of assets of the
Company among its members for the purpose of winding-up its affairs, to
receive before any distribution shall be made to holders of Common Shares
or any other shares of the Company ranking junior to the Preferred Shares
with




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- 36 - respect to repayment of capital, the amount paid up with respect to each
Preferred Share held by them, together with the fixed premium (if any)
thereon, all accrued and unpaid cumulative dividends (if any and if
preferential) thereon, and all declared and unpaid non-cumulative
dividends (if any and if preferential) thereon. After payment to holders
of Preferred Shares of the amounts so payable to them, such holders shall
not be entitled to share in any further distribution of the property or
assets of the Company except as specifically provided in the special
rights and restrictions attached to any particular series of the
Preferred Shares.(d)
    
    Except for such rights relating to the election of directors in
the event of a default in payment of dividends as may be attached to any series
of the Preferred Shares by the Directors, holders of Preferred Shares shall not
be entitled as such to receive notice of, or to attend or vote at, any general
meeting of members of the Company.
  SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO  SERIES 1 PREFERRED SHARES




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- 37 -  
 on the distribution of assets of the company
  1




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- 38 -




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SCHEDULE B
  
  Definitions




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Dividends
  Redemption at the Companys Option
 Redemption
  (a)
    
    Right of RedemptionThe Company may, at its option, redeem at any time all, or from
time to time any number which is a multiple of 100,000, of the
outstanding Series 2 Preferred Shares on payment of the
Redemption Price of each such share.(b)
    
    Partial RedemptionIf less than all of the outstanding Series 2 Preferred Shares are
to be redeemed, the shares to be redeemed shall be redeemed on a
pro rata basis (disregarding fractions).




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Redemption Procedure
  (a)
    
    NoticeNotice of any redemption of Series 2 Preferred Shares shall be
given by the Company, not less than five days prior to the date
fixed for redemption, to each holder of Series 2 Preferred Shares
to be redeemed. Accidental failure or omission to give such
notice to one or more of such holders shall not affect the
validity of such redemption. Such notice shall set out the
Redemption Price, the date fixed for redemption, the place of
redemption and, in the case of a partial redemption, the number
or percentage of the holders shares to be redeemed.
Notwithstanding the foregoing, the holders of Series 2 Preferred
Shares to be redeemed may waive notice of any such redemption by
instrument or instruments in writing.(b)
    
    PaymentOn and after the date fixed for redemption the Company
shall pay, or cause to be paid, the applicable Redemption
Prices to or to the order of the holders of the Series 2
Preferred Shares called for redemption, save as set out in
Article 28.8.3, by cheques of the Company drawn on a Canadian
chartered bank and payable at par at any branch
in Canada of such bank, upon presentation and surrender at the
place of redemption of the respective certificates representing
such shares, and such cheques shall be delivered to such holders
not later than 10:00 a.m. (Vancouver time) on the respective
dates fixed for redemption, and on the dates so fixed for
redemption the holders of the Series 2 Preferred Shares called
for redemption shall cease to be entitled to dividends or to
exercise any of the rights of members in respect thereof unless
payment of the applicable Redemption Prices shall not be made in
accordance with the foregoing provisions, in which case the
rights of the said holders shall remain unimpaired.(c)
    
    New CertificatesIf less than all the Series 2 Preferred Shares
represented by any certificate shall be redeemed, a new
certificate representing the unredeemed shares shall be
issued to the holder thereof at the expense of the
Company.




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Retraction Privilege
  (a)
    
    Method of ExerciseSuch right may be exercised by each holder by depositing with the
Company at its registered office, on or prior to the Retraction
Date, the share certificate or certificates representing the
Series 2 Preferred shares to be redeemed together with a notice
in writing requesting redemption signed by each holder or his
authorized attorney and, if less than all the Series 2 Preferred
Shares represented by such certificate or certificates are to be
redeemed, specifying the number of such shares which the holder
desires to have redeemed.(b)
    
    PaymentUpon receipt of a share certificate representing Series 2
Preferred Shares to be redeemed together with a notice in
accordance with the foregoing provisions the Company shall redeem
on the aforesaid date fixed for redemption the Series 2 Preferred
Shares so requested to be redeemed by paying or causing to be
paid to or to the order of such holder the Redemption Price for
each Series 2 Preferred Share being redeemed. Save as set out in
Article 28.8.3, cheques of the Company drawn on a Canadian
chartered bank and payable at par at any branch in Canada of such
bank shall be issued in respect of such Redemption Prices to the
holders of the Series 2 Preferred Shares entitled thereto and
shall be delivered to such holders not later than 10:00 a.m.
(Vancouver time) on the Retraction Date.(c)
    
    No Further EntitlementFrom and after the date on which cheques are delivered as
aforesaid the Series 2 Preferred Shares to be redeemed shall
cease to be entitled to dividends and the holders thereof shall
not be entitled to exercise any of the rights of a shareholder in
respect thereof unless the cheque in payment of the Redemption
Prices is not honoured in which event the rights of such holders
shall remain unaffected.(d)
    
    New CertificateIf a part only of the Series 2 Preferred Shares represented by
any certificate are to be redeemed a new




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(e)
    
    Pro Rata RedemptionIf the Company, by reason of any provision of applicable law, is
prohibited from redeeming all Series 2 Preferred Shares which the
holders have requested the Company to redeem as aforesaid, the
Company shall redeem on a pro rata basis (rounded in each case to
the next lower multiple of 1,000 shares) in accordance with the
number of Series 2 Preferred Shares so deposited for redemption
the maximum number of such shares which the Company is then
permitted to redeem. If the Company fails to redeem, because of
the provisions of applicable law, all of the Series 2 Preferred
Shares deposited for redemption, the Company shall thereafter
redeem on each succeeding Dividend Payment Date on a pro rata
basis, from the Series 2 Preferred Shares deposited by the
holders thereof in exercise of their retraction privilege and not
withdrawn, the lesser of (i) the number of shares so deposited
and not withdrawn and (ii) the number of shares the Company is
then permitted to redeem.(f)
    
    Deposit and WithdrawalA deposit of Series 2 Preferred Shares for redemption under this
Article 28.5 shall be irrevocable except to the extent that the
company fails to redeem on the applicable date fixed for
redemption in accordance with this Article 28.5 the Series 2
Preferred shares in respect of which the deposit was made. If the
Company fails to redeem any Series 2 Preferred Shares tendered for
redemption under this Article 28.5, the Company shall forthwith
notify the holder thereof and return the certificate representing
such shares to such holder upon request of the holder therefor and
such shares shall thereupon be deemed to be withdrawn for the
purposes of Article 28.5(e).(g)
    
    In the event of any request for redemption
pursuant to
this Article 28.5, the Company shall only be obligated to
redeem under this Article 28.5 those Series 2 Preferred
Shares which are the subject of such request (and then
only to the extent set out in this Article 28.5), and no
others.
 Cancellation of Shares Redeemed or Purchased




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Liquidation, Dissolution or Winding-Up
 distribution of assets of the company,
 Notices, Interpretation and Wire Transfers
 Notices
  Non-Banking Days
  Wire Transfers




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Modification and Approvals
  Tax Elections
  Restrictions on Dividends and Retirement of Shares
  (a)
    
    declare or pay any dividends on the Common
Shares or any
other shares ranking junior to or on a parity with the
Series 2 Preferred Shares with respect to the payment of
dividends (other than stock dividends in Common Shares or
other shares ranking junior to the Series 2 Preferred
Shares with respect to both the payment of dividends and
the return or repayment of capital (which latter phrase,
in this Article 28.11, refers to a return or repayment of
capital on the occurrence of an event referred to in
Article 28.7)) or the return or repayment of capital; or(b)
    
    redeem, purchase or otherwise retire any
Common Shares or any other shares ranking junior to or on a parity with
the Series 2 Preferred Shares with respect to the payment
of dividends or the return or repayment of capital
(except out of the net cash proceeds of a substantially
concurrent issue of shares ranking junior to the Series
2 Preferred Shares with respect to both the payment of
dividends and the return or repayment of capital ) ; or(c)
    
    redeem, purchase or otherwise retire any
other shares
ranking on a parity with the Series 2 Preferred Shares
with respect to the payment of dividends or the return or
repayment of capital;




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29.1
    
    The Class B Common Shares shall have
attached thereto the following special rights and restrictions:
 (a)
    
    Issuable in Series: The Class B Common
Shares may at any time and from time to
time be issued in one or more series. Subject to the provisions of
this Part 29.1, the
Board of Directors of the Company may from time to time, by
resolution passed before
the issue of any Class B Common Shares of any particular series:
 (i)
    
    alter the Memorandum of the
Company to fix the number of shares in, and to determine the
designation of the shares of, that series of Class B Common
Shares; and
 (ii)
    
    alter the Memorandum or the
Articles of the Company to create, define and attach special
rights and restrictions to that series of Class B Common
Shares.
 (b)
    
    Non-Voting: Except as required by the
Company Act(British Columbia) or as
hereinafter specifically provided, the holders of the Class B
Common Shares shall not
be entitled to receive notice of or to attend any meeting of the
members of the
Company and shall not be entitled to vote at any such meeting. The
holders of the
Class B Common Shares shall, however, be entitled to notice of
meetings of the
members called for the purpose of authorizing the voluntary
liquidation and dissolution
of the Company or the sale of its undertaking or a substantial
part thereof under
Section 150 of the Company Act(British Columbia), as now enacted
or as the same
may from time to time be amended, re-enacted or replaced, or as
otherwise required
by law.
 (c)
    
    Dividends: No special rights or
restrictions may be attached to a series of Class B
Common Shares which shall
confer upon the series a priority in respect
of dividends
over the Common Shares or over any other series of Class B Common
Shares then outstanding.
 (d)
    
    Participation upon Liquidation, Dissolution
or Winding Up: 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 members for
the purpose of winding-up its affairs, no amount shall be
paid and no property or asset
of the Company will be distributed to the holders of the Class B
Common Shares, as
such, until the holders of the Preferred Shares without par value,
as such, have
received from the property and assets of the Company the amount to
which they are
entitled pursuant to these Articles. No special rights or
restrictions may be attached to
a series of Class B Common Shares which shall confer upon the
series a priority in
respect of return of capital over the Common Shares or over any
other series of Class
B Common Shares then outstanding.




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1.
    
    I am an officer of Ainsworth Lumber Co. Ltd.
 2.
    
    All the provisions of the Company Act(British Columbia) have been
complied with in respect of the alterations to the Memorandum and Articles of Ainsworth Lumber Co.
Ltd. made by
special resolutions of the members of Ainsworth Lumber Co. Ltd. on May
7, 1996 and there is
no person entitled to apply to the Supreme Court of British Columbia
pursuant to Section 251
of the Company Act(British Columbia).
  /s/ Catherine Ainsworth




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30.1
    
    The Series 1 Class B Common Shares shall have attached
thereto the following special rights and restrictions:
 (a)
    
    Definitions: For the purposes hereof:
 (i)
    
    Act means the Income Tax Act(Canada);(ii)
    
    Adjustment Factor means
initially 1.00 and shall be subject to adjustment as
provided in Paragraph (f);(iii)
    
    Articles means the Companys
Memorandum and Articles and includes any amendments thereto;(iv)
    
    Base Common Share Fair Market
Value means the product of the Fair Market Value of a
Common Share as at the date on which the Series 1 Class B
Common Shares are issued and the Adjustment Factor;(v)
    
    Business Day means a day other
than a Saturday, Sunday or statutory holiday in the Province
of British Columbia, provided that the principal offices of
the Company in Vancouver, British Columbia are open for
business on the particular day;(vi)
    
    Common Share means a common share
without par value in the capital of the Company;(vii)
    
    Common Share Date means, with
respect to a Series 1 Class B Common Share, the date on which
such Series 1 Class B Common Share becomes a Common Share
pursuant to the provisions of Paragraph (e) below;(viii)
    
    dividends paid in the ordinary course means dividends
paid in any fiscal year of the Company, whether in (1) cash,
(2) shares of the Company, (3) warrants or similar
rights to purchase any shares of the Company or options to
purchase any property of the Company at a purchase or
exercise price less than the fair market value of the shares or property purchasable as of the date of distribution
of such warrants or similar rights, or (4) property
of the Company, provided that where shares in the capital of
the Company are distributed to a holder of any Common Shares,
pursuant to his exercise of an option to receive a dividend
in the form of such shares in lieu of a cash dividend, such
dividend shall be deemed to be a cash dividend and provided
further that any shares, warrants or similar rights,
or property which are distributed are to be valued at the
fair market value of such shares, warrants or similar
rights, or property, as the case may be, as determined by the
directors;(ix)
    
    Fair Market Value of a Common
Share on a particular day means the weighted average sale
price for board lots of the Common Shares on The Toronto
Stock Exchange (or if the Common Shares are not listed on
The Toronto Stock Exchange, on such stock exchange on which
the Common Shares are listed as may




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(x)
    
    Redemption Amount with respect
to any Series 1 Class B Common Share at a particular time
means the aggregate of (1) the Subscription Price and (2)
the amount, if any, of all dividends theretofore declared
thereon but unpaid at that time;(xi)
    
    Redemption Date means, with
respect to any Series 1 Class B Common Share, a Business Day
on which the Company redeems or proposes to redeem such
share;(xii)
    
    Series 1 Class B Common Share
Value with respect to any Series 1 Class B Common Share as
at a particular time means the greater of (1) the amount, if
any, by which the Fair Market Value of a Common Share at
that time exceeds the Base Common Share Fair Market Value,
and (2) the Subscription Price of such share;(xiii)
    
    Subscription Price means, with respect to any Series 1
Class B Common Share, the amount of the consideration paid
for the issue of such share; and(xiv)
    
    Subsidiary has the meaning set forth in the Company Act.
 (b)
    
    Dividends: The holders of the Series 1
Class B Common Shares shall be entitled to
receive dividends, if as and when declared by the Board of Directors
of the Company out
of the property of the Company properly applicable to the payment of
dividends in such
amount and payable at such times and at such place or places in Canada
as the Board of
Directors may from time to time determine; provided however that
whenever a dividend
is declared and paid on the Common Shares a dividend shall
also be declared and paid on
the Series 1 Class B Common Shares and further provided that no
dividends shall be
declared and paid on the Series 1 Class B Common Shares unless a
dividend is
concurrently therewith declared and paid on the Common Shares. All
dividends which the
Board of Directors may determine to declare and pay in any
financial year of the Company
shall be declared and paid on all of the Common Shares and the Series
1 Class B Common
Shares at the time outstanding and without preference.
 (c)
    
    Redemption: Subject to the provisions of
the Company Act and the Articles, the Company
may, upon giving notice as herein provided, redeem at any time all or
from time to time
any of the then outstanding Series 1 Class B Common Shares on payment
for each such
share of the Redemption Amount. If less than all of the then
outstanding Series 1 Class
B Common Shares are to be redeemed, the Series 1 Class B Common Shares
to be
redeemed shall be selected by the Board of Directors in their
absolute discretion and need
not be redeemed pro rata according to the shareholdings.
 (d)
    
    Procedure on Redemption: In the case of
redemption of Series 1 Class B Common Shares
under Paragraph (c) above, the Company shall at least 30 days before
the proposed
 - 2 -




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(e)
    
    Common Shares: Subject to prior
redemption in accordance with Paragraphs (c) and (d), Series 1
Class B Common Shares will become and be exchanged for Common
Shares, without any action on the part of the holder thereof, as
hereinafter provided.
 (i)
    
    Subject to clause (iii) of this
Paragraph (e), each Series 1 Class B Common Share
will, on the applicable Common Share Date (as determined in
accordance with clause (ii) of this Paragraph (e)), become
and be exchanged for that number of Common Shares which is
the product of (1) a fraction, the numerator of which is the
Series 1 Class B Common Share Value as at the applicable
Common Share Date, and the denominator of which is the Fair
Market Value of a Common Share
 - 3 -




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(ii)
    
    May 15, 2001 shall be the Common
Share Date subject to prior redemption thereof in accordance
with Paragraphs (c) and (d); provided however that in any of
the following events, the Common Share Date shall
be the earliest of the dates specified below in respect of
Vested Shares of a holder of any Series 1 Class B Common
Shares referred to below. Vested Shares of any one holder
means the following percentage of the aggregate number of
Series 1 Class B Common Shares issued to such holder based on
the following time that has elapsed since the date of issue
of Series 1 Class B Common Shares:
 Percentage
    
    Time Elapsed0%
    
    Less than 36 months;33.33%
    
    36 months up to but not including 48 months;66.67%
    
    48 months up to but not including 60 months.
 A.
    
    In the event of any
transfer of the undertaking or assets of the Company
as an entirety or substantially as an entirety to another corporation, or
the consolidation, amalgamation or merger of the Company with or into
any other corporation which is not a Subsidiary or an affiliate of the
Company within the meaning of the Act, or the occurrence of a Change
of Control (as hereinafter defined), the thirtieth
day after the effective date of such event
shall be the Common Share Date with respect
to all Vested Shares outstanding on such later day;B.
    
    In the event of the death
of a holder of any Series 1 Class B Common
Share, the date of such event shall be the Common
Share Date with
respect to all Vested Shares beneficially owned by such
holder on that
date;C.
    
    In the event of the
termination of all employment and offices of a holder
of any Series 1 Class B Common Share with the Company by
reason of
such holder having reached the age when retirement is
compulsory under
the regulations of the Company or in the event of such
holder otherwise
retiring with the consent of the Company, the date of
such event shall be
the Common Share Date with respect to all Vested Shares
beneficially
owned by such holder on that date;D.
    
    In the event of the
termination of all employment and offices of a holder
of any Series 1 Class B Common Share with the Company
other than as
described in clause B. or C. above, whether for any cause
or for no cause
and whether at the instance of the Company, such holder
or otherwise,
the Business Day after the date of such event shall be
the Common Share
Date with respect to all Vested Shares beneficially owned
by such holder
on that date; and
 - 4 -




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##### 



E.
    
    In the event that an order is made, an
effective resolution is passed or a proceeding or act
is taken that will result in the liquidation,
dissolution or winding-up of the Company, the date of
such order, resolution, proceeding or act shall be
the Common Share Date with respect to all Vested
Shares beneficially owned by such holder on that
date.
  (1)
    
    the
acquisition and exercise, or either of them, of
de facto control
(for the purpose of this clause, as defined by
subsection 256(5.1)
of the Income Tax Act(Canada)) or the
acquisition of the power
to exercise de facto control over the Company by
any person, firm
or corporation or group which does not, as at
the date on which
the Series 1 Class B Common Shares are issued,
exercise or have
power to exercise de facto control over the
Company; or(2)
    
    any
transaction or event or series of transactions or
events or a
combination thereof as a result of which the
Company, or any
subsidiary of the Company which represents all
or substantially
all of the properly of the Company, shall, or
may (including the
exercise of any option or rights) become
obligated at any time to,
sell, lease, exchange or otherwise dispose of
all or substantially all
of its property.
  (iii)
    
    Nothing contained herein shall
result in any fractional Common Shares being outstanding.
The number of whole Common Shares of which a holder of
Series 1 Class B Common Shares becomes the holder on any
Common Share Date shall be computed on the basis of the
number of all Series 1 Class B Common Shares held by such
holder which become Common Shares on that date. If any
fraction of a Common Share would, except for the provisions
of this clause (iii), result from any number of Series 1
Class B Common Shares becoming Common Shares, the Company
shall round down to the nearest whole number the Common
Shares of which any one holder becomes the holder.
 (iv)
    
    In case of any reclassification of
the Common Shares at any time Outstanding or any change of
the Common Shares into other shares, or in the case of the
consolidation, amalgamation or merger of the Company with or
into any other corporation (other than a consolidation,
amalgamation or merger which does not result in a
reclassification of the outstanding Common Shares or a
change of the Common Shares into other shares), or in case
of any transfer of the undertaking or assets of the Company
as an entirety or substantially as an entirety to another
corporation, any Series 1 Class B Common Shares in respect
of which the Common Share Date occurs subsequent to such
event, shall become the kind and amount of shares and other
securities or property to which such holder would have been
entitled as a result of such reclassification, change,
consolidation,
 - 5 -




---



##### 



(v)
    
    As of the Common Share Date
relating to any Series 1 Class B Common Shares, the holder
thereof shall be entitled to be entered in the books of the
Company as the holder of record of the number of Common
Shares which such Series 1 Class B Common Shares became in
accordance with the provisions of this Paragraph (e) and such
holder may, from and after such Common Share Date, on any day
which is a Business Day surrender any certificate evidencing
the Series 1 Class B Common Shares in respect of which the
Common Share Date has occurred to the Company at its
principal office in Vancouver or at such other place as the
Company may direct in exchange for a certificate or
certificates representing the Common Shares of which it
thereupon became holder of record and, if part only of the
Series 1 Class B Common Shares represented by such
certificate have become Common Shares, a new certificate or
certificates representing the balance of the Series 1 Class B
Common Shares. All Common Shares to which such holder becomes
entitled pursuant to the terms of the Series 1 Class B Common
Shares shall be issued as fully paid and non-assessable shares.
 (vi)
    
    If by reason of Series 1 Class B
Common Shares becoming Common Shares pursuant to the terms of
the Series 1 Class B Common Shares any filing with or
registration with or approval of any governmental authority
in Canada or compliance with any other requirement under any
law of Canada or a province thereof is required before such shares may be validly held or traded by the holder thereof,
the Company will take such action as may be necessary to
secure such filing, registration, approval or compliance as
the case may be; provided that, in the event that such
filing, registration, approval or compliance is required
other than by reason solely of the terms of the Series 1
Class B Common Shares, the Company will not be required to
take such action; and further provided that nothing herein
shall obligate the Company to file or obtain any receipt for
a prospectus.
 (f)
    
    Adjustment Factor: The Adjustment
Factor in effect at any date shall be subject to adjustment from
time to time as follows:
 (i)
    
    If and whenever at any time while
any Series 1 Class B Common Shares are outstanding the
Company shall (1) subdivide the outstanding Common Shares
into a greater number of Common Shares, (2) consolidate the
outstanding Common
 - 6 -




---



##### 



Shares into a lesser number of Common Shares, (3) issue Common Shares to the
holders of all or substantially all of the outstanding Common Shares by way of stock
dividend (other than as a dividend paid in the ordinary course on the outstanding Common
Shares), or (4) make a distribution on the outstanding Common Shares payable in Common
Shares (other than as a dividend paid in the ordinary course) (any such events in (1),
(2), (3) and (4) being called a Share Reorganization), the Adjustment Factor
shall be adjusted effective immediately after the record date at which the
holders of Common Shares are determined for the purposes of the Share Reorganization by
multiplying the Adjustment Factor in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of outstanding Common Shares on such
record date before giving effect to such Share Reorganization and the denominator of
which shall be the number of outstanding Common Shares after giving effect to
such Share Reorganization (including, in the case where securities exchangeable for or
convertible into Common Shares are distributed, the number of Common Shares that would
have been outstanding had such securities been exchanged for or converted into Common
Shares on such record date).(ii)
    
    If and whenever at any time while any Series 1 Class B Common Shares are outstanding, the
Company shall fix a record date for the issuance of rights, options or warrants to all or
substantially all the holders of the outstanding Common Shares entitling them, for a period
expiring not more than 45 days after such record date (the
Rights Period), to subscribe
for or purchase Common Shares or securities exchangeable for or convertible into Common
Shares at a price per share (or at an exchange or conversion price per share) of less than
95% of the Fair Market Value of a Common Share on such record date (any of such events being
called a Rights Offering), the Adjustment Factor shall be adjusted effective immediately
after the end of the Rights Period to a number determined by multiplying the Adjustment
Factor in effect immediately prior to the end of the Rights Period by a fraction, the
numerator of which shall be the aggregate of the number of Common Shares outstanding as of
the record date for the Rights Offering plus a number of Common Shares equal to the number
arrived at by dividing the aggregate price of the total number of additional Common Shares
offered for subscription or purchase or the aggregate conversion or exchange price of the
convertible securities so offered by such Fair Market Value, and the denominator of which
shall be the number of Common Shares outstanding after giving effect to the Rights Offering
(including the number of Common Shares actually issued or subscribed for during the Rights
Period upon exercise of the rights, warrants or options under the Rights Offering). Common
Shares owned by or held for the account of the Company or any Subsidiary shall be
deemed not to be outstanding for the purpose of any such computation.(iii)
    
    If and whenever at any time while any Series 1 Class B Common Shares are outstanding the
Company shall fix a record date for the making of a distribution to all or substantially all
the holders of its outstanding Common Shares of (1) shares of any class other than
Common Shares, (2) rights, options or warrants to acquire Common Shares, or securities
exchangeable for or convertible into Common Shares (other than rights, options or
warrants to acquire Common Shares or securities exchangeable for or convertible into Common
Shares for a period of not more than 45 days after such record date at a price per Common
Share, or having an exchange or conversion price per Common Share, not less than 95% of the
Fair Market Value of a Common Share on such record date), or
 - 7 -




---



##### 



property or other assets of the Company, (3) evidences of indebtedness, or (4) any
property or other assets, if such distribution does not constitute (A) a dividend paid in
the ordinary course, (B) a Share Reorganization, or (C) a Rights Offering (any of such
non-excluded events herein called a Special Distribution), the Adjustment Factor shall
be adjusted effective immediately after the record date at which holders of Common Shares
are determined for purposes of the Special Distribution to a number determined by
multiplying the Adjustment Factor in effect on such record date by a fraction, the
numerator of which shall be the number of Common Shares outstanding on such record
date multiplied by the Fair Market Value of a Common Share on such record date, less the
fair market value (as determined by the Board of Directors, which determination
shall be conclusive), of such shares, rights, options, warrants, evidences of
indebtedness or property or other assets issued or distributed, and the denominator of
which shall be the number of Common Shares outstanding on such record date
multiplied by such Fair Market Value. Common Shares owned by or held for the account of
the Company or any Subsidiary shall be deemed not to be outstanding for the purpose of any
such computation.
 (iv)
    
    There will be no adjustment of the Adjustment Factor in respect of any event described in
clause (ii) or (iii) of this Paragraph (f) if the holders of the Series 1 Class B Common
Shares are entitled to participate in such event on the same terms, mutatis mutandis,as if
the Common Share Date with respect to all of their Series 1 Class B Common Shares had occurred
prior to the applicable record date.(v)
    
    In any case in which this Paragraph (f) shall require that an adjustment
shall become effective immediately after a record date for an event referred to
herein, the Company may defer, until the occurrence of such event, recording the holder of
any Series 1 Class B Common Shares in respect of which the Common Share Date occurs after
such record date and before the occurrence of such event as registered holder of, or issuing
to such holder any certificate evidencing, the additional Common Shares to which such holder
becomes entitled by virtue of the Common Share Date by reason of the adjustment required by
such event before giving effect to such adjustment; provided, however, that the Company shall
deliver to such holder an appropriate instrument evidencing such holders right to be
recorded as registered holder of, and to receive a certificate evidencing, such additional
Common Shares upon the occurrence of the event requiring the adjustment and the right to
receive any distributions made on such additional Common Shares declared in favour of holders
of record of Common Shares on and after the Common Share Date or such later date as such
holder would, but for the provisions of this clause (v), have become the holder of record of
such additional Common Shares pursuant to Paragraph (e).(vi)
    
    The adjustments provided for in this Paragraph (f) are cumulative and shall, in the case of
adjustments to the Adjustment Factor, be computed to the nearest one-tenth of 1% and
shall be made successively whenever an event referred to therein shall occur,
provided that, notwithstanding any other provision of this Paragraph (f), no adjustment of
the Adjustment Factor shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Adjustment Factor then in effect; provided however, that any
adjustments which by reason of this clause (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
 - 8 -




---



##### 



(vii)
    
    No adjustment of the Adjustment Factor shall be made pursuant to this
Paragraph (f) in respect of the issue from time to time of Common Shares pursuant
to any stock option or stock purchase plan(s) in force from time to time for
officers or employees of the Company or members of the Company who exercise an
option to receive substantially equivalent dividends in Common Shares in lieu of
receiving a cash dividend paid in the ordinary course, and any such issue shall
be deemed not to be a Share Reorganization.(viii)
    
    In the event of any question arising with respect to the adjustments provided in
this Paragraph (f), such question shall be conclusively determined by a firm of
chartered accountants appointed by the Company (who may be auditors of the Company);
such accountants shall have access to all necessary records of the Company and
such determination shall be binding upon the Company, and the holders of the
Series 1 Class B Common Shares.(ix)
    
    If the Company shall take a record of the holders of Common Shares
for the purpose of entitling them to receive any dividend or distribution of any
subscription or purchase rights and shall, thereafter and before the distribution to
such members of any such dividend, distribution or subscription or purchase rights,
abandon its plan to pay or deliver such dividend, distribution or subscription or
purchase rights, then no adjustment in the Adjustment Factor shall be
required by reason of taking such records.(x)
    
    As a condition precedent to the taking of any action which would result in
an adjustment to the Adjustment Factor, the Company shall take any corporate
action which may, in the opinion of counsel, be necessary in order that the shares of
which the holders of the Series 1 Class B Common Shares become holders on the
applicable Common Share Date pursuant to Paragraph (e) shall be available and that
such shares are held by such holders as fully paid and non-assessable shares.
 (g)
    
    Notice to Holders: The Company shall from time to time immediately after the
occurrence of any event which requires an adjustment or re-adjustment as provided in
Paragraph (f), specify the nature of the event requiring the same and the amount of the
adjustment necessitated thereby and set forth in reasonable detail the method of calculation
and the facts upon which such calculation is based, which shall be verified by an opinion of
a firm of chartered accountants appointed by the Company (who may be the auditors of the
Company) and which shall be conclusive and binding on all parties in interest. The Company
shall, except in respect of any subdivision or consolidation of Common Shares,
forthwith give notice to the holders of the Series 1 Class B Common Shares by mail or
delivery to the latest address of the member appearing on the records of the Company, of its
intention to fix a record date for any event referred to in clause (iv) of Paragraph (e) or
clause (i), (ii) or (iii) of Paragraph (f) (other than subdivision or consolidation of the
Common Shares) which may give rise to an adjustment in the Adjustment Factor and, in each
case, such notice shall specify the particulars of such event and the record date and
the effective date for such event; provided, however, that the Company shall only be
required to specify in such notice particulars of such event as shall have been fixed and
determined on the date on which such notice is given. Such notice shall be given in each case
not less than 14 days prior to such applicable record date.(h)
    
    Voting: At any meeting of holders of Series 1 Class B Common Shares, each holder
shall be entitled to one vote for each Series 1 Class B Common Share held.
 - 9 -




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##### 



(i)
    
    Amendments: The provisions of Sections (a) through (k) hereof may be repealed,
altered, modified, amended or amplified only with the sanction of the holders of the Series
1 Class B Common Shares given as hereinafter specified, in addition to any other approval
required by the Company Act.(j)
    
    Sanction by holders of Series 1 Class B Common Shares: The sanction of holders of
the Series 1 Class B Common Shares as to any and all matters referred to herein may be given
by resolution signed by all the holders of the Series 1 Class B Common Shares then
outstanding or by resolution passed at a meeting of the holders of the Series 1 Class B
Common Shares duly called and held for such purpose at which the holders of at least a
majority of the outstanding Series 1 Class B Common Shares are present or represented by
proxy and carried by the affirmative vote of the holders of not less than 75% of the Series 1
Class B Common Shares represented and voted at such meeting cast on a poll If at any such
meeting the holders of a majority of the outstanding Series 1 Class B Common Shares are not
present or represented by proxy within half an hour after the time appointed for the
meeting then the meeting shall be adjourned to such date being not less than 15 days later
and to such time and place as may be appointed by the chairman of the meeting and at
least 10 days notice shall be given of such adjourned meeting but it shall not be necessary
in such notice to specify the purpose for which the meeting was originally called. At such
adjourned meeting the holders of Series 1 Class B Common Shares present or represented by
proxy shall form a quorum and may transact the business for which the meeting was originally
convened and a resolution passed thereat by the affirmative vote of the holders of not less
than 75% of the Series 1 Class B Common Shares represented and voted at such adjourned
meeting cast on a poll shall constitute the sanction of the holders of Series 1 Class B
Common Shares referred to in this Section (j). The formalities to be observed with respect to
the giving of notice of any such meeting or adjourned meeting and the conduct thereof shall
be those which may from time to time be prescribed in the Articles with respect to meetings
of members. On every poll taken at every such meeting or adjourned meeting every holder of
Series 1 Class B Common Shares shall be entitled to one vote in respect of each Series 1
Class B Common Share held.(k)
    
    Liquidation, Dissolution or Winding-Up: 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 members for the purpose of winding-up its affairs, the
holders of the Series 1 Class B Common Shares will share
pari passu with the holders of the
Common Shares on a share for share basis up to a maximum amount equal to the Redemption
Amount for each such Series 1 Class B Common Share held by them. Upon payment of the amounts
so payable to them, the holders of Series 1 Class B Common Shares shall not, as such, be
entitled to share in any further distribution of the property or assets of the Company.
 - 10 -




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##### 



SCHEDULE
B
 SPECIAL
RIGHTS AND RESTRICTIONS ATTACHED TO 
SERIES
2 CLASS B COMMON SHARES
 31.1
    
    The Series 2 Class B Common Shares shall have attached thereto the following special
rights and restrictions:
 (a)
    
    Definitions: For the purposes hereof:
 (i)
    
    Act means the Income Tax Act(Canada);(ii)
    
    Adjustment Factor means initially 1.00 and shall be subject to
adjustment as provided in Paragraph (f);(iii)
    
    Articles means the Companys Memorandum and
Articles and includes any amendments thereto;(iv)
    
    Base Common Share Fair Market Value means the product
of the Fair Market Value of a Common Share as at the date fixed by
resolution of the directors of the Company, which date shall not be
earlier than the date upon which the directors of the Company resolve to
issue the Series 2 Class B Common Shares nor later than the date upon
which the Series 2 Class B Common Shares are issued, and the Adjustment
Factor;(v)
    
    Business Day means a day other than a Saturday, Sunday
or statutory holiday in the Province of British Columbia, provided that
the principal offices of the Company in Vancouver, British Columbia are
open for business on the particular day;(vi)
    
    Common Share means a common share without par value in
the capital of the Company;(vii)
    
    Common Share Date means, with respect to a Series 2
Class B Common Share, the date on which such Series 2 Class B Common
Share becomes a Common Share pursuant to the provisions of Paragraph (e)
below;(viii)
    
    dividends paid in the ordinary course means dividends paid in any
fiscal year of the Company, whether in (1) cash, (2) shares of the
Company, (3) warrants or similar rights to purchase any shares of the
Company or options to purchase any property of the Company at a purchase
or exercise price less than the fair market value of the shares or
property purchasable as of the date of distribution of such warrants or
similar rights, or (4) property of the Company, provided that where shares in the capital of the Company are distributed to a holder of any
Common Shares,




---



##### 



pursuant to his exercise of an option to receive a dividend in the form of such shares in lieu of a cash dividend, such dividend shall be deemed to be a cash
dividend and provided further that any shares, warrants or similar rights, or
property which are distributed are to be valued at the fair market value of such shares, warrants or similar rights, or property, as the case may be, as determined
by the directors;
 (ix)
    
    Fair Market Value of a Common Share on a particular day means the
weighted average sale price for board lots of the Common Shares on The Toronto Stock
Exchange (or if the Common Shares are not listed on The Toronto Stock Exchange, on
such stock exchange on which the Common Shares are listed as may be selected for
such purpose by the directors or if the Common Shares be not so listed then on the
over-the-counter market) over the five consecutive trading days immediately
preceding the date on which such value is to be determined or, if no trades are made
during such five-day period, then over the fifteen consecutive trading days
immediately preceding the date on which such value is to be determined or, if no
trades are made during such fifteen-day period, then the Fair Market Value of a
Common Share means the fair value of a Common Share as determined by the Companys
auditors;(x)
    
    Redemption Amount with respect to any Series 2 Class B Common Share at a
particular time means the aggregate of (1) the Subscription Price and (2) the amount,
if any, of all dividends theretofore declared thereon but unpaid at that time;(xi)
    
    Redemption Date means, with respect to any Series 2 Class B Common Share,
a Business Day on which the Company redeems or proposes to redeem such share;(xii)
    
    Series 2 Class B Common Share Value with respect to any Series 2 Class B
Common Share as at a particular time means the greater of (1) the amount, if any, by
which the Fair Market Value of a Common Share at that time exceeds the Base Common
Share Fair Market Value, and (2) the Subscription Price of such share;(xiii)
    
    Subscription Price means, with respect to any Series 2 Class B Common Share, the
amount of the consideration paid for the issue of such share; and(xiv)
    
    Subsidiary has the meaning set forth in the Company Act.
 (b)
    
    Dividends: The holders of the Series 2 Class B Common Shares shall be entitled to
receive dividends, if as and when declared by the Board of Directors of the Company out of
the property of the Company properly applicable to the payment
 - 2 -




---



##### 



of dividends in such amount and payable at such times and at such place or places in Canada
as the Board of Directors may from time to time determine; provided however that whenever a
dividend is declared and paid on the Common Shares a dividend shall also be declared and
paid on the Series 2 Class B Common Shares and further provided that no dividends shall be
declared and paid on the Series 2 Class B Common Shares unless a dividend is concurrently
therewith declared and paid on the Common Shares. All dividends which the Board of
Directors may determine to declare and pay in any financial year of the Company shall be
declared and paid on all of the Common Shares and the Series 2 Class B Common Shares at the
time outstanding and without preference.
 (c)
    
    Redemption: Subject to the provisions of the Company
Act and the Articles, the Company
may, upon giving notice as herein provided, redeem at any time all
or from time to time any of
the then outstanding Series 2 Class B Common Shares on payment for each such share of the
Redemption Amount. If less than all of the then outstanding Series 2 Class B Common Shares are
to be redeemed, the Series 2 Class B Common Shares to be redeemed shall be selected by the
Board of Directors in their absolute discretion and need not be
redeemed pro rata according to
the shareholdings.(d)
    
    Procedure on Redemption: In the case of redemption of
Series 2 Class B Common Shares
under Paragraph (c) above, the Company shall at least
30 days before the proposed Redemption
Date mail to each person who at the date of mailing is a registered
holder of Series 2 Class B Common Shares to be redeemed a notice in writing of the intention of the Company to redeem such
Series 2 Class B Common Shares. Such notice shall be mailed by letter, postage
prepaid, addressed to each such member at his address as it appears on the records of
the Company or in the event of the address of any such member not so
appearing then to the last
known address of such member; provided, however, that accidental failure to give any such
notice to one or more of such holders shall not affect the validity of such redemption. Such
notice shall set out the redemption price and the date on which redemption is to take place
and, if part only of the shares held by the person to whom it is addressed are to be redeemed,
the number thereof so to be redeemed. On or after the date so specified for redemption
the Company shall pay or cause to be paid to or to the order of the
registered holders of the
Series 2 Class B Common Shares to be redeemed the
Redemption Amount on presentation and
surrender, at the registered office of the Company or any other place designated in such
notice, the certificates for the Series 2 Class B Common Shares called for redemption. Such
payment shall be made by cheque of the Company payable in lawful money of Canada at par at any
branch of the Companys bankers for the time being in Canada.
Such Series 2 Class B Common
Shares shall thereupon be redeemed and shall be cancelled and not reissued. If a part only of
the shares represented by any certificate be redeemed a new certificate for the balance shall
be issued at the expense of the Company.
 - 3 -




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##### 



From and after the date specified for redemption in any such notice the Series 2 Class B
Common Shares 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 members in respect thereof
unless payment of the Redemption Amount shall not be made upon presentation of certificates
in accordance with the foregoing provisions, in which case the rights of the members shall
remain unaffected. The Company shall have the right at any time after the mailing of notice
of its intention to redeem any Series 2 Class B Common Shares to deposit the Redemption
Amount of the shares so called for redemption or of such of the said shares represented by
certificates as have not at the date of such deposit been surrendered by the holders
thereof in connection with such redemption to a special account in any chartered bank or in
any trust company in Canada, named in such notice, to be paid without interest to or to the
order of the respective holders of such Series 2 Class B Common Shares 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 Redemption
Date specified in such notice, whichever is the later, the Series 2 Class B Common Shares
in respect whereof such deposit shall have been made shall be redeemed and the rights of
the holders thereof after such deposit or such Redemption Date, as the case may be, shall
be limited to receiving without interest their proportionate part of the total Redemption
Amount so deposited against presentation and surrender of the said certificates held by
them respectively and any interest allowed on such deposit shall belong to the Company.
 (e)
    
    Common Shares: Subject to prior redemption in accordance with Paragraphs (c) and
(d), Series 2 Class B Common Shares will become and be exchanged for Common Shares, without
any action on the part of the holder thereof, as hereinafter provided.
 (i)
    
    Subject to clause (iii) of this Paragraph (e), each Series 2 Class B Common Share
will, on the applicable Common Share Date (as determined in accordance with clause
(ii) of this Paragraph (e)), become and be exchanged for that number of Common Shares
which is the product of (1) a fraction, the numerator of which is the Series 2 Class
B Common Share Value as at the applicable Common Share Date, and the denominator of
which is the Fair Market Value of a Common Share as at the applicable Common Share
Date, and (2) the reciprocal of the Adjustment Factor.(ii)
    
    April 17, 2003 shall be the Common Share Date subject to prior redemption
thereof in accordance with Paragraphs (c) and (d); provided however that in any of
the following events, the Common Share Date shall be the earliest of the dates
specified below in respect of Vested
 - 4 -




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##### 



Shares of a holder of any Series 2 Class B Common Shares referred to below. Vested Shares of
any one holder means the following percentage of the aggregate number of Series 2 Class B Common
Shares issued to such holder based on the following time that has elapsed since the date of issue
of Series 2 Class B Common Shares:
 Percentage
    
    Time Elapsed0%
    
    Less than 36 months;33.33%
    
    36 months up to but not
including 48 months;66.67%
    
    48 months up to but not
including 60 months.
 A.
    
    In the event of any transfer of the undertaking or assets of the Company as an entirety or
substantially as an entirety to another corporation, or the consolidation, amalgamation or
merger of the Company with or into any other corporation which is not a Subsidiary or an
affiliate of the Company within the meaning of the Act, or the occurrence of a Change of
Control (as hereinafter defined), the thirtieth day after the effective date of such event
shall be the Common Share Date with respect to all Vested Shares outstanding on such later
day;B.
    
    In the event of the death of a holder of any Series 2 Class B Common Share, the date of such
event shall be the Common Share Date with respect to all Vested Shares beneficially owned by
such holder on that date;C.
    
    In the event of the termination of all employment and offices of a holder of any Series 2
Class B Common Share with the Company by reason of such holder having reached the age when
retirement is compulsory under the regulations of the Company or in the event of such holder
otherwise retiring with the consent of the Company, the date of such event shall be the Common
Share Date with respect to all Vested Shares beneficially owned by such holder on that date;D.
    
    In the event of the termination of all employment and offices of a holder of any Series 2
Class B Common Share with the Company other than as described in clause B. or C. above,
whether for any cause or for no cause and whether at the instance of the Company,
 - 5 -




---



##### 



such holder or otherwise, the Business Day after the date of such event shall be
the Common Share Date with respect to all Vested Shares beneficially owned by
such holder on that date; and
 E.
    
    In the event that an order is made, an effective resolution is passed or
a proceeding or act is taken that will result in the liquidation, dissolution or
winding-up of the Company, the date of such order, resolution, proceeding or act
shall be the Common Share Date with respect to all Vested Shares beneficially owned
by such holder on that date.
  (1)
    
    the acquisition and exercise, or either of them, of de
facto control (for the purpose of this clause, as defined by subsection
256(5.1) of the Income Tax Act(Canada)) or the acquisition of the power to
exercise de facto control over the Company by any person, firm or
corporation or group which does not, as at the date on which the Series 2
Class B Common Shares are issued, exercise or have power to exercise de
facto control over the Company; or(2)
    
    any transaction or event or series of transactions or
events or a combination thereof as a result of which the Company, or any
subsidiary of the Company which represents all or substantially all of the
property of the Company, shall, or may (including the exercise of any option
or rights) become obligated at any time to, sell, lease, exchange or
otherwise dispose of all or substantially all of its property.
  (iii)
    
    Nothing contained herein shall result in any fractional Common Shares being outstanding.
The number of whole Common Shares of which a holder of Series 2 Class B Common Shares
becomes the holder on any Common Share Date shall be computed on the basis of the number of
all Series 2 Class B Common Shares held by such holder which become Common Shares on that
date. If any fraction of a Common Share would,
 - 6 -




---



##### 



except for the provisions of this clause (iii), result from any number of Series 2 Class B
Common Shares becoming Common Shares, the Company shall round down to the nearest whole
number the Common Shares of which any one holder becomes the holder.
 (iv)
    
    In case of any reclassification of the Common Shares at any time outstanding or any change
of the Common Shares into other shares, or in the case of the consolidation, amalgamation or
merger of the Company with or into any other corporation (other than a consolidation,
amalgamation or merger which does not result in a reclassification of the outstanding Common
Shares or a change of the Common Shares into other shares), or in case of any transfer of the
undertaking or assets of the Company as an entirety or substantially as an entirety to
another corporation, any Series 2 Class B Common Shares in respect of which the Common Share
Date occurs subsequent to such event, shall become the kind and amount of shares and other
securities or property to which such holder would have been entitled as a result of such
reclassification, change, consolidation, amalgamation, merger or transfer if, on the
effective date thereof, such holder had been the registered holder of the number of Common
Shares to which such holder would otherwise have become entitled pursuant to this Paragraph
(e). If necessary, appropriate adjustments shall be made in the application of the provisions
set forth in this Paragraph (e) with respect to the rights and interests thereafter of the
holders of Series 2 Class B Common Shares to the end that the provisions set forth in this
Paragraph (e) shall thereafter correspondingly be made applicable as nearly as may be
reasonable in relation to any shares or other securities or property to which the Series 2
Class B Common Shares may thereafter entitle the holder thereof. Any such adjustments shall
be made by and set forth in a resolution of the Board of Directors, and such resolution shall
for all purposes be conclusively deemed to be an appropriate
adjustment. The subdivision or
consolidation of the Common Shares at any time outstanding into a greater or less number of
Common Shares shall be deemed not to be a reclassification of the capital of the Company for
the purposes of this Paragraph (e).(v)
    
    As of the Common Share Date relating to any Series 2 Class B Common Shares, the holder
thereof shall be entitled to be entered in the books of the Company as the holder of record
of the number of Common Shares which such Series 2 Class B Common Shares became in
accordance with the provisions of this Paragraph (e) and such holder may, from and after
such Common Share Date, on any day which is a Business Day surrender any certificate
evidencing the Series 2 Class B Common Shares in respect of which the Common Share Date has
occurred to the Company at its principal office in Vancouver or at such other place as the
Company may
 - 7 -




---



##### 



direct in exchange for a certificate or certificates representing the Common Shares
of which it thereupon became holder of record and, if part only of the Series 2
Class B Common Shares represented by such certificate have become Common Shares, a
new certificate or certificates representing the balance of the Series 2 Class B
Common Shares. All Common Shares to which such holder becomes entitled pursuant to
the terms of the Series 2 Class B Common Shares shall be issued as fully paid and
non-assessable shares.
 (vi)
    
    If by reason of Series 2 Class B Common Shares becoming Common Shares
pursuant to the terms of the Series 2 Class B Common Shares any filing with or
registration with or approval of any governmental authority in Canada or compliance
with any other requirement under any law of Canada or a province thereof is required
before such shares may be validly held or traded by the holder thereof, the Company
will take such action as may be necessary to secure such filing, registration,
approval or compliance as the case may be; provided that, in the event that such
filing, registration, approval or compliance is required other than by reason solely
of the terms of the Series 2 Class B Common Shares, the Company will not be required
to take such action; and further provided that nothing herein shall obligate the
Company to file or obtain any receipt for a prospectus.
 (f)
    
    Adjustment Factor: The Adjustment Factor in effect at any date shall be subject
to adjustment from time to time as follows:
 (i)
    
    If and whenever at any time while any Series 2 Class B Common Shares are
outstanding the Company shall (1) subdivide the outstanding Common Shares into a
greater number of Common Shares, (2) consolidate the outstanding Common Shares into a
lesser number of Common Shares, (3) issue Common Shares to the holders of all or
substantially all of the outstanding Common Shares by way of stock dividend (other
than as a dividend paid in the ordinary course on the outstanding Common Shares), or
(4) make a distribution on the outstanding Common Shares payable in Common Shares
(other than as a dividend paid in the ordinary course) (any such events to (1), (2),
(3) and (4) being called a Share Reorganization), the Adjustment Factor shall be
adjusted effective immediately after the record date at which the holders of Common
Shares are determined for the purposes of the Share Reorganization by multiplying the
Adjustment Factor in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of outstanding Common Shares on such record
date before giving effect to such Share Reorganization and the denominator of which
shall be the number of outstanding Common Shares after giving effect to such Share
 - 8 -




---



##### 



Reorganization (including, in the case where securities exchangeable for or convertible
into Common Shares are distributed, the number of Common Shares that would have been
outstanding had such securities been exchanged for or converted into Common Shares on such
record date).
 (ii)
    
    If and whenever at any time while any Series 2 Class B Common Shares are outstanding, the
Company shall fix a record date for the issuance of rights, options or warrants to all or
substantially all the holders of the outstanding Common Shares entitling them, for a period
expiring not more than 45 days after such record date (the Rights Period), to subscribe for
or purchase Common Shares or securities exchangeable for or convertible into Common Shares at
a price per share (or at an exchange or conversion price per share) of less than 95% of the
Fair Market Value of a Common Share on such record date (any of such events being called a
Rights Offering), the Adjustment Factor shall be adjusted effective immediately after the
end of the Rights Period to a number determined by multiplying the Adjustment Factor in
effect immediately prior to the end of the Rights Period by a fraction, the numerator of
which shall be the aggregate of the number of Common Shares outstanding as of the record date
for the Rights Offering plus a number of Common Shares equal to the number arrived at by
dividing the aggregate price of the total number of additional Common Shares offered for
subscription or purchase or the aggregate conversion or exchange price of the convertible
securities so offered by such Fair Market Value, and the denominator of which shall be the
number of Common Shares outstanding after giving effect to the Rights Offering (including the
number of Common Shares actually issued or subscribed for during the Rights Period upon
exercise of the rights, warrants or options under the Rights Offering). Common Shares owned
by or held for the account of the Company or any Subsidiary shall be deemed not to be
outstanding for the purpose of any such computation.(iii)
    
    If and whenever at any time while any Series 2 Class B Common Shares are outstanding the
Company shall fix a record date for the making of a distribution to all or substantially all
the holders of its outstanding Common Shares of (1) shares of any class other than Common
Shares, (2) rights, options or warrants to acquire Common Shares, or securities exchangeable
for or convertible into Common Shares (other than rights, options or warrants to acquire
Common Shares or securities exchangeable for or convertible into Common Shares for a period
of not more than 45 days after such record date at a price per Common Share, or having an
exchange or conversion price per Common Share, not less than 95% of the Fair Market Value of
a Common Share on such record date), or
 - 9 -




---



##### 



property or other assets of the Company, (3) evidences of indebtedness, or (4) any
property or other assets, if such distribution does not constitute (A) a dividend paid in
the ordinary course, (B) a Share Reorganization, or (C) a Rights Offering (any of such
non-excluded events herein called a Special Distribution), the Adjustment Factor shall
be adjusted effective immediately after the record date at which holders of Common Shares
are determined for purposes of the Special Distribution to a number determined by
multiplying the Adjustment Factor in effect on such record date by a fraction, the
numerator of which shall be the number of Common Shares outstanding on such record date
multiplied by the Fair Market Value of a Common Share on such record date, less the
fair market value (as determined by the Board of Directors, which determination shall be
conclusive), of such shares, rights, options, warrants, evidences of indebtedness or
property or other assets issued or distributed, and the denominator of which shall be the
number of Common Shares outstanding on such record date multiplied by such Fair Market
Value. Common Shares owned by or held for the account of the Company or any Subsidiary
shall be deemed not to be outstanding for the purpose of any such computation.
 (iv)
    
    There will be no adjustment of the Adjustment Factor in respect of any event described in
clause (ii) or (iii) of this Paragraph (f) if the holders of the Series 2 Class B Common
Shares are entitled to participate in such event on the same terms, mutatis mutandis,as if
the Common Share Date with respect to all of their Series 2 Class B Common Shares had
occurred prior to the applicable record date.(v)
    
    In any case in which this Paragraph (f) shall require that an adjustment shall become
effective immediately after a record date for an event. referred to herein, the Company may
defer, until the occurrence of such event, recording the holder of any Series 2 Class B
Common Shares in respect of which the Common Share Date occurs after such record date and
before the occurrence of such event as registered holder of, or issuing to such holder any
certificate evidencing, the additional Common Shares to which such holder becomes entitled by
virtue of the Common Share Date by reason of the adjustment required by such event before
giving effect to such adjustment; provided, however, that the Company shall deliver to such
holder an appropriate instrument evidencing such holders right to be recorded as registered
holder of, and to receive a certificate evidencing, such additional Common Shares upon the
occurrence of the event requiring the adjustment and the right to receive any distributions
made on such additional Common Shares declared in favour of holders of record of Common
Shares on and after the Common Share Date or such later date as such holder would, but for
the provisions of this clause (v),
 - 10 -




---



##### 



have become the holder of record of such additional Common Shares pursuant to Paragraph
(e).
 (vi)
    
    The adjustments provided for in this Paragraph (f) are cumulative and shall, in the case of
adjustments to the Adjustment Factor, be computed to the nearest one-tenth of 1% and shall
be made successively whenever an event referred to therein shall occur, provided that,
notwithstanding any other provision of this Paragraph (f), no adjustment of the Adjustment
Factor shall be required unless such adjustment would require an increase or decrease of at
least 1% in the Adjustment Factor then in effect; provided however, that any adjustments
which by reason of this clause (vi) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.(vii)
    
    No adjustment of the Adjustment Factor shall be made pursuant to this Paragraph (f) in
respect of the issue from time to time of Common Shares pursuant to any stock option or stock
purchase plan(s) in force from time to time for officers or employees of the Company or
members of the Company who exercise an option to receive substantially equivalent dividends
in Common Shares in lieu of receiving a cash dividend paid in the ordinary course, and any
such issue shall be deemed not to be a Share Reorganization.(viii)
    
    In the event of any question arising with respect to the adjustments provided in this
Paragraph (f), such question shall be conclusively determined by a firm of chartered
accountants appointed by the Company (who may be auditors of the Company); such accountants
shall have access to all necessary records of the Company and such determination shall be
binding upon the Company, and the holders of the Series 2 Class B Common Shares.(ix)
    
    If the Company shall take a record of the holders of Common Shares for the purpose of
entitling them to receive any dividend or distribution of any subscription or purchase rights
and shall, thereafter and before the distribution to such members of any such dividend,
distribution or subscription or purchase rights, abandon its plan to pay or deliver such
dividend, distribution or subscription or purchase rights, then no adjustment in the
Adjustment Factor shall be required by reason of taking such records.(x)
    
    As a condition precedent to the taking of any action which would result in an adjustment to
the Adjustment Factor, the Company shall take any corporate action which may, in the opinion
of counsel, be necessary in order that the shares of which the holders of the Series 2 Class
B
 - 11 -




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##### 



(g)
    
    Notice to Holders: The Company shall from time to time immediately after the
occurrence of any event which requires an adjustment or re-adjustment as provided in
Paragraph (f), specify the nature of the event requiring the same and the amount of the
adjustment necessitated thereby and set forth in reasonable detail the method of calculation
and the facts upon which such calculation is based, which shall be verified by an opinion of
a firm of chartered accountants appointed by the Company (who may be the auditors of the
Company) and which shall be conclusive and binding on all parties in interest. The Company
shall, except in respect of any subdivision or consolidation of Common Shares, forthwith give
notice to the holders of the Series 2 Class B Common Shares by mail or delivery to the latest
address of the member appearing on the records of the Company, of its intention to fix a
record date for any event referred to in clause (iv) of Paragraph (e) or clause (i), (ii) or
(iii) of Paragraph (f) (other than subdivision or consolidation of the Common Shares) which
may give rise to an adjustment in the Adjustment Factor and, in each case, such notice shall
specify the particulars of such event and the record date and the effective date for such
event; provided, however, that the Company shall only be required to specify in such notice
particulars of such event as shall have been fixed and determined on the date on which such
notice is given. Such notice shall be given in each case not less than 14 days prior to such
applicable record date.(h)
    
    Voting: At any meeting of holders of Series 2 Class B Common Shares, each holder
shall be entitled to one vote for each Series 2 Class B Common Share held.(i)
    
    Amendments: The provisions of Sections (a) through (k) hereof may be repealed,
altered, modified, amended or amplified only with the sanction of the holders of the Series 2
Class B Common Shares given as hereinafter specified, in addition to any other approval
required by the Company Act.(j)
    
    Sanction by holders of Series 2 Class B Common
Shares: The sanction of holders of
the Series 2 Class B Common Shares as to any and all matters referred to herein may be given
by resolution signed by all the holders of the Series 2 Class B Common Shares then
outstanding or by resolution passed at a meeting of the holders of the Series 2 Class B
Common Shares duly called and held for such purpose at which the holders of at least a
majority of the outstanding Series 2 Class B Common Shares are present or represented by
proxy and carried by the affirmative vote of the holders of not less than 75% of the Series
2 Class B Common Shares represented and voted at such meeting cast on a poll. If at any such
meeting the holders of a majority of the outstanding Series 2 Class B
 - 12 -




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Common Shares are not present or represented by proxy within half an hour after the time
appointed for the meeting then the meeting shall be adjourned to such date being not less
than 15 days later and to such time and place as may be appointed by the chairman of the
meeting and at least 10 days notice shall be given of such adjourned meeting but it shall
not be necessary in such notice to specify the purpose for which the meeting was originally
called. At such adjourned meeting the holders of Series 2 Class B Common Shares present or
represented by proxy shall form a quorum and may transact the business for which the meeting
was originally convened and a resolution passed thereat by the affirmative vote of the
holders of not less than 75% of the Series 2 Class B Common Shares represented and voted at
such adjourned meeting cast on a poll shall constitute the sanction of the holders of Series
2 Class B Common Shares referred to in this Section (j). The formalities to be observed with
respect to the giving of notice of any such meeting or adjourned meeting and the conduct
thereof shall be those which may from time to time be prescribed in the Articles with
respect to meetings of members. On every poll taken at every such meeting or adjourned
meeting every holder of Series 2 Class B Common Shares shall be entitled to one vote in
respect of each Series 2 Class B Common Share held.(k)
    
    Liquidation, Dissolution or Winding-Up: 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 members for the purpose of winding-up its
affairs, the holders of the Series 2 Class B Common Shares will share pari passu with the
holders of the Common Shares on a share for share basis up to a maximum amount equal to
the Redemption Amount for each such Series 2 Class B Common Share held by them. Upon
payment of the amounts so payable to them, the holders of Series 2 Class B Common Shares
shall not, as such, be entitled to share in any further distribution of the property or
assets of the Company.
 - 13 -




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ADDED by Special Resolutionfiled with the Registrar of Companies the25th
day of JUNE, 1999
 SCHEDULE
B
 SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO
SERIES 3 CLASS B COMMON SHARES
 32.1
    
    The Series 3 Class B Common Shares shall have attached thereto the following special
rights and restrictions:
 Definitions:
 Income Tax Act




---



##### 



Dividends:
 Redemption:
 2




---



##### 



Procedure
on Redemption:
 3




---



##### 



Common
Shares:
 (i)
    
    Subject to clause (iii) of this Paragraph (e), each Series 3 Class B Common Share will, on
the applicable Common Share Date (as determined in accordance with clause (ii) of this
Paragraph (e)), become and be exchanged for that number of Common Shares which is the product
of (1) a fraction, the numerator of which is the Series 3 Class B Common Share Value as at
the applicable Common Share Date, and me denominator of which is the Fair Market Value of a
Common Share as at the applicable Common Share Date, and (2) the reciprocal of the Adjustment
Factor.(ii)
    
    March 28, 2004 shall be the Common Share Date subject to prior redemption thereof in
accordance with Paragraphs (c) and (d); provided however that in any of the following events,
the Common Share Date shall be the earliest of the dates specified below in respect of
Vested Shares of a holder of any Series 3 Class B Common Shares referred to below. Vested
Shares of any one holder means the following percentage of the aggregate number of Series 3
Class B Common Shares issued to such holder based on the following time that has elapsed
since the date of issue of Series 3 Class B Common Shares:
 Percentage
    

Time
Elapsed0%
    
    Less than 36 months33.33%
    
    36 months up to but not including 48
months66.67%
    
    48 months up to but not including 60
months
 A.
    
    In the event of any transfer of the undertaking or assets of the Company
as an entirety or substantially as an entirety to another corporation, or the
consolidation, amalgamation or merger of the Company with or into any
other corporation which is not a Subsidiary or an affiliate of the
Company within the meaning of the Act, or the occurrence of a Change
of Control (as hereinafter defined), the thirtieth day after the effective
date of such event shall be the Common Share Date with respect to all
Vested Shares outstanding on such later day;B.
    
    In the event of the death of a holder of any Series 3 Class B Common
Share, the date of such event shall be the Common Share Date with
respect to all Vested Shares beneficially owned by such holder on that
date;C.
    
    In the event of the termination of all employment and offices of a holder
of any Series 3 Class B Common Share with the Company by reason of
such holder having reached the age when retirement is compulsory under
the regulations of the Company or in the event of such holder otherwise
 4




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##### 



retiring with the consent of the Company, the date of such event shall
be the Common Share Date with respect to all Vested Shares beneficially owned by
such holder on that date;D.
    
    In the event of the termination of all employment and offices of a holder
of any Series 3 Class B Common Share with the Company other than as
described in clause B. or C. above, whether for any cause or for no
cause and whether at the instance of the Company, such holder or
otherwise, the Business Day after the date of such event shall be the
Common Share Date with respect to all Vested Shares beneficially owned
by such holder on that date; andE.
    
    In the event that an order is made, an effective resolution is passed or a
proceeding or act is taken that will result in the liquidation, dissolution or
winding-up of the Company, the date of such order, resolution,
proceeding or act shall be the Common Share Date with respect to all
Vested Shares beneficially owned by such holder on that date.
  (1)
    
    the acquisition and exercise, or either of them, of de
facto control (for the purpose of this clause, as defined by subsection
256(5.1) of the Income Tax Act (Canada)) or the acquisition of
the power to exercise de facto control over the Company by
any person, firm or corporation or group which does not, as at
the date on which the Series 3 Class B Common Shares are
issued, exercise or have power to exercise de facto control over
the Company; or(2)
    
    any transaction or event or series of transactions or
events or a
combination thereof as a result of which the Company, or any
subsidiary of the Company which represents all or substantially
all of the property of the Company, shall, or may (including the
exercise of any option or rights) become obligated at any time
to, sell, lease, exchange or otherwise dispose of all or
substantially all of its property.
  (iii)
    
    Nothing contained herein shall result in any fractional Common Shares being outstanding.
The number of whole Common Shares of which a holder of Series 3 Class B Common Shares
becomes the holder on any Common Share Date shall be computed on the basis of the number of
all Series 3 Class B Common Shares held by such holder which become Common Shares on that
date. If any fraction of a Common Share would, except for the provisions of
 5




---



##### 



6




---



##### 



Adjustment
Factor:
   7




---



##### 



mutatis mutandis,
  8




---



##### 



9




---



##### 



Notice
to Holders:
 Voting:
 Amendments:
 Sanction
by holders of Series 3 Class B Common Shares:
 10




---



##### 



Liquidation,
Dissolution or Winding-Up:
 11




---



##### 



PART 33
 SPECIAL RIGHTS AND RESTRICTIONS  ATTACHED TO SERIES 3 PREFERRED SHARES
 33.
    
    The following special rights and restrictions shall be attached to the Series 3 Preferred
Shares of the Company.33.1
    
    Non-Voting  The holders of the Series 3 Preferred Shares shall not, as such, have
any voting rights for the election of directors or for any other purpose and shall not be
entitled to receive notice of, or to attend any meetings of the members of the Company, except
meetings at which only holders of the Series 3 Preferred Shares are entitled to vote or
otherwise as required at law.33.2
    
    Capital Distribution  In the event of the liquidation, dissolution or winding-up of
the Company or other distribution of assets of the Company among its members for the purpose
of winding-up its affairs (whether voluntary or involuntary) or upon a reduction of capital
(any of which events are referred to as a Capital Distribution), the holders of the Series 3
Preferred Shares shall, before any amount is paid or any property or assets of the Company is
distributed to the holders of any class of the Common Shares of the Company or other shares of
the Company ranking junior to the Series 3 Preferred Shares, be entitled to receive equally on
a per share basis, in respect of each Series 3 Preferred Share held, the Series 3 Redemption
Price (defined below) together with any declared but unpaid dividends or any unpaid cumulative
dividends to which the holder may be entitled. On payment of the amount so payable to them,
the holders of the Series 3 Preferred Shares shall not be entitled to share in any further
distribution of the property or assets of the Company.33.3
    
    Dividends  The holders of the Series 3 Preferred Shares shall be entitled to
receive, out of monies of the Company properly applicable to the payment of dividends, such
non-cumulative dividends as may be declared by the directors of the Company from time to time
in respect of the Series 3 Preferred Shares. The directors of the Company shall be at liberty
to declare dividends on the Series 3 Preferred Shares to the exclusion of any one or more
classes of the Common Shares or other shares of the Company ranking junior to the Series 3
Preferred Shares and no holder of Series 3 Preferred Shares shall be entitled to receive
dividends on parity with, or in priority to the holders of any other class or classes of shares entitled to receive dividends.33.4
    
    Redemption Price  Subject to paragraphs 33.11 and 33.12, the Series 3 Redemption
Price in respect of each Series 3 Preferred Share, shall be:
 (a)
    
    if it was issued for cash, the amount paid-up on the Series 3 Preferred Share;
or(b)
    
    if it was issued in exchange for property acquired by the Company or in
exchange for the surrender of any other shares of the Company (the Property), either:
 (i)
    
    the amount designated by the directors of the Company as the
value of the Property for the purposes of the exchange less an amount equal to
the aggregate of any cash paid, promissory note issued and indebtedness assumed
by the Company in partial payment for the Property (the Deducted Amount) all
divided by the number of Series 3 Preferred Shares issued in exchange for the
Property (the Subject Series 3 Preferred Shares); or(ii)
    
    the amount otherwise designated by the directors of the
Company.




---



##### 



33.5
    
    Redeemable at Companys Option  The Company may at any time, upon giving notice as
provided, redeem the whole or from time to time any part of the Series 3 Preferred Shares then
outstanding by payment of the Series 3 Redemption Price for each share to be redeemed together
with any declared but unpaid dividends thereon (the Series 3 Redemption Price together with
any applicable dividends in respect of each share to be redeemed is referred to as the Series
3 Redemption Price). It shall not be necessary for any redemption by the Company of any of
the Series 3 Preferred Shares to be made on a pro ratabasis and, accordingly, the number and
class of the Series 3 Preferred Shares to be redeemed may be selected by the directors in
their absolute discretion.33.6
    
    Redemption Procedure by Company  If, pursuant to paragraph 33.5, the Company desires
to redeem all or a portion of the Series 3 Preferred Shares outstanding:
 (a)
    
    Notice  The Company shall, at least 10 days before the date specified
for redemption, mail to each person who at the date of mailing is a registered holder
of the Series 3 Preferred Shares to be redeemed (the Redeemable Shares), a notice in
writing of the intention of the Company to redeem the Redeemable Shares. The notice
shall be mailed in a prepaid envelope addressed to each such member at the members
address as it appears on the register of members of the Company or, if the register of
members does not have an address for the member, then to the last known address of the
member, provided that the accidental failure to give any notice to one or more members
shall not affect the validity of the redemption. The notice shall set out the Series 3
Redemption Price for the Redeemable Shares to be redeemed, the date on which the
redemption is to take place and, if only part of the Series 3 Preferred Shares held by
a member is to be redeemed, the number of those Series 3 Preferred Shares to be
redeemed.(b)
    
    Payment  On the date specified for redemption, the Company shall pay
or cause to be paid to or to the order of the registered holders of the Redeemable
Shares to be redeemed the Series 3 Redemption Price for each Redeemable Share to be
redeemed on presentation and surrender, at the registered office of the Company or at
any other place designated in the notice, of the certificate or certificates for the
Redeemable Shares called for redemption, upon which the Redeemable Shares shall be
deemed to be redeemed and shall be cancelled. If a part only of the Series 3 Preferred
Shares represented by any certificate is redeemed, a new certificate for the balance
shall be issued at the expense of the Company.(c)
    
    Rights  From and after the date specified in the notice, the holders
of the Redeemable Shares called for redemption shall not be entitled to exercise any of
the rights of members in respect of the Redeemable Shares unless payment of the Series
3 Redemption Price for each Redeemable Share to be redeemed is not made upon
presentation of the share certificates in accordance with the foregoing provisions, in
which case the rights of the holders of the Redeemable Shares shall remain unaffected
until payment of the Series 3 Redemption Price for each Redeemable Share to be redeemed
is made.
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(d)
    
    Failure to Present  If any holders of any Redeemable Shares called for
redemption fail to present, on the date specified for redemption, the certificate or
certificates representing the Redeemable Shares called for redemption, the Company
shall have the right to deposit the Series 3 Redemption Price for each Redeemable Share
to be redeemed to a special account in any bank listed in Schedule I of the Bank
Act (Canada) (as may be amended or changed from time to time) or trust company in
Canada, to be paid without interest to or to the order of the respective holders of the
Redeemable Shares called for redemption upon presentation and surrender to the bank or
trust company of the certificate or certificates representing the Redeemable Shares
called for redemption. Upon that deposit being made, the Redeemable Shares in respect
of which the deposit was made shall be deemed to be redeemed, shall be cancelled and
the rights of the holders of those Redeemable Shares after the deposit shall be limited
to receiving without interest their proportionate part of the aggregate of the Series 3
Redemption Price deposited less any charges of the bank or trust company against
presentation and surrender of the certificate or certificates representing the
Redeemable Shares called for redemption held by them respectively.(e)
    
    Waiver  Notwithstanding the foregoing, the holders of the Redeemable
Shares may waive notice of any redemption by instrument or instruments in writing.
 33.7
    
    Redeemable at Holders Option  Any holder of the Series 3 Preferred Shares may, by
giving notice as hereinafter provided, require the Company to redeem at any time the whole or
from time to time any part of the Series 3 Preferred Shares held by that holder upon payment
of the Series 3 Redemption Price for each share to be redeemed together with any declared but
unpaid dividends thereon (the Series 3 Redemption Price together with any applicable dividends
in respect of each share to be redeemed is referred to as the Retraction Price).33.8
    
    Redemption Procedure by Holder  If, pursuant to paragraph 33.7, any holder of the
Series 3 Preferred Shares desires the Company to redeem all or any part of the Series 3
Preferred Shares registered in the name of that holder:
 (a)
    
    Notice  That holder shall, at least 10 days before the date specified
for redemption, give written notice thereof to the Company at its registered office.
The notice shall set out the date on which the redemption is to take place and, if only
part of the Series 3 Preferred Shares held by that holder is to be redeemed, the number
thereof to be redeemed (the Retractable Shares).(b)
    
    Payment  On the date specified for redemption, the Company shall pay
or cause to be paid to or to the order of that holder the Retraction Price for each
Retractable Share to be redeemed on presentation and surrender at the registered office
of the Company of the certificate or certificates for the Retractable Shares called for
redemption. The Retractable Shares shall thereupon be deemed to be redeemed and shall
be cancelled. If a part only of the Series 3 Preferred Shares represented by a
certificate is redeemed, a new certificate for the balance shall be issued at the
expense of the Company.
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(c)
    
    Failure to Present  If any holder of Retractable Shares called for
redemption fails to present, on the date specified for redemption, the certificate or
certificates for the Retractable Shares to be redeemed, the Company shall have the
right to deposit the Retraction Price for each Retractable Share to be redeemed to a
special account in any bank listed in Schedule I of the Bank Act (Canada) (as
may be amended or changed from time to time) or trust company in Canada, to be paid
without interest to or to the order of that holder upon presentation and surrender to
the bank or trust Company of the certificate or certificates representing the
Retractable Shares called for redemption. Upon that deposit being made, the
Retractable Shares in respect of which the deposit was made, shall be deemed to be
redeemed, shall be cancelled and the rights of the holder after the deposit shall be
limited to receiving without interest the holders proportionate share of the aggregate
of the Retraction Price deposited less any charges of the bank or trust Company against
presentation and surrender of the certificate or certificates for the Retractable
Shares called for redemption.(d)
    
    Waiver  Notwithstanding the foregoing, the Company may waive notice of
any redemption by instrument or instruments in writing.
 33.9
    
    Failure to Redeem  Subject to paragraph 33.10, if the Company fails to redeem the
Retractable Shares on the date specified for redemption, the holder of the Retractable Shares
called for redemption, in addition to any other rights the holder may have against the Company
at law or in equity for failing to redeem the Retractable Shares called for redemption, shall
be entitled to receive for each Series 3 Preferred Share which was not redeemed, out of any or
all profits or surplus available for dividends, in preference or priority to any payment of
non-cumulative dividends on the Series 3 Preferred Shares or any class of the Common shares of
the Company, cumulative dividends at the rate of 2% per quarter on the Series 3 Redemption
Price of each Series 3 Preferred Share that was not redeemed. The cumulative dividends herein
provided for shall accrue from the date specified for redemption until payment of the
Retraction Price for each Retractable Share to be redeemed has been made.33.10
    
    Restriction on Redemption Rights  Nothing herein shall be deemed to permit or
oblige the Company to redeem or repurchase any of the Series 3 Preferred Shares of the Company
if the redemption or repurchase would contravene any applicable statute, regulation or rule of
law or equity.33.11
    
    Price Adjustment  If any federal or provincial taxing authority assesses or
reassesses the Company or a holder or former holder of the Subject Series 3 Preferred Shares
on the basis of a determination that the aggregate fair market value of the Property less the
Deducted Amount is an amount other than the aggregate of the Series 3 Redemption Price of the
Subject Series 3 Preferred Shares as determined and designated by the directors of the Company
(the Subject Redemption Price), and the assessment or reassessment is not disputed by the
Company or holder or former holder or, if the assessment or reassessment is disputed, a final
settlement is reached with the applicable taxing authority or a court of competent
jurisdiction makes a final determination that the value of the Property less the Deducted
Amount at the effective time of the exchange is an amount other than the aggregate of the
Subject Redemption Price of the Subject Series 3 Preferred Shares (any one of which events is
herein called the Final Determination), then the aggregate fair market value of the Property
as determined by the Final Determination (the New Value) less the Deducted Amount, divided
by the number of the Subject Series 3 Preferred Shares issued in exchange therefor shall be
the New Redemption Price and the following shall apply:
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(a)
    
    No Redemption  If none of the Subject Series 3 Preferred Shares have
been redeemed, the Subject Redemption Price of each of the Subject Series 3 Preferred
Shares shall be increased or decreased nunc pro tunc, as the case may be, to the New
Redemption Price provided that if the New Redemption Price is zero or a negative
number, the Subject Redemption Price for each of the Subject Series 3 Preferred Shares
shall be nil and, if the New Redemption Price is a negative number, the holder or
holders of the Subject Series 3 Preferred Shares shall pay, in respect of each Subject
Series 3 Preferred Share held, in cash and on demand, to the Company an amount equal to
the amount required to bring the New Redemption Price to zero.(b)
    
    All or Partial Redemption  If at the time of the Final Determination
all or some of the Subject Series 3 Preferred Shares have been redeemed prior to the
Final Determination, the following adjustments shall be made:
 (i)
    
    if the New Redemption Price is zero or a negative number, the
Subject Redemption Price for each of the remaining Subject Series 3 Preferred
Shares, if any, shall be nil and, if the New Redemption Price is a negative
number, the holder or holders of the remaining Subject Series 3 Preferred
Shares shall pay in respect of each Subject Series 3 Preferred Share held, in
cash and on demand, to the Company an amount equal to the amount required to
bring the New Redemption Price to zero. The holder or holders of the Subject
Series 3 Preferred Shares previously redeemed shall pay in respect of each
Subject Series 3 Preferred Share previously redeemed, in cash and on demand, to
the Company an amount equal to the sum of (i) the Subject Redemption Price
previously paid by the Company for the redemption of that Subject Series 3
Preferred Share, and (ii) the amount required to bring the New Redemption Price
to zero if the New Redemption Price is a negative number; or(ii)
    
    if the New Redemption Price is a positive number, the Subject
Redemption Price for each of the remaining Subject Series 3 Preferred Shares,
if any, shall be increased or decreased, as the case may be, nunc pro tunc, to
the New Redemption Price. If the New Redemption Price is less than the Subject
Redemption Price, the holder or holders of the Subject Series 3 Preferred
Shares previously redeemed shall pay, in respect of each Subject Series 3
Preferred Share previously redeemed, in cash and on demand, to the Company an
amount equal to the amount by which the Subject Redemption Price previously
paid for the redemption of that Subject Series 3 Preferred Share exceeds the
New Redemption Price. If the New Redemption Price is greater than the Subject
Redemption Price, the Company shall pay, in respect of each Subject Series 3
Preferred Share previously redeemed, in cash and on demand, to the holder or
holders of the previously redeemed Subject Series 3 Preferred Shares, an amount
equal to the amount by which the New Redemption Price exceeds the Subject
Redemption Price previously paid for the redemption of that Subject Series 3
Preferred Share.
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(c)
    
    Independent Adjustments  In the event that there is more than one
holder of the Subject Series 3 Preferred Shares and the Subject Series 3 Preferred
Shares have been redeemed other than on a pro rata basis, then the adjustments
contemplated in this paragraph 33.11 shall be made on an independent basis as if the
Subject Series 3 Preferred Shares held by each holder were all of the Subject Series 3
Preferred Shares and that the Company had received, in exchange for the Subject Series
3 Preferred Shares held by each holder, respectively, only that portion of the Property
which is equal to the proportion that the number of Subject Series 3 Preferred Shares
held by each holder bears to the total number of Subject Series 3 Preferred Shares.
 33.12
    
    Adjustment of Contributed Surplus  If a Final Determination is made, the amount of
the contributed surplus, in the aggregate, recorded on the books of the Company at the time of
the issuance of the Subject Series 3 Preferred Shares in consideration of the Property shall
be increased or decreased, as the case may be, so that the aggregate amount of the contributed
surplus, after adjustment, is increased or decreased by the positive or negative difference,
respectively, as the case may be, between (i) the New Value less the Deducted Amount and (ii)
the Subject Redemption Price of the Subject Series 3 Preferred Shares multiplied by the number
of Subject Series 3 Preferred Shares originally issued. The directors of the Company shall be
authorized to make all adjustments, retroactively to the date of issue of the Subject Series 3
Preferred Shares, as may be necessary to give effect to this paragraph 33.12.33.13
    
    Acknowledgement by Holder  Before redeeming any Subject Series 3 Preferred Shares
the directors of the Company shall be entitled to receive from each holder of those Subject
Series 3 Preferred Shares to be redeemed a document containing an acknowledgement of the terms
of paragraphs 33.11 and 33.12 and a commitment under seal that the holder will be bound by
those terms, which commitment shall be binding on the holder and the holders heirs,
executors, administrators, representatives, successors and assigns.
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