6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of May, 2006

Commission File Number 1-10928

INTERTAPE POLYMER GROUP INC.

9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Quebec, Canada, H4M 2X5

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:  Form 20-F              Form 40-F          X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  __________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  __________

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  Yes                  No           X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with

Rule 12g3-2(b):    82-______

The Information contained in this Report is incorporated by reference into Registration Statement No. 333-109944

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INTERTAPE POLYMER GROUP INC.

Date:  May 17, 2006

By:  /s/ Andrew M. Archibald__________________

       Andrew M. Archibald, C.A., CFO and Secretary

ORLDOCS 10379415 1

EX-1

INTERTAPE POLYMER GROUP INC.

PROXY

The Management of the Corporation Solicits this Proxy

The undersigned shareholder of INTERTAPE POLYMER GROUP INC. (the "Corporation") hereby appoints Michael L. Richards, failing whom, Melbourne F. Yull, or instead of the foregoing,

,
as the proxyholder of the undersigned to attend and act for and on behalf of the undersigned at the Annual and Special Meeting of Shareholders of the Corporation to be held on June 14, 2006, and at any adjournment thereof to the same extent and with the same power as if the undersigned were present in person thereat and with authority to vote and act in the said proxyholder's discretion with respect to amendments or variations to matters referred to in the notice of the Meeting and with respect to other matters which may properly come before the Meeting. This proxy is solicited by and on behalf of the Management of the Corporation.

The said proxyholder is specifically directed to vote or withhold from voting the shares registered in the name of the undersigned as indicated below:

(1)

ELECTION OF DIRECTORS

¨ FOR all nominees listed below as a group (except as marked to the contrary below) ¨ WITHHOLD AUTHORITY to vote for all nominees listed below as a group

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)

H. Dale McSween, Michael L. Richards, Ben J. Davenport, Jr., L. Robbie Shaw, Gordon R. Cunningham, Thomas E. Costello, John E. Richardson.

(2)

VOTE FOR ¨ WITHHOLD FROM VOTING ¨ in respect of the appointment of Raymond Chabot Grant Thornton as auditors of the Corporation and authorizing the directors to fix their remuneration.

(3)

VOTE FOR ¨ VOTE AGAINST ¨ the resolution approving, ratifying and confirming the Corporation's amended Shareholder Protection Rights Plan Agreement.

(4)

VOTE FOR ¨ VOTE AGAINST ¨ the resolution approving, ratifying and confirming the Corporation's amended articles of amalgamation.

Date:

Signature

Notes:

(1)

This form of proxy must be executed by the shareholder or his attorney authorized in writing or, if the shareholder is a corporation, under the corporate seal or by an officer or attorney thereof duly authorized. Joint holders should each sign. Executors, administrators, trustees, etc., should so indicate when signing. If undated, this proxy is deemed to bear the date it was mailed to the shareholder.

(2)

A shareholder may appoint as proxyholder a person (who need not be a shareholder) other than the persons designated in this form of proxy to attend and act on his behalf at the Meeting by inserting the name of such other person in the space provided or by completing another proper form of proxy.

(3)

The shares represented by this proxy will, on a show of hand or any ballot that may be called for, be voted or withheld from voting in accordance with the instructions given by the shareholder; in the absence of any contrary instructions, this proxy will be voted "FOR" the itemized matters.

PROXY

Please complete and return in the envelope provided.

FORMULAIRE DE PROCURATION

FORMULAIRE DE PROCURATION

La Direction de la Société sollicite cette Procuration

Le soussigné, actionnaire de LE GROUPE INTERTAPE POLYMER INC. (la «Société»), constitue par les présentes Michael L. Richards, ou à défaut, Melbourne F. Yull,ou, à leur place,

,
son fondé de pouvoir, pour assister et agir en son nom à l'Assemblée annuelle et spéciale des actionnaires de la Société qui aura lieu le 14 juin 2006 ou à toute reprise. Il lui confère tous les pouvoirs qu'il pourrait exercer s'il était présent à une telle assemblée ou reprise, avec autorité pour le fondé de pouvoir de voter et d'agir selon sa discrétion quant aux modifications ou aux variations apportées aux questions énoncées dans l'avis de convocation à l'assemblée et quant à toute autre question dûment soumise à l'assemblée. Cette procuration est sollicitée par la direction de la Société et en son nom.

Le fondé de pouvoir est par les présentes spécifiquement autorisé à exercer cette procuration afin de voter ou de s'abstenir de voter de la façon indiquée ci-dessous :

(1)

ÉLECTION DES ADMINISTRATEURS

¨ EN FAVEUR du groupe de candidats dont les noms paraissent ci-dessous (sauf si indiqué au contraire) ¨ ABSTENTION de voter pour le groupe de candidats dont les noms apparaissent ci-dessous.

(DIRECTIVES : POUR FAIRE EN SORTE QUE LE FONDÉ DE POUVOIR S'ABSTIENNE DE VOTER EN FAVEUR DE TOUT CANDIDAT, BIFFER LE NOM DU CANDIDAT EN QUESTION DANS LA LISTE CI-DESSOUS.)

H. Dale McSween, Michael L. Richards, Ben J. Davenport, Jr., L. Robbie Shaw, Gordon R. Cunningham, Thomas E. Costello, John E. Richardson.

(2)

EN FAVEUR ¨ ABSTENTION ¨ quant à la nomination du cabinet Raymond Chabot Grant Thornton comme vérificateurs de la Société et quant à l'autorisation aux administrateurs de fixer leur rémunération.

(3)

EN FAVEUR ¨ CONTRE ¨ la résolution approuvant, ratifiant et confirmant la convention de protection des droits des actionnaires de la Société telle qu'amendée.

(4)

EN FAVEUR ¨ CONTRE ¨ la résolution approuvant, ratifiant et confirmant l'amendement apporté aux articles de fusion de la Société.

Date:

Signature

Remarques :

(1)

Cette procuration doit être signée par l'actionnaire ou par son mandataire autorisé par écrit. Si l'actionnaire est une société, la procuration doit porter son sceau ou être signée par un dirigeant ou un mandataire dûment autorisé. Les codétenteurs doivent tous signer. Les exécuteurs, administrateurs, fiduciaires et autres doivent faire mention de leur fonction lorsqu'ils signent. Une procuration non daté est réputée porter la date de son envoi par la poste à l'actionnaire.

(2)

Un actionnaire peut nommer comme fondé de pouvoir pour assister et agir en son nom à l'assemblée une personne (qui n'a pas à être actionnaire) autre que les personnes désignées dans ce formulaire de procuration en inscrivant le nom de cette personne dans l'espace prévu ou en remplissant un autre formulaire de procuration approprié.

(3)

Lors d'un vote à main levée ou d'un, scrutin, les voix afférentes aux actions représentées par ce formulaire de procuration seront exprimées, selon les directives données par l'actionnaire, en faveur ou en abstention d'une affaire; en l'absence de directives contraires, les voix afférentes aux actions seront exprimées «EN FAVEUR» des questions spécifiées aux présentes.

Endnotes

EX-2

INTERTAPE POLYMER GROUP INC.

NOTICE OF THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the Annual and Special Meeting (the "Meeting") of Shareholders of INTERTAPE POLYMER GROUP INC. (the "Corporation") will be held at the Hotel Omni Mont Royal, 1050 Sherbrooke St. West, Montreal, Quebec, on June 14, 2006, at 4:00 p.m. o'clock in the afternoon, for the purposes of:

(1)

receiving the consolidated financial statements for the year ended December 31, 2005, together with the auditors' report thereon;

(2)

electing a board of seven directors to serve until the next annual meeting of shareholders;

(3)

appointing auditors and authorizing the directors to fix their remuneration;

(4)

considering and, if deemed advisable, approving, ratifying and confirming the Corporation's amended Shareholder Protection Rights Plan Agreement;

(5)

considering and, if deemed advisable, approving, ratifying and confirming the Corporation's amended articles of amalgamation; and

(6)

transacting such other business as may properly be brought before the Meeting.

The specific details of all matters proposed to be put before the Meeting are set forth in the accompanying Management Proxy Circular.

Only holders of record of common shares of the Corporation at the close of business on May 5, 2006 will be entitled to vote at the Meeting.

By Order of the Board of Directors,
(signed) ANDREW M. ARCHIBALD, C.A.
Chief Financial Officer and Secretary

Montreal, Québec – May 17, 2006

SHAREHOLDERS WHO ARE UNABLE TO BE PRESENT AT THE MEETING ARE REQUESTED TO COMPLETE AND RETURN THE ENCLOSED FORM OF PROXY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE. PROXIES MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE TRANSFER AGENT OF THE CORPORATION NOT LESS THAN 48 HOURS PRIOR TO THE MEETING.

EX-3

INTERTAPE POLYMER GROUP INC.

and

CIBC MELLON TRUST COMPANY

as Rights Agent

AMENDED AND RESTATED

SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT

June 11, 2003 14, 2006

STIKEMAN ELLIOTT LLP

TABLE OF CONTENTS

ARTICLE 1
INTERPRETATION

1.1

Certain Definitions.

1

1.2

Currency.

13

1.3

Headings.

13

1.4

Number and Gender.

14

1.5

Acting Jointly or in Concert.

14

1.6

Statutory References.

14

ARTICLE 2
THE RIGHTS

2.1

Legend on Common Share Certificates.

14

2.2

Initial Exercise Price; Exercise of Rights; Detachment of Rights.

15

2.3

Adjustments to Exercise Price; Number of Rights.

17

2.4

Date on Which Exercise is Effective.

23

2.5

Execution, Authentication, Delivery and Dating of Rights Certificates

23

2.6

Registration, Registration of Transfer and Exchange.

23 24

2.7

Mutilated, Destroyed, Lost and Stolen Rights Certificates.

24

2.8

Persons Deemed Owners.

25

2.9

Delivery and Cancellation of Rights Certificates.

25

2.10

Agreement of Rights Holders.

25

2.11

Rights Certificate Holder not Deemed a Shareholder.

26

ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

3.1

Flip-in Event.

27

ARTICLE 4
THE RIGHTS AGENT

4.1

General.

27 28

4.2

Merger or Amalgamation or Change of Name of Rights Agent

28 29

4.3

Duties of Rights Agent

29

4.4

Change of Rights Agent

30 31

ARTICLE 5
MISCELLANEOUS

5.1

Redemption and Waiver.

31 32

5.2

Expiration.

33 34

5.3

Issuance of New Rights Certificates.

33 34

5.4

Supplements and Amendments.

33 34

5.5

Fractional Rights and Fractional Shares.

35 36

5.6

Rights of Action.

35 36

5.7

Notice of Proposed Actions.

35 36

5.8

Notices.

36 37

5.9

Successors.

36 38

(i)

5.10

Benefits of this Agreement.

37 38

5.11

Governing Law.

37 38

5.12

Severability.

37 38

5.13

Effective Date.

37 38

5.14

Determinations and Actions by the Board of Directors.

37 38

5.15

Rights of Board, Corporation and Offeror.

37 38

5.16

Regulatory Approvals.

38 39

5.17

Declaration as to Non-Canadian and Non-U.S. Holders.

38 39

5.18

Time of the Essence.

38 39

5.19

Execution in Counterparts.

38 39

SCHEDULE

SCHEDULE 2.2(3)

(ii)

SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT

THIS AMENDED AND RESTATED SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT dated June 11, 2003 14, 2006 between Intertape Polymer Group Inc. (the "Corporation"), a corporation amalgamated under the Canada Business Corporations Act, and CIBC Mellon Trust Company (formerly known as The R-M Trust Company) , a trust company incorporated existing under the laws of Canada, as Rights Agent (the "Rights Agent", which term shall include any successor Rights Agent hereunder).

WITNESSES THAT:

WHEREAS the Corporation and the Rights Agent entered into a shareholder protection rights plan agreement dated as of August 24, 1993, such shareholder protection rights plan agreement which was subsequently amended and restated on May 21, 1998 and on June 11, 2003 (the "Corporation’s Shareholder Protection Rights Plan Agreement"); and

WHEREAS the shareholders of the Corporation have determined to amend and restate the Corporation’s Shareholder Protection Rights Plan Agreement as set out herein (the amended and restated Corporation’s Shareholder Protection Rights Plan Agreement being referred to herein as the "Rights Plan");

NOW THEREFORE, in consideration of the foregoing premises and the respective covenants and agreements set forth herein, the parties hereby agree as follows:

ARTICLE 1
INTERPRETATION

1.1

Certain Definitions.

For purposes of the Agreement, the following terms have the meanings indicated:

(a)

"Acquiring Person" means, any Person who is the Beneficial Owner of twenty percent (20%) or more of the outstanding Voting Shares of the Corporation; provided, however, that the term "Acquiring Person" shall not include:

(i)

the Corporation or any Subsidiary of the Corporation;

(ii)

any Person who becomes the Beneficial Owner of twenty percent (20%) or more of the outstanding Voting Shares of the Corporation as a result of one or any combination of: (A) Corporate Acquisitions, (B) Permitted Bid Acquisitions, (C) Corporate Distributions, (D) Exempt Acquisitions, or (E) Convertible Security Acquisitions; provided, however, that if a Person shall become the Beneficial Owner of twenty percent (20%) or more of the Voting Shares of the Corporation then outstanding by reason of one or more or any combination of the operation of a Corporate Acquisition, Permitted Bid Acquisition, Corporate Distribution, Exempt Acquisition or Convertible Security Acquisition and, after such Corporate Acquisition, Permitted Bid Acquisition, Corporate Distribution, Exempt Acquisition or

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Convertible Security Acquisition, becomes the Beneficial Owner of an additional one percent (1%) or more of the outstanding Voting Shares of the Corporation other than pursuant to Corporate Acquisitions, Permitted Bid Acquisitions, Corporate Distributions, Exempt Acquisitions or Convertible Security Acquisitions, then as of the date of such acquisition, such Person shall become an Acquiring Person;

(iii)

for a period of ten (10) days after the Disqualification Date (as hereinafter defined), any Person who becomes the Beneficial Owner of twenty percent (20%) or more of the outstanding Voting Shares of the Corporation as a result of such Person becoming disqualified from relying on Clause 1.1(e)(3) hereof solely because such Person makes or proposes to make a Take-over Bid in respect of securities of the Corporation alone or by acting jointly or in concert with any other Person (the first date of public announcement (which, for the purposes of this definition, shall include, without limitation, a report filed pursuant to section 101 of the Securities Act (Ontario)) by such Person or the Corporation of a current intent to commence such a Take-over Bid being herein referred to as the "Disqualification Date"); and

(iv)

an underwriter or member of a banking or selling group that acquires Voting Shares of the Corporation from the Corporation in connection with a distribution of securities (including, for greater certainty, by way of private placement of such securities) to the public.

(b)

"Affiliate" when used to indicate a relationship with a specified Person, means a Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person.

(c)

"Agreement" means this agreement as amended, modified or supplemented from time to time.

(d)

"Associate" when used to indicate a relationship with a specified Person, means any relative of such specified Person who has the same home as such specified Person, or any Person to whom such specified Person is married or with whom such specified Person is living in a conjugal relationship outside marriage, or any relative of such spouse or other Person who has the same home as such specified Person.

(e)

A Person shall be deemed the "Beneficial Owner", and to have "Beneficial Ownership" of, and to "Beneficially Own":

(i)

any securities of which such Person or any Affiliate or Associate of such Person is the owner in law or equity;

(ii)

any securities as to which such Person or any of such Person’s Affiliates or Associates has the right to acquire (A) upon the exercise of any Convertible Securities, or (B) pursuant to any agreement, arrangement or

- 3 -

understanding, in each case if such right is exercisable immediately or within a period of 60 days thereafter whether or not on condition or the happening of any contingency (other than customary agreements with and between underwriters and banking group or selling group members with respect to a distribution of securities or pursuant to a pledge of securities in the ordinary course of business); and

(iii)

any securities that are Beneficially Owned within the meaning of Clause 1.1(e)(i) or (ii) hereof by any other Person with whom such Person is acting jointly or in concert;

provided, however, that a Person shall not be deemed the "Beneficial Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any security as a result of the existence of any one or more of the following circumstances:

(1)

such security has been deposited or tendered, pursuant to a Take-over Bid made by such Person or made by any Affiliate or Associate of such Person or made by any other Person acting jointly or in concert with such Person, unless such deposited or tendered security has been taken up or paid for, whichever shall first occur;

(2)

by reason of the holder of such security having agreed to deposit or tender such security to a Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person referred to in Clause (iii) of this definition pursuant to a Permitted Lock-Up Agreement, but only until such time as the securities are taken up or paid for under the Take-over Bid;

(3)

such Person or any Affiliate or Associate of such Person or any other Person acting jointly or in concert with such Person, holds such security; provided that (i) the ordinary business of any such Person (the "Fund Manager") includes the management of investment funds for others (which others may include or be limited to one or more employee benefit plans or pension plans) and/or includes the acquisition or holding of securities for a non-discretionary account of a Client (as defined below) by a dealer or broker registered under applicable securities laws to the extent required, and such security is held by the Fund Manager in the ordinary course of such business in the performance of such Fund Manager’s duties for the account of any other Person (a "Client"), (ii) such Person (the "Trust Company&q uot;) is licensed to carry on the business of a trust company under applicable law and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons or in relation to other accounts and holds such security in the ordinary course of such duties for the estate of any such deceased or incompetent Person (each an "Estate Account") or for such other accounts (each an "Other Account"), (iii) the Person (the "Statutory Body") is an independent Person established by statute for purposes that include, and the ordinary business or activity of such person includes, the

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management of investment funds for employee benefit plans, pension plans, insurance plans of various public bodies and the Statutory Body holds such security for the purposes of its activities as such, (iv) the ordinary business of any such Person includes acting as an agent of the Crown in the management of public assets (the "Crown Agent"), or (v) the Person, any of such Person’s Affiliates or Associates or any other Person acting jointly or in concert with such Person holds such security, provided that the Person is the administrator or the trustee of one or more pension funds or plans (each a "Pension Fund") registered under the laws of Canada or any province thereof or the United States or any state thereof (the "Independent Person"), or is a Pension Fund and holds such securi ties for the purposes of its activities as an Independent Person or as a Pension Fund, and further provided that such Person does not hold more than thirty percent (30%) of the Voting Shares of the Corporation;

provided, however, that in any of the foregoing cases no one of the Fund Manager, the Trust Company, the Statutory Body, the Crown Agent, the Independent Person or the Pension Fund makes or announces a current intention to make a Take-over Bid in respect of securities of the Corporation alone or by acting jointly or in concert with any other Person (other than pursuant to a distribution by the Corporation or by means of ordinary market transactions (including prearranged trades entered in the ordinary course of business of such Person) executed through the facilities of a stock exchange or organized over-the-counter market);

(4)

such Person is a Client of the same Fund Manager as another Person on whose account the Fund Manager holds such security, or such Person is an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security, or such Person is a Pension Fund with the same Independent Person as another Pension Fund;

(5)

such Person is a Client of a Fund Manager and such security is owned at law or in equity by the Fund Manager, or such Person is an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company, or such Person is a Pension Fund and such security is owned at law or in equity by the Independent Person; or

(6)

such Person is a registered holder of securities as a result of carrying on the business of, or acting as a nominee of, a securities depository.

For purposes of this Agreement, the percentage of Voting Shares Beneficially Owned by any Person, shall be and be deemed to be the product of one hundred (100) and the number of which the numerator is the number of votes for the election of all directors generally attaching to the Voting Shares Beneficially Owned by such Person and the denominator of which is the number of votes for

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the election of all directors generally attaching to all outstanding Voting Shares.  Where any Person is deemed to Beneficially Own unissued Voting Shares, such Voting Shares shall be deemed to be issued and outstanding for the purpose of calculating the percentage of Voting Shares Beneficially Owned by such Person.

(f)

"Board of Directors" means, at any time, the duly constituted board of directors of the Corporation.

(g)

"Business Day" means any day other than a Saturday, Sunday or a day on which banking institutions in Montreal are authorized or obligated by law to close.

(h)

"Canadian Dollar Equivalent" of any amount which is expressed in United States dollars shall mean on any date the Canadian dollar equivalent of such amount determined by multiplying such amount by the U.S. — Canadian Exchange Rate in effect on such date.

(i)

"CBCA" means the Canada Business Corporations Act R.S.C. 1985, c. C-44, and the regulations thereunder, and any comparable or successor laws or regulations thereto.

(j)

"close of business" on any given date means the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the office of the transfer agent for the Common Shares in the City of Montreal (or, after the Separation Time, the office of the Rights Agent in the City of Montreal) is closed to the public.

(k)

"Common Shares", when used with reference to the Corporation, means the common shares without par value in the capital of the Corporation.

(l)

"Competing Bid" means a Take-over Bid that: (i) is made while another Permitted Bid is in existence, and (ii) satisfies all the components of the definition of a Permitted Bid, except that the requirements set out in Clause (ii) of the definition of a Permitted Bid shall be satisfied if the Take-over Bid shall contain, and the take up and payment for securities tendered or deposited thereunder shall be subject to, an irrevocable and unqualified condition that no Voting Shares shall be taken up or paid for pursuant to the Competing Bid prior to the close of business on the date that is no earlier than the date which is the later of thirty-five (35) days after the date the Competing Bid is made or sixty (60) days after the earliest date on which any other Permitted Bid or Competing Bid that is then in existence was made and only if at that date, more than fifty percent (50%) of the then outstanding Voting Shares held by Independent Shareholders have been deposited or tendered to the Competing Bid and not withdrawn.

(m)

"controlled": a corporation is "controlled" by another Person if:

(i)

securities entitled to vote in the election of directors carrying more than fifty percent (50%) of the votes for the election of directors are held, other than by way of security only, by or for the benefit of the other Person; and

- 6 -

(ii)

the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such corporation;

and "controls", "controlling" and "under common control with" shall be interpreted accordingly.

(n)

"Convertible Security" means at any time:

(i)

any right (regardless of whether such right constitutes a security) to acquire Voting Shares from the Corporation; and

(ii)

any securities issued by the Corporation from time to time (other than the Rights) carrying any exercise, conversion or exchange right;

in each case pursuant to which the holder thereof may acquire Voting Shares or other securities which are convertible into or exercisable or exchangeable for Voting Shares.

(o)

"Convertible Security Acquisition" means the acquisition of Voting Shares upon the exercise, conversion or exchange of Convertible Securities received by a Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Corporate Distribution.

(p)

"Corporate Acquisition" means an acquisition by the Corporation or a Subsidiary of the Corporation or the redemption by the Corporation of Voting Shares of the Corporation which by reducing the number of Voting Shares of the Corporation outstanding increases the proportionate number of Voting Shares Beneficially Owned by any Person.

(q)

"Corporate Distribution" means an acquisition as a result of:

(i)

a stock dividend or a stock split or other event pursuant to which a Person receives or acquires Voting Shares on the same pro rata basis as all other holders of Voting Shares of the same class; or

(ii)

any other event pursuant to which all holders of Voting Shares of the Corporation are entitled to receive Voting Shares or Convertible Securities on a pro rata basis, including, without limiting the generality of the foregoing, pursuant to the receipt or exercise of rights issued by the Corporation and distributed to all the holders of a class of Voting Shares to subscribe for or purchase Voting Shares or Convertible Securities of the Corporation, provided that such rights are acquired directly from the Corporation and not from any other Person and provided further that the Person in question does not thereby acquire a greater percentage of Voting Shares, or Convertible Securities representing the right to acquire Voting Shares of such class, than the percentage of Voting Shares of the class Beneficially Owned immediately prior to such acquisition.< /P>

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(r)

"Disqualification Date" has the meaning ascribed thereto in Section 1.1(a)(iii) hereof.

(s)

"Effective Date" has the meaning ascribed thereto in Section 5.13 hereof.

(t)

"Election to Exercise" has the meaning ascribed thereto in Section 2.2(4) hereof.

(u)

"Exempt Acquisition" means an acquisition:

(i)

in respect of which the Board of Directors has waived the application of Section 3.1 hereof pursuant to the provisions of Section 5.1(2), 5.1(3) or 5.1(4) hereof;

(ii)

which was made on or prior to the Record Time;

(iii)

which was made pursuant to a dividend reinvestment plan of the Corporation or other similar share purchase plan made available to the holders of shares of the Corporation generally;

(iv)

pursuant to a distribution to the public by the Corporation of Voting Shares or Convertible Securities made pursuant to a prospectus provided that the Person in question does not thereby acquire a greater class percentage of Voting Shares, or Convertible Securities representing the right to acquire Voting Shares of such class, than the percentage of Voting Shares of the class Beneficially Owned immediately prior to such acquisition; or

(v)

pursuant to an issuance and sale by the Corporation of Voting Shares or Convertible Securities by way of a private placement by the Corporation, provided that (x) all necessary stock exchange approvals for such private placement have been obtained and such private placement complies with the terms and conditions of such approvals, and (y) the purchaser does not become the Beneficial Owner of more than 25% of the Voting Shares outstanding immediately prior to the private placement (and in making this determination, the securities to be issued to such purchaser on the private placement shall be deemed to be held by such purchaser but shall not be included in the aggregate number of outstanding Voting Shares immediately prior to the private placement).

(v)

"Exercise Price" means, as of any date, the price at which a holder may purchase the securities issuable upon exercise of one whole Right.  Until adjustment thereof in accordance with the terms hereof, the Exercise Price shall be $100.

(w)

"Expiration Time" means the earlier of: (i) the Termination Time, and (ii) the close of business on the date immediately following the date of the Corporation’s annual meeting of shareholders to be held in 2006. 2009.

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(x)

"Flip-in Event" means a transaction in or pursuant to which any Person becomes an Acquiring Person.

(y)

"Independent Shareholders" means holders of Voting Shares of the Corporation, but shall not include (i) any Acquiring Person or any Offeror, or any Affiliate or Associate of such Acquiring Person or such Offeror, or any Person acting jointly or in concert with such Acquiring Person or such Offeror, or (ii) any employee benefit plan, stock purchase plan, deferred profit sharing plan or any similar plan or trust for the benefit of employees of the Corporation or a Subsidiary of the Corporation, unless the beneficiaries of any such plan or trust direct the manner in which the Voting Shares are to be voted or direct whether the Voting Shares are to be tendered to a Take-over Bid; and shall include any Person referred to in Clause 1.1(e)(3) hereof (other than any Person who pursuant to Clause 1.1(e)(3) is deemed to Beneficially Own the V oting Shares).

(z)

"Market Price" per share of any securities on any date of determination means the average of the daily closing prices per share of such securities (determined as described below) on each of the twenty (20) consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused the closing prices used to determine the Market Price on any Trading Days not to be fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such closing price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to ma ke it fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day.  The closing price per share of any securities on any date shall be (i) the closing board lot sale price or, if such price is not available, the average of the closing bid and asked prices, for each share as reported by the stock exchange on which the greater number of shares has been traded on such day or if the shares are listed only on one (1) stock exchange at that time, that stock exchange, or (ii) if for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on any stock exchange, the closing board lot sale price or, if such price is not available, the average of the closing bid and asked prices, for each share as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the securities exchange in Canad a or the United States on which the securities are primarily traded, or (iii) if not so listed, the last quoted price, or if not so quoted, the average of the high bid and low asked prices for each share of such securities in the over-the-counter market, or (iv) if on any such date the securities are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the securities selected in good faith by the Board of Directors; provided, however, that if on any such date the securities are not traded in the over-the-counter market, the closing price per share of such securities on such date shall mean the fair value per share of such

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securities on such date as determined in good faith by a nationally or internationally recognized investment dealer or investment banker.  The Market Price shall be expressed in Canadian dollars and if initially determined in respect of any day forming part of the twenty (20) consecutive trading day period in United States dollars, such amount shall be translated into Canadian dollars at the Canadian Dollar Equivalent thereof.

(aa)

"Offer to Acquire" shall include:

(i)

an offer to purchase, a public announcement of an intention to make an offer to purchase, or a solicitation of an offer to sell; and

(ii)

an acceptance of an offer to sell, whether or not such offer to sell has been solicited;

or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell.

(bb)

"Offeror" means a Person who has announced a current intention to make, or who makes and has outstanding, a Take-over Bid.

(cc)

"Offeror’s Securities" means Voting Shares of the Corporation Beneficially Owned by an Offeror, any Affiliate or Associate of such Offeror or any Person acting jointly or in concert with the Offeror.

(dd)

"Permitted Bid" means a Take-over Bid that is made by means of a Take-over Bid circular and which also complies with the following additional provisions:

(i)

the Take-over Bid shall be made to all registered holders of Voting Shares (other than the Voting Shares held by the Offeror);

(ii)

the Take-over Bid shall contain, and the take up and payment for securities tendered or deposited thereunder shall be subject to, an irrevocable and unqualified condition that no Voting Shares shall be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date which is not less than sixty (60) days following the date of the Take-over Bid and that no Voting Shares shall be taken up or paid for pursuant to the Take-over Bid unless, at such date, more than fifty percent (50%) of the then outstanding Voting Shares held by Independent Shareholders have been deposited to the Take-over Bid and not withdrawn;

(iii)

the Take-over Bid shall contain an irrevocable and unqualified provision that, unless the Take-over Bid is withdrawn, Voting Shares of the Corporation may be deposited pursuant to such Take-over Bid at any time during the period of time described in Clause (ii) of this Section

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1.1(dd) and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn at any time until taken up and paid for; and

(iv)

the Take-over Bid shall contain an irrevocable and unqualified provision that should the condition referred to in Clause (ii) of this Section 1.1(dd) be met: (A) the Offeror will make a public announcement of that fact on the date the Take-over Bid would otherwise expire; and (B) the Take-over Bid will be extended for a period of not less than ten (10) Business Days from the date it would otherwise expire.

(ee)

"Permitted Bid Acquisitions" means share acquisitions made pursuant to a Permitted Bid or a Competing Bid.

(ff)

"Permitted Lock-Up Agreement" means an agreement between a Person and one or more holders (each a "Locked-up Person") of Voting Shares or Convertible Securities (the terms of which are publicly disclosed and a copy of which is made available to the public (including the Corporation) not later than the date the Lock-up Bid (as defined below) is publicly announced or, if the agreement was entered into after the date of the Lock-up Bid, not later than the date the agreement was entered into), pursuant to which such Locked-up Persons agree to deposit or tender Voting Shares or Convertible Securities to a Take-over Bid (the "Lock-up Bid") made by the Person or any of such Person’s Affiliates or Associates or any other Person referred to in Clause (iii) of the definition of Beneficial Owner and where the agreement:

(i)

(A) permits the Locked-up Person to withdraw Voting Shares or Convertible Securities in order to tender or deposit Voting Shares or Convertible Securities to another Take-over Bid (or terminate the agreement in order to support another transaction) that represents an offering price for each Voting Share or Convertible Security that exceeds, or provides a value for each Voting Share or Convertible Security that is greater than, the offering price or value represented by or proposed to be represented by the Lock-up Bid, provided that the other Take-over Bid or transaction is made for at least the same number of Voting Shares or Convertible Securities as the Lock-up Bid; or

(B) permits the Locked-up Person to withdraw Voting Shares or Convertible Securities in order to tender or deposit the Voting Shares or Convertible Securities to another Take-over Bid (or terminate the agreement in order to support another transaction) that represents an offering price for each Voting Share or Convertible Security that exceeds, or provides a value for each Voting Share or Convertible Security that is greater than, the offering price or value represented by or proposed to be represented by, the Lock-up Bid by as much or more than a specified amount (the "Specified Amount") and the Specified Amount is not greater than 7% of the offering price or value that is represented by the Lock-up Bid, provided that the other Take-over Bid or transaction is

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made for at least the same number of Voting Shares or Convertible Securities as the Lock-up Bid; and

(ii)

provides for no "break-up" fees, "top-up" fees, penalties, payments, expenses or other amounts that exceed in the aggregate the greater of:  (A) the cash equivalent of 2.5% of the price or value payable under the Lock-up Bid to the Locked-up Person, and (B) 50% of the amount by which the price or value payable under another Take-over Bid or another transaction to a Locked-up Person exceeds the price or value of the consideration that such Locked-up Person would have received under the Lock-up Bid, to be payable, directly or indirectly, by such Locked-up Person pursuant to the agreement in the event that the Lock-up Bid is not successfully concluded or if any Locked-up Person fails to tender Voting Shares or Convertible Securities pursuant thereto;

and, for greater certainty, the agreement may contain a right of first refusal or require a period of delay to give the Offeror an opportunity to at least match a higher consideration in another Take-over Bid or transaction or contain any other similar limitation on a Locked-up Person’s right to withdraw Voting Shares or Convertible Securities from the agreement, so long as any such limitation does not preclude the exercise by the Locked-up Person of the right to withdraw Voting Shares or Convertible Securities in sufficient time to tender to the other Take-over Bid or to support the other transaction.

(gg)

"Person" means any individual, firm, partnership, limited partnership, limited liability company or partnership, association, trust, trustee, executor, administrator, legal or personal representative, government, governmental body, entity or authority, group, body corporate, corporation, unincorporated organization or association, syndicate, joint venture or any other entity, whether or not having legal personality, and any of the foregoing in any derivative, representative or fiduciary capacity and pronouns have a similar extended meaning.

(hh)

"Record Time" means the close of business on September 1, 1993.

(ii)

"Redemption Price" has the meaning ascribed thereto in Section 5.1(1) hereof.

(jj)

"regular periodic cash dividends" means cash dividends paid at regular intervals in any fiscal year of the Corporation to the extent that such cash dividends do not exceed, in the aggregate, the greatest of:

(i)

two hundred percent (200%) of the aggregate amount of cash dividends declared payable by the Corporation on its Common Shares in its immediately preceding fiscal year; and

(ii)

one hundred percent (100%) of the aggregate consolidated net income of the Corporation, before extraordinary items, for its immediately preceding fiscal year.

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(kk)

"Right" means a right issued pursuant to this Agreement.

(ll)

"Rights Certificate" has the meaning ascribed thereto in Section 2.2(3) hereof.

(mm)

"Rights Register" has the meaning ascribed thereto in Section 2.6(1) hereof.

(nn)

"Securities Act (Ontario)" means the Securities Act (Ontario), and the regulations and rules thereunder, and any comparable or successor laws, regulations and rules thereto.

(oo)

"Separation Time" means the close of business on the tenth (10th) Trading Day after the earlier of (i) the Stock Acquisition Date, (ii) the date of the commencement of, or first public announcement of the intent of any person (other than the Corporation or any Subsidiary of the Corporation) to commence, a Take-over Bid (other than a Permitted Bid or Competing Bid) or such later date as may be determined by the Board of Directors and (iii) the date on which a Permitted Bid or Competing Bid ceases to qualify as such or such later date as may be determined by the Board of Directors provided that, if any Take-over Bid referred to in Clause (ii) of this Section 1.1(oo) or any Permitted Bid or Competing Bid referred to in Clause (iii) of this Section 1.1(oo) expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid, Permitted Bid or Competing Bid, as the case may be, shall be deemed, for the purposes of this Section 1.1(oo), never to have been made and provided further that if the Board of Directors determines pursuant to Sections 5.1(2), (3) or (4) hereof to waive the application of Section 3.1 hereof to a Flip-in Event, the Separation Time in respect of such Flip-in Event shall be deemed never to have occurred.

(pp)

"Stock Acquisition Date" means the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to section 101 of the Securities Act (Ontario)) by the Corporation or an Offeror or Acquiring Person of facts indicating that a Person has become an Acquiring Person.

(qq)

"Subsidiary": a corporation shall be deemed to be a Subsidiary of another corporation if:

(i)

it is controlled by:

(A)

that other;

(B)

that other and one or more corporations each of which is controlled by that other; or

(C)

two or more corporations each of which is controlled by that other; or

(ii)

it is a Subsidiary of a corporation that is that other’s Subsidiary.

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(rr)

"Take-over Bid" means an Offer to Acquire Voting Shares of the Corporation or securities convertible into or exchangeable for or carrying a right to purchase Voting Shares of the Corporation where the Voting Shares of the Corporation subject to the Offer to Acquire, together with the Voting Shares of the Corporation into which the securities subject to the Offer to Acquire are convertible, exchangeable or exercisable, and the Offeror’s Securities, constitute in the aggregate twenty percent (20%) or more of the outstanding Voting Shares of the Corporation at the date of the Offer to Acquire.

(ss)

"Termination Time" means the time at which the right to exercise Rights shall terminate pursuant to Sections 5.1(1) or (5) hereof.

(tt)

"Trading Day", when used with respect to any securities, means a day on which the principal Canadian stock exchange or American stock exchange or market on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian stock exchange or American stock exchange or market, a Business Day.

(uu)

"U.S. — Canadian Exchange Rate" shall mean on any date:

(i)

if on such date the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into Canadian dollars, such rate; and

(ii)

in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars which is calculated in the manner which shall be determined by the Board of Directors from time to time acting in good faith.

(vv)

"Voting Shares" means the Common Shares and any other shares of capital stock or voting interests of the Corporation entitled to vote generally in the election of all directors.

1.2

Currency.

All sums of money which are referred to in this Agreement are expressed in Canadian dollars, unless otherwise specified.

1.3

Headings.

The division of this Agreement into Articles, Sections and Clauses and the insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

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1.4

Number and Gender.

Wherever the context so requires, terms used herein importing the singular number only shall include the plural and vice-versa and words importing only one gender shall include all others.

1.5

Acting Jointly or in Concert.

For the purposes of this Agreement, a Person is acting jointly or in concert with every Person who is a party to an agreement, commitment or understanding, whether formal or informal, with the first Person or any Associate or Affiliate of the first Person to acquire or make an Offer to Acquire Voting Shares of the Corporation (other than customary agreements with and between underwriters or banking group members or selling group members with respect to a distribution of securities or to a pledge of securities in the ordinary course of business).

1.6

Statutory References.

Unless the context otherwise requires or except as expressly provided herein, any reference herein to a specific part, section, clause or Rule of any statute or regulation shall be deemed to refer to the same as it may be amended, re-enacted or replaced or, if repealed and there shall be no replacement therefor, to the same as it is in effect on the date of this Agreement.

ARTICLE 2
THE RIGHTS

2.1

Legend on Common Share Certificates.

(1)

Certificates issued for Common Shares after the Record Time but prior to the close of business on the earlier of the Separation Time and the Expiration Time shall evidence one Right for each Common Share represented thereby and, commencing as soon as reasonably practicable after the effective date of this Agreement, shall have impressed on, printed on, written on or otherwise affixed to them, a legend in substantially the following form:

Until the Separation Time (as defined in the Rights Agreement referred to below), this certificate also evidences and entitles the holder thereof to certain rights described in a Shareholder Protection Rights Plan Agreement, dated August 24, 1993, as amended and restated from time to time (the "Rights Agreement"), between Intertape Polymer Group Inc. and CIBC Mellon Trust Company, a copy of which is on file at the principal executive offices of the Corporation the terms of which are incorporated herein by reference. Under certain circumstances set out in the Rights Agreement, the rights may be redeemed, may expire, may become null and void (if, in certain cases, they are "Beneficially Owned" by an "Acquiring Person") or may be evidenced by separate certificates and no longer evidenced by this certificate. Upon written request, copy of the

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Rights Agreement will be mailed within five days to the holder of this Certificate.  

(2)

Until the earlier of the Separation Time and the Expiration Time, certificates representing Common Shares that are issued and outstanding at the Record Time shall evidence one Right for each Common Share evidenced thereby notwithstanding the absence of the foregoing legend.  Following the Separation Time, Rights will be evidenced by Rights Certificates issued pursuant to Section 2.2 hereof.

2.2

Initial Exercise Price; Exercise of Rights; Detachment of Rights.

(1)

Right to entitle holder to purchase one Common Share prior to adjustment.  Subject to adjustment as herein set forth and subject to Section 3.1(1) hereof, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price as at the Business Day immediately preceding the date of exercise of the Right, one Common Share (which price and number of Common Shares are subject to adjustment as set forth below and are subject to Section 3.1(1) hereof).  Notwithstanding any other provision of this Agreement, any Rights held by the Corporation or any of its Subsidiaries shall be void.

(2)

Rights not exercisable until Separation Time.  Until the Separation Time, (i) the Rights shall not be exercisable and no Right may be exercised, and (ii) for administrative purposes each Right will be evidenced by the certificates for the associated Common Shares registered in the names of the holders thereof (which certificates shall also be deemed to be Rights Certificates) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Shares.

(3)

Delivery of Rights Certificate and disclosure statement.  From and after the Separation Time and prior to the Expiration Time, (i) the Rights shall be exercisable, and (ii) the registration and transfer of the Rights shall be separate from, and independent of, Common Shares.  Promptly following the Separation Time, the Corporation will prepare and the Rights Agent will mail to each holder of record of Rights as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a "Nominee")) at such holder’s address as shown by the records of the Corporation (the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose), (A) a certificate (a "Rights Certificate") in substantially the form of Schedule 2.2(3) hereto appropriately completed, representing the number of Rights held by such holder at the Separation Time, and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule, regulation or judicial or administrative order or with any rule or regulation made pursuant thereto or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage , ; and (B) a disclosure statement describing the Rights, provided that a Nominee shall be sent the materials provided for in (A) and (B) in

- 16 -

respect of all Common Shares held of record by it which are not Beneficially Owned by an Acquiring Person.  In order for the Corporation to determine whether any Person is holding Common Shares which are Beneficially Owned by another Person, the Corporation may require such first mentioned Person to furnish it with such information and documentation as the Corporation considers advisable.

(4)

Exercise of Rights.  Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent (at its principal stock transfer office in the City of Montreal, or at its principal stock transfer office in the cities designated from time to time for that purpose by the Corporation) the Rights Certificate evidencing such Rights together with an election to exercise such Rights (an "Election to Exercise") substantially in the form attached to the Rights Certificate duly completed and executed, accompanied by payment by certified cheque, banker’s draft or money order payable to the order of the Corporation, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised, all of the above to be received before the Expiration Time by the Rights Agent at its principal office in any of the cities listed on the Rights Certificate.

(5)

Duties of Rights Agent upon receipt of Election to Exercise.  Upon receipt of a Rights Certificate, which is accompanied by (i) a completed and duly executed Election to Exercise, and (ii) payment as set forth in Section 2.2(4) above, the Rights Agent (unless otherwise instructed by the Corporation) will thereupon promptly:

(A)

requisition from the transfer agent for the Common Shares certificates representing the number of Common Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agent to comply with all such requisitions);

(B)

when appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuing fractional Common Shares;

(C)

after receipt of such certificates, deliver the same to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such registered holder;

(D)

when appropriate, after receipt, deliver such cash (less any amounts required to be withheld) to or to the order of the registered holder of the Rights Certificate; and

(E)

tender to the Corporation all payments received on exercise of the Rights.

(6)

Partial Exercise of Rights.  In case the holder of any Rights shall exercise less than all of the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns.

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(7)

Duties of the Corporation.  The Corporation covenants and agrees that it will:

(a)

take all such action as may be necessary and within its power to ensure that all Common Shares or other securities delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable;

(b)

take all such action as may be necessary and within its power to ensure compliance with the provisions of Section 3.1 hereof including, without limitation, all such action to comply with any applicable requirements of the CBCA, the Securities Act (Ontario) and any applicable comparable securities legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares or other securities upon exercise of Rights;

(c)

use reasonable efforts to cause, from and after such time as the Rights become exercisable, all Common Shares issued upon exercise of Rights to be listed upon issuance on the principal stock exchange on which the Common Shares were traded prior to the Stock Acquisition Date;

(d)

cause to be reserved and kept available out of its authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights;

(e)

pay when due and payable any and all Canadian and, if applicable, United States, federal and provincial transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Corporation to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, provided that the Corporation shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for shares or other securities in a name other than that of the registered holder of the Rights being transferred or exercised; and

(f)

after the Separation Time, except as permitted by Sections 5.1 or 5.4 hereof, not take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

2.3

Adjustments to Exercise Price; Number of Rights.

The Exercise Price, the number and kind of Common Shares or other securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 2.3:

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(a)

Adjustment to Exercise Price upon changes to share capital.  In the event the Corporation shall at any time after the Record Time:

(i)

declare or pay a dividend on the Common Shares payable in Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares or other securities) other than the issue of Common Shares or such exchangeable or convertible securities to holders of Common Shares in lieu of but not in an amount which exceeds the value of regular periodic cash dividends;

(ii)

subdivide or change the outstanding Common Shares into a greater number of Common Shares;

(iii)

combine or change the outstanding Common Shares into a smaller number of Common Shares; or

(iv)

issue any Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares or other securities) in respect of, in lieu of or in exchange for existing Common Shares, except as otherwise provided in this Section 2.3;

the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of Common Shares, or other securities, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of Common Shares or other securities, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Share transfer books of the Corporation were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification.  If an event occurs which would require an adjustmen t under both this Section 2.3 and Section 3.1 hereof, the adjustment provided for in this Section 2.3 shall be in addition to and, shall be made prior to, any adjustment required pursuant to Section 3.1 hereof.

(b)

Adjustment to Exercise Price upon issue of rights, options and warrants.  In case the Corporation shall at any time after the Record Time fix a record date for the issuance of rights, options or warrants to all holders of Common Shares entitling them (for a period expiring within forty-five (45) calendar days after such record date) to subscribe for or purchase Common Shares (or shares having the same rights, privileges and preferences as Common Shares ("equivalent common shares")) or securities convertible into or exchangeable for or carrying a right to purchase Common Shares or equivalent common shares at a price per Common Share or per equivalent common share (or having a conversion price or exchange price or exercise price per share, if a security convertible into or exchangeable for or carrying a right to purchase C ommon Shares or equivalent common shares) less than ninety percent (90%) of the Market Price per Common

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Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such record date, plus the number of Common Shares that the aggregate offering price of the total number of Common Shares and/or equivalent common shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the convertible or exchangeable securities or rights so to be offered, including the price required to be paid to purchase such convertible or exchangeable securities or rights so to be offered) would purchase at such Market Price per Common Share, and the denominator of which shall be the number of Common Shares outstanding on such r ecord date, plus the number of additional Common Shares and/or equivalent common shares to be offered for subscription or purchase (or into which the convertible or exchangeable securities are initially convertible, exchangeable or exercisable).  In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a certificate filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.  Such adjustment shall be made successively whenever such a record date is fixed and, in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.

For purposes of this Agreement, the granting of the right to purchase Common Shares (or equivalent common shares) (whether from treasury shares or otherwise) pursuant to any dividend or interest reinvestment plan and/or any Common Share purchase plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and/or the investment of periodic optional payments and/or employee benefit, stock option or similar plans (so long as such right to purchase is in no case evidenced by the delivery of rights or warrants) shall not be deemed to constitute an issue of rights, options or warrants by the Corporation; provided, however, that, in the case of any dividend or interest reinvestment plan, the right to purchase Common Shares (or equivalent common shares) is at a price per share of not less than ninety percent (90%) of the current market pri ce per share (determined as provided in such plans) of the Common Shares.

(c)

Adjustment to Exercise Price upon Corporate Distributions.  In case the Corporation shall at anytime after the Record Time fix a record date for a distribution to all holders of Common Shares (including any such distribution made in connection with a merger, amalgamation, arrangement, plan, compromise or reorganization in which the Corporation is the continuing or successor corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend or a regular periodic cash dividend paid in Common Shares, but including any dividend payable in securities other than Common Shares), assets or subscription rights, options or warrants (excluding those

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referred to in Section 2.3(b) above), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Market Price per Common Share on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to a Common Share and the denominator of which shall be such Market Price per Common Share.  Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Ex ercise Price shall be adjusted to be the Exercise Price which would have been in effect if such record date had not been fixed.

(d)

De minimis threshold for adjustment to Exercise Price.  Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Exercise Price; provided, however, that any adjustments which by reason of this Section 2.3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 2.3 shall be made to the nearest cent or to the nearest one-hundredth of a Common Share or other share, as the case may be.  Notwithstanding the first sentence of this Section 2.3(d), any adjustment required by this Section 2.3 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which mandates such a djustment or (ii) the Expiration Time.

(e)

Corporation may provide for alternate means of adjustment.  Subject to the prior consent of the holders of Voting Shares or Rights obtained as set forth in Section 5.4(2) or (3) hereof, as applicable, in the event the Corporation shall at any time after the Record Time issue any shares of capital stock (other than Common Shares), or rights or warrants to subscribe for or purchase any such capital stock, or securities convertible into or exchangeable for any such capital stock, in a transaction referred to in Sections 2.3(a)(i) or (iv) or 2.3(b) or (c) above, if the Board of Directors acting in good faith determines that the adjustments contemplated by Sections 2.3(a), (b) and (c) above in connection with such transaction will not appropriately protect the interests of the holders of Rights, the Corporation shall be entitled to determine what other adjustments to the Exercise Price, number of Rights and/or securities purchasable upon exercise of Rights would be appropriate and, notwithstanding Sections 2.3(a), (b) and (c) above, such adjustments, rather than the adjustments contemplated by Sections 2.3(a), (b) and (c) above, shall be made.  The Corporation and the Rights Agent shall amend this Agreement as appropriate to provide for such adjustments.

(f)

Adjustment to Rights exercisable into shares other than Common Shares.  If as a result of an adjustment made pursuant to Section 3.1 hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares other than

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Common Shares, thereafter the number of such other shares so receivable upon exercise of any Right and the Exercise Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Shares contained in Sections 2.3(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), and (l) above and below, as the case may be, and the provisions of this Agreement with respect to the Common Shares shall apply on like terms to any such other shares.

(g)

Rights to evidence right to purchase Common Shares at adjusted Exercise Price.  Each Right originally issued by the Corporation subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of Common Shares purchasable from time to time hereunder upon exercise of such Right, all subject to further adjustment as provided herein.

(h)

Adjustment to number of Common Shares purchasable upon adjustment to Exercise Price.  Unless the Corporation shall have exercised its election as provided in Section 2.3(i) below, upon each adjustment of the Exercise Price as a result of the calculations made in Sections 2.3(b) and (c) above, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Common Shares (calculated to the nearest one ten-thousandth) obtained by (A) multiplying (x) the number of shares purchasable upon exercise of a Right immediately prior to this adjustment by (y) the Exercise Price in effect immediately prior to such adjustment of the Exercise Price, and (B) dividing the product so obtained by the Exercise Price in effect immediately after such adjus tment of the Exercise Price.

(i)

Election to adjust number of Rights upon adjustment to Exercise Price.  The Corporation shall be entitled to elect on or after the date of any adjustment of the Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number of Common Shares purchasable upon the exercise of a Right.  Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of Common Shares for which a Right was exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Exercise Price in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after adjustment of the Exercise Price.  The Corporation shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made.  This record date may be the date on which the Exercise Price is adjusted or any day thereafter but, if Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement.  If Rights Certificates have been issued, upon each adjustment, of the number of Rights pursuant to this Section 2.3(i), the Corporation shall, as promptly as practicable, cause to be distributed to holders

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of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 5.5 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment.  Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and may bear, at the option of the Corporation, the adjusted Exercise Price and shall be registered in the names of the holders of record of Rights Certificates on the reco rd date for the adjustment specified in the public announcement.

(j)

Rights Certificates may contain Exercise Price before adjustment.  Irrespective of any adjustment or change in the Exercise Price or the number of Common Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price per share and the number of shares which were expressed in the initial Rights Certificates issued hereunder.

(k)

Corporation may in certain cases defer issues of securities.  In any case in which this Section 2.3 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise over and above the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Corporation shall deliver to such holder an appropriate instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment.

(l)

Corporation has discretion to reduce Exercise Price for tax reasons.  Notwithstanding anything in this Section 2.3 to the contrary, the Corporation shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in their good faith judgment, the Board of Directors shall determine to be advisable in order that any (A) consolidation or subdivision of the Common Shares, (B) issuance of any Common Shares at less than the Market Price, (C) issuance of securities convertible into or exchangeable for Common Shares, (D) stock dividends or (E) issuance of rights, options or warrants, referred to in this Section 2.3 hereafter made by the Corporation to holders of its Common Shares, shall not be taxable to such shareholders.

(m)

In any case in which this Section 2.3 shall require any adjustment, the Corporation shall deliver to the Rights Agent a certificate duly executed by an

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officer of the Corporation describing such adjustment, in addition to any other statement or document required by this Section 2.3. Notice of Adjustment or Change. Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon exercise of the Rights is made at any time after the Separation Time, the Corporation shall promptly:

(i)

file with the Rights Agent and with the transfer agent for the Common Shares a certificate specifying the particulars of such adjustment or change; and

(ii)

cause notice of the particulars of such adjustment or change to be given  to the holders of the Rights; provided that failure to file such certificate or cause such notice to be given as aforesaid, or any defect therein, shall not affect the validity of any such adjustment or change.

2.4

Date on Which Exercise is Effective.

Each person in whose name any certificate for Common Shares is issued upon the exercise of Rights, shall for all purposes be deemed to have become the holder of record of the Common Shares represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered (together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the Common Share transfer books of the Corporation are closed, such person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on w hich the Common Share transfer books of the Corporation are open.

2.5

Execution, Authentication, Delivery and Dating of Rights Certificates

(1)

The Rights Certificates shall be executed on behalf of the Corporation by its Chairman, President or any of its Vice-Presidents and by its Secretary or one of its Assistant Secretaries.  The signature and attestation of any of these officers on the Rights Certificates may be manual or facsimile.  Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Corporation shall bind the Corporation, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the countersignature and delivery of such Rights Certificates.

(2)

Promptly after the Corporation learns of the Separation Time, the Corporation will notify the Rights Agent in writing of such Separation Time and will deliver Rights Certificates executed by the Corporation to the Rights Agent for countersignature and a disclosure statement statements as described in Section 2.2(3), and the Rights Agent shall manually or by facsimile signature countersign and send such Rights Certificates and disclosure statement statements to the holders of the Rights pursuant to Section 2.2(3) hereof.  No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid.

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(3)

Each Rights Certificate shall be dated the date of countersignature thereof.

2.6

Registration, Registration of Transfer and Exchange.

(1)

The After the Separation Time, the Corporation will cause to be kept a register (the "Rights Register") in which, subject to such reasonable regulations as it may prescribe, the Corporation will provide for the registration and transfer of Rights.  The Rights Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the Rights Register for the Corporation and registering Rights and transfers of Rights as herein provided.  In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times.

After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate and subject to the provisions of Section 2.6(3) below and the other provisions of this Agreement, the Corporation will execute and the Rights Agent will countersign, register and deliver, in the name of the holder or the designated transferee or transferees as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.

(2)

All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be the valid obligations of the Corporation, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange.

(3)

Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed by the registered holder thereof or such holder’s attorney duly authorized in writing.  As a condition to the issuance of any new Rights Certificate under this Section 2.6, the Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and the Corporation may require payment of a sum sufficient to cover any other expenses (including the fees and expenses of the Rights Agent) in connection therewith.

2.7

Mutilated, Destroyed, Lost and Stolen Rights Certificates.

(1)

If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Corporation shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.

(2)

If there shall be delivered to the Corporation and the Rights Agent prior to the Expiration Time (i) evidence to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate, and (ii) such indemnity or other security as may be required by them to save each of them and any of their agents harmless then, in the absence of notice to the Corporation or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Corporation shall execute and upon its

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request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.

(3)

As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and the Corporation may require payment of a sum sufficient to cover any other expenses (including the fees and expenses of the Rights Agent) in connection therewith.

(4)

Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an original additional contractual obligation of the Corporation, whether or not the destroyed lost or stolen Rights Certificate shall be at any time enforceable by anyone, and the holder thereof shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other holders of Rights duly issued by the Corporation.

2.8

Persons Deemed Owners.

Prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent shall be entitled to deem and treat the person in whose name a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever.  As used in this Agreement, unless the context otherwise requires, the term "holder" of any Rights shall mean the registered holder of such Rights (or, prior to the Separation Time, the associated Common Shares).

2.9

Delivery and Cancellation of Rights Certificates.

All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange shall, if surrendered to any person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.  The Corporation may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Corporation may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent.  No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided in this Section 2.9 except as expressly permitted by this Agreement.  The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights Certificates and de liver a certificate of destruction to the Corporation upon the Corporation's request .

2.10

Agreement of Rights Holders.

Every holder of Rights, by accepting the same, consents and agrees with the Corporation and the Rights Agent and with every other holder of Rights:

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(a)

to be bound by and subject to the provisions of this Agreement, as amended or supplemented from time to time in accordance with the terms hereof, in respect of all Rights held;

(b)

that prior to the Separation Time each Right will be transferable only together with, and will be transferred by a transfer of, the Common Share certificate representing such Right;

(c)

that after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;

(d)

that prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent shall be entitled to deem and treat the person in whose name the Rights Certificate (or prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated Common Share certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected by any notice to the contrary;

(e)

that such holder of Rights has waived his right to receive any fractional Rights or any fractional shares upon exercise of Right;

(f)

that, in accordance with Section 5.4 hereof, without the approval of any holder of Rights and upon the sole authority of the Board of Directors acting in good faith this Agreement may be supplemented or amended from time to time pursuant to and as provided herein; and

(g)

that notwithstanding anything in this Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation, or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation.

2.11

Rights Certificate Holder not Deemed a Shareholder.

No holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder of any Common Share or any other share or security of the Corporation which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed to confer upon the holder of any Right or Rights Certificate, as such,

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any of the rights, titles, benefits or privileges of a holder of Common Shares or any other shares or securities of the Corporation or any right to vote at any meeting of shareholders of the Corporation whether for the election of directors or otherwise or upon any matter submitted to holders of shares of the Corporation at any meeting thereof, or to give or withhold consent to any action of the Corporation, or to receive notice of any meeting or other action affecting any holder of Common Shares or any other shares or securities of the Corporation except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and provisions hereof.

ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

3.1

Flip-in Event.

(1)

Subject to Section 3.1(2) below, and Sections 5.1(2), (3) and (4) hereof, in the event that prior to the Expiration Time a Flip-in Event shall occur, the Corporation shall take such action as may be necessary to ensure and provide within eight (8) Business Days of such occurrence, or such longer period as may be required to satisfy all applicable requirements of the Securities Act (Ontario), and the securities legislation of each other province of Canada that, except as provided below, each Right shall thereafter constitute the right to purchase from the Corporation upon exercise thereof in accordance with the terms hereof that number of Common Shares of the Corporation having an aggregate Market Price on the date of the occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such Right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in the event that after such date of occurrence an event of a type analogous to any of the events described in Section 2.3 hereof shall have occurred with respect to such Common Shares).

(2)

Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are Beneficially Owned by (i) an Acquiring Person, or any Affiliate or Associate of an Acquiring Person, or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such Acquiring Person, or any Affiliate or Associate of such Person so acting jointly or in concert, or (ii) a transferee or other successor in title of Rights, directly or indirectly, of an Acquiring Person (or of any Affiliate or Associate of an Acquiring Person) or of any Person acting jointly or in concert with an Acquiring Person or any Associate or Affiliate of an Acquiring Person (or of any Affiliate or Associate of such Person so acting jointly or in concert) who becomes a transferee or successor in title concurrently with or su bsequent to the Acquiring Person becoming such, shall become null and void without any further action, and any holder of such Rights (including transferees or successors in title) shall not have any rights whatsoever to exercise such Rights under any provision of this Agreement and shall not have thereafter any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise.

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(3)

Any Rights Certificates that represent Rights that are Beneficially Owned by a Person described in clause 3.1(2), and any Rights Certificates issued upon the transfer, exchange, replacement or adjustment of any other Rights Certificates referred to in this sentence, shall contain the following legend:

The Rights represented by this Rights Certificate were issued to a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) or a Person who was acting jointly or in concert with an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (including, without limitation, a Person who has entered into an agreement or arrangement to sell Shares to an Acquiring Person). This Rights Certificate and the Rights represented hereby are void or shall become void in the circumstances specified, without limitation, in clause 3.1(2) of the Rights Agreement.

provided, however, that the Rights Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend but shall impose such legend only if instructed to do so by the Corporation in writing or if a holder fails to certify upon transfer or exchange in the space provided on the Rights Certificate that such holder is not a Person described in such legend.

ARTICLE 4
THE RIGHTS AGENT

4.1

General.

(1)

The Corporation hereby appoints the Rights Agent to act as agent for the Corporation in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment.  The Corporation may from time to time appoint such Co-Rights Agents ("Co-Rights Agents") as it may deem necessary or desirable subject to the consent of the Rights Agent .  In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as the Corporation may determine subject to the consent of the Rights Agent .  The Corporation also agrees to indemnify the Rights Agent , as well as its directors, officers and employees, for, and to hold it them harmless against, any loss, liability, or expense, incurred without negligence, bad faith or wilful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent arising directly or indirectly out of its agency relationship to the Corporation or in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability, which right to indemnification will survive the termination of this Agreement or the resignation or removal of the Rights Agent .

The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder.

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(2)

The Corporation shall inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this Agreement by the Rights Agent and at any time, upon request, shall provide to the Rights Agent an incumbency certificate with respect to the then current officers of the Corporation, provided that failure to inform the Rights Agent of any such events, or any defect therein, shall not affect the validity of any action taken hereunder in relation to such events.

(3)

(2) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for Voting Shares or Common Shares or any Rights Certificate or certificate for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

4.2

Merger or Amalgamation or Change of Name of Rights Agent.

(1)

Any corporation into which the Rights Agent or any successor Rights Agent may be merged or amalgamated or with which it may be consolidated, or any corporation resulting from any merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any corporation succeeding to the shareholder or stockholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4.  In case at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certi ficates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates have not been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement.

(2)

In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

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4.3

Duties of Rights Agent.

The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Corporation and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

(a)

The Rights Agent may retain and consult with legal counsel (who may be legal counsel for the Corporation) and the opinion of such counsel will be full and complete authorisation and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion ; the Rights Agent may also, with the approval of the Corporation (where such approval may reasonably be obtained and such approval not be unreasonably withheld), consult with such other experts as the Rights Agent shall consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement (at the Corporation's expense) and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert ;

(b)

Whenever in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by a Person believed by the Rights Agent to be the Chairman of the Board, the President or any Vice President of the Corporation and delivered to the Rights Agent; and such certificate will be full authorisation to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate;

(c)

The Rights Agent will be liable hereunder only for its own negligence, bad faith or wilful misconduct;

(d)

The Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the certificates for Voting Shares or Common Shares or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Corporation only;

(e)

The Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorisation, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Common Share certificate or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Corporation of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Subsection 3.1(2)) or any adjustment required under the provisions of Section 2.3 or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjust ment

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(except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 describing any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorisation of any Common Shares to be issued pursuant to this Agreement or any Rights or as to whether any Common Shares will, when issued, be duly and validly authorised, executed, issued and delivered and fully paid and non-assessable;

(f)

The Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement;

(g)

The Rights Agent is hereby authorised and directed to accept instructions with respect to the performance of its duties hereunder from any Person believed by the Rights Agent to be the Chairman of the Board, the President, any Vice President, or the Treasurer or the Controller of the Corporation, and to apply to such Persons for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such Person; it is understood that instructions to the Rights Agent will, except where circumstances make it impracticable or the Rights Agent otherwise agrees, be given in writing and, where not in writing, such instructions will be confirmed in writing as soon as reasonably possible after the giving of such instructions;

(h)

The Rights Agent and any shareholder or stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or other securities of the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity; and

(i)

The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

4.4

Change of Rights Agent.

The Rights Agent may resign and be discharged from its duties under this Agreement upon 90 days' notice (or such lesser notice as is acceptable to the Corporation) in writing mailed to the Corporation and to each transfer agent of Common Shares by registered or certified mail,

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and to the holders of the Rights in accordance with Section 5.8.  The Corporation may remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent and to each transfer agent of the Common Shares by registered or certified mail, and to the holders of the Rights in accordance with Section 5.8.  If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Corporation will appoint a successor to the Rights Agent.  If the Corporation fails to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of any Rights (which holder shall, with such notice, submit such holder's Rights Certificate for inspection by the Corporation), then the holder of any Rights or the resigning Rights Agent (at the Corporation's expense) may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed by the Corporation or by such a court, shall be a corporation incorporated under the laws of Canada or a province thereof authorised to carry on the business of a trust company.  After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent following payment of all outstanding fees and expenses owed to it under this Agreement shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such appointment, the Corporation will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares, and mail a notice thereof in writing to the holders of the Rights.  Failure to give any notice provided for in this Section 4.4, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

ARTICLE 5
MISCELLANEOUS

5.1

Redemption and Waiver.

(1)

Subject to the prior consent of the holders of Voting Shares or Rights obtained as set forth in Section 5.4(2) or Section 5.4(3) hereof, as applicable, the Board of Directors acting in good faith may, at any time prior to the occurrence of a Flip-in Event, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in the event that an event of the type described in Section 2.3 hereof shall have occurred (such redemption price being herein referred to as the "Redemption Price").

(2)

Subject to the prior consent of the holders of Voting Shares obtained as set forth in Section 5.4(2) hereof, the Board of Directors may, at any time prior to the occurrence of a Flip-in Event as to which the application of Section 3.1 hereof has not been waived pursuant to this Section 5.1, if such Flip-in Event would occur by reason of an acquisition of Voting Shares otherwise than pursuant to a Take-over Bid made by means of a Take-over Bid circular to all registered holders of Voting Shares and otherwise than in the circumstances set forth in Section 5.1(4) hereof, waive the application of Section

- 33 -

3.1 hereof to such Flip-in Event.  In such event, the Board of Directors shall extend the Separation Time to a date at least ten (10) Business Days subsequent to the meeting of shareholders called to approve such waiver.

(3)

The Board of Directors acting in good faith, may, prior to the occurrence of a Flip-in Event, and upon prior written notice delivered to the Rights Agent, determine to waive the application of Section 3.1 hereof to a Flip-in Event that may occur by reason of a Take-over Bid made by means of a Take-over Bid circular to all registered holders of Voting Shares; provided that if the Board of Directors waives the application of Section 3.1 hereof to a particular Flip-in Event pursuant to this Section 5.1(3), the Board of Directors shall be deemed to have waived the application of Section 3.1 hereof to any other Flip-in Event occurring by reason of any Take-over Bid made by means of a Take-over Bid circular to all registered holders of Voting Shares prior to the expiry of any Take-over Bid in respect of which a waiver is, or is deemed to have been granted, pur suant to this Section 5.1(3).

(4)

The Board of Directors may, prior to the close of business on the tenth (10th) day following the Stock Acquisition Date, determine, upon prior written notice delivered to the Rights Agent, to waive or to agree to waive the application of Section 3.1 hereof to a Flip-in Event, provided that both of the following conditions are satisfied:

(a)

the Board of Directors has determined that a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that Person would become, an Acquiring Person; and

(b)

such Acquiring Person has reduced its Beneficial Ownership of Voting Shares (or has entered into a contractual arrangement with the Corporation, acceptable to the Board of Directors, to do so within thirty (30) days of the date on which such contractual arrangement is entered into) such that at the time the waiver becomes effective pursuant to this Section 5.1(4) it is no longer an Acquiring Person;

and in the event of such a waiver, for the purposes of this Agreement, the Flip-in Event shall be deemed never to have occurred.

(5)

Where a Person acquires pursuant to a Permitted Bid, a Competing Bid or an Exempt Acquisition under Section 5.1(3) above, outstanding Voting Shares, then the Corporation shall immediately upon the consummation of such acquisition redeem the Rights at the Redemption Price.

(6)

If the Corporation is obligated under Section 5.1(5) above to redeem the Rights, or if the Board of Directors elects under Section 5.1(1) above or Section 5.1(8) below to redeem the Rights, the right to exercise the Rights will thereupon, without further action and without notice, terminate and each Right will after redemption be null and void and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.

(7)

Within ten (10) days after the Corporation is obligated under Section 5.1(5) above to redeem the Rights, or the Board of Directors elects under Section 5.1(1)) above or Section

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5.1(8) below to redeem the Rights, the Corporation shall give notice of redemption to the holders of the then outstanding Rights by mailing such notice to all such holders at their last address as they appear upon the Rights Register or, prior to the Separation Time, on the registry books of the transfer agent for the Common Shares.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.  The Corporation may not redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 5.1 and other than in connection with the purchase of Common Shares prior to the Separation Time.

(8)

Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption Price.

(9)

Notwithstanding the Rights being redeemed pursuant to Section 5.1(8) above, all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Common Shares as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement the Separation Time shall be deemed not to have occurred and the Rights shall remain attached to outstanding Voting Shares, subject to and in accordance with the provisions of this Agreement.

5.2

Expiration.

No person shall have any rights whatsoever pursuant to or arising out of this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in Section 4.1(1) hereof.

5.3

Issuance of New Rights Certificates.

Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the number or kind or class of shares purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.

5.4

Supplements and Amendments.

(1)

The Corporation may from time to time supplement or amend this Agreement without the approval of any holders of Rights or Voting Shares to correct any clerical or typographical error or to maintain the validity of the Agreement as a result of a change in any applicable legislation or regulations or rules thereunder.

Notwithstanding anything in this Section 5.4 to the contrary, no supplement or amendment shall be made to the provisions of article 4 hereof except with the written concurrence of the Rights Agent to such supplement or amendment.

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(2)

Subject to Section 5.4(1) above, the Corporation may, with the prior consent of the holders of the Voting Shares obtained as set forth below, at any time prior to the Separation Time amend, vary or rescind any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally).  Such consent shall be deemed to have been given if provided by the holders of Voting Shares at a meeting of the holders of Voting Shares, which meeting shall be called and held in compliance with applicable laws and regulatory requirements and the requirements in the articles and by-laws of the Corporation.  Subject to compliance with any requirements imposed by the foregoing, consent shall be deemed to have been given if the proposed amendment, variation or revision is approv ed by the affirmative vote of a majority of the votes cast by all holders of Voting Shares (other than any holder of Voting Shares who is an Offeror pursuant to a Take-over Bid that is not a Permitted Bid or Competing Bid with respect to all Voting Shares Beneficially Owned by such Person), represented in person or by proxy at the meeting.

(3)

The Subject to Section 5.4(1), the Corporation may, with the prior consent of the holders of Rights, at any time after the Separation Time and before the Expiration Time, amend, vary or rescind any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally).

(4)

Any approval of the holders of Rights shall be deemed to have been given if the action requiring such approval is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights and representing a majority of the votes cast in respect thereof.  For the purposes hereof, each outstanding Right (other than Rights which are void pursuant to the provisions hereof) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Corporation’s by-laws and the CBCA with respect to a meeting of shareholders of the Corporation.

(5)

The Corporation shall be required to provide the Rights Agent with notice in writing of any such amendment, variation or deletion to this Agreement as referred to in this Section 5.4 within 5 days of effecting such amendment, variation or deletion.

(6)

Any supplements or amendments made by the Corporation to this Agreement pursuant to Section 5.4(1) above which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulations or rules thereunder shall:

(a)

if made before the Separation Time, be submitted to the shareholders of the Corporation at the next meeting of shareholders and the shareholders may, by the majority referred to in Section 5.4(2) above confirm or reject such amendment; and

(b)

if made after the Separation Time, be submitted to the holders of Rights at a meeting to be called for on a date not later than immediately following the next

- 36 -

meeting of shareholders of the Corporation and the holders of Rights may, by resolution passed by the majority referred to in Section 5.4(4) above, confirm or reject such amendment.

A supplement or amendment of the nature referred to in this Section 5.4(6) shall be effective from the date of the resolution of the Board of Directors adopting such supplement or amendment until it is confirmed or rejected or until it ceases to be effective (as described in the next sentence) and, where such supplement or amendment is confirmed, it continues in effect in the form so confirmed.  If such supplement or amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders or holders of Rights as required, then such supplement or amendment shall cease to be effective from and after the termination of the meeting at which it was rejected or to which it should have been but was not submitted or from and after the date of the meeting of holders of Rights that should have been but was not held, and no subsequent resolutio n of the Board of Directors to amend, vary or delete any provision of this Agreement to substantially the same effect shall be effective until confirmed by the shareholders or holders of Rights, as the case may be.

5.5

Fractional Rights and Fractional Shares.

(1)

The Corporation shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights.  Any such fractional Right shall be null and void and the Corporation will not have any obligation or liability in respect thereof.

(2)

The Corporation shall not be required to issue fractions of Common Shares or other securities upon exercise of the Rights or to distribute certificates which evidence fractional Common Shares or other securities.  In lieu of issuing fractional Common Shares or other securities, the Corporation shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided, an amount in cash equal to the same fraction of the Market Price of one Common Share.  The Rights Agent shall have no obligation to make any payments in lieu of fractional Common Shares unless the Corporation shall have provided the Rights Agent with the necessary funds to pay in full all amounts payable in accordance with Section 2.2(5).

5.6

Rights of Action.

Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective registered holders of the Rights; and any registered holder of any Rights, without the consent of the Rights Agent or of the registered holder of any other Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other holders of Rights enforce, and may institute and maintain any suit, action or proceeding against the Corporation to enforce such holder’s right to exercise such holder’s Rights in the manner provided in such holder’s Rights Certificate and in this Agreement.  Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

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5.7

Notice of Proposed Actions.

In case the Corporation shall propose after the Separation Time and prior to the Expiration Time to effect the liquidation, dissolution or winding-up of the Corporation or the sale of all or substantially all of the Corporation’s assets, then, in each such case, the Corporation shall give to each holder of a Right, in accordance with Section 5.8 hereof, a notice of such proposed action, which shall specify the date on which such liquidation, dissolution, winding up, or sale is to take place, and such notice shall be so given at least twenty (20) Business Days prior to the date of taking of such proposed action.

5.8

Notices.

(1)

Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to or on the Corporation shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

Intertape Polymer Group Inc.
110 E Montée de Liesse
Ville St-Laurent, Québec
H4T 1N4 Bradenton, Florida
3647 Cortez Road West
Bradenton, Florida 34210

Attention:

President and Chief Executive Officer
Telephone:

( 514 941 ) 731-7591 727-5788

Telecopier:

( 514 941 ) 731-5039 727-1568

(2)

Any notice or demand authorized or required by this Agreement to be given or made by the Corporation or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Corporation) as follows:

CIBC Mellon Trust Company
2001 University
16^th Floor
Montreal, Québec
H3A 2A6

Attention:

Manager
Telephone:

(514) 285-3603

Telecopier:

(514) 285-3640

(3)

Notices or demands authorized or required by this Agreement to be given or made by the Corporation or the Rights Agent to or on the holder of any Rights shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the Rights Register or, prior to the Separation Time, on the registry books of the transfer agent for

- 38 -

the Common Shares.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.

5.9

Successors.

All the covenants and provisions of this Agreement by or for the benefit of the Corporation or the Rights Agent shall bind and enure to the benefit of their respective successors and assigns hereunder.

5.10

Benefits of this Agreement.

Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights Agent and the holders of the Rights.

5.11

Governing Law.

This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws of the Province of Quebec and for all purposes shall be governed by and construed in accordance with the laws of such Province.

5.12

Severability.

If any Section, Clause, term or provision hereof or the application thereof to any circumstances or any right hereunder shall, in any jurisdiction and to any extent, be invalid or unenforceable, such Section, Clause, term or provision or such right shall be ineffective only in such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining Sections, Clauses, terms and provisions hereof or rights hereunder in such jurisdiction or the application of such Section, Clause, term or provision or rights hereunder in any other jurisdiction or to circumstances other than those as to which it is specifically held invalid or unenforceable.

5.13

Effective Date.

This Agreement is effective and in full force and effect in accordance with its terms and conditions as of and from August 24, 1993 (the "Effective Date").

5.14

Determinations and Actions by the Board of Directors.

All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made by the Board of Directors, in good faith, in relation to or in connection with this Agreement, shall not subject the Board of Directors or any director of the Corporation to any liability to the holders of the Rights.

5.15

Rights of Board, Corporation and Offeror.

Without limiting the generality of the foregoing, nothing contained herein shall be construed to suggest or imply that the Board of Directors shall not be entitled to recommend

- 39 -

that holders of Voting Shares reject or accept any Take-over Bid or take any other action (including, without limitation, the commencement, prosecution, defence or settlement of any litigation and the submission of additional or alternative Take-over Bids or other proposals to the holders of Voting Shares of the Corporation) with respect to any Take-over Bid or otherwise that the Board of Directors believes is necessary or appropriate in the exercise of its fiduciary duties.

5.16

Regulatory Approvals.

This Agreement shall be subject in any jurisdiction to the receipt of any required prior or subsequent approval or consent from any governmental or regulatory authority in such jurisdiction including any securities regulatory authority or stock exchange.

5.17

Declaration as to Non-Canadian and Non-U.S. Holders.

If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any action or event contemplated by this Agreement would require compliance with the securities laws or comparable legislation of a jurisdiction outside Canada and the United States of America, the Board of Directors acting in good faith may take such actions as it may deem appropriate to ensure such compliance.  In no event shall the Corporation or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to Persons who are citizens, residents or nationals of any jurisdiction other than Canada or the United States in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes, or (until such notice is given as required by law) without advance notice to any regulatory or self-re gulatory body.

5.18

Time of the Essence.

Time shall be of the essence in this Agreement.

5.19

Execution in Counterparts.

This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.

- 40 -

IN WITNESS WHEREOF, the parties have executed this Agreement.

INTERTAPE POLYMER GROUP INC.		CIBC MELLON TRUST COMPANY
By:		By:
	Melbourne F. Yull Chairman of the Board and Chief Executive Officer		Authorized Signatory
By:		By:
	Andrew M. Archibald Chief Financial Officer , and Secretary and Vice President Administration		Authorized Signatory

SCHEDULE 2.2(3)

FORM OF RIGHTS CERTIFICATE

Certificate No. ____________

___________ Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 3.1(2) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE TRANSFEREES SHALL BECOME VOID WITHOUT ANY FURTHER ACTION.

RIGHTS CERTIFICATE

This certifies that _______________ or registered assigns, is the registered holder of the number of Rights set forth above each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Amended and Restated Shareholder Protection Rights Plan Agreement dated August 24, 1993, as amended and restated from time to time (the "Rights Agreement"), between Intertape Polymer Group Inc., a Corporation amalgamated under the Canada Business Corporations Act (the "Corporation"), and CIBC Mellon Trust Company (formerly known as The R-M Trust Company) , a trust company incorporated existing under the laws of Canada, as rights agent (the "Rights Agent", which term shall include any successor Rights Agent under the Rights Agreement) to purchase from the Corporation at any time after the Separation Time (as such term is defined in the Rights Agreement) and prior to the Expiration Time (as such term is defined in the Rights Agreement) (or such earlier expiration time as is provided in the Rights Agreement) one fully paid common share of the Corporation (a "Common Share") at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate together with the Form of Election to Exercise duly executed and submitted to the Rights Agent at its principal office in the City of Montreal.  The Exercise Price shall initially be $100 (Canadian) per Right and shall be subject to adjustment in certain events as provided in the Rights Agreement.

In certain circumstances described in the Rights Agreement, each Right evidenced hereby may entitle the registered holder thereof to purchase or receive assets, debt securities or other equity securities of the Corporation (or a combination thereof) all as provided in the Rights Agreement.

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Corporation and the holders of the Rights.  Copies of the Rights Agreement are on file at the registered head office of the Corporation and are available upon written request.

- 2 -

This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights entitling the holder to purchase a like aggregate number of Common Shares as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered.  If this Rights Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation at a redemption price of $0.00001 per Right.

No fractional Common Shares will be issued upon the exercise of any Right or Rights evidenced hereby.

No holder of this Rights Certificate, as such, shall be entitled to vote, receive dividends or be deemed for any purpose the holder of Common Shares or of any other securities of the Corporation which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof any of the rights of a shareholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to shareholders of the Corporation at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders of the Corporation (except as expressly provided in the Rights Agreement), or to receive dividends, distributions or subscription rights, or otherwise until the Rights evidenced by this Rights Certif icate shall have been exercised as provided in the Rights Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been manually countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Corporation.

INTERTAPE POLYMER GROUP INC.

Date:

__________________________

By:	By:
Title:	Title:

Countersigned:

CIBC MELLON TRUST COMPANY

By __________________________

(To be attached to each Rights Certificate)

FORM OF ELECTION TO EXERCISE

TO:

INTERTAPE POLYMER GROUP INC.

The undersigned hereby irrevocably elects to exercise __________ whole Rights represented by the attached Rights Certificate to purchase the Common Shares issuable upon the exercise of such Rights and requests that certificates for such Shares be issued to:

_______________________________

(NAME)

_______________________________

(ADDRESS)

_______________________________

(CITY AND STATE OR PROVINCE)

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

_______________________________

(NAME)

_______________________________

(ADDRESS)

_______________________________

(CITY AND STATE OR PROVINCE)

__________________________________________________________________

SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFICATION NUMBER

Dated ___________________________

Signature Guaranteed

____________________________________________

Signature

(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

- 2 -

Signature must be guaranteed by a Schedule I Canadian chartered bank, a major Canadian trust company or a member of a recognized stock exchange or a member of the Securities Transfer Association a recognized Medallion Guarantee Program (Stamp) .

To be completed if true

The undersigned hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or any Person acting jointly or in consent with any of the foregoing or any Affiliate or Associate of such Person (as defined in the Rights Agreement).

_____________________________________________

Signature

NOTICE

In the event the certification set forth in the Form of Election to Exercise is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and accordingly such Rights shall be null and void.

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED ______________________________________________ hereby sells,

assigns and transfers unto ______________________________________

_______________________________________________________

(Please print name and address of transferee)

the Rights represented by this Rights Certificate, together with all right, title and interest therein and does hereby irrevocably constitute and appoint _____________________________ as attorney to transfer the within Rights on the books of the Corporation, with full power of substitution.

Dated __________________________

Signature Guaranteed

______________________________________________

Signature

(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

Signature must be guaranteed by a Schedule I Canadian chartered bank, a major Canadian trust company or a member of a recognized stock exchange or a member of the Securities Transfer Association a recognized Medallion Guarantee Program (Stamp) .

To be completed if true

The undersigned hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or any Person acting jointly or in consent with any of the foregoing (as defined in the Rights Agreement).

_____________________________________________

Signature

- 2 -

NOTICE

In the event the certification set forth in the Form of Assignment is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and accordingly such Rights shall be null and void.

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EX-4

POSITION DESCRIPTION OF THE CHAIR OF THE BOARD OF DIRECTORS OF
INTERTAPE POLYMER GROUP INC.

The Chair of the Board of Directors of Intertape Polymer Group Inc. (the “Corporation”) has the responsibility for:

1.

Providing leadership to the Board of Directors.

2.

Overseeing its effectiveness and ensuring that it meets its obligations and responsibilities.

3.

Monitoring and co-coordinating the functions of the Board of Directors with management of the Corporation.

4.

Chairing all Board of Directors and Shareholder meetings.

5.

Ensuring that adequate advance information is distributed to the Directors and that the Board of Directors receives regular updates on all issues important to the affairs of the Corporation.

6.

Meeting with members of the Board of Directors and each Board of Director committee to ensure full utilization of individual capacities and the optimum performance of the Board of Directors and each of its committees.

7.

Reviewing progress made by management of the Corporation in executing the Board of Directors' decisions and plans in conformity with the Corporation’s policies.

8.

Being available to provide counsel to management of the Corporation on major policy issues such as acquisitions, divestitures and financial structure.

9.

Participating in external activities involving the representation of the Corporation to its major stakeholders, including its shareholders, the financial community, governments and the public.

10.

At the request of the Board of Directors, undertaking specific assignments for the Board of Directors.

EX-5

POSITION DESCRIPTION OF THE LEAD DIRECTOR OF
INTERTAPE POLYMER GROUP INC.

Intertape Polymer Group Inc.’s (the "Corporation") Lead Director has an overall mandate to provide independent leadership to the Corporation’s Board of Directors (the "Board"). Each year the Lead Director of the Board shall be appointed by the Board for a one year term. Such appointment shall occur at the first meeting of the Board that follows the annual meeting of the Corporation’s shareholders.

The Lead Director shall:

1.

Facilitate the Board in functioning independently of the Corporation's management and shall maintain and enhance the quality of the Corporation's corporate governance practices. In order to do so, the Lead Director shall:

·

Ensure that measures are in place so that the Board can function independently of management of the Corporation;

·

Ensure that the independent directors of the Corporation have adequate opportunities to meet without management of the Corporation being present;

·

Advise the Chairman of the Board as to an appropriate schedule of Board meetings;

·

Provide the Chairman of the Board with input as to the preparation of the agendas for the Board and Committee meetings;

·

Advise the Chairman of the Board as to the quality, quantity and timeliness of the flow of information from the Corporation's management to the independent directors;

·

Make himself/herself available to directors who have concerns that cannot be addressed through the Chairman of the Board;

·

In the absence of the Chairman of the Board, act as chair of meetings of the Board;

·

Recommend, when necessary, the holding of special meetings of the Board;

·

Ensure that the Board, committees of the Board, individual directors and senior management of the Corporation understand and discharge their duties 17 mai 2006 and obligations under the Corporation's system of corporate governance; and

·

Facilitate the process of conducting director evaluations.

2.

Chair every separate meeting of the independent directors and encourage free and open discussion at meetings of the Board.

3.

Receive notices and materials for all committee meetings.

4.

Together with the Nominating and Corporate Governance Committee, identify guidelines for the selection of, and evaluation of conduct of, the directors of the Corporation.

5.

Act as the principal interface between the Chairman of the Board and the other directors of the Corporation.

6.

Carrying out other duties as requested by the Board.

EX-7

MANDATE OF THE BOARD OF DIRECTORS OF INTERTAPE POLYMER GROUP INC.

The mandate of the Board of Directors is to supervise the management of the business and affairs of Intertape Polymer Group Inc. (the “Corporation”), including the development of major policies and strategies and the identification of the risks of the Corporation’s business and implementation of the appropriate systems to manage these risks.  

The Board of Directors has the responsibility for:

1.

Executive / Senior Management

1.1

Selecting, appointing, evaluating and (if necessary) terminating the Chief Executive Officer.

1.2

Succession planning, including appointing, training and monitoring the performance of senior management.

1.3

Approving the compensation of the senior management team and the remuneration of the Board of Directors.

2.

Business Strategy / Plans / Budgets

2.1

The development of major policies and strategies of the Corporation, as well as the approval of strategic plans and the monitoring of the Corporation’s performance against plans.

2.2

Approving annual capital and operating plans and monitoring performance against those plans.

2.3

Approving all material amendments or departures proposed by management from established strategy, capital and operating budgets or matters of policy which diverge from the ordinary course of business.

3.

Finance

3.1

Approving dividend distributions to the Corporation’s shareholders, if any.

4.

Audit / Risk Management

4.1

Establishing policies and processes to identify business risks and ensure that systems and actions are in place to manage such risks.

4.2

Recommending the appointment of the external auditors to the shareholders at their annual meeting.

4.3

Approving external auditor scope of work and fees for annual audits and the scope of work and fees of any non-audit related projects or engagements.

4.4

Approving the quarterly and full year financial statements, the quarterly and full year Management's Discussions and Analyses and the related news releases.

4.5

Establishing policies and processes to ensure the integrity of the Corporation's internal control and management information systems.

5.

Corporate Governance

5.1

Providing appropriate orientation for new Directors.

5.2

Assessing, on an annual basis, the effectiveness of the Board as a whole, as well as periodically evaluating the contribution of individual members of the Board.

5.3

Approving a process for communication with the Corporation’s shareholders.

5.4

Approving the nominees as Directors for election to the Board of Directors at the annual meeting of Shareholders.

5.5

Establishing committees of the Board of Directors and approving their Chair, their respective mandates and the limits of authority delegated to each of these committees.

5.6

Monitoring compliance with the Corporation’s Code of Conduct and Business Ethics.

5.7

Establishing an effective process of corporate governance consistent with applicable regulatory requirements.

EX-8

POSITION DESCRIPTION OF THE CHIEF EXECUTIVE OFFICER
OF INTERTAPE POLYMER GROUP INC.

The Chief Executive Officer of Intertape Polymer Group Inc. (the “Corporation”) has the responsibility for:

1.

Directing the business and affairs of the Corporation by establishing, deploying and actuating a strategic plan, as well as operating plans/budgets as approved by the Board of Directors.

2.

Setting objectives for the Corporation consistent with the aforementioned strategic plan.

3.

Providing strategic directions to the management of the Corporation team in order so that the Corporation may achieve expected results.

4.

Determining and directing the overall objectives, policies and operating plans, both long- and short-term, of the Corporation in accordance with the Board of Directors' mandate.

5.

Subject to the Board of Director’s approval, developing and monitoring the various R&D programs consistent with the strategy of the Corporation.

6.

Ensuring that the Corporation has in place proper guidelines to provide for efficient, safe and long-term operations with focus on product quality. Ensuring that resources are made available to enact or to exceed such guidelines.

7.

Analyzing the operating results of the organization and its principal components and ensuring appropriate steps are taken to address significant / material areas of concern affecting the Corporation's balance sheet, assets, operating results, liabilities or risks of the business.

8.

Ensuring that the Board of Directors receives sufficient, timely information on all material aspects of the Corporation's operations.

9.

Ensuring that a carefully designed organization is in place and that the support provided to such organization is consistent with the strategy and objectives of the Corporation.

10.

Reviewing and recommending the employment or termination of all senior management personnel for Board of Director approval.

11.

Actively assisting in the recruitment, training, development and retention of personnel within the Corporation in order to provide for the future management of the Corporation.

12.

Evaluating the performance of the senior management of the Corporation.

13.

Monitoring the Corporation's compliance with current rules of regulatory compliance and disclosure.

14.

Exploring opportunities for the Corporation's growth, either through investment and/or acquisitions, as well as dispositions of unproductive or non-strategic assets.

15.

Acting as a member of the Board of Directors.

16.

Building the corporate profile with the public and with investor communities, including with the analysts that follow the Corporation.

17.

Identifying business risks and outlining plans to manage or mitigate such risks.

18.

Maintaining contact with other industry participants and government officials at senior levels.

19.

Ensuring that the appropriate information and disclosure are being provided to the shareholders of the Corporation.

EX-9

INTERTAPE POLYMER GROUP INC.

MANAGEMENT PROXY CIRCULAR

IN CONNECTION WITH

THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON

JUNE 14, 2006

intertape polymer group™

MANAGEMENT PROXY CIRCULAR

Solicitation of Proxies

This Management Proxy Circular (this "Circular"), which is being mailed to shareholders on or about May 17, 2006, is furnished in connection with the solicitation by the management of Intertape Polymer Group Inc. (the "Corporation") of proxies to be used at the Annual and Special Meeting of Shareholders of the Corporation (the "Meeting") to be held on June 14, 2006 at the time and place and for the purposes set forth in the accompanying notice of Annual and Special Meeting of Shareholders, or any adjournment thereof. The solicitation will be primarily by mail but may also be made by telephone or other means of telecommunication by regular employees of the Corporation at nominal cost. The cost of the solicitation will be borne by the Corporation.

All dollar amounts set forth in this Circular are in U.S. dollars, except as otherwise indicated.

Appointment of Proxyholders and Revocation of Proxies

A shareholder may appoint as proxyholder a person other than the directors of the Corporation named in the accompanying form of proxy to attend and vote at the Meeting in his stead, and may do so by inserting the name of such other person, who need not be a shareholder, in the blank space provided in the form of proxy or by completing another proper form of proxy.

In order for proxies to be recognized at the Meeting, the completed forms of proxy must be received at the office of the Corporation's Canadian transfer agent, CIBC Mellon Trust Company, 2001 University Street, 16th Floor, Montreal, Québec H2L 3A6, not less than 48 hours prior to the Meeting.

A shareholder, or his attorney authorized in writing, who executed a form of proxy may revoke it in any manner permitted by law, including the depositing of an instrument of revocation in writing at the principal place of business of the Corporation, 9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Québec H4M 2X5, at any time up to and including the last business day preceding the day of the Meeting or an adjournment thereof or with the Chairman of the Meeting on the day of the Meeting or an adjournment thereof but prior to the use of the proxy at the Meeting.

Non-Registered Holders

The information set forth in this section is important to the many shareholders who do not hold their common shares of the Corporation in their own names (the "Non-Registered Holders"). Non-Registered Holders should note that only proxies deposited by shareholders whose names appear on the records of the Corporation as the registered holders of shares can be recognized and acted upon at the Meeting. However, in many cases, common shares of the Corporation beneficially owned by a Non-Registered Holder are registered either:

(a)

in the name of an intermediary (an "Intermediary") that the Non-Registered Holder deals with in respect of the common shares, such as, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans; or

(b)

in the name of a clearing agency (such as The Canadian Depository for Securities Limited or "CSD") of which the Intermediary is a participant.

In accordance with the requirements of National Instrument Policy 54-101 of the Canadian Securities Administrators, the Corporation has distributed copies of the Notice of Meeting, this Circular, the form of proxy and the 2005 Annual Report including management's discussion and analysis (collectively, the "Meeting Materials") to the clearing agencies and Intermediaries for onward distribution to Non-Registered Holders.

Intermediaries are required to forward the Meeting Materials to Non-Registered Holders unless a Non-Registered Holder has waived the right to receive them. Very often, Intermediaries will use service companies to

forward the Meeting Materials to Non-Registered Holders. Generally, Non-Registered Holders who have not waived the right to receive the Meeting Materials will either:

(a)

be given a proxy which is signed by the Intermediary (typically by a facsimile, stamped signature) and already sets forth the number of common shares beneficially owned by the Non-Registered Holder but which is otherwise uncomplete. This form of proxy need not be signed by the Non-Registered Holder. The Non-Registered Holder who wishes to submit a proxy should properly complete the form of proxy and deposit it with CIBC Mellon Trust Company as described above;

(b)

more typically, be given a voting instruction form which must be completed and signed by the Non-Registered Holder in accordance with the directions on the CIBC Mellon Trust Company voting instruction form.

The majority of brokers now delegate responsibility for obtaining instructions from clients to ADP Investor Communications Corporation ("ADP" formerly IICC). ADP typically mails a proxy form to the Non-Registered Holders and asks Non-Registered Holders to return the proxy form to ADP (the ADP form also allows completion of the voting instructions form by telephone or online.) ADP then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of shares to be represented at a shareholders' meeting. A Non-Registered Holder receiving a proxy form from ADP cannot use that proxy to vote shares directly at the Meeting. The proxy must be returned to ADP well in advance of the Meeting in order to have the shares voted.

Shares held by brokers or their agents or nominees can be voted for or against resolutions only upon the instructions of the Non-Registered Holder. Without specific instructions, brokers and their agents and nominees are prohibited from voting shares for the broker's clients. The purpose of these procedures is to permit Non-Registered Holders to direct the voting of the common shares they beneficially own.

Should a Non-Registered Holder who receives either a proxy or a voting instruction form wish to attend and vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should strike out the names of the persons named in the proxy and insert the Non-Registered Holder's (or such other person's) name in the blank space provided, or, in the case of a voting instruction form, follow the corresponding directions on the form. In either case, Non-Registered Holders should carefully follow the instructions of their Intermediaries and their service companies and ensure that instructions respecting the voting of their shares are communicated to the appropriate person.

Exercise of Discretion by Proxyholders

The persons whose names are printed on the accompanying form of proxy will, on a show of hands or any ballot that may be called for, vote or withhold from voting the shares in respect of which they are appointed in accordance with the direction of the shareholder appointing them. If no choice is specified by the shareholder, the shares will be voted for the election of the nominees for directors set forth in this Circular under the heading "Election of Directors", for the appointment of the auditors set forth in this Circular under the heading "Appointment and Remuneration of Auditors", for the approval of the amendments to the Corporation’s Shareholder Protection Rights Plan set forth in this Circular under the heading "Amendments to the Corporation’s Shareholder Protection Rights Plan Agreement", and for the approval of the amendment to the Corporation’ ;s Articles of Amalgamation set forth in this Circular under the heading "Amendments to the Corporation’s Articles of Amalgamation".

The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the notice of the Meeting and to other matters which may properly come before the Meeting. As at the date hereof, management knows of no such amendment, variation or other matters to come before the Meeting. If any matters which are not now known should properly come before the Meeting, the persons named in the form of proxy will vote on such matters in accordance with their best judgment.

Shareholder Proposals for the 2007 Annual Meeting

Shareholder proposals intended to be presented at the Corporation's 2007 annual meeting of shareholders must be submitted for inclusion in the Corporation's proxy materials prior to March 1, 2007.

Voting Shares and Principal Holders Thereof

As at May 5, 2006, the Corporation had 40,985,440 common shares outstanding, being the only class of shares entitled to be voted at the Meeting. Each holder of such shares is entitled to one vote for each share registered in his name as at the close of business on May 5, 2006, being the date fixed by the Board of Directors of the Corporation ("Board of Directors" or "Board") for the determination of the registered holders of such shares who are entitled to receive the Notice of Annual and Special Meeting of Shareholders enclosed herewith and to vote shares at the Meeting (the "Record Date"). The Corporation shall prepare, no later than ten days after the Record Date, an alphabetical list of shareholders entitled to vote as of the Record Date. This list of shareholders will be available for inspection during usual business hours at the registered office of the Corporation and at the Meeting.

Based on public filings made by the persons mentioned in this paragraph, as of December 31, 2005, Letko, Brosseau & Ass. Inc. beneficially owned 19.06% of the Corporation's common shares, Wells Fargo & Company beneficially owned 15.5% of the Corporation's common shares, Wells Capital Management Incorporated beneficially owned 12.83% of the Corporation's common shares and Wells Fargo Funds Management LLC beneficially owned 9.52% of the Corporation's common shares; the foregoing persons being the only persons that, to the knowledge of the directors and officers of the Corporation, beneficially own or exercise control or direction over shares carrying approximately ten percent or more of the voting rights attached to all shares of the Corporation.

Election of Directors

The Articles of the Corporation stipulate that the Board of Directors shall consist of a minimum of one and a maximum of eleven directors. The entire Board of Directors currently consists of eight members all of whom were members of the Board prior to the last annual shareholders' meeting held on May 25, 2005, with the exception of John E. Richardson and Jorge N. Quintas, both of whom were elected to the board at such meeting. Following the announcement of his retirement as Chairman of the Board and Chief Executive Officer of the Corporation, Melbourne F. Yull will not be standing for re-election as a director of the Corporation. Additionally, Jorge N. Quintas will not stand for re-election as a director of the Corporation. The Nominating and Corporate Governance Committee of the Corporation has recommended that Mr. H. Dale McSween, whose biographical information is set out below, be nominated for election to the Board, and managem ent of the Corporation, has agreed to act on such recommendation. The following sets out information regarding each of the seven persons proposed by management as nominees for election as directors to hold office until the next succeeding annual meeting of shareholders of the Corporation or until their successors are elected or appointed.

				As at May 5, 2006 Control or Direction of the Corporation is Exercised by Means of (1)
Name	Age	Position or office with Corporation	Director Since	Common Shares	Options to Purchase Shares
Michael L. Richards (2)(4)	67	Director	December 22, 1989 (5)	77,600	46,000
Ben J. Davenport, Jr. (2) (4)	63	Director	June 8, 1994	19,000	46,000
L. Robbie Shaw (2)(3) (4)	64	Director	June 8, 1994	12,000	46,000
Gordon R. Cunningham (2)(3)(4)	61	Director	May 21, 1998	14,500	44,000
Thomas E. Costello (3) (4)	66	Lead Director	November 22, 2002	4,000	32,500
John E. Richardson (3) (4)	72	Director	May 25, 2005	2,000	12,500
H. Dale McSween(6)	57	President, Engineered Coated Products Division	Nominee for election as a director	40,120	320,165
				169,220	547,165

(1) This information, not being within the knowledge of the Corporation, was furnished by the respective nominees individually.

(2) Member of Compensation Committee.
(3) Member of Audit Committee.

(4) Member of Nominating & Governance Committee.
(5) Director of the predecessor company since 1981.

(6) Due to the retirement of Mr. Yull, H. Dale McSween will act as the Corporation's interim Chief Executive Officer.

Michael L. Richards, a resident of Westmount, Quebec, is a senior partner in the law firm Stikeman Elliott LLP, Montreal, Québec. He is also a director of Novamerican Steel Inc, a public company in the U.S. whose securities are listed on the NasdaqNM.

Ben J. Davenport, Jr., a resident of Chatham, Virginia, is the Chief Executive Officer of Chatham Oil Company, a distributor of oil, gasoline and propane. He also serves as Chairman and Chief Executive Officer of First Piedmont Corporation, a waste hauling business.

L. Robbie Shaw, a resident of Halifax, Nova Scotia, is the President of the IWR Health Centre Foundation. Prior to the acquisition of Meloche Monnex Inc. by TD Bank in 2003, Mr. Shaw was the Chair of its Audit Committee. He has also served as the Vice President, Finance and Administration of Dalhousie University, as the Operating Head of the Canadian Business Unit of National Sea Products, and he is the former Vice-President of Nova Scotia Community College and currently acts as a consultant for the College.

Gordon R. Cunningham, a resident of Toronto, Ontario, is President of Cumberland Private Wealth Management Corp., a discretionary investment management firm, and he is a trustee of Allied Properties Real Estate Investment Trust (and a member of their governance and compensation committee) whose units are listed on the TSX. Previously, Mr. Cunningham served as the President and Chief Executive Officer of London Life Insurance Canada, one of Canada's largest life insurers.

Thomas E. Costello, the Corporation's lead director, is a resident of Longboat Key, Florida and was, from 1992-2003, the Senior Vice-President of International Paper Company and, from 1991 to 2002, the Chief Executive Officer of its wholly-owned subsidiary, xpedx. Mr. Costello is also a director of Eagle Hospitality Properties Trust, Inc., a public company in the U.S. whose securities are listed on the NYSE, and a director of Cadmus Communications Corporation, a public company in the U.S. whose securities are listed on the NasdaqNM.

John E. Richardson, a resident of Toronto, Ontario, is currently the Chairman of the Ontario Pension Board, a director of Research in Motion Limited (and their audit committee financial expert), a public company in the U.S. and Canada whose securities are listed on the TSX and on the NasdaqNM, a trustee of Resolve Business Outsourcing Income Fund (and chairman of their audit committee) whose units are listed on the TSX, and a trustee of Armtec Infrastructure Income Fund (and a member of their audit committee) whose units are listed on the TSX.

H. Dale McSween, a resident of Sarasota County, Florida, has been an employee of the Corporation since 1982 and has held several executive positions with the Corporation since such time. Mr. McSween is currently the President of the Corporation's Engineered Coated Products Division and the Corporation's interim CEO.

If any of the above nominees is for any reason unavailable to serve as a director, proxies in favour of management will be voted for another nominee in the discretion of the persons named in the form of proxy unless the shareholder has specified in the proxy that his shares are to be withheld from voting on the election of directors. The Board of Directors recommends a vote in favour of each of the nominees.

Executive Compensation

Summary Compensation Table

The following table sets forth all compensation paid in respect of the individuals who were, at December 31, 2005, the Chief Executive Officer, the Chief Financial Officer and the other three most highly compensated executive officers of the Corporation (the "named executive officers").

SUMMARY COMPENSATION TABLE

		Annual Compensation			Long-Term Compensation Awards Securities Under
Name and Principal Position	Year	Salary (in U.S$)	Bonus (in U.S $)	Other Annual Compensation (in U.S $)(1)	Options Granted As At FY-End (#)
M.F. Yull Chairman of the Board and Chief Executive Officer(2)	2005 2004 2003	554,427 508,832 490,346	280,316 264,975 30,000	12,050 10,175 35,645	1,079,000 979,000 879,000
H.D. McSween President, Engineered Coated Products Division(3)	2005 2004 2003	343,245 329,932 309,197	133,141 171,002 15,000	4,418 1,964 12,683	320,165 320,165 280,165
A.M. Archibald Chief Financial Officer and Secretary	2005 2004 2003	283,810 275,983 268,400	139,250 148,960 12,500	4,675 2,668 2,240	309,543 279,543 239,543
G.A. Yull President, Distribution Products	2005 2004 2003	264,132 240,780 224,000	121,456 125,000 10,000	2,823 527 9,396	255,000 255,000 185,000
M..J. Dougherty(4) Former President, Consumer Products	2005 2004 2003	265,985 232,614 ─	103,600 Nil ─	54,161 485 ─	50,000 50,000 ─

⁽¹⁾

The amounts in this column relate primarily to taxable benefits on employee loans, to the Corporation’s contributions to the pension plan and to expenses incurred by the Corporation in connection with automobiles that it puts at the disposal of certain of the named executive officers.

⁽²⁾

On May 1, 2006, it was announced that Mr. Yull will retire as Chief Executive Officer and Chairman of the Board of the Corporation at the Meeting.

⁽³⁾

Due to the retirement of Mr. Yull, H. Dale McSween will act as the Corporation's interim Chief Executive Officer.

⁽⁴⁾

 Resigned on February 10, 2006.

The aggregate compensation for all executive officers and directors of the Corporation who are not "named executive officers" for the fiscal year ended December 31, 2005 was U.S.$1,713,226.

Executive Stock Option Plan

In 1992, the Corporation established its ongoing Executive Stock Option Plan (the "Plan") in respect of the common shares of the Corporation, which has been amended from time to time. The Plan is administered by the Board of Directors. The shares offered under the Plan are common shares of the Corporation.

The purpose of the Plan is to promote a proprietary interest in the Corporation among the executives, the key employees and the non-management directors of the Corporation and its subsidiaries, in order to both encourage such persons to further the development of the Corporation and to assist the Corporation in attracting and retaining key personnel necessary for the Corporation’s long term success. The Board of Directors designates from time to time from the eligible executives those executives to whom options are to be granted and determines the number of shares covered by such options. Generally, participation in the Plan is limited to persons holding positions that can have an impact on the Corporation's long-term results.

The number of common shares to which the options relate are determined by taking into account, inter alia, the market price of the common shares and each optionee's base salary. The exercise price payable for each common share covered by an option is determined by the Board of Directors but will not be less than the market value of the underlying common shares on the day preceding the effective date of the grant. The Plan provides that options issued thereunder shall vest at the rate of 25% per year, beginning, in the case of options granted to employees, on the first anniversary date of the grant and, in the case of options granted to non-management directors, on the date of the grant. The maximum number of common shares that may be issued under the Plan is 4,094,538. As at December 31, 2005,

there were a total of 3,919,251 outstanding options issued under the Plan, each of such options which, if or when vested, will be exercisable for one common share of the Corporation, and the weighted-average exercise price of such outstanding options equaled U.S.$8.61. As at December 31, 2005, 152,787 more options remained available for issue under the Plan.

The following table sets forth each grant of options to the named executive officers under the Plan during the financial year ended December 31, 2005.

OPTION GRANTS DURING THE FINANCIAL YEAR ENDED DECEMBER 31, 2005

Name	Securities Under Options Granted (#)	% Of The  Total Number Of Options That Were Granted To Employees During The Financial Year Ended Dec. 31, 2005	Exercise Price (U.S.$/ Common Share)	Market Value Of The Common Shares On the Date Of Grant (U.S.$/ Common Share)	Expiration Date
M.F. Yull	100,000 100,000	21.8% 21.8%	7.84 9.10	7.84 9.10	January 28, 2011 June 10, 2011
H.D. McSween	10,000 12,492	2.2% 2.7%	7.84 9.10	7.84 9.10	January 28, 2011 June 10, 2011
A.M. Archibald	40,000 11,086	8.7% 2.4%	7.84 9.10	7.84 9.10	January 28, 2011 June 10, 2011
G.A. Yull	5,000	1.1%	7.84	7.84	January 28, 2011
M..J. Dougherty	0	n/a	n/a	n/a	n/a

The following table sets forth details regarding the exercise of options by named executive officers in 2005.

AGGREGATED OPTION EXERCISES DURING THE FINANCIAL YEAR ENDED
DECEMBER 31, 2005 AND FINANCIAL YEAR-END OPTION VALUES

Name	Securities Acquired on Exercise (#)	Aggregate Value Realized ($)	Unexercised Options at FY-End (#) Exercisable/Unexercisable	Value of Unexercised Options at FY-End (U.S.$) Exercisable/Unexercisable
M.F. Yull	0	0	686,250/392,750(1)	242,505/343,415
H.D. McSween	0	0	217,673/102,492	222,590/135,025
A.M. Archibald	0	0	188,707/120,836	208,985/159,545
G.A. Yull	0	0	168,750/86,250	102,825/111,100
M..J. Dougherty	0	0	12,500/37,500(2)	10,063/30,187

⁽¹⁾

Upon Mr. Yull’s retirement, there will be an accelerated vesting of all of his stock options.

⁽²⁾

In connection with Mr. Dougherty’s resignation, he received U.S$25,000 from the Corporation in consideration for the immediate cancellation of all stock options that had been granted to him under the Plan.

Pension and Post-Retirement Benefit Plans

The Corporation has several defined contribution plans and defined benefit plans for substantially all its employees in both Canada and the United States. These plans are generally contributory in Canada and non-contributory in the United States.

Total cash payments

Total Cash payments for employee future benefits for 2005, consisting of cash contributed by the Corporation to its funded pension plans, cash payment directly to beneficiaries for its unfunded other benefit plans, cash contributed to its defined contribution plans and cash contributed to its multi-employer defined benefit plan were U.S.$4.2 million (U.S.$4.1 million in 2004 and U.S.$5.6 million in 2003).

Defined contribution plans

In the United States, the Corporation maintains a saving retirement plan (401[k] Plan) for the benefit of certain employees who have been employed for at least 90 days. Contribution to this plan is at the discretion of the Corporation.

The Corporation contributes as well to multi-employer plans for employees covered by collective bargaining agreements.

In Canada, the Corporation maintains defined contribution pension plans for its salaried employees. The Corporation contributes to the plan amounts equal to 4% of each participant's eligible salary.

The Corporation has expensed U.S.$2.1 million for these plans for the year ended December 31, 2005 (U.S.$0.9 million and U.S.$2.4 million in 2004 and 2003, respectively).

Defined benefits plans

The Corporation has, in the United States, two defined benefit pension plans (hourly and salaried). Benefits for employees are based on compensation and years of service for salaried employees and fixed benefit per month for each year of service for hourly employees.

In Canada, certain non-union hourly employees of the Corporation are covered by a pension plan which provides a fixed benefit of U.S.$17.15 (U.S.$14.60 and U.S.$12.81 in 2004 and 2003, respectively) per month for each year of service. In addition, the Corporation maintains two defined benefit plans, which provide for a fixed benefit ranging from 50% to 110% of the employee contributions, depending on the participation start date.

In the United States, the Corporation provides group health care and life insurance benefit to certain retirees.

In Canada, the Corporation provides group health care, dental and life insurance benefits for eligible retired employees.

The Corporation acquired Flexia Corporation and Fib-Pak Industries Inc. in October 2005, including their pension and post-retirement benefits plans. As a result, the Corporation accounted for U.S.$9.8 million and U.S.$8.4 million of accrued benefit obligations and plans assets related to two pension plans and U.S.$2.0 million of accrued benefit obligations related to the post-retirement benefit plans.

In 2005, the Corporation entered into a defined benefit retirement agreement with H.D. McSween whereby the Corporation agreed to fund a U.S.$150,000 per year pension (at age 65) for Mr. McSween with a 50% survivor benefit (or, in the case of death prior to age 65, a survivor benefit of 100% of base salary for one year, and 50% of base salary for each of the following four years).  

The Corporation's pension arrangements with M.F. Yull following his retirement are described in the following section of this Circular. Further details regarding the Corporation's pension and post-retirement benefit plans are provided in the notes to the Corporation's annual financial statements.

Executive Employment Contracts and Termination of Employment of Executives

On May 1, 2006, the Corporation announced that Melbourne F. Yull, founder, CEO and Chairman of the Board of Directors will be retiring following the Meeting. In connection with Mr. Yull’s retirement, the Corporation will record an expense in the second quarter of 2006 of approximately U.S.$5.5 million. The Corporation will also record non-cash stock-based compensation expense of approximately U.S.$1.5 million in recognition of the vesting of all of the stock options held by Mr. Yull upon his retirement. Finally, the Corporation is reviewing the appropriate amount to be recorded for Mr. Yull’s pension benefit obligation, which could be in the range of U.S.$2.0 million.

The Corporation entered into agreements as of January 2001 with each of Messrs. A.M. Archibald, W.A. Barnes, J.B. Carpenter, B.H. Hildreth, J.A. Jackson, G.C. Jones, H.D. McSween, S. Nelson, E. Nugent, K.R. Rogers, D.R. Yull and G.A. Yull, and, as of January 2004 with V. DiTommaso and, as of October 2004, with Kevin Jewell, Mike Young, Doug Nalette, Roy Van Essendelft and Shane Betts. These agreements provide that if, within a period of six months after a change in control of the Corporation, (a) the executive voluntarily terminates his employment with the Corporation, or (b) the Corporation terminates the executive’s employment without cause, such executive will be entitled to a lump sum in the case of his resignation or an indemnity in lieu of notice in a lump sum in the case of his termination, equal to 12 to 24 months of such executive’s remuneration at the effective date of such resigna tion or termination, depending on his seniority.

In addition, all options for the acquisition of common shares of the Corporation previously granted to such executive shall become immediately vested and exercisable. Furthermore, these agreements also provide that if during the term of the executive’s employment a bona fide offer is made to all shareholders of the Corporation which, if accepted, would result in a change of control of the Corporation, then, subject to any applicable law, all of the executive’s options which have not yet become vested and exercisable shall become vested and exercisable immediately. Upon expiry of such bona fide offer, if it does not result in a change of control of the Corporation, all of the executive’s unexercised options which were not vested prior to such offer, shall immediately revert to their unvested status and to their former provisions with respect to the time of their vesting.

Composition of the Compensation Committee and Report on Executive Compensation

The Compensation Committee is appointed by the Board of Directors and is currently composed of four directors, being Ben J. Davenport, Jr., Michael L. Richards, L. Robbie Shaw and Gordon R. Cunningham, none of whom are or have been at any previous time an employee of the Corporation or any of its subsidiaries. The Compensation Committee met 8 times during the period from January 1, 2005 to December 31, 2005. Following the Meeting, Michael L. Richards will not be re-appointed to the Compensation Committee in as much as he is deemed to be a non-independent director.

The Committee administers the Corporation’s compensation program in accordance with the mandate set out in the Committee’s charter, which has been adopted by the Board of Directors. Part of the mandate is to evaluate and recommend to the Board compensation policies and programs for the Corporation’s directors, executive officers and senior management, including option grants under the Corporation’s Executive Stock Option Plan described above. The Committee has the authority to retain compensation consultants to assist in the evaluation of director, chief executive officer or senior executive compensation. As disclosed in more detail in this Circular under the heading "Statement of Corporate Governance Practices of the Corporation – Compensation", during 2005, the Corporation retained Aon Consulting whose mandate was to review all components of the Corporation’s compensation for its senior man agement.

Three primary components comprise the Corporation’s compensation program: basic salary, annual bonuses based on performance and long-term stock options. Each element of compensation fulfils a different role in the attraction, retention and motivation of qualified executives and employees with the expertise and skills required in the business of the Corporation, who can effectively contribute to the long-term success and objectives of the Corporation. The annual bonus program is both formula based, measured against pre-determined performance targets, and discretionary. Stock options are granted to executives and key employees periodically by the Board of Directors based on the recommendations of the Committee. The amount and terms of outstanding options are taken into account when determining whether and how many new options will be granted. The options vest at a rate of 25% per year, beginning, in the case of options granted t o employees, on the first anniversary date of the grant and, in the case of options granted to non-management directors, on the date of the grant. The options have no resulting value if the stock market price of the Corporation’s shares does not appreciate.

The Committee annually reviews the compensation levels for the CEO and other executive officers and certain members of senior management. The Committee also reviews information it receives from the Corporation’s CEO as well as from external compensation consultants. It uses this information to determine and approve such changes to the general compensation levels that it considers appropriate. In addition, on the recommendation of the CEO, the Committee approves and recommends to the Board of Directors discretionary cash bonuses, annual bonuses and stock option awards for executive officers and senior management. In arriving at its decisions, the Committee reviews industry comparisons for similar sized companies and for other companies in the packaging materials sector.

The Committee annually reviews and approves the corporate goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance in light of those goals and objectives and recommends to the Board the CEO’s compensation level based on this evaluation. The Committee considers the Corporation’s performance and relative shareholder return and the awards given to the CEO in past years in determining the long-term component of his compensation. Based on these recommendations, the Board fixes the CEO’s compensation. The CEO does not participate in the Committee’s or the Board’s deliberations concerning his compensation. As a consequence of the announcement of Mr. Yull’s retirement, the Corporation has retained a professional executive search firm to identify and assess both internal and external qualified candidates to serve as the Corporation’s succe ssor CEO.

Directors who are not officers or employees of the Corporation receive both cash compensation and options based on the recommendations of the Committee following its review of compensation arrangements for directors of public companies with comparable market capitalization.

The above report has been submitted to and approved by the current members of the Committee, being Ben J. Davenport, Jr., Michael L. Richards, L. Robbie Shaw and Gordon R. Cunningham.

Compensation of Directors

In 2005, directors of the Corporation, who were not officers of the Corporation, received an annual fee of U.S.$19,000 for their services as directors and a fee of U.S.$1,000 for each board meeting attended (U.S.$500 for telephone meetings). Furthermore, a total of 68,500 options to purchase common shares of the Corporation were granted to directors of the Corporation who were not officers of the Corporation. These options were granted at a weighted-average exercise price of U.S.$7.89.

Minimum Stock Ownership Requirements for Directors and Officers

Upon recommendations made by the Corporation's Compensation Committee, in the first quarter of 2004, the Board of Directors passed resolutions implementing a policy whereby the officers and directors of the Corporation will be required to maintain ownership of a designated amount of common shares of the Corporation. Set out in the paragraphs below is a summary of such policy.

The Chief Executive Officer of the Corporation is required to own that number of common shares that has a value that is equal to eight times his or her base salary. Senior executive officers of the Corporation are required to own that number of common shares that has a value that is equal to three times their respective base salaries. All other executive officers of the Corporation are required to own that number of common shares that has a value that is equal to their respective base salaries. Directors of the Corporation are required to own that number of common shares that has a value that is equal to the aggregate of five times the total of the annual base retainer fees paid to such directors plus the meeting fees paid to such directors for the four regular quarterly meetings of the Board of Directors.

Directors and officers of the Corporation have four years from January 2004 to attain the foregoing common share ownership levels. Until such stock ownership levels have been achieved, a specific officer or director must maintain 75% of all common shares that they have received through the exercise of any options that had been granted to them by the Corporation and they must thereafter maintain 25% of all common shares that they have received through the exercise of any options. Failure to attain the required ownership levels within the prescribed time period will call for the holding of one-half of future incentive payments (or director’s fees) to be made to such individual until the required ownership level is obtained. Directors and officers may apply to the Corporation’s Compensation Committee in order to obtain a waiver from the application of all or a portion of the foregoing policy. The Compensation Committee may r ecommend that the Board of Directors grant a waiver to a particular director or officer on a case by case basis (the Compensation Committee will consider a specific individual’s estate planning needs, necessity to purchase a primary residence, education expenses, charitable contributions and/or other demonstrations of hardship (e.g. illness or divorce)).

Indebtedness of Directors and Officers

As listed in the table below, certain officers of the Corporation are currently indebted to the Corporation in respect of interest-free loans that are payable on demand by the Corporation. All such loans were entered into prior to the applicability to the Corporation of the relevant provisions of the Sarbanes-Oxley Act of 2002. As at May 5, 2006, the aggregate indebtedness of all directors, executive officers and senior officers to the Corporation entered into in

connection with such loans was Cdn$606,634 and U.S.$393,628. The following table summarizes the largest amount of such loans outstanding during the year ended December 31, 2005 and the amount outstanding as at May 5, 2006. Upon his retirement, Mr. Yull has agreed to repay the amounts listed in the table below that are owned by him to the Corporation.

TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS

Name and Principal Position	Involvement of the Corporation or its subsidiaries	Largest Amount Outstanding During FY-Ended Dec. 31, 2005 ($)	Amount Outstanding as at May 5, 2006 ($)
M.F. Yull(1) Chairman of the Board, Chief Executive Officer and a Director	The Corporation is the Lender	U.S.$216,398 Cdn$415,277	U.S.$216,398 Cdn$415,277
G.A. Yull President, Distribution Products	The Corporation is the Lender	U.S.$117,500	U.S.$107,500
A.M. Archibald Chief Financial Officer and Secretary	The Corporation is the Lender	Cdn$160,255	Cdn$160,255
D.R. Yull - Executive Vice President Strategic Planning and International Business	The Corporation is the Lender	U.S.$59,730	U.S.$59,730
H.D. McSween(2) President, Engineered Coated Products Division	The Corporation is the Lender	Cdn$31,102	Cdn$31,102
J. Jackson Vice President, Chief Information Officer	The Corporation is the Lender	U.S.$10,000	U.S.$10,000
2) On May 1, 2006, the Company announced that Mr. Yull had advised the Corporation that he will retire as Chief Executive Officer and Chairman of the Board of the Corporation at the Meeting. 2) H. Dale McSween will act as the Corporation's interim Chief Executive Officer due to the retirement of Mr. Yull.

Directors' and Officers' Insurance

The Corporation maintains directors' and officers' liability insurance covering liability, including defense costs, of directors and officers of the Corporation incurred as a result of acting as such directors or officers, provided they acted honestly and in good faith with a view to the best interests of the Corporation. The current limit of insurance is U.S.$25,000,000 and an annual premium of U.S.$350,000 was paid by the Corporation in the last completed financial year with respect to the period from December 2005 to December 2006. Claims payable to the Corporation are subject to a retention of up to U.S.$1,000,000 per occurrence.

Performance Graph

The following graphs illustrate changes over the past five year period in cumulative total shareholder return over the five-year period on the Corporation's common shares with the cumulative shareholder return on the S&P/TSX Composite Index, assuming reinvestment of all dividends.

[GRAPH]

Appointment and Remuneration of Auditors

Raymond Chabot Grant Thornton LLP, Chartered Accountants, who have been the auditors of the Corporation since December 22, 1989 and the auditors of the predecessor company since 1981, have been recommended by the Audit Committee and will be nominated for appointment as the Corporation's auditors to hold office until the next annual meeting of shareholders at such remuneration as may be fixed by the Board of Directors. A majority of the votes of the shareholders present or represented by proxy at the Meeting is required for the approval of such matter. Representatives of Raymond Chabot Grant Thornton LLP will be present at the Meeting and will have an opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.

Amendments to the Corporation’s Shareholder Protection Rights Plan Agreement

At the Meeting, the shareholders will be asked to consider and, if deemed advisable, to approve, ratify and confirm amendments to the Corporation's Shareholder Protection Rights Plan Agreement (the "Rights Plan"), the terms and conditions of which are set forth in the draft amended Shareholder Protection Rights Plan Agreement (the "2006 Rights Agreement") to be entered into by and between the Corporation and CIBC Mellon Trust Company.  If approved by the shareholders, the 2006 Rights Agreement will be submitted for approval by the Board of Directors immediately after the Meeting.

The Rights Plan was originally approved by the shareholders at the annual and special meeting of shareholders of the Corporation held on August 24, 1993.  At the annual and special meeting of shareholders held on May 21, 1998, the shareholders of the Corporation approved the extension of the term of the Rights Plan and, at the annual and special meeting of shareholders held on June 11, 2003, the shareholders of the Corporation approved the extension, as well as a restatement to the terms of, the Rights Plan. The common share purchase rights (the "Rights") distributed pursuant to the Rights Plan now expire on June 15, 2006. If the proposed amendments to the Rights Plan are approved by the shareholders, as such amendments are set forth in the 2006 Rights Agreement, the Rights will expire on the date immediately following the date of the Corporation’s annual meeting of shareholders to be held in 2009. The extens ion of the term of the Rights to the date immediately following the date of the Corporation’s annual meeting of shareholders to be held in 2009 is the sole substantive amendment that is currently proposed to be made to the Rights Plan. Other slight amendments to the Rights Plan are being made at the request of CIBC Mellon Trust Company but these amendments do not affect the substance of the Rights Plan.

General Function of the 2006 Rights Agreement

The 2006 Rights Agreement relies on the mechanism of the permitted bid to ensure that a person seeking control of the Corporation gives shareholders and the Board of Directors sufficient time to evaluate the bid.  The permitted bid is also designed to alleviate the coercive potential of a bid.  Permitted bids are common features in almost all Canadian and many United States shareholder rights plans, their purpose being to allow a potential bidder to avoid the dilutive features of a rights plan by making a bid in conformity with the conditions specified in the permitted bid provisions.  In Canada, permitted bids are typically those made in accordance with corporate and securities laws and additional conditions tailored to the individual circumstances of the company.  A summary of the permitted bid mechanism in the 2006 Rights Agreement, as well as a summary of the principal terms cont ained therein are attached to this Circular as Exhibit "A". Further, a copy of the full text of the proposed 2006 Rights Agreement, blacklined to show the changes proposed to be made since the last amended and restated Rights Plan was adopted in 2003, is attached to this Circular as Exhibit "B".

Background and Objective

In considering whether to extend the term and to amend the Rights Plan, the Board of Directors considered the following concerns inherent in the existing legislative framework governing take-over bids in Canada:

(a)

Time.

A particular concern that arises in the context of a take-over bid is the widely held view that applicable securities legislation does not allow sufficient time for directors and shareholders to evaluate a take-over bid and to consider, develop or pursue other alternatives which could maximize shareholder value. Current Canadian legislation permits a take-over bid to expire in 35 days after the date of announcement of the bid which, in the view of Board of Directors (and other boards of directors) may not be sufficient to permit shareholders to properly consider the take-over bid in a reasoned manner. In order to counter this concern, the 2006 Rights Agreement provides a mechanism whereby the minimum expiry period for a take-over bid must be 60 days after the date of the bid. By extending the period in which a take-over bid will remain open, the Board of Directors is of the view that (i) shareholders will have a more adequate time-frame to evaluate the bid, and (ii) their will be greater opportunities for the Corporation to pursue alternatives to the take-over bid, such as identifying other potential bidders or conducting an orderly auction process.

(b)

Pressure to Tender.  A shareholder may feel compelled to tender to a bid which the shareholder considers to be inadequate out of a concern that failing to tender may result in the shareholder being left with illiquid or minority discounted shares in the Corporation. This is particularly so in the case of a partial bid for less than all shares of a class, where the bidder wishes to obtain a control position but does not wish to acquire all of the common shares of the Corporation. The permitted bid concept in the Corporation’s Rights Plan is intended to ensure that a shareholder can wait and tender after a public announcement has been made that more than 50% of the common shares have been tendered. The Corporation’s Rights Plan requires that a bid remain open for acceptance for a further ten days following the public announcement that more than 50% of the common shares have been deposited under the bid. This pr ovision should lessen the undue pressure to tender typically encountered by a shareholder of a corporation that is the subject of a take-over bid.

(c)

Unequal Treatment.  Another concern that arises in the context of potential take-overs is the possibility that, in certain instances,  control of a corporation may be acquired pursuant to a private agreement in which a small group of shareholders dispose of shares at a premium to market price which premium is not shared with other shareholders. In such a context not all shareholders receive equal treatment. Additionally, it may also be possible for a person to slowly accumulate shares through stock exchange acquisitions, which may result, over time, in an acquisition of control without payment of fair value for control or a fair sharing of a control premium among all shareholders. The Corporation’s Rights Plan addresses these concerns as the Rights are triggered upon an acquisition of greater than 20% of the common shares of the Corporation.

In light of the above and in recognition of the fact that the Corporation remains a widely-held corporation with no controlling shareholder, the Board of Directors is proposing the extension of the term of the Rights Plan. The Board of Directors determined that it is in the best interests of the Corporation to extend the term of the Rights under the Rights Plan to help ensure that any acquisition of control of the Corporation takes place in an open and fair manner for the shareholders.  The Board of Directors believes that the Rights Plan will assist in achieving this objective. The Rights Plan encourages a potential bidder to negotiate with the Board of Directors, which empirical studies indicate, generally results in a higher price being paid to obtain control of a corporation. There are many Canadian and U.S. corporations which have adopted rights plans.

The Rights Plan is designed to not interfere with the day-to-day operations of the Corporation and the existence of the Rights does not in any way alter the financial condition of the Corporation, impede its business plans, affect the indebtedness of the Corporation, impose any additional burdens on the Corporation, alter the Corporation's balance sheet or income statement, involve a sale, exchange or purchase of significant assets or incur a loss of earning power for the Corporation. In addition, the existence of the Rights does not restrict the ability of shareholders to trade their common shares.  

While the Board of Directors believes that the Rights Plan offers the aforementioned protections, it is not intended to prevent a take-over bid or to deter fair offers for the common shares of the Corporation.  Rather, it is designed to encourage anyone seeking to acquire control of the Corporation to make an offer that treats all shareholders fairly and equally, that gives shareholders and the Corporation sufficient time to explore possible alternatives that may then present themselves and that recognizes the long term value of the common shares.

The Corporation’s Rights Plan focuses only on take-over bids where, in the opinion of the Board of Directors, it is prudent that shareholders be afforded protection in addition to that granted by applicable legislation.  It does not

apply to amalgamations, asset sales or similar transactions where shareholders already enjoy statutory safeguards, such as the right to vote on the approval of such transactions.  The Board of Directors reviewed whether the Rights Plan might deter attempts to acquire control of the Corporation on terms not approved by the Board of Directors and make it less likely that shareholders would be given an opportunity to sell their common shares at a premium over the market price.  The Board of Directors believes that the Rights Plan minimizes these concerns and that the protection which the Rights Plan affords shareholders overrides any concerns of this nature.

The Board of Directors is of the view that the 2006 Rights Agreement is consistent with rights plans that have been adopted by major Canadian corporations in the past few years and is in line with the guidelines and views that have been set out by institutional investors and other market participants.

The extension of the term of the Rights to the date immediately following the date of the Corporation’s annual meeting of shareholders to be held in 2009 is the sole substantive amendment that is currently proposed to be made to the Rights Plan. Other slight amendments to the Rights Plan are being made at the request of CIBC Mellon Trust Company but these amendments do not affect the substance of the Rights Plan.

The Rights Plan and the proposed amendment to the Rights Plan does not in any way detract from or lessen the duty of the Board of Directors to act honestly and in good faith with a view to the best interests of the Corporation and to consider a take-over bid in accordance with such duty.  The Board of Directors has no intention to secure the continuance of existing directors in office or to avoid an acquisition of control of the Corporation which is in the best interests of the Corporation and its shareholders. Pursuant to the role of the Board of Directors to negotiate in the best interests of the Corporation and to ensure the opportunity for any prospective acquiror to negotiate in good faith with the Board of Directors, the Rights may be redeemed by the Board of Directors prior to the occurrence of any transaction in or pursuant to which 20% or more of the outstanding common shares have been accumulated by an acquiror or gr oup. In addition, the Board of Directors may until the occurrence of such event determine to waive the application of the provisions of the Rights Plan to any transaction that would otherwise be subject to those provisions. The proxy mechanism of the Canada Business Corporations Act (the "CBCA") is not affected by the 2006 Rights Agreement, and a shareholder may use his statutory rights to promote a change in the management or direction of the Corporation, including the right of shareholders holding not less than 5% of the outstanding common shares to requisition the Board of Directors to call a meeting of shareholders.

The Corporation did not adopt the Rights Plan and is not proposing the amendments to the Rights Plan in response to or in anticipation of any pending or threatened take-over bid, or to deter take-over bids generally. As of the date of this Circular, the Board of Directors is not aware of any third party considering or preparing any proposal to acquire control of the Corporation.

Amendment of the Rights Plan

In order for the term of the Rights Plan to be extended to the date of the Corporation’s annual meeting of shareholders to be held in 2009, the affirmative vote of a majority of the votes cast in respect of the resolution to approve, confirm and ratify the 2006 Rights Agreement, a copy of the full text of which resolution is attached to this Circular as Exhibit "C", by the holders of common shares, as a single class, present in person or by proxy at the Meeting will be required. The Rights Plan will become void and of no further force or effect on its current termination date if this resolution is not approved at the Meeting.  The Corporation has not determined what further action, if any, it would take in the event that the resolution is not approved at the Meeting.

The Board of Directors recommends that the shareholders vote in favour of the resolution that will approve the proposed amendments to the Rights Plan. Unless instructions are given to vote against the confirmation of such resolution, the persons whose names appear on the enclosed proxy will vote in favour of the aforementioned resolution.

Amendments to the Corporation’s Articles of Amalgamation

Section 106(8) of the CBCA sets out that the directors of a corporation, if the articles of the corporation so provide, may appoint one or more additional directors to hold office for a term expiring not later than the close of the next annual meeting of the corporation’s shareholders, so long as the total number of directors so appointed does not exceed one third of the number of directors elected at the previous annual meeting of the corporation’s shareholders.

The current articles of amalgamation of the Corporation do not provide that the directors of the Corporation may appoint one or more additional directors in this manner.

As Melbourne F. Yull and Jorge N. Quintas will not be standing for re-election at the Meeting, if the proposed directors are elected at the Meeting, the Corporation’s Board will consist of seven directors. The directors are of the view that it would be in the best interests of the Corporation for the directors to have the flexibility to be able to appoint additional directors to the Board for a term expiring not later than the close of the then next annual meeting of the Corporation’s shareholders. Accordingly, at the Meeting, the shareholders of the Corporation will be asked to consider and, if deemed advisable, to approve, ratify and confirm an amendment to the Corporation's articles of amalgamation whereby the following provision would be added to 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 of the Corporation, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of the Corporation’s shareholders."

In order for the Corporation’s articles of amalgamation to be amended to add the aforementioned provision, the affirmative vote of a majority of the votes cast in respect of the resolution to approve, confirm and ratify such an amendment to the Corporation’s articles of amalgamation, by the holders of common shares, as a single class, present in person or by proxy at the Meeting will be required. The Board of Directors recommends that the shareholders vote in favour of the resolution that will approve the proposed amendment to the Corporation’s articles of amalgamation. Unless instructions are given to vote against the confirmation of such resolution, the persons whose names appear on the enclosed proxy will vote in favour of the aforementioned resolution.

Interest of Management and Others in Material Transactions

The management of the Corporation is unaware of any material interest of any director or officer of the Corporation, of any management nominee for election as a director of the Corporation or of any person who beneficially owns or exercises control or direction over shares carrying more than ten percent of the voting rights attached to all shares of the Corporation, or any associate or affiliate of any such person, in any transaction since the beginning of the last completed financial year of the Corporation or in any proposed transactions that has materially affected or will materially affect the Corporation or any of its affiliates.

Statement of Corporate Governance Practices of the Corporation

Over the past few years, regulators in both Canada and the United States have brought forth new requirements in terms of corporate governance and accountability in connection with public companies. Heightened expectations on the part of investors and the public in general encouraged governments and regulators in both countries to propose and adopt new rules in these sectors and to revise and amend those rules that were already in effect. For example, in Canada, National Instrument 58-101 – Disclosure of Corporate Governance Practices and National Instrument 58-201 – Corporate Governance Guidelines, both came into effect on June 30, 2005. The Corporation’s Nominating & Governance Committee has reviewed the governance practices of the Corporation and has concluded that, except as provided below, the Corporation complies with the requirements of National Instrument 58-101 – Disclosure of Corpor ate Governance Practices. During the course of the current year, the Corporation’s Nominating & Governance Committee intends to continue its assessment of the Corporation’s current governance practices with the goal of having the Corporation take such additional action as may be required so that it meets all the guidelines set out in National Instrument 58-101 – Disclosure of Corporate Governance Practices and National Instrument 58-201 – Corporate Governance Guidelines.

The following is a statement of the Corporation’s existing corporate governance practices with specific reference to the headings set out in Form 58-101F1 of National Instrument 58-101 – Disclosure of Corporate Governance Practices:

Board of Directors

As previously set out in this Circular, currently, the eight directors of the Corporation are Melbourne F. Yull, Michael L. Richards, Ben J. Davenport, Jr., L. Robbie Shaw, Gordon R. Cunningham, Thomas E. Costello, John E. Richardson and Jorge N. Quintas. All of the foregoing directors, with the exception of Mr. Yull and Mr. Quintas, are proposed to be re-elected at the Meeting, and all of them have served as directors in good standing of the Corporation since 1994, other than Gordon R. Cunningham who was elected in 1998, Thomas E. Costello who was elected in 2002,

and John E. Richardson and Jorge N. Quintas who were both elected in 2005. H. Dale McSween, the Corporation's interim CEO and the President of its Engineered Coated Products Division, will stand for election as a director at the Meeting. The biographies of each nominee for election as a director at the Meeting is set out at page three and following of this Circular.

As the term "independent" is defined within National Instrument 58-101 – Disclosure of Corporate Governance Practice, Melbourne F. Yull, the Chairman of the Board, is not an independent director as he is the Chief Executive Officer of the Corporation, and Michael L. Richards is not an independent director given that he is a senior partner at Stikeman Elliott LLP, a law firm which provides legal services to the Corporation on a regular basis. Mr. Yull is not standing for re-election as a director at the Meeting. As concerns Mr. Richards, the Corporation is of the view that its relationship with Stikeman Elliott LLP does not interfere with the exercise of Mr. Richards’ independent judgment with respect to his role as a director of the Corporation. As an executive of the Corporation, H. Dale McSween will, if nominated to the Board, be a non-independent director. The other members of the Board of Directo rs are independent. Thomas E. Costello has been appointed as the Corporation’s lead director. The position descriptions of the Chairman of the Board of Directors and of the lead director of the Corporation are set forth respectively in Exhibit "D" and Exhibit "E" to this Circular.

A director’s participation is expected at all Board of Directors meetings and at all Committee meetings of which they are a member. Directors are asked to notify the Corporation in advance if they will be unable to attend a meeting and attendance at meetings is duly recorded. During the period from January 1, 2005 to December 31, 2005, the Board of Directors held fifteen meetings. The following table sets out the attendance record of each director for all Board of Directors meetings from January 1, 2005 until December 31, 2005.

Name of Director	Board Meetings
Melbourne F. Yull	15/15
Michael L. Richards	15/15
Ben J. Davenport, Jr.	14/15
L. Robbie Shaw	14/15
Gordon R. Cunningham	10/15
J. Spencer Lanthier	6/6 (did not stand for re-election as a director following the annual general meeting of shareholders of the Corporation held on May 25, 2005)
Thomas E. Costello	14/15
Jorge N. Quintas	2/9 (appointed as a director at the annual general meeting of shareholders of the Corporation held on May 25, 2005)
John E. Richardson	7/9 (appointed as a director at the annual general meeting of shareholders of the Corporation held on May 25, 2005)

Board Mandate

The mandate of the Board of Directors of the Corporation is to supervise the management of the business and affairs of the Corporation, including the development of major policies and strategies and the identification of the risks of the Corporation's business and the implementation of the appropriate systems to manage these risks. The Board of Directors of the Corporation has explicitly assumed responsibility for the stewardship of the Corporation and has adopted a formal mandate setting out its stewardship responsibilities. The mandate of the Board of Directors of the Corporation is set forth in Exhibit "F" to this Circular.

Position Descriptions

The position descriptions of the Chairman of the Board of Directors, the lead director of the Corporation and the CEO of the Corporation are set forth respectively in Exhibit "D", Exhibit "E" and Exhibit "G" to this Circular.

Orientation and Continuing Education

The Corporation’s Nominating & Governance Committee is responsible to orient new directors that are appointed to the Board with respect to the nature and operation of the Corporation’s business, as well as with respect to the role of the Board, its committees and each individual director. The Corporation’s Nominating & Governance Committee is also charged with overseeing the continuing education of the Corporation’s directors. Upon a director’s appointment to the Board, the director receives all of the various corporate governance documents that have been adopted by the Corporation. Additionally, the director partakes in various meetings with members of management of the Corporation, is given a tour of certain of the Corporation's operational facilities and is briefed on the strategic policies and strategic direction of the Corporation.

As concerns the level of education of the Board, the Corporation has relied on the fact that each director elected to the Board has had vast prior corporate experiences and that each director has the necessary expertise to serve as an effective director of the Corporation. While the Corporation has no formal process currently in place to provide for the continuing education of its directors, various members of senior management of the Corporation report to the Board on an informal and formal basis regularly in order to keep the directors up-to-date on various matters concerning the business and affairs of the Corporation.

Ethical Business Conduct

The Corporation's Code of Business Conduct and Ethics (the "Code") applies to each of the Corporation's directors, officers and employees. A copy of the Code is available on SEDAR at www.sedar.com. All directors, officers and employees of the Corporation are strongly encouraged to discuss all issues with appropriate personnel at the Corporation in cases where they suspect a potential breach of the Code may have occurred. Any waiver of a provision of the Code for executive officers or directors of the Corporation may only be made by the Board or a committee thereof and will be promptly disclosed as required by law or by the regulations of the NYSE or the TSX. To the knowledge of the directors and officers of the Corporation, there has not been any instance of departure from the Code within the preceding 12 months. Persons who violate the standards set out in the Code will be subject to disciplinary action.

Nomination of Directors

The Board and its Nominating & Governance Committee participate in discussions in order to identify skill sets and individuals that could add value to the Board. As part of its mandate, the Nominating & Governance Committee, from time to time, recommends individuals that can add value to the Board.

Compensation

The Compensation Committee administers the Corporation’s compensation program in accordance with the mandate set out in the Committee’s charter, which has been adopted by the Board of Directors. Part of the mandate is to evaluate and recommend to the Board compensation policies and programs for the Corporation’s directors, executive officers and senior management, including option grants under the Corporation’s Executive Stock Option Plan.

The Committee has the authority to retain compensation consultants to assist in the evaluation of director, chief executive officer or senior executive compensation. During 2005, upon the recommendation of the Committee, the Corporation retained Ernst & Young in order to consider whether a deferred compensation plan should be implemented for the Corporation's senior executives and directors. Additionally, Aon Consulting was retained by the Corporation in order to review the compensation package of the Corporation’s CEO, as well as to consider the development of an updated bonus plan for the Corporation’s executive officers.

Three primary components comprise the Corporation’s compensation program: basic salary, annual bonuses based on performance and long-term stock options. Each element of compensation fulfils a different role in the attraction, retention and motivation of qualified executives and employees with the expertise and skills required in the

business of the Corporation, who can effectively contribute to the long-term success and objectives of the Corporation. The annual bonus program is both formula based, measured against pre-determined performance targets, and discretionary. Stock options are granted to executives and key employees periodically by the Board of Directors based on the recommendations of the Committee. The amount and terms of outstanding options are taken into account when determining whether and how many new options will be granted. The options vest at a rate of 25% per year, beginning, in the case of options granted to employees, on the first anniversary date of the grant and, in the case of options granted to non-management directors, on the date of the grant. The options have no resulting value if the stock market price of the Corporation’s shares does not appreciate.

The Committee annually reviews the compensation levels for the CEO and other executive officers and certain members of senior management. The Committee also reviews information it receives from the Corporation’s CEO as well as from external compensation consultants. It uses this information to determine and approve such changes to the general compensation levels that it considers appropriate. In addition, on the recommendation of the CEO, the Committee approves and recommends to the Board of Directors discretionary cash bonuses, annual bonuses and stock option awards for executive officers and senior management. In arriving at its decisions, the Committee reviews industry comparisons for similar sized companies and for other companies in the packaging materials sector.

The Committee annually reviews and approves the corporate goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance in light of those goals and objectives and recommends to the Board the CEO’s compensation level based on this evaluation. The Committee considers the Corporation’s performance and relative shareholder return and the awards given to the CEO in past years in determining the long-term component of his compensation. Based on these recommendations, the Board fixes the CEO’s compensation. The CEO does not participate in the Committee’s or the Board’s deliberations concerning his compensation. Directors who are not officers or employees of the Corporation receive both cash compensation and options based on the recommendations of the Committee following its review of compensation arrangements for directors of public companies with comparable market capitalizati on.

Board Committees

The Board of Directors has established three committees, the Audit Committee, the Compensation Committee, and the Nominating & Governance Committee to facilitate the carrying out of its duties and responsibilities and to meet applicable statutory requirements. The following is a description of the Committees of the Board of Directors and their mandate:

Audit Committee

The Audit Committee is presently composed of four directors, being John E. Richardson, L. Robbie Shaw, Gordon R. Cunningham and Thomas E. Costello, all of whom are independent directors. The Audit Committee met seven times during the period from January 1, 2005 to December 31, 2005.

The basic mandate of the Audit Committee is to review the financial statements of the Corporation and to make recommendations to the Board of Directors in respect thereto. Further, the Committee reviews the nature and scope of the annual audit as proposed by the external auditors and management and, with the external auditors and management, the adequacy of the internal accounting control procedures and systems within the Corporation.

During 2002, the Audit Committee formalized its mandate into a written charter document. The charter sets out that, in addition to its basic mandate, the Audit Committee will, on a going-forward basis, have the sole authority to recommend to the Corporation’s shareholders the appointment or replacement of the Corporation’s external auditors and shall approve all audit engagement fees and terms and all significant non-audit engagements with the external auditors. Further, the Audit Committee will require that the Corporation’s external auditors provide a report at least annually regarding, inter alia, the auditors’ internal quality-control procedures and all relationships between the external auditors and the Corporation. While the Audit Committee may consult with management on these issues, it shall not delegate its overall responsibility. The charter also sets out that the Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain special legal, accounting or other consultants for additional advice as may be required.

For more information concerning the Corporation's Audit Committee, please refer to the heading "Item 17 – Audit Committee" in the Corporation's latest Annual Information Form dated March 31, 2006 which is available on the

System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on EDGAR at www.sec.gov.

Compensation Committee

The Compensation Committee is presently composed of four directors, being Ben J. Davenport, Jr., Michael L. Richards, L. Robbie Shaw and Gordon R. Cunningham. Following the Meeting, Michael L. Richards will not be re-appointed to the Compensation Committee in as much as he is deemed to be a non-independent director. The Compensation Committee met 8 times during the period from January 1, 2005 to December 31, 2005. The mandate of the Compensation Committee is described above under the heading "Composition of the Compensation Committee and Report on Executive Compensation".

Nominating & Governance Committee

The Nominating & Governance Committee is composed of all of the members of the Board, a majority of whom are independent directors. The charter of the Nominating & Governance Committee sets out that the committee will, inter alia:

(i)

assess on an annual basis the effectiveness of the Board as a whole as well as periodically evaluate the contribution of individual members of the Board;

(ii)

review, on a periodic basis, the size and composition of the Board and ensure that an appropriate number of unrelated directors sit on the Board;

(iii)

identify individuals qualified to become members of the Board as may be required and recommend to the Board new nominees for appointment;

(iv)

provide appropriate orientation to any new members of the Board;

(v)

recommend to the Board corporate governance guidelines and ensure the sufficiency of such guidelines on a periodic basis; and

(vi)

review and advise the Board at least annually as to corporate governance issues.

Assessments

All directors are, from time to time, required to complete a director's questionnaire designed to assist the Board in assessing each director, the Board as a whole, and each Committee of the Board. The results of these assessments are discussed at a meeting of the Board.

Additional Information

Additional financial information is provided in the Corporation’s Consolidated Financial Statements and Management’s Discussion and Analysis for the fiscal year ended December 31, 2005. All of this information, as well as additional information relating to the Corporation is available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on EDGAR at www.sec.gov. Shareholders may also contact the Corporation to request copies of the Corporation’s Consolidated Financial Statements and Management’s Discussion and Analysis by contacting Investor Relations at 866-202-4713 or by e-mail to itp$info@itape.com.

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Approval of Directors

The contents and the sending of this Circular have been approved by the directors of the Corporation.

(SIGNED) ANDREW M. ARCHIBALD, C.A.

Chief Financial Officer and Secretary

Montreal, Québec – May 17, 2006

EXHIBIT "A"

SUMMARY OF THE PRINCIPAL TERMS OF THE 2006 RIGHTS AGREEMENT

This summary is qualified in its entirety by reference to the text of the 2006 Rights Agreement, a copy of which is attached to this Circular as Exhibit "B".  Capitalized terms used in this summary without express definition have the meanings ascribed thereto in the 2006 Rights Agreement.

Issue of Rights

The Corporation issued one right (a "Right") in respect of each common share outstanding at the close of business on September 1, 1993 (the "Record Time").  The Corporation will issue Rights on the same basis for each common share issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time (both defined below).

Rights Certificates and Transferability

Before the Separation Time, the Right will be evidenced by certificates for the common shares which are not transferable separate from the common shares.  From and after the Separation Time, the Rights will be evidenced by separate Rights Certificates which will be transferable separate from and independent of the common shares.

Exercise of Rights

Rights are not exercisable before the Separation Time.  After the Separation Time and before the Expiration Time, each Right entitles the holder to acquire one common share for the Exercise Price of $100 (subject to certain anti-dilution adjustments).  This Exercise Price is a price in excess of the estimated maximum value of the common shares during the term of the Rights Plan as determined by the Board of Directors.

Upon the occurrence of a Flip-In Event (defined below) prior to the Expiration Time (defined below), each Right (other than any Right held by an "Acquiring Person" (defined below), which will become null and void as a result of such Flip-In Event) may be exercised to purchase that number of common shares which have an aggregate Market Price equal to twice the Exercise Price of the Rights for a price equal to the Exercise Price.  Effectively, this means a shareholder of the Corporation (other than the Acquiring Person) can acquire additional common shares from treasury at half their Market Price.

Definition of "Acquiring Person"

Subject to certain exceptions, an Acquiring Person is a person who is the Beneficial Owner (defined below) of 20% or more of the outstanding common shares.

Definition of "Beneficial Ownership"

A person is a Beneficial Owner if such person or its affiliates or associates or any other person acting jointly or in concert:

(a)

owns the securities in law or equity; and

(b)

has the right to acquire (immediately or within 60 days) the securities upon the exercise of any convertible securities or pursuant to any agreement, arrangement or understanding.

However, a person is not a Beneficial Owner under the Rights Plan where:

(a)

the securities have been deposited or tendered pursuant to a take-over bid, unless those securities have been taken up or paid for;

(b)

by reason of the holders of such securities having agreed to deposit or tender such securities to a take-over bid pursuant to a Permitted Lock-Up Agreement;

(c)

such person (including a fund manager, trust company, pension fund administrator, trustee or non-discretionary client accounts of registered brokers or dealers) is engaged in the management of investment funds for others, as long as that person:

(i)

holds those common shares in the ordinary course of its business for the account of others;

(ii)

holds not more than 30% of the common shares; and

(iii)

is not making a take-over bid or acting jointly or in concert with a person who is making a take-over bid; or

(d)

such person is a registered holder of securities as a result of carrying on the business of or acting as a nominee of a securities depository.

Definition of "Separation Time"

Separation Time occurs on the tenth business day after the earlier of:

(a)

the first date of public announcement that a Flip-In Event has occurred;

(b)

the date of the commencement or announcement of the intent of a person to commence a take-over bid (other than a Permitted Bid or Competing Bid) or such later date as determined by the board; and

(c)

the date on which a Permitted Bid or Competing Bid ceases to qualify as such or such later date as determined by the board.

Definition of "Expiration Time"

Expiration Time occurs on the date being the earlier of:

(a)

the time at which the right to exercise Rights is terminated under the terms of the Rights Plan; and

(b)

the date immediately after the Corporation’s annual meeting of shareholders to be held in 2006.

Definition of a "Flip-In Event"

A Flip-In Event occurs when a person becomes an Acquiring Person.

Upon the occurrence of a Flip-In Event, any Rights that are beneficially owned by an Acquiring Person or any of its related parties to whom the Acquiring Person has transferred its Rights will become null and void as a result of which the Acquiring Person’s investment in the Corporation will be greatly diluted if a substantial portion of the Rights are exercised after a Flip-In Event occurs.

Definition of a "Permitted Bid"

A Permitted Bid is a take-over bid made by a person (the "Offeror") pursuant to a take-over bid circular that complies with the following conditions:

(a)

the bid is made to all registered holders of common shares (other than common shares held by the Offeror) on identical terms and conditions;

(b)

the Offeror agrees that no common shares will be taken up or paid for under the bid for 60 days following the commencement of the bid and that no common shares will be taken up or paid for unless more than 50% of the outstanding common shares held by shareholders other than the Offeror and certain related parties have been deposited pursuant to the bid and not withdrawn;

(c)

the Offeror agrees that the common shares may be deposited to and withdrawn from the take-over bid at any time before its expiry; and

(d)

if, on the date specified for take-up and payment, the condition in paragraph (b) above is satisfied, the bid shall remain open for an additional period of at least ten business days to permit the remaining shareholders to tender their common shares.

Definition of "Competing Bid"

A Competing Bid is a take-over bid that:

(a)

is made while another Permitted Bid is in existence; and

(b)

satisfies all the requirements of a Permitted Bid except that the common shares under a Competing Bid may be taken up on the later of 35 days after the Competing Bid was made and 60 days after the earliest date on which any other Permitted Bid or Competing Bid that was then in existence was made.

Definition of "Permitted Lock-Up Agreement"

A Permitted Lock-Up Agreement is an agreement between a person making a take-over bid and one or more shareholders (each, a "Locked-up Person") under which the Locked-up Persons agree to deposit or tender their common shares to such take-over bid and which provides:

(a)

(i) no limit on the right of the Locked-up Persons to withdraw its shares in order to deposit them to a Competing Bid (or terminate the agreement in order to support another transaction) where the price or value represented under the Competing Bid (or other transaction) exceeds the price or value represented under the original take-over bid; or (ii) limits such right to withdraw its shares in order to deposit them to a Competing Bid (or terminate the agreement in order to support another transaction) where the price or value represented under the Competing Bid (or other transaction) exceeds the price or value represented under the original take-over bid by as much as or more than an amount specified under the original take-over bid, and the specified amount is not more than 7% of the price or value represented under the original take-over bid, and the Competing Bid (or other transaction) is made for the same number of common share s as the original take-over bid; and

(b)

for no "break-up" fee or "top-up" fee in excess of the greater of:  (i) 2.5% of the price or value payable under the original take-over bid to Locked-up Persons; and (ii) 50% of the amount by which the price or value payable to Locked-up Persons under a Competing Bid (or other transaction) exceeds the price or value payable to Locked-up Persons under the original take-over bid, shall be payable by such Locked-up Persons in the event that the original take-over bid is not successfully completed or if any Locked-up Person fails to tender their common shares under the original take-over bid.

Redemption of Rights

The Rights may be redeemed by the board at its option with the prior approval of the shareholders at any time before a Flip-In Event occurs at a redemption price of $0.00001 per Right.  In addition, the Rights will be redeemed automatically in the event of a successful Permitted Bid, Competing Bid or a bid for which the board has waived the operation of the Rights Plan.

Waiver

Before a Flip-In Event occurs, the board may waive the application of the Flip-In provisions of the Rights Plan to any prospective Flip-In Event which would occur by reason of a take-over bid made by a take-over bid circular to all registered holders of common shares.  However, if the board waives the Rights Plan with respect to a particular bid, it will be deemed to have waived the Rights Plan with respect to any other take-over bid made by take-over bid circular to all registered holders of common shares before the expiry of that first bid.  Other waivers of the "Flip-In" provisions of the Rights Plan will require prior approval of the shareholders of the Corporation.

The board may also waive the "Flip-In" provisions of the Rights Plan in respect of any Flip-In Event provided that the board has determined that the Acquiring Person became an Acquiring Person through inadvertence and has reduced its ownership to such a level that it is no longer an Acquiring Person.

Term of the Rights Plan

Unless otherwise terminated, the Rights Plan will expire on the date immediately after the Corporation’s annual meeting of shareholders to be held in 2009.

Amending Power

Except for minor amendments to correct typographical errors and amendments to maintain the validity of the Rights Plan as a result of a change of law, shareholder or rights holder approval is required for amendments to the Rights Plan.

Rights Agent

CIBC Mellon Trust Company.

Rightsholder not a Shareholder

Until a Right is exercised, the holders thereof as such, will have no rights as a shareholder of the Corporation.

EXHIBIT "B"

BLACKLINED RIGHTS AGREEMENT HIGHLIGHTING PROPOSED AMENDMENTS

(please refer to the following pages)

EXHIBIT "C"

RESOLUTION OF THE SHAREHOLDERS OF INTERTAPE POLYMER GROUP INC.

BE IT RESOLVED:

THAT the amended Shareholder Protection Rights Plan Agreement between the Corporation and CIBC Mellon Trust Company (a blacklined copy of which (i) is attached as Exhibit "B" to this Circular, and (ii) has been tabled at the Meeting by the Secretary of the Corporation), be and is hereby approved, ratified and confirmed.

THAT any director or officer of the Corporation be and is hereby authorized for and on behalf of and in the name of the Corporation, to do all things and to execute and deliver all such documents and instruments as may be necessary or desirable to carry out the foregoing.

EXHIBIT "D"

POSITION DESCRIPTION OF THE
CHAIRMAN OF THE BOARD OF DIRECTORS OF THE CORPORATION

(please refer to the following pages)

EXHIBIT "E"

POSITION DESCRIPTION OF THE
LEAD DIRECTOR OF THE CORPORATION

(please refer to the following pages)

EXHIBIT "F"

MANDATE OF THE BOARD OF DIRECTORS OF THE CORPORATION

(please refer to the following pages)

EXHIBIT "G"

POSITION DESCIRPTION OF THE CEO OF THE CORPORATION

(please refer to the following pages)