---

AMENDED AND RESTATED 
  SHAREHOLDER RIGHTS PLAN AGREEMENT

POLYMET MINING CORP.

(the "Corporation")

AND

PACIFIC CORPORATE TRUST COMPANY

(the "Rights Agent")

|                                            
|--------------------------------------------
|DATED AS OF MAY 25, 2007                    
|(amending and restating a shareholder rights
|plan agreement dated as of December 4, 2003)
|                                            
|                                            

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TABLE OF CONTENTS

|**ARTICLE 1 INTERPRETATION**            | 2   
|--------------------------------------- | ----
|                                        | 1.1 
|                                        | 1.2 
|                                        | 1.3 
|                                        | 1.4 
|                                        | 1.5 
|                                        | 1.6 
|                                        |     
|**ARTICLE 2 THE RIGHTS**                | 17  
|                                        | 2.1 
|                                        | 2.2 
|                                        | 2.3 
|                                        | 2.4 
|                                        | 2.5 
|                                        | 2.6 
|                                        | 2.7 
|                                        | 2.8 
|                                        | 2.9 
|                                        | 2.10
|                                        | 2.11
|                                        |     
|**ARTICLE 3 ADJUSTMENTS TO THE RIGHTS** | 30  
|                                        | 3.1 
|                                        | 3.2 
|                                        |     
|**ARTICLE 4 THE RIGHTS AGENT**          | 33  
|                                        | 4.1 
|                                        | 4.2 
|                                        | 4.3 
|                                        | 4.4 
|                                        |     
|**ARTICLE 5 MISCELLANEOUS**             | 36  
|                                        | 5.1 
|                                        | 5.2 
|                                        | 5.3 
|                                        | 5.4 
|                                        | 5.5 
|                                        | 5.6 
|                                        | 5.7 
|                                        | 5.8 
|                                        | 5.9 
|                                        | 5.10

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- 2 -

| | 5.11 | Successors:                                                 | 43
| | ---- | ----------------------------------------------------------- | --
| | 5.12 | Benefits
      of this Agreement:                           | 43
| | 5.13 | Governing
      Law:                                        | 43
| | 5.14 | Severability:                                               | 43
| | 5.15 | Effective
      Date:                                       | 43
| | 5.16 | Confirmation:                                               | 43
| | 5.17 | Determinations
      and Actions by the Board of Directors: | 44
| | 5.18 | Counterparts:                                               | 44

|SCHEDULE
      A - FORM OF RIGHTS CERTIFICATE
|---------------------------------------------

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SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS AMENDED AND RESTATED AGREEMENTdated as of May 25,
2007 (amending and restating a shareholder rights plan agreement of the
Corporation dated as of December 4, 2003).

BETWEEN:

> POLYMET MINING CORP.,a corporation
>           incorporated pursuant to the laws of British Columbia and having its
>           registered office at 1003-1177 West Hastings Street, Vancouver, B.C.,
>           V6E 2K3
>         (the "Corporation")

OF THE FIRST PART

AND:

> PACIFIC CORPORATE TRUST COMPANY,a
>           trust company under the laws of British Columbia and having an office
>           at 510 Burrard Street, 2nd Floor, Vancouver, B.C., V6C 3B9
>         (the "Rights Agent")

OF THE SECOND PART

WHEREAS:

A.          
The Board of Directors of the Corporation determined that it was in the best
interests of the Corporation to adopt a shareholder rights plan (the "Rights
Plan") to ensure, to the extent possible, that all shareholders of the
Corporation are treated fairly in connection with any take-over bid for the
Corporation.

B.          
In order to adopt the Rights Plan, the Corporation and the Rights Agent entered
into a shareholder rights plan agreement dated as of December 4, 2003 (the
"Original Agreement").

C.          
  In order to implement the Rights Plan, the Board of Directors:

| | (1) | authorized and declared a distribution of one Right in
      respect of each Common Share outstanding at the Record Time;                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                           
| | (2) | authorized the issuance of one Right in respect of each
      Common Share issued after the Record Time and prior to the earlier of the
      Separation Time and the Expiration Time; and
| |     |                                                                                                                                                                                           
| | (3) | authorized the issuance of Rights Certificates to holders
      of Rights pursuant to the terms and subject to the conditions set forth in
      the Original Agreement.                  

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- 2 -

D.          
The Board of Directors wishes to make certain amendments to the Original
Agreement, which amendments will require the approval of the Independent
Shareholders in accordance with Section 5.4 of the Original Agreement.

E.          
The Corporation and the Rights Agent wish to amend and restate the Original
Agreement by entering into this Agreement, which amendment and restatement shall
become effective upon the Independent Shareholders approving the continued
existence of the Original Agreement as amended hereby.

F.          
The Corporation wishes to confirm its appointment of 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, the exercise of Rights and other matters
referred to in this Agreement.

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

ARTICLE 1 INTERPRETATION

1.1                     Definitions:

For the purposes of this Agreement, including the recitals thereto, the
following words and terms will, unless the context otherwise requires, have the
following meanings:

| | (a) | "**Acquiring Person**" means any Person who
      is or becomes the Beneficial Owner of 20% or more of the outstanding
      Voting Shares, provided that the term "Acquiring Person" will not
      include:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                              
| |     | (i)                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                              
| |     | (ii)                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                              

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- 3 -

| |       | thereafter such Person's Beneficial Ownership of Voting
      Shares increases by more than 1.0% of the number of Voting Shares then
      outstanding (other than pursuant to a Convertible Security Acquisition, a
      Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition
      or a Pro Rata Acquisition), then as of the date that such Person becomes
      the Beneficial Owner of such additional Voting Shares, such Person will
      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 Section 1.1(g)(viii) solely because such
      Person or the Beneficial Owner of such Voting Shares has participated in,
      proposes or announces a current intention to make a Take-Over Bid, or is
      participating in a Take-Over Bid or any plan or proposal relating thereto
      or resulting therefrom, 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 indicating that any Person has made or participated in, is
      making or participating in, or proposes to make or participate in a
      Take-Over Bid, alone or by acting jointly or in concert with any other
      Person;                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (iv)  | an underwriter or member of a banking or selling group
      acting in such capacity that becomes the Beneficial Owner of 20% or more
      of the outstanding Voting Shares in connection with a bona fide
      distribution to the public of securities pursuant to an underwriting
      agreement with the Corporation, or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (v)   | a Person (a "**Grandfathered Person**") who
      is the Beneficial Owner of 20% or more of the outstanding Voting Shares or
      Convertible Securities that, if converted or exchanged into Voting Shares,
      would constitute 20% or more of the outstanding Voting Shares, determined
      as at the close of business on the Effective Date; provided that this
      exception will not be, and will cease to be, applicable to a Grandfathered
      Person in the event that such Grandfathered Person, after the Record Time,
      becomes the Beneficial Owner of any additional Voting Shares or
      Convertible Securities that increases its Beneficial Ownership of Voting
      Shares by more than 1.0% of the number of Voting Shares outstanding from
      time to time, other than through a Convertible Security Acquisition, a
      Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
      Acquisition, a Pro Rata Acquisition or through the exercise of existing
      rights to acquire additional Voting Shares from the Corporation where such
      rights were owned by the Grandfathered Person at the Record
  Time.

| | (b) | "**Affiliate**" means, when used to indicate
      a relationship with a specified Person, a Person that, directly, or
      indirectly through one or more intermediaries
or
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- 4 -

| |     | otherwise, controls, or is controlled by, or is under
      common control with, such specified Person.                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | "**Agreement**" means this amended and
      restated shareholder rights plan agreement dated as of May 25, 2007
      between the Corporation and the Rights Agent, as amended, modified or
      supplemented from time to time (amending and restating a shareholder
      rights plan agreement dated as of December 4, 2003 between the Corporation
      and the Rights Agent).
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | "**Amendment Date**" means the date upon
      which this Agreement amends, restates and supersedes the Original
      Agreement in accordance with Section 5.16.                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| | (e) | "**annual cash dividend**" means cash
      dividends paid at regular intervals in any financial year of the
      Corporation to the extent that such cash dividends do not exceed, in the
      aggregate, the greatest of:                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| | (f) | "**Associate**" means, when used to indicate
      a relationship with a specified Person:                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| | (g) | "**Beneficial Owner**": A Person shall be
      deemed the "**Beneficial Owner**" of, and to have
      "**Beneficial Ownership**" of, and to "**Beneficially
      Own**",                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                  

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- 5 -

| | (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 (where such right is exercisable within a period of 60 days,
      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 exercise or
      exchange or purchase of a right attaching to a Convertible Security, other
      security, warrant or option (other than the Rights) to purchase a Voting
      Share; or
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | any securities which are Beneficially Owned within the
      meaning of Sections 1.1(g)(i) and (ii) by any other Person with whom such
      Person, or any of such Person's Affiliates, 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 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)                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | (B)                                                                                                                                                                                                                                                                                                                                                                                                                                     

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- 6 -

| |     | performance of the Fund Manager's duties with respect to
      the Mutual Fund, or (2) a Mutual Fund;                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (C) | 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 such Estate Account or for such Other
      Accounts;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (D) | 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;                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (E) | such Person (the "**Administrator**") is the
      administrator or trustee of one or more pension funds or plans (a
      "**Plan**"), or is a Plan, registered or qualified under the
      laws of Canada or any Province thereof or the laws of the United States of
      America or any State thereof, or                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (F) | such Person (the "**Crown Agent**") is a
      Crown agent or agency;                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |       | provided, in any of the above cases, that the Investment
      Manager, the Fund Manager, the Mutual Fund, the Trust Company, the
      Statutory Body, the Administrator, the Plan or the Crown Agent, 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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- 7 -

| |        | 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**" means the board of
      directors from time to time of the Corporation or any duly constituted and
      empowered committee thereof.                                                                                                                                                                                                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (i) | "**Business Corporations Act(British
      Columbia)"** means the Business Corporations Act(British
      Columbia) and the regulations thereunder, as now in effect or as the same
      may from time to time be amended, re-enacted or replaced.                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (j) | "**Business Day**" means any day other than
      a Saturday, Sunday or a day on which banking institutions in Vancouver are
      authorized or obligated by law to close.                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (k) | "**Canadian Dollar Equivalent**" means, for
      any amount which is expressed in United States dollars on any date, the
      Canadian dollar equivalent of such amount determined by reference to the
      U.S.-Canadian Exchange Rate on such date.                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (l) | "**Canadian-U.S. Exchange Rate**" means, on
      any date, the inverse of the U.S.- Canadian Exchange Rate.                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (m) | "**close of business**" means, on any given
      date, 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 Vancouver, British Columbia of the transfer agent for the Common
      Shares of the Corporation (or, after the Separation Time, the principal
      transfer office in Vancouver of the Rights Agent) closes to the
    public.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (a) | "**Closing Price**" per security of any
      securities on any date of determination shall mean:                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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- 8 -

| | (ii) | if for any reason none of such prices are available on
      such date or the securities are not listed or admitted to trading on a
      stock exchange or a national securities quotation system on such date, 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;
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     | provided, however, that (A) if for any reason none of
      such prices are available on such date, the "**Closing
      Price**" per security of such securities on such date shall mean
      the fair value per security of the securities on such date as determined
      at the request of the Board of Directors by a nationally or
      internationally recognized investment dealer or investment banker; and (B)
      if the Closing Price so determined is expressed in United States dollars,
      such amount shall be converted to the Canadian Dollar
Equivalent.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (n) | "**Common Shares**" means the common shares
      without par value in the capital of the Corporation as presently
      constituted, as such shares may be subdivided, consolidated, reclassified
      or otherwise changed from time to time.                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (o) | "**Company Act**" means the
      Company Act(British Columbia) and the regulations thereunder, as
      now in effect or as the same may from time to time be amended, re- enacted
      or replaced.                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (p) | "**Competing Permitted Bid**" means a
      Take-Over Bid that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (q) | "**controlled**" a corporation shall be
      deemed to be "controlled" by another Person or two or more Persons
    if:                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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- 9 -

| | (ii) | the votes carried by such securities are entitled, if
      exercised, to elect a majority of the Board of Directors of such
      corporation.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | (r)  | "**Co-Rights Agents**" means a Co-Rights
      Agent appointed pursuant to Subsection 4.1(a).                                                                                                                                                                                                                                                                                                                           
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (s)  | "**Corporation**" means Polymet Mining
      Corp.                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (t)  | "**Convertible Security**" means a security
      convertible, exercisable or exchangeable into a Voting Share and a
      "**Convertible Security Acquisition**" means an acquisition
      by a Person of Voting Shares upon the exercise, conversion or exchange of
      a Convertible Security received by a Person pursuant to a Permitted Bid
      Acquisition, an Exempt Acquisition or a Pro Rata Acquisition;
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (u)  | "**Disposition Date**" has the meaning
      ascribed thereto in Subsection 5.1(h).                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (v)  | "**Dividend Reinvestment Acquisition**"
      shall mean an acquisition of Voting Shares pursuant to a Dividend
      Reinvestment Plan.                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (w)  | "**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)                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | be applied to the purchase from the Corporation of Common
      Shares.                                                                                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (x)  | "**Effective Date**" means December 4,
      2003.                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (y)  | "**Election to Exercise**" means an election
      to exercise Rights substantially in the form attached to the Rights
      Certificate.                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (z)  | "**Exchange Act of 1934**" means the
      Securities Exchange Act of 1934 (United States of America), 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 repealed.                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (aa) | "**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 Sections 5.1 (a)
      or (h).                                                                                                                                                                                                        

---

- 10 -

| | (bb) | "**Exercise Price**" means, as of any date,
      the price at which a holder of a Right may purchase the securities
      issuable upon exercise of one whole Right which, until adjusted in
      accordance with the terms hereof, will be $50.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (cc) | "**Expansion Factor**" shall have the
      meaning ascribed thereto in Section 2.3(a)(A).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (dd) | "**Expiration Time**" means the close of
      business on that date which is the earlier of the date of termination of
      this Agreement pursuant to Section 5.16 or, if this Agreement is confirmed
      pursuant to Section 5.16, the close of business on the tenth anniversary
      of the Effective Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (ee) | "**Flip-in Event**" means a transaction or
      event in or pursuant to which a Person becomes an Acquiring
  Person.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (ff) | "**holder**" shall have the meaning ascribed
      thereto in Section 2.8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (gg) | "**Independent Shareholders**" means holders
      of outstanding Voting Shares, other than:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (hh) | "**Lock-up Agreement**" means an agreement
      between an Offeror or any Affiliate or Associate of an Offeror and one or
      more holders of Voting Shares (each such holder herein referred to as a
      "**Locked-up Person**") who are not Affiliates or Associates
      of the Offeror and who are not, other than by virtue of entering into such
      agreement, acting jointly or in concert with the Offeror, the terms of
      which are publicly disclosed and a copy of which is made available to the
      public (including the Corporation) not later than the date of the Lock-up
      Bid (as hereinafter defined) or, if the Lock-up Bid has been made prior to
      the date of the Lock-up Agreement, forthwith following the entering into
      of the Lock-up Agreement and, in any event, not later than the day
      immediately following the date the Lock-up Agreement was entered into,
      pursuant to which each Locked-up Person agrees to deposit or tender the
      Voting Shares held by such holder to a

---

- 11 -

Take-over Bid (the "**Lock-up
Bid**") made by the Offeror or any Affiliates or Associates of the
Offeror or any other Person acting jointly or in concert with the Offeror
provided that:

| | (i)  | the Lock-up Agreement permits the Locked-up Person to
      withdraw its Voting Shares from the Lock-up Agreement and the Lock-up Bid
      in order to deposit or tender the Voting Shares to another Take-over Bid
      or to support another transaction prior to the Voting Shares being taken
      up and paid for under the Lockup Bid:                                                                                                                                                                                                                                      
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (B)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (C)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | for greater certainty, the Lock-up Agreement may contain
      a right of first refusal or require a period of delay to give the Person
      who made the Lock- up Bid an opportunity to match a higher price in
      another Take-over Bid or transaction or other similar limitation on a
      Locked-up Person's right to withdraw Voting Shares from the agreement, so
      long as the limitation does not preclude the exercise by the Locked-up
      Person of the right to withdraw Voting Shares during the period of the
      other Take-over Bid or transaction; and
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii) | no "break-up" fees, "topping" fees, penalties, expenses
      or other amounts that exceed in aggregate the greater of:                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (B)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

- 12 -

transaction exceeds the price or value
of the consideration that the Locked-up Person would have received under the
Lock-up Bid;

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

| | (ii) | "**Market Price**" per security of any
      securities on any date of determination shall mean the average of the
      daily Closing Prices per security of such securities on each of the 20
      consecutive Trading Days through and including the Trading Day immediately
      preceding such date of determination; provided, however, that if an event
      of a type analogous to any of the events described in Section 2.3 hereof
      shall have caused any Closing Price used to determine the Market Price on
      any Trading Day not to be fully comparable with the Closing Price on the
      Trading Day immediately preceding such date of determination, 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
      (as determined by the Board of Directors acting in good faith) in order to
      make it fully comparable with the Closing Price on the Trading Day
      immediately preceding such date of determination.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (jj) | "**Nominee**" has the meaning ascribed
      thereto in Subsection 2.2(c).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (kk) | "**Offer to Acquire**" includes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (ll) | "**Offeror**" means a Person who has
      announced a current intention to make, or who is making, a Take-Over
      Bid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (mm) | "**Offeror's Securities**" means the
      aggregate of all Voting Shares Beneficially Owned by the Offeror on the
      date of a Take-Over Bid by an Offeror.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (nn) | "**Permitted Bid**" means a Take-Over Bid
      made by way of a take-over bid circular which also complies with the
      following additional provisions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

- 13 -

| | (ii) | the Take-Over Bid contains, and the take-up and payment
      for securities tendered or deposited thereunder is subject to, irrevocable
      and unqualified conditions that:
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                
| |      | (A)                                                                                                                                                                            
| |      |                                                                                                                                                                                
| |      | (B)                                                                                                                                                                            
| |      |                                                                                                                                                                                
| |      | (C)                                                                                                                                                                            
| |      |                                                                                                                                                                                
| |      | (D)                                                                                                                                                                            

| |      | For purposes of this Agreement, the term
      "**Permitted Bid**" shall include a Competing Permitted
      Bid.                                                                                                                                                                                              
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                
| | (oo) | "**Permitted Bid Acquisition**" means an
      acquisition of Voting Shares made pursuant to a Permitted Bid or a
      Competing Permitted Bid.                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                
| | (pp) | "**Person**" includes any individual, firm,
      partnership, association, trust, trustee, executor, administrator, legal
      personal representative, government, governmental body or authority,
      corporation, or other incorporated or unincorporated organization,
      syndicate or other entity.
| |      |                                                                                                                                                                                                                                                                                                                
| | (qq) | "**Pro-Rata Acquisition**" means an
      acquisition by a Person of Voting Shares pursuant to:                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                
| |      | (i)                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                
| |      | (ii)                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                
| |      | (iii)                                                                                                                                                                                                                                                                                                          

---

- 14 -

| |      | securities of the Corporation pursuant to a bona fide
      rights offering or pursuant to a prospectus; or                                                                                                                                                                                                                                                                                                                                                                             
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iv) | a distribution to the public of Voting Shares or
      Convertible Securities (and the conversion or exchange of such Convertible
      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 Convertible Securities, so offered
      than the Person's percentage of Voting Shares beneficially owned
      immediately prior to such acquisition.

| | (rr)  | "**Record Time**" means 12:01 a.m.
      (Vancouver time) on December 4, 2003.                                                                                                                                    
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                   
| | (ss)  | "**Redemption Price**" has the meaning
      ascribed thereto in Section 5.1(b).                                                                                                                                  
| |       |                                                                                                                                                                                                                   
| | (tt)  | "**Right**" means a right to purchase Common
      Shares on and subject to the terms and conditions of this
  Agreement.                                                                                         
| |       |                                                                                                                                                                                                                   
| | (uu)  | "**Rights Agent**" means Pacific Corporate
      Trust Company and any successor rights agent hereunder.                                                                                                          
| |       |                                                                                                                                                                                                                   
| | (vv)  | "**Rights Certificate**" means a certificate
      representing Rights in substantially the form of Schedule A attached
      hereto.                                                                             
| |       |                                                                                                                                                                                                                   
| | (ww)  | "**Rights Register**" shall have the meaning
      ascribed thereto in Section 2.6(a).                                                                                                                            
| |       |                                                                                                                                                                                                                   
| | (xx)  | "**Securities Act(Alberta)"** means
      the Securities Act, SA, 1981, c.S-61, as amended, and the regulations
      thereunder; and any comparable or successor laws or regulations
      thereto;              
| |       |                                                                                                                                                                                                                   
| | (yy)  | "**Securities Act(British
      Columbia**)" means the Securities Act, R.S.B.C. 1996, c. 418, as
      amended, and the regulations thereunder, and any comparable or successor
      laws or regulations thereto;
| |       |                                                                                                                                                                                                                   
| | (zz)  | "**Securities Act(Ontario)"** means
      the Securities Act, R.S.O. 1990, c.s.5, as amended, and the regulations
      thereunder, and any comparable or successor laws or regulations
      thereto;            
| |       |                                                                                                                                                                                                                   
| | (aaa) | "**Separation Time**" means the close of
      business on the tenth Business Day after the earlier of:                                                                                                           
| |       |                                                                                                                                                                                                                   
| |       | (i)                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                   
| |       | (ii)                                                                                                                                                                                                              

---

- 15 -

withdrawn prior to the Separation
Time, such Take-Over Bid shall be deemed, for the purposes of this definition,
never to have been made.

| | (bbb) | "**Share Acquisition Date**" means the first
      date of a public announcement or disclosure by the Corporation or an
      Acquiring Person of facts indicating that a Person has become an Acquiring
      Person (which, for purposes of this definition, shall include, without
      limitation, a report filed pursuant to Section 101 of the Securities
      Act(Ontario), Section 111 of the Securities Act(British
      Columbia) or Section 141 of the Securities Act(Alberta)).    
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ccc) | "**Subsidiary**": a corporation shall be
      deemed to be a subsidiary of another corporation if:                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ddd) | "**Take-Over Bid**" means an Offer to
      Acquire Voting Shares of any class, or Convertible Securities with respect
      thereto, where the Voting Shares subject to the Offer to Acquire, together
      with the Voting Shares into or for which the securities subject to the
      Offer to Acquire are convertible or exchangeable and the Offeror's
      Securities constitute in the aggregate 20% or more of the outstanding
      Voting Shares at the date of the Offer to Acquire.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (eee) | "**Trading Day**" means, when used with
      respect to any securities, a day on which the principal Canadian stock
      exchange on which such securities are listed or posted for trading is open
      for the transaction of business or, if the securities are not listed or
      posted for trading on any Canadian stock exchange, a Business
  Day.                                                                                                                                    
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (fff) | "**U.S. Canadian Exchange Rate**" means, on
      any date:                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

---

- 16 -

| | (ggg) | "**U.S. Dollar Equivalent**" means, for any
      amount which is expressed in Canadian dollars on any date, the United
      States dollar equivalent of such amount determined by reference to the
      Canadian-U.S. Exchange Rate on such date.                                                                              
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                   
| | (hhh) | "**Voting Share Reduction**" means an
      acquisition or redemption by the Corporation of outstanding Voting Shares
      which, by reducing the number of Voting Shares outstanding, increases the
      percentage of Voting Shares Beneficially Owned by a Person to 20% or more
      of the Voting Shares then outstanding.
| |       |                                                                                                                                                                                                                                                                                                                                   
| | (iii) | "**Voting Shares**" means the Common Shares
      and any other shares of the Corporation entitled to vote generally and at
      all times for the election of directors of the
  Corporation.                                                                                                                                   

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 and References:

The headings of the articles, sections and subsections of this Agreement and the
table of contents are inserted for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. All references to
articles, sections, subsections and paragraphs are to articles, sections,
subsections and paragraphs of this Agreement. The words "hereto", "herein",
"hereof, "hereunder", "this Agreement", "the Rights Agreement" and. similar
expressions refer to this Agreement including the schedule attached hereto as a
whole, as the same may be amended, modified or supplemented at any time or from
time to time.

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

For purposes of this Agreement, the percentage of Voting Shares of any class
Beneficially Owned by any Person, will 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 of the particular class
      Beneficially Owned by such Person; and
|       |           |   |                                                                                                                                                                          
|       | B         | = | the number of votes for the election of all directors
      generally attaching to all outstanding Voting Shares of the particular
      class.                          

---

- 17 -

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

1.5                    
Acting Jointly or in Concert:

For the purposes of this Agreement, a Person is acting jointly or in concert
with every Person who is a party to an agreement, commitment or understanding,
whether formal or informal and whether or not in writing, with the first Person
to acquire or to offer to acquire Voting Shares or Convertible Securities in
respect thereof (other than customary agreements with and between underwriters
and banking group or selling group members with respect to a distribution of
securities or pursuant to a pledge of securities in the ordinary course of the
pledgee's 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 of
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
an asset or liability or item of revenue or expense is 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                     Legend
on Common Share Certificates:

Certificates representing the Common Shares, including without limitation Common
Shares issued upon the conversion of Convertible Securities, issued after the
Record Time but prior to the close of business on 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 legend set forth in Section 2.1 of the Original
Agreement (which such legend shall be deemed for all purposes to be amended to
read the same as set forth below), but Common Share certificates issued after
the Amendment Date but prior to the close of business on the earlier of the
Separation Time and the Expiration Time shall have impressed on, printed on,
written on, or otherwise affixed to them the following legend:

> "Until the Separation Time (as such term is defined in
>       the Amended and Restated Shareholder Rights Plan Agreement referred to below),
>       this certificate also evidences and entitles the holder hereof to certain
>       rights as set forth in the amended and restated shareholder rights plan
>       agreement (the "Amended and

---

- 18 -

> Restated Shareholder Rights Plan Agreement") dated as of
>       May •, 2007 between Polymet Mining Corp. (the "Corporation") and Pacific
>       Corporate Trust Company, as Rights Agent, the terms of which are hereby
>       incorporated herein by reference and a copy of which is on file and may
>       be inspected during normal business hours at the principal executive office
>       of the Corporation. Under certain circumstances as set forth in the Amended
>       and Restated Shareholder Rights Plan Agreement, such Rights may be amended,
>       redeemed or exchanged, may expire, may lapse, may become void (if, in certain
>       circumstances, they are "Beneficially Owned" by a Person who is or becomes
>       an "Acquiring Person", as such terms are defined in the Amended and Restated
>       Shareholder Rights Plan Agreement, or a transferee thereof) or may be evidenced
>       by separate certificates and may no longer be evidenced by this certificate.
>       The Corporation will mail or arrange for the mailing of a copy of the Amended
>       and Restated Shareholder Rights Plan Agreement to the holder of this certificate
>       without charge as soon as practicable after the receipt of a written request
>       therefor."

Certificates representing Common Shares that are issued and outstanding at the
Record Time or the Amendment Date, as the case may be, shall also evidence one
Right for each Common Share evidenced 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) | Exercise Terms: 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. Notwithstanding any other provision of this
      Agreement, any Rights held by the Corporation or any of its Subsidiaries
      will be void.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (b) | No Exercise Prior to Separation Time: Until the
      Separation Tune:                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (c) | Exercise After Separation Time: From and after the
      Separation Time and prior to the Expiration Time:                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                             

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- 19 -

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 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):

| | (iii) | 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 "system" on which the Rights may from time
      to time be listed or traded, or to conform to usage; and
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (iv)  | a disclosure statement describing the
  Rights;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |     | provided that a Nominee shall be sent the materials
      provided for in (iii) and (iv) in respect of all Common Shares of the
      Corporation held of record by it which are not Beneficially Owned by an
      Acquiring Person.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                      
| | (d) | Manner of Exercise: 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)                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                      
| |     | (ii)                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                      
| |     | (iii)                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                      
| | (e) | Issue of Common Shares: Upon receipt of a Rights
      Certificate, together with a completed Election to Exercise executed in
      accordance with Subsection 2.2(d)(ii)                                                           

---

- 20 -

which does not indicate that such Right is null and void as
provided by Subsection 3.1(b), and payment as set forth in Section 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 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 Section
      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.                                                                                     

| | (f) | Partial Exercise: In case the holder of any Rights
      shall exercise less than all of the Rights evidenced by the Rights
      Certificate of such holder, 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
      authorized assigns.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                
| | (g) | Covenants: The Corporation covenants and agrees
      to:                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                          

---

- 21 -

| | (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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (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 the 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 naive 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | (h) | Authorized Capital: If the number of Common Shares
      which are not issued or reserved for issue is insufficient to permit the
      exercise in full of the Rights in accordance with this Section 2.2, then
      each Right, when such Right is aggregated with a sufficient number of
      Rights to acquire a whole number of Common Shares, will entitle the holder
      thereof, after the Separation Time, to purchase that number of Common
      Shares at the Exercise Price per Common Share equal to the quotient
      determined by dividing the difference between the number of authorized
      Common Shares and the number of Common Shares then issued or allotted or
      reserved for issuance by the Corporation, by the number of Rights then
      outstanding.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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) | Share Reorganization: If the Corporation shall at
      any time after the date of this Agreement:
| | --- | --------------------------------------------------------------------------------------------------
| |     |                                                                                                   
| |     | (i)                                                                                               
| |     |                                                                                                   
| |     | (ii)                                                                                              

---

- 22 -

| | (iii) | consolidate or change the then outstanding Common Shares
      into a smaller number of Common Shares; or                                                                                                                                                                                                            
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                      
| | (iv)  | issue any Common Shares for other securities exchangeable
      for or convertible into or giving a right to acquire Common Shares or
      other securities of the Corporation or 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 therefor 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:

| | (A) | 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 one Common
      Share immediately prior to such dividend, subdivision, change,
      consolidation or issuance would hold thereafter as a result thereof;
      and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (B) | each Right held prior to such adjustment will become that
      number of Rights as results from the application of 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 in effect 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.

---

- 23 -

| |     | 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) | Rights Offering: If 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 21 calendar
      days after such record date) to subscribe for or purchase Common Shares
      (or Convertible Securities) at a price per Common Share (or, if
      Convertible Securities, having a conversion, exchange or exercise price,
      including the price required to be paid to purchase such Convertible
      Securities) less than the Market Price per Common Share on such record
      date, the Exercise Price to be in effect alter such record date shall be
      determined by multiplying the Exercise Price in effect immediately prior
      to such record date by a fraction:                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | 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 Convertible Securities)
      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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

---

- 24 -

| |     | 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% of the current market price per share (determined as provided in
      such plans) of the Common Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | Special Distribution: If 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 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 the Exercise Price
      which would have been in effect if such record date had not been
    fixed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | Minimum Adjustments: 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 many subsequent
      adjustment. All calculations under Section 2.3 shall be made to the
      nearest cent or to the nearest tenthousandth 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e) | Discretionary Adjustment: If the Corporation shall
      at any time after the Record Time and prior to the Separation Time issue
      any shares of capital stock (other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

- 25 -

| |     | than Common Shares), or Convertible Securities, 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. The
      Corporation and the Rights Agent shall have authority without the approval
      of the holders of the Common Shares or the holders of Rights to amend this
      Agreement as appropriate to provide for such adjustments.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (f) | Benefit of Adjustments: 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) | No Change of Certificates: 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) | Timing of Issuance: 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;                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (i) | Adjustments Regarding Tax: 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
      Convertible Securities;
| |       |                                                                                        
| | (iii) | stock dividends; or                                                                    

---

- 26 -

| | (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 transfer books of the Common
Shares of the Corporation are closed, such Person shall be deemed to have become
the holder of record of such Common Shares on, and such certificate shall be
dated, the next succeeding Business Day on which the transfer books of the
Common Shares are open.

2.5                     
Execution, Authentication, Delivery and Dating of Rights Certificates:

| | (a) | Execution: The Rights Certificates shall be
      executed on behalf of the Corporation, under its corporate seal reproduced
      thereon, by any one of its Chairman, President, Chief Executive Officer or
      a Vice-President or Secretary. The signature of any of these officers on
      the Rights Certificates may be manual or facsimile.                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (b) | Valid Signatures: Rights Certificates bearing the
      manual or facsimile signatures of individuals who were at any time the
      proper officers of the Corporation shall bind the Corporation,
      notwithstanding that such individuals or any of them have ceased to hold
      such offices prior to the countersignature and delivery of such Rights
      Certificates.                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (c) | Delivery: Promptly after the Corporation learns of
      the Separation Time, the Corporation shall notify the Rights Agent of such
      Separation Time and shall deliver Rights Certificates executed by the
      Corporation to the Rights Agent for countersignature, and the Rights Agent
      shall countersign (manually or by facsimile signature in a manner
      satisfactory to the Corporation) and send such Rights Certificates to the
      holders of the Rights pursuant to Subsection 2.2(c) hereof. No Rights
      Certificate shall be valid for any purpose until countersigned by the
      Rights Agent in the manner described above.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (d) | Date: Each Rights Certificate shall be dated the
      date of countersignature thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

2.6                    
Registration, Transfer and Exchange:

| | (a) | Maintaining of Register: The Corporation shall
      cause to be kept a register (the "Rights Register") in which, subject to
      such reasonable regulations as it may
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 27 -

| |     | prescribe, the Corporation shall provide for the
      registration and transfer of Rights. The Rights Agent is hereby appointed
      registrar for the Rights ("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. If the Rights Agent shall cease to be the Rights
      Registrar, the Rights Agent shall have the right to examine such 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) below, the Corporation shall execute, and the Rights Agent shall
      countersign and deliver, in the name of the holder or the designated
      transferee or transferees, as required pursuant to the holder's
      instructions, one or more new Rights Certificates evidencing the same
      aggregate number of Rights as did the Rights Certificate so
      surrendered.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b) | Effect of Transfer or Exchange: All Rights issued
      upon any registration of a transfer or exchange of Rights Certificates
      shall be 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) | Transfer or Exchange of Rights: Every Rights
      Certificate surrendered for registration of transfer or exchange shall
      have the form of assignment thereon completed and executed, or be
      accompanied by a written instrument of transfer in form satisfactory to
      the Corporation or the Rights Agent, as the case may be, executed by the
      holder thereof or the attorney of such holder duly authorized in writing.
      As a condition to the issue of any new Rights Certificate under this
      Section 2.6, the Corporation may require the payment of an amount
      sufficient to cover any tax or other governmental charge that may be
      imposed in relation thereto and other expenses, including the reasonable
      fees and expenses of its Rights Agent, connected therewith.                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | No Transfer or Exchange After Termination: The
      Corporation shall not be required to register the transfer or exchange of
      any Rights after the Rights have been terminated under Section 5.1(e)
      hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

2.7                    
Mutilated, Destroyed, Lost and Stolen Rights Certificates:

| | (a) | Mutilation: If there shall be delivered to the
      Corporation and the Rights Agent prior to the Expiration Time, evidence to
      their satisfaction of the mutilation or defacing of any Rights
      Certificate, the Corporation shall execute and the Rights Agent shall
      countersign and deliver a new Rights Certificate upon surrender and
      cancellation of the mutilated or defaced Rights Certificate.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (b) | Destruction, Loss: If there shall be delivered to
      the Corporation and the Rights Agent prior to the Expiration
  Time:                                                                                                                                                                                                                                                                                                 

---

- 28 -

| | (i)  | evidence to their satisfaction of the destruction, loss
      or theft of any Rights Certificate; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (ii) | such security or indemnity as may be required by them to
      save each of them and their respective 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 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) | Taxes: As a condition to the issue of any new
      Rights Certificate under this Section 2.7, the Corporation may require the
      payment of an amount 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) | Original Obligation: Every new Rights Certificate
      issued pursuant to this Section 2.7 in lieu of any mutilated, destroyed,
      lost or stolen Rights Certificate shall evidence an original additional
      contractual obligation of the Corporation, whether or not the mutilated,
      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 issued
      hereunder.

2.8                    
Persons Deemed Owners:

The Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent may deem and treat the Person in whose name such 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 Certificates shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as

---

- 29 -

expressly permitted by this Agreement. The Rights Agent shall
destroy all cancelled Rights Certificates and deliver a certificate of
destruction to the Corporation.

2.10                   Agreement
of Rights Holders:

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

| | (a) | such holder is bound by and subject to the provisions of
      this Agreement, as amended from time to time in accordance with the terms
      hereof, in respect of all Rights held;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | prior to the Separation Time, each Right shall be
      transferable only together with, and shall be transferred by a transfer
      of, the associated Common Share certificate representing such
  Right;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | after the Separation Time, the Rights Certificates shall
      be transferable only on the Rights Register as provided herein;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | prior to due presentment of a Rights Certificate (or,
      prior to the Separation Time, the certificate evidencing the associated
      Common Shares 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 certificate evidencing the associated Common
      Shares 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 certificate evidencing the
      associated Common Shares made by anyone other than the Corporation or the
      Rights Agent) for all purposes whatsoever, and neither the Corporation nor
      the Rights Agent shall be affected by any notice to the
contrary;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (e) | such holder has waived all rights to receive any
      fractional Right or any fractional Common Share 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

---

- 30 -

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 the 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 Rights or Rights evidenced by the
Rights Certificates shall have been duly exercised in accordance with the terms
and the provisions hereof.

ARTICLE 3 ADJUSTMENTS TO THE RIGHTS

3.1                     Flip-in
Event:

| | (a) | Flip-In: Subject to the provisions of Sections
      3.1(b), 3.2 and Section 5.1, if prior to the Expiration Time a Flip-in
      Event shall occur, each Right shall constitute, effective at the close of
      business on the tenth Trading Day after the Share Acquisition Date, the
      right to purchase from the Corporation, upon exercise thereof in
      accordance with the terms hereof, that number of Common Shares as have 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
      hereof in the event that, after such date of consummation or occurrence,
      an event of a type analogous to any of the events described in Section 2.3
      hereof shall have occurred).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (b) | Certain Rights Void: 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 and the Share Acquisition Date by:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

- 31 -

with an Acquiring Person or any
affiliate or associate of an Acquiring Person), that has the purpose or effect
of avoiding Section 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) | Compliance with Laws: From and after the
      Separation Time, the Corporation shall do all 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
      that may be required to satisfy the requirements of the Securities Act(British Columbia) and the securities laws or comparable legislation
      of each of the Provinces of Canada in respect of the issue of Common
      Shares on the exercise of Rights in accordance with this
  Agreement.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (d) | Legend: Any Rights Certificate that represents
      Rights Beneficially Owned by a Person described in either Section
      3.1(b)(i) or (ii) or transferred to any Nominee of any such Person, and
      any Rights Certificate issued upon the transfer, exchange or replacement
      of any other Rights Certificate referred to in this sentence shall contain
      and be deemed to 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 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 represented
>             hereby shall become void in the circumstances specified in Subsection
>             3.1(b) of the Amended and Restated 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 be required to impose
such legend only if instructed to do so by the Corporation or if a holder fails
to certify upon transfer or exchange in the space provided on the Rights
Certificate that such holder is not a Person described in such legend.

3.2                     Exchange
Option:

| | (a) | Optional Exchange: In the event that the Board of
      Directors acting in good faith shall determine that conditions exist which
      would eliminate or otherwise materially diminish in any respect the
      benefits intended to be afforded to the holders of Rights pursuant to this
      Agreement, the Board of Directors may at its
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 32 -

option and without seeking the
approval of holders of Common Shares or Rights at any time after a Flip-in Event
has occurred, authorize the Corporation to issue and deliver in respect of each
Right which is not void pursuant to Section 3.1(b) either:

| | (i)  | in return for the Exercise Price and Right, cash, debt,
      equity or other securities or other property or assets (or a combination
      thereof) having a value equal to twice the Exercise Price; or                                                                                       
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                  
| | (ii) | in return for the Right and without further charge,
      subject to any amounts that may be required to be paid under applicable
      law, cash, debt, equity or other securities or other property or assets
      (or a combination thereof), having a value equal to the Exercise
    Price;

| |     | in full and final settlement of all rights attaching to
      the Rights; provided that the value of any such debt, equity or other
      securities or other property or assets shall be determined by the Board of
      Directors who may rely for that purpose on the advice of a nationally
      recognized Canadian firm of investment dealers or investment bankers
      selected by the Board of Directors. To the extent that the Board of
      Directors determines in good faith that any action need be taken pursuant
      to this Section 3.2, the Board of Directors may suspend the exercisability
      of the Rights for a period up to 60 days following the date of the
      occurrence of the relevant Flip-in Event in order to determine the
      appropriate form and value of cash, debt, equity or other securities or
      other property or assets (or a combination thereof to be issued or
      delivered on such exchange for Rights. In the event of any such
      suspension, the Corporation shall notify the Rights Agent and issue as
      promptly as practicable a public announcement stating that the
      exercisability of the Rights has been temporarily suspended.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | Termination of Right to Exercise: If the Board of
      Directors authorizes and directs the exchange of cash, debt, equity or
      other securities or other property or assets (or a combination thereof)
      for Rights pursuant to Subsection 3.2(a) hereof, then without any further
      action or notice the right to exercise the Rights will terminate and the
      only right thereafter of a holder of Rights shall be to receive such cash,
      debt, equity or other securities or other property or assets (or a
      combination thereof) in accordance with the determination of the Board of
      Directors made pursuant to Section 3.2(a). Within 10 Business Days of the
      Board of Directors authorizing and directing any such exchange, the
      Corporation shall give notice of such exchange to the holders of such
      Rights in accordance with Section 5.9. Each such notice of exchange shall
      state the method by which the exchange of cash, debt, equity or other
      securities or other property or assets (or a combination thereof) for
      Rights will be effected.                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | Additional Securities: If there shall not be
      sufficient securities authorized but unissued to permit the exchange in
      full of Rights pursuant to this Section 3.2, the Corporation will take all
      such action as may be necessary to authorize additional securities for
      issuance upon the exchange of Rights provided however, that
  the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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- 33 -

Corporation shall not be required to
issue fractions of securities or to distribute certificates evidencing
fractional securities. In lieu of issuing such fractional securities, subject to
Section 5.5(b), there shall be paid to the registered holders of Rights to whom
such fractional securities would otherwise be issuable, an amount in cash equal
to the same fraction of the market price of a whole such security.

ARTICLE 4 THE RIGHTS AGENT

4.1                     General:

| | (a) | Appointment of Rights Agent: The Corporation
      hereby appoints the Rights Agent to act as agent for the Corporation and
      the holders of Rights in accordance with the terms and conditions hereof
      and the Rights Agent hereby accepts such appointment. The Corporation may
      from time to time appoint one or more Co- Rights Agents as it may deem
      necessary or desirable. In such event, the respective duties of the Rights
      Agent and any Co-Rights Agent shall be as the Corporation may determine.
      The Corporation agrees to pay to the Rights Agent reasonable compensation
      for all services rendered by it hereunder and, from time to time on demand
      of the Rights Agent, its reasonable expenses and counsel fees and other
      disbursements incurred in the administration and execution of this
      Agreement and the exercise and performance of its duties hereunder. 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 performance of this Agreement, including the costs and
      expenses of defending against any claim of liability, which right to
      indemnification shall survive the termination of this Agreement.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Protection of Rights Agent: The Rights Agent shall
      be protected from, and shall incur no liability for or in respect of, any
      action taken, suffered or omitted by it in connection with its performance
      of this Agreement in reliance upon any certificate for Common Shares, or
      any 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
or Amalgamation or Change of Name of Rights Agent:

| | (a) | Merger: Any corporation into which the Rights
      Agent or any successor Rights Agent may be merged or amalgamated with or
      into, or any corporation succeeding to the shareholder services business
      of the Rights Agent or any successor Rights Agent, shall 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
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 34 -

| |     | for appointment as a successor Rights Agent under the
      provisions of Section 4.4 hereof. In case at the time such successor
      Rights Agent succeeds to the agency created by this Agreement any of the
      Rights Certificates have been countersigned but not delivered, any such
      successor Rights Agent may adopt the countersignature of the predecessor
      Rights Agent and deliver such Rights Certificates so countersigned, and in
      case at that time any of the Rights Certificates have not been
      countersigned, any successor Rights Agent may countersign such Rights
      Certificates either in the name of the predecessor Rights Agent or in the
      name of the successor Rights Agent, and in all such cases such Rights
      Certificates shall have the full force and effect provided in the Rights
      Certificates and in this Agreement.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Chance of Name: In case at any time the name of
      the Rights Agent is changed and at such time any of the Rights
      Certificates shall have been countersigned but not delivered, the Rights
      Agent may adopt the countersignature under its prior name and deliver
      Rights Certificates so countersigned, and in case at that time any of the
      Rights Certificates shall not have been countersigned, the Rights Agent
      may countersign such Rights Certificates either in its prior name or in
      its changed name and in all such cases such Rights Certificates shall have
      the full force provided in the Rights Certificates and in this
      Agreement.                                                                                                                                                                                                 

4.3                     Duties
of Rights Agent:

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

| | (a) | Legal Counsel: The Rights Agent may consult with
      legal counsel (who may be legal counsel for the Corporation), and the
      opinion of such counsel shall be full and complete authorization and
      protection to the Rights Agent as to any action taken or omitted to be
      taken by it in good faith and in accordance with such opinion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (b) | Satisfactory Proof: 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 or omitting to take
      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, the President, the Chief
      Executive Officer or any Vice-President and by the Chief Financial
      Officer, the Treasurer, any Assistant Treasurer, the Secretary or any
      Assistant Secretary of the Corporation and delivered to the Rights Agent
      and such certificate shall be full authorization to the Rights Agent for
      any action taken, omitted or suffered in good faith by it under the
      provisions of this Agreement in reliance upon such
  certificate.

---

- 35 -

| | (c) | Bad Faith: The Rights Agent shall be liable
      hereunder only for its own negligence, bad faith or wilful
    misconduct.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | Recitals: The Rights Agent shall not be liable for
      or by reason of any of the statements of fact or recitals contained in
      this Agreement or in the certificates representing Common Shares or the
      Rights Certificates (except its countersignature thereof) or be required
      to verify the same, but all such statements and recitals are and will be
      deemed to have been made only by the Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | No Responsibility: The Rights Agent shall not be
      under any responsibility in respect of the validity of this Agreement or
      the execution and delivery hereof (except the authorization, execution and
      delivery hereof by the Rights Agent) or in respect of the validity or
      execution of any certificate representing Common Shares 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, any change in
      the exercisability of the Rights (including the Rights becoming void
      pursuant to Section 2.11 or Subsection 3.2(b) hereof) or any adjustment
      required under the provisions of Section 2.3 hereof or 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 hereof describing any such adjustment) nor
      will it by any act hereunder be deemed to make any representation or
      warranty as to the authorization or reservation of any Common Shares to be
      issued pursuant to this Agreement or any Rights or as to whether any
      Common Shares shall, when issued, be duly and validly authorized,
      executed, issued and delivered and be fully paid and
  non-assessable.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | Performance By Corporation: 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) | Persons To Give Instructions: The Rights Agent is
      hereby authorized to rely upon and directed to accept instructions with
      respect to the performance of its duties hereunder from any person
      believed by the Rights Agent to be the Chairman, the President, the Chief
      Executive Officer, any Vice-President, the Secretary, any Assistant
      Secretary, the Chief Financial Officer, the Treasurer or any Assistant
      Treasurer of the Corporation and to apply to such persons for advice or
      instructions in connection with its duties, and it shall not be liable for
      any action taken, omitted or suffered by it in good faith in accordance
      with the instructions of any such person.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (h) | Ability To Deal: The Rights Agent and any
      shareholder, 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

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| |     | transaction in which the Corporation may be interested,
      or contract with or lend money to the Corporation or otherwise act as
      fully and freely as though it were not Rights Agent under this Agreement.
      Nothing herein shall preclude the Rights Agent from acting in any other
      capacity for the Corporation or for any other legal entity.                                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (i) | No Liability: 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 shall 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, omission, default,
      neglect or misconduct, provided reasonable care was exercised in the
      selection and continued employment thereof.

4.4                    
Change of Rights Agent:

The Rights Agent may resign and be discharged from its duties tinder this
Agreement upon 90 days' notice (or such lesser notice as is acceptable to the
Corporation) in writing delivered or mailed to the Corporation and to each
transfer agent of Common Shares by first class or registered mail. The
Corporation may remove the Rights Agent upon 60 days' notice in writing, mailed
or delivered to the Rights Agent and to each transfer agent of Common Shares by
first class or registered mail. If the Rights Agent should resign or be removed
or otherwise become incapable of acting, the Corporation shall 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 or by the holder of any Rights (which holder shall, with such
notice, submit the Rights Certificate of such holder for inspection by the
Corporation), then the holder of any Rights may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Corporation or by such a court, shall be a trust
company incorporated under the laws of Canada or a province thereof authorized
to carry on the business of a trust company as principal or through an agent in
the Provinces of Ontario and British Columbia. After appointment, the successor
Rights Agent shall 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; provided that 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 shall file notice thereof in writing with the
predecessor Rights Agent and the transfer agent of the Common Shares, and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

ARTICLE 5 MISCELLANEOUS

5.1                    
Redemption and Waiver:

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- 37 -

| | (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
      such particular Flip-in Event (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 which may arise in respect of any Take-Over Bid
      then in effect or made prior to the public announcement of the completion
      or termination of the transaction in respect of which the Board of
      Directors waived the application of Section 3.1.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | The Board of Directors 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 $0.0001 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**"). The redemption of the Rights by the
      Board of Directors may be made effective at such time, on such basis and
      with such conditions as the Board of Directors in its sole discretion may
      establish.                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | In the event that prior to the occurrence of a Flip-in
      Event a Person acquires, pursuant to a Permitted Bid or a Competing
      Permitted Bid, not less than 90% of the outstanding Common Shares other
      than Common Shares Beneficially Owned at the date of the Permitted Bid or
      the Competing Permitted Bid by such Person, then the Board of Directors of
      the Corporation shall immediately upon the consummation of such
      acquisition without further formality 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 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                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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- 38 -

| |     | the registry books of the transfer agent for the Common
      Shares. Any notice which is mailed in the manner herein provided shall be
      deemed given, whether or not the holder receives the notice. Each such
      notice of redemption will state the method by which the payment of the
      Redemption Price will be made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (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 ten Trading Days following a Share
      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 Share Acquisition Date shall be
      deemed not to have occurred. Any such waiver pursuant to this Subsection
      5.1(b) must be on the condition that such Person, within 10 days after the
      foregoing determination by the Board of Directors or such 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 Share Acquisition Date and Section 3.1 shall apply
    thereto.

5.2                     Expiration:

No Person shall have any rights pursuant to this Agreement or any Right after
the Expiration Time, except as provided in Section 4.1 hereof.

5.3                    
Issue of New Rights Certificates:

Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board of Directors to
reflect any adjustment or change in the number or kind 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 which are required to
      maintain the validity of this Agreement as a result of any change in any
      applicable legislation or regulations thereunder. The Corporation may,
      prior to the date of the shareholders' meeting referred to in Section
      5.16, supplement or amend this Agreement without
the
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- 39 -

| |     | approval of any holders of Rights or Voting Shares in
      order to make any changes which the Board of Directors acting in good
      faith may deem necessary or desirable. Notwithstanding anything in this
      Section 5.4 to the contrary, no such supplement or amendment shall be made
      to the provisions of Article 4 except with the written concurrence of the
      Rights Agent to such supplement or amendment.                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Subject to the 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 constating documents of the Corporation.                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (c) | The Corporation may, with the prior consent of the
      holders of Rights, at any time on or after the Share Acquisition Date,
      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
      constating documents and the Business Corporations Act(British
      Columbia) 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
      or regulation thereunder shall:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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- 40 -

| |      | may, by the majority referred to in Subsection 5.4(b),
      confirm or reject such amendment;                                                                                                                                                                                                                                                                             
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                            
| | (ii) | if made after the Separation Time, be submitted to the
      holders of Rights at a meeting to be called for 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(c), 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 Common Shares:

| | (a) | No Fractional Rights: The Corporation shall not be
      required to issue fractions of Rights or to distribute Right 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 Right Certificates, at the time such fractional Rights would
      otherwise be issuable, an amount in cash equal to the same 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) | No Fractional Common Shares: The Corporation shall not be
      required to issue fractions of Common Shares upon exercise of the Rights
      or to distribute certificates which evidence fractional Common Shares. In
      lieu of issuing fractional Common Shares, the Corporation shall pay to the
      holders of record of Right Certificates at the time such Rights are
      exercised as herein provided, an amount in cash equal to the same fraction
      of the Market Price of one Common Share that the fraction of a Common
      Share that would otherwise be issuable upon the exercise of such Right is
      of a whole Common Share.

5.6                    
Rights of Action:

Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights, and any holder of any Rights,
without the consent of the Rights

---

- 41 -

Agent or of the holder of any other Rights may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Corporation to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights of such holder in the manner provided
in the Rights Certificate of such holder 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 shall be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.

5.7                    
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 TSX Venture Exchange and
other exchanges will be obtained, such as to the issuance of Common Shares upon
the exercise of Rights under Section 2.2(d) and the issuance of convertible
debt, equity or other securities or other property or assets under section 3.2.
Notwithstanding anything to the contrary in this Agreement, no supplement or
amendment to this Agreement or to the terms of the Rights may be made without
the prior consent of the TSX Venture Exchange.

5.8                    
Declaration as to Non-Canadian 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 o£ Rights to persons who are
citizens, residents or nationals of any jurisdiction other than Canada, 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:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

POLYMET MINING CORP. 1003-1177
West Hastings Street Vancouver, B.C., V6E 2K3

Attention: William Murray
Telecopier No.: (604) 669-4705

---

- 42 -

With a copy to:

FARRIS, VAUGHAN, WILLS & MURPHY
LLP z25th Floor, 700 West Georgia Street Vancouver, B.C., V7Y 1B3

Attention: Mitchell H. Gropper, Q.C.
Telecopier No.: (604) 661-9349

| | (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:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Pacific Corporate Trust Company
510 Burrard Street, 2nd Floor Vancouver, B.C., V6C 3B9

Attention: Manager, Client Services
Telecopier No.: (604) 689-8144

| | (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 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 to the other given in the manner
      aforesaid.

5.10                   Costs
of Enforcement:

The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights, fails to fulfil any
of its obligations pursuant to this Agreement, then the Corporation or such
Person shall reimburse the holder of any Rights for

---

- 43 -

the costs and expenses (including legal fees) incurred by such
holder in actions to enforce his rights pursuant to any Rights or this
Agreement.

5.11                   Successors:

All of the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind their respective successors and
assigns and shall Inure to the benefit of their respective successors and
permitted 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 Rights any legal or
equitable right, remedy or claim under this Agreement and this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the holders of Rights.

5.13                  
 Governing Law:

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

5.14                  
Severability:

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

5.15                   Effective
Date:

This Agreement is effective and in full force and effect in accordance with its
terms from and after the Effective Date, subject to confirmation pursuant to
section 5.16.

5.16                    Confirmation:

This Agreement is effective and in full force and effect from and after the
Effective Date. If a majority of the votes cast by the Independent Shareholders
who vote in respect of a resolution to ratify and approve the continued
existence of the Original Agreement and the amendment and restatement thereof as
provided herein at the annual meeting of shareholders of the Corporation to be
held in 2007 are voted in favour of such resolution, this Agreement shall upon
such approval of such resolution amend, restate and supersede the Original
Agreement and shall be deemed to be effective from and after the Effective Date.
If such resolution is not then so approved by the aforesaid Independent
Shareholders, this Agreement shall have no force or effect, 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 Section 5.1(a)

---

- 44 -

or (h) hereof) prior to the date upon which this Agreement
would otherwise terminate pursuant to this Section 5.16. For greater certainty,
if this Agreement is not confirmed at such meeting by a majority of the votes
cast by holders of Voting Shares who vote in respect of the confirmation of this
Agreement, this Agreement and all outstanding Rights shall terminate and be void
and of no further force and effect on and from the close of business on the date
of termination of such meeting.

5.17                  
Determinations and Actions by the Board of Directors:

All actions, calculations, interpretations and determinations (including all
omissions with respect to the foregoing) which are done or made by the Board of
Directors pursuant to this Agreement, in good faith, (i) may be relied on by the
Rights Agent, and (ii) shall not subject the Board of Directors to any liability
to the holders of the Rights or to any other parties.

5.18                   
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.

| | **POLYMET MINING CORP.**           
| | -----------------------------------
| |                                    
| | By:                                
| |                                    
| |                                    
| |                                    
| | **PACIFIC CORPORATE TRUST COMPANY**
| |                                    
| | By:                                
| |                                    
| |                                    
| |                                    
| | By:                                
| |                                    
| |                                    

---

|SCHEDULE A TO THE AMENDED AND RESTATED
|--------------------------------------
|SHAREHOLDER RIGHTS PLAN AGREEMENT     
|DATED AS OF MAY 25, 2007 BETWEEN      
|POLYMET MINING CORP. AND              
|PACIFIC
      CORPORATE TRUST COMPANY 

**[Form of Rights Certificate]**

|Certificate No. _______ | ________________ Rights
|----------------------- | -----------------------

> THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE,
>       AT THE OPTION OF**POLYMET MINING CORP.,** ON THE TERMS SET
>       FORTH IN THE AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN AGREEMENT. RIGHTS
>       BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS SUCH TERMS ARE DEFINED IN THE
>       SHAREHOLDER RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES THEREOF ARE VOID.

**Rights Certificate**

This certifies that _________________________, or registered assigns, is the
  holder of record of the number of Rights set forth above, each one of which
  entitles the holder of record thereof, subject to the terms, provisions and
  conditions of the Amended and Restated Shareholder Rights Plan Agreement (the
  "**Amended and Restated Shareholder Rights Plan Agreement**"),
  dated as of May 25, 2007, between POLYMET MINING CORP. (the "Corporation"),
  a corporation incorporated under the Company Act(British Columbia),
  and PACIFIC CORPORATE TRUST COMPANY, a trust company incorporated under the
  laws of British Columbia, as Rights Agent under the Amended and Restated Shareholder
  Rights Plan Agreement, to purchase from the Corporation at any time after the
  Separation Time and prior to the Expiration Time (as such terns are defined
  in the Amended and Restated Shareholder Rights Plan Agreement), one common share
  of the Corporation (a "**Common Share**") (subject to adjustment
  as provided in the Amended and Restated Shareholder Rights Plan Agreement) at
  the Exercise Price referred to below, upon presentation and surrender of this
  Rights Certificate with a completed and executed Form of Election to Exercise
  at the principal office of the Rights Agent in Vancouver, Canada. The Exercise
  Price shall initially be $50 (Cdn.) per Common Share and shall be subject to
  adjustment in certain events as provided in the Amended and Restated Shareholder
  Rights Plan Agreement.

In certain circumstances described in the Amended and Restated Shareholder
Rights Plan Agreement, the Rights evidenced hereby may entitle the holder of
record thereof to purchase shares of an entity other than the Corporation or to
purchase or receive in exchange for such Rights assets, securities or shares of
the Corporation other than Common Shares or more or less than one Common Share,
or some combination of the foregoing, all as provided in the Amended and
Restated Shareholder Rights Plan Agreement.

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- 2 -

This Rights Certificate is subject to all of the terms, provisions and
conditions of the Amended and Restated Shareholder Rights Plan Agreement which
terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which 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. A copy of the Amended and Restated Shareholder Rights Plan
Agreement is on file at the principal executive office of the Corporation and is
available upon written request.

This Rights Certificate, with or without other Rights Certificates, upon
surrender at 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 the aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates so
surrendered. If this Rights Certificate shall be exercised in part, the holder
of record shall be entitled to receive, upon surrender hereof, another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provision of the Amended and Restated Shareholder Rights Plan
Agreement, the Rights evidenced by this Certificate may be redeemed by the
Corporation at a redemption price of $0.0001 per Right, subject to adjustment in
certain events, under certain circumstances at the option of the Corporation.

Subject to the provisions of the Amended and Restated Shareholder Rights Plan
Agreement, the Rights evidenced by this Certificate may be terminated or amended
by the Corporation at its option without the consent of holders of Rights.

No fractional Common Shares will be issued upon the exercise of any Right or
Rights evidenced hereby nor will Rights Certificates be issued for less than one
whole Right. After the Separation Time, in lieu of issuing factional Rights a
cash payment will be made as provided in the Amended and Restated Shareholder
Rights Plan Agreement.

No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Amended and Restated Shareholder Rights Plan
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 of the
Corporation at any meeting, to give or withhold consent to any corporate action,
to receive notice of meetings or other actions affecting shareholders of the
Corporation (except as provided in the Amended and Restated Shareholder Rights
Plan Agreement), to receive dividends or subscription rights or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Amended and Restated Shareholder Rights Plan Agreement.

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

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- 3 -

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

| |     | POLYMET MINING CORP.
| | --- | --------------------
| |     |                     
| | By: |                     
| |     | Name:               
| |     | Authorized Signatory

|Countersigned by and on behalf of the Rights Agent, |                     
|--------------------------------------------------- | --------------------
|PACIFIC CORPORATE TRUST COMPANY                     |                     
|                                                    |                     
|By:                                                 |                     
|                                                    | Name:               
|                                                    | Authorized Signatory

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[Form of Reverse Side of Rights Certificate]

POLYMET MINING CORP. - FORM OF ASSIGNMENT

(To be executed by the holder of record if such holder
desires to transfer the Rights.)

FOR VALUE RECEIVED _________________________ hereby sells,
  assigns and transfers unto _________________________________

____________________________________________________________________________________________________________
                                                         
(Please print name and address of transferee)

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
Certificate on the books of the Corporation with full power of substitution.

Dated: __________________________[month, day, year]

|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.)                                                  

The signature of the person executing this power must be guaranteed by a
participant of a recognized Medallion Guarantee Program, for example, a bank,
credit union, brokerage house or by a member of a recognized stock exchange.

CERTIFICATION(To be completed if true)

The
  undersigned hereby represents, warrants and certifies, 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 of an
  Acquiring Person or any Person acting jointly or in concert with an Acquiring
  Person or an Affiliate or Associate of an Acquiring Person (as such terms are
  defined in the Shareholder Rights Agreement).

|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.)                                                  



---

NOTICE

In the event the certification set forth above is not
completed in connection with a purported assignment, 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 of an Acquiring Person or any
Person acting jointly or in concert with an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as defined in the Amended and Restated
Shareholder Rights Plan Agreement) and accordingly will deem the Rights
evidenced by this Rights Certificate to be void and not transferable or
exercisable.

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FORM OF ELECTION TO EXERCISE

(To be executed if the holder desires to exercise the Rights
Certificate)

|TO: | Pacific Corporate Trust Company
|--- | -------------------------------
|    | 510 Burrard Street, 2nd Floor  
|    | Vancouver,
      B.C.  V6C 3B9 

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

Address:

________________________________________________________________________________________________

________________________________________________________________________________________________

Social Insurance or Other Taxpayer Identification Number:

________________________________________________________________________________________________

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

Full Address, including postal code:

________________________________________________________________________________________________

________________________________________________________________________________________________

Social Insurance or Other Taxpayer Identification Number:

________________________________________________________________________________________________

Dated: _________________________________[month, day, year]

|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.)                                                  

The signature of the person executing this power must be guaranteed by a
participant of a recognized Medallion Guarantee Program, for example, a bank,
credit union, brokerage house or by a member of a recognized stock exchange.

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- 2 -



CERTIFICATION (To be completed if true)

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



______________________________________________Signature

NOTICE

In the event the certification set forth above is not completed in connection
with a purported assignment, 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 of an Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as defined in the Shareholder Rights Agreement) and accordingly will
deem the Rights evidenced by this Rights Certificate to be void and not
transferable or exercisable.

---