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                                                                     Exhibit 4.1



                        SHAREHOLDER RIGHTS PLAN AGREEMENT







--------------------------------------------------------------------------------
                               724 SOLUTIONS INC.
                                       AND
                      COMPUTERSHARE TRUST COMPANY OF CANADA
                                 AS RIGHTS AGENT
                          DATED AS OF FEBRUARY 10, 2003
--------------------------------------------------------------------------------



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                                TABLE OF CONTENTS

                                   ARTICLE 1.
                                 INTERPRETATION

1.1.     Certain Definitions................................................. 1
1.2.     Currency............................................................11
1.3.     Descriptive Headings................................................11
1.4.     References to Agreement.............................................11
1.5.     Calculation of Number and Percentage of Beneficial Ownership of
         Outstanding Voting Shares...........................................12
1.6.     Acting Jointly or in Concert........................................12

                                   ARTICLE 2.
                                   THE RIGHTS

2.1.     Legend on Certificates..............................................12
2.2.     Execution, Authentication, Delivery and Dating of Rights
         Certificates........................................................13
2.3.     Registration, Transfer and Exchange.................................13
2.4.     Mutilated, Destroyed, Lost and Stolen Rights Certificates...........14
2.5.     Persons Deemed Owners of Rights.....................................14
2.6.     Delivery and Cancellation of Certificates...........................15
2.7.     Agreement of Rights Holders.........................................15
2.8.     Rights Certificate Holder Not Deemed a Shareholder..................16

                                   ARTICLE 3.
                             EXERCISE OF THE RIGHTS

3.1.     Initial Exercise Price; Exercise of Rights; Detachment of Rights....16
3.2.     Adjustments to Exercise Price: Number of Rights.....................18
3.3.     Date on Which Exercise Is Effective.................................23

                                   ARTICLE 4.
         ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

4.1.     Flip-in Event.......................................................23

                                   ARTICLE 5.
                                THE RIGHTS AGENT

5.1.     General.............................................................25
5.2.     Merger or Amalgamation or Change of Name of Rights Agent............26
5.3.     Duties of Rights Agent..............................................26
5.4.     Change of Rights Agent..............................................28


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                                   ARTICLE 6.
                                  MISCELLANEOUS

6.1.     Redemption and Waiver...............................................29
6.2.     Expiration..........................................................30
6.3.     Issuance of New Rights Certificates.................................30
6.4.     Fractional Rights and Fractional Shares.............................30
6.5.     Supplements and Amendments..........................................30
6.6.     Rights of Action....................................................32
6.7.     Notice of Proposed Actions..........................................32
6.8.     Notices.............................................................33
6.9.     Costs of Enforcement................................................34
6.10.    Successors..........................................................34
6.11.    Benefits of this Agreement..........................................34
6.12.    Governing Law.......................................................34
6.13.    Counterparts........................................................34
6.14.    Severability........................................................34
6.15.    Effective Date......................................................34
6.16.    Shareholder Approval................................................35
6.17.    Determinations and Actions by the Board of Directors................35
6.18.    Time of the Essence.................................................35
6.19.    Regulatory Approvals................................................35
6.20.    Declaration as to Non-Canadian and Non-United States Holders........35
6.21.    Fiduciary Duties of the Board of Directors..........................36
6.22.    Language............................................................36






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                        SHAREHOLDER RIGHTS PLAN AGREEMENT

                  This agreement, dated as of February 10, 2003, is between 724
Solutions Inc., a corporation incorporated under the laws of Ontario (the
"CORPORATION"), and Computershare Trust Company of Canada, a trust company
incorporated under the laws of Canada, as rights agent (the "RIGHTS AGENT",
which includes any successor Rights Agent).

RECITALS:
A.       The Board of Directors of the Corporation has determined that it is
         advisable for and in the best interests of the Corporation to adopt a
         shareholder rights plan (the "RIGHTS PLAN").
B.       In order to implement the Rights Plan, the Board of Directors of the
         Corporation has authorized:

        (i)     the issuance, effective at 4:00 p.m. (Eastern time) on February
                10, 2003, of one right (a "RIGHT") in respect of each Common
                Share of the Corporation outstanding at 4:00 p.m. (Eastern time)
                on February 10, 2003 (the "RECORD TIME"); and

        (ii)    the issuance of one Right in respect of each Common Share issued
                after the Record Time and prior to the earlier of the Separation
                Time and the Expiration Time.

C.       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 in this agreement.

D.       The Corporation wishes to appoint the Rights Agent to act on behalf of
         the Corporation and holders of Rights, and the Rights Agent is willing
         to so act, in connection with the issuance, transfer, exchange and
         replacement of Rights Certificates, the exercise of Rights and other
         matters referred to in this agreement.

                  NOW THEREFORE, in consideration of the premises and the
respective covenants and agreements set forth in this agreement, the parties
agree as follows.

                                   ARTICLE 1.
                                 INTERPRETATION

1.1.              CERTAIN DEFINITIONS

                  For the purpose of this agreement:

            (a)   "ACQUIRING PERSON" means any Person who is or becomes the
                  Beneficial Owner of 20% or more of the outstanding Voting
                  Shares; provided, however, that the term "Acquiring Person"
                  will not include:

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

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

                        (A)   a Voting Share Reduction;

                        (B)   a Permitted Bid Acquisition;

                        (C)   an Exempt Acquisition;


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                                      -2-

                        (D)   a Pro Rata Acquisition; or

                        (E)   a Convertible Security Acquisition;

                        provided, however, that if a Person becomes the
                        Beneficial Owner of 20% or more of the Voting Shares
                        then outstanding by reason of one or any combination of
                        a Voting Share Reduction, a Permitted Bid Acquisition,
                        an Exempt Acquisition, a Pro Rata Acquisition or a
                        Convertible Security Acquisition and thereafter such
                        Person, while such Person is the Beneficial Owner of 20%
                        or more of the Voting Shares then outstanding, increases
                        the number of Voting Shares beneficially owned by such
                        Person by more than 1.0% of the number of Voting Shares
                        outstanding (other than pursuant to one or any
                        combination of a Voting Share Reduction, a Permitted Bid
                        Acquisition, an Exempt Acquisition, a Pro Rata
                        Acquisition or a Convertible Security Acquisition) then,
                        as of the date such Person becomes the Beneficial Owner
                        of such additional outstanding Voting Shares, such
                        Person will be an "Acquiring Person";

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

            (b)   "AFFILIATE", when used to indicate a relationship with a
                  specified corporation, means a Person who directly, or
                  indirectly through one or more intermediaries, controls, or is
                  controlled by, or is under common control with, such specified
                  corporation;

            (c)   "ASSOCIATE", where used to indicate a relationship with any
                  Person, means a spouse of that Person, any Person who resides
                  in the same home as that Person and to whom that Person is
                  married or with whom that Person is living in a conjugal
                  relationship outside marriage, a child of that Person or a
                  relative of that Person if the relative has the same home as
                  that Person;

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

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

                  (ii)  any securities as to which such Person or any of such
                        Person's Affiliates or Associates has the right to
                        acquire (whether such right is exercisable immediately
                        or within a period of 60 days thereafter and whether or
                        not upon the occurrence of a contingency) pursuant to
                        any agreement, arrangement, pledge or understanding,
                        whether or not in writing, (other than customary
                        agreements with and between underwriters or banking
                        group or selling group members with respect to a
                        distribution of securities and other than pledges of
                        securities in the ordinary course of the pledgee's
                        business) or upon the exercise of any conversion right,
                        exchange right, share purchase right (other than a
                        Right), warrant or option; and

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

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                                      -3-

                        provided, however, that a Person will not be deemed
                        the "BENEFICIAL OWNER" of, or to have "BENEFICIAL
                        OWNERSHIP" of, or to "BENEFICIALLY OWN", any security
                        because:

                  (iv)  such security has been or agreed to be deposited or
                        tendered pursuant to a Lock-up Agreement or is otherwise
                        deposited or tendered pursuant to any Take-over Bid made
                        by such Person, any Affiliate or Associate of such
                        Person or any Person acting jointly or in concert with
                        such Person until such deposited security has been taken
                        up or paid for, whichever occurs first;

                  (v)   such Person or any Affiliate or Associate of such Person
                        or any other Person acting jointly or in concert with
                        such Person holds such security and:

                        (A)   the ordinary business of any such Person (the
                              "FUND MANAGER") includes the management of
                              investment funds for others and such security is
                              held by the Fund Manager in the ordinary course of
                              such business in the performance of the Fund
                              Manager's duties for the account of any other
                              Person (a "CLIENT"), including a non-discretionary
                              account held on behalf of a Client by a broker or
                              dealer registered under applicable laws;

                        (B)   such Person (the "TRUST COMPANY") is licensed to
                              carry on the business of a trust company under
                              applicable laws and, as such, acts as trustee or
                              administrator or in a similar capacity in relation
                              to the estates of deceased or incompetent Persons
                              (each, an "ESTATE ACCOUNT") or in relation to
                              other accounts (each, an "OTHER ACCOUNT") and
                              holds such security in the ordinary course of such
                              duties for Estate Accounts or Other Accounts;

                        (C)   such Person (the "PLAN ADMINISTRATOR") is the
                              administrator or the trustee of one or more
                              pension funds or plans (a "PLAN") registered under
                              the laws of Canada or any province thereof or the
                              laws of the United States of America or any state
                              thereof and such security is held by the Plan
                              Administrator or the Plan in the ordinary course
                              of the Plan Administrator's or Plan's activities;

                        (D)   such Person (the "STATUTORY BODY") is established
                              by statute for purposes that include, and the
                              ordinary business or activity of such Person
                              includes, the management of investment funds for
                              employee benefit plans, pension plans and
                              insurance plans of various public bodies and such
                              security is held by the Statutory Body in the
                              ordinary course of the management of such
                              investment funds;

                        (E)   such Person is a Crown Agent or agency (a "CROWN
                              AGENT"); or

                        (F)   such Person is a Plan;

                  provided, however, that in any of the foregoing cases, the
                  Fund Manager, the Trust Company, the Plan Administrator, the
                  Statutory Body, the Crown Agent or the Plan, as the case may
                  be, is not then making a Take-over Bid, has not then
                  announced an intention to make a Take-over Bid and is not then
                  acting jointly or in concert with any other Person who is
                  making a Take-over Bid or who has


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                                      -4-

                  announced a current intention to make a Take-over Bid, other
                  than an Offer to Acquire Voting Shares or other securities (1)
                  pursuant to a distribution by the Corporation, (2) by
                  means of a Permitted Bid or a Competing Permitted Bid or (3)
                  by means of market transactions made in the ordinary course of
                  business of such Person (including pre-arranged trades entered
                  into in the ordinary course of business of such Person)
                  executed through the facilities of a stock exchange or
                  organized over-the-counter market;

                  (vi)  such Person is (A) a Client of the same Fund Manager as
                        another Person on whose account the Fund Manager holds
                        such security, (B) an Estate Account or 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 Plan Administrator as another Plan on
                        whose account the Plan Administrator holds such
                        security;

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

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


            (e)   "BOARD OF DIRECTORS" means the board of directors of the
                  Corporation or, if duly constituted and whenever duly
                  empowered, any committee of the board of directors of the
                  Corporation;

            (f)   "BUSINESS DAY" means any day other than a Saturday, a Sunday
                  or a day on which banking institutions in Toronto, Ontario are
                  authorized or obligated by law to close;


            (g)   "CLOSE OF BUSINESS" on any given date means the time on such
                  date (or, if such date is not a Business Day, the time on the
                  next Business Day) at which the principal office in Toronto,
                  Ontario of the transfer agent for the Common Shares (or, after
                  the Separation Time, the office of the Rights Agent) is closed
                  to the public;

            (h)   "COMMON SHARE" means the common shares of the Corporation and
                  any other shares of the Corporation into which such shares may
                  be subdivided, consolidated, reclassified or changed;

            (i)   "COMMON SHARES", when used with reference to any Person other
                  than the Corporation, means the class or classes of shares (or
                  similar equity interest) with the greatest per share (or
                  similar interest) voting power entitled to vote generally in
                  the election of all directors of such other Person;

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

                  (i)   is made after a Permitted Bid or another Competing
                        Permitted Bid has been made and prior to the expiry of
                        that Permitted Bid or Competing Permitted Bid (in this
                        definition, the "PRIOR BID");

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

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                                      -5-


                  (iii) contains, and the take up and payment for securities
                        tendered or deposited under the Take-over Bid is subject
                        to, irrevocable and unqualified conditions that:


                        (A)   no Voting Shares will be taken up or paid for
                              pursuant to the Take-over Bid (1) prior to the
                              close of business on a date that is no earlier
                              than the later of the date which is 35 days (or
                              such other minimum deposit period for a take-over
                              bid as is provided in the Securities Act) after
                              the date the Take-over Bid is made and the 60th
                              day after the date of the Prior Bid that is then
                              outstanding and (2) then only if, at the close of
                              business on the date 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 such Take-over Bid and not withdrawn;
                              and

                        (B)   if the requirement in clause (iii)(A)(2) is
                              satisfied, the Offeror will make a public
                              announcement of that fact and the Take-over Bid
                              will remain open for deposits and tenders of
                              Voting Shares for a period of at least 10 Business
                              Days after the date of the announcement;

            (k)   "CONTROLLED": a corporation is controlled by another Person or
                  two or more Persons acting jointly or in concert if:

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

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

            and  "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH" will
            be interpreted accordingly;

            (l)   "CONVERTIBLE SECURITIES" means any securities issued by the
                  Corporation (including rights, warrants and options, but
                  excluding the Rights) carrying any purchase, exercise,
                  conversion or exchange rights, pursuant to which the holder of
                  Convertible Securities may acquire Voting Shares or other
                  securities convertible into or exercisable or exchangeable for
                  Voting Shares (in each case, whether such right is exercisable
                  immediately or after a specified period and whether or not on
                  condition or the happening of any contingency);

            (m)   "CONVERTIBLE SECURITY ACQUISITION" means the acquisition of
                  Voting Shares on the exercise, conversion or exchange of
                  Convertible Securities acquired by any Person pursuant to a
                  Permitted Bid Acquisition, Exempt Acquisition or Pro Rata
                  Acquisition;

            (n)   "CO-RIGHTS AGENT" has the meaning ascribed to it in subsection
                  5.1.(a);

            (o)   "CORPORATIONS ACT" means the BUSINESS CORPORATIONS ACT
                  (Ontario) or the CANADA BUSINESS CORPORATIONS ACT, in the
                  event the Corporation is continued under the laws of Canada,
                  as either may be amended, and the regulations made thereunder,
                  and any successor laws or regulations thereto;


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                                      -6-

            (p)   "DIVIDEND PAID IN THE ORDINARY COURSE" means cash dividends
                  paid in any financial year of the Corporation to the extent
                  that such cash dividends do not exceed, in the aggregate, the
                  greatest of:

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

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

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

            (q)   "ELECTION TO EXERCISE" has the meaning ascribed to it in
                  clause 3.1(e)(ii);

            (r)   "EXEMPT ACQUISITION" means an acquisition of Voting Shares:

                  (i)   in respect of which the Board of Directors has waived
                        the application of section 4.1 pursuant to section 6.1;

                  (ii)  pursuant to a distribution by the Corporation of Voting
                        Shares or Convertible Securities (and the conversion or
                        exchange of such securities) pursuant to a prospectus,
                        registration statement or similar document (provided
                        that the purchaser does not thereby Beneficially Own a
                        greater percentage of the Voting Shares or Convertible
                        Securities so offered than the percentage of Voting
                        Shares or Convertible Securities beneficially owned by
                        the purchaser immediately prior to that distribution) or
                        by way of private placement provided that, in the case
                        of a private placement, all necessary stock exchange
                        approvals for the private placement have been obtained
                        and the private placement complies with the terms and
                        conditions of those approvals and the purchaser does not
                        become the Beneficial Owner of more than 25% of the
                        Voting Shares outstanding immediately prior to the
                        private placement (and in making this determination, the
                        securities to be issued to that purchaser pursuant to
                        the private placement will be deemed to be held by that
                        purchaser but will not be included in the aggregate
                        number of outstanding Voting Shares immediately prior to
                        the private placement); and

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

            (s)   "EXERCISE PRICE" means, as of any date, the price at which a
                  holder of a Right may purchase the securities issuable upon
                  exercise of such Right and, until adjustment thereof in
                  accordance with the terms hereof, the Exercise Price will be
                  $100;

            (t)   "EXPANSION FACTOR" has the meaning ascribed to it in
                  subsection 3.2(a);

            (u)   "EXPIRATION TIME" means earlier of:

                  (i)   the Termination Time; and

                  (ii)  subject to section 6.15, the close of the annual meeting
                        of shareholders of the Corporation in 2004 and every one
                        year anniversary thereafter and so on unless the
                        continuation of this agreement for each such one year
                        period (or other period approved by the Independent
                        Shareholders) is approved in accordance with section
                        6.16;


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                                      -7-

            (v)   "FLIP-IN EVENT" means a transaction in or pursuant to which
                  any Person becomes an Acquiring Person;

            (w)   "HOLDER" has the meaning ascribed to it in section 2.5;

            (x)   "INDEPENDENT SHAREHOLDERS" means holders of Voting Shares
                  other than Voting Shares Beneficially Owned by:

                  (i)   an Acquiring Person;

                  (ii)  an Offeror, other than a Person described in any one or
                        more of paragraphs (A) through (E) of clause 1.1(d)(v);

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

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

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

            (y)   "LOCK UP AGREEMENT" means an agreement between an Offeror, any
                  Affiliate or Associate of the Offeror or any other Person
                  acting jointly or in concert with the Offeror and a Person
                  (the "LOCKED-UP PERSON") who is not an Affiliate or Associate
                  of the Offeror or a Person acting jointly or in concert with
                  the Offeror whereby the Locked-up Person agrees to deposit or
                  tender Voting Shares held by the Locked-up Person to the
                  Offeror's Take-over Bid or to any Take-over Bid made by an
                  Affiliate or Associate of the Offeror or made by any other
                  Person acting jointly or in concert with the Offeror (the
                  "LOCK-UP BID"), where the agreement:

                  (i)   (A) permits the Locked-up Person to withdraw the Voting
                        Shares in order to tender or deposit the Voting Shares
                        to another Take-over Bid or to support another
                        transaction that contains an offering price for each
                        Voting Share that exceeds, or provides a value for each
                        Voting Share that is greater than, the offering price
                        contained or proposed to be contained in the Lock-up
                        Bid; or


                        (B)   permits the Locked-up Person to withdraw the
                              Voting Shares in order to tender or deposit the
                              Voting Shares to another Take-over Bid or to
                              support another transaction that contains an
                              offering price for each Voting Share that exceeds,
                              or provides a value for each Voting Share that is
                              greater than, the offering price contained in or
                              proposed to be contained in the Lock-up Bid by as
                              much or more than a specified amount (the
                              "SPECIFIED AMOUNT") where the Specified Amount is
                              not greater than 7% of the offering price that is
                              contained or proposed to be contained in the
                              Lock-up Bid; and

                  (ii)  does not provide for any "break-up fees", "top-up fees",
                        "termination fees", penalties, expenses or other amounts
                        that exceed in the aggregate the greater of (A) the cash
                        equivalent of 2.5% of the price or value payable to the
                        Locked-up Person under the Take-over Bid and (B)
                        one-half of the increased price or value that is paid
                        pursuant to another Take-over Bid or


<PAGE>


                                      -8-

                        transaction, if the Locked-up Person fails to tender
                        Voting Shares pursuant thereto or withdraws Voting
                        Shares previously tendered in order to accept the
                        other Take-over Bid or support the other transaction;

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

            (z)   "MARKET PRICE" per share of any securities on any date of
                  determination means the average of the weighted average sale
                  price per share of such securities (determined as described
                  below) for 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 3.2 have caused the sale
                  prices in respect of any Trading Day used to determine the
                  Market Price not to be fully comparable with the sale prices
                  on such date of determination or, if the date of determination
                  is not a Trading Day, on the immediately preceding Trading
                  Day, each such sale price so used will be appropriately
                  adjusted in a manner analogous to the applicable adjustment
                  provided for in section 3.2 in order to make it fully
                  comparable with the sale price on such date of determination
                  or, if the date of determination is not a Trading Day, on the
                  immediately preceding Trading Day. The weighted average sale
                  price per share of any securities on any date will be
                  determined by dividing the aggregate sale price of all
                  securities sold on the principal stock exchange in Canada on
                  which such securities are listed and posted for trading
                  divided by the total number of securities so sold except that:

                  (i)   if for any reason such prices are not available on such
                        day or the securities are not listed and posted for
                        trading on any stock exchange in Canada, the Market
                        Price will be calculated using the sale prices for 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
                        securities are listed or admitted to trading;

                  (ii)  if for any reason such prices are not available on such
                        day or the securities are not listed and posted for
                        trading on a stock exchange in Canada or a national
                        securities exchange in the United States, the Market
                        Price will be calculated using the sale prices for such
                        securities in the over-the-counter market, as reported
                        by The Canadian Dealing Network Inc., or such other
                        comparable system then in use; or

                  (iii) if on any such date the securities are not quoted by any
                        such organization, the Market Price will be calculated
                        using the average of the closing bid and asked prices as
                        furnished by a professional market maker making a market
                        in the securities;

                  provided, however, that if on any such date the securities are
                  not traded on any exchange or in the over-the-counter market
                  and the price referred to in clause (iii) is not


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                                      -9-


                  available, the weighted average trading price per share of
                  such securities on such date will 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 chosen by the Board of Directors;

            (aa)  "NOMINEE" has the meaning attributed to it in subsection
                  3.1(d);

            (bb)  "OFFER TO ACQUIRE" includes:

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

                  (ii)  an acceptance of an offer to sell, whether or not such
                        offer to sell has been solicited,

            or any combination thereof, and the Person accepting an offer
            to sell will be deemed to be making an offer to acquire to the
            Person who made the offer to sell;


            (cc)  "OFFEROR" means a Person who has announced a current intention
                  to make or who is making a Take-over Bid;

            (dd)  "OFFEROR'S SECURITIES" means Voting Shares Beneficially Owned
                  by an Offeror on the date of a Take-over Bid;

            (ee)  "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 is made to all holders of Voting
                        Shares other than the Offeror;

                  (ii)  the Take-over Bid contains, and the take-up and payment
                        for securities tendered or deposited thereunder is
                        subject to, an irrevocable and unqualified condition
                        that no Voting Shares will be taken-up or paid for
                        pursuant to the Take-over Bid prior to the close of
                        business on the 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 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 the Voting Shares subject to the Take-over Bid 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
                        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;

            (ff)  "PERMITTED BID ACQUISITION" means an acquisition of Voting
                  Shares made pursuant to a Permitted Bid or a Competing
                  Permitted Bid;

            (gg)  "PERSON" includes any individual, body corporate, firm,
                  partnership, association, trust, trustee, executor,
                  administrator, legal personal representative, group,
<PAGE>


                                      -10-


                  unincorporated organization, syndicate, government or
                  governmental agency or instrumentality or other entity;

            (hh)  "PRO RATA ACQUISITION" means:

                  (i)   the acquisition of Voting Shares as a result of a stock
                        dividend, a stock split or other event pursuant to which
                        a Person receives or acquires Voting Shares on the same
                        proportionate basis as all other holders of the same
                        class of Voting Shares; (ii) the acquisition of Voting
                        Shares pursuant to any dividend reinvestment plan or
                        other plan made available by the Corporation to holders
                        of all its Voting Shares (other than holders resident in
                        any jurisdiction where participation in such plan is
                        restricted or impractical to the Corporation as a result
                        of applicable law); or (iii) the receipt and/or exercise
                        of rights (other than the Rights) issued by the
                        Corporation to all the holders of a class of Voting
                        Shares to subscribe for or purchase Voting Shares (other
                        than holders resident in any jurisdiction where the
                        distribution or exercise of such rights is restricted or
                        impractical as a result of applicable law), provided
                        that such rights are acquired directly from the
                        Corporation and not from any other Person.

            (ii)  "RECORD TIME" has the meaning ascribed to it in the recitals;

            (jj)  "REDEMPTION PRICE" has the meaning ascribed to it in
                  subsection 6.1(a);

            (kk)  "RIGHT" has the meaning ascribed to it in the recitals;

            (ll)  "RIGHTS CERTIFICATES" means the certificates representing the
                  Rights after the Separation Time, which are to be
                  substantially in the form attached as Exhibit A;

            (mm)  "RIGHTS PLAN" has the meaning ascribed to it in the recitals;

            (nn)  "RIGHTS REGISTER" and "RIGHTS REGISTRAR" have the respective
                  meanings ascribed to them in subsection 2.3(a);

            (oo)  "SECURITIES ACT" means the SECURITIES ACT (Ontario), as
                  amended, and the regulations and rules thereunder, and any
                  comparable or successor laws or regulations thereto;

            (pp)  "SEPARATION TIME" means, subject to subsection 6.1(c), the
                  close of business on the tenth Trading Day after the earlier
                  of:

                  (i)   the Stock Acquisition Date; and

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

            or such later time as may be determined by the Board of Directors;
            provided that (x) if the foregoing results in the Separation Time
            being prior to the Record Time, the Separation Time will be the
            Record Time, (y) if any Take-over Bid referred to in clause (ii)
            expires or is cancelled, terminated or otherwise withdrawn prior to
            the Separation Time, such Take-over Bid will be deemed, for the
            purposes of this definition, never to have been made, (z) if the
            Board of Directors determines pursuant to section 6.1 to waive the
            application of section 4.1 to have a Flip-in Event, the Separation
            Time in respect of that Flip-in Event will be deemed never to have
            occurred ;


<PAGE>


                                      -11-


            (qq)  "STOCK ACQUISITION DATE" means the date of the first public
                  announcement (which, for purposes of this definition, includes
                  the filing of a report pursuant to section 101 of the
                  Securities Act or section 13(d) of the U.S. EXCHANGE ACT) by
                  the Corporation or an Acquiring Person of facts indicating
                  that a Person has become an Acquiring Person;

            (rr)  "SUBSIDIARY" of a Person has the meaning ascribed to it in the
                  Securities Act;

            (ss)  "TAKE-OVER BID" means an Offer to Acquire Voting Shares or
                  securities convertible into or exchangeable for Voting Shares,
                  where the Voting Shares subject to the Offer to Acquire,
                  together with the Voting Shares into which the securities
                  subject to the Offer to Acquire are convertible or
                  exchangeable, together with the Offeror's Securities,
                  constitute, in the aggregate, 20% or more of the Voting Shares
                  outstanding on the date of the Offer to Acquire;

            (tt)  "TERMINATION TIME" means the time at which the right to
                  exercise Rights will terminate pursuant to subsection 6.1(f);

            (uu)  "TRADING DAY", when used with respect to any securities, means
                  a day on which the principal Canadian securities exchange on
                  which such securities are listed or admitted to trading is
                  open for the transaction of business or, if the securities are
                  not listed or admitted to trading on any Canadian securities
                  exchange, a Business Day;

            (vv)  "U.S. EXCHANGE ACT" means the UNITED STATES SECURITIES
                  EXCHANGE ACT OF 1934, as amended, and the rules and
                  regulations thereunder as from time to time in effect;

            (ww)  "VOTING SHARES" means the Common Shares and any other shares
                  in the capital of the Corporation to which are attached a
                  right to vote for the election of directors generally; and

            (xx)  "VOTING SHARE REDUCTION" means an acquisition or redemption by
                  the Corporation or a Subsidiary of the Corporation of Voting
                  Shares which, by reducing the number of Voting Shares
                  outstanding, increases the percentage of outstanding Voting
                  Shares Beneficially Owned by any Person to 20% or more of the
                  Voting Shares outstanding.

1.2.              CURRENCY

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

1.3.              DESCRIPTIVE HEADINGS

                  Descriptive headings are for convenience only and are not to
affect the meaning or construction of any of the provisions of this agreement.

1.4.              REFERENCES TO AGREEMENT

                  References to "THIS AGREEMENT", "HERETO", "HEREIN", "HEREBY",
"HEREUNDER", "HEREOF" and similar expressions refer to this agreement, as
amended or supplemented from time to time, and not to any particular Article,
section, subsection, clause or other portion hereof and include any and every
instrument supplemental or ancillary hereto.


<PAGE>


                                      -12-


1.5.              CALCULATION OF NUMBER AND PERCENTAGE OF BENEFICIAL OWNERSHIP
                  OF OUTSTANDING VOTING SHARES

            (a)   For the purposes of this agreement, in determining the
                  percentage of the outstanding Voting Shares of the Corporation
                  with respect to which a Person is or is deemed to be the
                  Beneficial Owner, all unissued Voting Shares of the
                  Corporation of which such Person is deemed to be the
                  Beneficial Owner will be deemed to be outstanding.

            (b)   The percentage of outstanding Voting Shares of the Corporation
                  Beneficially Owned by any Person, for the purposes of this
                  agreement, will be deemed to be the product determined by the
                  formula:
                                     100    x    A
                                                ---
                                                 B

         where:
                  A         =     the aggregate number of votes for the
                                  election of all directors generally attaching
                                  to the outstanding Voting Shares Beneficially
                                  Owned by such Person; and
                  B         =     the aggregate number of votes for the
                                  election of all directors generally attaching
                                  to all outstanding Voting Shares.

1.6.              ACTING JOINTLY OR IN CONCERT

                  For purposes of this agreement, a Person is acting jointly or
in concert with every other Person who has any agreement, arrangement,
commitment or understanding (whether formal or informal and whether or not in
writing) with the first Person, or with any other Person acting jointly or in
concert with the first Person, to acquire or Offer to Acquire any Voting Shares
or securities convertible into or exchangeable for Voting Shares (other than
customary agreements with and between underwriters or banking group members or
selling group members with respect to a distribution of securities and other
than pledges of securities in the ordinary course of the pledgee's business).


                                   ARTICLE 2.
                                   THE RIGHTS

2.1.              LEGEND ON CERTIFICATES

                  Certificates for Common Shares issued after the Record Time
but prior to the earlier of the Separation Time and the Expiration Time will
evidence, in addition to the Common Shares, but subject to section 3.2, one
Right for each Common Share evidenced thereby and will have impressed, printed
or written on or otherwise affixed to them substantially the following legend:

         UNTIL THE SEPARATION TIME (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED
         TO BELOW), THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER OF
         THIS CERTIFICATE TO CERTAIN RIGHTS AS SET FORTH IN A SHAREHOLDER RIGHTS
         PLAN AGREEMENT DATED AS OF FEBRUARY 10, 2003 (AS THE SAME MAY BE
         AMENDED OR SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS
         THEREOF, THE "RIGHTS AGREEMENT") BETWEEN 724 SOLUTIONS INC. (THE
         "CORPORATION") AND COMPUTERSHARE TRUST


<PAGE>


                                      -13-


            COMPANY OF CANADA, AS RIGHTS AGENT, THE TERMS OF WHICH ARE
            INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH 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, REDEEMED
            OR TERMINATED, MAY EXPIRE, MAY BECOME VOID (IF, IN CERTAIN CASES,
            THEY ARE "BENEFICIALLY OWNED" BY AN "ACQUIRING PERSON", WHETHER
            CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR ANY SUBSEQUENT
            HOLDER) OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND MAY NO
            LONGER BE EVIDENCED BY THIS CERTIFICATE. THE CORPORATION WILL MAIL
            OR ARRANGE FOR THE MAILING OF A COPY OF THE RIGHTS AGREEMENT TO THE
            HOLDER OF THIS CERTIFICATE WITHOUT CHARGE AS SOON AS IS PRACTICABLE
            AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.

                  Certificates representing Common Shares that are issued and
outstanding at the Record Time will evidence one Right for each Common Share
evidenced thereby, despite the absence of the foregoing legend until the earlier
of the Separation Time and the Expiration Time.

2.2.              EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
                  CERTIFICATES

            (a)   The Rights Certificates will be executed on behalf of the
                  Corporation by the Chairman of the Board, the Chief Executive
                  Officer, Chief Financial Officer or the Secretary. The
                  signatures of such officers may be mechanically reproduced in
                  facsimile on the Rights Certificates, and when so reproduced
                  will be valid and binding on the Corporation even though the
                  Persons whose signatures are so reproduced may not hold office
                  at the time the Rights Certificates are issued.

            (b)   Promptly after the Separation Time, the Corporation will
                  notify the Rights Agent of the Separation Time and will
                  deliver Rights Certificates executed by the Corporation to the
                  Rights Agent for countersignature and a disclosure statement
                  describing the Rights, and the Rights Agent will manually
                  countersign such Rights Certificates and deliver such Rights
                  Certificates and disclosure statement to the holders of the
                  Rights pursuant to subsection 3.1(d). No Rights Certificate
                  will be valid for any purpose until countersigned by the
                  Rights Agent.

            (c)   Each Rights Certificate will be dated the date it is
                  countersigned.

2.3.              REGISTRATION, TRANSFER AND EXCHANGE

            (a)   After the Separation Time, the Corporation will cause a
                  register to be kept (the "RIGHTS REGISTER") in which, subject
                  to such reasonable regulations as it may prescribe, the
                  Corporation will provide for the registration and transfer of
                  Rights. The Rights Agent is hereby appointed the "RIGHTS
                  REGISTRAR" for the purpose of maintaining the Rights Register
                  for the Corporation and registering Rights and transfers of
                  Rights as provided in this agreement. If the Rights Agent
                  ceases to be the Rights Registrar, the Rights Agent will have
                  the right to examine the Rights Register at all reasonable
                  times. After the Separation Time and prior to the Expiration
                  Time, upon surrender for registration of transfer or exchange
                  of any Rights Certificate, but subject to subsection (c) and
                  subsection 4.1(b), the Corporation will execute, and the
                  Rights Agent will manually countersign and deliver, in the
                  name of the holder or the designated transferee or
                  transferees, as required pursuant to the holder's
                  instructions, one or more new Rights Certificates


<PAGE>


                                      -14-


                  evidencing the same aggregate number of Rights as did  the
                  Rights Certificates so surrendered.

            (b)   All Rights issued upon any registration of transfer or
                  exchange of Rights Certificates will be valid obligations of
                  the Corporation, and such Rights will 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 will be duly endorsed, or be accompanied
                  by a written instrument of transfer in form satisfactory to
                  the Corporation or the Rights Agent, as the case may be, duly
                  executed by the holder thereof or such holder's attorney duly
                  authorized in writing. As a condition to the issuance of any
                  new Rights Certificate under this section 2.3, the Corporation
                  may require the payment of a sum sufficient to cover any tax
                  or other governmental charge that may be imposed in relation
                  thereto and any other expenses (including the fees and
                  expenses of the Rights Agent) in connection therewith.

2.4.              MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES

            (a)   If a mutilated Rights Certificate is surrendered to the Rights
                  Agent prior to the Expiration Time, the Corporation will
                  execute and the Rights Agent will manually countersign and
                  deliver in exchange therefor a new Rights Certificate
                  evidencing the same number of Rights as the Rights Certificate
                  so surrendered.

            (b)   If there will 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 indemnify them and any of their agents,
                  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 will execute, and upon
                  its request the Rights Agent will 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 2.4, the Corporation may require the
                  payment of a sum sufficient to cover any tax or other
                  governmental charge that may be imposed in relation thereto
                  and any other expenses (including the fees and expenses of the
                  Rights Agent) in connection therewith.

            (d)   Every new Rights Certificate issued pursuant to this section
                  2.4 in lieu of any destroyed, lost or stolen Rights
                  Certificate will evidence a contractual obligation of the
                  Corporation, whether or not the destroyed, lost or stolen
                  Rights Certificate is at any time enforceable by anyone, and
                  will be entitled to all the benefits of this agreement equally
                  and proportionately with any and all other Rights duly issued
                  by the Corporation under this agreement.

2.5.              PERSONS DEEMED OWNERS OF RIGHTS

                  The Corporation, the Rights Agent and any agent of the
Corporation or the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes. As used in this agreement, unless


<PAGE>


                                      -15-


the context otherwise requires, the term "HOLDER" of any Rights will mean the
registered holder of such Rights (or, prior to the Separation Time, of the
associated Common Shares).

2.6.              DELIVERY AND CANCELLATION OF CERTIFICATES

                  All Rights Certificates surrendered upon exercise or for
redemption, registration of transfer or exchange, if surrendered to any Person
other than the Rights Agent, will be delivered to the Rights Agent and, in any
case, will be promptly cancelled by the Rights Agent. The Corporation may
deliver at any time 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 will
be promptly cancelled by the Rights Agent. No Rights Certificate will be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided for in this section 2.6, except as expressly permitted by this
agreement. The Rights Agent will destroy all cancelled Rights Certificates and
deliver a certificate of destruction to the Corporation.

2.7.              AGREEMENT OF RIGHTS HOLDERS

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

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

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

            (c)   after the Separation Time, the Rights Certificates will be
                  transferable only upon registration of the transfer on the
                  Rights Register as provided in this agreement;

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

            (e)   it has waived any right and is not entitled to receive any
                  fractional Rights or any fractional Common Shares upon
                  exercise of a Right;

            (f)   subject to section 6.5, without the approval of the holders of
                  Voting Shares or Rights and on the sole authority of the Board
                  of Directors, this agreement may be amended or supplemented
                  from time to time as provided in this agreement; and

            (g)   notwithstanding anything in this agreement to the contrary,
                  neither the Corporation nor the Rights Agent will have any
                  liability to any holder of a Right or any other Person as a
                  result of its inability to perform any of its obligations


<PAGE>


                                      -16-


                  under this agreement by reason of any preliminary or permanent
                  injunction or other order, decree or ruling issued by a court
                  of competent jurisdiction or by a governmental, regulatory or
                  administrative agency or commission, or any statute, rule,
                  regulation or executive order promulgated or enacted by a
                  governmental authority, prohibiting or otherwise restraining
                  performance of such obligations.

2.8.              RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER

                  No holder, as such, of any Right or Rights Certificate will be
entitled to vote or receive dividends as, or be deemed for any purpose to be, a
holder of any Common Share which may at any time be issuable on the exercise of
such Right, nor will anything contained herein or in any Rights Certificate be
construed or deemed to confer on the holder of any Right or Rights Certificate,
as such, any of the rights, titles, benefits or privileges of a shareholder 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 on any matter
submitted to shareholders 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 shareholder 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 any
Rights Certificate will have been duly exercised in accordance with the terms
and provisions hereof.


                                   ARTICLE 3.
                             EXERCISE OF THE RIGHTS

3.1.              INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF
                  RIGHTS

            (a)   Subject to adjustment as set forth in this agreement, from and
                  after the Separation Time and prior to the Expiration Time,
                  each Right will entitle the holder thereof to purchase one
                  Common Share for the Exercise Price (which Exercise Price and
                  number of Common Shares are subject to adjustment as set forth
                  below).

            (b)   Until the Separation Time:

                  (i)   the Rights are not exercisable and may not be exercised;
                        and

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

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

                  (i)   the Rights will be exercisable; and

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

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


<PAGE>


                                      -17-


                  (i)   a Rights Certificate representing the number of Rights
                        held by such holder at the Separation Time in
                        substantially the form of Exhibit A, appropriately
                        completed, and having such marks of identification or
                        designation and such legends, summaries or endorsements
                        printed thereon as the Corporation may deem appropriate
                        and as are not inconsistent with the provisions of this
                        agreement, or as may be required to comply with any law,
                        rule, regulation or judicial or administrative order 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 be listed or
                        traded from time to time, or to conform to usage; and

                  (ii)  a disclosure statement prepared by the Corporation
                        describing the Rights;

                  provided that a Nominee will be sent the materials provided
                  for in clauses (i) and (ii) only in respect of all Common
                  Shares held of record by it which are not Beneficially Owned
                  by an Acquiring Person. In order for the Corporation to
                  determine whether any Person is holding Common Shares which
                  are Beneficially Owned by another Person, the Corporation may
                  require the first-mentioned Person to furnish any information
                  and documentation as the Corporation deems necessary or
                  appropriate to make that determination.

            (e)   Rights may be exercised in whole or in part on any Business
                  Day after the Separation Time and prior to the Expiration Time
                  by submitting to the Rights Agent at its principal office in
                  the city of Toronto or any other office of the Rights Agent
                  designated for that purpose from time to time by the
                  Corporation:

                  (i)   the Rights Certificate evidencing such Rights;

                  (ii)  an election to exercise such Rights (an "ELECTION TO
                        EXERCISE") substantially in the form attached to the
                        Rights Certificate duly completed and executed by the
                        holder or his or her executors or administrators or
                        other personal representatives or his, her or their
                        legal attorney duly appointed by an instrument in
                        writing in form and executed in a manner satisfactory to
                        the Rights Agent; and

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

            (f)   Upon receipt of the Rights Certificate which is accompanied by
                  a completed Election to Exercise that does not indicate that
                  such Right is null and void as provided by subsection 4.1(b)
                  and payment as set forth in subsection 3.1(e), the Rights
                  Agent (unless otherwise instructed by the Corporation if the
                  Corporation is of the opinion that the Rights cannot be
                  exercised in accordance with this agreement) will promptly:

                  (i)   requisition from the transfer agent of the Common
                        Shares, certificates representing the number of such
                        Common Shares (rounded down to the nearest whole number
                        of Common Shares) to be purchased (the

<PAGE>


                                      -18-


                        Corporation hereby irrevocably authorizes such transfer
                        agent to comply with all such requisitions);

                  (ii)  after receipt of the Common Share certificates, deliver
                        them to, or to the order of, the registered holder of
                        such Rights Certificate, registered in such name or
                        names as may be designated by such holder; and

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

            (g)   In case the holder of any Rights exercises less than all the
                  Rights evidenced by such holder's Rights Certificate, a new
                  Rights Certificate evidencing the Rights remaining unexercised
                  will be issued by the Rights Agent to such holder or to such
                  holder's duly authorized assigns.

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

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

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

                  (iii) use reasonable efforts to cause all Common Shares issued
                        on exercise of Rights to be listed on the principal
                        exchanges or over-the-counter markets on which the
                        Common Shares are then listed or traded;

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

                  (v)   pay when due and payable any Canadian and United States
                        federal and provincial and state transfer taxes and
                        charges (for greater certainty, not in the nature of
                        income or withholding taxes) which may be payable in
                        respect of the original issuance or delivery of the
                        Rights Certificates, provided that the Corporation will
                        not be required to pay any tax or other governmental
                        charge which may be payable in respect of any transfer
                        or delivery of Rights Certificates or the issuance or
                        delivery of certificates for Common Shares in a name
                        other than that of the holder of the Rights being
                        transferred or exercised.

3.2.              ADJUSTMENTS TO EXERCISE PRICE: NUMBER OF RIGHTS

                  The Exercise Price, the number of Common Shares or other
securities subject to purchase on the exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this section 3.2.

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


<PAGE>


                                      -19-


            (i)   declares or pays a dividend on the Common Shares payable in
                  Common Shares (or other securities exchangeable for or
                  convertible into or giving a right to acquire Common Shares)
                  other than pursuant to any dividend reinvestment program and
                  other than a dividend payable in Common Shares (or other
                  securities exchangeable for or convertible into or giving a
                  right to acquire Common Shares) in lieu of (and having a value
                  no greater than) a dividend paid in the ordinary course;

            (ii)  subdivides or changes the outstanding Common Shares into a
                  greater number of Common Shares;

            (iii) combines or changes the outstanding Common Shares into a
                  smaller number of Common Shares; or

            (iv)  issues any Common Shares (or other securities exchangeable for
                  or convertible into or giving a right to acquire Common
                  Shares) in respect of, in lieu of, or in exchange for existing
                  Common Shares;

            the Exercise Price and the number of Rights outstanding (or, if the
            payment or effective date therefor occurs after the Separation
            Time, the securities purchasable on exercise of Rights) will be
            adjusted in the following manner.

            If the Exercise Price and number of Rights are to be adjusted (y)
            the Exercise Price in effect after such adjustment will be equal to
            the Exercise Price in effect immediately prior to such adjustment
            divided by the number of Common Shares (or other securities of
            the Corporation) (the "EXPANSION FACTOR") that a holder of one
            Common Share immediately prior to such dividend, subdivision,
            combination, change or issuance would hold thereafter as a result
            thereof and (z) each Right held prior to such adjustment will become
            that number of Rights equal to the Expansion Factor, and the
            adjusted number of Rights will be deemed to be allocated among the
            Common Shares with respect to which the original Rights were
            associated (if they remain outstanding) and the securities of the
            Corporation issued in respect of such dividend, subdivision,
            consolidation, change or issuance, so that each such Common Share
            (or other security of the Corporation) will have exactly one Right
            associated with it.

            For greater certainty, if the securities purchasable upon exercise
            of Rights are to be adjusted, the securities purchasable on
            exercise of each Right after such adjustment will be the securities
            that a holder of the securities purchasable on exercise of one Right
            immediately prior to such dividend, subdivision, consolidation,
            change or issuance would hold thereafter as a result thereof.

            Adjustments pursuant to this subsection will be made successively
            whenever an event referred to in this subsection occurs.

      (b)   If the Corporation at any time after the Record Time and prior to
            the Expiration Time fixes a record date for the issuance of rights,
            options or warrants to all or substantially all holders of Common
            Shares entitling them to subscribe for or purchase (for a period
            expiring within 45 calendar days after such record date) Common
            Shares (or securities convertible into or exchangeable for or
            carrying a right to acquire Common Shares) at a price per Common
            Share (or, if a security convertible into or exchangeable for or
            carrying a right to acquire 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,


<PAGE>


                                      -20-


            per share) less than 95% of the Market Price per Common Share on the
            second Trading Day immediately preceding such record date, the
            Exercise Price in respect of the Rights to be in effect after such
            record date will be determined by multiplying the Exercise Price in
            respect of the Rights in effect immediately prior to such record
            date by a fraction (i) the numerator of which will be the number of
            Common Shares outstanding on such record date, plus the number of
            Common Shares that the aggregate offering price of the total number
            of Common Shares so to be offered (and/or the aggregate initial
            conversion, exchange or exercise price of the convertible or
            exchangeable securities or rights so to be offered (including the
            price required to be paid to purchase such convertible or
            exchangeable securities or rights)) would purchase at such Market
            Price per Common Share and (ii) the denominator of which will be the
            number of Common Shares outstanding on such record date, plus the
            number of additional Common Shares to be offered for subscription or
            purchase (or into which the convertible or exchangeable securities
            or rights so to be offered are initially convertible, exchangeable
            or exercisable). In case such subscription price may be paid by
            delivery of consideration, part or all of which is in a form other
            than cash, the value of such consideration will be as determined in
            good faith by the Board of Directors, whose determination will be
            described in a statement filed with the Rights Agent and will be
            binding on the Rights Agent and the holders of the Rights. Such
            adjustment will be made successively whenever such a record date is
            fixed. To the extent that such rights, options or warrants are not
            exercised prior to the expiration thereof, the Exercise Price will
            be readjusted to the Exercise Price which would then be in effect
            based on the number of Common Shares (or securities convertible into
            or exchangeable for Common Shares) actually issued on exercise of
            such rights, options or warrants.

      (c)   For purpose of this agreement, the granting of the right to purchase
            Common Shares (whether from treasury or otherwise) pursuant to a
            dividend reinvestment plan or any employee benefit, stock option or
            similar plans will be deemed not to constitute an issue of rights,
            options or warrants by the Corporation; provided, however, that, in
            all such cases, the right to purchase Common Shares is at a price
            per share of not less than 90% of the then current market price per
            share (determined as provided in such plans) of the Common Shares.

      (d)   If the Corporation at any time after the Record Time and prior to
            the Expiration Time fixes a record date for a distribution to all or
            substantially all holders of Common Shares (including any such
            distribution made in connection with a merger in which the
            Corporation is the continuing corporation) of (i) evidences of
            indebtedness or assets, including cash (other than a dividend paid
            in the ordinary course or a dividend paid in Common Shares, but
            including any dividend payable in securities other than Common
            Shares), (ii) rights, options or warrants entitling them to
            subscribe for or purchase Common Shares (or securities convertible
            into or exchangeable for or carrying a right to acquire Common
            Shares) (excluding those referred to in subsection 3.2(b)) at a
            price per Common Share (or, if a security convertible into or
            exchangeable for or carrying a right to acquire Common Shares,
            having a conversion, exchange or exercise price, including the price
            required to be paid to purchase such convertible or exchangeable
            security or


<PAGE>


                                      -21-


            right, per share) that is less than 95% of the Market Price per
            Common Share on the second Trading Day immediately preceding such
            record date or (iii) other securities of the Corporation, the
            Exercise Price will be adjusted as follows. The Exercise Price in
            effect after such record date will equal the Exercise Price in
            effect immediately prior to such record date less the fair market
            value (as determined in good faith by the Board of Directors) of the
            portion of the evidences of indebtedness, assets, rights, options or
            warrants or other securities so to be distributed applicable to the
            securities purchasable on exercise of one Right. Such adjustments
            will be made successively whenever such a record date is fixed and,
            if such distribution is not so made, the Exercise Price in respect
            of the Rights will be adjusted to be the Exercise Price in respect
            of the Rights which would have been in effect if such record date
            had not been fixed.

      (e)   Notwithstanding anything in this agreement to the contrary, no
            adjustment of the Exercise Price will be required unless such
            adjustment would require an increase or decrease of at least 1% in
            the Exercise Price; provided, however, that any adjustments which by
            reason of this subsection are not required to be made will be
            carried forward and taken into account in any subsequent adjustment.
            All calculations under section 3.2 will be made to the nearest cent
            or to the nearest ten-thousandth of a Common Share or other share,
            as the case may be.

      (f)   If as a result of an adjustment made pursuant to section 4.1, the
            holder of any Right thereafter exercised will become entitled to
            receive any shares other than Common Shares, thereafter the number
            of such other shares so receivable upon exercise of any Right and
            the applicable Exercise Price thereof will be subject to adjustment
            from time to time in a manner and on terms as nearly equivalent as
            is practicable to the provisions with respect to the Common Shares
            contained in this section 3.2, and the provisions of this agreement
            with respect to the Common Shares will apply on like terms to any
            such other shares.

      (g)   All Rights originally issued by the Corporation subsequent to any
            adjustment made to the Exercise Price will 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.

      (h)   Unless the Corporation has exercised its election as provided in
            subsection (i), upon each adjustment of an Exercise Price as a
            result of the calculations made in subsections (b) and (d), each
            Right outstanding immediately prior to the making of such adjustment
            will thereafter evidence the right to purchase, at the adjusted
            Exercise Price, that number of Common Shares obtained by:

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

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

      (i)   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 will be exercisable for


<PAGE>


                                      -22-


            the number of Common Shares for which such a Right was exercisable
            immediately prior to such adjustment. Each Right held of record
            prior to such adjustment of the number of Rights will become that
            number of Rights (calculated to the nearest one ten-thousandth)
            obtained by dividing the relevant Exercise Price in effect
            immediately prior to adjustment of the relevant Exercise Price by
            the relevant Exercise Price in effect immediately after adjustment
            of the relevant Exercise Price. The Corporation will 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 relevant Exercise Price is adjusted or any
            day thereafter, but, if the Rights Certificates have been issued,
            will be at least 10 days later than the date of the public
            announcement. If Rights Certificates have been issued, upon each
            adjustment of the number of Rights pursuant to this subsection, the
            Corporation, as promptly as is practicable, will cause to be
            distributed to holders of record of Rights Certificates on such
            record date, Rights Certificates evidencing, subject to section 6.4,
            the additional Rights to which such holders will be entitled as a
            result of such adjustment, or, at the option of the Corporation,
            will cause to be distributed to such holders of record in
            substitution and 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 will be entitled
            after such adjustment. Rights Certificates to be so distributed will
            be issued, executed and countersigned in the manner provided for
            herein and may bear, at the option of the Corporation, the relevant
            adjusted Exercise Price and will be registered in the names of
            holders of record of Rights Certificates on the record date
            specified in the public announcement.


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

      (k)   In any case in which this section 3.2 requires that an adjustment in
            an 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 relevant Exercise Price in effect prior to such
            adjustment; provided, however, that the Corporation delivers 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)   Notwithstanding anything in this section 3.2 to the contrary, the
            Corporation will be entitled to make such reductions in the Exercise
            Price, in addition to those adjustments expressly required by this
            section 3.2, as and to the extent that in its good faith judgment
            the Board of Directors determines to be advisable in order


<PAGE>


                                      -23-


            that any (i) consolidation or subdivision of Common Shares,
            (ii) issuance wholly for cash of any Common Share or securities that
            by their terms are convertible into or exchangeable for Common
            Shares, (iii) stock dividends or (iv) issuance of rights, options or
            warrants referred to in this section 3.2, hereafter made by the
            Corporation to holders of its Common Shares, will not be taxable to
            such shareholders.

      (m)   The Corporation covenants and agrees that, after the Separation
            Time, except as permitted by section 6.1 or 6.5, it will not take
            (or permit any Subsidiary of the Corporation to take) any action if
            at the time such action is taken it is reasonably foreseeable that
            such action would diminish substantially or otherwise eliminate the
            benefits intended to be afforded by the Rights.

      (n)   Whenever an adjustment to the Exercise Price or a change in the
            securities purchasable upon exercise of the Rights is made pursuant
            to this section 3.2, the Corporation will promptly:

            (i)   file with the Rights Agent and with the transfer agent for the
                  Common Shares a certificate specifying the particulars of such
                  adjustment or change; and

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

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

3.3.              DATE ON WHICH EXERCISE IS EFFECTIVE

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


                                   ARTICLE 4.
         ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

4.1.              FLIP-IN EVENT

            (a)   Subject to subsection 4.1(b) and section 6.1, if prior to the
                  Expiration Time a Flip-in Event occurs, each Right will
                  constitute, effective on and after the later of its date of
                  issue and the close of business on the tenth Trading Day
                  following the Stock Acquisition Date, the right to purchase
                  from the Corporation, upon payment of the relevant Exercise
                  Price and otherwise exercising such Right in accordance with
                  the terms hereof, that number of Common Shares (rounded down
                  to the nearest whole number of Common Shares) having an
                  aggregate Market Price on


<PAGE>


                                      -24-


                  the date of 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 adjustments provided for in
                  section 3.2 if, after such date of occurrence, an event of a
                  type analogous to any of the events described in section 3.2
                  has occurred with respect to the Common Share).

            (b)   Notwithstanding anything in this agreement to the contrary,
                  upon the occurrence of any Flip-in Event, any Rights that are
                  or were Beneficially Owned on or after the earlier of the
                  Separation Time and the Stock Acquisition Date by (i) an
                  Acquiring Person (or any Affiliate or Associate of an
                  Acquiring Person or any Person acting jointly or in concert
                  with an Acquiring Person or any Affiliate or Associate of an
                  Acquiring Person); or (ii) a transferee or other successor in
                  title, directly or indirectly, (a "TRANSFEREE") of Rights held
                  by an Acquiring Person (or any Affiliate or Associate of an
                  Acquiring Person or any Person acting jointly or in concert
                  with an Acquiring Person or any Affiliate or Associate of an
                  Acquiring Person) in a transfer that the Board of Directors
                  has determined is part of a plan, arrangement or scheme of an
                  Acquiring Person (or any Affiliate or Associate of an
                  Acquiring Person or any Person acting jointly or in concert
                  with an Acquiring Person or any Affiliate or Associate of an
                  Acquiring Person) that has the purpose or effect of avoiding
                  clause (i), will become null and void without any further
                  action, and any holder of such Rights (including any
                  Transferee) will not have any right whatsoever to exercise
                  such Rights and will not have thereafter any other 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 on 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 will be deemed to be an Acquiring Person for the
                  purpose of this section 4.1 and such Rights will be null and
                  void.

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

                        THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
                        ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS AN
                        ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
                        ACQUIRING PERSON OR A PERSON ACTING JOINTLY OR IN
                        CONCERT WITH ANY OF THEM (AS SUCH TERMS ARE DEFINED IN
                        THE SHAREHOLDER RIGHTS PLAN AGREEMENT). THIS RIGHTS
                        CERTIFICATE AND THE RIGHTS REPRESENTED BY THIS
                        CERTIFICATE WILL BE VOID IN THE CIRCUMSTANCES SPECIFIED
                        IN SUBSECTION 4.1(b) OF THE SHAREHOLDER RIGHTS PLAN
                        AGREEMENT.

                  The Rights Agent will not be under any responsibility to
                  ascertain the existence of facts that would require the
                  inclusion of that legend, but will be required to include the
                  legend only if instructed to do so by the Corporation or if a
                  holder fails to certify on transfer or exchange in the space
                  provided on the Rights Certificate that it is not an Acquiring
                  Person or other Person referred to in the legend. The issuance
                  of


<PAGE>


                                      -25-


                  a Rights Certificate without the legend referred to in this
                  subsection will not affect the application of subsection (b).

            (d)   From and after the Separation Time, the Corporation will
                  do all such acts and things as will be necessary and within
                  its power to ensure compliance with the provisions of this
                  section 4.1, including all such acts and things as may be
                  required to satisfy the requirements of the Corporations Act
                  and the Securities Act or comparable legislation of any other
                  applicable jurisdiction and the rules of any stock exchange
                  where the Common Shares may then be listed or traded in
                  respect of the issuance of Common Shares upon the exercise of
                  Rights in accordance with this agreement.

            (e)   Notwithstanding any other provision of this agreement, any
                  Rights held by the Corporation or any of its Subsidiaries
                  will be void.

                                   ARTICLE 5.
                                THE RIGHTS AGENT

5.1.              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, subject to the approval of the Rights Agent. In the
                  event the Corporation appoints one or more Co-Rights Agents,
                  the respective duties of the Rights Agents and Co-Rights
                  Agents will be as the Corporation may determine with the
                  approval of the 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 (including the fees and disbursements
                  of any expert or advisor retained by the Rights Agent with the
                  approval of the Corporation, acting reasonably). The
                  Corporation also agrees to indemnify the Rights Agent, its
                  officers, directors and employees for, and to hold it and them
                  harmless against, any loss, liability cost, claim, action,
                  damage or expense, incurred without negligence, bad faith or
                  wilful misconduct on the part of the Rights Agent, for
                  anything done or omitted by the Rights Agent in connection
                  with the acceptance and administration of this agreement,
                  including the costs and expenses of defending against any
                  claim of liability, which right to indemnification will
                  survive the termination of this agreement and/or the
                  resignation or removal of the Rights Agent.

            (b)   The Corporation will 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 request, will provide to the Rights Agent an
                  incumbency certificate with respect to the then current
                  directors of the Corporation, provided that failure to inform
                  the Rights Agent of any such events,


<PAGE>


                                      -26-


                  or any defect therein, will not affect the validity of any
                  action taken hereunder in relation to such events.

            (c)   The Rights Agent will be protected and will incur no liability
                  for or in respect of any action taken, suffered or omitted by
                  it in connection with its administration of this agreement in
                  reliance upon any certificate for Common Shares, Rights
                  Certificate, certificate for other securities of the
                  Corporation, instrument of assignment or transfer, power of
                  attorney, endorsement, affidavit, letter, notice, direction,
                  consent, certificate, statement or other paper or document
                  believed by it to be genuine and to be signed, executed and,
                  where necessary, verified or acknowledged, by the proper
                  Person or Persons.

5.2.              MERGER OR AMALGAMATION OR CHANGE OF NAME OF RIGHTS AGENT

            (a)   Any corporation into which the Rights Agent or any successor
                  Rights Agent may be merged or amalgamated or with which it may
                  be consolidated, or any corporation resulting from any merger,
                  amalgamation or consolidation to which the Rights Agent or any
                  successor Rights Agent is a party, or any corporation
                  succeeding to the shareholder or stockholder services business
                  of the Rights Agent or any successor Rights Agent, will be the
                  successor to the Rights Agent under this agreement without the
                  execution or filing of any paper or any further act on the
                  part of any of the parties, provided that such corporation
                  would be eligible for appointment as a successor Rights Agent
                  under the provisions of section 5.4. In case at the time such
                  successor Rights Agent succeeds to the agency created by this
                  agreement any of the Rights Certificates have been
                  countersigned but not delivered, any such successor Rights
                  Agent may adopt the countersignature of the predecessor Rights
                  Agent and deliver such Rights Certificates so countersigned;
                  and in case at that time any of the Rights Certificates have
                  not been countersigned, any successor Rights Agent may
                  countersign such Rights Certificates either in the name of the
                  predecessor Rights Agent or in the name of the successor
                  Rights Agent; and in all such cases such Rights Certificates
                  will have the full force provided in the Rights Certificates
                  and in this agreement.

            (b)   In case at any time the name of the Rights Agent is changed
                  and at such time any of the Rights Certificates 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 have not 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 will have the full force
                  provided in the Rights Certificates and in this agreement.

5.3.              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,
will be bound:

            (a)   the Rights Agent may consult with legal counsel (who may be
                  legal counsel for the Corporation) and the opinion of such
                  counsel will be full and complete


<PAGE>


                                      -27-


                  authorization and protection to the Rights Agent as to
                  any action taken or omitted by it in good faith and in
                  accordance with such opinion; the Rights Agent may also, with
                  the approval of the Corporation (where such approval may
                  reasonably be obtained and such approval not to be
                  unreasonably withheld), consult with such other experts as the
                  Rights Agent considers necessary or appropriate to properly
                  carry out the duties and obligations imposed under the
                  agreement and the Rights Agent will be entitled to rely in
                  good faith on the advice of any such expert;

            (b)   whenever in the performance of its duties under this agreement
                  the Rights Agent deems it necessary or desirable that any fact
                  or matter be proved or established by the Corporation prior to
                  taking or suffering any action hereunder, such fact or matter
                  (unless other evidence in respect thereof is specifically
                  prescribed in this agreement) may be deemed to be conclusively
                  proved and established by a certificate signed by a Person
                  believed by the Rights Agent to be a senior officer of the
                  Corporation and delivered to the Rights Agent; and such
                  certificate will be full authorization to the Rights Agent for
                  any action taken or suffered in good faith by it under the
                  provisions of this agreement in reliance upon such
                  certificate;

            (c)   the Rights Agent will be liable hereunder only for its own
                  negligence, bad faith or wilful misconduct;

            (d)   the Rights Agent will not be liable for or by reason of any of
                  the statements of fact or recitals contained in this agreement
                  or in the certificates for Common Shares or the Rights
                  Certificates (except its countersignature thereof) or be
                  required to verify the same, but all such statements and
                  recitals are and will be deemed to have been made by the
                  Corporation only;

            (e)   the Rights Agent will not be under any responsibility in
                  respect of the validity of this agreement or the execution and
                  delivery hereof (except the due authorization, execution and
                  delivery hereof by the Rights Agent) or in respect of the
                  validity or execution of any Common Share certificate or
                  Rights Certificate (except its countersignature thereof); nor
                  will it be responsible for any breach by the Corporation of
                  any covenant or condition contained in this agreement or in
                  any Rights Certificate; nor will it be responsible for any
                  change in the exercisability of the Rights (including the
                  Rights becoming void pursuant to subsection 4.1(b)) or any
                  adjustment required under the provisions of section 3.2 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 3.2 describing any such adjustment);
                  nor will it by any act hereunder be deemed to make any
                  representation or warranty as to the authorization of any
                  Common Shares to be issued pursuant to this agreement or any
                  Rights or as to whether any Shares will, when issued, be duly
                  and validly authorized, executed, issued and delivered as
                  fully paid and non-assessable;

            (f)   the Corporation 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;


<PAGE>


                                      -28-


            (g)   the Rights Agent is hereby authorized and directed to accept
                  instructions with respect to the performance of its duties
                  hereunder from any Person designated in writing by the
                  Corporation, and to apply to such Persons for advice or
                  instructions in connection with its duties, and it will not be
                  liable for any action taken or suffered by it in good faith in
                  accordance with the instructions of any such Person;

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

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

5.4.              CHANGE OF RIGHTS AGENT

                  The Rights Agent may resign and be discharged from its duties
under this agreement upon 60 days' notice in writing (or such lesser notice as
is acceptable to the Corporation) mailed to the Corporation and to each transfer
agent of Common Shares by registered or certified mail, and to the holders of
Rights in accordance with section 6.8, all of which will be at the Corporation's
expense. The Corporation may remove the Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of the Rights in
accordance with section 6.8. If the Rights Agent should resign or be removed or
otherwise become incapable of acting, the Corporation will appoint a successor
to the Rights Agent. If the Corporation fails to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of any Rights (which holder, with such notice, must submit such
holder's Rights Certificate for inspection by the Corporation), then the holder
of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, must be a corporation incorporated under
the laws of Canada or a province thereof authorized to carry on the business of
a trust company in the Province of Ontario. After appointment, the successor
Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent, upon payment by the
Corporation to the predecessor Rights Agent of all outstanding fees and expenses
owing by the Corporation to the predecessor Rights Agent pursuant to this
agreement, will deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Corporation will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares, and mail a notice thereof in writing to the holders of the


<PAGE>


                                      -29-


Rights. Failure to give any notice provided for in this section 5.4, however, or
any defect therein, will not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.


                                   ARTICLE 6.
                                  MISCELLANEOUS

6.1.              REDEMPTION AND WAIVER

            (a)   Until the occurrence of a Flip-in Event as to which the
                  application of section 4.1 has not been waived pursuant to
                  this section 6.1, the Board of Directors may 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 3.2, if an event of the type analogous to any
                  of the events described in section 3.2 have occurred (such
                  redemption price being herein referred to as the "REDEMPTION
                  PRICE").

            (b)   Until the occurrence of a Flip-in Event as to which the
                  application of section 4.1 has not been waived pursuant to
                  this section 6.1, upon written notice to the Rights Agent, the
                  Board of Directors, may determine to waive the application of
                  section 4.1 to any Flip-in Event.

            (c)   Notwithstanding subsection (b), upon written notice to the
                  Rights Agent, the Board of Directors may waive the application
                  of section 4.1 in respect of any Flip-in Event, provided that
                  both of the following conditions are satisfied:

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

                  (ii)  such Person has reduced its Beneficial Ownership of
                        Voting Shares such that at the time of the granting of a
                        waiver pursuant to this subsection, such Person is no
                        longer an Acquiring Person;

                  In the event of any such waiver, for the purposes of this
                  agreement, such Flip-in Event will be deemed not to have
                  occurred and the Separation Time will be deemed not to have
                  occurred as a result of such Person having inadvertently
                  become an Acquiring Person.

            (d)   The Board of Directors will be deemed to have elected to
                  redeem, without further formality, the Rights at the
                  Redemption Price on the date that a Person who has made a
                  Permitted Bid, a Competing Permitted Bid or Take-over Bid in
                  respect of which the Board of Directors has waived, or is
                  deemed to have waived, pursuant to this section 6.1 the
                  application of section 4.1, takes up and pays for Voting
                  Shares pursuant to the terms and conditions of such Permitted
                  Bid, Competing Permitted Bid or Take-over Bid, as the case may
                  be.

            (e)   Where a Take-over Bid that is not a Permitted Bid is withdrawn
                  or otherwise terminated after the Separation Time has occurred
                  and prior to the occurrence of a Flip-in Event, the Board of
                  Directors may elect to redeem all the then outstanding Rights
                  without the consent of the holders of Voting Shares or the
                  holders of Rights, as the case may be, at the Redemption Price
                  and reissue Rights under this agreement to holders of record
                  of Common Shares immediately following the


<PAGE>


                                      -30-


                  time of such redemption and, thereafter, all of the
                  provisions of this agreement will continue in full force and
                  effect and such Rights, without any further formality, will be
                  attached to the outstanding Common Shares in the same manner
                  as prior to the occurrence of such Separation Time.

            (f)   If the Board of Directors elects or is deemed to have elected
                  to redeem the Rights, the right to exercise the Rights will
                  thereupon, without further action and without notice,
                  terminate, and the only right thereafter of the holders of
                  Rights will be to receive the Redemption Price.

            (g)   Within 10 days after the Board of Directors electing or having
                  been deemed to have elected to redeem the Rights, the
                  Corporation will give notice of redemption to the holders of
                  the then outstanding Rights by issuing a press release, at
                  least once, in both Canada and the United States. The notice
                  of redemption will state, among other things, that a holder of
                  Rights shall be entitled to its PRO RATA portion of the
                  Redemption Price by requesting such payment in writing from
                  the Corporation at the address set out in section 6.8 on or
                  before the expiration of one year following the giving of the
                  notice of redemption. The Corporation shall be deemed to have
                  validly redeemed all of the Rights upon the publication of the
                  notice of redemption as contemplated herein. The Corporation
                  may not redeem, acquire or purchase for value any Rights at
                  any time in any manner other than that specifically set forth
                  in this section 6.1, and other than in connection with the
                  purchase of Common Shares prior to the Separation Time.

6.2.              EXPIRATION

                  No Person will have any rights pursuant to this agreement or
in respect of any Right after the Expiration Time, except the Rights Agent as
specified in section 5.1.

6.3.              ISSUANCE OF NEW RIGHTS CERTIFICATES

                  Notwithstanding any of the provisions of this agreement or of
the Rights to the contrary, the Corporation, at its option, may 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
securities purchasable upon exercise of Rights made in accordance with the
provisions of this agreement.

6.4.              FRACTIONAL RIGHTS AND FRACTIONAL SHARES

            (a)   The Corporation will not be required to issue fractions of
                  Rights or to distribute Rights Certificates which evidence
                  fractional Rights. The number of Rights issued at any time
                  shall be rounded down to the nearest whole number of Rights.

            (b)   The Corporation will not be required to issue fractions of
                  Common Shares upon exercise of the Rights as all such Common
                  Shares will be rounded down to the nearest whole number of
                  Common Shares.

6.5.              SUPPLEMENTS AND AMENDMENTS

            (a)   The Corporation may make amendments to this agreement from
                  time to time to correct any clerical or typographical error or
                  which are required to maintain the validity of this agreement
                  as a result of any change in any applicable legislation,


<PAGE>


                                      -31-

                  rules or regulations or decision of a court or regulatory
                  authority. The Corporation, at or prior to the meeting of
                  shareholders of the Corporation, or any adjournment or
                  postponement thereof, to be held for shareholders of the
                  Corporation to consider and, if deemed advisable, to adopt a
                  resolution approving, ratifying and confirming this agreement
                  and the Rights issued pursuant thereto, may supplement or
                  amend this agreement without the approval of any holders of
                  Rights or Voting Shares in order to make any changes which the
                  Board of Directors acting in good faith may deem necessary or
                  desirable to make this agreement effective (provided such
                  action would not materially adversely affect the interests of
                  the holders of Rights generally). Notwithstanding anything in
                  this section 6.5 to the contrary, no such supplement or
                  amendment may be made to the provisions of Article 5 except
                  with the written concurrence of the Rights Agent to such
                  supplement or amendment.

            (b)   Subject to subsection (a), the Corporation, with the prior
                  consent of the holders of Voting Shares obtained as set forth
                  below, at any time prior to the Separation Time, may
                  supplement or amend any of the provisions of this agreement
                  and the Rights (whether or not such action would materially
                  adversely affect the interests of the holders of Rights
                  generally). Such consent will be deemed to have been given if
                  the action requiring such approval is authorized by the
                  affirmative vote of a majority of the votes cast by
                  Independent Shareholders present or represented at and
                  entitled to vote at a meeting of the holders of Voting Shares
                  duly called and held in compliance with applicable laws and
                  the Corporation's by-laws.

            (c)   Subject to subsection (a), the Corporation, with the prior
                  consent of the holders of Rights, at any time on or after the
                  Separation Time, may supplement or amend any of the provisions
                  of this agreement and the Rights (whether or not such action
                  would materially adversely affect the interests of the holders
                  of Rights generally), provided that no such supplement or
                  amendment may be made to the provisions of Article 5 except
                  with the written concurrence of the Rights Agent thereto.

            (d)   Any approval of the holders of Rights will be deemed to have
                  been given if the action requiring such approval is authorized
                  by the affirmative votes of the holders of Rights present or
                  represented at and entitled to be voted at a meeting of the
                  holders of Rights and representing a majority of the votes
                  cast in respect thereof. For the purposes hereof, each
                  outstanding Right (other than Rights which are void pursuant
                  to the provisions hereof) will be entitled to one vote, and
                  the procedures for the calling, holding and conduct of the
                  meeting will be those, as nearly as may be, which are provided
                  in the Corporation's by-laws and the Corporations Act with
                  respect to meetings of shareholders of the Corporation.

            (e)   Any amendments made by the Corporation to this agreement
                  pursuant to subsection (a) which are required to maintain the
                  validity of this agreement shall:

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

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

<PAGE>


                                      -32-


                  by resolution passed by the majority referred to in
                  subsection (d), may confirm or reject such amendment.

            Any such amendment will be effective from the date of the
            resolution of the Board of Directors adopting such amendment, until
            it is confirmed or rejected or until it ceases to be effective (as
            described in the next sentence) and, where such amendment is
            confirmed, it continues in effect in the form so confirmed. If such
            amendment is rejected by the holders of Voting Shares or the holders
            of Rights or is not submitted to the holders of Voting Shares or
            holders of Rights as required, then such amendment will cease to be
            effective from and after the termination of the meeting at which it
            was rejected or to which it should have been but was not submitted
            or from and after the date of the meeting of holders of Rights that
            should have been but was not held, and no subsequent amendment to
            this agreement to substantially the same effect will be effective
            until confirmed by the shareholders or holders of Rights, as the
            case may be.

      (f)   The Corporation will give notice in writing to the Rights Agent of
            any amendment or supplement to this agreement pursuant to this
            section 6.5 within five Business Days of the date of any such
            amendment or supplement, provided that failure to give such notice,
            or any defect therein, will not affect the validity of any such
            supplement or amendment.

      (g)   For greater certainty, neither the exercise by the Board of
            Directors of any power or discretion conferred on it under this
            agreement nor the making by the Board of Directors of any
            determination or the granting of any waiver it is permitted to make
            or give under this agreement will constitute an amendment, variation
            or rescission of the provisions of this agreement or Rights for
            purposes of this section 6.5 or otherwise.

6.6.              RIGHTS OF ACTION

                  Subject to the terms of this agreement, all rights of action
in respect of this agreement, other than rights of action vested solely in the
Rights Agent, are vested in the respective holders of the Rights; and any holder
of any Rights, without the consent of the Rights Agent or of the holder of any
other Rights, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, may 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.

6.7.              NOTICE OF PROPOSED ACTIONS

                  If the Corporation proposes after the Separation Time and
prior to the Expiration Time to effect the liquidation, dissolution or
winding-up of the Corporation or the sale of all or substantially all of the
Corporation's assets, then, in each such case, the Corporation will give to each
holder of a Right, in accordance with section 6.8, a notice of such proposed
action. The notice must specify the date on which such liquidation, dissolution,
winding-up or sale is to take


<PAGE>


                                      -33-


place, and such notice must be so given at least 20 Business Days prior to the
date of taking such proposed action.

6.8.              NOTICES

      (a)   Notices or demands authorized or required by this agreement to be
            given or made by the Rights Agent or by the holder of any Rights to
            or on the Corporation will be sufficiently given or made if
            delivered or sent by facsimile or by first-class mail, postage
            prepaid, addressed (until another facsimile number or address is
            filed in writing with the Rights Agent) as follows:

         724 Solutions Inc.
         4101 Yonge Street, Suite 702
         Toronto, Ontario   M2P 1N6
         Attention:        General Counsel and Corporate Secretary
         Facsimile:        (416) 228-2454

      (b)   Notices or demands authorized or required by this agreement to be
            given or made by the Corporation or by the holder of any Rights to
            or on the Rights Agent will be sufficiently given or made if
            delivered or sent by facsimile or by first-class mail, postage
            prepaid, addressed (until another facsimile number or address is
            filed in writing with the Corporation) as follows:

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

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

      (d)   Notices will be deemed to have been received as follows:

            (i)   in the case of personal delivery, on the day of delivery,
                  unless delivered on a day that is not a Business Day or after
                  4:00 p.m. on the day of delivery, in which case notice will be
                  deemed to have been received on the next Business Day;

            (ii)  in the case of facsimile, on the Business Day of transmission
                  if transmitted before 4:00 p.m. on that Business Day or,
                  otherwise, on the next Business Day following the day of
                  transmission; and

            (iii) in the case of first class mail, on the fifth Business Day
                  following mailing.

      (e)   Any accidental error, omission or failure in giving or delivering or
            mailing any such notice will not invalidate or otherwise
            prejudicially affect any action or proceeding founded thereon.


<PAGE>


                                      -34-


6.9.              COSTS OF ENFORCEMENT

                  The Corporation agrees that, if it or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfil any
of its obligations pursuant to this agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including reasonable legal fees) incurred by such holder in actions to enforce
the holder's rights pursuant to any Rights or this agreement.

6.10.             SUCCESSORS

                  All the covenants and provisions of this agreement by or for
the benefit of the Corporation or the Rights Agent bind and enure to the benefit
of their respective successors and assigns hereunder.

6.11.             BENEFITS OF THIS AGREEMENT

                  Nothing in this agreement will 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 will be for the sole and exclusive benefit of the Corporation,
the Rights Agent and the holders of the Rights.

6.12.             GOVERNING LAW

                  This agreement and each Right issued hereunder will be deemed
to be a contract made under the laws of the Province of Ontario and for all
purposes will 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.

6.13.             COUNTERPARTS

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

6.14.             SEVERABILITY

                  If any term or provision hereof or the application thereof to
any circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision will 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.

6.15.             EFFECTIVE DATE

                  This agreement is in force in accordance with its terms from
the date hereof. If the Rights Plan is not ratified by resolution passed by a
majority of the votes cast by Independent Shareholders present or represented by
proxy at a meeting of shareholders of the Corporation


<PAGE>


                                      -35-


held on or before July 21, 2003, then, unless a Flip-in Event (as to which the
application of section 4.1 has not been waived pursuant to section 6.1) has
occurred on or prior to such date, this agreement and any then outstanding
Rights, without further formality, will be of no further force or effect as at
such date.

6.16.             SHAREHOLDER APPROVAL

                  At each annual meeting of shareholders of the Corporation
commencing in 2004 and every one year anniversary thereafter and so on, provided
that a Flip-in Event has not occurred prior to such time (other than a Flip-in
Event in respect of which the application of section 4.1 has been waived
pursuant to section 6.1), the board of directors may submit a resolution to the
Independent Shareholders for their consideration and approval ratifying this
agreement (as may be amended and restated) and its continued existence after
each such meeting. If a majority of the votes cast by Independent Shareholders
present or represented by proxy at any such meeting are not voted in favour of
this agreement and its continued existence, then the board of directors,
immediately upon confirmation by the chair of such shareholders meeting of the
results of the vote on such resolution, without further formality, will be
deemed to have elected to redeem the Rights at the Redemption Price.

6.17.             DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS

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

6.18.             TIME OF THE ESSENCE

                  Time will be of the essence of this agreement.

6.19.             REGULATORY APPROVALS

                  Any obligation of the Corporation or action contemplated by
this agreement, including any amendment hereto, will be subject to the receipt
of any requisite approval or consent from any applicable regulatory authority,
including any necessary approvals of the Nasdaq National Market, the Toronto
Stock Exchange or any other stock exchange.

6.20.             DECLARATION AS TO NON-CANADIAN AND NON-UNITED STATES HOLDERS

                  If in the opinion of the Board of Directors (who may rely on
the advice of legal 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 acting in good faith may take such actions as it may deem
appropriate to ensure that such compliance is not required, including
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 and the sale thereof and remittance of
the proceeds of such sale (if any) to the Persons entitled thereto. In no event
will the Corporation or the Rights Agent be required to issue or deliver Rights
or securities


<PAGE>


                                      -36-


issuable on exercise of Rights to Persons who are citizens, residents or
nationals of any jurisdiction other than Canada and the United States of America
in which such issue or delivery would be unlawful without registration of the
relevant Persons or securities for such purposes.

6.21.             FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS

                  For greater certainty, this agreement will not be construed to
suggest or imply that the Board of Directors is not entitled to recommend that
holders of Voting Shares reject or accept any Take-over Bid (whether or not such
Take-over Bid is a Permitted Bid or a Competing Permitted Bid) or take any other
action (including the commencement, prosecution, defence or settlement of any
litigation) with respect to any Take-over Bid or otherwise that the Board of
Directors believes is necessary or appropriate in the exercise of its fiduciary
duties.

6.22.             LANGUAGE

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



<PAGE>


                                      -37-


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


                                   724 SOLUTIONS INC.


                                   By:         /s/ Eric Lowy
                                               ---------------------------------
                                               Name:      Eric Lowy
                                               Title:     General Counsel and
                                                          Corporate Secretary

                                   COMPUTERSHARE TRUST COMPANY
                                   OF CANADA


                                   By:         /s/ Florence Smith
                                               ---------------------------------
                                                Authorized Signatory
                                                Professional, Client Services

                                               /s/ Judy Belanger
                                               ---------------------------------
                                                Authorized Signatory
                                                Professional, Client Services


<PAGE>


                                    EXHIBIT A
                           FORM OF RIGHTS CERTIFICATE

Certificate No.______________                                 ___________ Rights


                               RIGHTS CERTIFICATE
                  This certifies that __________________ is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms, provisions and conditions of
the Shareholder Rights Plan Agreement dated as of February 10, 2003, as the
same may be amended, restated or supplemented from time to time (the "RIGHTS
AGREEMENT") between 724 Solutions Inc. (the "CORPORATION"), and Computershare
Trust Company of Canada, as rights agent (the "RIGHTS AGENT", which term
includes any successor Rights Agent under the Rights Agreement), 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 of the Corporation (a "COMMON SHARE") at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate together with the Form of Election to Exercise and Declaration of
Ownership duly executed and submitted to the Rights Agent at its principal
office in the city of Toronto or any other office of the Rights Agent
designated for that purpose from time to time by the Rights Agent. The
Exercise Price initially is $100 per Right and will be subject to adjustment
in certain events as provided in the Rights Agreement.

                  In certain circumstances described in the Rights Agreement,
each Right evidenced hereby may entitle the registered holder thereof to
purchase or receive assets, debt securities or shares in the capital of the
Corporation other than Common Shares, or more or less than one Common Share, all
as provided in the Rights Agreement.

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

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

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be, and under certain circumstances are
required to be, redeemed by the Corporation at a redemption price of $0.0001 per
Right, subject to adjustment in certain events.


<PAGE>


                                     - ii -


                  Fractional Common Shares will not be issued upon the exercise
of any Right or Rights evidenced hereby as all such Common Shares will be
rounded down to the nearest whole number of Common Shares.

                  No holder of this Rights Certificate, as such, will be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Shares or of any other shares of the Corporation which may at any time be
issuable upon the exercise hereof, nor will 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 of the
Corporation 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 of the Corporation (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate have been exercised as provided in the
Rights Agreement.

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

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


                  Date: _________________


                                           724 SOLUTIONS INC.


                                           By:
                                               ---------------------------------

                                           By:
                                               ---------------------------------


Countersigned:

                                           COMPUTERSHARE TRUST COMPANY
                                           OF CANADA


                                           By:
                                               ---------------------------------
                                               Authorized Signature



<PAGE>


                          FORM OF ELECTION TO EXERCISE
                   (to be attached to each Rights Certificate)

TO:               724 SOLUTIONS INC.

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

                 _______________________________________________________________
                 Name

                 _______________________________________________________________
                 Address

                 _______________________________________________________________
                 City and Province

                 _______________________________________________________________
                 Social Insurance Number or other taxpayer identification number

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

                 _______________________________________________________________
                 Name

                 _______________________________________________________________
                 Address

                 _______________________________________________________________
                 City and Province

                 _______________________________________________________________
                 Social Insurance Number or other taxpayer identification number

Dated:__________________________    ____________________________________________
                                    Signature
Signature Guaranteed:
         (Signature must correspond to name as written upon the face of this
         Rights Certificate in every particular, without alteration or
         enlargement or any change whatsoever.)
                  Signature must be guaranteed by an Eligible Institution being
either a Canadian Schedule I chartered bank or major trust company in Canada, a
member of the Securities Transfer Association Medallion Program (STAMP), a
member of the Stock Exchange Medallion Program (SEMP) or a member of the New
York Stock Exchange, Inc. Medallion Signature Program (MSP). Members of these
programs are usually members of a recognized stock exchange in Canada and the
United States, members of the Investment Dealers Association of Canada, member
of the National Association of Securities Dealers of banks and trust companies
in the United States.


                            (To be completed if true)

<PAGE>


                                     - ii -


                  The undersigned hereby represents, for the benefit of the
Corporation and all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person, an
Affiliate or Associate of 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).


                                    ____________________________________________
                                    Signature



<PAGE>



                               FORM OF ASSIGNMENT


                FOR VALUE RECEIVED _____________________________________________

hereby sells, assigns and transfers unto _______________________________________

________________________________________________________________________________
(please print name and address of transferee)

________________________________________________________________________________
the Rights represented by this Rights Certificate, together with all right,
title and interest therein.

Dated: _____________________

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

                  Signature must be guaranteed by an Eligible Institution being
either a Canadian Schedule I chartered bank or major trust company in Canada, a
member of the Securities Transfer Association Medallion Program (STAMP), a
member of the Stock Exchange Medallion Program (SEMP) or a member of the New
York Stock Exchange, Inc. Medallion Signature Program (MSP). Members of these
programs are usually members of a recognized stock exchange in Canada and the
United States, members of the Investment Dealers Association of Canada, member
of the National Association of Securities Dealers of banks and trust companies
in the United States.

                            (To be completed if true)


                  The undersigned hereby represents, for the benefit of the
Corporation and all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person, an
Affiliate or Associate of 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).


                                    ____________________________________________
                                    Signature



<PAGE>


                                     NOTICE
                  If the certification set forth above in the Form of Election
to Exercise or the Form of Assignment is not completed, the Corporation reserves
the right to treat the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and accordingly such Rights will be null and
void.