Filed by Automated Filing Services Inc. (604) 609-0244 - Farallon Resources Ltd. - Exhibit 4.11






SHAREHOLDER RIGHTS PLAN AGREEMENT

DATED EFFECTIVE AS OF OCTOBER 3, 2007 

 

between 

 

FARALLON RESOURCES LTD. 

and 

COMPUTERSHARE INVESTOR SERVICES INC. 

as Rights Agent 




TABLE OF CONTENTS 

	ARTICLE
      1 - INTERPRETATION 	1
      
	     1.1
      	Certain
      Definitions 	1
      
	     1.2
      	Holder
      	11
      
	     1.3
      	Acting
      Jointly or in Concert 	11
      
	     1.4
      	Application
      of Statutes, Regulations and Rules 	11
      
	     1.5
      	Currency
      	12
      
	     1.6
      	Headings
      and References 	12
      
	     1.7
      	Singular,
      Plural, etc. 	12
      
	  	  	  
	ARTICLE
      2 - THE RIGHTS 	12
      
	     2.1
      	Legend
      on Common Share Certificates 	12
      
	     2.2
      	Initial
      Exercise Price: Exercise of Rights: Detachment of Rights 	12
      
	     2.3
      	Adjustments
      to Exercise Price, Number of Rights 	15
      
	     2.4
      	Date
      on Which Exercise is Effective 	18
      
	     2.5
      	Execution,
      Authentication, Delivery and Dating of Rights Certificates 	18
      
	     2.6
      	Registration,
      Registration of Transfer and Exchange 	19
      
	     2.7
      	Mutilated,
      Destroyed, Lost and Stolen Rights Certificates 	19
      
	     2.8
      	Persons
      Deemed Owners 	20
      
	     2.9
      	Delivery
      and Cancellation of Certificates 	20
      
	     2.10
      	Agreement
      of Rights Holders 	20
      
	     2.11
      	Rights
      Certificate Holder Deemed Not a Shareholder 	21
      
	  	  	  
	ARTICLE
      3 - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS 	21
      
	     3.1
      	Flip-in
      Event 	21
      
	  	  	  
	ARTICLE
      4 - THE RIGHTS AGENT 	22
      
	     4.1
      	General
      	22
      
	     4.2
      	Merger
      or Amalgamation or Change of Name of Rights Agent 	23
      
	     4.3
      	Duties
      of Rights Agent 	23
      
	     4.4
      	Change
      of Rights Agent 	24
      
	  	  	  
	ARTICLE
      5 - MISCELLANEOUS 	25
      
	     5.1
      	Redemption
      and Waiver 	25
      
	     5.2
      	Expiration
      	26
      
	     5.3
      	Issuance
      of New Rights Certificates 	26
      
	     5.4
      	Supplements
      and Amendments 	27
      
	     5.5
      	Fractional
      Rights and Fractional Common Shares 	28
      
	     5.6
      	Rights
      of Action 	28
      
	     5.7
      	Holder
      of Rights Not Deemed a Shareholder 	28
      
	     5.8
      	Non-Canadian
      or United States Holders 	28
      
	     5.9
      	Notices
      	29
      
	     5.10
      	Costs
      of Enforcement 	29
      
	     5.11
      	Successors
      	30
      
	     5.12
      	Benefits
      of this Agreement 	30
      
	     5.13
      	Governing
      Law 	30
      
	     5.14
      	Counterparts
      	30
      
	     5.15
      	Severability
      	30
      
	     5.16
      	Determinations
      and Actions by the Board of Directors 	30
      
	     5.17
      	Regulatory
      Approvals 	30
      


- i - 




SHAREHOLDER RIGHTS PLAN AGREEMENT 

SHAREHOLDER RIGHTS PLAN AGREEMENT dated effective as of
October 3, 2007 between FARALLON RESOURCES LTD., a corporation
incorporated under the Business Corporations Act (British Columbia) (the
“Corporation”) and COMPUTERSHARE INVESTOR SERVICES INC., a company
existing under the laws of Canada, as rights agent (the “Rights Agent”),
which term shall include any successor Rights Agent hereunder). 

WHEREAS the Board of Directors has determined it advisable and
in the best interests of the Corporation to adopt a shareholder rights plan
agreement (the “Rights Plan”) to ensure, to the extent possible, that all
shareholders of the Corporation are treated fairly in connection with any
take-over offer for the Corporation; and 

WHEREAS in order to implement the Rights Plan, the Board of
Directors has authorized the issuance of one right (“Right”): 

	(a) 	
      effective at the Record Time (as hereinafter defined) in
      respect of each Common Share (as hereinafter defined) outstanding at the
      Record Time; and

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



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

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

WHEREAS the Board of Directors has resolved to seek the
ratification of the Corporation’s shareholders, by way of ordinary resolution
within 180 days of the date hereof, of the adoption of this Rights Plan. 

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

ARTICLE 1 - INTERPRETATION 

	1.1 	
               
      Certain Definitions

	 	 	 	 
		
      In this Agreement, unless the context otherwise
      requires:

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

	 	 	 	 
			(i) 	
      the Corporation or any Subsidiary of the Corporation;
      or

	 	 	 	 
			(ii) 	
      an underwriter or member of a banking or selling group
      that acquires Voting Shares from the Corporation in connection with a
      distribution of securities; or

	 	 	 	 
			(iii) 	
      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:



- 1 - 





			
      
	(A) 	
      a Voting Share Reduction which, by reducing the number of
      Voting Shares outstanding, increases the percentage of Voting Shares
      Beneficially Owned by such Person to 20% or more of the Voting Shares then
      outstanding,

	 	 	 	 	 
	 			
      (B) 
	a Permitted Bid Acquisition,
	 	 	 	 	 
	 			
      (C) 
	an Exempt Acquisition,
	 	 	 	 	 
	 			
      (D) 
	a Pro-Rata Acquisition, or
	 	 	 	 	 
	 			
      (E) 
	a Convertible Security Acquisition,
	 	 	 	 	 
	 			
      in each such case, until such time thereafter as such
      Person shall become the Beneficial Owner (otherwise than pursuant to any
      one or more of a Voting Share Reduction, a Permitted Bid Acquisition, an
      Exempt Acquisition, a Pro-Rata Acquisition, or a Convertible Security
      Acquisition) of additional Voting Shares constituting more than 1% of the
      Voting Shares then outstanding, in which event such Person shall become an
      Acquiring Person as of the date and time of acquisition of such additional
      Voting Shares; or

	 	 	 	 	 
			(iv) 	
      for a period of 10 days after the Disqualification Date
      (as hereinafter defined), 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 clauses (vi) or (viii) of the
      definition of Beneficial Owner. In this definition, “Disqualification
      Date” means the first date of public announcement of facts indicating
      that such Person has or is making or has announced an intention to make a
      Take-over Bid alone or by acting jointly or in concert with any other
      Person.

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

	 	 	 	 	 
	 	(c) 	
      “Agreement” means this Shareholder Rights Plan
      Agreement as amended and supplemented from time to time.

	 	 	 	 	 
	 	(d) 	
      “Associate”, when used to indicate a relationship
      with a specified Person, means (i) a spouse of such specified Person, (ii)
      any Person of either sex with whom such specified Person is living in a
      conjugal relationship outside marriage or (iii) any relative of such
      specified Person or of a Person mentioned in clauses (i) or (ii) of this
      definition if that relative has the same residence as the specified
      Person.

	 	 	 	 	 
	 	(e) 	
      A Person shall be deemed the “Beneficial Owner”
      and to have “Beneficial Ownership” of and to “Beneficially
      Own”, any securities:

	 	 	 	 	 
	 		(i) 	
      of which such Person or any of such Person’s Affiliates
      or Associates is the owner at law or in equity;

	 	 	 	 	 
	 		(ii) 	
      as to which such Person or any of such Person’s
      Affiliates or Associates has the right to become owner at law or in equity
      (where such right is exercisable within 60 days, whether or not on
      condition or the happening of any contingency or the making of any
      payment) pursuant to any agreement, arrangement, pledge or understanding,
      including but not limited to any Lock-Up Agreement or similar agreement,
      arrangement or understanding that is not a Permitted Lock-Up Agreement,
      whether or not in writing (other than (x) customary agreements with and
      between underwriters and/or banking group members and/or selling group
      members with respect to a public offering or
private



- 2 - 





			
      placement of securities, and (y) pledges of securities in
      the ordinary course of business), or upon the exercise of any Convertible
      Securities; and 

	 	  	
       
	
       

		(iii) 	
      which are Beneficially Owned within the meaning of
      clauses (i) or (ii) of this definition by any other Person with which such
      Person is acting jointly or in concert; 

	 	  	
       
	
       

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

	 	  	
       
	
       

		(iv) 	
      by reason of such security having been deposited or
      tendered pursuant to a tender or exchange offer or Take-over Bid made by
      such Person or any of such Person’s Affiliates or Associates or any other
      Person referred to in clause (iii) of this definition until the earlier of
      such deposited or tendered security being accepted unconditionally for
      payment or exchange or being taken up and paid for; 

	 	  	
       
	
       

		(v) 	
      by reason of the holder of such security having agreed to
      deposit or tender such security to a Take-over Bid made by such Person or
      any of such Person’s Affiliates or Associates or any other Person referred
      to in clause (iii) of this definition pursuant to a Permitted Lock-up
      Agreement; 

	 	  	
       
	
       

		(vi) 	
      by reason of such Person, any of such Person’s Affiliates
      or Associates or any other Person referred to in clause (iii) of this
      definition holding such security, provided that: 

	 	  	
       
	
       

			
      (A) 
	
      the ordinary business of the Person (in this definition,
      the “Manager”) includes the management of mutual funds or
      investment funds for others (which others may include or be limited to one
      or more employee benefit plans or pension plans) and such security is held
      by the Manager in the ordinary course of such business in the performance
      of such Manager’s duties for the account of any other Person (in this
      definition, a “Client”), including non-discretionary accounts held
      on behalf of a Client by a dealer or broker registered under applicable
      laws; 

	 	  	
       
	
       

			
      (B) 
	
      the Person (in this definition, a “Trust Company”)
      is licensed to carry on the business of a trust company under applicable
      law and, as such, acts as a trustee or administrator or in a similar
      capacity in relation to the estates of deceased or incompetent Persons
      (each, in this definition, an “Estate Account”) or in relation to
      other accounts (each, in this definition, an “Other Account”) and
      holds such security, and is acting, in the ordinary course of such duties
      for the Estate Account or for such Other Accounts; 

	 	  	
       
	
       

			
      (C) 
	
      the ordinary business of such Person includes acting as
      an agent of the Crown in the management of public assets (in this
      definition, the “Crown Agent”); 

	 	  	
       
	
       

			
      (D) 
	
      the Person is an independent Person established by
      statute for purposes that include, and the ordinary business or activity
      of such Person (in this definition, the “Statutory Body”) includes,
      the management of investment funds for employee benefit plans, pension
      plans, insurance plans of various public bodies and the Statutory Body
      holds such security for the purposes of its activities as such; or
  

	 	  	
       
	
       

			
      (E) 
	
      the Person (in this definition, the
      “Administrator”) is the administrator or trustee of one or more
      pension funds or plans (each, in this definition, a “Plan”) or is a
      Plan registered under the laws of Canada or any province thereof or the
      corresponding laws of the jurisdiction by which such Plan is governed and
      the 



- 3 - 





	 		
      Administrator or Plan holds such security for the
      purposes of its activities as such;

	 	 	 	 
	 		
      but only if the Manager, the Trust Company, the Crown
      Agent, the Statutory Body, the Administrator or the Plan, as the case may
      be, is not then making and has not announced a current intention to make a
      Take-over Bid, other than an Offer to Acquire Common Shares or other
      securities pursuant to a distribution by the Corporation or by means of
      ordinary market transactions (including prearranged trades entered into in
      the ordinary course of business of such Person) executed through the
      facilities of a stock exchange or an organized over-the-counter market,
      alone or by acting jointly or in concert with any other Person;

	 	 	 	 
	 	(vii) 	
      because such Person, or any other Person acting jointly
      or in concert with such Person is:

	 	 	 	 
	 		(A) 	
      a Client of the same Manager as another Person on whose
      account the Manager holds such security, or

	 	 	 	 
	 		(B) 	
      an Estate Account or an Other Account of the same Trust
      Company as another Person on whose account the Trust Company holds such
      security, or

	 	 	 	 
	 		(C) 	
      a Plan with the same Administrator as another Plan on
      whose account the Administrator holds such securities, or

	 	 	 	 
	 	(viii) 	
      because such Person, or any other Person acting jointly
      or in concert with such Person, is:

	 	 	 	 
	 		(A) 	
      a Client of a Manager and such security is owned at law
      or in equity by the Manager, or

	 	 	 	 
	 		(B) 	
      an Estate Account or an Other Account of a Trust Company
      and such security is owned at law or in equity by the Trust Company,
    or

	 	 	 	 
	 		(C) 	
      a Plan and such security is owned at law or in equity by
      the Administrator of the Plan, or

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



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


	100 	x 	A 
	  	  	B 




		where: 	A = 	
      the number of votes for the election of all directors
      generally attached to the Voting Shares Beneficially Owned by such Person
      at such time; and 

	 	  	  	
       

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



Where any Person is deemed to
Beneficially Own unissued Voting Shares, such Voting Shares shall be deemed to
be outstanding for the purpose of calculating the percentage of Voting Shares
Beneficially Owned by such Person, but unissued Voting Shares which another
Person may be deemed to Beneficially Own shall not be included in the
denominator of the above formula. 

- 4 - 





	 	(f) 	
      “Board of Directors” means the board of directors
      for the time being of the Corporation.

	 	 	 	 
	 	(g) 	
      “Business Day” means any day other than a
      Saturday, Sunday or, unless otherwise specified, a day on which Canadian
      chartered banks in the cities of Toronto, Ontario, and Vancouver, British
      Columbia are generally authorized or obligated by law to close.

	 	 	 	 
		(h) 	
      “Business Corporations Act (British
      Columbia)” means the Business Corporations Act (BCA), S.
      B.C. 2002, c.57, as amended, and the regulations thereunder, unless
      otherwise specified, as the same exist on the date hereof.

	 	 	 	 
	 	(i) 	
      “Canadian-U.S. Exchange Rate” means, on any date,
      the inverse of the U.S.-Canadian Exchange Rate.

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

	 	 	 	 
	 	(k) 	
      “Close of Business” on any given date means 5:00
      p.m. (Toronto time, unless otherwise specified), on such date;
      provided, however, that if such date is not a Business Day,
      “Close of Business” on such date shall mean 5:00 p.m., (Toronto
      time, unless otherwise specified), on the next succeeding Business
    Day.

	 	 	 	 
	 	(l) 	
      “Common Shares” means the Common Shares in the
      capital of the Corporation.

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

	 	 	 	 
			
      (i)
	is made after a Permitted Bid or Competing
      Permitted Bid has been made and prior to the expiry of that Permitted Bid
      or Competing Permitted Bid (in this definition, the “Prior
  Bid”);
	 	 	 	 
	 		(ii) 	
      satisfies all components of the definition of a Permitted
      Bid other than the requirements set out in clause (ii) of that definition;
      and

	 	 	 	 
	 		(iii) 	
      contains, and the take-up and payment for securities
      tendered or deposited thereunder are subject to, irrevocable and
      unqualified conditions that no Voting Shares shall be taken-up or paid for
      pursuant to the Competing Permitted Bid:

	 	 	 	 
	 			
      A. 
	
      prior to the Close of Business (Vancouver time) on a date
      that is not earlier than the later of 35 days after the date of such
      Competing Permitted Bid and the earliest date on which Voting Shares may
      be taken-up or paid for under any Prior Bid in existence at the date of
      such Competing Permitted Bid; and

	 	 	 	 
	 			
      B. 
	
      then only if, at the time that such Voting Shares are
      first taken-up or paid for, more than 50% of the then outstanding Voting
      Shares held by Independent Shareholders have been deposited or tendered
      pursuant to the Competing Permitted Bid and not withdrawn.

	 	 	 	 
	 	(n) 	
      a body corporate is “controlled” by another Person
      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 on behalf of the other
      Person; and
	 	 	 	 
	 		(ii) 	
      the votes carried by such securities are entitled, if
      exercised, to elect a majority of the board of directors of such body
      corporate,



- 5 - 





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

	 	 	 	 
	 	(o) 	
      “Convertible Securities” means at any
  time:

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

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

	 	 	 	 
	 		
      which is then exercisable or exercisable within a period
      of 60 days from that time pursuant to which the holder thereof may acquire
      Voting Shares or other securities convertible into or exercisable or
      exchangeable for Voting Shares (in each case, whether such right is then
      exercisable or exercisable within a period of 60 days from that time and
      whether or not on condition or the happening of any
contingency).

	 	 	 	 
	 	(p) 	
      “Convertible Security Acquisition” means the
      acquisition of Voting Shares upon the exercise of Convertible Securities
      received by a Person pursuant to a Permitted Bid Acquisition, an Exempt
      Acquisition or a Pro-Rata Acquisition.

	 	 	 	 
	 	(q) 	
      “Exchange Act of 1934” means the
      Securities Exchange Act of 1934, as amended, of the United States
      of America and the rules and regulations thereunder, unless otherwise
      specified, as the same exist on the date hereof.

	 	 	 	 
	 	(r) 	
      “Exempt Acquisition” means a Share acquisition (i)
      in respect of which the Board of Directors has waived the application of
      Section 3.1 pursuant to the provisions of Section 5.1 hereof, (ii)
      pursuant to a regular dividend reinvestment or other plan of the
      Corporation made available by it to all holders of Voting Shares of a
      class or series of Voting Shares where such plan permits the holder to
      direct that dividends paid in respect of such Voting Shares be applied to
      the purchase from the Corporation of further securities of the
      Corporation, or (iii) by a Person pursuant to a prospectus or by way of
      private placement, provided that the Person does not thereby acquire a
      greater percentage of Voting Shares, or securities convertible into or
      exchangeable for Voting Shares, than the Person’s percentage of Voting
      Shares Beneficially Owned immediately prior to such acquisition.

	 	 	 	 
	 	(s) 	
      “Exercise Price” means, as of any date, the price
      at which a holder may purchase the securities issuable upon exercise of
      one whole Right. Until adjustment thereof in accordance with the terms
      hereof, the Exercise Price shall equal $7.

	 	 	 	 
	 	(t) 	
      “Expiration Time” means the earliest of: (i) the
      Termination Time; (ii) the termination of the annual meeting of the
      Corporation in the year 2010 unless at such meeting the duration of this
      Agreement is extended; and (iii) 180 days after the date of this Rights
      Plan if this Rights Plan is not ratified by holders of Voting Shares in
      accordance with the requirements of the Toronto Stock Exchange.

	 	 	 	 
	 	(u) 	
      “Flip-in Event” means a transaction or event that
      results in a Person becoming an Acquiring Person.

	 	 	 	 
	 	(v) 	
      “Fiduciary” means a trust company registered under
      the laws of Canada or any province thereof or a portfolio manager
      registered under the securities legislation of one or more provinces of
      Canada.

	 	 	 	 
	 	(w) 	
      “Independent Shareholders” means all holders of
      Common Shares other than (i) any Acquiring Person, (ii) any Offeror, (iii)
      any Affiliate or Associate of any Acquiring Person or Offeror,
  (iv)



- 6 - 





	 		
      any Person acting jointly or in concert with any Person
      referred to in clauses (i) or (ii) , and (v) any employee benefit plan,
      deferred profit sharing plan, stock participation plan or trust for the
      benefit of employees of the Corporation or a wholly-owned Subsidiary of
      the Corporation, unless the beneficiaries of such plan or trust direct the
      manner in which such Common Shares are to be voted or direct whether the
      Common Shares are to be tendered to a Take-over Bid.

	 	 	 	 
		(x) 	
      “Market Price” per security of any securities on
      any date means the average of the daily closing prices per security of
      such securities (determined as described below) on each of the 20
      consecutive Trading Days through and including the Trading Day immediately
      preceding such date.; provided, however, that if an event of a type
      analogous to any of the events described in Section 2.3 hereof shall have
      caused the closing prices used to determine the Market Price on any
      Trading Days 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 security of any
      securities on any date shall be:

	 	 	 	 
			
      (i) 
	the closing board lot sale price or, in the case no such
      sale takes place on such date, the average of the closing bid and asked
      prices for each share of such securities as reported by the principal
      stock exchange in Canada on which such shares are listed or posted for
      trading;
	 	 	 	 
			
      (ii) 
	if such shares are not listed or posted for trading on
      any stock exchange in Canada, the last sale price, regular way, or, in
      case no such sale takes place on such date, the average of the closing bid
      and asked prices, regular way, for each share of such securities as
      reported in the principal consolidated transaction reporting system with
      respect to securities listed or admitted to trading on the principal
      national securities exchange in the United States on which such shares are
      listed or admitted to trading, or
	 	 	 	 
	 		(iii) 	
      if for any reason none of such prices is available on
      such day or the securities are not listed or admitted to trading on a
      stock exchange in Canada or a national securities exchange in the United
      States, the last quoted price, or if not so quoted, the average of the
      high bid and low asked prices for each share of such securities in the
      over-the-counter market, as reported by the National Association of
      Securities Dealers, Inc. Automated Quotation System (“NASDAQ”) or
      such other system then in use; or

	 	 	 	 
	 		(iv) 	
      if on any such date such shares are not quoted by any
      such organization, the average of the closing bid and asked prices as
      furnished by a professional market maker making a market in such shares
      selected by the Board of Directors of the Corporation; provided, however,
      that if on any such date such shares are not traded in the
      over-the-counter market, the closing price per share of such securities on
      such date shall mean the fair value per share of such securities on such
      date as determined by a nationally or internationally recognized
      investment dealer or investment banker. The Market Price shall be
      expressed in Canadian dollars and if initially determined in respect of
      any day forming part of the 20 consecutive Trading Day period in question
      in United States dollars, such amount shall be translated into Canadian
      dollars at the Canadian Dollar Equivalent thereof on the relevant Trading
      Day.

	 	 	 	 
	 	(y) 	
      “Offer to Acquire” includes:

	 	 	 	 
			
      (i) 
	an offer to purchase, or a solicitation of an offer to
      sell, Common Shares (including an offer commenced by public announcement
      or advertisement);
	 	 	 	 
	 		(ii)	
       an acceptance of an offer to sell Common Shares,
      whether or not such offer to sell has been
solicited;



- 7 - 





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

	 	 	 	 
	 	(z) 	
      “Offeror” means a Person who is making or has
      announced a current intention to make a Take- over Bid (including a
      Permitted Bid or Competing Permitted Bid but excluding any person referred
      to in paragraph (vi) of the definition of Beneficial Owner) but only so
      long as the Take- over Bid so announced or made has not been withdrawn or
      terminated or has not expired.

	 	 	 	 
	 	(aa) 	
      “Permitted Bid” means a Take-over Bid which is
      made by means of a Take-over Bid circular and which also complies with the
      following additional provisions:

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

	 	 	 	 
	 		(ii) 	
      the Take-over Bid shall contain, and the take-up and
      payment for securities tendered or deposited thereunder shall be subject
      to, an irrevocable and unqualified condition that no Voting Shares shall
      be taken up or paid for pursuant to the Take-over Bid prior to the Close
      of Business (Vancouver time) on a date which is not less than 60 days
      after the date of the Take-over Bid 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, unless the Take-over Bid is withdrawn, Voting Shares may
      be deposited pursuant to such Take-over Bid at any time during the period
      of time between the date of the Take-over Bid and the date on which Voting
      Shares may be taken up and paid for 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 if, on the date on which Voting Shares may be taken up and
      paid for, 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, 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 10 Business Days
      from the date of such public announcement.

	 	 	 	 
	 	(bb) 	
      “Permitted Bid Acquisition” means a Share
      acquisition made pursuant to a Permitted Bid or Competing Permitted
      Bid.

	 	 	 	 
	 	(cc) 	
      “Permitted Lock-Up Agreement” means an agreement
      (the “Lock-up Agreement”) between a Person and one or more holders
      of Voting Shares (each holder referred to herein as a “Locked-up
      Person”), the terms of which are publicly disclosed and a copy of
      which is made available to the public, including the Corporation, pursuant
      to which such holders agree to deposit or tender Voting Shares to a
      Take-over Bid (the “Lock-up Bid”) made by the Person or any of such
      Person’s Affiliates or Associates or any other Person referred to in
      clause (iii) of the definition of Beneficial Owner, whether such Lock-up
      Bid is made before or after the Lock-up Agreement is signed, provided
      that:

	 	 	 	 
	 		(i) 	
      the Lock-up Agreement permits the Locked-up Person to
      terminate its agreement to deposit or tender to or to not withdraw Voting
      Shares from the Lock-up Bid in the event a “Superior Offer” is made
      to the Locked-up Person. For purposes of this subsection, a “Superior
      Offer” is any Take-over Bid, amalgamation, arrangement or similar
      transaction pursuant to which the cash equivalent value of the
      consideration per share to be received by holders of the Voting Shares
      under such transaction (the “Superior Offer Consideration”) is
      greater than the cash equivalent value per share to be received
  by



- 8 - 





	 			
      holders of Voting Shares under the Lock-up Bid (the
      “Lock-up Bid Consideration”). Notwithstanding the foregoing, the
      Lock-up Agreement may require that the Superior Offer Consideration must
      exceed the Lock-up Bid Consideration by a specified percentage before such
      termination rights take effect, provided such specified percentage is not
      greater than 7%.

	 	 	
       
	
       

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

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

	 	 	 	 
	 			
      A. 
	
      2.5% of the Lock-up Bid Consideration payable under the
      Lock-up Agreement to the Locked-up Person; and

	 	 	 	 
	 			
      B. 
	
      one-half of the difference between the Superior Offer
      Consideration payable to the Locked-up Person and the Lock-up Bid
      Consideration the Locked-up Person would have received under the Lock-up
      Bid,

	 	 	 	 
	 			
      shall be payable pursuant to the Lock-up Agreement in the
      event that the Locked-up Person fails to tender Voting Shares pursuant to
      the Lock-up Bid or withdraws Voting Shares from the Lock-Up Bid in order
      to accept the other Take-over Bid or transaction.

	 	 	 	 
	 	(dd) 	
      “Person” includes any individual, firm,
      partnership, association, trust, body corporate, joint venture, syndicate
      or other form of unincorporated organization, government and its agencies
      and instrumentalities or other entity or group (whether or not having
      legal personality) and any successor (by merger, statutory amalgamation or
      arrangement, or otherwise) thereof.

	 	 	 	 
	 	(ee) 	
      “Pro-Rata Acquisition” means the acquisition of
      Voting Shares or securities convertible into or exchangeable for Voting
      Shares (i) as a result of a stock dividend, stock split or other event
      pursuant to which a Person receives or acquires Voting Shares or
      securities convertible into or exchangeable for Voting Shares on the same
      pro-rata basis as all other holders of Voting Shares of the same class or
      series, or (ii) pursuant to the receipt and/or exercise of rights issued
      by the Corporation on a pro-rata basis to all holders of a class or series
      of Voting Shares to subscribe for or purchase Voting Shares or securities
      convertible into or exchangeable for Voting Shares provided that such
      rights are acquired directly from the Corporation and not from any other
      Person, provided that the Person acquiring such Voting Shares does not
      thereby acquire a greater percentage of such Voting Shares, or securities
      convertible into or exchangeable for such Voting Shares, than the Person’s
      percentage of Voting Shares Beneficially Owned immediately prior to such
      acquisition.

	 	 	 	 
	 	(ff) 	
      “Record Time” means the close of business on
      October 3, 2007.

	 	 	 	 
	 	(gg) 	
      “Redemption Price” has the meaning ascribed to
      that term in subsection 5.1(a) hereof.

	 	 	 	 
	 	(hh) 	
      “Regular Periodic Cash Dividends” means cash
      dividends paid at regular intervals in any fiscal year of the Corporation
      to the extent that such cash dividends do not exceed, in the aggregate,
      the greatest of:

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



- 9 - 





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

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

	 	 	 	 
	 	(ii) 	
      “Rights Certificate” has the meaning ascribed to
      that term in subsection 2.2(c) hereof.

	 	 	 	 
	 	(jj) 	
      “Rights Holders’ Special Meeting” means a meeting
      of the holders of Rights called by the Board of Directors and conducted in
      accordance with the terms hereof.

	 	 	 	 
	 	(kk) 	
      “Securities Act of 1933” means the
      Securities Act of 1933, as amended, of the United States of America
      and the rules and regulations thereunder, unless otherwise specified, as
      the same exist on the date hereof.

	 	 	 	 
	 	(ll) 	
      “Securities Act (British Columbia)”
      means the Securities Act, R.S.B.C. 1996, Chapter 418, as amended,
      and the regulations and rules thereunder, unless otherwise specified, as
      the same exist on the date hereof.

	 	 	 	 
	 	(mm) 	
      “Separation Time” means the Close of Business
      (Vancouver time) on the tenth Trading Day after the earliest of:

	 	 	 	 
	 		(i) 	
      the Stock Acquisition Date;

	 	 	 	 
	 		(ii) 	
      the date of the commencement of, or first public
      announcement of the intent of any Person (other than the Corporation or
      any Subsidiary of the Corporation) to commence, a Take-over Bid (other
      than a Permitted Bid or a Competing Permitted Bid, as the case may be);
      and

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

	 	 	 	 
	 		
      or such later date as may be determined by the Board of
      Directors provided, however, that if any such Take-over Bid expires, is
      cancelled, terminated or otherwise withdrawn prior to the Separation Time,
      such Take-over Bid shall be deemed, for purposes of this definition, never
      to have been made.

	 	 	 	 
	 	(nn) 	
      “Shares” means the shares in the capital of the
      Corporation.

	 	 	 	 
	 	(oo) 	
      “Stock Acquisition Date” means the first date of
      public announcement (which, for purposes of this definition, shall
      include, without limitation, a report filed pursuant to Section 111 of the
      Securities Act (British Columbia) or Section 13(d) under the
      Exchange Act of 1934, as amended from time to time and any
      provision substituted therefor) by the Corporation or an Acquiring Person
      of facts indicating that an Acquiring Person has become such.

	 	 	 	 
	 	(pp) 	
      “Subsidiary”:

	 	 	 	 
	 		
      A body corporate is a Subsidiary of another body
      corporate if:

	 	 	 	 
	 		(i) 	
      it is controlled by (A) that other, or (B) that other and
      one or more bodies corporate, each of which is controlled by that other,
      or (C) two or more bodies corporate, each of which is controlled by that
      other, or

	 	 	 	 
	 		(ii) 	
      it is a Subsidiary of a body corporate that is that
      other’s Subsidiary.



- 10 - 





	 	(qq) 	
      “Take-over Bid” means an Offer to Acquire Voting
      Shares or securities convertible into Voting Shares, where the Voting
      Shares subject to the Offer to Acquire, together with the Voting Shares,
      if any, into which the securities subject to the Offer to Acquire are
      convertible and the Voting Shares Beneficially Owned by the Offeror at the
      date of the Offer to Acquire constitute, in the aggregate, 20% or more of
      the then outstanding Voting Shares.

	 	 	 	 
	 	(rr) 	
      “Termination Time” means the time at which the
      right to exercise Rights shall terminate pursuant to Section 5.1
      hereof.

	 	 	 	 
	 	(ss) 	
      “Trading Day”, when used with respect to any
      securities, means a day on which the principal securities exchange in
      Canada on which such securities are listed or admitted to trading is open
      for the transaction of business or, if the securities are not listed or
      admitted to trading on any securities exchange in Canada, a day on which
      the principal securities exchange in the United States of America on which
      such securities are listed or admitted to trading is open for the
      transaction of business, or if the securities are not listed or admitted
      to trading on any securities exchange in Canada or the United States of
      America, a Business Day.

	 	 	 	 
	 	(tt) 	
      “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 which shall be determined by the Board of Directors from time
      to time.

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

	 	 	 	 
	 	(vv) 	
      “Voting Share Reduction” means an acquisition or a
      redemption by the Corporation of Voting Shares.

	 	 	 	 
	 	(ww) 	
      “Voting Shares” means, collectively, the Common
      Shares and any other Shares entitled to vote generally for the election of
      directors.




	1.2 	Holder 


                   
As used in this Agreement, unless the context otherwise requires, the
“holder” when used with reference to Rights, means the registered holder
of such Rights or, prior to the Separation Time, the associated Common Shares.


	1.3 	Acting Jointly or in Concert
  


                   
For purposes of this Agreement, a Person is acting jointly or in concert with
every other person who is a party to any agreement, to acquire or offer to
acquire Voting Shares (other than customary agreements with and between
underwriters and banking group or selling group members with respect to the
distribution of securities pursuant to a prospectus or by way of private
placement and other than pursuant to pledges of securities in the ordinary
course of business). 

	1.4 	Application of Statutes, Regulations and
      Rules 


                   
Where a statute, regulation or rule is referred to in a definition or other
provision of this Agreement, it shall be conclusively deemed to have application
in the contemplated circumstances notwithstanding that such 

- 11 - 




statute, regulation or rule might not, but for the provisions
of this Section 1.4, have application for want of jurisdiction or otherwise.


	1.5 	Currency 


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

	1.6 	Headings and References



                   
The headings of the Articles and Sections of this Agreement and the Table of
Contents are inserted for convenience and reference only and shall not affect
the construction or interpretation of this Agreement. All references to
Articles, Sections and Exhibits are to articles and sections of and exhibits to,
and forming part of, this Agreement. The words “hereto”, “herein”,
“hereof”, “hereunder”, “this Agreement”, “the Rights
Agreement” and similar expressions refer to this Agreement including the
Exhibits, as the same may be amended, modified or supplemented at any time or
from time to time. 

	1.7 	Singular, Plural, etc.



                   
In this Agreement, where the context so admits, words importing the singular
number include the plural and vice versa and words importing gender include the
masculine, feminine and neuter genders. 

ARTICLE 2 - THE RIGHTS 

	2.1 	Legend on Common Share Certificates
  


     Certificates for Common Shares
issued after the Record Time hereof but prior to the Separation Time shall
evidence one Right for each Common Share represented thereby and shall have
impressed, printed, or written thereon or otherwise affixed thereto a legend in
substantially the following form: 


  
    
      “Until the Separation Time (as such term is defined
        in the Rights Agreement referred to below), this certificate also evidences
        and entitles the holder hereof to certain Rights as set forth in a Rights
        Agreement dated effective as of October 3, 2007 (the “Rights Agreement”),
        between Farallon Resources Ltd. (the “Corporation”) and Computershare
        Investor Services Inc., as Rights Agent, the terms of which are hereby
        incorporated herein by reference and a copy of which is on file and may
        be inspected during normal business hours at the principal executive offices
        of the Corporation. Under certain circumstances, as set forth in the Rights
        Agreement, such Rights may be amended or redeemed, may expire, may become
        void (if, in certain circumstances, they are “Beneficially Owned”
        by a “Person” who is or becomes an “Acquiring Person”
        or any Person acting jointly or in concert with an Acquiring Person or
        with an “Affiliate” or “Associate” of an “Acquiring
        Person”, as such terms are defined in the Rights Agreement, or a
        transferee thereof) or may be evidenced by separate certificates and may
        no longer be evidenced by this certificate. The Corporation will mail
        or arrange for the mailing of a copy of the Rights Agreement to the holder
        of this certificate without charge within five days after the receipt
        of a written request therefor.” 

    

  



Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each Common Share
evidenced thereby notwithstanding the absence of a legend in substantially the
foregoing form until the earlier of the Separation Time and the Expiration Time.


	2.2 	
               
      Initial Exercise Price: Exercise of Rights: Detachment of
      Rights

	 	 
		
      (a) 
	Subject to adjustment as herein set forth, each Right
      will entitle the holder thereof, after the Separation Time and prior to
      the Expiration Time, to purchase, for the Exercise Price,
one


- 12 - 





	 		
      Common Share. Notwithstanding any other provision of this
      Agreement, any Rights held by the Corporation or any of its Subsidiaries
      shall be void.

	 	 	 	 
	 	(b) 	
      Until the Separation Time,

	 	 	 	 
	 		(i) 	
      the Rights shall not be exercisable and no Right may be
      exercised, and

	 	 	 	 
	 		(ii) 	
      for administrative purposes, each Right shall be
      evidenced by the certificate for the associated Common Share registered in
      the name of the holder thereof (which certificate shall 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) 	
      After the Separation Time and prior to the Expiration
      Time, the Rights (i) may be exercised and

	 	 	 	 
	 		(ii) 	
      shall be registered and transferable independent of
      Common Shares. Promptly following the

	 	 	 	 
	 		
      Separation Time, the Corporation shall prepare and the
      Rights Agent shall mail to each holder of record of Common Shares as of
      the Separation Time (other than an Acquiring Person, any other Person
      whose Rights are or become void pursuant to the provisions of subsection
      3.1(b) hereof and, in respect of any Rights Beneficially Owned by such
      Acquiring Person which are not held of record by such Acquiring Person,
      the holder of record of such Rights), at such holder’s address as shown in
      the records of the Corporation (the Corporation hereby agreeing to furnish
      copies of such records to the Rights Agent for this purpose),

	 	 	 	 
	 		(i) 	
      a certificate (a “Rights Certificate”) in
      substantially the form of Exhibit A hereto appropriately completed and
      registered in such holder’s name, 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 applicable law or with any rule or regulation made
      pursuant thereto or with any rule or regulation of any stock exchange or
      quotation system on which the Rights may from time to time be listed or
      traded, or to conform to usage, and

	 	 	 	 
	 		(ii) 	
      a disclosure statement describing the Rights.

	 	 	 	 
	 	(d) 	
      Rights may be exercised in whole at any time or in part
      from time to time on any Business Day (or other day that is not a bank
      holiday at the place of exercise) after the Separation Time and prior to
      the Expiration Time by submitting to the Rights Agent at its office in the
      City of Vancouver, Canada or at any other office of the Rights Agent or
      any Co-Rights Agent in the cities specified in the Rights Certificate or
      designated from time to time for that purpose by the Corporation after
      consultation with the Rights Agent:

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

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



- 13 - 





	 	(e) 	
      Upon receipt of a Rights Certificate accompanied by a
      duly completed and executed Election to Exercise which does not indicate
      that Rights evidenced by such Rights Certificate have become void pursuant
      to subsection 3.1(b) hereof and payment as set forth in subsection 2.2(d)
      above, the Rights Agent (unless otherwise instructed by the Corporation)
      shall thereupon promptly:

	 	 	 	 
	 		(i) 	
      requisition from a transfer agent of the Common Shares
      certificates for the number of Common Shares to be purchased (the
      Corporation hereby irrevocably authorizing its transfer agents 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 such certificates, deliver the same to
      or upon the order of the registered holder of such Rights Certificate,
      registered in such name or names as may be designated by such holder
      together with, where applicable, any cash payment in lieu of a fractional
      interest, and

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

	 	 	 	 
	 	(f) 	
      In case the holder of any Rights shall exercise less than
      all the Rights evidenced by such holder’s Rights Certificate, a new Rights
      Certificate evidencing (subject to the provisions of subsection 5.5(a)
      hereof) the Rights remaining unexercised will be issued by the Rights
      Agent to such holder or to such holder’s duly authorized
assigns.

	 	 	 	 
	 	(g) 	
      The Corporation covenants and agrees to:

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

	 	 	 	 
	 		(ii) 	
      take all reasonable action as may be necessary on its
      part and within its power to comply with any applicable requirements of
      the Business Corporations Act (British Columbia), the Securities
      Acts or comparable legislation of each of the provinces and territories of
      Canada and the Securities Act of 1933, and the rules and
      regulations thereunder, and any other applicable law, rule or regulation,
      in connection with the issuance and delivery of Rights Certificates and of
      any securities of the Corporation upon exercise of Rights;

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

	 	 	 	 
	 		(iv) 	
      pay when due and payable any and all Canadian and United
      States federal, provincial and state transfer taxes (not including any
      taxes referable to the income or profit of the holder or exercising Person
      or any liability of the Corporation to withhold tax) and charges which may
      be payable in respect of the original issuance or delivery of the Rights
      Certificates or of any Shares of the Corporation issued upon the exercise
      of 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 securities in a name other than
      that of the holder of the Rights being transferred or
  exercised.



- 14 - 





	2.3 	Adjustments to Exercise Price, Number of
      Rights 


                   
Subject to subsection 5.17, the Exercise Price, the number and kind of
securities subject to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 2.3. 

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

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

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

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

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



the Exercise Price and the number of Rights outstanding, or, if
the payment or effective date therefor shall occur after the Separation Time,
the securities purchasable upon exercise of Rights shall be adjusted in the
manner set forth below. If an event occurs which would require an adjustment
under both this Section 2.3 and subsection 3.1(a), the adjustment provided for
in this Section 2.3 shall be in addition to, and shall be made prior to, any
adjustment required under subsection 3.1(a) . If the Exercise Price and number
of Rights are to be adjusted, 

	 	 	(x) 	 the Exercise Price in effect after such adjustment shall
        be equal to the Exercise Price in effect immediately prior to such adjustment
        divided by the number of Common Shares (or other Shares of capital) (the
        “Expansion Factor”) that a holder of one Common Share
        immediately prior to such dividend, subdivision, change, consolidation
        or issuance would hold immediately thereafter as a result thereof (assuming
        the exercise of all such exchange or conversion rights, if any), and

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



and the adjusted number of Rights shall be deemed to be
distributed among the Common Shares with respect to which the original Rights
were associated (if they remain outstanding) and the Shares issued in respect of
such dividend, subdivision, change, consolidation or issuance, so that each such
Common Share (or other whole Share or security exchangeable for or convertible
into a whole Share of capital) shall have exactly one Right associated with it.


                   
If the securities purchasable upon exercise of Rights are to be adjusted, the
securities purchasable upon exercise of each Right after such adjustment shall
be the securities that a holder of the securities purchasable upon exercise of
one Right immediately prior to such dividend, subdivision, change, consolidation
or issuance would hold immediately thereafter as a result thereof. To the extent
that any such rights of exchange, conversion or acquisition are not exercised
prior to the expiration thereof, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect based upon the number of Common
Shares (or securities convertible into or exchangeable for Common Shares)
actually issued upon the exercise of such rights. If after the Record Time and
prior to the Expiration Time the Corporation shall issue any shares of its
authorized capital other than Common Shares in a transaction of a type described
in the first sentence of this subsection 2.3(a), such shares shall be treated


- 15 - 




herein as nearly equivalent to Common Shares as may be
practicable and appropriate under the circumstances and the Corporation and the
Rights Agent agree to amend this Agreement in order to effect such treatment.


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

          (b) 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 of rights or warrants entitling them (for a period
expiring within 45 days after such record date) to subscribe for or purchase
Common Shares (or securities convertible into or exchangeable for or carrying a
right to purchase or subscribe for Common Shares) at a price per Common Share
(or, in the case of 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) that is less than
90% of the Market Price per Common Share on such record date, the Exercise Price
shall be adjusted. The Exercise Price in effect after such record date shall
equal the Exercise Price in effect immediately prior to such record date
multiplied by a fraction, of which the numerator shall be the number of Common
Shares outstanding on such record date plus the number of Common Shares which
the aggregate offering price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion, exchange or exercise price of
the convertible or exchangeable securities or rights so to be offered (including
the price required to be paid to purchase such convertible or exchangeable
securities or rights)) would purchase at such Market Price and of which the
denominator shall be the number of shares of Common Shares outstanding on such
record date plus the number of additional Common Shares to be offered for
subscription or purchase (or into which the convertible or exchangeable
securities or rights so to be offered are initially convertible, exchangeable or
exercisable). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined by the Board of Directors. To the extent
that any such rights or warrants are not so issued or, if issued, are not
exercised prior to the expiration thereof, the Exercise Price shall be
readjusted to the Exercise Price which would then be in effect if such record
date had not been fixed or to the Exercise Price which would then be in effect
based upon the number of Common Shares (or securities convertible into or
exchangeable for Common Shares) actually issued upon the exercise of such rights
or warrants, as the case may be. For purposes of this Agreement, the granting of
the right to purchase Common Shares (whether previously unissued, treasury
shares or otherwise) pursuant to any optional dividend reinvestment plan and/or
any Common Share purchase plan providing for the reinvestment of dividends
payable on securities of the Corporation and/or employee stock option, stock
purchase or other employee benefit plan (so long as such right to purchase is in
no case evidenced by the delivery of rights or warrants) shall not be deemed to
constitute an issue of rights or warrants by the Corporation; provided,
however, that, in the case of any dividend reinvestment plan, the right to
purchase Common Shares is at a price per share of not less than 90% of the then
current market price per share (determined as provided in such plan) of the
Common Shares. 

          (c) 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 of evidences of indebtedness or assets (other than a
Regular Periodic Cash Dividend or a dividend paid in Common Shares) or rights or
warrants (excluding those referred to in subsection 2.3(a) or 2.3(b)), the
Exercise Price shall be adjusted. The Exercise Price in effect after such record
date shall, subject to adjustment as provided in the penultimate sentence of
subsection 2.3(b), equal the Exercise Price in effect immediately prior to such
record date less the fair market value of the portion of the assets, evidences
of indebtedness, rights or warrants so to be distributed applicable to the
securities purchasable upon exercise of one Right. 

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

	 	 	 	 
	 		(i) 	
      the payment or effective date for the applicable
      dividend, subdivision, change, consolidation or issuance in the case of an
      adjustment made pursuant to subsection 2.3(a) above,
and



- 16 - 





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



         
(e)           Anything herein
to the contrary notwithstanding, no adjustment to the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such Exercise Price; provided, however, that any adjustments
which by reason of this subsection 2.3(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. Each
adjustment made pursuant to this Section 2.3 shall be calculated to the nearest
cent or to the nearest one ten-thousandth of a Common Share or Right, as the
case may be.

         
(f)           All Rights
originally issued by the Corporation subsequent to any adjustment made to an
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 the Rights, all subject to further adjustment as
provided herein. 

         
(g)           Unless the
Corporation shall have exercised its election as provided in subsection 2.3(h),
upon each adjustment of an Exercise Price as a result of the calculations made
in subsections 2.3(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Exercise Price, that number of Common Shares (calculated to the
nearest one ten-thousandth) obtained by: 

	 	(i) 	
      multiplying (A) the number of Common Shares covered by a
      Right immediately prior to this adjustment, by (B) the Exercise Price in
      effect immediately prior to such adjustment of the Exercise Price;
    and

	 	 	 
	 	(ii) 	
      dividing the product so obtained by the Exercise Price in
      effect immediately after such adjustment of the Exercise
  Price.



         
(h)           The Corporation
may elect on or after the date of any adjustment of an Exercise Price to adjust
the number of Rights, in lieu of any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
Common Shares for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record immediately prior to such adjustment of
the number of Rights shall become the number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to the adjustment of the Exercise Price by the Exercise Price
in effect immediately after adjustment of the Exercise Price. The Corporation
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any date thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 calendar days after the date
of the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this subsection 2.3(h), the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date, Rights
Certificates evidencing the additional Rights to which such holder shall be
entitled as a result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in substitution or
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Corporation, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and may
bear, at the option of the Corporation, the adjusted Exercise Price and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement. 

         
(i)           Irrespective of
any adjustment or change in the securities purchasable upon exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the securities so purchasable which were expressed in the initial
Rights Certificates issued hereunder. 

         
(j)           If, as a result
of an adjustment made pursuant to Section 3.1, the holder of any Right
thereafter Exercised shall become entitled to receive any securities other than
Common Shares, thereafter the number of such 

- 17 - 




other securities so receivable upon exercise of any Right and
the applicable Exercise Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as may be practicable to
the provisions with respect to the Common Shares contained in the foregoing
subsections of this Section 2.3 and the provisions of this Agreement with
respect to the Common Shares shall apply on like terms to any such other
securities. 

         
(k)           In any case in
which this Section 2.3 shall require that any 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 of the number of Common Shares and
other securities of the Corporation, if any, issuable upon such exercise over
and above the number of Common Shares and other securities of the Corporation,
if any, issuable upon such exercise on the basis of the Exercise Price in effect
prior to such adjustment; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive such additional Common Shares or other securities
upon the occurrence of the event requiring such adjustment. 

         
(l)           Whenever an
adjustment to the Exercise Price or a change in the securities purchasable upon
the exercise of Rights is made pursuant to this Section 2.3, the Corporation
shall promptly: 

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

	 	 	 
	 	(ii) 	
      file with the Rights Agent and with each transfer agent
      for the Common Shares, a copy of such certificate; and

	 	 	 
	 	(iii) 	
      cause notice of the particulars of such adjustment or
      change to be given to the holders of the Rights.



Failure to file such certificate or to cause such notice to be
given as aforesaid, or any defect therein, shall not affect the validity of any
such adjustment or change. 

	2.4 	Date on Which Exercise is Effective
  


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

	2.5 	Execution, Authentication, Delivery and
      Dating of Rights Certificates 


         
(a)           The Rights
Certificates shall be executed on behalf of the Corporation by its Chief
Executive Officer, Chief Operating Officer or Chief Financial Officer under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. 

         
(b)           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)           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 

- 18 - 




manner satisfactory to the Corporation) and deliver 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)           Each Rights
Certificate shall be dated the date of countersignature thereof. 

	2.6 	Registration, Registration of Transfer and
      Exchange 


         
(a)           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 “Rights Registrar” for the purpose of maintaining the
Rights Register for the Corporation and registering Rights and transfers of
Rights as herein provided. If the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent shall have the right to examine the Rights Register
at all reasonable times. 

                   
After the Separation Time and prior to the Expiration Time, upon surrender for
registration of transfer or exchange of any Rights Certificate, and subject to
the provisions of subsection 2.6(c) 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)           All Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Corporation, and such Rights shall be
entitled to the same benefits under this Agreement as the Rights surrendered
upon such registration of transfer or exchange. 

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

         
(d)           The Corporation
shall not be required to register the transfer or exchange of any Rights after
the Rights have been terminated pursuant to the provisions of this Agreement.


	2.7 	Mutilated, Destroyed, Lost and Stolen Rights
      Certificates 


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

         
(b)           If there shall
be delivered to the Corporation and the Rights Agent prior to the Expiration
Time (i) evidence to their 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 upon the Corporation’s request, the Rights Agent shall countersign
and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a
new Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen. 

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

- 19 - 




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

	2.8 	Persons Deemed Owners



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

	2.9 	Delivery and Cancellation of
      Certificates 


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

	2.10 	Agreement of Rights Holders
  


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


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

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

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

         
(e)           such holder has
waived all rights to receive any fractional Right or fractional Share upon
exercise of a Right; 

         
(f)           this Agreement
may be supplemented or amended from time to time pursuant to subsection 5.4(a)
or the last sentence of the penultimate paragraph of subsection 2.3(a) hereof
upon the sole authority of the Board of Directors without the approval of any
holder of Rights. 

- 20 - 





	2.11 	Rights Certificate Holder Deemed Not a
      Shareholder 


                   
No holder of any Rights or Rights Certificate is entitled, as such holder, to
vote, receive dividends or be considered for any purpose the holder of any
Common Share or any other share or security of the Corporation which may at any
time be issuable on the exercise of the Rights represented thereby, and nothing
contained herein or in any Rights Certificate is to be construed as conferring
upon the holder of any Right or Rights Certificate, as such, any right of a
holder of Common Shares or any other shares or securities of the Corporation or
any right to vote at any meeting of shareholders of the Corporation whether for
the election of directors or otherwise or upon any matter submitted to holders
of Common Shares or any other shares of the Corporation at any meeting thereof,
or to give or withhold consent to any action of the Corporation or to receive
notice of any meeting or other action affecting any holder of Common Shares or
any other shares of the Corporation except as expressly provided herein, or to
receive dividends, distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by Rights Certificates have been duly exercised in
accordance with the terms and provisions hereof. 

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

	3.1 	Flip-in Event 


         
(a)           Subject to the
provisions of Subsection 3.1(b) and Section 5.1 hereof, if prior to the
Expiration Time a Flip-in Event shall occur, each Right shall thereafter
constitute, effective at the Close of Business on the tenth Business Day after
the relevant Stock Acquisition Date, the right to purchase from the Corporation,
upon exercise thereof in accordance with the terms hereof, that number of Common
Shares of the Corporation having an aggregate Market Price on the date of
consummation or occurrence of such Flip-in Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 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 with respect to such Common
Shares). 

         
(b)           Anything in this
Agreement to the contrary notwithstanding, upon the occurrence of a Flip-In
Event, any Rights that are or were Beneficially Owned on or after the earlier of
the Separation Time and the Stock Acquisition Date by: 

	 	(i) 	
      an Acquiring Person (or any Person acting jointly or in
      concert with an Acquiring Person or with an Affiliate or Associate of an
      Acquiring Person), or

	 	 	 
	 	(ii) 	
      a direct or indirect transferee of, or other successor in
      title to, such Rights (a “Transferee”), who becomes a Transferee
      concurrently with or subsequent to the Acquiring Person becoming an
      Acquiring Person, in a transfer, whether or not for consideration, that
      the Board of Directors has determined is part of a plan, understanding or
      scheme of 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) that
      has the purpose or effect of avoiding the provisions of this subsection
      3.1(b) applicable in the circumstances contemplated in clause (i)
      hereof,



shall thereupon become and be void and any holder of such
Rights (including any Transferee) shall thereafter have no rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The holder of any Rights represented by a Rights Certificate which is
submitted to the Rights Agent, or any Co-Rights Agent, upon exercise or for
registration of transfer or exchange which does not contain the necessary
certifications set forth in the Rights Certificate establishing that such Rights
are not void under this subsection 3.1(b) shall be deemed to be an Acquiring
Person for the purposes of this subsection 3.1(b) and such rights shall be null
and void. 

         
(c)           From and after
the Separation Time the Corporation shall do all such acts and things as shall
be necessary and within its power to ensure compliance with the provisions of
this Section 3.1, including without limitation, 

- 21 - 




all such acts and things as may be required to satisfy the
requirements of the Business Corporations Act (British Columbia), the
Securities Act (British Columbia) and the securities laws or comparable
legislation in each of the provinces of Canada in respect of the issue of Common
Shares upon the exercise of Rights in accordance with this Agreement. 

         
(d)           Any Rights
Certificate that represents Rights Beneficially Owned by a Person described in
either clauses (i) or (ii) of subsection 3.1(b) hereof 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 the following legend: 


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

    

  



provided, however, that the Rights Agent shall not be
under any responsibility to ascertain the existence of facts that would require
the imposition of such legend but shall be required to impose such legend only
if instructed to do so by the Corporation or if a holder fails to certify upon
transfer or exchange in the space provided on the Rights Certificate that such
holder is not an Acquiring Person or an Affiliate or Associate thereof or acting
jointly or in concert with any of them. 

ARTICLE 4 - THE RIGHTS AGENT 

	4.1 	General 


         
(a)           The Corporation
hereby appoints the Rights Agent to act as agent for the Corporation and the
holders of Rights in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation may from time to
time appoint one or more co-rights agents (each, a “Co-Rights Agent”) as
it may deem necessary or desirable after consultation with the Rights Agent. In
such event, the respective duties of the Rights Agent and any Co-Rights Agent
shall be as the Corporation may determine after consultation with the Rights
Agent and Co-Rights Agent. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Corporation also agrees to indemnify the Rights Agent, its officers, directors,
employees and agents for, and to hold them harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or wilful
misconduct on the part of the Rights Agent, its officers, directors, employees
or agents, for anything done or omitted by them in connection with the
acceptance and performance of this Agreement, including legal costs and
expenses, which right to indemnification shall survive the termination of this
Agreement or the resignation or removal of the Rights Agent. 

         
(b)           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 Shares, Rights Certificate,
certificate for other securities of the Corporation, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, opinion, 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. 

                   
The Corporation shall inform the Rights Agent in a reasonably timely manner of
events which may materially affect the administration of this Agreement by the
Rights Agent and, at any time upon written request, shall provide to the Rights
Agent an incumbency certificate certifying the then current officers of the
Corporation. 

- 22 - 





	4.2 	Merger or Amalgamation or Change of Name of
      Rights Agent 


         
(a)           Any body
corporate into which the Rights Agent or any successor Rights Agent may be
merged or amalgamated with or into, or any body corporate succeeding to the
security holder 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 body corporate 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 provided in the Rights
Certificates and in this Agreement. 

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

	4.3 	Duties of Rights Agent



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


	 	(a) 	
      The Rights Agent may retain and consult with legal
      counsel (who may be legal counsel for the Corporation), and the opinion of
      such counsel will be full and complete authorization and protection to the
      Rights Agent as to any action taken or omitted by it in good faith and in
      accordance with such opinion.

	 	 	 
	 	(b) 	
      Whenever in the performance of its duties under this
      Agreement the Rights Agent deems it necessary or desirable that any fact
      or matter be proved or established by the Corporation prior to taking or
      suffering any action or refraining from taking 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 an individual believed by the
      Rights Agent to be the Chief Executive Officer, Chief Operating Officer,
      Chief Financial Officer or the 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) 	
      The Rights Agent shall be liable hereunder only for its
      own negligence, bad faith or wilful misconduct.

	 	 	 
	 	(d) 	
      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 for Shares or the Rights Certificates (except its
      countersignature thereof) or be required to verify the same, but all such
      statements and recitals are and will be deemed to have been made by the
      Corporation only.

	 	 	 
	 	(e) 	
      The Rights Agent shall not be under any responsibility in
      respect of the validity of this Agreement or the execution and delivery
      hereof (except the due authorization, execution and delivery hereof by the
      Rights Agent) or in respect of the validity or execution of any Share
      certificate or Rights Certificate (except its countersignature thereof);
      nor will it be responsible for any breach by the



- 23 - 





	 		
      Corporation of any covenant or condition contained in
      this Agreement or in any Rights Certificate; nor will it be responsible
      for any change in the exercisability of the Rights (including the Rights
      becoming void pursuant to subsection 3.1(b) hereof) or any adjustment
      required under the provisions of Section 2.3 hereof or responsible for the
      manner, method or amount of any such adjustment or the ascertaining of the
      existence of facts that would require any such adjustment (except with
      respect to the exercise of Rights after receipt of the certificate
      contemplated by Section 2.3 hereof describing any such adjustment); nor
      will it by any act hereunder be deemed to make any representation or
      warranty is to the authorization or reservation of any Shares to be issued
      pursuant to this Agreement or any Rights or as to whether any Shares
      shall, when issued, be duly and validly authorized, executed, issued and
      delivered and be fully paid and non-assessable.

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

	 	 	 
	 	(g) 	
      The Rights Agent is hereby authorized to rely upon and
      directed to accept written instructions with respect to the performance of
      its duties hereunder from any individual believed by the Rights Agent to
      be the Chairman, the President and Chief Executive Officer or any
      Vice-President or the Secretary or any Assistant Secretary or the
      Treasurer or any Assistant Treasurer of the Corporation, and to apply to
      such individuals for advice or instructions in connection with its duties,
      and it shall not be liable for any action taken, omitted or suffered by it
      in good faith in accordance with instructions of any such
    individual.

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

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




	4.4 	Change of Rights Agent



                   
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days’ notice (or such lesser notice as is acceptable to the
Corporation) in writing delivered or mailed or sent by facsimile to the
Corporation and to each transfer agent of Shares by first class mall, and mailed
or delivered to the holders of the Rights in accordance with Section 5.9 hereof.
The Corporation may remove the Rights Agent upon 30 days’ notice in writing,
mailed or delivered to the Rights Agent and to each transfer agent of the Shares
by first class mail, or facsimile and mailed to the holders of the Rights in
accordance with Section 5.9 hereof. If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Corporation shall appoint a
successor to the Rights Agent. If the Corporation fails to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of any Rights (which holder shall, with such
notice, submit such holder’s Rights Certificate for inspection by the
Corporation), then the holder of any Rights may apply, at the Corporation’s
expense, to any court of competent jurisdiction for the appointment of a new
Rights Agent, Any successor Rights Agent, whether appointed by the Corporation
or by such a court, shall be a body corporate incorporated under the laws of
Canada or a province thereof. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent 

- 24 - 




any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Corporation shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Shares, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be. 

	4.5 	Compliance with Money Laundering
      Legislation 


                   
The Rights Agent shall retain the right not to act and shall not be liable for
refusing to act if, due to a lack of information or for any other reason
whatsoever, the Rights Agent reasonably determines that such an act might cause
it to be in non-compliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline. Further, should the Rights
Agent reasonably determine at any time that its acting under this Agreement has
resulted in it being in non-compliance with any applicable anti-money laundering
or anti-terrorist legislation, regulation or guideline, then it shall have the
right to resign on 10 days' written notice to the Corporation, provided: (i)
that the Rights Agent's written notice shall describe the circumstances of such
non-compliance; and (ii) that if such circumstances are rectified to the Rights
Agent's satisfaction within such 10-day period, then such resignation shall not
be effective. 

	4.6 	Privacy Provision 


                   
The parties acknowledge that federal and/or provincial legislation that
addresses the protection of individual's personal information (collectively,
"Privacy Laws") applies to obligations and activities under this Agreement.
Despite any other provision of this Agreement, neither party will take or direct
any action that would contravene, or cause the other to contravene, applicable
Privacy Laws. The Corporation will, prior to transferring or causing to be
transferred personal information to the Rights Agent, obtain and retain required
consents of the relevant individuals to the collection, use and disclosure of
their personal information, or will have determined that such consents either
have previously been given upon which the parties can rely or are not required
under the Privacy Laws. The Rights Agent will use commercially reasonable
efforts to ensure that its services hereunder comply with Privacy Laws. 

ARTICLE 5 - MISCELLANEOUS 

	5.1 	Redemption and Waiver



         
(a)           Subject to the
prior consent of the holders of Voting Shares or Rights (obtained as described
in Section 5.4(b) or Section 5.4(c)), the Board of Directors may, at any time
prior to the occurrence of a Flip-in Event, elect to redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.0001 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”).

         
(b)           The Board of
Directors may waive the application of Section 3.1 in respect of the occurrence
of any Flip-in Event if the Board of Directors has determined within eight
Trading Days following a Stock Acquisition Date that a Person became an
Acquiring Person by inadvertence and without any intention to become, or
knowledge that it would become, an Acquiring Person under this Agreement and if
such a waiver is granted by the Board of Directors, such Stock Acquisition Date
is deemed not to have occurred. Any such waiver pursuant to this subsection
5.1(b) must be on the condition that such Person has, within 10 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”), reduced
its Beneficial Ownership of Voting Shares such that the Person is no longer an
Acquiring Person or has entered into a contractual arrangement with the
Corporation, acceptable to the Board of Directors, to do so within 30 days of
the date on which the contractual arrangement is entered into. If the Person
remains an Acquiring Person at the close of 

- 25 - 




business on the Disposition Date, the Disposition Date is
deemed to be the date of occurrence of a further Stock Acquisition Date and
Section 3.1 applies thereto. 

         
(c)           If before the
occurrence of a Flip-in Event a Person acquires, pursuant to a Permitted Bid, a
Competing Permitted Bid or a Take-over Bid in respect of which the Board of
Directors of the Corporation has waived the application of Section 3.1 pursuant
to Subsection 5.1(d), any outstanding Common Shares, the Corporation shall,
immediately upon such acquisition and without further formality, redeem the
Rights at the Redemption Price. 

         
(d)           The Board of
Directors may, prior to the occurrence of a Flip-in Event as to which the
application of Section 3.1 has not been waived pursuant to this clause,
determine, upon prior written notice to the Rights Agent, to waive the
application of Section 3.1 to that Flip-in Event provided that the Flip-in Event
would occur by reason of a Take-over Bid made by means of a Take-over Bid
circular sent to all holders of record of Voting Shares and further provided
that if the Board of Directors waives the application of Section 3.1 to such
Flip-in Event, the Board of Directors shall be deemed to have waived the
application of Section 3.1 to any other Flip-in Event occurring by reason of a
Take-over Bid made by means of a Take-over Bid circular sent to all holders of
record of Voting Shares prior to the expiry of any Take-over Bid, as the same
may be extended from time to time, in respect of which a waiver is, or is deemed
to have been, granted under this subsection 5.1(d) .

         
(e)           If the Rights
are redeemed pursuant to this Agreement, the right to exercise the Rights will
thereupon, without further action and without notice, terminate and the only
right thereafter of the holders of Rights is to receive the Redemption Price.


         
(f)           Within 10 days
after the Rights are redeemed pursuant to this Agreement, the Corporation shall
give notice of redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last address as they appear
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Voting Shares. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption must state how
the Redemption Price will be paid. 

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

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

	5.2 	Expiration 


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

	5.3 	Issuance of New Rights Certificates
  


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

- 26 - 





	5.4 	Supplements and Amendments



         
(a)           At any time, the
Corporation may, by resolution of the Board of Directors, amend this Agreement
to correct any clerical or typographical errors or to maintain the validity of
this Agreement as a result of any changes in applicable legislation or
applicable rules or policies of securities regulatory authorities, and such
amendments shall be in force immediately after such a resolution is passed by
the Board of Directors. 

         
(b)           Prior to the
Separation Time, the Corporation may, by resolution of the Board of Directors,
and with the prior consent of the holders of Voting Shares obtained as set forth
below, supplement or amend this Agreement and the Rights (whether or not such
action would materially adversely affect the interests of the holders of Rights
generally). Such consent is deemed to have been given if the supplement or
amendment is approved by the affirmative vote of a majority of the votes cast by
Independent Shareholders represented in person or by proxy and entitled to be
voted at a meeting of the holders of Voting Shares duly called and held in
compliance with applicable laws and the articles and bylaws of the Corporation.


         
(c)           After the
Separation Time, the Corporation may, by resolution of the Board of Directors,
and with the prior consent of the holders of Rights obtained as set forth below,
supplement or amend this Agreement and the Rights (whether or not such action
would materially adversely affect the interests of the holders of Rights
generally). Such consent is deemed to have been given if provided by the holders
of Rights at a Rights Holders’ Special Meeting, which Rights Holders’ Special
Meeting is called and held in compliance with applicable laws and regulatory
requirements and, to the extent possible, with the requirements in the articles
and by-laws of the Corporation applicable to meetings of holders of Voting
Shares varied as the Corporation thinks appropriate. Subject to compliance with
any requirements imposed by the foregoing, consent is given if the proposed
supplement or amendment, is approved by the affirmative vote of a majority of
the votes cast by holders of Rights (other than holders of Rights whose Rights
have become void pursuant to subsection 3.1(b)), represented in person or by
proxy at the Rights Holders’ Special Meeting. 

         
(d)           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. 

         
(e)           Any supplement
to or amendment to this Agreement shall require the prior written consent of The
Toronto Stock Exchange. 

          (f)          
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 changes in applicable legislation or applicable rules or policies of
securities regulatory authorities shall: 

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

	 	 	 
	 	(ii) 	
      if made after the Separation Time, be submitted to
      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 a vote of the majority referred to in
      subsection 5.4(c), confirm or reject such
amendment.



Any such amendment shall be effective
from the date of the resolution of the Board of Directors adopting such
amendment, until it is confirmed or rejected in accordance with this subsection
5.4(f) or until it ceases to be effective (as described below) and, where such
amendment is confirmed, it continues in effect in the form so confirmed. If such
amendment is rejected by shareholders or holders of Rights or is not submitted
to shareholders or holders of Rights as required, then such amendment shall
cease to be effective from and after the termination of the meeting at which it
was rejected or to which it should have been but was not submitted or from and
after the date of the meeting of holders of Rights that should have been but was
not held, and 

- 27 - 




no subsequent resolution of the Board of Directors to amend
this Agreement to substantially the same effect shall be effective until
confirmed by shareholders or holders of Rights, as the case may be. 

	5.5 	Fractional Rights and Fractional Common
      Shares 


         
(a)           The Corporation
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights or to pay any amount to a holder
of record of Rights Certificates in lieu of such fractional Rights. 

         
(b)           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
registered holders of Right Certificates at the time such Rights are exercised
as herein provided, an amount in cash equal to the same fraction of the Market
Price of one Common Share that the fraction of a Common Share that would
otherwise be issuable upon the exercise of such Right is of a whole Common
Share. 

	5.6 	Rights of Action 


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

	5.7 	Holder of Rights Not Deemed a
      Shareholder 


                   
No holder, as such, of any Rights shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Common Shares or any other securities
which may at any time be issuable on the exercise of such Rights, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights, as such, any of the rights of a shareholder of
the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 5.8 hereof), or to
receive dividends or subscription rights, or otherwise, until such Rights shall
have been exercised in accordance with the provisions hereof. 

	5.8 	Non-Canadian or United States Holders
  


                   
If in the opinion of the Board of Directors (who may rely upon the advice of
counsel) any action or event contemplated by this Agreement would require
compliance by the Corporation with the securities laws or comparable legislation
of a jurisdiction outside Canada or the United States, the Board of Directors
may take such actions as it may deem appropriate to ensure that such compliance
is not required, including without limitation establishing procedures for the
issuance to a Canadian resident Fiduciary of Rights or securities issuable on
exercise of Rights, the holding thereof in trust for the Persons entitled
thereto (but reserving to the Fiduciary or to the Fiduciary and the Corporation,
as the Corporation may determine, absolute investment discretion with respect
thereto) and the sale thereof and remittance of the proceeds of such sale, if
any, to the Persons entitled thereto. In no event has the Corporation or the
Rights Agent an obligation to issue or deliver Rights or securities issuable on
exercise of Rights to Persons who are citizens, residents or nationals of any
jurisdiction other than Canada and the United States, in which jurisdiction such
issue or delivery would be unlawful without registration of the relevant
Persons, securities or issue or delivery for such purposes. 

- 28 - 





	5.9 	Notices 


                   
Any notice, demand or other communication required or permitted to be given or
made by the Rights Agent or by the holder of any Rights to or on the Corporation
or by the Corporation or by the holder of any Rights to or on the Rights Agent
shall be in writing and shall be well and sufficiently given or made if: 

	 	(i) 	
      delivered in person during normal business hours on a
      Business Day and left with the receptionist or other responsible employee
      at the relevant address set forth below; or

	 	 	 
	 	(ii) 	
      except during any general interruption of postal services
      due to strike, lockout or other cause, sent by first-class mail;
  or

	 	 	 
	 	(iii) 	
      sent by telegraph, facsimile or other form of recorded
      electronic communication, charges prepaid and confirmed in writing as
      aforesaid;




	if to the Corporation, addressed to
      it at: 
	 
	 	Suite 1020 – 800 West Pender Street 
	 	Vancouver, British Columbia V6C 2V6 
	 	 
	 	Attention: Corporate Secretary 
	 	Fax No. (604) 684-8092 
	 	 
	and if to the Rights Agent,
      addressed to it at: 
	 
	 	3rd Floor, 510 Burrard Street 
	 	Vancouver, British Columbia V6C 3B9 
	 	 
	 	Attention: General Manager, Client Services
  
	 	Fax No. (604) 661-9401 


Notices, demands or other communications required or permitted
to be given or made by the Corporation or the Rights Agent to or on the holder
of any Rights shall be in writing and shall be well and sufficiently given or
made if delivered personally to such holder or delivered or mailed by first
class mail to the address of such holder as it appears on the Rights Register
maintained by the Rights Registrar, or, prior to the Separation Time, in the
register of Shareholders maintained by the transfer agent for the Common Shares.


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

	5.10 	Costs of Enforcement



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

- 29 - 





	5.11 	Successors 


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

	5.12 	Benefits of this Agreement



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

	5.13 	Governing Law 


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


	5.14 	Counterparts 


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

	5.15 	Severability 


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

	5.16 	Determinations and Actions by the Board of
      Directors 


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

	5.17 	Regulatory Approvals



                   
Any obligation of the Corporation or action or event contemplated by this
Agreement, or any amendment or supplement to this Agreement, shall be subject to
receipt of any requisite approval or consent from any governmental or regulatory
authority having jurisdiction including the Toronto Stock Exchange while any
securities of the Corporation are listed and posted for trading thereon and for
a period of six months thereafter. 

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

	 	FARALLON RESOURCES
      LTD. 	 
	 	 	 	 
	 	 By: 		 


- 30 - 





	 	 By: 		 
	 	 	 	 
	 	COMPUTERSHARE
      INVESTOR SERVICES INC. 	 
	 	 	 
	 	 By: 		 
	 	 	 	 
	 	 By: 		 


- 31 - 




EXHIBIT A 

[Form of Rights Certificate] 

	Certificate No. 	 ___________________Rights



THE RIGHTS ARE SUBJECT TO REDEMPTION ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING PERSON OR
WITH AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BECOME VOID
WITHOUT FURTHER ACTION. 

RIGHTS CERTIFICATE 

     This certifies that
______________________, or registered assigns, is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder
thereof, subject to the terms, provisions and conditions of a Rights Agreement,
dated effective as of October 3, 2007 (the “Rights Agreement”) between
Farallon Resources Ltd., a corporation incorporated under the Business
Corporations Act (British Columbia) (the “Corporation”), and
Computershare Investor Services Inc., as Rights Agent, to purchase from
the Corporation at any time after the Separation Time and prior to the
Expiration Time (as such terms are defined in the Rights Agreement), one fully
paid common share in the capital of the Corporation (a “Common Share”)
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with a duly completed and executed Form of Election to Exercise at
the principal office of the Rights Agent in any of the Cities of Toronto or
Vancouver, Canada. The Exercise Price shall initially be $[] per right and shall
be subject to adjustment in certain events as provided in the Rights Agreement.


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

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

     Subject to the provision of the
Rights Agreement, the Rights evidenced by this Certificate may be redeemed by
the Corporation at a redemption price of $0.0001 per Right. 

     No fractional Common Shares will
be issued upon the exercise of any Right or Rights evidenced hereby nor will
Rights Certificates be issued for less than one whole Right. In lieu thereof, a
cash payment will be made as provided in the Rights Agreement. 

     No holder of this Rights
Certificate, as such, shall be entitled to vote or receive dividends or be
deemed for any purpose the Holder of Common Shares or of any other securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to 




any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement. 

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

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

	Date: 		 
	 	 	 
	ATTEST: 	 
	 	 
	FARALLON RESOURCES
      LTD. 	 
	 	 
	By: 		 
	 	  	 
	COMPUTERSHARE
      INVESTOR SERVICES INC. 	 
	 	 
	By: 		 
	 	Authorized Signatory 	 






[Form of Reverse Side of Rights Certificate] 

FORM OF ASSIGNMENT 

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

	FOR VALUE RECEIVED 	 
	hereby sells, assigns and transfers 
	 
	unto 	 	 
	 
	 
	             
                         
           (Please print name and address of transferee)
  


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


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


              
Signatures must be medallion guaranteed by a member firm of a recognized stock
exchange in Canada or a registered national securities exchange in the United
States, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in Canada or
the United States. 

(To be completed if true) 

CERTIFICATION 

              
The undersigned hereby represents and certifies, for the benefit of all holders
of Rights and Common Shares, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have not been,
Beneficially Owned by an Acquiring Person or any Person acting jointly or in
concert with any Acquiring Person or with any Affiliate or Associate thereof
(all as defined in the Rights Agreement). 

	 	 
	 	Signature 






NOTICE 

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




[To be attached to each Rights Certificate] 

FORM OF ELECTION TO EXERCISE 

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

TO: 

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

	 
	Address: 
	  
	  
	  
	  
	Social Insurance, Social Security or 
	Other Taxpayer Identification Number: 	 	 	 
	  
	If such number of Rights shall not be all the
      whole Rights evidenced by this Rights Certificate, a new Rights
      Certificate for the balance of such whole Rights shall be registered in
      the name of and delivered to: 
	  
	  
	  
	Address: 
	  
	  
	  
	  
	Social Insurance, Social Security or 
	Other Taxpayer Identification Number: 	 	 	 
	  
	Dated:
      ___________________________________________________	 	 
	  
	Signature Guaranteed: 
	  	 	 
	                                                                                                                                     	 Signature 	
	                                                                                                                                     	(Signature must correspond to name as
      written upon the 
	                                                                                                                                     	face of this Rights Certificate in
      every particular, 
	                                                                                                                                     	without alteration or enlargement or
      any change 
	                                                                                                                                     	whatsoever) 


     Signatures must be medallion
guaranteed by a member firm or a recognized stock exchange in Canada or a
registered national securities exchange in the United States, a member of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in Canada or the United States. 




(To be completed if true) 

CERTIFICATION 

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

	 	 
	 	Signature 


NOTICE 

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