EXHIBIT 4.1


 


SHAREHOLDER RIGHTS PLAN AGREEMENT


DATED AS OF APRIL 24, 2003


BETWEEN


TRANSCANADA CORPORATION


AND


COMPUTERSHARE TRUST COMPANY OF CANADA


AS RIGHTS AGENT


 


 


SHAREHOLDER  RIGHTS  PLAN 
AGREEMENT


TABLE OF CONTENTS


	
  ARTICLE 1 – INTERPRETATION

  	
   

  
	
  1.1

  	
  Certain Definitions

  	
   

  
	
  1.2

  	
  Currency

  	
   

  
	
  1.3

  	
  Headings

  	
   

  
	
  1.4

  	
  Calculation
  of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares

  	
   

  
	
  1.5

  	
  Acting Jointly or in
  Concert

  	
   

  
	
  1.6

  	
  Generally
  Accepted Accounting Principles

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 – THE RIGHTS

  	
   

  
	
  2.1

  	
  Issue
  of Rights:  Legend on Common Share
  Certificates

  	
   

  
	
  2.2

  	
  Initial
  Exercise Price; Exercise of Rights; Detachment of Rights

  	
   

  
	
  2.3

  	
  Adjustments
  to Exercise Price; Number of Rights

  	
   

  



 


 


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  2.4

  	
  Date on Which
  Exercise Is Effective

  	
   

  
	
  2.5

  	
  Execution,
  Authentication, Delivery and Dating of Rights Certificates

  	
   

  
	
  2.6

  	
  Registration,
  Transfer and Exchange

  	
   

  
	
  2.7

  	
  Mutilated,
  Destroyed, Lost and Stolen Rights Certificates

  	
   

  
	
  2.8

  	
  Persons Deemed Owners
  of Rights

  	
   

  
	
  2.9

  	
  Delivery and
  Cancellation of Certificates

  	
   

  
	
  2.10

  	
  Agreement of Rights Holders

  	
   

  
	
  2.11

  	
  Rights
  Certificate Holder Not Deemed a Shareholder

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 –
  ADJUSTMENTS TO THE RIGHTS

  	
   

  
	
  3.1

  	
  Flip–in Event

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 – THE RIGHTS
  AGENT

  	
   

  
	
  4.1

  	
  General

  	
   

  
	
  4.2

  	
  Merger,
  Amalgamation or Consolidation or Change of Name of Rights Agent

  	
   

  
	
  4.3

  	
  Duties of Rights Agent

  	
   

  
	
  4.4

  	
  Change of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 – MISCELLANEOUS

  	
   

  
	
  5.1

  	
  Redemption and Waiver

  	
   

  
	
  5.2

  	
  Expiration

  	
   

  
	
  5.3

  	
  Issuance of New
  Rights Certificates

  	
   

  
	
  5.4

  	
  Supplements and Amendments

  	
   

  
	
  5.5

  	
  Fractional
  Rights and Fractional Shares

  	
   

  
	
  5.6

  	
  Rights of Action

  	
   

  
	
  5.7

  	
  Regulatory Approvals

  	
   

  
	
  5.8

  	
  Declaration
  as to Non–Canadian or Non–U.S. Holders

  	
   

  
	
  5.9

  	
  Notices

  	
   

  
	
  5.10

  	
  Costs of Enforcement

  	
   

  
	
  5.11

  	
  Successors

  	
   

  
	
  5.12

  	
  Benefits of this Agreement

  	
   

  
	
  5.13

  	
  Governing Law

  	
   

  
	
  5.14

  	
  Severability

  	
   

  
	
  5.15

  	
  Effective Date of Agreement

  	
   

  
	
  5.16

  	
  Reconfirmation
  and Approval: Reconfirmation

  	
   

  
	
  5.17

  	
  Determinations
  and Actions by the Board of Directors

  	
   

  
	
  5.18

  	
  Time of the Essence

  	
   

  
	
  5.19

  	
  Execution in Counterparts

  	
   

  



 


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SHAREHOLDER RIGHTS PLAN AGREEMENT


 


MEMORANDUM OF AGREEMENT
dated as of April 24, 2003 between TransCanada Corporation (the
“Corporation”), a corporation incorporated under the Canada Business Corporations Act
and Computershare Trust Company of Canada, a trust company incorporated under
the laws of Canada (the “Rights Agent”);


WHEREAS in connection with
the completion of the Plan of Arrangement pursuant to the Arrangement Agreement
the board of directors of the Corporation has determined that it is in the best
interests of the Corporation to adopt a shareholder rights plan to insure, to
the extent possible, that all shareholders of the Corporation are treated
fairly in connection with any take-over bid for the Corporation;


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
holders of Rights, 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;


AND WHEREAS the Board of
Directors of the Corporation proposes that this Agreement be in place until the
Expiration Time, subject to the Agreement being reconfirmed by shareholders of
the Corporation at the 2004 annual meeting of the Corporation;


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


ARTICLE
1 – INTERPRETATION


 


1.1                                                                                 Certain 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 Voting Shares; 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
Voting Shares as a result of one or any combination of (A) a Voting Share
Reduction, (B) Permitted Bid Acquisitions, (C) an Exempt Acquisition
or (D) Pro Rata Acquisitions; provided, however, that if a Person becomes
the Beneficial Owner of 20% or more of the outstanding Voting Shares by reason
of one or any combination of the operation of Paragraphs (A), (B), (C) or
(D) above and such Person’s Beneficial Ownership of Voting Shares thereafter
increases by more than 1.0% of the number of Voting Shares outstanding (other
than pursuant


 


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                                                to
one or any combination of a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition or a Pro Rata Acquisition), then as of the
date such Person becomes the Beneficial Owner of such additional Voting Shares,
such Person shall become an “Acquiring Person”;


(iii)                               for
a period of ten days after the Disqualification Date (as defined below), any
Person who becomes the Beneficial Owner of 20% or more of the outstanding
Voting Shares as a result of such Person becoming disqualified from relying on
Clause 1.1(g)(v) solely because such Person or the Beneficial Owner of
such Voting Shares is making or has announced an intention to make a Take-over
Bid, either alone 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 has announced an intention
to make a Take-over Bid;


(iv)                              an
underwriter or member of a banking or selling group that becomes the Beneficial
Owner of 20% or more of the Voting Shares in connection with a distribution of
securities of the Corporation; or


(v)                                 a
Person (a “Grandfathered Person”) who is the Beneficial Owner of 20% or more of
the outstanding Voting Shares of the Corporation determined 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, become the Beneficial Owner of additional
Voting Shares of the Corporation that increases its Beneficial Ownership of
Voting Shares by more than 1% of the number of Voting Shares outstanding as at
the Record Time (other than pursuant to one or any combination of a Voting
Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition or a Pro
Rata Acquisition);


(b)                                 “Affiliate”
when used to indicate a relationship with a Person means a Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such specified Person;


(c)                                  “Agreement”
shall mean this shareholder rights plan agreement dated as of April 24,
2003 between the Corporation and the Rights Agent, as the same may be further
amended or supplemented from time to time; “hereof”, “herein”, “hereto” and
similar expressions mean and refer to this Agreement as a whole and not to any
particular part of this Agreement;


(d)                                 “annual cash
dividend” shall mean cash dividends paid in any fiscal year of the
Corporation to the extent that such cash dividends do not exceed, in the
aggregate, the greatest of:


(i)                                     200
per cent of the aggregate amount of cash dividends declared payable by the
Corporation on its Common Shares in its immediately preceding fiscal year;


(ii)                                  300
per cent of the arithmetic mean of the aggregate amounts of the annual cash
dividends declared payable by the Corporation on its Common Shares in its three
immediately preceding fiscal years; and


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(iii)                               100
per cent of the aggregate consolidated net income of the Corporation, before
extraordinary items, for its immediately preceding fiscal year;


(e)                                  “Arrangement
Agreement” means the Arrangement Agreement made as of March 4, 2003
between TransCanada Pipelines Limited and TransCanada Corporation providing for
the implementation of the Plan of Arrangement;


(f)                                    “Associate”
means, when used to indicate a relationship with a specified Person, a spouse
of that Person, any Person of the same or opposite sex with whom that Person is
living in a conjugal relationship outside marriage, a child of that Person or a
relative of that Person if that relative has the same residence as that Person;


(g)                                 A
Person shall be deemed the “Beneficial Owner” of, 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 become the owner at law or in equity (whether such right is
exercisable immediately or within a period of 60 days thereafter and whether or
not on condition or the happening of any contingency or the making of any
payment) pursuant to any agreement, arrangement, pledge or understanding,
whether or not in writing (other than (x) customary agreements with and
between underwriters and/or banking group members and/or selling group members
with respect to a public offering or private placement of securities and
(y) pledges of securities in the ordinary course of business), or upon the
exercise of any conversion right, exchange right, share purchase right (other
than the Rights), warrant or option; or


(iii)                               any
securities which are Beneficially Owned within the meaning of
Clauses 1.1(g)(i) and (ii) by any other Person with whom such Person is
acting jointly or in concert;


provided, however, that a
Person shall not be deemed the  “Beneficial
Owner” of, or to have “Beneficial Ownership”  of, or to “Beneficially Own”, any
security:


(iv)                              where
such security has been agreed to be deposited or tendered pursuant to a Lock-up
Agreement, or is otherwise deposited or tendered, to any Take-Over Bid
made by such Person, made by any of such Person’s Affiliates or Associates or
made by any other Person acting jointly or in concert with such Person until
such deposited or tendered security has been taken up or paid for, whichever
shall first occur;


(v)                                 where
such Person, any of such Person’s Affiliates or Associates or any other Person
acting jointly or in concert with such Person holds such security provided
that:


(A)                              the
ordinary business of any such Person (the “Investment Manager”) includes the
management of investment funds for others (which others, for greater certainty,
may include or be limited to one or more employee


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benefit plans or pension plans) 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 (a “Client”);


(B)                                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 (each an “Estate Account”) or in relation to other accounts (each an
“Other Account”) and holds such security in the ordinary course of such duties
for the estate of any such deceased or incompetent Person or for such other
accounts;


(C)                                such
Person is established by statute for purposes that include, and the ordinary
business or activity of such Person (the “Statutory Body”) includes, the
management of investment funds for employee benefit plans, pension plans,
insurance plans or various public bodies;


(D)                               such
Person (the “Administrator”) is the administrator or trustee of one or more
pension funds or plans (a “Plan”), or is a Plan, registered under the laws of
Canada or any Province thereof or the laws of the United States of America or
any State thereof;


provided, in any of the
above cases, that the Investment Manager, the Trust Company, the Statutory
Body, the Administrator or the Plan, as the case may be, is not then making a
Take-over Bid or has not then announced an intention to make a Take-over
Bid alone or acting jointly or in concert with any other Person, other than an
Offer to Acquire Voting Shares or other securities (x) pursuant to a
distribution by the Corporation (y) by means of a Permitted Bid or (z) by
means of ordinary market transactions (including prearranged trades entered
into in the ordinary course of business of such Person) executed through the
facilities of a stock exchange or organized over-the-counter
market;


(vi)                              where
such Person is (A) a Client of the same Investment Manager as another Person on
whose account the Investment Manager holds such security, (B) an Estate
Account or an Other Account of the same Trust Company as another Person on whose
account the Trust Company holds such security or (C) a Plan with the same
Administrator as another Plan on whose account the Administrator holds such
security;


(vii)                           where
such Person is (A) a Client of an Investment Manager and such security is
owned at law or in equity by the Investment Manager, (B) an Estate Account
or an Other Account of a Trust Company and such security is owned at law or in
equity by the Trust Company or (C) a Plan and such security is owned at
law or in equity by the Administrator of the Plan; or


(viii)                        where
such Person is a registered holder of such security as a result of carrying on
the business of, or acting as a nominee of, a securities depositary;


(h)                                 “Board of
Directors” shall mean the board of directors of the Corporation or
any duly constituted and empowered committee thereof;


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(i)                                     “Business Day”
shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in Calgary are authorized or obligated by law to close;


(j)                                     “Canada Business Corporations Act”
means the Canada
Business Corporations Act, R.S.C. 1985, c. C-44, as amended,
and the regulations made thereunder, and any comparable or successor laws or
regulations thereto or, if applicable, the comparable legislation of any other
jurisdiction pursuant to which the Corporation may be continued;


(k)                                  “Canadian
Dollar Equivalent” of any amount which is expressed in United States
Dollars means, on any date, the Canadian dollar equivalent of such amount determined
by multiplying such amount by the U.S. - Canadian Exchange Rate in effect
on such date;


(l)                                     “Canadian -
U.S. Exchange Rate” means, on any date, the inverse of the U.S. -
Canadian Exchange Rate in effect on such date;


(m)                               “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 principal transfer office in Calgary of the transfer agent for the
Common Shares of the Corporation (or, after the Separation Time, the principal
transfer office in Calgary of the Rights Agent) is closed to the public;


(n)                                 “Common
Shares” shall mean the Common Shares in the capital of the
Corporation;


(o)                                 “Competing
Permitted Bid” means a Take-over Bid that:


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


(ii)                                  satisfies
all components of the definition of a Permitted Bid other than the requirements
set out in Clause 1.1(kk)(ii)(A) of the definition of a Permitted Bid; and


(iii)                               contains,
and the take-up and payment for securities tendered or deposited is
subject to, an irrevocable and unqualified condition that no Voting Shares will
be taken up or paid for pursuant to the Take-over Bid prior to the close
of business on a date that is no earlier than the later of: (A) the 60th
day after the date on which the earliest Permitted Bid which preceded the
Competing Permitted Bid was made; and (B) 21 days after the date of the
Take-over Bid constituting the Competing Permitted Bid;


(p)                                 “controlled”:
a corporation is “controlled” by another Person if:


(i)                                     securities
entitled to vote in the election of directors carrying more than 50 per cent of
the votes for the election of directors are held, directly or indirectly, by or
for the benefit of the other Person; and


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


and “controls”,
“controlling” and “under common control with” shall be interpreted accordingly;


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(q)                                 “Co-Rights
Agents” shall have the meaning ascribed thereto in Subsection
4.1(a);


(r)                                    “Disposition
Date” shall have the meaning ascribed thereto in
Subsection 5.1(h);


(s)                                  “Dividend
Reinvestment Acquisition” shall mean an acquisition of Voting Shares
pursuant to a Dividend Reinvestment Plan;


(t)                                    “Dividend
Reinvestment Plan” means a regular dividend reinvestment or other
plan of the Corporation made available by the Corporation to holders of its
securities where such plan permits the holder to direct that some or all of:


(i)                                     dividends
paid in respect of shares of any class of the Corporation;


(ii)                                  proceeds
of redemption of shares of the Corporation;


(iii)                               interest
paid on evidences of indebtedness of the Corporation; or


(iv)                              optional
cash payments;


be applied to the purchase
from the Corporation of Voting Shares;


(u)                                 “Election to
Exercise” shall have the meaning ascribed thereto in
Clause 2.2(d)(ii);


(v)                                 “Effective
Date” means the date the Plan of Arrangement takes effect;


(w)                               “Exempt
Acquisition” means a share acquisition in respect of which the Board
of Directors has waived the application of Section 3.1 pursuant to the
provisions of Subsection 5.1(a) or (h);


(x)                                   “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 which, until
adjustment thereof in accordance with the terms hereof, shall be $100;


(y)                                 “Expansion
Factor” shall have the meaning ascribed thereto in
Clause 2.3(a)(x);


(z)                                   “Expiration
Time” shall mean the close of business on that date which is the
earliest of the date of termination of this Agreement pursuant to
Section 5.16 or, if this Agreement is confirmed pursuant to
Section 5.16, December 2, 2004;


(aa)                            “Flip-in
Event” shall mean a transaction in or pursuant to which any Person
becomes an Acquiring Person;


(bb)                          “holder”
shall have the meaning ascribed thereto in Section 2.8;


(cc)                            “Independent
Shareholders” shall mean holders of Voting Shares, other than:


(i)                                     any
Acquiring Person;


(ii)                                  any
Offeror (other than any Person who by virtue of Clause 1.1(g)(v) is not
deemed to Beneficially Own the Voting Shares held by such Person);


(iii)                               any
Affiliate or Associate of any Acquiring Person or Offeror;


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(iv)                              any
Person acting jointly or in concert with any Acquiring Person or Offeror; and


(v)                                 any
employee benefit plan, deferred profit sharing plan, stock participation plan
and any other similar plan or trust for the benefit of employees of the
Corporation unless the beneficiaries of the plan or trust direct the manner in
which the Voting Shares are to be voted or withheld from voting or direct
whether the Voting Shares are to be tendered to a Take-over Bid;


(dd)                          “Lock-Up
Agreement” means an agreement between an Offeror, any of its
Affiliates or Associates or any other Person acting jointly or in concert with
the Offeror and a Person (the “Locked-up Person”) who is not an Affiliate
or Associate of the Offeror or a Person acting jointly or in concert with the
Offeror whereby the Locked-up Person agrees to deposit or tender the
Voting Shares held by the Locked-up Person to the Offeror’s Take-over
Bid or to any Take-over Bid made by any of the Offeror’s Affiliates or
Associates or made by any other Person acting jointly or in concert with the
Offeror (the “Subject Bid”) where


(i)                                     the
agreement permits the Locked-up Person to withdraw the Voting Shares from
the agreement in order to tender or deposit the Voting Shares to another Take-over
bid or to support another transaction that in either case will provide greater
value to the Locked-up Person than the Subject Bid; or


(ii)                                  the
agreement  (A) permits the Locked-up
Person to withdraw the Voting Shares from the agreement in order to tender or
deposit the Voting Shares to another Take-over Bid or to support another
transaction that contains an offering price for each Voting Share that exceeds
by as much as or more than a specified amount (the “Specified Amount”) the offering
price for each Voting Share contained in or proposed to be contained in the
Subject Bid; and (B) does not by its terms provide for a specified Amount that
is greater than 7% of the offering price contained in or proposed to be
contained in the Subject Bid;


and, for greater clarity, an
agreement may contain a right of first refusal or require a period of delay to
give an Offeror an opportunity to match a higher price in another take-over
bid or other similar limitation on a Locked-up Person as long as the
Locked-up Person can accept another bid or tender to another transaction.


(ee)                            “Market  Price” per share of any
securities on any date of determination shall mean the average of the daily
closing prices per share 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 closing prices used to determine the Market Price on any Trading
Days not to be fully comparable with the closing price on such date of
determination or, if the date of determination is not a Trading Day, on the
immediately preceding Trading Day, each such closing price so used shall be
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 hereof in order to make it fully comparable
with the closing price on such date of determination or, if the date of determination
is not a Trading Day, on the immediately preceding Trading Day.  The closing price per share of any
securities on any date shall be:


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(i)                                     the
closing board lot sale price or, in case no such sale takes place on such date,
the average of the closing bid and asked prices for each of such securities as
reported by the principal Canadian stock exchange (as determined by volume of
trading) on which such securities are listed or admitted to trading;


(ii)                                  if
for any reason none of such prices is available on such day or the securities
are not listed or posted for trading on a Canadian stock exchange, the last
sale price or, in case no such sale takes place on such date, the average of
the closing bid and asked prices for each of such securities as reported by the
principal national United States securities exchange (as determined by volume
of trading) on which such securities are listed or admitted to trading;


(iii)                               if
for any reason none of such prices is available on such day or the securities
are not listed or admitted to trading on a Canadian stock exchange or a
national United States securities exchange, 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 each of such securities in the over-the-counter market, as
quoted by any recognized reporting system then in use; or


(iv)                              if
for any reason none of such prices is available on such day or the securities
are not listed or admitted to trading on a Canadian stock exchange or a
national United States securities exchange or quoted by any such reporting
system, the average of the closing bid and asked prices as furnished by a
recognized professional market maker making a market in the securities;


provided, however, that if
for any reason none of such prices is available on such day, the closing price
per share of such securities on such date means the fair value per share of
such securities on such date as determined by a nationally recognized investment
dealer or investment banker; and provided further that if an event of a type
analogous to any of the events described in Section 2.3 hereof shall have
caused any price used to determine the Market Price on any Trading Day not to
be fully comparable with the price as so determined on the Trading Day
immediately preceding such date of determination, 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 on the Trading Day immediately preceding such date of
determination.  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 on such
date at the Canadian Dollar Equivalent thereof;


(ff)                                “1934 Exchange Act”
means the Securities
Exchange Act of 1934 of the United States, as amended, and the rules
and regulations thereunder as now in effect or as the same may from time to
time be amended, re-enacted or replaced;


(gg)                          “Nominee”
shall have the meaning ascribed thereto in Subsection 2.2(c);


(hh)                          “Offer  to Acquire” shall include:


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


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(ii)                                  an
acceptance of an offer to sell Voting 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;


(ii)                                  “Offeror”
shall mean a Person who has announced, and has not withdrawn, an intention to
make or who has made, and has not withdrawn, a Take-over Bid, other than
a Person who has completed a Permitted Bid, a Competing Permitted Bid or an
Exempt Acquisition;


(jj)                                  “Offeror’s  Securities” means Voting Shares
Beneficially Owned by an Offeror on the date of the Offer to Acquire;


(kk)                            “Permitted
Bid” means a Take-over Bid made by an Offeror by way of take-over
bid circular which also complies with the following additional provisions:


(i)                                     the
Take-over Bid is made to all holders of Voting Shares as registered on the
books of the Corporation, other than the Offeror;


(ii)                                  the
Take-over Bid contains, and the take-up and payment for securities
tendered or deposited is subject to, an irrevocable and unqualified provision
that no Voting Shares will be taken up or paid for pursuant to the Take-over
Bid (A) prior to the close of business on the date which is not less than 60
days following the date of the Take-over Bid and (B) only if at such date
more than 50% of the Voting Shares held by Independent Shareholders shall have
been deposited or tendered pursuant to the Take-over Bid and not
withdrawn;


(iii)                               unless
the Take-over Bid is withdrawn, the Take-over Bid contains an
irrevocable and unqualified provision that Voting Shares may be deposited
pursuant to such Take-over Bid at any time during the period of time
described in Clause 1.1(kk)(ii) and that any Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn until taken up and paid
for; and


(iv)                              the
Take-over Bid contains an irrevocable and unqualified provision that in
the event that the deposit condition set forth in Clause 1.1(kk)(ii) is
satisfied the Offeror will make a public announcement of that fact and the Take-over
Bid will remain open for deposits and tenders of Voting Shares for not less
than ten Business Days from the date of such public announcement;


(ll)                                  “Permitted
Bid Acquisition” shall mean an acquisition of Voting Shares made
pursuant to a Permitted Bid or a Competing Permitted Bid;


(mm)                      “Person”
shall include any individual, firm, partnership, association, trust, trustee,
executor, administrator, legal personal representative, body corporate,
corporation, unincorporated organization, syndicate, governmental entity or
other entity;


(nn)                          “Plan of
Arrangement” means the Plan of Arrangement set forth as Appendix 1
to the Arrangement Agreement;


(oo)                          “Pro Rata
Acquisition” means an acquisition by a Person of Voting Shares
pursuant to:


9

















 


(i)                                     a
Dividend Reinvestment Acquisition;


(ii)                                  a
stock dividend, stock split or other event in respect of securities of the
Corporation of one or more particular classes or series pursuant to which such
Person becomes the Beneficial Owner of Voting Shares on the same pro rata basis
as all other holders of securities of the particular class, classes or series;


(iii)                               the
acquisition or the exercise by the Person of only those rights to purchase
Voting Shares distributed to that Person in the course of a distribution to all
holders of securities of the Corporation of one or more particular classes or
series pursuant to a rights offering or pursuant to a prospectus; or


(iv)                              a
distribution of Voting Shares, or securities convertible into or exchangeable
for Voting Shares (and the conversion or exchange of such convertible or exchangeable
securities), made pursuant to a prospectus or by way of a private placement,
provided that the Person does not thereby acquire a greater percentage of such
Voting Shares, or securities convertible into or exchangeable for Voting
Shares, so offered than the Person’s percentage of Voting Shares Beneficially
Owned immediately prior to such acquisition;


(pp)                          “Record Time”
has the meaning set forth in Section 2.1(a);


(qq)                          “Right”
means a right to purchase a Common Share of the Corporation upon the terms and
subject to the conditions set forth in this Agreement;


(rr)                                “Rights
Certificate” means the certificates representing the Rights after
the Separation Time, which shall be substantially in the form attached hereto
as Attachment 1;


(ss)                            “Rights  Register” shall have the meaning
ascribed thereto in Subsection 2.6(a);


(tt)                                “Securities Act (Alberta)”
shall mean the Securities Act, S.A. 1991, c.S-6.1, as amended, and
the regulations thereunder, and any comparable or successor laws or regulations
thereto;


(uu)                          “Separation
Time” shall mean the close of business on the eighth Trading Day
after the earlier of:


(i)                                     the
Stock Acquisition Date; and


(ii)                                  the
date of the commencement of or first public announcement of the intent of any
Person (other than the Corporation or any Subsidiary of the Corporation) to
commence a Take-over Bid (other than a Permitted Bid or a Competing
Permitted Bid), or such later time as may be determined by the Board of
Directors, 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 the purposes of
this definition, never to have been made;


(vv)                          “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


10

















 


section 176 of the Securities Act (Alberta) or
Section 13(d) of the 1934 Exchange Act) by the Corporation or an
Acquiring Person that an Acquiring Person has become such;


(ww)                      “Subsidiary”:
a corporation is a Subsidiary of another corporation if:


(i)                                     it
is controlled by:


(A)                              that
other; or


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


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


(ii)                                  it
is a Subsidiary of a corporation that is that other’s Subsidiary;


(xx)                              “Take-over  Bid” shall mean an Offer to
Acquire Voting Shares, or securities convertible into Voting Shares if,
assuming that the Voting Shares or convertible securities subject to the Offer
to Acquire are acquired and are Beneficially Owned at the date of such Offer to
Acquire by the Person making such Offer to Acquire, such Voting Shares
(including Voting Shares that may be acquired upon conversion of securities
convertible into Voting Shares) together with the Offeror’s Securities,
constitute in the aggregate 20% or more of the outstanding Voting Shares at the
date of the Offer to Acquire;


(yy)                          “Trading  Day”, when used with respect to
any securities, shall mean a day on which the principal Canadian stock exchange
on which such securities are listed or admitted to trading is open for the
transaction of business or, if the securities are not listed or admitted to
trading on any Canadian stock exchange, a Business Day;


(zz)                              “U.S.-Canadian
Exchange Rate” means, on any date:


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


(ii)                                  in
any other case, the rate for such date for the conversion of one United States
dollar into Canadian dollars calculated in such manner as may be determined by
the Board of Directors from time to time acting in good faith;


(aaa)                      “U.S. Dollar
Equivalent” of any amount which is expressed in Canadian dollars
means, on any date, the United States dollar equivalent of such amount
determined by multiplying such amount by the Canadian-U.S. Exchange Rate
in effect on such date; and


(bbb)                   “Voting Share
Reduction” means an acquisition or redemption by the Corporation of
Voting Shares which, by reducing the number of Voting Shares outstanding,
increases the proportionate number of Voting Shares Beneficially Owned by any
person to 20% or more of the Voting Shares then outstanding; and


(ccc)                      “Voting  Shares” shall mean the Common
Shares of the Corporation and any other shares in the capital of the
Corporation entitled to vote generally in the election of all directors.


11

















 


1.2                                                                                 Currency


 


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


1.3                                                                                 Headings


 


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


1.4                                                                                 Calculation
of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares


 


For purposes of this
Agreement, the percentage of Voting Shares Beneficially Owned by any Person,
shall be and be deemed to be the product (expressed as a percentage) determined
by the formula:


100 x A/B


where:




	
  A

  	
  =

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

  
	
   

  	
   

  	
   

  
	
  B

  	
  =

  	
  the number of votes for
  the election of all directors generally attaching to all outstanding Voting
  Shares.

  






 


Where any Person is deemed
to Beneficially Own unissued Voting Shares, such Voting Shares shall be deemed
to be outstanding for the purpose of calculating the percentage of Voting
Shares Beneficially Owned by such Person.


1.5                                                                                 Acting
Jointly or in Concert


 


For the purposes hereof, a
Person is acting jointly or in concert with every Person who, as a result of
any agreement, commitment or understanding, whether formal or informal, with
the first Person or any Affiliate thereof, acquires or offers to acquire Voting
Shares (other than customary agreements with and between underwriters and/or
banking group members and/or selling group members with respect to a public
offering or private placement of securities or pledges of securities in the
ordinary course of business).


1.6                                                                                 Generally
Accepted Accounting Principles


 


Wherever in this Agreement
reference is made to generally accepted accounting principles, such reference
shall be deemed to be the recommendations at the relevant time of the Canadian
Institute of Chartered Accountants, or any successor institute, applicable on a
consolidated basis (unless otherwise specifically provided herein to be
applicable on an unconsolidated basis) as at the date on which a calculation is
made or required to be made in accordance with generally accepted accounting
principles.  Where the character or
amount of any asset or liability or item of revenue or expense is


12

















 


required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any
document, such determination or calculation shall, to the extent applicable and
except as otherwise specified herein or as otherwise agreed in writing by the
parties, be made in accordance with generally accepted accounting principles
applied on a consistent basis.


ARTICLE
2 – THE RIGHTS


 


2.1                                                                                 Issue of
Rights:  Legend on Common Share
Certificates


 


(a)                                  One
Right shall be issued on the Effective Date in respect of each Common Share of
the Corporation issued under the Plan of Arrangement (the time of issue of such
Rights being herein called the “Record Time”) and one Right shall be issued in
respect of each Common Share of the Corporation issued after the Record Time
and prior to the earlier of the Separation Time and the Expiration Time.


 


(b)                                 Certificates
representing Common Shares which are issued at and after the Record Time but
prior to the earlier of the Separation Time and the Expiration Time, shall also
evidence one Right for each Common Share represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:


Until the
Separation Time (defined in the Agreement below), this certificate also
evidences the holder’s rights described in a Shareholder Rights Plan Agreement
dated as of April 24, 2003 (the ‘Agreement’) between TransCanada
Corporation and Computershare Trust Company of Canada, as amended from time to
time, the terms of which are incorporated herein and a copy of which is
available on demand without charge. 
Under certain circumstances set out in the Agreement, the rights may
expire, may become null and void or may be evidenced by separate certificates
and no longer evidenced by this certificate.


Certificates for Common
Shares of the Corporation which by the terms of the Plan of Arrangement will
represent, on the Effective Date, Common Shares of the Corporation that are
issued and outstanding shall also evidence one Right for each Common Share
represented thereby, notwithstanding the absence of the foregoing legend, until
the close of business on 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,
from and after the Separation Time and prior to the Expiration Time, to
purchase one Common Share for the Exercise Price (and the Exercise Price and
number of Common Shares are subject to adjustment as set forth below).  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)                                     the
Rights shall not be exercisable and no Right may be exercised; and


(ii)                                  each
Right will be evidenced by the certificate for the associated Common Share of
the Corporation registered in the name of the holder thereof (which certificate
shall also be deemed to represent a Rights Certificate) and will be
transferable


13

















only together with, and will be transferred by a transfer of, such
associated Common Share of the Corporation.


(c)                                  From
and after the Separation Time and prior to the Expiration Time:


(i)                                     the
Rights shall be exercisable; and


(ii)                                  the
registration and transfer of Rights shall be separate from and independent of
Common Shares of the Corporation.


Promptly following the
Separation Time, the Corporation will prepare and the Rights Agent will mail to
each holder of record of Common Shares as of the Separation Time (other than an
Acquiring Person and, in respect of any Rights Beneficially Owned by such
Acquiring Person which are not held of record by such Acquiring Person, the
holder of record of such Rights (a “Nominee”)), at such holder’s address as
shown by the records of the Corporation (the Corporation hereby agreeing to
furnish copies of such records to the Rights Agent for this purpose):


(x)                                   a Rights
Certificate appropriately completed, representing the number of Rights held by
such holder at the Separation Time and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law,
rule or regulation or with any rule or regulation of any self-regulatory
organization, stock exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage; and


(y)                                 a disclosure
statement describing the Rights,


provided that a Nominee
shall be sent the materials provided for in (x) and (y) in respect of all
Common Shares of the Corporation held of record by it which are not
Beneficially Owned by an Acquiring Person.


(d)                                 Rights
may be exercised, in whole or in part, on any Business Day after the Separation
Time and prior to the Expiration Time by submitting to the Rights Agent:


(i)                                     the
Rights Certificate evidencing such Rights;


(ii)                                  an
election to exercise such Rights (an “Election to Exercise”) substantially in
the form attached to the Rights Certificate appropriately completed and
executed by the holder or his executors or administrators or other personal
representatives or his or their legal attorney duly appointed by an instrument
in writing in form and executed in a manner satisfactory to the Rights Agent;
and


(iii)                               payment
by certified cheque, banker’s draft or money order payable to the order of the
Corporation, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
Common Shares in a name other than that of the holder of the Rights being
exercised.


14

















 


(e)                                  Upon
receipt of a Rights Certificate, together with a completed Election to Exercise
executed in accordance with Clause 2.2(d)(ii), which does not indicate
that such Right is null and void as provided by Subsection 3.1(b), and
payment as set forth in Clause 2.2(d)(iii), the Rights Agent (unless
otherwise instructed by the Corporation in the event that the Corporation is of
the opinion that the Rights cannot be exercised in accordance with this
Agreement) will thereupon promptly:


(i)                                     requisition
from the transfer agent certificates representing the number of such 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;


(iii)                               after
receipt of the certificates referred to in Clause 2.2(e)(i), deliver the
same to or upon the order of the registered holder of such Rights Certificates,
registered in such name or names as may be designated by such holder; and


(iv)                              when
appropriate, after receipt, deliver the cash referred to in
Clause 2.2(e)(ii) to or to the order of the registered holder of such
Rights Certificate; and


(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 (subject to the provisions of
Subsection 5.5(a)) 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
Common Shares delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such Common Shares (subject to payment of the Exercise
Price), be duly and validly authorized, executed, issued and delivered as fully
paid and non-assessable;


(ii)                                  take
all such action as may be necessary and within its power to comply with the
requirements of the Canada Business Corporations Act, the Securities
Act (Alberta) and the securities laws or comparable legislation of
each of the provinces of Canada and any other applicable law, rule or
regulation, in connection with the issuance and delivery of the Rights
Certificates and the issuance of any Common Shares upon exercise of Rights;


(iii)                               use
reasonable efforts to cause all Common Shares issued upon exercise of Rights to
be listed on the stock exchanges on which such Common Shares were traded
immediately prior to the Stock Acquisition Date;


(iv)                              cause
to be reserved and kept available out of the 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;


15

















 


(v)                                 pay
when due and payable, if applicable, any and all federal, provincial and
municipal transfer taxes and charges (not including any income or capital taxes
of the holder or exercising holder or any liability of the Corporation to
withhold tax) which may be payable in respect of the original issuance or
delivery of the Rights Certificates, or certificates for Common Shares to be
issued upon exercise of any Rights, 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 Common Shares in a name other than
that of the holder of the Rights being transferred or exercised; and


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


2.3                                                                                 Adjustments
to Exercise Price; Number of Rights


 


The Exercise Price, the
number and kind of 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 date of this Agreement:


(i)                                     declare
or pay a dividend on Common Shares payable in Common Shares (or other
securities exchangeable for or convertible into or giving a right to acquire
Common Shares or other securities of the Corporation) other than pursuant to
any optional stock dividend program;


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


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


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


the Exercise Price and the
number of Rights outstanding, or, if the payment or effective date therefore
shall occur after the Separation Time, the securities purchasable upon exercise
of Rights shall be adjusted as of the payment or effective date 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 will 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


16

















 


one Common Share immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold thereafter as a result thereof;
and


(y)                                 each Right held
prior to such adjustment will become that number of Rights equal to the
Expansion Factor,


and the adjusted number of
Rights will be deemed to be distributed 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, consolidation
or issuance, so that each such Common Share (or other capital stock) will have
exactly one Right associated with it following the payment or effective date of
the event referred to in Clause 2.3(a)(i), (ii), (iii) or (iv), as the
case may be.


For greater certainty, 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 securities that a holder of the securities purchasable upon exercise of
one Right immediately prior to such dividend, subdivision, change,
consolidation or issuance would hold thereafter as a result of such dividend,
subdivision, change, consolidation or issuance.


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.


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 this
Subsection 2.3(a), 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 associated Common Share.


(b)                                 In
the event the Corporation shall at any time after the Record Time and prior to
the Separation Time fix a record date for the issuance of rights, options or
warrants to all holders of Common Shares entitling them (for a period expiring
within 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 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 the Market Price per Common
Share on such record date, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction:


(i)                                     the
numerator of which shall be the number of Common Shares outstanding on such
record date, plus the number of Common Shares that the aggregate offering price
of the total number of Common Shares 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


17

















 


be paid to purchase such convertible or
exchangeable securities or rights) would purchase at such Market Price per
Common Share; and


(ii)                                  the
denominator of which 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 may be paid by delivery of consideration, part or all of which may be in
a form other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors, whose determination shall be described
in a 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, and
in the event that such rights, options or warrants are not so issued, or if
issued, are not exercised prior to the expiration thereof, the Exercise Price
shall be readjusted to the Exercise Price which would then be in effect if such
record date had not been fixed, or to the Exercise Price which would be in
effect based upon the number of Common Shares (or securities convertible into,
or exchangeable or exercisable for Common Shares) actually issued upon the
exercise of such rights, options or warrants, as the case may be.


For purposes of this
Agreement, the granting of the right to purchase Common Shares (whether from
treasury or otherwise) pursuant to the Dividend Reinvestment Plan or any
employee benefit, stock option or similar plans shall be deemed not to
constitute an issue of rights, options or warrants by the Corporation;
provided, however, that, in all such cases, the right to purchase Common Shares
is at a price per share of not less than 95 per cent 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 Separation Time fix a record date for the making of a distribution to all
holders of Common Shares (including any such distribution made in connection
with a merger or amalgamation) of evidences of indebtedness, cash (other than
an annual cash dividend or a dividend paid in Common Shares, but including any
dividend payable in securities other than Common Shares), assets or rights,
options or warrants (excluding those referred to in Subsection 2.3(b)),
the Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction:


(i)                                     the
numerator of which shall be the Market Price per Common Share on such record
date, less the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of Rights),
on a per share basis, of the portion of the cash, assets, evidences of
indebtedness, rights, options or warrants so to be distributed; and


(ii)                                  the
denominator of which shall be such Market Price per Common Share.


Such adjustments shall be
made successively whenever such a record date is fixed, and in the event that
such a distribution is not so made, the Exercise Price shall be adjusted to be


18

















 


the Exercise Price which
would have been in effect if such record date had not been fixed.


(d)                                 Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least one per cent in the Exercise Price; provided, however, that any
adjustments which by reason of this Subsection 2.3(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under
Section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth
of a share.  Notwithstanding the first
sentence of this Subsection 2.3(d), any adjustment required by
Section 2.3 shall be made no later than the earlier of:


(i)                                     three
years from the date of the transaction which gives rise to such adjustment; or


(ii)                                  the
Expiration Date.


(e)                                  In
the event the Corporation shall at any time after the Record Time and prior to
the Separation Time issue any shares of capital stock (other than Common
Shares), or rights, options 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 2.3(a)(i) or (iv),
if the Board of Directors acting in good faith determines that the adjustments
contemplated by Subsections 2.3(a), (b) and (c) in connection with such
transaction will not appropriately protect the interests of the holders of
Rights, the Board of Directors may determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding Subsections 2.3(a), (b)
and (c), such adjustments, rather than the adjustments contemplated by
Subsections 2.3(a), (b) and (c), shall be made.  Subject to the prior consent of the holders of the Voting Shares
or the Rights obtained as set forth in Subsection 5.4(b) or (c), the
Corporation and the Rights Agent shall have authority to amend this Agreement
as appropriate to provide for such adjustments.


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


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


(h)                                 In
any case in which this Section 2.3 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Corporation may elect to defer until the occurrence of such event the issuance
to the holder of any Right exercised after such record date the number of
Common Shares and other securities of the Corporation, if any, issuable upon
such exercise over and above the number of Common Shares and other securities
of the Corporation, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the


19

















 


Corporation shall deliver to
such holder an appropriate instrument evidencing such holder’s right to receive
such additional shares (fractional or otherwise) or other securities upon the
occurrence of the event requiring such adjustment.


(i)                                     Notwithstanding
anything contained in this Section 2.3 to the contrary, the Corporation
shall be entitled to make such reductions in the Exercise Price, in addition to
those adjustments expressly required by this Section 2.3, as and to the
extent that in their good faith judgment the Board of Directors shall determine
to be advisable, in order that any:


(i)                                     consolidation
or subdivision of Common Shares;


(ii)                                  issuance
(wholly or in part for cash) of Common Shares or securities that by their terms
are convertible into or exchangeable for Common Shares;


(iii)                               stock
dividends; or


(iv)                              issuance
of rights, options or warrants referred to in this Section 2.3,


hereafter made by the
Corporation to holders of its Common Shares, shall not be taxable to such
shareholders.


2.4                                                                                 Date on
Which Exercise Is Effective


 


Each Person in whose name
any certificate for Common Shares or other securities, if applicable, is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares or other securities, if applicable,
represented thereon, and such certificate shall be dated the date upon which
the Rights Certificate evidencing such Rights was duly surrendered in
accordance with Subsection 2.2(d) (together with a duly completed Election
to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on 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 its
Chairman of the Board, President or any Vice-President and by its
Corporate Secretary or any Assistant Secretary under the corporate seal of the
Corporation reproduced thereon.  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 either
before or after the countersignature and delivery of such Rights Certificates.


(b)                                 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 manually countersign (in a manner
satisfactory to the Corporation) and send such Rights Certificates to the
holders of the Rights pursuant to Subsection 2.2(c) hereof.  No Rights


20

















 


Certificate shall be valid
for any purpose until countersigned by the Rights Agent as aforesaid.


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


2.6                                                                                 Registration,
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
registrar for the Rights (the “Rights Registrar”) for the purpose of
maintaining the Rights Register for the Corporation and registering Rights and
transfers of Rights as herein provided and the Rights Agent hereby accepts such
appointment.  In the event that the
Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have
the right to examine the Rights Register at all reasonable times.


After the Separation Time
and prior to the Expiration Time, upon surrender for registration of transfer
or exchange of any Rights Certificate, and subject to the provisions of
Subsection 2.6(c), the Corporation will execute, and the Rights Agent will
manually 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.


(b)                                 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.


(c)                                  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 and any other expenses
(including the reasonable fees and expenses of the Rights Agent) connected
therewith.


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.


(b)                                 If
there shall be delivered to the Corporation and the Rights Agent prior to the
Expiration Time:


(i)                                     evidence
to their reasonable satisfaction of the destruction, loss or theft of any
Rights Certificate; and


21

















 


(ii)                                  such
security or indemnity as may be reasonably required by them to save each of
them and any of their agents harmless;


then, in the absence of notice
to the Corporation or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Corporation shall execute and upon
the Corporation’s 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 reasonable 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 the 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 of Rights


 


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.  As used in this Agreement,
unless the context otherwise requires, the term “holder” of any Right shall
mean the registered holder of such Right (or, prior to the Separation Time, of
the associated Common Share).


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 laws, 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:


(a)                                  to
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;


22

















 


(b)                                 that
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
certificate representing such Right;


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


(d)                                 that
prior to due presentment of a Rights Certificate (or, prior to the Separation
Time, the associated Common Share certificate) for registration of transfer,
the Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent 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)                                  that
such holder of Rights has waived his right to receive any fractional Rights or
any fractional shares or other securities upon exercise of a Right (except as
provided herein); and


(f)                                    that,
subject to the provisions of Section 5.4, without the approval of any
holder of Rights or Voting Shares 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 to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with the intent of this
Agreement or is otherwise defective, as provided herein.


2.11                                                                           Rights
Certificate Holder Not Deemed a Shareholder


 


No holder, as such, of any
Rights or Rights Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose whatsoever the holder of any Common Share or any other
share or security of the Corporation which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed or deemed or confer upon the holder
of any Right or Rights Certificate, as such, any right, title, benefit or
privilege of a holder of Common Shares or any other shares or securities of the
Corporation or any right to vote at any meeting of shareholders of the
Corporation whether for the election of directors or otherwise or upon any
matter submitted to holders of Common Shares or any other shares of the
Corporation at any meeting thereof, or to give or withhold consent to any
action of the Corporation, or to receive notice of any meeting or other action
affecting any holder of Common Shares or any other shares of the Corporation
except as expressly provided herein, or to receive dividends, distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by Rights
Certificates shall have been duly exercised in accordance with the terms and
provisions hereof.


ARTICLE
3 – ADJUSTMENTS TO THE RIGHTS


 


3.1                                                                                 Flip–in
Event


 


(a)                                  Subject
to Subsection 3.1(b) and Section 5.1, in the event that prior to the
Expiration Time a Flip-in Event shall occur, each Right shall constitute,
effective at the close of business on the eighth Trading Day after the Stock
Acquisition Date, the right to


23

















 


purchase from the
Corporation, upon exercise thereof in accordance with the terms hereof, that
number of Common Shares 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 consummation or
occurrence, an event of a type analogous to any of the events described in Section 2.3
shall have occurred).


(b)                                 Notwithstanding
anything in this Agreement to the contrary, 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 of Rights, directly or indirectly, from 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), where such transferee becomes a transferee concurrently with
or subsequent to the Acquiring Person becoming such in a transfer that the
Board of Directors has determined is part of a plan, arrangement or scheme 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), that has the purpose or effect
of avoiding Clause 3.1(b)(i),


shall become null and void
without any further action, and any holder of such Rights (including
transferees) shall thereafter have no right to exercise such Rights under any
provision of this Agreement and further shall thereafter not have any other
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise.


(c)                                  From
and after the Separation Time, the Corporation shall do all such acts and
things as shall be necessary and within its power to ensure compliance with the
provisions of this Section 3.1, including without limitation, all such
acts and things as may be required to satisfy the requirements of the Canada
Business Corporations Act, the Securities Act (Alberta) and the
securities laws or comparable legislation of each of the provinces of Canada
and of the United States and each of the states thereof in respect of the issue
of Common Shares upon the exercise of Rights in accordance with this Agreement.


(d)                                 Any
Rights Certificate that represents Rights Beneficially Owned by a Person
described in either Clause 3.1(b)(i) or (ii) 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 issued to a Person who was an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such terms are defined
in the Shareholder Rights Plan Agreement) or a Person who was acting jointly or
in concert with an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.  This Rights
Certificate and the Rights


24

















 


represented hereby are void
or shall become void in the circumstances specified in Subsection 3.1(b)
of the Shareholder Rights Plan Agreement.


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


ARTICLE 4 – THE
RIGHTS AGENT


4.1                                                                                 General


 


(a)                                  The
Corporation hereby appoints the Rights Agent to act as agent for the
Corporation and the holders of the 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 (“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.  The
Corporation agrees to pay all reasonable fees and expenses of the Rights Agent
in respect of the performance of its duties under this Agreement.  The Corporation also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or wilful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability, which right
to indemnification will survive the termination of this Agreement.


(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 be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.


4.2                                                                                 Merger,
Amalgamation or Consolidation or Change of Name of Rights Agent


 


(a)                                  Any
corporation into which the Rights Agent may be merged or amalgamated or with
which it may be consolidated, or any corporation resulting from any merger,
amalgamation, statutory arrangement or consolidation to which the Rights Agent
is a party, or any corporation succeeding to the shareholder or stockholder
services business of the 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 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 have
not


25

















 


been countersigned, any
successor Rights Agent may countersign such Rights Certificates 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, all of which the Corporation and the holders of certificates
for Common Shares 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;


(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, President, any Vice-President, Treasurer, Corporate
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 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 in 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 certificate for a Common Share 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 exerciseability of the Rights (including the Rights


26

















 


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 in
writing with respect to the performance of its duties hereunder from any
individual believed by the Rights Agent to be the Chairman of the Board,
President, any Vice-President, Treasurer, Corporate Secretary or any
Assistant Secretary of the Corporation, and to apply to such individuals for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance with
instructions of any such individual;


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


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


4.4                                                                                 Change of Rights Agent


 


The Rights Agent may resign
and be discharged from its duties under this Agreement upon 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.  The Corporation may
remove the Rights Agent upon 60 days’ notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Shares by 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 60 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 by prior written notice to the Corporation the
resigning Rights Agent or the holder of any Rights (which holder shall, with
such notice, submit such holder’s Rights Certificate, if any, for inspection by
the Corporation), may apply to any court of competent


27

















 


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 Alberta.  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 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 in
accordance with Section 5.9. 
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 any
successor Rights Agent, as the case may be.


ARTICLE 5 –
MISCELLANEOUS


5.1                                                                                 Redemption and Waiver


 


(a)                                  The
Board of Directors acting in good faith may, until the occurrence of a Flip-in
Event, upon prior written notice delivered to the Rights Agent, determine to
waive the application of Section 3.1 to a particular Flip-in Event
that would result from a Take-over Bid made by way of take-over bid
circular to all holders of Voting Shares (which for greater certainty shall not
include the circumstances described in Subsection 5.1(h)); provided that
if the Board of Directors waives the application of Section 3.1 to a
particular Flip-in Event pursuant to this Subsection 5.1(a), 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 which is made by means of a take-over bid circular to
all holders of Voting Shares prior to the expiry of any Take-over Bid in
respect of which a waiver is, or is deemed to have been, granted under this
Subsection 5.1(a).


(b)                                 Subject
to the prior consent of the holders of the Voting Shares or the Rights obtained
as set forth in Subsection 5.4(b) or (c), the Board of Directors of the
Corporation acting in good faith may, at its option, at any time prior to the
provisions of Section 3.1 becoming applicable as a result of the
occurrence of a Flip-in Event, elect to redeem all but not less than all
of the outstanding Rights at a redemption price of $0.001 per Right
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 if 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”).


(c)                                  Where
a Person acquires pursuant to a Permitted Bid, a Competing Permitted Bid or an
Exempt Acquisition under Subsection 5.1(a) outstanding Voting Shares,
other than Voting Shares Beneficially Owned at the date of the Permitted Bid,
the Competing Permitted Bid or the Exempt Acquisition under
Subsection 5.1(a) by such Person, then the Board of Directors of the
Corporation shall immediately upon the consummation of such acquisition without
further formality and without any approval under Subsection 5.4(b) or (c)
be deemed to have elected to redeem the Rights at the Redemption Price.


(d)                                 Where
a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or
otherwise terminated after the Separation Time has occurred and prior to the
occurrence of a Flip-in


28

















 


Event, the Board of
Directors may elect to redeem all the outstanding Rights at the Redemption
Price.


(e)                                  If
the Board of Directors is deemed under Subsection 5.1(c) to have elected,
or elects under either of Subsection 5.1(b) or (d), to redeem the Rights,
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 shall be to receive the Redemption Price.


(f)                                    Within
10 days after the Board of Directors is deemed under Subsection 5.1(c) to
have elected, or elects under Subsection 5.1(b) or (d), to redeem the
Rights, the Corporation shall give notice of redemption to the holders of the
then outstanding Rights by mailing such notice to each such holder at his last
address as it appears upon the registry books of the Rights Agent or, prior to
the Separation Time, on the registry books of the transfer agent for the Voting
Shares.  Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made.


(g)                                 Upon
the Rights being redeemed pursuant to Subsection 5.1(d), all the
provisions of this Agreement shall continue to apply as if the Separation Time
had not occurred and Rights Certificates representing the number of Rights held
by each holder of record of Common Shares as of the Separation Time had not
been mailed to each such holder and for all purposes of this Agreement the
Separation Time shall be deemed not to have occurred.


(h)                                 The
Board of Directors may waive the application of Section 3.1 in respect of
the occurrence of any Flip-in Event if the Board of Directors has
determined within eight Trading Days following a Stock Acquisition Date that a
Person became an Acquiring Person by inadvertence and without any intention to
become, or knowledge that it would become, an Acquiring Person under this
Agreement and, in the event that such a waiver is granted by the Board of
Directors, such Stock Acquisition Date shall be deemed not to have occurred.  Any such waiver pursuant to this
Subsection 5.1(h) must be on the condition that such Person, within 14
days after the foregoing determination by the Board of Directors or such
earlier or later date as the Board of Directors may determine (the “Disposition
Date”), has reduced its Beneficial Ownership of Voting Shares such that the
Person is no longer an Acquiring Person. 
If the Person remains an Acquiring Person at the close of business on
the Disposition Date, the Disposition Date shall be deemed to be the date of
occurrence of a further Stock Acquisition Date and Section 3.1 shall apply
thereto.


5.2                                                                                 Expiration


 


No Person shall have any
rights whatsoever 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 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 or kind or class


29

















 


of securities 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, subject to Subsection 5.4(e), which are required
to maintain the validity of this Agreement as a result of any change in any
applicable legislation, rules or regulations thereunder.  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 Agent to such supplement or amendment.


(b)                                 Subject
to Section 5.4(a), the Corporation may, with the prior consent of the
holders of Voting Shares obtained as set forth below, at any time prior to the
Separation Time, amend, vary or rescind any of the provisions of this Agreement
and the Rights (whether or not such action would materially adversely affect
the interests of the holders of Rights generally).  Such consent shall be deemed to have been given if 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 Voting Shares duly called
and held in compliance with applicable laws and the articles and by-laws
of the Corporation.


(c)                                  The
Corporation may, with the prior consent of the holders of Rights, at any time
on or after the Stock Acquisition Date, amend, vary 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 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 a majority of the votes cast
in respect thereof.  For the purposes
hereof, each outstanding Right (other than Rights which are void pursuant to
the provisions hereof) shall be entitled to one vote, and the procedures for
the calling, holding and conduct of the meeting shall be those, as nearly as
may be, which are provided in the Corporation’s by-laws and the Canada
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, rule 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;


30

















 


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


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, in lieu of issuing fractional Rights,
the Corporation shall pay to the holders of record of the Rights Certificates
(provided the Rights represented by such Rights Certificates are not void
pursuant to the provisions of Subsection 3.1(b), at the time such
fractional Rights would otherwise be issuable), an amount in cash equal to the
fraction of the Market Price of one whole Right that the fraction of a Right
that would otherwise be issuable is of one whole Right.


(b)                                 The
Corporation shall not be required to issue fractions of Common Shares upon
exercise of Rights or to distribute certificates which evidence fractional
Common Shares.  In lieu of issuing
fractional Common Shares, the Corporation shall pay to the registered holders
of Rights Certificates, at the time such Rights are exercised as herein
provided, an amount in cash equal to the fraction of the Market Price of one
Common Share that the fraction of a Common Share that would otherwise be
issuable upon the exercise of such Right is of one whole Common Share at the
date of such exercise.


5.6                                                                                 Rights of Action


 


Subject to the terms of this
Agreement, all rights of action in respect of this Agreement, other than rights
of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights.  Any holder of
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 such holder’s
right to exercise such holder’s Rights, or Rights to which such holder is
entitled, in the manner provided in such holder’s Rights and in this Agreement.  Without limiting the foregoing or any
remedies available to the holders of Rights it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.


31

















 


5.7                                                                                 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, and without limiting the generality of the foregoing,
necessary approvals of The Toronto Stock Exchange and other exchanges shall be
obtained, such as to the issuance of Common Shares upon the exercise of Rights
under Subsection 2.2(d).


5.8                                                                                 Declaration as to Non–Canadian or 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 by the
Corporation with the securities laws or comparable legislation of a
jurisdiction outside Canada, the Board of Directors acting in good faith shall
take such actions as it may deem appropriate to ensure such compliance.  In no event shall the Corporation or the
Rights Agent be required to issue or deliver Rights or securities issuable on
exercise of Rights to persons who are citizens, residents or nationals of any
jurisdiction other than Canada or the United States, in which such issue or
delivery would be unlawful without registration of the relevant Persons or
securities for such purposes.


5.9                                                                                 Notices


 


(a)                                  Notices
or demands authorized or required by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights to or on the Corporation shall be
sufficiently given or made if delivered, sent by registered or certified mail,
postage prepaid (until another address is filed in writing with the Rights
Agent), or sent by facsimile or other form of recorded electronic
communication, charges prepaid and confirmed in writing, as follows:




	
  TransCanada Corporation

  TransCanada PipeLines Tower

  450 - 1st
  Street S.W.

  P.O. Box 1000, Station M

  Calgary, Alberta

  T2P 4K5

  
	
   

  
	
  Attention:  Corporate Secretary

  Telecopy No.:  (403) 920-2460

  
	
   

  






(b)                                 Notices
or demands authorized or required by this Agreement to be given or made by the
Corporation or by the holder of any Rights to or on the Rights Agent shall be
sufficiently given or made if delivered, sent by registered or certified mail,
postage prepaid (until another address is filed in writing with the
Corporation), or sent by facsimile or other form of recorded electronic
communication, charges prepaid and confirmed in writing, as follows:




	
  Computershare Trust
  Company of Canada

  600, 530 - 8  Avenue S.W.

  Calgary, Alberta

  T2P 358

  
	
   

  
	
  Attention:  Manager, Corporate Trust Department

  






 


32

















 




	
  Telecopy No.:  (403) 267-6598

  
	
   

  






(c)                                  Notices
or demands authorized or required by this Agreement to be given or made by the
Corporation or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the register of the Rights Agent or, prior to the Separation Time, on the
register of the Corporation for its Common Shares.  Any notice which is mailed or sent in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.


(d)                                 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
telegraphing, telecopying or sending of the same by other means of recorded
electronic communication (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.


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 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; further, this Agreement shall be for the sole and
exclusive benefit of the Corporation, the Rights Agent and the holders of the
Rights.


5.13                                                                           Governing Law


 


This Agreement and each
Right issued hereunder shall be deemed to be a contract made under the laws of
the Province of Alberta 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.


5.14                                                                           Severability


 


If any term or provision
hereof or the application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such term or
provision shall be ineffective


33

















 


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


5.15                                                                           Effective
Date of Agreement


 


This Agreement shall be
effective and in full force and effect in accordance with its terms from and
after the date hereof.


5.16                                                                           Reconfirmation
and Approval: Reconfirmation


 


This Agreement must be
reconfirmed by a resolution passed by a majority of greater than 50 percent of
the votes cast by all holders of Voting Shares who vote in respect of such
reconfirmation at the 2004 annual meeting of the Corporation.  If the Agreement is not so reconfirmed or is
not presented for reconfirmation at such annual meeting, the Agreement and all
outstanding Rights shall terminate and be void and of no further force and
effect on and from the date of termination of the annual meeting; provided that
termination shall not occur if a Flip-in Event has occurred (other than a
Flip-in Event which has been waived pursuant to Subsection 5.1(a) or
(h) hereof), prior to the date upon which this Agreement would otherwise
terminate pursuant to this Section 5.16.


5.17                                                                           Determinations
and Actions by the Board of Directors


 


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


5.18                                                                           Time of the Essence


 


Time shall be of the essence
in this Agreement.


5.19                                                                           Execution in Counterparts


 


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


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




	
  TRANSCANADA CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   /S/ Dale E. Skinner

  
	
   

  	
  Director

  
	
   

  
	
   

  
	
  By

  	
   

  
	
   

  	
  Corporate Secretary

  	
  c/s

  






 


34

















 




	
  COMPUTERSHARE TRUST COMPANY OF CANADA

  
	
   

  
	
   

  
	
  By:

  	
   /S/ Stephen Bandola

  
	
   

  	
   

  
	
   

  
	
   

  
	
  By

  	
   /S/ Marilyne Paynter

  
	
   

  	
   

  	
  c/s

  






 


35

















ATTACHMENT  1


TRANSCANADA CORPORATION


SHAREHOLDER RIGHTS PLAN
AGREEMENT


[Form of Rights Certificate]


	
  Certificate No.

  	
  
   

  

  	
   

  	
  Rights

  	
  
   

  

  
	
   

  	
   

  



THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET
FORTH IN THE SHAREHOLDER  RIGHTS  PLAN 
AGREEMENT.  UNDER  CERTAIN 
CIRCUMSTANCES (SPECIFIED  IN  SUBSECTION 3.1(b)  OF 
THE  SHAREHOLDER  RIGHTS 
PLAN AGREEMENT),  RIGHTS  BENEFICIALLY  OWNED  BY  AN 
ACQUIRING  PERSON  OR 
CERTAIN  RELATED  PARTIES, 
OR  TRANSFEREES  OF 
AN  ACQUIRING  PERSON 
OR  CERTAIN  RELATED 
PARTIES,  MAY  BECOME 
VOID.


Rights Certificate


This certifies that                                                              ,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Shareholder Rights Plan Agreement,
dated as of April 24, 2003, as the same may be amended or supplemented from
time to time (the “Shareholder Rights Agreement”), between TransCanada
Corporation, a corporation duly incorporated under the Canada Business Corporations Act
(the “Corporation”) and Computershare Trust Company of Canada, a trust company
incorporated under the laws of Canada (the “Rights Agent”) (which term shall
include any successor Rights Agent under the Shareholder Rights Agreement), to
purchase from the Corporation at any time after the Separation Time (as such
term is defined in the Shareholder Rights Agreement) and prior to the
Expiration Time (as such term is defined in the Shareholder 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 with the Form of Election to Exercise (in the form provided
hereinafter) duly executed and submitted to the Rights Agent at its principal
office in any of the cities of Vancouver, Calgary, Regina, Winnipeg, Toronto
and Montreal or to the principal office of The Bank of Montreal Trust Company
in New York City, New York.  The
Exercise Price shall initially be $100 (Cdn.) per Right and shall be subject to
adjustment in certain events as provided in the Shareholder Rights Agreement.


This Rights Certificate is
subject to all of the terms and provisions of the Shareholder Rights Agreement,
which terms and provisions are incorporated herein by reference and made a part
hereof and to which Shareholder 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
Shareholder Rights Agreement are on file at the registered office of the
Corporation.


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.

















 


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 Shareholder 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 Shareholder 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 Shareholder 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:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TRANSCANADA CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  [President]

  	
   

  	
   

  	
  [Corporate Secretary]

  
	
   

  	
   

  	
   

  
	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPUTERSHARE TRUST COMPANY OF CANADA

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  	
   

  	
   

  



 

















FORM OF ASSIGNMENT


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


FOR VALUE RECEIVED                                                      hereby
sells, assigns and transfers unto


	
   

  
	
  (Please print name and address of transferee.)

  



 


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


	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guaranteed:

  	
  Signature

  
	
   

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

  
	
   

  	
   

  
				



Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, or a commercial bank or trust company having an office or
correspondent in Canada.




 





CERTIFICATE


(To be completed if true.)


The undersigned party
transferring Rights hereunder, 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 a Person acting jointly or in concert with an Acquiring Person or an
Affiliate or Associate thereof. 
Capitalized terms shall have the meaning ascribed thereto in the
Shareholder Rights Agreement.




	
   

  
	
  Signature

  








 





(To be attached to each
Rights Certificate.)

















FORM OF ELECTION TO EXERCISE


(To be exercised by the
registered holder if such holder desires to exercise the Rights Certificate.)


	
  TO:

  	
   

  



 


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


	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Address)

  
	
   

  
	
   

  
	
  (City and Province)

  
	
   

  
	
   

  
	
  Social Insurance Number or
  other taxpayer identification number.

  
	
   

  



 


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


	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Address)

  
	
   

  
	
   

  
	
  (City and Province)

  
	
   

  
	
   

  
	
  Social Insurance Number 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 member firm of a
recognized stock exchange in Canada, or a commercial bank or trust company
having an office or correspondent in Canada.


 


CERTIFICATE


(To be completed if true.)


The undersigned party
exercising Rights hereunder, 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 a Person
acting jointly or in concert with an Acquiring Person or an Affiliate or
Associate thereof.  Capitalized terms
shall have the meaning ascribed thereto in the Shareholder Rights Agreement.




	
   

  
	
  Signature

  








 





(To be attached to each
Rights Certificate.)

















NOTICE


In the event the
certification set forth above in the Forms of Assignment and Election is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof.  No Rights
Certificates shall be issued in exchange for a Rights Certificate owned or
deemed to have been owned by an Acquiring Person or an Affiliate or Associate
thereof, or by a Person acting jointly or in concert with an Acquiring Person
or an Affiliate or Associate thereof.