Document:

EXHIBIT 4.1

[Canadian Flag] Industry Canada                  Industrie Canada

CERTIFICATE                                      CERTIFICAT
OF AMALGAMATION                                  DE FUSION

CANADA BUSINESS                                  LOI CANADIENNE SUR
CORPORATIONS ACT                                 LES SOCIETES PAR ACTIONS
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CAE INC.                                              387674-8
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Name of corporation - Denomination      Corporation number - Numero de la de la
         de la societe                                 societe

I hereby certify that the above-named   Je certifie que la societe
corporation resulted from an            susmentionnee est issue d'une fusion,
amalgamation, under section 185 of the  en vertu de l'article 185 de la LOI
CANADA BUSINESS CORPORATIONS ACT, of    CANADIENNE SUR LES SOCIETES PAR
the corporations set out in the         ACTIONS, des societes dont les
attached articles of amalgamation.      denominations apparaissent dans les
                                        statuts de fusion ci-joints.

By: /s/ Director of Industry Canada     APRIL 1, 2001 / LE 1 AVRIL 2001

                                        Date of Amalgamation - Date de fusion

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[Canada logo]

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                        CANADA BUSINESS CORPORATIONS ACT

                                     FORM 9
                            ARTICLES OF AMALGAMATION
                                 (SECTION 185)

1.   Name of amalgamated corporation:

     CAE Inc.

2.   The place in Canada where the registered office is to be situated:

     City of Toronto.

3.   The classes and any maximum number of shares that the Corporation is
     authorized to issue:

     An unlimited number of common shares ("Common Shares") and an unlimited
     number of preferred shares, issuable in series ("Preferred Shares").

     3.1   The Preferred Shares shall have attached thereto, as a class, the
     following rights, privileges, restrictions and conditions:

     3.1.1   DIRECTORS TO ISSUE IN ONE OR MORE SERIES:

          The Preferred Shares may at any time or from time to time be issued in
     one or more series, each series to consist of such number of shares as may,
     before the issue thereof, be determined by resolution of the board of
     directors of the Corporation and confirmed and declared by certificate and
     articles of amendment.

     3.1.2   DIRECTORS TO FIX TERMS OF EACH SERIES:

          The directors of the Corporation shall have the right, by resolution,
     but subject to the provisions of the laws governing the Corporation, as now
     existing or hereafter amended (such laws being herein referred to as the
     "Act") and subject to the provisions herein contained and to any conditions
     in that regard attaching to any outstanding series of Preferred Shares,
     from time to time before issue, to fix the number of shares in, the
     designation of, and to determine the respective rights, privileges,
     restrictions and conditions attaching to each series of Preferred Shares,
     including, but without in any way limiting or restricting the generality of
     the foregoing:

     (a)  provisions, if any, with respect to the rights of the holders of the
          shares of the series to receive notice of or to attend any meeting of
          the shareholders of the Corporation or to vote at any such meeting;

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     (b)  the rate or amount of preferential dividends and whether or not they
          are cumulative or non-cumulative, the currency or currencies of
          payment, the date or dates from or on which such preferential
          dividends shall accrue or be payable;

     (c)  the rights of the Corporation, if any, to purchase or redeem the
          Preferred Shares of the series and the consideration therefor, premium
          (if any) and the terms and conditions of any such purchase or
          redemption;

     (d)  the conversion rights, if any;

     (e)  the terms and conditions, if any, under which a series of the
          Preferred Shares shall or may be purchased by the Corporation; and

     (f)  the restrictions, if any, respecting payment or dividends on Common
          Shares or on any other shares ranking junior to the Preferred Shares;

     the whole to be subject to the issue of a certificate and articles of
     amendment setting forth the designation of and the rights, privileges,
     restrictions and conditions attaching to such series of Preferred Shares.

     3.1.3   PRIORITY OF DIVIDENDS:

          The Preferred Shares of each series shall, with respect to the payment
     of dividends, be entitled to preference over the Common Shares and over any
     other shares of the Corporation ranking junior to the Preferred Shares.

     3.1.4   PRIORITY OF DISTRIBUTION:

          In the event of the liquidation, dissolution or winding-up of the
     Corporation or other distribution of the assets of the Corporation among
     shareholders for the purpose of winding-up its affairs, the holders of the
     Preferred Shares shall, before any amount shall be paid to or any property
     or assets of the Corporation distributed among the holders of the Common
     Shares or any other shares of the Corporation ranking junior to the
     Preferred Shares, be entitled to receive to the extent provided for with
     respect to each series:

     (a)  an amount equal to the price at which such shares were issued;

     (b)  such premium, if any, as has been provided for with respect to such
          series;

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     (c)  in the case of any series of Preferred Shares entitled to cumulative
          dividends, all unpaid cumulative dividends (which for such purpose
          shall be calculated as if such cumulative dividends were accruing from
          day to day for the period from the expiration of the last period for
          which cumulative dividends have been paid up to and including the date
          of distribution); and

     (d)  in the case of any series of Preferred Shares entitled to
          non-cumulative dividends, all declared but unpaid dividends.

     After payment to the holders of Preferred Shares of the amounts so payable
     to them, they shall not be entitled to share in any further distribution of
     the property or assets of the Corporation.

     3.1.5   PARITY OF SERIES:

          The Preferred Shares of all series shall participate rateably in
     respect of the payment of accumulated dividends and the distribution of
     assets in the event of the liquidation, dissolution or winding-up of the
     Corporation, whether voluntary or involuntary; provided, however, that if
     such assets are not sufficient to pay in full the amount due on all the
     Preferred Shares, then such assets shall be distributed rateably as
     follows:

     (a)  firstly to the payment of an amount equal to the price at which the
          Preferred Shares of each series were issued and the premium if any
          payable thereon; and

     (b)  secondly if assets remain after the payment of all amounts to be paid
          pursuant to paragraph 3.1.5(a) above, to the payment of accrued and
          unpaid cumulative dividends and declared but unpaid non-cumulative
          dividends owing on the Preferred Shares.

     3.1.6   LIMITATION ON VOTING RIGHTS:

          Except as otherwise provided in the provisions attached to any
     Preferred Shares as a series, the holders of Preferred Shares shall not be
     entitled to receive any notice of or attend at any meeting of shareholders
     of the Corporation and shall not be entitled to vote at any such meeting.
     Holders of Preferred Shares shall not be entitled to vote separately as a
     class, nor shall the holders of any series of Preferred Share be entitled
     to vote separately as a series, in the case of an amendment to the articles
     of the Corporation referred to in paragraphs (a), (b) or (e) of subsection
     (1) of Section 176 of the Act as now existing.
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     3.1.7 APPROVAL:

          Any approval to be given by the holders of Preferred Shares separately
     as a class or by the holders of a series thereof separately as a class, as
     the case may be, shall be deemed to have been sufficiently given if it
     shall have been given in writing by the holders of at least two-thirds
     (2/3) of the outstanding Preferred Shares or the outstanding shares of such
     series, as the case may be, or by a resolution passed at a meeting of
     holders of Preferred Shares or such series, as the case may be, duly called
     and held, by the affirmative vote of not less than two-thirds (2/3) of the
     votes cast at such meeting. The formalities to be observed with respect to
     the giving of notice of any meeting of the holders of the Preferred Shares
     or any series thereof, the conduct of such meeting and the quorum therefor
     shall be those prescribed in the by-laws of the Corporation with respect to
     the Preferred Shares or, in the absence thereof, the formalities prescribed
     in the by-laws of the Corporation for meetings of the holders of voting
     shares shall apply mutatis mutandis.

     3.2   The Common Shares shall entitle the holders thereof to one vote per
     Common Share at all meetings of shareholders, except meetings at which only
     holders of another specified class or series of shares are entitled to
     vote, and shall, subject to the rights, privileges, restrictions and
     conditions attaching to the Preferred Shares, whether as a class or series,
     and to any other class or series of shares of the Corporation which ranks
     prior to the Common Shares, entitle the holders thereof to receive any
     dividend declared by the Corporation and the remaining property of the
     Corporation upon dissolution.

4.   Restrictions if any on share transfers:

     None.

5.   Number (or minimum and maximum number) of directors:

     A minimum of three (3) and a maximum of twenty-one (21).

6.   Restrictions if any on business the Corporation may carry on:

     None.

7.   Other provisions, if any:

     (a)  The directors of the Corporation may, without authorization of the
          shareholders:

          (i)  borrow money upon the credit of the Corporation;

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          (ii) issue, re-issue, sell or pledge any bonds, debentures, debenture
               stock or other debt obligations of the Corporation; and

          (iii) mortgage, hypothecate, pledge or otherwise create a security
               interest in all or any real or personal, movable or immovable
               property of the Corporation, owned or subsequently acquired,
               present or future, to secure any debt of the Corporation.

          The directors may, by resolution or by-law, provide for the delegation
          of such powers by the directors to such officers or directors of the
          Corporation to such extent and in such manner as may be set out in the
          resolution or by-law, as the case may be.

     (b)  Subject to the provisions of the Act, the Corporation may purchase or
          otherwise acquire any shares issued by it.

     (c)  In addition to any other right of the directors under the Act, the
          directors may, pursuant to section 106(8) of the Act, appoint one or
          more directors, who shall hold office for a term expiring not later
          than the close of the next annual meeting of shareholders, but the
          total number of directors so appointed may not exceed one third of the
          number of directors elected at the previous annual meeting of
          shareholders.

8.   The amalgamation has been approved pursuant to that section or subsection
     of the Act which is indicated as follows:

                                        / / 183
                                        /X/ 184(1)
                                        / / 184(2)

9.   Name the amalgamating corporations:

     CAE Inc.
     Corporation No.: 0104001

                                                   /s/ Paul G. Renaud
                                       ----------------------------------------
     Date: March 27, 2001              Title: Executive V.P. C.F.O. & Secretary

     CAE Electronics Ltd./CAE Electronique Ltee
     Corporation No.: 364502-9

                                                   /s/ Paul G. Renaud
                                       ----------------------------------------
     Date: March 27, 2001              Title: Executive V.P. C.F.O. & SecretaryEXHIBIT 4.2
                                 BY-LAW NO. 73

                       A by-law relating generally to the
                       transaction of the business and
                       affairs of CAE INDUSTRIES LTD.

                                    CONTENTS

                       One      -  Interpretation
                       Two      -  Business of the Corporation
                       Three    -  Borrowing and Securities
                       Four     -  Directors
                       Five     -  Committees
                       Six      -  Officers
                       Seven    -  Protection of Directors, Officers and Others
                       Eight    -  Shares
                       Nine     -  Dividends and Rights
                       Ten      -  Meetings of Shareholders
                       Eleven   -  Divisions and Departments
                       Twelve   -  Notices
                       Thirteen -  Effective Date and Repeal

                       BE IT ENACTED as a by-law of the Corporation
                 as follows:

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                                  SECTION ONE

                                 INTERPRETATION

     1.01 DEFINITIONS - In the by-laws of the Corporation, unless the context
otherwise requires:

          "Act" means the Canada Business Corporations Act, and any statute that
          may be substituted therefor, as from time to time amended;

          "appoint" includes "elect" and vice versa;

          "articles" means the articles attached to the certificate of
          continuance dated August 3, 1977, of the Corporation as from time to
          time amended or restated;

          "board" means the board of directors of the Corporation;

          "by-laws" means this by-law and all other by-laws of the Corporation
          from time to time in force and effect;

          "Corporation" means the corporation continued under the Act and named
          CAE INDUSTRIES LTD.;

          "meeting of shareholders" means an annual meeting of shareholders and
          a special meeting of shareholders;

          "special meeting of shareholders" means a special meeting of all
          shareholders entitled to vote at an annual meeting of shareholders;

          "non-business day" means Saturday, Sunday and any other day that is a
          holiday as defined in the Interpretation Act (Canada);

          "recorded address" means in the case of a shareholder his address as
          recorded in the securities register; and in the case of joint
          shareholders the address appearing in the securities register in
          respect of such joint holding or the first address so appearing if
          there are more than one; and in the case of a director, officer,
          auditor or member of a committee of the board, his latest address as
          recorded in the records of the Corporation;

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          "signing officer" means, in relation to any instrument, any person
          authorized to sign the same on behalf of the Corporation by section
          2.04 or by a resolution passed pursuant thereto;

          "unanimous shareholder agreement" means a written agreement among all
          shareholders of the Corporation, or among all such shareholders and a
          person who is not a shareholder, that restricts, in whole or in part,
          the powers of the directors to manage the business and affairs of the
          Corporation, as from time to time amended;

          save as aforesaid, words and expressions defined in the Act have the
          same meanings when used herein; and

          words importing the singular number include the plural and vice versa;
          words importing gender include the masculine, feminine and neuter
          genders; and words importing persons include individuals, bodies
          corporate, partnerships, trusts and unincorporated organizations.

                                  SECTION TWO

                          BUSINESS OF THE CORPORATION

     2.01 REGISTERED OFFICE - Until changed in accordance with the Act, the
registered office of the Corporation shall be in the Montreal Urban Community,
in the Province of Quebec, and at such location therein as the board may from
time to time determine.

     2.02 CORPORATE SEAL - Until changed by the board, the corporate seal of the
Corporation shall be in the form impressed hereon.

     2.03 FINANCIAL YEAR - Until changed by the board, the financial year of the
Corporation shall end on the last day of March in each year.

     2.04 EXECUTION OF INSTRUMENTS - Deeds, transfers, assignments, contracts,
obligations, certificates and other instruments may be signed on behalf of the
Corporation by two persons, one of whom holds the office of chairman of the
board, president, vice-president or director and the other

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of whom holds one of the said offices or the office of secretary, treasurer,
comptroller, assistant secretary or assistant treasurer or any other office
created by by-law or by resolution of the board. In addition, the board may from
time to time direct the manner in which the person or persons by whom any
particular instrument or class of instruments may or shall be signed. Any
signing officer may affix the corporate seal to any instrument requiring the
same.

     2.05 BANKING ARRANGEMENTS - The banking business of the Corporation
including, without limitation, the borrowing of money and the giving of security
therefor, shall be transacted with such banks, trust companies or other bodies
corporate or organizations as may from time to time be designated by or under
the authority of the board. Such banking business or any part thereof shall be
transacted under such agreements, instructions and delegations of powers as the
board may from time to time prescribe or authorize.

     2.06 VOTING RIGHTS IN OTHER BODIES CORPORATE - The signing officers of the
Corporation may execute and deliver proxies and arrange for the issuance of
voting certificates or other evidence of the right to exercise the voting rights
attaching to any securities held by the Corporation. Such instruments,
certificates or other evidence shall be in favour of such person or persons as
may be determined by the officers executing such proxies or arranging for the
issuance of voting certificates or such other evidence of the right to exercise
such voting rights. In addition, the board may from time to time direct the
manner in which and the person or persons by whom any particular voting rights
or class of voting rights may or shall be exercised.

     2.07 WITHHOLDING INFORMATION FROM SHAREHOLDERS - Subject to the provisions
of the Act, no shareholder shall be entitled to discovery of any information
respecting any details or conduct of the Corporation's business which, in the
opinion of the board, it would be inexpedient in the interests of the
shareholders or the Corporation to communicate to the public. The board may from
time to time determine whether and to what extent and at what time and place and
under what conditions or regulations the accounts, records and documents of the
Corporation or any of them shall be open to the inspection of shareholders and
no shareholder shall have any right of inspecting any account, record or
document of the Corporation except as conferred by the Act or authorized by the
board or by resolution passed at a general meeting of shareholders.

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                                 SECTION THREE

                            BORROWING AND SECURITIES

     3.01 BORROWING POWER - Without limiting the borrowing powers of the
Corporation as set forth in the Act, the board may from time to time:

     (a)  borrow money upon the credit of the Corporation;

     (b)  issue, reissue, sell or pledge bonds, debentures, notes or other
          evidence of indebtedness or guarantee of the Corporation, whether
          secured or unsecured; and

     (c)  mortgage, hypothecate, pledge or otherwise create an interest in or
          charge upon all or any property (including the undertaking and rights)
          of the Corporation, owned or subsequently acquired, by way of
          mortgage, hypothec, pledge or otherwise, to secure payment of any such
          evidence of indebtedness or guarantee of the Corporation.

Nothing in this section limits or restricts the borrowing of money by the
Corporation on bills of exchange or promissory notes made, drawn, accepted or
endorsed by or on behalf of the Corporation.

     3.02 DELEGATION - The board may from time to time delegate to such one or
more of the directors and officers of the Corporation as may be designated by
the board all or any of the powers conferred on the board by section 3.01 or by
the Act to such extent and in such manner as the board shall determine at the
time of each such delegation.

                                  SECTION FOUR

                                   DIRECTORS

     4.01 NUMBER OF DIRECTORS AND QUORUM - The Board shall consist of 12
directors until the directors adopt a resolution calling for a different number
of directors within the minimum and maximum specified in the articles. Subject
to section 4.08, the quorum for the transaction of business at any meeting of
the board shall consist of a majority of the minimum number of directors
specified in the articles or such greater number of directors as the board may
from time to time determine.

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     4.02 QUALIFICATION - No person shall be qualified for election as a
director if he is less than 18 years of age; if he is of unsound mind and has
been so found by a court in Canada or elsewhere; if he is not an individual; or
if he has the status of a bankrupt. A director need not be a shareholder. A
majority of the directors shall be resident Canadians.

     4.03 ELECTION AND TERM - The election of directors shall take place at the
first meeting of shareholders and at each annual meeting of shareholders and all
the directors then in office shall retire but, if qualified, shall be eligible
for re-election. The number of directors to be elected at any such meeting shall
be the number of directors then in office unless the directors otherwise
determine. The election shall be by resolution. If an election of directors is
not held at the proper time, the incumbent directors shall continue in office
until their successors are elected.

     4.04 REMOVAL OF DIRECTORS - Subject to the provisions of the Act, the
shareholders may by resolution passed at a special meeting remove any director
from office and the vacancy created by such removal may he filled at the same
meeting failing which it may be filled by the directors.

     4.05 VACATION OF OFFICE - A director ceases to hold office when he dies; he
is removed from office by the shareholders; he ceases to be qualified for
election as a director; or his written resignation is sent or delivered to the
Corporation, or if a time is specified in such resignation, at the time so
specified, whichever is later.

     4.06 VACANCIES - Subject to the Act, a quorum of the board may fill a
vacancy in the board, except a vacancy resulting from an increase in the minimum
number of directors or from a failure of the shareholders to elect the minimum
number of directors required by the articles. In the absence of a quorum of the
board, or if the vacancy has arisen from a failure of the shareholders to elect
the minimum number of directors, the directors then in office shall forthwith
call a special meeting of the shareholders to fill the vacancy. If such
directors fail to call such meeting or if there are no directors then in office,
any shareholder may call the meeting.

     4.07 ACTION BY THE BOARD - Subject to any unanimous shareholder agreement,
the board shall manage the business and affairs of the Corporation. Subject to
sections 4.08 and 4.09, the powers of the board may be exercised by resolution
passed at a meeting at which a quorum is present or by

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resolution in writing signed by all the directors entitled to vote on that
resolution at a meeting of the board. Where there is a vacancy in the board, the
remaining directors may exercise all the powers of the board so long as a quorum
remains in office. Where the Corporation has only one director, that director
may constitute the meeting.

     4.08 CANADIAN MAJORITY - The board shall not transact business at a
meeting, other than filling a vacancy in the board, unless a majority of the
directors present are resident Canadians, except where:

     (a)  a resident Canadian director who is unable to be present approves in
          writing or by telephone or other communications facilities the
          business transacted at the meeting; and

     (b)  a majority of resident Canadians would have been present had that
          director been present at the meeting.

     4.09 MEETINGS BY TELEPHONE - If all the directors consent, a director may
participate in a meeting of the board or of a committee of the board by means of
such telephone or other communications facilities as permit all persons
participating in the meeting to hear each other, and a director participating in
such a meeting by such means is deemed to be present at the meeting. Any such
consent shall be effective whether given before or after the meeting to which it
relates and may be given with respect to all meetings of the board and of
committees of the board held while a director holds office.

     4.10 PLACE OF MEETING - Meetings of the board may be held at any place in
or outside Canada.

     4.11 CALLING OF MEETINGS - Meetings of the board shall be held from time to
time and at such place as the board, the chairman of the board, the president or
any two directors may determine.

     4.12 NOTICE OF MEETING - Notice of the time and place of each meeting of
the board shall be given in the manner provided in section 12.01 to each
director not less than 48 hours before the time when the meeting is to be held.
A notice of a meeting of directors need not specify the purpose of or the
business to be transacted at the meeting, except where the Act requires such
purpose or business to be specified, including, without limitation, any proposal
to:

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     (a)  submit to the shareholders any question or matter requiring approval
          of the shareholders;

     (b)  fill a vacancy among the directors or in the office of auditor;

     (c)  issue securities;

     (d)  declare dividends;

     (e)  purchase, redeem or otherwise acquire shares of the Corporation;

     (f)  pay a commission for the sale of shares;

     (g)  approve a management proxy circular;

     (h)  approve a take-over bid circular or directors' circular;

     (i) approve any annual financial statements; or

     (j) adopt, amend or repeal by-laws.

A director may in any manner waive notice of or otherwise consent to a meeting
of the board.

     4.13 FIRST MEETING OF NEW BOARD - Provided a quorum of directors is
present, each newly elected board may without notice hold its first meeting
immediately following the meeting of shareholders at which such board is
elected.

     4.14 ADJOURNED MEETING - Notice of an adjourned meeting of the board is not
required if the time and place of the adjourned meeting is announced at the
original meeting.

     4.15 REGULAR MEETINGS - The board may appoint a day or days in any month or
months for regular meetings of the board at a place and hour to be named. A copy
of any resolution of the board fixing the place and time of such regular
meetings shall be sent to each director forthwith after being passed, but no
other notice shall be required for any such regular meeting except where the Act
requires the purpose thereof or the business to be transacted thereat to be
specified.

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     4.16 CHAIRMAN - The Chairman of any meeting of the board shall be the first
mentioned of such of the following officers as have been appointed and who is a
director and is present at the meeting: chairman of the board, president, or a
vice-president who is a director. If no such officer is present, the directors
present shall choose one of their number to be chairman.

     4.17 VOTES TO GOVERN - At all meetings of the board every question shall be
decided by a majority of the votes cast on the question. In case of an equality
of votes the chairman of the meeting shall be entitled to a second or casting
vote.

     4.18 CONFLICT OF INTEREST - A director or officer who is a party to, or who
is a director or officer of or has a material interest in any person who is a
party to, a material contract or proposed material contract with the Corporation
shall disclose the nature and extent of his interest at the time and in the
manner provided by the Act. Any such contract or proposed contract shall be
referred to the board or shareholders for approval even if such contract is one
that in the ordinary course of the Corporation's business would not require
approval by the board or shareholders, and a director interested in a contract
so referred to the board shall not vote on any resolution to approve the same
except as provided by the Act.

     4.19 REMUNERATION AND EXPENSES - Subject to any unanimous shareholder
agreement, the directors shall be paid such remuneration for their services as
the board may from time to time determine. The directors shall also be entitled
to be reimbursed for travelling and other expenses properly incurred by them in
attending meetings of the board or any committee thereof. Except as provided in
section 4.02, nothing herein contained shall preclude any director from serving
the Corporation in any other capacity and receiving the remuneration therefor.

                                  SECTION FIVE

                                   COMMITTEES

     5.01 EXECUTIVE COMMITTEE - The Board may at their meeting held immediately
after the annual meeting of shareholders and from time to time as vacancies
occur, elect three or more of their body, two of whom shall be the Chairman and
the Committee President, and two or more others as alternates as a committee of
directors (the "Executive Committee") and the following provisions shall apply
thereto:

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     (a) The president shall be ex officio chairman of the Executive Committee
and in his absence the Executive Committee shall choose one of its body to be
chairman. The chairman shall preside at all meetings and shall have a casting
vote in case of a tie.

     (b) A majority of the members of the Executive Committee shall be resident
Canadians.

     (c) The Executive Committee shall meet at the office of the Corporation in
the City of Toronto at such times as they shall by resolution appoint, and shall
also meet at any other time or place at the call of the president on two hours'
notice to be given orally or by telephone or in any of the manners provided in
section 12.01.

     (d) Subject to the provisions of the Act, the number of members of the
Executive Committee may be increased or decreased from time to time and their
remuneration fixed by resolution of the board.

     (e) During the intervals between the meetings of the board, the Executive
Committee shall possess and may exercise (subject to any regulations which the
board may from time to time impose) all the powers of the board in the
management and direction of the operations of the Corporation, save and except
only those acts which, under the Act, a committee of directors has no authority
to exercise. The Executive Committee shall have no authority to:

          (a)  submit to the shareholders any question or matter requiring the
               approval of the shareholders;

          (b)  fill a vacancy among the directors or in the office of auditor;

          (c)  issue securities except in the manner and on the terms authorized
               by the directors;

          (d)  declare dividends;

          (e)  purchase, redeem or otherwise acquire shares issued by the
               Corporation;

          (f)  pay a commission referred to in section 89;

          (g)  approve a management proxy circular referred to in Part XII;

          (h)  approve a take-over bid circular or directors' circular referred
               to in Part XVI;

          (i)  approve any financial statements referred to in section 149;

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          (j)  adopt, amend or repeal by-laws.

The Executive Committee shall exercise its powers as it shall deem best for the
interests of the Corporation in all cases in which specific directions shall not
have been given by the board. All action by the Executive Committee shall be
reported to the board at its meeting next succeeding such action and shall be
subject to revision or alteration by the board; provided that no acts or rights
of third parties shall be affected or invalidated by any such revision or
alteration.

     5.02 TRANSACTION OF BUSINESS - Subject to the provisions of section 4.09,
the powers of the Executive Committee may be exercised by a meeting at which a
quorum is present or by resolution in writing signed by all the members of such
committee who would have been entitled to vote on that resolution at a meeting
of the committee. Meetings of such committee may be held at any place in or
outside Canada.

     5.03 AUDIT COMMITTEE - The board shall elect annually from among its number
an audit committee to be composed of not fewer than 3 directors of whom a
majority shall neither be officers nor employees of the Corporation or its
affiliates. The audit committee shall have the power and duties provided in the
Act.

     5.04 RETIREMENT COMMITTEE - the board may appoint a retirement committee
made up of at least 3 persons, each of whom is a director or an officer and a
majority of whom shall be directors. The retirement committee shall administer
the Corporation's retirement plan, instruct the trustee of such plan in
connection with the nature and extent of the investments to be made, authorize
all disbursements to be made by such trustee, and generally advise the board in
connection with matters of policy as they relate to interpretation and
application of the plan and any insuring and re-insuring of benefits provided by
the plan.

     5.05 ADVISORY COMMITTEES - The board may from time to time appoint such
other committees as it may deem advisable, but the functions of any such other
committees shall be advisory only.

     5.06 PROCEDURE - Unless otherwise determined by the board or the by-laws,
each committee shall have the power to fix its quorum at not less than a
majority of its members, to elect its chairman and to regulate its procedure.

<PAGE>

                                     - 12 -

                                  SECTION SIX

                                    OFFICERS

     6.01 APPOINTMENT - Subject to any unanimous shareholder agreement, the
board may from time to time appoint a president, one or more vice-presidents (to
which title may be added words indicating seniority or function), a secretary, a
treasurer and such other officers as the board may determine, including one or
more assistants to any of the officers so appointed. The board may specify the
duties of and, in accordance with this by-law and subject to the provisions of
the Act, delegate to such officers powers to manage the business and affairs of
the Corporation. Subject to sections 6.02 and 6.03, an officer may but need not
be a director and one person may hold more than one office.

     6.02 CHAIRMAN OF THE BOARD - The board may from time to time also appoint a
chairman of the board who shall be a director. If appointed, the board may
assign to him any of the powers and duties that are by any provisions of this
by-law assigned to the president; and he shall, subject to the provisions of the
Act, have such other powers and duties as the board may specify. During the
absence or disability of the chairman of the board, his duties shall be
performed and his powers exercised by the president.

     6.03 PRESIDENT - If appointed, the president shall be the chief executive
officer and the chief operating officer and, subject to the authority of the
board, shall have general supervision of the business and affairs of the
Corporation; and he shall, subject to the provisions of the Act, have such other
powers and duties as the board may specify.

     6.04 VICE-PRESIDENT - A vice-president shall have such powers and duties as
the board or, subject to the approval of the board, the chief executive officer
may specify.

     6.05 SECRETARY - The secretary shall attend and be the secretary of all
meetings of the board, shareholders and committees of the board and shall enter
or cause to be entered in records kept for that purpose minutes of all
proceedings thereat; he shall give or cause to be given, as and when instructed,
all notices of shareholders, directors, officers, auditors and members of
committees of the board; he shall be the custodian of the stamp or mechanical
device generally used for affixing the corporate seal of the Corporation and of
all books, papers, records, documents and instruments belonging to the
Corporation, except when some other

<PAGE>

                                     - 13 -

officer or agent has been appointed for that purpose; and he shall have such
other powers and duties as the board or the chief executive officer may specify.

     6.06 TREASURER - The treasurer shall keep proper accounting records in
compliance with the Act and shall be responsible for the deposit of money, the
safekeeping of securities and the disbursement of the funds of the Corporation;
he shall render to the board whenever required an account of all his
transactions as treasurer and of the financial position of the Corporation; and
he shall have such other powers and duties as the board or the chief executive
officer may specify.

     6.07 COMPTROLLER - The comptroller shall have charge of the accounts of the
Corporation, shall supervise the bookkeeping and accounting procedures and
advise the Corporation on matters of financial planning and budgeting and have
such other powers and duties as the board may specify. During the absence or
disability of the treasurer, or if no treasurer has been appointed, the
comptroller shall also have the powers and duties of that office.

     6.08 POWERS AND DUTIES OF OTHER OFFICERS - The powers and duties of all
other officers shall be such as the terms of their engagement call for or as the
board or, subject to the approval of the board, the chief executive officer may
specify. Any of the powers and duties of an officer to whom an assistant has
been appointed may be exercised and performed by such assistant, unless the
board or the chief executive officer otherwise directs.

     6.09 VARIATION OF POWERS AND DUTIES - The board may from time to time and
subject to the provisions of the Act, vary, add to or limit the powers and
duties of any officer.

     6.10 TERM OF OFFICE - The board, in its discretion, may remove any officer
of the Corporation, without prejudice to such officer's rights under any
employment contract. Otherwise each officer appointed by the board shall hold
office until his successor is appointed.

     6.11 TERMS OF EMPLOYMENT AND REMUNERATION - The terms of employment and the
remuneration of officers appointed by the board shall be settled by it from time
to time.

     6.12 CONFLICT OF INTEREST - An officer shall disclose his interest in any
material contract or proposed material contract with the Corporation in
accordance with section 4.18.

<PAGE>

                                     - 14 -

6.13 AGENTS AND ATTORNEYS - The board shall have power from time to time to
appoint agents or attorneys for the Corporation in or outside Canada with such
powers of management or otherwise (including the power to sub-delegate) as may
be thought fit.

6.14 FIDELITY BONDS - The board may require such officers, employees and agents
of the Corporation as the board deems advisable to furnish bonds for the
faithful discharge of their powers and duties, in such form and with such surety
as the board may from time to time determine.

                                 SECTION SEVEN

                  PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

     7.01 LIMITATION OF LIABILITY - No director or officer shall be liable for
the acts, receipts, neglects or defaults of any other director or officer or
employee, or for joining in any receipt or other act for conformity, or for any
loss, damage or expense happening to the Corporation through the insufficiency
or deficiency of title to any property acquired for or on behalf of the
Corporation, or for the insufficiency or deficiency of any security in or upon
which any of the moneys of the Corporation shall be invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious acts of any person
with whom any of the moneys, securities or effects of the Corporation shall be
deposited, or for any loss occasioned by any error of judgment or oversight on
his part, or for any other loss, damage or misfortune whatever which shall
happen in the execution of the duties of his office or in relation thereto,
unless the same are occasioned by his own wilful neglect or default; provided
that nothing herein shall relieve any director or officer from the duty to act
in accordance with the Act and the regulations thereunder or from liability for
any breach thereof.

     7.02 INDEMNITY - Subject to the limitations contained in the Act, the
Corporation shall indemnify a director or officer, a former director or officer,
or a person who acts or acted at the Corporation's request as a director or
officer of a body corporate of which the Corporation is or was a shareholder or
creditor (or a person who undertakes or has undertaken any liability on behalf
of the Corporation or any such body corporate) and his heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgement, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding to which
he is made a

<PAGE>

                                     - 15 -

party by reason of being or having been a director or officer of the Corporation
or such body corporate, if

          (a)  he acted honestly and in good faith with a view to the best
               interests of the Corporation; and

          (b)  in the case of a criminal or administrative action or proceeding
               that is enforced by a monetary penalty, he had reasonable grounds
               for believing that his conduct was lawful.

     7.03 INSURANCE - Subject to-the limitations contained in the Act, the
Corporation may purchase and maintain such insurance for the benefit of its
directors and officers as such, as the board may from time to time determine.

                                 SECTION EIGHT

                                     SHARES

     8.01 ALLOTMENT - The board may from time to time allot or grant options to
purchase shares of the Corporation at such times and to such persons and for
such consideration as the board shall determine, provided that no share shall be
issued until it is fully paid as prescribed by the Act.

     8.02 COMMISSIONS - The board may from time to time authorize the
Corporation to pay a commission to any person in consideration of his purchasing
or agreeing to purchase shares of the Corporation, whether from the Corporation
or from any other person, or procuring or agreeing to procure purchasers for any
such shares.

     8.03 REGISTRATION OF TRANSFER - Subject to the provisions of the Act, no
transfer of shares shall be registered in a securities register except upon
presentation of the certificate representing such shares with a transfer
endorsed thereon or delivered therewith duly executed by the registered holder
or by his attorney or successor duly appointed, together with such reasonable
assurance or evidence of signature, identification and authority to transfer as
the board may from time to time prescribe, upon payment of all applicable taxes
and any fees prescribed by the board, upon compliance with such restrictions on
transfer as are authorized by the articles and upon satisfaction of any lien
referred to in section 8.05.

     8.04 TRANSFER AGENTS AND REGISTRARS - The board may from time to time
appoint a registrar to maintain the securities

<PAGE>

                                     - 16 -

register and a transfer agent to maintain the register of transfers and may also
appoint one or more branch registrars to maintain branch securities registers
and one or more branch transfer agents to maintain branch registers of
transfers, but one person may be appointed both registrar and transfer agent.
The board may at any time terminate any such appointment.

     8.05 NON-RECOGNITION OF TRUSTS - Subject to the provisions of the Act, the
Corporation shall treat as absolute owner of any share the person in whose name
the share is registered in the securities register as if that person had full
legal capacity and authority to exercise all rights of ownership, irrespective
of any indication to the contrary through knowledge or notice or description in
the Corporation's records or on the share certificate.

     8.06 SHARE CERTIFICATE - Every holder of one or more shares of the
Corporation shall be entitled, at his option, to a share certificate, or to a
non-transferable written acknowledgement of his right to obtain a share
certificate, stating the number and class or series of shares held by him as
shown on the securities register. Share certificates and acknowledgements of a
shareholder's right to a share certificate, respectively, shall be in such form
as the board shall from time to time approve. Any share certificate shall be
signed in accordance with section 2.04 and need not be under the corporate seal;
provided that, unless the board otherwise determines, certificates representing
shares in respect of which a transfer agent and/or registrar has been appointed
shall not be valid unless countersigned by or on behalf of such transfer agent
and/or registrar. The signature of one of the signing officers or, in the case
of share certificates which are not valid unless countersigned by or on behalf
of a transfer agent and/or registrar, the signatures of both signing officers,
may be printed or mechanically reproduced in facsimile upon share certificates
and every such facsimile signature shall for all purposes be deemed to be the
signature of the officer whose signature it reproduces and shall be binding upon
the Corporation. A share certificate executed as aforesaid shall be valid
notwithstanding that one or both of the officers whose facsimile signature
appears thereon no longer holds office at the date of issue of the certificate.

     8.07 REPLACEMENT OF SHARE CERTIFICATES - The board or any officer or agent
designated by the board may in its or his discretion direct the issue of a new
share certificate in lieu of and upon cancellation of a share certificate that
has been mutilated or in substitution for a share certificate

<PAGE>

                                     - 17 -

claimed to have been lost, destroyed or wrongfully taken on payment of such
reasonable fee, and on such terms as to indemnity, reimbursement of expenses and
evidence of loss and of title as the board may from time to time prescribe,
whether generally or in any particular case.

     8.08 JOINT SHAREHOLDERS - If two or more persons are registered as joint
holders of any share, the Corporation shall not be bound to issue more than one
certificate in respect thereof, and delivery of such certificate to one of such
persons shall be sufficient delivery to all of them. Any one of such persons may
give effectual receipts for the certificate issued in respect thereof or for any
dividend, bonus, return of capital or other money payable or warrant issuable in
respect of such share.

     8.09 DECEASED SHAREHOLDERS - In the event of the death of a holder, or of
one of the joint holders, of any share, the Corporation shall not be required to
make any entry in the securities register in respect thereof or to make payment
of any dividends thereon except upon production of all such documents as may be
required by law and upon compliance with the reasonable requirements of the
Corporation and its transfer agents.

                                  SECTION NINE

                              DIVIDENDS AND RIGHTS

     9.01 DIVIDENDS - Subject to the provisions of the Act, the board may from
time to time declare dividends payable to the shareholders according to their
respective rights and interests in the Corporation. Dividends may be paid in
money or property or by issuing fully paid shares of the Corporation.

     9.02 DIVIDEND CHEQUES - A dividend payable in cash shall be paid by cheque
drawn on the Corporation's bankers or one of them to the order of each
registered holder of shares of the class or series in respect of which it has
been declared and mailed by prepaid ordinary mail to such registered holder at
his recorded address, unless such holder otherwise directs. In the case of joint
holders the cheque shall, unless such joint holders otherwise direct, be made
payable to the order of all of such joint holders and mailed to them at their
recorded address. The mailing of such cheque as aforesaid, unless the same is
not paid on due presentation, shall satisfy and discharge the liability for the
dividend to the extent of the sum represented thereby plus the amount of any tax
which the Corporation is required to and does withhold.

<PAGE>

                                     - 18 -

     9.03 NON-RECEIPT OF CHEQUES - In the event of non-receipt of any dividend
cheque by the person to whom it is sent as aforesaid, the Corporation shall
issue to such person a replacement cheque for a like amount on such terms as to
indemnity, reimbursement of expenses and evidence of non-receipt and of title as
the board may from time to time, prescribe whether generally or in any
particular case.

     9.04 RECORD DATE FOR DIVIDENDS AND RIGHTS - The board may fix in advance a
date, preceding by not more than 50 days the date for the payment of any
dividend or the date for the issue of any warrant or other evidence of right to
subscribe for securities of the Corporation, as a record date for the
determination of the persons entitled to receive payment of such dividend or to
exercise the right to subscribe for such securities, provided that notice of any
such record date is given, not less than 14 days before such record date, by
newspaper advertisement in the manner provided in the Act. Where no record date
is fixed in advance as aforesaid, the record date for the determination of the
persons entitled to receive payment of any dividend or to exercise the right to
subscribe for securities of the Corporation shall be at the close of business on
the day on which the resolution relating to such dividend or right to subscribe
is passed by the board.

     9.05 UNCLAIMED DIVIDENDS - Any dividend unclaimed after a period of 6 years
from the date on which the same has been declared to be payable shall be
forfeited and shall revert to the Corporation.

                                  SECTION TEN

                            MEETINGS OF SHAREHOLDERS

     10.01 ANNUAL MEETINGS - The annual meeting of shareholders shall be held at
such time in each year and, subject to section 10.03, at such place as the
board, the chairman of the board, the managing director or the president may
from time to time determine, for the purpose of considering the financial
statements and reports required by the Act to be placed before the annual
meeting, electing directors, appointing auditors and for the transaction of such
other business as may properly be brought before the meeting.

     10.02 SPECIAL MEETINGS - The board, the chairman of the board or the
president shall have power to call a special meeting of shareholders at any
time.

<PAGE>

                                     - 19 -

     10.03 PLACE OF MEETINGS - Meetings of shareholders shall be held at the
registered office of the Corporation or elsewhere in the municipality in which
the registered office is situate or, if the board shall so determine, at some
other place in Canada or, if all the shareholders entitled to vote at the
meeting so agree, at some place outside Canada.

     10.04 NOTICE OF MEETINGS - Notice of the time and place of each meeting of
shareholders shall be given in the manner provided in section 12.01 not less
than 21 nor more than 50 days before the date of the meeting to each director,
to the auditor and to each shareholder whose name appears on the list of
shareholders entitled to receive notice as provided in Section 10.15. Notice of
a meeting of shareholders called for any purpose other than consideration of the
financial statements and auditor's report, election of directors and
reappointment of the incumbent auditor shall state the nature of such business
in sufficient detail to permit the shareholders to form a reasoned judgment
thereon and shall state the text of any special resolution to be submitted to
the meeting. A shareholder may in any manner waive notice of or otherwise
consent to a meeting of shareholders.

     10.05 LIST OF SHAREHOLDERS ENTITLED TO VOTE - For every meeting of
shareholders, the Corporation shall prepare a list of shareholders entitled to
receive notice of the meeting, arranged in alphabetical order and showing the
number of shares entitled to vote at the meeting held by each shareholder. If a
record date for the meeting is fixed pursuant to section 10.06, the shareholders
listed shall be those registered at the close of business on a day not later
than 10 days after such record date. If no record date is fixed, the
shareholders listed shall be those registered at the close of business on the
day immediately preceding the day on which notice of the meeting is given, or
where no such notice is given, the day on which the meeting is held. The list
shall be available for examination by any shareholder during usual business
hours at the registered office of the Corporation or at the place where the
securities register is kept and at the place where the meeting is held.

     10.06 RECORD DATE FOR NOTICE - The board may fix in advance a record date,
preceding the date of any meeting of shareholders by not more than 50 days and
not less than 21 days, for the determination of the shareholders entitled to
notice of the meeting, provided that notice of any such record date is given,
not less than 14 days before such record date, by newspaper advertisement in the
manner provided

<PAGE>

                                     - 20 -

in the Act. If no record date is so fixed, the record date for the determination
of the shareholders entitled to notice of the meeting shall be the close of
business on the day immediately preceding the day on which the notice is given.

     10.07 CHAIRMAN, SECRETARY AND SCRUTINEERS - The chairman of any meeting of
shareholders shall be the first mentioned of such of the following officers as
have been appointed and who is present at the meeting: president, managing
director, chairman of the board, or a vice-president, who is a shareholder. If
no such officer is present within 15 minutes from the time fixed for holding the
meeting, the persons present and entitled to vote shall choose one of their
number to be chairman. If the secretary of the Corporation is absent, the
chairman shall appoint some person, who need not be a shareholder, to act as
secretary of the meeting. If desired, one or more scrutineers, who need not be
shareholders, may be appointed by a resolution or by the chairman with the
consent of the meeting.

     10.08 PERSONS ENTITLED TO BE PRESENT - The only persons entitled to be
present at a meeting of shareholders shall be those entitled to vote thereat,
the directors and auditors of the Corporation and others who, although not
entitled to vote, are entitled or required under any provision of the Act or the
articles or by-laws to be present at the meeting. Any other person may be
admitted only on the invitation of the chairman of the meeting or with the
consent of the meeting.

     10.09 QUORUM - A quorum for the transaction of business at any meeting of
shareholders shall be ten (10) persons present in person, each being a
shareholder entitled to vote thereat or a duly appointed proxyholder for an
absent shareholder so entitled, and each holding or representing by proxy not
less than 1 outstanding share of the Corporation entitled to vote at the
meeting. If a quorum is present at the opening of any meeting of shareholders,
the shareholders present or represented by proxy may proceed with the business
of the meeting notwithstanding that a quorum is not present throughout the
meeting. If a quorum is not present at the opening of any meeting of
shareholders, the shareholders present or represented by proxy may adjourn the
meeting to a fixed time and place but not transact any other business.

     10.10 RIGHT TO VOTE - Subject to the provisions of the Act as to authorized
representatives of any other body corporate, at any meeting of shareholders in
respect of which the Corporation has prepared the list referred to in

<PAGE>

                                     - 21 -

section 10.05, every person who is named in such list shall be entitled to vote
the shares shown thereon opposite his name except, where the Corporation has
fixed a record date in respect of such meeting pursuant to section 10.06, to the
extent that such person has transferred any of his shares after such record date
and the transferee, upon producing properly endorsed certificates evidencing
such shares or otherwise establishing that he owns such shares, demands not
later than 10 days before the meeting that his name be included to vote the
transferred shares at the meeting. In the absence of a list prepared as
aforesaid in respect of a meeting of shareholders, every person shall be
entitled to vote at the meeting who at the time is entered in the securities
register as the holder of one or more shares carrying the right to vote at such
meeting.

     10.11 PROXIES - Every shareholder entitled to vote at a meeting of
shareholders may appoint a proxyholder, or one or more alternate proxyholders,
who need not be shareholders, to attend and act at the meeting in the manner and
to the extent authorized and with the authority conferred by the proxy. A proxy
shall be in writing executed by the shareholder or his attorney and shall
conform with the requirements of the Act.

     10.12 TIME FOR DEPOSIT OF PROXIES - The board may specify in the notice
calling a meeting of shareholders a time, preceding the time of such meeting by
not more than 48 hours exclusive of non-business days, before which time proxies
to be used at such meeting must be deposited. A proxy shall be acted upon only
if, prior to the time so specified, it shall have been deposited with the
Corporation or an agent thereof specified in such notice or, if no such time is
specified in such notice, unless it has been received by the secretary of the
Corporation or by the chairman of the meeting or any adjournment thereof prior
to the time of voting.

     10.13 JOINT SHAREHOLDERS - If two or more persons hold shares jointly, any
one of them present in person or represented by proxy at a meeting of
shareholders may, in the absence of the other or others, vote the shares; but if
two or more of those persons are present in person or represented by proxy and
vote, they shall vote as one on the shares jointly held by them.

     10.14 VOTES TO GOVERN - At any meeting of shareholders every question
shall, unless otherwise required by the articles or by-laws or by law, be
determined by the majority of the votes cast on the question. In case of an
equality

<PAGE>

                                     - 22 -

of votes either upon a show of hands or upon a poll, the chairman of the meeting
shall be entitled to a second or casting vote.

     10.15 SHOW OF HANDS - Subject to the provisions of the Act, any question at
a meeting of shareholders shall be decided by a show of hands unless a ballot
thereon is required or demanded as hereinafter provided. Upon a show of hands
every person who is present and entitled to vote shall have one vote. Whenever a
vote by show of hands shall have been taken upon a question, unless a ballot
thereon is so required or demanded, a declaration by the chairman of the meeting
that the vote upon the question has been carried or carried by a particular
majority or not carried and an entry to that effect in the minutes of the
meeting shall be prima facie evidence of the fact without proof of the number or
proportion of the votes recorded in favour of or against any resolution or other
proceeding in respect of the said question, and the result of the vote so taken
shall be the decision of the shareholders upon the said question.

     10.16 BALLOTS - On any question proposed for consideration at a meeting of
shareholders, and whether or not a show of hands has been taken thereon, any
shareholders or proxyholder entitled to vote at the meeting may require or
demand a ballot. A ballot so required or demanded shall be taken in such manner
as the chairman shall direct. A requirement or demand for a ballot may be
withdrawn at any time prior to the taking of the ballot. If a ballot is taken
each person present shall be entitled, in respect of the shares which he is
entitled to vote at the meeting upon the question, to that number of votes
provided by the Act or the articles, and the result of the ballot so taken shall
be the decision of the shareholders upon the said question.

     10.17 ADJOURNMENT - If a meeting of shareholders is adjourned for less than
30 days, it shall not be necessary to give notice of the adjourned meeting,
other than by announcement at the earliest meeting that is adjourned. If a
meeting of shareholders is adjourned by one or more adjournments for an
aggregate of 30 days or more, notice of the adjourned meeting shall be given as
for an original meeting.

                                 SECTION ELEVEN

                            DIVISIONS AND DEPARTMENTS

     11.01 CREATION AND CONSOLIDATION OF DIVISIONS - The board may cause the
business and operations of the Corporation or any part thereof to be divided or
to be segregated into

<PAGE>

                                     - 23 -

one or more divisions upon such basis, including without limitation, character
or type of operation, geographical territory, product manufactured or service
rendered, as the board may consider appropriate in each case. The board may also
cause the business and operations of any such division to be further divided
into sub-units and the business and operations of any such divisions or
sub-units to be consolidated upon such basis as the board may consider
appropriate in each case.

     11.02 NAME OF DIVISION - Any division or its sub-units may be designated by
such name as the board may from time to time determine and may transact
business, enter into contracts, sign cheques and other documents of any kind and
do all acts and things under such name. Any such contract, cheque or document
shall be binding upon the Corporation as if it had been entered into or signed
in the name of the Corporation.

     11.03 OFFICERS OF DIVISIONS - From time to time the board or, if authorized
by the board, the chief executive officer, may appoint one or more officers for
any division, prescribe their powers and duties and settle their terms of
employment and remuneration. The board or, if authorized by the board, the chief
executive officer, may remove at its or his pleasure any officer so appointed,
without prejudice to such officer's rights under any employment contract.
Officers of divisions or their sub-units shall not, as such, be officers of the
Corporation.

                                 SECTION TWELVE

                                    NOTICES

     12.01 METHOD OF GIVING NOTICES - Any notice (which term includes any
communication or document) to be given (which term includes sent, delivered or
served) pursuant to the Act, the regulations thereunder, the articles, the
by-laws or otherwise to a shareholder, director, officer, auditor or member of a
committee of the board shall be sufficiently given if delivered personally to
the person to whom it is to be given or if delivered to his recorded address or
if mailed to him at his recorded address by prepaid ordinary or air mail or if
sent to him at his recorded address by any means of prepaid transmitted or
recorded communication. A notice so delivered shall be deemed to have been given
when it is delivered personally or to the recorded address as aforesaid; a
notice so mailed shall be deemed to have been given when deposited in a post
office or

<PAGE>

                                     - 24 -

public letter box; and a notice so sent by any means of transmitted or recorded
communication shall be deemed to have been given when dispatched or delivered to
the appropriate communication company or agency or its representative for
dispatch. The secretary may change or cause to be changed the recorded address
of any shareholder, director, officer, auditor or member of a committee of the
board in accordance with any information believed by him to be reliable.

     12.02 NOTICE TO JOINT SHAREHOLDERS - If two or more persons are registered
as joint holders of any share, any notice shall be addressed to all of such
joint holders but notice to one of such persons shall be sufficient notice to
all of them.

     12.03 COMPUTATION OF TIME - In computing the date when notice must be given
under any provision requiring a specified number of days' notice of any meeting
or other event, the date of giving the notice shall be excluded and the date of
the meeting or other event shall be included.

     12.04 UNDELIVERED NOTICES - If any notice given to a shareholder pursuant
to section 12.01 is returned on three consecutive occasions because he cannot be
found, the Corporation shall not be required to give any further notices to such
shareholder until he informs the Corporation in writing of his new address.

     12.05 OMISSIONS AND ERRORS - The accidental omission to give any notice to
any shareholder, director, officer, auditor or member of a committee of the
board or the non-receipt of any notice by any such person or any error in any
notice not affecting the substance thereof shall not invalidate any action taken
at any meeting held pursuant to such notice or otherwise founded thereon.

     12.06 PERSONS ENTITLED BY DEATH OR OPERATION OF LAW - Every person who, by
operation of law, transfer, death of a shareholder or any other means
whatsoever, shall become entitled to any share, shall be bound by every notice
in respect of such share which shall have been duly given to the shareholder
from whom he derives his title to such share prior to his name and address being
entered on the securities register (whether such notice was given before or
after the happening of the event upon which he became so entitled) and prior to
his furnishing to the Corporation the proof of authority or evidence of his
entitlement prescribed by the Act.

<PAGE>

                                     - 25 -

     12.07 WAIVER OF NOTICE - Any shareholder (or his duly appointed
proxyholder), director, officer, auditor or member of a committee of the board
may at any time waive any notice, or waive or abridge the time for any notice,
required to be given to him under any provision of the Act, the regulations
thereunder, the articles, the by-laws or otherwise and such waiver or
abridgement shall cure any default in the giving or in the time of such notice,
as the case may be. Any such waiver or abridgement shall be in writing except a
waiver of notice of a meeting of shareholders or of the board which may be given
in any manner.

                                SECTION THIRTEEN

                           EFFECTIVE DATE AND REPEAL

     13.01 EFFECTIVE DATE - This by-law shall come into force upon the date of
the resolution of the board enacting this by-law.

     13.02 REPEAL - All previous by-laws of the Corporation are repealed as of
the coming into force of this by-law provided that such repeal shall not affect
the previous operation of any by-law so repealed or affect the validity of any
act done or right, privilege, obligation or liability acquired or incurred under
or the validity of any contract or agreement made pursuant to any such by-law
prior to its repeal. All officers and persons acting under any by-law so
repealed shall continue to act as if appointed under the provisions of this
by-law and all resolutions of the shareholders or board with continuing effect
passed under any repealed by-law shall continue good and valid except to the
extent inconsistent with this by-law and until amended or repealed.

     ENACTED and made by the board the 3rd day of August, 1977.

President                            Secretary
/s/ C.D. Reekie                      /s/ R.G. Small
-------------------------------      -------------------------------

     CONFIRMED by the shareholders in accordance with the Act
the     day of               , 19 .

                                     /s/ R.G. Small
                                     -------------------------------
                                     Secretary

<PAGE>

                              CAE INDUSTRIES LTD.

                                 BY-LAW NO. 74

     Being a by-law to amend Section 4 of By-law No. 73

     WHEREAS the directors have deemed it to be in the best interests of the
Corporation that the By-laws be amended to provide for the mandatory retirement
of directors at the age of 70.

     AND WHEREAS it has been determined that such mandatory retirement
provisions should be introduced gradually over a period of four years and that
Mr. Henry Benson, a director of the Corporation since 1947, should be exempted
from the mandatory retirement provision.

     NOW THEREFORE BE IT ENACTED, as By-law No. 74 of CAE Industries Ltd. (the
"Corporation") that:

1. Paragraph 4.02 of By-law No. 73 be and it is hereby deleted and replaced with
the following:

          "4.02. QUALIFICATIONS - A majority of the directors shall be resident
          Canadians. A director need not be a shareholder of the Corporation. No
          person shall be qualified for election as a director if:

          (a)  he is not an individual;

          (b)  he is of unsound mind and has been so found by a court in Canada
               or elsewhere;

<PAGE>

                                     - 2 -

          (c)  he is a bankrupt;

          (d)  he is less than 18 years of age; or

          (e)  he is 70 years of age or more at the time of such election."

2. Clause 4.02(e) shall not apply:

(a)  in 1980 to a person who is, at the time of his election, under the age of
     73 years;

(b)  in 1981 to a person who is at the time of his election, under the age of 72
     years;

(c)  in 1982 to a person who is, at the time of his election under the age of 71
     years; and

(d)  to Henry Benson.

3. Paragraph 4.05 of By-law No. 73 be and it is hereby deleted and replaced with
the following:

          "4.05. VACATION OF OFFICE - A director ceases to hold office when he
          dies; he is removed from office by the shareholders; he becomes
          bankrupt; he becomes of unsound mind and is so found by a court in
          Canada or elsewhere; or his resignation is sent or delivered to the
          Corporation, or if the time is specified in such resignation, at the
          time so specified, whichever is later."

<PAGE>

                                     - 3 -

4. This by-law shall come into force upon the date of the resolution of board
enacting this by-law.

     ENACTED and made by the board the 5th day of September, 1979.

                                                -------------------------------
                                                          President

                                                -------------------------------
                                                          Secretary

     Confirmed by the shareholders in accordance with the Act the        day
of June, 1980.

                                                -------------------------------
                                                          Secretary

<PAGE>

                              CAE INDUSTRIES LTD.
                                   BY-LAW 77

     BEING A BY-LAW TO AMEND BY-LAW NO. 73 TO PERMIT R. FRASER ELLIOTT TO
CONTINUE AS A DIRECTOR OF THE CORPORATION.

     BE IT ENACTED as By-law No. 77 of CAE Industries Ltd. that:

     Paragraph 4.02 of By-law No. 73, as amended by By-law No. 74, be and it is
hereby amended by adding a new sentence to the end of such paragraph as follows:

     "Clause 4.02(e) shall not apply to R. Fraser Elliott."

     ENACTED and made by the Board the 4th day of September, 1991.

-------------------------------                 -------------------------------
    D. H. Race, President                         John E. Caldwell, Secretary

     CONFIRMED by the shareholders in accordance with the Act the 11th day of
June, 1992.

                                                -------------------------------
                                                  John E. Caldwell, Secretary

<PAGE>

                               CAE INC. BY-LAW 78

<PAGE>

                                    CAE INC.
                                   BY-LAW 78

     BEING A BY-LAW TO AMEND SECTION FIVE OF BY-LAW NO. 73 AND TO REPEAL BY-LAW
NO. 75 AND BY-LAW NO. 76

     BE IT ENACTED as By-law No. 78 of CAE Inc. that Section Five of By-law No.
73 be and it is hereby deleted and replaced with the following:

"5.01 EXECUTIVE COMMITTEE - The board may at their meeting held immediately
after the annual meeting of shareholders and from time to time as vacancies
occur elect three or more of their body, one of whom shall be the Chairman of
the Board, as a committee of directors (the "Executive Committee") and the
following provisions shall apply thereto:

     (a) The Chairman of the Board shall be chairman of the Executive Committee
and in his absence the Executive Committee shall choose one of its body to be
chairman. The chairman shall preside at all meetings and shall have a casting
vote in case of a tie.

     (b) The Executive Committee shall meet at the office of the Corporation in
the City of Toronto at such times as they shall by resolution appoint, and shall
also meet at any other time or place at the call of the Chairman and President
and Chief Executive Officer on two hours' notice to be given orally or by
telephone or in any of the manners provided in section 12.01.

     (c) Subject to the provisions of the Act, the number of members of the
Executive Committee may be increased or decreased from time to time and their
remuneration fixed by resolution of the board.

<PAGE>

                                                              CAE INC. BY-LAW 78
                                                                          PAGE 2

     (d) During the intervals between the meetings of the board, the Executive
Committee shall possess and may exercise (subject to any regulations which the
board may from time to time impose) all the powers of the board in the
management and direction of the operations of the Corporation, save and except
only those acts which, under the Act, a committee of directors has no authority
to exercise. The Executive Committee shall exercise its powers as it shall deem
best for the interests of the Corporation in all cases in which specific
directions shall not have been given by the board. All action by the Executive
Committee shall be reported to the board at its meeting next succeeding such
action and shall be subject to revision or alteration by the board; provided
that no acts or rights of third parties shall be affected or invalidated by any
such revision.

5.02 AUDIT COMMITTEE - The board shall elect annually from among its number an
audit committee to be composed of not fewer than four directors, and of whom a
majority shall neither be officers nor employees of the Corporation or its
affiliates. The audit committee shall have the power and duties provided in the
Act and such other duties that may be assigned by the Board of Directors.

5.03 COMPENSATION COMMITTEE - The board shall elect annually from among its
number a Compensation Committee to be composed of not fewer than four directors,
one of whom shall be the Chairman of the Board, and of whom a majority shall
neither be officers nor employees of the Corporation or its affiliates, and the
following provisions shall apply thereto:

     (a) The chairman of the Compensation Committee shall be elected annually by
the board and in his absence the Compensation Committee shall choose one of its
body to be chairman. The chairman shall preside at all meetings and shall have a
casting vote in the case of a tie.

<PAGE>

                                                              CAE INC. BY-LAW 78
                                                                          PAGE 3

     (b) The Compensation Committee shall meet at the office of the Corporation
in the City of Toronto at such times as they shall by resolution appoint, and
shall also meet at any time or place at the call of any of the Chairman of the
Board, the President, the chairman or any two members of the Compensation
Committee on two hour's notice to be given orally or by telephone or in any of
the manners provided in section 12.01 of By-law No. 73 of the Corporation.

     (c) The Compensation Committee shall, in addition to any other powers of
the board delegated to the Compensation Committee, administer any stock option
or share purchase plan of the Corporation for employees of the Corporation and
its subsidiaries and shall have full power to (i) construe and interpret such
plans; (ii) establish and amend rules and regulations for their administration;
(iii) grant options to purchase shares of the Corporation to employees of the
Corporation and its subsidiaries under such plans; and (iv) perform all other
acts relating to such plan, including the delegation of administrative
responsibilities thereunder that it believes reasonable and proper.

     (d) All actions of the Compensation Committee shall be reported to the
board at its meeting next succeeding such action.

5.04 COMMITTEES - The board may from time to time appoint such other committees
as it may deem advisable.

5.05 PROCEDURE - Unless otherwise determined by the board or the by-laws, each
committee shall have the power to fix its quorum at not less than a majority of
its members, to elect its chairman and to regulate its procedure."

<PAGE>

                                                              CAE INC. BY-LAW 78
                                                                          PAGE 4

     Each of By-law No. 75 and By-law No. 76 is hereby repealed as of the coming
into force of this By-law No. 78. Such repeal shall not affect the previous
operation of the by-laws so repealed or affect the validity of any act done or
right, privilege, obligation or liability acquired or incurred under, or the
validity of any contract or agreement made pursuant to such by-laws prior to
their repeal.

     ENACTED and made by the board the 2nd day of February, 1994.
                                       ---        --------

/s/ John E. Caldwell                    /s/ Paul G. Renaud
-------------------------------         -------------------------------
President                               Secretary

     CONFIRMED by the shareholders in accordance with the Act the 7th day of
July, 1994.

                                       /s/ Paul G. Renaud
                                       -------------------------------
                                       Secretary

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