---

Exhibit 2.1

SHAREHOLDER RIGHTS PLAN AGREEMENT

ROYAL STANDARD MINERALS
INC.

and

EQUITY FINANCIAL TRUST COMPANY

as Rights Agent

Dated as of December 23, 2010

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TABLE OF CONTENTS

|                                                                               |                                                                                                 | **Page**
|------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | --------
|                                                                               |                                                                                                 |         
|ARTICLE 1
      INTERPRETATION                                                 | 1                                                                                              
|1.1                                                                            | Certain Definitions                                                                             | 1       
|1.2                                                                            | Currency                                                                                        | 12      
|1.3                                                                            | Descriptive Headings                                                                            | 12      
|1.4                                                                            | References
      to Agreement                                                                   | 12      
|1.5                                                                            | Calculation of Number and
      Percentage of Beneficial Ownership of Outstanding Voting Shares | 13      
|1.6                                                                            | Acting
      Jointly or in Concert                                                              | 13      
|ARTICLE 2 THE RIGHTS                                                           | 13                                                                                             
|2.1                                                                            | Legend on
      Certificates                                                                    | 13      
|2.2                                                                            | Execution, Authentication,
      Delivery and Dating of Rights Certificates                     | 14      
|2.3                                                                            | Registration, Registration of Transfer and Exchange                                             | 14      
|2.4                                                                            | Mutilated, Destroyed, Lost
      and Stolen Rights Certificates                                 | 15      
|2.5                                                                            | Persons
      Deemed Owners of Rights                                                           | 15      
|2.6                                                                            | Delivery and Cancellation
      of Certificates                                                 | 16      
|2.7                                                                            | Agreement
      of Rights Holders                                                               | 16      
|2.8                                                                            | Rights Certificate Holder
      Not Deemed a Shareholder                                        | 17      
|ARTICLE 3
      EXERCISE OF THE RIGHTS                                         | 17                                                                                             
|3.1                                                                            | Initial Exercise Price:
      Exercise of Rights; Detachment of Rights                          | 17      
|3.2                                                                            | Adjustments
      to Exercise Price: Number of Rights                                           | 19      
|3.3                                                                            | Date on Which Exercise Is
      Effective                                                       | 24      
|ARTICLE 4
      ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS | 24                                                                                             
|4.1                                                                            | Flip-in Event                                                                                   | 24      
|ARTICLE 5 THE
      RIGHTS AGENT                                               | 25                                                                                             
|5.1                                                                            | General                                                                                         | 25      
|5.2                                                                            | Merger or
      Amalgamation or Change of Name of Rights Agent                                  | 26      
|5.3                                                                            | Duties of Rights
      Agent                                                                    | 27      
|5.4                                                                            | Change of
      Rights Agent                                                                    | 28      
|ARTICLE 6
      MISCELLANEOUS                                                  | 29                                                                                             
|6.1                                                                            | Redemption
      and Waiver                                                                     | 29      
|6.2                                                                            | Expiration                                                                                      | 31      
|6.3                                                                            | Issuance of
      New Rights Certificates                                                       | 31      
|6.4                                                                            | Fractional Rights and
      Fractional Shares                                                   | 31      
|6.5                                                                            | Supplements
      and Amendments                                                                | 32      
|6.6                                                                            | Rights of Action                                                                                | 32      
|6.7                                                                            | Notice of
      Proposed Actions                                                                | 32      
|6.8                                                                            | Notices                                                                                         | 32      
|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      

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- ii -

|6.14 | Severability                                                       | 34
|---- | ------------------------------------------------------------------ | --
|6.15 | Effective Date                                                     | 34
|6.16 | Determinations and Actions by the Board of Directors               | 34
|6.17 | Time of the Essence                                                | 35
|6.18 | Regulatory
      Approvals                                         | 35
|6.19 | Declaration as to
      Non-Canadian and Non-United States Holders | 35
|6.20 | Fiduciary
      Duties of the Board of Directors                   | 35
|6.21 | Language                                                           | 35

|Exhibit A
       | Form of
      Rights Certificate  
|----------------- | ----------------------------------
|                  | Form of Election to
      Exercise
|                  | Form of
      Assignment          
|                  | Notice                            

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SHAREHOLDER RIGHTS PLAN AGREEMENT

This agreement, dated as of December 23,
2010, is between Royal Standard Minerals Inc., a corporation existing under the
federal laws of Canada (the "Corporation"), and Equity Financial Trust
Company, a company incorporated under the federal laws of Canada, as rights
agent (the "Rights Agent", which includes any successor Rights
Agent).

WHEREAS:

|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.
      (Toronto time) on December 23, 2010, of one right (a "Right") in respect of each
      Common Share of the Corporation outstanding at 4:00 p.m. (Toronto time) on
      December 23, 2010 (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;
| | --- | -----------------------------

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- 2 -

| | (B) | a Permitted Bid
      Acquisition;       
| | --- | -----------------------------------------
| |     |                                          
| | (C) | an Exempt
  Acquisition;                 
| |     |                                          
| | (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) | for a period of ten days after the
      Disqualification Date (as defined below), any Person who becomes the
      Beneficial Owner of 20% or more of the outstanding Voting Shares as a
      result of such Person becoming disqualified from relying on Clause
      1.1(d)(viii) solely because such Person or the Beneficial Owner of such
      Voting Shares is making or has announced an intention to make a Take-over
      Bid, either alone or by acting jointly or in concert with any other
      Person. For the purposes of this definition, "Disqualification Date"
      means the first date of public announcement that any Person is making or
      has announced an intention to make a Take-over Bid, either alone, through
      such Persons Affiliates or Associates or by acting jointly or in concert
      with any other Person, and includes, without limitation, a report filed
      pursuant to Section 102 of the Securities Act or Section 13(d) of the U.S.
      Exchange Act;
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (iv)  | an underwriter or member of a banking
      or selling group acting in such capacity that becomes the Beneficial Owner
      of 20% or more of the Voting Shares in connection with a distribution of
      securities of the Corporation; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (v)   | a Person (a "Grandfathered Person") who
      is the Beneficial Owner of 20% or more of the outstanding Voting Shares of
      the Corporation determined as at the Record Time, provided, however, that
      this exception shall not be, and shall cease to be, applicable to a
      Grandfathered Person in the event that such Grandfathered Person shall,
      after the Record Time, become the Beneficial Owner of any additional
      Voting Shares of the Corporation outstanding as at the Record Time, other
      than pursuant to one or any combination of a Voting Share Reduction, a
      Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata
      Acquisition;                                                                                                                                                                                                                                                                                                                       

| | (b) | "Affiliate", when used to
      indicate a relationship with a 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                                                                                      

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- 3 -

| |     | 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 (if 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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
      nondiscretionary 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;                                                                     

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- 4 -

| | (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
      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;                     

---

- 5 -

| | (g) | "Canadian Dollar Equivalent" of any amount, which is expressed in United States dollars
      means, on any date, the Canadian dollar equivalent of such amount
      determined by multiplying such amount by the U.S. - Canadian Exchange Rate
      in effect on such date;                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                   
| | (a) | "Canadian - U.S. Exchange Rate" means, on any date, the inverse of the U.S. - Canadian
      Exchange Rate in effect on such date;                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | "CBCA" means theCanada Business Corporations
      Act, as amended, and the regulations made
      thereunder, and any successor laws or regulations
thereto;                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                   
| | (i) | "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;
| |     |                                                                                                                                                                                                                                                                                                                                                                   
| | (j) | "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;                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                   
| | (k) | "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;                              
| |     |                                                                                                                                                                                                                                                                                                                                                                   
| | (l) | "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                                                               
| |       |                                                                                                                                                                                                                 
| | (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 theSecurities 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;                                                                                                                                                                                                                                                                                                                                                                                                                                           

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- 6 -

| | (m) | "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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (n) | "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);
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (o) | "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;                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (p) | "Co-Rights Agent" has the
      meaning ascribed to it in subsection 5.1 (a);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (q) | "dividends 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;                                                     

| | (r) | "Election to Exercise" has
      the meaning ascribed to it in clause 3.1(e) (ii);
| | --- | ----------------------------------------------------------------------------------
| |     |                                                                                   
| | (s) | "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 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

---

- 7 -

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

| | (t) | "Exercise Price" means, as
      of any date from and after the Separation Time, the price at which a
      holder of a Right may purchase the securities issuable upon exercise of
      such Right and, subject to adjustment thereof in accordance with the terms
      hereof, the Exercise Price will be an amount equal to five times the
      Market Price per Common Share determined as at the Separation
      Time;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (u) | "Expansion Factor" has the
      meaning ascribed to it in subsection 3.2(a);                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (v) | "Expiration Time" means the
      earlier of:                                                                                                                                                                                                                                                                                                                                                                                  

| | (i)  | the Termination Time;
    and                                                                                             
| | ---- | --------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                           
| | (ii) | the close of business on the tenth
      anniversary of the date hereof, unless extended by the Board of
      Directors.;

| | (w) | "Flip-in Event" means a
      transaction in or pursuant to which any Person becomes an Acquiring
      Person;
| | --- | ---------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                
| | (x) | "holder" has the meaning
      ascribed to it in section 2.5;                                                  
| |     |                                                                                                                
| | (y) | "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;

---

- 8 -

| | (z) | "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
      5% 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 3.5% 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 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (aa) | "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:

---

- 9 -

| | (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, 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
      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.
      The Market Price shall be expressed in Canadian dollars and, if initially
      determined in respect of any day forming part of the 20 consecutive
      Trading Day period in question in United States dollars, such amount shall
      be translated into Canadian dollars on such date at the Canadian Dollar
      Equivalent thereof;
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (bb) | "Nominee" has the meaning
      attributed to it in subsection 3.1(d);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (cc) | "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;
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                            
| | (dd) | "Offeror" means a Person
      who has announced a current intention to make or who is making a Take-over
      Bid;                                                       

---

- 10 -

| | (ee) | "Offeror's Securities"
      means Voting Shares Beneficially Owned by an Offeror on the date of a
      Take-over Bid;                                                 
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                         
| | (ff) | "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;                   

| | (gg) | "Permitted Bid Acquisition"
      means an acquisition of Voting Shares made pursuant to a Permitted Bid or
      a Competing Permitted Bid;                                                                                                                                                          
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                       
| | (hh) | "Person" includes any
      individual, body corporate, firm, partnership, association, trust,
      trustee, executor, administrator, legal personal representative, group,
      unincorporated organization, syndicate, government or governmental agency
      or instrumentality or other entity;
| |      |                                                                                                                                                                                                                                                                                                       
| | (ii) | "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.

---

- 11 -

| | (jj) | "Record
      Time" has the meaning ascribed to it in the
      recitals;                                                                                                         
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                   
| | (kk) | "Redemption Price" has the
      meaning ascribed to it in subsection 6.1(a);                                                                                                     
| |      |                                                                                                                                                                                   
| | (ll) | "Right" has the meaning
      ascribed to it in the recitals;                                                                                                                     
| |      |                                                                                                                                                                                   
| | (mm) | "Rights
      Certificates" means the certificates
      representing the Rights after the Separation Time, which are to be
      substantially in the form attached as Exhibit A;
| |      |                                                                                                                                                                                   
| | (nn) | "Rights
      Plan" has the meaning ascribed to it in the
      recitals;                                                                                                         
| |      |                                                                                                                                                                                   
| | (oo) | "Rights
      Register" and "Rights Registrar" have the
      respective meanings ascribed to them in subsection
2.3(a);                                                          
| |      |                                                                                                                                                                                   
| | (pp) | "Securities Act" means theSecurities Act(Ontario), as amended, and the regulations and rules
      thereunder, and any comparable or successor laws or regulations
      thereto; 
| |      |                                                                                                                                                                                   
| | (qq) | "Separation Time" means,
      subject to subsection 6.1(d), the close of business on the tenth Trading
      Day after the earlier of:                                           

| | (i)   | the Stock Acquisition
    Date;                                                                                                                                                                                                                                                
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                
| | (ii)  | the date of the commencement of, or
      first public announcement of the intent of any Person (other than the
      Corporation or any Subsidiary of the Corporation) to commence, a Take-over
      Bid (other than a Permitted Bid or a Competing Permitted Bid);
      and
| |       |                                                                                                                                                                                                                                                                                
| | (iii) | the date on which a Permitted Bid or
      a Competing Permitted Bid ceases to qualify as
  such;                                                                                                                                                                              

| |      | or such later time as may be
      determined by the Board of Directors; provided that (i) if the foregoing
      results in the Separation Time being prior to the Record Time, the
      Separation Time will be the Record Time, (ii) 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
      (iii) if the Board of Directors determines pursuant to section 6.1 to
      waive the application of section 4.1 to a Flip-in Event, the Separation
      Time in respect of that Flip-in Event will be deemed never to have
      occurred;
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (rr) | "Stock
      Acquisition Date" means the date of the
      first public announcement (which, for purposes of this definition,
      includes the filing of a report of acquisition pursuant to theSecurities Actor theU.S. Exchange Act)by the Corporation or an Acquiring Person
      of facts indicating that a Person has become an Acquiring
      Person;                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (ss) | "Subsidiary" of a Person
      has the meaning ascribed to it in theSecurities Act,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (tt) | "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;                                                                                                                                                                                                                                                         

---

- 12 -

| | (uu) | "Termination Time" means
      the time at which the right to exercise Rights will terminate pursuant to
      subsection 6.1(g);                                                                                                                                                                                                                                         
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                           
| | (vv) | "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;
| |      |                                                                                                                                                                                                                                                                                                                                                                           
| | (ww) | "U.S.
      Exchange Act" means theUnited States Securities Exchange Act of 1934,as amended, and the rules and regulations
      thereunder as from time to time in effect;                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                           
| | (xx) | "U.S. -
      Canadian Exchange Rate" means, on any
      date:                                                                                                                                                                                                                                                                                                           

| | (i)  | if on such date the Bank of Canada
      sets an average noon spot rate of exchange for the conversion of one
      United States dollar into Canadian dollars, such rate;
and                                                                   
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                  
| | (ii) | in any other case, the rate for such
      date for the conversion of one United States dollar into Canadian dollars
      calculated in such manner as may be determined by the Board of Directors
      from time to time acting in good faith;

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

---

- 13 -

|1.5 | Calculation of Number and Percentage
      of Beneficial Ownership of Outstanding Voting
    Shares
|--- | ---------------------------------------------------------------------------------------------------

| | (i)  | 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.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                         
| | (ii) | The percentage of outstanding Voting
      Shares of the Corporation Beneficially Owned by any Person, for the
      purposes of this agreement, will be and be deemed to be the product
      determined by the formula:                                                                                                                                               

| | 100    | x | A                                                                                                                                                           
| | ------ | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |   | B                                                                                                                                                           
| |        |   |                                                                                                                                                             
| | where: |   |                                                                                                                                                             
| |        |   |                                                                                                                                                             
| | A      | = | the number of
      votes for the election of all directors generallyattaching to the
      outstanding Voting Shares Beneficially Owned by such Person; and
| |        |   |                                                                                                                                                             
| | B      | = | the number of
      votes for the election of all directors generallyattaching to all
      outstanding Voting Shares.                                      

|1.6 | Acting Jointly or in
      Concert
|--- | ----------------------------------

For purpose 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
or selling group members with respect to a distribution of securities or 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
DECEMBER 23, 2010 (AS THE SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE
TERMS THEREOF, THE "RIGHTS AGREEMENT") BETWEEN ROYAL STANDARD MINERALS INC. (THE
"CORPORATION") AND EQUITY FINANCIAL TRUST COMPANY, 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.

---

- 14 -

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
      President or any Vice-President and by any other Vice President 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 that the Persons whose
      signatures are so reproduced may not hold office at the time the Rights
      Certificates are issued.                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b) | Promptly after the Corporation learns
      of 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, Registration of
      Transfer and Exchange
|--- | ---------------------------------------------------------

| | (a) | After the Separation Time, the
      Corporation will cause to be kept a register (the "Rights Register") in
      which, subject to such reasonable regulations as it may prescribe, the
      Corporation will provide for the registration and transfer of Rights. The
      Rights Agent is hereby appointed 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 evidencing the same
aggregate number of Rights as did the Rights Certificates so surrendered.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 15 -

| | (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 any 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 surety bond and 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 abona fidepurchaser, the Corporation will execute,
      and upon the request of the Corporation, 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, 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 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 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).

---

- 16 -

|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 Certificate cancelled as provided for in this section, except as
expressly permitted by this agreement. The Rights Agent will destroy all
cancelled Rights Certificates and, upon written request, deliver a certificate
of destruction to the Corporation.

|2.7 | Agreement of Rights
      Holders
|--- | ---------------------------------

Every holder of Rights, by accepting
Rights, 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 (except as provided herein);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (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 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.                                                                                                                                                         

---

- 17 -

|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):
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (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
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 18 -

| | (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) | a certified cheque, banker's draft or
      money order payable to the order of the Corporation, 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 to be purchased (the Corporation hereby irrevocably authorizing its
      transfer agents 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                                 

---

- 19 -

| | (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 CBCA, theSecurities Actand 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.

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

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

---

- 20 -

| | (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 (i) 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 (ii) 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, 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.

---

- 21 -

| | (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 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.

---

- 22 -

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

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- 23 -

| | (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
      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 (fractional or otherwise) or other securities
      upon the occurrence of the event requiring such
  adjustment.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (l) | Notwithstanding anything in this
      section 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, as and to the extent that in its good
      faith judgment the Board of Directors determines to be advisable in order
      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, 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, 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
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 24 -

| | (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 4ADJUSTMENTS 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 having
      an aggregate Market Price on 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 and such Rights will be null and void.

---

- 25 -

| | (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 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,
      including all such acts and things as may be required to satisfy the
      requirements of the CBCA and theSecurities
      Actor 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, suit or expense,
incurred without gross 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.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- 26 -

| | (b) | In no event will the Rights Agent be
      liable for special, indirect, consequential or punitive loss or damages of
      any kind whatsoever (including, but not limited to, lost profits), even if
      the Rights Agent has been advised of the possibility of such
      damages.                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | 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, or
      any defect therein, will not affect the validity of any action taken
      hereunder in relation to such events.                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (d) | 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.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (e) | In the event of any disagreement
      arising regarding the terms of this agreement, the Rights Agent shall be
      entitled, at its option, to refuse to comply with any and all demands
      whatsoever until the dispute is settled either by written agreement
      amongst the parties of this agreement or by a court of competent
      jurisdiction.                                                                                                                                                                                                                                                                                                                          

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

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- 27 -

| | (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), at the
      Corporation's expense, and the opinion of such counsel will be full and
      complete authorization and protection to the Rights Agent as to any action
      taken or omitted by it in good faith and in accordance with such opinion;
      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 not be liable
      for any loss or damages hereunder unless caused by its own gross
      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 Common Shares will, when issued, be
duly and validly authorized, executed, issued and delivered as fully paid and
non-assessable;

---

- 28 -

| | (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;                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (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.
      It is understood that instructions to the Rights Agent shall, except where
      circumstances make it impractical or the Rights Agent otherwise agrees, be
      given in writing and, where not in writing, such instructions shall be
      confirmed in writing as soon as reasonably practicable after the giving of
      such instructions;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (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. 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. If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Corporation will appoint a successor to the Rights Agent. If the
Corporation fails to make such appointment within a period of 60 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent 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 transfer agent 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 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.

---

- 29 -

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, the Board of Directors, with the prior consent
      of the holders of Voting Shares or the holders of Rights given in
      accordance with subsection (i) or (j), as the case may be, may elect to
      redeem all but not less than all of the then outstanding Rights at a
      redemption price of $0.00001 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, upon written notice to the Rights Agent, the
      Board of Directors, with the prior consent of the holders of Voting Shares
      given in accordance with subsection (i), may determine, if such Flip-in
      Event would occur by reason of an acquisition of Voting Shares otherwise
      than pursuant to a Take-over Bid made by means of a take-over bid circular
      to all holders of Voting Shares and otherwise than in the circumstances
      set forth in subsection (d), to waive the application of section 4.1 to
      such Flip-in Event. If the Board of Directors proposes such a waiver, the
      Board of Directors will extend the Separation Time to a date subsequent to
      and not more than ten Business Days following the meeting of shareholders
      called to approve such waiver.                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (c) | 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, upon written notice delivered to the Rights
      Agent, the Board of Directors may determine to waive the application of
      section 4.1 to any Flip- in Event provided that the Flip-in Event would
      occur by reason of a Take-over Bid made by take-over bid circular sent to
      all holders of Voting Shares and provided further that if the Board of
      Directors waives the application of section 4.1 to such Flip-in Event, the
      Board of Directors will be deemed to have waived the application of
      section 4.1 to any other Flip-in Event occurring by reason of
any Take-over Bid made by take-over bid circular to all holders of Voting Shares
which is made prior to the expiry of any Take-over Bid (as the same may be
extended from time to time) made by take-over bid circular in respect of which a
waiver is, or is deemed to have been, granted under this subsection.

---

- 30 -

| | (d) | Notwithstanding subsections (b) and
      (c), 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | 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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | 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 may reissue Rights
      under this agreement to holders of record of Common Shares immediately
      following the 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.                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (g) | If the Board of Directors elects or
      is deemed to have elected to redeem the Rights and, in circumstances in
      which subsection (a) is applicable, such redemption is approved by the
      holders of Voting Shares or the holders of Rights in accordance with
      subsection (i) or (j), as the case may be, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (h) | Within 10 days after the Board of
      Directors electing or having been deemed to have elected to redeem the
      Rights or, if subsection (a) applies, within 10 Business Days after the
      holders of Voting Shares or the holders of Rights have approved the
      redemption of Rights in accordance with subsection (i) or (j), as the case
      may be, the Corporation will give notice of redemption to the holders of
      the then outstanding Rights by mailing such notice to each such holder at
      such holder's last address as it appears upon the registry books of the
      Rights Agent or, prior to the Separation Time, on the registry books of
      the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided will be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
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, and
other than in connection with the purchase of Common Shares prior to the
Separation Time.

---

- 31 -

| | (i) | If a redemption of Rights pursuant to
      subsection (a) or a waiver of a Flip-in Event pursuant to subsection (b)
      is proposed at any time prior to the Separation Time, such redemption or
      waiver must be submitted for approval to the holders of Voting Shares.
      Such approval will be deemed to have been given if the redemption or
      waiver is approved by the affirmative vote of a majority of the votes cast
      by Independent Shareholders represented in person or by proxy at a meeting
      of such holders duly held in accordance with applicable laws and the
      Corporation's by-laws.                                                                                                                                                                                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (j) | If a redemption of Rights pursuant to
      subsection (a) is proposed at any time after the Separation Time, such
      redemption must be submitted for approval to the holders of Rights. Such
      approval will be deemed to have been given if the redemption is approved
      by holders of Rights by a majority of the votes cast by the holders of
      Rights represented in person or by proxy at and entitled to vote at a
      meeting of such holders. For the purposes hereof, each outstanding Right
      (other than Rights which are Beneficially Owned by any Person referred to
      in clauses (i) to (v) inclusive of the definition of Independent
      Shareholders) 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 CBCA with
      respect to meetings of shareholders of the
  Corporation.

|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 and the Corporation shall not be required to
      pay any amount to any holder of record of Rights Certificates in lieu of
      such fractional Rights.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                              
| | (b) | The Corporation will not be required
      to issue fractions of Common Shares upon exercise of the Rights or to
      distribute certificates which evidence fractional Common Shares and the
      Corporation shall not be required to pay any amount in lieu of such
      fractional Common Shares.     

---

- 32 -

|6.5 | Supplements and
      Amendments
|--- | --------------------------------

| | (a) | The Corporation, without the prior
      consent of the holders of Voting Shares, 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)
      including, 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, rules or regulations or decision of
      a court or regulatory authority, including a stock exchange on which the
      Common Shares are traded. Notwithstanding anything in this section 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) | The Corporation will give notice in
      writing to the Rights Agent of any amendment or supplement to this
      agreement pursuant to this section 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | 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 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 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:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 33 -

Royal Standard
Minerals Inc. 360 Bay Street, Suite 500 Toronto, Ontario M5H 2V6

Attention:      President
Facsimile:       (804) 580-4132

| | (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:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Equity Financial Trust Company
      200 University Avenue, Suite 400 Toronto, Ontario M5H
      4H1                                                                                                                                                                                                                                                                                                              

Attention:      Corporate Trust Services
Facsimile:       (416) 361-0470

| | (c) | Notices or demands authorized or
      required by this agreement to be given or made by the Corporation or the
      Rights Agent to or on the holder of any Rights 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 third 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.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                               
| | (f) | Each of the Corporation and the
      Rights Agent may from time to time change its address for notice by notice
      to the other given in the manner put forth
herein.                                     

---

- 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 and after the date of this agreement.

|6.16 | Determinations and Actions by
      the Board of Directors
|---- | ----------------------------------------------------------

Upon the advice of outside legal counsel,
the Board of Directors shall have the exclusive power and authority to
administer this agreement and to exercise all rights and powers specifically
granted to the Board of Directors as may be necessary or advisable in the
administration of this agreement, including, without limitation, the right and
power to, make all determinations deemed necessary or advisable for the
administration of this agreement.

---

- 35 -

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.

|6.17 | Time of the
      Essence
|---- | -------------------------

Time will be of the essence of this
agreement.

|6.18 | 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 stock exchange on
which the Common Shares are listed or any other stock exchange.

|6.19 | 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 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.

|6.20 | 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.

|6.21 | Language
|---- | --------

Les parties aux présentes ont exigé que la
présente convention ainsi que tous les documents et avis qui s'y rattachent
et/ou qui en découleront soient rédigés 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.

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

---

- 36 -

**ROYAL STANDARD
      MINERALS INC.**Per:
    (signed) "Roland
      M.Larsen"Name: Roland M. LarsenTitle: CEOPer:
    (sigend) "J. Allan
      Ringler"Name: J.
      Allan RinglerTitle: Director**EQUITY FINANCIAL
      TRUST**COMPANYPer:
    (signed) "Carol
      Mikos"Authorized
      SignatoryPer:
    (signed) "Shelley
      Martin"Authorized
      Signatory


---

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 December 23,
2010, as the same may be amended, restated or supplemented from time to time
(the "Rights Agreement") between Royal Standard Minerals Inc., a
corporation existing under the federal laws of Canada (the
"Corporation"), and Equity Financial Trust Company, a company existing
under the federal laws 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 duly executed Form of Election to Exercise (in the
form provided hereafter) together with payment of the Exercise Price by
certified cheque, bank draft or money order payable to the Corporation 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 shall be an amount expressed in
Canadian dollars equal to five times the Market Price (as such term is defined
in the Rights Agreement) per Common Share at the Separation Time, 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 $0.00001 per Right, subject to adjustment in certain events.

No fractional Common Shares will be issued
upon the exercise of any Right or Rights evidenced hereby.

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- 2 -

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:

|                   | **ROYAL STANDARD
      MINERALS INC.**   
|------------------ | -----------------------------------------
|                   |                                          
|                   | By:
      _______________________________
|                   |                                          
|                   | By:
      _______________________________
|**Countersigned:** |                                          
|                   | **EQUITY FINANCIAL
      TRUSTCOMPANY**  
|                   |                                          
|                   | By:
      _______________________________
|                   | Authorized Signature                     

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

|TO: | ROYAL STANDARD MINERALS
      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 a Canadian
Schedule I chartered bank or a member of an approved signature guarantee
medallion program.

(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

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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 and herby irrevocably
appoints the attorney of the undersigned to transfer the said Rights on the
books of the Corporation with full power of substitution in the premises.

Dated:
___________________________

Signature Guaranteed:

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

Signature
must be guaranteed by a Canadian Schedule I chartered bank or a member of an
approved signature guarantee medallion program.

(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

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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.

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