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<SEC-DOCUMENT>0001072613-04-002293.txt : 20041207
<SEC-HEADER>0001072613-04-002293.hdr.sgml : 20041207
<ACCEPTANCE-DATETIME>20041207165437
ACCESSION NUMBER:		0001072613-04-002293
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20041207
FILED AS OF DATE:		20041207
DATE AS OF CHANGE:		20041207

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DESCARTES SYSTEMS GROUP INC
		CENTRAL INDEX KEY:			0001050140
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A6
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29970
		FILM NUMBER:		041188877

	BUSINESS ADDRESS:	
		STREET 1:		120 RANDALL ST
		CITY:			WATERLOO ONTARIO CAN
		STATE:			A6
		BUSINESS PHONE:		5197468110

	MAIL ADDRESS:	
		STREET 1:		120 RANDALL DRIVE
		STREET 2:		WATERLOO, ONTARIO, CANADA N2V 1C6
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6-k_13139.txt
<DESCRIPTION>DESCARTES SYSTEMS GROUP FORM 6-K
<TEXT>
================================================================================

                                    FORM 6-K
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549





                        REPORT OF FOREIGN PRIVATE ISSUER

                      PURSUANT TO RULE 13A-16 OR 15D-16 OF

                       THE SECURITIES EXCHANGE ACT OF 1934




                         For the month of DECEMBER 2004

                        THE DESCARTES SYSTEMS GROUP INC.

                 (Translation of registrant's name into English)




                                120 Randall Drive

                                Waterloo, Ontario

                                 Canada N2V 1C6

                    (Address of principal executive offices)





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



                Form 20-F  [_]                    Form  40-F  [X]
                          -----                              -----



     Indicate by check mark whether the registrant by furnishing the information
contained in this Form 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-__________.]

================================================================================
                             Exhibit Index on Page 4

                                   Page 1 of 4
<PAGE>


            The attached PRESS RELEASE was issued by the Company on November 30,
2004, and is filed herewithin as Exhibit I.

            The attached PRESS RELEASE was issued by the Company on December 1,
2004, and is filed herewithin as Exhibit II.

            The attached MATERIAL CHANGE REPORT was issued by the Company on
December 6, 2004, and is filed herewithin as Exhibit III.

            The SHAREHOLDER RIGHTS PLAN AGREEMENT, dated as of November 29,
2004, by and between The Descartes Systems Group Inc. and Computershare Trust
Company of Canada is incorporated herein by reference to Exhibit 1 on the Form
8-A, filed by the Company on November 30, 2004 as file number 000-29970.

            The attached PRESS RELEASE was issued by the Company on December 7,
2004, and is filed herewithin as Exhibit V.

















                             Exhibit Index on Page 4

                                   Page 2 of 4
<PAGE>

                                   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.





                                            THE DESCARTES SYSTEMS GROUP INC.

                                                       (Registrant)





Date:       December 7, 2004                By: /s/ J. Scott Pagan
                                               -------------------------------
                                            Name:  J. Scott Pagan

                                            Title: General Counsel and Corporate
                                                   Secretary










                             Exhibit Index on Page 4

                                   Page 3 of 4
<PAGE>


                                  EXHIBITS



      Exhibit No.       Description
      -----------       -----------

          I             Press Release dated November 30, 2004.

          II            Press Release dated December 1, 2004.

          III           Material Change Report, dated December 6, 2004.

          IV            Shareholder Rights Plan Agreement, dated as of November
                        29, 2004, by and between The Descartes Systems Group
                        Inc. and Computershare Trust Company of Canada
                        (incorporated herein by reference to Exhibit 1 to the
                        Form 8-A, filed by the Company on November 30, 2004 as
                        file number 000-29970).

          V             Press Release dated December 7, 2004.




























                             Exhibit Index on Page 4

                                   Page 4 of 4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.I
<SEQUENCE>2
<FILENAME>exh99-i_13139.txt
<DESCRIPTION>PRESS RELEASE DATED NOVEMBER 30, 2004
<TEXT>
                                                                    EXHIBIT 99.I
                                                                    ------------
[LOGO]
Descartes

           DESCARTES REPORTS RESULTS FOR THIRD QUARTER OF FISCAL 2005

   SIGNIFICANT EXPENSE REDUCTIONS CONTRIBUTE TO IMPROVED OPERATING PERFORMANCE
          AND UNCHANGED CASH POSITION; SHAREHOLDER RIGHTS PLAN ADOPTED

WATERLOO, ONTARIO, NOVEMBER 30, 2004 -- The Descartes Systems Group Inc.,
(Nasdaq:DSGX), (TSX:DSG), a leading provider of technology solutions for
distribution and logistics sensitive organizations, today announced the
following:
     o    Unaudited financial results for the third fiscal quarter of its 2005
          fiscal year (Q3FY05) which ended on October 31, 2004; and
     o    The adoption of a shareholder rights plan (the "Rights Plan").

Q3FY05 FINANCIAL RESULTS
The Company announced its unaudited financial results for Q3FY05, determined in
accordance with United States Generally Accepted Accounting Principles (GAAP).
All dollar amounts referenced are in United States currency.

Total revenues for Q3FY05 were $11.0 million, compared to $11.1 million in the
previous quarter (Q2FY05) and down from $16.0 million in the third quarter in
the prior fiscal year (Q3FY04). Total expenses for Q3FY05 were $13.8 million,
down significantly from $33.8 million in Q2FY05 and $20.2 million in Q3FY04.
This significant reduction in expenses is principally a consequence of the
Company's May 2004 restructuring initiative. The loss per share for Q3FY05 was
($0.07) cents, improved from ($0.56) in Q2FY05 and ($0.10) in Q3FY04.

Compared to the prior fiscal quarter, Q3FY05 total expenses (excluding
restructuring) were down $7.4 million to $13.2 million. This exceeded the
Company's previously indicated expectation that Q3FY05 total expenses (excluding
restructuring) would be reduced by approximately $7 million compared to Q2FY05.
This significant expense reduction was a key contributor to the Company's
improved operating performance in Q3FY05. Total expenses (excluding
restructuring) is a non-GAAP measure (discussed in detail below) referenced to
illustrate the expense savings from the Company's May 2004 restructuring
initiative.

The Company's aggregate cash, cash equivalents and marketable securities at the
end of Q3FY05 were $46.4 million, unchanged from the position at the end of
Q2FY05 and $0.4 million higher than the preliminary estimate provided by the
Company on November 2, 2004. Cash generated by the business was used to pay the
$0.5 million contribution to the defense and previously announced
settlement-in-principle of the class action litigation as well as $1.8 million
for restructuring activities and $0.3 million to terminate a third-party
outsourcing contract.

The Company's days-sales-outstanding for Q3FY05 was 68 days, down significantly
from 82 days in Q2FY05 and 99 days in Q3FY04.

"Our Q3FY05 financial results reflect that our business operations have
stabilized," said Art Mesher, Chief Executive Officer. "With this type of
operating performance, our continued focus on aligning operating expenses with
visible and recurring revenues, and our healthy cash position, our customers can
be confident that we will continue to be a customer-centric organization that
delivers them superior results on a long-term basis."
<PAGE>

[LOGO]
Descartes

DESCARTES ADOPTS RIGHTS PLAN
The Company also announced that the Board of Directors has adopted the Rights
Plan. The Company is not adopting the Rights Plan in response to any proposal to
acquire control of the Company.

The Board of Directors has adopted the Rights Plan to ensure the fair treatment
of shareholders in connection with any take-over offer for the Company, and to
provide the Board of Directors and shareholders with additional time to fully
consider any unsolicited take-over bid. In such event, the Rights Plan will also
provide the Board of Directors more time to pursue, if appropriate, other
alternatives to maximize shareholder value.

Under the Rights Plan, Rights have been issued and attached to all common shares
of the Company issued and outstanding as of the close of business on November
29, 2004. Rights will be issued upon any future issuance of any common shares of
the Company that occurs prior to the Separation Time (as defined in the Rights
Plan).

The Rights Plan has been conditionally approved by the Toronto Stock Exchange
and is subject to approval by shareholders at the Company's next annual and
special meeting of shareholders. If approved by shareholders, the Rights Plan
will continue in force for an initial term of three years commencing on November
29, 2004. The Rights Plan is similar to plans adopted by other Canadian
companies and approved by their shareholders.

The Rights Plan is not intended to prevent take-over bids. Under the Rights
Plan, those bids that meet certain requirements intended to protect the
interests of all shareholders are deemed to be "Permitted Bids". Permitted Bids
must be made by way of a take-over bid circular prepared in compliance with
applicable securities laws and remain open for sixty days.

In the event a take-over bid does not meet the Permitted Bid requirements of the
Rights Plan, the Rights will entitle shareholders, other than any shareholder or
shareholders making the take-over bid, to purchase additional common shares in
the Company at a substantial discount to the market value at the time.

CONFERENCE CALL TODAY
Company management will discuss the Q3FY05 results and expectations regarding
the business in a live conference and audio Web cast with the financial
community at 8:00 am ET today. The conference call is accessible by dialing
(800) 289-0493 or (913) 981-5510 and quoting reservation number 968678. The
audio Web cast can be accessed at www.descartes.com/investors. Replays will also
be available in two formats shortly after the completion of the conference call.
A telephone replay will be accessible for 24 hours by dialing (888) 203-1112 or
(719) 457-0820 and quoting reservation number 968678. An archived replay of the
audio Web cast will also be available through the Descartes Web site at:
www.descartes.com/investors

ABOUT DESCARTES
The Descartes Systems Group Inc. (Nasdaq:DSGX) (TSX:DSG) is a leading provider
of technology solutions for distribution and logistics sensitive organizations.
Helping companies reduce costs, save time, and enhance customer satisfaction,
Descartes' products and services provide connectivity and document exchange,
route planning and wireless dispatch, inventory and asset visibility,
transportation management, and warehouse optimization. These products and
services enable distribution-sensitive companies in industries such as retail,
consumer packaged goods,
<PAGE>

[LOGO]
Descartes

manufacturing, transportation, third-party logistics, and distribution to
optimize and gain real-time control of their inventory and assets. Descartes'
products and services are used by more than 2,500 customers in over 60
countries. For more information, visit www.descartes.com.

SAFE HARBOR STATEMENT

This release contains forward-looking statements that relate to financial and
operating performance, the Company's restructuring initiatives and the benefits
of the Rights Plan and other matters that may constitute forward-looking
statements. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of Descartes to differ materially from the anticipated results,
performance or achievements implied by such forward-looking statements. Such
factors include, but are not limited to the ability to continue to align
operating expenses to visible and recurring revenues; the ability to achieve
cost reductions on a timely basis; the ability to attract and retain key
personnel; variances in our revenues from quarter to quarter; departures of key
customers; global economic, market and political conditions; the failure of the
Company's shareholders to adopt the Rights Plan; and other factors discussed in
the section entitled, "Risk Factors" in documents filed with the Securities and
Exchange Commission, the Ontario Securities Commission and other securities
commissions across Canada.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

Our quarterly unaudited financial statements are prepared in accordance with
GAAP. We also disclose and discuss certain non-GAAP financial information, used
to evaluate our performance, in this earnings release and our investor
conference calls. We believe that current shareholders and potential investors
in the Company use non-GAAP financial measures in making investment decisions
about the Company.

TOTAL EXPENSES (EXCLUDING RESTRUCTURING)
A non-GAAP financial measure we use in this release is total expenses (excluding
restructuring). Total expenses refers to a GAAP financial measure; we use the
term "total expenses (excluding restructuring)" to reflect that our financial
measure also excludes restructuring costs and asset impairment (including
impairment of goodwill). However, total expenses (excluding restructuring) is
not a measure determined under GAAP and is not likely to be comparable to
similarly titled measures reported by other companies. Total expenses (excluding
restructuring) should not be construed as a substitute for total expenses or any
other financial measure determined in accordance with GAAP, but rather should be
evaluated in conjunction with such GAAP measures. We have presented total
expenses (excluding restructuring) to illustrate the expense savings generated
by our May 2004 restructuring initiative. The table below reconciles total
expenses (excluding restructuring) for each of the Company's previous four
fiscal quarters to the GAAP total expenses, which we believe is the most
directly comparable GAAP measure.

<TABLE><CAPTION>
(USD, IN THOUSANDS)                              Q3FY05           Q2FY05           Q1FY05           Q4FY04
                                                --------         --------         --------         --------
<S>                                             <C>              <C>              <C>              <C>
Total expenses                                  $ 13,775         $ 33,764         $ 42,199         $ 24,928
Adjustments to reconcile to total
expenses (excluding restructuring):
   Restructuring costs and asset
   impairment (includes                             (556)         (13,154)         (18,592)          (1,018)
   impairment of goodwill)
                                                -----------------------------------------------------------
TOTAL EXPENSES (EXCLUDING RESTRUCTURING)        $ 13,219         $ 20,610         $ 23,607         $ 23,910
                                                ===========================================================
</TABLE>

CONTACT INFORMATION

Anca Mihaila
(519) 746-6114 ext. 2238
pr@descartes.com
- ----------------
<PAGE>

[LOGO]
Descartes

THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(US dollars in thousands; US GAAP; October 31 Data Unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                                           ------------         ------------
                                                                             OCTOBER 31           January 31
                                                                                   2004                 2004
                                                                           ------------         ------------
<S>                                                                              <C>                  <C>
ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                                   12,803               13,187
     Marketable securities                                                       23,552               34,586
     Accounts receivable
         Trade                                                                    8,335               12,986
         Other                                                                    1,949                3,501
     Prepaid expenses and other                                                   2,135                3,045
                                                                           ------------         ------------
                                                                                 48,774               67,305
MARKETABLE SECURITIES                                                            10,000               17,279
CAPITAL ASSETS                                                                    7,564               13,452
LONG-TERM INVESTMENTS                                                             3,300                3,300
GOODWILL                                                                           --                 18,038
INTANGIBLE ASSETS                                                                 5,128                8,264
DEFERRED CHARGES                                                                   --                  1,021
                                                                           ------------         ------------
      TOTAL ASSETS                                                               74,766              128,659
                                                                           ============         ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                                             3,036                4,743
     Accrued liabilities                                                          5,902                3,609
     Deferred revenue                                                             2,262                2,860
     Convertible debentures                                                      26,995                 --
                                                                           ------------         ------------
                                                                                 38,195               11,212
CONVERTIBLE DEBENTURES                                                             --                 26,995
                                                                           ------------         ------------
                                                                                 38,195               38,207
                                                                           ------------         ------------

SHAREHOLDERS' EQUITY
     Common shares - unlimited shares authorized; Shares issued and
     outstanding 40,705,811 and                                                 364,907              364,907
                                                                                                  40,705,811
     Additional paid-in capital                                                  81,658               81,667
     Unearned deferred compensation                                                (227)                (339)
     Accumulated other comprehensive income (loss)                                    1                 (387)
     Accumulated deficit                                                       (409,768)            (355,396)
                                                                           ------------         ------------
                                                                                 36,571               90,452
                                                                           ------------         ------------
                                                                                 74,766              128,659
                                                                           ============         ============
</TABLE>
<PAGE>

[LOGO]
Descartes

THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars in thousands, except per share amounts; US GAAP; Unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                       --------------------------      --------------------------
                                                           THREE MONTHS ENDED               NINE MONTHS ENDED
                                                       --------------------------      --------------------------
                                                       OCTOBER 31      October 31      OCTOBER 31      October 31
                                                             2004            2003            2004            2003
                                                       ----------      ----------      ----------      ----------
<S>                                                           <C>             <C>             <C>             <C>
REVENUES                                                   11,045          16,026          35,366          45,432
COST OF REVENUES                                            4,711           4,787          16,068          14,257
                                                       ----------      ----------      ----------      ----------
GROSS MARGIN                                                6,334          11,239          19,298          31,175
                                                       ----------      ----------      ----------      ----------
EXPENSES
     Sales and marketing                                    2,329           7,226          16,107          21,061
     Research and development                               2,102           2,298           8,736           6,485
     General and administrative                             2,633           2,680          12,265           9,082
     Amortization of intangible assets                      1,005           1,313           3,136           4,026
     Impairment of goodwill                                  --              --            18,038            --
     Restructuring costs and asset impairment                 556           1,637          14,264          17,766
                                                       ----------      ----------      ----------      ----------
                                                            8,625          15,154          72,546          58,420
                                                       ----------      ----------      ----------      ----------
LOSS FROM OPERATIONS                                       (2,291)         (3,915)        (53,248)        (27,245)
                                                       ----------      ----------      ----------      ----------
OTHER INCOME (EXPENSE)
     Interest expense                                        (425)           (433)         (1,299)         (2,605)
     Investment income                                        109             176             405           1,074
     Gain on purchase of convertible debentures              --              --              --               904
                                                       ----------      ----------      ----------      ----------
                                                             (316)           (257)           (894)           (627)
                                                       ----------      ----------      ----------      ----------
LOSS BEFORE INCOME TAXES                                   (2,607)         (4,172)        (54,142)        (27,872)
INCOME TAX EXPENSE - CURRENT                                 (123)            (22)           (230)            (46)
                                                       ----------      ----------      ----------      ----------
LOSS                                                       (2,730)         (4,194)        (54,372)        (27,918)
                                                       ----------      ----------      ----------      ----------
LOSS PER SHARE
     Basic and diluted                                      (0.07)          (0.10)          (1.34)          (0.58)
                                                       ----------      ----------      ----------      ----------
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic and diluted (thousands)                         40,706          40,654          40,706          47,736
                                                       ==========      ==========      ==========      ==========
</TABLE>
<PAGE>

[LOGO]
Descartes

THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US dollars in thousands; US GAAP; Unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                               -----------------------------         -----------------------------
                                                                     THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                               -----------------------------         -----------------------------
                                                               OCTOBER 31         October 31         OCTOBER 31         October 31
                                                                     2004               2003               2004               2003
                                                               ----------         ----------         ----------         ----------
<S>                                                                <C>                <C>               <C>                <C>
OPERATING ACTIVITIES
Loss                                                               (2,730)            (4,194)           (54,372)           (27,918)
Adjustments to reconcile loss to cash provided by (used in)
operating activities:
     Depreciation                                                     544                835              1,662              1,988
     Amortization of intangible assets                              1,005              1,313              3,136              4,026
     Impairment of goodwill                                          --                 --               18,038               --
     Write-off of redundant assets                                   --                 --                5,770               --
     Amortization of convertible debenture costs                       64                 63                192                386
     Amortization of deferred compensation                             34                 35                103                136
     Gain on purchase of convertible debentures                      --                 --                 (904)
     Changes in operating assets and liabilities:
        Accounts receivable
            Trade                                                   1,708             (2,443)             4,651             (3,502)
            Other                                                     367               (417)             1,552                156
        Prepaid expenses and other                                    424                623                530               (815)
        Deferred charges                                             --                   61                657               (409)
        Accounts payable                                            1,176                528             (1,707)            (2,438)
        Accrued liabilities                                        (2,374)            (1,784)             2,681                203
        Deferred revenue                                             (261)              (549)              (598)              (923)
                                                               ----------         ----------         ----------         ----------
Cash used in operating activities                                     (43)            (5,929)           (17,705)           (30,014)
                                                               ----------         ----------         ----------         ----------
INVESTING ACTIVITIES
     Maturities of marketable securities                            4,228             29,838             22,252            132,029
     Sale of marketable securities                                   --                 --                8,198               --
     Purchase of marketable securities                             (3,197)              --              (12,137)            (1,404)
     Additions to capital assets                                      (25)            (1,185)              (992)            (3,839)
     Acquisition of subsidiaries                                     --                 (235)              --                 (335)
                                                               ----------         ----------         ----------         ----------
Cash provided by investing activities                               1,006             28,418             17,321            126,451
                                                               ----------         ----------         ----------         ----------
FINANCING ACTIVITIES
     Purchase of convertible debentures                              --                 --                 --              (43,274)
     Purchase of common shares                                       --                 --                 --              (27,228)
     Issuance of common shares for cash                              --                 --                 --                   17
                                                               ----------         ----------         ----------         ----------
Cash used in financing activities                                    --                 --                 --              (70,485)
                                                               ----------         ----------         ----------         ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      963             22,489               (384)            25,952

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                   11,840             24,658             13,187             21,195
                                                               ----------         ----------         ----------         ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                         12,803             47,147             12,803             47,147
                                                               ==========         ==========         ==========         ==========
</TABLE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.II
<SEQUENCE>3
<FILENAME>exh99-ii_13139.txt
<DESCRIPTION>PRESS RELEASE DATED DECEMBER 1, 2004
<TEXT>
                                                                   EXHIBIT 99.II
                                                                   -------------
[LOGO]
Descartes

          MARKET LEADERS EXPAND IMPLEMENTATIONS OF DESCARTES' SOLUTIONS

  AUTOZONE, CVS /PHARMACY, ASHLEY FURNITURE INDUSTRIES AND PEAPOD CONTINUE TO
    IMPROVE SUPPLY CHAIN OPERATIONS WITH DELIVERY MANAGEMENT SOLUTIONS FROM
                                   DESCARTES

WATERLOO, ONTARIO, DECEMBER 1, 2004 -- The Descartes Systems Group Inc.,
(Nasdaq:DSGX), (TSX:DSG), a leading provider of technology solutions for
distribution and logistics sensitive organizations, today announced that
AutoZone, CVS/pharmacy, Ashley Furniture Industries, and Peapod, market leaders
in their respective industry, have each expanded their relationship with
Descartes by deploying additional Descartes delivery management solutions to
strengthen their respective supply chain operations.

Retail and distribution companies face increasingly competitive conditions that
have forced them to search for ways to increase profitability. A key focus has
been reducing major costs within their supply chains, including the cost of
managing inventory and fleet operations. Descartes' delivery management
solutions help these companies to address these challenges.

Descartes' solutions provide retailers and distributors with functions and
flexibility to help manage the movement of goods. With better control over the
movement of goods, retailers and distributors can reduce on-hand inventory while
minimizing out-of-stocks; meet the logistics challenges presented by sales
promotions; measure supplier and carrier performance; and improve customer
service. Descartes' broad delivery management solution set can be deployed by
retail and distribution companies to enhance communication with trading
partners; gain visibility over their end-to-end supply chain; improve the
efficiency of distribution centers; lower the cost of purchased transportation;
or optimize private fleets for distributions to stores and directly to
customers.

"Retailers and distributors with flexible and responsive supply chains have a
competitive advantage," said Arthur Mesher, CEO at Descartes. "Descartes is
committed to delivering solutions to its customers that help make efficient and
effective supply chains a reality. We believe the positive results we have
achieved with each of AutoZone, CVS/pharmacy, Ashley Furniture Industries and
Peapod reflect the value and in-depth expertise we provide to our customers and
to the retail and distribution industries," continued Mesher. "Our unmatched
experience and technology has helped Descartes emerge as a preferred choice of
some of the world's leading retail and distribution companies."

AUTOZONE
AutoZone is North America's leading retailer of automotive parts and accessories
with over 3,400 stores in the US and Mexico. Each store carries an extensive
line for cars, sport utility vehicles, vans and light trucks, including new and
remanufactured hard parts, maintenance items and accessories.
<PAGE>

[LOGO]
Descartes

After working with Descartes on a consultative basis to determine and test the
best possible solution to help streamline delivery processes from regional
distribution centers to their retail stores, AutoZone selected and is
implementing Descartes' Routing and Scheduling solution enterprise-wide.
AutoZone expects to benefit from improved planning of their delivery
territories, better utilization of their private fleet of vehicles, and
reductions in mileage, stop duration and fuel usage. Richard McDuffie, Vice
President, Transportation, at AutoZone said, "Getting the right products on our
store shelves at the right time and cost are critical logistics issues for
AutoZone. We expect the solution provided by Descartes will enable us to better
leverage our delivery assets, resulting in increased productivity, cost savings
and enhanced customer service."

CVS/PHARMACY
CVS/pharmacy is America's number one retail pharmacy with over 5,000 stores
across the United States. With a supplier network comprised of thousands of
trading partners, the ability to effectively manage replenishment of inventory
in stores and maintain the highest levels of customer satisfaction are key for
CVS. CVS has deployed several of Descartes' products to improve both inbound
supply chain visibility and high-velocity regional distribution to its retail
stores.

"Descartes is a CVS supply chain technology provider of choice," said Kevin
Smith, CVS' senior vice president, Supply Chain and Logistics. "They understand
the unique needs of our business and continue to deliver solutions that help us
drive down logistics costs and improve supply chain performance. Leveraging the
success of previous initiatives focused on improving CVS' inbound shipment
visibility, we have recently expanded our relationship with Descartes to include
enterprise-wide capabilities for strategic transportation and delivery planning,
yard management and dock appointment scheduling."

ASHLEY FURNITURE INDUSTRIES
Ashley Furniture Industries is the largest privately-held furniture manufacturer
in the US. Ashley's 50 year tradition of superior craftsmanship, innovative
design and commitment to being the best furniture company in the industry
continue to drive improvements in all phases of their operations.

Now, Ashley is extending their leadership beyond manufacturing to retail. With a
growing nationwide network of independent Homestore licensees, Ashley has
emerged as one of the leading furniture retailers in North America. According to
FurnitureToday, Ashley's "dedicated store network took the crown as the
fastest-growing furniture chain on FurnitureToday's Top 100 for the 2nd
consecutive year, barreling ahead of the competition in sales volume growth and
holding its own in store expansion."

Ashley uses Descartes' Routing and Scheduling solution to optimally route a
distribution fleet of over 1,000 trailers making over 10,000 average weekly
deliveries to retailers throughout North America. Dwain Jansson, CIO of Ashley
Furniture Industries, said, "After a successful rollout of Descartes' solutions
to optimize our line-haul operations, we have now decided to commence a rollout
of Descartes' solutions for home delivery. We look forward to taking our
fulfillment operations to the next level, as we use Descartes' next-generation
routing technology to optimize deliveries direct to customers' homes from our
national network of Ashley Furniture HomeStore licensees. Descartes' solutions
are enabling us to better leverage our delivery assets, resulting in increased
productivity, cost savings and enhanced customer service. "
<PAGE>

[LOGO]
Descartes

PEAPOD
Founded in 1989 as a smart shopping option for busy people, Peapod today stands
as the country's leading Internet grocer. The Skokie, Illinois-based company, a
wholly-owned subsidiary of Royal Ahold in The Netherlands, serves 14 U.S.
markets including the metro areas of Chicago, Boston, Suburban N.Y. and
Washington, D.C., and communities in the states of Illinois, Maryland,
Massachusetts, Connecticut, Virginia, Rhode Island and New Jersey. Peapod has
achieved over 6 million deliveries since its late 1980's inception.

Peapod currently uses Descartes' Routing and Scheduling solution to optimize all
of its delivery routes on a daily basis. After successfully implementing and
driving value with Descartes' Routing and Scheduling solution for five years,
Peapod is migrating to Descartes' next generation Routing and Scheduling
solution built on Descartes' proprietary Logistics Network Operating System(TM)
(LNOS). The new solution features enhanced route planning, dispatch, and web
reservations capabilities. The LNOS architecture features enhanced scalability,
simplified data exchange, enhanced interoperability between different Descartes'
application modules, and user interface improvements. This solution will give
Peapod the ability to accept real-time information about its fleet activities
and route performance.

"The decision to make additional investments in Descartes was based on
Descartes' proven track record, the substantial return on investment we have had
from the use of existing solutions, and Descartes' ongoing commitment to leading
edge transportation technologies," said John Burchard, CIO of Peapod. "The
highly-scalable LNOS-architectured solution keeps up with Peapod's continued
fast paced growth. We expect the additional investments will result in even
better customer service and continued improvements in operational efficiency."

ABOUT DESCARTES
The Descartes Systems Group Inc. (Nasdaq:DSGX) (TSX:DSG) is a leading provider
of technology solutions for distribution and logistics sensitive organizations.
By enabling companies to efficiently and effectively manage the delivery of
goods, Descartes' products and services help reduce costs, save time and enhance
customer satisfaction. Descartes delivers trading partner connectivity and
document exchange, route planning, wireless dispatch, inventory and asset
visibility, transportation management and warehouse optimization solutions for
industries such as retail, consumer goods, manufacturing, transportation,
distribution and third-party logistics. These solutions help customers optimize
and gain real-time control of their inventory, logistics assets and mobile
workforce. Descartes' products and services are used by more than 2,500
customers in over 60 countries. For more information, visit www.descartes.com.

    All registered and unregistered trademarks mentioned in this release are
                    the property of their respective owners.

                                       ###
<PAGE>

[LOGO]
Descartes

This release contains forward-looking statements that relate to Descartes'
product and service functionality and performance, potential benefits derived
therefrom, Descartes' competitive position and other matters that may constitute
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Descartes to differ materially from the
anticipated results, performance or achievements implied by such forward-looking
statements. Such factors include, but are not limited to, the factors discussed
in the section entitled, "Risk Factors" in documents filed with the Securities
and Exchange Commission, the Ontario Securities Commission and other securities
commissions across Canada.



CONTACT INFORMATION:
Elisse Bierstock
Bierstock Communications
(416) 618-6164
elissebierstock@rogers.com

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.III
<SEQUENCE>4
<FILENAME>exh99-iii_13139.txt
<DESCRIPTION>MATERIAL CHANGE REPORT DATED 12-06-2004
<TEXT>
                                                                  EXHIBIT 99.III
                                                                  --------------

                             MATERIAL CHANGE REPORT

                                   PURSUANT TO

                  SECTION 75(2) OF THE SECURITIES ACT (ONTARIO)
  AND CORRESPONDING PROVISIONS OF THE SECURITIES LEGISLATION IN OTHER PROVINCES
                                 AND TERRITORIES


1.   NAME AND ADDRESS OF COMPANY

          The Descartes Systems Group Inc.
          120 Randall Drive
          Waterloo, Ontario  N2V 1C6
          Canada

2.   DATE OF MATERIAL CHANGE

          November 29, 2004

3.   NEWS RELEASE

          A press release was issued at Waterloo, Ontario on November 30, 2004.
          A copy of the press release is attached as Schedule "A".

4.   SUMMARY OF MATERIAL CHANGE

          The Board of Directors of The Descartes Systems Group Inc. (the
          "Company") authorized, effective November 29, 2004, subject to
          regulatory and shareholder approval, adoption of a shareholder rights
          plan (the "Rights Plan") pursuant to a Shareholder Rights Plan
          Agreement dated as of November 29, 2004 between the Company and
          Computershare Trust Company of Canada (the "Rights Agent"). A copy of
          the Rights Plan is attached as Schedule "B".

          The Rights Plan creates a right (which may only be exercised if a
          person acquires control of 20% or more of the Common Shares of the
          Company) for each shareholder, other than the person that acquires 20%
          or more of the Common Shares of the Company, to acquire additional
          Common Shares at one-half of the market price of the Common Shares.
          This significantly dilutes the share position of the person that
          acquires 20% or more of the Common Shares of the Company and
          practically prevents that person from acquiring control of 20% or
          greater of the Common Shares unless the rights plan has been withdrawn
          or the buyer makes a Permitted Bid (as defined in the Rights Plan and
          discussed below).

          Under the terms of the Rights Plan, the continued existence of the
          Rights Plan must be approved and reconfirmed by the Independent
          Shareholders (as defined in the Rights Plan) on or before the date of
          the Company's annual meeting held in 2008. An "Independent
          Shareholder" is generally any shareholder other than an "Acquiring
          Person" (as defined in the Rights Plan) and its associates and
          affiliates. As of the
<PAGE>

                                       2

          date of the Rights Plan, the Company is not aware of any shareholder
          that would not be considered an Independent Shareholder.

          Shareholder approval of the Rights Plan is not required by law but is
          required by applicable stock exchange rules. The Rights Plan has been
          conditionally approved by the Toronto Stock Exchange, subject to
          shareholder approval within six (6) months of November 29, 2004. A
          resolution (the "Rights Plan Resolution") authorizing the adoption of
          the Rights Plan must be approved by a simple majority of 50% plus one
          vote of the votes cast by the Independent Shareholders at the
          Company's next annual and special meeting (the "Meeting") of the
          holders of Common Shares.

5.   FULL DESCRIPTION OF MATERIAL CHANGE

          The Board of Directors of the Company authorized, effective November
          29, 2004, subject to regulatory and shareholder approval, adoption of
          the Rights Plan pursuant to the Rights Agent. A copy of the Rights
          Plan is attached as Schedule "B".

          The Rights Plan creates a right (which may only be exercised if a
          person acquires control of 20% or more of the Common Shares of the
          Company) for each shareholder, other than the person that acquires 20%
          or more of the Common Shares of the Company, to acquire additional
          Common Shares at one-half of the market price of the Common Shares.
          This significantly dilutes the share position of the person that
          acquires 20% or more of the Common Shares of the Company and
          practically prevents that person from acquiring control of 20% or
          greater of the Common Shares unless the rights plan has been withdrawn
          or the buyer makes a Permitted Bid (as defined in the Rights Plan and
          discussed below).

          Under the terms of the Rights Plan, the continued existence of the
          Rights Plan must be approved and reconfirmed by the Independent
          Shareholders (as defined in the Rights Plan) on or before the date of
          the Company's annual meeting held in 2008. An "Independent
          Shareholder" is generally any shareholder other than an "Acquiring
          Person" (as defined in the Rights Plan) and its associates and
          affiliates. As of the date of the Rights Plan, the Company is not
          aware of any shareholder that would not be considered an Independent
          Shareholder.

          Shareholder approval of the Rights Plan is not required by law but is
          required by applicable stock exchange rules. The Rights Plan has been
          conditionally approved by the Toronto Stock Exchange, subject to
          shareholder approval within six (6) months of November 29, 2004. The
          Rights Plan Resolution authorizing the adoption of the Rights Plan
          must be approved by a simple majority of 50% plus one vote of the
          votes cast by the Independent Shareholders at the Company's next
          annual and special meeting (the "Meeting") of the holders of Common
          Shares.

          The following is a summary of the features of the Rights Plan. The
          summary is qualified in its entirety by the full text of the Rights
          Plan. All capitalized terms used in this summary without definition
          have the meanings attributed to them in the Rights Plan unless
          otherwise indicated.
<PAGE>

                                       3

6.   ISSUANCE OF RIGHTS

          The Board has authorized, subject to regulatory approvals, the issue
          on November 29, 2004 of one Right in respect of each Common Share
          outstanding at the close of business on November 29, 2004, the date of
          implementation of the Rights Plan. The Board will also authorize the
          issue of one Right for each Common Share issued after such date and
          prior to the earlier of the Separation Time and the Expiration Time.
          Each Right entitles the registered holder thereof to purchase from the
          Company one Common Share at the exercise price equal to three times
          the Market Price of the Common Share, subject to adjustment and
          certain anti-dilution provisions (the "Exercise Price"). The Rights
          are not exercisable until the Separation Time. If a Flip-in Event
          occurs, each Right will entitle the registered holder to receive, upon
          payment of the Exercise Price, Common Shares having an aggregate
          market price equal to twice the Exercise Price.

          The Company is not required to issue or deliver Rights, or securities
          upon the exercise of Rights, outside Canada or the United States where
          such issuance or delivery would be unlawful without registration of
          the relevant Persons or securities. If the Rights Plan would require
          compliance with securities laws or comparable legislation of a
          jurisdiction outside Canada and the United States, the Board of
          Directors may establish procedures for the issuance to a Canadian
          resident fiduciary of such securities, to hold such Rights or other
          securities in trust for the Persons beneficially entitled to them, to
          sell such securities, and to remit the proceeds to such Persons.

          TRADING OF RIGHTS

          Until the Separation Time (or the earlier termination or expiration of
          the Rights), the Rights will be evidenced by the certificates
          representing the Common Shares and will be transferable only together
          with the associated Common Shares. From and after the Separation Time,
          separate certificates evidencing the Rights ("Rights Certificates")
          will be mailed to holders of record of Common Shares (other than an
          Acquiring Person) as of the Separation Time. Rights Certificates will
          also be issued in respect of Common Shares issued prior to the
          Expiration Time, to each holder (other than an Acquiring Person)
          converting, after the Separation Time, securities ("Convertible
          Securities") convertible into or exchangeable for Common Shares. The
          Rights will trade separately from the Common Shares after the
          Separation Time.

          SEPARATION TIME

          The Separation Time is the Close of Business on the tenth Business Day
          after the earlier of (i) the "Stock Acquisition Date", which is
          generally the first date of public announcement of facts indicating
          that a Person has become an Acquiring Person; and (ii) the date of the
          commencement of, or first public announcement of the intent of any
          Person (other than the Company or any Subsidiary of the Company) to
          commence a Take-over Bid (other than a Permitted Bid or a Competing
          Permitted Bid, and the Rights Plan requires such bid to continue to
          satisfy the requirements of a Permitted Bid or Competing Permitted
          Bid). In either case, the Separation Time can be such later date as
          may from time to time be determined by the Board of Directors. If a
          Take-over Bid expires, is cancelled, terminated or otherwise withdrawn
          prior to the Separation Time, it shall be deemed never to have been
          made.
<PAGE>

                                       4

          ACQUIRING PERSON

          In general, an Acquiring Person is a Person who is the Beneficial
          Owner of 20% or more of the outstanding Common Shares. Excluded from
          the definition of "Acquiring Person" are the Company and its
          Subsidiaries, and any Person who becomes the Beneficial Owner of 20%
          or more of the outstanding Common Shares as a result of one or more or
          any combination of an acquisition or redemption by the Company of
          Common Shares, a Permitted Bid Acquisition, an Exempt Acquisition, a
          Convertible Security Acquisition and a Pro Rata Acquisition. The
          definitions of "Permitted Bid Acquisition", "Exempt Acquisition",
          "Convertible Security Acquisition" and "Pro Rata Acquisition" are set
          out in the Rights Plan. However, in general:

7.   a "Permitted Bid Acquisition" means an acquisition of Common Shares made
     pursuant to a Permitted Bid or a Competing Permitted Bid;

8.   an "Exempt Acquisition" means an acquisition of Common Shares in respect of
     which the Board of Directors has waived the application of the Rights Plan,
     which was made pursuant to a dividend reinvestment plan of the Company,
     which was made pursuant to the receipt or exercise of rights issued by the
     Company to all the holders of Common Shares (other than holders resident in
     a jurisdiction where such distribution is restricted or impracticable as a
     result of applicable law) to subscribe for or purchase Common Shares or
     Convertible Securities (provided that such rights are acquired directly
     from the Company and not from any other Person and provided that the Person
     does not hereby acquire a greater percentage of Common Shares or
     Convertible Securities so offered than the Person's percentage of Common
     Shares or Convertible Securities beneficially owned immediately prior to
     such acquisition), which was made pursuant to a distribution by the Company
     of Common Shares or Convertible Securities made pursuant to a prospectus
     (provided that the Person does not thereby acquire a greater percentage of
     the Common Shares or Convertible Securities so offered than the percentage
     owned immediately prior to such acquisition), which was made pursuant to a
     distribution by the Company of Common Shares or Convertible Securities by
     way of a private placement or a securities exchange take-over bid circular
     or upon the exercise by an individual employee of stock options granted
     under a stock option plan of the Company or rights to purchase securities
     granted under a share purchase plan of the Company, or which is made
     pursuant to an amalgamation, merger or other statutory procedure requiring
     shareholder approval;

9.   a "Convertible Security Acquisition" means an acquisition of Common Shares
     upon the exercise of Convertible Securities received by such Person
     pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata
     Acquisition; and

10.  a "Pro Rata Acquisition" means an acquisition as a result of a stock
     dividend, a stock split or other event pursuant to which such Person
     receives or acquires Common Shares or Convertible Securities on the same
     pro rata basis as all other holders of Common Shares of the same class.

          Also excluded from the definition of "Acquiring Person" are
          underwriters or members of a banking or selling group acting in
          connection with a distribution of securities by way of prospectus or
          private placement, a Person in its capacity as an Investment Manager,
          Trust Company, Plan Trustee, Statutory Body, Crown agent or agency or
          Manager (provided that such Person is not making or proposing to make
          a Take-over Bid), and a Person (a "Grandfathered Person") who is the
          Beneficial
<PAGE>

                                       5

          Owner of 20% or more of the outstanding Common Shares of the
          Corporation as at the Record Time, provided, however, that this
          exception ceases to be applicable to a Grandfathered Person in the
          event that such Grandfathered Person shall, after the Record Time: (1)
          cease to own 20% or more of the outstanding Common Shares or (2)
          become the Beneficial Owner of additional Common Shares constituting
          more than 1% of the number of Common Shares outstanding as at the
          Record Time.

          BENEFICIAL OWNERSHIP

          GENERAL

          In general, a Person is deemed to Beneficially Own Common Shares
          actually held by others in circumstances where those holdings are or
          should be grouped together for purposes of the Rights Plan. Included
          are holdings by the Person's Affiliates (generally, a person that
          controls, is controlled by, or under common control with another
          person) and Associates (generally, relatives sharing the same
          residence). Also included are securities which the Person or any of
          the Person's Affiliates or Associates has the right to acquire within
          60 days (other than (1) customary agreements with and between
          underwriters and banking group or selling group members with respect
          to a distribution to the public or pursuant to a private placement of
          securities; or (2) pursuant to a pledge of securities in the ordinary
          course of business).

          A Person is also deemed to "Beneficially Own" any securities that are
          Beneficially Owned (as described above) by any other Person with which
          the Person is acting jointly or in concert (a "Joint Actor"). A Person
          is a Joint Actor with any Person who is a party to an agreement,
          arrangement or understanding with the first Person or an Associate or
          Affiliate thereof to acquire or offer to acquire Common Shares.

          INSTITUTIONAL SHAREHOLDER EXEMPTIONS FROM BENEFICIAL OWNERSHIP

          The definition of "Beneficial Ownership" contains several exclusions
          whereby a Person is not considered to "Beneficially Own" a security.
          There are exemptions from the deemed "Beneficial Ownership" provisions
          for institutional shareholders acting in the ordinary course of
          business. These exemptions apply to (i) an investment manager
          ("Investment Manager") which holds securities in the ordinary course
          of business in the performance of its duties for the account of any
          other Person (a "Client") including, the acquisition or holding of
          securities for non-discretionary accounts held on behalf of a Client
          by a broker or dealer registered under applicable securities laws);
          (ii) a licensed trust company ("Trust Company") acting as trustee or
          administrator or in a similar capacity in relation to the estates of
          deceased or incompetent persons (each an "Estate Account") or in
          relation to other accounts (each an "Other Account") and which holds
          such security in the ordinary course of its duties for such accounts;
          (iii) the administrator or the trustee (a "Plan Trustee") of one or
          more pension funds or plans (a "Plan") registered under applicable
          law; (iv) a Person who is a Plan or is a Person established by statute
          (the "Statutory Body"), and its ordinary business or activity includes
          the management of investment funds for employee benefit plans, pension
          plans, insurance plans, or various public bodies; (v) a Crown agent or
          agency; (iv) a manager or trustee ("Manager") of a mutual fund
          ("Mutual Fund") that is registered or qualified to issue its
          securities to investors under the securities laws of any province of
          Canada or the laws of the United States
<PAGE>

                                       6

          of America or is a Mutual Fund. The foregoing exemptions only apply so
          long as the Investment Manager, Trust Company, Plan Trustee, Plan,
          Statutory Body, Crown agent or agency, Manager or Mutual Fund is not
          then making or has not then announced an intention to make a Take-over
          Bid, other than an Offer to Acquire Common Shares or other securities
          pursuant to a distribution by the Company or by means of ordinary
          market transactions.

          A Person will not be deemed to "Beneficially Own" a security because
          (i) the Person is a Client of the same Investment Manager, an Estate
          Account or an Other Account of the same Trust Company, or Plan with
          the same Plan Trustee as another Person or Plan on whose account the
          Investment Manager, Trust Company or Plan Trustee, as the case may be,
          holds such security; or (ii) the Person is a Client of an Investment
          Manager, Estate Account, Other Account or Plan, and the security is
          owned at law or in equity by the Investment Manager, Trust Company or
          Plan Trustee, as the case may be.

          EXEMPTION FOR PERMITTED LOCK-UP AGREEMENT

          Under the Rights Plan, a Person will not be deemed to "Beneficially
          Own" any security where the holder of such security has agreed to
          deposit or tender such security, pursuant to a Permitted Lock-up
          Agreement, to a Take-over Bid made by such Person or such Person's
          Affiliates or Associates or a Joint Actor, or such security has been
          deposited or tendered pursuant to a Take-over Bid made by such Person
          or such Person's Affiliates, Associates or Joint Actors until the
          earliest time at which any such tendered security is accepted
          unconditionally for payment or is taken up or paid for.

          A Permitted Lock-up Agreement is essentially an agreement between a
          Person and one or more holders of Common Shares (the terms of which
          are publicly disclosed and available to the public within the time
          frames set forth in the definition of Permitted Lock-up Agreement)
          pursuant to which each Locked-up Person agrees to deposit or tender
          Common Shares to the Lock-up Bid and which further (i) permits the
          Locked-up Person to withdraw its Common Shares in order to deposit or
          tender the Common Shares to another Take-over Bid or support another
          transaction at a price or value that exceeds the price under the
          Lock-Up Bid; or (ii) permits the Locked-up Person to withdraw its
          Common Shares in order to deposit or tender the Common Shares to
          another Take-over Bid or support another transaction at an offering
          price that exceeds the offering price in the Lock-up Bid by as much as
          or more than a Specified Amount and that does not provide for a
          Specified Amount greater than 7% of the offering price in the Lock-up
          Bid. The Rights Plan therefore requires that a Person making a
          Take-Over Bid structure any lock-up agreement so as to provide
          reasonable flexibility to the shareholder in order to avoid being
          deemed the Beneficial Owner of the Common Shares subject to the
          lock-up agreement and potentially triggering the provisions of the
          Rights Plan.

          A Permitted Lock-up Agreement may contain a right of first refusal or
          require a period of delay to give the Person who made the Lock-up Bid
          an opportunity to match a higher price in another Take-Over Bid or
          other similar limitation on a Locked-up Person's right to withdraw
          Common Shares so long as the limitation does not preclude the exercise
          by the Locked-up Person of the right to withdraw Common Shares during
          the period of the other Take-Over Bid or transaction. Finally, under a
<PAGE>

                                       7

          Permitted Lock-up Agreement, no "break up" fees, "top up" fees,
          penalties, expenses or other amounts that exceed in aggregate the
          greater of (i) 2 1/2% of the price or value of the consideration
          payable under the Lock-up Bid; and (ii) 50% of the amount by which the
          price or value of the consideration received by a Locked-up Person
          under another Take-Over Bid or transaction exceeds what such Locked-up
          Person would have received under the Lock-up Bid; can be payable by
          such Locked-up Person if the Locked-up Person fails to deposit or
          tender Common Shares to the Lock-up Bid or withdraws Common Shares
          previously tendered thereto in order to deposit such Common Shares to
          another Take-Over Bid or support another transaction.

          FLIP-IN EVENT

          A Flip-in Event occurs when any Person becomes an Acquiring Person. In
          the event that, prior to the Expiration Time, a Flip-in Event which
          has not been waived by the Board of Directors occurs (see "Redemption,
          Waiver and Termination"), each Right (except for Rights Beneficially
          Owned or which may thereafter be Beneficially Owned by an Acquiring
          Person, an Affiliate or Associate of an Acquiring Person or a Joint
          Actor (or a transferee of any such Person), which Rights will become
          null and void) shall constitute the right to purchase from the
          Company, upon exercise thereof in accordance with the terms of the
          Rights Plan, that number of Common Shares having an aggregate Market
          Price on the date of the Flip-in Event equal to twice the Exercise
          Price, for the Exercise Price (such Right being subject to
          anti-dilution adjustments). For example, if at the time of the Flip-in
          Event the Exercise Price is $4.50 and the Market Price of the Common
          Shares is $2.00, the holder of each Right would be entitled to
          purchase Common Shares having an aggregate Market Price of $9.00 (that
          is, 4.5 Common Shares) for $4.50 (that is, a 50% discount from the
          Market Price).

          PERMITTED BID AND COMPETING PERMITTED BID

          A Permitted Bid is a Take-over Bid made by way of a Take-over Bid
          circular and which complies with the following additional provisions:

          (i)  the Take-over Bid is made to all holders of record of Common
               Shares, other than the Offeror;

          (ii) the Take-over Bid contains irrevocable and unqualified conditions
               that:

11.  no Common Shares shall be taken up or paid for pursuant to the Take-over
     Bid prior to the close of business on a date which is not less than 60 days
     following the date of the Take-over Bid and the provisions for the take-up
     and payment for Common Shares tendered or deposited thereunder shall be
     subject to such irrevocable and unqualified condition;

12.  unless the Take-over Bid is withdrawn, Common Shares may be deposited
     pursuant to the Take-over Bid at any time prior to the close of business on
     the date of first take-up or payment for Common Shares and all Common
     Shares deposited pursuant to the Take-over Bid may be withdrawn at any time
     prior to the close of business on such date;

13.  more than 50% of the outstanding Common Shares held by Independent
     Shareholders must be deposited to the Take-over Bid and not withdrawn at
     the close of business on the date of first take-up or payment for Common
     Shares; and
<PAGE>

                                       8

14.  in the event that more than 50% of the then outstanding Common Shares held
     by Independent Shareholders have been deposited to the Take-over Bid and
     not withdrawn as at the date of first take-up or payment for Common Shares
     under the Take-over Bid, the Offeror will make a public announcement of
     that fact and the Take-over Bid will remain open for deposits and tenders
     of Common Shares for not less than 10 Business Days from the date of such
     public announcement.

          A Competing Permitted Bid is a Take-over Bid that is made after a
          Permitted Bid has been made but prior to its expiry and that satisfies
          all the requirements of a Permitted Bid as described above, except
          that a Competing Permitted Bid is not required to remain open for 60
          days so long as it is open until the later of (i) the earliest date on
          which Common Shares may be taken-up or paid for under any earlier
          Permitted Bid or Competing Permitted Bid that is in existence and (ii)
          35 days (or such other minimum period of days as may be prescribed by
          applicable law in Ontario) after the date of the Take-over Bid
          constituting the Competing Permitted Bid.

          REDEMPTION, WAIVER AND TERMINATION

          (i)     REDEMPTION OF RIGHTS ON APPROVAL OF HOLDERS OF COMMON SHARES
                  AND RIGHTS. The Board of Directors acting in good faith may,
                  after having obtained the prior approval of the holders of
                  Common Shares or Rights, 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 for anti-dilution
                  as provided in the Rights Agreement (the "Redemption Price").

          (ii)    WAIVER OF INADVERTENT ACQUISITION. The Board of Directors
                  acting in good faith may waive the application of the Rights
                  Plan in respect of the occurrence of any Flip-in Event if (i)
                  the Board of Directors has determined that a Person became an
                  Acquiring Person under the Rights Plan by inadvertence and
                  without any intent or knowledge that it would become an
                  Acquiring Person; and (ii) the Acquiring Person has reduced
                  its Beneficial Ownership of Common Shares such that at the
                  time of waiver the Person is no longer an Acquiring Person.

          (iii)   DEEMED REDEMPTION. In the event that a Person who has made a
                  Permitted Bid or a Take-over Bid in respect of which the Board
                  of Directors has waived or has deemed to have waived the
                  application of the Rights Plan consummates the acquisition of
                  the Common Shares, the Board of Directors shall be deemed to
                  have elected to redeem the Rights for the Redemption Price.

          (iv)    DISCRETIONARY WAIVER WITH MANDATORY WAIVER OF CONCURRENT BIDS.
                  The Board of Directors acting in good faith may, prior to the
                  occurrence of a Flip-in Event as to which the Rights Plan has
                  not been waived under this clause, upon prior written notice
                  to the Rights Agent, waive the application of the Rights Plan
                  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 holders of
                  record of Common Shares. However, if the Board of Directors
                  waives the application of the Rights Plan, the Board of
                  Directors shall be deemed to have waived the application of
                  the Rights Plan in respect of any other Flip-in Event
<PAGE>

                                       9

                  occurring by reason of such a Take-over Bid made prior to the
                  expiry of a bid for which a waiver is, or is deemed to have
                  been, granted.

          (v)     DISCRETIONARY WAIVER RESPECTING ACQUISITION NOT BY TAKE-OVER
                  BID CIRCULAR. The Board of Directors acting in good faith may,
                  with the prior consent of the holders of Common Shares,
                  determine, at any time prior to the occurrence of a Flip-in
                  Event as to which the application of the Rights Plan has not
                  been waived, if such Flip-in Event would occur by reason of an
                  acquisition of Common Shares otherwise than pursuant to a
                  Take-over Bid made by means of a Take-over Bid circular to
                  holders of Common Shares and otherwise than by inadvertence
                  when such inadvertent Acquiring Person has then reduced its
                  holdings to below 20%, to waive the application of the Rights
                  Plan to such Flip-in Event. However, if the Board of Directors
                  waives the application of the Rights Plan, the Board of
                  Directors shall extend the Separation Time to a date
                  subsequent to and not more than 10 Business Days following the
                  meeting of shareholders called to approve such a waiver.

          (vi)    REDEMPTION OF RIGHTS ON WITHDRAWAL OR TERMINATION OF BID.
                  Where a Take-over Bid that is not a Permitted Bid is withdrawn
                  or otherwise terminated after the Separation Time 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.

          If the Board of Directors is deemed to have elected or elects to
          redeem the Rights as described above, the right to exercise the Rights
          will thereupon, without further action and without notice, terminate
          and the only right thereafter of the holders of Rights is to receive
          the Redemption Price. Within 10 Business Days of any such election or
          deemed election to redeem the Rights, the Company will notify the
          holders of the Common Shares or, after the Separation Time, the
          holders of the Rights.

          ANTI-DILUTION ADJUSTMENTS

          The Exercise Price of a Right, the number and kind of securities
          subject to purchase upon exercise of a Right, and the number of Rights
          outstanding, will be adjusted in certain events, including:

               (a)  if there is a dividend payable in Common Shares or
                    Convertible Securities (other than pursuant to any optional
                    stock dividend program, divided reinvestment plan or a
                    dividend payable in Common Shares in lieu of a regular
                    periodic cash dividend) on the Common Shares,

               (b)  or a subdivision or consolidation of the Common Shares,

               (c)  or an issuance of Common Shares or Convertible Securities in
                    respect of, in lieu of or in exchange for Common Shares; or

               (d)  if the Company fixes a record date for the distribution to
                    all holders of Common Shares of certain rights or warrants
                    to acquire Common Shares or Convertible Securities, or for
                    the making of a distribution to all holders of Common Shares
                    of evidences of indebtedness or assets (other than regular
<PAGE>

                                       10

                    periodic cash dividend or a dividend payable in Common
                    Shares) or rights or warrants.

          SUPPLEMENTS AND AMENDMENTS

          The Company may make amendments to correct any clerical or
          typographical error or which are necessary to maintain the validity of
          the Rights Agreement as a result of any change in any applicable
          legislation, rules or regulation. Any changes made to maintain the
          validity of the Rights Plan shall be subject to subsequent
          confirmation by the holders of the Common Shares or, after the
          Separation Time, the holders of the Rights.

          Subject to the above exceptions, after the meeting, any amendment,
          variation or deletion of or from the Rights Agreement and the Rights
          is subject to the prior approval of the holders of Common Shares, or,
          after the Separation Time, the holders of the Rights.

          The Board of Directors reserves the right to alter any terms of or not
          proceed with the Rights Plan at any time prior to the Meeting if the
          Board of Directors determines that it would be in the best interests
          of the Company and its shareholders to do so, in light of subsequent
          developments.

          EXPIRATION

          If the Rights Plan is ratified, confirmed and approved at the Meeting,
          it will become effective immediately following such approval and
          remain in force until the earlier of the Termination Time (the time at
          which the right to exercise Rights shall terminate pursuant to the
          Rights Plan) and the termination of the annual meeting of the
          Shareholders in the year 2008 unless at or prior to such meeting the
          Company's shareholders ratify the continued existence of the Rights
          Plan, in which case the Rights Plan would expire at the earlier of the
          Termination Time and the termination of the 2011 annual meeting of the
          Company's shareholders.

1.   RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102

          Not applicable.

2.   OMITTED INFORMATION

          Not applicable.

15.  EXECUTIVE OFFICER

          J. Scott Pagan
          General Counsel and Corporate Secretary
          The Descartes Systems Group Inc.
          Telephone No. (519) 746-6114

16.  DATE OF REPORT

          December 3, 2004
<PAGE>

                                  SCHEDULE "A"

           DESCARTES REPORTS RESULTS FOR THIRD QUARTER OF FISCAL 2005

   SIGNIFICANT EXPENSE REDUCTIONS CONTRIBUTE TO IMPROVED OPERATING PERFORMANCE
          AND UNCHANGED CASH POSITION; SHAREHOLDER RIGHTS PLAN ADOPTED

WATERLOO, ONTARIO, NOVEMBER 30, 2004 -- The Descartes Systems Group Inc.,
(Nasdaq:DSGX), (TSX:DSG), a leading provider of technology solutions for
distribution and logistics sensitive organizations, today announced the
following:
     o    Unaudited financial results for the third fiscal quarter of its 2005
          fiscal year (Q3FY05) which ended on October 31, 2004; and
     o    The adoption of a shareholder rights plan (the "Rights Plan").

Q3FY05 FINANCIAL RESULTS
The Company announced its unaudited financial results for Q3FY05, determined in
accordance with United States Generally Accepted Accounting Principles (GAAP).
All dollar amounts referenced are in United States currency.

Total revenues for Q3FY05 were $11.0 million, compared to $11.1 million in the
previous quarter (Q2FY05) and down from $16.0 million in the third quarter in
the prior fiscal year (Q3FY04). Total expenses for Q3FY05 were $13.8 million,
down significantly from $33.8 million in Q2FY05 and $20.2 million in Q3FY04.
This significant reduction in expenses is principally a consequence of the
Company's May 2004 restructuring initiative. The loss per share for Q3FY05 was
($0.07) cents, improved from ($0.56) in Q2FY05 and ($0.10) in Q3FY04.

Compared to the prior fiscal quarter, Q3FY05 total expenses (excluding
restructuring) were down $7.4 million to $13.2 million. This exceeded the
Company's previously indicated expectation that Q3FY05 total expenses (excluding
restructuring) would be reduced by approximately $7 million compared to Q2FY05.
This significant expense reduction was a key contributor to the Company's
improved operating performance in Q3FY05. Total expenses (excluding
restructuring) is a non-GAAP measure (discussed in detail below) referenced to
illustrate the expense savings from the Company's May 2004 restructuring
initiative.

The Company's aggregate cash, cash equivalents and marketable securities at the
end of Q3FY05 were $46.4 million, unchanged from the position at the end of
Q2FY05 and $0.4 million higher than the preliminary estimate provided by the
Company on November 2, 2004. Cash generated by the business was used to pay the
$0.5 million contribution to the defense and previously announced
settlement-in-principle of the class action litigation as well as $1.8 million
for restructuring activities and $0.3 million to terminate a third-party
outsourcing contract.

The Company's days-sales-outstanding for Q3FY05 was 68 days, down significantly
from 82 days in Q2FY05 and 99 days in Q3FY04.

"Our Q3FY05 financial results reflect that our business operations have
stabilized," said Art Mesher, Chief Executive Officer. "With this type of
operating performance, our continued focus on aligning operating expenses with
visible and recurring revenues, and our healthy cash position, our customers can
be confident that we will continue to be a customer-centric organization that
delivers them superior results on a long-term basis."
<PAGE>

                                      -2-

DESCARTES ADOPTS RIGHTS PLAN
The Company also announced that the Board of Directors has adopted the Rights
Plan. The Company is not adopting the Rights Plan in response to any proposal to
acquire control of the Company.

The Board of Directors has adopted the Rights Plan to ensure the fair treatment
of shareholders in connection with any take-over offer for the Company, and to
provide the Board of Directors and shareholders with additional time to fully
consider any unsolicited take-over bid. In such event, the Rights Plan will also
provide the Board of Directors more time to pursue, if appropriate, other
alternatives to maximize shareholder value.

Under the Rights Plan, Rights have been issued and attached to all common shares
of the Company issued and outstanding as of the close of business on November
29, 2004. Rights will be issued upon any future issuance of any common shares of
the Company that occurs prior to the Separation Time (as defined in the Rights
Plan).

The Rights Plan has been conditionally approved by the Toronto Stock Exchange
and is subject to approval by shareholders at the Company's next annual and
special meeting of shareholders. If approved by shareholders, the Rights Plan
will continue in force for an initial term of three years commencing on November
29, 2004. The Rights Plan is similar to plans adopted by other Canadian
companies and approved by their shareholders.

The Rights Plan is not intended to prevent take-over bids. Under the Rights
Plan, those bids that meet certain requirements intended to protect the
interests of all shareholders are deemed to be "Permitted Bids". Permitted Bids
must be made by way of a take-over bid circular prepared in compliance with
applicable securities laws and remain open for sixty days.

In the event a take-over bid does not meet the Permitted Bid requirements of the
Rights Plan, the Rights will entitle shareholders, other than any shareholder or
shareholders making the take-over bid, to purchase additional common shares in
the Company at a substantial discount to the market value at the time.

CONFERENCE CALL TODAY
Company management will discuss the Q3FY05 results and expectations regarding
the business in a live conference and audio Web cast with the financial
community at 8:00 am ET today. The conference call is accessible by dialing
(800) 289-0493 or (913) 981-5510 and quoting reservation number 968678. The
audio Web cast can be accessed at www.descartes.com/investors. Replays will also
be available in two formats shortly after the completion of the conference call.
A telephone replay will be accessible for 24 hours by dialing (888) 203-1112 or
(719) 457-0820 and quoting reservation number 968678. An archived replay of the
audio Web cast will also be available through the Descartes Web site at:
www.descartes.com/investors

ABOUT DESCARTES
The Descartes Systems Group Inc. (Nasdaq:DSGX) (TSX:DSG) is a leading provider
of technology solutions for distribution and logistics sensitive organizations.
Helping companies reduce costs, save time, and enhance customer satisfaction,
Descartes' products and services provide connectivity and document exchange,
route planning and wireless dispatch, inventory and asset visibility,
transportation management, and warehouse optimization. These products and
services enable distribution-sensitive companies in industries such as retail,
consumer packaged goods, manufacturing, transportation, third-party logistics,
and distribution to optimize and gain real-time control of their inventory and
assets. Descartes' products and services are used by more than 2,500 customers
in over 60 countries. For more information, visit www.descartes.com.
<PAGE>

                                      -3-

SAFE HARBOR STATEMENT
This release contains forward-looking statements that relate to financial and
operating performance, the Company's restructuring initiatives and the benefits
of the Rights Plan and other matters that may constitute forward-looking
statements. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of Descartes to differ materially from the anticipated results,
performance or achievements implied by such forward-looking statements. Such
factors include, but are not limited to the ability to continue to align
operating expenses to visible and recurring revenues; the ability to achieve
cost reductions on a timely basis; the ability to attract and retain key
personnel; variances in our revenues from quarter to quarter; departures of key
customers; global economic, market and political conditions; the failure of the
Company's shareholders to adopt the Rights Plan; and other factors discussed in
the section entitled, "Risk Factors" in documents filed with the Securities and
Exchange Commission, the Ontario Securities Commission and other securities
commissions across Canada.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
Our quarterly unaudited financial statements are prepared in accordance with
GAAP. We also disclose and discuss certain non-GAAP financial information, used
to evaluate our performance, in this earnings release and our investor
conference calls. We believe that current shareholders and potential investors
in the Company use non-GAAP financial measures in making investment decisions
about the Company.

TOTAL EXPENSES (EXCLUDING RESTRUCTURING)
A non-GAAP financial measure we use in this release is total expenses (excluding
restructuring). Total expenses refers to a GAAP financial measure; we use the
term "total expenses (excluding restructuring)" to reflect that our financial
measure also excludes restructuring costs and asset impairment (including
impairment of goodwill). However, total expenses (excluding restructuring) is
not a measure determined under GAAP and is not likely to be comparable to
similarly titled measures reported by other companies. Total expenses (excluding
restructuring) should not be construed as a substitute for total expenses or any
other financial measure determined in accordance with GAAP, but rather should be
evaluated in conjunction with such GAAP measures. We have presented total
expenses (excluding restructuring) to illustrate the expense savings generated
by our May 2004 restructuring initiative. The table below reconciles total
expenses (excluding restructuring) for each of the Company's previous four
fiscal quarters to the GAAP total expenses, which we believe is the most
directly comparable GAAP measure.

<TABLE><CAPTION>
(USD, IN THOUSANDS)                              Q3FY05           Q2FY05           Q1FY05           Q4FY04
                                                --------         --------         --------         --------
<S>                                             <C>              <C>              <C>              <C>
Total expenses                                  $ 13,775         $ 33,764         $ 42,199         $ 24,928
Adjustments to reconcile to total
expenses (excluding restructuring):
   Restructuring costs and asset
   impairment (includes                             (556)         (13,154)         (18,592)          (1,018)
   impairment of goodwill)
                                                -----------------------------------------------------------
TOTAL EXPENSES (EXCLUDING RESTRUCTURING)        $ 13,219         $ 20,610         $ 23,607         $ 23,910
                                                ===========================================================
</TABLE>

CONTACT INFORMATION
Anca Mihaila
(519) 746-6114 ext. 2238
pr@descartes.com
- ----------------
<PAGE>

                                      -4-

THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(US DOLLARS IN THOUSANDS; US GAAP; OCTOBER 31 DATA UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                                           ------------         ------------
                                                                             OCTOBER 31           January 31
                                                                                   2004                 2004
                                                                           ------------         ------------
<S>                                                                              <C>                  <C>
ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                                   12,803               13,187
     Marketable securities                                                       23,552               34,586
     Accounts receivable
         Trade                                                                    8,335               12,986
         Other                                                                    1,949                3,501
     Prepaid expenses and other                                                   2,135                3,045
                                                                           ------------         ------------
                                                                                 48,774               67,305
MARKETABLE SECURITIES                                                            10,000               17,279
CAPITAL ASSETS                                                                    7,564               13,452
LONG-TERM INVESTMENTS                                                             3,300                3,300
GOODWILL                                                                           --                 18,038
INTANGIBLE ASSETS                                                                 5,128                8,264
DEFERRED CHARGES                                                                   --                  1,021
                                                                           ------------         ------------
      TOTAL ASSETS                                                               74,766              128,659
                                                                           ============         ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                                             3,036                4,743
     Accrued liabilities                                                          5,902                3,609
     Deferred revenue                                                             2,262                2,860
     Convertible debentures                                                      26,995                 --
                                                                           ------------         ------------
                                                                                 38,195               11,212
CONVERTIBLE DEBENTURES                                                             --                 26,995
                                                                           ------------         ------------
                                                                                 38,195               38,207
                                                                           ------------         ------------

SHAREHOLDERS' EQUITY
     Common shares - unlimited shares authorized; Shares issued and
     outstanding 40,705,811 and                                                 364,907              364,907
                                                                                                  40,705,811
     Additional paid-in capital                                                  81,658               81,667
     Unearned deferred compensation                                                (227)                (339)
     Accumulated other comprehensive income (loss)                                    1                 (387)
     Accumulated deficit                                                       (409,768)            (355,396)
                                                                           ------------         ------------
                                                                                 36,571               90,452
                                                                           ------------         ------------
                                                                                 74,766              128,659
                                                                           ============         ============
</TABLE>
<PAGE>

                                      -5-

THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS; US GAAP; UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                       --------------------------      --------------------------
                                                           THREE MONTHS ENDED               NINE MONTHS ENDED
                                                       --------------------------      --------------------------
                                                       OCTOBER 31      October 31      OCTOBER 31      October 31
                                                             2004            2003            2004            2003
                                                       ----------      ----------      ----------      ----------
<S>                                                           <C>             <C>             <C>             <C>
REVENUES                                                   11,045          16,026          35,366          45,432
COST OF REVENUES                                            4,711           4,787          16,068          14,257
                                                       ----------      ----------      ----------      ----------
GROSS MARGIN                                                6,334          11,239          19,298          31,175
                                                       ----------      ----------      ----------      ----------
EXPENSES
     Sales and marketing                                    2,329           7,226          16,107          21,061
     Research and development                               2,102           2,298           8,736           6,485
     General and administrative                             2,633           2,680          12,265           9,082
     Amortization of intangible assets                      1,005           1,313           3,136           4,026
     Impairment of goodwill                                  --              --            18,038            --
     Restructuring costs and asset impairment                 556           1,637          14,264          17,766
                                                       ----------      ----------      ----------      ----------
                                                            8,625          15,154          72,546          58,420
                                                       ----------      ----------      ----------      ----------
LOSS FROM OPERATIONS                                       (2,291)         (3,915)        (53,248)        (27,245)
                                                       ----------      ----------      ----------      ----------
OTHER INCOME (EXPENSE)
     Interest expense                                        (425)           (433)         (1,299)         (2,605)
     Investment income                                        109             176             405           1,074
     Gain on purchase of convertible debentures              --              --              --               904
                                                       ----------      ----------      ----------      ----------
                                                             (316)           (257)           (894)           (627)
                                                       ----------      ----------      ----------      ----------
LOSS BEFORE INCOME TAXES                                   (2,607)         (4,172)        (54,142)        (27,872)
INCOME TAX EXPENSE - CURRENT                                 (123)            (22)           (230)            (46)
                                                       ----------      ----------      ----------      ----------
LOSS                                                       (2,730)         (4,194)        (54,372)        (27,918)
                                                       ----------      ----------      ----------      ----------
LOSS PER SHARE
     Basic and diluted                                      (0.07)          (0.10)          (1.34)          (0.58)
                                                       ----------      ----------      ----------      ----------
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic and diluted (thousands)                         40,706          40,654          40,706          47,736
                                                       ==========      ==========      ==========      ==========
</TABLE>
<PAGE>

                                      -6-

THE DESCARTES SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US DOLLARS IN THOUSANDS; US GAAP; UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                               -----------------------------         -----------------------------
                                                                     THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                               -----------------------------         -----------------------------
                                                               OCTOBER 31         October 31         OCTOBER 31         October 31
                                                                     2004               2003               2004               2003
                                                               ----------         ----------         ----------         ----------
<S>                                                                <C>                <C>               <C>                <C>
OPERATING ACTIVITIES
Adjustments to reconcile loss to cash provided by (used in)
operating activities:
     Depreciation                                                     544                835              1,662              1,988
     Amortization of intangible assets                              1,005              1,313              3,136              4,026
     Impairment of goodwill                                          --                 --               18,038               --
     Write-off of redundant assets                                   --                 --                5,770               --
     Amortization of convertible debenture costs                       64                 63                192                386
     Amortization of deferred compensation                             34                 35                103                136
     Gain on purchase of convertible debentures                      --                 --                 (904)
     Changes in operating assets and liabilities:
        Accounts receivable
            Trade                                                   1,708             (2,443)             4,651             (3,502)
            Other                                                     367               (417)             1,552                156
        Prepaid expenses and other                                    424                623                530               (815)
        Deferred charges                                             --                   61                657               (409)
        Accounts payable                                            1,176                528             (1,707)            (2,438)
        Accrued liabilities                                        (2,374)            (1,784)             2,681                203
        Deferred revenue                                             (261)              (549)              (598)              (923)
                                                               ----------         ----------         ----------         ----------
Cash used in operating activities                                     (43)            (5,929)           (17,705)           (30,014)
                                                               ----------         ----------         ----------         ----------
INVESTING ACTIVITIES
     Maturities of marketable securities                            4,228             29,838             22,252            132,029
     Sale of marketable securities                                   --                 --                8,198               --
     Purchase of marketable securities                             (3,197)              --              (12,137)            (1,404)
     Additions to capital assets                                      (25)            (1,185)              (992)            (3,839)
     Acquisition of subsidiaries                                     --                 (235)              --                 (335)
                                                               ----------         ----------         ----------         ----------
Cash provided by investing activities                               1,006             28,418             17,321            126,451
                                                               ----------         ----------         ----------         ----------
FINANCING ACTIVITIES
     Purchase of convertible debentures                              --                 --                 --              (43,274)
     Purchase of common shares                                       --                 --                 --              (27,228)
     Issuance of common shares for cash                              --                 --                 --                   17
                                                               ----------         ----------         ----------         ----------
Cash used in financing activities                                    --                 --                 --              (70,485)
                                                               ----------         ----------         ----------         ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      963             22,489               (384)            25,952

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                   11,840             24,658             13,187             21,195
                                                               ----------         ----------         ----------         ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                         12,803             47,147             12,803             47,147
                                                               ==========         ==========         ==========         ==========
</TABLE>
<PAGE>



                                  SCHEDULE "B"

                        SHAREHOLDER RIGHTS PLAN AGREEMENT




                                     BETWEEN




                        THE DESCARTES SYSTEMS GROUP INC.


                                       and


                      COMPUTERSHARE TRUST COMPANY OF CANADA
                                 as Rights Agent




                          Dated as of November 29, 2004





<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

                                    ARTICLE 1
                                   DEFINITIONS

1.1    Definitions............................................................2
1.2    Currency 11
1.3    Acting Jointly or in Concert..........................................12
1.4    Control  .............................................................12
1.5    Holder of Rights and Trust Units......................................12
1.6    References to this Agreement..........................................12

                                    ARTICLE 2
                                   THE RIGHTS

2.1    Legend on Common Share Certificates...................................12
2.2    Initial Exercise Price; Exercise of Rights; Detachment of Rights......13
2.3    Adjustments to Exercise Price; Number of Rights.......................15
2.4    Date on Which Exercise is Effective...................................17
2.5    Execution, Authentication, Delivery and Dating of
         Rights Certificates.................................................18
2.6    Registration, Registration of Transfer and Exchange...................18
2.7    Mutilated, Destroyed, Lost and Stolen Rights Certificates.............18
2.8    Persons Deemed Owners.................................................19
2.9    Delivery and Cancellation of Certificates.............................19
2.10   Agreement of Rights Holders...........................................19

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

3.1    Flip-in Event.........................................................20

                                    ARTICLE 4
                                THE RIGHTS AGENT

4.1    General  .............................................................21
4.2    Merger, Amalgamation or Consolidation or Change of
         Name of Rights Agent................................................22
4.3    Duties of Rights Agent................................................22
4.4    Change of Rights Agent................................................24

                                    ARTICLE 5
                                  MISCELLANEOUS

5.1    Redemption and Termination............................................24
5.2    Expiration............................................................26
5.3    Issuance of New Rights Certificates...................................26
5.4    Supplements and Amendments............................................26
5.5    Fractional Rights and Fractional Shares...............................28
5.6    Rights of Action......................................................28
5.7    Holder of Rights Not Deemed a Shareholder.............................28
5.8    Notice of Proposed Actions............................................28
5.9    Notices  .............................................................29
5.10   Costs of Enforcement..................................................30
5.11   Successors............................................................30
5.12   Benefits of this Agreement............................................30
5.13   Descriptive Headings..................................................30

                                       -i-
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                            PAGE

5.14   Governing Law.........................................................30
5.15   Language 30
5.16   Counterparts..........................................................30
5.17   Severability..........................................................30
5.18   Effective Date........................................................30
5.19   Shareholder Review....................................................31
5.20   Regulatory Approvals..................................................31
5.21   Declaration as to Non-Canadian and Non-U.S. Holders...................31
5.22   Determinations and Actions by the Board of Directors..................31























                                      -ii-
<PAGE>

                        SHAREHOLDER RIGHTS PLAN AGREEMENT

     THIS SHAREHOLDER RIGHTS PLAN AGREEMENT made as of the 29th day of November,
2004.

BETWEEN:

         THE DESCARTES SYSTEMS GROUP INC., a body corporate organized under the
         laws of Ontario (hereinafter referred to as the "CORPORATION")

                                                               OF THE FIRST PART

                                     - and -

         COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated
         under the laws of Canada (hereinafter referred to as the "RIGHTS
         AGENT")

                                                              OF THE SECOND PART

     WHEREAS the board of directors of the Corporation (the "BOARD OF
DIRECTORS") has determined that it is advisable to adopt a shareholder rights
plan to take effect immediately upon receipt of approval of the Independent
Shareholders (the "RIGHTS PLAN") to ensure, to the extent possible, that all
shareholders of the Corporation are treated fairly in connection with any
take-over offer or bid for the common shares of the Corporation, and to ensure
that the Board of Directors is provided with a sufficient time to evaluate
unsolicited take-over bids and to explore and develop alternatives to maximize
shareholder value;

     AND WHEREAS, in order to implement the adoption of the Rights Plan as
established by this agreement, the Board of Directors has:

     (a)  authorized the issuance of one right (a "Right") in respect of each
          Common Share (as hereinafter defined) outstanding at the close of
          business on November 29, 2004 (the "Record Time"), such distribution
          to be made to shareholders of record at the Record Time; and

     (b)  authorized the issuance of one Right in respect of each Common Share
          issued after the Record Time and prior to the earlier of the
          Separation Time (as hereinafter defined) and the Expiration Time (as
          hereinafter defined);

     AND WHEREAS each Right entitles the holder thereof, after the Separation
Time, to purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth herein;

     AND WHEREAS the Corporation desires to appoint the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;

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

<PAGE>
                                       -2-

                                    ARTICLE 1
                                   DEFINITIONS

1.1 DEFINITIONS

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

     (a)  "ACQUIRING PERSON" shall mean any Person who is the Beneficial Owner
          of 20% or more of the outstanding Common 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 20% or more of the
               outstanding Common Shares of the Corporation as a result of any
               one or a combination of:

               (A)  an acquisition or redemption by the Corporation of Common
                    Shares of the Corporation which, by reducing the number of
                    Common Shares outstanding, increases the proportionate
                    number of Common Shares Beneficially Owned by such Person to
                    20% or more of the Common Shares of the Corporation then
                    outstanding;

               (B)  share acquisitions made pursuant to a Permitted Bid
                    ("PERMITTED BID ACQUISITIONS");

               (C)  share acquisitions (1) in respect of which the Board of
                    Directors has waived the application of Section 3.1 pursuant
                    to subsections 5.1(b), 5.1(c) or 5.1(d); or (2) which were
                    made pursuant to a dividend reinvestment plan of the
                    Corporation; or (3) pursuant to the receipt or exercise of
                    rights issued by the Corporation to all the holders of the
                    Common Shares (other than holders resident in a jurisdiction
                    where such distribution is restricted or impracticable as a
                    result of applicable law) to subscribe for or purchase
                    Common Shares or Convertible Securities, provided that such
                    rights are acquired directly from the Corporation and not
                    from any other person and provided that the Person does not
                    thereby acquire a greater percentage of Common Shares or
                    Convertible Securities so offered than the Person's
                    percentage of Common Shares or Convertible Securities
                    beneficially owned immediately prior to such acquisition; or
                    (4) pursuant to a distribution by the Corporation of Common
                    Shares or Convertible Securities made pursuant to a
                    prospectus, provided that the Person does not thereby
                    acquire a greater percentage of Common Shares or Convertible
                    Securities so offered than the Person's percentage of Common
                    Shares or Convertible Securities beneficially owned
                    immediately prior to such acquisition; or (5) pursuant to a
                    distribution by the Corporation of Common Shares or
                    Convertible Securities by way of a private placement or a
                    securities exchange take-over bid circular or upon the
                    exercise by an individual employee of stock options granted
                    under a stock option plan of the Corporation or rights to
                    purchase securities granted under a share purchase plan of
                    the Corporation, provided that (i) all necessary stock
                    exchange approvals for such private placement, stock option
                    plan or share purchase plan have been obtained and such
                    private placement, stock option plan or share purchase plan
                    complies with the terms and conditions of such approvals and
                    (ii) such Person does not become the Beneficial Owner of
                    more than 25% of the Common Shares outstanding immediately
                    prior to the distribution, and in making this determination,
                    the Common Shares to be issued to such Person in the
                    distribution shall be deemed to be held by such Person but
                    shall not be included in the aggregate number of outstanding
                    Common Shares immediately prior to the distribution; or (6)

<PAGE>
                                       -3-

                    pursuant to an amalgamation, merger or other statutory
                    procedure requiring shareholder approval ("EXEMPT
                    ACQUISITIONS");

               (D)  the acquisition of Common Shares upon the exercise of
                    Convertible Securities received by such Person pursuant to a
                    Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata
                    Acquisition (as defined below) ("CONVERTIBLE SECURITY
                    ACQUISITIONS"); or

               (E)  acquisitions as a result of a stock dividend, a stock split
                    or other event pursuant to which such Person receives or
                    acquires Common Shares or Convertible Securities on the same
                    PRO RATA basis as all other holders of Common Shares of the
                    same class ("PRO RATA ACQUISITIONS");

               provided, however, that if a Person shall become the Beneficial
               Owner of 20% or more of the Common Shares of the Corporation then
               outstanding by reason of any one or a combination of (i) share
               acquisitions or redemptions by the Corporation or (ii) Permitted
               Bid Acquisitions or (iii) Exempt Acquisitions or (iv) Convertible
               Security Acquisitions or (v) Pro Rata Acquisitions and, after
               such share acquisitions or redemptions by the Corporation or
               Permitted Bid Acquisitions or Exempt Acquisitions or Convertible
               Security Acquisitions or Pro Rata Acquisitions, such Person
               subsequently becomes the Beneficial Owner of more than an
               additional 1% of the number of Common Shares of the Corporation
               outstanding other than pursuant to any one or a combination of
               share acquisitions or redemptions of shares by the Corporation,
               Permitted Bid Acquisitions, Exempt Acquisitions, Convertible
               Security Acquisitions or Pro Rata Acquisitions, then as of the
               date of any such acquisition such Person shall become an
               "Acquiring Person";

          (iii) for a period of 10 days after the Disqualification Date, any
               Person who becomes the Beneficial Owner of 20% or more of the
               outstanding Common Shares as a result of such Person becoming
               disqualified from relying on clause 1.1(d)(B) solely because such
               Person makes or announces an intention to make a Take-over Bid,
               either alone, through such Person's Affiliates or Associates or
               by acting jointly or in concert with any other Person. For the
               purposes of this definition, "DISQUALIFICATION DATE" means the
               first date of public announcement that any Person is making or
               intends to make a Take-over Bid, either alone, through such
               Person's Affiliates or Associates or by acting jointly or in
               concert with any other Person;

          (iv) an underwriter or member of a banking or selling group that
               becomes the Beneficial Owner of 20% or more of the Common Shares
               in connection with a distribution of securities by way of
               prospectus or private placement; or

          (v)  a Person (a "GRANDFATHERED PERSON") who is the Beneficial Owner
               of 20% or more of the outstanding Common Shares of the
               Corporation as at the Record Time, PROVIDED, HOWEVER, that this
               exception shall not be, and shall cease to be, applicable to a
               Grandfathered Person in the event that such Grandfathered Person
               shall, after the Record Time: (1) cease to own 20% or more of the
               outstanding Common Shares or (2) become the Beneficial Owner
               (other than pursuant to any one or a combination of (A) share
               acquisitions or redemptions by the Corporation or (B) Permitted
               Bid Acquisitions (C) Exempt Acquisitions or (D) Convertible
               Security Acquisition or (E) Pro Rata Acquisitions) of additional
               Common Shares constituting more than 1% of the number of Common
               Shares outstanding as at the Record Time.

     (b)  "AFFILIATE", used to indicate a relationship with a specified Person,
          shall mean 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.

<PAGE>
                                       -4-

     (c)  "ASSOCIATE" of a specified individual shall mean any individual to
          whom such specified individual is married or with whom such specified
          individual is living in a conjugal relationship, outside marriage, or
          any relative of such specified individual or said spouse who has the
          same home as such specified individual.

     (d)  A Person shall be deemed the "BENEFICIAL OWNER", and to have
          "BENEFICIAL OWNERSHIP", of, and to "BENEFICIALLY OWN":

          (i)  any securities as to which such Person or any of such Person's
               Affiliates or Associates is the owner at law or in 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 understanding, in either case where
               such right is exercisable within a period of 60 days and whether
               or not on condition or the happening of any contingency (other
               than (1) customary agreements with and between underwriters and
               banking group or selling group members with respect to a
               distribution to the public or pursuant to a private placement of
               securities, or (2) pursuant to a pledge of securities in the
               ordinary course of business); and

          (iii) any securities which are Beneficially Owned within the meaning
               of clauses 1.1(d)(i) or (ii) above by any other Person with which
               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:

               (A)  where (1) the holder of such security has agreed to deposit
                    or tender such security pursuant to a Permitted Lock-up
                    Agreement 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 1.1(d)(iii), or (2) such security has
                    been deposited or tendered pursuant 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
                    1.1(d)(iii), in each case until the earliest time at which
                    any such tendered security is accepted unconditionally for
                    payment or exchange or is taken up and paid for;

               (B)  where such Person, any of such Person's Affiliates or
                    Associates or any other Person referred to in clause
                    1.1(d)(iii), holds such security provided that (1) the
                    ordinary business of any such Person (the "INVESTMENT
                    MANAGER") includes the management of investment funds for
                    others and such security is held by the Investment Manager
                    in the ordinary course of such business in the performance
                    of such Investment Manager's duties for the account of any
                    other Person, including the acquisition or holding of
                    securities for non-discretionary accounts held on behalf of
                    a client by a broker or dealer registered under applicable
                    securities laws, or (2) such Person (the "TRUST COMPANY") is
                    licensed to carry on the business of a trust company under
                    applicable laws 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 estates of deceased or
                    incompetent Persons or for such other accounts, or (3) such
                    Person (the "PLAN TRUSTEE") is the administrator or trustee
                    of one or more pension funds or plans (each a "PLAN")
                    registered under applicable laws and holds such security for
                    the purposes of its activity as such, or (4) such Person is
                    a Plan or is a Person established by statute (the "STATUTORY
                    BODY") for purposes that include, and the ordinary business
                    or activity of such Person includes the management of
                    investment funds for employee benefit plans, pension plans,
                    insurance plans

<PAGE>
                                       -5-

                    (other than plans administered by insurance companies) or
                    various public bodies, or (5) such Person is a Crown agent
                    or agency or (6) such Person (the "MANAGER") is the manager
                    or trustee of a mutual fund ("MUTUAL FUND") that is
                    registered or qualified to issue its securities to investors
                    under the securities laws of any province of Canada or the
                    laws of the United States of America or is a Mutual Fund;
                    provided in any of the above cases, that the Investment
                    Manager, the Trust Company, the Plan Trustee, the Plan, the
                    Statutory Body, the Crown agent or agency, the Manager or
                    the Mutual Fund, as the case may be, is not then making a
                    Take-over Bid or has not announced a current intention to
                    make a Take-over Bid, other than an Offer to Acquire Common
                    Shares or other securities pursuant to a distribution by the
                    Corporation or by means of ordinary market transactions
                    (including pre-arranged trades entered into in the ordinary
                    course of business of such Person) executed through the
                    facilities of a stock exchange, securities quotation system
                    or organized over-the-counter market, alone, through its
                    Affiliates or Associates or by acting jointly or in concert
                    with any other Person; or

               (C)  because such Person is a client of or has an account with
                    the same Investment Manager as another Person on whose
                    account the Investment Manager holds such security, or where
                    such Person is a client of or has an account with the same
                    Trust Company as another Person on whose account the Trust
                    Company holds such security, or where such Person is a Plan
                    and has a Plan Trustee who is also a Plan Trustee for
                    another Plan on whose account the Plan Trustee holds such
                    security; or

               (D)  where such Person is (i) a client of an Investment Manager
                    and such security is owned at law or in equity by the
                    Investment Manager, or (ii) an account of a Trust Company
                    and such security is owned at law or in equity by the Trust
                    Company, or (iii) a Plan and such security is owned at law
                    or in equity by the Plan Trustee; or

               (E)  where such Person is the registered holder of securities as
                    a result of carrying on the business of or acting as a
                    nominee of a securities depositary.

          For purposes of this Agreement, the percentage of Common Shares
          Beneficially Owned by any Person, shall be and be deemed to be the
          product determined by the formula:

          100 x A/B

          Where:

          A =  the number of votes for the election of all directors generally
               attaching to the Common Shares Beneficially Owned by such Person;
               and

          B =  the number of votes for the election of all directors generally
               attaching to all outstanding Common Shares.

          For the purposes of the foregoing formula, where any Person is deemed
          to Beneficially Own unissued Common Shares which may be acquired
          pursuant to Convertible Securities, such Common Shares shall be deemed
          to be outstanding for the purpose of calculating the percentage of
          Common Shares Beneficially Owned by such Person in both the numerator
          and the denominator, but no other unissued Common Shares which may be
          acquired pursuant to any other outstanding Convertible Securities
          shall, for the purposes of that calculation, be deemed to be
          outstanding.

<PAGE>
                                       -6-

     (e)  "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
          day that is treated as a holiday at the Corporation's principal
          executive offices in Waterloo, Canada.

     (f)  "BUSINESS CORPORATIONS ACT" shall mean the BUSINESS CORPORATIONS ACT
          (Ontario), R.S.O. 1990, c. B.16, as amended, and the regulations
          thereunder, and any comparable or successor laws or regulations
          thereto.

     (g)  "CANADIAN-U.S. EXCHANGE RATE" shall mean on any date the inverse of
          the U.S. Canadian Exchange Rate.

     (h)  "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in
          United States dollars shall mean on any day the Canadian dollar
          equivalent of such amount determined by reference to the Canadian-U.S.
          Exchange Rate on such date.

     (i)  "CLOSE OF BUSINESS" on any given date shall mean 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 Toronto (or, after the Separation
          Time, the offices of the Rights Agent in the City of Toronto) becomes
          closed to the public.

     (j)  "COMMON SHARES OF THE CORPORATION" and "COMMON SHARES" shall mean the
          common shares in the capital stock of the Corporation and any other
          share of the Corporation into which such common shares may be
          subdivided, consolidated, reclassified or changed from time to time.

     (k)  "COMPETING PERMITTED BID" means a Take-over Bid that:

          (i)  is made after a Permitted Bid or another Competing Permitted Bid
               has been made and prior to the expiry of the Permitted Bid or
               Competing Permitted Bid;

          (ii) satisfies all components of the definition of a Permitted Bid
               other than the requirements set out in clause (ii) of that
               definition; and

          (iii) contains, and the take-up and payment for securities tendered or
               deposited is subject to, an irrevocable and unqualified provision
               that no Common Shares will be taken up or paid for pursuant to
               the Take-over Bid prior to the close of business on the date that
               is no earlier than the later of (1) the earliest date on which
               Common Shares may be taken up or paid for under any Permitted Bid
               or Competing Permitted Bid that is then in existence and (2) 35
               days (or such other minimum period of days as may be prescribed
               by applicable law in Ontario) after the date of the Take-over Bid
               constituting the Competing Permitted Bid.

     (l)  "CONVERTIBLE SECURITIES" means, at any time, any securities issued by
          the Corporation from time to time (other than the Rights) carrying any
          exercise, conversion or exchange right pursuant to which the holder
          thereof may acquire Common Shares or other securities which are
          convertible into or exercisable or exchangeable for Common Shares.

     (m)  "CONVERTIBLE SECURITY ACQUISITIONS" has the meaning set forth in the
          definition of "Acquiring Person" herein.

     (n)  "CO-RIGHTS AGENTS" shall have the meaning set forth in subsection
          4.1(a).

     (o)  "EFFECTIVE DATE" shall mean the close of business on November 29,
          2004.

     (p)  "EXEMPT ACQUISITION" has the meaning set forth in the definition of
          "Acquiring Person" herein.

<PAGE>
                                       -7-

     (q)  "EXERCISE PRICE" shall mean, as of any date, the price at which a
          holder may purchase the securities issuable upon exercise of one whole
          Right in accordance with the terms hereof and, subject to adjustment
          thereof in accordance with the terms hereof, the Exercise Price shall
          be:

          (i)  until the Separation Time, an amount equal to three times the
               Market Price, from time to time, per Common Share; and

          (ii) from and after the Separation Time, an amount equal to three
               times the Market Price, as at the Separation Time, per Common
               Share.

     (r)  "EXPANSION FACTOR" shall have the meaning set forth in subsection
          2.3(a)(x).

     (s)  "EXPIRATION TIME" shall mean the earlier of:

          (i)  the Termination Time; and

          (ii) the termination of the annual meeting of the shareholders of the
               Corporation in the year 2008;

                  provided, however, that if the resolution referred to in
                  Section 5.19 is approved by Independent Shareholders in
                  accordance with Section 5.19 at or prior to such annual
                  meeting, "EXPIRATION TIME" means the earlier of (i) the
                  Termination Time and (ii) the termination of the annual
                  meeting of the shareholders of the Corporation in the year
                  2011.

     (t)  "FIDUCIARY" shall mean a trust company registered under the trust
          company legislation of Canada or any province thereof, a trust company
          organized under the laws of any state of the United States, a
          portfolio manager registered under the securities legislation of one
          or more provinces of Canada or an investment adviser registered under
          the United States Investment Advisers Act of 1940 or any other
          securities legislation of the United States or any state of the United
          States.

     (u)  A "FLIP-IN EVENT" shall mean a transaction occurring subsequent to the
          date of this Agreement as a result of which any Person shall become an
          Acquiring Person provided, however, that a Flip-in Event, shall be
          deemed to occur at the close of business on the tenth day (or such
          later day as the Board of Directors of the Corporation may determine)
          after the Stock Acquisition Date.

     (v)  "INDEPENDENT SHAREHOLDERS" shall mean holders of outstanding Common
          Shares of the Corporation excluding (i) any Acquiring Person; or (ii)
          any Person (other than a Person referred to in clause 1.1(d)(B)) that
          is making or has announced a current intention to make a Take-over Bid
          for Common Shares of the Corporation (including a Permitted Bid or a
          Competing Permitted Bid) but excluding any such Person if the
          Take-over Bid so announced or made by such Person has been withdrawn,
          terminated or expired; or (iii) any Affiliate or Associate of such
          Acquiring Person or a Person referred to in clause (ii); or (iv) any
          Person acting jointly or in concert with such Acquiring Person or a
          Person referred to in clause (ii); or (v) a Person who is a trustee of
          any employee benefit plan, share 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 the plan or trust direct the manner in which the
          Common Shares are to be voted or direct whether the Common Shares are
          to be tendered to a Take-over Bid.

     (w)  "MARKET PRICE" per security of any securities on any date of
          determination shall mean the average of the daily Closing Price Per
          Security of such securities (determined as described below) on each of
          the 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 price used to determine the Closing Price
          Per Security on any Trading Day not to be fully comparable with the
          price used to determine the Closing Price Per Security on such date of
          determination or, if the date of determination is not a Trading Day,
          on the

<PAGE>
                                       -8-

          immediately preceding Trading Day, each such 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 make it
          fully comparable with the price per security used to determine the
          Closing Price Per Security 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 Security" 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
               such securities as reported by the securities exchange or
               national securities quotation system on which such securities are
               listed or admitted for trading on which the largest number of
               such securities were traded during the most recently completed
               calendar year;

          (ii) if, for any reason, none of such prices is available on such date
               or the securities are not listed or admitted to trading on a
               securities exchange or on a national securities quotation system,
               the last sale price, or in case no sale takes place on such date,
               the average of the high bid and low asked prices for such
               securities in the over-the-counter market, as quoted by any
               reporting system then in use (as selected by the Board of
               Directors); or

          (iii) if the securities are not listed or admitted to trading as
               contemplated in clause 1.1(w)(i) or (ii), the average of the
               closing bid and asked prices as furnished by a professional
               market maker making a market in the securities provided, however,
               that if on any such date the Closing Price Per Security cannot be
               determined in accordance with the foregoing, the Closing Price
               Per Security of such securities on such date shall mean the fair
               value per share of such securities on such date as determined in
               good faith by an internationally recognized investment dealer or
               investment banker with respect to the fair value per share of
               such securities.

          The Market Price, shall be expressed in Canadian dollars and, if
          initially determined in respect of any day forming part of the 20
          consecutive Trading Day period in question in United States dollars,
          such amount shall be translated into Canadian dollars at the Canadian
          Dollar Equivalent thereof.

     (x)  "1933 SECURITIES ACT" shall mean the SECURITIES ACT of 1933 of the
          United States, as amended, and the rules and regulations thereunder,
          and any comparable or successor laws or regulations thereto.

     (y)  "1934 EXCHANGE ACT" shall mean the SECURITIES EXCHANGE ACT of 1934 of
          the United States, as amended, and the rules and regulations
          thereunder, and any comparable or successor laws or regulations
          thereto.

     (z)  "OFFER TO ACQUIRE" shall include:

          (i)  an offer to purchase, or a solicitation of an offer to sell,
               Common Shares; and

          (ii) an acceptance of an offer to sell Common Shares, 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.

     (aa) "OFFEROR'S SECURITIES" means Common Shares Beneficially Owned on the
          date of an Offer to Acquire by any Person who is making a Take-over
          Bid and "OFFEROR" means a Person who has announced a current intention
          to make or is making a Take-over Bid.

<PAGE>
                                       -9-

     (bb) "PERMITTED BID" means a Take-over Bid made by a Person by means of a
          Take-over Bid circular and which also complies with the following
          additional provisions:

          (i)  the Take-over Bid is made to all holders of record of Common
               Shares, other than the Offeror;

          (ii) the Take-over Bid shall contain, and the provisions for the
               take-up and payment for Common Shares tendered or deposited
               thereunder shall be subject to, an irrevocable and unqualified
               condition that no Common Shares shall be taken up or paid for
               pursuant to the Take-over Bid prior to the close of business on a
               date which is not less than 60 days following the date of the
               Take-over Bid;

          (iii) the Take-over Bid shall contain irrevocable and unqualified
               provisions that, unless the Take-over Bid is withdrawn, Common
               Shares may be deposited pursuant to the Take-over Bid at any time
               prior to the close of business on the date of first take-up or
               payment for Common Shares and that all Common Shares deposited
               pursuant to the Take-over Bid may be withdrawn at any time prior
               to the close of business on such date;

          (iv) the Take-over Bid shall contain an irrevocable and unqualified
               condition that more than 50% of the outstanding Common Shares
               held by Independent Shareholders, determined as at the close on
               business on the date of first take-up or payment for Common
               Shares under the Take-over Bid, must be deposited to the
               Take-over Bid and not withdrawn at the close of business on the
               date of first take-up or payment for Common Shares; and

          (v)  the Take-over Bid shall contain an irrevocable and unqualified
               provision that in the event that more than 50% of the then
               outstanding Common Shares held by Independent Shareholders shall
               have been deposited to the Take-over Bid and not withdrawn as at
               the close on business on the date of first take-up or payment for
               Common Shares under the Take-over Bid, the Offeror will make a
               public announcement of that fact and the Take-over Bid will
               remain open for deposits and tenders of Common Shares for not
               less than 10 Business Days from the date of such public
               announcement;

          provided that if a Take-over Bid constitutes a Competing Permitted
          Bid, the term "Permitted Bid" shall also mean the Competing Permitted
          Bid.

     (cc) "PERMITTED BID ACQUISITIONS" has the meaning set forth in the
          definition of "Acquiring Person" herein.

     (dd) "PERMITTED LOCK-UP AGREEMENT" means an agreement (the "LOCK-UP
          AGREEMENT") between a Person and one or more holders of Common Shares
          (each such holder herein referred to as a "LOCKED-UP Person") (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 of the Lock-up Bid (as defined below), or if the Lock-up Bid has
          been made prior to the date of the Lock-up Agreement not later than
          the first Business Day following the date of the Lock-up Agreement)
          pursuant to which each Locked-up Person agrees to deposit or tender
          the Common Shares held by such holder 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 1.1(d)(iii),
          provided that:

          (i)  the Lock-up Agreement permits the Locked-up Person to withdraw
               its Common Shares from the Lock-up Agreement in order to deposit
               or tender the Common Shares to another Take-over Bid or to
               support another transaction prior to the Common Shares being
               taken up and paid for under the Lock-up Bid at a price or value
               per Common Share that exceeds the price or value per Common Share
               offered under the Lock-up Bid; or

<PAGE>
                                      -10-

          (ii) the Lock-up Agreement permits the Locked-up Person to withdraw
               its Common Shares from the Lock-up Agreement in order to deposit
               or tender the Common Shares to another Take-over Bid or to
               support another transaction prior to the Common Shares being
               taken up and paid for under the Lock-up Bid at an offering price
               for each Common Share that exceeds by as much as or more than a
               specified amount (the "SPECIFIED AMOUNT") the offering price for
               each Common Share contained in or proposed to be contained in the
               Lock-up Bid and that does not by itself provide for a Specified
               Amount that is greater than 7% of the offering price contained in
               or proposed to be contained in the Lock-up Bid;

               and, for greater clarity, the agreement may contain a right of
               first refusal or require a period of delay to give the Person who
               made the Lock-up Bid an opportunity to match a higher price in
               another Take-over Bid or transaction or other similar limitation
               on a Locked-up Person's right to withdraw Common Shares from the
               agreement, so long as the limitation does not preclude the
               exercise by the Locked-up Person of the right to withdraw Common
               Shares during the period of the other Take-over Bid or
               transaction; and

          (iii) no "break-up" fees, "top-up" fees, penalties, expenses or other
               amounts that exceed in aggregate the greater of:

               (A)  2.5% of the price or value of the consideration payable
                    under the Lock-up Bid to a Locked-up Person; and

               (B)  50% of the amount by which the price or value of the
                    consideration received by a Locked-up Person under another
                    Take-over Bid or transaction exceeds the price or value of
                    the consideration that the Locked-up Person would have
                    received under the Lock-up Bid;

               shall be payable by such Locked-up Person if the Locked-up Person
               fails to deposit or tender Common Shares to the Lock-up Bid, or
               withdraws Common Shares previously tendered thereto in order to
               deposit or tender such Common Shares to another Take-over Bid or
               support another transaction.

     (ee) "PERSON" shall mean any individual, firm, partnership, association,
          trust, trustee, personal representative, body corporate, corporation,
          unincorporated organization, syndicate or other entity.

     (ff) "PRO RATA ACQUISITION" has the meaning set forth in the definition of
          "Acquiring Person" herein.

     (gg) "RECORD TIME" shall mean the close of business on November 29, 2004.

     (hh) "REDEMPTION PRICE" has the meaning set forth in subsection 5.1(a)
          herein.

     (ii) "RIGHTS CERTIFICATE" shall mean, after the Separation Time, the
          certificate representing the Rights substantially in the form of
          Exhibit A hereto;

     (jj) "SECURITIES ACT" shall mean the SECURITIES ACT (Ontario), R.S.O. 1990,
          c. S-5, and the rules and regulations thereunder, each as may be
          amended from time to time, and any comparable or successor laws, rules
          or regulations thereto.

     (kk) "SEPARATION TIME" shall mean the close of business on the tenth
          Business 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

<PAGE>
                                      -11-

               Take-over Bid (other than a Take-over Bid which is a Permitted
               Bid so long as such Take-over Bid continues to satisfy the
               requirements of a Permitted Bid), provided that, if any Take-over
               Bid referred to in this clause (ii) expires, is cancelled,
               terminated or otherwise withdrawn prior to the Separation Time,
               such Take-over Bid shall be deemed, for purposes of this
               subsection 1.1(kk), never to have been made; and

          (iii) the date upon which a Permitted Bid ceases to be a Permitted
               Bid;

          or such later date as may be determined by the Board of Directors
          acting in good faith provided that, if the foregoing results in the
          Separation Time being prior to the Record Time, the Separation Time
          shall be the Record Time and if the Board of Directors determines
          pursuant to Section 5.1 to waive the application of Section 3.1 to a
          Flip-in Event, the Separation Time in respect of such Flip-in Event
          shall be deemed never to have occurred.

     (ll) "STOCK ACQUISITION DATE" shall mean 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 or Section 13(d) under the 1934 EXCHANGE ACT) by the
          Corporation or an Acquiring Person that a Person has become an
          Acquiring Person.

     (mm) "SUBSIDIARY" of any specified Person shall mean any corporation or
          other entity controlled by such specified Person.

     (nn) "TAKE-OVER BID" means an Offer to Acquire Common Shares or securities
          convertible into Common Shares, where the Common Shares subject to the
          Offer to Acquire, together with the Common Shares into which the
          securities subject to the Offer to Acquire are convertible, and the
          Offeror's Securities, constitute in the aggregate 20% or more of the
          outstanding Common Shares at the date of the Offer to Acquire.

     (oo) "TERMINATION TIME" shall mean the time at which the right to exercise
          Rights shall terminate pursuant to Section 5.1, 5.18 or 5.19 hereof.

     (pp) "TRADING DAY", when used with respect to any securities, shall mean a
          day on which the securities exchange or national securities quotation
          system on which such securities are listed or admitted for trading on
          which the largest number of such securities were traded during the
          most recently completed calendar year is open for the transaction of
          business or, if the securities are not listed or admitted to trading
          on any securities exchange, a Business Day.

     (qq) "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 with a conversion of one United States dollar into
               Canadian dollars, such rate;

          (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.

     (rr) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in Canadian
          dollars shall mean on any day the United States dollar equivalent of
          such amount determined by reference to the U.S.-Canadian Exchange Rate
          on such date.

1.2  CURRENCY

     All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada.

<PAGE>
                                      -12-

1.3  ACTING JOINTLY OR IN CONCERT

     For purposes of this Agreement, a Person is acting jointly or in concert
with another Person if such Person has any agreement, arrangement or
understanding (whether formal or informal and whether or not in writing) with
such other Person to acquire, or Offer to Acquire, any Common Shares of the
Corporation (other than (A) customary agreements with and between underwriters
and banking group or selling group members with respect to a distribution of
securities by way of prospectus or private placement, or (B) pursuant to a
pledge of securities in the ordinary course of business).

1.4  CONTROL

     A Person is "CONTROLLED" by another Person or two or more other Persons
acting jointly or in concert if:

     (a)  in the case of a body corporate, securities entitled to vote in the
          election of directors of such body corporate carrying more than 50% of
          the votes for the election of directors are held, directly or
          indirectly, by or for the benefit of the other Person or Persons
          acting jointly or in concert and the votes carried by such securities
          are entitled, if exercised, to elect a majority of the board of
          directors of such body corporate; or

     (b)  in the case of a Person which is not a body corporate, more than 50%
          of the voting or equity interests of such entity are held, directly or
          indirectly, by or for the benefit of the other Person or Persons

and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH" shall be
interpreted accordingly.

1.5  HOLDER OF RIGHTS AND TRUST UNITS

     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).

1.6  REFERENCES TO THIS AGREEMENT

     In this Agreement, unless otherwise provided herein and unless the context
otherwise requires, references to "THIS AGREEMENT", "HEREIN", "HEREBY" and
"HEREUNDER" mean this Shareholder Rights Plan Agreement dated as of November 29,
2004 between the Corporation and the Rights Agent as amended and supplemented
from time to time.

                                   ARTICLE 2
                                   THE RIGHTS

2.1  LEGEND ON COMMON SHARE CERTIFICATES

     Certificates for the Common Shares, including without limitation Common
Shares issued upon the conversion of Convertible Securities, issued after the
Record Time but prior to 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 Record Time, shall have
impressed on, printed on, written on or otherwise affixed to them a legend,
substantially in the following form:

          Until the Separation Time (as defined in the Rights Agreement referred
          to below), this certificate also evidences and entitles the holder
          hereof to certain Rights as set forth in a Shareholder Rights Plan
          Agreement dated as of November 29, 2004, as such may from time to time
          be amended, restated, varied or replaced (the "Rights Agreement"),
          between The Descartes Systems Group Inc. (the "Corporation") and
          Computershare Trust Company of Canada as Rights Agent, the terms of
          which are hereby incorporated herein by reference and, a

<PAGE>
                                      -13-

          copy of which is on file at the registered office of the Corporation.
          In certain circumstances, as set forth in the Rights Agreement, such
          Rights may be amended, redeemed, may expire, may become void (if, in
          certain cases, they are "Beneficially Owned" by an "Acquiring Person",
          as such terms are defined in the Rights Agreement, or a transferee
          thereof) or may be evidenced by separate certificates and may no
          longer be evidenced by this certificate. The Corporation will mail or
          arrange for the mailing of a copy of the Rights Agreement to the
          holder of this certificate without charge as soon as practicable,
          after the receipt of a written request therefor.

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, until the earlier of the
Separation Time and the Expiration Time.

2.2  INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS

     (a)  Subject to adjustment as herein set forth, each Right will entitle the
          holder thereof, after the Separation Time, to purchase, for the
          Exercise Price, or its U.S. Dollar Equivalent as at the Business Day
          immediately preceding the day of exercise of the Right, one Common
          Share. Notwithstanding any other provision of this Agreement, any
          Rights held by the Corporation or any of its Subsidiaries shall be
          void.

     (b)  Until the Separation Time,

          (i)  no Right may be exercised; and

          (ii) each Right will be evidenced by the certificate for the
               associated Common Share and will be transferable only together
               with, and will be transferred by a transfer of, such associated
               share.

     (c)  After the Separation Time and prior to the Expiration Time, the Rights
          (i) may be exercised; and (ii) will be transferable independent of
          Common Shares. Promptly following the Separation Time the Rights Agent
          will mail to each holder of record of Common Shares as of the
          Separation Time and, in respect of each Convertible Security converted
          into Common Shares after the Separation Time and prior to the
          Expiration Time promptly after such conversion to the holder so
          converting (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) 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), (x) a Rights
          Certificate with registration particulars 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 or with any rule or regulation made pursuant thereto or with any
          rule or regulation of any stock exchange or securities quotation
          system on which the Rights may from time to time be listed or traded,
          or to conform to usage, and (y) a disclosure statement describing the
          Rights.

     (d)  Rights may be exercised in whole or in part on any Business Day (or on
          any other day which, in the city at which an Election to Exercise (as
          hereinafter defined) is duly submitted to the Rights Agent in
          accordance with this Agreement, is not a Saturday, Sunday or a day
          that is treated as a holiday in such city) after the Separation Time
          and prior to the Expiration Time by submitting to the Rights Agent (at
          its office in the City of Toronto, Canada or at any other office of
          the Rights Agent 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 (an "ELECTION TO
          EXERCISE") substantially in the form attached to the Rights
          Certificate duly completed,

<PAGE>
                                      -14-

          accompanied by payment by certified cheque, banker's draft or money
          order payable to the order of the Rights Agent, 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.

     (e)  Upon receipt of a Rights Certificate, with a duly completed Election
          to Exercise (which does not indicate that the holder so exercising is
          an Acquiring Person) accompanied by payment as set forth in subsection
          2.2(d) above, the Rights Agent will thereupon promptly:

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

          (ii) when appropriate, requisition from the Corporation the amount of
               cash to be paid in lieu of issuing fractional Common Shares and,
               after receipt, deliver such cash to or to the order of the
               registered holder of the Rights Certificate;

          (iii) after receipt of the Common Share 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 holder; and

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

     (f)  In case the holder of any Rights shall exercise less than all 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.

     (g)  The Corporation covenants and agrees that it will:

          (i)  take all such action as may be necessary and within its power to
               ensure that all shares 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;

          (ii) take all such action as may be necessary and within its power to
               comply with any applicable requirements of the BUSINESS
               CORPORATIONS ACT, the SECURITIES ACT, the securities acts or
               comparable legislation of each of the other provinces of Canada,
               the 1933 SECURITIES ACT and the 1934 EXCHANGE ACT, and the rules
               and regulations thereunder or any other applicable law, rule or
               regulation, in connection with the issuance and delivery of the
               Rights Certificates and the issuance of any shares upon exercise
               of Rights;

          (iii) use reasonable efforts to cause all shares issued upon exercise
               of Rights to be listed on the principal exchanges or traded in
               the over-the-counter markets on which the shares were traded
               immediately prior to the Stock Acquisition Date;

          (iv) 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; and

          (v)  pay when due and payable any and all Canadian and United States
               federal, provincial, and state transfer taxes (for greater
               certainty not including any income taxes or capital gains of the
               holder or exercising holder or any liability of the Corporation
               to withhold tax) and charges which may be payable in respect of
               the original issuance or delivery of

<PAGE>
                                      -15-

               the Rights Certificates or certificates for shares, 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 in a name other
               than that of the holder of the Rights being transferred or
               exercised.

2.3  ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS

     The Exercise Price, the number and kind of 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.

     (a)  In the event the Corporation shall at any time after the Record Date
          and prior to the Expiration Time:

          (i)  declare or pay a dividend on the Common Shares payable in Common
               Shares (or other capital stock or securities exchangeable for or
               convertible into or giving a right to acquire Common Shares or
               other capital stock) other than pursuant to any optional stock
               dividend program, dividend reinvestment plan or a dividend
               payable on Common Shares in lieu of a regular periodic cash
               dividend;

          (ii) subdivide or change the then outstanding Common Shares into a
               greater number of Common Shares;

          (iii) combine or change the then outstanding Common Shares into a
               smaller number of Common Shares; or

          (iv) issue any Common Shares (or other capital stock or securities
               exchangeable for or convertible into or giving a right to acquire
               Common Shares or other capital stock) in respect of, in lieu of
               or in exchange for existing Common Shares in a reclassification,
               amalgamation, merger, statutory arrangement or consolidation,

          the Exercise Price and the number of Rights outstanding, or, if the
          payment or effective date therefor shall occur after the Separation
          Time, the securities purchasable upon exercise of Rights shall be
          adjusted in the manner set forth below. If the Exercise Price and
          number of Rights outstanding are to be adjusted (x) the Exercise Price
          in effect after such adjustment shall be equal to the Exercise Price
          in effect immediately prior to such adjustment divided by the number
          of Common Shares (or other capital stock) (the "EXPANSION FACTOR")
          that a holder of one Common Share immediately prior to such dividend,
          subdivision, change, combination or issuance would hold thereafter as
          a result thereof and (y) each Right held prior to such adjustment
          shall become that number of Rights equal to the Expansion Factor, and
          the adjusted number of Rights will be deemed to be allocated among the
          Common Shares with respect to which the original Rights were
          associated (if they remain outstanding) and the shares issued in
          respect of such dividend, subdivision, change, combination or
          issuance, so that each such Common Share (or other capital stock) will
          have exactly one Right associated with it. If the securities
          purchasable upon exercise of Rights are to be adjusted, the securities
          purchasable upon exercise of each Right after such adjustment will be
          the number of securities that a holder of the securities purchasable
          upon exercise of one Right immediately prior to such dividend,
          subdivision, change, combination or issuance would hold thereafter as
          a result thereof. If after the Record Time and prior to the Expiration
          Time the Corporation shall issue any shares of capital stock other
          than Common Shares in a transaction of a type described in clause
          2.3(a)(i) or (iv), shares of such capital stock shall be treated
          herein as nearly equivalent to Common Shares as may be practicable and
          appropriate under the circumstances and the Corporation and the Rights
          Agent agree to amend this Agreement in order to effect such treatment.
          If an event occurs which would require an adjustment 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.

<PAGE>
                                      -16-

          Adjustments pursuant to subsection 2.3(a) shall be made successively,
          whenever an event referred to in subsection 2.3(a) occurs.

          In the event the Corporation shall at any time after the Record Time
          and prior to the Separation Time issue any Common Shares otherwise
          than in a transaction referred to in the preceding paragraph, each
          such Common Share so issued shall automatically have one new Right
          associated with it, which Right shall be evidenced by the certificate
          representing such Common Share.

     (b)  In the event the Corporation shall at any time after the Record Time
          and prior to the Expiration Time fix a record date for the making of a
          distribution to all holders of Common Shares of rights or warrants
          entitling them (for a period expiring within 45 calendar days after
          such record date) to subscribe for or purchase Common Shares (or
          securities convertible into or exchangeable for or carrying a right to
          purchase or subscribe for Common Shares) at a price per Common Share
          (or, if a security convertible into or exchangeable for or carrying a
          right to purchase or subscribe for Common Shares, having a conversion,
          exchange or exercise price (including the price required to be paid to
          purchase such convertible or exchangeable security or right per
          share)) less than 90% of the Market Price per Common Share on such
          record date, the Exercise Price shall be adjusted in the manner set
          forth below. The Exercise Price in effect after such record date shall
          equal the Exercise Price in effect immediately prior to such record
          date multiplied by a fraction, of which the numerator shall be the
          number of Common Shares outstanding on such record date plus the
          number of Common Shares which the aggregate offering price of the
          total number of 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)) would purchase at such Market Price and of
          which the denominator shall be the number of Common Shares outstanding
          on such record date plus the number of additional Common Shares to be
          offered for subscription or purchase (or into which the convertible or
          exchangeable securities or rights so to be offered are initially
          convertible, exchangeable or exercisable). In case such subscription
          price is satisfied in whole or in part by consideration 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 statement filed with the Rights Agent and shall be
          binding on the Rights Agent and the holders of Rights.

          Such adjustment shall be made successively whenever such a record date
          is fixed. For purposes of this paragraph (b), the granting of the
          right to purchase Common Shares 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 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 or warrants by the
          Corporation; provided, however, that in the case of any dividend or
          interest reinvestment plan, the right to purchase Common Shares is at
          a price per share of not less than 90% of the current market price per
          share (determined as provided in such plans) of the Common Shares.

     (c)  In the event the Corporation shall at any time after the Record Time
          and prior to the Expiration Time fix a record date for the making of a
          distribution to all holders of Common Shares of evidences of
          indebtedness or assets (other than a regular periodic cash dividend or
          a dividend paid in Common Shares) or rights or warrants entitling them
          to subscribe for or purchase Common Shares (or Convertible Securities
          in respect of Common Shares) at a price per Common Share (or, in the
          case of a Convertible Security in respect of Common Shares having a
          conversion or exercise price per share (including the price required
          to be paid to purchase such Convertible Security) less than 90% of the
          Market Price per Common Share on such record date (excluding those
          referred to in subsection 2.3(b)), the Exercise Price shall be
          adjusted in the manner set forth below. The Exercise Price in effect
          after such record date shall equal the Exercise Price in effect
          immediately prior to such record date less the fair market value (as
          determined in good faith by the Board of Directors of the Corporation)
          of the portion of the assets, evidences of indebtedness, rights or

<PAGE>
                                      -17-

          warrants so to be distributed applicable to each of the securities
          purchasable upon exercise of one Right (such determination to be
          described in a statement 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.

     (d)  Each adjustment made pursuant to this Section 2.3 shall be made as of:

          (i)  the payment or effective date for the applicable dividend,
               subdivision, change, combination or issuance, in the case of an
               adjustment made pursuant to paragraph (a) above; and

          (ii) the record date for the applicable dividend or distribution, in
               the case of an adjustment made pursuant to paragraph (b) or (c)
               above,

          subject to readjustment to reverse the same if such distribution shall
          not be made.

     (e)  In the event the Corporation shall at any time after the Record Time
          and prior to the Expiration 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 clause (a)(i) or (a)(iv) above, or if the Corporation shall take
          any other action (other than the issue of Common Shares) which might
          have a negative effect on the holders of Rights, if the Board of
          Directors acting in good faith determines that the adjustments
          contemplated by paragraphs (a), (b) and (c) above are not applicable
          or will not appropriately protect the interests of the holders of
          Rights, the Corporation may determine what other adjustments to the
          Exercise Price, number of Rights and/or securities purchasable upon
          exercise of Rights would be appropriate and, if the adjustments
          contemplated by paragraphs (a), (b) and (c) above are applicable,
          notwithstanding such paragraphs, the adjustments so determined by the
          Corporation, rather than adjustments contemplated by paragraphs (a),
          (b) and (c) above, shall be made. The Corporation and the Rights Agent
          shall amend this Agreement in accordance with subsections 5.4(b) and
          5.4(c), as the case may be, to provide for such adjustments.

     (f)  Each adjustment to the Exercise Price made pursuant to this Section
          2.3 shall be calculated to the nearest cent. Whenever an adjustment to
          the Exercise Price is made pursuant to this Section 2.3, the
          Corporation shall:

          (i)  promptly prepare a certificate setting forth such adjustment and
               a brief statement of the facts accounting for such adjustment;
               and

          (ii) promptly file with the Rights Agent and with each transfer agent
               for the Common Shares a copy of such certificate and mail a brief
               summary thereof to each holder of Rights who requests a copy.

          Failure to file such certificate or cause such summary to be mailed 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, 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

<PAGE>
                                      -18-

shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Common Share transfer books of the Corporation are open.

2.5  EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES

     (a)  The Rights Certificates shall be executed on behalf of the Corporation
          by any one of its Chairman of the Board, the President, the Chief
          Executive Officer, the Chief Financial Officer, any Vice President,
          the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
          Secretary of the Corporation. The signature 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. Promptly after the Corporation
          learns of the Separation Time, the Corporation will notify the Rights
          Agent of such Separation Time and will deliver Rights Certificates
          executed by the Corporation to the Rights Agent for countersignature,
          and the Rights Agent shall countersign (manually or by facsimile
          signature in a manner satisfactory to the Corporation) and mail such
          Rights Certificates to the holders of the Rights pursuant to
          subsection 2.2(c) hereof. No Rights Certificate shall be valid for any
          purpose until countersigned by the Rights Agent as aforesaid.

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

2.6  REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE

     (a)  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.

     (b)  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 subsection 2.6(d) below,
          the Corporation shall execute, and the Rights Agent shall countersign
          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.

     (c)  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.

     (d)  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 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 may require the payment of a sum sufficient to cover
          any tax or other governmental charge that may be imposed in relation
          thereto.

2.7  MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES

     (a)  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.

<PAGE>
                                      -19-

     (b)  If there shall be delivered to the Corporation and the Rights Agent
          prior to the Expiration Time (i) evidence of ownership of any Rights
          Certificate, (ii) evidence to their satisfaction of the destruction,
          loss or theft of any Rights Certificate and (iii) such security or
          indemnity as may be required by them in their sole discretion 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 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.

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

     (d)  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 shall be
          entitled to all the benefits of this Agreement equally and
          proportionately with any and all other Rights, duly issued hereunder.

2.8  PERSONS DEEMED OWNERS

     The Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent may 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.

2.9  DELIVERY AND CANCELLATION OF 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 law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.

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 that:

     (a)  he will be bound by and subject to the provisions of this Agreement,
          as amended from time to time in accordance with the terms hereof, in
          respect of all Rights held;

     (b)  prior to the Separation Time, each Right will be transferable only
          together with, and will be transferred by a transfer of, the
          associated Common Share;

     (c)  after the Separation Time, the Rights Certificates will be
          transferable only on the Rights Register as provided herein.

<PAGE>
                                      -20-

     (d)  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 may 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)  such holder of Rights has waived his right to receive any fractional
          Rights or any fractional shares upon exercise of a Right (except as
          provided herein);

     (f)  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 as provided
          herein; and

     (g)  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.


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

3.1  FLIP-IN EVENT

     (a)  Subject to subsections 3.1(b), 5.1(b), 5.1(c) and 5.1(d) hereof, in
          the event that prior to the Expiration Time a Flip-in Event shall
          occur, the Corporation shall take such action as shall be necessary to
          ensure and provide, within 10 Business Days thereafter or such longer
          period as may be required to satisfy the requirements of the
          applicable securities acts or comparable legislation so 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 consummation or
          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 in the event that after such
          date of consummation or occurrence an event of a type analogous to any
          of the events described in Section 2.3 shall have occurred with
          respect to such Common Shares).

     (b)  Notwithstanding the foregoing or any other provisions of this
          Agreement, upon the occurrence of any Flip-in Event, any Rights that
          are or were Beneficially Owned on or after the earlier of the
          Separation Time or the Stock Acquisition Date 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 an Acquiring
               Person); or

          (ii) a transferee, direct or indirect, of 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 an Acquiring Person) in a transfer made
               after the date hereof, whether or not for consideration, that the
               Board of Directors acting in good faith

<PAGE>
                                      -21-

               has determined is part of a plan, arrangement or scheme of an
               Acquiring Person (or any Affiliate or Associate of an Acquiring
               Person) that has the purpose or effect of avoiding clause (i) of
               this subsection 3.1(b),

          shall become void and any holder of such Rights (including
          transferees) shall thereafter have no right, to exercise such Rights
          under any provision of this Agreement and shall not have any other
          rights whatsoever in respect of such Rights, whether under any
          provision of this Agreement or otherwise.

     (c)  Any Rights Certificate that represents Rights Beneficially Owned by a
          Person described in either clauses (i) or (ii) of subsection 3.1(b) or
          transferred to any nominee of any such Person, and any Rights
          Certificate issued upon transfer, exchange, replacement or adjustment
          of any other Rights Certificate referred to in this sentence, shall
          contain the following legend:

               "The Rights represented by this Rights Certificate were
               Beneficially Owned by a Person who was an Acquiring Person or who
               was an Affiliate or an Associate of an Acquiring Person (as such
               terms are defined in the Rights Agreement) or was acting jointly
               or in concert with any of them. This Rights Certificate and the
               Rights represented hereby shall become void in the circumstances
               specified in subsection 3.1(b) of the Rights Agreement.",

          provided 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 be required to impose such legend only if
          instructed to do so by the Corporation or if a holder fails to certify
          upon transfer or exchange in the space provided on the Rights
          Certificate that such holder is not an Acquiring Person, an Affiliate
          or Associate thereof or a Person acting jointly or in concert with any
          of them.

                                    ARTICLE 4
                                THE RIGHTS AGENT

4.1  GENERAL

     (a)  The Corporation hereby appoints the Rights Agent to act as agent for
          the Corporation and the holders of Rights 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 (the "CO-RIGHTS AGENTS") as it may deem necessary or
          desirable. 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 with the approval of the
          Rights Agent and Co-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 execution and administration of this Agreement and the exercise
          and performance of its duties hereunder. The Corporation also agrees
          to indemnify the Rights Agent, its directors, officers, employees and
          agents for, and to hold them harmless against, any loss, liability,
          cost, claim, action, damage or expense, incurred without negligence,
          bad faith or wilful misconduct on the part of the Rights Agent or its
          directors, officers, employees and agents for anything done, suffered
          or omitted by the Rights Agent in connection with the acceptance,
          execution and administration of this Agreement and the exercise and
          performance of its duties hereunder, 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.

     (b)  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 Common Shares, Rights Certificate, 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

<PAGE>
                                      -22-

          be signed, executed and, where necessary, verified or acknowledged, by
          the proper person or persons.

     (c)  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. At any time, upon request, the
          Corporation shall provide to the Rights Agent an incumbency
          certificate with respect to the current directors and officers of the
          Corporation.

4.2  MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT

     (a)  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 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 hereof. In case, at
          the time such successor Rights Agent succeeds to the agency created by
          this Agreement, any of the Rights Certificates 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.

     (b)  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 Rights 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 Rights Certificates shall have the full force
          provided in the Rights Certificates and in this Agreement.

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 consult with legal counsel (who may be legal
          counsel for the Corporation), and the opinion of such counsel will be
          full and complete authorization 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 (such approval not to be unreasonably withheld) and at the
          expense of the Corporation, 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 and the
          Rights Agent shall be entitled to 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, the Chief Executive Officer, the Chief
          Financial Officer, any Vice

<PAGE>
                                      -23-

          President, the Treasurer, any Assistant Treasurer, the Secretary or
          any Assistant Secretary of the Corporation and delivered to the Rights
          Agent; and such certificate will be full authorization 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 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 authorization, 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(b) hereof) or any adjustment required under
          the provisions of Section 2.3 hereof 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 adjustment (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 authorization 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 authorized, 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 authorized 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, the Chief Executive Officer, the Chief Financial
          Officer, any Vice President, the Secretary or any Assistant Secretary
          or the Treasurer or any Assistant Treasurer 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 reliance upon instructions of any such
          person; it is understood that instructions to the Rights Agent shall,
          except where circumstances make it impracticable or the Rights Agent
          otherwise agrees, be given in writing and, where not in writing, such
          instructions shall 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.

     (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, omission, default, neglect or
          misconduct of any such attorneys or agents or for any loss to the
          Corporation resulting from any such act,

<PAGE>
                                      -24-

          omission, 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 60 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, and to the holders of the Rights
in accordance with Section 5.9. The Corporation may remove the Rights Agent upon
30 days' notice in writing given to the Rights Agent and to each transfer agent
of the Common Shares (by personal delivery, or registered or certified mail). 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, then the resigning
Rights Agent, at the expense of the Corporation, or any holder of any Rights 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 authorized to carry on the business of a trust company in the
Province of Ontario. 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 shall, upon the receipt of all outstanding fees and
expenses, 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 TERMINATION

     (a)  The Board of Directors acting in good faith may, with the prior
          consent of holders of Common Shares or of the holders of Rights given
          in accordance with subsection 5.1(f) or 5.1(g), as the case may be, at
          any time prior to the occurrence of a Flip-in Event as to which the
          application of Section 3.1 has not been waived pursuant to the
          provisions of this Section 5.1, elect to redeem all but not less than
          all of the then outstanding Rights at a redemption price of $0.000001
          per Right appropriately adjusted in a manner analogous to the
          applicable adjustment provided for in Section 2.3 in the event that an
          event of the type analogous to any of the events described in Section
          2.3 shall have occurred (such redemption price being herein referred
          to as the "REDEMPTION PRICE").

     (b)  The Board of Directors acting in good faith may, with the prior
          consent of the holders of Common Shares given in accordance with
          subsection 5.1(f), determine, at any time prior to the occurrence of a
          Flip-in Event as to which the application of Section 3.1 has not been
          waived pursuant to this Section 5.1, if such Flip-in Event would occur
          by reason of an acquisition of Common Shares otherwise than pursuant
          to a Take-over Bid made by means of a Take-over Bid circular to all
          holders of record of Common Shares and otherwise than in the
          circumstances set forth in subsection 5.1(d), to waive the application
          of Section 3.1 to such Flip-in Event. In the event that the Board of
          Directors proposes such a waiver, the Board of Directors shall extend
          the Separation Time to a date subsequent to and not more than ten
          Business Days following the meeting of shareholders called to approve
          such waiver.

     (c)  The Board of Directors acting in good faith may, prior to the
          occurrence of a Flip-in Event as to which the application of Section
          3.1 has not been waived under this clause, determine, upon prior
          written notice to the Rights Agent, to waive the application of
          Section 3.1 to that Flip-in Event provided that the Flip-in Event
          would occur by reason of a Take-over Bid made by means of a

<PAGE>
                                      -25-

          Take-over Bid circular sent to all holders of record of Common Shares;
          further provided that if the Board waives the application of Section
          3.1 to such a Flip-in Event, the Board of Directors shall be deemed to
          have waived the application of Section 3.1 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 holders of record of Common Shares which is made
          prior to the expiry of any Take-over Bid in respect of which a waiver
          is, or is deemed to have been, granted under this subsection 5.1(c).

     (d)  The Board of Directors acting in good faith may, in respect of any
          Flip-in Event waive the application of Section 3.1 to that Flip-in
          Event, provided that both of the following conditions are satisfied:

          (i)  the Board of Directors has determined that the Acquiring Person
               became an Acquiring Person by inadvertence and without any intent
               or knowledge that it would become an Acquiring Person; and

          (ii) such Acquiring Person has reduced its Beneficial Ownership of
               Common Shares such that at the time of waiver pursuant to this
               subsection 5.1(d) it is no longer an Acquiring Person.

     (e)  The Board of Directors shall, without further formality, be deemed to
          have elected to redeem the Rights at the Redemption Price on the date
          that a Person who has made a Permitted Bid or a Take-over Bid in
          respect of which the Board of Directors has waived, or is deemed to
          have waived, pursuant to subsection 5.1(c), the application of Section
          3.1, takes up and pays for the Common Shares pursuant to the terms and
          conditions of the Permitted Bid or Take-over Bid, as the case may be.

     (f)  If a redemption of Rights pursuant to subsection 5.1(a) or a waiver of
          a Flip-in Event pursuant to subsection 5.1(b) is proposed at any time
          prior to the Separation Time, such redemption or waiver shall be
          submitted for approval to the holders of Common Shares. Such approval
          shall be deemed to have been given if the redemption or waiver is
          approved by the affirmative vote of a majority of the votes cast by
          Independent Shareholders represented in person or by proxy at a
          meeting of such holders duly held in accordance with applicable laws
          and the Corporation's by-laws.

     (g)  If a redemption of Rights pursuant to subsection 5.1(a) is proposed at
          any time after the Separation Time, such redemption shall be submitted
          for approval to the holders of Rights. Such approval shall be deemed
          to have been given if the redemption is approved by holders of Rights
          by a majority of the votes cast by the holders of Rights represented
          in person or by proxy at and entitled to vote at a meeting of such
          holders. For the purposes hereof, each outstanding Right (other than
          Rights which are Beneficially Owned by any Person referred to in
          clauses (i) to (v) inclusive of the definition of Independent
          Shareholders) 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 BUSINESS CORPORATIONS ACT with respect to meetings of shareholders
          of the Corporation.

     (h)  Where a Take-over Bid that is not a Permitted Bid is withdrawn or
          otherwise terminated after the Separation Time has occurred and prior
          to the occurrence of a Flip-in Event, the Board may elect to redeem
          all the outstanding Rights at the Redemption Price. Notwithstanding
          such redemption, all of the provisions of this Agreement shall
          continue to apply as if the Separation Time had not occurred and it
          shall be deemed not to have occurred and Rights shall remain attached
          to the outstanding Common Shares, subject to and in accordance with
          the provisions of this Agreement.

     (i)  If the Board of Directors elects or is deemed to have elected to
          redeem the Rights, and, in circumstances where subsection 5.1(a) is
          applicable, such redemption is approved by the holders of Common
          Shares or the holders of Rights in accordance with subsection 5.1(f)
          or (g), as the case may be, the right to exercise the Rights will
          thereupon, without further action and without notice,

<PAGE>
                                      -26-

          terminate and the only right thereafter of the holders of Rights will
          be to receive the Redemption Price.

     (j)  Within 10 Business Days of the Board of Directors electing or having
          been deemed to have elected to redeem the Rights or, if subsection
          5.1(a) is applicable within 10 Business Days after the holders of
          Common Shares or the holders of Rights have approved a redemption of
          Rights in accordance with subsection 5.1(f) or 5.1(g), as the case may
          be, the Corporation shall give notice of redemption to the holders of
          the then outstanding Rights by mailing such notice to each such holder
          at its last address as it appears upon the register of the Rights
          Agent or, prior to the Separation Time, on the register of the
          transfer agent for the Common Shares. Any notice which is mailed in
          the manner herein provided will 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 or in connection with the purchase of Common
          Shares prior to the Separation Time.

     (k)  The Corporation shall give prompt written notice to the Rights Agent
          of any waiver of the application of Section 3.1 made by the Board of
          Directors under this Section 5.1.

5.2  EXPIRATION

     No Person shall have any rights pursuant to this Agreement or in respect of
any Right after the Expiration Time, except the Rights Agent as specified in
subsection 4.1(a) of this Agreement.

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 the Board of Directors to
reflect any adjustment or change in the number of 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

     (a)  The Corporation may make amendments to this Agreement to correct any
          clerical or typographical error or which are required to maintain the
          validity of this Agreement as a result of any change in any applicable
          legislation, rules or regulations thereunder. The Corporation may,
          prior to the date of the shareholders' meeting referred to in Section
          5.18, supplement, amend, vary, rescind or delete any of the provisions
          of this Agreement without the approval of any holders of Rights or
          Common Shares (whether or not such action would materially adversely
          affect the interests of the holders of Rights generally) where the
          Board of Directors acting in good faith deems such action necessary or
          desirable. Notwithstanding anything in this Section 5.4 to the
          contrary, no such supplement or amendment shall be made to the
          provisions of Article 4 except with the written concurrence of the
          Rights Agents to such supplement or amendment.

     (b)  Subject to subsection 5.4(a), the Corporation may, with the prior
          consent of the holders of Common Shares, obtained as set forth below,
          at any time prior to the Separation Time, supplement, amend, vary,
          rescind or delete 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 the action requiring such approval is
          authorized by the affirmative vote of a majority of the votes cast by
          Independent Shareholders present or represented at and entitled to be
          voted at a meeting of the holders of Common Shares duly called and
          held in compliance with applicable laws and the articles and by-laws
          of the Corporation.

<PAGE>
                                      -27-

     (c)  The Corporation may, with the prior consent of the holders of Rights,
          at any time on or after the Separation Time, supplement, amend, vary,
          rescind or delete 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), provided that no
          such amendment, variation or deletion shall be made to the provisions
          of Article 4 except with the written concurrence of the Rights Agent
          thereto. Such consent shall be deemed to have been given if such
          amendment, variation or deletion 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 held in accordance with
          subsection 5.4(d) and representing 50% plus one of the votes cast in
          respect thereof.

     (d)  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 50% plus one 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 BUSINESS CORPORATIONS ACT with respect
          to meetings of shareholders of the Corporation.

     (e)  Any amendments made by the Corporation to this Agreement pursuant to
          subsection 5.4(a) which are required to maintain the validity of this
          Agreement as a result of any change in any applicable legislation,
          rules or regulation thereunder shall:

          (i)  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 subsection 5.4(b), confirm or reject such amendment;

          (ii) if made after the Separation Time, be submitted to the holders of
               Rights at a meeting to be called for a date not later than
               immediately following the next meeting of shareholders of the
               Corporation and the holders of Rights may, by resolution passed
               by the majority referred to in subsection 5.4(d), confirm or
               reject such amendment.

          Any such amendment shall be effective from the date of the resolution
          of the Board of Directors adopting such amendment, until it is
          confirmed or rejected or until it ceases to be effective (as described
          in the next sentence) and, where such amendment is confirmed, it
          continues in effect in the form so confirmed. If such 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 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 resolution of the Board of Directors to amend
          this Agreement to substantially the same effect shall be effective
          until confirmed by the shareholders or holders of Rights as the case
          may be.

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

     (g)  Any supplement or amendment to this Agreement pursuant to subsection
          5.4(b) through 5.4(e) shall be subject to the receipt of any requisite
          approval or consent from any governmental or regulatory authority
          having jurisdiction over the Corporation, including without limitation
          any requisite approval of stock exchanges on which the Common Shares
          are listed.

<PAGE>
                                      -28-

5.5  FRACTIONAL RIGHTS AND FRACTIONAL SHARES

     (a)  The Corporation shall not be required to issue fractions of Rights or
          to distribute Rights Certificates which evidence fractional Rights.
          After the Separation Time there shall be paid to the registered
          holders of the Rights Certificates with regard to which fractional
          Rights would otherwise be issuable, an amount in cash equal to the
          same fraction of the Market Price of a whole Right in lieu of such
          fractional Rights as of the date such fractional Rights would
          otherwise be issuable. The Rights Agent shall have no obligation to
          make any payments in lieu of fractional Rights unless the Corporation
          shall have provided the Rights Agent with the necessary funds to pay
          in full all amounts payable in accordance with subsection 2.2(e).

     (b)  The Corporation shall not be required to issue fractional Common
          Shares upon exercise of the Rights or to distribute certificates which
          evidence fractional Common Shares. In lieu of issuing fractional
          Common Shares, the Corporation shall pay to the registered holder 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 at the date of such exercise. 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 subsection 2.2(e).

5.6  RIGHTS OF ACTION

     Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the 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, or otherwise act
in respect of, such holder's right to exercise such holder's Rights, or Rights
to which he is entitled, in the manner provided in this Agreement and in such
holder's Rights Certificate. 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.

5.7  HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER

     No holder, as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Shares or any other
securities which may at any time be issuable on the exercise of Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, 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 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 (except as provided in Section
5.8 hereof), or to receive dividends or subscription rights or otherwise, until
such Rights, or Rights to which such holder is entitled, shall have been
exercised in accordance with the provisions hereof.

5.8  NOTICE OF PROPOSED ACTIONS

     In case the Corporation shall propose after the Separation Time and prior
to the Expiration Time:

     (a)  to effect or permit (in cases where the Corporation's permission is
          required) any Flip-in Event; or

     (b)  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 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such Flip-in Event, liquidation, dissolution, or

<PAGE>
                                      -29-

winding up is to take place, and such notice shall be so given at least 10
Business Days prior to the date of taking of such proposed action by the
Corporation.

5.9  NOTICES

     Notices or demands to be given or made in connection with this Agreement 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 mail, postage prepaid or
by fax (with, in the case of fax, an original copy of the notice or demand sent
by first class mail, postage prepaid, to the Corporation following the giving of
the notice or demand by fax), addressed (until another address is filed in
writing with the Rights Agent) as follows:

          The Descartes Systems Group Inc.
          120 Randall Drive
          Waterloo, Ontario
          N2V 1C6
          Attention:   Chief Executive Officer
          Fax:         519-746-8110

Notices or demands to be given or made in connection with this Agreement 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 mail, postage prepaid, or by
fax (with, in the case of fax, an original copy of the notice or demand sent by
first class mail, postage prepaid, to the Rights Agent following the giving of
the notice or demand by fax), addressed (until another address is filed in
writing with the Corporation) as follows:

          Computershare Trust Company of Canada
          100 University Avenue, 9th Floor
          Toronto, Ontario
          M5J 2Y1
          Attention:   General Manager, Client Services
          Fax:         416-981-9800

Notices or demands to be given or made in connection with this Agreement 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, or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to such holder following the
giving of the notice or demand by fax), addressed to such holder at the address
of such holder as it appears upon the register of the Rights Agent or, prior to
the Separation Time, on the register of the Corporation for the Common Shares.

Any notice given or made in accordance with this Section 5.9 shall be deemed to
have been given and to have been received on the day of delivery, if so
delivered, on the third Business Day (excluding each day during which there
exists any general interruption of postal service due to strike, lockout or
other cause) following the mailing thereof, if so mailed, and on the day of
faxing (provided such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business Day thereafter).
Each of the Corporation and the Rights Agent may from time to time change its
address for notice by notice to the other given in the manner aforesaid.

If mail service is or is threatened to be interrupted at a time when the
Corporation or the Rights Agent wishes to give a notice or demand hereunder to
or on the holders of the Rights, the Corporation or the Rights Agent may,
notwithstanding the foregoing provisions of this Section 5.9, give such notice
by means, of publication once in each of two successive weeks in the business
section of The Globe and Mail and, so long as the Corporation has a transfer
agent in the United States, in a daily publication in the United States
designated by the Corporation, or in such other publication or publications as
may be designated by the Corporation and notice so published shall be deemed to
have been given on the date on which the first publication of such notice in any
such publication has taken place.

<PAGE>
                                      -30-

5.10 COSTS OF ENFORCEMENT

     The Corporation agrees that if the Corporation fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation will reimburse the
holder of any Rights for the costs and expenses (including legal fees) incurred
by such holder in actions to enforce his rights pursuant to any Rights or this
Agreement.

5.11 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.

5.12 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.

5.13 DESCRIPTIVE HEADINGS

     Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

5.14 GOVERNING LAW

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

5.15 LANGUAGE

     Les parties aux presentes ont exige que la presente convention ainsi que
tous les documents et avis qui s'y rattachent et/ou qui en decouleront soient
rediges en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and/or resulting therefrom be
drawn up in the English language.

5.16 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 but one and the same instrument.

5.17 SEVERABILITY

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

5.18 EFFECTIVE DATE

     This Agreement (subject to receipt of the approval of the Independent
Shareholders as set forth below) is effective from the Effective Date. If this
Agreement is not approved by resolution passed by a majority of the votes cast
by Independent Shareholders who vote at a meeting of shareholders to be held not
later than the date on which

<PAGE>
                                      -31-

the 2005 annual meeting of shareholders of the Corporation terminates, then this
Agreement shall terminate and be void and of no further force and effect.

5.19 SHAREHOLDER REVIEW

     At or prior to the annual meeting of the shareholders of the Corporation in
2008, provided that a Flip-in Event has not occurred prior to such time, the
Board of Directors shall submit a resolution ratifying the continued existence
of this Agreement to the Independent Shareholders for their consideration and,
if thought advisable, approval. Unless the majority of the votes cast by
Independent Shareholders who vote in respect of such resolution are voted in
favour of the continued existence of this Agreement, the Board of Directors
shall, immediately upon the confirmation by the Chairman of such shareholders'
meeting of the results of the votes on such resolution and without further
formality, be deemed to elect to redeem the Rights at the Redemption Price.

5.20 REGULATORY APPROVALS

     Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the receipt of any requisite approval or consent
from any governmental or regulatory authority. Without limiting the generality
of the foregoing, any issuance or delivery of debt or equity securities (other
than non-convertible debt securities) of the Corporation upon the exercise of
Rights and any amendment or supplement to this Agreement shall be subject to the
prior consent of the Toronto Stock Exchange.

5.21 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, its territories and
possessions, the Board of Directors acting in good faith may take such actions
as it may deem appropriate to ensure that such compliance is not required,
including without limitation establishing procedures for the issuance to a
Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. 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 and a province or territory thereof and the United States of America
and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.

5.22 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS

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










<PAGE>
                                      -32-

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.


                                         THE DESCARTES SYSTEMS GROUP INC.


                                         PER: "J. Scott Pagan"
                                              Name: J. Scott Pagan"
                                              Title: General Counsel and
                                              Corporate Secretary


                                         PER: "Brandon Nussey"
                                              Name: Brandon Nussey
                                              Title: Chief Financial Officer


                                         COMPUTERSHARE TRUST COMPANY OF CANADA


                                         PER: "Graham Sheward"
                                              Name: Graham Sheward
                                              Title: Account Manager


                                         PER: "Sophie Arcaro"
                                              Name: Sophie Arcaro
                                              Title: Account Manager








<PAGE>

                                    EXHIBIT A
                           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. IN CERTAIN CIRCUMSTANCES (SPECIFIED IN
SUBSECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR TRANSFEREE OF AN ACQUIRING PERSON OR ITS AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM MAY BECOME VOID .

                               RIGHTS CERTIFICATE

     This certifies that _________________________________________________ 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 Shareholder Rights Plan Agreement dated as of November 29,
2004, as such may from time to time be amended, restated, varied or replaced,
(the "RIGHTS AGREEMENT") between The Descartes Systems Group Inc., a corporation
organized under the laws of Ontario (the "CORPORATION"), and Computershare Trust
Company of Canada, a trust company incorporated 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 earlier of (i) the Termination Time (as such term is defined in the
Rights Agreement) and (ii) the termination of the first annual meeting of the
shareholders of the Corporation after the third anniversary of the Rights
Agreement (unless extended in accordance with 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 to the Rights Agent
at its principal office in the City of Toronto or in such other cities as may be
designated by the Corporation from time to time. Until adjustment thereof in
certain events as provided in the Rights Agreement, the Exercise Price shall be:
(i) until the Separation Time, an amount equal to three times the Market Price
(as such term is defined in the Rights Agreement), from time to time, per Common
Share; and (ii) from and after the Separation Time, an amount equal to three
times the Market Price, as at the Separation Time, per Common Share.

     In certain circumstances described in the Rights Agreement, the number of
Common Shares which each Right entitles the registered holder thereof to
purchase shall be adjusted 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 Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.

     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 equal to the aggregate
number of 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 Certificate may be redeemed by the Corporation at a redemption price of
$0.000001 per Right, subject to adjustment in certain events, under certain
circumstances at its option.

<PAGE>
                                       -2-

     No fractional Common Shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.

     No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities 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, as such, 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 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 (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate 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 countersigned by the Rights Agent.

     WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal.


Date: ________________________


THE DESCARTES SYSTEMS GROUP INC.


By: __________________________
    Authorized Officer


Countersigned:

COMPUTERSHARE TRUST COMPANY OF CANADA


By: __________________________
    Authorized Signature








<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
Rights represented by this Rights Certificate.)


     FOR VALUE RECEIVED ________________________________________________________


hereby sells, assigns and transfers to _________________________________________
                                                (Please print name and
                                                 address of transferee)

the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and hereby irrevocably constitutes and appoints
____________________________________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 Canadian Schedule 1 chartered bank, a major
Canadian trust company, a member of a recognized stock exchange or a member of a
recognized Medallion Program (STAMP, MSP or SEMP).


________________________________________________________________________________
                            (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 by any Person acting
jointly or in concert with any of the foregoing (all capitalized terms are used
as defined in the Rights Agreement).

Dated: ______________________________     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.)


                                     NOTICE

     In the event the certification set forth above in the Form of Election to
Exercise is not completed upon exercise of the Right(s) evidenced hereby or in
the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof or a Person acting jointly or in concert with any of them (each as
defined in the Rights Agreement) and, in the case of an assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.

<PAGE>

                   (To be attached to each Rights Certificate)


                          FORM OF ELECTION TO EXERCISE


TO: THE DESCARTES SYSTEMS GROUP INC.


The undersigned hereby irrevocably elects to exercise ______________________
whole Rights represented by the attached Rights Certificate to purchase the
Common Shares (or other securities or property) issuable upon the exercise of
such Rights and requests that certificates for such shares (or other, securities
or title to such property) be issued in the name of:


                                          ______________________________________
                                          (Name)


                                          ______________________________________
                                          (Street)


                                          ______________________________________
                                          (City and State or Province)


                                          ______________________________________
                                          (Country, Postal Code or Zip Code)


                                          ______________________________________
                                          SOCIAL INSURANCE, SOCIAL SECURITY OR
                                          OTHER TAXPAYER IDENTIFICATION NUMBER



<PAGE>
                                       -2-

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)

                                          ______________________________________
                                          (Street)

                                          ______________________________________
                                          (City and State or Province)

                                          ______________________________________
                                          (Country, Postal Code or Zip Code)

                                          ______________________________________
                                          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.)

Signature must be guaranteed by a Canadian Schedule 1 chartered bank, a major
Canadian trust company, a member of a recognized stock exchange or a member of a
recognized Medallion Program (STAMP, MSP or SEMP).


________________________________________________________________________________
                            (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 by any Person acting
jointly or in concert with any of the foregoing (all capitalized terms are used
as defined in the Rights Agreement).

Dated: _______________________            Signature: ___________________________


                                     NOTICE

In the event the certification set forth above in the Form of Election to
Exercise is not completed upon exercise of the Right(s) evidenced hereby or in
the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person, an Affiliate or Associate thereof
or a Person acting jointly or in concert with any of them (each as defined in
the Rights Agreement) and, in the case of an assignment, will affix a legend to
that effect on any Rights Certificates issued in exchange for this Rights
Certificate.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.V
<SEQUENCE>5
<FILENAME>exh99-v_13139.txt
<DESCRIPTION>PRESS RELEASE DATED DECEMBER 7, 2004
<TEXT>
                                                                    EXHIBIT 99.V
                                                                    ------------

        FERRELLGAS SUCCESSFULLY DEPLOYS DESCARTES' REAL-TIME ROUTING AND
                              SCHEDULING SOLUTION


MARKET-LEADER USES DESCARTES' WIRELESS-ENABLED SOLUTION TO STREAMLINE OPERATIONS
     AND TO ADDRESS REAL-TIME DISTRIBUTION AND CUSTOMER SERVICE CHALLENGES


WATERLOO, ONTARIO, DECEMBER 7, 2004 -- The Descartes Systems Group Inc.,
(Nasdaq:DSGX), (TSX:DSG), a leading provider of technology solutions for
distribution and logistics sensitive organizations, announced today that
Ferrellgas Partners, L.P. (NYSE:FGP), a leading U.S. propane distributor, is
successfully deploying Descartes' Routing and Scheduling solution enhanced with
wireless capabilities.

Ensuring cost-effective, on-time deliveries to customers is a key competitive
differentiator for Ferrellgas in serving U.S. commercial and home delivery
propane markets. The company runs a national distribution network involving over
4,000 vehicles and more than one million customers.

Ferrellgas is using Descartes' Routing and Scheduling solution, enhanced with
real-time dispatch and wireless capabilities, to streamline the planning and
execution of deliveries of bulk propane refills and cylinders. Descartes'
solution receives and processes data from wireless devices to help Ferrellgas
address distribution and customer service challenges such as last-minute orders
that need to be immediately incorporated into drivers' schedules. The solution
enables Ferrellgas to improve vehicle utilization, gain up-to-the-minute
visibility of its distribution operations and quickly respond to customer
demands. In addition, by measuring and managing en-route performance with
real-time wireless communication and data collection, Ferrellgas anticipates
improvements in its overall delivery productivity and profitability.

"Descartes has been a great partner and is a critical part of Ferrellgas'
distribution and delivery systems," said Patrick Walsh, Chief Information
Officer at Ferrellgas. "Their technology has allowed us to be much more
effective in our scheduling of deliveries and in the proactive management of our
drivers."

"More and more distribution-sensitive companies, like Ferrellgas, are looking to
strengthen their operations with responsive, yet cost effective, customer
delivery management. We can help these companies with our advanced offering that
leverages both routing and scheduling technology and real-time wireless
communication," said Arthur Mesher, CEO at Descartes. "We are extremely pleased
to be working with our valued customer, Ferrellgas, to help them to continuously
improve their delivery operations, and as a result, their market leadership."

ABOUT FERRELLGAS
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P.,
is engaged primarily in the retail and wholesale marketing of propane.
Established in 1939, it is the leading retail propane marketer in the United
States and is publicly traded on the New York Stock Exchange under the symbol
FGP. Visit www.ferrellgas.com.

ABOUT DESCARTES
The Descartes Systems Group Inc. (Nasdaq:DSGX) (TSX:DSG) is a leading provider
of technology solutions for distribution and logistics sensitive organizations.
By enabling companies to efficiently
<PAGE>

and effectively manage the delivery of goods, Descartes' products and services
help reduce costs, save time and enhance customer satisfaction. Descartes
delivers trading partner connectivity and document exchange, route planning,
wireless dispatch, inventory and asset visibility, transportation management and
warehouse optimization solutions for industries such as retail, consumer goods,
manufacturing, transportation, distribution and third-party logistics. These
solutions help customers optimize and gain real-time control of their inventory,
logistics assets and mobile workforce. Descartes' products and services are used
by more than 2,500 customers in over 60 countries. For more information, visit
www.descartes.com.

    All registered and unregistered trademarks mentioned in this release are
                    the property of their respective owners.

                                       ###

This release contains forward-looking statements that relate to Descartes'
product and service functionality and performance, potential benefits derived
therefrom, Descartes' competitive position and other matters that may constitute
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Descartes to differ materially from the
anticipated results, performance or achievements implied by such forward-looking
statements. Such factors include, but are not limited to, the factors discussed
in the section entitled, "Risk Factors" in documents filed with the Securities
and Exchange Commission, the Ontario Securities Commission and other securities
commissions across Canada.


CONTACT INFORMATION

Elisse Bierstock
Bierstock Communications
(416) 618-6164
elissebierstock@rogers.com

</TEXT>
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</SEC-DOCUMENT>
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