**SHAREHOLDER      RIGHTS PLAN AGREEMENT**

**POLYMET      MINING CORP.**

**(the      "Corporation")**

**AND**

**PACIFIC      CORPORATE TRUST COMPANY **

**(the      "Rights Agent")**

**December      4, 2003**

----

**TABLE      OF CONTENTS**

|                                               |                                                                                                                     | Page   |
|----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------|
|                                               |                                                                                                                     |   |
| ARTICLE                1 INTERPRETATION            | 2                                                                                                                        |
|                                               |                                                                                                                     |   |
| 1.1                                                | Definitions:                                                                                                             | 2      |
| 1.2                                                | Currency:                                                                                                                | 16     |
| 1.3                                                | Headings                and References:                                                                                  | 16     |
| 1.4                                                | Calculation                of Number and Percentage of Beneficial Ownership of Outstanding Voting                Shares: | 17     |
| 1.5                                                | Acting                Jointly or in Concert:                                                                             | 17     |
| 1.6                                                | Generally                Accepted Accounting Principles:                                                                 | 18     |
|                                               |                                                                                                                     |   |
| ARTICLE                2 THE RIGHTS                | 18                                                                                                                       |
|                                               |                                                                                                                     |   |
| 2.1                                                | Legend                on Common Share Certificates:                                                                      | 18     |
| 2.2                                                | Initial                Exercise Price: Exercise of Rifts: Detachment of Rifts:                                           | 19     |
| 2.3                                                | Adjustments                to Exercise Price: Number of Rights:                                                          | 22     |
| 2.4                                                | Date                on Which Exercise is Effective:                                                                      | 27     |
| 2.5                                                | Execution.                Authentication. Delivery and Dating of Rifts Certificates:                                     | 27     |
| 2.6                                                | Registration.                Transfer and Exchange:                                                                      | 28     |
| 2.7                                                | Mutilated.                Destroyed. Lost and Stolen Rights Certificates:                                                | 28     |
| 2.8                                                | Persons                Deemed Owners:                                                                                    | 29     |
| 2.9                                                | Delivery                and Cancellation of Certificates:                                                                | 29     |
| 2.10                                               | Agreement                of Rights Holders:                                                                              | 30     |
| 2.11                                               | Rights                Certificate Holder Not Deemed a Shareholder:                                                       | 30     |
|                                               |                                                                                                                     |   |
| ARTICLE                3 ADJUSTMENTS TO THE RIGHTS | 31                                                                                                                       |
|                                               |                                                                                                                     |   |
| 3.1                                                | Flip-in                Event:                                                                                            | 31     |
| 3.2                                                | Exchange                Option:                                                                                          | 32     |
|                                               |                                                                                                                     |   |
| ARTICLE                4 THE RIGHTS AGENT          | 34                                                                                                                       |
|                                               |                                                                                                                     |   |
| 4.1                                                | General:                                                                                                                 | 34     |
| 4.2                                                | Merger                or Amalgamation or Chance of Name of Rights Agent:                                                 | 34     |
| 4.3                                                | Duties                of Rights Agent:                                                                                   | 35     |
| 4.4                                                | Change                of Rights Agent:                                                                                   | 37     |

----

|                                   |                                                                 |   |
|----------------------------------------|----------------------------------------------------------------------|--------|
| ARTICLE                5 MISCELLANEOUS | 37                                                                   |
|                                   |                                                                 |   |
| 5.1                                    | Redemption                and Waiver:                                | 37     |
| 5.2                                    | Expiration:                                                          | 39     |
| 5.3                                    | Issue                of New Rights Certificates:                     | 39     |
| 5.4                                    | Supplements                and Amendments:                           | 39     |
| 5.5                                    | Fractional                Rights and Fractional Common Shares:       | 41     |
| 5.6                                    | Rights                of Action:                                     | 41     |
| 5.7                                    | Regulatory                Approvals:                                 | 42     |
| 5.8                                    | Declaration                as to Non-Canadian holders:               | 42     |
| 5.9                                    | Notices:                                                             | 42     |
| 5.10                                   | Costs                of Enforcement:                                 | 43     |
| 5.11                                   | Successors:                                                          | 44     |
| 5.12                                   | Benefits                of this Agreement:                           | 44     |
| 5.13                                   | Governing                Law:                                        | 44     |
| 5.14                                   | Severability:                                                        | 44     |
| 5.15                                   | Effective                Date:                                       | 44     |
| 5.16                                   | Confirmation:                                                        | 44     |
| 5.17                                   | Determinations                and Actions by the Board of Directors: | 45     |
| 5.18                                   | Counterparts:                                                        | 46     |

----

**SHAREHOLDER      RIGHTS PLAN AGREEMENT**

**THIS      SHAREHOLDER RIGHTS PLAN AGREEMENT made as of December 4,      2003.**

|   |   | **POLYMET                MINING CORP.****,**                a                corporation incorporated pursuant to the laws of British Columbia                and                having its registered office at 1040-999 West Hastings Street, Vancouver,                B.C. V6C 2W2 |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**"Corporation"**

|   |   | **PACIFIC                CORPORATE TRUST COMPANY**,                a                trust company under the laws of British Columbia and having an office                at                10th                Floor, 625 Howe Street, Vancouver, B.C., V6C                3B8 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**"Rights      Agent"**

|   | (1) | authorized                the issuance, effective at 12:01 a.m. (Vancouver time) on the Effective                Date, of one Right in respect of each Common Share outstanding as                of 12:01                a.m. (Vancouver time) on the Effective Date (the **"Record                Time"**);                and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | authorized                the issue 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. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.1 |   | Definitions: |
|-----|--------|--------------|

|   | (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) | the                Corporation or any Subsidiary of the                Corporation; |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (ii) | any                Person who becomes the Beneficial Owner of 20% or more of the outstanding                Voting Shares as a result of one or any combination                of: |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | a                Voting Share Reduction; |
|--------|-----|------------------------------------------|

|   | (B) | Permitted                Bid Acquisitions; |
|--------|-----|--------------------------------------------|

|   | (C) | an                Exempt Acquisition; or |
|--------|-----|------------------------------------------|

|   | (D) | a                Pro Rata Acquisition, |
|--------|-----|----------------------------------------|

----

|   | (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(f)(viii) solely because such Person or                the                Beneficial Owner of such Voting Shares has participated in, proposes                or                intends to make 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 of facts indicating that any Person has participated                in, has                made, proposes or intends to make or is participating in a Take-Over                Bid                or any plans or proposals relating thereto or resulting therefrom,                including, without limitation, a report filed pursuant to Section                111 of                the Securities                Act                (British Columbia), Section 101 of the Securities                Act                (Ontario), or Section 176 of the Securities                Act                (Alberta); |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | an                underwriter or member of a banking or selling group 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                Grandfathered Person, 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 that increases its Beneficial Ownership                of                Voting Shares by more than 5% of the number of Voting Shares outstanding                from time to time, other than through 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                otherwise, controls, or is controlled by, or is under common control                with,                such specified Person. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | **"Agreement"**                means this shareholder rights plan agreement dated as of December                4, 2003                between the Corporation and the Rights Agent, as amended, modified                or                supplemented from time to time. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (d) | **"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) | 200%                of the aggregate amount of cash dividends declared payable by the                Corporation on its Common Shares in its immediately preceding financial                year; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | 300%                of the arithmetic average of the aggregate amount of cash dividends                declared payable by the Corporation on its Common Shares in its three                immediately preceding financial years;                and |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | 100%                of the aggregate consolidated net income of the Corporation, before                extraordinary items, for its immediately preceding financial                year. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | **"Associate"**                means, when used to indicate a relationship with a specified                Person: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------|

|   | (i) | a                corporation of which that Person owns, at law or in equity, shares                or                securities currently convertible into shares carrying more than 10%                of the                Voting Rights exercisable with respect to the election of directors                under                all circumstances or by reason of the occurrence of an event that                has                occurred and is continuing, or a currently exercisable option or                right to                purchase such shares or such convertible securities and with whom                that                Person is acting jointly or in                concert; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | a                partner of that Person acting on behalf of the partnership of which                they                are partners; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | a                trust or estate in which that Person has a beneficial interest and                with                whom that Person is acting jointly or in concert or in which that                Person                has a beneficial interest of 50% or more or in respect of which that                Person serves as a trustee or in a similar capacity provided, however,                that a Person shall not be an associate of a trust by reason only                of the                fact that such Person serves as a trustee or any similar capacity                in                relation to such trust if such Person is duly licensed to carry on                the                business of a trust company under the laws of Canada or any province                thereof or if the ordinary business of such Person includes the management                of investment funds for unaffiliated investors and such Person acts                as                trustee or in a similar capacity in relation to such trust in the                ordinary                course of such business; and |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | a                spouse of that Person, any person of the same or opposite sex with                whom                that person is living in a conjugal relationship outside marriage,                a child                of that Person or a relative of that Person if that relative has                the same                residence as that Person. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (f) | **"Beneficial                Owner"**:                a                Person shall be deemed the "Beneficial Owner", and to have "Beneficial                Ownership" of, and to "Beneficially                Own": |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | any                securities as to which such Person or any of such Person's Affiliates                is                the direct or indirect owner at law or in equity and for the purposes                of                this Clause 1.1(f)(i), but without limiting the generality of the                foregoing, a Person shall be deemed to be an owner at law or in equity                of                all securities: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | owned                by a partnership of which the Person is a                partner; |
|--------|-----|----------------------------------------------------------------------------------------|

|   | (B) | owned                by a trust in which the Person has a beneficial interest and which                is                acting jointly or in concert with that Person or in which the Person                has a                beneficial interest of 50% or more; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | owned                jointly or in common with others;                and |
|--------|-----|---------------------------------------------------------------------------|

|   | (D) | of                which the Person may be deemed to be the beneficial owner (whether                or not                of record) pursuant to the provisions of the Company                Act                (British Columbia), or the Securities                Act                (British Columbia), the Securities                Act                (Ontario), the Securities                Act                (Alberta), or pursuant to Rule 13d-3 or 13d-5 under the Exchange                Act of                1934 (or pursuant to any comparable or successor laws, regulations                or                rules enacted in relation to the provisions of the Company                Act                (British Columbia), the Securities                Act                (British Columbia), the Securities                Act                (Ontario), the Securities                Act                (Alberta) or pursuant to Rule 13d-3 or 13d-5 as in effect on the                date of                this Agreement); |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | any                securities as to which such Person or any of such Person's Affiliates                or                Associates has, directly or                indirectly: |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | the                right to acquire (whether such right is exercisable immediately or                after                the lapse or passage of time and whether or not on condition or the                happening of any contingency or otherwise) 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 bona                fide                public offering of securities; (y) pledges of securities in the ordinary                course of business that meet all the conditions specified in Rule                13d-3(d)(3) under the Exchange Act of 1934 (except for the condition                in                Rule 13d-3(d)(3)(ii)); and (z) pledge agreements with a registered                securities dealer relating to the extension of credit for purchases                of                securities on margin in the ordinary course of the dealer's business),                or                upon the exercise of any conversion right, exchange right, share                purchase                right (other than the Rights), warrant or option, or otherwise;                or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (B) | the                right to vote such securities (whether such right is exercisable                immediately or after the lapse or passage of time and whether or                not on                condition or the happening of any contingency or otherwise) pursuant                to                any agreement, arrangement, pledge (other than (x) pledges of securities                in the ordinary course of business that meet all the conditions specified                in Rule 13d-3(d)(3) under the Exchange Act of 1934 (except for the                condition in Rule 13d-3(d)(3)(ii)); and (y) pledge agreements with                a                registered securities dealer relating to the extension of credit                for                purchases of securities on margin in the ordinary course of the dealer's                business) or understanding (whether or not in writing) or                otherwise; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | any                securities which are Beneficially Owned within the meaning of Clauses                1.1(f)(i) or (ii) by any other Person with which such Person or any                of                such Person's Affiliates or Associates has any agreement, arrangement                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 bona fide public offering                of securities, (y) pledges of securities in the ordinary course of                business that meet all the conditions specified in Rule 13d-3(d)(3)                under                the Exchange Act of 1934 (except for the condition in Rule                13d-3(d)(3)(ii)) and (z) pledge agreements with a registered securities                dealer relating to the extension of credit for purchases of securities                on                margin in the ordinary course of the dealer's business) with respect                to or                for the purpose of acting jointly or in concert in acquiring, holding,                voting or disposing of any Voting Shares of any class;                and |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | any                securities which are directly or indirectly owned at law or in equity                by                an Associate of such Person; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | where                such security has been deposited or tendered pursuant 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 referred to in Clause 1.1(f)(iii), until                such                deposited or tendered security has been taken up or paid for, whichever                shall first occur; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (vi) | where                such Person, any of such Person's Affiliates or Associates or any                other                Person referred to in Clause 1.1(f)(iii), has or shares the power                to vote                or direct the voting of such security pursuant to a revocable proxy                given                in response to a public proxy solicitation or where such Person has                an                agreement, arrangement or understanding with respect to a shareholder                proposal or proposals or a matter or matters to come before a meeting                of                shareholders, including the election of                directors; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | where                such Person, any of such Person's Affiliates or Associates or any                other                Person referred to in Clause 1.1(f)(iii), has or shares the power                to vote                or direct the voting of such security in connection with or in order                to                participate in a public proxy solicitation or where such Person has                an                agreement, arrangement or understanding with respect to a shareholder                proposal or proposals or a matter or matters to come before a meeting                of                shareholders, including the election of                directors; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (viii) | where                such Person, any of such Person's Affiliates or Associates or any                other                Person referred to in Clause 1.1(f)(iii), holds or exercises voting                or                dispositive power over such security provided                that: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | the                ordinary business of any such Person (the **"Investment                Manager"**)                includes the management of investment funds for others (which others,                for                greater certainty, may include or be limited to one or more employee                benefit plans or pension plans) and such voting or dispositive power                over                such security is held by the Investment Manager in the ordinary course                of                such business in the performance of such Investment Manager's duties                for                the account of another Person (a **"Client"**); |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | such                Person (the **"Trust                Company"**)                is licensed to carry on the business of a trust company under the                laws of                Canada or any province thereof 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 voting or dispositive power over such security in                the                ordinary course of such duties for the estate of any such deceased                or                incompetent Person or for such other                accounts; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | C. | such                Person is established by statute for purposes that include, and a                substantial portion of the ordinary business or activity of such                Person                (the **"Statutory                Body"**)                is, the management of investment funds for employee benefit plans,                pension                plans, insurance plans or various public bodies;                or |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | such                Person (the **"Administrator"**)                is the administrator or trustee of one or more pension funds or plans                registered under the laws of Canada or any Province thereof or the                laws of                the United States of America or any State                thereof; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | where                such Person is a Client of the same Investment Manager as another                Person                on whose account the Investment Manager holds or exercises voting                or                dispositive power over such security, or by reason of such Person                being an                Estate Account or an Other Account of the same Trust Company as another                Person on whose account the Trust Company holds or exercises voting                or                dispositive power over such                security. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | "**Board                of Directors"**                means the board of directors from time to time of the Corporation                or any                duly constituted and empowered committee                thereof. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | **"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. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | **"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. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | **"Canadian-U.S.                Exchange Rate"**                means, on any date, the inverse of the U.S.-Canadian Exchange                Rate. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (k) | **"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. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (l) | **"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. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (m) | **"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. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (n) | **"Competing                Permitted Bid"**                means a Take-Over Bid made while a Permitted Bid is in existence                and that                satisfies all of the provisions of a Permitted Bid except that the                condition set forth in Section 1.1(am)(ii) may provide that the Voting                Shares that are the subject of the Take-Over Bid may be taken up                or paid                for on a date which is not earlier than the later of 21 days after                the                date of the Take-Over Bid or the earliest date on which Voting Shares                may                be taken up or paid for under any other Permitted Bid that is in                existence                for the Voting Shares. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (o) | **"controlled":**                a                corporation shall be deemed to be "controlled" by another Person                or two or                more Persons if: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

|   | (p) | **"Co-Rights                Agents"**                means a Co-Rights Agent appointed pursuant to Subsection                4.1(a). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------|

|   | (q) | **"Corporation"**                means Polymet Mining Corp. |
|--------|-----|-------------------------------------------------------------|

|   | (r) | **"Disposition                Date"**                has the meaning ascribed thereto in Subsection                5.1(h). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------|

|   | (s) | **"Dividend                Reinvestment Acquisition"**                shall mean an acquisition of Voting Shares pursuant to a Dividend                Reinvestment Plan. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (i) | dividends                paid in respect of Common Shares; |
|--------|-----|------------------------------------------------------------|

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

----

|   | (iii) | interest                paid on evidence of indebtedness of the Corporation;                or |
|--------|-------|------------------------------------------------------------------------------------------------|

|   | (iv) | optional                cash payments; |
|--------|------|----------------------------------------|

|   | (u) | **"Effective                Date"**                means December 4, 2003. |
|--------|-----|----------------------------------------------------------------------------|

|   | (v) | **"Election                to Exercise"**                means an election to exercise Rights substantially in the form attached                to                the Rights Certificate. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (w) | **"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. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | **"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). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (y) | **"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. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (z) | **"Expansion                Factor"**                shall have the meaning ascribed thereto in Section                2.3(a)(1). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

|  | (aa) | **"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. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ab) | **“Feasibility                Study”**                has the meaning set out in Section 1.2 of National Instrument                43-101. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ac) | **"Flip-in                Event"**                means a transaction or event in or pursuant to which a Person becomes                an                Acquiring Person. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ad) | **"Grandfathered                Person"**                means a Person who is the Beneficial Owner of 20% or more of the                outstanding Voting Shares of the Corporation determined as at the                Record                Time. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ae) | **"holder"**                shall have the meaning ascribed thereto in Section                2.8. |
|--------|------|----------------------------------------------------------------------------------------------------|

|   | (af) | **"Independent                Shareholders"**                means holders of outstanding Voting Shares, other                than: |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | any                Acquiring Person; |
|--------|-----|--------------------------------------|

|   | (ii) | any                Offeror; |
|--------|------|-----------------------------|

----

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

|   | (iv) | any                Person acting jointly or in concert with any Acquiring Person or                Offeror,                or with any Affiliate or Associate of any Acquiring Person or Offeror;                and |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (ag) | **"Market                Price"**                per share of any securities on any date means the average daily Closing                Price per Share of such securities on each of the 20 consecutive                Trading                Days through and including the Trading Day immediately preceding                such date                provided, however, that if an event of a type analogous to any of                the                events described in Section 2.3 hereof shall have caused the closing                prices used to determine the Market Price on any Trading Day not                to be                fully comparable with the closing price on such date (or, if such                date is                not a Trading Day, on the immediately preceding Trading Day), each                such                closing price so used shall be appropriately adjusted in a manner                analogous to the applicable adjustment provided for in Section 2.3                hereof                in order to make it fully comparable with the closing price on such                date                or, if such date is not a Trading Day, on the immediately preceding                Trading Day. The closing price per share (**"Closing                Price per Share"**)                of any securities on any date shall                be: |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                closing board lot sale price or, in case no sale takes place on such                date,                the average of the closing bid and asked prices per security, as                reported                by the principal Canadian stock exchange (as determined by the Board                of                Directors) on which such securities are listed and posted for                trading; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (iii) | if                for any reason none of such prices is available on such date or the                securities are not listed or remitted to trading on a Canadian stock                exchange or a United States securities exchange, the last sale price                or,                in case no sale takes place on such date, the average of the high                bid and                low ask prices for each of such securities in the over the counter                market,                as quoted by any reporting system then in use (as determined by the                Board                of Directors); or |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (iv) | if                for any reason none of such prices is available on such date or the                securities are not listed or remitted to trading on a Canadian stock                exchange or a United States securities exchange or quoted by any                such                reporting system, the average of the closing bid and ask prices as                furnished by a professional marketmaker making a market in the securities                selected by the Board of Directors; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ah) | **"Nominee"**                has the meaning ascribed thereto in Subsection                2.2(c). |
|--------|------|----------------------------------------------------------------------------------------------------|

|   | (ai) | **“Northmet                Property”**                means those patented mineral claims covering 4,162 acres in the Mesabi                Range District, St. Louis County, Minnesota leased by the Corporation,                together with the associated improvements and other assets subject                to the                agreement between the Corporation and Cleveland Cliffs                Inc. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (aj) | **"Offer                to Acquire"**                includes: |
|--------|------|----------------------------------------------------------------|

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

|   | (ii) | an                acceptance of an offer to sell Voting Shares, whether or not such                offer to                sell has been solicited; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ak) | **"Offeror"**                means a Person who has announced an intention to make, or who has                made, a                Take-Over Bid. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (al) | **"Offeror's                Securities"**                means the aggregate of all Voting Shares Beneficially Owned by the                Offeror                on the date of an Offer to Acquire. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (am) | **"Permitted                Bid**"                means a Take-Over Bid made by an Offeror by way of a takeover bid                circular                which also complies with the following additional                provisions: |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                Take-Over Bid is made for all outstanding Voting Shares and to all                holders                of Voting Shares as registered on the books of the Corporation, other                than                the Offeror. The Take-Over Bid shall expressly state that Common                Shares                issued on the exercise of share purchase warrants, options and other                securities convertible into Common Shares shall, subject to compliance                with the procedures applicable generally to the tendering of Voting                Shares                of the Take-Over Bid, be eligible to be tendered under the Take-Over                Bid; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (iii) | the                Take-Over Bid contains an irrevocable and unqualified provision that                Voting Shares may be deposited pursuant to such Take-Over Bid at                any time                during the period of time described in Section 1.1(am)(ii) and that                any                Voting Shares deposited pursuant to the Take-Over Bid may be withdrawn                until taken up and paid for; and |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (an) | **"Permitted                Bid Acquisition"**                means an acquisition of Voting Shares made pursuant to a Permitted                Bid or                a Competing Permitted Bid. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ao) | **“Permitted                Bid Expiry Date”**                means the earliest of the following                dates: |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (i) | 75                days following the date of the Take-Over Bid, upon the earlier to                occur                of: (A) the completion of a Feasibility Study on the Northmet Property                and                (B) five years from the Effective                Date; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | 35                days following the date of the Take-Over Bid, upon the earlier to                occur of                (A) seven years from the Effective Date and (B) the date on which                the                Corporation abandons or sells all of its interest in the Northmet                Property. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ap) | **"Person"**                includes an individual, body corporate, partnership, syndicate or                other                form of unincorporated association, a government and its agencies                or                instrumentalities, any entity or group (as such term is used in Rule                13d-5                under the Exchange Act of 1934 as in effect on the date hereof) whether                or                not having legal personality and any of the foregoing acting in any                derivative, representative or fiduciary                capacity. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (aq) | **"Pro-Rata                Acquisition"**                means an acquisition by a Person of Voting Shares pursuant                to: |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | a                Dividend Reinvestment Acquisition; |
|--------|-----|-----------------------------------------------------|

|   | (ii) | a                stock dividend, stock split or other event in respect of securities                of the                Corporation pursuant to which such Person becomes a beneficial owner                of                Voting Shares on the same pro-rata basis as all other holders of                securities; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | the                exercise by the Person of only those rights to purchase Voting Shares                distributed to that Person in the course of a distribution to all                holders                of securities of the Corporation pursuant to a bona fide rights offering                or pursuant to a prospectus; or |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (ar) | **"Record                Time"**                means 12:01 a.m. (Vancouver time) on December 4,                2003. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------|

|   | (as) | **"Redemption                Price"**                has the meaning ascribed thereto in Section                5.1(b). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | (at) | **"Right"**                means a right to purchase Common Shares on and subject to the terms                and                conditions of this Agreement. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (au) | **"Rights                Agent"**                means Pacific Corporate Trust Company and any successor rights agent                hereunder. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (av) | **"Rights                Certificate"**                means a certificate representing Rights in substantially the form                of                Schedule A attached hereto. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (aw) | **"Rights                Register"**                shall have the meaning ascribed thereto in Section                2.6(a). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------|

|   | (ax) | (i) | **“Securities                Act (Alberta)”**                means the Securities                Act,                SA, 1981, c.S-61, as amended, and the regulations                thereunder; |
|--------|------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | **"Securities                Act (British Columbia)”**                means the Securities Act, RSBC 1996, c.418, as amended, and the                Securities                Rules                thereunder, |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | (iii) | **"Securities                Act (Ontario)"**                means the Securities                Act,                R.S.O. 1990, c.s.5, as amended, and the regulations thereunder;                and |
|--------|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ay) | **"Separation                Time"**                means the close of business on the tenth Business Day after the earlier                of: |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                Share Acquisition Date; and |
|--------|-----|------------------------------------------------|

|   | (ii) | the                date of the commencement of or first public announcement of the intent                of                any Person (other than the Corporation or any Subsidiary of the                Corporation) to commence a Take-Over Bid (other than a Permitted                Bid or a                Competing Permitted Bid), or such earlier or later time as may be                determined by the Board of Directors, provided that, if any Take-Over                Bid                referred to in this clause (ii) expires, is cancelled, terminated                or                otherwise withdrawn prior to the Separation Time, such Take-Over                Bid shall                be deemed, for the purposes of this definition, never to have been                made. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (az) | **"Share                Acquisition Date"**                means the first date of a public announcement or disclosure (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), and Section 141 of the                Securities Act (Alberta)) by the Corporation or an Acquiring Person                that a                Person has become an Acquiring                Person. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ba) | **"Subsidiary":**                a                corporation shall be deemed to be a subsidiary of another corporation                if: |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | it                is controlled by: |
|--|-----|-------------------------------------|

|   | (A) | that                other; or |
|--------|-----|-------------------------------|

----

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

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

|   | (ii) | it                is a Subsidiary of a corporation that is that other's                Subsidiary. |
|--------|------|----------------------------------------------------------------------------------------------------|

|   | (bb) | **"Take-Over                Bid"**                means an Offer to Acquire Voting Shares, or securities convertible                into                Voting Shares if, assuming that the Voting Shares or convertible                securities subject to the Offer to Acquire are acquired and are                Beneficially Owned at the date of such Offer to Acquire by the Person                making such Offer to Acquire, such Voting Shares (including Voting                Shares                that may be acquired upon conversion of securities, convertible into                Voting Shares) together with the Offeror's Securities, constitute                in the                aggregate 20% or more of the outstanding Voting Shares at the date                of the                Offer to Acquire. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (bc) | **"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. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (bd) | **"U.S.-Canadian                Exchange Rate"**                means, on any date: |
|--------|------|-------------------------------------------------------------------------------------|

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

|   | (ii) | in                any other case, the rate for such date for the conversion of one                United                States dollar into Canadian dollars calculated in the manner determined                by                the Board of Directors from time to                time. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (be) | **"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. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (bf) | **"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. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (bg) | **"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. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.2 |   | Currency: |
|-----|--------|-----------|

| 1.3 |   | Headings                and References: |
|-----|--------|-----------------------------------------|

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

|   | 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. |
|--------|---|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.5 |   | Acting                Jointly or in Concert: |
|-----|--------|----------------------------------------------|

----

|   | (a) | unrelated                to the Corporation; or |
|--------|-----|-------------------------------------------------|

|   | (b) | pertaining                to: |
|--------|-----|-------------------------------|

|   | (i) | voting                or directing the vote of securities of the Corporation pursuant to                a                revocable proxy given in response to a public proxy                solicitation; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | voting                or directing the vote of securities of the Corporation in connection                with                or in order to participate in a public proxy solicitation made or                to be                made; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | having                an agreement, arrangement or understanding with respect to a particular                shareholder proposal or a particular matter to come before a meeting                of                shareholders, including the election of                directors. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.6 |   | Generally                Accepted Accounting Principles: |
|-----|--------|----------------------------------------------------------|

| 2.1 |   | Legend                on Common Share Certificates: |
|-----|--------|-----------------------------------------------------|

----

| 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 Time: |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (i) | the                Rights will not be exercisable and no Right may be exercised;                and |
|--------|-----|-----------------------------------------------------------------------------------------------------|

|   | (ii) | each                Right shall be evidenced by the certificate for the associated Common                Share registered in the name of the holder thereof (which certificate                shall also be deemed to represent a Rights Certificate) and shall                be                transferable only together with, and shall be transferred by a transfer                of, such associated Common Share. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Exercise                After Separation Time:                From and after the Separation Time and prior to the Expiration                Time: |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                Rights are exercisable; and |
|--------|-----|------------------------------------------------|

|   | (ii) | the                registration and transfer of Rights will be separate from and independent                of Common Shares. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------|

----

**"Nominee"**

|   | (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; |
|--------|------|-----------------------------------------------------------------------------|

|   | (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) | the                Rights Certificate evidencing such                Right; |
|--------|-----|-----------------------------------------------------------------------------|

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

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

----

|   | (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) 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) | take                all such action as may be necessary on its part and within its powers                to                ensure that all Common Shares delivered upon exercise of Rights shall,                at                the time of delivery of the certificates evidencing such Common Shares                (subject to payment of the Exercise Price), be validly authorized,                executed, issued and delivered and be fully paid and                non-assessable; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

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

|   | (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 name other than that of the holder                of                the Rights being transferred or exercised;                and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

|   | (iv) | issue                any Common Shares 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, |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | 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 |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | each                Right held prior to such adjustment will become that number of Rights                as                results from the application of the Expansion                Factor, |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (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 securities convertible into or exchangeable                for or carrying a right to purchase Common Shares) at a price per                Common                Share (or, if a security convertible into or exchangeable for or                carrying                a right to purchase or subscribe for Common Shares, having a conversion,                exchange or exercise price, including the price required to be paid                to                purchase such convertible or exchangeable security or right per share)                less than the Market Price per Common Share on such record date,                the                Exercise Price to be in effect after such record date shall be determined                by multiplying the Exercise Price in effect immediately prior to                such                record date by a fraction: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                numerator of which shall be the number of Common Shares outstanding                on                such record date, plus the number of Common Shares that the aggregate                offering price of the total number of Common Shares so to be offered                (and/or the aggregate initial conversion, exchange or exercise price                of                the convertible or exchangeable securities or rights so to be offered,                including the price required to be paid to purchase such convertible                or                exchangeable securities or rights) would purchase at such Market                Price per                Common Share; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ii) | the                denominator of which shall be the number of Common Shares outstanding                on                such record date, plus the number of additional Common Shares to                be                offered for subscription or purchase (or into which the convertible                or                exchangeable securities or rights so to be offered are initially                convertible, exchangeable or                exercisable). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

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

|   | (ii) | the                Expiration Date. |
|--------|------|-------------------------------------|

|   | (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 than Common                Shares), or rights, options or warrants to subscribe for or purchase                any                such capital stock, or securities convertible into or exchangeable                for any                such capital stock, in a transaction referred to in Clause 2.3(a)(i)                or                (iv), if the Board of Directors acting in good faith determines that                the                adjustments contemplated by Subsections 2.3(a), (b) and (c) in connection                with such transaction will not appropriately protect the interests                of the                holders of Rights, the Board of Directors may determine what other                adjustments to the Exercise Price, number of Rights and/or securities                purchasable upon exercise of Rights would be appropriate and,                notwithstanding Subsections 2.3(a), (b)and (c), such adjustments,                rather                than the adjustments contemplated by Subsections 2.3(a), (b)and (c),                shall                be made. 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 securities that                by their                terms are convertible into or exchangeable for Common                Shares; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | stock                dividends; or |
|--------|-------|------------------------------------|

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

| 2.4 |   | Date                on Which Exercise is Effective: |
|-----|--------|-----------------------------------------------------|

----

| 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 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: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| 2.9 |   | Delivery                and Cancellation of                Certificates: |
|-----|--------|--------------------------------------------------------------------------|

| 2.10 |   | Agreement                of Rights Holders: |
|------|--------|---------------------------------------------|

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

----

| 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) | an                Acquiring Person (or any Affiliate or Associate of an Acquiring Person                or                any Person acting jointly or in concert with an Acquiring Person                or any                Affiliate or Associate of an Acquiring Person);                or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | a                transferee of Rights, directly or indirectly, of an Acquiring Person                (or                any Affiliate or Associate of an Acquiring Person or any Person acting                jointly or in concert with an Acquiring Person or an Affiliate or                Associate of an Acquiring Person), where such transferee becomes                a                transferee concurrently with or subsequent to the Acquiring Person                becoming such in a transfer that the Board of Directors has determined                is                part of a plan, arrangement or scheme of an Acquiring Person (or                any                affiliate or associate of an Acquiring Person or any person acting                jointly                or in concert with an Acquiring Person or any affiliate or associate                of an                Acquiring Person), that has the purpose or effect of avoiding Section                3.1(b)(i), |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (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 Shareholder Rights Agreement."*

| 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 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; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (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 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. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 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 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: |
|-----|--------|----------------------------------------|

|   | (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. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| 5.1 |   | Redemption                and Waiver: |
|-----|--------|---------------------------------------|

|   | (a) | The                Board of Directors acting in good faith may, until the occurrence                of a                Flip-in Event, upon prior written notice delivered to the Rights                Agent,                determine to waive the application of Section 3.1 to 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. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (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 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. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (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 14 days                after the                foregoing determination by the Board of Directors or such earlier                or later                date as the Board of Directors may determine (the **"Disposition                Date"**),                has reduced its Beneficial Ownership of Voting Shares such that the                Person                is no longer an Acquiring Person. If the Person remains an Acquiring                Person at the close of business on the Disposition Date, the Disposition                Date shall be deemed to be the date of occurrence of a further Share                Acquisition Date and Section 3.1 shall apply                thereto. |
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| 5.2 |   | Expiration: |
|-----|--------|-------------|

| 5.3 |   | Issue                of New Rights Certificates: |
|-----|--------|--------------------------------------------------|

| 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 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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (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 Company Act with respect to meetings of shareholders of the                corporation. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (i) | if                made before the Separation Time, he submitted to the shareholders                of the                Corporation at the next meeting of shareholders and the shareholders                may,                by the majority referred to in Subsection 5.4(b), confirm or reject                such                amendment; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | if                made after the Separation Time, be submitted to the holders of Rights                at a                meeting to be called for 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. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 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: |
|-----|--------|----------------------------------|

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| 5.7 |   | Regulatory                Approvals: |
|-----|--------|--------------------------------------|

| 5.8 |   | Declaration                as to Non-Canadian holders: |
|-----|--------|--------------------------------------------------------|

| 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: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**VEC**

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

|   | (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. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 5.                10 |   | Costs                of Enforcement: |
|----------------------|--------|--------------------------------------|

| 5.11 |   | Successors: |
|------|--------|-------------|

| 5.12 |   | Benefits                of this Agreement: |
|------|--------|--------------------------------------------|

| 5.13 |   | Governing                Law: |
|------|--------|-------------------------------|

| 5.14 |   | Severability: |
|------|--------|---------------|

| 5.15 |   | Effective                Date: |
|------|--------|--------------------------------|

| 5.16 |   | Confirmation: |
|------|--------|---------------|

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| 5.17 |   | Determinations                and Actions by the Board of                Directors: |
|------|--------|-------------------------------------------------------------------------------------|

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| 5.18 |   | Counterparts: |
|------|--------|---------------|

|   | POLYMET                MINING CORP.c/sBy:                 _____________________________*(signature)**______________________(name                - please print)*Authorized                SignatoryPACIFIC                CORPORATE TRUST COMPANYBy:                   _____________________________*(signature)**______________________(name                  - please print)*Authorized                  Signatory_____________________________*(signature)**______________________(name                  - please print)*Authorized                Signatory |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**      POLYMET MINING CORP. **
**      PACIFIC CORPORATE TRUST COMPANY **

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**SCHEDULE      A TO THE SHAREHOLDER RIGHTS AGREEMENT**

**DATED      AS OF DECEMBER 4, 2003 BETWEEN**

**POLYMET      MINING CORP. AND**

**PACIFIC      CORPORATE TRUST COMPANY**

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**[Form      of Rights Certificate]**

**POLYMET      MINING CORP.**

**Rights      Certificate**

**"Shareholder      Rights Agreement"**
**"Corporation"**
**"Common      Share"**

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|   | POLYMET                MINING CORP.c/s                 By:                   _____________________________*(signature)**______________________(name                  - please print)*Authorized                  Signatory |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PACIFIC        CORPORATE TRUST COMPANY**

*(signature)*

*______________________(name          - please print)*

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**[Form      of Reverse Side of Rights Certificate]**

**POLYMET      MINING CORP. - FORM OF ASSIGNMENT**

*[month,      day, year]*

*(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**

*(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.)*

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**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.**

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**FORM      OF ELECTION TO EXERCISE**

| TO: | Pacific                Corporate Trust Company |
|-----|------------------------------------------------|

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*[month,      day, year]*

*(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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**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.**

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