<PAGE>
                                                                     EXHIBIT 4.1

                          SHAREHOLDER RIGHTS AGREEMENT

                                     BETWEEN

                                  NOVELIS INC.

                                       AND

                            CIBC MELLON TRUST COMPANY
<PAGE>
                          SHAREHOLDER RIGHTS AGREEMENT

<TABLE>
<S>       <C>                                                                 <C>
ARTICLE 1 - INTERPRETATION
   1.01   Definitions......................................................    2
   1.02   Headings.........................................................   10
   1.03   Extended Meanings................................................   11
   1.04   Currency.........................................................   11
   1.05   Schedule.........................................................   11
   1.06   Language Clause..................................................   11
   1.07   Acting Jointly or in Concert.....................................   11
   1.08   As Now Enacted...................................................   11
ARTICLE 2 - THE RIGHTS
   2.01   Initial Exercise Price, Exercise of Rights and
             Detachment of Rights..........................................   11
   2.02   Legend on Common Share Certificates..............................   14
   2.03   Adjustments......................................................   14
   2.04   Date on Which Exercise is Effective..............................   17
   2.05   Execution, Authentication, Delivery and Dating of
             Rights Certificates...........................................   17
   2.06   Registration of Rights...........................................   18
   2.07   Mutilated, Destroyed, Lost and Stolen Rights Certificates........   18
   2.08   Persons Deemed Owners............................................   19
   2.09   Delivery and Cancellation of Certificates........................   19
   2.10   Agreement of Rights Holders......................................   19
ARTICLE 3 - EFFECT OF CERTAIN TRANSACTIONS
   3.01   Flip-In Event....................................................   20
ARTICLE 4 - THE RIGHTS AGENT
   4.01   General..........................................................   22
   4.02   Merger or Consolidation or Change of Name of the
             Rights Agent..................................................   22
   4.03   Entitlements of the Rights Agent.................................   23
   4.04   Change of the Rights Agent.......................................   24
ARTICLE 5 - MISCELLANEOUS
   5.01   Redemption, Waiver and Termination...............................   25
   5.02   Expiration.......................................................   26
   5.03   Issuance of New Rights Certificates..............................   26
   5.04   Supplements and Amendments.......................................   26
   5.05   Fractional Rights and Fractional Shares..........................   27
   5.06   Rights of Action.................................................   28
   5.07   Holder of Rights Not Deemed to be a Shareholder..................   28
   5.08   Notices..........................................................   28
   5.09   Costs of Enforcement.............................................   29
   5.10   Benefit of the Agreement.........................................   29
   5.11   Governing Law....................................................   30
   5.12   Counterparts.....................................................   30
   5.13   Severability.....................................................   30
   5.14   Determinations and Actions by the Board..........................   30
   5.15   Effective Date...................................................   30
   5.16   Re-confirmation after Three Years................................   30
   5.17   Regulatory Approvals.............................................   31
   5.18   Declaration as to Non-Canadian Holders...........................   31
ARTICLE 6 - PERMITTED BIDS
   6.01   Permitted Bids...................................................   31
   6.02   Competing Permitted Bids.........................................   32
   Schedule 1..............................................................   33
</TABLE>
<PAGE>
                          SHAREHOLDER RIGHTS AGREEMENT

THIS AGREEMENT made as of 23 December 2004.

BETWEEN:
                 NOVELIS INC., a corporation  incorporated
                 under the laws of Canada  (hereinafter
                 referred to as the "Corporation"),
                                                              OF THE FIRST PART,

AND:

                 CIBC MELLON TRUST COMPANY, a trust company
                 existing under the laws of Canada
                 (hereinafter referred to as the
                 "Rights Agent"),

                                                              OF THE SECOND PART

WITNESSES that:

WHEREAS the Corporation will, upon the effectiveness of an arrangement under
section 192 of the Canada Business Corporations Act proposed by Alcan Inc.
("Alcan") and described in Alcan's Management Proxy Circular dated 23 November
2004 (the "Arrangement"), become a publicly traded corporation with its Common
Shares listed on the Toronto Stock Exchange and the New York Stock Exchange;

WHEREAS the Board has determined that it is advisable for the Corporation to
adopt and maintain a shareholder rights plan inter alia in order to (i) provide
a framework in which Take-Over Bids for the Corporation can be made for the
Voting Shares of the Corporation including providing the Board with sufficient
time to explore and develop alternatives, (ii) facilitate the maximization of
shareholder values if a substantial portion of the Voting Shares is to be
acquired by any Person, and (iii) protect the Corporation and its shareholders
from abusive acquisition tactics or acquisitions which may not be in the best
interests of the Corporation;

AND WHEREAS it is not the intention of the Board to adopt the Rights Plan as a
means of preventing or deterring any Person from seeking to acquire the Voting
Shares, provided they do so fairly, or of foreclosing the ability of the Board
to take any action that in its discretion it considers reasonable in the
circumstances of any such transaction;

AND WHEREAS, in order to implement the Rights Plan, the Board authorized and
declared a distribution of one Right effective at the earliest possible time
following the effectiveness of the Arrangement ("Record Time") in respect of
each Common Share outstanding as at the Record Time and has authorized the
issuance of one Right in respect of each Common Share issued after such date and
prior to the earlier of the Separation Time and the Expiration Time;

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

AND WHEREAS the Corporation desires to appoint the Rights Agent to act on behalf
of the Corporation in connection with the issuance, transfer, exchange and
replacement of Rights Certificates, the exercise of the Rights and the other
matters relating to the Corporation referred to herein and to act as the trustee
for the holders of the Rights in connection with the promise of the Corporation
herein to issue Rights Certificates to the Rights Agent for distribution to the
holders of Common Shares after the Separation Time, and the Rights Agent is
willing to so act;

NOW THEREFORE in consideration of the premises and the agreements herein
contained the parties hereto agree as follows:


                                                                               1
<PAGE>
                           ARTICLE 1 - INTERPRETATION

1.01 DEFINITIONS

For purposes of this Agreement, the following terms have the meanings indicated:

     (a)  "Acquiring Person" means any Person (other than the Corporation or any
          Subsidiary of the Corporation) who is a Beneficial Owner of 20% or
          more of the outstanding Voting Shares. Notwithstanding the foregoing,
          no Person shall become an "Acquiring Person"

          (i)  (A)  as a result of the purchase, redemption or other acquisition
                    of Voting Shares by the Corporation which, by reducing the
                    number of Voting Shares then outstanding, increases the
                    proportionate number of shares Beneficially Owned by such
                    Person to 20% or more of the Voting Shares then outstanding;

               (B)  as a result of share acquisitions made pursuant to a
                    Permitted Bid or Competing Permitted Bid;

               (C)  as a result of share acquisitions made pursuant to a
                    Permitted Acquisition;

               (D)  as a result of an Exempt Acquisition; or

               (E)  as a result of a Convertible Security Acquisition;

          provided, however, that if a Person becomes the Beneficial Owner of
          20% or more of the Voting Shares then outstanding as a result of a
          purchase, redemption or other acquisition of Voting Shares by the
          Corporation as provided for in clause (A) above, or as a result of a
          Permitted Bid or Competing Permitted Bid as provided for in clause (B)
          above, or as a result of a Permitted Acquisition as provided for in
          clause (C) above, or as a result of the waiver of the application of
          Section 3.01 pursuant to Section 5.01(2) as provided for in clause (D)
          above, or as a result of a Convertible Security Acquisition as
          provided for in clause (E) above, or as a result of any combination of
          acquisitions referred to in clauses (A) to (E) above, and after such
          acquisition or acquisitions such Person becomes the Beneficial Owner
          of more than an additional 1% of the Voting Shares then outstanding
          other than pursuant to clauses (A), (B), (C), (D) or (E) above or any
          combination thereof, such Person shall thereupon immediately be deemed
          to be an "Acquiring Person";

          (ii) as a result of such person (a "Grandfathered Person") being 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 such 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 that increase its Beneficial Ownership of Voting
               Shares by more than 1% of the number of Voting Shares outstanding
               as at the Record Time, other than as a result of a Permitted Bid,
               a Competing Permitted Bid, a Permitted Acquisition or any
               Take-Over Bid in respect of which a waiver is, or is deemed to
               have been, granted under Section 5.01(2);

          (iii) for a period of ten calendar days after the Disqualification
               Date (as defined below), where such Person becomes the Beneficial
               Owner of 20% or more of the outstanding Voting Shares as a result
               of such Person becoming disqualified from relying on Section
               1.01(e)(v) solely because


                                                                               2
<PAGE>
               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;

          (iv) being an underwriter or member of a banking or selling group that
               becomes the Beneficial Owner of 20% or more of the Voting Shares
               in connection with a distribution of securities of the
               Corporation.

     (b)  "Affiliate" when used to indicate a relationship with a specified
          Person, shall mean a Person that controls, or is controlled by, or is
          under common control with, such specified Person.

     (c)  "Agreement" means this agreement and all amendments made hereto by
          written agreement between the Corporation and the Rights Agent.

     (d)  "Alcan" has the meaning ascribed to that term in the first recital
          hereto.

     (e)  "Arrangement" has the meaning ascribed to that term in the first
          recital hereto.

     (f)  "Associate" means, when used to indicate a relationship with a
          specified Person, a spouse of that Person or any Person with whom that
          Person is living in a conjugal relationship outside marriage or a
          child of that Person or a relative of that Person who has the same
          residence as that Person.

     (g)  A Person shall be deemed to be the "Beneficial Owner" of and to have
          "Beneficial Ownership" of and to "Beneficially Own" any securities
          which:

          (i)  such Person or any of such Person's Affiliates or Associates owns
               at law or in equity;

          (ii) such Person or any of such Person's Affiliates or Associates has
               the right to become the owner of at law or in equity (whether
               such right is exercisable immediately or within a period of 60
               calendar days thereafter and whether or not on condition or on
               the happening of any contingency), (A) upon the exercise of any
               Convertible Securities or (B) pursuant to any agreement,
               arrangement, pledge or understanding, whether or not in writing,
               (other than (x) customary agreements with and between
               underwriters and/or banking group members and/or selling group
               members with respect to a public offering or private placement of
               securities and (y) pledges of securities in the ordinary course
               of business) or upon the exercise of any conversion right,
               exchange right, share purchase right (other than the Rights),
               warrant or option; or

          (iii) without limiting the generality of the foregoing, are
               beneficially owned within the meaning of paragraphs (i) and (ii)
               of this definition by any other Person with which such Person is
               acting jointly or in concert;

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

          (iv) where such security has been, or has agreed to be, deposited or
               tendered pursuant to a Lock-up Agreement, or is otherwise
               deposited or tendered, to any Take-Over Bid made by such Person
               or by any of such Person's Affiliates or Associates or made by
               any Person


                                                                               3
<PAGE>
               acting jointly or in concert with such Person until such
               deposited or tendered security has been taken up and paid for,
               whichever shall first occur;

          (v)  where such Person, any of such Person's Affiliates or Associates
               or any other Person acting jointly or in concert with such Person
               holds such security provided that:

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

               (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 the estate of any such deceased or incompetent Person or
                    for such other accounts;

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

               (D)  such Person (the "Administrator") is the administrator or
                    trustee of one or more pension funds or plans (a "Plan"), or
                    is 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;

               provided, in any of the above cases, that the Investment Manager,
               the Trust Company, the Statutory Body, the Administrator or the
               Plan, as the case may be, is not then making a Take-Over Bid or
               has not then announced an intention to make a Take- over Bid
               alone or acting jointly or in concert with any other Person,
               other than an Offer to Acquire Voting Shares or other securities
               (x) pursuant to a distribution by the Corporation (y) by means of
               a Permitted Bid or (z) by means of ordinary market transactions
               (including prearranged trades entered into in the ordinary course
               of business of such Person) executed through the facilities of a
               stock exchange or organized over-the-counter market;

          (vi) where such Person is:

               A.   a Client of the same Investment Manager as another Person on
                    whose account the Investment Manager holds such security,

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

               C.   a Plan with the same Administrator as another Plan on whose
                    account the Administrator holds such security;


                                                                               4
<PAGE>
          (vii) where such Person is:

               A.   a Client of an Investment Manager and such security is owned
                    at law or in equity by the Investment Manger,

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

               C.   a Plan and such security is owned at law or in equity by the
                    Administrator of the Plan; or

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

          For the purposes of this Agreement, in determining the percentage of
          the outstanding Voting Shares with respect to which a Person is the
          Beneficial Owner, all Voting Shares of which such Person is or is
          deemed to be the Beneficial Owner shall be deemed to be outstanding.

     (h)  "Board" means the board of directors of the Corporation.

     (i)  "Business Day" means any day, other than a Saturday or Sunday, on
          which banks are generally open for business in the City of Montreal.

     (j)  "Canadian-U.S. Exchange Rate" means, on any date, the inverse of the
          U.S.-Canadian Exchange Rate in effect on such date.

     (k)  "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.

     (l)  "close of business" means, with respect to any date, the time on such
          date at which the offices of the Rights Agent in the City of Montreal
          are, after having been open to the public for business, closed to the
          public.

     (m)  "Common Shares", when used with reference to the Corporation, means
          the common shares in the capital of the Corporation and, when used
          with reference to any Person other than the Corporation, means the
          class of shares in the capital of such other Person with the greatest
          voting power per share.

     (n)  "Competing Permitted Bid" has the meaning set out in Section 6.02.

     (o)  "controlled": a corporation is "controlled" by another Person if:

          (i)  securities entitled to vote in the election of directors carrying
               more than 50% of the votes for the election of directors are
               held, directly or indirectly, by or on behalf of the other
               person; and

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

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


                                                                               5
<PAGE>
     (p)  "Convertible Securities" means at any time:

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

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

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

     (q)  "Convertible Security Acquisition" means the acquisition of Voting
          Shares upon the exercise of a Convertible Security received by a
          Person pursuant to a Permitted Acquisition.

     (r)  "Dividend Reinvestment Acquisition" shall mean an acquisition of
          Voting Shares of any class pursuant to a Dividend Reinvestment Plan.

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

          (i)  dividends paid in respect of shares of any class of the
               Corporation;

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

          (iii) interest paid on evidences of indebtedness of the Corporation;
               or

          (iv) optional cash payments;

          be applied to the purchase from the Corporation of Voting Shares.

     (t)  "Election to Exercise" has the meaning set out in Section 2.01(4).

     (u)  "Exempt Acquisition" means a share acquisition in respect of which the
          Board has waived the application of Section 3.01 pursuant to the
          provisions of Sections 5.01(2).

     (v)  "Exercise Price" means, as of any date, the price at which a holder
          may purchase the securities issuable upon the exercise of one Right
          which, until the adjustment thereof in accordance with the provisions
          hereof, shall equal $200.

     (w)  "Expansion Factor" has the meaning set out in Section 2.03(2)(e).

     (x)  "Expiration Time" means the earlier of:

          (i)  the Termination Time, or

          (ii) subject to Sections 5.15 and 5.16, the close of business on 1 May
               2014.


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<PAGE>
     (y)  "Flip-In Event" means a transaction or event in which any Person
          becomes an Acquiring Person.

     (z)  "holder" has the meaning set out in Section 2.08.

     (aa) "Independent Shareholders" means holders of Voting Shares, but shall
          not include any Acquiring Person or any Offeror (including an Offeror
          who is making a Permitted Bid or Competing Permitted Bid) other than
          any Person who by virtue of Section 1.01 (g) (v) is not deemed to
          Beneficially Own the Voting Shares held by such Person, any Affiliate
          or Associate of any such Acquiring Person or Offeror or any Person
          acting jointly or in concert with such Acquiring Person or Offeror, or
          Persons with rights or powers under any employee stock ownership
          plans, benefit plans, deferred profit sharing 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 such plan
          or trust direct the manner in which such Voting Shares are to be voted
          or direct whether the Voting Shares are to be tendered to a Take-Over
          Bid.

     (bb) "Lock-up Agreement" means an agreement between an Offeror, any of its
          Affiliates or Associates 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 the Voting Shares held by the Locked-up
          Person to the Offeror's Take-Over Bid or to any Take-Over Bid made by
          any of the Offeror's Affiliates or Associates or made by any other
          Person acting jointly or in concert with the Offeror, where the
          agreement permits the Locked-up Person to withdraw the Voting Shares
          from the agreement in order to tender or deposit the Voting Shares to
          another Take-Over Bid that contains an offering price for each Voting
          Share that is at least 5% higher than the offering price contained in
          or proposed to be contained in the Take-Over Bid that the Locked-up
          Person has agreed to deposit or tender Voting Shares pursuant to the
          Lock-up Agreement.

     (cc) "Market Price" per share of any securities on any date of
          determination shall mean the average of the daily Closing Prices Per
          Share of such securities (determined as described below) on each of
          the 20 consecutive Trading Days through and including the Trading Day
          immediately preceding such date; provided, however, that if an event
          of a type analogous to any of the events described in Section 2.03
          hereof shall have caused the closing prices used to determine the
          Market Price on any Trading Day not to be fully comparable with the
          closing price on such date of determination or, if the date of
          determination is not a Trading Day, on the immediately preceding
          Trading Day, each such closing price so used shall be appropriately
          adjusted in a manner analogous to the applicable adjustment provided
          for in Section 2.03 hereof in order to make it fully comparable with
          the closing price on such date of determination or, if the date of
          determination is not a Trading Day, on the immediately preceding
          Trading Day. The "Closing Price Per Share" of any securities on any
          date shall be:

          (i)  the closing board lot sale price or, if such price is not
               available, the average of the closing bid and asked prices, for
               each share as reported in the principal consolidated transaction
               reporting system with respect to securities listed or admitted to
               trading on The Toronto Stock Exchange;

          (ii) if the securities are not listed or admitted to trading on The
               Toronto Stock Exchange, the last sale price, regular way, or, in
               the case no such sale takes place on such date, the average of
               the closing bid and asked prices, regular way, for each share of
               such securities as reported in the principal consolidated
               transaction reporting system with respect to securities listed or
               admitted to trading on the New York Stock Exchange;

          (iii) if for any reason none of such prices is available on such day
               or the securities are not listed


                                                                               7
<PAGE>
               or admitted to trading on any of The Toronto Stock Exchange or
               the New York Stock Exchange, the average of the high bid and low
               asked prices for each share of such securities in the
               over-the-counter market if such high bid and low asked prices are
               regularly published in a newspaper or business or financial
               publication of regular or paid circulation; or

          (iv) if on any such date the securities are not quoted by any such
               organization, the average of the closing bid and asked prices as
               furnished by a professional market maker making a market in the
               securities;

          provided, however, that if on any such date the securities are not
          traded in the over-the-counter market, the closing price per share of
          such securities on such date shall mean the fair value per share of
          securities on such date as determined by a nationally or
          internationally recognized Canadian investment dealer (or investment
          banker) with respect to the fair value per share of such securities.
          The Market Price shall be expressed in United States dollars and if
          initially determined in respect of any day forming part of the 20
          consecutive Trading Day period in question in Canadian dollars, such
          amount shall be translated into United States dollars at the U.S.
          Dollar Equivalent thereof on the relevant Trading Day.

     (dd) "Offer to Acquire" includes:

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

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

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

     (ee) "Offeror" means any Person who has announced an intention to make or
          who is making, but has not completed, a Take-Over Bid (including a
          Permitted Bid or a Competing Bid) but only so long as the Take-Over
          Bid so made or announced has not been withdrawn or terminated or has
          not expired.

     (ff) "Offeror's Securities" means Voting Shares Beneficially Owned on the
          date of an Offer to Acquire by an Offeror.

     (gg) "Permitted Acquisition" means an acquisition by a Person of Voting
          Shares pursuant to:

          (i)  a Dividend Reinvestment Acquisition;

          (ii) a stock dividend, stock split or other event in respect of
               securities of the Corporation of one or more particular classes
               or series pursuant to which such Person becomes the Beneficial
               Owner of Voting Shares on the same pro rata basis as all other
               holders of securities of the particular class, classes or series;

          (iii) the acquisition or the exercise by the Person of only those
               rights to purchase Voting Shares distributed to that Person in
               the course of a distribution to all holders of securities of the
               Corporation of one or more particular classes or series pursuant
               to a rights offering or rights offering prospectus; or

          (iv) a distribution by the Corporation of Voting Shares or Convertible
               Securities (and the conversion or exchange of such), made
               pursuant to a prospectus or by way of a private


                                                                               8
<PAGE>
               placement, provided that the Person does not thereby acquire a
               greater percentage of such Voting Shares, or securities
               convertible into or exchangeable for Voting Shares, so offered
               than the Person's percentage of Voting Shares Beneficially Owned
               immediately prior to such acquisition.

     (hh) "Permitted Bid" has the meaning set out in Section 6.01.

     (ii) "Person" includes any individual, partnership, association, body
          corporate, unincorporated syndicate, unincorporated organization,
          trust, trustee, executor, administrator or other legal representative
          or entity and any successor thereto.

     (jj) "Record Time" has the meaning ascribed to that term in the fourth
          recital hereto.

     (kk) "Regular Periodic Cash Dividend" means cash dividends declared payable
          on the Common Shares of the Corporation and paid at regular intervals
          in any fiscal year of the Corporation to the extent that such cash
          dividends do not in any fiscal year exceed, in the aggregate, the
          greatest of:

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

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

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

     (ll) "Right" means the right of each holder of Common Shares to purchase
          additional securities upon and subject to the terms and conditions
          hereof.

     (mm) "Rights Agent" means CIBC Mellon Trust Company or any successor
          thereto appointed pursuant to Section 4.04.

     (nn) "Rights Certificate" has the meaning set out in Section 2.01(3)(c).

     (oo) "Rights Plan" means the shareholder rights plan established hereby.

     (pp) "Rights Register" has the meaning set out in Section 2.06(1).

     (qq) "Rights Registrar" has the meaning set out in Section 2.06(1).

     (rr) "Separation Time" means the close of business on the tenth Business
          Day after the earliest of:

          (i)  the Stock Acquisition Date;

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

          (iii) the date on which a Permitted Bid or Competing Bid ceases to
               qualify as such or on such later day as the Board shall determine
               acting in good faith; provided that, if any such


                                                                               9
<PAGE>
               Take-Over Bid expires, is cancelled, terminated or otherwise
               withdrawn prior to the Separation Time, such Take-Over Bid shall
               be deemed, for the purposes of this definition, never to have
               been made.

     (ss) "Stock Acquisition Date" means the first date of public announcement
          by the Corporation or an Acquiring Person that an Acquiring Person has
          become such.

     (tt) "Subsidiary": a corporation shall be a Subsidiary of another
          corporation if:

          (i)  it is controlled by:

               (A)  that other, or

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

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

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

     (uu) "Take-Over Bid" means an Offer to Acquire Voting Shares where the
          Voting Shares subject to the Offer to Acquire, together with the
          Offeror's Securities, constitute in the aggregate 20% or more of the
          outstanding Voting Shares at the date of the Offer to Acquire.

     (vv) "Termination Time" means the time at which the right to exercise the
          Rights shall terminate pursuant to Section 5.01 hereof.

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

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

          (i)  if on such date the Bank of Canada sets a noon spot rate of
               exchange for the conversion of United States dollars into
               Canadian dollars, such rate, or

          (ii) in any other case, the rate for the conversion of United States
               dollars into Canadian dollars as determined by the Board 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 of the Corporation and any
          other shares in the capital of the Corporation entitled to vote
          generally in the election of directors.

1.02 HEADINGS

     The division of this Agreement into Articles and Sections and the insertion
     of headings and a table of contents are for convenience of reference only
     and shall not affect the construction or interpretation of this Agreement.
     The terms "this Agreement", "hereof", "hereunder" and similar expressions
     refer to this Agreement and not to any particular Article, Section or other
     portion hereof and include any agreement supplemental hereto. Unless
     something in the subject matter or context is inconsistent therewith,
     references herein to Articles and Sections


                                                                              10
<PAGE>
     are to Articles and Sections of this Agreement.

1.03 EXTENDED MEANINGS

     In this Agreement words importing the singular number only shall include
     the plural and vice versa and words importing the masculine shall include
     the feminine gender and vice versa.

1.04 CURRENCY

     All references to currency herein are to lawful money of the United States
     of America unless otherwise specified.

1.05 SCHEDULE

     The form of the Rights Certificate is annexed hereto as Schedule 1 and
     incorporated by reference and deemed to be a part hereof.

1.06 LANGUAGE CLAUSE

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

1.07 ACTING JOINTLY OR IN CONCERT

     For purposes of this Agreement, a Person is acting jointly or in concert
     with every Person who is a party to any agreement, commitment or
     understanding, whether formal or informal, with the first Person or any
     Associate or Affiliate thereof for the purpose of acquiring or offering to
     acquire Voting Shares (other than customary agreements with and between
     underwriters and/or banking group members and/or selling group members with
     respect to a public offering or private placement of securities or pledges
     of securities in the ordinary course of business).

1.08 AS NOW ENACTED

     For the purposes of this Agreement, references to statutes, as now enacted,
     shall mean as in force and effect on 23 December 2004.

                             ARTICLE 2 - THE RIGHTS

2.01 INITIAL EXERCISE PRICE, EXERCISE OF RIGHTS AND DETACHMENT OF RIGHTS

(1)  Subject to the provisions hereof including, without limiting the generality
     of the foregoing, Section 2.03, each


                                                                              11
<PAGE>
     Common Share now or, until the earlier of the Separation Time and the
     Expiration Time, hereafter issued shall have one Right associated
     therewith. Subject to the provisions hereof and subject to adjustment as
     herein set forth, each Right shall entitle the holder thereof, after the
     Separation Time, to purchase one Common Share for the Exercise Price or its
     Canadian Dollar Equivalent. Notwithstanding any other provision of this
     Agreement, any Rights held by the Corporation or by any of its Subsidiaries
     or Beneficially Owned by an Acquiring Person shall be void.

(2)  Until the Separation Time:

     (a)  no Right shall be exercisable and no Right may be exercised,

     (b)  each Right shall be evidenced by the certificate for the associated
          Common Share, and

     (c)  each Right shall be transferable only together with, and shall be
          transferred by a transfer of, such associated Common Share.

(3)  After the Separation Time but prior to the Expiration Time the Rights:

     (a)  may be exercised in accordance with the provisions hereof, and

     (b)  shall be transferable independently of the Common Shares.

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

     (c)  a certificate (a "Rights Certificate") substantially in the form
          annexed hereto as Schedule 1 appropriately completed, representing the
          number of Rights held by such holder as at the Separation Time and
          having such marks of identification or designation and such legends,
          summaries or endorsements printed thereon as the Corporation may deem
          appropriate and as are not inconsistent with the provisions of this
          Agreement, or as may be required to comply with any law or with any
          rule or regulation made pursuant thereto or with any rule or
          regulation of any stock exchange or quotation system on which the
          Rights may from time to time be listed or traded, or to conform to
          usage, and

     (d)  a disclosure statement describing the Rights.

(4)  Rights may be exercised on any Business Day after the Separation Time and
     prior to the Expiration Time by submitting to the Rights Agent the Rights
     Certificate evidencing such Rights with an election to exercise such Rights
     (an "Election to Exercise") substantially in the form attached to the
     Rights Certificate duly completed and accompanied by payment by certified
     cheque or money order payable to the order of the Rights Agent of a sum
     equal to the Exercise Price multiplied by the number of Rights being
     exercised and a sum sufficient to cover any transfer tax or charge which
     may be payable in respect of any transfer involved in the 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 exercised.

(5)  Upon receipt of a Rights Certificate together with a duly completed
     Election to Exercise and the payments provided for in Section 2.01(4), the
     Rights Agent (unless otherwise instructed by the Corporation in the event
     that the Corporation is of the opinion that the Rights cannot be exercised
     in accordance with this Agreement)


                                                                              12
<PAGE>
shall thereupon promptly:

     (a)  requisition from the Corporation or its transfer agent for Common
          Shares, certificates for the number of Common Shares to be purchased;

     (b)  after receipt of such Common Share certificates, remit the payments
          provided for in Section 2.01(4) to the Corporation and deliver the
          share certificates 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;

     (c)  when appropriate, requisition from the Corporation the amount of cash
          to be paid in lieu of issuing fractional Common Shares; and

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

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

(7)  The Corporation shall:

     (a)  promptly deliver the share certificates requisitioned by the Rights
          Agent pursuant to Section 2.01(5)(a) to the Rights Agent;

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

     (c)  take all such action as may be necessary and reasonably within its
          power to comply with the applicable requirements of securities laws in
          Canada and the United States of America in connection with the
          issuance and delivery of the Rights Certificates and the issuance of
          Common Shares upon the exercise of the Rights;

     (d)  use reasonable efforts to cause all Common Shares issued upon the
          exercise of the Rights to be listed upon issuance on The Toronto Stock
          Exchange, the New York Stock Exchange and such other exchanges, if
          any, that the Corporation determines are appropriate;

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

     (f)  pay when due and payable any and all federal, provincial and state
          transfer taxes of Canada and the United States of America (except, for
          greater certainty, any income taxes of the holder or exercising holder
          or any liability of the Corporation to withhold tax) and charges which
          may be payable in respect of the original issuance or delivery of the
          Rights Certificates, provided that the Corporation shall not be
          required to pay any transfer tax or charge which may be payable in
          respect of any transfer involved in the transfer or delivery of Rights
          Certificates or the issuance or delivery of certificates for Common
          Shares in a name other than that of the holder of the Rights being
          transferred or exercised; and

     (g)  after the Separation Time, except as permitted by Section 5.01, not
          take (or permit any Subsidiary to


                                                                              13
<PAGE>
          take) any action if at the time such action is taken it is reasonably
          foreseeable that such action will diminish substantially or otherwise
          eliminate the benefits intended to be afforded by the Rights.

2.02 LEGEND ON COMMON SHARE CERTIFICATES

(1)  Certificates issued for Common Shares after the Record Time but prior to
     the earlier of the Separation Time and the Expiration Time shall have
     printed on or affixed to them the following legend in, if appropriate, both
     the English and French languages:

          "Until the Separation Time (as defined in the Shareholder Rights
          Agreement referred to below), this certificate also evidences and
          entitles the holder hereof to certain Rights as set forth in a
          Shareholder Rights Agreement made as of 23 December 2004, (the "Rights
          Agreement") between Novelis Inc. (the "Corporation") and CIBC Mellon
          Trust Company, as Rights Agent, the terms of which are incorporated
          herein by reference and a copy of which is on file at the principal
          executive offices of the Corporation. Under certain circumstances, as
          set forth in the Rights Agreement, such Rights may be amended,
          redeemed, may expire, may become void if, in certain cases, they are
          "Beneficially Owned" by an "Acquiring Person" (as such terms are
          defined in the Rights Agreement) or a transferee thereof, or may be
          evidenced by separate certificates and may no longer be evidenced by
          this certificate. The Corporation will mail or arrange for the mailing
          of a copy of the Rights Agreement to the holder of this certificate
          without charge within five days after the receipt of a written request
          therefor."

(2)  Certificates representing Common Shares that are issued and outstanding at
     any time shall evidence one Right for each Common Share evidenced thereby
     notwithstanding the absence of a legend in accordance with Section 2.02(1).

2.03 ADJUSTMENTS

(1)  The Exercise Price, the number and kind of securities subject to purchase
     upon exercise of each Right and the number of Rights outstanding are
     subject to adjustment from time to time as provided in this Section 2.03.

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

     (a)  declare or pay a dividend on the Common Shares payable in Common
          Shares or Convertible Securities other than pursuant to any optional
          stock dividend programme,

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

     (c)  combine or change the then outstanding Common Shares into a smaller
          number of Common Shares, or

     (d)  issue any Common Shares or Convertible Securities in respect of, in
          lieu of or in exchange for existing Common Shares in a
          reclassification, amalgamation, arrangement or consolidation,

     the Exercise Price and the number of Rights outstanding or, if the payment
     or effective date thereof shall occur after the Separation Time, the
     securities purchasable upon exercise of the Rights shall be adjusted in the
     following manner.


                                                                              14
<PAGE>
     If the Exercise Price and the number of Rights outstanding are to be
     adjusted:

     (e)  the Exercise Price in effect after such adjustment shall be equal to
          the Exercise Price in effect immediately prior to such adjustment
          divided by the number of Common Shares that a holder of one Common
          Share immediately prior to such dividend, subdivision, change,
          combination or issuance would hold thereafter as a result thereof
          (such denominator being the "Expansion Factor"), and

     (f)  each Right held prior to such adjustment shall become that number of
          Rights equal to the Expansion Factor and, if such adjustment is to be
          made prior to the Separation Time, the adjusted number of Rights shall
          be deemed to be distributed among the Common Shares with respect to
          which the original Rights were associated (if they remain outstanding)
          and the shares issued in respect of such dividend, subdivision,
          change, combination or issuance, so that each such Common Share shall
          have exactly one Right associated with it.

     If the securities purchasable upon the exercise of the Rights are to be
     adjusted, the securities purchasable upon the exercise of each Right after
     such adjustment shall be the securities that a holder of the securities
     purchasable upon the exercise of one Right immediately prior to such
     dividend, subdivision, change, combination or issuance would hold
     thereafter as a result thereof.

     If, after the Record Time but prior to the Expiration Time, the Corporation
     issues any securities in a transaction of a type described in the first
     sentence of this Section 2.03(2) which are exchangeable for or convertible
     into or give a right to acquire Common Shares, such securities shall be
     treated herein as nearly equivalent to Common Shares as may be practicable
     and appropriate under the circumstances and the Corporation and the Rights
     Agent shall amend this Agreement in order to effect such treatment;
     provided that no such amendment may materially adversely affect the
     interests of the holders of the Rights generally.

     In the event the Corporation shall at any time after the Record Time and
     prior to the Separation Time issue any Common Share otherwise than in a
     transaction referred to in this Section 2.03(2), each Common Share so
     issued shall automatically have one new Right associated with it which
     Right shall be evidenced by the certificate representing such Common Share.

(3)  If the Corporation at any time after the Record Time but prior to the
     Expiration Time fixes a record date for the making of a distribution to all
     holders of Common Shares of rights or warrants entitling them (for a period
     expiring within 45 calendar days after such record date) to subscribe for
     or purchase Common Shares (or securities convertible into or exchangeable
     for or carrying a right to purchase or subscribe for Common Shares) at a
     price per Common Share (or, if a security convertible into or exchangeable
     for or carrying a right to purchase or subscribe for Common Shares, having
     a conversion, exchange or exercise price (including the price required to
     be paid to purchase such convertible or exchangeable security or right per
     share)) less than 95% of the Market Price per Common Share on such record
     date, the Exercise Price shall be adjusted by multiplying the Exercise
     Price in effect immediately prior to such record date by a fraction, the
     numerator of which shall be the number of Common Shares outstanding on such
     record date plus the number of Common Shares which the aggregate offering
     price of the total number of Common Shares so to be offered (and/or the
     aggregate initial conversion, exchange or exercise price of the convertible
     or exchangeable securities or rights so to be offered (including the price
     required to be paid to purchase such convertible or exchangeable securities
     or rights)) would purchase at such Market Price and the denominator of
     which shall be the number of Common Shares outstanding on such record date
     plus the number of additional Common Shares to be offered for subscription
     or purchase (or into which the convertible or exchangeable securities or
     rights so to be offered are initially convertible, exchangeable or
     exercisable). In case such subscription price may be paid in a
     consideration all or part of which is in a form other than cash, the value
     of such consideration shall be as determined in good faith by the Board. To
     the extent that such rights or warrants are not exercised prior to the


                                                                              15
<PAGE>
     expiration thereof, the Exercise Price shall be readjusted to the Exercise
     Price that would then be in effect based on the number of Common Shares (or
     securities convertible into or exchangeable for Common Shares) actually
     issued upon the exercise of such rights.

     For the purposes of this Agreement, the granting of the right to purchase
     Common Shares (whether from treasury or otherwise) pursuant to any (i)
     Dividend Reinvestment Plan and/or (ii) Common Share purchase plan providing
     for the investment of periodic optional payments and/or (iii) employee or
     executive or director benefit or similar plans (so long as such right to
     purchase is in no case evidenced by the delivery of rights or warrants)
     shall not be deemed to constitute an issue of rights or warrants by the
     Corporation; provided, however, that, in the case of any Dividend
     Reinvestment Plan or Common Share purchase plan, the right to purchase
     Common Shares is at a price per share not less than 90% of the then Market
     Price of the Common Shares.

(4)  If the Corporation at any time after the Record Time but prior to the
     Expiration Time fixes a record date for the making of a distribution to all
     holders of Common Shares of evidences of indebtedness or assets (other than
     a Regular Periodic Cash Dividend or a dividend paid in Common Shares) or
     rights or warrants (excluding those referred to in Section 2.03(3)), the
     Exercise Price shall be adjusted by multiplying the Exercise Price in
     effect immediately prior to such record date by a fraction, the numerator
     of which shall be the Market Price per Common Share on such record date
     less the fair market value per Common Share (as determined in good faith by
     the Board) of the evidences of indebtedness, assets, rights or warrants to
     be so distributed and the denominator of which shall be the Market Price
     per Common Share on such record date. Such adjustments shall be made
     successively whenever such a record date is fixed, and in the event that
     such a distribution is not so made, the Exercise Price shall be adjusted to
     be the Exercise Price that would have been in effect if such record date
     had not been fixed.

(5)  Each adjustment made pursuant to this Section 2.03 shall be made as of:

     (a)  the payment or effective date for the applicable dividend,
          subdivision, change, combination or issuance, in the case of an
          adjustment made pursuant to Section 2.03(2), or

     (b)  the record date for the applicable dividend or distribution, in the
          case of an adjustment made pursuant to Sections 2.03(3) or (4).

(6)  Subject to a prior consent of the holders of Voting Shares or Rights
     obtained as set forth in Sections 5.04(3) or (4) as applicable, if the
     Corporation at any time after the Record Time but prior to the Expiration
     Time issues any shares in the capital of the Corporation (other than Common
     Shares), any rights or warrants to subscribe for or purchase any such
     shares, or any securities convertible into or exchangeable for any such
     shares and the Board, acting in good faith, determines that the adjustments
     contemplated by Sections 2.03(2), (3) or (4) are not applicable and the
     interests of the holders of the Rights will, as a result thereof, be
     adversely affected or, if applicable, such adjustments will not
     appropriately protect the interests of the holders of the Rights, the Board
     may determine what adjustments to the Exercise Price, number of Rights
     and/or securities purchasable upon exercise of the Rights would be
     appropriate to protect the interests of the holders of the Rights and,
     notwithstanding Sections 2.03(2), (3) or (4), such adjustments, rather
     than, if applicable, the adjustments contemplated by Sections 2.03(2), (3)
     or (4), shall be made and the Corporation and the Rights Agent shall amend
     this Agreement as appropriate to provide for such adjustments.

(7)  Notwithstanding anything herein to the contrary, no adjustment to the
     Exercise Price shall be required unless such adjustment would require an
     increase or decrease of at least 1% in the Exercise Price, provided that
     any adjustment which is not made as a result of the provisions of this
     Section 2.03(7) shall be carried forward and taken into account in any
     subsequent adjustment. Each adjustment to the Exercise Price made pursuant
     to this Section 2.03 shall be rounded upward or downward to the nearest
     cent. Whenever an adjustment to the


                                                                              16
<PAGE>
     Exercise Price is made pursuant to this Section 2.03, the Corporation shall
     promptly:

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

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

     (c)  mail a brief summary thereof to each holder of a Right.

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

(9)  Notwithstanding anything contained in this Section 2.03 to the contrary,
     the Corporation shall be entitled to make such reductions in the Exercise
     Price, in addition to those adjustments expressly required by this Section
     2.03, as and to the extent that in their good faith judgment the Board
     shall determine to be advisable, in order that any:

     (a)  stock dividend;

     (b)  consolidation or subdivision of Common Shares;

     (c)  issuance (wholly or in part for cash) of Common Shares or securities
          that by their terms are convertible into or exchangeable for Common
          Shares; or

     (d)  issuance of rights, options or warrants referred to in this Section
          2.03,

     hereafter made by the Corporation to holders of its Common Shares, shall
     not be taxable to such shareholders.

2.04 DATE ON WHICH EXERCISE IS EFFECTIVE

Each person in whose name any certificate for Common Shares is issued upon the
exercise of the Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and the payment of the Exercise
Price for such Rights (and any applicable transfer tax and other governmental
charge 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 Common
Share transfer books of the Corporation are closed, such person shall be deemed
to have become the record holder of such shares on, and such certificates shall
be dated, the next succeeding Business Day on which the Common Share transfer
books of the Corporation are open.

2.05 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES

(1)  The Rights Certificates shall be executed (either manually or by facsimile
     signature) on behalf of the Corporation by any two officers of the
     Corporation under its corporate seal or a facsimile thereof. Rights
     Certificates bearing the manual or facsimile signatures of individuals who
     were at any time the proper officers of the Corporation shall bind the
     Corporation, notwithstanding that such individuals or any of them have
     ceased to hold such offices prior to the countersignature and delivery of
     such Rights Certificates as herein provided for.


                                                                              17
<PAGE>
(2)  Promptly after the Corporation learns of the Separation Time, the
     Corporation shall notify the Rights Agent of such Separation Time and,
     subject to compliance with Section 2.01(7), shall deliver Rights
     Certificates executed by the Corporation to the Rights Agent for
     countersignature, and the Rights Agent shall countersign (manually or by
     facsimile signature in a manner satisfactory to the Corporation) and give
     such Rights Certificates to the holders of the Rights pursuant to Section
     2.01(3) hereof. No Rights Certificates shall be valid for any purpose
     unless countersigned by the Rights Agent as aforesaid.

(3)  Each Rights Certificate shall be dated the date of countersignature
     thereof.

2.06 REGISTRATION OF RIGHTS

(1)  The Corporation shall cause a register (the "Rights Register") to be kept
     after the Separation Time in which, subject to such reasonable regulations
     as it may prescribe, the Corporation shall provide for the registration of
     the Rights. The Rights Agent is hereby appointed "Rights Registrar" for the
     purpose of maintaining the Rights Register for the Corporation and
     registering the Rights and the transfers and exchanges of the Rights as
     herein provided. If the Rights Agent ceases to be the Rights Registrar, the
     Rights Agent shall have the right to examine the Rights Register at all
     reasonable times.

(2)  After the Separation Time and prior to the Expiration Time, upon surrender
     of any Rights Certificate and subject to the provisions of Sections 2.06(4)
     and (5), the Corporation shall execute, and the Rights Agent shall
     countersign and deliver in the name of the holder or the designated
     transferee or transferees, as required pursuant to the holder's
     instructions, one or more new Rights Certificates evidencing the same
     aggregate number of Rights as did the Rights Certificates so surrendered.

(3)  All Rights issued upon any registration of transfer or exchange of Rights
     Certificates shall be valid obligations of the Corporation and shall be
     entitled to the same benefits under this Agreement as the Rights
     surrendered upon such registration of transfer or exchange.

(4)  Every Rights Certificate surrendered for transfer or exchange shall be duly
     endorsed, or be accompanied by a written instrument of transfer in a 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.

(5)  As a condition to the issuance of any new Rights Certificate under this
     Section 2.06, 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.

2.07 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES

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

(2)  If prior to the Expiration Time there is delivered to the Corporation and
     the Rights Agent:

     (a)  evidence to their satisfaction of the destruction, loss or theft of
          any Rights Certificate, and


                                                                              18
<PAGE>
     (b)  such security or indemnity as may be required by each of them to save
          each of them and any of their agents harmless,

     then, in the absence of notice to the Corporation or the Rights Agent that
     such Rights Certificate has been acquired by a bona fide purchaser, the
     Corporation shall execute and the Rights Agent shall countersign and
     deliver in the name of the holder, 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.

(3)  As a condition to the issuance of any new Rights Certificate under this
     Section 2.07, 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 expense (including the fees and expenses of
     the Rights Agent) connected therewith.

(4)  Every new Rights Certificate issued pursuant to this Section 2.07 in lieu
     of any destroyed, lost or stolen Rights Certificate shall evidence an
     original additional contractual obligation of the Corporation, whether or
     not the destroyed, lost or stolen Rights Certificate shall be at any time
     enforceable by anyone, and shall be entitled to all the benefits of this
     Agreement equally and proportionally with any and all other Rights duly
     issued hereunder.

2.08 PERSONS DEEMED OWNERS

     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
     such Rights Certificate (or, prior to the Separation Time, such Common
     Share certificate) is registered as the absolute owner thereof and of the
     Rights evidenced thereby for all purposes whatsoever. As used in this
     Agreement, unless the context otherwise requires, the term "holder" of
     Rights shall mean the registered holder of such Rights (or, prior to the
     Separation Time, the associated Common Shares).

2.09 DELIVERY AND CANCELLATION OF CERTIFICATES

     All Rights Certificates surrendered upon exercise or for registration of
     transfer or exchange shall, if surrendered to any person other than the
     Rights Agent, be delivered to the Rights Agent and, in any case, shall be
     promptly cancelled by the Rights Agent. The Corporation may at any time
     deliver to the Rights Agent for cancellation any Rights Certificates
     previously countersigned and delivered hereunder which the Corporation may
     have acquired in any manner whatsoever, and all Rights Certificates so
     delivered shall be promptly cancelled by the Rights Agent. No Rights
     Certificate shall be countersigned in lieu of or in exchange for any Rights
     Certificates cancelled as provided in this Section 2.09, except as
     expressly permitted by this Agreement. The Rights Agent shall destroy all
     cancelled Rights Certificates and promptly thereafter deliver a certificate
     of destruction to the Corporation on request.

2.10 AGREEMENT OF RIGHTS HOLDERS

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

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


                                                                              19
<PAGE>
     (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 Shares and after the Separation Time, the Rights
          shall be transferable only on the Rights Register as provided herein;

     (c)  prior to due presentment of a Rights Certificate (or, prior to the
          Separation Time, the associated Common Share certificate) for
          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 (notwithstanding 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 whatsoever, and
          neither the Corporation nor the Rights Agent shall be affected by any
          notice to the contrary;

     (d)  without the approval of any holder of Rights and upon the sole
          authority of the Board acting in good faith this Agreement may be
          supplemented or amended from time to time pursuant and subject to
          Section 2.03 or Section 5.04;

     (e)  if such holder at any time becomes an Acquiring Person or otherwise
          becomes subject to the provisions of Section 3.01(2), the Rights held
          by such holder shall immediately become void pursuant to the
          provisions of Section 3.01(2);

     (f)  such holder of Rights has waived his right to receive any fractional
          Right or any fractional Share or other security upon exercise of a
          Right (except as specifically provided herein); and

     (g)  notwithstanding anything in this Agreement to the contrary, neither
          the Corporation nor the Rights Agent shall 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 any
          governmental authority, prohibiting or otherwise restraining
          performance of such obligation.

                   ARTICLE 3 - EFFECT OF CERTAIN TRANSACTIONS

3.01 FLIP-IN EVENT

(1)  Subject to Section 3.01(2) and Section 5.01, if a Flip-In Event occurs
     prior to the Expiration Time, the Corporation shall take such action as is
     necessary to ensure and provide that, except as provided below, each Right
     shall thereafter constitute the right to purchase from the Corporation,
     upon the exercise thereof in accordance with the terms hereof, that number
     of Common Shares of the Corporation having an aggregate Market Price on the
     date of consummation or occurrence of such Flip-In Event equal to twice the
     Exercise Price for an amount in cash equal to the Exercise Price (such
     right to be appropriately adjusted in a manner analogous to the applicable
     adjustment provided for in Section 2.03 in the event that after such date
     of consummation or occurrence an event of a type analogous to any of the
     events described in Section 2.03 shall have occurred with respect to such
     Common Shares).


                                                                              20
<PAGE>
(2)  Notwithstanding the foregoing, upon the occurrence of any Flip-In Event,
     any Rights that are or were Beneficially Owned on or after 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, direct or indirect, from 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, whether or not for
          consideration, that the Board, acting in good faith has determined is
          part of a plan, arrangement or scheme of an Acquiring Person (or any
          Affiliate or Associate of an Acquiring Person) that has the purpose or
          effect of avoiding clause (i) of this Section 3.01(2),

     shall become void and any holder of such Rights (including transferees)
     shall thereafter have no right to exercise such Rights under any provision
     of this Agreement or otherwise.

     From and after the Separation Time, the Corporation shall do all such acts
     and things as shall be necessary and within its power to ensure compliance
     with the provisions of this Section 3.01, including without limitation, all
     such acts and things as may be required to satisfy the requirements of the
     Canada Business Corporations Act, the Securities Act (Ontario) and the
     securities laws or comparable legislation of each of the provinces of
     Canada, the United States of America and each of the states thereof in
     respect of the issue of Common Shares upon the exercise of Rights in
     accordance with this Agreement.

(3)  Any Rights Certificate issued pursuant to Section 2.01 that represents
     Rights Beneficially Owned by a Person described in either clauses (i) or
     (ii) of Section 3.01(2) or transferred to any nominee of any such Person
     and any Rights Certificates issued upon transfer, exchange, replacement or
     adjustment of any other Rights Certificates referred to in this sentence
     shall contain or will be deemed to contain the following additional legend:

          "The Rights represented by this Rights Certificate represent Rights
          Beneficially Owned by an Acquiring Person (as such terms are defined
          in the Rights Agreement). This Rights Certificate and the Rights
          represented hereby shall become void in the circumstances specified in
          Section 3.01(2) of the Shareholder Rights Agreement.";

     provided that the Rights Agent shall not be under any responsibility to
     ascertain the existence of facts that would require the imposition of such
     legend but shall be required to impose such legend only if instructed to do
     so by the Corporation in writing or if a holder fails to certify upon
     transfer or exchange in the space provided on the Rights Certificate that
     the Rights represented thereby are not, and, to the best of such holder's
     knowledge, never have been, Beneficially Owned by an Acquiring Person after
     such person became an Acquiring Person.

                          ARTICLE 4 - THE RIGHTS AGENT


                                                                              21
<PAGE>
4.01 GENERAL

(1)  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 appointments.
     The Corporation may upon such terms as it considers appropriate from time
     to time appoint such Co-Rights Agents as it may deem necessary or desirable
     subject to the Rights Agent receiving notice of such appointment. If the
     Corporation appoints one or more Co-Rights Agents, the respective duties of
     the Rights Agent and Co-Rights Agents shall be as the Corporation may
     determine subject to 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 by the Rights
     Agent, its reasonable expenses and counsel fees and other disbursements
     incurred in the administration and execution of this Agreement and the
     exercise and performance of its duties hereunder. The Corporation also
     agrees to indemnify the Rights Agent, its officers, directors, employees
     and agents for, and to hold them harmless against, any loss, liability or
     expense, if incurred without negligence, bad faith or wilful misconduct on
     the part of the Rights Agent for anything done or omitted to be done by the
     Rights Agent in connection with the exercise and performance of its duties
     hereunder, including the costs and expenses of defending against any claim
     of liability, which right to indemnification shall survive the termination
     of this Agreement or the removal or resignation of the Rights Agent.

(2)  The Rights Agent shall be protected and shall incur no liability for or in
     respect of any action taken, suffered or omitted to be taken by it in
     connection with the exercise and performance of its duties hereunder 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.

(3)  The Corporation shall inform the Rights Agent in a reasonably timely manner
     of events which may materially affect the administration of this Agreement
     by the Rights Agent and at any time, upon request, shall provide to the
     Rights Agent an incumbency certificate with respect to the then current
     officers of the Corporation, provided that failure to inform the Rights
     Agent of any such events, or any defect therein, shall not affect the
     validity of any action taken hereunder in relation to such events.

4.02 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF THE RIGHTS AGENT

(1)  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 hereto,
     provided that such corporation would be eligible for appointment as a
     successor Rights Agent under the provisions of Section 4.04. In case at the
     time such successor Rights Agent succeeds to the agency created by this
     Agreement any of the Rights Certificates have been countersigned but not
     delivered, any such successor Rights Agent may adopt the countersignature
     of the predecessor Rights Agent and deliver such Rights Certificates so
     countersigned; and in case at that time any of the Rights Certificates have
     not been countersigned, any successor Rights Agent may countersign such
     Rights Certificates either in the name of the predecessor Rights Agent or
     in the name of the successor Rights Agent; and in all such cases such
     Rights Certificates shall have the full force provided for in the Rights
     Certificates and in this Agreement.

(2)  In case at any time the name of the Rights Agent is changed and at such
     time any of the Rights Certificates


                                                                              22
<PAGE>
     shall have been countersigned but not delivered, the Rights Agent may adopt
     the countersignature under its prior name and deliver Rights Certificates
     so countersigned; and in case at that time any of the Rights Certificates
     shall not have been countersigned, the Rights Agent may countersign such
     Rights Certificates either in its prior name or in its changed name; and in
     all such cases such Rights Certificates shall have the full force provided
     for in the Rights Certificates and in this Agreement.

4.03 ENTITLEMENTS OF THE RIGHTS AGENT

     The Rights Agent undertakes the duties and obligations imposed by this
     Agreement upon the following terms and conditions, by which the Corporation
     and every holder of Rights, by accepting the same, shall be bound:

     (a)  the Rights Agent may retain and consult with legal counsel (who may be
          legal counsel for the Corporation), or such other experts or advisors
          as the Rights Agent deems necessary to carry out its duties under this
          Agreement, and the opinion of such counsel or other expert or advisor
          shall be full and complete authorization and protection to the Rights
          Agent with respect to any action taken or omitted by it in good faith
          and in accordance with such opinion;

     (b)  whenever in the performance of its duties under this Agreement the
          Rights Agent deems it necessary or desirable that any fact or matter
          be proved or established by the Corporation prior to taking or
          suffering any action hereunder, such fact or matter (unless other
          evidence in respect thereof be herein specifically prescribed) may be
          deemed to be conclusively proved and established by a certificate
          signed by persons believed by the Rights Agent to be Chairman of the
          Board, President, Chief Executive Officer, any Vice President, Chief
          Financial Officer, the Secretary, or any Assistant Secretary of the
          Corporation and delivered to the Rights Agent; and such certificate
          shall be full authorization to the Rights Agent for any action taken
          or suffered in good faith by it under the provisions of this Agreement
          in reliance upon such certificate;

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

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

     (e)  the Rights Agent shall not be under any responsibility in respect of
          the validity of this Agreement or the execution and delivery hereof
          (except the due authorization, execution and delivery hereof by the
          Rights Agent) or in respect of the validity or execution of any Common
          Share certificate or Rights Certificate (except its countersignature
          thereof); nor shall it be responsible for any breach by the
          Corporation of any covenant or condition contained in this Agreement
          or in any Rights Certificate; nor shall it be responsible for any
          change in the exercisability of the Rights (including the Rights
          becoming void pursuant to Section 3.01(2)) or any adjustment required
          under the provisions of Section 2.03 or for the manner, method or
          amount of any such adjustment or the ascertaining of the existence of
          facts that would require any such adjustment (except with respect to
          the exercise of Rights after receipt of the certificate contemplated
          by Section 2.03 describing any such adjustment); nor shall 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;

     (f)  the Corporation shall perform, execute, acknowledge and deliver or
          cause to be performed,


                                                                              23
<PAGE>
          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 agency duties
          hereunder from any person believed by the Rights Agent to be the Chief
          Executive Officer or the Chief Legal Officer or the Chief Financial
          Officer of the Corporation, and to apply to such persons for advice or
          instructions in connection with its duties, and it shall not be liable
          for any action taken or suffered by it in good faith in accordance
          with instructions of any such person;

     (h)  the Rights Agent and any shareholder, director, officer or employee of
          the Rights Agent may buy, sell or deal in Common Shares, Rights or
          other securities of the Corporation or become pecuniarily interested
          in any transaction in which the Corporation may be interested, or
          contract with or lend money to the Corporation or otherwise act as
          fully and freely as though it were not Rights Agent under this
          Agreement. Nothing herein shall preclude the Rights Agent from acting
          in any other capacity for the Corporation or for any other legal
          entity; 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 shall not be
          answerable or accountable for any act, default, neglect or misconduct
          of any such attorneys or agents or for any loss to the Corporation
          resulting from any such act, default, neglect or misconduct, provided
          reasonable care was exercised in the selection and continued
          employment thereof.

4.04 CHANGE OF THE RIGHTS AGENT

     The Rights Agent may resign and be discharged from its duties under this
     Agreement upon 60 calendar days' notice (or such lesser notice as is
     acceptable to the Corporation) to the Corporation, to each transfer agent
     of Common Shares by registered or certified mail and to the holders of
     Rights in accordance with Section 5.08 at the Corporation's expense. The
     Corporation may remove the Rights Agent upon 60 calendar days' notice to
     the Rights Agent, to each transfer agent of the Common Shares by registered
     or certified mail and to the holders of Rights in accordance with Section
     5.08. If the Rights Agent resigns or is removed or otherwise becomes
     incapable of acting, the Corporation shall appoint a successor to the
     Rights Agent. If the Corporation fails to make such appointment within a
     period of 30 CALENDAR days after such removal or after it has been notified
     in writing of such resignation or incapacity by the resigning or
     incapacitated Rights Agent or by the holder of any Rights (which holder
     shall, with such notice, submit such holder's Rights Certificate for
     inspection by the Corporation), then the Rights Agent at the Corporation's
     expense or the holder of any Rights may apply to any court of competent
     jurisdiction for the appointment of a new Rights Agent. Any successor
     Rights Agent, whether appointed by the Corporation or by such a court,
     shall be a corporation incorporated under the laws of Canada or a province
     thereof authorized to carry on the business of a trust company in the
     Province of Ontario. After appointment, the successor Rights Agent shall be
     vested with the same powers, rights, duties and responsibilities as if it
     had been originally named as Rights Agent without further act or deed; but
     the predecessor Rights Agent upon payment of all outstanding fees expenses
     owed to it under this Agreement shall deliver and transfer to the successor
     Rights Agent any property at the time held by it hereunder, and execute and
     deliver any further assurance, conveyance, act or deed necessary for the
     purpose. Not later than the effective date of any such appointment, the
     Corporation shall file notice thereof in writing with the predecessor
     Rights Agent and each transfer agent of the Common Shares, and give a
     notice thereof to the holders of the Rights. Failure to give any notice
     provided for in this Section 4.04 or any defect therein shall not affect
     the legality or validity of the resignation or removal of the Rights Agent
     or the appointment of the successor Rights Agent, as the case may be.


                                                                              24
<PAGE>
                            ARTICLE 5 - MISCELLANEOUS

5.01 REDEMPTION, WAIVER AND TERMINATION

(1)  Subject to the prior consent of the holders of Voting Shares or Rights
     obtained as set forth in Sections 5.04(3) or (4), as applicable, the Board
     acting in good faith may, at its option, at any time prior to the
     provisions of Sections 3.01 becoming applicable as a result of the
     occurrence of a Flip-In Event, elect to redeem all but not less than all of
     the then outstanding Rights at a redemption price of $0.01 per Right
     appropriately adjusted in a manner analogous to the applicable adjustment
     provided for in Section 2.03 in the event that an event of the type
     analogous to any of the events described in Section 2.03 shall have
     occurred (such redemption price being herein referred to as the "Redemption
     Price").

(2)  The Board may, until a Flip-In Event shall occur, upon written notice
     delivered to the Rights Agent, determine to waive the application of
     Section 3.01 to such particular Flip-In Event but only if such Flip-In
     Event would occur as a result of a Take-Over Bid made by way of a Take-Over
     Bid circular to all holders of Voting Shares of record; provided that if
     the Board waives the application of Section 3.01 to a particular Flip-In
     Event, the Board shall be deemed to have waived the application of Section
     3.01 to any other Flip-In Event, that would occur as a result of a
     Take-Over Bid which is made by means of a Take-Over Bid circular to all
     holders of Voting Shares of record prior to the expiry of any Take-Over Bid
     in respect of which a waiver is, or is deemed to have been, granted under
     this Section 5.01(2).

(3)  Notwithstanding Section 5.01(2), upon written notice delivered to the
     Rights Agent, the Board may also, with respect to any Flip-In Event, waive
     the application of Section 3.01 to that Flip-In Event, provided that both
     of the following conditions are satisfied:

     (i)  the Board has determined that the Acquiring Person became an Acquiring
          Person by inadvertence and without any intent that he would become an
          Acquiring Person; and

     (ii) such Acquiring Person has reduced his Beneficial Ownership of Voting
          Shares such that at the time of waiver pursuant to this Section
          5.01(3) he is no longer an Acquiring Person.

(4)  If the Board elects or is deemed to have elected to redeem the Rights, the
     right to exercise the Rights will thereupon, without further action and
     without notice, terminate and each Right will after redemption be null and
     void and the only right thereafter of the holders of Rights will be to
     receive the Redemption Price and no further Rights shall thereafter be
     issued.

(5)  Within 10 calendar days after the Board electing or having been deemed to
     have elected to redeem the Rights, the Corporation shall give notice of
     redemption to the holders of the then outstanding Rights by mailing such
     notice to each such holder at its 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 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. Each such notice of redemption will
     state the method by which the payment of the Redemption Price will be made.
     The failure to give or any defect in such notice shall not affect the
     validity of such redemption.

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


                                                                              25
<PAGE>
(7)  Upon the Rights being redeemed pursuant to Section 5.01(6), all the
     provisions of this Agreement shall continue to apply as if the Separation
     Time had not occurred and Rights Certificates representing the number of
     Rights held by each holder of record of Common Shares, as of the Separation
     Time had not been mailed to each such holder and for all purposes of this
     Agreement the Separation Time shall be deemed not to have occurred.

(8)  In the event that prior to the occurrence of a Flip-In Event a Person
     acquires, pursuant to a Permitted Bid, a Competing Permitted Bid or an
     Exempt Acquisition, outstanding Voting Shares, then the Board shall
     immediately upon the consummation of such acquisition without further
     formality be deemed to have elected to redeem the Rights at the Redemption
     Price.

5.02 EXPIRATION

     No Person shall 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 4.01(1).

5.03 ISSUANCE OF NEW RIGHTS CERTIFICATES

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

5.04 SUPPLEMENTS AND AMENDMENTS

(1)  The Corporation may from time to time amend this Agreement with the
     approval of the Rights Agent but without the consent of any holder of
     Rights or the holders of Voting Shares in order to correct a clerical or
     typographical error or to maintain the validity and effectiveness of this
     Agreement as a result of any change in any applicable laws, rules or
     regulatory requirements.

(2)  The Corporation may, prior to the date of the shareholders' meeting
     referred to in Section 5.15, supplement or amend this Agreement without the
     approval of any of the holders of Rights or Voting Shares (whether or not
     such action would materially adversely affect the interest of the holders
     of Rights generally) where the Board acting in good faith deems such action
     necessary or desirable. Notwithstanding anything in this Section 5.04 to
     the contrary, no such supplement or amendment shall be made to the
     provisions of Article 4 except with the written concurrence of the Rights
     Agent to such supplement or amendment.

(3)  Subject to Sections 5.04(1) and 5.04(2), the Corporation may, with the
     prior consent of the holders of Voting Shares obtained as set forth below,
     at any time prior to the Separation Time, amend, vary or rescind any of the
     provisions of this Agreement and the Rights (whether or not such action
     would materially adversely affect the interests of the holders of Rights
     generally). Such consent shall be deemed to have been given if the action
     requiring such approval is authorized by the affirmative vote of a majority
     of the votes cast by Independent Shareholders present or represented at and
     entitled to be voted at a meeting of the holders of Voting Shares duly
     called and held in compliance with applicable laws and the articles and
     by-laws of the Corporation.

(4)  The Corporation may, with the prior consent of the holders of Rights, at
     any time on or after the Separation Time and before the Expiration Time,
     amend, vary or delete any of the provisions of this Agreement and the


                                                                              26
<PAGE>
     Rights (whether or not such action would materially adversely affect the
     interests of the holders of Rights generally), provided that no such
     amendment, variation or deletion shall be made to the provisions of Article
     4 except with the written concurrence of the Rights Agent thereto. Such
     consent shall be deemed to have been given if such amendment, variation or
     deletion is authorized in the manner specified in Section 5.04(5).

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

(6)  Any amendment to this Agreement pursuant to Subsection 5.04(1) which is
     required to maintain the validity of this Agreement as a result of any
     change in any applicable laws, rules or regulatory requirements shall:

     (i)  if made before the Separation Time, any such amendment shall be
          submitted to the shareholders of the Corporation at the next meeting
          of shareholders and the shareholders may, by the majority referred to
          in Section 5.04(3) confirm or reject such amendment;

     (ii) if made after the Separation Time, any such amendment shall be
          submitted to the holders of Rights at a meeting to be called for on a
          date not later than immediately following the next meeting of
          shareholders of the Corporation and the holders of Rights may, by
          resolution passed by the majority referred to in Section 5.04(5)
          confirm or reject such amendment.

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

(7)  The Corporation shall give notice in writing to the Rights Agent of any
     supplement, amendment, deletion, variation or rescission to this Agreement
     pursuant to this Section within five Business Days of the date of any such
     supplement, amendment, deletion, variation or rescission, provided that
     failure to give notice, or any defect therein, shall not affect the
     validity of any such supplement, amendment, deletion, variation or
     rescission.

5.05 FRACTIONAL RIGHTS AND FRACTIONAL SHARES

(1)  The Corporation shall not be required to issue fractions of Rights or to
     distribute Rights Certificates which evidence fractional Rights. After the
     Separation Time, in lieu of issuing fractional Rights, the Corporation
     shall pay to the holders of record of the Rights Certificates (provided the
     Rights represented by such Rights Certificates are not void pursuant to the
     provisions of Section 3.01(2), at the time such fractional Rights would
     otherwise be issuable), an amount in cash equal to the fraction of the
     Market Price of one whole Right that the fraction of a Right that would
     otherwise be issuable is of one whole Right.


                                                                              27
<PAGE>
(2)  The Corporation shall not be required to issue fractions of Common Shares
     upon exercise of Rights or to distribute certificates which evidence
     fractional Common Shares. In lieu of issuing fractional Common Shares, the
     Corporation shall pay to the registered holders of Rights Certificates, at
     the time such Rights are exercised as herein provided, an amount in cash
     equal to the fraction of the Market Price of one Common Share that the
     fraction of a Common Share that would otherwise be issuable upon the
     exercise of such Right is of one whole Common Share at the date of such
     exercise.

5.06 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
     Corporation or the Rights Agent, are vested in the respective holders of
     Rights; and any holder of Rights, without the consent of the Rights Agent
     or of any other holder of Rights, may, on such holder's own behalf and for
     such holder's own benefit and the benefit of other holders of Rights,
     enforce, and may institute and maintain any suit, action or proceeding
     against the Corporation to enforce or otherwise act in respect of, such
     holder's right to exercise such holder's Rights in the manner provided in
     such holder's Rights Certificate and in this Agreement. Without limiting
     the generality of 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 of, and
     injunctive relief against actual or threatened violations of the
     obligations of, any Person subject to this Agreement.

5.07 HOLDER OF RIGHTS NOT DEEMED TO BE A SHAREHOLDER

     No holder of Rights, as such, shall be entitled to vote, to receive
     dividends, to receive the remaining property of the Corporation on
     dissolution or to be deemed for any purpose the holder of Common Shares or
     any other securities which may at any time be issuable on the exercise of
     such Rights, nor shall anything contained herein or in any Rights
     Certificate be construed to confer upon any holder of Rights, as such, any
     of the rights of a shareholder of the Corporation or any right to vote for
     the election of directors or upon any matter submitted to shareholders at
     any meeting thereof, to give or withhold consent to any corporate action,
     to receive notice of meetings or other actions affecting shareholders
     (except as provided in Section 5.08) or to receive dividends or
     subscription rights or otherwise, until such Rights shall have been
     exercised in accordance with the provisions hereof.

5.08 NOTICES

     Any document or other communication to be given in connection with this
     Agreement to the Corporation shall be given in writing and shall be given
     by (i) personal delivery, (ii) telegraph, facsimile or other form of
     recorded electronic communication (charges prepaid and confirmed in
     writing) or (iii) by first-class postage prepaid mail (except during any
     general interruption of postal services due to strike, lockout or other
     cause) addressed to the Corporation as follows:

          Novelis Inc.
          Royal Bank Plaza, South Tower
          200 Bay Street, Suite 3800
          P.O. Box  84
          Toronto, Ontario M5J 2Z4

          Attention: Chief Executive Officer


                                                                              28
<PAGE>
     Any document or other communication to be given in connection with this
     Agreement to the Rights Agent shall be given in writing and shall be given
     by (i) personal delivery, (ii) telegraph, facsimile or other form of
     recorded electronic communication (charges prepaid and confirmed in
     writing) or (iii) by first-class postage prepaid mail (except during any
     general interruption of postal services due to strike, lockout or other
     cause) addressed to the Rights Agent as follows:

          CIBC Mellon Trust Company
          2001 University Street
          16th Floor
          Montreal, Quebec
          Canada
          H3A 2A6

          Attention: Branch Manager

     Any document or other communication to be given in connection with this
     Agreement to any holder of Rights shall be given in writing and shall be
     given by (i) personal delivery, (ii) telegraph, facsimile or other form of
     recorded electronic communication (charges prepaid and confirmed in
     writing) or (iii) by first-class postage prepaid mail (except during any
     general interruption of postal services due to strike, lockout or other
     cause) 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 (the
     Corporation hereby agreeing to furnish copies of such records to the Rights
     Agent). The Corporation and the Rights Agent may by notice to the other
     designate with respect to itself any other address or individual. Any
     document or other communication given by personal delivery shall be
     conclusively deemed to have been given on the day of actual delivery
     thereof and, if given by first class postage prepaid mail, on the fifth
     Business Day following the deposit thereof in the mail (it being
     acknowledged, for greater certainty, that any such communication mailed to
     a holder of a Right as herein provided shall be deemed to have been given
     whether or not the holder receives such communication).

5.09 COSTS OF ENFORCEMENT

     If the Corporation or any other Person, the securities of which are
     purchasable upon exercise of the Rights, fails to fulfil any of its
     obligations pursuant to this Agreement, then the Corporation or such Person
     shall reimburse any holder of Rights for the costs and expenses (including
     reasonable legal fees) incurred by such holder in any action to enforce his
     rights pursuant to any Rights or this Agreement.

5.10 BENEFIT OF THE AGREEMENT

     This Agreement shall inure to the benefit of and be binding upon the
     respective successors and assigns of the Corporation and the Rights Agent
     and upon the heirs, executors, administrators, successors and assigns of
     the holders of Rights. This Agreement shall be for the sole and exclusive
     benefit of the Corporation, the Rights Agent and the holders of Rights and
     nothing in this Agreement shall be construed to give any Person other than
     the Corporation, the Rights Agent and the holders of Rights any legal or
     equitable right, remedy or claim under this Agreement.


                                                                              29
<PAGE>
5.11 GOVERNING LAW

     This Agreement and each Right issued hereunder shall be deemed to be a
     contract made under the laws of the Province of Ontario and for all
     purposes shall be governed by and construed in accordance with the laws of
     the Province of Ontario and the laws of Canada applicable therein.

5.12 COUNTERPARTS

     This Agreement may be executed in counterparts, each of which shall be
     considered an original and both of which taken together shall constitute a
     single agreement.

5.13 SEVERABILITY

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

5.14 DETERMINATIONS AND ACTIONS BY THE BOARD

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

(2)  Nothing contained in this Agreement shall be deemed to be in derogation of
     the obligation of the Board to exercise its fiduciary duties. Without
     limiting the generality of the foregoing, nothing contained herein shall be
     construed to suggest or imply that the Board shall not be entitled to
     recommend that the holders of the Voting Shares reject any Permitted Bid or
     any Competing Permitted Bid or any Take-Over Bid, or to take any other
     action (including, without limiting the generality of the foregoing, the
     commencement, prosecution, defence or settlement of any litigation and the
     submission of additional or alternative Permitted Bids or Competing
     Permitted Bids or Take-Over Bids) with respect to any Permitted Bid or any
     Competing Permitted Bid or any Take-Over Bid or otherwise that the Board
     believes is necessary or appropriate in the exercise of its fiduciary
     duties.

5.15 EFFECTIVE DATE

     This Agreement is effective from the Record Time.

5.16 RE-CONFIRMATION AFTER THREE YEARS

     At the 2008 Annual Meeting and every third Annual Meeting of Shareholders
     of the Corporation following the 2008 Annual Meeting, provided that a
     Flip-In Event has not occurred prior to such time, the Board shall submit a
     resolution to the holders of Voting Shares of the Corporation for their
     consideration and, if thought advisable, approval ratifying the continued
     existence of the Rights. If a majority of greater than 50% of the votes
     cast by


                                                                              30
<PAGE>
     holders of Voting Shares who vote in respect of such reconfirmation and
     approval is voted against the continued existence of the Rights, then this
     Agreement, the Rights Plan and any outstanding Rights shall be of no
     further force and effect. There shall be excluded from the calculation of
     shares eligible to vote at such meeting shares held by an Acquiring Person
     or by any Person who has made or announced an intention to make a tender or
     exchange offer or Take-Over Bid which, if consummated, would result in such
     Person holding in the aggregate 20% or more of the outstanding Voting
     Shares at the date of such bid.

5.17 REGULATORY APPROVALS

     Any obligation of the Corporation or action or event contemplated by this
     Agreement, or any amendment or supplement to this Agreement, shall be
     subject to the receipt of any requisite approval or consent from any
     governmental or regulatory authority. Without limiting the generality of
     the foregoing, any issuance or delivery of debt or equity securities (other
     than non-convertible debt securities) of the Corporation upon the exercise
     of Rights and any amendment or supplement to this Agreement shall be
     subject to the prior consent of The Toronto Stock Exchange.

5.18 DECLARATION AS TO NON-CANADIAN HOLDERS

     If in the opinion of the Board (who may rely upon the advice of counsel)
     any action or event contemplated by this Agreement would require compliance
     by the Corporation with the securities laws or comparable legislation of a
     jurisdiction outside Canada, the Board acting in good faith shall take such
     actions as it may deem appropriate to ensure such compliance. In no event
     shall the Corporation or the Rights Agent be required to issue or deliver
     Rights or securities issuable on exercise of Rights to persons who are
     citizens, residents or nationals of any jurisdiction other than Canada or
     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.

                           ARTICLE 6 - PERMITTED BIDS

6.01 PERMITTED BIDS

     The expression "Permitted Bid" referred to in Section 1.01(hh) means a
     Take-Over Bid made by an Offeror that is made by means of a Take-Over Bid
     circular sent to holders of Voting Shares and which complies with the
     following additional provisions:

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

     (ii) the Take-Over Bid contains, and the take-up and payment for securities
          tendered or deposited is subject to, the following irrevocable and
          unqualified provision that no Voting Shares will be taken up or paid
          for pursuant to the Take-Over Bid (A) prior to the close of business
          on the date which is not less than 60 calendar days following the date
          of the Take-Over Bid and (B) only if at such date more than 50% of the
          Voting Shares held by Independent Shareholders shall have been
          tendered or deposited pursuant to the Take-Over Bid and not withdrawn;

     (iii) unless the Take-Over Bid is withdrawn, the Take-Over Bid contains an
          irrevocable and unqualified provision that Voting Shares may be
          deposited pursuant to such Take-Over Bid at any time during the


                                                                              31
<PAGE>
          period of time described in Section 6.01(ii) and that any Voting
          Shares deposited pursuant to the Take-Over Bid may be withdrawn until
          taken up and paid for; and

     (iv) the Take-Over Bid also contains an irrevocable and unqualified
          condition that in the event that the deposit condition set forth in
          Section 6.01(ii)(B) is satisfied, the Offeror will make a public
          announcement of that fact and the Take-Over Bid will remain open for
          deposits and tenders of Voting Shares for not less than 10 Business
          Days from the date of such public announcement.

6.02 COMPETING PERMITTED BIDS

     The expression "Competing Permitted Bid" referred to in Section 1.01(n)
     means a Take-Over Bid that:

     (i)  is made for Voting Shares after a Permitted Bid or Competing Permitted
          Bid for Voting Shares has been made but prior to the expiry of such
          Permitted Bid or Competing Permitted Bid;

     (ii) satisfies all of the conditions of the definition of Permitted Bid
          other than the requirements set out in Section 6.01(ii) (A); and

     (iii) contains, and the take-up and payment for securities tendered or
          deposited is subject to, an irrevocable and unqualified condition that
          no Voting Shares will be taken up and paid for pursuant to the
          Take-Over Bid prior to the close of business on a date which is not
          earlier than the later of (A) the 60th calendar day following the date
          on which the earliest Permitted Bid which preceded the Competing
          Permitted Bid was made and (B) 21 calendar days after the date of the
          Take-Over Bid constituting the Competing Permitted Bid.

IN WITNESS WHEREOF the parties have executed this Agreement on the date and year
above written.

NOVELIS INC.                                            CORPORATE
                                                          SEAL
                                                           OF
PER: /S/ BRIAN W. STURGELL                            NOVELIS INC.
     --------------------------------


CIBC MELLON TRUST COMPANY

                                                        CORPORATE
PER: /S/ MONICA BYNOE                                      SEAL
     --------------------------------                     OF THE
                                                    CIBC MELLON TRUST
                                                         COMPANY
PER: /S/ STEVE GILBERT
     --------------------------------


                                                                              32
<PAGE>
                                                                      SCHEDULE 1

                           FORM OF RIGHTS CERTIFICATE

Certificate No. ____________                                 ____________ Rights

     THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE CORPORATION, ON
     THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT. UNDER CERTAIN
     CIRCUMSTANCES (SPECIFIED IN SECTION 3.01(2) OF THE SHAREHOLDER RIGHTS
     AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
     ARE DEFINED IN THE SHAREHOLDER RIGHTS AGREEMENT) OR TRANSFEREES OF AN
     ACQUIRING PERSON MAY BECOME VOID.

                               RIGHTS CERTIFICATE

This certifies that _________________________________________________________,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Shareholder Rights Agreement made as
of (the "Rights Agreement") between Novelis Inc., a corporation incorporated
under the laws of Canada (the "Corporation") and CIBC Mellon Trust Company, a
trust company incorporated under the laws of Canada, as Rights Agent (the
"Rights Agent") (which term shall include any successor Rights Agent under the
Rights Agreement) to purchase from the Corporation at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on 1 may 2014 one fully paid Common Share in the capital
of the Corporation (a "Common Share") at the Exercise Price referred to below,
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed and submitted to the Rights Agent or
Co-Rights Agent at its principal office in any one of the Cities of Montreal,
Toronto, Winnipeg, Regina, Calgary or Vancouver. The Exercise Price shall
initially be $200 (U.S.) per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.

This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby 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 shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be, and under certain circumstances are required to be, redeemed
by the Corporation at a redemption price of $0.01 per Right. No holder of this
Rights Certificate, as such, shall be entitled to vote or receive dividends or
be deemed for any purpose the holder of Common Shares or of any other securities
which may at any time be issuable upon the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the


                                                                              33
<PAGE>
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.

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

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

Date:
      ------------------------------

ATTEST:

NOVELIS INC.


By:
    --------------------------------
    Secretary

    Countersigned:


    CIBC MELLON TRUST COMPANY


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


                                                                              34
<PAGE>
                               FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED _____________________________________________________________

hereby sells, assigns and transfers unto _______________________________________


--------------------------------------------------------------------------------
                  (Please print name and address of transferee)

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


Dated:
       ------------------               ----------------------------------------
                                                        Signature

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

Signature must be guaranteed by a major Canadian trust company, a Schedule I
Canadian chartered bank, or a member of a recognized Medallion Guarantee
program.

-------------------------------------
                            (To be completed if true)

The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the best of the knowledge of the undersigned, never have been,
Beneficially Owned by an Acquiring Person (as defined in the Rights Agreement)
after such person became an Acquiring Person.


                                        ----------------------------------------
                                                        Signature


                                                                              35
<PAGE>
                          FORM OF ELECTION TO EXERCISE

                   (To be attached to each Rights Certificate)

TO:

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 shares be issued in the name of:

Name:
      ---------------------

Street:
        ------------------------------------------------------------------------

City, Province & Postal Code:
                              --------------------------------------------------

Social Insurance, Social Security or
Other Taxpayer Identification Number:
                                      ------------------------------------------

If such number of Rights shall not be 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:
      --------------------------------------------------------------------------

Street:
        ------------------------------------------------------------------------

City, Province & Postal Code:
                              --------------------------------------------------

Social lnsurance, Social Security or
Other Taxpayer Identification Number:
                                      ------------------------------------------


Dated:
       ------------------               ----------------------------------------
                                                        Signature

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

Signature must be guaranteed by a major Canadian trust company, a Schedule I
Canadian chartered bank, or a member of a recognized Medallion Guarantee
program.

--------------------------------------------------------------------------------
                            (To be completed if true)

The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the best of the knowledge of the undersigned, never have been,
Beneficially Owned by an Acquiring Person (as defined in the Rights Agreement)
after such person became an Acquiring Person.


                                        ----------------------------------------
                                                        Signature


                                                                              36
<PAGE>
                                     NOTICE

In the event the certification set forth above in the Forms of Assignment and
Election is not completed, the Corporation will deem the Beneficial Owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Shareholder Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Rights Certificate issued in exchange for this Rights Certificate.


                                                                              37