Document:

EXHIBIT 4.1

  

   

  

   

  

  
    

    

    

    
      
        

    

     

    

    
      

      

      

      
        
          

      

      
        Schedule “A”

        TransAlta Corporation

        
          	
                  1.

                	
                  Common Shares

                

        

         

        

        The Corporation shall be authorized to issue an unlimited number of Common Shares, having the following rights,
          privileges, restrictions and conditions attaching thereto:

        
          
            	

                  	(a)	
                    Dividends.  The holders of Common Shares
                        shall be entitled to receive dividends as and when declared by the board of directors of the Corporation, subject to the prior satisfaction of all preferential rights to dividends attached to all shares of other classes ranking in
                        priority to the Common Shares in respect of dividends.

                  

          

        

        
          
            	

                  	(b)	
                    Voting Rights.  The holders of Common
                        Shares shall be entitled to receive notice of and to attend any meeting of the shareholders of the Corporation and shall be entitled to one vote in respect of each Common Share held, except in respect of meetings at which only
                        holders of a specified class or series of shares, other than the Common Shares, are entitled to vote.

                  

          

        

        
          
            	

                  	(c)	
                    Participation upon Liquidation, Dissolution or Winding Up.  In the event of the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary or for reorganization or otherwise, and upon any distribution of assets for the purpose of the
                        winding up of its affairs or in the event of any distribution upon a reduction of stated capital, the holders of the Common Shares shall, subject to the prior rights and privileges attaching to any class of shares of the Corporation
                        ranking prior to the Common Shares, be entitled to receive the remaining assets of the Corporation and the same shall be paid or distributed equally share for share to the holders of the Common Shares.

                  

          

        

        
          	
                  2.

                	
                  First Preferred Shares

                

        

        

        

        The Corporation shall be·authorized to issue an unlimited number of First Preferred Shares, issuable in series,
          and having the following rights, privileges, restrictions and conditions attaching thereto as a class:

        
          
            	

                  	(a)	
                    Issuable in Series.  The First Preferred
                        Shares may be issued from time to time in one or more series and, subject to these Articles, the board of directors is authorized to fix, from time to time before issuance, the designations, rights, privileges, restrictions and
                        conditions to attach to the shares of each series of First Preferred Shares.

                  

          

        

        
          
            
              
                
                  

              

              
               

              

              
                	 	
                        (b)

                      	
                        Seniority.  The First Preferred Shares of all series shall rank senior to all other shares of the Corporation with respect to priority in payment of dividends and with respect to distribution
                          of assets in the event of liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, or any other distribution of assets for the purpose of winding up its affairs or in the event of any
                          distribution upon a reduction of stated capital.  The First Preferred Shares shall not be liable to cancellation or reduction by reason of loss or depreciation of the Corporation’s assets until all other shares of the Corporation
                          shall have been exhausted.  The First Preferred Shares of each series shall rank equally with the First Preferred Shares of every other series.

                      

              

            

          

        

        
          
            	

                  	(c)	
                    Dividends.  The holders of First Preferred
                        Shares shall be entitled to receive out of the net profits or surplus of the Corporation when and as declared by the board of directors cumulative dividends, payable quarterly, on the subscription price thereof, to shareholders of
                        record on such days as shall be fixed by the board of directors from time to time.  The rate of dividend and the initial quarterly instalment date shall be determined by the board of directors at the time of issue of any one or more
                        series of First Preferred Shares and dividends shall accrue and be cumulative from date of issue.  No dividends shall be declared, paid or set apart upon any other shares of the Corporation unless all cumulative dividends accrued
                        upon the First Preferred Shares shall have been paid or declared and set apart.

                  

          

        

        
          
            	

                  	(d)	
                    Redemption.  Subject to the provisions
                        relating to any particular series, the Corporation, upon resolution of the board of directors, may call for redemption and redeem, out of capital or otherwise, at any time the whole or from time to time any part of the then
                        outstanding First Preferred Shares of any one or more series on payment for each share of such price or prices as may at the time be applicable to such series.  If the Corporation desires at any time to call for redemption and
                        redeem less than all the outstanding First Preferred Shares of any one series, the shares to be redeemed shall be selected by lot in such manner as may be prescribed by resolution of the board of directors.

                  

          

        

        
          
            	

                  	(e)	
                    Idem.  In any case of redemption of First
                        Preferred Shares under the provisions of paragraph (d) above, the Corporation shall, at least 30 days before the date fixed for redemption, mail to each registered holder of the First Preferred Shares to be redeemed a notice in
                        writing of the intention of the Corporation to redeem such shares.  Such notice shall be mailed in a prepaid letter addressed to such registered holder at the registered address or addresses of such holder or holders,

                  

          

        

        
          
            
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                      as the case may be, or in the event of the address of any such holder not so appearing,
                          then to the last known address of such holder, provided, however, that accidental failure to give any such notice to one or more such holders shall not affect the validity of such redemption.  Such notice shall state the
                          redemption price and the date on which redemption is to take place and, if part only of the shares held by the holder to whom it is addressed is to be redeemed, the number thereof so to be redeemed.  On or after the date fixed for
                          redemption as specified in any such notice, the Corporation shall pay or cause to be paid to or to the order of the registered holder of the First Preferred Shares to be redeemed the redemption price on presentation and surrender
                          of the certificates representing the shares called for redemption at the head office of the Corporation, or any other place designated in such notice, and upon payment of such redemption price as aforesaid to the holder or holders
                          of any of the First Preferred Shares to be redeemed such shares shall thereupon be cancelled and shall not be reissued.  If a part only of the shares represented by any certificate be redeemed, a new certificate representing the
                          balance shall be issued to the holder at the expense of the Corporation.  From and after the date fixed for redemption as specified in any such notice the First Preferred Shares thereby called for redemption shall cease to be
                          entitled to dividends and the holders thereof shall not be entitled to exercise any of the rights of shareholders in respect thereof unless payment of the redemption price shall not be made upon presentation of certificates in
                          accordance with the foregoing provisions, in which case the rights of the holders shall remain unaffected.  Should the holders of any of the First Preferred Shares so called for redemption fail to present the certificates
                          representing such share s on the date fixed for redemption as specified in such notice, the Corporation shall have the right to deposit the redemption price of such shares with any chartered bank or banks or with any trust company
                          or trust companies in Canada 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 and upon such deposit or deposits being made such shares shall be cancelled and shall not be reissued and the rights of the respective holders thereof after such
                          deposit shall be limited to receiving without interest their respective proportionate parts of the tot al redemption price so deposited upon presentation and surrender of the certificates representing such shares held by them,
                          respectively.  Any interest allowed on such deposit or deposits shall belong to the Corporation.

                    

            

            

            

            
              
                
                  
                    	 	
                            (f)

                          	
                            Purchase by the Corporation.  Subject to 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 acquire,
                              out of capital or otherwise, any of the First Preferred Shares

                            

                          

                  

                  
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                            of any one or more series by purchase for cancellation in the open market, or by invitation for tenders addressed to all the holders of record of the said series, at a price or prices not
                              exceeding in any case the redemption price applicable to such series under the provisions of paragraph (d) hereof, plus costs of purchase.  If, in response to any invitation for tenders, more First Preferred Shares are
                              tendered at a price or prices acceptable to the Corporation than the Corporation is willing to purchase, the Corporation will accept the lowest tender first and then tenders submitted at the next progressively higher prices,
                              and if more shares are tendered at any such price than the Corporation is prepared to purchase then the Corporation shall accept such tenders in proportion as nearly as may be to the number of shares offered in each such
                              tender.

                          

                  

                

              

            

          

        

        
          
            	

                  	(g)	
                    Participation upon Liquidation, Dissolution or Winding Up.  In the event of the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary or for reorganization or otherwise, and upon any distribution of assets for the purpose of winding
                        up its affairs or in the event of any distribution upon a reduction of stated capital, no sum whatever shall be paid to and no assets whatever shall be distributed among the holders of any shares ranking junior to the First
                        Preferred Shares until there shall have been paid to the holders of the First Preferred Shares the subscription price of the First Preferred Shares held by them plus a sum equal to the premium payable in case of redemption and a sum
                        equivalent to the arrears, if any, of the dividends accumulated on the First Preferred Shares to the date of such liquidation, dissolution, winding up or reduction of stated capital, as the case may be, whether or not earned or
                        declared, and after payment to the holders of the First Preferred Shares of the moneys so payable to them they shall not be entitled to share any further in the distribution of the profits or assets of the Corporation.

                  

          

        

        
          
            	

                  	(h)	
                    Voting Rights.  The holders of any
                        particular series of First Preferred Shares shall, if the board of directors so determines prior to the issuance of any such series, be entitled to the voting rights set forth in Schedule “Z” hereto.  Except as herein referred to or
                        as required by law, the holders of the First Preferred Shares as a class shall not be entitled as such to receive notice of, to attend or to vote at any meeting of the shareholders of the Corporation.

                  

          

        

        
          
            	

                  	(i)	
                    Further Issuances.  The holders of First
                        Preferred Shares shall be subject to the right of the Corporation at any time and from time to time to issue additional shares of the Corporation including, without limiting the foregoing, the right to issue thereafter additional
                        First Preferred Shares ranking equally with those now authorized.

                  

          

        

        
          
            
              
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                        (j)

                      	
                        No Pre-emptive Rights.  The holders of the First Preferred Shares shall not as such be entitled to subscribe for or purchase or receive any part of any issue of shares or bonds, debentures or other securities of the
                          Corporation otherwise than in accordance with the conversion, exchange or other rights, if any, which may from time to time attach to any series of the First Preferred Shares.

                      

              

            

          

        

        
          
            	

                  	(k)	
                    Amendment.  The provisions of paragraphs
                        (a) to (l) inclusive may be repealed or amended only with the sanction of the holders of the First Preferred Shares given as hereinafter specified in addition to any other approval required by the Canada Business Corporations Act.

                  

          

        

        
          
            	

                  	(l)	
                    Idem.  The sanction of holders of the
                        First Preferred Shares or of any series of the First Preferred Shares as to any and all matters referred to herein or as to any change adversely affecting the rights or privileges of the First Preferred Shares or of such series may,
                        subject to the provisions applicable to such series, be given by resolution passed or by by-law sanctioned at a·meeting of such holders duly called for such purpose and at which the holders of at least 50% of the aggregate
                        subscription price of the outstanding First Preferred Shares or series, as the case may be, are present or represented by proxy and carried by the affirmative vote of the holders of not less than 66 2/3% of the aggregate
                        subscription price of the First Preferred Shares or series, as the case may be, represented and voted at such meeting cast on a poll.  If at any such meeting the holders of a majority of the outstanding First Preferred Shares or
                        series, as the case may be, 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 and at least ten days’ notice shall be given of such adjourned meeting.  At such adjourned meeting the holders of First Preferred Shares present or represented by proxy shall form a quorum
                        and a resolution passed by the affirmative vote of the holders of not less than 66 2/3% of the aggregate subscription price of the First Preferred Shares represented and voted at such adjourned meeting cast on a poll shall
                        constitute the sanction of the holders of First Preferred.  Shares or series referred to in this paragraph.  On every poll taken at every such meeting or adjourned meeting every holder of First Preferred Shares shall be entitled to
                        one vote for each full $25 of subscription price of First Preferred Shares held.

                  

          

        

        

        

        
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        Schedule “Z”

        The holders of the [        ] Series First Preferred Shares shall not
          be entitled to receive notice of or to attend any meeting of the shareholders of the Corporation and shall not be entitled to vote at any such meeting unless and until the Corporation fails to pay in the aggregate six quarterly dividends on the
          [               ] Series First Preferred Shares pursuant to clause [  ] hereof  on the dates when the same should be paid, 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 for so long as any dividends on the [               ] Series First Preferred Shares remain in arrears, the holders of
          the [        ] Series First Preferred Shares shall be entitled to one vote for each full $25 of subscription price of the [        ] Series First Preferred Shares held by them and in addition shall be
          entitled, voting separately and exclusively as a combined class with the holders of all series of First Preferred Shares who at such time are entitled to vote for the election of directors, to elect two members of the board of directors if the
          board consists of less than sixteen directors or three members of the board of directors if the board consists of sixteen or more directors.  Notwithstanding anything contained in the by-laws of the Corporation, the term of office of all persons
          who may be directors of the Corporation at any time when the right to elect directors shall accrue to the holders of the [        ] Series First Preferred Shares as provided in this paragraph or who may be appointed as directors thereafter and
          before a meeting of shareholders shall have been held shall terminate upon the election of directors at the next annual meeting of shareholders or at a special meeting of shareholders which may be held for the purpose of electing directors at any
          time after the accrual of such right to elect directors upon not less than 21 days’ written notice and which shall be called by the Secretary of the Corporation upon the written request of the holders of record of at least one-tenth of the
          aggregate subscription price of the then outstanding First Preferred Shares then entitled to vote for the election of directors; in default of the calling of such special meeting by the Secretary within five days after the making of such request
          such meeting may be called by any holder of record of First Preferred Shares then entitled to vote for the election of directors.  Any vacancy occurring among the members of the board elected to represent the holders of any First Preferred Shares
          in accordance with the foregoing provisions of this paragraph may be filled by the board with the consent and approval of a remaining director elected to represent the holders of First Preferred Shares but if there be no such remaining director
          the board may elect sufficient members to fill the vacancy or vacancies.  Whether or not such vacancies are so filled by the board, the holders of record of at least one-tenth of the aggregate subscription price of the then outstanding First
          Preferred Shares entitled to vote for the election of directors shall have the right to require the Secretary of the Corporation to call a meeting of the holders of First Preferred Shares entitled to vote for the election of directors for the
          purpose of filling the vacancies or replacing all or any of the persons filling such vacancies who have been appointed by the directors when there is no director in office who has been elected to represent the holders of First Preferred Shares 

         

        

        
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        entitled to vote for the election of directors.  Notwithstanding anything contained in the by-laws of the Corporation, (1) upon
          any termination of the said right to elect directors, the term of office of the directors elected or appointed to represent the holders of First Preferred Shares entitled to vote for the election of directors shall forthwith terminate and (2) it
          shall not be necessary for a person to be a holder of First Preferred Shares in order to qualify for election or appointment as a director of the Corporation to represent the holders of First Preferred Shares as described hereunder.

         

        

         

        

        
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        Schedule “B”

          

          TransAlta Corporation

        
          	
                  7.

                	
                  Higher Shareholder Vote for Certain Specified Transactions

                

        

         

        

        The following provisions shall form part of the rights, privileges, restrictions and conditions attaching to
          the Common Shares as a class, the First Preferred Shares as a class and the Second Preferred Shares as a class:

        
          
            	7.1	
                    Higher Vote for Specified Transactions. 
                        Subject to subsections 7.5 and 7.6, in addition to any affirmative vote required by law or by these Articles, a resolution passed by the affirmative vote of a Majority of the Non-Interested Shareholders and of a majority of the
                        votes cast by holders of Voting Shares shall be required in respect of:

                  

          

        

        
          
            	 	(A)	
                    any merger, amalgamation or consolidation of the Corporation or any Subsidiary of the Corporation with (i) a Major Shareholder or (ii) any other corporation (whether or not itself a Major Shareholder) which is, or after such
                      merger, amalgamation or consolidation would as a result be, an Affiliate or Associate of a Major Shareholder;

                  

          

        

        
          
            	 	(B)	
                    the furnishing by the Corporation or any Subsidiary of the Corporation to a Major Shareholder or an Affiliate or Associate of a Major Shareholder of financial assistance in connection with any existing, contingent or future
                      liability or obligation of the Major Shareholder or an Affiliate or Associate of the Major Shareholder or in connection with the creation, issue, redemption, purchase or cancellation of any securities of the Major Shareholder or of an
                      Affiliate or Associate of the Major Shareholder;

                  

          

        

        
          
            	 	(C)	
                    any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) in any period of 12 consecutive months to or with a Major Shareholder or an Affiliate or Associate of a
                      Major Shareholder of any assets, products or services of the Corporation or any Subsidiary of the Corporation, having an aggregate Fair Market Value (determined on a cumulative basis) of 5% or more of Common Shareholders’ Equity;

                  

          

        

        
          
            	 	(D)	
                    the purchase, lease or other acquisition (in one transaction or a series of transactions) in any period of 12 consecutive months by the Corporation or any Subsidiary of the Corporation from a Major Shareholder or an Affiliate or
                      Associate of a Major Shareholder of assets, products or services having an aggregate Fair Market Value (determined on a cumulative basis) of 5% or more of Common Shareholders’ Equity;

                  

          

        

        
          
            
              
                
                  
                    	 	
                            (E)

                          	
                            the issue or transfer by the Corporation or any Subsidiary of the Corporation of any securities, or of rights, options or warrants to acquire any securities, of the Corporation or any Subsidiary
                              of the Corporation (in one transaction or a series of transactions) in any period of 36 consecutive months to a Major Shareholder or an Affiliate or Associate of a Major Shareholder where the securities which are the
                              Shareholder or an Affiliate or Associate of a Major Shareholder of the outstanding shares of any class of shares carrying voting rights or any securities convertible into shares carrying voting rights of the Corporation, a
                              Subsidiary of the Corporation or any successor of the Corporation or any Subsidiary of the Corporation;

                          

                  

                

              

               

              

              
                
                  

              

              

          

        

        
          
            	

                  	(F)	
                    any reclassification of securities (including any subdivision or consolidation), capital reorganization or recapitalization of the Corporation or any Subsidiary of the Corporation, or any merger, amalgamation, arrangement or
                      consolidation of the Corporation with any Subsidiary of the Corporation or any other body corporate or any other transaction (whether or not with or into or otherwise involving any Major Shareholder) which has the effect, directly or
                      indirectly, of increasing the proportionate share directly or indirectly owned by a Major Shareholder or an Affiliate or Associate of a Major Shareholder of the outstanding shares of any class of shares carrying voting rights or any
                      securities convertible into shares of any class of shares carrying voting rights of the Corporation, any Subsidiary of the Corporation or any successor of the Corporation or any Subsidiary of the Corporation;

                  

          

        

        
          
            	

                  	(G)	
                    the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed at any time that there is a Major Shareholder;

                  

          

        

        
          
            	

                  	(H)          	(i)          	the creation of a class or series of shares, either by amendment of the Articles of Amalgamation of the Corporation, as
                    amended, or by a resolution of the board of directors of the Corporation establishing the rights, privileges, restrictions and conditions attaching to a series of a previously authorized class of shares, as the case may be, which are
                    Non-Voting Equity Shares or which would have the effect of making another class or series of securities Non-Voting Equity Shares; or

          

        

        
          
            	

                  	(ii)	
                    a reorganization, arrangement, amalgamation or other form of business combination the effect of which is that any outstanding shares become Non-Voting Equity Shares; or

                  

          

        

        
          
            	

                  	(I)	
                    any agreement, contract or other arrangement providing for any one or more of the actions specified in clauses (A) through (H) of this subsection 7.1.

                  

          

        

        Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser vote may be
          otherwise specified, by law or by any other provision of the Articles of Amalgamation of the Corporation, as amended.

        
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            	7.2	
                    Certain Definitions.  For the purposes of
                        this Section 7:

                  

          

        

        
          
            	

                  	(A)	
                    “Affiliate”: a company shall be deemed to be an Affiliate of another company if one of them is the Subsidiary of the other or if both are Subsidiaries of the same company or if each of them is controlled by the same person or
                      company.

                  

          

        

        
          
            	

                  	(B)	
                    “Associate” when used to indicate a relationship with any person means

                  

          

        

        
          
            	

                  	(i)	
                    a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than twenty percent (20%) of the voting rights exercisable in the
                      election of directors under all circumstances or by reason of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase such shares or such convertible securities;

                  

          

        

        
          
            	

                  	(ii)	
                    a partner of that person;

                  

          

        

        
          
            	

                  	(iii)	
                    a trust or estate in which that person has a substantial beneficial interest or in respect of which he serves as a trustee or in a similar capacity;

                  

          

        

        
          
            	

                  	(iv)	
                    a spouse of that person or any person of the opposite sex with whom that person is living in a conjugal relationship outside marriage or a child of that person; and

                  

          

        

        
          
            	

                  	(v)	
                    a relative of a person mentioned in sub-clause (iv) if that relative has the same residence as that person.

                  

          

        

        
          
            	

                  	(C)	
                    “Beneficial Owner” means a person who has beneficial ownership of a security and includes a person who has beneficial ownership within the meaning of the CBCA and, in addition to but without limiting the foregoing, a person shall
                      be considered a beneficial owner of any security (whether or not owned of record):

                  

          

        

        
          
            	

                  	(i)	
                    with respect to which such person or any Affiliate or Associate of such person, directly or indirectly, has or shares voting power, including the power to vote or direct the voting of such security, or investment power, including
                      the power to dispose of or to direct the disposition of such security;

                  

          

        

        
          
            
              
                	 	
                        (ii)

                      	
                        if such person or any Affiliate or Associate of such person has the right to acquire such security (whether such right is exercisable immediately or after the passage of time or otherwise and whether such security shall then be
                          issued or unissued) pursuant to any agreement, arrangement or understanding, written or oral, or upon the exercise of any conversion right, exchange right, purchase right, warrant or option or otherwise or the right to vote or
                          direct the voting of such security pursuant to any agreement, arrangement or understanding, written or oral (whether such 

                        

                      

              

               

              

              
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                        right is exercisable immediately or after the passage of time or otherwise); or

                      

              

            

          

        

        
          
            	

                  	(iii)	
                    which is beneficially owned within the meaning of sub-clauses (i) or (ii) by any other person with which such first-mentioned person, or any Associate or Affiliate of such person, has any agreement, arrangement or understanding,
                      written or oral, with respect to acquiring, holding, voting or disposing of any securities of the issuer of such security or acquiring, holding or disposing of all or substantially all of the property of such issuer;

                  

          

        

        and the terms “Beneficially Owned” and “Beneficial Ownership” shall have corresponding meanings.

        For the purpose only of determining whether a person is the Beneficial Owner of a specified percentage of the outstanding Voting
          Shares, the number of outstanding Voting Shares shall be deemed to include any unissued Voting Shares which may be issuable pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights,
          purchase rights, warrants, options or otherwise (whether or not the same are then capable of being exercised) and which are deemed to be Beneficially Owned by such person pursuant to the provisions of clause (C) of this subsection 7.2.

        A person shall be deemed to be the Beneficial Owner of securities Beneficially Owned by a corporation controlled by such person or
          by an Affiliate of such corporation.

        
          
            	

                  	(D)	
                    “CBCA” means the Canada Business Corporations Act, as amended, as in force and effect on the date of the Articles of Amalgamation of which these provisions form a part.

                  

          

        

        
          
            	

                  	(E)	
                    “Common Shareholders’ Equity” means the total amount of common shareholders’ equity of the Corporation, determined in accordance with generally accepted accounting principles, including, without limitation:

                  

          

        

        
          
            	

                  	(i)	
                    the stated capital of all Equity Shares of the Corporation;

                  

          

        

        
          
            	

                  	(ii)	
                    reinvested earnings; and

                  

          

        

        
          
            	

                  	(iii)	
                    contributed surplus;

                  

          

        

        as shown on the most recent audited consolidated financial statements of the Corporation.

        
          
            
              
                	 	
                        (F)

                      	
                        “controlled”: a body corporate shall be deemed to be “controlled” by another person or two or more persons if:

                      

              

               

              

              
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                  	(i)	
                    securities entitled to vote in the election of directors carrying more than 50% of the votes for the election of directors are held by or for the benefit of the other person or persons; and

                  

          

        

        
          
            	

                  	(ii)	
                    the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such corporation.

                  

          

        

        
          
            	

                  	(G)	
                    “Equity Shares” means shares of the Corporation that carry a residual right to participate to an unlimited degree in earnings of the Corporation and in its assets upon liquidation or winding up.

                  

          

        

        
          
            	

                  	(H)	
                    “Fair Market Value” means (i) in the case of shares, the highest closing sale price during the 30 day period immediately preceding the date in question of such shares on The Toronto Stock Exchange, or, if such shares are not listed
                      on such Exchange, on the principal securities exchange on which such shares are listed as determined by the directors in their sole discretion, or, if such shares are not listed on any such exchange, the fair market value on the date
                      in question of such shares as determined by the board of directors in good faith; and (ii) in the case of property other than cash or shares, the fair market value of such property on the date in question as determined by the board of
                      directors in good faith.

                  

          

        

        
          
            	

                  	(I)	
                    “financial assistance” includes, without limiting the generality of the words, the giving, granting or issuing of any loan, guarantee, indemnity or security, or the giving, granting or issuing of any undertaking or covenant
                      involving the expenditure of funds now or in the future.

                  

          

        

        
          
            	

                  	(J)	
                    “Major Shareholder” means any person who or which:

                  

          

        

        
          
            	

                  	(i)	
                    is the Beneficial Owner of shares representing more than 20% of the votes  that may be cast by the holders of Voting Shares;

                  

          

        

        
          
            	

                  	(ii)	
                    is a person who at any time within the two year period immediately prior to the date in question was the Beneficial Owner of shares representing more than 20% of the votes that may be cast by the holders of Voting Shares; or

                  

          

        

        
          
            	

                  	(iii)	
                    will be a Major Shareholder upon the completion of a Specified Transaction.

                  

          

        

        
          
            	

                  	(K)	
                    “Majority of the Non-Interested Shareholders” means a majority of votes cast by holders of Voting Shares voting on the resolution in question, excluding the votes attached to all Voting Shares Beneficially Owned by the Major
                      Shareholder involved in the Specified Transaction in question or, in the case of a vote on a matter referred to in clause (H) of subsection 7.1, excluding the votes attached to all Voting Shares Beneficially Owned by any Major
                      Shareholder.

                  

          

        

        
          
            
              
                	 	
                        (L)

                      	
                        “Non-Interested Shareholder” means a holder of Voting Shares of the Corporation, other than a Major Shareholder.

                      

              

               

              

              
                5

                
                  

              

            

          

        

        
          
            	

                  	(M)	
                    “Non-Voting Equity Shares” means Equity Shares

                  

          

        

        
          
            	

                  	(i)	
                    which are not Voting Shares;

                  

          

        

        
          
            	

                  	(ii)	
                    to which are attached voting rights that are less, on a per share basis, than the voting rights attaching to any other shares of an outstanding class or series of shares of the Corporation; or

                  

          

        

        
          
            	

                  	(iii)	
                    that carry a vote subject to some limit or restriction on the number or percentage of shares that may be voted by a person or group of persons.

                  

          

        

        
          
            	

                  	(N)	
                    “person” includes any individual, partnership, firm, body corporate, association, trust, trustee, executor, administrator, legal representative, unincorporated organization or other entity or group.

                  

          

        

        
          
            	

                  	(O)	
                    “product” means real and personal property of every description manufactured, supplied,
                        furnished or produced including, without limitation, energy, however produced or supplied.

                  

          

        

        
          
            	

                  	(P)	
                    “series of transactions” includes not only a series of transactions with the same Major Shareholder but also a series of separate transactions with a Major Shareholder or any Affiliate or Associate of such Major Shareholder or any
                      combination of them.

                  

          

        

        
          
            	

                  	(Q)	
                    “service” means a service of any description, including, without limitation, an industrial, trade, financial or professional service.

                  

          

        

        
          
            	

                  	(R)	
                    “Specified Transaction” means any transaction which is referred to in any one or more of clauses (A) through (I) of subsection 7.1.

                  

          

        

        
          
            	

                  	(S)	
                    “Subsidiary”: a company shall be deemed to be Subsidiary of another company if

                  

          

        

        
          
            	

                  	(i)	
                    it is controlled by

                  

          

        

        
          
            	

                  	(a)	
                    that other, or

                  

          

        

        
          
            	

                  	(b)	
                    that other and one or more companies each of which is controlled by that other, or

                  

          

        

        
          
            	

                  	(c)	
                    two or more companies each of which is controlled by that other, or

                  

          

        

        
          
            	

                  	(ii)	
                    it is a subsidiary of a company that is that other’s subsidiary.

                  

          

        

        
          
            
              
                	 	
                        (T)

                      	
                        “take-over bid” means an offer to purchase, directly or indirectly, Equity Shares that is made to holders of Equity Shares by take-over bid circular pursuant to applicable securities legislation or by stock exchange take-over
                          bid through the

                        

                      

              

               

              

              
                6

                
                  

              

            

          

        

        
          
            
              	 	
                      

                      

                    	
                      facilities of a stock exchange recognized by applicable Canadian and provincial laws for such purpose and made in accordance with the rules of the exchange.

                    

            

            

            

            
              
                	 	
                        (U)

                      	
                        “Voting Shares” means the outstanding shares of the Corporation entitled to vote generally in the election of directors under all circumstances or by reason of the occurrence of an event that has occurred and is continuing.

                      

              

            

          

        

        
          
            	

                  	(V)	
                    “class of Voting Shares” shall include a series of a class of Voting Shares.

                  

          

        

        
          
            	7.3	
                    No Effect on Obligations.  Nothing
                        contained in this Section 7 shall be construed to relieve any Major Shareholder from any obligation, liability or responsibility imposed by law.

                  

          

        

        
          
            	7.4	
                    Amendment or Repeal.  In addition to any
                        other approval required by Law, a resolution passed by the affirmative vote of a Majority of the Non-Interested Shareholders and a majority of the votes cast by holders of Voting Shares shall be required to amend, alter or repeal,
                        or adopt any provision or provisions inconsistent with any provision or provisions of this Section 7.

                  

          

        

        
          
            	7.5	
                    Non-Application.  The provisions o:f
                        clauses (A) to (G) of subsection 7.1, and clause (I) of subsection 7.1 as it applies to clauses (A) to (G) of subsection 7.1, do not apply where:

                  

          

        

        
          
            	

                  	(A)	
                    the Major Shareholder is a person, or an assignee of or successor to a person, who, in order to become the Beneficial Owner of more than 20% of the Voting shares, made a single take-over bid for all the Equity Shares not
                      Beneficially Owned by such person and as a consequence of the take-over bid acquired Beneficial Ownership of 66-2/3% or more of the Equity Shares not already Beneficially Owned by such person; or

                  

          

        

        
          
            	

                  	(B)	
                    the Major Shareholder is the Beneficial Owner of more than 85% of the Equity Shares.

                  

          

        

        
          
            	7.6	
                    Certain Exemptions.  The provisions of
                        clauses (A), (B), (C) and (D) of subsection 7.1 shall not apply where the Specified Transaction is solely between or among the Corporation and one or more Subsidiaries or Associates of the Corporation or of a Subsidiary of the
                        Corporation, where the relationship of Subsidiary or Associate arises through the direct beneficial ownership or control by the Corporation or a Subsidiary of the Corporation of shares or securities of the Subsidiary or Associate
                        and not by way of deemed beneficial ownership or control.

                  

          

        

        
          
            	7.7	
                    Severability.  If any provision contained
                        in this Section 7 is determined to be invalid in whole or in part, it shall not be deemed to affect or impair the validity of any other provision contained in this section.

                  

          

        

         

       

        

      
       

        7EXHIBIT 4.2

  

  

  

  

  

  

  
    

    

      

      

      

      

      

    

    
      
        

    

     

    

    
      

      

    

  

  

    
      
        

    

    SCHEDULE RE SECTION “D” OF ARTICLES OF AMENDMENT

      

      TRANSALTA CORPORATION (the “Corporation”)

    The Articles of the Corporation are amended pursuant to Section 27 of the Canada Business Corporations Act to
      create a new series of First Preferred Shares in the capital of the Corporation designated as “Cumulative Redeemable Rate Reset First Preferred Shares, Series A”.  The Corporation is authorized to issue 12,000,000 Cumulative Redeemable Rate Reset
      First Preferred Shares, Series A shares.  The rights, privileges, restrictions and conditions attaching to the Cumulative Redeemable Rate Reset First Preferred Shares, Series A shall be as set out in Schedule “A” attached hereto.

    The Articles of the Corporation are amended pursuant to Section 27 of the Canada Business Corporations Act to
      create a new series of First Preferred Shares in the capital of the Corporation designated as “Cumulative Redeemable Floating Rate First Preferred Shares, Series D”.  The Corporation is authorized to issue 12,000,000 Cumulative Redeemable Floating
      Rate First Preferred Shares, Series D shares.  The rights, privileges, restrictions and conditions attaching to the Cumulative Redeemable Floating Rate First Preferred Shares, Series B shall be as set out in Schedule “B” attached hereto.

    

    

    
      
        

    

    SCHEDULE “A” TO ARTICLES OF AMENDMENT OF

      TRANSALTA CORPORATION

    The first series of First Preferred Shares of the Corporation shall consist of 12,000,000 shares designated as Cumulative Redeemable
      Rate Reset First Preferred Shares, Series A (the “Series A Preferred Shares”).  In addition to the rights, privileges, restrictions and conditions attaching to the First Preferred Shares as a class, the rights,
      privileges, restrictions and conditions attaching to the Series A Preferred Shares shall be as follows:

    
      
        	1.	
                Interpretation

              

      

    

    
      
        	

              	(a)	
                In these Series A Preferred Share provisions, the following expressions have the meanings indicated:

              

      

    

    
      
        	

              	(i)	
                “Annual Fixed Dividend Rate” means, for any Subsequent Fixed Rate Period, the annual rate of interest (expressed as a percentage rounded to
                  the nearest one hundred-thousandth of one percent (with 0.000005% being rounded up)) equal to the sum of the Government of Canada Yield on the applicable Fixed Rate Calculation Date and 2.03%;

              

      

    

    
      
        	

              	(ii)	
                “Bloomberg Screen GCAN5YR Page” means the display designated as page “GCAN5YR<INDEX>” on the
                  Bloomberg Financial L.P. service or its successor service (or such other page as may replace the GCAN5YR<INDEX> page on that service or its successor service) for purposes of displaying Government of Canada bond yields;

              

      

    

    
      
        	

              	(iii)	
                “Book-Based System” means the record entry securities transfer and pledge system administered by the System Operator in accordance with the
                  operating rules and procedures of the System Operator in force from time to time and any successor system thereof;

              

      

    

    
      
        	

              	(iv)	
                “Book-Entry Holder” means the person that is the beneficial holder of a Book-Entry Share;

              

      

    

    
      
        	

              	(v)	
                “Book-Entry Shares” means the Series A Preferred Shares held through the Book-Based System;

              

      

    

    
      
        	

              	(vi)	
                “Business Day” means a day on which chartered banks are generally open for business in both Calgary, Alberta and Toronto, Ontario;

              

      

    

    
      
        	

              	(vii)	
                “CDS” means CDS Clearing and Depository Services Inc. or any successor thereof;

              

      

    

    
      
        	

              	(viii)	
                “Common Shares” means the common shares of the Corporation;

              

      

    

    
      
        	

              	(ix)	
                “Definitive Share” means a fully registered, typewritten, printed, lithographed, engraved or otherwise produced share certificate
                  representing one or more Series A Preferred Shares;

              

      

    

    

    

    
      
        

    

    
    
      
        	

              	(x)	
                “Dividend Payment Date” means the last day of March, June, September and December, in each year; provided that, if such date is not a
                  Business Day, the applicable Dividend Payment Date will be the next succeeding Business Day;

              

      

    

    
      
        	

              	(xi)	
                “First Preferred Shares” means the first preferred shares of the Corporation;

              

      

    

    
      
        	

              	(xii)	
                “Fixed Rate Calculation Date” means, for any Subsequent Fixed Rate Period, the 30th day prior to the first day of such Subsequent Fixed Rate
                  Period;

              

      

    

    
      
        	

              	(xiii)	
                “Floating Quarterly Dividend Rate” means, for any Quarterly Floating Rate Period, the annual rate of interest (expressed as a percentage
                  rounded to the nearest one hundred-thousandth of one percent (with 0.000005% being rounded up)) equal to the sum of the T-Bill Rate on the applicable Floating Rate Calculation Date and 2.03%;

              

      

    

    
      
        	

              	(xiv)	
                “Floating Rate Calculation Date” means, for any Quarterly Floating Rate Period, the 30th day prior to the first day of such Quarterly
                  Floating Rate Period;

              

      

    

    
      
        	

              	(xv)	
                “Global Certificate” means the global certificate representing outstanding Book-Entry Shares;

              

      

    

    
      
        	

              	(xvi)	
                “Government of Canada Yield” on any date means the yield to maturity on such date (assuming semi-annual compounding) of a Canadian dollar
                  denominated non-callable Government of Canada bond with a term to maturity of five years as quoted as of 10:00 a.m.  (Toronto time) on such date and that appears on the Bloomberg Screen GCAN5YR Page on such date; provided that if such
                  rate does not appear on the Bloomberg Screen GCAN5YR Page on such date, then the Government of Canada Yield shall mean the arithmetic average of the yields quoted to the Corporation by two registered Canadian investment dealers selected
                  by the Corporation as being the annual yield to maturity on such date, compounded semi-annually, that a non-callable Government of Canada bond would carry if issued, in Canadian dollars in Canada, at 100% of its principal amount on such
                  date with a term to maturity of five years;

              

      

    

    
      
        	

              	(xvii)	
                “Initial Fixed Rate Period” means the period from and including the date of issue of the Series A Preferred Shares to but excluding March 31,
                  2016;

              

      

    

    
      
        	

              	(xviii)	
                “Liquidation” means 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;

              

      

    

    
      
        	

              	(xix)	
                “Participants” means the participants in the Book-Based System;

              

      

    

    

    

    
      2

      
        

    

    
      
        	

              	(xx)	
                “Pro Rated Dividend” means the amount determined by multiplying the amount of the dividend payable for a Quarter in which a Liquidation,
                  conversion or redemption is to occur by four and multiplying that product by a fraction, the numerator of which is the number of days from and including the Dividend Payment Date immediately preceding the date fixed for Liquidation,
                  conversion or redemption to but excluding such date and the denominator of which is 365 or 366, depending upon the actual number of days in the applicable year;

              

      

    

    
      
        	

              	(xxi)	
                “Quarter” means a three-month period ending on a Dividend Payment Date;

              

      

    

    
      
        	

              	(xxii)	
                “Quarterly Commencement Date” means the last day of March, June, September and December in each year, commencing March 31, 2016;

              

      

    

    
      
        	

              	(xxiii)	
                “Quarterly Floating Rate Period” means the period from and including a Quarterly Commencement Date to but excluding the next succeeding
                  Quarterly Commencement Date;

              

      

    

    
      
        	

              	(xxiv)	
                “Series A Conversion Date” means March 31, 2016, and March 31 in every fifth year thereafter;

              

      

    

    
      
        	

              	(xxv)	
                “Series B Preferred Shares” means the Cumulative Redeemable First Preferred Shares, Series B of the Corporation;

              

      

    

    
      
        	

              	(xxvi)	
                “Subsequent Fixed Rate Period” means, for the initial Subsequent Fixed Rate Period, the period from and including March 31, 2016, to but
                  excluding March 31, 2021, and for each succeeding Subsequent Fixed Rate Period means the period from and including the day immediately following the last day of the immediately preceding Subsequent Fixed Rate Period to but excluding
                  March 31 in the fifth year thereafter;

              

      

    

    
      
        	

              	(xxvii)	
                “System Operator” means CDS or its nominee or any successor thereof; and

              

      

    

    
      
        	

              	(xxviii)	
                “T-Bill Rate” means, for any Quarterly Floating Rate Period, the average yield expressed as an annual rate on 90 day Government of Canada
                  treasury bills, as reported by the Bank of Canada, for the most recent treasury bills auction preceding the applicable Floating Rate Calculation Date.

              

      

    

    
      
        	

              	(b)	
                The expressions “on a parity with”, “ranking prior to”, “ranking junior to” and similar expressions refer to the order of priority in the payment of dividends or in the distribution
                  of assets in the event of any Liquidation.

              

      

    

    
      
        	

              	(c)	
                If any day on which any dividend on the Series A Preferred Shares is payable by the Corporation or on or by which any other action is required to be taken by the Corporation is not
                  a Business Day, then such dividend shall be payable and such other action may be taken on or by the next succeeding day that is a Business Day.

              

      

    

    

    

    
      3

      
        

    

    
      
        	2.	
                Dividends

              

      

    

    
      
        	

              	(a)	
                During the Initial Fixed Rate Period, the holders of the Series A Preferred Shares shall be entitled to receive and the Corporation shall pay, as and when declared by the board of
                  directors of the Corporation, out of the moneys of the Corporation properly applicable to the payment of dividends, fixed cumulative preferential cash dividends at an annual rate of $1.15 per share, payable quarterly on each Dividend
                  Payment Date in each year.  The first dividend, if declared, shall be payable on March 31, 2011, and, notwithstanding the foregoing, shall be in the amount per share determined by multiplying $1.15 by the number of days in the period from
                  and including the date of issue of the Series A Preferred Shares to but excluding, March 31, 2011, and dividing that product by 365.

              

      

    

    
      
        	

              	(b)	
                During each Subsequent Fixed Rate Period, the holders of the Series A Preferred Shares shall be entitled to receive and the Corporation shall pay, as and.  when declared by the Board of Directors, out of the moneys of the Corporation properly applicable to the payment of dividends, fixed cumulative preferential cash dividends,
                  payable quarterly on each Dividend Payment Date, in the amount per share determined by multiplying one-quarter of the Annual Fixed Dividend Rate for such Subsequent Fixed Rate Period by $25.00.

              

      

    

    
      
        	

              	(c)	
                On each Fixed Rate Calculation Date, the Corporation shall determine the Annual Fixed Dividend Rate for the ensuing Subsequent Fixed Rate Period.  Each such determination shall, in
                  the absence of manifest error, be final and binding upon the Corporation and upon all holders of Series A Preferred Shares.  The Corporation shall, on each Fixed Rate Calculation Date, give written notice of the Annual Fixed Dividend Rate
                  for the ensuing Subsequent Fixed Rate Period to the registered holders of the then outstanding Series A Preferred Shares.  Each such notice shall be given by electronic transmission, by facsimile transmission or by ordinary unregistered
                  first class prepaid mail addressed to each holder of Series A Preferred Shares at the last address of such holder as it appears on the books of the Corporation or, in the event of the address of any holder not so appearing, to the address
                  of such holder last known to the Corporation.

              

      

    

    
      
        	

              	(d)	
                If a dividend has been declared for a Quarter and a date is fixed for a Liquidation, redemption or conversion that is prior to the Dividend Payment Date for such Quarter, a Pro
                  Rated Dividend shall be payable on the date fixed for such Liquidation, redemption or conversion instead of the dividend declared, but if such Liquidation, redemption or conversion does not occur, then the full amount of the dividend
                  declared shall be payable on the originally scheduled Dividend Payment Date.

              

      

    

    
      
        	

              	(e)	
                If the dividend payable on any Dividend Payment Date is not paid in full on such date on all of the Series A Preferred Shares then outstanding, such dividend or the unpaid part of
                  it shall be paid on a subsequent date or dates to be determined by the Board of Directors on which the Corporation shall have sufficient moneys properly applicable, under the provisions of any applicable law and under the provisions of

              

      

    

    

    

    
      4

      
        

    

    
      
        
          	 	
                  

                  

                	
                  any trust indenture securing bonds, debentures or other securities of the Corporation, to the payment of the dividend.

                

        

         

        

      

    

    
      
        	

              	(f)	
                Cheques of the Corporation payable in lawful money of Canada at par at any branch of the Corporation’s bankers in Canada may be issued in respect of the dividends (less any tax
                  required to be deducted) and payment of the cheques shall satisfy such dividends, or payments in respect of dividends may be made in any other manner determined by the Corporation.

              

      

    

    
      
        	

              	(g)	
                The holders of the Series A Preferred Shares shall not be entitled to any dividend other than as specified in this paragraph (2).

              

      

    

    
      
        	3.	
                Purchase for Cancellation

              

      

    

    Subject to the provisions of paragraphs (5) and (9) and subject to such provisions of the Canada
        Business Corporations Act as may be applicable, the Corporation may at any time or times purchase (if obtainable) for cancellation all or any part of the Series A Preferred Shares outstanding from time to time:

    
      
        	

              	(a)	
                through the facilities of any stock exchange on which the Series A Preferred Shares are listed,

              

      

    

    
      
        	

              	(b)	
                by invitation for tenders addressed to all the holders of record of the Series A Preferred Shares outstanding, or

              

      

    

    
      
        	

              	(c)	
                in any other manner,

              

      

    

    at the lowest price or prices at which, in the opinion of the Board of Directors, such shares are obtainable.  If upon any
      invitation for tenders under the provisions of this paragraph (3) more Series A Preferred Shares are tendered at a price or prices acceptable to the Corporation than the Corporation is willing to purchase, the Corporation shall accept, to the extent
      required, the tenders submitted at the lowest price and then, if and as required, the tenders submitted at the next progressively higher prices, and if more shares are tendered at any such price than the Corporation is prepared to purchase, then the
      shares tendered at such price shall be purchased as nearly as may be pro rata (disregarding fractions) according to the number of Series A Preferred Shares so tendered by each of the holders of Series A Preferred Shares who submit tenders at that
      price.  From and after the date of purchase of any Series A Preferred Shares under the provisions of this paragraph (3), the shares so purchased shall be restored to the status of authorized but unissued shares.

    
      
        	4.	
                Redemption

              

      

    

    
      
        	

              	(a)	
                The Series A Preferred Shares shall not be redeemable prior to March 31, 2016, Subject to the provisions of paragraph (9), on March 31, 2016, and on March 31 in every fifth year
                  thereafter, the Corporation, upon giving notice as herein provided, may redeem all or any part of the Series A Preferred Shares by the payment of an amount in cash for each share to be redeemed equal to $25.00 (such amount being the “redemption amount”) plus all accrued and unpaid dividends thereon to but excluding the date fixed for redemption (the whole constituting the “cash redemption price”). 

                  For the purposes of subsection 191(4) of the Income Tax Act

              

      

    

    

    

    
      5

      
        

    

    
      	 	

            	
              (Canada) or any successor or replacement provision of similar effect, the amount specified in respect of each Series A Preferred Share is $25.00.

            

    

     

    

    
      
        	

              	(b)	
                In any case of redemption of Series A Preferred Shares under the provisions of this paragraph (4), the Corporation shall, at least 30 days and not more than 60 days before the date
                  specified for redemption, mail to each person who at the date of mailing is a registered holder of Series A Preferred Shares to be redeemed a written notice of the intention of the Corporation to redeem such Series A Preferred Shares. 
                  Such notice shall be mailed in a prepaid letter addressed to each such holder at the holder’s address as it appears on the books of the Corporation or, in the event of the address of any such holder not so appearing, to the last known
                  address of such holder; provided, however, that accidental failure to give any such notice to one or more of such holders shall not affect the validity of such redemption.  Such notice shall set out the cash redemption price and the date
                  on which redemption is to take place and, if part only of the Series A Preferred Shares held by the person to whom it is addressed is to be redeemed, the number so to be redeemed.  On or 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 Preferred Shares to be redeemed the cash redemption price on presentation and surrender at the head office of the Corporation or any
                  other place designated in such notice of the certificates for the Series A Preferred Shares called for redemption, subject to the provisions of paragraph (14).  Such payment shall be made by cheque payable at par at any branch of the
                  Corporation’s bankers in Canada.  Such Series A Preferred Shares shall then be and be deemed to be redeemed and shall be restored to the status of authorized but unissued shares.  If a part only of the shares represented by any
                  certificate shall be redeemed, a new certificate for the balance shall be issued at the expense of the Corporation.  From and after the date specified in any such notice, the Series A Preferred Shares called for redemption shall cease to
                  be entitled to dividends and the holders shall not be entitled to exercise any of the rights of holders in respect thereof unless payment of the cash redemption price shall not be made upon presentation of 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 of notice of its intention to redeem any Series A Preferred Shares, to deposit
                  the cash redemption price of the shares so called for redemption, or of such of the shares represented by certificates that have not at the date of such deposit been surrendered by the holders in connection with such redemption, to a
                  special account in any chartered bank or any trust company in Canada named in such notice, to be paid without interest to or to the order of the respective holders of such Series A Preferred 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 Preferred Shares in
                  respect of which such deposit shall have been made shall then be and be deemed to be redeemed and shall be restored to the status of authorized but unissued shares and the rights of the holders after such deposit or such redemption date
                  shall be limited to receiving without interest their proportionate part of the total cash redemption price so deposited against presentation and surrender of the certificates held by them respectively.  Any interest

              

      

    

     

    

    
      6

      
        

    

    
      	 	
              

              

            	
              allowed on any such deposit shall belong to the Corporation and any unclaimed funds remaining on deposit on the sixth anniversary date of the redemption shall be returned to the Corporation. 
                Subject to such provisions of the Canada Business Corporations Act as may be applicable, in case a part only of the then outstanding Series A Preferred Shares is at any time to be redeemed, the shares so to be redeemed shall be selected by
                lot in such manner as the Board of Directors or the transfer agent and registrar, if any, appointed by the Corporation in respect of such shares shall decide, or, if the Board of Directors so decides, such shares may be redeemed pro rata
                (disregarding fractions).

            

    

     

    

    
      
        	5.	
                Conversion into Series B Preferred Shares

              

      

    

    
      
        	

              	(a)	
                The Series A Preferred Shares shall not be convertible prior to March 31, 2016.  Holders of Series A Preferred Shares shall have the right to convert on each Series A Conversion
                  Date, subject to the provisions hereof, all or any of their Series A Preferred Shares into Series B Preferred Shares on the basis of one Series B Preferred Share for each Series A Preferred Share.  The Corporation shall, not more than 60
                  days and not less than 30 days prior to the applicable Series A Conversion Date, give notice in writing in accordance with the provisions of subparagraph 2(c) to the then registered holders of the Series A Preferred Shares of the
                  conversion right provided for in this paragraph (5), which notice shall set out the Series A Conversion Date and instructions to such holders as to the method by which such conversion right may be exercised.  On the 30th day prior to each
                  Series A Conversion Date, the Corporation shall give notice in writing to the then registered holders of the Series A Preferred Shares of the Annual Fixed Dividend Rate for the Series A Preferred Shares for the next succeeding Subsequent
                  Fixed Rate Period and the Floating Quarterly Dividend Rate for the Series B Preferred Shares for the next succeeding Quarterly Floating Rate Period.  Such notice shall be delivered in accordance with the provisions of subparagraph (2)(c).

              

      

    

    
      
        	

              	(b)	
                If the Corporation gives notice as provided in paragraph (4) to the holders of the Series A Preferred Shares of the redemption of all of the Series A Preferred Shares, then the
                  right of a holder of Series A Preferred Shares to convert such Series A Preferred Shares shall terminate effective on the date of such notice and the Corporation shall not be required to give the notice specified in subparagraph (a) of
                  this paragraph (5).

              

      

    

    
      
        	

              	(c)	
                Holders of Series A Preferred Shares shall not be entitled to convert their shares into Series B Preferred Shares if the Corporation determines that there.  would remain outstanding on a Series A Conversion Date less than 1,000,000 Series B Preferred Shares, after having taken into account all Series A Preferred Shares tendered for
                  conversion into Series B Preferred Shares and all Series B Preferred Shares tendered for conversion into Series A Preferred Shares, and the Corporation shall give notice in writing thereof in accordance with the provisions of subparagraph
                  (2)(c) to all affected registered holders of the Series A Preferred Shares at least seven days prior to the applicable Series A Conversion Date and shall issue and deliver, or cause to be delivered, prior to such Series A Conversion Date,
                  at the expense of the Corporation, to such holders of Series A Preferred Shares who have surrendered for conversion

              

      

    

    
      7

      
        

    

    
      	 	
              

              

            	
              any certificate or certificates representing Series A Preferred Shares, certificates representing the Series A Preferred Shares represented by any certificate or certificates so surrendered.

            

    

     

    

    
      
        	

              	(d)	
                If the Corporation determines that there would remain outstanding on a Series A Conversion Date less than 1,000,000 Series A Preferred Shares, after having taken into account all
                  Series A Preferred Shares tendered for conversion into Series B Preferred Shares and all Series B Preferred Shares tendered for conversion into Series A Preferred Shares, then all of the remaining outstanding Series A Preferred Shares
                  shall be converted automatically into Series B Preferred Shares on the basis of one Series B Preferred Share for each Series A Preferred Share on the applicable Series A Conversion Date and the Corporation shall give notice in writing
                  thereof in accordance with the provisions of subparagraph (2)(c) to the then registered holders of such remaining Series A Preferred Shares at least seven days prior to the Series A Conversion Date.

              

      

    

    
      
        	

              	(e)	
                The conversion right may be exercised by a holder of Series A Preferred Shares by notice in writing, in a form satisfactory to the Corporation (the “Series

                    A Conversion Notice”), which notice must be received by the transfer agent and registrar for the Series A Preferred Shares at the principal office in Toronto or Calgary of such transfer agent and registrar not earlier than the
                  30th day prior to, but not later than 5:00 p.m.  (Toronto time) on the 15th day preceding, a Series A Conversion Date.  The Series A Conversion Notice shall indicate the number of Series A Preferred Shares to be converted.  Once received
                  by the transfer agent and registrar on behalf of the Corporation, the election of a holder to convert is irrevocable.  Except in the case where the Series B Preferred Shares are in the Book-Based System, if the Series B Preferred Shares
                  are to be registered in a name or names different from the name or names of the registered holder of the Series A Preferred Shares to be converted, the Series A Conversion Notice shall contain written notice in form and execution
                  satisfactory to such transfer agent and registrar directing the Corporation to register the Series B Preferred Shares in some other name or names (the “Series B Transferee”) and stating the name or
                  names (with addresses) and a written declaration, if required by the Corporation or by applicable law, as to the residence and share: ownership status of the Series B Transferee and such other matters as may be required by such law in
                  order to determine the entitlement of such Series B Transferee to hold such Series B Preferred Shares.

              

      

    

    
      
        	

              	(f)	
                If all remaining outstanding Series A Preferred Shares are to be converted into Series B Preferred Shares on the applicable Series A Conversion Date as provided for in subparagraph
                  (d) of this paragraph (5), the Series A Preferred Shares that holders have not previously elected to convert shall be converted on the Series A Conversion Date into Series B Preferred Shares and the holders thereof shall be deemed to be
                  holders of Series B Preferred Shares at 5:00 p.m. (Toronto time) on the Series A Conversion Date and shall be entitled, upon surrender during regular business hours at the principal office in Toronto or Calgary of the transfer agent and
                  registrar of the Corporation of the certificate or certificates representing Series A Preferred Shares not previously surrendered for conversion, to receive a certificate or certificates

              

      

    

    

    

    
      8

      
        

    

    
      	 	
              

              

            	
              representing the same number of Series B Preferred Shares in the manner and subject to the provisions of this paragraph (5) and paragraph (14).

            

    

     

    

    
      
        	

              	(g)	
                Subject to subparagraph (h) of this paragraph (5) and paragraph (14), as promptly as practicable after the Series A Conversion Date the Corporation shall deliver or cause to be
                  delivered certificates representing the Series B Preferred Shares registered in the name of the holders of the Series A Preferred Shares to be converted, or as such holders shall have directed, on presentation and surrender at the
                  principal office in Toronto or Calgary of the transfer agent and registrar for the Series A Preferred Shares of the certificate or certificates for the Series A Preferred Shares to be converted.  If only a part of such Series A Preferred
                  Shares represented by any certificate shall be converted, a new certificate for the balance shall be issued at the expense of the Corporation.  From and after the date specified in any Series B Conversion Notice, the Series A Preferred
                  Shares converted into Series B Preferred Shares shall cease to be outstanding and shall be restored to the status of authorized but unissued shares, and the holders thereof shall cease to be entitled to dividends and shall not be entitled
                  to exercise any of the rights of holders in respect thereof unless the Corporation shall fail, subject to paragraph (14), to deliver to the holders of the Series A Preferred Shares to be converted share certificates representing the
                  Series B Preferred Shares into which such shares have been converted.

              

      

    

    
      
        	

              	(h)	
                The obligation of the Corporation to issue Series B Preferred Shares upon conversion of any Series A Preferred Shares shall be deferred during the continuance of any one or more of
                  the following events:

              

      

    

    
      
        	

              	(i)	
                the issuing of such Series B Preferred Shares is prohibited pursuant to any agreement or arrangement entered into by the Corporation to assure its solvency or continued operation;

              

      

    

    
      
        	

              	(ii)	
                the issuing of such Series B Preferred Shares is prohibited by law or by any regulatory or other authority having jurisdiction over the Corporation that is acting in conformity with
                  law; or

              

      

    

    
      
        	

              	(iii)	
                for any reason beyond its control, the Corporation is unable to issue Series B Preferred Shares or is unable to deliver Series B Preferred Shares.

              

      

    

    
      
        	

              	(i)	
                the Corporation reserves the right not to deliver Series B Preferred Shares to any person that the Corporation or its transfer agent and registrar has reason to believe is a person
                  whose address is in, or that the Corporation or its transfer agent and registrar has reason to believe is a resident of, any jurisdiction outside Canada if such delivery would require the Corporation to take any action to comply with the
                  securities laws of such jurisdiction.  In those circumstances, the Corporation shall hold, as agent of any such person, all or the relevant number of Series B Preferred Shares, and the Corporation shall attempt to sell such Series B
                  Preferred Shares to parties other than the Corporation and its affiliates on behalf of any such person.  Such sales (if any) shall be made at such times and at such prices as the Corporation, in its sole discretion, may determine.  The
                  Corporation shall not be subject to any liability for failure to sell Series B Preferred Shares on behalf of any such person at all or at any

              

      

    

    

    

    
      9

      
        

    

    
      	 	
              

              

            	
              particular price or on any particular day.  The net proceeds received by the Corporation from the sale of any such Series B Preferred Shares shall be delivered to any such person, after
                deducting the costs of sale, by cheque or in any other manner determined by the Corporation.

            

    

     

    

    
      
        	6.	
                Liquidation, Dissolution or Winding-up

              

      

    

    In the event of a Liquidation, the holders of the Series A Preferred Shares shall be entitled to receive $25.00 per Series A
      Preferred Share plus all accrued and unpaid dividends thereon, which for such purpose shall be calculated on a pro rata basis for the period from and including the last Dividend Payment Date on which dividends on the Series A Preferred Shares have
      been paid to but excluding the date of such Liquidation, before any amount shall be paid or any property or assets of the Corporation shall be distributed to the holders of the Common Shares or to the holders of any other shares ranking junior to the
      Series A Preferred Shares in any respect.  After payment to the holders of the Series A Preferred Shares of the amount so payable to them, they shall not, as such, be entitled to share in any further distribution of the property or assets of the
      Corporation.

    
      
        	7.	
                Voting Rights

              

      

    

    The holders of the Series A Preferred Shares shall not be entitled to receive notice of or to attend any meeting of the shareholders
      of the Corporation and shall not be entitled to vote at any such meeting unless and until the Corporation fails to pay in the aggregate six quarterly dividends on the Series A Preferred Shares pursuant to clause 2 hereof on the dates when the same
      should be paid, 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 for so long as any
      dividends on the Series A Preferred Shares remain in arrears, the holders of the Series A Preferred Shares shall be entitled to one vote for each full $25 of subscription price of the Series A Preferred Shares held by them and in addition shall be
      entitled, voting separately and exclusively as a combined class with the holders of all series of First Preferred Shares who at such time are entitled to vote for the election of directors, to elect two members of the board of directors if the board
      consists of less than sixteen directors or three members of the board of directors if the board consists of sixteen or more directors.  Notwithstanding anything contained in the by-laws of the Corporation, the term of office of all persons who may be
      directors of the Corporation at any time when the right to elect directors shall accrue to the holders of the Series A Preferred Shares as provided in this paragraph or who may be appointed as directors thereafter and before a meeting of shareholders
      shall terminate upon the election of directors at the next annual meeting of shareholders or at a special meeting of shareholders which may be held for the purpose of electing directors at any time after the accrual of such right to elect directors
      upon not less than 21 days written notice and which shall be called by the Secretary of the Corporation upon the written request of the holders of record of at least one-tenth of the aggregate subscription price of the then outstanding First
      Preferred Shares then entitled to vote for the election of directors; in default of the calling of such special meeting by the Secretary within five days after the making of such request such meeting may be called by any holder of record of First
      Preferred Shares then entitled to vote for the election of directors.  Any vacancy occurring among the members of the board elected to represent the holders of any First Preferred Shares in accordance with the foregoing provisions of this paragraph
      may be filled by the board with the consent and approval of a remaining director elected to represent the holders of First Preferred Shares but if there be no such remaining director the board may elect

    

    

    
      10

      
        

    

    sufficient members to fill the vacancy or vacancies.  Whether or not such vacancies are so filled by the board, the holders of
      record of at least one-tenth of the aggregate subscription price of the then outstanding First Preferred Shares entitled to vote for the election of directors shall have the right to require the Secretary of the Corporation to call a meeting of the
      holders of First Preferred Shares entitled to vote for the election of directors for the purpose of filling the vacancies or replacing all or any of the persons filling such vacancies who have been appointed by the directors when there is no director
      in office who has been elected to represent the holders of the First Preferred Shares entitled to vote for the election of directors.  Notwithstanding anything contained in the by-laws of the Corporation, (1) upon any termination of the said right to
      elect directors, the term of office of the directors elected or appointed to represent the holders of First Preferred Shares entitled to vote for the election of directors shall forthwith terminate and (2) it shall not be necessary for a person to be
      a holder of First Preferred Shares in order to qualify for election or appointment as a director of the Corporation to represent the holders of First Preferred Shares as described hereunder.

    
      
        	8.	
                Restrictions on Partial Redemption or Purchase

              

      

    

    So long as any of the Series A Preferred Shares are outstanding, the Corporation shall not call for redemption, purchase, reduce or
      otherwise pay for less than all the Series A Preferred Shares and all other preferred shares then outstanding ranking prior to or on a parity with the Series A Preferred Shares with respect to payment of dividends unless all dividends up to and
      including the dividends payable on the last preceding dividend payment dates on all such shares then outstanding shall have been declared and paid or set apart for payment at the date of such call for redemption, purchase, reduction or other payment.

    
      
        	9.	
                Restrictions on Payment of Dividends and Reduction of Junior Capital

              

      

    

    So long as any of the Series A Preferred Shares are outstanding, the Corporation shall not:

    
      
        	

              	(a)	
                declare, pay or set apart for payment any dividends (other than stock dividends in shares of the Corporation ranking junior to the Series A Preferred Shares) on the Common Shares or
                  any other shares of the Corporation ranking junior to the Series A Preferred Shares with respect to payment of dividends; or

              

      

    

    
      
        	

              	(b)	
                call for redemption of, purchase, reduce the stated capital maintained by the Corporation or otherwise pay for any shares of the Corporation ranking junior to the Series A Preferred
                  Shares with respect to repayment of capital or with respect to payment of dividends;

              

      

    

    unless all dividends up to and including the dividends payable on the last preceding dividend payment dates on the Series A
      Preferred Shares and on all other preferred shares ranking prior to or on a parity with the Series A Preferred Shares with respect to payment of dividends then outstanding shall have been declared and paid or set apart for payment at the date of any
      such action referred to in subparagraphs 9(a) and (b).

    
      
        	10.	
                Issue of Additional Preferred Shares

              

      

    

    No class of shares may be created or issued ranking as to repayment of capital or payment of dividends prior to or on a parity with
      the Series A Preferred Shares without the prior approval of the

    

    

    
      11

      
        

    

    holders of the Series A Preferred Shares given as specified in paragraph (11), nor shall the number of Series A Preferred Shares be
      increased without such approval; provided, however, that nothing in this paragraph (10) shall prevent the Corporation from creating additional series of First Preferred Shares and, if all dividends then payable on the Series A Preferred Shares shall
      have been paid or set apart for payment, from issuing additional series of First Preferred Shares without such approval.

    
      
        	11.	
                Sanction by Holders of Series A Preferred Shares

              

      

    

    The approval of the holders of the Series A Preferred Shares with respect to any and all matters referred to in these share
      provisions may be given in writing by all of the holders of the Series A Preferred Shares outstanding or by resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at a meeting of the holders of the Series A
      Preferred Shares duly called and held for the purpose of considering the subject matter of such resolution and at which holders of not less than a majority of all Series A Preferred Shares then outstanding are present in person or represented by
      proxy in accordance with the by-laws of the Corporation; provided, however, that if at any such meeting, when originally held, the holders of at least a majority of all Series A Preferred Shares then outstanding are not present in person or so
      represented by proxy within 30 minutes after the time fixed 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 fixed by the chairman of such meeting, and at such
      adjourned meeting the holders of Series A Preferred Shares present in person or so represented by proxy, whether or not they hold a majority of all Series A Preferred Shares then outstanding, may transact the business for which the meeting was
      originally called, and a resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at such adjourned meeting shall constitute the approval of the holders of the Series A Preferred Shares.  Notice of any such original
      meeting of the holders of the Series A Preferred Shares shall be given not less than 15 days prior to the date fixed for such meeting and shall specify in general terms the purpose for which the meeting is called, and notice of any such adjourned
      meeting shall be given not less than 10 days prior to the date fixed for such adjourned meeting, but it shall not be necessary to specify in such notice the purpose for which the adjourned meeting is called.  The formalities to be observed with
      respect to the giving of notice of any such original meeting or adjourned meeting and the conduct of it shall be those from time to time prescribed in the by-laws of the Corporation with respect to meetings of shareholders.  On every poll taken at
      any such original meeting or adjourned meeting, each holder of Series A Preferred Shares present in person or represented by proxy shall be entitled to one vote for each of the Series A Preferred Shares held by such holder.

    
      
        	12.	
                Tax Election

              

      

    

    The Corporation shall elect, in the manner and within the time provided under subsection.  191.2(1) of the Income Tax Act (Canada) or any successor or replacement provision of similar effect, to pay tax at a rate, and shall take all other action necessary under such Act, such that no holder of Series A Preferred Shares shall be required
      to pay tax on dividends received on the Series A Preferred Shares under section 187.2 of such Act or any successor or replacement provision of similar effect.

    
      
        	13.	
                Withholding Tax

              

      

    

    Notwithstanding any other provision of these share provisions, the Corporation may deduct or withhold from any payment,
      distribution, issuance or delivery (whether in cash or in shares) to be made pursuant to these share provisions any amounts required or permitted by law to be deducted or

    
      12

      
        

    

    withheld from any such payment, distribution, issuance or delivery and shall remit any such amounts to the relevant tax authority as
      required.  If the cash component of any payment, distribution, issuance or delivery to be made pursuant to these share provisions is less than the amount that the Corporation is so required or permitted to deduct or withhold, the Corporation shall be
      permitted to deduct and withhold from any non-cash payment, distribution, issuance or delivery to be made pursuant to these share provisions any amounts required or permitted by law to be deducted or withheld from any such payment, distribution,
      issuance or delivery and to dispose of such property in order to remit any amount required to be remitted to any relevant tax authority.  Notwithstanding the foregoing, the amount of any payment, distribution, issuance or delivery made to a holder of
      Series A Preferred Shares pursuant to these share provisions shall be considered to be the amount of the payment, distribution, issuance or delivery received by such holder plus any amount deducted or withheld pursuant to this paragraph (13). 
      Holders of Series A Preferred Shares shall be responsible for all withholding taxes under Part XIII of the Income Tax Act (Canada), or any successor or replacement provision of similar effect, in respect of
      any payment, distribution, issuance or delivery made or credited to them pursuant to these share provisions and shall indemnify and hold harmless the Corporation on an after-tax basis for any such taxes imposed on any payment, distribution, issuance
      or delivery made or credited to them pursuant to these share provisions.

    
      
        	14.	
                Book‐Based System

              

      

    

    
      
        	

              	(a)	
                Subject to the provisions of subparagraphs (b) and (c) of this paragraph (14) and notwithstanding the provisions of paragraphs (1) through (13) of these share provisions, the Series
                  A Preferred Shares shall be evidenced by a single fully registered Global Certificate representing the aggregate number of Series A Preferred Shares issued by the Corporation which shall be held by, or on behalf of, the System Operator as
                  custodian of the Global Certificate for the Participants and registered in the name of “CDS & Co.” (or in such other name as the System Operator may use from time to time as its nominee for purposes of the Book-Based System), and
                  registrations of ownership, transfers, surrenders and conversions of Series A Preferred Shares shall be made only through the Book-Based System.  Accordingly, subject to subparagraph (c) of this paragraph (14), no beneficial holder of
                  Series A Preferred Shares shall receive a certificate or other instrument from the Corporation or the System Operator evidencing such holder’s ownership thereof, and no such holder shall be shown on the records maintained by the System
                  Operator except through a book-entry account of a Participant acting on behalf of such holder.

              

      

    

    
      
        	

              	(b)	
                Notwithstanding the provisions of paragraphs (1) through (13), so long as the System Operator is the registered holder of the Series A Preferred Shares:

              

      

    

    
      
        	

              	(i)	
                the System Operator shall be considered the sole owner of the Series A Preferred Shares for the purposes of receiving notices or payments on or in respect of the Series A Preferred
                  Shares or the delivery of Series B Preferred Shares and certificates therefor upon the exercise of rights of conversion; and

              

      

    

    
      
        	

              	(ii)	
                the Corporation, pursuant to the exercise of rights of redemption or conversion, shall deliver or cause to be delivered to the System Operator, for the benefit of the beneficial
                  holders of the Series A Preferred Shares, the cash redemption price for the Series A Preferred Shares or certificates for Series B

              

      

    

    

    

    
      13

      
        

    

    
      	 	
              

              

            	
              Preferred Shares against delivery to the Corporation’s account with the System Operator of such holders’ Series A Preferred Shares.

            

    

     

    

    
      
        	

              	(c)	
                If the Corporation determines that the System Operator is no longer willing or able to discharge properly its responsibilities with respect to the Book-Based System and the
                  Corporation is unable to locate a qualified successor or the Corporation elects, or is required by applicable law, to withdraw the Series A Preferred Shares from the Book-Based System, then subparagraphs (a) and (b) of this paragraph (14)
                  shall no longer be applicable to the Series A Preferred Shares and the Corporation shall notify Book-Entry Holders through the System Operator of the occurrence of any such event or election and of the availability of Definitive Shares to
                  Book-Entry Holders.  Upon surrender by the System Operator of the Global Certificate to the transfer agent and registrar for the Series A Preferred Shares accompanied by registration instructions for re-registration, the Corporation shall
                  execute and deliver Definitive Shares.  The Corporation shall not be liable for any delay in delivering such instructions and may conclusively act and rely on and shall be protected in acting and relying on such instructions.  Upon the
                  issuance of Definitive Shares, the Corporation shall recognize the registered holders of such Definitive Shares and the Book-Entry Shares for which such Definitive Shares have been substituted shall be void and of no further effect.

              

      

    

    
      
        	

              	(d)	
                The provisions of paragraphs (1) through (13) and the exercise of rights of redemption and conversion, with respect to Series A Preferred Shares are subject to the provisions of
                  this paragraph (14), and to the extent that there is any inconsistency or conflict between such provisions, the provisions of this paragraph (14) shall prevail.

              

      

    

    
      
        	15.	
                Wire or Electronic Transfer of Funds

              

      

    

    Notwithstanding any other right, privilege, restriction or condition attaching to the Series A Preferred Shares, the Corporation
      may, at its option, make any payment due to registered holders of Series A Preferred Shares by way of a wire or electronic transfer of funds to such holders.  If a payment is made by way of a wire or electronic transfer of funds, the Corporation
      shall be responsible for any applicable charges or fees relating to the making of such transfer.  As soon as practicable following the determination by the Corporation that a payment is to be made by way of a wire or electronic transfer of funds, the
      Corporation shall provide a notice to the applicable registered holders of Series A Preferred Shares at their respective addresses appearing on the books of the Corporation.  Such notice shall request that each applicable registered holder of
      Series A Preferred Shares provide the particulars of an account of such holder with a chartered bank in Canada to which the wire or electronic transfer of funds shall be directed.  If the Corporation does not receive account particulars from a
      registered holder of Series A Preferred Shares prior to the date such payment is to be made, the Corporation shall deposit the funds otherwise payable to such holder in a special account or accounts in trust for such holder.  The making of a payment
      by way of a wire or electronic transfer of funds or the deposit by the Corporation of funds otherwise payable to a holder in a special account or accounts in trust for such holder shall be deemed to constitute payment by the Corporation on the date
      thereof and shall satisfy and discharge all liabilities of the Corporation for such payment to the extent of the amount represented by such transfer or deposit.

    

    

    
      14

      
        

    

    
      
        	16.	
                Amendments

              

      

    

    The provisions attaching to the Series A Shares may be deleted, varied, modified, amended or amplified by articles of amendment with
      such approval as may then be required by the Canada Business Corporations Act, with any such approval to be given in accordance with paragraph (11) and with any
      required approvals of any stock exchanges on which the Series A Shares may be listed.

     

    

     

    

    
      15

      
        

    

    SCHEDULE “B” TO ARTICLES OF AMENDMENT OF

      TRANSALTA CORPORATION

    The second series of First Preferred Shares of the Corporation shall consist of 12,000,000 shares designated as Cumulative
      Redeemable Floating Rate First Preferred Shares, Series B (the “Series B Preferred Shares”).  In addition to the rights, privileges, restrictions and conditions attaching to the First Preferred Shares as a
      class, the rights, privileges, restrictions and conditions attaching to the Series B Preferred Shares shall be as follows:

    
      
        	1.	
                Interpretation

              

      

    

    
      
        	

              	(a)	
                In these Series B Preferred Share provisions, the following expressions have the meanings indicated:

              

      

    

    
      
        	

              	(i)	
                “Annual Fixed Dividend Rate” means, for any Subsequent Fixed Rate Period, the annual rate of interest (expressed as a percentage rounded to
                  the nearest one hundred-thousandth of one percent (with 0.000005% being rounded up)) equal to the sum of the Government of Canada Yield on the applicable Fixed Rate Calculation Date and 2.03%;

              

      

    

    
      
        	

              	(ii)	
                “Bloomberg Screen GCAN5YR Page” means the display designated as page “GCAN5YR<INDEX>” on the
                  Bloomberg Financial L.P. service or its successor service (or such other page as may replace the GCAN5YR<INDEX> page on that service or its successor service) for purposes of displaying Government of Canada bond yields;

              

      

    

    
      
        	

              	(iii)	
                “Book-Based System” means the record entry securities transfer and pledge system administered by the System Operator in accordance with the
                  operating rules and procedures of the System Operator in force from time to time and any successor system thereof;

              

      

    

    
      
        	

              	(iv)	
                “Book-Entry Holder” means the person that is the beneficial holder of a Book-Entry Share;

              

      

    

    
      
        	

              	(v)	
                “Book-Entry Shares” means the Series B Preferred Shares held through the Book-Based System;

              

      

    

    
      
        	

              	(vi)	
                “Business Day” means a day on which chartered banks are generally open for business in both Calgary, Alberta and Toronto, Ontario;

              

      

    

    
      
        	

              	(vii)	
                “CDS” means CDS Clearing and Depository Services Inc. or any successor thereof;

              

      

    

    
      
        	

              	(viii)	
                “Common Shares” means the common shares of the Corporation;

              

      

    

    
      
        	

              	(ix)	
                “Definitive Share” means a fully registered, typewritten, printed, lithographed, engraved or otherwise produced share certificate
                  representing one or more Series B Preferred Shares;

              

      

    

    
      
        	

              	(x)	
                “Dividend Payment Date” means the last day of March, June, September and December, in each year; provided that, if such date is not a
                  Business

              

      

    

    

    

  

  
    
      

  

  
  

    
      
        
          	 	

                	
                  Day, the applicable Dividend Payment Date will be the next succeeding Business Day;

                

        

      

    

     

    

    
      
        	

              	(xi)	
                “First Preferred Shares” means the first preferred shares of the Corporation;

              

      

    

    
      
        	

              	(xii)	
                “Fixed Rate Calculation Date” means, for any Subsequent Fixed Rate Period, the 30th day prior to the first day of such Subsequent Fixed Rate
                  Period;

              

      

    

    
      
        	

              	(xiii)	
                “Floating Quarterly Dividend Rate” means, for any Quarterly Floating Rate Period, the annual rate of interest (expressed as a percentage
                  rounded to the nearest one hundred-thousandth of one percent (with 0.000005% being rounded up)) equal to the sum of the T-Bill Rate on the applicable Floating Rate Calculation Date and 2.03%;

              

      

    

    
      
        	

              	(xiv)	
                “Floating Rate Calculation Date” means, for any Quarterly Floating Rate Period, the 30th day prior to the first day of such Quarterly
                  Floating Rate Period;

              

      

    

    
      
        	

              	(xv)	
                “Global Certificate” means the global certificate representing outstanding Book-Entry Shares;

              

      

    

    
      
        	

              	(xvi)	
                “Government of Canada Yield” on any date means the yield to maturity on such date (assuming semi-annual compounding) of a Canadian dollar
                  denominated non-callable Government of Canada bond with a term to maturity of five years as quoted as of 10:00 a.m. (Toronto time) on such date and that appears on the Bloomberg Screen GCAN5YR Page on such date; provided that if such rate
                  does not appear on the Bloomberg Screen GCAN5YR Page on such date, then the Government of Canada Yield shall mean the arithmetic average of the yields quoted to the Corporation by two registered Canadian investment dealers selected by the
                  Corporation as being the annual yield to maturity on such date, compounded semi-annually, that a non-callable Government of Canada bond would carry if issued, in Canadian dollars in Canada, at 100% of its principal amount on such date
                  with a term to maturity of five years;

              

      

    

    
      
        	

              	(xvii)	
                “Liquidation” means 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;

              

      

    

    
      
        	

              	(xviii)	
                “Participants” means the participants in the Book-Based System;

              

      

    

    
      
        	

              	(xix)	
                “Pro Rated Dividend” means the amount determined by multiplying the amount of the dividend payable for a Quarter in which a Liquidation,
                  conversion or redemption is to occur by four and multiplying that product by a fraction, the numerator of which is the number of days from and including the Dividend Payment Date immediately preceding the date fixed for Liquidation,
                  conversion or redemption to but excluding such date and the

              

      

    

    
      2

      
        

    

    
      	 	

            	
              denominator of which is 365 or 366, depending upon the actual number of days in the applicable year;

            

    

     

    

    
      
        	

              	(xx)	
                “Quarter” means a three-month period ending on a Dividend Payment Date;

              

      

    

    
      
        	

              	(xxi)	
                “Quarterly Commencement Date” means the last day of March, June, September and December in each year, commencing March 31, 2016;

              

      

    

    
      
        	

              	(xxii)	
                “Quarterly Floating Rate Period” means the period from and including a Quarterly Commencement Date to but excluding the next succeeding
                  Quarterly Commencement Date;

              

      

    

    
      
        	

              	(xxiii)	
                “Series A Preferred Shares” means the Cumulative Redeemable First Preferred Shares, Series A of the Corporation;

              

      

    

    
      
        	

              	(xxiv)	
                “Series B Conversion Date” means March 31, 2021, and March 31 in every fifth year thereafter;

              

      

    

    
      
        	

              	(xxv)	
                “Subsequent Fixed Rate Period” means, for the initial Subsequent Fixed Rate Period, the period from and including March 31, 2016, to but
                  excluding March 31, 2021, and for each succeeding Subsequent Fixed Rate Period means the period from and including the day immediately following the last day of the immediately preceding Subsequent Fixed Rate Period to but excluding
                  March 31 in the fifth year thereafter;

              

      

    

    
      
        	

              	(xxvi)	
                 “System Operator” means CDS or its nominee or any successor thereof; and

              

      

    

    
      
        	

              	(xxvii)	
                “T-Bill Rate” means, for any Quarterly Floating Rate Period, the average yield expressed as an annual rate on 90 day Government of Canada
                  treasury bills, as reported by the Bank of Canada, for the most recent treasury bills auction preceding the applicable Floating Rate Calculation Date.

              

      

    

    
      
        	

              	(b)	
                The expressions “on a parity with”, “ranking prior to”, “ranking junior to” and similar expressions refer to the order of priority in the payment of dividends or in the distribution
                  of assets in the event of any Liquidation.

              

      

    

    
      
        	

              	(c)	
                If any day on which any dividend on the Series B Preferred Shares is payable by the Corporation or on or by which any other action is required to be taken by the Corporation is not
                  a Business Day, then such dividend shall be payable and such other action may be taken on or by the next succeeding day that is a Business Day.

              

      

    

    
      
        	2.	
                Dividends

              

      

    

    
      
        	

              	(a)	
                During each Quarterly Floating Rate Period, the holders of the Series B Preferred Shares shall be entitled to receive and the Corporation shall pay, as and when declared by the
                  board of directors of the Corporation, out of the moneys of the Corporation properly applicable to the payment of dividends, cumulative preferential cash dividends, payable on each Dividend Payment Date, in the amount per share determined
                  by multiplying the Floating Quarterly Dividend Rate for such Quarterly Floating Rate Period by $25.00 and multiplying that product by a fraction, the

              

      

    

    

    

    
      3

      
        

    

    
      	 	

            	
              numerator of which is the actual number of days in such Quarterly Floating Rate Period and the denominator of which is 365 or 366, depending on the actual number of days in the applicable
                year.

            

    

     

    

    
      
        	

              	(b)	
                On each Floating Rate Calculation Date, the Corporation shall determine the Floating Quarterly Dividend Rate for the ensuing Quarterly Floating Rate Period.  Each such determination
                  shall, in the absence of manifest error, be final and binding upon the Corporation and upon all holders of Series B Preferred Shares.  The Corporation shall, on each Floating Rate Calculation Date, give written notice of the Floating
                  Quarterly Dividend Rate for the ensuing Quarterly Floating Rate Period to the registered holders of the then outstanding Series B Preferred Shares.  Each such notice shall be given by electronic transmission, by facsimile transmission or
                  by ordinary unregistered first class prepaid mail addressed to each holder of Series B Preferred Shares at the last address of such holder as it appears on the books of the Corporation or, in the event of the address of any holder not so
                  appearing, to the address of such holder last known to the Corporation.

              

      

    

    
      
        	

              	(c)	
                If a dividend has been declared for a Quarter and a date is fixed for a Liquidation, redemption or conversion that is prior to the Dividend Payment Date for such Quarter, a Pro
                  Rated Dividend shall be payable on the date fixed for such Liquidation, redemption or conversion instead of the dividend declared, but if such Liquidation, redemption or conversion does not occur, then the full amount of the dividend
                  declared shall be payable on the originally scheduled Dividend Payment Date.

              

      

    

    
      
        	

              	(d)	
                If the dividend payable on any Dividend Payment Date is not paid in full on such date on all of the Series B Preferred Shares then outstanding, such dividend or the unpaid part of
                  it shall be paid on a subsequent date or dates to be determined by the Board of Directors on which the Corporation shall have sufficient moneys properly applicable, under the provisions of any applicable law and under the provisions of
                  any trust indenture securing bonds, debentures or other securities of the Corporation, to the payment of the dividend.

              

      

    

    
      
        	

              	(e)	
                Cheques of the Corporation payable in lawful money of Canada at par at any branch of the Corporation’s bankers in Canada may be issued in respect of the dividends (less any tax
                  required to be deducted) and payment of the cheques shall satisfy such dividends, or payments in respect of dividends may be made in any other manner determined by the Corporation.

              

      

    

    
      
        	

              	(f)	
                The holders of the Series B Preferred Shares shall not be entitled to any dividend other than as specified in this paragraph (2).

              

      

    

    
      4

      
        

    

    
      
        	3.	
                Purchase for Cancellation

              

      

    

    Subject to the provisions of paragraphs (5) and (9) and subject to such provisions of the Canada
        Business Corporations Act as may be applicable, the Corporation may at any time or times purchase (if obtainable) for cancellation all or any part of the Series B Preferred Shares outstanding from time to time:

    
      
        	

              	(a)	
                through the facilities of any stock exchange on which the Series B Preferred Shares are listed,

              

      

    

    
      
        	

              	(b)	
                by invitation for tenders addressed to all the holders of record of the Series B Preferred Shares outstanding, or

              

      

    

    
      
        	

              	(c)	
                in any other manner,

              

      

    

    at the lowest price or prices at which, in the opinion of the Board of Directors, such shares are obtainable.  If upon any
      invitation for tenders under the provisions of this paragraph (3) more Series B Preferred Shares are tendered at a price or prices acceptable to the Corporation than the Corporation is willing to purchase, the Corporation shall accept, to the extent
      required, the tenders submitted at the lowest price and then, if and as required, the tenders submitted at the next progressively higher prices, and if more shares are tendered at any such price than the Corporation is prepared to purchase, then the
      shares tendered at such price shall be purchased as nearly as may be pro rata (disregarding fractions) according to the number of Series B Preferred Shares so tendered by each of the holders of Series B Preferred Shares who submit tenders at that
      price.  From and after the date of purchase of any Series B Preferred Shares under the provisions of this paragraph (3), the shares so purchased shall be restored to the status of authorized but unissued shares.

    
      
        	4.	
                Redemption

              

      

    

    
      
        	

              	(a)	
                Subject to the provisions of paragraph (9), the Corporation, upon giving notice as herein provided, may redeem all or any part of the Series B Preferred Shares by the payment of an
                  amount in cash for each share to be redeemed equal to:

              

      

    

    
      
        	

              	(i)	
                $25.00 in the case of a redemption on a Series B Conversion Date on or after March 31, 2021, or

              

      

    

    
      
        	

              	(ii)	
                $25.50 in the case of a redemption on any other date after March 31, 2021 that is not a Series B Conversion Date, (such amount being the “redemption
                    amount”) plus all accrued and unpaid dividends thereon, which for such purpose shall be calculated on a pro rata basis for the period from and including the last Dividend Payment Date on which dividends on the Series B Preferred
                  Shares have been paid to but excluding the date fixed for redemption (the whole constituting the “cash redemption price”).  For the purposes of subsection 191(4) of the Income Tax Act (Canada) or any successor or replacement provision of similar effect, the amount specified in respect of each Series B Preferred Share is $25.00.

              

      

    

    

    

    
      5

      
        

    

    
      
        	

              	(b)	
                In any case of redemption of Series B Preferred Shares under the provisions of this paragraph (4), the Corporation shall, at least 30 days and not more than 60 days before the date
                  specified for redemption, mail to each person who at the date of mailing is a registered holder of Series B Preferred Shares to be redeemed a written notice of the intention of the Corporation to redeem such Series B Preferred Shares. 
                  Such notice shall be mailed in a prepaid letter addressed to each such holder at the holder’s address as it appears on the books of the Corporation or, in the event of the address of any such holder not so appearing, to the last known
                  address of such holder; provided, however, that accidental failure to give any such notice to one or more of such holders shall not affect the validity of such redemption.  Such notice shall set out the cash redemption price and the date
                  on which redemption is to take place and, if part only of the Series B Preferred Shares held by the person to whom it is addressed is to be redeemed, the number so to be redeemed.  On or 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 Preferred Shares to be redeemed the cash redemption price on presentation and surrender at the head office of the Corporation or any
                  other place designated in such notice of the certificates for the Series B Preferred Shares called for redemption, subject to the provisions of paragraph (14).  Such payment shall be made by cheque payable at par at any branch of the
                  Corporation’s bankers in Canada.  Such Series B Preferred Shares shall then be and be deemed to be redeemed and shall be restored to the status of authorized but unissued shares.  If a part only of the shares represented by any
                  certificate shall be redeemed, a new certificate for the balance shall be issued at the expense of the Corporation.  From and after the date specified in any such notice, the Series B Preferred Shares called for redemption shall cease to
                  be entitled to dividends and the holders shall not be entitled to exercise any of the rights of holders in respect thereof unless payment of the cash redemption price shall not be made upon presentation of 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 of notice of its intention to redeem any Series B Preferred Shares, to deposit
                  the cash redemption price of the shares so called for redemption, or of such of the shares represented by certificates that have not at the date of such deposit been surrendered by the holders in connection with such redemption, to a
                  special account in any chartered bank or any trust company in Canada named in such notice, to be paid without interest to or to the order of the respective holders of such Series B Preferred 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 Preferred Shares in
                  respect of which such deposit shall have been made shall then be and be deemed to be redeemed and shall be restored to the status of authorized but unissued shares and the rights of the holders after such deposit or such redemption date
                  shall be limited to receiving without interest their proportionate part of the total cash redemption price so deposited against presentation and surrender of the certificates held by them respectively.  Any interest allowed on any such
                  deposit shall belong to the Corporation and any unclaimed funds remaining on deposit on the sixth anniversary date of the redemption shall be returned to the Corporation.  Subject to such provisions of the Canada Business

              

      

    

    

    

    
      6

      
        

    

    Corporations Act as may be applicable, in case a part only of the then outstanding Series B Preferred Shares is at any time to be redeemed, the shares so to be
      redeemed shall be selected by lot in such manner as the Board of Directors or the transfer agent and registrar, if any, appointed by the Corporation in respect of such shares shall decide, or, if the Board of Directors so decides, such shares may be
      redeemed pro rata (disregarding fractions).

     

    

    
      
        	5.	
                Conversion into Series A Preferred Shares

              

      

    

    
      
        	

              	(a)	
                The Series B Preferred Shares shall not be convertible prior to March 31, 2021.  Holders of Series B Preferred Shares shall have the right to convert on each Series B Conversion
                  Date, subject to the provisions hereof, all or any of their Series B Preferred Shares into Series A Preferred Shares on the basis of one Series A Preferred Share for each Series B Preferred Share.  The Corporation shall, not more than 60
                  days and not less than 30 days prior to the applicable Series B Conversion Date, give notice in writing in accordance with the provisions in subparagraph 2(b) to the then registered holders of the Series B Preferred Shares of the
                  conversion right provided for in this paragraph (5), which notice shall set out the Series B Conversion Date and instructions to such holders as to the method by which such conversion right may be exercised.  On the 30th day prior to each
                  Series B Conversion Date, the Corporation shall give notice in writing to the then registered holders of the Series B Preferred Shares of the Annual Fixed Dividend Rate for the Series A Preferred Shares for the next succeeding Subsequent
                  Fixed Rate Period and the Floating Quarterly Dividend Rate for the Series B Preferred Shares for the next succeeding Quarterly Floating Rate Period.  Such notice shall be delivered in accordance with the provisions of subparagraph (2)(b).

              

      

    

    
      
        	

              	(b)	
                If the Corporation gives notice as provided in paragraph (4) to the holders of the Series B Preferred Shares of the redemption of all of the Series B Preferred Shares, then the
                  right of a holder of Series B Preferred Shares to convert such Series B Preferred Shares shall terminate effective on the date of such notice and the Corporation shall not be required to give the notice specified in subparagraph (a) of
                  this paragraph (5).

              

      

    

    
      
        	

              	(c)	
                Holders of Series B Preferred Shares shall not be entitled to convert their shares into Series A Preferred Shares if the Corporation determines that there would remain outstanding
                  on a Series B Conversion Date less than 1,000,000 Series A Preferred Shares, after having taken into account all Series B Preferred Shares tendered for conversion into Series A Preferred Shares and all Series A Preferred Shares tendered
                  for conversion into Series B Preferred Shares, and the Corporation shall give notice in writing thereof in accordance with the provisions of subparagraph (2)(b) to all affected registered holders of the Series B Preferred Shares at least
                  seven days prior to the applicable Series B Conversion Date and shall issue and deliver, or cause to be delivered, prior to such Series B Conversion Date, at the expense of the Corporation, to such holders of Series B Preferred Shares who
                  have surrendered for conversion any certificate or certificates representing Series B Preferred Shares, certificates representing the Series B Preferred Shares represented by any certificate or certificates so surrendered.

              

      

    

    

    

    
      7

      
        

    

    
      
        	

              	(d)	
                If the Corporation determines that there would remain outstanding on a Series B Conversion Date less than 1,000,000 Series B Preferred Shares, after having taken into account all
                  Series B Preferred Shares tendered for conversion into Series A Preferred Shares and all Series A Preferred Shares tendered for conversion into Series B Preferred Shares, then all of the remaining outstanding Series B Preferred Shares
                  shall be converted automatically into Series A Preferred Shares on the basis of one Series A Preferred Share for each Series B Preferred Share on the applicable Series B Conversion Date and the Corporation shall give notice in writing
                  thereof in accordance with the provisions of subparagraph (2)(b) to the then registered holders of such remaining Series B Preferred Shares at least seven days prior to the Series B Conversion Date.

              

      

    

    
      
        	

              	(e)	
                The conversion right may be exercised by a holder of Series B Preferred Shares by notice in writing, in a form satisfactory to the Corporation (the “Series

                    B Conversion Notice”), which notice must be received by the transfer agent and registrar for the Series B Preferred Shares at the principal office in Toronto or Calgary of such transfer agent and registrar not earlier than the
                  30th day prior to, but not later than 5:00 p.m. (Toronto time) on the 15th day preceding, a Series B Conversion Date.  The Series B Conversion Notice shall indicate the number of Series B Preferred Shares to be converted.  Once received
                  by the transfer agent and registrar on behalf of the Corporation, the election of a holder to convert is irrevocable.  Except in the case where the Series A Preferred Shares are in the Book-Based System, if the Series A Preferred Shares
                  are to be registered in a name or names different from the name or names of the registered holder of the Series B Preferred Shares to be converted, the Series B Conversion Notice shall contain written notice in form and execution
                  satisfactory to such transfer agent and registrar directing the Corporation to register the Series A Preferred Shares in some other name or names (the “Series B Transferee”) and stating the name or
                  names (with addresses) and a written declaration, if required by the Corporation or by applicable law, as to the residence and share ownership status of the Series B Transferee and such other matters as may be required by such law in
                  order to determine the entitlement of such Series B Transferee to hold such Series A Preferred Shares.

              

      

    

    
      
        	

              	(f)	
                If all remaining outstanding Series B Preferred Shares are to be converted into Series A Preferred Shares on the applicable Series B Conversion Date as provided for in subparagraph
                  (d) of this paragraph (5), the Series B Preferred Shares that holders have not previously elected to convert shall be converted on the Series B Conversion Date into Series A Preferred Shares and the holders thereof shall be deemed to be
                  holders of Series A Preferred Shares at 5:00 p.m. (Toronto time) on the Series B Conversion Date and shall be entitled, upon surrender during regular business hours at the principal office in Toronto or Calgary of the transfer agent and
                  registrar of the Corporation of the certificate or certificates representing Series B Preferred Shares not previously surrendered for conversion, to receive a certificate or certificates representing the same number of Series A Preferred
                  Shares in the manner and subject to the provisions of this paragraph (5) and paragraph (14).

              

      

    

    
      
        	

              	(g)	
                Subject to subparagraph (h) of this paragraph (5) and paragraph (14), as promptly as practicable after the Series B Conversion Date the Corporation shall deliver or cause

              

      

    

    

    

    
      8

      
        

    

    
      	 	

            	
              to be delivered certificates representing the Series A Preferred Shares registered in the name of the holders of the Series B Preferred Shares to be converted, or as such holders shall have
                directed, on presentation and surrender at the principal office in Toronto or Calgary of the transfer agent and registrar for the Series B Preferred Shares of the certificate or certificates for the Series B Preferred Shares to be
                converted.  If only a part of such Series B Preferred Shares represented by any certificate shall be converted, a new certificate for the balance shall be issued at the expense of the Corporation.  From and after the date specified in any
                Series B Conversion Notice, the Series B Preferred Shares converted into Series A Preferred Shares shall cease to be outstanding and shall be restored to the status of authorized but unissued shares, and the holders thereof shall cease to
                be entitled to dividends and shall not be entitled to exercise any of the rights of holders in respect thereof unless the Corporation, subject to paragraph (14) shall fail to deliver to the holders of the Series B Preferred Shares to be
                converted share certificates representing the Series A Preferred Shares into which such shares have been converted.

            

    

     

    

    
      
        	

              	(h)	
                The obligation of the Corporation to issue Series A Preferred Shares upon conversion of any Series B Preferred Shares shall be deferred during the continuance of any one or more of
                  the following events:

              

      

    

    
      
        	

              	(i)	
                the issuing of such Series A Preferred Shares is prohibited pursuant to any agreement or arrangement entered into by the Corporation to assure its solvency or continued operation;

              

      

    

    
      
        	

              	(ii)	
                the issuing of such Series A Preferred Shares is prohibited by law or by any regulatory or other authority having jurisdiction over the Corporation that is acting in conformity with
                  law; or

              

      

    

    
      
        	

              	(iii)	
                for any reason beyond its control, the Corporation is unable to issue Series A Preferred Shares or is unable to deliver Series A Preferred Shares.

              

      

    

    
      
        	

              	(i)	
                The Corporation reserves the right not to deliver Series A Preferred Shares to any person that the Corporation or its transfer agent and registrar has reason to believe is a person
                  whose address is in, or that the Corporation or its transfer agent and registrar has reason to believe is a resident of any jurisdiction outside Canada if such delivery would require the Corporation to take any action to comply with the
                  securities laws of such jurisdiction.  In those circumstances, the Corporation shall hold, as agent of any such person, all or the relevant number of Series A Preferred Shares, and the Corporation shall attempt to sell such Series A
                  Preferred Shares to parties other than the Corporation and its affiliates on behalf of any such person.  Such sales (if any) shall be made at such times and at such prices as the Corporation, in its sole discretion, may determine.  The
                  Corporation shall not be subject to any liability for failure to sell Series A Preferred Shares on behalf of any such person at all or at any particular price or on any particular day.  The net proceeds received by the Corporation from
                  the sale of any such Series A Preferred Shares shall be delivered to any such person, after deducting the costs of sale, by cheque or in any other manner determined by the Corporation.

              

      

    

    

    

    
      9

      
        

    

    
      
        	6.	
                Liquidation, Dissolution or Winding-up

              

      

    

    In the event of a Liquidation, the holders of the Series B Preferred Shares shall be entitled to receive $25.00 per Series B
      Preferred Share plus all accrued and unpaid dividends thereon, which for such purpose shall be calculated on a pro rata basis for the period from and including the last.  Dividend Payment Date on which dividends on the Series B Preferred Shares have
      been paid to but excluding the date of such Liquidation, before any amount shall be paid or any property or assets of the Corporation shall be distributed to the holders of the Common Shares or to the holders of any other shares ranking junior to the
      Series B Preferred Shares in any respect.  After payment to the holders of the Series B Preferred Shares of the amount so payable to them, they shall not, as such, be entitled to share in any further distribution of the property or assets of the
      Corporation.

    
      
        	7.	
                Voting Rights

              

      

    

    The holders of the Series B Preferred Shares shall not be entitled to receive notice of or to attend any meeting of the shareholders
      of the Corporation and shall not be entitled to vote at any such meeting unless and until the Corporation fails to pay in the aggregate six quarterly dividends on the Series B Preferred Shares pursuant to clause 2 hereof on the dates when the same
      should be paid, 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 for so long as any
      dividends on the Series B Preferred Shares remain in arrears, the holders of the Series B Preferred Shares shall be entitled to one vote for each full $25 of subscription price of the Series B Preferred Shares held by them and in addition shall be
      entitled, voting separately and exclusively as a combined class with the holders of all series of First Preferred.  Shares who at such time are entitled to vote for the election of directors, to elect two members of the board of directors if the
      board consists of less than sixteen directors or three members of the board of directors if the board consists of sixteen or more directors.  Notwithstanding anything contained in the by-laws of the Corporation, the term of office of all persons who
      may be directors of the Corporation at any time when the right to elect directors shall accrue to the holders of the Series B Preferred Shares as provided in this paragraph or who may be appointed as directors thereafter and before a meeting of
      shareholders shall terminate upon the election of directors at the next annual meeting of shareholders or at a special meeting of shareholders which may be held for the purpose of electing directors at any time after the accrual of such right to
      elect directors upon not less than 21 days written notice and which shall be called by the Secretary of the Corporation upon the written request of the holders of record of at least one-tenth of the aggregate subscription price of the then
      outstanding First Preferred Shares then entitled to vote for the election of directors; in default of the calling of such special meeting by the Secretary within five days after the making of such request such meeting may be called by any holder of
      record of First Preferred Shares then entitled to vote for the election of directors.  Any vacancy occurring among the members of the board elected to represent the holders of any First Preferred Shares in accordance with the foregoing provisions of
      this paragraph may be filled by the board with the consent and approval of a remaining director elected to represent the holders of First Preferred Shares but if there be no such remaining director the board may elect sufficient members to fill the
      vacancy or vacancies.  Whether or not such vacancies are so filled by the board, the holders of record of at least one-tenth of the aggregate subscription price of the then outstanding First Preferred Shares entitled to vote for the election of
      directors shall have the right to require the Secretary of the Corporation to call a meeting of the holders of First Preferred Shares entitled to vote for the election of directors for the purpose of filling the vacancies or replacing all or any of
      the persons filling such vacancies who have been appointed by the directors when there is no

    

    

    
      10

      
        

    

    director in office who has been elected to represent the holders of the First Preferred Shares entitled to vote for the election of
      directors.  Notwithstanding anything contained in the by-laws of the Corporation, (1) upon any termination of the said right to elect directors, the term of office of the directors elected or appointed to represent the holders of First Preferred
      Shares entitled to vote for the election of directors shall forthwith terminate and (2) it shall not be necessary for a person to be a holder of First Preferred Shares in order to qualify for election or appointment as a director of the Corporation
      to represent the holders of First Preferred Shares as described hereunder.

    
      
        	8.	
                Restrictions on Partial Redemption or Purchase

              

      

    

    So long as any of the Series B Preferred Shares are outstanding, the Corporation shall not call for redemption, purchase, reduce or
      otherwise pay for less than all the Series B Preferred Shares and all other preferred shares then outstanding ranking prior to or on a parity with the Series B Preferred Shares with respect to payment of dividends unless all dividends up to and
      including the dividends payable on the last preceding dividend payment dates on all such shares then outstanding shall have been declared and paid or set apart for payment at the date of such call for redemption, purchase, reduction or other payment.

    
      
        	9.	
                Restrictions on Payment of Dividends and Reduction of Junior Capital

              

      

    

    So long as any of the Series B Preferred Shares are outstanding, the Corporation shall not:

    
      
        	

              	(a)	
                declare, pay or set apart for payment any dividends (other than stock dividends in shares of the Corporation ranking junior to the Series B Preferred Shares) on the Common Shares or
                  any other shares of the Corporation ranking junior to the Series B Preferred Shares with respect to payment of dividends; or

              

      

    

    
      
        	

              	(b)	
                call for redemption of, purchase, reduce the stated capital maintained by the Corporation or otherwise pay for any shares of the Corporation ranking junior to the Series B Preferred
                  Shares with respect to repayment of capital or with respect to payment of dividends;

              

      

    

    unless all dividends up to and including the dividends payable on the last preceding dividend payment dates on the Series B
      Preferred Shares and on all other preferred shares ranking prior to or on a parity with the Series B Preferred Shares with respect to payment of dividends then outstanding shall have been declared and paid or set apart for payment at the date of any
      such action referred to in subparagraphs 9(a) and (b).

    
      
        	10.	
                Issue of Additional Preferred Shares

              

      

    

    No class of shares may be created or issued ranking as to repayment of capital or payment of dividends prior to or on a parity with
      the Series B Preferred Shares without the prior approval of the holders of the Series B Preferred Shares given as specified in paragraph (11), nor shall the number of Series B Preferred Shares be increased without such approval; provided, however,
      that nothing in this paragraph (10) shall prevent the Corporation from creating additional series of First Preferred Shares and, if all dividends then payable on the Series B Preferred Shares shall have been paid or set apart for payment, from
      issuing additional series of First Preferred Shares without such approval.

    

    

    
      11

      
        

    

    
      
        	11.	
                Sanction by Holders of Series B Preferred Shares

              

      

    

    The approval of the holders of the Series B Preferred Shares with respect to any and all matters referred to in these share
      provisions may be given in writing by all of the holders of the Series B Preferred Shares outstanding or by resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at a meeting of the holders of the Series B
      Preferred Shares duly called and held for the purpose of considering the subject matter of such resolution and at which holders of not less than a majority of all Series B Preferred Shares then outstanding are present in person or represented by
      proxy in accordance with the by-laws of the Corporation; provided, however, that if at any such meeting, when originally held, the holders of at least a majority of all Series B Preferred Shares then outstanding are not present in person or so
      represented by proxy within 30 minutes after the time fixed 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 fixed by the chairman of such meeting, and at such
      adjourned meeting the holders of Series B Preferred Shares present in person or so represented by proxy, whether or not they hold a majority of all Series B Preferred Shares then outstanding, may transact the business for which the meeting was
      originally called, and a resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at such adjourned meeting shall constitute the approval of the holders of the Series B Preferred Shares.  Notice of any such original
      meeting of the holders of the Series B Preferred Shares shall be given not less than 15 days prior to the date fixed for such meeting and shall specify in general terms the purpose for which the meeting is called, and notice of any such adjourned
      meeting shall be given not less than 10 days prior to the date fixed for such adjourned meeting, but it shall not be necessary to specify in such notice the purpose for which the adjourned meeting is called.  The formalities to be observed with
      respect to the giving of notice of any such original meeting or adjourned meeting and the conduct of it shall be those from time to time prescribed in the by-laws of the Corporation with respect to meetings of shareholders.  On every poll taken at
      any such original meeting or adjourned meeting, each holder of Series B Preferred Shares present in person or represented by proxy shall be entitled to one vote for each of the Series B Preferred Shares held by such holder.

    
      
        	12.	
                Tax Election

              

      

    

    The Corporation shall elect, in the manner and within the time provided under subsection 191.2(1) of the Income Tax Act (Canada) or any successor or replacement provision of similar effect, to pay tax at a rate, and shall take all other action necessary under such Act, such that no holder of Series B Preferred Shares shall be required
      to pay tax on dividends received on the Series B Preferred Shares under section 187.2 of such Act or any successor or replacement provision of similar effect.

    
      
        	13.	
                Withholding Tax

              

      

    

    Notwithstanding any other provision of these share provisions, the Corporation may deduct or withhold from any payment,
      distribution, issuance or delivery (whether in cash or in shares) to be made pursuant to these share provisions any amounts required or permitted by law to be deducted or withheld from any such payment, distribution, issuance or delivery and shall
      remit any such amounts to the relevant tax authority as required.  If the cash component of any payment, distribution, issuance or delivery to be made pursuant to these share provisions is less than the amount that the Corporation is so required or
      permitted to deduct or withhold, the Corporation shall be permitted to deduct and withhold from any non-cash payment, distribution, issuance or delivery to be made pursuant to these share provisions any amounts required or permitted by law to be
      deducted or

    

    

    
      12

      
        

    

    withheld from any such payment, distribution, issuance or delivery and to dispose of such property in order to remit any amount
      required to be remitted to any relevant tax authority.  Notwithstanding the foregoing, the amount of any payment, distribution, issuance or delivery made to a holder of Series B Preferred Shares pursuant to these share provisions shall be considered
      to be the amount of the payment, distribution, issuance or delivery received by such holder plus any amount deducted or withheld pursuant to this paragraph (13).  Holders of Series B Preferred Shares shall be responsible for all withholding taxes
      under Part XIII of the Income Tax Act (Canada), or any successor or replacement provision of similar effect, in respect of any payment, distribution, issuance or delivery made or credited to them pursuant to
      these share provisions and shall indemnify and hold harmless the Corporation on an after-tax basis for any such taxes imposed on any payment, distribution, issuance or delivery made or credited to them pursuant to these share provisions.

    
      
        	14.	
                Book- Based System

              

      

    

    
      
        	

              	(a)	
                Subject to the provisions of subparagraphs (b) and (c) of this paragraph (14) and notwithstanding the provisions of paragraphs (1) through (13) of these share provisions, the Series
                  B Preferred Shares shall be evidenced by a single fully registered Global Certificate representing the aggregate number of Series B Preferred Shares issued by the Corporation which shall be held by, or on behalf of, the System Operator as
                  custodian of the Global Certificate for the Participants and registered in the name of “CDS & Co.” (or in such other name as the System Operator may use from time to time as its nominee for purposes of the Book-Based System), and
                  registrations of ownership, transfers, surrenders and conversions of Series B Preferred Shares shall be made only through the Book-Based System.  Accordingly, subject to subparagraph (c) of this paragraph (14), no beneficial holder of
                  Series B Preferred Shares shall receive a certificate or other instrument from the Corporation or the System Operator evidencing such holder’s ownership thereof, and no such holder shall be shown on the records maintained by the System
                  Operator except through a book-entry account of a Participant acting on behalf of such holder.

              

      

    

    
      
        	

              	(b)	
                Notwithstanding the provisions of paragraphs (1) through (13), so long as the System Operator is the registered holder of the Series B Preferred Shares:

              

      

    

    
      
        	

              	(i)	
                the System Operator shall be considered the sole owner of the Series B Preferred Shares for the purposes of receiving notices or payments on or in respect of the Series B Preferred
                  Shares or the delivery of Series A Preferred Shares and certificates therefor upon the exercise of rights of conversion; and

              

      

    

    
      
        	

              	(ii)	
                the Corporation, pursuant to the exercise of rights of redemption or conversion, shall deliver or cause to be delivered to the System Operator, for the benefit of the beneficial
                  holders of the Series B Preferred Shares, the cash redemption price for the Series B Preferred Shares or certificates for Series A Preferred Shares against delivery to the Corporation’s account with the System Operator of such holders’
                  Series B Preferred Shares.

              

      

    

    
      
        	

              	(c)	
                If the Corporation determines that the System Operator is no longer willing or able to discharge properly its responsibilities with respect to the Book-Based System and the
                  Corporation is unable to locate a qualified successor or the Corporation elects, or is required by applicable law, to withdraw the Series B Preferred Shares from the

              

      

    

    

    

    
      13

      
        

    

    Book-Based System, then subparagraphs (a) and (b) of this paragraph (14) shall no longer be applicable to the
      Series B Preferred Shares and the Corporation shall notify Book-Entry Holders through the System Operator of the occurrence of any such event or election and of the availability of Definitive Shares to Book-Entry Holders.  Upon surrender by the
      System Operator of the Global Certificate to the transfer agent and registrar for the Series B Preferred Shares accompanied by registration instructions for re-registration, the Corporation shall execute and deliver Definitive Shares.  The
      Corporation shall not be liable for any delay in delivering such instructions and may conclusively act and rely on and shall be protected in acting and relying on such instructions.  Upon the issuance of Definitive Shares, the Corporation shall
      recognize the registered holders of such Definitive Shares and the Book-Entry Shares for which such Definitive Shares have been substituted shall be void and of no further effect.

    
      
        	

              	(d)	
                The provisions of paragraphs (1) through (13) and the exercise of rights of redemption and conversion with respect to Series B Preferred Shares are subject to the provisions of this
                  paragraph (14), and to the extent that there is any inconsistency or conflict between such provisions, the provisions of this paragraph (14) shall prevail.

              

      

    

    
      
        	15.	
                Wire or Electronic Transfer of Funds

              

      

    

    Notwithstanding any other right, privilege, restriction or condition attaching to the Series B Preferred Shares, the Corporation
      may, at its option, make any payment due to registered holders of Series B Preferred Shares by way of a wire or electronic transfer of funds to such holders.  If a payment is made by way of a wire or electronic transfer of funds, the Corporation
      shall be responsible for any applicable charges or fees relating to the making of such transfer.  As soon as practicable following the determination by the Corporation that a payment is to be made by way of a wire or electronic transfer of funds, the
      Corporation shall provide a notice to the applicable registered holders of Series B Preferred Shares at their respective addresses appearing on the books of the Corporation.  Such notice shall request that each applicable registered holder of Series
      B Preferred Shares provide the particulars of an account of such holder with a chartered bank in Canada to which the wire or electronic transfer of funds shall be directed.  If the Corporation does not receive account particulars from a registered
      holder of Series B Preferred Shares prior to the date such payment is to be made, the Corporation shall deposit the funds otherwise payable to such holder in a special account or accounts in trust for such holder.  The making of a payment by way of a
      wire or electronic transfer of funds or the deposit by the Corporation of funds otherwise payable to a holder in a special account or accounts in trust for such holder shall be deemed to constitute payment by the Corporation on the date thereof and
      shall satisfy and discharge all liabilities of the Corporation for such payment to the extent of the amount represented by such transfer or deposit.

    
      
        	16.	
                Amendments

              

      

    

    The provisions attaching to the Series B Shares may be deleted, varied, modified, amended or amplified by articles of amendment with
      such approval as may then be required by the Canada Business Corporations Act, with any such approval to be given in accordance with paragraph (11) and with any required approvals of any stock exchanges on
      which the Series B Shares may be listed.

  

  

  

  14

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