NORTEL NETWORKS CORPORATION

 

                                     BY-LAW

 

                                      NO. 1

 

 

 

                                   February 22, 2001

 

 

 

                                  BY-LAW NO. 1

 

                                TABLE OF CONTENTS

 

                                    ARTICLE 1

 

                                   DEFINITIONS

 

SECTION 1.1       DEFINITIONS..............................................    1

 

 

                                    ARTICLE 2

 

                                 CORPORATE SEAL

 

SECTION 2.1       CORPORATE SEAL..........................................     1

 

 

                                    ARTICLE 3

 

                                  SHAREHOLDERS

 

SECTION 3.1       ANNUAL MEETING..........................................     1

SECTION 3.2       SPECIAL MEETINGS........................................     1

SECTION 3.3       NOTICE OF MEETING.......................................     2

SECTION 3.4       ATTENDANCE..............................................     2

SECTION 3.5       QUORUM..................................................     2

SECTION 3.6       CHAIRMAN AND SECRETARY OF MEETING.......................     2

SECTION 3.7       PROXIES.................................................     3

SECTION 3.8       PROCEDURE AND VOTING AT MEETINGS........................     3

SECTION 3.9       SCRUTINEERS.............................................     4

SECTION 3.10      ADJOURNMENT OF MEETINGS.................................     4

 

                                    ARTICLE 4

 

                                    DIRECTORS

 

SECTION 4.1       POWERS..................................................     4

SECTION 4.2       NUMBER OF DIRECTORS.....................................     4

SECTION 4.3       ELECTION................................................     4

SECTION 4.4       RESIGNATION AND VACANCY.................................     4

SECTION 4.5       REGULAR MEETINGS OF DIRECTORS...........................     5

SECTION 4.6       SPECIAL MEETINGS OF DIRECTORS...........................     5

SECTION 4.7       PLACE OF MEETINGS.......................................     5

SECTION 4.8       NOTICE OF MEETINGS......................................     5

SECTION 4.9       QUORUM..................................................     5

SECTION 4.10      CHAIRMAN OF MEETING.....................................     5

SECTION 4.11      VOTING..................................................     6

SECTION 4.12      PARTICIPATION IN MEETINGS...............................     6

SECTION 4.13      RESOLUTION IN LIEU OF MEETING...........................     6

SECTION 4.14      REMUNERATION OF DIRECTORS...............................     6

 

                                    ARTICLE 5

 

                               EXECUTIVE COMMITTEE

 

SECTION 5.1       FORMATION...............................................     6

SECTION 5.2       POWERS..................................................     6

SECTION 5.3       FURTHER PROVISIONS......................................     6

 

                                   ARTICLE 6

 

                                AUDIT COMMITTEE

 

SECTION 6.1       FORMATION...............................................     7

SECTION 6.2       POWERS..................................................     7

SECTION 6.3       FURTHER PROVISIONS......................................     7

 

                                    ARTICLE 7

 

                       OTHER COMMITTEE AND ADVISORY BODIES

 

SECTION 7.1       FORMATION...............................................     7

SECTION 7.2       POWERS..................................................     7

SECTION 7.3       FURTHER PROVISIONS......................................     7

 

                                    ARTICLE 8

 

                                    OFFICERS

 

SECTION 8.1       APPOINTMENT.............................................     8

SECTION 8.2       TENURE OF OFFICE........................................     8

SECTION 8.3       POWERS..................................................     8

SECTION 8.4       CHAIRMAN OF THE BOARD...................................     8

SECTION 8.5       MANAGING DIRECTOR.......................................     9

SECTION 8.6       CHIEF EXECUTIVE OFFICER.................................     9

SECTION 8.7       PRESIDENT...............................................     9

SECTION 8.8       CORPORATE SECRETARY.....................................     9

SECTION 8.9       CONTROLLER..............................................     9

SECTION 8.10      TREASURER...............................................    10

SECTION 8.11      OTHER OFFICERS..........................................    10

 

                                    ARTICLE 9

 

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

SECTION 9.1       LIMITATION OF LIABILITY.................................    10

SECTION 9.2       INDEMNITY...............................................    10

SECTION 9.3       INSURANCE...............................................    11

 

                                   ARTICLE 10

 

                DISCLOSURE OF INTEREST BY DIRECTORS AND OFFICERS

 

SECTION 10.1      DISCLOSURE OF INTEREST AND VOTING.......................    11

 

                                   ARTICLE 11

 

                                 FINANCIAL YEAR

 

SECTION 11.1      FINANCIAL YEAR..........................................    11

 

 

                                   ARTICLE 12

 

                                     AUDITOR

 

SECTION 12.1      AUDITOR.................................................    11

 

                                   ARTICLE 13

 

                                   SECURITIES

 

SECTION 13.1      ISSUANCE................................................    12

SECTION 13.2      SECURITY CERTIFICATES...................................    12

SECTION 13.3      SECURITIES REGISTERS....................................    12

SECTION 13.4      LOST OR DESTROYED CERTIFICATES..........................    12

SECTION 13.5      PAYMENT OF DIVIDENDS AND OTHER AMOUNTS..................    12

SECTION 13.6      JOINT HOLDERS...........................................    13

SECTION 13.7      UNCLAIMED DIVIDENDS.....................................    13

 

                                   ARTICLE 14

 

                             EXECUTION OF DOCUMENTS

 

SECTION 14.1      DOCUMENTS...............................................    13

SECTION 14.2      BANKING ARRANGEMENTS....................................    13

SECTION 14.3      CUSTODY OF SECURITIES...................................    13

 

                                   ARTICLE 15

 

                                     NOTICES

 

SECTION 15.1      METHOD OF GIVING NOTICES................................    14

SECTION 15.2      PROOF OF GIVING OF NOTICE...............................    14

SECTION 15.3      ADDRESSES OF SHAREHOLDERS...............................    14

SECTION 15.4      ACCIDENTAL OMISSION.....................................    14

SECTION 15.5      PERSONS ENTITLED BY DEATH OR OPERATION OF LAW...........    14

SECTION 15.6      WAIVER OF NOTICE........................................    15

 

 

                                   ARTICLE 16

 

                                    BORROWING

 

SECTION 16.1      BORROWING POWER.........................................    15

SECTION 16.2      DELEGATION..............................................    15

 

                                   ARTICLE 17

 

                              ENACTMENT AND REPEAL

 

SECTION 17.1      EFFECTIVE DATE..........................................    15

 

                                   ARTICLE 18

 

                                 INTERPRETATION

 

SECTION 18.1      INTERPRETATION..........................................    16

 

 

 

                                    ARTICLE 1

 

                                   DEFINITIONS

 

SECTION 1.1       DEFINITIONS

 

In the by-laws of the corporation, unless the context otherwise requires:

 

"Act" shall mean the Canada Business Corporations Act, R.S.C. 1985, c. C-44, the

Regulations enacted pursuant to the Act and any statute and regulations that may

be substituted therefor, all as amended from time to time;

 

"by-laws" shall mean this by-law, as amended from time to time, and all other

by-laws of the corporation in force and effect from time to time;

 

"corporation" shall mean Nortel Networks Corporation;

 

"meeting of shareholders" shall mean an annual meeting of shareholders or a

special meeting of shareholders, and includes a meeting of the holders of one

(1) or more of the classes or series of shares of the corporation;

 

"notice" shall include any communication or document; and

 

"special meeting of shareholders" shall mean any meeting of shareholders at

which special business is to be conducted, and includes an annual and special

meeting of shareholders.

 

                                    ARTICLE 2

 

                                 CORPORATE SEAL

 

SECTION 2.1       CORPORATE SEAL

 

The corporation may, but need not have, one (1) or more corporate seals. The

corporate seal or seals of the corporation shall be in such form as the board of

directors may adopt by resolution. An instrument or agreement executed on behalf

of the corporation by a director, officer or agent of the corporation is not

invalid merely because the corporate seal is not affixed thereto.

 

                                    ARTICLE 3

 

                                  SHAREHOLDERS

 

SECTION 3.1       ANNUAL MEETING

 

Subject to the Act, the annual meeting of shareholders shall be held at such

place and on such date in each year and at such time as may be fixed by the

board of directors.

 

An annual meeting of shareholders may also be constituted as an annual and

special meeting of shareholders to consider and transact any special business,

which may be considered and transacted at a special meeting of shareholders.

 

SECTION 3.2       SPECIAL MEETINGS

 

Subject to the Act, special meetings of shareholders may be called at any time

by, or by the order of, the board of directors, the chairman of the board or the

chief executive officer and shall be held at such place as may be determined by

the person or body calling, or ordering the calling of, the special meeting.

 

 

SECTION 3.3       NOTICE OF MEETING

 

A notice of meeting of shareholders or, to the extent required under the Act,

notice of any adjournment or postponement thereof, shall be given as specified

by the Act and other applicable law, and may be given in the manner provided in

Article 15.

 

SECTION 3.4       ATTENDANCE

 

The only persons entitled to attend a meeting of shareholders are those entitled

to vote thereat, the directors, the auditor of the corporation and others who,

although not entitled to vote, are entitled or required under the Act or other

applicable law, the articles or the by-laws of the corporation to be present at

such meeting. The chairman of a meeting of shareholders may permit or restrict

attendance at such meeting by persons other than those enumerated above.

 

The chairman of a meeting of shareholders may order the removal from the meeting

of any person whose conduct, in the opinion of the chairman, has prejudiced or

is likely to prejudice, the orderly conduct of the meeting.

 

To the extent permitted by the Act, meetings of shareholders may be held by

telephonic, electronic or other communication facility. A person participating

in a meeting by such means is deemed to be present at the meeting. The board of

directors may establish, by resolution, procedures regarding the holding of

meetings of shareholders by such means as are permitted by the Act.

 

SECTION 3.5       QUORUM

 

Unless otherwise provided in the articles of the corporation, a quorum at a

meeting of shareholders shall be three (3) persons present in person and

representing in their own right, or by proxy, or as the duly authorized

representative of any shareholder that is a body corporate or association, not

less than ten percent (10%) in number of the outstanding shares of the

corporation carrying voting rights at the meeting of shareholders. At an

adjourned meeting of shareholders, a quorum shall be the shareholders present in

person or represented by proxy or by a duly authorized representative, holding

shares carrying voting rights at the adjourned meeting of shareholders.

Notwithstanding the foregoing, if the corporation has fewer than ten (10)

shareholders of any class or series of shares, any two (2) persons present in

person and representing in their own right, or by proxy, or as the duly

authorized representative of any shareholder that is a body corporate or

association, not less than ten percent (10%) in number of the outstanding shares

of that class or series carrying voting rights at the meeting of that class or

series of shareholders constitutes a quorum for such meeting.

 

If a quorum is present at the opening of a meeting of shareholders, the persons

present may proceed with the business of the meeting, notwithstanding that a

quorum is not present throughout the meeting.

 

SECTION 3.6       CHAIRMAN AND SECRETARY OF MEETING

 

The chairman of the board or, in his or her absence or in case of his or her

disability or refusal to act, the chief executive officer or, in his or her

absence or in case of his or her disability or refusal to act, the president or,

in his or her absence or in case of his or her disability or refusal to act,

such other person that may have been designated by the board of directors to

exercise such function, shall preside as chairman at meetings of shareholders.

In the absence of the chairman of the board, the chief executive officer, the

president and all such other persons designated by the board of directors, or in

case of their disability or refusal to act, the persons present entitled to vote

at a meeting of shareholders shall choose another director as chairman of the

meeting and if no director is present or if all the directors present refuse to

act, then the persons present entitled to vote shall choose one (1) of their

number to be chairman of the meeting.

 

The corporate secretary shall act as secretary of meetings of shareholders or,

in his or her absence or in the case of his or her disability or refusal to act,

the chairman of the meeting shall appoint a person, who need not be a

shareholder, to act as secretary of the meeting.

 

SECTION 3.7       PROXIES

 

A shareholder is entitled to vote in person or by proxy or, if a body corporate

or an association, by its duly authorized representative.

 

Proxyholders must be appointed by a form of proxy or other appropriate

instrument in writing signed by the shareholder or his or her attorney duly

authorized in writing that conforms with the requirements of the Act; provided,

however, that if the Act permits the appointment of a proxyholder or attorney by

telephonic or electronic or other means, the board of directors may establish,

by resolution, procedures in respect of the delivery, completion, execution,

submission and revocation of such instruments by such means.

 

To the extent permitted by the Act, the board of directors may establish, by

resolution, procedures regarding the lodging of instruments appointing a

proxyholder at some place or places other than the place at which a meeting or

adjourned meeting of shareholders is to be held and for particulars of the means

by which such instruments may be communicated prior to the meeting or adjourned

meeting to the corporation or any agent of the corporation appointed for the

purpose of receiving such particulars and providing that instruments appointing

a proxyholder so lodged may be voted as though the instruments themselves were

produced at the meeting or adjourned meeting and votes given in accordance with

such procedures shall be valid and shall be counted. The chairman of a meeting

of shareholders may, subject to any procedures made as aforesaid and applicable

law, in his or her discretion accept telephonic, electronic or other

communication as to the authority of anyone claiming to vote on behalf of and to

represent a shareholder, notwithstanding that no instrument of proxy conferring

such authority has been lodged with the corporation, and any votes given in

accordance with such communication accepted by the chairman of the meeting shall

be valid and shall be counted.

 

SECTION 3.8       PROCEDURE AND VOTING AT MEETINGS

 

The chairman of a meeting of shareholders shall conduct the meeting and shall

determine the procedure thereof in all respects. The chairman's decision on all

matters or things, including, for greater certainty, 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.

 

Unless otherwise required by the Act or other applicable law, or by the articles

or by-laws of the corporation, the vote of the shareholders representing a

majority of the votes attaching to all shares represented at a meeting of

shareholders and entitled to vote thereat shall be sufficient for all purposes

and shall be the decision of the meeting. In the case of an equality of votes,

the chairman of the meeting shall have a casting vote in addition to the vote or

votes to which the chairman is entitled as a shareholder, a proxyholder or a

duly authorized representative of a shareholder.

 

Unless otherwise required by the Act, every matter submitted to a meeting of

shareholders for decision shall be decided by a show of hands, unless a ballot

thereon is required or demanded. The chairman of a meeting of shareholders may

require, or any person entitled to vote may demand, a ballot on any matter

either before or after any vote by a show of hands. A demand for a ballot may be

withdrawn at any time prior to the taking of the ballot. A ballot so required or

demanded shall be taken in such manner and either at once or after adjournment,

as the chairman of the meeting shall direct. The result of the ballot shall be

the decision of the meeting of shareholders, whether or not a vote by a show of

hands shall have been taken previously on the same matter.

 

Subject to the Act, every person entitled to vote at a meeting of shareholders

shall have one (1) vote on a show of hands. Upon a ballot, every person entitled

to vote at a meeting of shareholders shall be entitled to the number of votes

attached to the aggregate number of shares that such person holds or represents.

 

Whenever a vote by a show of hands shall have been taken, unless a ballot

thereon is required or demanded, a declaration by the chairman of a meeting of

shareholders that a particular resolution has been carried, or carried

unanimously, or by any majority, or lost, or not carried by a particular

majority, shall be conclusive evidence of that fact, without proof of the number

or proportion of the votes recorded in favour of or against any resolution, and

the result of the vote so taken shall be the decision of the shareholders on the

resolution.

 

To the extent permitted by the Act, a vote at a meeting may be carried out by

means of a telephonic, electronic or other communication facility.

 

SECTION 3.9       SCRUTINEERS

 

The chairman of a meeting of shareholders may appoint one (1) or more persons

who need not be shareholders to act as scrutineers at a meeting of shareholders

or at any adjourned or postponed meeting of shareholders.

 

The scrutineers shall determine the number of shares held by shareholders

present in person or represented by proxy or by a duly authorized representative

at the meeting and the existence of a quorum. The scrutineers shall also

receive, count and tabulate all ballots, determine the result of a vote by

ballot, and do such acts as are necessary to conduct such 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

shall be conclusive evidence of the facts declared or stated therein.

 

SECTION 3.10      ADJOURNMENT OF MEETINGS

 

The chairman of a meeting of shareholders may adjourn such meeting from time to

time and from place to place. Any adjourned meeting shall be duly constituted if

held in accordance with the terms of the adjournment and a quorum is present

thereat. 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 4

 

                                    DIRECTORS

 

SECTION 4.1       POWERS

 

Subject to the Act, the board of directors shall supervise the management of the

business and affairs of the corporation.

 

The board of directors may exercise all such authority and powers of the

corporation and do all such lawful acts and things as are not by law or

otherwise directed or required to be exercised or done by the shareholders or in

some other manner.

 

SECTION 4.2       NUMBER OF DIRECTORS

 

Until otherwise determined in accordance with the Act, the board of directors

shall consist of not fewer than the minimum number and not more than the maximum

number of directors provided in the articles of the corporation, and within such

minimum and maximum numbers, the board of directors shall from time to time

determine the actual number of directors.

 

Unless otherwise permitted by the Act, a majority of the directors shall be

resident Canadians and the corporation shall have at least two (2) directors who

are neither officers nor employees of the corporation or of its affiliates.

 

SECTION 4.3       ELECTION

 

The directors shall be elected at each annual meeting of shareholders, except as

otherwise provided by the Act, the articles or the by-laws of the corporation.

 

Each director shall hold office until the close of the next annual meeting of

shareholders or until he or she ceases to be a director as provided by the Act

or until his or her resignation becomes effective.

 

SECTION 4.4       RESIGNATION AND VACANCY

 

A director may resign by sending to the corporation a resignation in writing. A

resignation of a director shall become effective at the time it is sent to the

corporation or at the time specified in the resignation, whichever is later. The

provisions of Article 15 with respect to the sending of notice by the

corporation shall apply mutatis mutandis.

 

In addition to any power the directors may have pursuant to the Act to fill the

vacancies among their number, but subject to the maximum number of directors

provided for in the articles, the directors may appoint one or more additional

directors, who shall hold office for a term expiring not later than the close of

the next annual meeting of shareholders, provided that the total number of

additional directors so appointed shall not exceed one third of the number of

directors elected at the previous annual meeting of shareholders.

 

SECTION 4.5       REGULAR MEETINGS OF DIRECTORS

 

Regular meetings of the board of directors may be held at such time or times as

the board of directors or the chairman of the board may determine. Subject to

the Act, no notice shall be required for any such regular meeting.

 

A meeting may be held without notice, except as otherwise provided by the Act,

immediately after each annual meeting of shareholders or annual and special

meeting of shareholders, by the directors as are then present, provided they

shall constitute a quorum, for the appointment of certain officers of the

corporation and for the consideration and transaction of such other business as

may come before the meeting.

 

SECTION 4.6       SPECIAL MEETINGS OF DIRECTORS

 

Special meetings of the board of directors may be called by, or by the order of,

the chairman of the board, the chief executive officer, the president or any two

(2) directors. Unless otherwise determined by the board of directors, notice of

special meetings shall be given.

 

SECTION 4.7       PLACE OF MEETINGS

 

Meetings of the board of directors may be held at any place within or outside of

Canada. To the extent permitted by the Act, meetings of the board of directors

may be held by means of a telephonic, electronic or other communication

facility.

 

SECTION 4.8       NOTICE OF MEETINGS

 

Unless otherwise determined by the board of directors, a notice of meeting of

the board of directors, if required, shall be given at least twenty-four (24)

hours before the hour fixed for the meeting and need not specify the purpose of,

or the business to be considered and transacted at, the meeting, except as

otherwise provided by the Act. Notices of meeting may be given by oral

communication.

 

Directors may in any manner waive notice of any meeting of the board of

directors, or any irregularity in any meeting or in the notice thereof, before

or after the meeting is held.

 

SECTION 4.9       QUORUM

 

The board of directors may determine the quorum for its meetings and, until

otherwise so determined, three (3) directors shall constitute a quorum.

 

Unless otherwise permitted by the Act, no business shall be transacted at a

meeting of the board of directors unless a majority of directors present are

resident Canadians.

 

SECTION 4.10      CHAIRMAN OF MEETING

 

Unless otherwise determined by the board of directors, the chairman of the board

or, in his or her absence or in case of his or her disability or refusal to act,

the chief executive officer, provided the chief executive officer is a director,

or in his or her absence or in case of his or her disability or refusal to act,

such other director who has been designated by the board of directors to

exercise such function, shall preside as chairman at meetings of the board of

directors.

 

SECTION 4.11      VOTING

 

Matters considered at a meeting of the board of directors shall be decided by a

majority of the votes cast. In the case of an equality of votes, the chairman of

the meeting shall have a casting vote in addition to the vote to which the

chairman is entitled as a director.

 

SECTION 4.12      PARTICIPATION IN MEETINGS

 

To the extent permitted by the Act, a director may, if all the directors of the

corporation consent, participate in a meeting of directors by means of a

telephonic, electronic or other communication facility. A director participating

in such a meeting by such means is deemed to be present at the meeting. Any such

consent shall be effective whether given before or after the meeting to which it

relates and may be given with respect to all meetings of the board of directors.

 

SECTION 4.13      RESOLUTION IN LIEU OF MEETING

 

A resolution in writing, signed by all the directors entitled to vote on that

resolution at a meeting of the board of directors, is as valid as if it had been

passed at a meeting of the board of directors.

 

SECTION 4.14      REMUNERATION OF DIRECTORS

 

Each director shall be entitled to receive such remuneration for all services as

a director as the board of directors shall determine.

 

The board of directors may also award additional remuneration to any director

serving as a member of any committee of the board of directors and to any

director undertaking special services on the corporation's behalf beyond the

services ordinarily required of a director by the corporation.

 

The directors shall also be entitled to be reimbursed for such traveling and

other expenses incurred by them in attending board of directors' meetings or

board of directors' committee meetings or otherwise in connection with the

business and affairs of the corporation as the board of directors may determine.

 

                                    ARTICLE 5

 

                               EXECUTIVE COMMITTEE

 

SECTION 5.1       FORMATION

 

The board of directors may appoint from its members an executive committee

consisting of such number of members as the board of directors may determine.

The chairman of the board and the chief executive officer, provided he or she is

a director, shall be members of the executive committee.

 

Unless otherwise permitted by the Act, a majority of the members of the

executive committee shall be resident Canadians.

 

The executive committee shall determine its own organization and procedure,

including its quorum, except as may be otherwise determined by the board of

directors.

 

SECTION 5.2       POWERS

 

The executive committee shall possess and may exercise all the authority and

powers of the board of directors, subject to any limitations or regulations the

board of directors may make and except as otherwise provided by the Act or the

by-laws.

 

SECTION 5.3       FURTHER PROVISIONS

 

Unless otherwise determined, the provisions of Sections 4.7, 4.11, 4.12 and 4.13

shall apply to the executive committee mutatis mutandis.

 

                                    ARTICLE 6

 

                                 AUDIT COMMITTEE

 

SECTION 6.1       FORMATION

 

The board of directors shall appoint annually from its members an audit

committee consisting of such number of members as the board of directors may

determine, but not less than three (3).

 

At least a majority of the members of the audit committee shall be neither

officers nor employees of the corporation or of any of its affiliates.

 

Unless otherwise permitted by the Act, a majority of the members of the audit

committee shall be resident Canadians.

 

Subject to the provisions of the Act and as may be otherwise determined by the

board of directors, the audit committee shall determine its own organization and

procedure, including its quorum.

 

SECTION 6.2       POWERS

 

The audit committee shall possess and may exercise the authority and powers

provided in the Act, as well as all further authority and powers that may be

delegated to it from time to time by the board of directors.

 

SECTION 6.3       FURTHER PROVISIONS

 

Unless otherwise determined, the provisions of Sections 4.7, 4.11, 4.12 and 4.13

shall apply to the audit committee mutatis mutandis.

 

                                    ARTICLE 7

 

                      OTHER COMMITTEES AND ADVISORY BODIES

 

SECTION 7.1       FORMATION

 

The board of directors may constitute one (1) or more such other committees of

the board of directors as it may determine.

 

Unless otherwise permitted by the Act, a majority of the members of any such

committee shall be resident Canadians.

 

The board of directors may also constitute such other advisory bodies as it may

determine, whose members need not be directors of the corporation.

 

Each such other committee or advisory body shall determine its own organization

and procedure, including its quorum, except as may be otherwise determined by

the board of directors.

 

SECTION 7.2       POWERS

 

Such other committees of the board of directors shall possess and may exercise

all the authority and powers that may be delegated to them by the board of

directors.

 

Each advisory body shall have the mandate determined by the board of directors.

 

SECTION 7.3       FURTHER PROVISIONS

 

Unless otherwise determined, the provisions of Sections 4.7, 4.11, 4.12 and 4.13

shall apply to such other committees of the board and advisory bodies mutatis

mutandis.

 

 

                                    ARTICLE 8

 

                                    OFFICERS

 

SECTION 8.1       APPOINTMENT

 

The officers of the corporation shall be appointed by the board of directors.

The chairman of the board may, but need not be, an officer of the corporation.

The board of directors may appoint a chairman of the board, chief executive

officer, president, chief operating officer, chief financial officer, chief

legal officer, chief marketing officer, chief technology officer, one (1) or

more presidents of business units, divisions or other organizations within the

corporation, one (1) or more vice-presidents (to which title words may be added

to indicate seniority or function), corporate secretary, controller and

treasurer. The board of directors may also appoint such other officers,

including assistants to any of the officers so appointed, as it may deem

appropriate and they shall have such authority and powers and shall perform such

duties as may be determined by the board of directors.

 

The same person may hold more than one (1) office in the corporation.

 

None of the officers of the corporation, except the chairman of the board, if an

officer, is required to be a director of the corporation.

 

If no person has been appointed to the office of chief financial officer, the

officer having senior financial responsibility for the corporation shall be the

chief financial officer of the corporation.

 

SECTION 8.2       TENURE OF OFFICE

 

The chairman of the board, if an officer, and any other officers who have also

been elected as directors of the corporation may be appointed for a period not

exceeding the period for which they have been elected as directors. All other

officers shall be appointed at the pleasure of the board of directors and may be

removed from office with or without cause. Unless removed from office by the

board of directors, each officer shall hold office until a successor is

appointed or until the officer resigns either orally or in writing.

 

SECTION 8.3       POWERS

 

The officers of the corporation shall possess and exercise such authority and

powers and shall perform such duties, in addition to those provided in the

by-laws, as may be determined by the board of directors. Any of the powers and

duties of an officer to whom an assistant has been appointed may be exercised

and performed by such assistant, unless the board of directors, the chairman of

the board or the chief executive officer otherwise determines.

 

In case of the absence or inability or refusal to act of any officer of the

corporation or for any other reason that the board of directors may deem

sufficient, the board of directors may delegate all or any of the powers of an

officer to any other officer or employee, or to a director.

 

SECTION 8.4       CHAIRMAN OF THE BOARD

 

The chairman of the board shall possess and exercise such authority and powers

and perform such duties as may be determined by the by-laws and the board of

directors. If a chief executive officer has not been appointed by the board of

directors, unless the board of directors determines otherwise, the chairman of

the board shall be the chief executive officer of the corporation and, as such,

shall possess and exercise the authority and powers and perform the duties of

the chief executive officer.

 

The board of directors may determine that the chairman of the board shall not be

an officer of the corporation and shall act solely in a non-executive capacity.

A non-executive chairman of the board shall possess and exercise such authority

and powers and perform such duties as may be determined by the by-laws and the

board of directors.

 

The board of directors may appoint from their number one (1) or more

vice-chairmen of the board who shall possess and exercise such authority and

powers and shall perform such duties as may be determined by the board of

directors, including, if so determined, possession of any of the authority and

powers and performance of any of the duties of the chairman of the board.

 

SECTION 8.5       MANAGING DIRECTOR

 

The board of directors may appoint from their number a managing director who,

unless otherwise permitted by the Act, shall be a resident Canadian. Subject to

the Act, a managing director shall possess and exercise such authority and

powers and shall perform such duties as may be determined by the by-laws and the

board of directors. A managing director shall not be an officer of the

corporation.

 

SECTION 8.6       CHIEF EXECUTIVE OFFICER

 

The chief executive officer shall have, under the control of the board of

directors, general supervision and direction of the business and affairs of the

corporation. The chief executive officer shall possess and exercise such

authority and powers and perform such other duties as may be determined by the

by-laws, the board of directors and the chairman of the board.

 

SECTION 8.7       PRESIDENT

 

Unless the board of directors determines otherwise, the president shall be the

chief operating officer of the corporation and shall have, under the control of

the board of directors and the chief executive officer, general supervision of

the business of the corporation. The president shall possess and exercise such

authority and powers and perform such other duties as may be determined by the

by-laws, the board of directors, the chairman of the board and the chief

executive officer.

 

SECTION 8.8       CORPORATE SECRETARY

 

The corporate secretary shall possess and exercise such authority and powers and

perform such duties as may be determined by the by-laws, the board of directors,

the chairman of the board, the chief executive officer and the president.

 

The corporate secretary shall give or cause to be given, as and when instructed,

notices to the board of directors, the shareholders, officers, auditors and

members of committees and advisory bodies of the board of directors. Unless

otherwise determined by the board of directors, the corporate secretary shall

attend and record minutes of all meetings of the board of directors, committees

of the board of directors, shareholders and advisory bodies. The corporate

secretary shall have charge of the corporate seal or seals and of the corporate

records required by law to be kept, except accounting records.

 

SECTION 8.9       CONTROLLER

 

The controller shall possess and exercise such authority and powers and perform

such duties as may be determined by the by-laws, the board of directors, the

chairman of the board, the chief executive officer, the president and the chief

financial officer.

 

The controller shall have charge of the accounts and accounting records of the

corporation and shall keep or cause to be kept accurate accounts of all

transactions affecting the financial position of the corporation. Subject to the

control of the chief financial officer of the corporation, the controller shall

determine the appropriate accounting procedures for the proper recording of the

corporation's assets and liabilities.

 

The controller shall prepare for submission to the board of directors such

financial statements as may be required by the board of directors and shall

prepare after the close of each financial year financial statements in

accordance with the requirements of any applicable laws.

 

The controller shall provide financial information and data to the board of

directors of the corporation, whenever requested.

 

SECTION 8.10      TREASURER

 

The treasurer shall possess and exercise such authority and powers and perform

such duties as may be determined by the by-laws, the board of directors, the

chairman of the board, the chief executive officer, the president and the chief

financial officer.

 

The treasurer shall be responsible for the moneys and securities of the

corporation, including the deposit of money, the safekeeping of securities and

the disbursement of the funds of the corporation. The treasurer shall render to

the board of directors, whenever required, an account of all transactions as

treasurer and of the financial position of the corporation.

 

SECTION 8.11      OTHER OFFICERS

 

The chief financial officer, chief legal officer, chief marketing officer, chief

technology officer, president or presidents of a business unit, division or

other organization within the corporation and the vice-president or

vice-presidents, if appointed, shall possess and exercise such authority and

powers and perform such duties as may be determined by the by-laws, the board of

directors, the chairman of the board, the chief executive officer and the

president.

 

                                    ARTICLE 9

 

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

SECTION 9.1       LIMITATION OF LIABILITY

 

No director or officer shall be liable for the acts, receipts, omissions,

failures, neglects or defaults of any other director, officer or employee, or

for joining in any receipt or act for conformity or for any loss, damage or

misfortune whatever occasioned by any error of judgement or oversight on the

part of such director or officer, or for any other loss, damage or misfortune

which shall happen in the execution of the duties of office or in relation

thereto, including any loss, damage or expense suffered or incurred by or

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

any property acquired for or on behalf of the corporation, or for the

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

of the corporation shall be placed out or invested, or for any loss or damage

arising from the bankruptcy, insolvency or tortuous acts of any person with whom

any of the moneys, securities or effects of the corporation shall be lodged or

deposited. Nothing herein shall relieve any director or officer from the duty to

act in accordance with the Act or from liability for any breach thereof. The

directors of the corporation shall not be under any duty or responsibility in

respect of any contract, act or transaction, made, done or entered into on

behalf of the corporation, except such as shall have been submitted to and

authorized or approved by the board of directors. If any director or officer of

the corporation shall be employed by or shall perform services for the

corporation otherwise than as a director or officer or shall be a member of a

firm or a shareholder, director or officer of a body corporate which is employed

by or performs services for the corporation, the fact of such director or

officer being a shareholder, director or officer of the corporation shall not

disentitle such director or officer or such firm or body corporate, as the case

may be, from receiving proper remuneration for such services.

 

SECTION 9.2       INDEMNITY

 

Subject to the limitations contained in the Act, the corporation shall indemnify

a director or officer, a former director or officer, or a person who acts or

acted at the corporation's request as a director or officer of a body corporate

of which the corporation is or was a shareholder or creditor, or a person who

undertakes or has undertaken any liability on behalf of the corporation or any

such body corporate, and his or her heirs and legal representatives, against all

costs, charges and expenses, including an amount paid to settle an action or

satisfy a judgment, reasonably incurred by that person in respect of any civil,

criminal or administrative action or proceeding to which such person is made a

party by reason of being or having been a director or officer of the corporation

or such body corporate, if:

 

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

         interests of the corporation; and

 

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

         is enforced by a monetary penalty, such person had reasonable grounds

         for believing that his or her conduct was lawful.

 

The corporation shall indemnify any person referred to above who fulfills the

conditions contained in (a) and (b) above and who has been substantially

successful on the merits in the defense of any civil, criminal or administrative

action or proceeding to which such person is made a party by reason of his or

her being or having been a director or officer of the corporation or body

corporate, against all costs, charges and expenses reasonably incurred by such

person in connection with the defense of such action or proceeding.

 

The corporation may also indemnify such persons in such other circumstances as

the Act or other applicable law permits or requires. Nothing in this by-law

shall limit the right of any person entitled to indemnity to claim indemnity

apart from the provisions of this by-law. The corporation is hereby authorized

to execute agreements evidencing its indemnity in favour of the foregoing

persons to the full extent permitted by law.

 

SECTION 9.3       INSURANCE

 

To the extent permitted by the Act and other applicable law, the corporation may

purchase and maintain insurance for the benefit of any person referred to in

Section 9.2 against such liability as the board of directors may determine.

 

                                   ARTICLE 10

 

                DISCLOSURE OF INTEREST BY DIRECTORS AND OFFICERS

 

SECTION 10.1      DISCLOSURE OF INTEREST AND VOTING

 

No director or officer shall be disqualified by virtue of being a director, or

by holding any other office of, or having any other relationship with or

pecuniary interest with respect to, the corporation or any body corporate,

partnership or other person in which the corporation is a shareholder, partner

or is otherwise interested, from entering into, or from being concerned or

interested in any manner in, any contract, transaction or arrangement made, or

proposed to be made, with the corporation or any body corporate, partnership or

other person in which the corporation is a shareholder or is otherwise

interested and no such contract, transaction or arrangement shall be void or

voidable for any such reason. Subject to the Act, no director or officer shall

be liable to account to the corporation for any profit arising from any such

directorship, office, relationship or pecuniary interest or realized in respect

of any such contract, transaction or arrangement. Except as required by the Act,

no director or officer need make any declaration or disclosure of interest or,

in the case of a director, refrain from voting in respect of any such contract,

transaction or arrangement.

 

                                   ARTICLE 11

 

                                 FINANCIAL YEAR

 

SECTION 11.1      FINANCIAL YEAR

 

Unless otherwise determined by the board of directors, the financial year of the

corporation shall be the calendar year.

 

                                   ARTICLE 12

 

                                     AUDITOR

 

SECTION 12.1      AUDITOR

 

At each annual meeting of shareholders, the shareholders shall appoint an

auditor to hold office until the close of the next annual meeting of

shareholders.

 

At least once in each financial year, the accounts of the corporation shall be

examined and the auditor shall report on the financial statements of the

corporation required by law.

 

                                   ARTICLE 13

 

                                   SECURITIES

 

SECTION 13.1      ISSUANCE

 

Subject to the Act and to the articles of the corporation, the issuance of

shares of the corporation shall be determined by the board of directors which

may accept subscriptions for, allot, issue and grant rights and options in

respect of the shares of the corporation to such persons, on such terms and

conditions, and for such consideration as it may determine.

 

SECTION 13.2      SECURITY CERTIFICATES

 

Unless otherwise permitted by the Act, every holder of a security of the

corporation is entitled, at such holder's option, to a security certificate or

to a non-transferable written acknowledgement of such holder's right to obtain a

security certificate. Security certificates shall be in such form as the board

of directors may determine. Unless otherwise permitted under the Act, a security

certificate shall be signed manually by at least one (1) director or officer of

the corporation or by, or on behalf of, the registrar, transfer agent or branch

transfer agent of the corporation, or by a trustee who certifies it in

accordance with a trust indenture, and any additional signatures required on the

security certificate may be printed or otherwise mechanically reproduced

thereon.

 

SECTION 13.3      SECURITIES REGISTERS

 

To the extent permitted under the Act, a central securities register shall be

maintained by the corporation or by an agent at its registered office or at any

other place designated by the board of directors for each class or series of

securities. Branch securities registers may be maintained by the corporation or

by an agent at any place designated by the board of directors for each class or

series of securities.

 

Offices for the transfer of securities of the corporation may be maintained at

such places as the board of directors may determine.

 

SECTION 13.4      LOST OR DESTROYED CERTIFICATES

 

New certificates for securities of the corporation may be issued upon such terms

and conditions as the board of directors or any officer or agent designated by

the board of directors may prescribe to replace any certificates theretofore

issued by the corporation that have been defaced, mutilated, lost, destroyed or

wrongfully taken.

 

SECTION 13.5      PAYMENT OF DIVIDENDS AND OTHER AMOUNTS

 

Subject to the Act, the board of directors may declare dividends payable to the

shareholders according to their respective rights and interests in the

corporation.

 

Subject to the articles and by-laws of the corporation, any amount payable in

cash to shareholders (including dividends payable in cash) may be paid by cheque

drawn on a financial institution or by electronic means to or to the order of

each registered holder of shares of the class or series in respect of which such

amount is to be paid. Cheques may be sent by delivery or first class mail to

such registered holder at the holder's address appearing on the register of

shareholders, unless that holder otherwise directs in writing. The sending of a

cheque, as herein provided, in the amount of the dividend less any tax that the

corporation is require to withhold, shall discharge the corporation from its

liability to pay the amount of that dividend, unless the cheque is not paid on

due presentation.

 

Cheques payable to joint shareholders shall be made payable to the order of all

such joint shareholders. Such cheques may be sent to the joint shareholders at

the address appearing on the register of shareholders in respect of that joint

holding, to the first address so appearing if there is more than one (1), or to

such other address as such joint shareholders direct in writing.

 

Dividends or other distributions payable in cash may be paid to shareholders in

Canadian currency or in equivalent amounts of a currency or currencies other

than Canadian currency. The board of directors may declare dividends or

other distributions in any currency or in alternative currencies and make such

provisions as it deems advisable for the payment of such dividends or other

distributions.

 

SECTION 13.6      JOINT HOLDERS

 

In case of several persons registered as the joint holders of any securities of

the corporation, any one (1) of such persons may give effectual receipts for all

dividends and payments on account of dividends, bonus, return of capital,

principal, interest, redemption payments on redemption of securities (if any)

subject to redemption, or other money or security payable or issuable in respect

of such securities.

 

SECTION 13.7      UNCLAIMED DIVIDENDS

 

To the extent permitted under applicable law, any dividend unclaimed after a

period of five (5) years from the date on which it has been declared payable

shall be forfeited and shall revert to the corporation.

 

                                   ARTICLE 14

 

                             EXECUTION OF DOCUMENTS

 

SECTION 14.1      DOCUMENTS

 

Any two (2) of the chairman of the board, the chief executive officer, the

president, the chief operating officer, the chief financial officer, the chief

legal officer, the chief marketing officer, the chief technology officer, the

corporate secretary, the controller, the treasurer, any president of a business

unit, division, or other organization within the corporation, or any

vice-president, or any one (1) of the aforesaid officers together with any other

officer of the corporation, or any one (1) of the aforesaid officers together

with a director, or any other person or persons as the board of directors may

authorize, are authorized and empowered to execute and deliver, in the name and

on behalf of the corporation, any and all agreements, deeds, documents,

instruments and writings. In addition, any two (2) officers that may execute

agreements, deeds, documents, instruments and writings on behalf of the

corporation may direct the manner in which and the person or persons by whom any

particular agreement, deed, document, instrument or writing or class of

agreements, deeds, documents, instruments and writings may or shall be executed

and delivered on behalf of the corporation.

 

To the extent permitted by the Act or other applicable law, agreements, deeds,

documents, instruments and writings on behalf of the Corporation may be executed

by the authorized individuals using electronic signatures. The board of

directors may establish, by resolution, procedures in respect of the use of

electronic signatures.

 

SECTION 14.2      BANKING ARRANGEMENTS

 

The banking business of the corporation, including, without limitation, the

borrowing of money and the giving of security therefor, shall be transacted in

such manner and by such persons as the board of directors, or as an officer or

officers designated by the board of directors, may determine, either generally

or with respect to a particular instance.

 

All cheques, drafts or orders for payment of money and all notes, acceptances

and bills of exchange shall be signed by such officer or officers or other

person or persons, whether or not officers of the corporation, and in such

manner as the board of directors, or as an officer or officers designated by the

board of directors, may determine.

 

SECTION 14.3      CUSTODY OF SECURITIES

 

The securities owned by the corporation shall be deposited for safekeeping with

a bank or trust company or with such other financial institutions or

depositories or in such other manner as may be selected by such officer or

officers or other person or persons, whether or not officers of the corporation,

and in such manner as the board of directors, or as an officer or officers

designated by the board of directors, shall determine. Any securities so

deposited may be withdrawn from time to time only upon the written order of the

corporation signed by such officer or officers or other person or persons,

whether or not officers of the corporation, and in such manner as the board of

directors, or an officer or officers designated by the board of directors shall

determine. Any such authority may be general or confined to specific instances.

 

                                   ARTICLE 15

 

                                     NOTICES

 

SECTION 15.1      METHOD OF GIVING NOTICES

 

To the extent permitted by the Act or other applicable law, notice to be given,

delivered or sent by the corporation to any director, officer, shareholder,

auditor or other person entitled to it shall be sufficiently given, delivered or

sent if delivered personally, or left at such person's recorded address, or sent

by first class mail, telecopy, facsimile, or is otherwise communicated by

electronic means capable of producing a copy that is accessible to the addressee

at the recorded address of such person and is capable of being retained so as to

be usable for subsequent reference. The board of directors may establish, by

resolution, procedures to give, deliver or send a notice to any director,

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

permitted by the Act or other applicable law.

 

Subject to the Act, a notice shall be deemed to have been given, delivered or

sent when it is delivered personally or to the recorded address as aforesaid;

when it has been deposited in a post office or post office letter box; or when

it has been dispatched or delivered for dispatch by telecopy, facsimile, or is

otherwise communicated by electronic means.

 

Notwithstanding the foregoing, if there are reasonable grounds for believing

that a notice to be given, delivered or sent to shareholders, if sent by

unregistered mail, will not be received in the ordinary course of mail,

alternate methods may be authorized by the board of directors, such as

depositing the notice at the offices at which the securities registers of the

corporation are maintained or other places and publishing a notice of its

availability at such places in appropriate publications, subject to applicable

law.

 

For purposes of this Article 15, the recorded address of a shareholder is the

address as recorded in the securities register, and the recorded address of a

director, officer, auditor or other person entitled to receive a notice is the

latest address as recorded in the records of the corporation.

 

Any such notice to be given, delivered or sent to shareholders by the

corporation may, if two (2) or more persons are registered as joint holders of

shares, be given, delivered or sent to whichever person is first named in the

securities register of the corporation.

 

SECTION 15.2      PROOF OF GIVING OF NOTICE

 

A certificate of the corporate secretary or any other officer of the corporation

or of any agent appointed by the corporation, with respect to the giving,

delivery or sending of any notice shall be conclusive evidence of the facts

stated therein and shall be binding on every director, officer, shareholder,

auditor or other persons, as the case may be.

 

SECTION 15.3      ADDRESSES OF SHAREHOLDERS

 

Every shareholder shall furnish in writing to the corporation or to any agent

appointed by the corporation an address where all notices intended for such

shareholder may be given. In the absence of any such address being furnished,

the address of the shareholder shall be deemed to be that of the office at which

the central securities register of the corporation is maintained.

 

SECTION 15.4      ACCIDENTAL OMISSION

 

The accidental omission to give, deliver or send any notice to any director,

officer, shareholder, auditor or other person entitled thereto or the

non-receipt of any notice by any such person or any irregularity or error in any

notice or in the giving, delivery or sending thereof shall not invalidate any

action taken at any meeting held pursuant to such notice or otherwise founded

thereon.

 

SECTION 15.5      PERSONS ENTITLED BY DEATH OR OPERATION OF LAW

 

Every person who, by operation of law, transfer, death of a security holder or

any other means whatsoever, shall become entitled to any security, shall be

bound by every notice in respect of such security which shall have been

duly given, delivered or sent to the security holder from whom such person

derives title to such security prior to the name and address of such person

being entered on the securities register (whether such notice was given before

or after the happening of the event upon which such person became so entitled)

and prior to such person furnishing to the corporation the proof of authority or

evidence of entitlement prescribed by the Act.

 

SECTION 15.6      WAIVER OF NOTICE

 

Any shareholder, proxyholder or other person entitled to attend a meeting of

shareholders, and any director, officer, auditor or other person entitled to

receive notice may at any time waive any notice, or waive or abridge time for

any notice required to be given, delivered or sent to such person and such

waiver or abridgement, whether given before or after the meeting or event, or

other occurrence of which or in respect of which notice is required to be given,

delivered or sent, shall cure any default in the giving, delivery or sending of

such notice or in the length of such notice, as the case may be. Unless required

by the Act or other applicable law, or by the articles or by-laws of the

corporation, a waiver of notice of meeting of shareholders or of the board of

directors or committee of directors may be given in any manner.

 

                                   ARTICLE 16

 

                                    BORROWING

 

SECTION 16.1      BORROWING POWER

 

Without in any way limiting the borrowing powers of the corporation and of the

board of directors of the corporation as set forth in the Act, but subject to

the articles of the corporation, the board of directors may, on behalf of the

corporation, without authorization of the shareholders:

 

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

 

         (b)      issue, reissue, 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 directly or

                  indirectly financial assistance to any person by means of a

                  loan, guarantee or otherwise 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, movable or immovable, property of

                  the corporation including book debts, rights, powers,

                  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.

 

Nothing in this Section 16.1 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 16.2      DELEGATION

 

Unless the Act or the articles or by-laws of the corporation otherwise provide,

the board of directors may delegate to a director or directors, a committee of

the board of directors, or an officer or officers of the corporation any or all

of the powers conferred on the board of directors by the Act and Section 16.1 to

such extent and in such manner as the board of directors may determine at the

time of such delegation.

 

                                   ARTICLE 17

 

                              ENACTMENT AND REPEAL

 

SECTION 17.1      EFFECTIVE DATE

 

This by-law shall come into force and effect when made by the board of directors

in accordance with the Act.

 

                                   ARTICLE 18

 

                                 INTERPRETATION

 

SECTION 18.1      INTERPRETATION

 

This by-law shall be in both the English and French languages and both versions

shall be equally authoritative. If there be a difference between the English and

French texts of this by-law, that version shall prevail which is most consistent

with the intention of the by-law and the ordinary rules of interpretation shall

apply in determining such intention.

 

This by-law and all other by-laws are made pursuant to and are subordinate to

the Act and should be read in conjunction with the Act. In case of conflict

between a provision of any by-law and a provision of the Act, the applicable

provision of the Act shall govern.

 

Words and expressions not defined in this by-law shall have the same meaning as

ascribed by the Act, unless required otherwise by the context.

 

Words importing the singular number shall include the plural and vice versa and

words importing gender shall include the masculine, feminine and neuter genders.

 

[End]