ACE AVIATION HOLDINGS INC.

 

                                  BY-LAW NO. 1

 

                                    ARTICLE 1

                                 INTERPRETATION

 

SECTION 1.1  DEFINITIONS

 

      As used in this by-law, the following terms have the following meanings:

 

      "ACT" means the Canada Business Corporations Act and the regulations under

      the Act, all as amended, re-enacted or replaced from time to time.

 

 

 

      "CORPORATION" means ACE Aviation Holdings Inc.

 

      "PERSON" means a natural person, partnership, limited partnership, limited

      liability partnership, corporation, limited liability corporation,

      unlimited liability corporation, joint stock company, trust,

      unincorporated association, joint venture or other entity or governmental

      entity, and pronouns have a similarly extended meaning.

 

      "RECORDED ADDRESS" means (i) in the case of a shareholder or other

      securityholder, the shareholder's or securityholder's latest address as

      shown in the records of the Corporation, (ii) in the case of joint

      shareholders or other joint securityholders, the address appearing in the

      records of the Corporation in respect of the joint holding or, if there is

      more than one address in respect of the joint holding, the first address

      that appears, and (iii) in the case of a director, officer or auditor, the

      person's latest address as shown in the records of the Corporation or, if

      applicable, the last notice filed with the Director under the Act,

      whichever is the most recent.

 

 

 

      Terms used in this by-law that are defined in the Act have the meanings

given to such terms in the Act.

 

SECTION 1.2  INTERPRETATION

 

      The division of this by-law into articles, sections and other subdivisions

and the insertion of headings are for convenient reference only and do not

affect its interpretation. Words importing the singular number include the

plural and vice

 

 

<PAGE>

                                      -2-

 

 

 

versa. Any reference in this by-law to gender includes all genders. In this

by-law the words "including", "includes" and "include" mean "including (or

includes or include) without limitation".

 

 

SECTION 1.3  SUBJECT TO ACT AND ARTICLES

 

      This by-law is subject to, and should be read in conjunction with, the Act

and the articles. If there is any conflict or inconsistency between any

provision of the Act or the articles and any provision of this by-law, the

provision of the Act or the articles will govern.

 

                                    ARTICLE 2

                           BUSINESS OF THE CORPORATION

 

SECTION 2.1  REGISTERED OFFICE

 

 

      The registered office of the Corporation shall be situated in the Province

of Quebec, and at such location therein as the directors may from time to time

determine.

 

 

SECTION 2.2  FINANCIAL YEAR

 

      The financial year of the Corporation ends on such date of each year as

the directors determine from time to time.

 

 

 

<PAGE>

                                      -3-

 

 

 

 

                                    ARTICLE 3

                                    DIRECTORS

 

SECTION 3.1  NUMBER OF DIRECTORS

 

      If the articles specify a minimum and a maximum number of directors, the

number of directors is the number, within the minimum and maximum, determined by

the directors from time to time. No decrease in the number of directors will

shorten the term of an incumbent director.

 

SECTION 3.2  QUALIFICATION

 

 

      No person shall be qualified for election or appointment as a director if

he is less than 18 years of age; if he is of unsound mind and has been so found

by a court in Canada or elsewhere; if he is not an individual or if he has the

status of a bankrupt. A director need not be a shareholder. A majority of

directors of the Corporation shall be resident Canadians and shall not be

officers or employees of the Corporation or its affiliates. A director shall

cease to hold office at the time and in the manner set forth in the Act, and

directors who are not officers shall also cease to hold office at the annual

meeting of shareholders immediately following an age to be determined by the

directors from time to time.

 

 

SECTION 3.3  PLACE OF MEETINGS

 

      Meetings of directors may be held at any place in or outside Canada.

 

SECTION 3.4  CALLING OF MEETINGS

 

      The chair of the board, the president, the chief executive officer or any

two or more directors may call a meeting of the directors at any time. Meetings

of directors will be held at the time and place as the persons calling the

meeting determine.

 

SECTION 3.5  REGULAR MEETINGS

 

      The directors may establish regular meetings of directors. Any resolution

establishing such meetings will specify the dates, times and places of the

regular meetings and will be sent to each director.

 

SECTION 3.6  NOTICE OF MEETING

 

      Subject to this section, notice of the time and place of each meeting of

directors will be given to each director not less than 24 hours before the time

of the meeting. No notice of meeting is required for any regularly scheduled

meeting except where the Act requires the notice to specify the purpose of, or

the business to be transacted at, the meeting. Provided a quorum of directors is

present, a meeting

 

 

<PAGE>

                                      -4-

 

 

of directors may be held, without notice, immediately following the annual

meeting of shareholders.

 

      The accidental omission to give notice of any meeting of directors to, or

the non-receipt of any notice by, any person, or any error in any notice not

affecting the substance of the notice, does not invalidate any resolution passed

or any action taken at the meeting.

 

SECTION 3.7  WAIVER OF NOTICE

 

      A director may waive notice of a meeting of directors, any irregularity in

a notice of meeting of directors or any irregularity in a meeting of directors.

Such waiver may be given in any manner and may be given at any time either

before or after the meeting to which the waiver relates. Waiver of any notice of

a meeting of directors cures any irregularity in the notice, any default in the

giving of the notice and any default in the timeliness of the notice.

 

SECTION 3.8  QUORUM

 

      Subject to Section 3.9 of this by-law, a majority of the number of

directors in office or such greater or lesser number as the directors may

determine from time to time, constitutes a quorum at any meeting of directors.

Notwithstanding any vacancy among the directors, a quorum of directors may

exercise all the powers of the directors.

 

SECTION 3.9  CANADIAN MAJORITY

 

      The directors shall not transact business at a meeting, other than filling

a vacancy on the board, unless a majority of the directors present are resident

Canadians, except where:

 

      (a)   a resident Canadian director who is unable to be present approves in

            writing or by telephone, electronic or other communications

            facilities the business transacted at the meeting; and

 

      (b)   a majority of resident Canadian directors would have been present

            had the director specified in paragraph (a) above been present at

            the meeting.

 

SECTION 3.10  CONSENT TO BE ELECTED OR APPOINTED DIRECTOR

 

      An individual who is elected or appointed to hold office as a director is

not a director and is deemed not to have been elected or appointed to hold

office as a director unless:

 

      (a)   the said individual was present at the meeting when the election or

            appointment took place and the said individual did not refuse to

            hold office as a director; or

 

 

 

<PAGE>

                                      -5-

 

 

      (b)   the said individual was not present at the meeting when the election

            or appointment took place and the said individual consented to hold

            office as a director in writing before the election or appointment

            or within 10 days after it, or the said individual has acted as a

            director pursuant to the election or appointment.

 

SECTION 3.11  MEETING BY TELEPHONIC, ELECTRONIC OR OTHER COMMUNICATION

              FACILITY

 

      A director may, if all the directors consent, participate in a meeting of

directors by means of a telephonic, electronic or other communication facility.

A director participating in a meeting by such means is deemed to be present at

the meeting. Any consent is effective whether given before or after the meeting

to which it relates and may be given with respect to all meetings of the

directors.

 

SECTION 3.12  CHAIR

 

      The chair of any meeting of directors is the first mentioned of the

following officers that is a director and is present at the meeting:

 

      (a)   the chair of the board; or

 

      (b)   the president; or

 

      (c)   a vice-president (in order of seniority measured by length of

            service with the Corporation).

 

If no such person is present at the meeting, the directors present shall choose

one of their number to chair the meeting.

 

SECTION 3.13  SECRETARY

 

      The corporate secretary of the Corporation will act as secretary at

meetings of directors. If the corporate secretary is absent or has not been

appointed, the chair of the meeting will appoint a person, who need not be a

director, to act as secretary of the meeting.

 

SECTION 3.14  VOTES TO GOVERN

 

 

      At all meetings of directors, every question shall be decided by a

majority of the votes cast.

 

 

SECTION 3.15  REMUNERATION AND EXPENSES

 

      The directors may determine from time to time the remuneration, if any, to

be paid to a director for his services as a director. The directors are also

entitled to be reimbursed for travelling and other out-of-pocket expenses

properly incurred by them in attending directors meetings, committee meetings

and shareholders meetings and in the performance of other duties of directors.

The directors may also

 

 

<PAGE>

                                      -6-

 

 

award additional remuneration to any director undertaking special services on

the Corporation's behalf beyond the services ordinarily required of a director

by the Corporation.

 

      A director may be employed by or provide services to the Corporation

otherwise than as a director. Such a director may receive remuneration for such

employment or services in addition to any remuneration paid to the director for

his services as a director.

 

SECTION 3.16  ADMINISTRATIVE AND STANDING RESOLUTIONS

 

      For the purposes of establishing at any time, and amending as may be

required from time to time, the power and duties of committees of the board, of

officers of the Corporation and of such other persons and any such other

continuing administrative procedures as it may deem appropriate, the directors

may adopt resolutions not contrary to the Act or the Corporation's articles or

by-laws, which resolutions may but need not be designated as administrative

resolutions or standing resolutions.

 

                                    ARTICLE 4

                                   COMMITTEES

 

SECTION 4.1  COMMITTEES OF DIRECTORS

 

      The directors may appoint from their number one or more committees and

delegate to such committees any of the powers of the directors except those

powers that, under the Act, a committee of directors has no authority to

exercise.

 

SECTION 4.2  AUDIT COMMITTEE

 

 

      The directors shall appoint annually from among their number an audit

committee to be composed of not fewer than three directors all of whom shall be

independent. The audit committee shall have the powers and duties provided in

the Act and delegated to it by the board.

 

 

SECTION 4.3  PROCEEDINGS

 

      Meetings of committees of directors may be held at any place in or outside

Canada. At all meetings of committees, every question shall be decided by a

majority of the votes cast on the question. Unless otherwise determined by the

directors, each committee of directors may make, amend or repeal rules and

procedures to regulate its meetings including: (i) fixing its quorum, provided

that the quorum may not be less than a majority of its members; (ii) procedures

for calling meetings; (iii) requirements for providing notice of meetings; (iv)

selecting a chair for a meeting; and (v) determining whether the chair will have

a deciding vote in the event there is an equality of votes cast on a question.

 

 

<PAGE>

                                      -7-

 

 

      Subject to a committee of directors establishing rules and procedures to

regulate its meetings, Section 3.3 to Section 3.13 (inclusive) of this by-law

apply to committees of directors, with such changes as are necessary.

 

SECTION 4.4  REMOVAL AND VACANCIES

 

      The directors may from time to time remove from office any member of a

committee of the board. Any vacancy that may occur in the membership of a

committee of the board shall be filled only by the directors.

 

                                    ARTICLE 5

                                    OFFICERS

 

SECTION 5.1  APPOINTMENT OF OFFICERS

 

      The directors may appoint such officers of the Corporation as they deem

appropriate from time to time. The officers may include any of a chair of the

board, a president, a chief executive officer, one or more vice-presidents, a

chief financial officer, a corporate secretary and a treasurer and one or more

assistants to any of the appointed officers. No person may be the chair of the

board unless that person is a director.

 

SECTION 5.2  POWERS AND DUTIES

 

      Unless the directors determine otherwise, an officer has all powers and

authority and will perform all functions and duties that are incident to his

office. An officer will have such other powers, authority, functions and duties

that are prescribed or delegated, from time to time, by the directors, or by

other officers if authorized to do so by the directors. The directors or

authorized officers may, from time to time, vary, add to or limit the powers and

duties of any officer.

 

SECTION 5.3  CHAIR OF THE BOARD

 

      If appointed, the chair of the board will preside at all director meetings

and shareholder meetings. The chair of the board will have such other powers and

duties as the directors determine.

 

SECTION 5.4  PRESIDENT

 

      If appointed, the president of the Corporation will have general

supervision of the business and affairs of the Corporation. The president will

have such other powers and duties as the directors determine. Subject to Section

3.12 and Section 7.14 of this by-law, during the absence or disability of the

corporate secretary or the treasurer, or if no corporate secretary or treasurer

is appointed, the president will also have the powers and duties of the office

of corporate secretary and treasurer, as the case may be.

 

 

<PAGE>

                                      -8-

 

 

SECTION 5.5  CORPORATE SECRETARY

 

      If appointed, the corporate secretary will have the following powers and

duties. The corporate secretary will: (i) give or cause to be given, as and when

instructed, all notices required to be given to shareholders, directors,

officers, auditors and members of committees of directors; (ii) attend at and be

the secretary of all meetings of directors, shareholders, and committees of

directors and shall have the minutes of all proceedings at such meetings entered

in the books and records kept for that purpose; and (iii) be the custodian of

any corporate seal of the Corporation and of all books, papers, records,

documents, and instruments belonging to the Corporation, except when another

officer or agent has been appointed for that purpose. In addition, the corporate

secretary will have such other powers and duties as the directors or the

president of the Corporation determine.

 

SECTION 5.6  TREASURER

 

      If appointed, the treasurer of the Corporation will have the following

powers and duties. The treasurer will: (i) ensure that the Corporation prepares

and maintains adequate accounting records in compliance with the Act; (ii) be

responsible for the deposit of money, the safekeeping of securities and the

disbursement of the funds of the Corporation; and (iii) at the request of the

directors, render an account of all the treasurer's transactions and of the

financial position of the Corporation. In addition, the treasurer will have such

other powers and duties as the directors or the president of the Corporation

determine.

 

SECTION 5.7  REMOVAL OF OFFICERS

 

      The directors may remove an officer from office at any time, with or

without cause. Such removal is without prejudice to the officer's rights under

any employment contract with the Corporation.

 

                                    ARTICLE 6

                  PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

 

SECTION 6.1  LIMITATION OF LIABILITY

 

      Subject to the Act and other applicable law, no director or officer is

liable for: (i) the acts, omissions, receipts, failures, neglects or defaults of

any other director, officer or employee; (ii) any loss, damage or expense

happening to the Corporation through the insufficiency or deficiency of title to

any property acquired for or on behalf of the Corporation; (iii) the

insufficiency or deficiency of any security in or upon which any of the monies

of the Corporation shall be invested; (iv) any loss or damage arising from the

bankruptcy, insolvency or tortious acts of any person with whom any of the

monies, securities or effects of the Corporation shall be deposited; or (v) any

loss occasioned by any error of judgment or oversight on his part, or for any

other loss, damage or misfortune whatever which shall happen in the execution of

the duties of his office or in relation to his office.

 

 

<PAGE>

                                      -9-

 

 

SECTION 6.2  INDEMNITY

 

 

      Subject to the Act, the Corporation shall indemnify a director or officer

of the Corporation, a former director or officer of the Corporation or another

individual who acts or acted at the Corporation's request as a director or

officer, or an individual acting in a similar capacity, of another entity

against all costs, charges and expenses, including an amount paid to settle an

action or satisfy a judgment, reasonably incurred by the individual in respect

of any civil, criminal, administrative, investigative or other proceeding in

which the individual is involved because of that association with the

Corporation or other entity. The Corporation shall advance the necessary moneys

to a director, officer or other individual for the costs, charges and expenses

of such proceeding. The indemnified individual shall repay such moneys to the

Corporation if the individual does not fulfil the following conditions:

 

 

      (a)   he acted honestly and in good faith with a view to the best

            interests of the Corporation, or, as the case may be, to the best

            interests of the other entity for which the individual acted as a

            director or officer or in a similar capacity at the Corporation's

            request; and

 

      (b)   in the case of a criminal or administrative action or proceeding

            that is enforced by a monetary penalty, he had reasonable grounds

            for believing that his conduct was lawful.

 

      The Corporation shall also indemnify such director, officer or individual

in such other circumstances as the Act permits or requires. Nothing in this

by-law shall limit the right of any such director, officer or individual

entitled to indemnity to claim indemnity apart from the provisions of this

by-law.

 

SECTION 6.3  INSURANCE

 

      The Corporation may purchase and maintain insurance for the benefit of any

person referred to in Section 6.2 of this by-law against such liabilities and in

such amounts as the directors may determine and as are permitted by the Act.

 

                                    ARTICLE 7

                                  SHAREHOLDERS

 

SECTION 7.1  CALLING ANNUAL AND SPECIAL MEETINGS

 

      The directors and each of the chair of the board, the president and the

chief executive officer have the power to call annual meetings of shareholders

and special meetings of shareholders. Annual meetings of shareholders and

special meetings of shareholders will be held on the date and at the time and

place in Canada as the persons calling the meeting determine.

 

 

<PAGE>

                                      -10-

 

 

SECTION 7.2  ELECTRONIC MEETINGS

 

      A shareholder or any other person entitled to attend a meeting may

participate in the meeting by means of a telephonic, electronic or other

communication facility that permits all participants to communicate adequately

with each other during the meeting if the Corporation makes available such a

communication facility. A person participating in a meeting by such means is

deemed to be present at that meeting. Meetings of shareholders may be held

entirely by means of telephonic, electronic or other communications facility if

the requirements listed previously are met. The directors may establish

procedures regarding the holding of meetings of shareholders by such means.

 

SECTION 7.3  VOTING BY ELECTRONIC FACILITIES

 

      Any vote may be held, in accordance with the regulations under the Act,

entirely by means of a telephonic, electronic or other communications facility,

if the Corporation makes available such a communications facility. Any duly

authorized person participating in a meeting of shareholders and entitled to

vote at that meeting may vote, in accordance with the regulations under the Act,

if any, by means of a telephonic, electronic or other communications facility

that the Corporation has made available for that purpose.

 

SECTION 7.4  NOTICE OF MEETINGS

 

      Subject to the Act, notice of the time and place of each meeting of

shareholders shall be given in the manner provided in Section 12.1 of this

by-law not less than 21 days nor more than 55 days (or such other minimum or

maximum periods prescribed pursuant to the Act) before the date of the meeting

to each director, to the auditor, and to each shareholder of the Corporation

whose name appears on the list of shareholders entitled to receive notice as

provided in Section 7.5 of this by-law. Notice of a meeting of shareholders

called for any purpose other than consideration of the financial statements and

auditor's report, election of directors and re-appointment of the incumbent

auditor shall state the nature of such business in sufficient detail to permit

the shareholder to form a reasoned judgment thereon and shall state the text of

any special resolution to be submitted to the meeting. A shareholder and any

other person entitled to attend a meeting of shareholders may in any manner

waive notice of or otherwise consent to a meeting of shareholders.

 

SECTION 7.5  LIST OF SHAREHOLDERS ENTITLED TO NOTICE AND RIGHT TO VOTE

 

      The Corporation shall prepare an alphabetical list of its shareholders

entitled to receive notice of a meeting, showing the number of shares held by

each shareholder, (a) if a record date for the meeting is fixed pursuant to

Section 7.6of this by-law, not later than 10 days after that record date; or (b)

if no record date is fixed, at the close of business on the day immediately

preceding the day on which notice of the meeting is given. The list shall be

available for examination by any shareholder during usual business hours at the

registered office of the Corporation or at the

 

 

<PAGE>

                                      -11-

 

 

place where the central securities register is maintained and at the meeting for

which the list was prepared. Where a separate list of shareholders has not been

prepared, the names of persons appearing in the securities register at the

requisite time as the holder of one or more shares carrying the right to vote at

such meeting shall be deemed to be a list of shareholders. Subject to Section

7.12 of this by-law, a shareholder whose name appears on a list prepared as

described above is entitled to vote the shares shown opposite his name at the

meeting to which the list related.

 

SECTION 7.6  RECORD DATE FOR NOTICE

 

      Subject to the Act, the directors may fix in advance a date, preceding the

date of any meeting of shareholders within the period prescribed pursuant to the

Act, as a record date for the determination of the shareholders entitled to

receive notice of the meeting, in the manner provided in the Act. If no record

date for notice is so fixed, the record date for the determination of the

shareholders entitled to receive notice of the meeting shall be at the close of

business on the day immediately preceding the day on which the notice is given

or, if no notice is given, the day on which the meeting is held.

 

SECTION 7.7  MEETINGS WITHOUT NOTICE

 

      A meeting of shareholders may be held without notice at any time and place

permitted by the Act if: (a) all the shareholders entitled to vote thereat are

present in person or represented by proxy or if those not present or represented

by proxy waive notice of or otherwise consent to such meeting being held; and

(b) the auditors and the directors of the Corporation are present or waive

notice of or otherwise consent to such meeting being held; so long as such

shareholders, auditors or directors present are not attending for the express

purpose of objecting to the transaction of any business on the grounds that the

meeting is not lawfully called. At such a meeting, any business may be

transacted which the Corporation at a meeting of shareholders may transact. If

the meeting is held at a place outside Canada, shareholders not present or

represented by proxy, but who have waived notice of or otherwise consented to

such meeting, shall also be deemed to have consented to the meeting being held

at such place.

 

SECTION 7.8  WAIVER OF NOTICE

 

      A shareholder, a proxyholder, a director or the auditor and any other

person entitled to attend a meeting of shareholders may waive notice of a

meeting of shareholders, any irregularity in a notice of meeting of shareholders

or any irregularity in a meeting of shareholders. Such waiver may be waived in

any manner and may be given at any time either before or after the meeting to

which the waiver relates. Waiver of any notice of a meeting of shareholders

cures any irregularity in the notice, any default in the giving of the notice

and any default in the timeliness of the notice.

 

 

<PAGE>

                                      -12-

 

 

SECTION 7.9  REPRESENTATIVES

 

      No representative of a shareholder that is a body corporate or an

association will be recognized unless: (i) a certified copy of the resolution of

the directors or governing body of the body corporate or association, or a

certified copy of an extract from the by-laws of the body corporate or

association, authorizing the representative to represent the body corporate or

association is deposited with the Corporation; or (ii) the authorization of the

representative is established in another manner that is satisfactory to the

corporate secretary or the chair of the meeting.

 

SECTION 7.10  PERSONS ENTITLED TO BE PRESENT

 

      The only persons entitled to be present at a meeting of shareholders are

those persons entitled to vote at the meeting, the directors, the officers, the

auditor of the Corporation and others who, although not entitled to vote, are

entitled or required under any provision of the Act or the articles or by-laws

to be present at the meeting. Any other person may be admitted only with the

consent of the chair of the meeting.

 

SECTION 7.11  QUORUM

 

 

      A quorum of shareholders is present at a meeting of shareholders if the

holders of not less than 25% of the shares entitled to vote at the meeting are

present in person or represented by proxy, irrespective of the number of persons

actually present at the meeting.

 

 

SECTION 7.12  RIGHT TO VOTE

 

      Subject to the Act, the directors may fix in advance a date as the record

date for the purpose of determining shareholders entitled to vote at a meeting

of shareholders and notice of any such record date shall be given in the manner

provided in the Act. If a record date for voting is fixed under this Section

7.12, the Corporation shall prepare, no later than 10 days after the record

date, an alphabetical list of shareholders entitled to vote as of the record

date at a meeting of shareholders that shows the number of shares held by each

shareholder. If a record date for voting is not fixed under this Section 7.12,

the Corporation shall prepare, no later than 10 days after a record date is

fixed under Section 7.6 of this by-law or no later than the record date

established under Section 7.6 in the absence of a determination of a record date

by the directors, as the case may be, an alphabetical list of shareholders who

are entitled to vote as of the record date that shows the number of shares held

by each shareholder. A shareholder whose name appears on a list prepared under

this Section 7.12 is entitled to vote the shares shown opposite such

shareholder's name at the meeting to which the list relates.

 

SECTION 7.13  PROXIES

 

      A proxy shall comply with the applicable requirements of the Act and other

applicable law and will be in such form as the directors may approve from time

to

 

 

<PAGE>

                                      -13-

 

 

time or such other form as may be acceptable to the chair of the meeting at

which the instrument of proxy is to be used. A proxy will be acted on only if it

is deposited with the Corporation or its agent prior to the time specified in

the notice calling the meeting at which the proxy is to be used or, if no time

is specified in the notice, it is deposited with the corporate secretary or the

chair of the meeting or any adjournment of the meeting prior to the time of

voting.

 

SECTION 7.14  CHAIR, SECRETARY AND SCRUTINEERS

 

      The chair of any meeting of shareholders is the first mentioned of the

following officers that is a shareholder or a director and is present at the

meeting:

 

      (a)   the chair of the board;

 

      (b)   the president; or

 

      (c)   a vice-president (in order of seniority measured by length of

            service with the Corporation).

 

If no such person is present at the meeting, the shareholders present who are

entitled to vote shall choose (by a majority vote) a director who is present, or

a shareholder who is present or another person who is present, to chair the

meeting.

 

      The corporate secretary, if any, will act as secretary at meetings of

shareholders. If a corporate secretary has not been appointed or the corporate

secretary is absent, the chair of the meeting will appoint a person, who need

not be a shareholder, to act as secretary of the meeting.

 

      If desired, the chair of the meeting may appoint one or more persons, who

need not be shareholders, to act as scrutineers at any meeting of shareholders.

The scrutineers will assist in determining the number of shares held by persons

entitled to vote who are present at the meeting and the existence of a quorum.

The scrutineers will also receive, count and tabulate all ballots and assist in

determining the result of a vote by ballot, and do such acts as are necessary to

conduct the vote in an equitable manner. The decision of a majority of the

scrutineers shall be conclusive and binding upon the meeting and a declaration

or certificate of the scrutineers will be conclusive evidence of the facts

declared or stated in it.

 

SECTION 7.15  PROCEDURE

 

      The chair of a meeting of shareholders will conduct the meeting and

determine the procedure to be followed at the meeting. The chair's decision on

all matters or things, including any questions regarding the validity or

invalidity of a form of proxy or other instrument appointing a proxy, shall be

conclusive and binding upon the meeting of shareholders.

 

 

<PAGE>

                                      -14-

 

 

SECTION 7.16  MANNER OF VOTING

 

      Subject to the Act and other applicable law, any question at a meeting of

shareholders shall be decided by a show of hands, unless a ballot on the

question is required or demanded. Subject to the Act and other applicable law,

the chair of the meeting may require a ballot or any person who is present and

entitled to vote may demand a ballot on any question at a meeting of

shareholders. The requirement or demand for a ballot may be made either before

or after any vote on the question by a show of hands. A ballot will be taken in

the manner the chair of the meeting directs. A requirement or demand for a

ballot may be withdrawn at any time prior to the taking of the ballot. The

result of such ballot shall be the decision of the shareholders upon the

question.

 

      In the case of a vote by a show of hands, each person present who is

entitled to vote has one vote. If a ballot is taken, each person present who is

entitled to vote is entitled to the number of votes that are attached to the

shares which such person is entitled to vote at the meeting.

 

SECTION 7.17  VOTES TO GOVERN

 

      Any question at a meeting of shareholders shall be decided by a majority

of the votes cast on the question unless the articles, the by-laws, the Act or

other applicable law requires otherwise. In case of an equality of votes either

when the vote is by a show of hands or when the vote is by a ballot the chair of

the meeting is not entitled to a second or casting vote.

 

SECTION 7.18  ADJOURNMENT

 

      The chair of any meeting of shareholders may, with the consent of the

persons present who are entitled to vote at the meeting, adjourn the meeting

from time to time and place to place, subject to such conditions as such persons

may decide. Any adjourned meeting is duly constituted if held in accordance with

the terms of the adjournment and a quorum is present at the adjourned meeting.

Any business may be considered and transacted at any adjourned meeting which

might have been considered and transacted at the original meeting of

shareholders.

 

                                    ARTICLE 8

                                   SECURITIES

 

SECTION 8.1  TRANSFER OF SHARES

 

      Subject to the Act, the Corporation's articles and Section 8.2 of this

by-law, no transfer of a security issued by the Corporation will be registered

except upon: (i) presentation of the security certificate representing the

security with an endorsement which complies with the Act, together with such

reasonable assurance that the endorsement is genuine and effective as the

directors or officers may require; (ii) payment of all applicable taxes and

fees; and (iii) compliance with the

 

 

<PAGE>

                                      -15-

 

 

articles of the Corporation. If no security certificate has been issued by the

Corporation in respect of a security issued by the Corporation, clause (i) above

may be satisfied by presentation of a duly executed security transfer power,

together with such reasonable assurance that the security transfer power is

genuine and effective as the directors or officers may require.

 

SECTION 8.2  STATUTORY DECLARATIONS

 

      For the purposes of administering the constrained share provisions set out

in the Corporation's articles, any person in whose name voting shares of the

Corporation are registered who desires to exercise the voting rights pertaining

to such shares and any person seeking to have a transfer of a voting share

registered in his name or to have a voting share issued to him shall, if

required by the Corporation to do so, furnish a statutory declaration under the

Canada Evidence Act declaring whether:

 

      (a)   the person is the beneficial owner of the voting shares of the

            Corporation or holds them for a beneficial owner;

 

      (b)   the person or beneficial owner is a "Canadian" as such term is

            defined in the Corporation's articles;

 

      and declaring any further facts as may be considered relevant by the

      directors.

 

      A statutory declaration shall, unless otherwise determined by the

directors, be required in respect of, and at the time of a request for, each

subscription for and each transfer of a voting share of the Corporation and in

such other circumstances and at such times as the general counsel or corporate

secretary of the Corporation shall from time to time determine. The form of any

statutory declaration required pursuant hereto shall be approved by the general

counsel or corporate secretary of the Corporation. Where a person is required to

furnish a statutory declaration, the directors may refuse to recognize all

ownership rights attributable to the voting share, including the voting rights

attached to such share, to register a transfer of a voting share in his name or

to issue a voting share to him until that person has furnished the statutory

declaration.

 

SECTION 8.3  ALLOTMENT

 

      Subject to the Act and the Corporation's articles and by-laws, the

directors may from time to time allot or grant options to purchase, accept

subscriptions for, issue or otherwise dispose of the whole or any part of the

authorized and unissued shares of the Corporation at such times and to such

persons and for such consideration as the directors shall determine, provided

that no share shall be issued until it is fully paid as provided by the Act.

 

 

<PAGE>

                                      -16-

 

 

SECTION 8.4  COMMISSION

 

      The directors may from time to time authorize the Corporation to pay a

reasonable commission to any person in consideration of his purchasing or

agreeing to purchase shares of the Corporation, whether from the Corporation or

from any other person, or procuring or agreeing to procure purchasers for any

such shares.

 

SECTION 8.5  NON-RECOGNITION OF TRUSTS

 

      Subject to the Act and the Corporation's articles, the Corporation may

treat as absolute owner of any share the person in whose name the share is

registered in the securities register as if that person had full legal capacity

and authority to exercise all rights of ownership, irrespective of any

indication to the contrary through knowledge or notice or description in the

Corporation's records or on the share certificate.

 

SECTION 8.6  FORM OF SECURITY CERTIFICATES

 

      Subject to the Act and the Corporation's articles, security certificates

will be in the form that the directors approve from time to time or that the

Corporation adopts.

 

SECTION 8.7  REPLACEMENT OF SECURITY CERTIFICATES

 

 

      The directors or any officer or agent designated by the directors may in

its or his discretion direct the issue of a new security certificate in lieu of

and upon cancellation of a certificate that has been mutilated or in

substitution for a security certificate claimed to have been lost, destroyed or

wrongfully taken on payment of such fee and on such terms as to indemnity,

reimbursement of expenses and evidence of loss and of title as the directors or

any officer or agent designated by the directors may from time to time

prescribe, whether generally or in any particular case.

 

 

SECTION 8.8  TRANSFER AGENTS AND REGISTRARS

 

      The Corporation may from time to time appoint one or more agents to

maintain, for each class or series of securities issued by it in registered or

other form, a central securities register and one or more branch securities

registers. Such an agent may be designated as transfer agent or registrar

according to their functions and one person may be designated both registrar and

transfer agent. The Corporation may at any time terminate such appointment.

 

SECTION 8.9  LIEN FOR INDEBTEDNESS

 

      If the articles provide that the Corporation has a lien on shares

registered in the name of a shareholder or the shareholder's personal

representative for a debt of that shareholder to the Corporation, such lien may

be enforced, subject to applicable law, as follows:

 

 

<PAGE>

                                      -17-

 

 

      (a)   where such shares are redeemable pursuant to the articles, by

            redeeming such shares and applying the redemption price to the debt;

 

      (b)   by purchasing such shares for cancellation for a price equal to the

            fair value of such shares as determined by the directors and

            applying the proceeds to the debt;

 

      (c)   by selling such shares to any third party whether or not such party

            is at arm's length to the Corporation for the best price which the

            directors in their sole discretion consider to be obtainable on

            reasonable terms for such shares and applying the proceeds to the

            debt;

 

      (d)   by refusing to permit the registration of a transfer of such shares

            until the debt is paid; and

 

      (e)   by any other means permitted by law.

 

                                    ARTICLE 9

                                    PAYMENTS

 

SECTION 9.1  PAYMENTS OF DIVIDENDS AND OTHER DISTRIBUTIONS

 

       Any dividend or other distribution payable in cash to shareholders

will be paid by cheque or by electronic means or by such other method as the

directors may determine. The payment will be made to or to the order of each

registered holder of shares in respect of which the payment is to be made.

Cheques will be sent to the registered holder's recorded address, unless the

holder otherwise directs. In the case of joint holders, the payment will be made

to the order of all such joint holders and, if applicable, sent to them at their

recorded address, unless such joint holders otherwise direct. The sending of the

cheque or the sending of the payment by electronic means or the sending of the

payment by a method determined by the directors in an amount equal to the

dividend or other distribution to be paid less any tax that the Corporation is

required to withhold will satisfy and discharge the liability for the payment,

unless payment is not made upon presentation, if applicable.

 

SECTION 9.2  NON-RECEIPT OF PAYMENT

 

       In the event of non-receipt of any payment made as contemplated by

Section 9.1 of this by-law by the person to whom it is sent, the Corporation may

issue re-payment to such person for a like amount. The directors may determine,

whether generally or in any particular case, the terms on which any re-payment

may be made, including terms as to indemnity, reimbursement of expenses, and

evidence of non-receipt and of title.

 

 

<PAGE>

                                      -18-

 

 

SECTION 9.3  RECORD DATE FOR DIVIDENDS AND RIGHTS

 

      The directors may fix in advance a date, preceding by not more than 55

days the date for the payment of any dividend or the date for the issue of any

warrant or other evidence of the right to subscribe for securities of the

Corporation, as a record date for the determination of the persons entitled to

receive payment of such dividend or to exercise the right to subscribe for such

securities, and notice of any such record date shall be given not less than 7

days before such record date in the manner provided by the Act. If no record

date is so fixed, the record date for the determination of the persons entitled

to receive payment of any dividend or to exercise the right to subscribe for

securities of the Corporation shall be at the close of business on the day on

which the resolution relating to such dividend or right to subscribe is passed

by the directors.

 

SECTION 9.4  UNCLAIMED DIVIDENDS

 

      To the extent permitted by law, any dividend or other distribution that

remains unclaimed after a period of 2 years from the date on which the dividend

has been declared to be payable is forfeited and will revert to the Corporation.

 

                                   ARTICLE 10

                         SUBSIDIARY AND OTHER COMPANIES

 

SECTION 10.1  INVESTMENT, LOAN, GUARANTEE

 

      Subject to the Act, any loan or guarantee in favour of, or investment in

shares of any subsidiary or other companies of the Corporation, or any disposal

thereof, shall be subject to approval by the directors.

 

SECTION 10.2  VOTING

 

 

      A person delegated by the directors to vote such shares in a subsidiary or

associated company or to serve as a director thereof, shall comply with any

applicable policies in respect thereof adopted by the directors from time to

time.

 

 

SECTION 10.3  GENERAL

 

 

      Provisions for the control, conduct, regulation and administration of

subsidiary companies of the Corporation shall be in conformity with any

applicable policies in respect thereof adopted by the directors from time to

time.

 

 

                                   ARTICLE 11

                              BANKING AND BORROWING

 

SECTION 11.1  BANKING ARRANGEMENTS

 

      The banking and borrowing business of the Corporation or any part of it

may be transacted with such banks, trust companies or other firms or

corporations as the directors determine from time to time. All such banking and

borrowing business or

 

 

<PAGE>

                                      -19-

 

 

 

any part of it may be transacted on the Corporation's behalf under the

agreements, instructions and delegations and by the one or more officers and

other persons that the directors authorize from time to time.

 

 

SECTION 11.2  BORROWING POWERS

 

      Without limiting the borrowing powers of the Corporation as set forth in

the Act, the directors may from time to time on behalf of the Corporation,

without authorization of the shareholders:

 

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

 

      (b)   issue, re-issue, sell or pledge bonds, debentures, notes or other

            evidences of indebtedness or guarantee of the Corporation, whether

            secured or unsecured;

 

      (c)   to the extent permitted by the Act, give a guarantee on behalf of

            the Corporation to secure performance of any present or future

            indebtedness, liability or obligation of any person; and

 

      (d)   mortgage, hypothecate, pledge or otherwise create a security

            interest in all or any currently owned or subsequently acquired real

            or personal, moveable or immoveable property of the Corporation,

            including book debts, rights, franchises and undertakings, to secure

            any such bonds, debentures, notes or other evidences of indebtedness

            or guarantee or any other present or future indebtedness, liability

            or obligation of the Corporation; and, without limiting the

            generality of the foregoing, mortgage, hypothecate or pledge any

            property of the Corporation, moveable or immoveable, present or

            future, for the purpose of securing any bonds, debentures, or

            debenture-stock which it is entitled to issue, pursuant to and in

            accordance with the Special Corporate Powers Act (Quebec).

 

      Nothing in this Section 11.2 limits or restricts the borrowing of money by

the Corporation on bills of exchange or promissory notes made, drawn, accepted

or endorsed by or on behalf of the Corporation.

 

SECTION 11.3  DELEGATION

 

      The directors may from time to time delegate to a committee of the board,

a director or officer of the Corporation or any other person as may be

designated by the directors, all or any of the powers conferred on the

directors, to such extent and in such manner as the directors shall determine at

the time of each such delegation.

 

 

<PAGE>

                                      -20-

 

 

                                   ARTICLE 12

                                  MISCELLANEOUS

 

SECTION 12.1  NOTICES

 

      Any notice, communication or document required to be given, delivered or

sent by the Corporation to any director, officer, shareholder, auditor or other

person is sufficiently given, delivered or sent if delivered personally, or if

delivered to the person's recorded address, or if mailed to the person at the

person's recorded address by pre-paid mail, or if otherwise communicated by

electronic means permitted by the Act. The directors may establish procedures to

give, deliver or send a notice, communication or document to any director,

officer, shareholder, auditor or other person by any means of communication

permitted by the Act or other applicable law. In addition, any notice,

communication or document may be delivered by the Corporation in the form of an

electronic document. The accidental omission to give notice of any meeting of

shareholders to, or the non-receipt of any notice by, any person, or any error

in any notice not affecting the substance of the notice, does not invalidate any

resolution passed or any action taken at the meeting.

 

SECTION 12.2  NOTICE TO JOINT HOLDERS

 

      If two or more persons are registered as joint holders of any security,

any notice may be addressed to all such joint holders, but notice addressed to

one of them constitutes sufficient notice to all of them.

 

SECTION 12.3  COMPUTATION OF TIME

 

      In computing the date when notice must be given when a specified number of

days' notice of any meeting or other event is required, the date of giving the

notice is excluded and the date of the meeting or other event is included.

 

SECTION 12.4  PERSONS ENTITLED BY DEATH OR OPERATION OF LAW

 

      Every person who, by operation of law, transfer, death of a securityholder

or any other means whatsoever, becomes entitled to any security, is bound by

every notice and other acts in respect of such security which has been given to

the securityholder from whom the person derives title to such security. Such

notices may have been given before or after the happening of the event upon

which they became entitled to the security.

 

                                   ARTICLE 13

                                 EFFECTIVE DATE

 

SECTION 13.1  EFFECTIVE DATE

 

 

      This by-law comes into force on the date determined in the Articles of

Arrangement of the Corporation.