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EVOLVING GOLD CORP.

and

PACIFIC CORPORATE TRUST COMPANY

as Rights Agent

|                                 
|---------------------------------
|                                 
|SHAREHOLDER RIGHTS PLAN AGREEMENT
|                                 
|DATED                            
|                                 
|Dated Effective January 23, 2008 
|                                 

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TABLE OF CONTENTS

|                                                                            | Page
|--------------------------------------------------------------------------- | ----
|                                                                            |     
|PART
      1 INTERPRETATION                                                 | 2   
|CERTAIN
      DEFINITIONS                                                   | 2   
|CURRENCY                                                                    | 14  
|HEADINGS                                                                    | 14  
|NUMBER
      AND GENDER                                                     | 15  
|ACTING
      JOINTLY OR IN CONCERT                                          | 15  
|STATUTORY
      REFERENCES                                                  | 15  
|HOLDER                                                                      | 15  
|CALCULATION
      OF VOTING SHARE PERCENTAGE                                | 15  
|INTERPRETATION                                                              | 15  
|                                                                            |     
|PART
      2 THE RIGHTS                                                     | 16  
|LEGEND
      ON VOTING SHARE CERTIFICATES                                   | 16  
|INITIAL
      EXERCISE PRICE                                                | 17  
|RIGHTS
      NOT EXERCISABLE UNTIL SEPARATION TIME                          | 17  
|MAILING
      OF RIGHTS CERTIFICATES AND DISCLOSURE STATEMENT               | 17  
|EXERCISE
      OF RIGHTS                                                    | 18  
|DUTIES
      OF RIGHTS AGENT UPON RECEIPT OF ELECTION TO EXERCISE           | 18  
|PARTIAL
      EXERCISE OF RIGHTS                                            | 19  
|DUTIES
      OF THE CORPORATION                                             | 19  
|ADJUSTMENTS
      TO EXERCISE PRICE; NUMBER OF RIGHTS                       | 20  
|DATE
      ON WHICH EXERCISE IS EFFECTIVE                                   | 26  
|EXECUTION
      OF RIGHTS CERTIFICATES                                      | 26  
|AUTHENTICATION
      OF RIGHTS CERTIFICATES                                 | 26  
|DATING
      OF RIGHTS CERTIFICATES                                         | 26  
|REGISTER
      OF RIGHTS                                                    | 26  
|TRANSFERS
      AND EXCHANGES                                               | 27  
|MUTILATED
      RIGHTS CERTIFICATES                                         | 27  
|DESTROYED,
      LOST AND STOLEN RIGHTS CERTIFICATES                        | 27  
|REPLACEMENT
      FEE                                                       | 28  
|VALIDITY
      OF REPLACEMENT RIGHTS CERTIFICATES                           | 28  
|PERSONS
      DEEMED OWNERS                                                 | 28  
|DELIVERY
      AND CANCELLATION OF RIGHTS CERTIFICATES                      | 28  
|AGREEMENT
      OF RIGHTS HOLDERS                                           | 28  
|RIGHTS
      CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER                    | 29  
|                                                                            |     
|PART
      3 ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS | 30  
|FLIP-IN
      EVENT                                                         | 30  
|CANCELLATION
      OF RIGHTS HELD BY AN ACQUIRING PARTY                     | 30  
|LEGEND
      ON RIGHTS CERTIFICATES TRANSFERRED BY AN ACQUIRING PARTY       | 31  
|                                                                            |     
|PART
      4 THE RIGHTS AGENT                                               | 31  
|APPOINTMENT
      OF RIGHTS AGENT                                           | 31  
|PROTECTION
      OF RIGHTS AGENT                                            | 32  
|RIGHTS
      AGENT TO BE KEPT INFORMED                                      | 32  
|MERGER
      OR AMALGAMATION OR CHANGE OF NAME OF RIGHTS AGENT              | 32  
|COUNTERSIGNING
      OF RIGHTS CERTIFICATES                                 | 32  
|DUTIES
      OF RIGHTS AGENT                                                | 33  
|CHANGE
      OF RIGHTS AGENT                                                | 34  

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- ii -

|PART
      5 MISCELLANEOUS                                 | 35
|---------------------------------------------------------- | --
|                                                           |   
|REDEMPTION
      AND WAIVER                                | 35
|EXPIRATION                                                 | 37
|ISSUANCE
      OF NEW RIGHT CERTIFICATES                   | 37
|SUPPLEMENTS
      AND AMENDMENTS                           | 37
|TIMING
      OF CERTAIN APPROVALS OF THE SHAREHOLDERS      | 38
|EFFECTIVE
      TIME OF SUPPLEMENTS AND AMENDMENTS         | 38
|APPROVALS
      OF AMENDMENTS BY RIGHTS AGENT              | 39
|FRACTIONAL
      RIGHTS AND FRACTIONAL SHARES              | 39
|RIGHTS
      OF ACTION                                     | 39
|NOTICE
      OF PROPOSED ACTIONS                           | 40
|NOTICES                                                    | 40
|SUCCESSORS                                                 | 40
|BENEFITS
      OF THIS AGREEMENT                           | 41
|GOVERNING
      LAW                                        | 41
|SEVERABILITY                                               | 41
|EFFECTIVE
      DATE                                       | 41
|DETERMINATIONS
      AND ACTIONS BY THE BOARD OF DIRECTORS | 41
|RIGHTS
      OF BOARD, CORPORATION AND OFFEROR             | 41
|REGULATORY
      APPROVALS                                 | 42
|DECLARATION
      AS TO NON-CANADIAN HOLDERS               | 42
|TIME
      OF THE ESSENCE                                  | 42
|COMPLIANCE
      WITH MONEY LAUNDERING LEGISLATION         | 42
|PRIVACY
      PROVISION                                    | 42
|EXECUTION
      IN COUNTERPARTS                            | 43

|Exhibits    |                                                                                                    
|----------- | ---------------------------------------------------------------------------------------------------
|Exhibit A - | Form of Rights Certificate (and
      attached Form of Election to Exercise and Form of Assignment)

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SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS AGREEMENTis dated effective January 23, 2008

BETWEEN:

EVOLVING GOLD CORP., a
corporation incorporated under the laws of Canada with an address for
mailing at 725 - 666 Burrard Street, Vancouver, British Columbia, V6C
2X8

(the Corporation)

AND:

PACIFIC CORPORATE TRUST
COMPANY, a trust company incorporated under the laws of British
Columbia, as Rights Agent, which term shall include any successor Rights
Agent hereunder with an address for mailing at 510 Burrard Street,
2nd Floor, Vancouver, British Columbia, V6C 3B9

(the Rights Agent)

WHEREAS:

(A) The Board of Directors of the Corporation has determined
that it is advisable and in the best interests of the Corporation and its
shareholders to adopt a shareholder rights plan (the Rights Plan) to
ensure, to the extent possible, that all shareholders of the Corporation are
treated fairly in connection with any take-over bid for the Corporation;

(B) In order to implement the adoption of the Rights Plan, the
Board of Directors has, subject to receipt of shareholder and regulatory
approval:

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

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

(C) Each Right entitles the holder thereof, after the
Separation Time, to purchase securities of the Corporation pursuant to the terms
and subject to the conditions set forth herein; and

(D) The Corporation desires to appoint the Rights Agent to act
on behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer,

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exchange and replacement of Rights Certificates, the exercise
of Rights, and other matters referred to herein;

NOW THEREFORE in consideration of the premises and the
respective covenants and agreements set forth herein the parties agree as
follows:

PART 1

INTERPRETATION

Certain Definitions

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

(a) 1933 Securities Act
means the Securities Act of 1933 of the United States of America, as amended,
and the rules and regulations thereunder, and any comparable or successor laws
or regulations thereto;

(b) 1934 Exchange Act
means the Securities Exchange Act of 1934 of the United States of America, as
amended, and the rules and regulations thereunder, and any comparable or
successor laws or regulations thereto;

(c) Acquiring Person means,
any Person who is the Beneficial Owner of 20% or more of the outstanding Voting
Shares, save and except that the term Acquiring Person will not include:

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

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

(A) Corporate Acquisitions,

(B) Permitted Bid Acquisitions,

(C) Corporate Distributions,

(D) Exempt Acquisitions, or

(E) Convertible Security
Acquisitions;

(each an Exempt
Transaction),

provided, however, that if a Person
becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares by
reason of one or more or any combination of Exempt Transactions and, after such
becomes the Beneficial

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Owner of an additional 1% or more of
the outstanding Voting Shares, other than pursuant to an Exempt Transaction,
such Person will, as at such time, become an Acquiring Person;

(iii) a Grandfathered Person provided,
however, that if such person becomes, after the Record Time, the Beneficial
Owner of more than an additional 1% of the number of Voting Shares outstanding,
other than pursuant to Corporate Acquisitions, Permitted Bid Acquisitions,
Corporate Distributions, Exempt Acquisitions or Convertible Security
Acquisitions, such Person will as of the date of such acquisition become an
Acquiring Person;

(iv) for a period of 10 days after the
Disqualification Date, any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of such Person becoming
disqualified from relying on §1.1(g)(vi) or §1.1(g)(viii) solely because such
Person makes or proposes to make a Take-over Bid in respect of securities of the
Corporation alone or by acting jointly or in concert with any other Person;
and

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

(d) Affiliate when used to
indicate a relationship with a specified Person, means a Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such specified Person and a body corporate will
be deemed to be an Affiliate of another body corporate if one of them is the
Subsidiary of the other or if both are Subsidiaries of the same body corporate
or if each of them is controlled by the same Person;

(e) Agreement means this
agreement as amended, modified or supplemented from time to time;

(f) Associate when used to
indicate a relationship with a specified Person, means

(i) a spouse of such specified
Person,

(ii) any Person of either sex with
whom such specified Person is living in a conjugal relationship outside
marriage, or

(iii) any relative of such specified
Person or of a Person mentioned in §(i) or §(ii) of this definition if that
relative has the same residence as the specified Person;

(g) a Person will be deemed the
Beneficial Owner, and to have Beneficial Ownership of, and to
Beneficially Own:

(i) any securities of which such
Person or any Affiliate or Associate of such Person is the owner in law or
equity,

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(ii) any securities as to which such
Person or any of such Persons Affiliates or Associates has the right to become
the owner at law or in equity (whether such right is exercisable immediately or
within a period of 60 days thereafter and whether or not on condition or the
happening of any contingency or the making of any payment) pursuant to any
agreement, arrangement, pledge or understanding, whether or not in writing
(other than customary agreements with and between underwriters and banking group
or selling group members with respect to a distribution of securities or
pursuant to a pledge of securities in the ordinary course of business), or upon
the exercise of any conversion right, exchange right, share purchase right
(other than a Right), warrant or option, and

(iii) any securities that are
Beneficially Owned within the meaning of §1.1(g)(i) or (ii) by any other Person
with whom such Person is acting jointly or in concert;

provided, however, that a Person will
not be deemed to be the Beneficial Owner, or to have Beneficial
Ownership of, or to Beneficially Own, any security by reason
of:

(iv) such security having been
deposited or tendered pursuant to a Take-over Bid made by such Person or any of
such Persons Affiliates or Associates or made by any other Person acting
jointly or in concert with such Person, unless such deposited or tendered
security has been accepted unconditionally for payment or exchange or has been
taken up or paid for, whichever occurs first; or

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

(vi) such Person or any Affiliate or
Associate of such Person or any other Person acting jointly or in concert with
such Person, holding such security, in circumstances where:

(A) the ordinary business of the
Person (the Fund Manager) includes the management of investment funds
for others and such security is held by the Fund Manager in the ordinary course
of such business in the performance of such Fund Managers duties for the
account of any other Person (a Client), or

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

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(C) the ordinary business or activity
of such Person includes acting as an agent of the Crown in the management of
public assets (the Crown Agent), or

(D) the Person is the administrator or
the trustee of one or more pension funds, plans or related trusts (each a
Pension Fund) registered or qualified under the laws of Canada or any
province thereof or the laws of the United States or any state thereof (the
Independent Person), or is a Pension Fund, and holds such securities
for the purposes of its activities as an Independent Person or as a Pension
Fund, or

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

and provided that the Fund Manager,
the Trust Company, the Crown Agent, the Independent Person, the Pension Fund or
the Statutory Body, as the case may be, does not make or propose to make a
Take-over Bid in respect of securities of the Corporation alone or by acting
jointly or in concert with any other Person (other than 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); or

(vii) such Person being a Client of
the same Fund Manager as another Person on whose account the Fund Manager holds
such security, or such Person being an Estate Account or an Other Account of the
same Trust Company as another Person on whose account the Trust Company holds
such security, or such Person being a Pension Fund with the same Independent
Person as another Pension Fund;

(viii) such Person being a Client of a
Fund Manager and such security is owned at law or in equity by the Fund Manager,
or such Person being 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 such
Person being a Pension Fund and such security is owned at law or in equity by
the Independent Person; or

(ix) such Person being a registered
holder of securities as a result of carrying on the business of, or acting as
the nominee of, a securities depository;

(h) Board of Directors means,
at any time, the duly constituted board of directors of the Corporation;

(i) Business Day means any day
other than a Saturday, Sunday or a day on which banking institutions in
Vancouver, British Columbia are authorized or obligated by law to close;

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

(k) Canadian-U.S. Exchange
Rate means, on any date, the inverse of the U.S.-Canadian Exchange
Rate;

(l) close of business on any
given day means the time on such day (or, if such day is not a Business Day, the
time on the next succeeding Business Day) at which the office of the transfer
agent for the Common Shares in Vancouver, British Columbia (or, after the
Separation Time, the office of the Rights Agent in Vancouver, British Columbia)
is closed to the public;

(m) Common Shares means the
common shares in the capital of the Corporation;

(n) Competing Permitted Bid
means a Take-over Bid that is made while another Permitted Bid or Competing
Permitted Bid is in existence and that satisfies all of the components of the
definition of a Permitted Bid, except that the requirements set out in §(ii) of
the definition of a Permitted Bid will be satisfied if the Competing Permitted
Bid contains, and the take up and payment for securities tendered or deposited
thereunder will be subject to, an irrevocable and unqualified condition that no
Voting Shares will be taken up or paid for pursuant to the Competing Permitted
Bid prior to the close of business on the day that is no earlier than the later
of 35 days after the date the Competing Permitted Bid is made and the earliest
date on which Voting Shares may be taken up or paid for under any other
Permitted Bid then in existence at the date of such Competing Permitted Bid and
only if at the time when Voting Shares are first taken up and paid for under the
Competing Permitted Bid, more than 50% of the then outstanding Voting Shares
held by Independent Shareholders have been deposited to the Competing Permitted
Bid and not withdrawn;

(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 for the benefit of the other
Person or Persons acting jointly or in concert with it; and

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

and controls,
controlling and under common control with will be interpreted
accordingly;

(p) Convertible Security means
at any time;

(i) any right (regardless of whether
such right constitutes a security); or

(ii) any security issued by the
Corporation (other than the Rights);

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

(q) Convertible Security
Acquisition means the acquisition of Voting Shares upon the exercise of
Convertible Securities received by a Person pursuant to a Permitted Bid
Acquisition, an Exempt Acquisition or a Corporate Distribution;

(r) Corporate Acquisition
means an acquisition by the Corporation or a Subsidiary of the Corporation of
Voting Shares which by reducing the number of outstanding Voting Shares,
increases the proportionate number of Voting Shares Beneficially Owned by any
Person;

(s) Corporate Distribution
means:

(i) a stock dividend or a stock split
or other event pursuant to which a Person receives or acquires Voting Shares or
Convertible Securities on the same pro rata basis as all other holders of Voting
Shares of the same class, or

(ii) any other event pursuant to which
all holders of Voting Shares are entitled to receive Voting Shares or
Convertible Securities on a pro rata basis, including, without limiting the
generality of the foregoing, pursuant to the receipt or exercise of rights
issued by the Corporation and distributed to all the holders of a series or
class of Voting Shares to subscribe for or purchase Voting Shares or Convertible
Securities, provided that such rights are acquired directly from the Corporation
and not from any other Person;

(t) Corporations Act means the
Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended, and
the regulations made thereunder, and any comparable or successor laws or
regulations thereto;

(u) Disqualification Date in
respect of a Person means the first date that a public announcement is made
indicating that the Person has or is making or has announced an intention to
make, a Take-over Bid alone or by acting jointly or in concert with any other
Person;

(v) Election to Exercise has
the meaning ascribed thereto in §2.5(a);

(w) Exempt Acquisition means
an acquisition of Voting Shares:

(i) in respect of which the Board of
Directors has waived the application of §3.1 pursuant to the provisions of
§5.1(b), §5.1(c) or §5.1(d), or

(ii) pursuant to a dividend
reinvestment plan of the Corporation, or

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(iii) pursuant to a distribution to
the public by the Corporation of Voting Shares or Convertible Securities made
pursuant to a prospectus, or pursuant to a distribution by the Corporation of
Voting Shares or Convertible Securities by way of a private placement by the
Corporation or upon the exercise by an individual employee or director of stock
options granted under a stock option plan of the Corporation or rights to
purchase securities granted under a share purchase plan of the Corporation,
provided that all necessary stock exchange approvals for such private placement,
stock option plan or share purchase plan have been obtained and such private
placement, stock option plan or share purchase plan complies with the terms and
conditions of such approvals and such Person does not become the Beneficial
owner of more than 25% of the Voting Shares outstanding immediately prior to the
distribution and in making this determination the Voting Shares to be issued to
such Person in the distribution will be deemed to be held by such Person but
will not be included in the aggregate number of outstanding Voting Shares
immediately prior to the distribution;

(x) Exercise Price means, as
of any date, the price at which a holder may purchase the securities
issuable upon exercise of one whole Right. Until adjustment or revision
thereof in accordance with the terms hereof, the Exercise Price will be
$100.00;

(y) Expiration Time means the
earlier of:

(i) the Termination Time, and

(ii) the close of business on the date
of the Corporations Annual Meeting of Shareholders that is held in 2011;

(z) Flip-in Event means a
transaction or event that results in a Person becoming an Acquiring Person;

(aa) Grandfathered Person
means any person who is the Beneficial Owner of 20% or more of the outstanding
Voting Shares as at the Record Time;

(bb) Independent Shareholders
means all holders of Voting Shares except for:

(i) an Acquiring Person,

(ii) an Offeror, other than a person
referred to in §1.1(g)(vi),

(iii) an Affiliate or Associate of
such Acquiring Person or such Offeror,

(iv) a Person acting jointly or in
concert with such Acquiring Person or such Offeror, and

(v) an employee benefit plan, stock
purchase plan, deferred profit sharing plan or any similar plan or trust for the
benefit of employees of the Corporation or a Subsidiary of the Corporation,
unless the beneficiaries of any such plan or trust

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- 9 -

direct the manner in which the Voting
Shares are to be voted or withheld from voting or direct whether the Voting
Shares are to be tendered to a Take-over Bid;

(cc) Market Price per security
of any securities on any date of determination means the average of the daily
closing prices per security of such securities (determined as described below)
on each of the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event of a type
analogous to any of the events described in §2.9 has caused the closing prices
used to determine the Market Price on any Trading Days not to be fully
comparable with the closing price on such date 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 will be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in §2.9 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 security of a security on a specified date will
be

(i) the closing board lot sale price
on the date or, if such price is not available, the average of the closing bid
and asked prices on the date, for the security as reported by the TSX Venture
Exchange, or

(ii) if for any reason such price is
not available on such day or the securities are not listed or admitted to
trading on the TSX Venture Exchange, the closing board lot sale price on the
date, or if such price is not available, the average of the closing bid and
asked prices on the date, for the security as reported by the principal stock
exchange in Canada, or if none exists, in the United States, on which the
security is primarily traded, or

(iii) if not so listed, the last
quoted price on the date, or if not so quoted, the average of the high bid and
low asked prices on the date, for the security in the over-the-counter market,
as reported by Nasdaq or, if the securities are not quoted on Nasdaq, as
reported by such other system then in use, 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 on the date as furnished by a professional market maker
making a market in the security as selected by the Board of Directors; provided,
however, that if on any such date the security is not traded in the
over-the-counter market, the closing price per security on such date will mean
the fair value per security on such date as determined by a nationally or
internationally recognized investment dealer or investment banker.

The Market Price will be expressed in
Canadian dollars. If the price for the security on any day forming part of the
20 consecutive Trading Day period is in United States dollars, such amount will
be translated into Canadian dollars at the Canadian Dollar Equivalent
thereof;

(dd) Nasdaq means The NASDAQ
SmallCap Market;

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- 10 -

(ee) Offer to Acquire
means:

(i) an offer to purchase, a public
announcement of an intention to make 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 will be deemed to be making an Offer to
Acquire to the Person that made the offer to sell;

(ff) Offeror means a Person
who has announced a current intention to make, or who makes and has outstanding,
a Take-over Bid;

(gg) Offerors Securities
means the aggregate of Voting Shares and Convertible Securities Beneficially
Owned by a Person on the date upon which it becomes an Offeror;

(hh) Outstanding Voting Shares
means that number of Common Shares, or other Voting Shares, which are issued and
outstanding at the time of a Flip-in Event on a fully-diluted basis and, for
more certainty, includes without limitation all outstanding options, warrants,
rights or other securities (excluding the Rights) convertible into Common Shares
or other Voting Shares to be issued from treasury at the time of a Flip-in
Event;

(ii) Permitted Bid means a
Take-over Bid made by an Offeror which is made by means of a Take-over Bid
circular and which:

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

(ii) contains, and the take up and
payment for securities tendered or deposited thereunder will be subject to, an
irrevocable and unqualified condition that no Voting Shares will be taken up or
paid for pursuant to the Take-over Bid prior to the close of business on the
date which is not less than 60 days following the date the Take-over Bid
circular is sent to shareholders of the Corporation and that no Voting Shares
will be taken up or paid for pursuant to the Take-over Bid unless, at such date,
more than 50% of the then outstanding Voting Shares held by Independent
Shareholders have been deposited to the Take-over Bid and not withdrawn;

(iii) contains an irrevocable and
unqualified provision that, unless the Take-over Bid is withdrawn, Voting Shares
of the Corporation may be deposited pursuant to the Take-over Bid at any time
during the period of time described in §1.1(ii)(ii) and that any Voting Shares
deposited pursuant to the Take-over Bid may be withdrawn at any time until taken
up and paid for; and

(iv) contains an irrevocable and
unqualified provision that provides upon the condition referred to in
§1.1(ii)(ii) being satisfied, the Offeror will make a public announcement of
that fact on the date the Take-over Bid would otherwise expire

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and the Take-over Bid will be extended
for a period of not less than 10 Business Days from the date it would otherwise
expire;

(jj) Permitted Bid Acquisition
means the acquisition of Voting Shares made pursuant to a Permitted Bid or a
Competing Permitted Bid;

(kk) Permitted 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 or
Convertible Securities 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 (the Lock-up Bid), where,

(i) the agreement,

(A) permits the Locked-up Person to
withdraw the Voting Shares or Convertible Securities from the agreement in order
to tender or deposit them to another Take-over Bid or to support another
transaction, that provides for a consideration for each Voting Share or
Convertible Security that is higher than the consideration contained in or
proposed to be contained in and is made for at least the same number of Voting
Shares or Convertible Securities as, the Lock-up Bid; or

(B) permits the Locked-up Person to
withdraw its Voting Shares or Convertible Securities from the agreement in order
to tender or deposit them to another Take-over Bid or to support another
transaction, that provides for a consideration for each Voting Shares or
Convertible Security that exceeds by as much as or more than a specified amount
(the Specified Amount) the consideration for each Voting Share or
Convertible Security contained in and is made for at least the same number of
Voting Shares and Convertible Securities as, the Lock-up Bid and does not by its
terms provide for a Specified Amount that is greater than 7% over the
consideration for each Voting Share or Convertible Security contained in the
Lock-up Bid;

and, for greater certainty, the
agreement may contain a right of first refusal or require a period of delay to
give the Offeror an opportunity to at least match a higher consideration payable
under another Take-over Bid or transaction or other similar limitation on a
Locked-up Persons right to withdraw Voting Shares or Convertible Securities
from the agreement and not tender such to the Lock-up Bid, so long as the
limitation does preclude the exercise by the Locked-up Person of the right to
withdraw Voting Shares or Convertible Securities in sufficient time to tender to
the other Take-over Bid or participate in the other transaction;

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(ii) the agreement does not provide
for any break-up fees, top-up fees, penalties, expense reimbursement or
other amounts that exceed in the aggregate the greater of:

(A) the cash equivalent of 2.5% of the
consideration payable under the Lock-up Bid to the Locked-up Person; and

(B) 50% of the amount by which the
consideration payable under another Take-over Bid or transaction to a Locked-up
Person exceeds the consideration that such Locked-up Person would have received
under the Lock-up Bid;

to be paid by a Locked-up Person
pursuant to the Lock-up Agreement in the event that the Locked-up Persons fails
to deposit or tender Voting Shares or Convertible Securities to the Take-over
Bid or withdraws such in order to tender to another Take-over Bid or participate
in another transaction;

(ll) Person means any
individual, firm, partnership, association, trust, trustee, executor,
administrator, legal or personal representative, government, governmental body,
entity or authority, group, body corporate, corporation, unincorporated
organization or association, syndicate, joint venture or any other entity,
whether or not having legal personality, and any of the foregoing in any
derivative, representative or fiduciary capacity, and pronouns have a similar
extended meaning;

(mm) Privacy Laws has the
meaning ascribed thereto in §5.23;

(nn) Record Time means 4:00
p.m. (Vancouver time) on March 20, 2008;

(oo) Redemption Price has the
meaning ascribed thereto in §5.1(a);

(pp) Regular periodic cash
dividends means cash dividends paid at regular intervals in any fiscal year
of the Corporation to the extent that such cash dividends do not exceed, in the
aggregate, the greatest of

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

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

(qq) Right means a right
issued pursuant to this Agreement;

(rr) Rights Certificate has
the meaning ascribed thereto in §2.4(a);

(ss) Rights Plan has the
meaning ascribed thereto in Recital (A);

(tt) Rights Register has the
meaning ascribed thereto in §2.14;

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(uu) Securities
Act(British Columbia) means theSecurities Act, R.S.B.C.
1996, c.418, as amended, and the regulations, rules, policies and notices
thereunder, and any comparable or successor laws, regulations, rules, policies
or notices thereto;

(vv) Securities Act(Ontario) means the Securities Act, R.S.O. 1990, c. S.5, as amended, and
the regulations, rules, policies, and notices thereunder, and any comparable or
successor laws, regulations, rules, policies or notices thereto;

(ww) Separation Time means
4:00 p.m. (Vancouver time) on the 10th Trading Day after the earlier
of:

(i) the Stock Acquisition Date,

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

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

or such later date as may be determined
by the Board of Directors provided that, if any such Take-over Bid expires, is
cancelled, terminated or otherwise withdrawn prior to the Separation Time, such
Take-over Bid will be deemed, for the purposes of this definition, never to have
been made and provided further that if the Board of Directors determines
pursuant to §5.1(b), §5.1(c) or §5.1(d) to waive the application of §3.1 to a
Flip-in Event, the Separation Time in respect of such Flip-in Event will be
deemed never to have occurred;

(xx) Stock Acquisition Date
means the first date of public announcement (which, for purposes of this
definition, will include, without limitation, a report filed pursuant to §101 of
the Securities Act (Ontario) or §111 of the Securities Act
(British Columbia)) by the Corporation or an Offeror or Acquiring Person, that a
Person has become an Acquiring Person;

(yy) Subsidiary a corporation
will be deemed to be a Subsidiary of another corporation if:

(i) it is controlled by:

(A) that other; or

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

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

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(ii) it is a Subsidiary of a
corporation that is that others Subsidiary;

(zz) Take-over Bid means an
Offer to Acquire Voting Shares or Convertible Securities where the Voting Shares
subject to the Offer to Acquire, together with the Voting Shares into which the
Convertible Securities are convertible, exchangeable or exercisable, and the
Offerors Securities, constitute in the aggregate 20% or more of the outstanding
Voting Shares at the date of the Offer to Acquire;

(aaa) Termination Time means
the time at which the right to exercise Rights will terminate pursuant to
§5.1(a), §5.1(e) or §5.16;

(bbb) Trading Day, when used
with respect to any securities, means a day on which the principal Canadian
stock exchange or American stock exchange or market on which such securities are
listed or admitted to trading is open for the transaction of business or, if the
securities are not listed or admitted to trading on any Canadian stock exchange
or American stock exchange or market, a Business Day;

(ccc) Transferee has the
meaning ascribed thereto in §3.2(b); (ddd) U.S. means the United States
of America; (eee) U.S.-Canadian Exchange Rate means on any date:

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

(ii) in any other case, the rate for
such date for the conversion of one United States dollar into Canadian dollars
which is calculated in the manner which will be determined by the Board of
Directors from time to time acting in good faith; and

(fff) Voting Shares means the
Common Shares and any other shares in the capital of the Corporation entitled to
vote generally in the election of all directors of the Corporation.

Currency

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

Headings

1.3 The division of this Agreement into Articles, Sections,
Subsections, Clauses and Subclauses and the insertion of headings, subheadings
and a table of contents are for convenience of reference only and will not
affect the construction or interpretation of this Agreement.

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Number and Gender

1.4 Wherever the context so requires, terms used herein
importing the singular number only will include the plural and vice-versa and
words importing only one gender will include all others.

Acting Jointly or in Concert

1.5 For the purposes of this Agreement, a Person is acting
jointly or in concert with every Person who is a party to an agreement,
commitment or understanding, whether formal or informal, with the first Person
or any Associate or Affiliate of such Person to acquire or make directly or
indirectly an Offer to Acquire Voting Shares of the Corporation (other than
customary agreements with and between underwriters or banking group members or
selling group members with respect to a distribution of securities or to a
pledge of securities in the ordinary course of business).

Statutory References

1.6 Unless the context otherwise requires or except as
expressly provided herein, any reference herein to a specific part, section,
subsection, clause or rule of any statute or regulation will be deemed to refer
to the same as it may be amended, re-enacted or replaced or, if repealed and
there will be no replacement therefore, to the same as it is in effect on the
date of this Agreement.

Holder

1.7 As used in this Agreement, unless the context otherwise
requires, the term holder when used with reference to Rights, means the
registered holder of such Rights or, prior to the Separation Time, the
associated Voting Shares.

Calculation of Voting Share Percentage

1.8 For purposes of this Agreement, the percentage of Voting
Shares Beneficially Owned by any Person, will be and be deemed to be the product
of 100 and the number of which the numerator is the number of votes for the
election of all directors generally attaching to the Voting Shares and
Convertible Securities Beneficially Owned by such Person and the denominator of
which is the number of votes for the election of all directors generally
attaching to all outstanding Voting Shares and Convertible Securities. Where any
Person is deemed to Beneficially Own unissued Voting Shares, such Voting Shares
will be deemed to be issued and outstanding for the purpose of calculating the
percentage of Voting Shares Beneficially Owned by such Person.

Interpretation

1.9 For the purposes of this Agreement, except as otherwise
expressly provided herein:

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(a) the symbol § followed by a number
or some combination of numbers and letters refers to the section, paragraph,
subparagraph, clause or subclause of this Agreement so designated;

(b) the word or is not exclusive and
the word including is not limiting (whether or not non-limiting language such
as without limitation or but not limited to or other words of similar import
is used with reference thereto); and

(c) a reference to a corporate entity
includes and is also a reference to any corporate entity that is a successor to
such entity.

PART 2

THE RIGHTS

Legend on Voting Share Certificates

2.1 Certificates:

(a) issued for Voting Shares after the
Record Time but prior to the close of business on the earlier of the Separation
Time and the Expiration Time will evidence one Right for each Voting Share
represented thereby and will have impressed on, printed on, written on or
otherwise affixed to them, a legend in substantially the following form:

Until the Separation Time (as defined
in the Rights Plan referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a Shareholder
Rights Plan Agreement, dated as of January 23, 2008 (the Rights Plan),
between Evolving Gold Corp. (the Corporation) and Pacific Corporate
Trust Company, as rights agent (the Rights Agent), the terms of which
are hereby incorporated herein by reference and a copy of which is on file at
the principal executive office of the Corporation. Under certain circumstances,
as set forth in the Rights Plan, such Rights may be amended or redeemed, may
expire, may become null and void (if, in certain cases, they are issued to or
Beneficially Owned by any Person who is, was or becomes an
Acquiring Person, as such terms are defined in the Rights Plan, whether
currently held by or on behalf of such Person or any subsequent holder) or may
be evidenced by separate certificates and may no longer be evidenced by this
certificate. The Corporation will mail or arrange for the mailing of a copy of
the Rights Plan to the holder of this certificate without charge upon receipt of
a written request therefor.,

and

(b) representing Voting Shares that are
issued and outstanding at the Record Time will evidence one Right for each
Voting Share evidenced thereby, notwithstanding the absence of the foregoing
legend until the earlier of the Separation Time and the Expiration Time.

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Initial Exercise Price

2.2 Subject to adjustment as herein set forth and subject to
§3.1, each Right, save and except those held by the Corporation and any of its
Subsidiaries which will be void, will entitle the holder thereof, from and after
the Separation Time and prior to the Expiration Time, to purchase, for the
Exercise Price as at the Business Day immediately preceding the date of exercise
of the Right, one Common Share.

Rights Not Exercisable Until Separation Time

2.3 Until the Separation Time:

(a) the Rights will not be exercisable,
and

(b) for administrative purposes each
Right will be evidenced by the certificates for the associated Voting Shares
registered in the names of the holders thereof (which certificates will also be
deemed to be Rights Certificates) and will be transferable only together with,
and will be transferred by a transfer of, such associated Voting Shares.

Mailing of Rights Certificates and Disclosure
Statement

2.4 From and after the Separation Time and prior to the
Expiration Time, the Rights may be exercised, and will be registered and
transferable independently of Voting Shares. Promptly following the Separation
Time, the Corporation will prepare and the Rights Agent will mail to each holder
of record of Rights as of the Separation Time (other than an Acquiring Person,
any other Person whose Rights are or become void pursuant to the provisions of
§3.2 and, in respect of any Rights Beneficially Owned by such Acquiring Person
which are not held of record by such Acquiring Person, the holder of record of
such Rights) at such holders address as shown by the records of the Corporation
(the Corporation hereby agreeing to furnish copies of such records to the Rights
Agent for this purpose),

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

(b) a disclosure statement describing
the Rights,

provided that a nominee will be sent the materials provided for
in this §2.4 in respect of all Voting Shares held of record by it which are not
Beneficially Owned by an Acquiring Person. In order for the Corporation to
determine whether any Person is holding Voting Shares which are Beneficially
Owned by another Person, the Corporation may require such first mentioned Person
to furnish it with such information and documentation as the Corporation
considers advisable.

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Exercise of Rights

2.5 Rights may be exercised in whole at any time or in part
from time to time on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent, at its office in Vancouver,
British Columbia, Canada or at any other office of the Rights Agent or any
Co-Rights Agent in the cities specified in the Rights Certificate or designated
from time to time for that purpose by the Corporation after consultation with
the Rights Agent:

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

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

Duties of Rights Agent Upon Receipt of Election to
Exercise

2.6 Upon receipt of a Rights Certificate, which is accompanied
by a completed Election to Exercise that does not indicate that such Right is
null and void as provided by §3.2, and payment as set forth in §2.5(b), the
Rights Agent (unless otherwise instructed by the Corporation, if the Corporation
is of the opinion that the Rights cannot be exercised in accordance with this
Agreement) will thereupon promptly:

(a) requisition from the transfer agent
for the Voting Shares certificates representing the number of Voting Shares to
be purchased (the Corporation hereby irrevocably authorizing its transfer agent
to comply with all such requisitions);

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

(c) after receipt of the certificates
referred to in §2.6(a) above, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such registered holder;

(d) when appropriate, after receipt,
deliver the cash referred to in §2.6(b) above (less any amounts required to be
withheld) to or to the order of the registered holder of the Rights Certificate;
and

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

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Partial Exercise of Rights

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

Duties of the Corporation

2.8 The Corporation covenants and agrees that it will:

(a) take all reasonable action as may
be necessary on its part and within its power to ensure that all Common Shares
or other securities delivered upon exercise of Rights will, 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 and fully
paid and non-assessable;

(b) take all reasonable action as may
be necessary on its part and within its power to comply with any applicable
requirements of the Corporations Act, the Securities Act(British
Columbia), the Securities Act (Ontario), and any applicable comparable
securities legislation of each of the other provinces of Canada, the 1933
Securities Act, the 1934 Exchange Act and any other applicable law, rule or
regulation, in connection with the issuance and delivery of the Rights
Certificates and the issuance of any Common Shares or other securities upon
exercise of Rights. The Corporation may temporarily suspend, for a period of
time not to exceed 90 days, the exercisability of the Rights in order to prepare
and file any securities disclosure documents required by securities legislation
in respect of the issuance and delivery of the Rights Certificates and the
issuance of any Common Shares or other securities upon exercise of Rights. Upon
such suspension, the Corporation will issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect, in
each case with prompt written notice to the Rights Agent. Notwithstanding any
such provision of this Agreement to the contrary, the Rights will not be
exercisable in any jurisdiction unless the requisite qualification in such
jurisdiction has been obtained;

(c) use its reasonable efforts to
cause, from and after such time as the Rights become exercisable, all Common
Shares which may be issued upon the exercise thereof, to be listed on the
principal stock exchanges on which the Common Shares are traded;

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

(e) pay when due and payable any and
all Canadian and, if applicable, United States, federal, provincial and state
transfer taxes and charges (not including any income or capital taxes of the
holder or exercising holder or any liability of the Corporation to withhold tax)
which may be payable in respect of the original issuance or delivery of the
Rights Certificates, provided that the Corporation will not be required to pay
any transfer

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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 shares or other
securities in a name other than that of the registered holder of the Rights
being transferred or exercised.

Adjustments to Exercise Price; Number of Rights

2.9 The Exercise Price, the number and kind of Common Shares or
other 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 §2.9:

(a) if the Corporation at any time
after the Record Time,

(i) declares or pays a dividend on the
Voting Shares payable in Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or other securities)
other than the issue of Common Shares or such exchangeable or convertible
securities to holders of Common Shares in lieu of but not in an amount which
exceeds the value of regular periodic cash dividends;

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

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

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

the Exercise Price and the number of
Rights outstanding, or, if the payment or effective date therefore will occur
after the Separation Time, the securities purchasable upon exercise of Rights
will be adjusted in the manner set forth below. If an event occurs which would
require an adjustment under both this §2.9 and §3.1, the adjustment provided for
in this §2.9 will be in addition to, and will be made prior to, any adjustment
required under §3.1.

If the Exercise Price and number of
Rights are to be adjusted,

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

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(B) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the Voting
Shares with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision,
change, consolidation or issuance, so that each such Common Share (or other
capital stock) will have exactly one Right associated with it.

If the securities purchasable upon
exercise of Rights are to be adjusted, the securities purchasable upon exercise
of each Right after such adjustment will be the securities that a holder of the
securities purchasable upon exercise of one Right immediately prior to such
dividend, subdivision, change, consolidation or issuance would hold immediately
thereafter as a result thereof. To the extent that any such rights of exchange,
conversion or acquisition are not exercised prior to the expiration thereof, the
Exercise Price will be readjusted to the Exercise Price which would then be in
effect based upon the number of Common Shares (or securities convertible into or
exchangeable for Common Shares) actually issued upon the exercise of such
rights. If after the Record Time and prior to the Expiration Time the
Corporation issues any shares of its authorized capital other than Common Shares
in a transaction of a type described in §2.9(a)(i) and §2.9(a)(iv), such shares
will 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 agree to amend this Agreement in order to effect such
treatment.

If the Corporation, at any time after
the Record Time and prior to the Separation Time, issues any Voting Shares
otherwise than in a transaction referred to in this §2.9(a), each Voting Share
so issued will automatically have one new Right associated with it, which Right
will be evidenced by the certificate representing such share;

(b) if at any time after the Record
Time and prior to the Separation Time the Corporation fixes a record date for
the issuance of rights, options or warrants to all holders of Voting Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or shares having the same
rights, privileges and preferences as Common Shares (equivalent common
shares)) or securities convertible into or exchangeable for or carrying a
right to purchase Common Shares or equivalent common shares, at a price per
Common Share or per equivalent common share (or having a conversion price or
exchange price or exercise price per share, if a security convertible into or
exchangeable for or carrying a right to purchase Common Shares or equivalent
common shares) less than 90% of the Market Price per Common Share on such record
date, the Exercise Price will be adjusted as follows:

(i) the Exercise Price to be in effect
after such record date will equal the Exercise Price in effect immediately prior
to such record date multiplied by a fraction, the numerator of which will be the
number of Voting Shares outstanding on such record date, plus the number of
Common Shares that the aggregate offering price of the total number of Common
Shares and/or equivalent common

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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 so
to be offered) would purchase at such Market Price per Common Share, and the
denominator of which will be the number of Voting Shares outstanding on such
record date, plus the number of additional Common Shares and/or equivalent
common shares to be offered for subscription or purchase (or into which the
convertible or exchangeable securities are initially convertible, exchangeable
or exercisable);

(ii) if the Exercise Price may be paid
by delivery of consideration, part or all of which is in a form other than cash,
the value of such non-cash consideration will be as determined by the Board of
Directors, whose determination will be described in a certificate filed with the
Rights Agent and will be binding on the Rights Agent and the holders of the
Rights; and

(iii) such adjustment will be made
successively whenever such a record date is fixed, and in the event that such
rights or warrants are not so issued or if issued, are not exercised prior to
the expiration thereof, the Exercise Price will be adjusted to be the Exercise
Price which would then be in effect if such record date had not been fixed, or
to the Exercise Price which would be in effect based upon the number of Common
Shares (or securities convertible into, or exchangeable or exercisable for
Common Shares) actually issued upon the exercise of such rights, options or
warrants, as the case may be.

For purposes of this Agreement, the
granting of the right to purchase Common Shares (or equivalent common shares)
(whether from treasury shares or otherwise) pursuant to any dividend or interest
reinvestment plan and/or any Common Share purchase plan providing for the
reinvestment of dividends or interest payable on securities of the Corporation
and/or the investment of periodic optional payments and/or employee benefit,
stock option or similar plans (so long as such right to purchase is in no case
evidenced by the delivery of rights or warrants) will not be deemed to
constitute an issue of rights, options or warrants by the Corporation; provided,
however, that, in the case of any dividend or interest reinvestment plan, the
right to purchase Common Shares (or equivalent common shares) must be at a price
per share of not less than 90% of the current market price per share (determined
as provided in such plans) of the Common Shares;

(c) if after the Record Time and prior
to the Separation Time the Corporation fixes a record date for a distribution to
all holders of Voting Shares (including any such distribution made in connection
with a merger, amalgamation, arrangement, plan, compromise or reorganization in
which the Corporation is the continuing or successor corporation) of evidences
of indebtedness, cash (other than a regular periodic cash dividend or a regular
periodic cash dividend paid in Common Shares, but including any dividend payable
in securities other than Common Shares), assets or subscription rights, options
or warrants (excluding those referred to in §2.9(b)), the Exercise Price will be
adjusted as follows:

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(i) the Exercise Price to be in effect
after such record date will be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator of
which will be the Market Price per Common Share on such record date, less the
fair market value (as determined by the Board of Directors, whose determination
will be described in a statement filed with the Rights Agent and will be binding
on the Rights Agent and the holders of Rights) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such subscription
rights, options or warrants applicable to a Common Share and the denominator of
which will be such Market Price per Common Share; and

(ii) such adjustments will be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Exercise Price will be adjusted to be the
Exercise Price which would have been in effect if such record date had not been
fixed;

(d) notwithstanding anything herein to
the contrary, no adjustment in the Exercise Price will be required unless such
adjustment would require an increase or decrease of at least 1% in the Exercise
Price; provided, however, that any adjustments which by reason of this §2.9(d)
are not required to be made will be carried forward and taken into account in
any subsequent adjustment. All calculations under this §2.9 will be made to the
nearest cent or to the nearest one-hundredth of a Common Share or other share,
as the case may be. Notwithstanding the first sentence of this §2.9(d), any
adjustment required by this §2.9 will be made no later than the earlier of (A)
three years from the date of the transaction which mandates such adjustment or
(B) the Expiration Time;

(e) each adjustment made pursuant to
this §2.9 will be made as of:

(i) the payment or effective date for
the applicable dividend, subdivision, change, consolidation or issuance in the
case of an adjustment made pursuant to §2.9(a), and

(ii) the record date for the
applicable dividend or distribution, in the case of an adjustment made pursuant
to §2.9(b) or §2.9(c);

(f) if the Corporation, at any time
after the Record Time and prior to the Expiration Time, issues any shares of
capital stock (other than Common Shares), or rights or warrants to subscribe for
or purchase any such capital stock, or securities convertible into or
exchangeable for any such capital stock, in a transaction referred to in
§2.9(a)(i) or §2.9(a)(iv) and, if the Board of Directors determines that the
adjustments contemplated by §2.9(a), §2.9(b) and §2.9(c) in connection with such
transaction will not appropriately protect the interests of the holders of
Rights, the Board of Directors may determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding §2.9(a), §2.9(b) and §2.9(c),
such adjustments, rather than the adjustments contemplated by §2.9(a), §2.9(b)
and §2.9(c), will be made. The Corporation and the Rights Agent will amend this
Agreement, subject to prior approval of the holders of the Voting Shares or the
Rights, as appropriate to provide for such adjustments;

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(g) each Right originally issued by the
Corporation subsequent to any adjustment made to the Exercise Price hereunder
will evidence the right to purchase, at the adjusted Exercise Price, the number
of Common Shares purchasable from time to time hereunder upon exercise of such
Right, all subject to further adjustment as provided herein;

(h) unless the Corporation has
exercised its election as provided in §2.9(i), upon each adjustment of the
Exercise Price as a result of the calculations made in §2.9(b) and §2.9(c), each
Right outstanding immediately prior to the making of such adjustment will
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of Common Shares (calculated to the nearest one ten-thousandth) obtained
by (A) multiplying (x) the number of shares purchasable upon exercise of a Right
immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (B) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price;

(i) the Corporation may elect on or
after the date of any adjustment of the Exercise Price to adjust the number of
Rights, in lieu of any adjustment in the number of Common Shares purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights will be exercisable for the number of Common
Shares for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights will
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by multiplying it by a fraction, the numerator of which is the Exercise
Price in effect immediately prior to adjustment of the Exercise Price and the
denominator of which is the Exercise Price in effect immediately after
adjustment of the Exercise Price. The Corporation will make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if Rights Certificates have been
issued, will be at least 10 days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this §2.9(i), the Corporation will, as promptly as
practicable, cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to §5.8, the
additional Rights to which such holders will be entitled as a result of such
adjustment, or, at the option of the Corporation, will cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, new Rights Certificates evidencing all the Rights to which
such holders will be entitled after such adjustment. Rights Certificates so to
be distributed will be issued, executed and countersigned in the manner provided
for herein and may bear, at the option of the Corporation, the adjusted Exercise
Price and will be registered in the names of the holders of record of Rights
Certificates on the record date for the adjustment specified in the public
announcement;

(j) irrespective of any adjustment or
change in the Exercise Price or the securities purchasable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Exercise Price per share and the number of

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Voting Shares or other securities which
were expressed in the initial Rights Certificates issued hereunder;

(k) in any case in which this §2.9
requires that an adjustment in the Exercise Price be made effective as of a
record date for a specified event, the Corporation may elect to defer until the
occurrence of such event the issuance, to the holder of any Right exercised
after such record date, of the number of Common Shares and other securities of
the Corporation, if any, issuable upon such exercise over and above the number
of Common Shares and other securities of the Corporation, if any, issuable upon
such exercise on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation will deliver to such holder
an appropriate instrument evidencing such holders right to receive such
additional shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment;

(l) notwithstanding anything in this
§2.9 to the contrary, the Corporation will be entitled, but not obligated, to
make such reductions in the Exercise Price, in addition to those adjustments
expressly required by this §2.9, as and to the extent that the Board of
Directors determines to be advisable in order that any:

(i) consolidation or subdivision of
Voting Shares,

(ii) issuance of any Common Shares at
less than the Market Price,

(iii) issuance of securities
convertible into or exchangeable for Common Shares,

(iv) stock dividends or

(v) issuance of rights, options or
warrants,

referred to in this §2.9 hereafter made
by the Corporation to holders of its Voting Shares, will not be taxable to such
shareholders;

(m) whenever an adjustment to the
Exercise Price or a change in the securities purchasable upon the exercise of
Rights is made pursuant to this §2.9, the Corporation will promptly:

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

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

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

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

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Date on Which Exercise is Effective

2.10 Each Person in whose name any certificate for Common
Shares is issued upon the exercise of Rights, will for all purposes be deemed to
have become the holder of record of the Common Shares represented thereby on,
and such certificate will be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered pursuant to §2.5, (together with a
duly completed Election to Exercise) and payment of the Exercise Price for such
Rights (and any applicable transfer taxes and other governmental charges payable
by the exercising holder hereunder) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Share
transfer books of the Corporation are closed, such Person will be deemed to have
become the record holder of such shares on, and such certificate will be dated,
the next succeeding Business Day on which the Common Share transfer books of the
Corporation are open.

Execution of Rights Certificates

2.11 The Rights Certificates will be executed on behalf of the
Corporation by its President or any of its senior officers, together with its
Secretary or Assistant Secretary. The signature of any of these officers on the
Rights Certificates may be manual or facsimile. Rights Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Corporation will 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.

Authentication of Rights Certificates

2.12 Promptly after the Corporation learns of the Separation
Time, the Corporation will notify the Rights Agent of such Separation Time and
will deliver Rights Certificates executed by the Corporation to the Rights Agent
for countersignature, and the Rights Agent will countersign (manually or by
facsimile signature in a manner satisfactory to the Corporation) and send such
Rights Certificates to the holders of the Rights pursuant to §2.4. No Rights
Certificate will be valid for any purpose until countersigned by the Rights
Agent as aforesaid.

Dating of Rights Certificates

2.13 Each Rights Certificate will be dated the date of
countersignature thereof.

Register of Rights

2.14 The Corporation will cause to be kept a register (the
Rights Register) in which, subject to such reasonable regulations as it
may prescribe, the Corporation will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed Rights Registrar for the purpose
of maintaining the Rights Register for the Corporation and registering Rights
and transfers of Rights as herein provided. In the event that the Rights Agent
will cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times.

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Transfers and Exchanges

2.15 After the Separation Time and prior to the Expiration
Time, upon surrender for registration of transfer or exchange of any Rights
Certificate and subject to the provisions of §2.15(c) and the other provisions
of this Agreement:

(a) the Corporation will execute and
the Rights Agent will 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;

(b) all Rights issued upon any
registration of transfer or exchange of Rights Certificates will be the valid
obligations of the Corporation, and such Rights will be entitled to the same
benefits under this Agreement as the Rights surrendered upon such registration
of transfer or exchange; and

(c) every Rights Certificate
surrendered for registration of transfer or exchange will be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Corporation or the Rights Agent, as the case may be, duly executed by the holder
thereof or such holders attorney duly authorized in writing. As a condition to
the issuance of any new Rights Certificate under this §2.15, the Corporation or
the Rights Agent may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and the
Corporation may require payment of a sum sufficient to cover any other expenses
(including the fees and expenses of the Rights Agent) in connection
therewith.

Mutilated Rights Certificates

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

Destroyed, Lost and Stolen Rights Certificates

2.17 If the Corporation and the Rights Agent receive, prior to
the Expiration Time:

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

(b) such indemnity or other security as
may be required by 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 will execute and upon its request the Rights Agent will countersign
and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a
new Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.

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Replacement Fee

2.18 As a condition to the issuance of any new Rights
Certificate under §2.17, the Corporation or the Rights Agent may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and the Corporation may require payment of a
sum sufficient to cover any other expenses (including the fees and expenses of
the Rights Agent) in connection therewith.

Validity of Replacement Rights Certificates

2.19 Every new Rights Certificate issued pursuant to §2.17 in
lieu of any destroyed, lost or stolen Rights Certificate will evidence an
additional original contractual obligation of the Corporation, whether or not
the destroyed lost or stolen Rights Certificate will be at any time enforceable
by anyone, and the holder thereof will be entitled to all the benefits of this
Agreement equally and proportionately with any and all other holders of Rights
duly issued by the Corporation.

Persons Deemed Owners

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

Delivery and Cancellation of Rights Certificates

2.21 All Rights Certificates surrendered upon exercise or for
redemption, registration of transfer or exchange will, if surrendered to any
Person other than the Rights Agent, be delivered to the Rights Agent and, in any
case, will 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 will
be promptly cancelled by the Rights Agent. No Rights Certificate will be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this §2.21 except as expressly permitted by this Agreement. The
Rights Agent will destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Corporation.

Agreement of Rights Holders

2.22 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:

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

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

(c) that after the Separation Time, the
Rights Certificates will be transferable only on the Rights Register as provided
herein;

(d) that prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Voting
Share certificate) for registration of transfer, the Corporation, the Rights
Agent and any agent of the Corporation or the Rights Agent will be entitled to
deem and treat the Person in whose name the Rights Certificate (or prior to the
Separation Time, the associated Voting 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
Voting 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 will be affected by any notice to the contrary;

(e) that such holder of Rights has
waived his or her right to receive any fractional Rights or any fractional
shares upon exercise of Right;

(f) that this Agreement may be
supplemented or amended from time to time pursuant to and as provided herein and
subject to §2.9(f) and §5.4 upon the sole authority of the Board of Directors
without the approval of any holder of Rights; and

(g) that 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 to 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 government,
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.

Rights Certificate Holder not Deemed a Shareholder

2.23 No holder, as such, of any Rights or Rights Certificate
will be entitled to vote, receive dividends or be deemed for any purpose
whatsoever the holder of any Voting Share or any other share or security of the
Corporation which may at any time be issuable on the exercise of the Rights
represented thereby, nor will anything contained herein or in any Rights
Certificate be construed or deemed to confer upon the holder of any Right or
Rights Certificate, as such, any of the rights, titles, benefits or privileges
of a holder of Voting Shares or any other shares or securities of the
Corporation or any right to vote at any meeting of shareholders of the
Corporation whether for the election of directors or otherwise or upon any
matter submitted to

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holders of shares of the Corporation at any meeting thereof, or
to give or withhold consent to any action of the Corporation, or to receive
notice of any meeting or other action affecting any holder of Voting Shares or
any other shares or securities of the Corporation except as expressly provided
herein, or to receive dividends, distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by Rights Certificates will have
been duly exercised in accordance with the terms and provisions hereof.

PART 3

ADJUSTMENTS TO THE RIGHTSIN THE EVENT OF CERTAIN
TRANSACTIONS

Flip-in Event

3.1 Subject to adjustment pursuant to Part 2 and the redemption
and waiver provisions of §5.1 and except as provided below, if prior to the
Expiration Time a Flip-in Event occurs, each Right will thereafter constitute,
effective at the Close of Business on the 10thBusiness Day after the
relevant Stock Acquisition Date, the right to purchase from the Corporation,
upon exercise thereof in accordance with the terms hereof, that number of Common
Shares of the Corporation having an aggregate Market Price on the date of
consummation or occurrence of such Flip-in Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in §2.9 in the event that, after such date of consummation or
occurrence, an event of a type analogous to any of the events described in §2.9
occurs with respect to such Common Shares).

Cancellation of Rights Held by an Acquiring Party

3.2 Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of a Flip-in Event, any Rights that are or were Beneficially
Owned on or after the earlier of the Separation Time and the Stock Acquisition
Date by:

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

(b) a direct or indirect transferee of,
or other successor in title to, such Rights (a Transferee), who becomes
a Transferee concurrently with or subsequent to the Acquiring Person becoming an
Acquiring Person, in a transfer, whether or not for consideration, that the
Board of Directors has determined is part of a plan, understanding or scheme of
an Acquiring Person (or an Affiliate or Associate of an Acquiring Person or any
Person acting jointly or in concert with an Acquiring Person or an Affiliate or
Associate of an Acquiring Person) that has the purpose or effect of avoiding the
provisions of this §3.2;

will thereupon become and be void and any holder of such Rights
(including any Transferee) will thereafter have no rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The holder of any Rights represented by a Rights

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Certificate which is submitted to the Rights Agent, or any
Co-Rights Agent, upon exercise or for registration of transfer or exchange which
does not contain the necessary certifications set forth in the Rights
Certificate establishing that such Rights are not void under this §3.2 will be
deemed to be an Acquiring Person for the purposes of this §3.2 and such rights
will be null and void.

Legend on Rights Certificates Transferred by an Acquiring
Party

3.3 Any Rights Certificate that represents Rights Beneficially
Owned by a Person described in either §(a) or §(b) of §3.2 or transferred to any
nominee of any such Person, and any Rights Certificate issued upon the transfer,
exchange or replacement of any other Rights Certificate referred to in this
sentence will contain the following legend:

The Rights represented by this Rights
Certificate were issued to a Person who was an Acquiring Person or an Affiliate
or an Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement) or was acting jointly or in concert with any of them. This Rights
Certificate and the Rights represented hereby will become void in the
circumstances specified in §3.2 of the Rights Agreement.

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

PART 4

THE RIGHTS AGENT

Appointment of Rights Agent

4.1 The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Corporation may from
time to time appoint such co-Rights Agents as it may deem necessary or desirable
subject to the prior approval of the Rights Agent. If the Corporation appoints
one or more co-Rights Agents, the respective duties of the Rights Agents and
co-Rights Agents will be as the Corporation may determine with the approval of
the Rights Agent and the Co-Rights Agent. The Corporation agrees to pay the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred that is not
the result of gross negligence, bad faith or wilful misconduct on the part of
any one or all of the Rights Agent, its officers, employees or other
representatives, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and

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expenses of defending against any claim of liability, which
right to indemnification will survive the termination of this Agreement or the
resignation or removal of the Rights Agent.

Protection of Rights Agent

4.2 The Rights Agent will be protected from and will incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for Voting Shares or any Rights Certificate or 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.

Rights Agent to be Kept Informed

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

Merger or Amalgamation or Change of Name of Rights
Agent

4.4 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,
statutory arrangement 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
§4.7. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.

Countersigning of Rights Certificates

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

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Duties of Rights Agent

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

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

(b) 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 proven and established by a certificate signed by a person
believed by the Rights Agent to be the Chairman of the Board, the President or
any Vice-President, the Treasurer or the Secretary of the Corporation and
delivered to the Rights Agent; and such certificate will be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate;

(c) the Rights Agent will be liable
hereunder only for events which are the result of its own gross negligence, bad
faith or wilful misconduct and that of its officers, employees and other
representatives;

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

(e) the Rights Agent will not be under
any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due authorization, execution and delivery hereof
by the Rights Agent) or in respect of the validity or execution of any Voting
Share certificate or Rights Certificate (except its countersignature thereof);
nor will it be responsible for any breach by the Corporation of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to §3.2) or any adjustment required under the
provisions of §2.9 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights after receipt of
the certificate contemplated by §2.9 describing any such adjustment); nor will
it by any act hereunder be deemed to make any representation or warranty as to
the authorization of any Voting Shares to be issued pursuant to this Agreement
or any Rights or as to whether any Voting Shares will, when

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issued, be duly and validly authorized,
executed, issued and delivered or fully paid and non-assessable;

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

(g) the Rights Agent is hereby
authorized and directed to accept instructions in writing with respect to the
performance of its duties hereunder from any person believed by the Rights Agent
to be the Chairman of the Board, President, any Vice-President, Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the
Corporation and to apply to such persons for advice or instructions in
connection with its duties, and it will not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such
person;

(h) the Rights Agent and any
shareholder or stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in Voting 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 will preclude the Rights Agent from acting in any
other capacity for the Corporation or for any other legal entity; and

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

Change of Rights Agent

4.7 The Rights Agent may resign and be discharged from its
duties under this Agreement upon 60 days notice (or such lesser notice as is
acceptable to the Corporation) in writing mailed to the Corporation and to each
transfer agent of Voting Shares of the Corporation by registered or certified
mail. The Corporation may remove the Rights Agent upon 30 days notice in
writing, mailed to the Rights Agent and to each transfer agent of the Voting
Shares of the Corporation by registered or certified mail. If the Rights Agent
resigns or is removed or otherwise becomes incapable of acting, the Corporation
will appoint a successor to the Rights Agent. If the Corporation fails to make
such appointment within a period of 60 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of any Rights (which holder will,
with such notice, submit such holders Rights Certificate for inspection by the
Corporation), 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, will be a
corporation incorporated under the laws of Canada or a province thereof
authorized to

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carry on the business of a trust company in Canada. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent, upon
receiving from the Corporation payment in full of all amounts outstanding under
this Agreement, will deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Corporation will file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Voting Shares of the Corporation, and mail a notice thereof in writing to the
holders of the Rights. The cost of giving any notice required under this §4.7
will be borne solely by the Corporation. Failure to give any notice provided for
in this §4.7 however, or any defect therein, will not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

PART 5

MISCELLANEOUS

Redemption and Waiver

5.1 The:

(a) Board of Directors may, with the
prior consent of holders of Voting Shares or of the holders of Rights given in
accordance with §5.1(i) or §(j), as the case may be, any time prior to the
occurrence of a Flip-in Event, elect to redeem all but not less than all of the
then outstanding Rights at a redemption price of $0.00001 per Right
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in §2.9 if an event of the type described in §2.9 has occurred
(such redemption price being herein referred to as the Redemption
Price);

(b) Board of Directors may, with the
prior consent of the holders of Voting Shares given in accordance with §5.1(i),
determine, at any time prior to the occurrence of a Flip-in Event as to which
the application of §3.1 has not been waived pursuant to this §5.1, if such
Flip-in Event would occur by reason of an acquisition of Voting Shares otherwise
than pursuant to a Take-over Bid made by means of a Take-over Bid circular and
otherwise than in the circumstances set forth in §5.1(d), waive the application
of §3.1 to such Flip-in Event. In such event, the Board of Directors will extend
the Separation Time to a date at least 10 Business Days subsequent to the
meeting of shareholders called to approve such waiver;

(c) Board of Directors may, prior to
the occurrence of a Flip-in Event, and upon prior written notice delivered to
the Rights Agent, determine to waive the application of §3.1 to a Flip-in Event
which may occur by reason of a Take-over Bid made by means of a Take-over Bid
circular; provided that if the Board of Directors waives the application of §3.1
to a particular Flip-in Event pursuant to this §5.1(c), the Board of Directors
will be deemed to have waived the application of §3.1 to any other Flip-in Event
occurring by

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reason of any Take-over Bid made by
means of a Take-over Bid circular prior to the expiry of any Take-over Bid (as
the same may be extended from time to time) in respect of which a waiver is, or
is deemed to have been, granted pursuant to this §5.1(c);

(d) Board of Directors may, prior to
the close of business on the 10th day following the Stock Acquisition
Date, determine, upon prior written notice delivered to the Rights Agent, to
waive or to agree to waive the application of §3.1 to a Flip-in Event, provided
that both of the following conditions are satisfied:

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

(ii) such Acquiring Person has reduced
its Beneficial Ownership of Voting Shares (or has entered into a contractual
arrangement with the Corporation, acceptable to the Board of Directors, to do so
within 30 days of the date on which such contractual arrangement is entered
into) such that at the time the waiver becomes effective pursuant to this
§5.1(d) it is no longer an Acquiring Person;

and in the event of such a waiver, for
the purposes of this Agreement, the Flip-in Event will be deemed never to have
occurred;

(e) Board of Directors, notwithstanding
the provisions of §5.1(a), will and will be deemed to have elected without
further formality to redeem the Rights at the Redemption Price, if a Person
acquires, pursuant to a Permitted Bid or a Competing Permitted Bid or pursuant
to a Take-over Bid in respect of which the Board of Directors has waived, or is
deemed to have waived, the application of §3.1 pursuant to §5.1(c), any
Outstanding Voting Shares;

(f) right to exercise the Rights will,
if the Corporation is obligated under §5.1(e) to redeem the Rights, or if the
Board of Directors elects under §5.1(a) or §5.1(h) to redeem the Rights, 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 will be
issued thereafter;

(g) Corporation will, within 10 days
after the Corporation is obligated under §5.1(e) to redeem the Rights, or if
§5.1(a) is applicable within 10 Business Days after the Board of Directors
determines to redeem the Rights, as applicable, give notice of redemption to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last address as they appear upon the Rights Register or, prior
to the Separation Time, on the registry books of the Transfer Agent for the
Voting Shares. Any notice which is mailed in the manner herein provided will be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. The Corporation may not redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this
§5.1 and other than in connection with the purchase of Voting Shares prior to
the Separation Time;

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(h) Board of Directors may, where a
Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or is
otherwise terminated after the Separation Time has occurred and prior to the
occurrence of a Flip-in Event, elect to redeem all the outstanding Rights at the
Redemption Price and upon such redemption, all the provisions of this Agreement
will 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
Voting Shares as of the Separation Time had not been mailed to each such holder
and for all purposes of this Agreement the Separation Time will be deemed not to
have occurred;

(i) Shareholder consent required under
§5.1(a) or §(b) will be deemed to have been given if the redemption or waiver is
approved by the affirmative vote of a majority of the votes cast by Independent
Shareholders represented in person or by proxy at a meeting of such holders duly
held in accordance with applicable laws and the Corporations articles; and

(j) Consent of holders of Rights which
is required pursuant to §5.1(a) will be deemed to have been given if the
redemption is approved by holders of Rights by a majority of the votes cast by
the holders of Rights represented in person or by proxy at and entitled to vote
at a meeting of such holders called in accordance with procedures for the
calling, holding and conduct of meetings of shareholders of the Corporation held
in accordance with applicable laws and the Corporations articles. For the
purposes of this subsection, each outstanding Right (other than Rights which are
void pursuant to the provisions of this Agreement) will be entitled to one
vote.

Expiration

5.2 No person will have any rights whatsoever pursuant to or
arising out of this Agreement or in respect of any Right after the Expiration
Time, except the Rights Agent as specified herein.

Issuance of New Right Certificates

5.3 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 its
Board of Directors to reflect any adjustment or change in the number or kind or
class of shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.

Supplements and Amendments

5.4 The Corporation may:

(a) prior to the Annual Meeting of
Shareholders of the Corporation to be held in the year 2006, supplement or amend
this Agreement without the approval of any holder of Rights or Voting Shares in
order to make any changes which the Board of Directors may deem necessary or
desirable. Thereafter, the Corporation may, subject to §5.1, from time to time
supplement or amend this Agreement without the approval of any holders of Rights
or Voting Shares to correct any clerical or typographical error or to maintain
the

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validity of the Agreement as a result
of a change in any applicable legislation, rules or regulations thereunder;

(b) subject to §5.4(a), with the prior
consent of the holders of the 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
will be deemed to have been given if provided by the holders of Voting Shares at
a meeting of the holders of Voting Shares, which meeting will be called and held
in compliance with applicable laws and regulatory requirements and the
requirements in the articles of the Corporation. Subject to compliance with any
requirements imposed by the foregoing, consent will be deemed to have been given
if the proposed amendment, variation or revision is approved by the affirmative
vote of a majority of the votes cast by Independent Shareholders represented in
person or by proxy at the meeting; and

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

Timing of Certain Approvals of the Shareholders

5.5 Any supplements or amendments made by the Corporation to
this Agreement pursuant to §5.4(a) which are required to maintain the validity
of this Agreement as a result of any change in any applicable legislation, rules
or regulations thereunder:

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

(b) if made after the Separation Time,
will be submitted to the holders of Rights at a meeting to be called and held as
soon as reasonably possible in accordance with the provisions of §5.4(c) .

Effective Time of Supplements and Amendments

5.6 A supplement or amendment of the type referred to in §5.5
will be effective from the date of the resolution of the Board of Directors
adopting such supplement or amendment and will continue in force until it is
either rejected by the shareholders or holders of Rights, as the

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case may be, or, if approved, until it ceases to be effective
in accordance with the terms hereof. Any other supplement or amendment will be
effective upon approval of the shareholders or holders of Rights, as the case
may be. If a supplement or amendment is rejected by the shareholders or the
holders of Rights or is not submitted to the shareholders or holders of Rights
as required, such supplement or amendment will cease to be effective from and
after the termination of the meeting at which it was rejected or to which it
should have been but was not submitted or from and after the date of the meeting
of holders of Rights that should have been but was not held, and no subsequent
resolution of the Board of Directors to amend, vary or delete any provision of
this Agreement to substantially the same effect will be effective until
confirmed by the shareholders or holders of Rights, as the case may be.

Approvals of Amendments by Rights Agent

5.7 Notwithstanding anything in §5.4 to the contrary, no
supplement or amendment will be made to the provisions of Part 4 except with the
written concurrence of the Rights Agent to such supplement or amendment.

Fractional Rights and Fractional Shares

5.8 The Corporation will not be required to issue fractions
of:

(a) Rights or to distribute Rights
Certificates which evidence fractional Rights. Any such fractional Right will be
null and void and the Corporation will not have any obligation or liability in
respect thereof; and

(b) Common Shares or other securities
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares or other securities. In lieu of issuing fractional
Common Shares or other securities, the Corporation will 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 same fraction of the Market Price of
one Common Share.

Rights of Action

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

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Notice of Proposed Actions

5.10 If the Corporation proposes after the Separation Time and
prior to the Expiration Time to effect the liquidation, dissolution or winding-
up of the Corporation or the sale of all or substantially all of the
Corporations assets, the Corporation, in each such case, will give to each
holder of a Right, in accordance with §5.11, a notice of such proposed action,
which will specify the date on which such liquidation, dissolution, winding-up,
or sale is to take place, and such notice will be so given at least 20 Business
Days prior to the date of such proposed action.

Notices

5.11 Notices or demands authorized or required by this
Agreement to be given or made:

(a) by the Rights Agent or by the
holder of any Rights to or on the Corporation will be sufficiently given or made
if delivered or sent by mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:

Evolving Gold Corp. 725  666
Burrard Street Vancouver, B.C. V6C 2X8

Attention: President;

(b) by the Corporation or by the holder
of any Rights to or on the Rights Agent will be sufficiently given or made if
delivered or sent by mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:

Pacific Corporate Trust Company
2nd Floor, 510 Burrard Street Vancouver, British Columbia V6C
3B9

Attention: Manager, Client Services;
and

(c) by the Corporation or the Rights
Agent to or on the holder of any Rights will be sufficiently given or made if
delivered or sent by mail, postage prepaid, addressed to such holder at the
address of such holder as it appears upon the Rights Register or, prior to the
Separation Time, on the registry books of the transfer agent for the Voting
Shares. Any notice which is mailed in the manner herein provided will be deemed
given, whether or not the holder receives the notice.

Successors

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

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Benefits of this Agreement

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

Governing Law

5.14 This Agreement and each Right issued hereunder will be
deemed to be a contract made under the laws of the Province of British Columbia
and for all purposes will be governed by and construed in accordance with the
laws of such province.

Severability

5.15 If any Section, Subsection, Clause, Subclause, term or
provision hereof or the application thereof to any circumstances or any right
hereunder will, in any jurisdiction and to any extent, be invalid or
unenforceable, such Section, Subsection, Clause, Subclause, term or provision or
such right will be ineffective only in such jurisdiction and to the extent of
such invalidity or unenforceability in such jurisdiction without invalidating or
rendering unenforceable or ineffective the remaining Sections, Subsections,
Clauses, Subclauses, terms and provisions hereof or rights hereunder in such
jurisdiction or the application of such Section, Subsection, Clause, Subclause,
term or provision or rights hereunder in any other jurisdiction or to
circumstances other than those as to which it is specifically held invalid or
unenforceable.

Effective Date

5.16 This Agreement is effective and in full force and effect
in accordance with its terms as of and from the Record Time. If this Agreement
is not confirmed by a majority of the votes cast by the holders of Voting Shares
of the Corporation represented in person or by proxy at the Annual Meeting of
Shareholders of the Corporation to be held in the year 2008 who vote in respect
of confirmation of this Agreement at such meeting, then this Agreement and any
then outstanding Rights will be of no further force and effect from the date of
such Annual Meeting of Shareholders of the Corporation.

Determinations and Actions by the Board of Directors

5.17 All actions, calculations and determinations (including
all omissions with respect to the foregoing) which are done or made by the Board
of Directors for the purposes hereof, will not subject the Board of Directors or
any director of the Corporation to any liability to the holders of the
Rights.

Rights of Board, Corporation and Offeror

5.18 Without limiting the generality of the foregoing, nothing
contained herein will be construed to suggest or imply that the Board of
Directors will not be entitled to recommend that holders of Voting Shares reject
or accept any Take-over Bid or take any other action (including, without
limitation, the commencement, prosecution, defence or settlement of any
litigation and

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the submission of additional or alternative Take-over Bids or
other proposals to the Shareholders of the Corporation) with respect to any
Take-over Bid or otherwise that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.

Regulatory Approvals

5.19 Any obligation of the Corporation or action or event
contemplated by this Agreement will be subject to the prior receipt of any
requisite approval or consent from any governmental or regulatory authority
including, without limiting the generality of the foregoing, any necessary
approval of any securities regulatory authority or stock exchange.

Declaration as to Non-Canadian Holders

5.20 If in the opinion of the Board of Directors (who may rely
upon the advice of counsel) any action or event contemplated by this Agreement
would require compliance with the securities laws or comparable legislation of a
jurisdiction outside Canada, the Board of Directors may take such actions as it
may deem appropriate to ensure such compliance. In no event will the Corporation
or the Rights Agent be required to issue or deliver Rights or securities
issuable on exercise of Rights to Persons who are citizens, residents or
nationals of any jurisdiction other than Canada or the United States in which
such issue or delivery would be unlawful without registration of the relevant
Persons or securities for such purposes.

Time of the Essence

5.21 Time will be of the essence in this Agreement.

Compliance with Money Laundering Legislation

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

Privacy Provision

5.23 The parties acknowledge that federal and/or provincial
legislation that addresses the protection of individuals personal information
(collectively, Privacy Laws) applies to obligations and activities
under this Agreement. Despite any other provision of this Agreement, neither
party will take or direct any action that would contravene, or cause the other
to contravene, applicable Privacy Laws. The Corporation will, prior to
transferring or causing to be transferred personal information to the Rights
Agent, obtain and retain required consents of the

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relevant individuals to the collection, use and disclosure of
their personal information, or will have determined that such consents either
have previously been given upon which the parties can rely or are not required
under the Privacy Laws. The Rights Agent will use commercially reasonable
efforts to ensure that its services hereunder comply with Privacy Laws.

Execution in Counterparts

5.24 This Agreement may be executed in any number of
counterparts as may be necessary or by facsimile and each such counterpart or
facsimile so executed are deemed to be an original and such counterpart and
facsimile copies together shall constitute one and the same instrument.

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

EVOLVING GOLD CORP.

|Per: | /s/ Donald Gee       | 
|---- | -------------------- | 
|     | Authorized Signatory | 
|     |                      | 
|Per: | /s/ Robert Bick      | 
|     | Authorized Signatory | 

PACIFIC CORPORATE TRUST COMPANY

|Per: | /s/ Simon Thomas     | 
|---- | -------------------- | 
|     | Authorized Signatory | 
|     |                      | 
|Per: | /s/ Lisa Scotland    | 
|     | Authorized Signatory | 

---

Exhibit A

[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 RIGHTS AGREEMENT. UNDER
      CERTAIN CIRCUMSTANCES (SPECIFIED IN §3.2 OF THE RIGHTS AGREEMENT), RIGHTS
      BENEFICIALLY OWNED BY AN ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN
      CONCERT WITH AN ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND
      AFFILIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND THEIR
      RESPECTIVE TRANSFEREES WILL BECOME VOID WITHOUT ANY FURTHER ACTION. | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

RIGHTS CERTIFICATE

This certifies that _______________ or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement dated as of the 23rd day of
January, 2008 (the Rights Agreement) between Evolving Gold Corp., a
corporation existing under the Business Corporations Act (British
Columbia) (the Corporation), and Pacific Corporate Trust Company, a
trust company incorporated under the laws of Canada, as rights agent (the
Rights Agent, which term will 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 the date of the Corporations Annual Meeting of
Shareholders to be held in the year 2011 (or such earlier expiration time as is
provided in the Rights Agreement) one fully paid and non-assessable Common Share
of the Corporation (a Common Share) (subject to adjustment as provided
in the Rights Agreement) at the Exercise Price, upon presentation and surrender
of this Rights Certificate together with the Form of Election to Exercise duly
executed and submitted to the Rights Agent at its office in Vancouver, British
Columbia. The Exercise Price will initially be $100.00 (Canadian) per Right and
will be subject to adjustment or revision in certain events as provided in the
Rights Agreement.

In certain circumstances described in the Rights Agreement,
each Right evidenced hereby may entitle the registered holder thereof to
purchase or receive assets, debt securities or other equity securities of the
Corporation (or a combination thereof) all 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. Copies of
the Rights Agreement are on file at the registered head office of the
Corporation and are available upon written request.

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- 2 -

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 entitling the holder to purchase a like aggregate number of Common Shares
as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate will be exercised in part, the
registered holder will be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.

Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be, and under certain circumstances are
required to be, redeemed by the Corporation at a redemption price of $0.00001
per Right.

No fractional Common Shares, nor any other securities which may
at any time be issuable upon the exercise hereof, will be issued upon the
exercise of any Right or Rights evidenced hereby.

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

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

WITNESS the facsimile signature of the proper officers
of the Corporation.

|Date |  | 
|---- |  | 

EVOLVING GOLD CORP.

|By |  | 
|-- |  | 

Countersigned

PACIFIC CORPORATE TRUST COMPANY

|By |                      | 
|-- | -------------------- | 
|   | Authorized Signature | 

---

(To be attached to each Rights Certificate)

FORM OF ELECTION TO EXERCISE

TO: EVOLVING GOLD CORP.

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 to:

| |                              | 
| | ---------------------------- | 
| | (NAME)                       | 
| |                              | 
| |                              | 
| | (ADDRESS)                    | 
| |                              | 
| |                              | 
| | (CITY AND STATE OR PROVINCE) | 

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

| |                              | 
| | ---------------------------- | 
| | (NAME)                       | 
| |                              | 
| |                              | 
| | (ADDRESS)                    | 
| |                              | 
| |                              | 
| | (CITY AND STATE OR PROVINCE) | 

| |                                                                  | 
| | ---------------------------------------------------------------- | 
| | SOCIAL INSURANCE, SOCIAL
      SECURITY OR OTHER TAXPAYER NUMBER | 

|Dated |  | 
|----- |  | 

|Signature Guaranteed |           | 
|-------------------- | --------- | 
|                     | Signature | 

The signature of this assignment must correspond with the name
as written upon the face of the certificate, in every particular, without
alteration or enlargement, or any change whatsoever, and must be guaranteed by a
Canadian chartered bank or eligible guarantor institution with membership in an
approved signature guarantee medallion program.

[The following is to be completed, if true:]

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- 2 -

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 knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
or any Person acting jointly or in consent with any of the foregoing or any
Affiliate or Associate of such Person (as defined in the Rights Agreement).

_____________________________________________Signature

NOTICE

In the event the certification set forth in the Form of
Election to Exercise 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 Rights Agreement)
and accordingly such Rights will be null and void.

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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) | 

the Rights represented by this Rights Certificate, together
with all right, title and interest therein and does hereby irrevocably
constitute and appoint  ____________________________________ as attorney to
transfer the within Rights on the books of the Corporation, with full power of
substitution.

|Dated |  | 
|----- |  | 

|Signature Guaranteed |                                                                                                                                                                                                                        
|-------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     | Signature                                                                                                                                                                                                              
|                     |                                                                                                                                                                                                                        
|                     | (The signature of this assignment must
      correspond with the name as written upon the face of this Rights
      Certificate, in every particular, without alteration or enlargement or any
      change whatsoever)

Signature must be guaranteed by a Canadian chartered bank or
eligible guarantor institution with membership in an approved signature
guarantee medallion program.

[The following 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 knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
or any Person acting jointly or in consent with any of the foregoing (as defined
in the Rights Agreement).

| |          
| | ---------
| | Signature

NOTICE

In the event the certification set forth in the Form of
Assignment 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 Rights Agreement) and
accordingly such Rights will be null and void.

---