Document:

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                                                                     EXHIBIT 4.2

[CDN. FLAG GRAPHIC]
Industry Canada                       Industrie Canada

RESTATED CERTIFICATE                           CERTIFICAT DE
OF INCORPORATION                               CONSTITUTION A JOUR

CANADA BUSINESS                                LOI CANADIENNE SUR
CORPORATIONS ACT                               LES SOCIETES PAR ACTIONS

BROOKFIELD PROPERTIES CORPORATION                          074605-3

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Name of corporation -                          Corporation number -
Denomination de la societe                     Numero de la societe

I hereby certify that the articles of          Je certifie que les statuts con-
incorporation of the above-named               stitutifs de la societe susmen-
corporation were restated under                tionnee ont ete mis a jour en
section 180 of the Canada Business             vertu de l'article 180 de la Loi
Corporations Act as set out in the             canadienne sur les societes par
attached restated articles of                  actions, tel qu'il est indique
incorporation.                                 dans les statuts mis a jour
                                               ci-joints.

/s/ [signature]                                        SEPTEMBER 5, 2002/
-------------------------------------                 LE 5 SEPTEMBRE 2002
Director - Directeur                            Effective Date of Restatement -
                                                    Date d'entree en vigueur
                                                       de la mise a jour

[CANADA LOGO]
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[CDN. FLAG LOGO]
Industry Canada     Industrie Canada
                                          FORM 7                 FORMULE 7
Canada Business     Loi canadienne       RESTATED           STATUTS CONSTITUTIFS
Corporations Act    sur les societes    ARTICLES OF              MIS A JOUR
                    par actions        INCORPORATION           (ARTICLE 180)
                                       (SECTION 180)
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1. Name of Corporation -                    Corporation No. -
   Denomination de la                       No de la societe

   Brookfield Properties Corporation        0746053
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2. The place in Canada where the            Lieu au Canada ou est situe
   office is situated                       le siege social

   Province of Ontario
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3. The classes and any maximum              Categories et tout nombre maximal
   number of shares that the corp-          d'actions que le societe est
   oration is authorized to issue           autorisee a emettre

Unlimited number of Class A preference shares, 2,050,000 Class A preference
shares Series A, 4,262,000 Class A preference shares Series B, 6,000,000 Class
AA preference shares, 1,200,000 Class AA preference shares Series A, 400,000
Class AA preference shares Series B, 400,000 Class AA preference shares Series
C, 400,000 Class AA preference shares Series D, 2,000,000 Class AA preference
shares Series E, unlimited number of Class AAA preference shares, 3,000,000
Class AAA preference shares Series A, 3,000,000 Class AAA preference shares
Series B, 3,000,000 Class AAA preference shares Series C, 3,000,000 Class AAA
preference shares Series D, 12,000,000 Class AAA preference shares Series E and
unlimited number of common shares with the rights, privileges, restrictions and
conditions as set forth in the attached Schedules A-K.
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4. Restrictions, if any, on                 Restrictions sur le transfert des
   share transfers                          actions, s'il y a lieu

   N/A
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5. Number (or minimum and maximum           Nombre (ou nombre minimal et
   number) of directors                     maximal) d'administrateurs

   Minimum of 4; maximum of 15
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6. Restrictions, if any, on                 Limites imposees a l'actions
   business the corporation may             commerciale de la societe,
   carry on                                 s'il y a lieu

   No restrictions
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7. Other provisions, if any                 Autres dispositions, s'il y a lieu

   See attached Schedule L

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The foregoing restated articles of          Cette mise a jour des statuts con-
incorporation correctly set out,            stitutifs demontre exactement, sans
without substantive change, the cor-        changement substantiel, les dispo-
responding provisions of the articles       sitions correspondantes des statuts
of incorporation as amended and             constitutifs modifiees qui rem-
supersede the original articles of          placement les statuts constitutifs
incorporation.                              originaux.
--------------------------------------------------------------------------------
Signature                   Date            FOR DEPARTMENTAL USE ONLY -
                            D-J   M   Y-A   A L'USAGE DU MINISTERE SEULEMENT
/s/ [signature]             05 / 09 / 02
-----------------------------------------   Filed - Depose a
Title - Titre
                                            Sep. 06 2002
EVP & CFO
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                                   SCHEDULE A

1.          CLASS A PREFERENCE SHARES

            The Class A preference shares shall carry and be subject to the
following rights, conditions and limitations that is to say:

1.1.        The holders of the Class A preference shares shall be entitled to
receive dividends as and when declared by the Directors. Such dividends shall be
payable by cheques of the Corporation payable at par at any branch of the
Corporation's bankers for the time being in Canada (far northern branches
excepted) in half-yearly instalments on March 15 and September 15 in each year
to shareholders of record on March 1 and September 1 respectively. If on any
dividend payment date the Corporation shall not have paid the said dividends in
full on all Class A preference shares then issued and outstanding, such
dividends or the unpaid part thereof shall be paid on a subsequent date or
dates, in priority to dividends on any other shares of the Corporation and no
dividends shall be declared or paid on or set apart for any such other shares
unless all accrued cumulative dividends on all Class A preference shares then
issued and outstanding shall have been declared and paid or provided for at the
date of such declaration or payment or setting apart.

1.2.        In the event of the liquidation, dissolution or winding-up of the
Corporation or other distribution of its assets among the shareholders by way of
return of capital, the holders of the Class A preference shares shall be
entitled to receive the sum of $2.50 per share together with all unpaid
cumulative dividends, whether or not earned or declared, which shall have
accrued thereon and which, for such purpose, shall be treated as accruing up to
the date of such distribution, in priority to any distribution to the holders of
the common shares or any shares of any other class ranking junior to the Class A
preference shares and such holders shall not be entitled to share any further in
the distribution of the property or assets of the Corporation.

1.3.        The Corporation may, in the manner hereinafter provided, redeem all
or from time to time any part of the outstanding Class A preference shares on
payment to the holders thereof, for each share to be redeemed, of the sum of
$2.50 per share together with all unpaid cumulative dividends, whether or not
earned or declared, which shall have accrued thereon and which, for such
purpose, shall be treated as accruing up to the date of such redemption.

1.4.        Before redeeming any Class A preference shares, the Corporation
shall mail to each person who, at the date of such mailing, is a registered
holder of Class A preference shares to be redeemed, notice of the intention of
the Corporation to redeem such Class A preference shares held by such registered
holder, such notice shall be mailed by ordinary prepaid post addressed to the
last address of such holder as it appears on the books of the Corporation or, in
the event of the address of any such holder not appearing on the books of the
Corporation, then to the last known address of such holder, at least thirty (30)
days before the date specified for redemption, provided, however, that the
accidental failure to give such notice to one or more such holders shall not
affect the validity of such redemption as to the other such holders. Such notice
shall set out the redemption price, the date on which redemption is to take
place and, if

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part only of the Class A preference shares held by the person to whom it is
addressed is to be redeemed, the number thereof so to be redeemed. In case a
part only of the then outstanding Class A preference shares is at any time to be
redeemed, the Class A preference shares so to be redeemed shall be selected by
lot, at the discretion of the Directors, shall be redeemed pro rata disregarding
fractions. On and after the date so specified for redemption the Corporation
shall pay or cause to be paid the redemption price to the registered holders of
the Class A preference shares to be redeemed, on presentation and surrender of
the certificates for the Class A preference shares so called for redemption at
the head office of the Corporation or at such other place or places as may be
specified in such notice, and the certificates for such Class A preference
shares shall thereupon be cancelled, and the redemption of the shares
represented thereby shall thereupon be and be deemed to be complete. From and
after the date specified for redemption in such notice, the holders of such
Class A preference shares called for redemption shall cease to be entitled to
dividends and shall not be entitled to any rights, in respect thereof, except to
receive the redemption price, unless payment of the redemption price shall not
be made by the Corporation in accordance with the foregoing provisions, in which
case the rights, of the holders of such Class A preference shares shall remain
unimpaired. On or before the date specified for redemption the Corporation shall
have the right to deposit the redemption price of Class A preference shares
called for redemption with any trust company or chartered bank in Canada
specified in the notice of redemption, to be paid, without interest, to or to
the order of the respective holders of such Class A preference shares called for
redemption upon presentation and surrender of the certificate representing the
same and, upon such deposits being made, the Class A preference shares in
respect whereof such deposit shall have been made shall be deemed to be redeemed
and the rights of the several holders thereof, after such deposit, shall be
limited to receiving, out of the moneys so deposited, without interest, the
redemption price applicable to their respective Class A preference shares
against presentation and surrender of the certificates representing such Class A
preference shares.

1.5.        The Corporation shall have the right at its option at any time and
from time to time to purchase (if obtainable) the whole or any part of the Class
A preference shares outstanding in the open market or by invitation for tenders
addressed to all holders of record of the Class A preference shares outstanding
at the lowest price at which, in the opinion of the Directors of the
Corporation, such shares are obtainable, but not exceeding the amount paid
thereon, together with costs of purchase and all unpaid cumulative dividends,
whether or not earned or declared, which shall have accrued thereon and which,
for such purpose, shall be treated as accruing up to the date of such purchase,
the shares so tendered shall be purchased by lot in such manner as the Directors
in their discretion shall decide, or, if the Directors so determine, shall be
purchased pro rata, disregarding fractions.

1.6.        Commencing with the fiscal period ending June 30, 1979 the
Corporation shall undertake to purchase for cancellation or cause to be
purchased (if obtainable) in the open market 40,000 Class A preference shares at
such time or times in each fiscal year as in its discretion it shall determine
at the price of $2.50 per share, together with costs of purchase and all unpaid
cumulative dividends whether or not earned or declared, which shall have accrued
thereon, and which for such purposes shall be treated as accruing up to the date
of such purchase.

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                                     - 3 -

1.7.        The holders of the Class A preference shares shall be entitled to
receive notice of and to attend all shareholders' meetings and for all purposes
shall be entitled to one vote for each Class A preference share held.

1.8.        The Class A preference shares shall consist of two series, namely
Series A and Series B and no other series may be designated.

2.          CLASS AA PREFERENCE SHARES

            The Class AA Preference shares shall as a class carry and be subject
to the following rights, restrictions, conditions and limitations that is to
say:

2.1.        The Class AA preference shares may be issued at any time or from
time to time in one or more series with such preferred deferred or other special
rights, restrictions, conditions, limitations or designations attaching thereto
including, without limiting the generality of the foregoing, such rates of
cumulative preferred dividends, redemption price, conversion rights (if any),
sinking or purchase fund (if any), retraction provisions (if any) and provisions
for the amendment of such rights, restrictions, conditions, limitations or
designations (the whole subject to the preferences, priorities, rights,
conditions, limitations and restrictions attaching to the Class AA preference
shares as a class) as shall be prescribed from time to time before issuance by
any resolution providing for the issue of the Class AA preference shares of any
series which may be passed by the directors of the Corporation.

2.2.        The preferences, priorities and rights attaching to the Class AA
preference shares shall be subject and subordinate to those attaching to the
Class A preference shares of the Corporation, but only to the extent that they
may conflict therewith.

2.3.        The Class AA preference shares of each series shall rank on a parity
with the Class AA preference shares of every other series with respect to
priority in payment of dividends and in the distribution of assets in the event
of liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding up its affairs.

2.4.        Subject to the provisions of section 2.2 hereof, the holders of the
Class AA preference shares shall be entitled to receive and the Corporation
shall pay thereon as and when declared by the Directors of the Corporation, out
of the moneys of the Corporation properly applicable to the payment of
dividends, fixed, cumulative, preferential, cash dividends at such rates and
payable at such intervals as shall have been prescribed for each series. Such
dividends shall accrue from such date as may in the case of each series be
determined by the Directors of the Corporation, or in case no date be so
determined, then from the date of issue thereof. Cheques of the Corporation,
payable at par at any branch in Canada of a chartered bank from time to time
selected by the Directors of the Corporation, shall be issued in respect of such
dividends (less any taxes required to be deducted) and payment thereof shall
satisfy such dividends. With respect to each series of Class AA preference
shares, dividends shall be paid to the registered holders appearing on the
register at the close of business on such a day preceding

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                                     - 4 -

the day fixed for the payment of dividends as may be determined from time to
time by the Directors of the Corporation.

2.5.        Subject to the provisions of section 2.2 hereof, and the provisions
relating to any particular series the Corporation shall have the right at its
option at any time and from time to time to purchase (if obtainable) the whole
or any part of the Class AA preference shares outstanding in the open market or
by invitation for tenders addressed to all holders of record of the Class AA
preference shares outstanding at the lowest price at which, in the opinion of
the Directors of the Corporation, such shares are obtainable, but not exceeding
the amount paid thereon, together with costs of purchase and all unpaid
cumulative dividends, whether or not earned or declared, which shall have
accrued thereon and which, for such purpose, shall be treated as accruing up to
the date of such purchase; provided that, if more Class AA preference shares are
tendered in response to such invitation than the Corporation is willing to
purchase, the shares so tendered shall be purchased by lot in such manner as the
Directors in their discretion shall decide or, if the Directors so determine,
shall be purchased pro rata, disregarding fractions.

2.6.        Subject to the provisions of section 2.2 hereof, and the provisions
relating to any particular series the Corporation shall before redeeming any
Class AA preference shares mail to each person who, at the date of such mailing,
is a registered holder of Class AA preference shares to be redeemed, notice of
the intention of the Corporation to redeem such Class AA preference shares held
by such registered holder; such notice shall be mailed by ordinary prepaid post
addressed to the last address of such holder as it appears on the books of the
Corporation or, in the event of the address of any such holder not appearing on
the books of the Corporation, then to the last known address of such holder, at
least thirty (30) days before the date specified for redemption, provided,
however, that the accidental failure to give such notice to one or more such
holders shall not affect the validity of such redemption as to the other such
holders. Such notice shall set out the redemption price, the date on which
redemption is to take place and, if part only of the Class AA preference shares
held by the person to whom it is addressed is to be redeemed, the number thereof
so to be redeemed. In case a part only of the then outstanding Class AA
preference shares is at any time to be redeemed, the Class AA preference shares
so to be redeemed shall be selected by lot or, at the discretion of the
Directors, shall be redeemed pro rata disregarding fractions. On and after the
date so specified for redemption the Corporation shall pay or cause to be paid
the redemption price to the registered holders of the Class AA preference shares
to be redeemed, on presentation and surrender of certificates for the Class AA
preference shares so called for redemption at the head office of the Corporation
or at such other place or places as may be specified in such notice, and the
certificates for such Class AA preference shares shall thereupon be cancelled,
and the redemption of the shares represented thereby shall thereupon be and be
deemed to be complete. From and after the date specified for redemption in such
notice, the holders of such Class AA preference shares called for redemption
shall cease to be entitled to dividends and shall not be entitled to any rights
in respect thereof, except to receive the redemption price, unless payment of
the redemption price shall not be made by the Corporation in accordance with the
foregoing provisions, in which case the rights of the holders of such Class AA
preference shares shall remain unimpaired. On or before the date specified for
redemption the Corporation shall have the right to deposit the redemption price
of the Class AA preference shares called for redemption with any trust company
or chartered bank in Canada specified in the notice of redemption, to be paid,
without interest, to or to the order of

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                                     - 5 -

the respective holders of such Class AA preference shares called for redemption
upon presentation and surrender of the certificates representing the same and,
upon such deposits being made, the Class AA preference shares in respect whereof
such deposit shall have been made shall be deemed to be redeemed and the rights
of the several holders thereof, after such deposit, shall be limited to
receiving, out of the moneys so deposited, without interest, the redemption
price applicable to their respective Class AA preference shares against
presentation and surrender of the certificates representing such Class AA
preference shares.

2.7.        The redemption price for each of the Class AA preference shares so
redeemed shall be payable in lawful money of Canada and shall be at such price
and with such premium thereon, if any, as may have been fixed for that purpose
in respect of each series prior to the sale and allotment of any Class AA
preference shares of such series plus an amount equal to all accrued but unpaid
preferential dividends whether or not earned or declared (which for such purpose
shall be calculated as if such dividends were accruing from day to day for the
period from the expiration of the last period for which dividends have been paid
up to and including the date fixed for redemption).

2.8.        In the event of liquidation, dissolution or winding up the
Corporation or other distribution of assets of the Corporation among
shareholders for the purpose of winding up its affairs, the holders of the Class
AA preference shares shall, subject to the provisions of section 2.2 hereof, be
entitled to receive the amount paid on such shares together with all unpaid
dividends (which dividends, for such purpose, shall be calculated as if they
were accruing from day to day for the period from the expiration of the last
period for which dividends have been paid up to and including the date of
distribution) in priority to any distribution to the holders of the common
shares or any shares of any other class ranking junior to the Class AA
preference shares and such holders shall not be entitled to share any further in
the distribution of the property or assets of the Corporation.

2.9.        Subject to the Canada Business Corporations Act the holders of the
Class AA preference shares shall not be entitled as such to receive notice of or
to attend any meeting of the shareholders of the Corporation or to vote at any
such meeting unless and until the Corporation from time to time shall fail to
pay in the aggregate 8 quarterly dividends on the Class AA preference shares of
any one series on the dates on which the same should be paid according to the
terms thereof whether or not consecutive and whether or not such dividends have
been declared and whether or not there are any moneys of the Corporation
properly applicable to the payment of dividends. Thereafter but only so long as
any dividends on the Class AA preference shares or any series remain in arrears
the holders of the Class AA preference shares shall be entitled to receive
notice of and to attend all meetings of shareholders of the Corporation and
shall be entitled to 1 vote in respect of each Class AA preference share held.

3.          COMMON SHARES

            The common shares shall as a class carry and be subject to the
following rights, restrictions, conditions and limitations that is to say:

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                                     - 6 -

3.1.        The holders of the common shares shall be entitled to receive notice
of and to attend all shareholders' meetings and for all purposes shall be
entitled to one vote for each common share held.

3.2.        The holders of the common shares shall be entitled to receive any
dividends declared thereon by the board of directors of the Corporation.

3.3.        In the event of the liquidation, dissolution or winding-up of the
Corporation or other distribution of its assets among the shareholders by way of
return of capital, the holders of the common shares shall be entitled to receive
after distribution to the holders of the Class A preference shares and the Class
AA preference shares the remaining property of the Corporation.

4.          CLASS A PREFERENCE SHARES, SERIES A

            The first series of Class A preference shares shall be designated as
Series A and, in addition to the rights, restrictions, conditions and
limitations attaching to the Class A preference shares as a class, shall have
the following rights, restrictions, conditions and limitations that is to say:

4.1.        Series A shall consist of 2,050,000 Class A preference shares and no
more;

4.2.        The holders of the Class A preference shares, Series A shall be
entitled to receive fixed preferential, cumulative cash dividends at the rate of
7-1/2% per annum on the amount paid thereon. With respect to any Class A
preference shares, Series A issued up to March 1, 1979, the dividends shall
accrue and be cumulative from the first day of December 1978 and such holders
with respect to the first dividend payment due on March 15, 1979 shall be
entitled to receive an additional amount equal to 4.6875 cents per share. With
respect to any Class A preference shares, Series A issued after March 1, 1979,
dividends shall accrue and be cumulative from the record date immediately
preceding such issue.

5.          CLASS A PREFERENCE SHARES, SERIES B

            The second series of Class A preference shares shall be designated
as Series B and, in addition to the rights, restrictions, conditions and
limitations attaching to the Class A preference shares as a class, shall have
the following rights, restrictions, conditions and limitations that is to say:

5.1.        Series B shall consist of 4,262,000 Class A preference shares and no
more;

5.2.        The holders of the Class A preference shares, Series B shall be
entitled to receive fixed preferential, cumulative cash dividends at the rate of
7-1/2% per annum on the amount paid thereon. Such dividends shall accrue and be
cumulative from the first day of March, 1979.

6.          CLASS AA PREFERENCE SHARES, SERIES A

            The first series of Class AA preference shares shall be designated
as Series A and, in addition to the rights, restrictions, conditions and
limitations attaching to the Class AA

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                                     - 7 -

preference shares as a class, shall have the following rights, restrictions,
conditions and limitations that is to say:

6.1.        Series A shall consist of 1,200,000 Class AA preference shares and
no more;

6.2.        The fixed, preferential, cumulative cash dividends payable on the

Class AA preference shares, Series A shall be a percentage rate equal to 1-1/2
plus 1/2 of the Mercantile Bank of Canada's prime lending rate as calculated on
a daily basis, payable half-yearly on January 31 and July 31 until June 30,
1981. Thereafter the Corporation shall establish a dividend rate subject to the
approval of the holders of the Class AA preference shares, Series A as provided
in the Canada Business Corporations Act failing which rate shall be 12% per
annum or the fluctuating rate of 1% over the Mercantile Bank of Canada's best
lending rate, whichever is higher, payable half-yearly on January 31 and July 31
and in such event the Corporation shall repurchase at an amount equal to the
price paid thereon, together with all accrued and unpaid dividends on the Class
AA preference shares, Series A, 7,500 Class AA preference shares, Series A each
October 30, January 31, April 30 and July 31 commencing October 31, 1981.

6.3.        The Corporation shall have the right at its option, from time to
time, upon three months prior written notice to redeem the whole or any part of
the Class AA preference shares, Series A at an amount equal to the price paid
thereon together with all accrued and unpaid dividends on the Class AA
preference shares, Series A to be redeemed to the date fixed for redemption. In
case a part only of the then outstanding Class AA preference shares, Series A is
to be redeemed, the shares so to be redeemed shall be selected by lot in such
manner as the directors in their discretion shall decide or, if the directors so
determine, may be redeemed pro rata, disregarding fractions.

<PAGE>
                                   SCHEDULE B

CLASS AA PREFERENCE SHARES, SERIES B

            There is hereby created a series of 400,000 Class AA preference
shares designated Class AA preference shares, Series B (herein referred to as
the "Class AA, Series B Shares") to carry and be subject as a series to the
following rights, privileges, restrictions and conditions in addition to those
attaching to the Class AA preference shares as a class:

1.          The Class AA, Series B Shares shall be issued for a cash
consideration of Twenty-five Dollars ($25.00) per share.

2.          Subject to the provisions of section 2.2 of Schedule A, the holders
of the Class AA, Series B Shares shall be entitled to receive, and the
Corporation shall pay thereon, as and when declared by the board of directors,
out of moneys of the Corporation properly applicable to the payment of
dividends, cumulative preferential cash dividends at the Annual Floating Rate
expressed on a per annum basis, such rate to be applied to an amount of
Twenty-five Dollars ($25.00) per share. Dividends on the Class AA, Series B
Shares shall accrue on a day-to-day basis from the date of issue thereof, shall
be calculated on the basis of a 365-day year or a 366-day year, as the case may
be, for the actual number of days elapsed and shall be payable in Canadian
currency, quarterly, on April 30, July 31, October 31 and January 31 of each
year (which dates are herein referred to collectively as "Dividend Payment
Dates" and individually as a "Dividend Payment Date"), the first Dividend
Payment Date to be July 31, 1979. At the time of payment of each dividend the
Corporation shall furnish to the holders of the Class AA, Series B Shares
particulars of its calculation of the rate of such dividend.

3.          For the purposes hereof, the following terms shall have the
following respective meanings:

      3.1.  "MERCANTILE'S BEST LENDING RATE" for any business day means the rate
            of interest, expressed on a per annum basis, quoted by La Banque
            Mercantile du Canada, as at the Close of Business, as being charged
            by it on commercial demand loans payable in Canadian dollars to its
            commercial customers in Canada having the highest credit rating;

      3.2.  "CLOSE OF BUSINESS" means the normal closing hour of La Banque
            Mercantile du Canada in Montreal, Quebec;

      3.3.  "RATE" for a particular Dividend Payment Date means the rate of
            interest, expressed on a per annum basis, rounded to the nearest
            one-hundredth of one per cent (0.01%) equal to the quotient obtained
            by dividing the sum of the Mercantile's Best Lending Rates in
            respect of each business day of the quarterly period preceding such
            Dividend Payment Date by the number of business days in such
            quarterly period;
<PAGE>
                                     - 2 -

      3.4.  "ANNUAL FLOATING RATE" expressed on a per annum basis in respect of
            each Dividend Payment Date means, subject to Article 9, the
            aggregate of:

            (a)   one-half (1/2) of the Rate for the particular Dividend Payment
                  Date, plus

            (b)   one and one-half per cent (1-1/2%).

4.          The Corporation shall have the right at its option, on any Dividend
Payment Date occurring after June 30, 1982, upon three (3) months' prior written
notice or, at any time after the introduction of legislation containing an
amendment contemplated by Article 9 hereof, upon thirty (30) days' prior written
notice, to redeem the whole or any part of the Class AA, Series B Shares at a
redemption price per share of Twenty-five Dollars ($25.00) together with all
accrued and unpaid dividends, whether or not earned or declared, which shall
have accrued on the Class AA, Series B Shares to and including the date fixed
for redemption. In case a part of the then outstanding Class AA, Series B Shares
is to be redeemed, the shares so to be redeemed shall be selected by lot in such
manner as the Directors of the Corporation in their discretion shall decide or,
if the Directors of the Corporation so determine, may be redeemed, pro rata,
disregarding fractions.

            Any redemption contemplated by this Article 4 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class. Notice of any
redemption shall be given in writing by the Corporation to each holder of Class
AA, Series B Shares to be redeemed at least three (3) months' prior to the date
fixed for redemption setting out the number of shares held by such holder which
are to be redeemed, the date on which such redemption is to take place and the
redemption price; provided, however, that accidental failure to give such notice
to one (1) or more of such holders, who shall not in the aggregate hold more
than ten per cent (10%) of the issued and outstanding Class AA, Series B Shares,
shall not affect the validity of such redemption as to the other holders, but
upon such failure being discovered notice shall be given forthwith and shall
have the same force and effect as if given in due time.

            If a part only of the preference shares represented by any
certificate shall be redeemed, a new certificate for the balance shall be
issued. Any Class AA, Series B Shares so redeemed shall not be re-issued by the
Corporation.

5.          To the extent permitted by law, and subject to the provisions of
section 2.2 of Schedule A and the provisions hereinafter contained, the
Corporation shall, commencing on April 30, 1982 and each and every year
thereafter on each subsequent anniversary of such date (which date and
anniversaries thereof are herein referred to collectively as "Redemption Dates"
and individually as a "Redemption Date"), redeem five per cent (5%) of the Class
AA, Series B Shares issued and outstanding on the particular Redemption Date at
a price per share equal to Twenty-five Dollars ($25.00) together with an amount
equal to all dividends accrued and unpaid thereon, whether or not earned or
declared, which shall have accrued on the Class AA, Series B Shares to and
including the particular Redemption Date.
<PAGE>
                                     - 3 -

            Any redemption contemplated by this Article 5 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class.

            The shares so to be redeemed shall be redeemed pro rata disregarding
fractions and not by lot.

            A holder of the Class AA, Series B Shares may, within fifteen (15)
days of its receipt of a notice of redemption contemplated by this Article 5,
notify the Corporation in writing of its desire to waive, for one year at a
time, the obligation of the Corporation to redeem Class AA, Series B Shares on
the particular Redemption Date and, provided the Corporation shall have received
waiver(s) with respect to a particular Redemption Date from holder(s)
representing not less than two-thirds (2/3rds) in number of the issued and
outstanding Class AA, Series B Shares at the particular time, the Corporation
shall not redeem any of the Class AA, Series B Shares that would otherwise have
been redeemed on the particular Redemption Date; provided, however, that the
Corporation shall be required to redeem the Class AA, Series B Shares in respect
of which the requisite waiver(s) has been given on the next following Redemption
Date in addition to the number of Class AA, Series B Shares that the Corporation
is obligated to redeem on such date in accordance with the first paragraph of
this Article 5.

            If a part only of the preference shares represented by any
certificate shall be redeemed, a new certificate for the balance shall be
issued. Any Class AA, Series B Shares so redeemed shall not be re-issued by the
Corporation.

6.          To the extent permitted by law, and subject to the provisions of
section 2.2 of Schedule A, the Corporation shall, on December 31, 1989, redeem
all of the Class AA, Series B Shares issued and outstanding on such date at a
price per share equal to Twenty-five Dollars ($25.00) together with all accrued
and unpaid cumulative dividends, whether or not earned or declared, which shall
have accrued on the Class AA, Series B Shares to and including such redemption
date.

            The redemption contemplated by this Article 6 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class.

            If prior to the mailing of the notice of redemption contemplated by
this Article 6, the Corporation determines that it will not be permitted, by
insolvency or other provisions of applicable law, to redeem all the Class AA,
Series B Shares then outstanding, the Corporation shall include in such notice a
statement of the maximum number of Class AA, Series B Shares which it then
believes it will be permitted to redeem; provided that, if the Corporation has
acted in good faith in making such determination, the Corporation shall have no
liability in the event that such determination proves inaccurate. If the
redemption by the Corporation of all of the Class AA, Series B Shares would be
contrary to any insolvency provisions or other provisions of applicable law, the
Corporation shall be obligated to redeem Class AA, Series B Shares only to the
extent of the maximum sum of money that may be so applied (rounded to the next
lower multiple of Twenty-five Dollars ($25.00)) without being contrary to such
provisions. In such
<PAGE>
                                     - 4 -

case the Corporation shall pay to each holder of Class AA, Series B Shares that
holder's pro rata share of the moneys available as aforesaid and shall issue and
deliver to each such holder a new share certificate, at the expense of the
Corporation, representing the Class AA, Series B Shares not redeemed. If the
Corporation fails to redeem, because of insolvency provisions or other
provisions of applicable law, all of the Class AA, Series B Shares in accordance
with the first paragraph of this Article 6, then as soon as reasonably feasible
after the Corporation is no longer prevented, by insolvency or other provisions
of applicable law, from redeeming the remaining outstanding Class AA, Series B
Shares, the Corporation shall redeem such shares and shall send written notice
to all holders thereof that the redemption of such shares by the Corporation
shall take place on a date which is not less than thirty (30) days subsequent to
the date of such notice, such redemptions to continue as aforesaid until all
remaining outstanding Class AA, Series B Shares have been redeemed.

7.          So long as any of the Class AA, Series B Shares are outstanding, the
Corporation shall not, without the approval of the holders of the Class AA,
Series B Shares as hereinafter specified:

      (i)   issue any shares ranking senior to or on a parity with the Class AA,
            Series B Shares, or

      (ii)  redeem or purchase for cancellation any shares of the Corporation
            except for the Class A preference shares, Series A and Class A
            preference shares, Series B issued and outstanding as of this date.

8.          In the event of liquidation, dissolution or winding-up of the
Corporation or other distribution of its assets among its shareholders, other
than by way of dividends paid while the Corporation is a going concern out of
moneys of the Corporation properly applicable to the payment of dividends, the
holders of the Class AA, Series B Shares shall, subject to the provisions of
section 2.2 of Schedule A, be entitled to receive the sum of Twenty-five Dollars
($25.00) per share together with an amount equal to all dividends accrued and
unpaid thereon (which dividends, for such purpose, shall be calculated as if
they were accruing from day to day for the period from the expiration of the
last period for which dividends have been paid up to and including the date of
distribution) before any distribution shall be made to the holders of the common
shares of the Corporation or any shares of any other class ranking junior to the
Class AA preference shares and such holders shall not be entitled to share any
further in the distribution of the property or assets of the Corporation.

9.          In the event of any amendment to the Income Tax Act (Canada) or to
any other legislation of Canada or of any province of Canada which imposes tax
on income, including an amendment to the regulations under any such legislation,
other than an amendment to the general tax rate for corporations levied on
"taxable income" (as that term is defined in the relevant tax legislation as in
force at the time of the making of the amendment) of corporations or a class of
corporations, is made which affects the income tax treatment of dividends on the
Class AA, Series B Shares received or receivable by a holder of Class AA, Series
B Shares which is a "taxable Canadian corporation" and a "public corporation"
but is not a "mutual fund corporation" (as those terms are defined in the Income
Tax Act (Canada) as in force at the time of
<PAGE>
                                     - 5 -

the making of the amendment) or which affects the income tax treatment of the
interest charges (the "Corresponding Interest Charges") payable by such holder
on funds which are deemed to have been borrowed in order to finance the purchase
of the Class AA, Series B Shares by such holder, in any manner which has the
effect of lowering the holder's effective after-tax return on dividends received
on the Class AA, Series B Shares, based on the issue price of Twenty-five
Dollars ($25.00) per share and after taking into account all income taxes levied
on the dividends on such shares received by such holder and the income tax
treatment of the Corresponding Interest Charges, the Annual Floating Rate in
respect of each Dividend Payment Date falling on or subsequent to the effective
date of such amendment shall, notwithstanding section 3.4, mean the Rate for the
particular Dividend Payment Date and the first dividend which shall be paid on
the first Dividend Payment Date falling subsequent to the date on which such
amendment is enacted into law shall consist of the regular quarterly dividend
accrued to such Dividend Payment Date calculated at the Rate together with an
additional dividend equal to the aggregate amount, if any, by which the
dividends that would have accrued on such Class AA, Series B Shares calculated
at the Rate during the period commencing on the date upon which the relevant tax
amendment commenced to affect accruing dividends on the Class AA, Series B
Shares and terminating on the immediately prior Dividend Payment Date would have
exceeded the dividends actually paid on the Class AA, Series B Shares during
such period.

            In the event that the Class AA, Series B Shares are redeemed, in
whole or in part, by the Corporation on a date which is on or subsequent to the
introduction of legislation containing an amendment contemplated by this Article
9 and which is prior to the date on which such amendment is enacted into law
("Date of Enactment"), the tenth day following the Date of Enactment shall for
the purposes hereof be deemed to be a Dividend Payment Date and the Corporation
shall pay to the holder(s) of the Class AA, Series B Shares, at the time of such
redemption, on such Dividend Payment Date an additional dividend equal to the
aggregate amount, if any, by which the dividends that would have accrued on such
Class AA, Series B Shares calculated at the Rate during the period commencing on
the date upon which the relevant tax amendment commenced to affect accruing
dividends on the Class AA, Series B Shares and terminating on the date of the
aforesaid redemption would have exceeded the dividends actually paid on the
Class AA, Series B Shares during such period.

10.         Subject to the provisions of the Canada Business Corporations Act,
the provisions contained in Articles 1 to 9, in Article 11 and in this Article
may be repealed or amended in whole or in part, but only with the approval of
the holders of the Class AA, Series B Shares given as hereinafter specified.

11.         The approval of the holders of the Class AA, Series B Shares as to
any and all matters hereinbefore referred to may be given in writing by the
holders of at least two-thirds (2/3rds) of the outstanding shares of such series
or by resolution passed or by-law sanctioned at a meeting of holders of shares
of such series duly called for the purpose and held upon at least twenty-one
(21) days' notice at which the holders of at least a majority of such shares are
present or represented by proxy and carried by not less than two-thirds (2/3rds)
of the votes cast on a poll at such meeting. If at any such meeting the holders
of a majority of such 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 fifteen (15) days later and to such
<PAGE>
                                     - 6 -

time and place as may be appointed by the chairman of the meeting and at least
ten (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 Class AA, Series B
Shares present or represented by proxy may transact the business for which the
meeting was originally convened and a resolution passed thereat by not less than
two-thirds (2/3rds) of the votes cast on a poll at such adjourned meeting shall
constitute the approval of the holders of the Class AA, Series B Shares referred
to above. Any meeting of the holders of the outstanding Class AA, Series B
Shares may be held at any time and for any purpose, without notice, if all
holders of the Class AA, Series B Shares entitled to vote at the meeting are
present or represented by proxy or waive notice of the meeting in writing. For
the purposes of waiver of notice, the words "in writing" shall, without
limitation, include the sending of a telegram, telex, cable or any other form of
written communication by a shareholder. Any holder may waive notice of any
meeting either before or after the meeting is held.

            Irregularities in the notice or in the giving thereof as well as the
accidental omission to give notice of any meeting to, or the non-receipt of any
notice by, one (1) or more holders of Class AA, Series B Shares, who shall not
in the aggregate hold more than ten per cent (10%) of the issued and outstanding
Class AA, Series B Shares, shall not invalidate any action taken at any meeting.

            At any meeting of the holders of Class AA, Series B Shares each
holder of such shares shall be entitled to one (1) vote in respect of each such
share held by him.

            The formalities to be observed with respect to the giving of notice
of any meeting of holders of Class AA, Series B Shares and the conduct thereof
shall be those from time to time prescribed in the by-laws of the Corporation
with respect to the meetings of shareholders.

<PAGE>
                                   SCHEDULE C

CLASS AA PREFERENCE SHARES, SERIES C

            There is hereby created a series of 400,000 Class AA preference
shares designated Class AA preference shares, Series C (herein referred to as
the "Class AA, Series C Shares") to carry and be subject as a series to the
following rights, privileges, restrictions and conditions in addition to those
attaching to the Class AA preference shares as a class:

ISSUE PRICE

1.    The Class AA, Series C Shares shall be issued for a cash consideration of
Twenty-five Dollars ($25.00) per share.

DIVIDENDS

2.    (a)   Subject to the provisions of section 2.2 of Schedule A, the holders
of the Class AA, Series C Shares shall be entitled to receive, and the
Corporation shall pay thereon, as and when declared by the board of directors,
out of moneys of the Corporation properly applicable to the payment of
dividends, cumulative preferential cash dividends at the Annual Floating Rate,
such rate to be applied to an amount of Twenty-five Dollars ($25.00) per share.
Dividends on the Class AA, Series C Shares shall accrue on a day-to-day basis
and shall be cumulative from and including the date of issue thereof, shall be
calculated on the basis of a 365-day year or a 366-day year, as the case may be,
for the actual number of days elapsed and shall be calculated on each Dividend
Payment Date and shall be payable, quarterly, on each Dividend Payment Date
commencing October 31, 1980. Cheques of the Corporation in Canadian currency
payable at par at the main branch of the Corporation's bankers in Toronto shall
be issued in respect of such dividends and shall be delivered to each holder of
Class AA, Series C Shares on or before each Dividend Payment Date. At the time
of payment of each dividend the Corporation shall furnish to the holders of the
Class AA, Series C Shares particulars of its calculation of the Annual Floating
Rate for such Dividend Payment Date.

      (b)   If on any Dividend Payment Date the dividend payable on such date is
not paid in full on each Class AA, Series C preference share then issued and
outstanding, such dividend or the unpaid portion thereof shall be paid on a
subsequent date or dates determined by the board of directors of the Corporation
on which the Corporation shall have sufficient monies properly applicable to the
payment of the same.

      (c)   If on any Dividend Payment Date any amount of accrued dividends is
not paid on any Class AA, Series C preference share then issued and outstanding,
then, for the purpose only of calculating the dividends accruing on any such
preference share thereafter and for no other purpose, such accrued and unpaid
amount of dividends shall be deemed to be an amount of cash consideration for
which such Class AA, Series C preference share was issued so that thereupon and
thereafter dividends at the Annual Floating Rate shall accrue on such Class AA,
Series C preference share on the sum of:
<PAGE>
                                     - 2 -

            (i)   the aggregate cash consideration paid therefor; and

            (ii)  until the declaration of such accrued and unpaid amount of
                  dividends by the board of directors of the Corporation and the
                  actual payment thereof, the amount so deemed to have been paid
                  as cash consideration for such Class AA, Series C preference
                  share.

      (d)   For the purpose only of the calculation set out in paragraph 2(c),
paragraph 2(a) shall be read as if the reference therein to October 31, 1980
were to April 30, 1980.

DEFINITIONS

3.    For the purpose hereof, the following terms shall have the following
respective meanings:

      3.1.  "ANNUAL FLOATING RATE" expressed on a per annum basis in respect of
      each Dividend Payment Date means, subject to section 5(f) and Article 8
      hereof, the aggregate of:

      (a)   one-half (1/2) of the Rate for the particular Dividend Payment Date;
            plus

      (b)   one and one-half per cent (1-1/2%);

      3.2.  "CLOSE OF BUSINESS" means the normal closing hour of The Bank of
      Nova Scotia in Toronto, Ontario;

      3.3.  "DIVIDEND PAYMENT DATE" shall mean the last day of each of the
      months of January, April, July and October in each year;

      3.4.   "RATE" for a particular Dividend Payment Date means the rate of
      interest, expressed on a per annum basis, rounded to the nearest
      one-hundredth of one per cent (0.01%) equal to the quotient obtained by
      dividing the sum of Scotiabank's Best Lending Rates in respect of each day
      of the quarterly period ending on such Dividend Payment Date by the number
      of days in such quarterly period;

      3.5.   "REDEMPTION PRICE PER SHARE" shall mean for each Class AA, Series C
      preference share the sum of:

      (a)   Twenty-five Dollars ($25.00);

      (b)   an amount equal to all accrued and unpaid dividends whether or not
            earned or declared which shall have accrued on such Class AA, Series
            C preference share to and including the date fixed for redemption,
            and

      (c)   such further amounts, if any, as may be prescribed or required to be
            paid on such Class AA, Series C preference shares by the terms
            attaching to the Class AA, Series C Shares;
<PAGE>
                                     - 3 -

      3.6.  "SCOTIABANK'S BEST LENDING RATE" for any day means the rate of
      interest, expressed on a per annum basis, quoted by The Bank of Nova
      Scotia, as at the Close of Business, as being charged by it on commercial
      demand loans payable in Canadian dollars to its commercial customers in
      Canada having the highest credit rating, provided that Scotiabank's Best
      Lending Rate shall, in respect of any day that is not a business day and
      for which no such rate is quoted by The Bank of Nova Scotia, be
      Scotiabank's Best Lending Rate for the nearest preceding business day.

OPTIONAL REDEMPTION

4.    (a)   The Corporation shall have the right at its option, on any Dividend
Payment Date occurring after June 30, 1982, upon three (3) months' prior written
notice or, at any time after the occurrence of a change or change in status or
the making of a determination or direction contemplated by Article 8 hereof,
upon thirty (30) days' prior written notice, to redeem the whole or any part of
the Class AA, Series C Shares at the Redemption Price per Share. In case a part
of the then outstanding Class AA, Series C Shares is to be redeemed, the minimum
number of Class AA, Series C which may be redeemed shall be four thousand
(4,000) and the shares so to be redeemed shall be selected by lot in such manner
as the Directors of the Corporation in their discretion shall decide or, if the
Directors of the Corporation so determine, may be redeemed, pro rata,
disregarding fractions. Except to the extent that on any date fixed under
Article 5 hereof for the mandatory redemption of Class AA, Series C Shares there
are fewer preference shares then issued and outstanding than are required to be
redeemed, the Class AA, Series C Shares redeemed pursuant to this Article 4
shall not reduce the number of preference shares which the Corporation is
required to redeem on the dates fixed for mandatory redemption in Article 5
hereof.

      (b)   Any redemption contemplated by this Article 4 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class. Notice of any
redemption shall be given in writing by the Corporation to each holder of Class
AA, Series C Shares to be redeemed at least three (3) months, or in the case of
a redemption resulting from the occurrence of a change or change in status or
the making of a determination or direction contemplated by Article 8 hereof, at
least thirty (30) days, prior to the date fixed for redemption, setting out the
number of shares held by such holder which are to be redeemed, the date on which
such redemption is to take place, the redemption price and the calculation
thereof; provided, however, that accidental failure to give such notice to one
(1) or more of such holders, who shall not in the aggregate hold more than ten
per cent (10%) of the issued and outstanding Class AA, Series C Shares, shall
not affect the validity of such redemption as to the other holders, but upon
such failure being discovered notice shall be given forthwith and shall have the
same force and effect as if given in due time.

      (c)   If a part only of the Class AA, Series C preference shares
represented by any certificate shall be redeemed, a new certificate for the
balance shall be issued. Any Class AA, Series C Shares so redeemed shall not be
re-issued by the Corporation.
<PAGE>
                                     - 4 -

MANDATORY REDEMPTION

5.    (a)   Subject to the provisions of section 2.2 of Schedule A and the
provisions hereinafter contained, the Corporation shall redeem Class AA, Series
C Shares in accordance with the following schedule, in each case at the
Redemption Price per Share:

<TABLE>
<CAPTION>
            Redemption Date              No. of Class AA, Series C Shares to
                                                     be redeemed
            <S>                           <C>
            April 30, 1982                              20,000
            April 30, 1983                              19,000
            April 30, 1984                              18,040
            April 30, 1985                              17,120
            April 30, 1986                              16,280
            April 30, 1987                              15,440
            April 30, 1988                              14,680
            April 30, 1989                              13,960
            April 30, 1990                All Class AA, Series C shares then
                                               issued and outstanding
</TABLE>

      (b)   Any redemption contemplated by this Article 5 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class. Notice of any
redemption shall be given in writing by the Corporation to each holder of Class
AA, Series C Shares at least thirty (30) days prior to the date fixed for
redemption setting out the number of shares held by such holder which are to be
redeemed, the date on which such redemption is to take place, the redemption
price and the calculation thereof; provided, however, that accidental failure to
give such notice to one (1) or more of such holders who shall not in the
aggregate hold more than ten per cent (10%) of the issued and outstanding Class
AA, Series C Shares shall not affect the validity of such redemption as to the
other holders, but upon such failure being discovered notice shall be given
forthwith and shall have the same force and effect as if given in due time. The
redemption price for the Class AA, Series C Shares of each holder to be redeemed
will be paid to such holder by cheque of the Corporation in Canadian currency
payable at par at the main branch of the Corporation's bankers in Toronto. The
shares so to be redeemed shall be redeemed pro rata disregarding fractions and
not by lot.

      (c)   A holder of the Class AA, Series C Shares may, within fifteen (15)
days of its receipt of a notice of redemption given under this Article 5, other
than a notice of redemption given in respect of the redemption of all issued and
outstanding Class AA, Series C Shares on April 30, 1990, notify the Corporation
in writing of its desire to waive, for one year at a time, the obligation of the
Corporation to redeem Class AA, Series C Shares on the particular redemption
date and, provided the Corporation shall have received waiver(s) with respect to
a particular redemption date from holder(s) representing not less than
two-thirds (2/3rds) in number of the issued and outstanding Class AA, Series C
Shares at the particular time, the Corporation shall not redeem any of the Class
AA, Series C Shares that would otherwise have been redeemed on the particular
redemption date; provided, however, that the Corporation shall be required to
redeem
<PAGE>
                                     - 5 -

the Class AA, Series C Shares in respect of which the requisite waiver(s) has
been given on the next following redemption date provided for under this Article
5 in addition to the number of Class AA, Series C Shares that the Corporation is
obligated to redeem on such date in accordance with this Article 5.

      (d)   If a part only of the Class AA, Series C preference shares
represented by any certificate shall be redeemed, a new certificate for the
balance shall be issued. Any Class AA, Series C Shares so redeemed shall not be
re-issued by the Corporation.

      (e)   If prior to the mailing of a notice of redemption contemplated by
this Article 5, the Corporation determines that it will not be permitted, by
insolvency or other provisions of applicable law, to redeem all the Class AA,
Series C Shares required to be redeemed, the Corporation shall include in such
notice a statement of the maximum number of Class AA, Series C Shares which it
then believes it will be permitted to redeem; provided that, if the Corporation
has acted in good faith in making such determination, the Corporation shall have
no liability in the event that such determination proves inaccurate. If the
redemption by the Corporation of all of the Class AA, Series C Shares required
to be redeemed would be contrary to any insolvency provisions or other
provisions of applicable law, the Corporation shall be obligated to redeem Class
AA, Series C Shares only to the extent of the maximum sum of money that may be
so applied (rounded to the next lower multiple of Twenty-five Dollars ($25.00))
without being contrary to such provisions. In such case the Corporation shall
pay to each holder of Class AA, Series C Shares that holder's pro rata share of
the moneys available as aforesaid and shall issue and deliver to each such
holder a new share certificate, at the expense of the Corporation, representing
the Class AA, Series C Shares not redeemed. If the Corporation fails to redeem,
because of insolvency provisions or other provisions of applicable law, any
Class AA, Series C Shares in accordance with this Article 5, then as soon as
reasonably feasible after the Corporation is no longer prevented, by insolvency
or other provisions of applicable law, from redeeming the lesser of the
remaining outstanding Class AA, Series C Shares required to be redeemed and four
thousand (4,000) Class AA, Series C Shares, the Corporation shall redeem the
lesser of such shares and shall send written notice to all holders thereof that
the redemption of such shares by the Corporation shall take place on a date
which is not less than thirty (30) days subsequent to the date of such notice,
and such redemptions shall continue as aforesaid until all remaining Class AA,
Series C Shares required to be redeemed on any redemption date have been
redeemed.

      (f)   Notwithstanding section 3.1 hereof, if on any mandatory redemption
date provided for in this Article 5, any Class AA, Series C preference shares
required to be redeemed is not redeemed, including any Class AA, Series C
preference shares not redeemed as a result of the application of section (e) of
this Article 5 but excluding any Class AA, Series C preference share not
redeemed as a result of the application of section (c) of this Article 5, then,
in respect of each Dividend Payment Date falling subsequent to the date on which
any such preference share was required to be redeemed, the Annual Floating Rate
in respect of such preference share shall, until such preference share is
redeemed, be the Rate for the particular Dividend Payment Date.
<PAGE>
                                     - 6 -

RESTRICTIONS

6.    So long as any of the Class AA, Series C Shares are outstanding, the
Corporation shall not, without the approval of the holders of the Class AA,
Series C Shares as hereinafter specified:

      (i)   issue any shares ranking senior to or on a parity with the Class AA,
            Series C Shares; or

      (ii)  redeem or purchase for cancellation any shares of the Corporation
            except for the Class A preference shares, Series A, Class A
            preference shares, Series B or the Class AA preference shares,
            Series B issued and outstanding as of January 31, 1980.

LIQUIDATION

7.    In the event of liquidation, dissolution or winding-up of the Corporation
whether voluntary or involuntary or other distribution of its assets among its
shareholders, other than by way of dividends paid while the Corporation is a
going concern out of moneys of the Corporation properly applicable to the
payment of dividends, the holders of the Class AA, Series C Shares shall,
subject to the provisions of section 2.2 of Schedule A, be entitled to receive
the Redemption Price per Share for each Class AA, Series C Shares before any
distribution shall be made to the holders of the common shares of the
Corporation or any shares of any other class ranking junior to the Class AA
preference shares and except as provided in Article 8 hereof such holders shall
not be entitled to share any further in the distribution of the property or
assets of the Corporation.

TAX CHANGE

8.    If at any time (whether before or after the redemption of any Class AA,
Series C Shares, the obligation of the Corporation thereunder being deemed to
survive any such redemption) a change occurs in any applicable law or in the
interpretation, administration or enforcement thereof or a determination or
direction is made by any court of competent jurisdiction or any other lawful
authority or the Corporation ceases to be a taxable Canadian corporation within
the meaning of the Income Tax Act (Canada) the effect of which is that:

      (i)   dividends paid or payable on the Class AA, Series C Shares to a
            holder of Class AA, Series C Shares are subject to any tax, levy or
            impost of any kind;

      (ii)  such dividends are not fully deductible from the income of a holder
            of Class AA, Series C Shares in computing its taxable income for
            taxation purposes in any jurisdiction in Canada;

      (iii) the cost to a holder of Class AA, Series C Shares of making or
            maintaining its investment in the Class AA, Series C Shares is
            increased; or

      (iv)  the cost to a holder of Class AA, Series C Shares of funds used or
            deemed to have been used in making or maintaining the investment of
            such holder in the Class
<PAGE>
                                     - 7 -

            AA, Series C Shares is not fully deductible against income (assuming
            that income exists in any year against which to deduct such cost) in
            computing its income for taxation purposes in any jurisdiction in
            Canada;

then the Annual Floating Rate in respect of each Dividend Payment Date falling
on or subsequent to the date upon which the relevant change, change in status,
determination or direction commences to affect accruing dividends on the Class
AA, Series C Shares (the "effective date") shall, notwithstanding section 3.1,
mean the Rate for the particular Dividend Payment Date and the first dividend
which shall be paid on the Class AA, Series C Shares outstanding on the first
Dividend Payment Date falling subsequent to the date of occurrence of such
change or change in status or the date of making of such determination or
direction shall consist of the quarterly dividends accrued on such Class AA,
Series C Shares to such Dividend Payment Date together with an additional
dividend equal to the aggregate amount, if any, by which the dividends that
accrued on such Class AA, Series C Shares calculated at the Rate during the
period commencing on the effective date and terminating on the immediately prior
Dividend Payment Date exceeded the dividends actually paid on such Class AA,
Series C Shares during such period.

            In the event that any Class AA, Series C Shares are redeemed prior
to the first Dividend Payment Date falling subsequent to the date of occurrence
of a change or change in status or the date of making of a determination or
direction contemplated by this Article 8, the Corporation shall pay to the
holder(s) of the Class AA, Series C Shares so redeemed at the time of such
redemption, an additional amount equal to the aggregate amount, if any, by which
the dividends that accrued on such Class AA, Series C Shares calculated at the
Rate during the period commencing on the effective date and terminating on the
date of the aforesaid redemption exceeded the dividends actually paid on the
Class AA, Series C Shares so redeemed during such period. In the event that the
additional amount so required to be paid is not determinable at the time of such
redemption, the Corporation shall upon thirty (30) days' prior written notice
from the holder(s) of the Class AA, Series C Shares so redeemed pay such
additional amount to such holder(s).

TRANSFER

9.    The transfer of the Class AA, Series C Shares by any holder thereof is
restricted in that no transfer shall take place or be effective without the
consent of the Corporation (to be expressed either by a resolution passed at a
meeting of the board of directors or by an instrument or instruments in writing
signed by all the directors) if, as a result of the transfer and the operation
of Article 8 hereof the Annual Floating Rate immediately after the transfer
would be greater than the Annual Floating Rate immediately before the transfer.

AMENDMENT

10.   The provisions contained in Articles 1 to 9, in Articles 11 to 13 and in
this Article may be repealed or amended in whole or in part, but only with the
approval of the holders of the Class AA, Series C Shares given as hereinafter
specified.
<PAGE>
                                     - 8 -

APPROVAL OF HOLDERS

11.   The approval of the holders of the Class AA, Series C Shares as to any and
all matters whether or not hereinbefore referred to may be given in writing by
the holders of at least two-thirds (2/3rds) of the outstanding shares of such
series or by resolution passed or by-law sanctioned at a meeting of holders of
shares of such series duly called for the purpose and held upon at least
twenty-one (21) days' notice at which the holders of at least a majority of such
shares are present or represented by proxy and carried by not less than
two-thirds (2/3rds) of the votes cast on a poll at such meeting. If at any such
meeting the holders of a majority of such 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 fifteen (15) days
later and to such time and place as may be appointed by the chairman of the
meeting and at least ten (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 Class AA, Series C Shares present or represented by proxy may transact the
business for which the meeting was originally convened and a resolution passed
thereat by not less than two-thirds (2/3rd) of the votes cast on a poll at such
adjourned meeting shall constitute the approval of the holders of the Class AA,
Series C Shares referred to above. Any meeting of the holders of the outstanding
Class AA, Series C Shares may be held at any time and for any purpose, without
notice, if all holders of the Class AA, Series C Shares entitled to vote at the
meeting are present or represented by proxy or waive notice of the meeting in
writing. For the purposes of waiver of notice, the words "in writing" shall,
without limitation, include the sending of a telegram, telex, cable or any other
form of written communication by a shareholder. Any holder may waive notice of
any meeting either before or after the meeting is held.

            Irregularities in the notice or in the giving thereof as well as the
accidental omission to give notice of any meeting to, or the non-receipt of any
notice by, one (1) or more holders of Class AA, Series C Shares, who shall not
in the aggregate hold more than ten per cent (10%) of the issued and outstanding
Class AA, Series C Shares, shall not invalidate any action taken at any meeting.

            At any meeting of the holders of Class AA, Series C Shares each
holder of such shares shall be entitled to one (1) vote in respect of each such
share held by him.

            The formalities to be observed with respect to the giving of notice
of any meeting of holders of Class AA, Series C Shares and the conduct thereof
shall be those from time to time prescribed in the by-laws of the Corporation
with respect to meetings of shareholders.

NOTICES

12.   All notices and communications may be given by the Corporation to the
holders of Class AA, Series C Shares at their respective addresses as they
appear in the Securities Register of the Corporation. All notices and
communications may be given by a holder of Class AA, Series C Shares to the
Corporation at its registered office.
<PAGE>
                                     - 9 -

INTERPRETATION

13.   In the event that any date on which any dividend on the Class AA, Series C
Shares is payable by the Corporation or on or by which any other action required
to be taken by the Corporation hereunder is not a business day, then the
dividend shall be payable, or such other actions shall be required to be taken,
on the next succeeding date that is a business day. For greater certainty, it is
expressly declared that the Dividend Payment Date shall, for the purposes of
calculating the dividend payable on the actual date of payment, remain
unchanged.
<PAGE>
                                   SCHEDULE D

CLASS AA PREFERENCE SHARES, SERIES D

            There is hereby created a series of 400,000 Class AA preference
shares designated Class AA preference shares, Series D (herein referred to as
the "Class AA, Series D Shares") to carry and be subject as a series to the
following rights, privileges, restrictions and conditions in addition to those
attaching to the Class AA preference shares as a class:

1.          The Class AA, Series D Shares shall be issued for a cash
consideration of $25.00 per share.

2.          Subject to the provisions of section 2.2 of Schedule A, the holders
of the Class AA, Series D Shares shall be entitled to receive, and the
Corporation shall pay thereon, as and when declared by the board of directors,
out of moneys of the Corporation properly applicable to the payment of
dividends, cumulative preferential cash dividends at the Annual Floating Rate
expressed on a per annum basis, such rate to be applied to an amount of $25.00
per share. Dividends on the Class AA, Series D Shares shall accrue on a
day-to-day basis from the date of issue thereof, shall be calculated on the
basis of a 365-day year or a 366-day year, as the case may be, for the actual
number of days elapsed and shall be payable in Canadian currency, quarterly, on
January 31, April 30, July 31 and October 31 of each year (which dates are
herein referred to collectively as "Dividend Payment Dates" and individually as
a "Dividend Payment Date"), the first Dividend Payment Date to be April 30,
1981. At the time of payment of each dividend the Corporation shall furnish to
the holders of the Class AA, Series D Shares particulars of its calculation of
the rate of such dividend.

3.          For the purposes hereof, the following terms shall have the
following respective meanings:

      3.1.  "MERCANTILE'S BEST LENDING RATE" for any business day means the rate
            of interest, expressed on a per annum basis, published, quoted and
            commonly known as the "prime rate" of The Mercantile Bank of Canada,
            as at the Close of Business, as being charged by it on commercial
            demand loans payable in Canadian dollars to its commercial customers
            in Canada having the highest credit rating;

      3.2.  "CLOSE OF BUSINESS" means the normal closing hour of The Mercantile
            Bank of Canada in Toronto, Ontario;

      3.3.  "RATE" for a particular Dividend Payment Date means the rate of
            interest, expressed on a per annum basis, rounded to the nearest
            0.01%, equal to the quotient obtained by dividing the sum of the
            Mercantile's Best Lending Rate in respect of each business day of
            the quarterly period preceding such Dividend Payment Date by the
            number of business days in such quarterly period;
<PAGE>
                                     - 2 -

      3.4.  "ANNUAL FLOATING RATE" expressed on a per annum basis in respect of
            each Dividend Payment Date means, subject to Article 9, the
            aggregate of:

            (a)   1/2 of the Rate for the particular Dividend Payment, plus

            (b)   1-1/2%.

4.          The Corporation shall have the right at its option, on any Dividend
Payment Date occurring after June 30, 1982, upon 3 months' prior written notice
or, at any time after the occurrence of any Tax Event contemplated by Article 9
hereof, upon 30 days' prior written notice, to redeem the whole or any part of
the Class AA, Series D Shares at a redemption price per share of $25.00 together
with all accrued and unpaid dividends, whether or not earned or declared, which
shall have accrued on the Class AA, Series D Shares to and including the date
fixed for redemption. In case a part only of the then outstanding Class AA,
Series D Shares is to be redeemed, the shares so to be redeemed shall be
selected by lot in such manner as the Directors of the Corporation in their
discretion shall decide or, if the Directors of the Corporation so determine,
may be redeemed, pro rata, disregarding fractions.

            Any redemption contemplated by this Article 4 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class. Notice of any
redemption shall be given in writing by the Corporation to each holder of Class
AA, Series D Shares to be redeemed at least 3 months prior to the date fixed for
redemption setting out the number of shares held by such holder which is to be
redeemed, the date on which such redemption is to take place and the redemption
price; provided, however, that accidental failure to give such notice to 1 or
more of such holders, who shall not in the aggregate hold more than 10% of the
issued and outstanding Class AA, Series D Shares, shall not affect the validity
of such redemption as to the other holders, but upon such failure being
discovered, notice shall be given forthwith and shall have the same force and
effect as if given in due time.

            If a part only of the Class AA, Series D Shares represented by any
certificate shall be redeemed, a new certificate for the balance shall be
issued. Any Class AA, Series D Shares so redeemed shall not be re-issued by the
Corporation.

5.          To the extent permitted by law, and subject to the provisions of
section 2.2 of Schedule A and the provisions hereinafter contained, the
Corporation shall, commencing on January 31, 1984 and each and every year
thereafter on each subsequent anniversary of such date (which date and
anniversaries thereof are herein referred to collectively as "Redemption Dates"
and individually as a "Redemption Date"), redeem 5% of the Class AA, Series D
Shares issued and outstanding on the particular Redemption Date at a price per
share equal to $25.00 together with an amount equal to all dividends accrued and
unpaid thereon, whether or not earned or declared, which shall have accrued on
the Class AA, Series D Shares to and including the particular Redemption Date.
<PAGE>
                                     - 3 -

            Any redemption contemplated by this Article 5 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class.

            The shares so to be redeemed shall be redeemed pro rata among
holders of the Class AA, Series D Shares disregarding fractions and not by lot.

            A holder of the Class AA, Series D Shares may, within 15 days of
receipt by it of a notice of redemption contemplated by this Article 5, notify
the Corporation in writing of its desire to waive, for 1 year at a time, the
obligation of the Corporation to redeem Class AA, Series D Shares on the
particular Redemption Date and, provided the Corporation shall have received
waiver(s) with respect to a particular Redemption Date from holder(s)
representing not less than 2/3rds in number of the issued and outstanding Class
AA, Series D Shares at the particular time, the Corporation shall not redeem any
of the Class AA, Series D Shares that would otherwise have been redeemed on the
particular Redemption Date; provided, however, that the Corporation shall be
required to redeem the Class AA, Series D Shares in respect of which the
requisite waiver(s) has been given on the next following Redemption Date in
addition to the number of Class AA, Series D Shares that the Corporation is
obligated to redeem on such date in accordance with the first paragraph of this
Article 5.

            If a part only of the Class AA, Series D Shares represented by any
certificate shall be redeemed, a new certificate for the balance shall be
issued. Any Class AA, Series D Shares so redeemed shall not be re-issued by the
Corporation.

6.          To the extent permitted by law, and subject to the provisions of
section 2.2 of Schedule A, the Corporation shall, on July 31, 1991, redeem all
of the Class AA, Series D Shares issued and outstanding on such date at a price
per share equal to $25.00 together with all accrued and unpaid cumulative
dividends, whether or not earned or declared, which shall have accrued on the
Class AA, Series D Shares to and including such redemption date.

            The redemption contemplated by this Article 6 shall be effected
pursuant to the provisions hereof and to the provisions not inconsistent
herewith relating to the Class AA preference shares as a class.

            If prior to the mailing of the notice of redemption contemplated by
this Article 6, the Corporation determines that it will not be permitted, by
insolvency or other provisions of applicable law, to redeem all the Class AA,
Series D Shares then outstanding, the Corporation shall include in such notice a
statement of the maximum number of Class AA, Series D Shares which it then
believes it will be permitted to redeem; provided that, if the Corporation has
acted in good faith in making such determination, the Corporation shall have no
liability in the event that such determination proves inaccurate. If the
redemption by the Corporation of all of the Class AA, Series D Shares would be
contrary to any insolvency provisions or other provisions of applicable law, the
Corporation shall be obligated to redeem Class AA, Series D Shares only to the
extent of the maximum sum of money that may be so applied (rounded to the next
lower multiple of $25.00) without being contrary to such provisions. In such
case the Corporation shall pay to each holder of Class AA, Series D Shares that
holder's pro rata share of the moneys
<PAGE>
                                     - 4 -

available as aforesaid and shall issue and deliver to each such holder a new
share certificate, at the expense of the Corporation, representing the Class AA,
Series D Shares not redeemed. If the Corporation fails to redeem, because of
insolvency provisions or other provisions of applicable law, all of the Class
AA, Series D Shares in accordance with the first paragraph of this Article 6,
then as soon as reasonably feasible after the Corporation is no longer
prevented, by insolvency or other provisions of applicable law, from redeeming
the remaining outstanding Class AA, Series D Shares, the Corporation shall
redeem such shares and shall send written notice to all holders thereof that the
redemption of such shares by the Corporation shall take place on a date which is
not less than 30 days subsequent to the date of such notice, such redemptions to
continue as aforesaid until all remaining outstanding Class AA, Series D Shares
have been redeemed.

7.          So long as any of the Class AA, Series D Shares are outstanding, the
Corporation shall not, without the approval of the holders of the Class AA,
Series D Shares as hereinafter specified:

      (i)   issue any shares ranking senior to or on a parity with the Class AA,
            Series D Shares, or

      (ii)  redeem or purchase for cancellation any shares of the Corporation
            except for the Class A preference shares, Series A, the Class A
            preference shares, Series B, the Class AA preference shares, Series
            B and the Class AA preference shares, Series C issued and
            outstanding as of the date these Articles of Amendment become
            effective.

8.          In the event of liquidation, dissolution or winding-up of the
Corporation or other distribution of its assets among its shareholders, other
than by way of dividends paid while the Corporation is a going concern out of
moneys of the Corporation properly applicable to the payment of dividends, the
holders of the Class AA, Series D Shares shall, subject to the provisions of
section 2.2 of Schedule A, be entitled to receive the sum of $25.00 per share
together with an amount equal to all dividends accrued and unpaid thereon before
any distribution shall be made to the holders of the common shares of the
Corporation or any shares of any other class ranking junior to the Class AA
preference shares and such holders shall not be entitled to share any further in
the distribution of the property or assets of the Corporation.

9.          In the event of the occurrence of any Tax Event

      (a)   which affects the income tax treatment of dividends on the Class AA,
            Series D Shares received or receivable by a holder of Class AA,
            Series D Shares which is a "taxable Canadian corporation" and a
            "public corporation" but is not a "mutual fund corporation" (as
            those terms are defined in the Income Tax Act (Canada)) as in force
            at the time of the occurrence of the said Tax Event; or

      (b)   which affects the income tax treatment of the interest charges
            (referred to in this Article as the "Corresponding Interest
            Charges") payable by a holder of Class AA, Series D Shares on funds
            which are deemed to have been borrowed in order to finance the
            purchase of the Class AA, Series D Shares by such holder; in any
<PAGE>
                                     - 5 -

            manner which has the effect of lowering a holder's Effective
            After-Tax Return on dividends received on the Class AA, Series D
            Shares from what would have been such holder's Effective After-Tax
            Return had the Tax Event not occurred, the Annual Floating Rate in
            respect of each Dividend Payment Date falling subsequent to the
            first Dividend Payment Date falling subsequent to the Effective Date
            of such Tax Event shall, notwithstanding section 3.4, mean the Rate
            for the particular Dividend Payment Date.

            Subject to the provisions of section 2.2 of Schedule A, the holders
of the Class AA, Series D Shares shall be entitled to receive and the
Corporation shall pay thereon, as and when declared by the board of directors,
out of moneys of the Corporation properly applicable to the payment of
dividends, a cumulative preferential dividend in addition to the dividends
provided for in Article 2, payable on the first Dividend Payment Date falling
subsequent to the Effective Date of the said Tax Event equal to the aggregate
amount by which the dividends that would have accrued on such Class AA, Series D
Shares calculated at the Rate during the period commencing on the Effective Date
of the said Tax Event and terminating on the said Dividend Payment Date would
have exceeded the dividends which would otherwise be payable on the Class AA,
Series D Shares in respect of such period.

            For the purposes of this Article 9, the following expressions shall
have the meanings assigned hereunder:

            "TAX EVENT" means:

      (a)   any change in applicable legislation (which term includes any
            regulation or order-in-council) other than a change in the rate of
            income tax applicable to corporations generally, or any change in
            the administrative interpretation of applicable law;

      (b)   any judgment or order of a court of competent jurisdiction;

      (c)   any change in the status of the Corporation (including without
            limitation, the loss of its status as a taxable Canadian corporation
            as defined in the Income Tax Act (Canada)) under applicable
            legislation for any reason;

      (d)   a breach by the Corporation of any representations or warranties
            given in writing to a holder of the Class AA, Series D Shares at the
            time of their purchase from the Corporation; or

      (e)   the receipt of a response from the Department of National Revenue,
            Taxation, to a request for an opinion made at or about the time of
            their purchase in respect of the Class AA, Series D Shares which, in
            the opinion of a holder who purchases such shares from the
            Corporation, is unfavourable;
<PAGE>
                                     - 6 -

            "EFFECTIVE DATE" of a Tax Event means the date which is fifteen days
            after:

      (a)   in the case of a change referred to in paragraph (a) of the
            definition of Tax Event the earlier of: (y) the date on which such
            change becomes effective and (z) the date as of which such change is
            proposed to become effective, as announced in any official
            announcement of any competent governmental authority,
            notwithstanding that such change may not be formally enacted or
            implemented on or before such date;

      (b)   in the case of a judgment or order referred to in paragraph (b) of
            the definition of Tax Event the date when it is pronounced,
            notwithstanding the existence of any right of appeal;

      (c)   in the case of an event referred to in paragraph (c), (d) or (e) of
            the definition of Tax Event the earlier of: (y) the date on which
            the event occurs and (z) the date as of which a holder has
            reasonable cause to believe that the event has occurred provided the
            holder has so notified the Corporation in writing and 15 days have
            passed in which the Corporation, to the reasonable satisfaction of
            the holder, has not satisfied the holder that no such event has
            occurred;

            "EFFECTIVE AFTER-TAX RETURN" in respect of dividends received on the
            Class AA, Series D Shares means the return on the issue price of
            $25.00 per share computed after taking into account all income taxes
            payable by the holder in the year in which such dividends are
            received or in any other year which may reasonably be regarded as
            attributable to the receipt by such holder of such dividends or the
            disallowance as a deduction, in whole or in part, of the
            Corresponding Interest Charges.

            In this Article 9, the term "holder" shall include, if applicable,
the beneficial owner of any Class AA, Series D Shares.

10.         Subject to the provisions of the Canada Business Corporations Act,
the provisions contained in Articles 1 to 9, in Article 11 and in this Article
may be repealed or amended in whole or in part, but only with the approval of
the holders of the Class AA, Series D Shares given as hereinafter specified.

11.         The approval of the holders of the Class AA, Series D Shares as to
any and all matters hereinbefore referred to may be given in writing by the
holders of at least 2/3rds of the outstanding shares of such series or by
resolution passed or by-law sanctioned at a meeting of holders of shares of such
series duly called for the purpose and held upon at least 21 days' notice at
which the holders of at least a majority of such shares are present or
represented by proxy and carried by not less than 2/3rds of the votes cast on a
poll at such meeting. If at any such meeting the holders of a majority of such
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
<PAGE>
                                     - 7 -

not be necessary in such notice to specify the purpose for which the meeting was
originally called. At such adjourned meeting the holders of Class AA, Series D
Shares present or represented by proxy may transact the business for which the
meeting was originally convened and a resolution passed thereat by not less than
2/3rds of the votes cast on a poll at such adjourned meeting shall constitute
the approval of the holders of the Class AA, Series D Shares referred to above.
Any meeting of the holders of the outstanding Class AA, Series D Shares may be
held at any time and for any purpose, without notice, if all holders of the
Class AA, Series D Shares entitled to vote at the meeting are present or
represented by proxy or waive notice of the meeting in writing. For the purposes
of waiver of notice, the words "in writing" shall, without limitation, include
the sending of a telegram, telex, cable or any other form of written
communication by a shareholder. Any holder may waive notice of any meeting
either before or after the meeting is held.

            Irregularities in the notice or in the giving thereof as well as the
accidental omission to give notice of any meeting to, or the non-receipt of any
notice by, 1 or more holders of Class AA, Series D Shares, who shall not in the
aggregate hold more than 10% of the issued and outstanding Class AA, Series D
Shares, shall not invalidate any action taken at any meeting.

            At any meeting of the holders of Class AA, Series D Shares each
holder of such shares shall be entitled to 1 vote in respect of each such share
held by him.

            The formalities to be observed with respect to the giving of notice
of any meeting of holders of Class AA, Series D Shares and the conduct thereof
shall be those from time to time prescribed in the by-laws of the Corporation
with respect to meetings of shareholders.
<PAGE>

                                   SCHEDULE E

                      Number of, Designation of and Rights,
                     Privileges, Restrictions and Conditions
                         attaching to the Floating Rate
                      Class AA preference shares, Series E

CLASS AA PREFERENCE SHARES, SERIES E

            The fifth series of Class AA preference shares of the Corporation
shall consist of 2,000,000 Class AA preference shares which shall be designated
as Floating Rate Class AA preference shares, Series E (hereinafter referred to
as the "Class AA, Series E Shares") and which, in addition to the rights,
privileges, restrictions and conditions attached to the Class AA preference
shares as a class, shall have attached thereto the following rights, privileges,
restrictions and conditions:

1.          CONSIDERATION FOR ISSUE

            The consideration for the issue of each Class AA, Series E Share
shall be $25.00.

2.          DIVIDENDS

      2.1.  PAYMENT OF DIVIDENDS

            Subject to the prior rights of the holders of the Class A preference
shares and any other shares ranking senior to the Class AA preference shares,
the holders of the Class AA, Series E Shares shall be entitled to receive, and
the Corporation shall pay thereon, as and when declared by the board of
directors of the Corporation, out of moneys of the Corporation properly
applicable to the payment of dividends, cumulative preferential cash dividends
as follows:

      (i)   an initial dividend (the "Initial Dividend") payable on September
            30, 1984 (the "Initial Dividend Payment Date") in the amount per
            Class AA, Series E Share equal to the amount obtained when the
            Initial Dividend Rate (as defined in section 2.2) is multiplied by
            $25.00;

      (ii)  dividends payable quarterly (the "Quarterly Dividends") on the last
            day of each of the months of March, June, September and December in
            each year (the "Dividend Payment Dates") commencing on December 31,
            1984, each such Quarterly Dividend to be equal to the amount
            obtained when the applicable Quarterly Dividend Rate (as defined in
            section 2.2) is multiplied by $25.00.

            In any case where dividends are payable for a period (the "Dividend
Payment Period") that ends on a date other than the Initial Dividend Payment
Date or a Dividend Payment Date, dividends shall be paid in the amount per Class
AA, Series E Share obtained when

<PAGE>

                                     - 2 -

      (i)   $25.00 multiplied by seventy percent (70%) of the Average Prime Rate
            for the period of ninety days ending on a date which is thirty days
            before the end of such Dividend Payment Period

      is  multiplied by

      (ii)  the result obtained when the number of days in such Dividend Payment
            Period is divided by 365.

Dividends shall accrue on a day-to-day basis.

      2.2.  DEFINITIONS

            Where used in these share provisions, the following terms shall have
the following meanings, respectively:

      (a)   "QUARTERLY DIVIDEND RATE" means, in relation to any Dividend Payment
            Date, one-quarter of seventy percent (70%) of the Average Prime Rate
            for the three calendar months ending on the last day of the calendar
            month immediately preceding the month during which such Dividend
            Payment Date falls.

      (b)   "INITIAL DIVIDEND RATE" means the result obtained when

            (i)   seventy percent (70%) of the Average Prime Rate for the period
                  from and including the date of the initial issue of Class AA,
                  Series E Shares (the "Initial Issue Date") to and including
                  August 31, 1984

                  is multiplied by

            (ii)  the result obtained when the number of days in the period from
                  and including the Initial Issue Date to and including the
                  Initial Dividend Payment Date is divided by 365.

      (c)   "AVERAGE PRIME RATE" means, for any period, the arithmetic average
            (rounded to the nearest one-one-hundredth of one percent (0.01%)) of
            the Average Daily Prime Rate for each day during such period.

      (d)   "AVERAGE DAILY PRIME RATE" means, for any day, the arithmetic
            average (rounded to the nearest one-one-hundredth of one percent
            (0.01%)) of the Daily Prime Rates of the Banks on such day; provided
            that, if on such day, there shall be no Daily Prime Rate for one
            (but not both) of the Banks, the Average Daily Prime Rate for such
            day shall be the Daily Prime Rate of the other of such Banks, and
            further provided that if, on such day, there shall be no Daily Prime
            Rate for both of the Banks, the Average Daily Prime Rate for such
            day shall be 1.65% above the average yields at weekly tender on 91
            day Government of Canada Treasury Bills as reported by the Bank of
            Canada for such day.

<PAGE>

                                     - 3 -

      (e)   "DAILY PRIME RATE" means, for either Bank, on any day, the annual
            prime commercial lending rate of interest established and announced
            as the reference rate of interest used by such Bank on such day to
            determine the rates of interest on Canadian dollar loans to
            customers in Canada and designated by such Bank as its prime rate.

      (f)   "BANKS" means the Bank of Montreal and the Bank of Nova Scotia,
            collectively, and the term "Bank" means one of the Banks.

      2.3.  METHOD OF PAYMENT

            Dividends (less any tax required to be withheld by the Corporation)
on the Class AA, Series E Shares shall be paid by cheque payable in lawful money
of Canada at par at any branch in Canada of the Corporation's bankers for the
time being or by any other reasonable means the Corporation deems desirable. The
mailing of such cheque from the Corporation's registered office, or the
principal office in Toronto of the registrar for the Class AA, Series E Shares,
or the payment by such other means as the Corporation deems desirable, on or
before the date on which such dividend is to be paid to a holder of Class AA,
Series E Shares shall be deemed to be payment of the dividends represented
thereby and payable on such date unless the cheque is not paid upon presentation
or payment by such other means if not received. Dividends which are represented
by a cheque which has not been presented to the Corporation's bankers for
payment or that otherwise remain unclaimed for a period of 6 years from the date
on which they were declared to be payable shall be forfeited to the Corporation.

      2.4.  CUMULATIVE PAYMENT OF DIVIDENDS

            If on any date on which dividends are to be paid the dividends
accrued to such date are not paid in full on all of the Class AA, Series E
Shares then outstanding, such dividends, or the unpaid part thereof, shall be
paid on a subsequent date or dates determined by the directors of the
Corporation on which the Corporation shall have sufficient moneys properly
applicable to the payment of such dividends. The holders of Class AA, Series E
Shares shall not be entitled to any dividends other than or in excess of the
cumulative preferential cash dividends herein provided for.

3.          REDEMPTION

      3.1.  OPTIONAL REDEMPTION

            The Corporation may not redeem the Class AA, Series E Shares or any
of them on or prior to June 30, 1989. After June 30, 1989 and subject to the
provisions of Article 5 hereof, the Corporation may redeem at any time the whole
or from time to time any part of the then outstanding Class AA, Series E Shares,
on payment for each share to be redeemed of:

      (i)   $26.00 if the date fixed for redemption is on or prior to June 30,
            1990;

      (ii)  $25.75 if the date fixed for redemption is after June 30, 1990 and
            on or prior to June 30, 1991;

<PAGE>

                                     - 4 -

      (iii) $25.50 if the date fixed for redemption is after June 30, 1991 and
            on or prior to June 30, 1992;

      (iv)  $25.25 if the date fixed for redemption is after June 30, 1992 and
            on or prior to June 30, 1993; and

      (v)   $25.00 if the date fixed for redemption is after June 30, 1993;

together in each case with all accrued and unpaid dividends thereon up to the
date fixed for redemption which, for greater certainty, shall include dividends
calculated in accordance with section 2.1 hereof during the period from and
including the immediately preceding Dividend Payment Date to but excluding the
date fixed for redemption, the whole constituting and hereinafter referred to as
the "Redemption Price".

      3.2.  PARTIAL REDEMPTION

            In case a part only of the Class AA, Series E Shares is at any time
to be redeemed, the shares so to be redeemed shall be selected by lot or in such
other manner as the directors of the Corporation, from time to time, so
determine. If a part only of the Class AA, Series E Shares represented by any
certificate shall be redeemed, a new certificate representing the balance of
such shares shall be issued to the holder thereof at the expense of the
Corporation upon presentation and surrender of the first mentioned certificate.

      3.3.  METHOD OF REDEMPTION

            In any case of redemption of Class AA, Series E Shares, the
Corporation shall not less than 30 days and not more than 60 days before the
date specified for redemption send by prepaid mail or deliver to the registered
address of each person who at the date of mailing or delivery is a registered
holder of Class AA, Series E Shares to be redeemed a notice in writing of the
intention of the Corporation to redeem such Class AA, Series E Shares.
Accidental failure or omission to give such notice to one or more holders shall
not affect the validity of such redemption, but upon such failure or omission
being discovered notice shall be given forthwith to such holder or holders and
shall have the same force and effect as if given in due time. Such notice shall
set out the number of Class AA, Series E Shares held by the person to whom it is
addressed which are to be redeemed, the Redemption Price, the date specified for
redemption and the place or places within Canada at which holders of Class AA,
Series E Shares may present and surrender such shares for redemption.

            On and after the date so specified for redemption, the Corporation
shall pay or cause to be paid to or to the order of the registered holders of
the Class AA, Series E Shares to be redeemed the Redemption Price of such shares
on presentation and surrender, at the registered office of the Corporation or
any other place or places within Canada specified in such notice of redemption,
of the certificate or certificates representing the Class AA, Series E shares
called for redemption. Payment in respect of Class AA, Series E Shares being
redeemed shall be made by cheque payable to the holders thereof in lawful money
of Canada at part at any branch in Canada of the Corporation's bankers for the
time being or by any other reasonable means the Corporation

<PAGE>

                                     - 5 -

deems desirable. From and after the date specified for redemption in any such
notice of redemption, the Class AA, Series E Shares called for redemption shall
cease to be entitled to dividends or any other participation in the assets of
the Corporation and the holders thereof shall not be entitled to exercise any of
their other rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and surrender of the
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected.

            The Corporation shall have the right at any time after the mailing
or delivery of notice of its intention to redeem Class AA, Series E Shares to
deposit the Redemption Price of the Class AA, Series E Shares so called for
redemption, or of such of the Class AA, Series E Shares which are represented by
certificates which have not at the date of such deposit been surrendered by the
holders thereof in connection with such redemption, to a special account in any
chartered bank or any trust company in Canada named in such notice or in a
subsequent notice to the holders of the shares in respect of which the deposit
is made, to be paid without interest to or to the order of the respective
holders of Class AA, Series E Shares called for redemption upon presentation and
surrender to such bank or trust company of the certificates representing such
shares. Upon such deposit being made or upon the date specified for redemption
in such notice, whichever is the later, the Class AA, Series E Shares in respect
of which such deposit shall have been made shall be deemed to be redeemed and
the rights of the holders thereof shall be limited to receiving, without
interest, their proportionate part of the amount so deposited upon presentation
and surrender of the certificate or certificates representing their Class AA,
Series E Shares being redeemed. Any interest allowed on any such deposit shall
belong to the Corporation. Redemption moneys that are represented by a cheque
which has not been presented to the Corporation's bankers for payment or that
otherwise remain unclaimed (including moneys held on deposit to a special
account as provided for above) for a period of 6 years from the date specified
for redemption shall be forfeited to the Corporation.

4.          PURCHASE FOR CANCELLATION

            The Corporation may at any time or from time to time purchase for
cancellation all or any part of the outstanding Class AA, Series E Shares in the
open market (including purchase through or from an investment dealer or a member
of a recognized stock exchange) or by invitation for tenders addressed to all of
the holders of record of Class AA, Series E Shares then outstanding, at the
lowest price or prices at which, in the opinion of the directors of the
Corporation, such shares are then obtainable but not exceeding a price per share
(i) of $26.00 together with accrued and unpaid dividends thereon up to the date
of purchase which, for greater certainty, shall include dividends calculated in
accordance with section 2.1 hereof during the period from and including the
immediately preceding Dividend Payment Date (which term shall, for the purposes
of this Article 4, include the Initial Divided Payment Date) to but excluding
the date of purchase, if purchased at any time on or prior to June 30, 1989; or
(ii) equal to the applicable Redemption Price if purchased at any other time; as
the case may be, plus, in all cases, reasonable costs of purchase. If, in
response to an invitation for tenders under the provisions of this Article 4,
more Class AA, Series E Shares are tendered at a price or prices acceptable to
the Corporation than the Corporation is prepared to purchase, then the Class AA,
Series E Shares to be purchased by the Corporation shall be purchased as nearly
as may be pro rata according to the

<PAGE>

                                     - 6 -

number of shares tendered by each holder who submits a tender to the
Corporation, provided that when shares are tendered at different prices, the pro
rating shall be effected only with respect to the shares tendered at the price
at which more shares were tendered than the Corporation is prepared to purchase
after the Corporation has purchased all the shares tendered at lower prices.

5.          VOTING RIGHTS

            The holders of the Class AA, Series E Shares shall not be entitled
(except as specifically provided by law, by the provisions attaching to the
Class AA preference shares as a class or as otherwise provided herein) to
receive notice of or to attend or to vote at any meetings of shareholders of the
Corporation.

6.          LIQUIDATION, DISSOLUTION OR WINDING UP

            In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or in the event of any other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs, the holders of the Class AA, Series E Shares shall be
entitled to receive from the assets of the Corporation a sum equal to $25.00 per
Class AA, Series E Share held by them respectively, plus an amount equal to all
accrued and unpaid dividends thereon up to the date of payment which, for
greater certainty, shall include dividends calculated in accordance with section
2.1 during the period from and including the immediately preceding Dividend
Payment Date (which term shall, for the purposes of this Article 6, include the
Initial Dividend Payment Date) to but excluding the date of payment before any
amount shall be paid to, or assets of the Corporation distributed amongst the
holders of any other shares of the Corporation ranking as to capital junior to
the Class AA, Series E Shares. After payment to the holders of the Class AA,
Series E Shares of the amounts so payable to them, they shall not be entitled to
share in any further distribution of the assets of the Corporation.

7.          INTERPRETATION

            In the event that any date on which any dividend on the Class AA,
Series E Shares is payable by the Corporation, or on or by which any other
action is required to be taken by the Corporation hereunder, is not a business
day, then such dividend shall be payable, or such other action shall be required
to be taken, on or by the next succeeding day that is a business day.

            For the purposes of these share provisions:

      (a)   "BUSINESS DAY" means a day other than a Saturday, a Sunday or any
            other day that is treated as a statutory holiday in the jurisdiction
            in which the Corporation's registered office is located;

      (b)   "JUNIOR SHARE" means a share of the Corporation ranking as to
            capital or dividends junior to the Class AA, Series E Shares; and

      (c)   "RANKING AS TO CAPITAL" means ranking with respect to the
            distribution of assets in the event of a liquidation, dissolution or
            winding up of the Corporation,

<PAGE>
                                     - 7 -

            whether voluntary or involuntary, or in the event of any other
            distribution of assets of the Corporation among its shareholders for
            the purpose of winding up its affairs.

8.          MAIL SERVICE INTERRUPTION

            If the directors of the Corporation determine that mail service is
or is threatened to be interrupted at the time when the Corporation is required
or elects to give any notice hereunder, or is required to send any cheque or any
share certificate to the holder of any Class AA, Series E Share, whether in
connection with the redemption of such share or otherwise, the Corporation may,
notwithstanding the provisions hereof:

      (a)   give such notice by publication thereof once in a daily English
            language newspaper of general circulation published in Toronto and
            such notice shall be deemed to have been validly given on the day
            next succeeding its publication in Toronto; and

      (b)   fulfill the requirement to send such cheque or such share
            certificate by arranging for the delivery thereof to such holder in
            the city of Toronto, and such cheque and/or certificate shall be
            deemed to have been sent on the date on which notice of such
            arrangement shall have been given as provided in (a) above, provided
            that as soon as the directors of the Corporation determine that mail
            service is no longer interrupted or threatened to be interrupted
            such cheque or share certificate, if not theretofor delivered to
            such holder, shall be sent by mail as herein provided. In the event
            that the Corporation is required to mail such share certificate,
            such mailing shall be made by prepaid mail to the registered address
            of each person who at the date of mailing is a registered holder and
            who is entitled to receive such certificate.

9.          AMENDMENT

            The rights, privileges, restrictions and conditions attached to the
Class AA, Series E Shares may be added to, changed or removed by Articles of
Amendment but only with the prior approval of the holders of the Class AA,
Series E Shares given as hereinafter specified in addition to any vote or
authorization required by law.

10.         APPROVAL OF HOLDERS OF CLASS AA, SERIES E SHARES

            Any approval of the holders of the Class AA, Series E Shares with
respect to any and all matters referred to herein or of any other matter
requiring the consent of the holders of the Class AA, Series E Shares may be
given in such manner as may then be required by law, subject to a minimum
requirement that such approval be given by resolution signed by all the holders
of outstanding Class AA, Series E Shares or passed by the affirmative vote of at
least 66-2/3% of the votes cast by the holders of Class AA, Series E Shares who
voted in respect of that resolution at a meeting of the holders of the Class AA,
Series E Shares duly called for that purpose. The quorum requirement for, the
proxy rules applicable to, and the formalities to be observed in

<PAGE>

                                     - 8 -

respect of the giving notice of, the formalities to be observed in respect of
the conduct of, any such meeting or any adjourned meeting shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders, or if not so prescribed, as required by the Canada
Business Corporations Act. On every poll taken at every meeting of holders of
Class AA, Series E Shares, each holder of Class AA, Series E Shares entitled to
vote thereat shall have one vote in respect of each Class AA, Series E Share
held.

<PAGE>

                                   SCHEDULE F

CLASS AAA PREFERENCE SHARES

The unlimited number of Class AAA preference shares without par value (the
"Class AAA preference shares"), issuable in series, which shall, as a class,
have attached thereto the following rights, privileges, restrictions and
conditions:

1.    The Class AAA preference shares shall, as to the payment of dividends and
      return of capital in the event of liquidation, dissolution or winding up
      of the Corporation, rank junior to the Class A preference shares without
      par value (the "Class A preference shares") and to the Class AA preference
      shares without par value (the "Class AA preference Shares") and senior to
      the common shares without par value (the "common shares") and all other
      shares ranking in such regard junior to the Class AAA preference shares
      and shall be subject to the rights, privileges, restrictions and
      conditions attaching to the Class A preference shares and to the Class AA
      preference shares;

2.    The directors of the Corporation may from time to time issue Class AAA
      preference shares in one or more series, each series to consist of such
      number of shares as shall before issuance thereof be fixed by the
      directors who (subject as herein provided) shall at the same time
      determine the designation, rights, restrictions and conditions attaching
      to the Class AAA preference shares of such series including, without
      limiting the generality of the foregoing, the rate of preferential
      dividends, the dates of payment thereof, the redemption price and terms
      and conditions of redemption (if any), the conversion rights (if any), the
      participation rights (if any) and any sinking fund, purchase fund or other
      provisions attaching to the Class AAA preference shares of such series,
      the whole subject to the issuance of a certificate of amendment;

3.    Subject to the Canada Business Corporations Act, the holders of the Class
      AAA preference shares or of a series thereof shall not be entitled as
      holders of such class or series to receive notice of or to attend any
      meeting of the shareholders of the Corporation or to vote at any such
      meeting except that votes may be granted to a series of Class AAA
      preference shares when dividends are in arrears on any one or more series;
      such voting rights, if any, will be determined by the applicable series
      provisions;

4.    The approval of the holders of the Class AAA preference shares as to any
      and all matters to be approved by a separate vote of the holders of Class
      AAA preference shares may be given by special resolution signed by all the
      holders of Class AAA preference shares or passed at a meeting of the
      holders of Class AAA preference shares duly called and held upon at least
      21 days' notice at which the matter in question is carried by the
      affirmative votes of the holders of not less than 2/3 of the Class AAA
      preference shares represented and voted at such meeting cast on a poll;
      the formalities to be observed with respect to the giving of notice of any
      such meeting and the conduct thereof shall be those from time to time
      described in the by-laws of the Corporation with respect to meetings of
      shareholders; on every poll taken at every such meeting, each holder of
      Class AAA preference shares shall be entitled to one vote in respect of
      each Class AAA preference share held.

<PAGE>

                                   SCHEDULE G

                      CLASS AAA PREFERENCE SHARES SERIES A

                            NUMBER AND DESIGNATION OF
                      AND RIGHTS, PRIVILEGES, RESTRICTIONS
                         AND CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES SERIES A

            The first series of Class AAA preference shares of the Corporation
shall consist of 3,000,000 Class AAA preference shares which shall be designated
as Class AAA preference shares Series A (hereinafter referred to as the "Series
A Shares") and which, in addition to the rights, privileges, restrictions and
conditions attached to the Class AAA preference shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.          CONSIDERATION FOR ISSUE

            The consideration for the issue of each Series A Share shall be
$25.00.

2.          DIVIDENDS

      2.1.  PAYMENT OF DIVIDENDS

            The holders of the Series A Shares shall be entitled to receive, and
the Corporation shall pay thereon, as and when declared by the directors of the
Corporation, out of moneys of the Corporation properly applicable to the payment
of dividends, a fixed cumulative preferential cash dividend of $2.25 per share
per annum, payable in equal quarterly amounts in lawful money of Canada, on the
last day of each of the months of March, June, September and December in each
year (the "Dividend Payment Dates").

            Subject to the immediately preceding paragraph, the amount of the
dividend for any period which is less than a full quarter year with respect to
any Series A Share:

      (i)   which is issued, redeemed or purchased during a quarter; or

      (ii)  where assets of the Corporation are distributed to the holders of
            the Series A Shares pursuant to Article 5 hereof during a quarter;

shall be equal to the amount calculated by multiplying $0.5625 by a fraction of
which the numerator is the number of days in such quarter on which such share
has been outstanding (including the date of issue or the Dividend Payment Date
at the beginning of such quarter if such share was outstanding on that date and
excluding the date of redemption, purchase or distribution or the Dividend
Payment Date at the end of such quarter if such share was outstanding on that
date) and the denominator is the number of days in such quarter (including

<PAGE>
                                     - 2 -

the Dividend Payment Date at the beginning thereof and excluding the Dividend
Payment Date at the end thereof).

      2.2.  METHOD OF PAYMENT

            Cheques payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being shall be issued in
respect of the dividends on the Series A Shares (less any tax required to be
withheld by the Corporation). The mailing from the Corporation's registered
office on or before any Dividend Payment Date of such a cheque to a holder of
Series A Shares shall be deemed to be payment of the dividends represented
thereby and payable on such Dividend Payment Date unless the cheque is not paid
on presentation. Dividends which are represented by a cheque which has not been
presented to the Corporation's bankers for payment or that otherwise remain
unclaimed for a period of 6 years from the date on which they were declared to
be payable shall be forfeited to the Corporation.

      2.3.  CUMULATIVE PAYMENT OF DIVIDENDS

            If on any Dividend Payment Date the dividends accrued to such date
are not paid in full on all of the Series A Shares then outstanding, such
dividends, or the unpaid part thereof, shall be paid on a subsequent date or
dates determined by the directors of the Corporation on which the Corporation
shall have sufficient moneys properly applicable to the payment of such
dividends. The holders of Series A Shares shall not be entitled to any dividends
other than or in excess of the cumulative preferential cash dividends herein
provided for.

3.          REDEMPTION

      3.1.  OPTIONAL REDEMPTION

            Subject to the provisions of this Article 3 and to the rights,
privileges, restrictions and conditions attaching to any shares of the
Corporation ranking prior to the Class AAA preference shares, the Corporation
may, upon giving notice as hereinafter provided, redeem at any time the whole or
from time to time any part of the then outstanding Series A Shares, on payment
for each share to be redeemed of $25.00, together with an amount equal to all
dividends accrued and unpaid thereon up to the redemption date (the whole
constituting and being hereinafter referred to as the "Redemption Price").

      3.2.  PARTIAL REDEMPTION

            In case a part only of the Series A Shares is at any time to be
redeemed, the shares so to be redeemed shall be selected by lot or in such other
manner as the directors of the Corporation, from time to time, so determine. If
a part only of the Series A Shares represented by any certificate shall be
redeemed, a new certificate representing the balance of such shares shall be
issued to the holder thereof at the expense of the Corporation upon presentation
and surrender of the first mentioned certificate.

<PAGE>
                                     - 3 -

      3.3.  METHOD OF REDEMPTION

            In any case of redemption of Series A Shares, the Corporation shall
at least 30 days before the date specified for redemption send by prepaid mail
or deliver to each person who at the date of mailing or delivery is a registered
holder of Series A Shares to be redeemed, a notice in writing of the intention
of the Corporation to redeem such Series A Shares. Such notice shall be mailed
or delivered to each holder of Series A Shares to be redeemed at the last
address of such shareholder as it appears on the books of the Corporation, or in
the event of the address of any such shareholder not so appearing, then to the
address of such shareholder last known to the Corporation; provided that,
accidental failure or omission to give such notice to one or more holders shall
not affect the validity of such redemption, but upon such failure or omission
being discovered notice shall be given forthwith to such holder or holders and
shall have the same force and effect as if given in due time. Such notice shall
set out the number of Series A Shares held by the person to whom it is addressed
which are to be redeemed, the Redemption Price, the date specified for
redemption, and the place or places within Canada at which holders of Series A
Shares may present and surrender such shares for redemption.

            On and after the date so specified for redemption, the Corporation
shall pay or cause to be paid to or to the order of the registered holders of
the Series A Shares to be redeemed the Redemption Price of such shares on
presentation and surrender, at the registered office of the Corporation or any
other place or places within Canada specified in such notice of redemption, of
the certificate or certificates representing the Series A Shares called for
redemption. Payment in respect of Series A Shares being redeemed shall be made
by cheques payable to the holders thereof in lawful money of Canada at par at
any branch in Canada of the Corporation's bankers for the time being or by any
other reasonable means the Corporation deems desirable. The Corporation shall
have the right at any time after the mailing or delivery of notice of its
intention to redeem Series A Shares to deposit the Redemption Price of the
Series A Shares so called for redemption, or of such of the Series A Shares
which are represented by certificates which have not at the date of such deposit
been surrendered by the holders thereof in connection with such redemption, in a
special account in any chartered bank or any trust company in Canada named in
such notice or in a subsequent notice to the holders of the shares in respect of
which the deposit is made, to be paid without interest to or to the order of the
respective holders of Series A Shares called for redemption upon presentation
and surrender to such bank or trust company of the certificates representing
such shares. Upon such deposit being made or upon the date specified for
redemption in such notice, whichever is the later, the Series A Shares in
respect of which such deposit shall have been made shall be deemed to be
redeemed and the rights of the holders thereof shall be limited to receiving,
without interest, the Redemption Price of such Series A Shares upon presentation
and surrender of the certificate or certificates representing their Series A
Shares being redeemed. Any interest allowed on any such deposit shall belong to
the Corporation.

            From and after the date specified for redemption in any such notice
of redemption, the Series A Shares called for redemption shall cease to be
entitled to dividends or any other participation in the assets of the
Corporation and the holders thereof shall not be entitled to exercise any of
their other rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and surrender of the share
certificates in

<PAGE>
                                     - 4 -

accordance with the foregoing provisions, in which case the rights of the
holders shall remain unaffected. Redemption moneys which are represented by a
cheque which has not been presented to the Corporation's bankers for payment or
that otherwise remain unclaimed (including moneys held on deposit to a special
account as provided for above) for a period of 6 years from the date specified
for redemption shall be forfeited to the Corporation.

4.          VOTING RIGHTS

            Subject to the Canada Business Corporations Act, the holders of the
Series A Shares shall not be entitled as such to receive notice of or to attend
any meeting of the shareholders of the Corporation or to vote at any such
meeting other than a meeting of holders of Series A Shares.

5.          LIQUIDATION, DISSOLUTION OR WINDING UP

            In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or in the event of any other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs, the holders of the Series A Shares shall be entitled
to receive from the assets of the Corporation a sum equal to $25.00 per Series A
Share held by them respectively, plus an amount equal to all dividends accrued
and unpaid thereon up to the date of payment, the whole before any amount shall
be paid by the Corporation or any assets of the Corporation shall be distributed
to holders of shares of any class of the Corporation ranking as to capital
junior to the Series A Shares. After payment to the holders of the Series A
Shares of the amounts so payable to them, they shall not be entitled to share in
any further distribution of the assets of the Corporation.

6.          GENERAL

            Without limiting the rights, privileges, restrictions and conditions
herein set forth, the Series A Shares may be used at any time to purchase common
shares of the Corporation and if tendered as payment for common shares the value
attached to each Series A Share shall be the value of such share as determined
by the directors of the Corporation at the time of each such purchase.

7.          INTERPRETATION

            In the event that any date on which any dividend on the Series A
Shares is payable by the Corporation, or on or by which any other action is
required to be taken by the Corporation hereunder, is not a business day, then
such dividend shall be payable, or such other action shall be required to be
taken, on or by the next succeeding date that is a business day.

            For the purpose of these share provisions:

      (a)   "BUSINESS DAY" means a day other than a Saturday, a Sunday or any
            other day that is treated as a statutory holiday in the jurisdiction
            in which the Corporation's registered office is located;

<PAGE>
                                     - 5 -

      (b)   "JUNIOR SHARE" means a share of the Corporation ranking junior to
            the Series A Shares with respect to the payment of dividends or the
            distribution of assets in the event of the liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or in the event of any other distribution of assets of the
            Corporation among its shareholders for the purpose of winding up its
            affairs; and

      (c)   "RANKING AS TO CAPITAL" means ranking with respect to the
            distribution of assets in the event of a liquidation, dissolution or
            winding up of the Corporation, whether voluntary or involuntary, or
            in the event of any other distribution of assets of the Corporation
            among its shareholders for the purpose of winding up its affairs.

8.          AMENDMENT

            The rights, privileges, restrictions and conditions attached to the
Series A Shares may be added to, changed or removed by Articles of Amendment,
but only with the prior approval of the holders of the Series A Shares given as
hereinafter specified in addition to any vote or authorization required by law.

9.          APPROVAL OF HOLDERS

            Any approval of the holders of the Series A Shares with respect to
any and all matters referred to herein or of any other matters requiring the
consent of the holders of the Series A Shares may be given by special resolution
signed by all the holders of Series A Shares or passed at meeting of the holders
of Series A Shares duly called and held at least 21 days' notice at which the
matter in question is carried by the affirmative votes of the holders of not
less than 2/3 of the Series A Shares represented and voted at such meeting cast
on a poll. The formalities to be observed with respect to the giving of notice
of any such meeting and the conduct thereof shall be those from time to time
prescribed by the by-laws of the Corporation with respect to meetings of
shareholders. On every poll taken at every such meeting each holder of Series A
shares shall be entitled to one vote in respect of each Series A Share held by
him.

<PAGE>

                                   SCHEDULE H

                      CLASS AAA PREFERENCE SHARES SERIES B

                            NUMBER AND DESIGNATION OF
                      AND RIGHTS, PRIVILEGES, RESTRICTIONS
                         AND CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES SERIES B

            The second series of Class AAA preference shares of the Corporation
shall consist of 3,000,000 Class AAA preference shares which shall be designated
as Class AAA preference shares Series B (hereinafter referred to as the "Series
B Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA preference shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.          CONSIDERATION FOR ISSUE

            The consideration for the issue of each Series B Share shall be
$25.00.

2.          DIVIDENDS

      2.1.  PAYMENT OF DIVIDENDS

            The holders of the Series B Shares shall be entitled to receive, and
the Corporation shall pay thereon, as and when declared by the directors of the
Corporation, out of moneys of the Corporation properly applicable to the payment
of dividends, a fixed cumulative preferential cash dividend of $2.25 per share
per annum, payable in equal quarterly amounts in lawful money of Canada, on the
last day of each of the months of January, April, July and October in each year
(the "Dividend Dates").

            Subject to the immediately preceding paragraph, the amount of the
dividend for any period which is less than a full quarter year with respect to
any Series B Shares:

      (i)   which is issued, redeemed or purchased during a quarter; or

      (ii)  where assets of the Corporation are distributed to the holders of
            the Series B Shares pursuant to Article 6 hereof during a quarter;

shall be equal to the amount calculated by multiplying $0.5625 by a fraction of
which the numerator is the number of days in such quarter during which such
share has been outstanding (including the day at the beginning of such period
and excluding the day at the end of such period) and the denominator is the
number of days in such quarter (including the day at the beginning thereof and
excluding the Dividend Payment Date at the end thereof).

<PAGE>

                                     - 2 -

      2.2   METHOD OF PAYMENT

            Cheques payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being shall be issued in
respect of the dividends on the Series B Shares (less any tax required to be
withheld by the Corporation). The mailing from the Corporation's registered
office on or before any Dividend Payment Date of such a cheque to a holder of
Series B Shares shall be deemed to be payment of the dividends represented
thereby and payable on such Dividend Payment Date unless the cheque is not paid
upon presentation. Dividends which are represented by a cheque which has not
been presented to the Corporation's bankers for payment or that otherwise remain
unclaimed for a period of six years from the date on which they were declared to
be payable shall be forfeited to the Corporation.

      2.3.  CUMULATIVE PAYMENT OF DIVIDENDS

            If on any Dividend Payment Date the dividends accrued to such date
are not paid in full on all of the Series B Shares then outstanding, such
dividends, or the unpaid part thereof, shall be paid on a subsequent date or
dates determined by the directors of the Corporation on which the Corporation
shall have sufficient moneys properly applicable to the payment of such
dividends. The holders of Series B Shares shall not be entitled to any dividends
other than or in excess of the cumulative preferential cash dividends herein
provided for.

3.          REDEMPTION

      3.1.  OPTIONAL REDEMPTION

            Subject to the provisions of this Article 3 and to the rights,
privileges, restrictions and conditions attaching to any shares of the
Corporation ranking prior to the Class AAA preference shares, the Corporation
may, upon giving notice as hereinafter provided, redeem at any time the whole or
from time to time any part of the then outstanding Series B Shares, on payment
for each share to be redeemed of $25.00, together with an amount equal to all
dividends accrued and unpaid thereon up to the redemption date (the whole
constituting and being hereafter referred to as the "Redemption Price").

      3.2.  PARTIAL REDEMPTION

            In case a part only of the Series B Shares is at any time to be
redeemed, the shares so to be redeemed shall be selected by lot or in such other
manner as the directors of the Corporation, from time to tune, so determine. If
a part only of the Series B Shares represented by any certificate shall be
redeemed, a new certificate representing the balance of such shares shall be
issued to the holder thereof at the expense of the Corporation upon presentation
and surrender of the first mentioned certificate.

      3.3.  METHOD OF REDEMPTION

            In any case of redemption of Series B Shares, the Corporation shall
at least 30 days before the date specified for redemption send by prepaid mail
or deliver to each person who at the date of mailing or delivery is a registered
holder of Series B Shares to be redeemed a notice

<PAGE>

                                     - 3 -

in writing of the intention of the Corporation to redeem such Series B Shares.
Such notice shall be mailed or delivered to each holder of Series B Shares to be
redeemed at the last address of such shareholder as it appears on the books of
the Corporation, or in the event of the address of any such shareholder not so
appearing, then to the address of such shareholder last known to the
Corporation; provided that accidental failure or omission to give such notice to
one or more holders shall not affect the validity of such redemption, but upon
such failure or omission being discovered, notice shall be given forthwith to
such holder or holders and shall have the same force and effect as if given in
due time. Such notice shall set out the number of Series B Shares held by the
person to whom it is addressed which are to be redeemed, the Redemption Price,
the date specified for redemption, and the place or places within Canada at
which such holders of Series B Shares may present and surrender such shares for
redemption.

            On and after the date so specified for redemption, the Corporation
shall pay or cause to be paid to or to the order of the registered holders of
the Series B Shares to be redeemed the Redemption Price of such shares on
presentation and surrender, at the registered office of the Corporation or any
other place or places within Canada specified in such notice of redemption, of
the certificate or certificates representing the Series B Shares called for
redemption. Payment in respect of Series B Shares being redeemed shall be made
by cheques payable to the holders thereof in lawful money of Canada at par at
any branch in Canada of the Corporation's bankers for the time being or by any
other reasonable means the Corporation deems desirable.

            The Corporation shall have the right at any time after the mailing
or delivery of notice of its intention to redeem Series B Shares to deposit the
Redemption Price of the Series B Shares so called for redemption, or of such of
the Series B Shares which are represented by certificates which have not at the
date of such deposit been surrendered by the holders thereof in connection with
such redemption, in a special account in any chartered bank or any trust company
in Canada named in such notice or in a subsequent notice to the holders of the
shares in respect of which the deposit is made, to be paid without interest to
or to the order of the respective holders of Series B Shares called for
redemption upon presentation and surrender to such bank or trust company of the
certificates representing such shares. Upon such deposit being made or upon the
date specified for redemption in such notice, whichever is the later, the Series
B Shares in respect of which such deposit shall have been made shall be deemed
to be redeemed and the rights of the holders thereof shall be limited to
receiving, without interest, the Redemption Price of such Series B Shares upon
presentation and surrender of the certificate or certificates representing their
Series B Shares being redeemed. Any interest allowed on any such deposit shall
belong to the Corporation.

            From and after the date specified for redemption in any such notice
of redemption, the Series B Shares called for redemption shall cease to be
entitled to dividends or any other participation in the assets of the
Corporation and the holders thereof shall not be entitled to exercise any of
their other rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and surrender of the share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected. Redemption moneys which are
represented by a cheque which has not been presented to the Corporation's
bankers for payment or that otherwise remain unclaimed

<PAGE>

                                     - 4 -

(including moneys held on deposit in a special account as provided for above)
for a period of six years from the date specified for redemption shall be
forfeited to the Corporation.

4.          EXCHANGE RIGHT

      4.1.  RIGHT TO EXCHANGE

            Subject to the provisions of this Article 4 and to the receipt by
the Corporation of all necessary regulatory approvals, the holders of Series B
Shares shall have the right (the "Exchange Right"), on each date on which a
closing (a "Closing") occurs of

      (a)   a distribution (a "Public Offering") by the Corporation of its
            common shares pursuant to a prospectus or other similar document
            ("prospectus") filed with any appropriate securities regulatory
            agency or stock exchange;

      (b)   a rights offering (a "Rights Offering") by the Corporation; or

      (c)   a private placement (a "Private Placement") by the Corporation;

to exchange Series B Shares held by them for up to the aggregate number of
common shares of the Corporation set forth in section 4.2 below at the Exchange
Rate determined in accordance with section 4.8 below.

            For the purpose of this Article 4, "common shares" means the common
shares in the capital of the Corporation as such shares were constituted on July
24, 1992 and includes shares of any other class of shares of the Corporation (i)
resulting from the reclassification or change of the common shares, or (ii)
which carry a residual right to participate to an unlimited degree in the
Corporation's earnings and in its assets on liquidation, dissolution or
winding-up.

      4.2.  NUMBER OF COMMON SHARES TO WHICH THE EXCHANGE RIGHT RELATES

            For so long as Hees International Bancorp Inc. ("Hees") shall be the
holder of the Series B Shares, the maximum number of common shares for which
Hees may exercise the Exchange Right on the date of a Closing shall be equal to
that number of common shares which, when added to the common shares then held
directly or indirectly by Hees and Carena Holdings Inc. ("CHI") will result in
Hees and CHI, after giving effect to the Closing and the exercise of the
Exchange Right, holding directly or indirectly the same aggregate percentage of
the outstanding common shares that Hees and CHI held directly or indirectly on
the business day immediately preceding the day on which the Closing occurs.

            From and after the date on which Hees shall cease to be the holder
of the Series B Shares, the maximum number of common shares for which a holder
of Series B Shares may exercise the Exchange Right on the date of a Closing
shall be equal to that number of common shares which, when added to the common
shares then held directly or indirectly by such holder will result in such
holder, after giving effect to the Closing and the exercise of the Exchange
Right, holding directly or indirectly the same percentage of the outstanding
common shares that

<PAGE>

                                     - 5 -

such holder held directly or indirectly on the business day immediately
preceding the day on which the Closing occurs.

            Nothing in this section 4.2 shall require Hees or any other holder
of Series B Shares to exchange Series B Shares for the maximum number of common
shares (or any lesser number thereof) to which Hees or such holder is otherwise
entitled.

      4.3.  EXERCISE OF RIGHT TO EXCHANGE

            The Exchange Right may be exercised by a holder of Series B Shares
by notice in writing given to the Corporation on the business day immediately
prior to the day on which a Closing occurs accompanied by the certificate or
certificates representing the Series B Shares in respect of which the holder
desires to exercise the Exchange Right. Such notice shall be signed by such
holder or by a duly authorized agent and shall specify the number of Series B
Shares that the holder desires to have exchanged. If less than all the Series B
Shares represented by any certificate or certificates accompanying any notice
are to be exchanged, the holder shall be entitled to receive, at the expense of
the Corporation, a new certificate representing the Series B Shares comprised in
the certificate or certificates surrendered as aforesaid which are not to be
exchanged. A holder of Series B Shares who has given a notice to the Corporation
as herein provided shall be deemed to have become a holder of the number of
common shares in respect of which the exchange right has been exercised on the
day on which the Closing occurs.

      4.4.  ENTITLEMENT TO DIVIDENDS

            The registered holder of any Series B Share on the record date for
any dividend payable on such share shall be entitled to such dividend
notwithstanding that such share has been exchanged into common shares after such
record date and before the payment date of such dividend, and the registered
holder of a common share resulting from such exchange shall be entitled to rank
equally per common share with the registered holders of all other common shares
of record on any date on or after the date of such exchange.

            Subject to the foregoing, upon exchange of any Series B Shares there
shall be no adjustment by the Corporation or by any holder of Series B Shares on
account of any dividends either on the Series B Shares so exchanged or on the
common shares resulting from such exchange.

      4.5.  SHARES CALLED FOR REDEMPTION

            In the case of any Series B Shares which are called for redemption,
the Exchange Right thereof shall, notwithstanding anything herein contained,
terminate at the close of business on the business day immediately preceding the
date fixed for redemption, provided, however, that if the Corporation fails to
redeem such Series B Shares in accordance with the notice of redemption the
Exchange Right shall thereupon be restored and continue as if such Series B
Shares had not been called for redemption.

<PAGE>

                                     - 6 -

      4.6.  CERTIFICATES

            On any exchange of Series B Shares, the certificate or certificates
representing the common shares of the Corporation resulting therefrom shall be
issued at the expense of the Corporation in the name of the holder of the Series
B Shares exchanged or in such nominee name or names as such holder may direct in
writing (either in the notice referred to in section 4.3 or otherwise) provided
that such holder shall pay any applicable security transfer taxes.

      4.7.  NO FRACTIONAL SHARES

            The Corporation shall not issue fractional shares in satisfaction of
the Exchange Right but in lieu thereof may, in respect of any fractional
interest resulting from the exercise of the Exchange Right, pay a cash
adjustment by cheque payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being. The amount of any cash
adjustment shall equal the current market value of such fractional interest
computed on the basis of the last board lot sale price (or average of the bid
and asked prices if there were no sales) per share for the common shares that
are the subject of the Public Offering, Rights Offering or Private Placement on
the Toronto Stock Exchange (or, if such common shares are not then listed on the
Toronto Stock Exchange, on such other stock exchange on which such common shares
are listed as selected by the directors of the Corporation) on the business day
immediately preceding the Closing. If such common shares are not listed on any
stock exchange, their current market value shall be determined by the directors.
If a cash adjustment is to be paid pursuant to the provisions of this section
4.7, the mailing from the Corporation's registered office to a holder of Series
B Shares who has exercised the Exchange Right shall be deemed to be payment of
the cash adjustment unless the cheque is not paid upon due presentation. Cash
adjustments represented by cheques which have not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which the same became payable shall be
forfeited to the Corporation.

      4.8.  EXCHANGE RATE

            The number of Series B Shares to be exchanged for each common share
of the Corporation shall be equal to the Exchange Rate. The Exchange Rate is A
divided by B, where A is the price per common share which would have been
payable by a holder exercising the Exchange Right to acquire common shares of
the Corporation in connection with the Public Offering, Rights Offering or
Private Placement and B is $25.00.

      4.9.  DISPUTES

            If any question at any time arises with respect to the determination
of the number of common shares issuable by the Corporation pursuant to section
4.8, the right of a holder of Series B Shares to exercise the Exchange Right or
with respect to the amount of any cash payment to be made in lieu of issuing a
fractional share, such question shall be conclusively determined by the auditors
from time to time of the Corporation and shall be binding upon the Corporation
and all shareholders, transfer agents and registrars of Series B Shares and
common

<PAGE>

                                     - 7 -

shares. In making any such determination, the auditors will be entitled to rely
on an opinion of legal counsel or other expert retained by them.

5.          VOTING RIGHTS

            Subject to the Canada Business Corporations Act, the holders of the
Series B Shares shall not be entitled as such to receive notice of or to attend
any meeting of the shareholders of the Corporation or to vote at any such
meeting other than a meeting of holders of Series B Shares.

6.          LIQUIDATION, DISSOLUTION OR WINDING UP

            In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or in the event of any other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs, the holders of the Series B Shares shall be entitled
to receive from the assets of the Corporation a sum equal to $25.00 per Series B
Share held by them respectively, plus an amount equal to all dividends accrued
and unpaid thereon up to the date of payment, the whole before any amount shall
be paid by the Corporation or any assets of the Corporation shall be distributed
to holders of shares of any class of the Corporation ranking as to capital
junior to the Series B Shares. After payment to the holders of the Series B
Shares of the amounts so payable to them, they shall not be entitled to share in
any further distribution of the assets of the Corporation.

7.          INTERPRETATION

            In the event that any date on which any dividend on the Series B
Shares is payable by the Corporation or on or by which any other action is
required to be taken by the Corporation hereunder, is not a business day, then
such dividend shall be payable, or such other action shall be required to be
taken, on or by the next succeeding date that is a business day.

            For the purpose of these share provisions:

      (a)   "BUSINESS DAY" means a day other than a Saturday, a Sunday or any
            other day that is treated as a statutory holiday in the jurisdiction
            in which the Corporation's registered office is located;

      (b)   "JUNIOR SHARE" means a share of the Corporation ranking junior to
            the Series B Shares with respect to the payment of dividends or the
            distribution of assets in the event of the liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or in the event of any other distribution of assets of the
            Corporation among its shareholders for the purpose of winding up its
            affairs; and

      (c)   "RANKING AS TO CAPITAL" means ranking with respect to the
            distribution of assets in the event of a liquidation, dissolution or
            winding up of the Corporation, whether voluntary or involuntary, or
            in the event of any other distribution of assets of the Corporation
            among its shareholders for the purpose of winding up its affairs.

<PAGE>

                                     - 8 -

8.          AMENDMENT

            The rights, privileges, restrictions and conditions attaching to the
Series B Shares may be added to, changed or removed by Articles of Amendment,
but only with the prior approval of the holders of the Series B Shares given as
hereinafter specified in addition to any vote or authorization required by law.

9.          APPROVAL OF HOLDERS

            Any approval of the holders of the Series B Shares with respect to
any and all matters referred to herein or of any other matters requiring the
consent of the holders of the Series B Shares may be given by special resolution
signed by all the holders of Series B Shares or passed at a meeting of the
holders of Series B Shares duly called and held on at least 21 days' notice at
which the matter in question is carried by the affirmative votes of the holders
of not less than two-thirds of the Series B Shares represented and voted at such
meeting cast on a poll. The formalities to be observed with respect to the
giving of notice of any such meeting and the conduct thereof shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders. On every poll taken at every such meeting each holder
of Series B Shares shall be entitled to one vote in respect of each Series B
Share held.
<PAGE>

                                   SCHEDULE I

                      CLASS AAA PREFERENCE SHARES SERIES C

                            NUMBER AND DESIGNATION OF
                      AND RIGHTS, PRIVILEGES, RESTRICTIONS
                         AND CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES SERIES C

            The third series of Class AAA preference shares of the Corporation
shall consist of 3,000,000 Class AAA preference shares which shall be designated
as Class AAA preference shares Series C (hereinafter referred to as the "Series
C Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA preference shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.          CONSIDERATION FOR ISSUE

            The consideration for the issue of each Series C Share shall be
$25.00.

2.          DIVIDENDS

      2.1.  PAYMENT OF DIVIDENDS

            The holders of the Series C Shares shall be entitled to receive, and
the Corporation shall pay thereon, as and when declared by the directors of the
Corporation, out of moneys of the Corporation properly applicable to the payment
of dividends, a fixed cumulative preferential cash dividend of $2.00 per share
per annum, payable in equal quarterly amounts in lawful money of Canada, on the
last day of each of the months of January, April, July and October in each year
(the "Dividend Dates").

            Subject to the immediately preceding paragraph, the amount of the
dividend for any period which is less than a full quarter year with respect to
any Series C Shares:

      (i)   which is issued, redeemed or purchased during a quarter; or

      (ii)  where assets of the Corporation are distributed to the holders of
            the Series C Shares pursuant to Article 6 hereof during a quarter;

shall be equal to the amount calculated by multiplying $0.50 by a fraction of
which the numerator is the number of days in such quarter during which such
share has been outstanding (including the day at the beginning of such period
and excluding the day at the end of such period) and the denominator is the
number of days in such quarter (including the day at the beginning thereof and
excluding the Dividend Payment Date at the end thereof).

<PAGE>

                                     - 2 -

      2.2.  METHOD OF PAYMENT

            Cheques payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being shall be issued in
respect of the dividends on the Series C Shares (less any tax required to be
withheld by the Corporation). The mailing from the Corporation's registered
office on or before any Dividend Payment Date of such a cheque to a holder of
Series C Shares shall be deemed to be payment of the dividends represented
thereby and payable on such Dividend Payment Date unless the cheque is not paid
upon presentation. Dividends which are represented by a cheque which has not
been presented to the Corporation's bankers for payment or that otherwise remain
unclaimed for a period of six years from the date on which they were declared to
be payable shall be forfeited to the Corporation.

      2.3.  CUMULATIVE PAYMENT OF DIVIDENDS

            If on any Dividend Payment Date the dividends accrued to such date
are not paid in full on all of the Series C Shares then outstanding, such
dividends, or the unpaid part thereof, shall be paid on a subsequent date or
dates determined by the directors of the Corporation on which the Corporation
shall have sufficient moneys properly applicable to the payment of such
dividends. The holders of Series C Shares shall not be entitled to any dividends
other than or in excess of the cumulative preferential cash dividends herein
provided for.

3.          REDEMPTION

      3.1.  OPTIONAL REDEMPTION

            Subject to the provisions of this Article 3 and to the rights,
privileges, restrictions and conditions attaching to any shares of the
Corporation ranking prior to the Class AAA preference shares, the Corporation
may, upon giving notice as hereinafter provided, redeem at any time the whole or
from time to time any part of the then outstanding Series C Shares, on payment
for each share to be redeemed of $25.00, together with an amount equal to all
dividends accrued and unpaid thereon up to the redemption date (the whole
constituting and being hereafter referred to as the "Redemption Price").

      3.2.  PARTIAL REDEMPTION

            In case a part only of the Series C Shares is at any time to be
redeemed, the shares so to be redeemed shall be selected by lot or in such other
manner as the directors of the Corporation, from time to time, so determine. If
a part only of the Series C Shares represented by any certificate shall be
redeemed, a new certificate representing the balance of such shares shall be
issued to the holder thereof at the expense of the Corporation upon presentation
and surrender of the first mentioned certificate.

      3.3.  METHOD OF REDEMPTION

            In any case of redemption of Series C Shares, the Corporation shall
at least 30 days before the date specified for redemption send by prepaid mail
or deliver to each person who at the date of mailing or delivery is a registered
holder of Series C Shares to be redeemed a notice

<PAGE>

                                     - 3 -

in writing of the intention of the Corporation to redeem such Series C Shares.
Such notice shall be mailed or delivered to each holder of Series C Shares to be
redeemed at the last address of such shareholder as it appears on the books of
the Corporation, or in the event of the address of any such shareholder not so
appearing, then to the address of such shareholder last known to the
Corporation; provided that accidental failure or omission to give such notice to
one or more holders shall not affect the validity of such redemption, but upon
such failure or omission being discovered, notice shall be given forthwith to
such holder or holders and shall have the same force and effect as if given in
due time. Such notice shall set out the number of Series C Shares held by the
person to whom it is addressed which are to be redeemed, the Redemption Price,
the date specified for redemption, and the place or places within Canada at
which such holders of Series C Shares may present and surrender such shares for
redemption.

            On and after the date so specified for redemption, the Corporation
shall pay or cause to be paid to or to the order of the registered holders of
the Series C Shares to be redeemed, the Redemption Price of such shares on
presentation and surrender, at the registered office of the Corporation or any
other place or places within Canada specified in such notice of redemption, of
the certificate or certificates representing the Series C Shares called for
redemption. Payment in respect of Series C Shares being redeemed shall be made
by cheques payable to the holders thereof in lawful money of Canada at par at
any branch in Canada of the Corporation's bankers for the time being or by any
other reasonable means the Corporation deems desirable.

            The Corporation shall have the right at any time after the mailing
or delivery of notice of its intention to redeem Series C Shares to deposit the
Redemption Price of the Series C Shares so called for redemption, or of such of
the Series C Shares which are represented by certificates which have not at the
date of such deposit been surrendered by the holders thereof in connection with
such redemption, in a special account in any chartered bank or any trust company
in Canada named in such notice or in a subsequent notice to the holders of the
share in respect of which the deposit is made, to be paid without interest to or
to the order of the respective holders of Series C Shares called for redemption
upon presentation and surrender to such bank or trust company of the
certificates representing such shares. Upon such deposit being made or upon the
date specified for redemption in such notice, whichever is the later, the Series
C Shares in respect of which such deposit shall have been made shall be deemed
to be redeemed and the rights of the holders thereof shall be limited to
receiving, without interest, the Redemption Price of such Series C Shares upon
presentation and surrender of the certificate or certificates representing their
Series C Shares being redeemed. Any interest allowed on any such deposit shall
belong to the Corporation.

            From and after the date specified for redemption in any such notice
of redemption, the Series C Shares called for redemption shall cease to be
entitled to dividends or any other participation in the assets of the
Corporation and the holders thereof shall not be entitled to exercise any of
their other rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and surrender of the share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected. Redemption moneys which are
represented by a cheque which has not been presented to the Corporation's
bankers for payment or that otherwise remain unclaimed

<PAGE>

                                     - 4 -

(including moneys held on deposit in a special account as provided for above)
for a period of six years from the date specified for redemption shall be
forfeited to the Corporation.

4.          EXCHANGE RIGHT

      4.1.  RIGHT TO EXCHANGE

            Subject to the provisions of this Article 4 and to the receipt by
the Corporation of all necessary regulatory approvals, the holders of Series C
Shares shall have the right (the "Exchange Right"), on each date on which a
closing (a "Closing") occurs of

      (a)   a distribution (a "Public Offering") by the Corporation of its
            common shares pursuant to a prospectus or other similar document
            ("prospectus") filed with any appropriate securities regulatory
            agency or stock exchange;

      (b)   a rights offering (a "Rights Offering") by the Corporation; or

      (c)   a private placement (a "Private Placement") by the Corporation;

to exchange Series C Shares held by them for up to the aggregate number of
common shares of the Corporation set forth in section 4.2 below at the Exchange
Rate determined in accordance with section 4.8 below.

            For the purpose of this Article 4, "common shares" means the common
shares in the capital of the Corporation as such shares were constituted on
January 31, 1994 and includes shares of any other class of shares of the
Corporation (i) resulting from the reclassification or change of the common
shares, or (ii) which carry a residual right to participate to an unlimited
degree in the Corporation's earnings and in its assets on liquidation,
dissolution or winding-up.

      4.2.  NUMBER OF COMMON SHARES TO WHICH THE EXCHANGE RIGHT RELATES

            For so long as Hees International Bancorp Inc. ("Hees") shall be the
holder of the Series C Shares, the maximum number of common shares for which
Hees may exercise the Exchange Right on the date of a Closing shall be equal to
that number of common shares which, when added to the common shares then held
directly or indirectly by Hees and Carena Holdings Inc. ("CHI") will result in
Hees and CHI, after giving effect to the Closing and the exercise of the
Exchange Right, holding directly or indirectly the same aggregate percentage of
the outstanding common shares that Hees and CHI held directly or indirectly on
the business day immediately preceding the day on which the Closing occurs.

            From and after the date on which Hees shall cease to be the holder
of the Series C Shares, the maximum number of common shares for which a holder
of Series C Shares may exercise the Exchange Right on the date of a Closing
shall be equal to that number of common shares which, when added to the common
shares then held directly or indirectly by such holder will result in such
holder, after giving effect to the Closing and the exercise of the Exchange
Right, holding directly or indirectly the same percentage of the outstanding
common shares that

<PAGE>

                                     - 5 -

such holder held directly or indirectly on the business day immediately
preceding the day on which the Closing occurs.

            Nothing is this section 4.2 shall require Hees or any other holder
of Series C Shares to exchange Series C Shares for the maximum number of common
shares (or any lesser number thereof) to which Hees or such holder is otherwise
entitled.

      4.3.  EXERCISE OF RIGHT TO EXCHANGE

            The Exchange Right may be exercised by a holder of Series C Shares
by notice in writing given to the Corporation on the business day immediately
prior to the day on which a Closing occurs accompanied by the certificate or
certificates representing the Series C Shares in respect of which the holder
desires to exercise the Exchange Right. Such notice shall be signed by such
holder or by a duly authorized agent and shall specify the number of Series C
Shares that the holder desires to have exchanged. If less than all the Series C
Shares represented by any certificate or certificates accompanying any notice
are to be exchanged, the holder shall be entitled to receive, at the expense of
the Corporation, a new certificate representing the Series C Shares comprised in
the certificate or certificates surrendered as aforesaid which are not to be
exchanged. A holder of Series C Shares who has given a notice to the Corporation
as herein provided shall be deemed to have become a holder of the number of
common shares in respect of which the exchange right has been exercised on the
day on which the Closing occurs.

      4.4.  ENTITLEMENT TO DIVIDENDS

            The registered holder of any Series C Share on the record date for
any dividend payable on such share shall be entitled to such dividend
notwithstanding that such share has been exchanged into common shares after such
record date and before the payment date of such dividend, and the registered
holder of a common share resulting from such exchange shall be entitled to rank
equally per common share with the registered holders of all other common shares
of record on any date on or after the date of such exchange.

            Subject to the foregoing, upon exchange of any Series C Shares there
shall be no adjustment by the Corporation or by any holder of Series C Shares on
account of any dividends either on the Series C Shares so exchanged or on the
common shares resulting from such exchange.

      4.5.  SHARES CALLED FOR REDEMPTION

            In the case of any Series C Shares which are called for redemption,
the Exchange Right thereof shall, notwithstanding anything herein contained,
terminate at the close of business on the business day immediately preceding the
date fixed for redemption, provided, however, that if the Corporation fails to
redeem such Series C Shares in accordance with the notice of redemption the
Exchange Right shall thereupon be restored and continue as if such Series C
Shares had not been called for redemption.

<PAGE>

                                     - 6 -

      4.6.  CERTIFICATES

            On any exchange of Series C Shares, the certificate or certificates
representing the common shares of the Corporation resulting therefrom shall be
issued at the expense of the Corporation in the name of the holder of the Series
C Shares exchanged or in such nominee name or names as such holder may direct in
writing (either in the notice referred to in section 4.3 or otherwise) provided
that such holder shall pay any applicable security transfer taxes.

      4.7.  NO FRACTIONAL SHARES

            The Corporation shall not issue fractional shares in satisfaction of
the Exchange Right but in lieu thereof may, in respect of any fractional
interest resulting from the exercise of the Exchange Right, pay a cash
adjustment by cheque payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being. The amount of any cash
adjustment shall equal the current market value of such fractional interest
computed on the basis of the last board lot sale price (or average of the bid
and asked prices if there were no sales) per share for the common shares that
are the subject of the Public Offering, Rights Offering or Private Placement on
the Toronto Stock Exchange (or, if such common shares are not then listed on the
Toronto Stock Exchange, on such other stock exchange on which such common shares
are listed as selected by the directors of the Corporation) on the business day
immediately preceding the Closing. If such common shares are not listed on any
stock exchange, their current market value shall be determined by the directors.
If a cash adjustment is to be paid pursuant to the provisions of this section
4.7, the mailing from the Corporation's registered office to a holder of Series
C Shares who has exercised the Exchange Right shall be deemed to be payment of
the cash adjustment unless the cheque is not paid upon due presentation. Cash
adjustments represented by cheques which have not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which the same became payable shall be
forfeited to the Corporation.

      4.8.  EXCHANGE RATE

            The number of Series C Shares to be exchanged for each common share
of the Corporation shall be equal to the Exchange Rate. The Exchange Rate is A
divided by B, where A is the price per common share which would have been
payable by a holder exercising the Exchange Right to acquire to common shares of
the Corporation in connection with the Public Offering, Rights Offering or
Private Placement and B is $25.00.

      4.9.  DISPUTES

            If any question at any time arises with respect to the determination
of the number of common shares issuable by the Corporation pursuant to section
4.8, the right of a holder of Series C Shares to exercise the Exchange Right or
with respect to the amount of any cash payment to be made in lieu of issuing a
fractional share, such question shall be conclusively determined by the auditors
from time to time of the Corporation and shall be binding upon the Corporation
and all shareholders, transfer agents and registrars of Series C Shares and
common

<PAGE>

                                     - 7 -

shares. In making any such determination, the auditors will be entitled to rely
on an opinion of legal counsel or other expert retained by them.

5.          VOTING RIGHTS

            Subject to the Canada Business Corporations Act, the holders of the
Series C Shares shall not be entitled as such to receive notice of or to attend
any meeting of the shareholders of the Corporation or to vote at any such
meeting other than a meeting of holders of Series C Shares.

6.          LIQUIDATION, DISSOLUTION OR WINDING UP

            In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or in the event of any other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs, the holders of the Series C Shares shall be entitled
to receive from the assets of the Corporation a sum equal to $25.00 per Series C
Share held by them respectively, plus an amount equal to all dividends accrued
and unpaid thereon up to the date of payment, the whole before any amount shall
be paid by the Corporation or any assets of the Corporation shall be distributed
to holders of shares of any class of the Corporation ranking as to capital
junior to the Series C Shares. After payment to the holders of the Series C
Shares of the amounts so payable to them, they shall not be entitled to share in
any further distribution of the assets of the Corporation.

7.          INTERPRETATION

            In the event that any date on which any dividend on the Series C
Shares is payable by the Corporation or on or by which any other action is
required to be taken by the Corporation hereunder, is not a business day, then
such dividend shall be payable, or such other action shall be required to be
taken, on or by the next succeeding date that is a business day.

            For the purpose of these share provisions:

      (a)   "BUSINESS DAY" means a day other than a Saturday, a Sunday or any
            other day that is treated as a statutory holiday in the jurisdiction
            in which the Corporation's registered office is located;

      (b)   "JUNIOR SHARE" means a share of the Corporation ranking, junior to
            the Series C Shares with respect to the payment of dividends or the
            distribution of assets in the event of the liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or in the event of any other distribution of assets of the
            Corporation among its shareholders for the purpose of winding up its
            affairs; and

      (c)   "RANKING AS TO CAPITAL" means ranking with respect to the
            distribution of assets in the event of a liquidation, dissolution or
            winding up of the Corporation, whether voluntary or involuntary, or
            in the event of any other distribution of assets of the Corporation
            among its shareholders for the purpose of winding up its affairs.

<PAGE>

                                     - 8 -

8.          AMENDMENT

            The rights, privileges, restrictions and conditions attaching to the
Series C Shares may be added to, changed or removed by Articles of Amendment,
but only with the prior approval of the holders of the Series C Shares given as
hereinafter specified in addition to any vote or authorization required by law.

9.          APPROVAL OF HOLDERS

            Any approval of the holders of the Series C Shares with respect to
any and all matters referred to herein or of any other matters requiring the
consent of the holders of the Series C Shares may be given by special resolution
signed by all the holders of Series C Shares or passed at a meeting of the
holders of Series C Shares duly called and held on at least 21 days' notice at
which the matter in question is carried by the affirmative votes of the holders
of not less than two-thirds of the Series C Shares represented and voted at such
meeting cast on a poll. The formalities to be observed with respect to the
giving of notice of any such meeting and the conduct thereof shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders. On every poll taken at every such meeting each holder
of Series C Shares shall be entitled to one vote in respect of each Series C
Share held.

<PAGE>
                                   SCHEDULE J

                      CLASS AAA PREFERENCE SHARES SERIES D

                            NUMBER AND DESIGNATION OF
                      AND RIGHTS, PRIVILEGES, RESTRICTIONS
                         AND CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES, SERIES D

            The fourth series of Class AAA preference shares of the Corporation
shall consist of 3,000,000 Class AAA preference shares which shall be designated
as Class AAA preference shares, Series D (hereinafter referred to as the "Series
D Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA preference shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.          CONSIDERATION FOR ISSUE

            The consideration for the issue of each Series D Share shall be
$25.00.

2.          DIVIDENDS

      2.1.  PAYMENT OF DIVIDENDS

            The holders of the Series D Shares shall be entitled to receive, and
the Corporation shall pay thereon, as and when declared by the directors of the
Corporation, out of moneys of the Corporation properly applicable to the payment
of dividends, a fixed cumulative preferential cash dividend of $2.00 per share
per annum, payable in equal quarterly amounts in lawful money of Canada, on the
last day of each of the months of January, April, July and October in each year
(the `Dividend Payment Dates").

            Subject to the immediately preceding paragraph, the amount of the
dividend for any period which is less than a full quarter year with respect to
any Series D Shares:

      (i)   which is issued, redeemed or purchased during a quarter; or

      (ii)  where assets of the Corporation are distributed to the holders of
            the Series D Shares pursuant to Article 6 hereof during a quarter;

shall be equal to the amount calculated by multiplying $0.50 by a fraction of
which the numerator is the number of days in such quarter during which such
share has been outstanding (including the day at the beginning of such period
and excluding the day at the end of such period) and the denominator is the
number of days in such quarter (including the day at the beginning thereof and
excluding the Dividend Payment Date at the end thereof).
<PAGE>
                                     - 2 -

      2.2.  METHOD OF PAYMENT

            Cheques payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being shall be issued in
respect of the dividends on the Series D Shares (less any tax required to be
withheld by the Corporation). The mailing from the Corporation's registered
office on or before any Dividend Payment Date of such a cheque to a holder of
Series D Shares shall be deemed to be payment of the dividends represented
thereby and payable on such Dividend Payment Date unless the cheque is not paid
upon presentation. Dividends which are represented by a cheque which has not
been presented to the Corporation's bankers for payment or that otherwise remain
unclaimed for a period of six years from the date on which they were declared to
be payable shall be forfeited to the Corporation.

      2.3.  CUMULATIVE PAYMENT OF DIVIDENDS

            If on any dividend Payment Date the dividends accrued to such date
are not paid in full on all of the Series D Shares then outstanding, such
dividends, or the unpaid part thereof, shall be paid on a subsequent date or
dates determined by the directors of the Corporation on which the Corporation
shall have sufficient moneys properly applicable to the payment of such
dividends. The holders of Series D Shares shall not be entitled to any dividends
other than or in excess of the cumulative preferential cash dividends herein
provided for.

3.          REDEMPTION

      3.1.  OPTIONAL REDEMPTION

            Subject to the provisions of this Article 3 and to the rights,
privileges, restrictions and conditions attaching to any shares of the
Corporation ranking prior to the Class AAA preference shares, the Corporation
may, upon giving notice as hereinafter provided, redeem at any time the whole or
from time to time any part of the then outstanding Series D Shares, on payment
for each share to be redeemed of $25.00, together with an amount equal to all
dividends accrued and unpaid thereon up to the redemption date (the whole
constituting and being hereafter referred to as the "Redemption Price").

      3.2.  PARTIAL REDEMPTION

            In case a part only of the Series D Shares is at any time to be
redeemed, the shares so to be redeemed shall be selected by lot or in such other
manner as the directors of the Corporation, from to time, so determine. If a
part only of the Series D Shares represented by any certificate shall be
redeemed, a new certificate representing the balance of such shares shall be
issued to the holder thereof at the expense of the Corporation upon presentation
and surrender of the first mentioned certificate.

      3.3.  METHOD OF REDEMPTION

            In any case of redemption of Series D Shares, the Corporation shall
at least 30 days before the date specified for redemption send by prepaid mail
or deliver to each person who at the date of mailing or delivery is a registered
holder of Series D Shares to be redeemed a notice
<PAGE>
                                     - 3 -

in writing of the intention of the Corporation to redeem such Series D Shares.
Such notice shall be mailed or delivered to each holder of Series D Shares to be
redeemed at the last address of such shareholder as it appears on the books of
the Corporation, or in the event of the address of any such shareholder not so
appearing, then to the address of such shareholder last known to the
Corporation; provided that accidental failure or omission to give such notice to
one or more holders shall not affect the validity of such redemption, but upon
such failure or omission being discovered notice shall be given forthwith to
such holder or holders and shall have the same force and effect as if given in
due time. Such notice shall set out the number of Series D Shares held by the
person to whom it is addressed which are to be redeemed, the Redemption Price,
the date specified for redemption, and the place or places within Canada at
which such holders of Series D Shares may present and surrender such shares for
redemption.

            On and after the date so specified for redemption, the Corporation
shall pay or cause to be paid to or to the order of the registered holders of
the Series D Shares to be redeemed, the Redemption Price of such shares on
presentation and surrender, at the registered office of the Corporation or any
other place or places within Canada specified in such notice of redemption, of
the certificate or certificates representing the Series D Shares called for
redemption. Payment in respect of Series D Shares being redeemed shall be made
by cheques payable to the holders thereof in lawful money of Canada at par at
any branch in Canada of the Corporation's bankers for the time being or by any
other reasonable means the Corporation deems desirable.

            The Corporation shall have the right at any time after the mailing
or delivery of notice of its intention to redeem Series D Shares to deposit the
Redemption Price of the Series D Shares so called for redemption, or of such of
the Series D Shares which are represented by certificates which have not at the
date of such deposit been surrendered by the holders thereof in connection with
such redemption, in a special account in any chartered bank or any trust company
in Canada named in such notice or in a subsequent notice to the holders of the
shares in respect of which the deposit is made, to be paid without interest to
or to the order of the respective holders of Series D Shares called for
redemption upon presentation and surrender to such bank or trust company of the
certificates representing such shares. Upon such deposit being made or upon the
date specified for redemption in such notice, whichever is the later, the Series
D Shares in respect of which such deposit shall have been made shall be deemed
to be redeemed and the rights of the holders thereof shall be limited to
receiving, without interest, the Redemption Price of such Series D Shares upon
presentation and surrender of the certificate or certificates representing their
Series D Shares being redeemed. Any interest allowed on any such deposit shall
belong to the Corporation.

            From and after the date specified for redemption in any such notice
of redemption, the Series D Shares called for redemption shall cease to be
entitled to dividends or any other participation in the assets of the
Corporation and the holders thereof shall not be entitled to exercise any of
their other rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and surrender of the share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected. Redemption moneys which are
represented by a cheque which has not been presented to the Corporation's
bankers for payment or that otherwise remain unclaimed
<PAGE>
                                     - 4 -

(including moneys held on deposit in a special account as provided for above)
for a period of six years from the date specified for redemption shall be
forfeited to the Corporation.

4.          EXCHANGE RIGHT

      4.1.  RIGHT TO EXCHANGE

            Subject to the provisions of this Article 4 and to the receipt by
the Corporation of all necessary regulatory approvals, the holders of Series D
Shares shall have the right (the "Exchange Right"), on each date on which a
closing (a "Closing") occurs of:

      (a)   a distribution (a "Public Offering") by the Corporation of its
            common shares pursuant to a prospectus or other similar document
            ("prospectus") filed with any appropriate securities regulatory
            agency or stock exchange;

      (b)   a rights offering (a "Rights Offering") by the Corporation; or

      (c)   a private placement (a "Private Placement") by the Corporation;

to exchange Series D Shares held by them for up to the aggregate number of
common shares of the Corporation set forth in section 4.2 below at the Exchange
Rate determined in accordance with section 4.8 below.

            For the purpose of this Article 4, "common shares" means the common
shares in the capital of the Corporation as such shares were constituted on July
24, 1992 and includes shares of any other class of shares of the Corporation (i)
resulting from the reclassification or change of the common shares, or (ii)
which carry a residual right to participate to an unlimited degree in the
Corporation's earnings and in its assets on liquidation, dissolution or
winding-up.

      4.2.  NUMBER OF COMMON SHARES TO WHICH THE EXCHANGE RATE RELATES

            For so long as Hees International Bancorp Inc. ("Hees") shall be the
holder of the Series D Shares, the maximum number of common shares for which
Hees may exercise the Exchange Right on the date of a Closing shall be equal to
that number of common shares which, when added to the common shares then held
directly or indirectly by Hees and Carena Holdings Inc. ("CHI") will result in
Hees and CHI, after giving effect to the Closing and the exercise of the
Exchange Right, holding directly or indirectly the same aggregate percentage of
the outstanding common shares that Hees and CHI held directly or indirectly on
the business day immediately preceding the day on which the Closing occurs.

            From and after the date on which Hees shall cease to be the holder
of the Series D Shares, the maximum number of common shares for which a holder
of Series D Shares may exercise the Exchange Right on the date of a Closing
shall be equal to that number of common shares which, when added to the common
shares then held directly or indirectly by such holder will result in such
holder, after giving effect to the Closing and the exercise of the Exchange
Right, holding directly or indirectly the same percentage of the outstanding
common shares that
<PAGE>
                                     - 5 -

such holder held directly or indirectly on the business day immediately
preceding the day on which the Closing occurs.

            Nothing in this section 4.2 shall require Hees or any other holder
of Series D Shares to exchange Series D Shares for the maximum number of common
shares (or any lesser number thereof) to which Hees or such holder is otherwise
entitled.

      4.3.  EXERCISE OF RIGHT TO EXCHANGE

            The Exchange Right may be exercised by a holder of Series D Shares
by notice in writing given to the Corporation on or before the business day
immediately prior to the day on which a Closing occurs, accompanied by the
certificate or certificates representing the Series D Shares in respect of which
the holder desires to exercise the Exchange Right. Such notice shall be signed
by such holder or by a duly authorized agent and shall specify the number of
Series D Shares that the holder desires to have exchanged. If less than all the
Series D Shares represented by any certificate or certificate accompanying any
notice are to be exchanged, the holder shall be entitled to receive, at the
expense of the Corporation, a new certificate representing the Series D Shares
comprised in the certificate or certificates surrendered as aforesaid, which are
not to be exchanged. A holder of Series D Shares who has given a notice to the
Corporation as herein provided shall be deemed to have become a holder of the
number of common shares in respect of which the Exchange Right has been
exercised on the day on which the Closing occurs.

      4.4.  ENTITLEMENT TO DIVIDENDS

            The registered holder of any Series D Share on the record date for
any dividend payable on such share shall be entitled to such dividend
notwithstanding that such share has been exchanged into common shares after such
record date and before the payment date of such dividend, and the registered
holder of a common share resulting from such exchange shall be entitled to rank
equally per common share with the registered holders of all other common shares
of record on any date on or after the date of such exchange.

            Subject to the foregoing, upon exchange of any Series D Shares there
shall be no adjustment by the Corporation or by any holder of Series D Shares on
account of any dividends either on the Series D Shares so exchanged or on the
common shares resulting from such exchange.

      4.5.  SHARES CALLED FOR REDEMPTION

            In the case of any Series D Shares which are called for redemption,
the Exchange Right thereof shall, notwithstanding anything herein contained,
terminate at the close of business on the business day immediately preceding the
date fixed for redemption, provided, however, that if the Corporation fails to
redeem such Series D Shares in accordance with the notice of redemption the
Exchange Right shall thereupon be restored and continue as if such Series D
Shares had not been called for redemption.
<PAGE>
                                     - 6 -

      4.6.  CERTIFICATES

            On any exchange of Series D Shares, the certificate or certificates
representing the common shares of the Corporation resulting therefrom shall be
issued at the expense of the Corporation in the name of the holder of the Series
D Shares exchanged or in such nominee name or names as such holder may direct in
writing (either in the notice referred to in section 4.3 or otherwise) provided
that such holder shall pay any applicable security transfer taxes.

      4.7.  NO FRACTIONAL SHARES

            The Corporation shall not issue fractional shares in satisfaction of
the Exchange Right but in lieu thereof may, in respect of any fractional
interest resulting from the exercise of the Exchange Right, pay a cash
adjustment by cheque payable in lawful money of Canada at par at any branch in
Canada of the Corporation's bankers for the time being. The amount of any cash
adjustment shall equal the current market value of such fractional interest
computed on the basis of the last board lot sale price (or average of the bid
and asked prices if there were no sales) per share for the common shares that
are the subject of the Public Offering, Rights Offering or Private Placement on
the Toronto Stock Exchange (or, if such common shares are not then listed on the
Toronto Stock Exchange, on such other stock exchange on which such common shares
are listed as selected by the directors of the Corporation) on the business day
immediately preceding the Closing. If such common shares are not listed on any
stock exchange, their current market value shall be determined by the directors.
If a cash adjustment is to be paid pursuant to the provisions of this section
4.7, the mailing from the Corporation's registered office to a holder of Series
D Shares who has exercised the Exchange Right shall be deemed to be payment of
the cash adjustment unless the cheque is not paid upon due presentation. Cash
adjustments represented by cheques which have not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which the same became payable shall be
forfeited to the Corporation.

      4.8.  EXCHANGE RATE

            The number of Series D Shares to be exchanged for each common share
of the Corporation shall be equal to the Exchange Rate. The Exchange Rate is A
divided by B, where A is the price per common share which would have been
payable by a holder exercising the Exchange Right to acquire common shares of
the Corporation in connection with the Public Offering, Rights Offering or
Private Placement and B is $25.00.

      4.9.  DISPUTES

            If any question at any time arises with respect to the determination
of the number of common shares issuable by the Corporation pursuant to section
4.8, the right of a holder of Series D Shares to exercise the Exchange Right or
with respect to the amount of any cash payment to be made in lieu of issuing a
fractional share, such question shall be conclusively determined by the auditors
from time to time of the Corporation and shall be binding upon the Corporation
and all shareholders, transfer agents and registrars of Series D Shares and
common
<PAGE>
                                     - 7 -

shares. In making any such determination, the auditors will be entitled to rely
on an opinion of legal counsel or other expert retained by them.

5.          VOTING RIGHTS

            Subject to the Canada Business Corporations Act, the holders of the
Series D Shares shall not be entitled as such to receive notice of or to attend
any meeting of the shareholders of the Corporation or to vote at any such
meeting other than a meeting of holders of Series D Shares.

6.          LIQUIDATION, DISSOLUTION OR WINDING UP

            In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or in the event of any other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs, the holders of the Series D Shares shall be entitled
to receive from the assets of the Corporation a sum equal to $25.00 per Series D
Share held by them respectively, plus an amount equal to all dividends accrued
and unpaid thereon up to the date of payment, the whole before any amount shall
be paid by the Corporation or any assets of the Corporation shall be distributed
to holders of shares of any class of the Corporation ranking as to capital
junior to the Series D Shares. After payment to the holders of the Series D
Shares of the amounts so payable to them, they shall not be entitled to share in
any further distribution of the assets of the Corporation.

7.          INTERPRETATION

            In the event that any date on which any dividend on the Series D
Shares is payable by the Corporation or on or by which any other action is
required to be taken by the Corporation hereunder, is not a business day, then
such dividend shall be payable, or such other action shall be required to be
taken, on or by the next succeeding date that is a business day.

            For the purpose of these share provisions:

      (a)   "BUSINESS DAY" means a day other than a Saturday, a Sunday or any
            other day that is treated as a statutory holiday in the jurisdiction
            in which the Corporation's registered office is located;

      (b)   "JUNIOR SHARE" means a share of the Corporation ranking junior to
            the Series D Shares with respect to the payment of dividends or the
            distribution of assets in the event of the liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or in the event of any other distribution of assets of the
            Corporation among its shareholders for the purpose of winding up its
            affairs; and

      (c)   "RANKING AS TO CAPITAL" means ranking with respect to the
            distribution of assets in the event of a liquidation, dissolution or
            winding up of the Corporation, whether voluntary or involuntary, or
            in the event of any other distribution of assets of the Corporation
            among its shareholders for the purpose of winding up its affairs.
<PAGE>
                                     - 8 -

8.          AMENDMENT

            The rights, privileges, restrictions and conditions attaching to the
Series D Shares may be added to, changed or removed by Articles of Amendment,
but only with the prior approval of the holders of the Series D Shares given as
hereinafter specified in addition to any vote or authorization required by law.

9.          APPROVAL OF HOLDERS

            Any approval of the holders of the Series D Shares with respect to
any and all matters referred to herein or of any other matters requiring the
consent of the holders of the Series D Shares my be given by special resolution
signed by all the holders of Series D Shares or passed at a meeting of the
holders of Series D Shares duly called and held on at least 21 days' notice at
which the matter in question is carried by the affirmative votes of the holders
of not less than two-thirds of the Series D Shares represented and voted at such
meeting cast on a poll. The formalities to be observed with respect to the
giving of notice of any such meeting and the conduct thereof shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders. On every poll taken at every such meeting each holder
of Series D Shares shall be entitled to one vote in respect of each Series D
Share held.
<PAGE>
                                   SCHEDULE K

                      CLASS AAA PREFERENCE SHARES SERIES E

                            NUMBER AND DESIGNATION OF
                      AND RIGHTS, PRIVILEGES, RESTRICTIONS
                         AND CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES, SERIES E

            The fifth series of Class AAA preference shares of the Corporation
shall consist of 12,000,000 preference shares which shall be designated as Class
AAA preference shares, Series E (hereinafter referred to as the "Series E
Shares") and which, in addition to the rights, privileges, restrictions and
conditions attached to the Class A preference shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.          CONSIDERATION FOR ISSUE

      1.1.  The consideration for the issue of each Series E Preference Share
shall be $25.00.

2.          DIVIDENDS

      2.1.  PAYMENT OF DIVIDENDS

            Holders of Series E Shares shall be entitled to receive and the
Corporation shall pay thereon, as and when declared by the directors of the
Corporation, out of moneys of the Corporation properly applicable to the payment
of dividends, cumulative preferential cash dividends in lawful money of Canada
at the Dividend Rate. Dividends on the Series E Shares shall accrue on a
day-to-day basis from the date of issue thereof, shall be calculated from
day-to-day on the basis of a 365-day or 366-day year, as the case may be, for
the actual number of days elapsed, and shall be payable on the last day of
March, June, September and December in each year (the "Dividend Payment Dates").
The amount of each such dividend shall be calculated by applying the Dividend
Rate to the Amount Paid Up for the period from and including the last Dividend
Payment Date to but excluding the next succeeding Dividend Payment Date.

            For the purposes hereof, the following terms shall have the
following meanings, respectively:

      (a)   "AMOUNT PAID UP" means $25.00 plus such additional amount or amounts
            as may be deemed to be paid on each Series E Share pursuant to the
            provisions of paragraph 2.2 below:

      (b)   "AVERAGE PRIME RATE" means, for any period, the arithmetic average
            (rounded to the nearest one-one-hundredth of the percent (0.01%) of
            the Daily Prime Rate for each business day during such period;
<PAGE>
                                     - 2 -

      (c)   "DAILY PRIME RATE" means, on any business day, the annual prime
            commercial lending rate of interest established and announced as the
            reference rate of interest used by the Canadian Imperial Bank of
            Commerce (or, failing the establishment and announcement of such a
            reference rate by Canadian Imperial Bank of Commerce, the reference
            rate established and announced by The Toronto Dominion Bank) on such
            business day to determine the rates of interest on Canadian dollar
            loans to its customers in Canada and designated as its prime rate;
            and

      (d)   "DIVIDEND RATE" expressed on a per annum basis, with respect to the
            dividends payable on any Dividend Payment Date means seventy percent
            (70%) of the Average Prime Rate during the three calendar months
            ending on the last day of the calendar month immediately preceding
            the month during which the Dividend Payment Date occurs.

      2.2.  METHOD OF PAYMENT

            Cheques payable in lawful money of Canada at any branch in Canada of
the Corporation's bankers shall be issued in respect of the dividends on the
Series E Shares (less any tax required to be withheld by the Corporation),
provided that the Corporation and any particular holder of Series E Shares may
agree on some other means for payment of dividends to such holder. The mailing
from the Corporation's registered office on or before any Dividend Payment Date
of such a cheque to a holder of Series E Shares shall be deemed to be payment of
the dividends represented thereby and payable on such Dividend Payment Date
unless the cheque is not paid upon presentation. Dividends which are represented
by a cheque which has not been presented to the Corporation's bankers for
payment or that otherwise remain unclaimed for a period of six years from the
date on which they were declared to be payable shall be forfeited to the
Corporation.

      2.3.  CUMULATIVE PAYMENT OF DIVIDENDS

            If, by reason of insolvency provisions of applicable law or for any
other reason, on any Dividend Payment Date the dividends accrued to such date
are not paid in full on all of the Series E Shares then outstanding, such
dividends, or the unpaid part thereof, shall be paid on a subsequent date or
dates determined by the board of directors of the Corporation. The holders of
the Series E Shares shall not be entitled to any dividends other than or in
excess of the fixed cumulative preferential cash dividends herein provided for.

3.          REDEMPTION

      3.1.  OPTIONAL REDEMPTION

            Subject to the provisions of this Article 3 and Article 5 and to the
rights, privileges, restrictions and conditions attaching to any shares of the
Corporation ranking prior to the Series E Shares, the Corporation may, upon
giving notice as hereinafter provided, redeem at any time all, or from time to
time any part, of the then outstanding Series E Shares on payment
<PAGE>
                                     - 3 -

for each share to be redeemed of $25.00, together with an amount equal to all
dividends accrued and unpaid thereon up to the redemption date (the whole
constituting and being herein referred to as the "Redemption Price").

      3.2.  PARTIAL REDEMPTION

            In case a part only of the Series E Shares is to be redeemed at any
time, the shares to be redeemed shall be selected by lot or some other random
selection method as the board of directors of the Corporation in its sole
discretion determines or in such other manner as the board of directors of the
Corporation in its sole discretion determines to be equitable. If a part only of
the Series E Shares represented by any certificate shall be redeemed, a new
certificate representing the balance of such shares shall be issued to the
holder thereof at the expense of the Corporation upon presentation and surrender
of the first mentioned certificate.

      3.3.  METHOD OF REDEMPTION

            In any case of redemption of Series E Shares, the Corporation shall,
at least 30 days before the date specified for redemption, send by prepaid first
class mail or deliver to each person who at the date of mailing or delivery is a
holder of Series E Shares to be redeemed a notice in writing of the intention of
the Corporation to redeem such Series E Shares. Such notice shall be mailed or
delivered to each holder of Series E Shares to be redeemed at the last address
of such holder as it appears on the securities register of the Corporation, or
in the event of the address of any such holder not so appearing, then to the
last address of such holder known to the Corporation. Accidental failure or
omission to give such notice to one or more holders shall not affect the
validity of such redemption, but if such failure or omission is discovered
notice as aforesaid shall be given forthwith to such holder or holders and shall
have the same force and effect as if given in due time. Such notice shall set
out the number of Series E Shares held by the person to whom it is addressed
which are to be redeemed, the Redemption Price, the date specified for
redemption, whether the Series E Shares are convertible into another series of
preference shares at the date of the mailing of the notice and the place or
places in Canada at which holders of Series E Shares may present and surrender
the certificate or certificates representing such shares for redemption.

            On and after the date so specified for redemption, the Corporation
shall pay or cause to be paid to or to the order of the holders of the Series E
Shares to be redeemed the Redemption Price of such shares on presentation and
surrender, at the registered office of the Corporation or any other place or
places in Canada specified in the notice of redemption, of the certificate or
certificates representing the Series E Shares called for redemption. Payment in
respect of Series E Shares being redeemed shall be made by cheque payable to the
respective holders thereof in lawful money of Canada at any branch in Canada of
the Corporation's bankers.

            The Corporation shall have the right, at any time after the mailing
or delivery of notice of its intention to redeem Series E Shares, to deposit the
Redemption Price of the Series E Shares so called for redemption, or of such of
the Series E Shares which are represented by certificates which have not, at the
date of such deposit, been
<PAGE>
                                     - 4 -

surrendered by the holders thereof in connection with such redemption, or which
have not, at the date of such deposit, been surrendered by the holders thereof
for conversion into another series of preference shares if the Series E Shares
are convertible into another such series at that time in a separate account in
any chartered bank or trust company in Canada named in the redemption notice or
in a subsequent notice in writing to the holders of the Series E Shares in
respect of which the deposit is made, to be paid without interest to or to the
order of the respective holders of the Series E Shares called for redemption
upon presentation and surrender to such bank or trust company of the
certificates representing such shares. Upon such deposit being made or upon the
date specified for redemption in such notice, whichever is the later, the Series
E Shares in respect of which such deposit shall have been made shall be deemed
to be redeemed and the rights of the holders thereof shall be limited to
receiving, without interest, the Redemption Price of their respective Series E
Shares being redeemed upon presentation and surrender of the certificate or
certificates representing such shares. Any interest allowed on any such deposit
shall belong to the Corporation.

            From and after the date specified for redemption in any notice of
redemption, the Series E Shares called for redemption shall cease to be entitled
to dividends or any other participation in any distribution of the assets of the
Corporation and the holders thereof shall not be entitled to exercise any of
their other rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and surrender of the
certificates representing such shares in accordance with the foregoing
provisions, in which case the rights of the holders shall remain unaffected.
Redemption moneys which are represented by a cheque which has not been presented
to the Corporation's bankers for payment or that otherwise remain unclaimed
(including moneys held on deposit in a separate account as provided for above)
for a period of six years from the date specified for redemption shall be
forfeited to the Corporation.

4.          RETRACTION PRIVILEGE

      4.1.  RIGHT TO REQUIRE RETRACTION

            The Series E Shares may be tendered at any time for retraction. In
order to elect to have the Corporation redeem Series E Shares pursuant to this
retraction privilege, a holder of Series E Shares must tender to the
Corporation, at its registered office, the certificate or certificates
representing the Series E Shares which the holder wishes the Corporation to
redeem together with a written notice (a "Retraction Notice") specifying the
date (not less than 10 business days following the delivery of the Retraction
Notice to the Corporation) upon which such Series E Shares are to be redeemed
(the "Retraction Date").

      4.2.  RETRACTION PROCEDURE

            The Corporation shall redeem Series E Shares duly tendered pursuant
to the above retraction privilege at a price equal to $25.00 per share, together
with an amount equal to all dividends accrued and unpaid thereon up to the
Retraction Date (the whole constituting and being herein referred to as the
"Retraction Price"). Such tender shall be irrevocable unless payment of the
Retraction Price shall not be duly made by the Corporation to the holder on or
before the Retraction Date. In the event that payment of the Retraction Price is
not made by the
<PAGE>
                                     - 5 -

Corporation on or before the Retraction Date, the Corporation shall forthwith
thereafter return the holder's deposited share certificate or certificates to
the holder.

            Subject to section 4.3 and Article 5, the Corporation shall redeem
all the Series E Shares tendered pursuant to the above retraction privilege. If
a holder of Series E Shares wishes to tender for redemption pursuant to the
above retraction privilege a part only of the Series E Shares represented by any
certificate or certificates, the holder may deposit the certificate or
certificates and at the same time advise the Corporation in writing as to the
number of Series E Shares with respect to which tender is being made, and the
Corporation shall issue and deliver to such holder at the expense of the
Corporation a new certificate representing the Series E Shares which are not
being tendered.

            The provisions of Article 3 shall apply to any redemption pursuant
to this Article 4 except to the extent that such provisions are inconsistent
with the provisions of this Article 4.

      4.3.  RETRACTION SUBJECT TO APPLICABLE LAW

            If, as a result of insolvency provisions or other provisions of
applicable law or the rights, privileges, restrictions and conditions attaching
to any shares of the Corporation ranking prior to the Series E Shares, the
Corporation is not permitted to redeem all of the Series E Shares duly tendered
pursuant to the above retraction privilege, the Corporation shall redeem only
the maximum number of Series E Shares (rounded to the next lower multiple of
1,000 shares) which the board of directors of the Corporation determines the
Corporation is then permitted to redeem. Such redemption shall be made pro rata,
disregarding fractions of shares, from each holder of tendered Series E Shares
according to the number of Series E Shares tendered for redemption by each such
holder and the Corporation shall issue and deliver to each such holder at the
expense of the Corporation a new certificate representing the Series E Shares
not redeemed by the Corporation.

            If, as a result of insolvency provisions or other provisions of
applicable law or the rights, privileges, restrictions and conditions attaching
to any shares of the Corporation ranking prior to the Series E Shares, the
Corporation fails to redeem all of the Series E Shares duly tendered pursuant to
the above retraction privilege, then the Corporation shall redeem on each
Dividend Payment Date thereafter, from Series E Shares tendered for redemption
by the holders thereof on or before the 30th day preceding such Dividend Payment
Date in the same manner as set forth in section 4.2, the lesser of (i) the
number of Series E Shares so tendered, and (ii) the number of Series E Shares
(rounded to the next lower multiple of 1,000 shares and selected pro rata,
disregarding fractions of shares, from each holder of tendered Series E Shares
according to the number of Series E Shares tendered by each such holder) which
the board of directors of the Corporation determines the Corporation is then
permitted to redeem. The Corporation shall be under no obligation to give any
notice to the holders of Series E Shares in respect of the redemptions provided
for in this paragraph.

            So long as the board of directors of the Corporation has acted in
good faith in making any of the determinations referred to above as to the
number of Series E Shares which
<PAGE>
                                     - 6 -

the Corporation is permitted at any time to redeem, neither the Corporation nor
the directors shall have any liability in the event that any such determination
proves to be inaccurate.

5.          VOTING RIGHTS

      5.1.  Except as herein referred to or as required by law, the holders of
the Series E Shares as a series shall not be entitled as such to receive notice
of, to attend or to vote at any meeting of the shareholders of the Corporation.

6.          LIQUIDATION, DISSOLUTION OR WINDING-UP

      6.1.  In the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or in the event of any other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs, the holders of the Series E Shares shall be entitled
to receive from the assets of the Corporation a sum equal to $25.00 for each
Series E Share held by them respectively, plus an amount equal to all dividends
accrued and unpaid thereon up to the date of payment. After payment to the
holders of the Series E Shares of the amounts so payable to them, they shall not
be entitled to share in any further distribution of the assets of the
Corporation.

7.          INTERPRETATION

      7.1.  In the event that any date on which any dividend on the Series E
Shares is payable by the Corporation, or on or by which any other action is
required to be taken by the Corporation or the holders of Series E Shares
hereunder, is not a business day, then such dividend shall be payable, or such
other action shall be required to be taken, on or by the next succeeding date
that is a business day.

      7.2.  For the purpose of these share provisions:

            7.2.1.  "BUSINESS DAY" means a day other than Saturday, Sunday or
            any other day that is treated as a statutory holiday in the
            jurisdiction in which the Corporation's registered office is
            located;

            7.2.2.  "JUNIOR SHARE" means a share of the Corporation ranking
            junior to the Series E Shares with respect to the payment of
            dividends or the distribution of assets in the event of the
            liquidation, dissolution or winding-up of the Corporation, whether
            voluntary or involuntary, or in the event of any other distribution
            of assets of the Corporation among its shareholders for the purpose
            of winding up its affairs; and

            7.2.3.  "RANKING AS TO CAPITAL" means ranking with respect to the
            distribution of assets in the event of a liquidation, dissolution or
            winding-up of the Corporation, whether voluntary or involuntary, or
            in the event of any other distribution of assets of the Corporation
            among its shareholders for the purpose of winding up its affairs.

<PAGE>
                                     - 7 -

8.          AMENDMENT

      8.1.  The rights, privileges, restrictions and conditions attached to the
Series E Shares may be added to, changed or removed by Articles of Amendment,
but only with the approval of the holders of the Series E Shares given as
hereinafter specified in addition to any vote or authorization required by law.

9.          APPROVAL OF HOLDERS OF THE SERIES E PREFERENCE SHARES

      9.1.  The approval of the holders of the Series E Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Series
E Shares as a series or in respect of any other matter requiring the consent of
the holders of the Series E Shares may be given in such manner as may then be
required by law, subject to a minimum requirement that such approval be given by
resolution signed by all the holders of the Series E Shares or passed by the
affirmative vote of at least 2/3 of the votes cast at a meeting of the holders
of the Series E Shares duly called for that purpose.

            The formalities to be observed with respect to the giving of notice
of any such meeting or any adjourned meeting, the quorum required therefor and
the conduct thereof shall be those from time to time prescribed by the by-laws
of the Corporation with respect to meetings of shareholders in the rights,
privileges, restrictions and conditions attached to the Class AAA Preference
Shares as a class, or if not so prescribed, as required by the Canada Business
Corporations Act as in force at the time of the meeting or as otherwise required
by law. On every poll taken at every meeting of holders of Series E Shares as a
series, each holder of Series E Shares entitled to vote thereat shall have one
vote in respect of each Series E Share held.
<PAGE>
                                   SCHEDULE L

(a)   Without restricting the generality of Section 189 of the Canada Business
      Corporations Act, the Corporation shall have the power to hypothecate,
      mortgage or pledge any property, moveable or immoveable, present or
      future, wheresoever situate, for the purpose of securing any bonds or
      debentures which it is by law entitled to issue.

(b)   The articles of the Corporation be amended to provide that every
      shareholder of the Corporation entitled to vote at an election of
      directors has the right to cast thereat a number of votes equal to the
      number of votes attached to the shares held by him multiplied by the
      number of directors to be elected, and he may cast all such votes in
      favour of one candidate or distribute them among the candidates in such
      manner as he sees fit, and where he has voted for more than one candidate
      without specifying the distribution of his votes among such candidates, he
      shall be deemed to have divided his votes equally among the candidates for
      whom he voted.

(c)   The articles of the Corporation are hereby amended to permit meetings of
      the shareholders to be held at any place within Canada, as the directors
      in their discretion decide from time to time, or in the United States in
      the following cities: New York, New York; Boston, Massachusetts; Denver,
      Colorado; Minneapolis, Minnesota; San Francisco, Los Angeles or San Diego,
      California; Washington, D.C.; or Miami Florida.
<PAGE>

[CDN. FLAG GRAPHIC]
Industry Canada                       Industrie Canada

CERTIFICATE                                    CERTIFICAT
OF AMENDMENT                                   DE MODIFICATION

CANADA BUSINESS                                LOI CANADIENNE SUR
CORPORATIONS ACT                               LES SOCIETES PAR ACTIONS

BROOKFIELD PROPERTIES CORPORATION                          074605-3

--------------------------------------------------------------------------------
Name of corporation -                          Corporation number -
Denomination de la societe                     Numero de la societe

I hereby certify that the articles of          Je certifie que les statuts de la
the above-named corporation were               societe susmentionnee ont ete
amended:                                       modifies:

a) under section 13 of the Canada     [ ]      a) en vertu de l'article 13 de
   Business Corporations Act in                   la Loi canadienne sur les
   accordance with the attached                   societes par actions, con-
   notice;                                        formement a l'avis ci-joint;

b) under section 27 of the Canada     [X]      b) en vertu de l'article 27 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment designating a series                 qu'il est indique dans les
   of shares;                                     clauses modificatrices ci-
                                                  jointes designant une serie
                                                  d'actions;

c) under section 179 of the Canada    [ ]      c) en vertu de l'article 179 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment;                                     qu'il est indique dans les
                                                  clauses modificatrices
                                                  ci-jointes;

d) under section 191 of the Canada    [ ]     d) en vertu de l'article 191 de la
   Business Corporations Act as set              Loi canadienne sur les societes
   out in the attached articles of               par actions, tel qu'il est
   reorganization;                               indique dans les clauses de
                                                 reorganisation ci-jointes;

/s/ [signature]                                       SEPTEMBER 23, 2002/
-------------------------------------                LE 23 SEPTEMBRE 2002
Director - Directeur                                 Date of Amendment -
                                                     Date de modification

[CANADA LOGO]
<PAGE>

[CDN. FLAG LOGO]
Industry Canada     Industrie Canada
                                          FORM 4             FORMULE 4
Canada Business     Loi canadienne      ARTICLES OF    CLAUSES MODIFICATRICES
Corporations Act    sur les societes     AMENDMENT      (ARTICLES 27 OU 177)
                    par actions         (SECTION 27
                                          OR 177)

--------------------------------------------------------------------------------
1. Name of the Corporation -            2. Corporation No. -
   Denomination sociale de                 No de la societe
   la societe

   Brookfield Properties Corporation       0746053
--------------------------------------------------------------------------------
3. The articles of the above-named      Les statuts de la societe mentionnee
   corporation are amended as follows:  ci-dessus sont modifies de la facon
                                        suivante :

The articles of the Corporation are amended to create the sixth series of Class
AAA Preference Shares of the Corporation by designating 8,000,000 of such
shares as "Class AAA Preference Shares, Series F", which shares shall have
rights, privileges, restrictions and conditions set out in the attached
Schedule.

--------------------------------------------------------------------------------
Date                        Signature             3. Capacity of - En qualite de

September 23, 2002         /s/ [signature]           Vice-President
--------------------------------------------------------------------------------
For Departmental           Printed Name -
Use Only                   Nom en lettres moulees
A l'usage du
ministere seulement                                                [CANADA LOGO]
Filed
Dated     Sep. 23, 2002
--------------------------------------------------------------------------------
IC 3069 (2001/11)                                                    OSG 11/2001
<PAGE>
                                     - 1A -

                            NUMBER AND DESIGNATION OF
                    AND RIGHTS, PRIVILEGES, RESTRICTIONS AND
                           CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES, SERIES F

      The sixth series of Class AAA Preference Shares of the Corporation shall
consist of 8,000,000 Class AAA Preference Shares which shall be designated as
Class AAA Preference Shares, Series F (hereinafter referred to as the "Series F
Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA Preference Shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.    CONSIDERATION FOR ISSUE

      The consideration for the issue of each Series F Share shall be $25.00.

2.    DIVIDENDS

      For the purposes hereof, the following terms shall have the following
meanings, unless the context otherwise requires:

      (a)   "Dividend Payment Date" in respect of the dividends payable on the
            Series F Shares means the last day of each of March, June, September
            and December in each year.

      (b)   "Dividend Period" means the period from and including the date of
            initial issue of the Series F Shares up to but excluding December
            31, 2002 and, thereafter, the period from and including a Dividend
            Payment Date up to but excluding the next succeeding Dividend
            Payment Date.

      2.1   PAYMENT OF DIVIDENDS

      Holders of Series F Shares (the "Holders") shall be entitled to receive,
and the Corporation shall pay thereon, if, as and when declared by the directors
of the Corporation, out of moneys of the Corporation properly applicable to the
payment of dividends, fixed cumulative preferential cash dividends (the "Series
F Dividends") payable quarterly, with respect to each Dividend Period, on the
Dividend Payment Date immediately following each such Dividend Period at the
rate of $1.50 per Series F Share per annum accruing daily from the date of issue
(less any tax required to be deducted and withheld by the Corporation) which
shall be calculated on a 365 or 366 day basis, being the actual number of days
in the year in which the amount is to be ascertained, by cheque at par in lawful
money of Canada at any branch in Canada of the Corporation's bankers for the
time being or by any other reasonable means the Corporation deems desirable.
<PAGE>
                                     - 1B -

      2.2   METHOD OF PAYMENT

      Series F Dividends shall (except in case of redemption in which case
payment of Series F Dividends shall be made on surrender of the certificate
representing the Series F Shares to be redeemed) be paid by sending to each
Holder (in the manner provided for in Section 12) a cheque for such Series F
Dividends (less any tax required to be deducted and withheld by the Corporation)
payable to the order of such Holder or, in the case of joint Holders, to the
order of all such Holders failing written instructions from them to the
contrary. The posting or delivery of such cheque on or before the date on which
such dividend is to be paid to a Holder shall be deemed to be payment and shall
satisfy and discharge all liabilities for the payment of such dividends to the
extent of the sum represented thereby (plus the amount of any tax required to be
and in fact deducted and withheld by the Corporation from the related dividends
as aforesaid and remitted to the proper taxing authority) unless such cheque is
not honoured when presented for payment. Subject to applicable law, dividends
which are represented by a cheque which has not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which they were declared to be payable
shall be forfeited to the Corporation.

      2.3   CUMULATIVE PAYMENT OF DIVIDENDS

      If on any Dividend Payment Date, the Series F Dividends accrued to such
date are not paid in full on all of the Series F Shares then outstanding, such
Series F Dividends, or the unpaid part thereof, shall be paid on a subsequent
date or dates determined by the directors on which the Corporation shall have
sufficient monies properly applicable to the payment of such Series F Dividends.
The Holders shall not be entitled to any dividends other than or in excess of
the cumulative preferential cash dividends herein provided for.

      2.4   DIVIDEND FOR OTHER THAN A FULL DIVIDEND PERIOD

      The Holders shall be entitled to receive, and the Corporation shall pay
thereon, if, as and when declared by the directors, out of moneys of the
Corporation properly applicable to the payment of dividends, cumulative
preferential cash dividends for any period which is more or less than a full
Dividend Period as follows:

      (a)   in respect of the period beginning on and including the date of
            initial issue of the Series F Shares up to but excluding December
            31, 2002 (the "Initial Dividend Period"), a dividend in an amount
            per Series F Share equal to the amount obtained (rounded to four
            decimal places) when $1.50 is multiplied by a fraction, the
            numerator of which is the number of calendar days from and including
            the date of issue of the Series F Shares up to but excluding
            December 31, 2002 and the denominator of which is 365. The Series F
            Dividend payable for the Initial Dividend Period, payable as of
            December 31, 2002, as calculated by this method shall be $0.3986 per
            Series F Share; and

      (b)   in respect of any period other than the Initial Dividend Period that
            is more or less than a full Dividend Period, a dividend in an amount
            per Series F Share equal to
<PAGE>
                                     - 1C -

            the amount obtained (rounded to four decimal places) when $1.50 is
            multiplied by a fraction, the numerator of which is the number of
            calendar days in the relevant period (which shall include the first
            day of such period but exclude the last day of such period) and the
            denominator of which is the number of calendar days in the year in
            which such period falls.

3.    REDEMPTION

      3.1   OPTIONAL REDEMPTION

      The Corporation may not redeem any of the Series F Shares prior to
September 30, 2009. On or after this date, subject to the terms of any shares
ranking prior to the Series F Shares, to applicable law and to the provisions
described under Section 5 below, the Corporation may, upon giving notice as
hereinafter provided, at its option, at any time redeem all, or from time to
time any part, of the then outstanding Series F Shares by the payment of an
amount in cash for each such Series F Share so redeemed equal to:

      (a)   $25.75 if redeemed before September 30, 2010;

      (b)   $25.50 if redeemed on or after September 30, 2010, but before
            September 30, 2011;

      (c)   $25.25 if redeemed on or after September 30, 2011, but before
            September 30, 2012; and

      (d)   $25.00 if redeemed on or after September 30, 2012;

in each case, together with all accrued and unpaid Series F Dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for redemption) up to but excluding the date fixed for redemption
(the "Redemption Price") (less any tax required to be deducted and withheld by
the Corporation).

      3.2   PARTIAL REDEMPTION

      If less than all of the then outstanding Series F Shares are at any time
to be redeemed, then the particular Series F Shares to be redeemed shall be
selected on a pro rata basis.

      3.3   METHOD OF REDEMPTION

      The Corporation shall give notice in writing not less than 30 days nor
more than 60 days prior to the date on which the redemption is to take place of
its intention to redeem such Series F Shares to each person who at the date of
giving such notice is the Holder of Series F Shares to be redeemed. Any such
notice shall be validly and effectively given on the date on which it is sent to
each Holder of Series F Shares to be redeemed in the manner provided for in
Section 12. Such notice shall set out the number of such Series F Shares held by
the person to whom it is addressed which are to be redeemed and the Redemption
Price and shall also set out the date on which the redemption is to take place.
On and after the date so specified for redemption, the
<PAGE>
                                     - 1D -

Corporation shall pay or cause to be paid to the Holders to be redeemed the
Redemption Price (less any tax required to be deducted and withheld by the
Corporation) on presentation and surrender, at any place within Canada
designated by such notice, of the certificate or certificates for such Series F
Shares so called for redemption. Such payment shall be made by cheque in the
amount of the Redemption Price (less any tax required to be and in fact deducted
and withheld by the Corporation and remitted to the proper taxing authority)
payable at par at any branch in Canada of the Corporation's bankers for the time
being or by any other reasonable means that the Corporation deems desirable and
the delivery of such cheque in such amount shall be a full and complete
discharge of the Corporation's obligation to pay the Redemption Price owed to
the holders of Series F Shares so called for redemption unless the cheque is not
honoured when presented for payment. From and after the date specified in any
such notice, the Series F Shares called for redemption shall cease to be
entitled to Series F Dividends and the Holders thereof shall not be entitled to
exercise any of the rights of shareholders in respect thereof, except to receive
the Redemption Price therefor (less any tax required to be deducted and withheld
by the Corporation), unless payment of the Redemption Price shall not be duly
made by the Corporation. At any time after notice of redemption is given as
aforesaid, the Corporation shall have the right to deposit the Redemption Price
of any or all Series F Shares called for redemption (less any tax required to be
deducted and withheld by the Corporation), or such part thereof as at the time
of deposit has not been claimed by the holders entitled thereto, with any
chartered bank or banks or with any trust company or trust companies in Canada
named in the notice of redemption to the credit of a special account or accounts
in trust for the respective Holders of such shares, to be paid to them
respectively upon surrender to such bank or banks or trust company or trust
companies of the certificate or certificates representing the same. Upon such
deposit or deposits being made, such shares shall be redeemed on the redemption
date specified in the notice of redemption. After the Corporation has made a
deposit as aforesaid with respect to any shares, the Holders thereof shall not,
from and after the redemption date, be entitled to exercise any of the rights of
shareholders in respect thereof and the rights of the Holders thereof shall be
limited to receiving a proportion of the amounts so deposited applicable to such
shares, without interest. Any interest allowed on such deposit shall belong to
the Corporation. Subject to applicable law, redemption monies that are
represented by a cheque which has not been presented to the Corporation's
bankers for payment or that otherwise remain unclaimed (including monies held in
deposit as provided for above) for a period of six years from the date specified
for redemption shall be forfeited to the Corporation.

4.    CONVERSION OF SERIES F SHARES

      4.1   CONVERSION AT THE OPTION OF THE CORPORATION

      The Series F Shares shall not be convertible at the option of the
Corporation prior to September 30, 2009. On and after September 30, 2009, the
Corporation may, subject to applicable law and, if required, to other regulatory
approvals, and upon notice as hereinafter described, convert all, or from time
to time any part, of the then outstanding Series F Shares into that number of
freely tradeable Common Shares (per Series F Share) determined by dividing the
Redemption Price that would be applicable on the Corporation's Conversion Date
(as hereinafter defined), together with accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
Corporation's Conversion Date) up to but excluding the
<PAGE>
                                     - 1E -

Corporation's Conversion Date, by the greater of $2.00 and 95% of the weighted
average trading price of the Common Shares on the Toronto Stock Exchange (or, if
the Common Shares do not trade on the Toronto Stock Exchange on the date
specified for conversion, on the exchange or trading system with the greatest
volume of Common Shares traded during the 20 trading day period referred to
below) for the 20 consecutive trading days ending on: (i) the fourth day prior
to the Corporation's Conversion Date, or (ii) if such fourth day is not a
trading day, the immediately preceding trading day (the "Current Market Price").
Fractional Common Shares will not be issued on any conversion of Series F Shares
but in lieu thereof the Corporation will make cash payments in the manner set
out in Sections 4.3 and 4.5 below. Such conversion shall be deemed to have been
made at the close of business on the Corporation's Conversion Date, so that the
rights of the Holder of such Series F Shares as the Holder thereof shall cease
at such time and the person or persons entitled to receive Common Shares upon
such conversion shall be treated for all purposes as having become the holder or
holders of record of such Common Shares at such time.

      Upon exercise by the Corporation of its right to convert Series F Shares
into Common Shares, the Corporation is not required to (but may at its option)
issue Common Shares to any person whose address is in, or whom the Corporation
or its transfer agent has reason to believe is a resident of, any jurisdiction
outside of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      The Corporation shall give written notice to each Holder whose shares are
to be converted, which notice (the "Corporation's Conversion Notice") shall
specify the number of Series F Shares held by such Holder that will be converted
and the date fixed by the Corporation for conversion (the "Corporation's
Conversion Date"), and which notice shall be given not more than 60 days and not
less than 30 days prior to such Corporation's Conversion Date.

      If less than all of the then outstanding Series F Shares are at any time
to be converted at the option of the Corporation, then the particular Series F
Shares to be so converted shall be selected on a pro rata basis.

      Series F Shares that are the subject of a Corporation's Conversion Notice
shall be converted effective on the Corporation's Conversion Date.

      The Corporation cannot exercise its conversion rights hereunder in respect
of any Series F Shares that are the subject of a Holder's Conversion Notice
under Section 4.2 below.

      4.2   CONVERSION AT THE OPTION OF THE HOLDER

      Subject to applicable law and to the option of the Corporation in Section
4.4, on each Dividend Payment Date on or after March 31, 2013, Holders, upon
notice as hereinafter described, may convert all or any part of the then
outstanding Series F Shares registered in the name of the Holder into that
number of freely tradeable Common Shares determined (per Series F Share) by
dividing $25.00, together with all accrued and unpaid Series F Dividends (for
greater certainty excluding declared dividends with a record date prior to the
Holder's Conversion Date) up to but excluding the Holder's Conversion Date (as
hereinafter defined), by the greater of
<PAGE>
                                     - 1F -

$2.00 and 95% of the Current Market Price. Fractional Common Shares will not be
issued on any conversion of Series F Shares but in lieu thereof the Corporation
will make cash payments in the manner set out in Sections 4.3 and 4.5 below.
Such conversion shall be deemed to have been made at the close of business on
the Holder's Conversion Date, so that the rights of the Holder of such Series F
Shares as the Holder thereof shall cease at such time and the person or persons
entitled to receive Common Shares upon such conversion shall be treated for all
purposes as having become the holder or holders of record of such Common Shares
at such time.

      In order to exercise its conversion rights, the Holder shall give written
notice to the Corporation at the registered office of the Corporation or the
principal transfer office of the transfer agent for the Series F Shares in the
City of Toronto (the "Holder's Conversion Notice"), which Holder's Conversion
Notice shall specify the number of Series F Shares (the "Subject Shares") held
by such Holder which shall be converted on the Dividend Payment Date chosen by
the Holder for conversion, or if such Dividend Payment Date is not a business
day the immediately succeeding business day (the "Holder's Conversion Date").
The Holder's Conversion Notice shall be given at least 30 calendar days prior to
such Holder's Conversion Date and shall be irrevocable.

      Upon exercise by the Holder of its right to convert Series F Shares into
Common Shares, the Corporation is not required to (but may at its option) issue
Common Shares to any person whose address is in, or whom the Corporation or its
transfer agent has reason to believe is a resident of, any jurisdiction outside
of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      If the Corporation gives notice as provided in Section 3 to a Holder of
the redemption of Series F Shares prior to that Holder giving a Holder's
Conversion Notice to the Corporation, the right of that Holder to convert such
Series F Shares as herein provided shall cease and terminate in that event.

      4.3   DELIVERY OF CERTIFICATES REPRESENTING COMMON SHARES

      The Corporation shall, on presentation and surrender at the head office of
the Corporation, the principal transfer office of the transfer agent for the
Series F Shares in the City of Toronto, or such other place or places in Canada
as the Corporation may agree, of the certificate or certificates representing
the Series F Shares being converted by the Corporation or the Holder, give or
cause to be given, on the applicable Corporation's Conversion Date or Holder's
Conversion Date, as the case may be, to each Holder of Series F Shares being
converted or as such Holder may have otherwise directed:

      (a)   a certificate representing the whole number of Common Shares into
            which such Series F Shares being converted are to be converted,
            registered in the name of the Holder, or as such Holder may have
            otherwise directed; and

      (b)   in lieu of the issuance of a fractional Common Share, a cheque in an
            amount equal to the product of the fractional remainder, if any
            (rounded to four decimal places), produced by the conversion formula
            set forth in Section 4.1 or Section 4.2 above,
<PAGE>
                                     - 1G -

            as the case may be, multiplied by the greater of $2.00 and 95% of
            the then Current Market Price.

      If on any conversion under Section 4.1 or 4.2, less than all of the Series
F Shares represented by any certificate are to be converted, a new certificate
representing the balance of such Series F Shares shall be issued by the
Corporation without cost to the Holder.

      The Holder of any Series F Share on the record date for any dividend
declared payable on such share shall be entitled to such dividend
notwithstanding that such share is converted into Common Shares after such
record date and on or before the date of the payment of such dividend.

      The issuance of certificates for the Common Shares upon the conversion of
Series F Shares shall be made without charge to the Holders for any fee or tax
in respect of the issuance of such certificates or the Common Shares represented
thereby; provided, however, that the Corporation shall not be required to pay
any tax which may be imposed upon the person or persons to whom such Common
Shares are issued in respect of the issuance of such Common Shares or the
certificate therefor or which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate in the name or names other
than that of the Holder or deliver such certificate unless the person or persons
requesting the issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.

      4.4   OPTION OF THE CORPORATION

      If a Holder gives a Holder's Conversion Notice to the Corporation, subject
to the provisions described in Section 5 below, as applicable, the Corporation
may, at its option, on notice to such Holder in the manner described in this
Section 4.4, either (i) redeem for cash on the Holder's Conversion Date all or
any part of the Subject Shares, or (ii) cause the Holder to sell on the Holder's
Conversion Date all or any part of the Subject Shares to another purchaser or
purchasers (a "Substitute Purchaser") in the event that a purchaser or
purchasers willing to purchase any or all of such Subject Shares is or are found
by the Corporation pursuant to this Section 4.4. The proportion of the Subject
Shares which are either redeemed, purchased or converted on that Conversion Date
shall, to the extent practicable, be the same for each holder delivering a
Conversion Notice.

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall, not less than 20 calendar
days prior to the Holder's Conversion Date, give written notice to all Holders
of the Subject Shares stating the number of Subject Shares to be redeemed for
cash by the Corporation, the number of Subject Shares to be sold to another
purchaser, and the number of Subject Shares to be converted into Common Shares
pursuant to the Holder's Conversion Notice, such that all of the Subject Shares
are either redeemed, purchased or converted on the Holder's Conversion Date.

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall pay or cause to be paid, in
respect of those Subject Shares to
<PAGE>
                                     - 1H -

be redeemed for cash or purchased, on presentation and surrender at the head
office of the Corporation, the principal transfer office of the transfer agent
for the Series F Shares in the City of Toronto, or such other place or places in
Canada as the Corporation may agree, of the certificate or certificates
representing such Subject Shares, on the Holder's Conversion Date, to the Holder
of the Subject Shares or as such Holder may have otherwise directed, an amount
equal to $25.00 plus all accrued and unpaid Series F Dividends (for greater
certainty excluding declared dividends with a record date prior to the Holder's
Conversion Date) up to but excluding the Holder's Conversion Date for each
Subject Share being redeemed or purchased (less any tax required to be deducted
and withheld by the Corporation), and each such Subject Share shall be deemed to
have been redeemed or purchased, but not converted, as the case may be, on the
Holder's Conversion Date. Payment under this Section 4.4 shall be made by cheque
in accordance with Section 4.5 hereof.

      If the Corporation elects to redeem for cash or arrange for the purchase
of some, but not all, of the Subject Shares, then the Corporation shall, in
respect of those Subject Shares to be converted into Common Shares, give or
cause to be given to the Holder of such Subject Shares the certificate or
certificates representing such Common Shares and, if applicable, a cheque in
lieu of a fractional Common Share, all in accordance with the procedures set
forth in Section 4.3.

      4.5   PAYMENT BY CHEQUE

      Any amounts that are paid by the Corporation to Holders in respect of the
payment of (i) a redemption or purchase amount under Section 4.4, or (ii) a cash
amount in lieu of the issuance of a fractional Common Share under Sections 4.1
or 4.2, shall be paid by cheques drawn on a Canadian chartered bank and payable
in lawful money of Canada at any branch of such bank in Canada and the delivery
or mailing of any such cheque to a Holder shall constitute a full and complete
discharge of the Corporation's obligation to pay the amount represented by such
cheque (plus any tax required to be and in fact deducted and withheld by the
Corporation from the related redemption or purchase amount or cash in lieu of a
fractional common share and remitted to the proper taxing authority), unless
such cheque is not honoured when presented for payment.

5.    RESTRICTIONS ON DIVIDENDS AND RETIREMENT AND ISSUE OF SHARES

      So long as any of the Series F Shares are outstanding, the Corporation
shall not, without the approval of the Holders:

      (a)   declare, pay or set apart for payment any dividends (other than
            stock dividends payable in shares of the Corporation ranking as to
            capital and dividends junior to the Series F Shares) on any shares
            of the Corporation ranking as to dividends junior to the Series F
            Shares;

      (b)   except out of the net cash proceeds of a substantially concurrent
            issue of shares of the Corporation ranking as to return of capital
            and dividends junior to the Series F Shares, redeem or call for
            redemption, purchase or otherwise pay off, retire or make any return
            of capital in respect of any shares of the Corporation ranking as to
            capital junior to the Series F Shares;
<PAGE>
                                     - 1I -

      (c)   redeem or call for redemption, purchase or otherwise retire for
            value or make any return of capital in respect of less than all of
            the Series F Shares then outstanding;

      (d)   except pursuant to any purchase obligation, sinking fund, retraction
            privilege or mandatory redemption provisions attaching thereto,
            redeem or call for redemption, purchase or otherwise pay off, retire
            or make any return of capital in respect of any Class AAA Preference
            Shares, ranking as to the payment of dividends or return of capital
            on a parity with the Series F Shares; or

      (e)   issue any additional Series F Shares or any shares ranking as to the
            payment of dividends or the return of capital prior to or on a
            parity with the Series F Shares;

      unless, in each such case, all accrued and unpaid dividends up to and
      including the dividend payable for the last completed period for which
      dividends were payable on the Series F Shares and on all other shares of
      the Corporation ranking prior to or on a parity with the Series F Shares
      with respect to the payment of dividends have been declared paid or set
      apart for payment.

6.    PURCHASE FOR CANCELLATION

      Subject to applicable law and to the provisions described in Section 5
above, the Corporation may at any time purchase (if obtainable) for cancellation
the whole or any part of the Series F Shares outstanding from time to time, in
the open market through or from an investment dealer or any firm holding
membership on a recognized stock exchange or by private agreement or otherwise,
at the lowest price or prices at which in the opinion of the directors of the
Corporation such shares are obtainable.

7.    LIQUIDATION, DISSOLUTION OR WINDING-UP

      In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, the Holders shall be entitled to payment of an amount equal to
$25.00 per Series F Share, plus an amount equal to all accrued and unpaid Series
F Dividends up to but excluding the date of payment or distribution (less any
tax required to be deducted and withheld by the Corporation), before any amounts
shall be paid or any assets of the Corporation distributed to the holders of any
shares ranking junior as to capital to the Series F Shares. Upon payment of such
amounts, the Holders shall not be entitled to share in any further distribution
of the assets of the Corporation.

8.    VOTING RIGHTS

      The Holders will not be entitled (except as otherwise provided by law and
except for meetings of the holders of Class AAA Preference Shares as a class and
meetings of the holders of the Series F Shares as a series) to receive notice
of, attend at, or vote at any meeting of shareholders of the Corporation unless
and until the Corporation shall have failed to pay eight quarterly Series F
Dividends, whether or not consecutive and whether or not such dividends have
been declared and whether or not there are any moneys of the Corporation
properly applicable to
<PAGE>
                                     - 1J -

the payment of Series F Dividends. In the event of such non-payment, the Holders
shall have the right to receive notice of and to attend each meeting of
shareholders of the Corporation which takes place more than 60 days after the
date on which the failure first occurs (other than a separate meeting of the
holders of another series or class of shares) and such Holders shall have the
right, at any such meeting, to one (1) vote for each Series F Share until all
such arrears of Series F Dividends shall have been paid whereupon such rights
shall cease unless and until the same default shall again arise under the
provisions of this Section 8.

9.    MODIFICATIONS

      The provisions attaching to the Series F Shares as a series may be
repealed, altered, modified or amended from time to time with such approval as
may then be required by the Canada Business Corporations Act, any such approval
to be given in accordance with Section 10.

10.   APPROVAL OF HOLDERS OF SERIES F SHARES

      10.1  APPROVAL

      Except as otherwise provided herein, any approval of the Holders with
respect to any matters requiring the consent of the Holders may be given in such
manner as may then be required by law, subject to a minimum requirement that
such approval be given by a resolution signed by all the Holders or passed by
the affirmative vote of at least 66 2/3% of the votes cast by the Holders who
voted in respect of that resolution at a meeting of the Holders duly called for
that purpose and at which the Holders of a majority of the outstanding Series F
Shares are present or represented by proxy. If at any such meeting the Holder(s)
of a majority of the outstanding Series F Shares are not present or represented
by proxy within one-half hour after the time appointed for such meeting, then
the meeting shall be adjourned to such date not less than 15 days thereafter and
to such time and place as may be designated by the chairman of such meeting, and
not less than 10 days' written notice shall be given of such adjourned meeting.
At such adjourned meeting, the Holders(s) of Series F Shares represented in
person or by proxy may transact the business for which the meeting was
originally called and the Holders represented in person or by proxy shall form
the necessary quorum. At any meeting of Holders as a series, each Holder shall
be entitled to one vote in respect of each Series F Share held.

      10.2  FORMALITIES, ETC.

      The proxy rules applicable to, the formalities to be observed in respect
of the giving notice of, and the formalities to be observed in respect of the
conduct of, any meeting or any adjourned meeting of holders shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders or, if not so prescribed, as required by law. On every
poll taken at every meeting of Holders, each Holder entitled to vote thereat
shall have one vote in respect of each Series F Share held.
<PAGE>
                                     - 1K -

11.   TAX ELECTION

      The Corporation shall elect, in the manner and within the time provided
under the Income Tax Act (Canada), under Subsection 191.2(1) of the said Act, or
any successor or replacement provision of similar effect, and take all other
necessary action under such Act, to pay or cause payment of tax under Part VI.1
of such Act at a rate such that the corporate Holders will not be required to
pay tax on dividends received on the Series F Shares under Section 187.2 of Part
IV.I of such Act or any successor or replacement provision of similar effect.

12.   COMMUNICATIONS WITH HOLDERS

      Except as specifically provided elsewhere in these share conditions, any
notice, cheque, invitation for tenders or other communication from the
Corporation herein provided for shall be sufficiently given, sent or made if
delivered or if sent by first class unregistered mail, postage prepaid, to each
Holder at the last address of such Holder as it appears on the securities
register of the Corporation or, in the case of joint Holders, to the address of
the Holder whose name appears first in the securities register of the
Corporation as one of such joint Holders, or, in the event of the address of any
of such Holders not so appearing, then to the last address of such Holder known
to the Corporation. Accidental failure to give such notice, invitation for
tenders or other communication to one or more Holders of the Series F Shares
shall not affect the validity of the notices, invitations for tenders or other
communications properly given or any action taken pursuant to such notice,
invitation for tender or other communication but, upon such failure being
discovered, the notice, invitation for tenders or other communication, as the
case may be, shall be sent forthwith to such holder or holders.

      If any notice, cheque, invitation for tenders or other communication from
the Corporation given to a holder of Series F Shares pursuant to paragraph (b)
is returned on three consecutive occasions because the holder cannot be found,
the Corporation shall not be required to give or mail any further notices,
cheques, invitations for tenders or other communications to such shareholder
until the holder informs the Corporation in writing of such holder's new
address.

      If the directors determine that mail service is or is threatened to be
interrupted at the time when the Corporation is required or elects to give any
notice hereunder by mail, or is required to send any cheque or any share
certificate to a Holder, whether in connection with the redemption or conversion
of such share or otherwise, the Corporation may, notwithstanding the provisions
hereof:

      (a)   give such notice by publication thereof once in a daily English
            language newspaper of general circulation published in each of
            Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax, and
            once in a daily French language newspaper published in Montreal and
            such notice shall be deemed to have been validly given on the day
            next succeeding its publication in all of such cities; and

      (b)   fulfill the requirement to send such cheque or such share
            certificate by arranging for the delivery thereof to such Holder by
            the transfer agent for the Series F Shares at its principal offices
            in the cities of Vancouver, Toronto and Montreal, and such
<PAGE>
                                     - 1L -

            cheque and/or share certificate shall be deemed to have been sent on
            the date on which notice of such arrangement shall have been given
            as provided in (a) above, provided that as soon as the Board of
            Directors determines that mail service is no longer interrupted or
            threatened to be interrupted, such cheque or share certificate, if
            not theretofore delivered to such Holder, shall be sent by mail as
            herein provided.

13.   INTERPRETATION

      In the provisions herein contained attaching to the Series F Shares:

      (a)   "ACCRUED AND UNPAID DIVIDENDS" means the aggregate of: (i) all
            unpaid dividends on the Series F Shares for any quarterly period;
            and (ii) the amount calculated as though dividends on each Series F
            Share had been accruing on a day-to-day basis from and including the
            date on which the last quarterly dividend was payable up to and
            including the date to which the computation of accrued dividends is
            to be made;

      (b)   "IN PRIORITY TO", "ON A PARITY WITH" and "JUNIOR TO" have reference
            to the order of priority in payment of dividends and in the
            distribution of assets in the event of any liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or other distribution of the assets of the Corporation among its
            shareholders for the purpose of winding up its affairs; and

      (c)   in the event that any date on which any dividend on the Series F
            Shares is payable by the Corporation, or any date on or by which any
            other action is required to be taken by the Corporation or the
            Holders hereunder, is not a business day (as hereinafter defined),
            then such dividend shall be payable, or such other action shall be
            required to be taken, on or by the next succeeding day that is a
            business day. A "BUSINESS DAY" shall be a day other than a Saturday,
            a Sunday or any other day that is treated as a holiday in the
            province of Ontario; and

      (d)   "COMMON SHARES" means common shares of the Corporation.

14.   BOOK-ENTRY ONLY SYSTEM

      If the Series F Shares are held through the book-entry only system of the
Canadian Depository for Securities ("CDS"), then the beneficial owner thereof
shall provide instructions only by such beneficial owner providing instructions
to the CDS Participant through whom such beneficial owner holds such Series F
Shares. Beneficial owners of Series F Shares will not have the right to receive
share certificates representing their ownership of the shares.
<PAGE>

[CDN. FLAG GRAPHIC]
Industry Canada                       Industrie Canada

CERTIFICATE                                    CERTIFICAT
OF AMENDMENT                                   DE MODIFICATION

CANADA BUSINESS                                LOI CANADIENNE SUR
CORPORATIONS ACT                               LES SOCIETES PAR ACTIONS

BROOKFIELD PROPERTIES CORPORATION                          074605-3

--------------------------------------------------------------------------------
Name of corporation -                          Corporation number -
Denomination de la societe                     Numero de la societe

I hereby certify that the articles of          Je certifie que les statuts de la
the above-named corporation were               societe susmentionnee ont ete
amended:                                       modifies:

a) under section 13 of the Canada     [ ]      a) en vertu de l'article 13 de
   Business Corporations Act in                   la Loi canadienne sur les
   accordance with the attached                   societes par actions, con-
   notice;                                        formement a l'avis ci-joint;

b) under section 27 of the Canada     [ ]      b) en vertu de l'article 27 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment designating a series                 qu'il est indique dans les
   of shares;                                     clauses modificatrices ci-
                                                  jointes designant une serie
                                                  d'actions;

c) under section 179 of the Canada    [X]      c) en vertu de l'article 179 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment;                                     qu'il est indique dans les
                                                  clauses modificatrices
                                                  ci-jointes;

d) under section 191 of the Canada    [ ]     d) en vertu de l'article 191 de la
   Business Corporations Act as set              Loi canadienne sur les societes
   out in the attached articles of               par actions, tel qu'il est
   reorganization;                               indique dans les clauses de
                                                 reorganisation ci-jointes;

/s/ [signature]                                         JUNE 9, 2003/
-------------------------------------                  LE 9 JUIN 2003
Director - Directeur                                 Date of Amendment -
                                                     Date de modification

[CANADA LOGO]
<PAGE>

[CDN. FLAG LOGO]
Industry Canada     Industrie Canada
                                          FORM 4             FORMULE 4
Canada Business     Loi canadienne      ARTICLES OF    CLAUSES MODIFICATRICES
Corporations Act    sur les societes     AMENDMENT      (ARTICLES 27 OU 177)
                    par actions         (SECTION 27
                                          OR 177)

--------------------------------------------------------------------------------
1. Name of the Corporation -            2. Corporation No. -
   Denomination sociale de                 No de la societe
   la societe

   Brookfield Properties Corporation       0746053
--------------------------------------------------------------------------------
3. The articles of the above-named      Les statuts de la societe mentionnee
   corporation are amended as follows:  ci-dessus sont modifies de la facon
                                        suivante :

The articles of the Corporation are amended to create a new class of shares to
be designated as Class AAA Preference Shares, Series G and to have the rights,
privileges, restrictions and conditions as set forth on pages 1A to 1L.

--------------------------------------------------------------------------------
Date                        Signature             3. Capacity of - En qualite de

June 6, 2003               /s/ J. Bruce Flatt        Director
--------------------------------------------------------------------------------
For Departmental           Printed Name -
Use Only                   Nom en lettres moulees
A l'usage du
ministere seulement                                                [CANADA LOGO]
Filed                      J. Bruce Flatt
Dated     Jun 09, 2003
--------------------------------------------------------------------------------
IC 3069 (2001/11)                                                    OSG 11/2001
<PAGE>
                                     - 1A -

                            NUMBER AND DESIGNATION OF
                    AND RIGHTS, PRIVILEGES, RESTRICTIONS AND
                           CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES, SERIES G

      The seventh series of Class AAA Preference Shares of the Corporation shall
consist of 6,000,000 Class AAA Preference Shares which shall be designated as
Class AAA Preference Shares, Series G (hereinafter referred to as the "Series G
Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA Preference Shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.    CONSIDERATION FOR ISSUE

      The consideration for the issue of each Series G Share shall be US$25.00.

2.    DIVIDENDS

      For the purposes hereof, the following terms shall have the following
meanings, unless the context otherwise requires:

      (a)   "Dividend Payment Date" in respect of the dividends payable on the
            Series G Shares means the last day of each of March, June, September
            and December in each year.

      (b)   "Dividend Period" means the period from and including the date of
            initial issue of the Series G Shares up to but excluding September
            30, 2003 and, thereafter, the period from and including a Dividend
            Payment Date up to but excluding the next succeeding Dividend
            Payment Date.

      2.1.  PAYMENT OF DIVIDENDS

      Holders of Series G Shares (the "Holders") shall be entitled to receive,
and the Corporation shall pay thereon, if, as and when declared by the directors
of the Corporation, out of moneys of the Corporation properly applicable to the
payment of dividends, fixed cumulative preferential cash dividends (the "Series
G Dividends") payable quarterly, with respect to each Dividend Period, on the
Dividend Payment Date immediately following each such Dividend Period at the
rate of US$1.3125 per Series G Share per annum accruing daily from the date of
issue (less any tax required to be deducted and withheld by the Corporation)
which shall be calculated on a 365 or 366 day basis, being the actual number of
days in the year in which the amount is to be ascertained, by cheque at par in
lawful money of Canada at any branch in Canada of the Corporation's bankers for
the time being or by any other reasonable means the Corporation deems desirable.
<PAGE>
                                     - 1B -

      2.2.  METHOD OF PAYMENT

      Series G Dividends shall (except in case of redemption in which case
payment of Series G Dividends shall be made on surrender of the certificate
representing the Series G Shares to be redeemed) be paid by sending to each
Holder (in the manner provided for in Section 12) a cheque for such Series G
Dividends (less any tax required to be deducted and withheld by the Corporation)
payable to the order of such Holder or, in the case of joint Holders, to the
order of all such Holders failing written instructions from them to the
contrary. The posting or delivery of such cheque on or before the date on which
such dividend is to be paid to a Holder shall be deemed to be payment and shall
satisfy and discharge all liabilities for the payment of such dividends to the
extent of the sum represented thereby (plus the amount of any tax required to be
and in fact deducted and withheld by the Corporation from the related dividends
as aforesaid and remitted to the proper taxing authority) unless such cheque is
not honoured when presented for payment. Subject to applicable law, dividends
which are represented by a cheque which has not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which they were declared to be payable
shall be forfeited to the Corporation.

      2.3.  CUMULATIVE PAYMENT OF DIVIDENDS

      If on any Dividend Payment Date, the Series G Dividends accrued to such
date are not paid in full on all of the Series G Shares then outstanding, such
Series G Dividends, or the unpaid part thereof, shall be paid on a subsequent
date or dates determined by the directors on which the Corporation shall have
sufficient monies properly applicable to the payment of such Series G Dividends.
The Holders shall not be entitled to any dividends other than or in excess of
the cumulative preferential cash dividends herein provided for.

      2.4.  DIVIDEND FOR OTHER THAN A FULL DIVIDEND PERIOD

      The Holders shall be entitled to receive, and the Corporation shall pay
thereon, if, as and when declared by the directors, out of moneys of the
Corporation properly applicable to the payment of dividends, cumulative
preferential cash dividends for any period which is more or less than a full
Dividend Period as follows:

      (a)   in respect of the period beginning on and including the date of
            initial issue of the Series G Shares up to but excluding September
            30, 2003 (the "Initial Dividend Period"), a dividend in an amount
            per Series G Share equal to the amount obtained (rounded to four
            decimal places) when US$1.3125 is multiplied by a fraction, the
            numerator of which is the number of calendar days from and including
            the date of issue of the Series G Shares up to but excluding
            September 30, 2003 and the denominator of which is 365. The Series G
            Dividend payable for the Initial Dividend Period, payable as of
            September 30, 2003, as calculated by this method shall be US$0.39555
            per Series G Share; and

      (b)   in respect of any period other than the Initial Dividend Period that
            is more or less than a full Dividend Period, a dividend in an amount
            per Series G Share equal to
<PAGE>
                                     - 1C -

            the amount obtained (rounded to four decimal places) when US$1.3125
            is multiplied by a fraction, the numerator of which is the number of
            calendar days in the relevant period (which shall include the first
            day of such period but exclude the last day of such period) and the
            denominator of which is the number of calendar days in the year in
            which such period falls.

3.    REDEMPTION

      3.1.  OPTIONAL REDEMPTION

      The Corporation may not redeem any of the Series G Shares prior to June
30, 2011. On or after this date, subject to the terms of any shares ranking
prior to the Series G Shares, to applicable law and to the provisions described
in Section 5 below, the Corporation may, upon giving notice as hereinafter
provided, at its option, at any time redeem all, or from time to time any part,
of the then outstanding Series G Shares by the payment of an amount in cash for
each such Series G Share so redeemed equal to:

      (a)   US$26.00 if redeemed before June 30, 2012;

      (b)   US$25.67 if redeemed on or after June 30, 2012, but before June 30,
            2013;

      (c)   US$25.33 if redeemed on or after June 30, 2013, but before June 30,
            2014; and

      (d)   US$25.00 if redeemed on or after June 30, 2014;

in each case, together with all accrued and unpaid Series G Dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for redemption) up to but excluding the date fixed for redemption
(the "Redemption Price") (less any tax required to be deducted and withheld by
the Corporation).

      3.2.  PARTIAL REDEMPTION

      If less than all of the then outstanding Series G Shares are at any time
to be redeemed, then the particular Series G Shares to be redeemed shall be
selected on a pro rata basis.

      3.3.  METHOD OF REDEMPTION

      The Corporation shall give notice in writing not less than 30 days nor
more than 60 days prior to the date on which the redemption is to take place of
its intention to redeem such Series G Shares to each person who at the date of
giving such notice is the Holder of Series G Shares to be redeemed. Any such
notice shall be validly and effectively given on the date on which it is sent to
each Holder of Series G Shares to be redeemed in the manner provided for in
Section 12. Such notice shall set out the number of such Series G Shares held by
the person to whom it is addressed which are to be redeemed and the Redemption
Price and shall also set out the date on which the redemption is to take place.
On and after the date so specified for redemption, the Corporation shall pay or
cause to be paid to the Holders to be redeemed the Redemption Price (less any
tax required to be deducted and withheld by the Corporation) on presentation and
<PAGE>
                                     - 1D -

surrender, at any place within Canada designated by such notice, of the
certificate or certificates for such Series G Shares so called for redemption.
Such payment shall be made by cheque in the amount of the Redemption Price (less
any tax required to be and in fact deducted and withheld by the Corporation and
remitted to the proper taxing authority) payable at par at any branch in Canada
of the Corporation's bankers for the time being or by any other reasonable means
that the Corporation deems desirable and the delivery of such cheque in such
amount shall be a full and complete discharge of the Corporation's obligation to
pay the Redemption Price owed to the holders of Series G Shares so called for
redemption to the extent of the sum represented thereby (plus the amount of any
tax required to be and in fact deducted and withheld by the Corporation and
remitted to the proper taxing authority) unless the cheque is not honoured when
presented for payment. From and after the date specified in any such notice, the
Series G Shares called for redemption shall cease to be entitled to Series G
Dividends and the Holders thereof shall not be entitled to exercise any of the
rights of shareholders in respect thereof, except to receive the Redemption
Price therefor (less any tax required to be deducted and withheld by the
Corporation), unless payment of the Redemption Price shall not be duly made by
the Corporation. At any time after notice of redemption is given as aforesaid,
the Corporation shall have the right to deposit the Redemption Price of any or
all Series G Shares called for redemption (less any tax required to be deducted
and withheld by the Corporation), or such part thereof as at the time of deposit
has not been claimed by the holders entitled thereto, with any chartered bank or
banks or with any trust company or trust companies in Canada named in the notice
of redemption to the credit of a special account or accounts in trust for the
respective Holders of such shares, to be paid to them respectively upon
surrender to such bank or banks or trust company or trust companies of the
certificate or certificates representing the same. Upon such deposit or deposits
being made, such shares shall be redeemed on the redemption date specified in
the notice of redemption. After the Corporation has made a deposit as aforesaid
with respect to any shares, the Holders thereof shall not, from and after the
redemption date, be entitled to exercise any of the rights of shareholders in
respect thereof and the rights of the Holders thereof shall be limited to
receiving a proportion of the amounts so deposited applicable to such shares,
without interest. Any interest allowed on such deposit shall belong to the
Corporation. Subject to applicable law, redemption monies that are represented
by a cheque which has not been presented to the Corporation's bankers for
payment or that otherwise remain unclaimed (including monies held in deposit as
provided for above) for a period of six years from the date specified for
redemption shall be forfeited to the Corporation.

4.    CONVERSION OF SERIES G SHARES

      4.1.  CONVERSION AT THE OPTION OF THE CORPORATION

      The Series G Shares shall not be convertible at the option of the
Corporation prior to June 30, 2011. On and after June 30, 2011, the Corporation
may, subject to applicable law and, if required, to other regulatory approvals,
and upon notice as hereinafter described, convert all, or from time to time any
part, of the then outstanding Series G Shares into that number of freely
tradeable Common Shares (per Series G Share) determined by dividing the
Redemption Price that would be applicable on the Corporation's Conversion Date
(as hereinafter defined), together with accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
Corporation's Conversion Date) up to but excluding the Corporation's
<PAGE>
                                     - 1E -

Conversion Date, by the greater of US$2.00 and 95% of the weighted average
trading price of the Common Shares on the New York Stock Exchange (or, if the
Common Shares do not trade on the New York Stock Exchange on the date specified
for conversion, on the exchange or trading system with the greatest volume of
Common Shares traded during the 20 trading day period referred to below) for the
20 consecutive trading days ending on: (i) the fourth day prior to the
Corporation's Conversion Date, or (ii) if such fourth day is not a trading day,
the immediately preceding trading day (the "Current Market Price"). Fractional
Common Shares will not be issued on any conversion of Series G Shares but in
lieu thereof the Corporation will make cash payments in the manner set out in
Sections 4.3 and 4.5 below. Such conversion shall be deemed to have been made at
the close of business on the Corporation's Conversion Date, so that the rights
of the Holder of such Series G Shares as the Holder thereof shall cease at such
time and the person or persons entitled to receive Common Shares upon such
conversion shall be treated for all purposes as having become the holder or
holders of record of such Common Shares at such time.

      Upon exercise by the Corporation of its right to convert Series G Shares
into Common Shares, the Corporation is not required to (but may at its option)
issue Common Shares to any person whose address is in, or whom the Corporation
or its transfer agent has reason to believe is a resident of, any jurisdiction
outside of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      The Corporation shall give written notice to each Holder whose shares are
to be converted, which notice (the "Corporation's Conversion Notice") shall
specify the number of Series G Shares held by such Holder that will be converted
and the date fixed by the Corporation for conversion (the "Corporation's
Conversion Date"), and which notice shall be given not more than 60 days and not
less than 30 days prior to such Corporation's Conversion Date.

      If less than all of the then outstanding Series G Shares are at any time
to be converted at the option of the Corporation, then the particular Series G
Shares to be so converted shall be selected on a pro rata basis.

      Series G Shares that are the subject of a Corporation's Conversion Notice
shall be converted effective on the Corporation's Conversion Date.

      The Corporation cannot exercise its conversion rights hereunder in respect
of any Series G Shares that are the subject of a Holder's Conversion Notice
under Section 4.2 below.

      4.2.  CONVERSION AT THE OPTION OF THE HOLDER

      Subject to applicable law and to the option of the Corporation in Section
4.4, on each Dividend Payment Date on or after September 30, 2015, Holders, upon
notice as hereinafter described, may convert all or any part of the then
outstanding Series G Shares registered in the name of the Holder into that
number of freely tradeable Common Shares determined (per Series G Share) by
dividing US$25.00, together with all accrued and unpaid Series G Dividends (for
greater certainty excluding declared dividends with a record date prior to the
Holder's Conversion Date) up to but excluding the Holder's Conversion Date (as
hereinafter defined), by
<PAGE>
                                     - 1F -

the greater of US$2.00 and 95% of the Current Market Price. Fractional Common
Shares will not be issued on any conversion of Series G Shares but in lieu
thereof the Corporation will make cash payments in the manner set out in
Sections 4.3 and 4.5 below. Such conversion shall be deemed to have been made at
the close of business on the Holder's Conversion Date, so that the rights of the
Holder of such Series G Shares as the Holder thereof shall cease at such time
and the person or persons entitled to receive Common Shares upon such conversion
shall be treated for all purposes as having become the holder or holders of
record of such Common Shares at such time.

      In order to exercise its conversion rights, the Holder shall give written
notice to the Corporation at the registered office of the Corporation or the
principal transfer office of the transfer agent for the Series G Shares in the
City of Toronto (the "Holder's Conversion Notice"), which Holder's Conversion
Notice shall specify the number of Series G Shares (the "Subject Shares") held
by such Holder which shall be converted on the Dividend Payment Date chosen by
the Holder for conversion, or if such Dividend Payment Date is not a business
day the immediately succeeding business day (the "Holder's Conversion Date").
The Holder's Conversion Notice shall be given at least 30 calendar days prior to
such Holder's Conversion Date and shall be irrevocable.

      Upon exercise by the Holder of its right to convert Series G Shares into
Common Shares, the Corporation is not required to (but may at its option) issue
Common Shares to any person whose address is in, or whom the Corporation or its
transfer agent has reason to believe is a resident of, any jurisdiction outside
of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      If the Corporation gives notice as provided in Section 3 to a Holder of
the redemption of Series G Shares prior to that Holder giving a Holder's
Conversion Notice to the Corporation, the right of that Holder to convert such
Series G Shares as herein provided shall cease and terminate in that event.

      4.3.  DELIVERY OF CERTIFICATES REPRESENTING COMMON SHARES

      The Corporation shall, on presentation and surrender at the head office of
the Corporation, the principal transfer office of the transfer agent for the
Series G Shares in the City of Toronto, or such other place or places in Canada
as the Corporation may agree, of the certificate or certificates representing
the Series G Shares being converted by the Corporation or the Holder, give or
cause to be given, on the applicable Corporation's Conversion Date or Holder's
Conversion Date, as the case may be, to each Holder of Series G Shares being
converted or as such Holder may have otherwise directed:

      (a)   a certificate representing the whole number of Common Shares into
            which such Series G Shares being converted are to be converted,
            registered in the name of the Holder, or as such Holder may have
            otherwise directed; and

      (b)   in lieu of the issuance of a fractional Common Share, a cheque in an
            amount equal to the product of the fractional remainder, if any
            (rounded to four decimal places),
<PAGE>
                                     - 1G -

            produced by the conversion formula set forth in Section 4.1 or
            Section 4.2 above, as the case may be, multiplied by the greater of
            US$2.00 and 95% of the then Current Market Price.

      If on any conversion under Section 4.1 or 4.2, less than all of the Series
G Shares represented by any certificate are to be converted, a new certificate
representing the balance of such Series G Shares shall be issued by the
Corporation without cost to the Holder.

      The Holder of any Series G Share on the record date for any dividend
declared payable on such share shall be entitled to such dividend
notwithstanding that such share is converted into Common Shares after such
record date and on or before the date of the payment of such dividend.

      The issuance of certificates for the Common Shares upon the conversion of
Series G Shares shall be made without charge to the Holders for any fee or tax
in respect of the issuance of such certificates or the Common Shares represented
thereby; provided, however, that the Corporation shall not be required to pay
any tax which may be imposed upon the person or persons to whom such Common
Shares are issued in respect of the issuance of such Common Shares or the
certificate therefor or which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate in the name or names other
than that of the Holder or deliver such certificate unless the person or persons
requesting the issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.

      4.4.  OPTION OF THE CORPORATION

      If a Holder gives a Holder's Conversion Notice to the Corporation, subject
to the provisions described in Section 5 below, as applicable, the Corporation
may, at its option, on notice to such Holder in the manner described in this
Section 4.4, either (i) redeem for cash on the Holder's Conversion Date all or
any part of the Subject Shares, or (ii) cause the Holder to sell on the Holder's
Conversion Date all or any part of the Subject Shares to another purchaser or
purchasers (a "Substitute Purchaser") in the event that a purchaser or
purchasers willing to purchase any or all of such Subject Shares is or are found
by the Corporation pursuant to this Section 4.4. The proportion of the Subject
Shares which are either redeemed, purchased or converted on that Conversion Date
shall, to the extent practicable, be the same for each holder delivering a
Conversion Notice.

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall, not less than 20 calendar
days prior to the Holder's Conversion Date, give written notice to all Holders
of the Subject Shares stating the number of Subject Shares to be redeemed for
cash by the Corporation, the number of Subject Shares to be sold to another
purchaser, and the number of Subject Shares to be converted into Common Shares
pursuant to the Holder's Conversion Notice, such that all of the Subject Shares
are either redeemed, purchased or converted on the Holder's Conversion Date.
<PAGE>
                                     - 1H -

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall pay or cause to be paid, in
respect of those Subject Shares to be redeemed for cash or purchased, on
presentation and surrender at the head office of the Corporation, the principal
transfer office of the transfer agent for the Series G Shares in the City of
Toronto, or such other place or places in Canada as the Corporation may agree,
of the certificate or certificates representing such Subject Shares, on the
Holder's Conversion Date, to the Holder of the Subject Shares or as such Holder
may have otherwise directed, an amount equal to US$25.00 plus all accrued and
unpaid Series G Dividends (for greater certainty excluding declared dividends
with a record date prior to the Holder's Conversion Date) up to but excluding
the Holder's Conversion Date for each Subject Share being redeemed or purchased
(less any tax required to be deducted and withheld by the Corporation), and each
such Subject Share shall be deemed to have been redeemed or purchased, but not
converted, as the case may be, on the Holder's Conversion Date. Payment under
this Section 4.4 shall be made by cheque in accordance with Section 4.5 hereof.

      If the Corporation elects to redeem for cash or arrange for the purchase
of some, but not all, of the Subject Shares, then the Corporation shall, in
respect of those Subject Shares to be converted into Common Shares, give or
cause to be given to the Holder of such Subject Shares the certificate or
certificates representing such Common Shares and, if applicable, a cheque in
lieu of a fractional Common Share, all in accordance with the procedures set
forth in Section 4.3.

      4.5.  PAYMENT BY CHEQUE

      Any amounts that are paid by the Corporation to Holders in respect of the
payment of (i) a redemption or purchase amount under Section 4.4, or (ii) a cash
amount in lieu of the issuance of a fractional Common Share under Sections 4.1
or 4.2, shall be paid by cheques drawn on a Canadian chartered bank and payable
in lawful money of the United States at any branch of such bank in Canada and
the delivery or mailing of any such cheque to a Holder shall constitute a full
and complete discharge of the Corporation's obligation to pay the amount
represented by such cheque (plus any tax required to be and in fact deducted and
withheld by the Corporation from the related redemption or purchase amount or
cash in lieu of a fractional common share and remitted to the proper taxing
authority), unless such cheque is not honoured when presented for payment.

5.    RESTRICTIONS ON DIVIDENDS AND RETIREMENT AND ISSUE OF SHARES

      So long as any of the Series G Shares are outstanding, the Corporation
shall not, without the approval of the Holders:

      (a)   declare, pay or set apart for payment any dividends (other than
            stock dividends payable in shares of the Corporation ranking as to
            capital and dividends junior to the Series G Shares) on any shares
            of the Corporation ranking as to dividends junior to the Series G
            Shares;

      (b)   except out of the net cash proceeds of a substantially concurrent
            issue of shares of the Corporation ranking as to return of capital
            and dividends junior to the Series G
<PAGE>
                                     - 1I -

            Shares, redeem or call for redemption, purchase or otherwise pay
            off, retire or make any return of capital in respect of any shares
            of the Corporation ranking as to capital junior to the Series G
            Shares;

      (c)   redeem or call for redemption, purchase or otherwise retire for
            value or make any return of capital in respect of less than all of
            the Series G Shares then outstanding;

      (d)   except pursuant to any purchase obligation, sinking fund, retraction
            privilege or mandatory redemption provisions attaching thereto,
            redeem or call for redemption, purchase or otherwise pay off, retire
            or make any return of capital in respect of any Class AAA Preference
            Shares, ranking as to the payment of dividends or return of capital
            on a parity with the Series G Shares; or

      (e)   issue any additional Series G Shares or any shares ranking as to the
            payment of dividends or the return of capital prior to or on a
            parity with the Series G Shares;

      unless, in each such case, all accrued and unpaid dividends up to and
      including the dividend payable for the last completed period for which
      dividends were payable on the Series G Shares and on all other shares of
      the Corporation ranking prior to or on a parity with the Series G Shares
      with respect to the payment of dividends have been declared paid or set
      apart for payment.

6.    PURCHASE FOR CANCELLATION

      Subject to applicable law and to the provisions described in Section 5
above, the Corporation may at any time purchase (if obtainable) for cancellation
the whole or any part of the Series G Shares outstanding from time to time, in
the open market through or from an investment dealer or any firm holding
membership on a recognized stock exchange or by private agreement or otherwise,
at the lowest price or prices at which in the opinion of the directors of the
Corporation such shares are obtainable.

7.    LIQUIDATION, DISSOLUTION OR WINDING-UP

      In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, the Holders shall be entitled to payment of an amount equal to
US$25.00 per Series G Share, plus an amount equal to all accrued and unpaid
Series G Dividends up to but excluding the date of payment or distribution (less
any tax required to be deducted and withheld by the Corporation), before any
amounts shall be paid or any assets of the Corporation distributed to the
holders of any shares ranking junior as to capital to the Series G Shares. Upon
payment of such amounts, the Holders shall not be entitled to share in any
further distribution of the assets of the Corporation.

8.    VOTING RIGHTS

      The Holders will not be entitled (except as otherwise provided by law and
except for meetings of the holders of Class AAA Preference Shares as a class and
meetings of the holders of
<PAGE>
                                     - 1J -

the Series G Shares as a series) to receive notice of, attend at, or vote at any
meeting of shareholders of the Corporation unless and until the Corporation
shall have failed to pay eight quarterly Series G Dividends, whether or not
consecutive and whether or not such dividends have been declared and whether or
not there are any moneys of the Corporation properly applicable to the payment
of Series G Dividends. In the event of such non-payment, the Holders shall have
the right to receive notice of and to attend each meeting of shareholders of the
Corporation which takes place more than 60 days after the date on which the
failure first occurs (other than a separate meeting of the holders of another
series or class of shares) and such Holders shall have the right, at any such
meeting, to one (1) vote for each Series G Share until all such arrears of
Series G Dividends shall have been paid whereupon such rights shall cease unless
and until the same default shall again arise under the provisions of this
Section 8.

9.    MODIFICATIONS

      The provisions attaching to the Series G Shares as a series may be
repealed, altered, modified or amended from time to time with such approval as
may then be required by the Canada Business Corporations Act, any such approval
to be given in accordance with Section 10.

10.   APPROVAL OF HOLDERS OF SERIES G SHARES

      10.1. APPROVAL

      Except as otherwise provided herein, any approval of the Holders with
respect to any matters requiring the consent of the Holders may be given in such
manner as may then be required by law, subject to a minimum requirement that
such approval be given by a resolution signed by all the Holders or passed by
the affirmative vote of at least 66 2/3% of the votes cast by the Holders who
voted in respect of that resolution at a meeting of the Holders duly called for
that purpose and at which the Holders of a majority of the outstanding Series G
Shares are present or represented by proxy. If at any such meeting the Holder(s)
of a majority of the outstanding Series G Shares are not present or represented
by proxy within one-half hour after the time appointed for such meeting, then
the meeting shall be adjourned to such date not less than 15 days thereafter and
to such time and place as may be designated by the chairman of such meeting, and
not less than 10 days' written notice shall be given of such adjourned meeting.
At such adjourned meeting, the Holders(s) of Series G Shares represented in
person or by proxy may transact the business for which the meeting was
originally called and the Holders represented in person or by proxy shall form
the necessary quorum. At any meeting of Holders as a series, each Holder shall
be entitled to one vote in respect of each Series G Share held.

      10.2. FORMALITIES, ETC.

      The proxy rules applicable to, the formalities to be observed in respect
of the giving notice of, and the formalities to be observed in respect of the
conduct of, any meeting or any adjourned meeting of holders shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders or, if not so prescribed, as required by law.
<PAGE>
                                     - 1K -

On every poll taken at every meeting of Holders, each Holder entitled to vote
thereat shall have one vote in respect of each Series G Share held.

11.   TAX ELECTION

      The Corporation shall elect, in the manner and within the time provided
under the Income Tax Act (Canada), under Subsection 191.2(1) of the said Act, or
any successor or replacement provision of similar effect, and take all other
necessary action under such Act, to pay or cause payment of tax under Part VI.1
of such Act at a rate such that the corporate Holders will not be required to
pay tax on dividends received on the Series G Shares under Section 187.2 of Part
IV.I of such Act or any successor or replacement provision of similar effect.

12.   COMMUNICATIONS WITH HOLDERS

      Except as specifically provided elsewhere in these share conditions, any
notice, cheque, invitation for tenders or other communication from the
Corporation herein provided for shall be sufficiently given, sent or made if
delivered or if sent by first class unregistered mail, postage prepaid, to each
Holder at the last address of such Holder as it appears on the securities
register of the Corporation or, in the case of joint Holders, to the address of
the Holder whose name appears first in the securities register of the
Corporation as one of such joint Holders, or, in the event of the address of any
of such Holders not so appearing, then to the last address of such Holder known
to the Corporation. Accidental failure to give such notice, invitation for
tenders or other communication to one or more Holders of the Series G Shares
shall not affect the validity of the notices, invitations for tenders or other
communications properly given or any action taken pursuant to such notice,
invitation for tender or other communication but, upon such failure being
discovered, the notice, invitation for tenders or other communication, as the
case may be, shall be sent forthwith to such holder or holders.

      If any notice, cheque, invitation for tenders or other communication from
the Corporation given to a holder of Series G Shares pursuant to paragraph (b)
is returned on three consecutive occasions because the holder cannot be found,
the Corporation shall not be required to give or mail any further notices,
cheques, invitations for tenders or other communications to such shareholder
until the holder informs the Corporation in writing of such holder's new
address.

      If the directors determine that mail service is or is threatened to be
interrupted at the time when the Corporation is required or elects to give any
notice hereunder by mail, or is required to send any cheque or any share
certificate to a Holder, whether in connection with the redemption or conversion
of such share or otherwise, the Corporation may, notwithstanding the provisions
hereof:

      (a)   give such notice by publication thereof once in a daily English
            language newspaper of general circulation published in each of
            Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax, and
            once in a daily French language newspaper published in Montreal and
            such notice shall be deemed to have been validly given on the day
            next succeeding its publication in all of such cities; and
<PAGE>
                                     - 1L -

      (b)   fulfill the requirement to send such cheque or such share
            certificate by arranging for the delivery thereof to such Holder by
            the transfer agent for the Series G Shares at its principal offices
            in the cities of Vancouver, Toronto and Montreal, and such cheque
            and/or share certificate shall be deemed to have been sent on the
            date on which notice of such arrangement shall have been given as
            provided in (a) above, provided that as soon as the Board of
            Directors determines that mail service is no longer interrupted or
            threatened to be interrupted, such cheque or share certificate, if
            not theretofore delivered to such Holder, shall be sent by mail as
            herein provided.

13.   INTERPRETATION

      In the provisions herein contained attaching to the Series G Shares:

      (a)   "ACCRUED AND UNPAID DIVIDENDS" means the aggregate of: (i) all
            unpaid dividends on the Series G Shares for any quarterly period;
            and (ii) the amount calculated as though dividends on each Series G
            Share had been accruing on a day-to-day basis from and including the
            date on which the last quarterly dividend was payable up to and
            including the date to which the computation of accrued dividends is
            to be made;

      (b)   "IN PRIORITY TO", "ON A PARITY WITH" and "JUNIOR TO" have reference
            to the order of priority in payment of dividends and in the
            distribution of assets in the event of any liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or other distribution of the assets of the Corporation among its
            shareholders for the purpose of winding up its affairs; and

      (c)   in the event that any date on which any dividend on the Series G
            Shares is payable by the Corporation, or any date on or by which any
            other action is required to be taken by the Corporation or the
            Holders hereunder, is not a business day (as hereinafter defined),
            then such dividend shall be payable, or such other action shall be
            required to be taken, on or by the next succeeding day that is a
            business day. A "BUSINESS DAY" shall be a day other than a Saturday,
            a Sunday or any other day that is treated as a holiday in the
            province of Ontario; and

      (d)   "COMMON SHARES" means common shares of the Corporation.

14.   BOOK-ENTRY ONLY SYSTEM

      If the Series G Shares are held through the book-entry only system of the
Canadian Depository for Securities ("CDS"), then the beneficial owner thereof
shall provide instructions only by such beneficial owner providing instructions
to the CDS Participant through whom such beneficial owner holds such Series G
Shares. Beneficial owners of Series G Shares will not have the right to receive
share certificates representing their ownership of the shares.
<PAGE>

[CDN. FLAG GRAPHIC]
Industry Canada                       Industrie Canada

CERTIFICATE                                    CERTIFICAT
OF AMENDMENT                                   DE MODIFICATION

CANADA BUSINESS                                LOI CANADIENNE SUR
CORPORATIONS ACT                               LES SOCIETES PAR ACTIONS

BROOKFIELD PROPERTIES CORPORATION                          074605-3

--------------------------------------------------------------------------------
Name of corporation -                          Corporation number -
Denomination de la societe                     Numero de la societe

I hereby certify that the articles of          Je certifie que les statuts de la
the above-named corporation were               societe susmentionnee ont ete
amended:                                       modifies:

a) under section 13 of the Canada     [ ]      a) en vertu de l'article 13 de
   Business Corporations Act in                   la Loi canadienne sur les
   accordance with the attached                   societes par actions, con-
   notice;                                        formement a l'avis ci-joint;

b) under section 27 of the Canada     [ ]      b) en vertu de l'article 27 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment designating a series                 qu'il est indique dans les
   of shares;                                     clauses modificatrices ci-
                                                  jointes designant une serie
                                                  d'actions;

c) under section 179 of the Canada    [X]      c) en vertu de l'article 179 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment;                                     qu'il est indique dans les
                                                  clauses modificatrices
                                                  ci-jointes;

d) under section 191 of the Canada    [ ]     d) en vertu de l'article 191 de la
   Business Corporations Act as set              Loi canadienne sur les societes
   out in the attached articles of               par actions, tel qu'il est
   reorganization;                               indique dans les clauses de
                                                 reorganisation ci-jointes;

/s/ [signature]                                        OCTOBER 8, 2003/
-------------------------------------                 LE 8 OCTOBRE 2003
Director - Directeur                                 Date of Amendment -
                                                     Date de modification

[CANADA LOGO]
<PAGE>

[CDN. FLAG LOGO]
Industry Canada     Industrie Canada
                                          FORM 4             FORMULE 4
Canada Business     Loi canadienne      ARTICLES OF    CLAUSES MODIFICATRICES
Corporations Act    sur les societes     AMENDMENT      (ARTICLES 27 OU 177)
                    par actions         (SECTION 27
                                          OR 177)

--------------------------------------------------------------------------------
1. Name of the Corporation -            2. Corporation No. -
   Denomination sociale de                 No de la societe
   la societe

   Brookfield Properties Corporation       0746053
--------------------------------------------------------------------------------
3. The articles of the above-named      Les statuts de la societe mentionnee
   corporation are amended as follows:  ci-dessus sont modifies de la facon
                                        suivante :

The articles of the Corporation are amended to create a new class of shares to
be designated as Class AAA Preference Shares, Series H and to have the rights,
privileges, restrictions and conditions as set forth on pages 1A to 1L.

--------------------------------------------------------------------------------
Date                        Signature             3. Capacity of - En qualite de

October 7, 2003            /s/ Steve Douglas         Chief Financial Officer
--------------------------------------------------------------------------------
For Departmental           Printed Name -
Use Only                   Nom en lettres moulees
A l'usage du
ministere seulement                                                [CANADA LOGO]
Filed                      Steve Douglas
Dated     Oct. 8, 2003
--------------------------------------------------------------------------------
IC 3069 (2001/11)                                                    OSG 11/2001

<PAGE>
                                     - 1A -

                            NUMBER AND DESIGNATION OF
                    AND RIGHTS, PRIVILEGES, RESTRICTIONS AND
                           CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES, SERIES H

      The eighth series of Class AAA Preference Shares of the Corporation shall
consist of 8,000,000 Class AAA Preference Shares which shall be designated as
Class AAA Preference Shares, Series H (hereinafter referred to as the "Series H
Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA Preference Shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.    CONSIDERATION FOR ISSUE

      The consideration for the issue of each Series H Share shall be $25.00.

2.    DIVIDENDS

      For the purposes hereof, the following terms shall have the following
meanings, unless the context otherwise requires:

      (a)   "Dividend Payment Date" in respect of the dividends payable on the
            Series H Shares means the last day of each of March, June, September
            and December in each year.

      (b)   "Dividend Period" means the period from and including the date of
            initial issue of the Series H Shares up to but excluding December
            31, 2003 and, thereafter, the period from and including a Dividend
            Payment Date up to but excluding the next succeeding Dividend
            Payment Date.

      2.1   PAYMENT OF DIVIDENDS

      Holders of Series H Shares (the "Holders") shall be entitled to receive,
and the Corporation shall pay thereon, if, as and when declared by the directors
of the Corporation, out of moneys of the Corporation properly applicable to the
payment of dividends, fixed cumulative preferential cash dividends (the "Series
H Dividends") payable quarterly, with respect to each Dividend Period, on the
Dividend Payment Date immediately following each such Dividend Period at the
rate of $1.4375 per Series H Share per annum accruing daily from the date of
issue (less any tax required to be deducted and withheld by the Corporation)
which shall be calculated on a 365 or 366 day basis, being the actual number of
days in the year in which the amount is to be ascertained, by cheque at par in
lawful money of Canada at any branch in Canada of the Corporation's bankers for
the time being or by any other reasonable means the Corporation deems desirable.
<PAGE>
                                     - 1B -

      2.2   METHOD OF PAYMENT

      Series H Dividends shall (except in case of redemption in which case
payment of Series H Dividends shall be made on surrender of the certificate
representing the Series H Shares to be redeemed) be paid by sending to each
Holder (in the manner provided for in Section 12) a cheque for such Series H
Dividends (less any tax required to be deducted and withheld by the Corporation)
payable to the order of such Holder or, in the case of joint Holders, to the
order of all such Holders failing written instructions from them to the
contrary. The posting or delivery of such cheque on or before the date on which
such dividend is to be paid to a Holder shall be deemed to be payment and shall
satisfy and discharge all liabilities for the payment of such dividends to the
extent of the sum represented thereby (plus the amount of any tax required to be
and in fact deducted and withheld by the Corporation from the related dividends
as aforesaid and remitted to the proper taxing authority) unless such cheque is
not honoured when presented for payment. Subject to applicable law, dividends
which are represented by a cheque which has not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which they were declared to be payable
shall be forfeited to the Corporation.

      2.3   CUMULATIVE PAYMENT OF DIVIDENDS

      If on any Dividend Payment Date, the Series H Dividends accrued to such
date are not paid in full on all of the Series H Shares then outstanding, such
Series H Dividends, or the unpaid part thereof, shall be paid on a subsequent
date or dates determined by the directors on which the Corporation shall have
sufficient monies properly applicable to the payment of such Series H Dividends.
The Holders shall not be entitled to any dividends other than or in excess of
the cumulative preferential cash dividends herein provided for.

      2.4   DIVIDEND FOR OTHER THAN A FULL DIVIDEND PERIOD

      The Holders shall be entitled to receive, and the Corporation shall pay
thereon, if, as and when declared by the directors, out of moneys of the
Corporation properly applicable to the payment of dividends, cumulative
preferential cash dividends for any period which is more or less than a full
Dividend Period as follows:

      (a)   in respect of the period beginning on and including the date of
            initial issue of the Series H Shares up to but excluding December
            31, 2003 (the "Initial Dividend Period"), a dividend in an amount
            per Series H Share equal to the amount obtained (rounded to four
            decimal places) when $1.4375 is multiplied by a fraction, the
            numerator of which is the number of calendar days from and including
            the date of issue of the Series H Shares up to but excluding
            December 31, 2003 and the denominator of which is 365. The Series H
            Dividend payable for the Initial Dividend Period, payable as of
            September 30, 2003, as calculated by this method shall be $0.30325
            per Series H Share; and

      (b)   in respect of any period other than the Initial Dividend Period that
            is more or less than a full Dividend Period, a dividend in an amount
            per Series H Share equal to
<PAGE>
                                     - 1C -

            the amount obtained (rounded to four decimal places) when $1.4375 is
            multiplied by a fraction, the numerator of which is the number of
            calendar days in the relevant period (which shall include the first
            day of such period but exclude the last day of such period) and the
            denominator of which is the number of calendar days in the year in
            which such period falls.

3.    REDEMPTION

      3.1   OPTIONAL REDEMPTION

      The Corporation may not redeem any of the Series H Shares prior to
December 31, 2011. On or after this date, subject to the terms of any shares
ranking prior to the Series H Shares, to applicable law and to the provisions
described in Section 5 below, the Corporation may, upon giving notice as
hereinafter provided, at its option, at any time redeem all, or from time to
time any part, of the then outstanding Series H Shares by the payment of an
amount in cash for each such Series H Share so redeemed equal to:

      (a)   $26.00 if redeemed before December 31, 2012;

      (b)   $25.67 if redeemed on or after December 31, 2012, but before
            December 31, 2013;

      (c)   $25.33 if redeemed on or after December 31, 2013, but before
            December 31, 2014; and

      (d)   $25.00 if redeemed on or after December 31, 2014;

in each case, together with all accrued and unpaid Series H Dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for redemption) up to but excluding the date fixed for redemption
(the "Redemption Price") (less any tax required to be deducted and withheld by
the Corporation).

      3.2   PARTIAL REDEMPTION

      If less than all of the then outstanding Series H Shares are at any time
to be redeemed, then the particular Series H Shares to be redeemed shall be
selected on a pro rata basis.

      3.3   METHOD OF REDEMPTION

      The Corporation shall give notice in writing not less than 30 days nor
more than 60 days prior to the date on which the redemption is to take place of
its intention to redeem such Series H Shares to each person who at the date of
giving such notice is the Holder of Series H Shares to be redeemed. Any such
notice shall be validly and effectively given on the date on which it is sent to
each Holder of Series H Shares to be redeemed in the manner provided for in
Section 12. Such notice shall set out the number of such Series H Shares held by
the person to whom it is addressed which are to be redeemed and the Redemption
Price and shall also set out the date on which the redemption is to take place.
On and after the date so specified for redemption, the
<PAGE>
                                     - 1D -

Corporation shall pay or cause to be paid to the Holders to be redeemed the
Redemption Price (less any tax required to be deducted and withheld by the
Corporation) on presentation and surrender, at any place within Canada
designated by such notice, of the certificate or certificates for such Series H
Shares so called for redemption. Such payment shall be made by cheque in the
amount of the Redemption Price (less any tax required to be and in fact deducted
and withheld by the Corporation and remitted to the proper taxing authority)
payable at par at any branch in Canada of the Corporation's bankers for the time
being or by any other reasonable means that the Corporation deems desirable and
the delivery of such cheque in such amount shall be a full and complete
discharge of the Corporation's obligation to pay the Redemption Price owed to
the holders of Series H Shares so called for redemption to the extent of the sum
represented thereby (plus the amount of any tax required to be and in fact
deducted and withheld by the Corporation and remitted to the proper taxing
authority) unless the cheque is not honoured when presented for payment. From
and after the date specified in any such notice, the Series H Shares called for
redemption shall cease to be entitled to Series H Dividends and the Holders
thereof shall not be entitled to exercise any of the rights of shareholders in
respect thereof, except to receive the Redemption Price therefor (less any tax
required to be deducted and withheld by the Corporation), unless payment of the
Redemption Price shall not be duly made by the Corporation. At any time after
notice of redemption is given as aforesaid, the Corporation shall have the right
to deposit the Redemption Price of any or all Series H Shares called for
redemption (less any tax required to be deducted and withheld by the
Corporation), or such part thereof as at the time of deposit has not been
claimed by the holders entitled thereto, with any chartered bank or banks or
with any trust company or trust companies in Canada named in the notice of
redemption to the credit of a special account or accounts in trust for the
respective Holders of such shares, to be paid to them respectively upon
surrender to such bank or banks or trust company or trust companies of the
certificate or certificates representing the same. Upon such deposit or deposits
being made, such shares shall be redeemed on the redemption date specified in
the notice of redemption. After the Corporation has made a deposit as aforesaid
with respect to any shares, the Holders thereof shall not, from and after the
redemption date, be entitled to exercise any of the rights of shareholders in
respect thereof and the rights of the Holders thereof shall be limited to
receiving a proportion of the amounts so deposited applicable to such shares,
without interest. Any interest allowed on such deposit shall belong to the
Corporation. Subject to applicable law, redemption monies that are represented
by a cheque which has not been presented to the Corporation's bankers for
payment or that otherwise remain unclaimed (including monies held in deposit as
provided for above) for a period of six years from the date specified for
redemption shall be forfeited to the Corporation.

4.    CONVERSION OF SERIES H SHARES

      4.1   CONVERSION AT THE OPTION OF THE CORPORATION

      The Series H Shares shall not be convertible at the option of the
Corporation prior to December 31, 2011. On and after December 31, 2011, the
Corporation may, subject to applicable law and, if required, to other regulatory
approvals, and upon notice as hereinafter described, convert all, or from time
to time any part, of the then outstanding Series H Shares into that number of
freely tradeable Common Shares (per Series H Share) determined by dividing the
Redemption Price that would be applicable on the Corporation's Conversion Date
(as hereinafter
<PAGE>
                                     - 1E -

defined), together with accrued and unpaid dividends (for greater certainty
excluding declared dividends with a record date prior to the Corporation's
Conversion Date) up to but excluding the Corporation's Conversion Date, by the
greater of $2.00 and 95% of the weighted average trading price of the Common
Shares on the Toronto Stock Exchange (or, if the Common Shares do not trade on
the Toronto Stock Exchange on the date specified for conversion, on the exchange
or trading system with the greatest volume of Common Shares traded during the 20
trading day period referred to below) for the 20 consecutive trading days ending
on: (i) the fourth day prior to the Corporation's Conversion Date, or (ii) if
such fourth day is not a trading day, the immediately preceding trading day (the
"Current Market Price"). Fractional Common Shares will not be issued on any
conversion of Series H Shares but in lieu thereof the Corporation will make cash
payments in the manner set out in Sections 4.3 and 4.5 below. Such conversion
shall be deemed to have been made at the close of business on the Corporation's
Conversion Date, so that the rights of the Holder of such Series H Shares as the
Holder thereof shall cease at such time and the person or persons entitled to
receive Common Shares upon such conversion shall be treated for all purposes as
having become the holder or holders of record of such Common Shares at such
time.

      Upon exercise by the Corporation of its right to convert Series H Shares
into Common Shares, the Corporation is not required to (but may at its option)
issue Common Shares to any person whose address is in, or whom the Corporation
or its transfer agent has reason to believe is a resident of, any jurisdiction
outside of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      The Corporation shall give written notice to each Holder whose shares are
to be converted, which notice (the "Corporation's Conversion Notice") shall
specify the number of Series H Shares held by such Holder that will be converted
and the date fixed by the Corporation for conversion (the "Corporation's
Conversion Date"), and which notice shall be given not more than 60 days and not
less than 30 days prior to such Corporation's Conversion Date.

      If less than all of the then outstanding Series H Shares are at any time
to be converted at the option of the Corporation, then the particular Series H
Shares to be so converted shall be selected on a pro rata basis.

      Series H Shares that are the subject of a Corporation's Conversion Notice
shall be converted effective on the Corporation's Conversion Date.

      The Corporation cannot exercise its conversion rights hereunder in respect
of any Series H Shares that are the subject of a Holder's Conversion Notice
under Section 4.2 below.

      4.2   CONVERSION AT THE OPTION OF THE HOLDER

      Subject to applicable law and to the option of the Corporation in Section
4.4, on each Dividend Payment Date on or after December 31, 2015, Holders, upon
notice as hereinafter described, may convert all or any part of the then
outstanding Series H Shares registered in the name of the Holder into that
number of freely tradeable Common Shares determined (per Series H Share) by
dividing $25.00, together with all accrued and unpaid Series H Dividends (for
<PAGE>
                                     - 1F -

greater certainty excluding declared dividends with a record date prior to the
Holder's Conversion Date) up to but excluding the Holder's Conversion Date (as
hereinafter defined), by the greater of $2.00 and 95% of the Current Market
Price. Fractional Common Shares will not be issued on any conversion of Series H
Shares but in lieu thereof the Corporation will make cash payments in the manner
set out in Sections 4.3 and 4.5 below. Such conversion shall be deemed to have
been made at the close of business on the Holder's Conversion Date, so that the
rights of the Holder of such Series H Shares as the Holder thereof shall cease
at such time and the person or persons entitled to receive Common Shares upon
such conversion shall be treated for all purposes as having become the holder or
holders of record of such Common Shares at such time.

      In order to exercise its conversion rights, the Holder shall give written
notice to the Corporation at the registered office of the Corporation or the
principal transfer office of the transfer agent for the Series H Shares in the
City of Toronto (the "Holder's Conversion Notice"), which Holder's Conversion
Notice shall specify the number of Series H Shares (the "Subject Shares") held
by such Holder which shall be converted on the Dividend Payment Date chosen by
the Holder for conversion, or if such Dividend Payment Date is not a business
day the immediately succeeding business day (the "Holder's Conversion Date").
The Holder's Conversion Notice shall be given at least 30 calendar days prior to
such Holder's Conversion Date and shall be irrevocable.

      Upon exercise by the Holder of its right to convert Series H Shares into
Common Shares, the Corporation is not required to (but may at its option) issue
Common Shares to any person whose address is in, or whom the Corporation or its
transfer agent has reason to believe is a resident of, any jurisdiction outside
of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      If the Corporation gives notice as provided in Section 3 to a Holder of
the redemption of Series H Shares prior to that Holder giving a Holder's
Conversion Notice to the Corporation, the right of that Holder to convert such
Series H Shares as herein provided shall cease and terminate in that event.

      4.3   DELIVERY OF CERTIFICATES REPRESENTING COMMON SHARES

      The Corporation shall, on presentation and surrender at the head office of
the Corporation, the principal transfer office of the transfer agent for the
Series H Shares in the City of Toronto, or such other place or places in Canada
as the Corporation may agree, of the certificate or certificates representing
the Series H Shares being converted by the Corporation or the Holder, give or
cause to be given, on the applicable Corporation's Conversion Date or Holder's
Conversion Date, as the case may be, to each Holder of Series H Shares being
converted or as such Holder may have otherwise directed:

      (a)   a certificate representing the whole number of Common Shares into
            which such Series H Shares being converted are to be converted,
            registered in the name of the Holder, or as such Holder may have
            otherwise directed; and
<PAGE>
                                     - 1G -

      (b)   in lieu of the issuance of a fractional Common Share, a cheque in an
            amount equal to the product of the fractional remainder, if any
            (rounded to four decimal places), produced by the conversion formula
            set forth in Section 4.1 or Section 4.2 above, as the case may be,
            multiplied by the greater of $2.00 and 95% of the then Current
            Market Price.

      If on any conversion under Section 4.1 or 4.2, less than all of the Series
H Shares represented by any certificate are to be converted, a new certificate
representing the balance of such Series H Shares shall be issued by the
Corporation without cost to the Holder.

      The Holder of any Series H Share on the record date for any dividend
declared payable on such share shall be entitled to such dividend
notwithstanding that such share is converted into Common Shares after such
record date and on or before the date of the payment of such dividend.

      The issuance of certificates for the Common Shares upon the conversion of
Series H Shares shall be made without charge to the Holders for any fee or tax
in respect of the issuance of such certificates or the Common Shares represented
thereby; provided, however, that the Corporation shall not be required to pay
any tax which may be imposed upon the person or persons to whom such Common
Shares are issued in respect of the issuance of such Common Shares or the
certificate therefor or which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate in the name or names other
than that of the Holder or deliver such certificate unless the person or persons
requesting the issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.

      4.4   OPTION OF THE CORPORATION

      If a Holder gives a Holder's Conversion Notice to the Corporation, subject
to the provisions described in Section 5 below, as applicable, the Corporation
may, at its option, on notice to such Holder in the manner described in this
Section 4.4, either (i) redeem for cash on the Holder's Conversion Date all or
any part of the Subject Shares, or (ii) cause the Holder to sell on the Holder's
Conversion Date all or any part of the Subject Shares to another purchaser or
purchasers (a "Substitute Purchaser") in the event that a purchaser or
purchasers willing to purchase any or all of such Subject Shares is or are found
by the Corporation pursuant to this Section 4.4. The proportion of the Subject
Shares which are either redeemed, purchased or converted on that Conversion Date
shall, to the extent practicable, be the same for each holder delivering a
Conversion Notice.

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall, not less than 20 calendar
days prior to the Holder's Conversion Date, give written notice to all Holders
of the Subject Shares stating the number of Subject Shares to be redeemed for
cash by the Corporation, the number of Subject Shares to be sold to another
purchaser, and the number of Subject Shares to be converted into Common Shares
pursuant to the Holder's Conversion Notice, such that all of the Subject Shares
are either redeemed, purchased or converted on the Holder's Conversion Date.
<PAGE>
                                     - 1H -

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall pay or cause to be paid, in
respect of those Subject Shares to be redeemed for cash or purchased, on
presentation and surrender at the head office of the Corporation, the principal
transfer office of the transfer agent for the Series H Shares in the City of
Toronto, or such other place or places in Canada as the Corporation may agree,
of the certificate or certificates representing such Subject Shares, on the
Holder's Conversion Date, to the Holder of the Subject Shares or as such Holder
may have otherwise directed, an amount equal to $25.00 plus all accrued and
unpaid Series H Dividends (for greater certainty excluding declared dividends
with a record date prior to the Holder's Conversion Date) up to but excluding
the Holder's Conversion Date for each Subject Share being redeemed or purchased
(less any tax required to be deducted and withheld by the Corporation), and each
such Subject Share shall be deemed to have been redeemed or purchased, but not
converted, as the case may be, on the Holder's Conversion Date. Payment under
this Section 4.4 shall be made by cheque in accordance with Section 4.5 hereof.

      If the Corporation elects to redeem for cash or arrange for the purchase
of some, but not all, of the Subject Shares, then the Corporation shall, in
respect of those Subject Shares to be converted into Common Shares, give or
cause to be given to the Holder of such Subject Shares the certificate or
certificates representing such Common Shares and, if applicable, a cheque in
lieu of a fractional Common Share, all in accordance with the procedures set
forth in Section 4.3.

      4.5   PAYMENT BY CHEQUE

      Any amounts that are paid by the Corporation to Holders in respect of the
payment of (i) a redemption or purchase amount under Section 4.4, or (ii) a cash
amount in lieu of the issuance of a fractional Common Share under Sections 4.1
or 4.2, shall be paid by cheques drawn on a Canadian chartered bank and payable
in lawful money of Canada at any branch of such bank in Canada and the delivery
or mailing of any such cheque to a Holder shall constitute a full and complete
discharge of the Corporation's obligation to pay the amount represented by such
cheque (plus any tax required to be and in fact deducted and withheld by the
Corporation from the related redemption or purchase amount or cash in lieu of a
fractional common share and remitted to the proper taxing authority), unless
such cheque is not honoured when presented for payment.

5.    RESTRICTIONS ON DIVIDENDS AND RETIREMENT AND ISSUE OF SHARES

      So long as any of the Series H Shares are outstanding, the Corporation
shall not, without the approval of the Holders:

      (a)   declare, pay or set apart for payment any dividends (other than
            stock dividends payable in shares of the Corporation ranking as to
            capital and dividends junior to the Series H Shares) on any shares
            of the Corporation ranking as to dividends junior to the Series H
            Shares;

      (b)   except out of the net cash proceeds of a substantially concurrent
            issue of shares of the Corporation ranking as to return of capital
            and dividends junior to the Series H Shares, redeem or call for
            redemption, purchase or otherwise pay off, retire or
<PAGE>
                                     - 1I -

            make any return of capital in respect of any shares of the
            Corporation ranking as to capital junior to the Series H Shares;

      (c)   redeem or call for redemption, purchase or otherwise retire for
            value or make any return of capital in respect of less than all of
            the Series H Shares then outstanding;

      (d)   except pursuant to any purchase obligation, sinking fund, retraction
            privilege or mandatory redemption provisions attaching thereto,
            redeem or call for redemption, purchase or otherwise pay off, retire
            or make any return of capital in respect of any Class AAA Preference
            Shares, ranking as to the payment of dividends or return of capital
            on a parity with the Series H Shares; or

      (e)   issue any additional Series H Shares or any shares ranking as to the
            payment of dividends or the return of capital prior to or on a
            parity with the Series H Shares;

      unless, in each such case, all accrued and unpaid dividends up to and
      including the dividend payable for the last completed period for which
      dividends were payable on the Series H Shares and on all other shares of
      the Corporation ranking prior to or on a parity with the Series H Shares
      with respect to the payment of dividends have been declared paid or set
      apart for payment.

6.    PURCHASE FOR CANCELLATION

      Subject to applicable law and to the provisions described in Section 5
above, the Corporation may at any time purchase (if obtainable) for cancellation
the whole or any part of the Series H Shares outstanding from time to time, in
the open market through or from an investment dealer or any firm holding
membership on a recognized stock exchange or by private agreement or otherwise,
at the lowest price or prices at which in the opinion of the directors of the
Corporation such shares are obtainable.

7.    LIQUIDATION, DISSOLUTION OR WINDING-UP

      In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, the Holders shall be entitled to payment of an amount equal to
$25.00 per Series H Share, plus an amount equal to all accrued and unpaid Series
H Dividends up to but excluding the date of payment or distribution (less any
tax required to be deducted and withheld by the Corporation), before any amounts
shall be paid or any assets of the Corporation distributed to the holders of any
shares ranking junior as to capital to the Series H Shares. Upon payment of such
amounts, the Holders shall not be entitled to share in any further distribution
of the assets of the Corporation.

8.    VOTING RIGHTS

      The Holders will not be entitled (except as otherwise provided by law and
except for meetings of the holders of Class AAA Preference Shares as a class and
meetings of the holders of the Series H Shares as a series) to receive notice
of, attend at, or vote at any meeting of
<PAGE>
                                     - 1J -

shareholders of the Corporation unless and until the Corporation shall have
failed to pay eight quarterly Series H Dividends, whether or not consecutive and
whether or not such dividends have been declared and whether or not there are
any moneys of the Corporation properly applicable to the payment of Series H
Dividends. In the event of such non-payment, the Holders shall have the right to
receive notice of and to attend each meeting of shareholders of the Corporation
which takes place more than 60 days after the date on which the failure first
occurs (other than a separate meeting of the holders of another series or class
of shares) and such Holders shall have the right, at any such meeting, to one
(1) vote for each Series H Share until all such arrears of Series H Dividends
shall have been paid whereupon such rights shall cease unless and until the same
default shall again arise under the provisions of this Section 8.

9.    MODIFICATIONS

      The provisions attaching to the Series H Shares as a series may be
repealed, altered, modified or amended from time to time with such approval as
may then be required by the Canada Business Corporations Act, any such approval
to be given in accordance with Section 10.

10.   APPROVAL OF HOLDERS OF SERIES H SHARES

      10.1  APPROVAL

      Except as otherwise provided herein, any approval of the Holders with
respect to any matters requiring the consent of the Holders may be given in such
manner as may then be required by law, subject to a minimum requirement that
such approval be given by a resolution signed by all the Holders or passed by
the affirmative vote of at least 66 2/3% of the votes cast by the Holders who
voted in respect of that resolution at a meeting of the Holders duly called for
that purpose and at which the Holders of a majority of the outstanding Series H
Shares are present or represented by proxy. If at any such meeting the Holder(s)
of a majority of the outstanding Series H Shares are not present or represented
by proxy within one-half hour after the time appointed for such meeting, then
the meeting shall be adjourned to such date not less than 15 days thereafter and
to such time and place as may be designated by the chairman of such meeting, and
not less than 10 days' written notice shall be given of such adjourned meeting.
At such adjourned meeting, the Holders(s) of Series H Shares represented in
person or by proxy may transact the business for which the meeting was
originally called and the Holders represented in person or by proxy shall form
the necessary quorum. At any meeting of Holders as a series, each Holder shall
be entitled to one vote in respect of each Series H Share held.

      10.2  FORMALITIES, ETC.

      The proxy rules applicable to, the formalities to be observed in respect
of the giving notice of, and the formalities to be observed in respect of the
conduct of, any meeting or any adjourned meeting of holders shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders or, if not so prescribed, as required by law. On every
poll taken at every meeting of Holders, each Holder entitled to vote thereat
shall have one vote in respect of each Series H Share held.
<PAGE>
                                     - 1K -

11.   TAX ELECTION

      The Corporation shall elect, in the manner and within the time provided
under the Income Tax Act (Canada), under Subsection 191.2(1) of the said Act, or
any successor or replacement provision of similar effect, and take all other
necessary action under such Act, to pay or cause payment of tax under Part VI.1
of such Act at a rate such that the corporate Holders will not be required to
pay tax on dividends received on the Series H Shares under Section 187.2 of Part
IV.I of such Act or any successor or replacement provision of similar effect.

12.   COMMUNICATIONS WITH HOLDERS

      Except as specifically provided elsewhere in these share conditions, any
notice, cheque, invitation for tenders or other communication from the
Corporation herein provided for shall be sufficiently given, sent or made if
delivered or if sent by first class unregistered mail, postage prepaid, to each
Holder at the last address of such Holder as it appears on the securities
register of the Corporation or, in the case of joint Holders, to the address of
the Holder whose name appears first in the securities register of the
Corporation as one of such joint Holders, or, in the event of the address of any
of such Holders not so appearing, then to the last address of such Holder known
to the Corporation. Accidental failure to give such notice, invitation for
tenders or other communication to one or more Holders of the Series H Shares
shall not affect the validity of the notices, invitations for tenders or other
communications properly given or any action taken pursuant to such notice,
invitation for tender or other communication but, upon such failure being
discovered, the notice, invitation for tenders or other communication, as the
case may be, shall be sent forthwith to such holder or holders.

      If any notice, cheque, invitation for tenders or other communication from
the Corporation given to a holder of Series H Shares pursuant to paragraph (b)
is returned on three consecutive occasions because the holder cannot be found,
the Corporation shall not be required to give or mail any further notices,
cheques, invitations for tenders or other communications to such shareholder
until the holder informs the Corporation in writing of such holder's new
address.

      If the directors determine that mail service is or is threatened to be
interrupted at the time when the Corporation is required or elects to give any
notice hereunder by mail, or is required to send any cheque or any share
certificate to a Holder, whether in connection with the redemption or conversion
of such share or otherwise, the Corporation may, notwithstanding the provisions
hereof:

      (a)   give such notice by publication thereof once in a daily English
            language newspaper of general circulation published in each of
            Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax, and
            once in a daily French language newspaper published in Montreal and
            such notice shall be deemed to have been validly given on the day
            next succeeding its publication in all of such cities; and

      (b)   fulfill the requirement to send such cheque or such share
            certificate by arranging for the delivery thereof to such Holder by
            the transfer agent for the Series H Shares at its principal offices
            in the cities of Vancouver, Toronto and Montreal,
<PAGE>
                                     - 1L -

            and such cheque and/or share certificate shall be deemed to have
            been sent on the date on which notice of such arrangement shall have
            been given as provided in (a) above, provided that as soon as the
            Board of Directors determines that mail service is no longer
            interrupted or threatened to be interrupted, such cheque or share
            certificate, if not theretofore delivered to such Holder, shall be
            sent by mail as herein provided.

13.   INTERPRETATION

      In the provisions herein contained attaching to the Series H Shares:

      (a)   "ACCRUED AND UNPAID DIVIDENDS" means the aggregate of: (i) all
            unpaid dividends on the Series H Shares for any quarterly period;
            and (ii) the amount calculated as though dividends on each Series H
            Share had been accruing on a day-to-day basis from and including the
            date on which the last quarterly dividend was payable up to and
            including the date to which the computation of accrued dividends is
            to be made;

      (b)   "IN PRIORITY TO", "ON A PARITY WITH" and "JUNIOR TO" have reference
            to the order of priority in payment of dividends and in the
            distribution of assets in the event of any liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or other distribution of the assets of the Corporation among its
            shareholders for the purpose of winding up its affairs; and

      (c)   in the event that any date on which any dividend on the Series H
            Shares is payable by the Corporation, or any date on or by which any
            other action is required to be taken by the Corporation or the
            Holders hereunder, is not a business day (as hereinafter defined),
            then such dividend shall be payable, or such other action shall be
            required to be taken, on or by the next succeeding day that is a
            business day. A "BUSINESS DAY" shall be a day other than a Saturday,
            a Sunday or any other day that is treated as a holiday in the
            province of Ontario; and

      (d)   "COMMON SHARES" means common shares of the Corporation.

14.   BOOK-ENTRY ONLY SYSTEM

      If the Series H Shares are held through the book-entry only system of the
Canadian Depository for Securities ("CDS"), then the beneficial owner thereof
shall provide instructions only by such beneficial owner providing instructions
to the CDS Participant through whom such beneficial owner holds such Series H
Shares. Beneficial owners of Series H Shares will not have the right to receive
share certificates representing their ownership of the shares.
<PAGE>

[CDN. FLAG GRAPHIC]
Industry Canada                       Industrie Canada

CERTIFICATE                                    CERTIFICAT
OF AMENDMENT                                   DE MODIFICATION

CANADA BUSINESS                                LOI CANADIENNE SUR
CORPORATIONS ACT                               LES SOCIETES PAR ACTIONS

BROOKFIELD PROPERTIES CORPORATION                          074605-3

--------------------------------------------------------------------------------
Name of corporation -                          Corporation number -
Denomination de la societe                     Numero de la societe

I hereby certify that the articles of          Je certifie que les statuts de la
the above-named corporation were               societe susmentionnee ont ete
amended:                                       modifies:

a) under section 13 of the Canada     [ ]      a) en vertu de l'article 13 de
   Business Corporations Act in                   la Loi canadienne sur les
   accordance with the attached                   societes par actions, con-
   notice;                                        formement a l'avis ci-joint;

b) under section 27 of the Canada     [X]      b) en vertu de l'article 27 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment designating a series                 qu'il est indique dans les
   of shares;                                     clauses modificatrices ci-
                                                  jointes designant une serie
                                                  d'actions;

c) under section 179 of the Canada    [X]      c) en vertu de l'article 179 de
   Business Corporations Act as set               la Loi canadienne sur les
   out in the attached articles of                societes par actions, tel
   amendment;                                     qu'il est indique dans les
                                                  clauses modificatrices
                                                  ci-jointes;

d) under section 191 of the Canada    [ ]     d) en vertu de l'article 191 de la
   Business Corporations Act as set              Loi canadienne sur les societes
   out in the attached articles of               par actions, tel qu'il est
   reorganization;                               indique dans les clauses de
                                                 reorganisation ci-jointes;

/s/ [signature]                                       DECEMBER 23, 2003/
-------------------------------------                LE 23 DECEMBRE 2003
Director - Directeur                                 DATE OF AMENDMENT -
                                                     DATE DE MODIFICATION

[CANADA LOGO]
<PAGE>

[CDN. FLAG LOGO]
Industry Canada     Industrie Canada
                                          FORM 4             FORMULE 4
Canada Business     Loi canadienne      ARTICLES OF    CLAUSES MODIFICATRICES
Corporations Act    sur les societes     AMENDMENT      (ARTICLES 27 OU 177)
                    par actions         (SECTION 27
                                          OR 177)

--------------------------------------------------------------------------------
1. Name of the Corporation -            2. Corporation No. -
   Denomination sociale de                 No de la societe
   la societe

   BROOKFIELD PROPERTIES CORPORATION       0746053
--------------------------------------------------------------------------------
3. The articles of the above-named      Les statuts de la societe mentionnee
   corporation are amended as follows:  ci-dessus sont modifies de la facon
                                        suivante :

The articles of the Corporation are amended to create the ninth series of Class
AAA Preference Shares of the Corporation by designating 8,000,000 of such
shares as "Class AAA Preference Shares, Series I", which shares shall have the
rights, privileges, restrictions and conditions set out in the attached
Schedule A.

--------------------------------------------------------------------------------
Date                        Signature             3. Capacity of - En qualite de

December 22, 2003          /s/ Craig J. Laurie       Senior Vice President & CFO
--------------------------------------------------------------------------------
For Departmental           Printed Name -
Use Only                   Nom en lettres moulees
A l'usage du
ministere seulement                                                [CANADA LOGO]
Filed                      Craig J. Laurie
Dated     Jan. 6, 2004
--------------------------------------------------------------------------------
IC 3069 (2001/11)                                                    OSG 11/2001

<PAGE>

                                   SCHEDULE A

                            NUMBER AND DESIGNATION OF
                    AND RIGHTS, PRIVILEGES, RESTRICTIONS AND
                           CONDITIONS ATTACHING TO THE
                      CLASS AAA PREFERENCE SHARES, SERIES I

      The ninth series of Class AAA Preference Shares of the Corporation shall
consist of 8,000,000 Class AAA Preference Shares which shall be designated as
Class AAA Preference Shares, Series I (hereinafter referred to as the "Series I
Shares") and which, in addition to the rights, privileges, restrictions and
conditions attaching to the Class AAA Preference Shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:

1.    CONSIDERATION FOR ISSUE

      The consideration for the issue of each Series I Share shall be $25.00.

2.    DIVIDENDS

      For the purposes hereof, the following terms shall have the following
meanings, unless the context otherwise requires:

      (a)   "DIVIDEND PAYMENT DATE" in respect of the dividends payable on the
            Series I Shares means the last day of each of March, June, September
            and December in each year.

      (b)   "DIVIDEND PERIOD" means the period from and including the date of
            initial issue of the Series I Shares up to but excluding March 31,
            2004 and, thereafter, the period from and including a Dividend
            Payment Date up to but excluding the next succeeding Dividend
            Payment Date.

      2.2   Payment of Dividends

      Holders of Series I Shares (the "Holders") shall be entitled to receive,
and the Corporation shall pay thereon, if, as and when declared by the directors
of the Corporation, out of moneys of the Corporation properly applicable to the
payment of dividends, fixed cumulative preferential cash dividends (the "Series
I Dividends") payable quarterly, with respect to each Dividend Period, on the
Dividend Payment Date immediately following each such Dividend Period at the
rate of $1.30 per Series I Share per annum accruing daily from the date of issue
(less any tax required to be deducted and withheld by the Corporation) which
shall be calculated on a 365 or 366 day basis, being the actual number of days
in the year in which the amount is to be ascertained, by cheque at par in lawful
money of Canada at any branch in Canada of the Corporation's bankers for the
time being or by any other reasonable means the Corporation deems desirable.

<PAGE>

                                     - 2 -

      2.3   METHOD OF PAYMENT

      Series I Dividends shall (except in case of redemption in which case
payment of Series I Dividends shall be made on surrender of the certificate
representing the Series I Shares to be redeemed) be paid by sending to each
Holder (in the manner provided for in Section 12) a cheque for such Series I
Dividends (less any tax required to be deducted and withheld by the Corporation)
payable to the order of such Holder or, in the case of joint Holders, to the
order of all such Holders failing written instructions from them to the
contrary. The posting or delivery of such cheque on or before the date on which
such dividend is to be paid to a Holder shall be deemed to be payment and shall
satisfy and discharge all liabilities for the payment of such dividends to the
extent of the sum represented thereby (plus the amount of any tax required to be
and in fact deducted and withheld by the Corporation from the related dividends
as aforesaid and remitted to the proper taxing authority) unless such cheque is
not honoured when presented for payment. Subject to applicable law, dividends
which are represented by a cheque which has not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed for a
period of six years from the date on which they were declared to be payable
shall be forfeited to the Corporation.

      2.4   CUMULATIVE PAYMENT OF DIVIDENDS

      If on any Dividend Payment Date, the Series I Dividends accrued to such
date are not paid in full on all of the Series I Shares then outstanding, such
Series I Dividends, or the unpaid part thereof, shall be paid on a subsequent
date or dates determined by the directors on which the Corporation shall have
sufficient monies properly applicable to the payment of such Series I Dividends.
The Holders shall not be entitled to any dividends other than or in excess of
the cumulative preferential cash dividends herein provided for.

      2.5   DIVIDEND FOR OTHER THAN A FULL DIVIDEND PERIOD

      The Holders shall be entitled to receive, and the Corporation shall pay
thereon, if, as and when declared by the directors, out of moneys of the
Corporation properly applicable to the payment of dividends, cumulative
preferential cash dividends for any period which is more or less than a full
Dividend Period as follows:

      (a)   in respect of the period beginning on and including the date of
            initial issue of the Series I Shares up to but excluding March 31,
            2004 (the "Initial Dividend Period"), a dividend in an amount per
            Series I Share equal to the amount obtained (rounded to four decimal
            places) when $1.30 is divided by four. The Series I Dividend payable
            for the Initial Dividend Period, payable as of March 31, 2004, as
            calculated by this method shall be $0.3250 per Series I Share; and

      (b)   in respect of any period other than the Initial Dividend Period that
            is more or less than a full Dividend Period, a dividend in an amount
            per Series I Share equal to the amount obtained (rounded to four
            decimal places) when $1.30 divided by four and then multiplied by a
            fraction, the numerator of which is the number of calendar days in
            the relevant period (which shall include the first day of such

<PAGE>

                                      - 3 -

            period but exclude the last day of such period) and the denominator
            of which is the number of calendar days in the year in which such
            quarter falls.

3.    REDEMPTION

      3.1   OPTIONAL REDEMPTION

      The Corporation may not redeem any of the Series I Shares prior to
December 31, 2008. On or after this date, subject to the terms of any shares
ranking prior to the Series I Shares, to applicable law and to the provisions
described in Section 5 below, the Corporation may, upon giving notice as
hereinafter provided, at its option, at any time redeem all, or from time to
time any part, of the then outstanding Series I Shares by the payment of an
amount in cash for each such Series I Share so redeemed equal to:

      (a)   $25.75 if redeemed before December 31, 2009;

      (b)   $25.50 if redeemed on or after December 31, 2009, but before
            December 31, 2010; and

      (c)   $25.00 if redeemed on or after December 31, 2010;

in each case, together with all accrued and unpaid Series I Dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for redemption) up to but excluding the date fixed for redemption
(the "Redemption Price") (less any tax required to be deducted and withheld by
the Corporation).

      3.2   PARTIAL REDEMPTION

      If less than all of the then outstanding Series I Shares are at any time
to be redeemed, then the particular Series I Shares to be redeemed shall be
selected on a pro rata basis.

      3.3   METHOD OF REDEMPTION

      The Corporation shall give notice in writing not less than 30 days nor
more than 60 days prior to the date on which the redemption is to take place of
its intention to redeem such Series I Shares to each person who at the date of
giving such notice is the Holder of Series I Shares to be redeemed. Any such
notice shall be validly and effectively given on the date on which it is sent to
each Holder of Series I Shares to be redeemed in the manner provided for in
Section 12. Such notice shall set out the number of such Series I Shares held by
the person to whom it is addressed which are to be redeemed and the Redemption
Price and shall also set out the date on which the redemption is to take place.
On and after the date so specified for redemption, the Corporation shall pay or
cause to be paid to the Holders to be redeemed the Redemption Price (less any
tax required to be deducted and withheld by the Corporation) on presentation and
surrender, at any place within Canada designated by such notice, of the
certificate or certificates for such Series I Shares so called for redemption.
Such payment shall be made by cheque in the amount of the Redemption Price (less
any tax required to be and in fact deducted and withheld by the

<PAGE>

                                     - 4 -

Corporation and remitted to the proper taxing authority) payable at par at any
branch in Canada of the Corporation's bankers for the time being or by any other
reasonable means that the Corporation deems desirable and the delivery of such
cheque in such amount shall be a full and complete discharge of the
Corporation's obligation to pay the Redemption Price owed to the holders of
Series I Shares so called for redemption to the extent of the sum represented
thereby (plus the amount of any tax required to be and in fact deducted and
withheld by the Corporation and remitted to the proper taxing authority) unless
the cheque is not honoured when presented for payment. From and after the date
specified in any such notice, the Series I Shares called for redemption shall
cease to be entitled to Series I Dividends and the Holders thereof shall not be
entitled to exercise any of the rights of shareholders in respect thereof,
except to receive the Redemption Price therefor (less any tax required to be
deducted and withheld by the Corporation), unless payment of the Redemption
Price shall not be duly made by the Corporation. At any time after notice of
redemption is given as aforesaid, the Corporation shall have the right to
deposit the Redemption Price of any or all Series I Shares called for redemption
(less any tax required to be deducted and withheld by the Corporation), or such
part thereof as at the time of deposit has not been claimed by the holders
entitled thereto, with any chartered bank or banks or with any trust company or
trust companies in Canada named in the notice of redemption to the credit of a
special account or accounts in trust for the respective Holders of such shares,
to be paid to them respectively upon surrender to such bank or banks or trust
company or trust companies of the certificate or certificates representing the
same. Upon such deposit or deposits being made, such shares shall be redeemed on
the redemption date specified in the notice of redemption. After the Corporation
has made a deposit as aforesaid with respect to any shares, the Holders thereof
shall not, from and after the redemption date, be entitled to exercise any of
the rights of shareholders in respect thereof and the rights of the Holders
thereof shall be limited to receiving a proportion of the amounts so deposited
applicable to such shares, without interest. Any interest allowed on such
deposit shall belong to the Corporation. Subject to applicable law, redemption
monies that are represented by a cheque which has not been presented to the
Corporation's bankers for payment or that otherwise remain unclaimed (including
monies held in deposit as provided for above) for a period of six years from the
date specified for redemption shall be forfeited to the Corporation.

4.    CONVERSION OF SERIES I SHARES

      4.1   CONVERSION AT THE OPTION OF THE CORPORATION

      The Series I Shares shall not be convertible at the option of the
Corporation prior to December 31, 2008. On and after December 31, 2008, the
Corporation may, subject to applicable law and, if required, to other regulatory
approvals, and upon notice as hereinafter described, convert all, or from time
to time any part, of the then outstanding Series I Shares into that number of
freely tradeable Common Shares (per Series I Share) determined by dividing the
Redemption Price that would be applicable on the Corporation's Conversion Date
(as hereinafter defined), together with accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
Corporation's Conversion Date) up to but excluding the Corporation's Conversion
Date, by the greater of $2.00 and 95% of the weighted average trading price of
the Common Shares on the Toronto Stock Exchange (or, if the Common Shares do not
trade on the Toronto Stock Exchange on the date specified for conversion, on the
exchange or

<PAGE>

                                     - 5 -

trading system with the greatest volume of Common Shares traded during the 20
trading day period referred to below) for the 20 consecutive trading days ending
on: (i) the fourth day prior to the Corporation's Conversion Date, or (ii) if
such fourth day is not a trading day, the immediately preceding trading day (the
"Current Market Price"). Fractional Common Shares will not be issued on any
conversion of Series I Shares but in lieu thereof the Corporation will make cash
payments in the manner set out in Sections 4.3 and 4.5 below. Such conversion
shall be deemed to have been made at the close of business on the Corporation's
Conversion Date, so that the rights of the Holder of such Series I Shares as the
Holder thereof shall cease at such time and the person or persons entitled to
receive Common Shares upon such conversion shall be treated for all purposes as
having become the holder or holders of record of such Common Shares at such
time.

      Upon exercise by the Corporation of its right to convert Series I Shares
into Common Shares, the Corporation is not required to (but may at its option)
issue Common Shares to any person whose address is in, or whom the Corporation
or its transfer agent has reason to believe is a resident of, any jurisdiction
outside of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      The Corporation shall give written notice to each Holder whose shares are
to be converted, which notice (the "Corporation's Conversion Notice") shall
specify the number of Series I Shares held by such Holder that will be converted
and the date fixed by the Corporation for conversion (the "Corporation's
Conversion Date"), and which notice shall be given not more than 60 days and not
less than 30 days prior to such Corporation's Conversion Date.

      If less than all of the then outstanding Series I Shares are at any time
to be converted at the option of the Corporation, then the particular Series I
Shares to be so converted shall be selected on a pro rata basis.

      Series I Shares that are the subject of a Corporation's Conversion Notice
shall be converted effective on the Corporation's Conversion Date.

      The Corporation cannot exercise its conversion rights hereunder in respect
of any Series I Shares that are the subject of a Holder's Conversion Notice
under Section 4.2 below.

      4.2   CONVERSION AT THE OPTION OF THE HOLDER

      Subject to applicable law and to the option of the Corporation in Section
4.4, on each Dividend Payment Date on or after December 31, 2010, Holders, upon
notice as hereinafter described, may convert all or any part of the then
outstanding Series I Shares registered in the name of the Holder into that
number of freely tradeable Common Shares determined (per Series I Share) by
dividing $25.00, together with all accrued and unpaid Series I Dividends (for
greater certainty excluding declared dividends with a record date prior to the
Holder's Conversion Date) up to but excluding the Holder's Conversion Date (as
hereinafter defined), by the greater of $2.00 and 95% of the Current Market
Price. Fractional Common Shares will not be issued on any conversion of Series I
Shares but in lieu thereof the Corporation will make cash payments in the manner
set out in Sections 4.3 and 4.5 below. Such conversion shall be deemed to have
been made at the close of business on the Holder's Conversion Date, so that the
rights of the Holder of

<PAGE>

                                     - 6 -

such Series I Shares as the Holder thereof shall cease at such time and the
person or persons entitled to receive Common Shares upon such conversion shall
be treated for all purposes as having become the holder or holders of record of
such Common Shares at such time.

      In order to exercise its conversion rights, the Holder shall give written
notice to the Corporation at the registered office of the Corporation or the
principal transfer office of the transfer agent for the Series I Shares in the
City of Toronto (the "Holder's Conversion Notice"), which Holder's Conversion
Notice shall specify the number of Series I Shares (the "Subject Shares") held
by such Holder which shall be converted on the Dividend Payment Date chosen by
the Holder for conversion, or if such Dividend Payment Date is not a business
day the immediately succeeding business day (the "Holder's Conversion Date").
The Holder's Conversion Notice shall be given at least 30 calendar days prior to
such Holder's Conversion Date and shall be irrevocable.

      Upon exercise by the Holder of its right to convert Series I Shares into
Common Shares, the Corporation is not required to (but may at its option) issue
Common Shares to any person whose address is in, or whom the Corporation or its
transfer agent has reason to believe is a resident of, any jurisdiction outside
of Canada, to the extent that such issue would require compliance by the
Corporation with the securities or other laws of such jurisdiction.

      If the Corporation gives notice as provided in Section 3 to a Holder of
the redemption of Series I Shares prior to that Holder giving a Holder's
Conversion Notice to the Corporation, the right of that Holder to convert such
Series I Shares as herein provided shall cease and terminate in that event.

      4.3   DELIVERY OF CERTIFICATES REPRESENTING COMMON SHARES

      The Corporation shall, on presentation and surrender at the head office of
the Corporation, the principal transfer office of the transfer agent for the
Series I Shares in the City of Toronto, or such other place or places in Canada
as the Corporation may agree, of the certificate or certificates representing
the Series I Shares being converted by the Corporation or the Holder, give or
cause to be given, on the applicable Corporation's Conversion Date or Holder's
Conversion Date, as the case may be, to each Holder of Series I Shares being
converted or as such Holder may have otherwise directed:

      (a)   a certificate representing the whole number of Common Shares into
            which such Series I Shares being converted are to be converted,
            registered in the name of the Holder, or as such Holder may have
            otherwise directed; and

      (b)   in lieu of the issuance of a fractional Common Share, a cheque in an
            amount equal to the product of the fractional remainder, if any
            (rounded to four decimal places), produced by the conversion formula
            set forth in Section 4.1 or Section 4.2 above, as the case may be,
            multiplied by the greater of $2.00 and 95% of the then Current
            Market Price.

<PAGE>

                                     - 7 -

      If on any conversion under Section 4.1 or 4.2, less than all of the Series
I Shares represented by any certificate are to be converted, a new certificate
representing the balance of such Series I Shares shall be issued by the
Corporation without cost to the Holder.

      The Holder of any Series I Share on the record date for any dividend
declared payable on such share shall be entitled to such dividend
notwithstanding that such share is converted into Common Shares after such
record date and on or before the date of the payment of such dividend.

      The issuance of certificates for the Common Shares upon the conversion of
Series I Shares shall be made without charge to the Holders for any fee or tax
in respect of the issuance of such certificates or the Common Shares represented
thereby; provided, however, that the Corporation shall not be required to pay
any tax which may be imposed upon the person or persons to whom such Common
Shares are issued in respect of the issuance of such Common Shares or the
certificate therefor or which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate in the name or names other
than that of the Holder or deliver such certificate unless the person or persons
requesting the issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.

      4.4   OPTION OF THE CORPORATION

      If a Holder gives a Holder's Conversion Notice to the Corporation, subject
to the provisions described in Section 5 below, as applicable, the Corporation
may, at its option, on notice to such Holder in the manner described in this
Section 4.4, either (i) redeem for cash on the Holder's Conversion Date all or
any part of the Subject Shares, or (ii) cause the Holder to sell on the Holder's
Conversion Date all or any part of the Subject Shares to another purchaser or
purchasers (a "Substitute Purchaser") in the event that a purchaser or
purchasers willing to purchase any or all of such Subject Shares is or are found
by the Corporation pursuant to this Section 4.4. The proportion of the Subject
Shares which are either redeemed, purchased or converted on that Conversion Date
shall, to the extent practicable, be the same for each holder delivering a
Conversion Notice.

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall, not less than 20 calendar
days prior to the Holder's Conversion Date, give written notice to all Holders
of the Subject Shares stating the number of Subject Shares to be redeemed for
cash by the Corporation, the number of Subject Shares to be sold to another
purchaser, and the number of Subject Shares to be converted into Common Shares
pursuant to the Holder's Conversion Notice, such that all of the Subject Shares
are either redeemed, purchased or converted on the Holder's Conversion Date.

      If the Corporation elects to redeem for cash or arrange for the purchase
of any Subject Shares, then the Corporation shall pay or cause to be paid, in
respect of those Subject Shares to be redeemed for cash or purchased, on
presentation and surrender at the head office of the Corporation, the principal
transfer office of the transfer agent for the Series I Shares in the City of
Toronto, or such other place or places in Canada as the Corporation may agree,
of the certificate or certificates representing such Subject Shares, on the
Holder's Conversion Date, to

<PAGE>

                                     - 8 -

the Holder of the Subject Shares or as such Holder may have otherwise directed,
an amount equal to $25.00 plus all accrued and unpaid Series I Dividends (for
greater certainty excluding declared dividends with a record date prior to the
Holder's Conversion Date) up to but excluding the Holder's Conversion Date for
each Subject Share being redeemed or purchased (less any tax required to be
deducted and withheld by the Corporation), and each such Subject Share shall be
deemed to have been redeemed or purchased, but not converted, as the case may
be, on the Holder's Conversion Date. Payment under this Section 4.4 shall be
made by cheque in accordance with Section 4.5 hereof.

         If the Corporation elects to redeem for cash or arrange for the
purchase of some, but not all, of the Subject Shares, then the Corporation
shall, in respect of those Subject Shares to be converted into Common Shares,
give or cause to be given to the Holder of such Subject Shares the certificate
or certificates representing such Common Shares and, if applicable, a cheque in
lieu of a fractional Common Share, all in accordance with the procedures set
forth in Section 4.3.

      4.5   PAYMENT BY CHEQUE

      Any amounts that are paid by the Corporation to Holders in respect of the
payment of (i) a redemption or purchase amount under Section 4.4, or (ii) a cash
amount in lieu of the issuance of a fractional Common Share under Sections 4.1
or 4.2, shall be paid by cheques drawn on a Canadian chartered bank and payable
in lawful money of Canada at any branch of such bank in Canada and the delivery
or mailing of any such cheque to a Holder shall constitute a full and complete
discharge of the Corporation's obligation to pay the amount represented by such
cheque (plus any tax required to be and in fact deducted and withheld by the
Corporation from the related redemption or purchase amount or cash in lieu of a
fractional common share and remitted to the proper taxing authority), unless
such cheque is not honoured when presented for payment.

5.    RESTRICTIONS ON DIVIDENDS AND RETIREMENT AND ISSUE OF SHARES

      So long as any of the Series I Shares are outstanding, the Corporation
shall not, without the approval of the Holders:

      (a)   declare, pay or set apart for payment any dividends (other than
            stock dividends payable in shares of the Corporation ranking as to
            capital and dividends junior to the Series I Shares) on any shares
            of the Corporation ranking as to dividends junior to the Series I
            Shares;

      (b)   except out of the net cash proceeds of a substantially concurrent
            issue of shares of the Corporation ranking as to return of capital
            and dividends junior to the Series I Shares, redeem or call for
            redemption, purchase or otherwise pay off, retire or make any return
            of capital in respect of any shares of the Corporation ranking as to
            capital junior to the Series I Shares;

      (c)   redeem or call for redemption, purchase or otherwise retire for
            value or make any return of capital in respect of less than all of
            the Series I Shares then outstanding;

<PAGE>

                                     - 9 -

      (d)   except pursuant to any purchase obligation, sinking fund, retraction
            privilege or mandatory redemption provisions attaching thereto,
            redeem or call for redemption, purchase or otherwise pay off, retire
            or make any return of capital in respect of any Class AAA Preference
            Shares, ranking as to the payment of dividends or return of capital
            on a parity with the Series I Shares; or

      (e)   issue any additional Series I Shares or any shares ranking as to the
            payment of dividends or the return of capital prior to or on a
            parity with the Series I Shares;

      unless, in each such case, all accrued and unpaid dividends up to and
      including the dividend payable for the last completed period for which
      dividends were payable on the Series I Shares and on all other shares of
      the Corporation ranking prior to or on a parity with the Series I Shares
      with respect to the payment of dividends have been declared paid or set
      apart for payment.

6.    PURCHASE FOR CANCELLATION

      Subject to applicable law and to the provisions described in Section 5
above, the Corporation may at any time purchase (if obtainable) for cancellation
the whole or any part of the Series I Shares outstanding from time to time, in
the open market through or from an investment dealer or any firm holding
membership on a recognized stock exchange or by private agreement or otherwise,
at the lowest price or prices at which in the opinion of the directors of the
Corporation such shares are obtainable.

7.    LIQUIDATION, DISSOLUTION OR WINDING-UP

      In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, the Holders shall be entitled to payment of an amount equal to
$25.00 per Series I Share, plus an amount equal to all accrued and unpaid Series
I Dividends up to but excluding the date of payment or distribution (less any
tax required to be deducted and withheld by the Corporation), before any amounts
shall be paid or any assets of the Corporation distributed to the holders of any
shares ranking junior as to capital to the Series I Shares. Upon payment of such
amounts, the Holders shall not be entitled to share in any further distribution
of the assets of the Corporation.

8.    VOTING RIGHTS

      The Holders will not be entitled (except as otherwise provided by law and
except for meetings of the holders of Class AAA Preference Shares as a class and
meetings of the holders of the Series I Shares as a series) to receive notice
of, attend at, or vote at any meeting of shareholders of the Corporation unless
and until the Corporation shall have failed to pay eight quarterly Series I
Dividends, whether or not consecutive and whether or not such dividends have
been declared and whether or not there are any moneys of the Corporation
properly applicable to the payment of Series I Dividends. In the event of such
non-payment, the Holders shall have the right to receive notice of and to attend
each meeting of shareholders of the Corporation which takes place more than 60
days after the date on which the failure first occurs (other than a separate
meeting of the holders of another series or class of shares) and such Holders
shall have

<PAGE>

                                     - 10 -

the right, at any such meeting, to one (1) vote for each Series I Share until
all such arrears of Series I Dividends shall have been paid whereupon such
rights shall cease unless and until the same default shall again arise under the
provisions of this Section 8.

9.    MODIFICATIONS

      The provisions attaching to the Series I Shares as a series may be
repealed, altered, modified or amended from time to time with such approval as
may then be required by the Canada Business Corporations Act, any such approval
to be given in accordance with Section 10.

10.   APPROVAL OF HOLDERS OF SERIES I SHARES

      10.1  APPROVAL

      Except as otherwise provided herein, any approval of the Holders with
respect to any matters requiring the consent of the Holders may be given in such
manner as may then be required by law, subject to a minimum requirement that
such approval be given by a resolution signed by all the Holders or passed by
the affirmative vote of at least 66 2/3% of the votes cast by the Holders who
voted in respect of that resolution at a meeting of the Holders duly called for
that purpose and at which the Holders of a majority of the outstanding Series I
Shares are present or represented by proxy. If at any such meeting the Holder(s)
of a majority of the outstanding Series I Shares are not present or represented
by proxy within one-half hour after the time appointed for such meeting, then
the meeting shall be adjourned to such date not less than 15 days thereafter and
to such time and place as may be designated by the chairman of such meeting, and
not less than 10 days' written notice shall be given of such adjourned meeting.
At such adjourned meeting, the Holders(s) of Series I Shares represented in
person or by proxy may transact the business for which the meeting was
originally called and the Holders represented in person or by proxy shall form
the necessary quorum. At any meeting of Holders as a series, each Holder shall
be entitled to one vote in respect of each Series I Share held.

      10.2  FORMALITIES, ETC.

      The proxy rules applicable to, the formalities to be observed in respect
of the giving notice of, and the formalities to be observed in respect of the
conduct of, any meeting or any adjourned meeting of holders shall be those from
time to time prescribed by the by-laws of the Corporation with respect to
meetings of shareholders or, if not so prescribed, as required by law. On every
poll taken at every meeting of Holders, each Holder entitled to vote thereat
shall have one vote in respect of each Series I Share held.

11.   TAX ELECTION

      The Corporation shall elect, in the manner and within the time provided
under the Income Tax Act (Canada), under Subsection 191.2(1) of the said Act, or
any successor or replacement provision of similar effect, and take all other
necessary action under such Act, to pay or cause payment of tax under Part VI.1
of such Act at a rate such that the corporate Holders will not be

<PAGE>

                                     - 11 -

required to pay tax on dividends received on the Series I Shares under Section
187.2 of Part IV.I of such Act or any successor or replacement provision of
similar effect.

12.   COMMUNICATIONS WITH HOLDERS

      Except as specifically provided elsewhere in these share conditions, any
notice, cheque, invitation for tenders or other communication from the
Corporation herein provided for shall be sufficiently given, sent or made if
delivered or if sent by first class unregistered mail, postage prepaid, to each
Holder at the last address of such Holder as it appears on the securities
register of the Corporation or, in the case of joint Holders, to the address of
the Holder whose name appears first in the securities register of the
Corporation as one of such joint Holders, or, in the event of the address of any
of such Holders not so appearing, then to the last address of such Holder known
to the Corporation. Accidental failure to give such notice, invitation for
tenders or other communication to one or more Holders of the Series I Shares
shall not affect the validity of the notices, invitations for tenders or other
communications properly given or any action taken pursuant to such notice,
invitation for tender or other communication but, upon such failure being
discovered, the notice, invitation for tenders or other communication, as the
case may be, shall be sent forthwith to such holder or holders.

      If any notice, cheque, invitation for tenders or other communication from
the Corporation given to a holder of Series I Shares pursuant to paragraph (b)
is returned on three consecutive occasions because the holder cannot be found,
the Corporation shall not be required to give or mail any further notices,
cheques, invitations for tenders or other communications to such shareholder
until the holder informs the Corporation in writing of such holder's new
address.

      If the directors determine that mail service is or is threatened to be
interrupted at the time when the Corporation is required or elects to give any
notice hereunder by mail, or is required to send any cheque or any share
certificate to a Holder, whether in connection with the redemption or conversion
of such share or otherwise, the Corporation may, notwithstanding the provisions
hereof:

      (a)   give such notice by publication thereof once in a daily English
            language newspaper of general circulation published in each of
            Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax, and
            once in a daily French language newspaper published in Montreal and
            such notice shall be deemed to have been validly given on the day
            next succeeding its publication in all of such cities; and

      (b)   fulfill the requirement to send such cheque or such share
            certificate by arranging for the delivery thereof to such Holder by
            the transfer agent for the Series I Shares at its principal offices
            in the cities of Vancouver, Toronto and Montreal, and such cheque
            and/or share certificate shall be deemed to have been sent on the
            date on which notice of such arrangement shall have been given as
            provided in (a) above, provided that as soon as the Board of
            Directors determines that mail service is no longer interrupted or
            threatened to be interrupted, such cheque or share certificate, if
            not theretofore delivered to such Holder, shall be sent by mail as
            herein provided.

<PAGE>

                                     - 12 -

13.   INTERPRETATION

      In the provisions herein contained attaching to the Series I Shares:

      (a)   "ACCRUED AND UNPAID DIVIDENDS" means the aggregate of: (i) all
            unpaid dividends on the Series I Shares for any quarterly period;
            and (ii) the amount calculated as though dividends on each Series I
            Share had been accruing on a day-to-day basis from and including the
            date on which the last quarterly dividend was payable up to and
            including the date to which the computation of accrued dividends is
            to be made;

      (b)   "IN PRIORITY TO", "ON A PARITY WITH" and "JUNIOR TO" have reference
            to the order of priority in payment of dividends and in the
            distribution of assets in the event of any liquidation, dissolution
            or winding up of the Corporation, whether voluntary or involuntary,
            or other distribution of the assets of the Corporation among its
            shareholders for the purpose of winding up its affairs; and

      (c)   in the event that any date on which any dividend on the Series I
            Shares is payable by the Corporation, or any date on or by which any
            other action is required to be taken by the Corporation or the
            Holders hereunder, is not a business day (as hereinafter defined),
            then such dividend shall be payable, or such other action shall be
            required to be taken, on or by the next succeeding day that is a
            business day. A "BUSINESS DAY" shall be a day other than a Saturday,
            a Sunday or any other day that is treated as a holiday in the
            province of Ontario; and

      (d)   "COMMON SHARES" means common shares of the Corporation.

14.   BOOK-ENTRY ONLY SYSTEM

      If the Series I Shares are held through the book-entry only system of the
Canadian Depository for Securities ("CDS"), then the beneficial owner thereof
shall provide instructions only by such beneficial owner providing instructions
to the CDS Participant through whom such beneficial owner holds such Series I
Shares. Beneficial owners of Series I Shares will not have the right to receive
share certificates representing their ownership of the shares.Exhibit 4(a)(9)

                        CERTIFICATE OF ELIMINATION OF THE
              ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES A
                         THE BEAR STEARNS COMPANIES INC.

                       (Pursuant to Section 151(g) of the
                General Corporation Law of the State of Delaware)

      The Bear Stearns Companies Inc., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:

      FIRST: The Certificate of Powers, Designations, Preferences and Relative,
Participating, Optional or Other Special Rights and the Qualifications,
Limitations or Restrictions of the Adjustable Rate Cumulative Preferred Stock,
Series A, filed on February 19, 1987, as amended by the Certificate of
Correction filed on February 25, 1987 and constituting part of the Corporation's
Certificate of Incorporation (the "Certificate of Designations") authorizes the
issuance of 3,000,000 shares of a series of Preferred Stock designated
Adjustable Rate Cumulative Preferred Stock, Series A, par value $1.00 per share,
with a stated value of $50.00 per share (the "Series A Preferred Stock").

      SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware, the Board of Directors of the
Corporation adopted the following resolutions:

            RESOLVED, that none of the authorized shares of the Series A
            Preferred Stock are outstanding and none of the authorized shares of
            the Series A Preferred Stock will be issued subject to the
            Certificate of Designations; and

            RESOLVED, that the Secretary of the Corporation is authorized and
            directed to execute a Certificate of Elimination as provided by
            Section 151(g) of the General Corporation Law of the State of
            Delaware (the "DGCL") in accordance with Section 103 of the DGCL,
            substantially in the form attached as an exhibit to these
            resolutions, with such changes therein as the Secretary may approve
            and as are permitted by the DGCL to be made by such officer, such
            approval to be conclusively evidenced by the Secretary's execution
            of such Certificate of Elimination, and to file the same forthwith
            in the Office of the Secretary of State of the State of Delaware,
            and when such Certificate of Elimination becomes effective, all
            references to the Series A Preferred Stock in the Certificate of
            Incorporation of the Corporation shall be eliminated and the shares
            of Series A Preferred Stock shall resume the status of authorized
            and unissued shares of Preferred Stock of the Corporation, without
            designation as to series.

<PAGE>

      THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to Series A Preferred Stock in the Certificate of Incorporation of
the Corporation hereby are eliminated, and the shares that were designated to
such series hereby are returned to the status of authorized but unissued shares
of the Preferred Stock of the Corporation, without designation as to series.

                                      -2-
<PAGE>

      IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Kenneth L. Edlow, its Secretary, this 19th day of February, 2004.

                                       THE BEAR STEARNS COMPANIES INC.

                                       By:   /s/ Kenneth L. Edlow
                                          --------------------------------------
                                          Name:   Kenneth L. Edlow
                                          Title:  Secretary

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