SHAREHOLDER RIGHTS PLAN AGREEMENT


 


DATED AS OF


 


September 1, 2010






BETWEEN


 


VERMILION ENERGY INC.


 


AND


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


AS RIGHTS AGENT


 




    	 



    	 



    

 


Table
of Contents


 


	 	 	Page
	 	 	 
	ARTICLE 1	INTERPRETATION	1
	1.1	Certain Definitions	1
	1.2	Currency	12
	1.3	Headings	12
	1.4	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares	12
	1.5	Acting Jointly or in Concert	12
	1.6	Generally Accepted Accounting Principles	12
	ARTICLE 2	THE RIGHTS	13
	2.1	Legend on Share Certificates	13
	2.2	Initial Exercise Price; Exercise of Rights; Detachment of Rights	13
	2.3	Adjustments to Exercise Price; Number of Rights	15
	2.4	Date on Which Exercise Is Effective	19
	2.5	Execution, Authentication, Delivery and Dating of Rights Certificates	19
	2.6	Registration, Transfer and Exchange	19
	2.7	Mutilated, Destroyed, Lost and Stolen Rights Certificates	20
	2.8	Persons Deemed Owners of Rights	20
	2.9	Delivery and Cancellation of Certificates	21
	2.10	Agreement of Rights Holders	21
	2.11	Rights Certificate Holder Not Deemed a Shareholder	21
	ARTICLE 3	ADJUSTMENTS TO THE RIGHTS	22
	3.1	Flip-in Event	22
	ARTICLE 4	THE RIGHTS AGENT	23
	4.1	General	23
	4.2	Merger, Amalgamation or Consolidation or Change of Name of Rights Agent	24
	4.3	Duties of Rights Agent	24
	4.4	Change of Rights Agent	25
	ARTICLE 5	MISCELLANEOUS	26
	5.1	Redemption and Waiver	26
	5.2	Expiration	28
	5.3	Issuance of New Rights Certificates	28
	5.4	Supplements and Amendments	28
	5.5	Fractional Rights and Fractional Shares	29
	5.6	Rights of Action	29
	5.7	Regulatory Approvals	30
	5.8	Notice of Proposed Actions	30
	5.9	Notices	30
	5.10	Costs of Enforcement	31
	5.11	Successors	31
	5.12	Benefits of this Agreement	31
	5.13	Governing Law	31
	5.14	Severability	31
	5.15	Effective Date and Expiration Time	31
	5.16	Determinations and Actions by the Board of Directors	31
	5.17	Declaration as to Non-Canadian Holders	32
	5.18	Time of the Essence	32
	5.19	Execution in Counterparts	32


ATTACHMENT 1


FORM OF ASSIGNMENT


FORM OF ELECTION TO EXERCISE


NOTICE


 




    	i



    	 



    




 


SHAREHOLDER RIGHTS PLAN AGREEMENT


 


MEMORANDUM OF AGREEMENT,
dated as of September 1, 2010, between Vermilion Energy Inc. (the "Corporation"), a corporation incorporated under
the laws of the Province of Alberta and Computershare Trust Company of Canada, a trust company incorporated under the laws of Canada
(the "Rights Agent");


 


WHEREAS the Corporation
was formed for the purpose of facilitating the conversion of Vermilion Energy Trust (the "Trust") from a trust
structure to a corporate structure by way of a plan of arrangement under the Alberta Business Corporations Act (as hereinafter
defined) and certain related transactions (the "Conversion");


 


AND WHEREAS in connection
with the Conversion, the holders of trust units of the Trust ("Trust Units") and the holders of Series A exchangeable
shares of Vermilion Resources Ltd. approved the adoption of this shareholder rights plan (the "Rights Plan") to
come into effect immediately upon the Conversion being effected;


 


AND WHEREAS the Conversion
was completed effective September 1, 2010;


 


AND WHEREAS in order
to implement the adoption of the Rights Plan, as established by this Agreement, the board of directors of the Corporation (the
"Board of Directors") has:


 


		(a)	authorized the issuance, effective at the close of business
(Calgary time) on the Effective Date (as hereinafter defined), of one Right (as hereinafter defined) in respect of each Common
Share (as hereinafter defined) outstanding at the close of business (Calgary time) on the Effective Date (the "Record
Time");



 


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



 


		(c)	authorized the issuance of Rights Certificates (as hereinafter defined) to holders of Rights pursuant to the terms and subject
to the conditions set forth herein;



 


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


 


AND WHEREAS the Corporation
desires to appoint the Rights Agent to act on behalf of the Corporation and the holders of Rights, and the Rights Agent is willing
to so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and
other matters referred to herein;


 


NOW THEREFORE, in consideration
of the premises and the respective covenants and agreements set forth herein, and subject to such covenants and agreements, the
parties hereby agree as follows:


 


ARTICLE
1

INTERPRETATION


 


		1.1	Certain Definitions



 


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


 


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



 


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



 




    	 



    	 



    

  


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



 


		(A)	a Voting Share Reduction;



 


		(B)	Permitted Bid Acquisitions;



 


		(C)	an Exempt Acquisition;



 


		(D)	Pro Rata Acquisitions; or



 


		(E)	a Convertible Security Acquisition;



 


provided, however,
that if a Person becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares by reason of one or any combination
of the operation of Paragraphs (A), (B), (C), (D) or (E) above and such Person's Beneficial Ownership of Voting Shares thereafter
increases by more than 1% of the number of Voting Shares outstanding (other than pursuant to one or any combination of a Voting
Shares Reduction, a Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition),
then as of the date such Person becomes the Beneficial Owner of such additional Voting Shares, such Person shall become an "Acquiring
Person";


 


		(iii)	for a period of ten days after the Disqualification Date (as defined
below), any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of such Person
becoming disqualified from relying on Subclause 1.1(g)(B) because such Person is making or has announced a current intention
to make a Take-over Bid, either alone or by acting jointly or in concert with any other Person. For the purposes of this definition,
"Disqualification Date" means the first date of public announcement that any Person is making or intends to make
a Take-over Bid;



 


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



 


		(v)	a Person (a "Grandfathered Person") who is the Beneficial
Owner of 20% or more of the outstanding Voting Shares determined as at the Record Time, provided, however, that this exception
shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after
the Record Time, become the Beneficial Owner of any additional Voting Shares that increases its Beneficial Ownership of Voting
Shares by more than 1% of the number of Voting Shares outstanding, other than through one or any combination of a Permitted Bid
Acquisition, an Exempt Acquisition, a Voting Share Reduction, a Pro Rata Acquisition or a Convertible Security Acquisition; and
provided, further, that a Person shall cease to be a Grandfathered Person in the event that such Person ceases to Beneficially
Own 20% or more of the then outstanding Voting Shares at any time after the Record Time; 



 


		(b)	"Affiliate", when used to indicate a relationship with
a specified Person, shall mean 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; 



 


		(c)	"Agreement" shall mean this shareholder rights plan agreement dated as of September 1,
2010 between the Corporation and the Rights Agent, as amended or supplemented from time to time; "hereof", "herein",
"hereto" and similar expressions mean and refer to this Agreement as a whole and not to any particular part of this Agreement;



 




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		(d)	"Alberta Business Corporations Act" shall mean the
Business Corporation Act (Alberta), as amended, and the regulations made thereunder and any comparable or successor laws
or regulations thereto;



 


		(e)	"annual cash dividend" shall mean cash dividends paid in any fiscal year to the
extent that such cash dividends do not exceed, in the aggregate on a per share basis, in any fiscal year, the greatest of:



 


		(i)	200% of the aggregate amount of cash dividends, on a per security basis, declared payable by Vermilion
on the Vermilion Securities in its immediately preceding fiscal year;



 


		(ii)	300% of the arithmetic mean of the aggregate amounts of the cash dividends, on a per security basis,
declared payable by Vermilion on the Vermilion Securities in its three immediately preceding fiscal years;



 


		(iii)	100% of the aggregate consolidated net income of the Corporation, before extraordinary items, for
its immediately preceding fiscal year divided by the number of Common Shares outstanding as at the end of such fiscal year; and



 


		(iv)	100% of the aggregate consolidated net income of the Trust, before extraordinary items, for fiscal
2009 divided by the number of Common Shares outstanding as at the end of such fiscal year;



 


		(f)	"Associate" shall mean, when used to indicate a relationship
with a specified Person, a spouse of that Person, any Person of the same or opposite sex with whom that Person is living in a conjugal
relationship outside marriage, a child of that Person and a relative of that Person if that relative has the same residence as
that Person;



 


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



 


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



 


		(ii)	any securities as to which such Person or any of such Person's Affiliates
or Associates has the right to become the owner at law or in equity (where such right is exercisable within a period of 60 days,
whether or not on condition or on the happening of any contingency) pursuant to any agreement, arrangement, pledge or understanding,
whether or not in writing or upon the exercise of any conversion exchange or purchase right (other than the Rights) attaching to
a Convertible Security; other than pursuant: (x) customary agreements between the Corporation and underwriters or between underwriters
and/or banking group members and/or selling group members with respect to a distribution of securities by the Corporation; (y)
pledges of securities in the ordinary course of business), or upon the exercise of any conversion, exchange or purchase right (other
than the Rights) attaching to a Convertible Security; and (z) any agreement between the Corporation and any Person or Persons relating
to a plan of arrangement, amalgamation or other statutory procedure which is subject to the approval of the holders of Voting Shares;



 


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



 


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


 


		(A)	where such security has been deposited or tendered pursuant to any Take-over
Bid or where the holder of such security has agreed pursuant to a Permitted Lock-Up Agreement to deposit or tender such security
pursuant to a Take-Over Bid, in each case made by such Person, made by any of such Person's Affiliates or Associates or made by
any other Person acting jointly or in concert with such Person, until such deposited or tendered security has been taken up or
paid for, whichever shall first occur;



 




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		(B)	where such Person, any of such Person's Affiliates or Associates or
any other Person referred to in Subclause 1.1(g)(iii), holds such security provided that (1) the ordinary business of any
such Person (the "Investment Manager") includes the management of mutual funds or investment funds for others
(which others, for greater certainty, may include or be limited to one or more employee benefit plans or pension plans and/or includes
the acquisition or holding of securities for a non-discretionary account of a Client (as defined below) by a dealer or broker registered
under applicable securities laws to the extent required) and such security is held by the Investment Manager in the ordinary course
of such business and in the performance of such Investment Manager's duties for the account of any other Person or Persons (a "Client");
or (2) such Person (the "Trust Company") is licensed to carry on the business of a trust company under applicable
laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent
Persons (each an "Estate Account") or in relation to other accounts (each an "Other Account")
and holds such security in the ordinary course of such duties for such Estate Accounts or for such Other Accounts or; (3) such
Person is a pension plan or fund registered under the laws of Canada or any Province thereof or the laws of the United States of
America (a "Plan") or is a Person established by statute for purposes that include, and the ordinary business
or activity of such Person (the "Statutory Body") includes, the management of investment funds for employee benefit
plans, pension plans, insurance plans of various public bodies; or (4) such Person (the "Administrator")
is the administrator or trustee of one or more Plans and holds such security for the purposes of its activities as an Administrator;
provided, in any of the above cases, that the Investment Manager, the Trust Company, the Statutory Body, the Administrator or the
Plan, as the case may be, is not then making and has not then announced an intention to make a Take-over Bid (other than an Offer
to Acquire Voting Shares or other securities by means of a distribution by the Corporation or by means of ordinary market transactions
(including prearranged trades) executed through the facilities of a stock exchange or organized over-the-counter market), alone
or by acting jointly or in concert with any other Person;



 


		(C)	only because such Person or any of such Person's Affiliates or Associates
is: (1) a Client of the same Investment Manager as another Person on whose account the Investment Manager holds such security;
(2) 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 (3) a Plan with the same Administrator as another Plan on whose account the Administrator holds such security;




 


		(D)	only because such Person is: (1) a Client of an Investment Manager and
such security is owned at law or in equity by the Investment Manager; (2) 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 (3) a Plan and such security is owned at law or in equity
by the Administrator of the Plan; or



 


		(E)	where such person is the registered holder of securities as a result
of carrying on the business of or acting as a nominee of a securities depository;



 


		(h)	"Board of Directors" shall mean the board of directors
of the Corporation or any duly constituted and empowered committee thereof;



 


		(i)	"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Calgary, Alberta 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 shall mean on any day the Canadian dollar equivalent of such amount determined by reference
to the U.S.- Canadian Exchange Rate in effect on such date;



 


		(k)	"close of business" on any given date shall mean the
time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the transfer
office of the transfer agent for the Common Shares (or, after the Separation Time, the principal transfer office of the Rights
Agent) is closed to the public in the city in which such transfer agent or rights agent has an office for the purposes of this
Agreement;



 


		(l)	"Common Shares" shall mean the common shares in the
capital of the Corporation as presently constituted, as such shares may be subdivided, consolidated, reclassified or otherwise
changed from time to time;



 


		(m)	"Competing Permitted Bid" shall mean a Take-over Bid
which also complies with the following additional provisions: 



 


		(i)	the Take-over Bid is made after a Permitted Bid or another Competing
Permitted Bid has been made and prior to the expiry, termination or withdrawal of such Permitted Bid or Competing Permitted Bid;



 


		(ii)	the Take-over Bid complies with all of the provisions of a Permitted
Bid other than the condition set forth in Subclause (iii) of the definition of a Permitted Bid; and 



 


		(iii)	no Voting Shares are taken up or paid for pursuant to the Take-over
Bid prior to the close of business on the date that is earlier than the later of: (A) 35 days after the date of the Take-over
Bid constituting the Competing Permitted Bid; and (B) 60 days (or such shorter period of time as may be permitted by the Board
of Directors from time to time) following the date on which the earliest Permitted Bid or Competing Permitted Bid which preceded
the Competing Permitted Bid was made;



 


		(n)	"controlled": a body corporate is "controlled"
by another Person or two or more Persons acting jointly or in concert if:



 


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



 


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



 


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


 


		(o)	"Conversion" means the conversion of the Trust from
a trust structure to a corporate structure by way of a plan of arrangement pursuant to the Alberta Business Corporations Act and
related transactions;



 


		(p)	"Convertible Security" shall mean a security convertible,
exercisable or exchangeable into a Voting Share and a "Convertible Security Acquisition" shall mean an acquisition
by a Person of Voting Shares upon the exercise, conversion or exchange of a Convertible Security received by a Person pursuant
to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition;



 


		(q)	"Co-Rights Agents" shall have the meaning ascribed
thereto in Subclause 4.1(a);



 


		(r)	"Disposition Date" shall have the meaning ascribed
thereto in Subclause 5.1(d);



 


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



 




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



 


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



 


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



 


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



 


		(iv)	optional cash payments;



 


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


 


		(u)	"early warning requirement" shall have the meaning
ascribed thereto under National Instrument 62-103 The Early Warning System promulgated under the Securities Act;



 


		(v)	"Effective Date" shall mean September 1, 2010;



 


		(w)	"Election to Exercise" shall have the meaning ascribed
thereto in Subclause 2.2(d)(ii);



 


		(x)	"Exempt Acquisition" shall mean an acquisition by a
Person of Voting Shares and/or Convertible Securities: (i) in respect of which the Board of Directors has waived the application
of Clause 3.1 pursuant to the provisions of Subclause 5.1(b), (c) or (d); (ii) pursuant to a distribution of Voting Shares and/or
Convertible Securities made by the Corporation: (A) to the public pursuant to a prospectus, provided that such Person does not
thereby become the Beneficial Owner of a greater percentage of Voting Shares so offered than the percentage of Voting Shares Beneficially
Owned by such Person immediately prior to such distribution; or (B) pursuant to a private placement provided that: (x) all necessary
stock exchange approvals for such private placement have been obtained and such private placement complies with the terms and conditions
of such approvals; and (y) such Person does not thereby become the Beneficial Owner of Voting Shares equal in number to more than
25% of the Voting Shares outstanding immediately prior to the private placement and, in making this determination, the securities
to be issued to such Person on the private placement shall be deemed to be held by such Person but shall not be included in the
aggregate number of Voting Shares outstanding immediately prior to the private placement; or (iii) pursuant to an amalgamation,
merger, arrangement or other statutory procedure requiring shareholder approval; 



 


		(y)	"Exercise Price" shall mean, as of any date, the price
at which a holder may purchase the securities issuable upon exercise of one whole Right which, until adjustment thereof in accordance
with the terms hereof, shall be:



 


		(i)	until the Separation Time, an amount equal to three times the Market Price, from time to time,
per Common Share; and



 


		(ii)	from and after the Separation Time, an amount equal to three times the Market Price, as at the
Separation Time, per Common Share;



 


		(z)	"Expansion Factor" shall have the meaning ascribed
thereto in Subclause 2.3(a)(x);



 


		(aa)	"Expiration Time" shall have the meaning ascribed thereto
in Subclause 5.15(b);



 


		(bb)	"Flip-in Event" shall mean a transaction in or pursuant
to which any Person becomes an Acquiring Person;



 


		(cc)	"holder" shall have the meaning ascribed thereto in
Clause 2.8;



 


		(dd)	"Independent Shareholders" shall mean holders of Voting
Shares, other than:



 




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		(i)	any Acquiring Person;



 


		(ii)	any Offeror, other than a Person referred to in Subclause 1.1(g)(B);



 


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



 


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



 


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



 


		(ee)	"Market Price" per share of any securities on any date
of determination shall mean the average of the daily closing prices per share of such securities (determined as described below)
on each of the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Clause 2.3 hereof shall have caused the closing prices
used to determine the Market Price on any Trading Days not to be fully comparable with the closing price on such date of determination
or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such closing price so used
shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Clause 2.3 hereof in order
to make it fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading
Day, on the immediately preceding Trading Day. The closing price per share of any securities on any date shall be:



 


		(i)	the closing board lot sale price or, in case no such sale takes place
on such date, the average of the closing bid and asked prices for each of such securities as reported by the principal Canadian
stock exchange on which such securities are listed or admitted to trading;



 


		(ii)	if for any reason none of such prices is available on such day or the
securities are not listed or admitted to trading on a Canadian stock exchange, the last sale price or, in case no such sale takes
place on such date, the average of the high bid and low asked prices for each of such securities in the over-the-counter market,
as quoted by any reporting system then in use; or



 


		(iii)	if for any reason none of such prices is available on such day or the
securities are not listed or admitted to trading on a Canadian stock exchange or quoted by any such reporting system, the average
of the closing bid and asked prices as furnished by a professional market maker making a market in the securities selected in good
faith by the Board of Directors;



 


		(ff)	provided, however, that if for any reason none of such prices is available on such day, the closing
price per share of such securities on such date means the fair value per share of such securities on such date as determined by
a nationally or internationally recognized investment dealer or investment banker with respect to the fair value per share of such
securities. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming
part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian
dollars on such date at the Canadian Dollar Equivalent thereof;



 


		(gg)	"Nominee" shall have the meaning ascribed thereto in
Subclause 2.2(c);



 


		(hh)	"Offer to Acquire" shall include:



 


		(i)	an offer to purchase or a solicitation of an offer to sell or a public
announcement of an intention to make such an offer or solicitation; and



 


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



 




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


 


		(ii)	"Offeror" shall mean a Person who has made a public
announcement of a current intention to make or who is making a Take-over Bid but only so long as the Take-over Bid so announced
or made has not been withdrawn or terminated or has not expired;



 


		(jj)	"Permitted Bid" shall mean a Take-over Bid made by
an Offeror by way of take-over bid circular which also complies with the following additional provisions:



 


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



 


		(ii)	no Voting Shares are taken up or paid for pursuant to the Take-over
Bid unless more than 50% of the Voting Shares held by Independent Shareholders: (x) shall have been deposited or tendered pursuant
to the Take-over Bid and not withdrawn; and (y) have previously been or are taken up at the same time;



 


		(iii)	no Voting Shares are taken up or paid for pursuant to the Take-over
Bid prior to the close of business on the date that is no earlier than the later of: (A) 35 days after the date of the Take-over
Bid; and (B) 60 days (or such shorter period of time as may be permitted by the Board of Directors from time to time) following
the date of the Take-over Bid;



 


		(iv)	Voting Shares may be deposited pursuant to such Take-over Bid at any
time during the period of time between the date of the Take-over Bid and the date on which Voting Shares may be taken up and paid
for and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn until taken up and paid for; and



 


		(v)	if on the date on which Voting Shares may be taken up and paid for under
the Take-over Bid, more than 50% of the Voting Shares held by Independent Shareholders have been deposited or tendered pursuant
to the Take-over Bid and not withdrawn, the Offeror makes a public announcement of that fact and the Take-over Bid is extended
to remain open for deposits and tenders of Voting Shares for not less than ten Business Days from the date of such public announcement;



 


For purposes of this Agreement:
(A) should a Take-over Bid which qualified as a Permitted Bid cease to be a Permitted Bid because it ceases to meet any or all
of the requirements mentioned above prior to the time it expires (after giving effect to any extension) or is withdrawn, any acquisition
of Voting Shares made pursuant to such Take-over Bid shall not be a Permitted Bid Acquisition; and (B) the term “Permitted
Bid” shall include a Competing Permitted Bid.


 


		(kk)	"Permitted Bid Acquisition" shall mean an acquisition
of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted Bid;



 


		(ll)	"Permitted Lock-Up Agreement" shall mean an agreement
between a Person and one or more holders of Voting Shares pursuant to which such holders (each a "Locked-Up Person")
agree to deposit or tender Voting Shares to a Take-Over Bid (the "Lock-Up Bid") made or to be made by such Person
or any of such Person's Affiliates or Associates or any other Person with which such Person is acting jointly or in concert, provided
that:



 


		(i)	the terms of such agreement are publicly disclosed and a copy of such
agreement is made available to the public (including the Corporation) not later than the date of the Lock-Up Bid or, if the Lock-Up
Bid has been made prior to the date on which such agreement is entered into, not later than the first business day following the
date of such agreement;



 




    	- 8 -



    	 



    

		(ii)	the agreement permits a Locked-Up Person to terminate its obligation
to deposit or tender Voting Shares to or not to withdraw such Voting Shares from the Lock-Up Bid, and to terminate any obligation
with respect to the voting of such Voting Shares, in order to tender or deposit the Voting Shares to another Take-over Bid or to
support another transaction:



 


		(A)	where the price or value of the consideration per Voting Share offered
under such other Take-over Bid or transaction:



 


		(1)	is greater than the price or value of the consideration
per Voting Share at which the Locked-Up Person has agreed to deposit or tender Voting Shares to the Lock-Up Bid; or



 


		(2)	exceeds by as much as or more than a specified amount
(the "Specified Amount") the price or value of the consideration per Voting Share at which the Locked-Up Person
has agreed to deposit or tender Voting Shares to the Lock-Up Bid, provided that such Specified Amount is not greater than 7% of
the price or value of the consideration per Voting Share at which the Locked-Up Person has agreed to deposit or tender Voting
Shares to the Lock-Up Bid; and



 


		(B)	if the number of Voting Shares offered to be purchased under the Lock-Up Bid is less than 100%
of the Voting Shares held by Independent Shareholders, where the number of Voting Shares to be purchased under such other Take-over
Bid or transaction at a price or value per Voting Share that is not less than the price or value per
Voting Share offered under the Lock-Up Bid:



 


		(1)	is greater than the number of Voting Shares that the
Offeror has offered to purchase under the Lock-Up Bid; or



 


		(2)	exceeds by as much as or more than a specified number
(the "Specified Number") the number of Voting Shares that the Offeror has offered to purchase under the Lock-Up
Bid, provided that the Specified Number is not greater than 7% of the number of Voting Shares offered to purchased under the Lock-Up
Bid,



 


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


 


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



 


		(A)	2.5% of the price or value of the consideration payable under the Lock-Up
Bid to a Locked-Up Person; and



 


		(B)	50% of the amount by which the price or value of the consideration received
by a Locked-Up Person under another Take-over Bid or transaction exceeds the price or value of the consideration that the Locked-Up
Person would have received under the Lock-Up Bid,



 


			shall be payable by such Locked-Up Person pursuant to the agreement if the Locked-Up Person fails
to deposit or tender Voting Shares to the Lock-Up Bid, withdraws Voting Shares previously tendered thereto or supports another
transaction;



 




    	- 9 -



    	 



    

		(mm)	"Person" shall include an individual, body corporate,
firm, partnership, syndicate or other form of unincorporated association, trust, trustee, executor, administrator, legal personal
representative, group, unincorporated organization, a government and its agencies or instrumentalities, or other entity whether
or not having legal personality;



 


		(nn)	"Pro Rata Acquisition" shall mean an acquisition by
a Person of Voting Shares pursuant to:



 


		(i)	a Dividend Reinvestment Acquisition;



 


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



 


		(iii)	the acquisition or the exercise by the Person of rights to purchase
Voting Shares issued by the Corporation to all holders of securities of the Corporation (other than holders resident in any jurisdiction
where such issuance is restricted or impractical as a result of applicable law) of one or more particular classes or series pursuant
to a rights offering or pursuant to a prospectus, provided that such rights are acquired directly from the Corporation and not
from any other Person and the Person does not thereby acquire a greater percentage of such Voting Shares than the Person's percentage
of Voting Shares Beneficially Owned immediately prior to such acquisition;



 


		(oo)	"Record Time" shall have the meaning set forth in the
recitals hereto;



 


		(pp)	“Redemption Price” shall have the meaning attributed
thereto in Subclause 5.1(a);



 


		(qq)	"Right" shall mean a right to purchase a Common Share
of the Corporation, upon the terms and subject to the conditions set forth in this Agreement;



 


		(rr)	"Rights Certificate" shall mean a certificate representing
the Rights after the Separation Time, which shall be substantially in the form attached hereto as Attachment 1;



 


		(ss)	"Rights Register" shall have the meaning ascribed thereto
in Subclause 2.6(a);



 


		(tt)	"Securities Act" shall mean the Securities Act
(Alberta), as amended, and the regulations thereunder, and any comparable or successor laws or regulations thereto;



 


		(uu)	"Separation Time" shall mean, subject to Subclause 5.1(d),
the close of business on the tenth Trading Day after the earlier of:



 


		(i)	the Stock Acquisition Date; and



 


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



 


		(iii)	the date on which a Permitted Bid or Competing Permitted Bid ceases to qualify as such;



 


or such later time as may be determined
by the Board of Directors, provided that, if any Take-over Bid referred to in Subclause (ii) above expires, is not made, is
cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the purposes
of this definition, never to have been commenced, made or announced and further provided that if the Board of Directors determines,
pursuant to Clause 5.1, to waive the application of Clause 3.1 to a Flip-In Event, then the Separation Time in respect of such
Flip-In Event shall be deemed never to have occurred and further provided that if the foregoing results in the Separation Time
being prior to the Record Time, the Separation Time shall be the Record Time;


 




    	- 10 -



    	 



    

  


		(vv)	"Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition shall include, without limitation, a report filed pursuant to the
early warning requirements under applicable securities laws) by the Corporation or an Acquiring Person of facts indicating that
a Person has become an Acquiring Person; 



 


		(ww)	"Subsidiary": a Person is a Subsidiary of another Person
if:



 


		(i)	it is controlled by:



 


		(A)	that other; or



 


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



 


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



 


		(ii)	it is a Subsidiary of a Person that is that other's Subsidiary;



 


		(xx)	"Take-over Bid" shall mean an Offer to Acquire Voting Shares or Convertible Securities,
if, assuming that the Voting Shares or Convertible Securities subject to the Offer to Acquire are acquired and are Beneficially
Owned at the date of such Offer to Acquire by the Person making such Offer to Acquire, the Voting Shares Beneficially Owned by
the Person making the Offer to Acquire would constitute in the aggregate 20% or more of the outstanding Voting Shares at the date
of the Offer to Acquire;



 


		(yy)	"Termination Time" shall mean the time at which the
right to exercise Rights shall terminate pursuant to Subclause 5.1(g);



 


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



 


		(aaa)	"Trust" means Vermilion Energy Trust, an unincorporated
open-ended trust established under the laws of the Province of Alberta which, pursuant to the Conversion, was replaced by the Corporation;



 


		(bbb)	"Trust Units" means the units of the Trust which, prior
to the Conversion, represented an equal undivided beneficial interest in the Trust;



 


		(ccc)	"U.S. – Canadian Exchange Rate" on any date shall
mean:



 


		(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 shall be determined by the Board of Directors from time to time acting in good
faith;



 


		(ddd)	"Vermilion" means collectively, the Corporation and the Trust;



 


		(eee)	"Vermilion Securities" means collectively, the Trust
Units and Common Shares;



 


		(fff)	"Voting Share Reduction" shall mean an acquisition
or redemption by the Corporation of Voting Shares which, by reducing the number of Voting Shares outstanding, increases the percentage
of outstanding Voting Shares Beneficially Owned by any Person to 20% or more of the Voting Shares then outstanding; and



 


		(ggg)	"Voting Shares" shall mean 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.



 




    	- 11 -



    	 



    

 


 


		1.2	Currency



 


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


 


		1.3	Headings



 


The division of this
Agreement into Articles, Sections, Subsections, Clauses, Subclauses Paragraphs, Subparagraphs or other portions hereof and the
insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction
or interpretation of this Agreement.


 


		1.4	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares



 


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



 


		(b)	For purposes of this Agreement, the percentage of Voting Shares Beneficially
Owned by any Person shall be and be deemed to be the product (expressed as a percentage) determined by the formula:



 


100 x A/B


 


where:


 


	 	A	=	the number of votes for the election of directors
of the Corporation generally attaching to the Voting Shares Beneficially Owned by such Person; and



 


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



 


The percentage of outstanding Voting
Shares represented by any particular group of Voting Shares acquired or held by any Person shall be determined in like manner mutatis
mutandis.


 


		1.5	Acting Jointly or in Concert



 


For purposes of this
Agreement a Person is acting jointly or in concert with every Person who is a party to an agreement, commitment, arrangement or
understanding, whether formal or informal or written or unwritten, with the first Person to acquire or Offer to Acquire any Voting
Shares or Convertible Securities (other than (x) customary agreements with and between underwriters and/or banking group members
and/or selling group members with respect to a distribution of securities by the Corporation, (y) pledges of securities in the
ordinary course of business, and (z) Permitted Lock-Up Agreements).


 


		1.6	Generally Accepted Accounting
Principles



 


Wherever in this Agreement
reference is made to generally accepted accounting principles, such reference shall be deemed to be the recommendations at the
relevant time of the Canadian Institute of Chartered Accountants, or any successor institute, applicable on a consolidated basis
(unless otherwise specifically provided herein to be applicable on an unconsolidated basis) as at the date on which a calculation
is made or required to be made in accordance with generally accepted accounting principles. Where the character or amount
of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any document, such determination or calculation shall,
to the extent applicable and except as otherwise specified herein or as otherwise agreed in writing by the parties, be made in
accordance with generally accepted accounting principles applied on a consistent basis. For greater certainty, and without limiting
the generality of the foregoing, references to consolidated net income or any other financial statement line item shall be determined
based on the generally accepted accounting principles used in connection with the preparation of the financial statements for the
applicable period.


 




    	- 12 -



    	 



    

  


ARTICLE
2

THE RIGHTS


 


		2.1	Legend on Share Certificates



 


Certificates representing
Voting Shares which are issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time, shall
also evidence one Right for each Voting Shares represented thereby until the earlier of the Separation Time or the Expiration Time
and shall have impressed on, printed on, written on or otherwise affixed to them the following legend:


 


Until the earlier of the Separation
Time or the Expiration Time (as both terms are defined in the Shareholder Rights Agreement referred to below), this certificate
also evidences and entitles the holder hereof to certain Rights as set forth in a Shareholder Rights Plan Agreement dated as of
September 1, 2010, as may be amended or supplemented from time to time (the "Shareholder Rights Agreement"), between
Vermilion Energy Inc. (the "Corporation") and Computershare Trust Company of Canada, as Rights Agent, the terms of which
are incorporated herein by reference and a copy of which is on file at the principal executive offices of the Corporation. Under
certain circumstances set out in the Shareholder Rights Agreement, the rights may be amended or redeemed, may expire or may become
void (if, in certain cases they are "Beneficially Owned" by an "Acquiring Person" as such terms are defined
in the Shareholder Rights Agreement, whether currently held by or on behalf of such Person or a subsequent holder) or may be evidenced
by separate certificates and no longer evidenced by this certificate. The Corporation will mail or arrange for the mailing of a
copy of the Shareholder Rights Agreement to the holder of this certificate without charge as soon as practicable after the receipt
of a written request therefor.


 


Certificates representing
Common Shares that are issued and outstanding at the Record Time shall also evidence one Right for each Common Shares represented
thereby notwithstanding the absence of the foregoing legend, until the earlier of the Separation Time and the Expiration Time.


 


		2.2	Initial Exercise Price;
Exercise of Rights; Detachment of Rights



 


		(a)	Subject to adjustment as herein set forth, each Right will entitle the
holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise
Price as at the Business Day immediately preceding the day of exercise of the Right (which Exercise Price and number of Common
Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by
the Corporation or any of its Subsidiaries shall be void.



 


		(b)	Until the Separation Time:



 


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




 


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



 


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



 


		(i)	the Rights shall be exercisable; and 



 


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



 




    	- 13 -



    	 



    

 


Promptly following the Separation
Time, the Corporation will prepare or cause to be prepared and the Rights Agent will mail to each holder of record of Common Shares
as of the Separation Time and, in respect of each Convertible Security converted into Common Shares after the Separation Time and
prior to the Expiration Time, promptly after such conversion, the Corporation will prepare or cause to be prepared and the Rights
Agent will mail to the holder so converting (other than in either case an Acquiring Person and any Transferee whose rights are
or become null and void pursuant to Subclause 3.1(b) and, in respect of any Rights Beneficially Owned by such Acquiring Person
which are not held of record by such Acquiring Person or Transferee, the holder of record of such Rights (a "Nominee")),
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):


 


		(x)	a Rights Certificate appropriately completed, representing the number of Rights held by such holder
at the Separation Time or at the time of conversion, as applicable, 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 or regulation or judicial or administrative
order 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



 


		(y)	a disclosure statement prepared by the Corporation describing the Rights,



 


provided that a Nominee shall be
sent the materials provided for in (x) and (y) only in respect of all Common Shares held of record by it which are not Beneficially
Owned by an Acquiring Person. In order for the Corporation to determine whether any Person is holding Common Shares which are Beneficially
Owned by another Person, the Corporation may require such first Person to furnish such information and documentation as the Corporation
deems necessary.


 


		(d)	Rights may be exercised, in whole or in part, on any Business Day after
the Separation Time and prior to the Expiration Time by submitting to the Rights Agent at its office in Calgary, Canada or any
other office of the Rights Agent in cities designated from time to time for that purpose by the Corporation with the approval of
the Rights Agent:



 


		(i)	the Rights Certificate evidencing such Rights;



 


		(ii)	an election to exercise such Rights (an "Election to Exercise")
substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or such holder's
executors or administrators or other personal representatives or such holder's or their legal attorney duly appointed by an instrument
in writing in form and executed in a manner satisfactory to the Rights Agent; and 



 


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



 


		(e)	Upon receipt of a Rights Certificate, together with a completed Election
to Exercise executed in accordance with Subclause 2.2(d)(ii), which does not indicate that such Right is null and void as
provided by Subclause 3.1(b), and payment as set forth in Subclause 2.2(d)(iii), the Rights Agent (unless otherwise instructed
by the Corporation in the event that the Corporation is of the opinion that the Rights cannot be exercised in accordance with this
Agreement) will thereupon as soon as practicable:



 


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



 




    	- 14 -



    	 



    

  


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



 


		(iii)	after receipt of the certificates referred to in Subclause 2.2(e)(i),
deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as
may be designated by such holder;



 


		(iv)	when appropriate, after receipt, deliver the cash referred to in Subclause 2.2(e)(ii)
to or to the order of the registered holder of such Rights Certificate; and



 


		(v)	remit to the Corporation all payments received on the exercise of Rights.



 


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



 


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



 


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



 


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



 


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



 


		(iv)	pay when due and payable, if applicable, any and all federal, provincial
and municipal 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,
or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Corporation shall not be required
to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights
being transferred or exercised; and



 


		(v)	after the Separation Time, except as permitted by Clauses 5.1 and
5.4, not take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.



 


		2.3	Adjustments to Exercise
Price; Number of Rights



 


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


 


		(a)	In the event the Corporation shall at any time after the date of this
Agreement:



 




    	- 15 -



    	 



    

  


		(i)	declare or pay a dividend on Common Shares payable in Common Shares
or Convertible Securities in respect thereof other than pursuant to any Dividend Reinvestment Plan;



 


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



 


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



 


		(iv)	issue any Common Shares (or Convertible Securities in respect thereof)
in respect of, in lieu of or in exchange for existing Common Shares except as otherwise provided in this Clause 2.3, 



 


then the Exercise Price and the
number of Rights outstanding (or, if the payment or effective date therefor shall occur after the Separation Time, the securities
purchasable upon exercise of Rights) shall be adjusted as of the payment or effective date in the manner set forth below.


 


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


 


		(x)	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) (the "Expansion Factor")
that a holder of one Common Share immediately prior to such dividend, subdivision, change, consolidation or issuance would hold
thereafter as a result thereof; and



 


		(y)	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 Common Shares with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such distribution, subdivision, change, consolidation or issuance, so that each
such Common Share (or other capital stock) will have exactly one Right associated with it.


 


For greater certainty, if the securities
purchasable upon exercise of Rights are to be adjusted, the securities purchasable 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 thereafter as a result of such distribution, subdivision, change, consolidation
or issuance.


 


If, after the Record Time and prior
to the Expiration Time, the Corporation shall issue any shares of capital stock other than Common Shares in a transaction of a
type described in Subclause 2.3(a)(i) or (iv), shares of such capital stock shall be treated herein as nearly equivalent to
Common Shares as may be practicable and appropriate under the circumstances and the Corporation and the Rights Agent agree to amend
this Agreement in order to effect such treatment.


 


If an event occurs which would
require an adjustment under both this Clause 2.3 and Clause 3.1, the adjustment provided for in this Clause 2.3 shall be in addition
to, and shall be made prior to, any adjustment required under Clause 3.1.


 


In the event the Corporation shall
at any time after the Record Time and prior to the Separation Time issue any Common Shares otherwise than in a transaction referred
to in this Subclause 2.3(a), each such Common Share so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such associated Common Share.


 






    	- 16 -



    	 



    
 








		(b)	In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time fix a record date for the issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Shares
(or Convertible Securities in respect of Common Shares) at a price per Common Share (or, in the case of a Convertible Security,
having a conversion, exchange or exercise price per share, including the price required to be paid to purchase such Convertible
Security) less than the Market Price per Common Share on such record date, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction:



 


		(i)	the numerator of which shall be the number of Common Shares outstanding
on such record date plus the number of Common Shares that the aggregate offering price of the total number of Common Shares so
to be offered (and/or the aggregate initial conversion, exchange or exercise price of the Convertible Securities, including the
price required to be paid to purchase such Convertible Securities) would purchase at such Market Price per Common Share; and



 


		(ii)	the denominator of which shall be the number of Common Shares outstanding
on such record date plus the number of additional Common Shares to be offered for subscription or purchase (or into which the Convertible
Securities so to be offered are initially convertible, exchangeable or exercisable). 



 


In case such subscription price
may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of Rights. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, or if issued, are
not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would then be
in effect if such record date had not been fixed, or to the Exercise Price which would 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 (whether from treasury or otherwise) pursuant to any Dividend Reinvestment
Plan or any employee benefit plan, stock option plan, deferred or restricted stock unit plan or any similar plan shall be deemed
not to constitute an issue of rights, options or warrants by the Corporation; provided, however, that, in the case of any Dividend
Reinvestment Plan or share purchase plan, the right to purchase Common Shares is 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)	In the event the Corporation shall, at any time after the Record Time
and prior to the Separation Time, fix a record date for the making of a distribution to all holders of Common Shares (including
any such distribution made in connection with a merger or amalgamation) of evidences of indebtedness, cash (other than an annual
cash dividend or a dividend paid in Common Shares, but including any dividend payable in securities other than Common Shares),
assets or rights, options or warrants (excluding rights, options or warrants expiring within 45 calendar days after such record
date) to purchase Common Shares or Convertible Securities in respect of Common Shares, the Exercise Price in effect after such
record date shall be equal to the Exercise Price in effect immediately prior to such record date less the fair market value (as
determined in good faith by the Board of Directors) of the portion of the evidences of indebtedness, cash, assets, rights, options
or warrants so to be distributed applicable to the securities purchasable upon exercise of one Right.



 


		(d)	Notwithstanding anything herein to the contrary, no adjustment in the
Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one per cent in the Exercise
Price; provided, however, that any adjustments which by reason of this Subclause 2.3(d) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All calculations under Clause 2.3 shall be made to
the nearest cent or to the nearest ten-thousandth of a share. Any adjustment required by Clause 2.3 shall be made as of:



 




    	- 17 -



    	 



    

  


		(i)	the payment or effective date for the applicable dividend, subdivision,
change, combination or issuance, in the case of an adjustment made pursuant to Subclause 2.3(a); or 



 


		(ii)	the record date for the applicable dividend or distribution, the case
of an adjustment made pursuant to Subclause 2.3(c) or (d), subject to readjustment to reverse the same if such distribution shall
not be made.



 


		(e)	In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any shares of capital stock (other than Common Shares), or rights, options 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 Subclause 2.3(a)(i) or (iv) or Subclauses 2.3(b) or (c), if the Board of Directors acting
in good faith determines that the adjustments contemplated by Subclauses 2.3(a), (b) and (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
Subclauses 2.3(a), (b) and (c), such adjustments, rather than the adjustments contemplated by Subclauses 2.3(a), (b)
and (c), shall be made. Subject to Subclause 5.4(b) and (c), the Corporation and the Rights Agent may, with the prior approval
of the holders of the Common Shares amend this Agreement as appropriate to provide for such adjustments.



 


		(f)	Each Right originally issued by the Corporation subsequent to any adjustment
made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of Common
Shares purchasable from time to time hereunder upon exercise of a Right immediately prior to such issue, all subject to further
adjustment as provided herein.



 


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



 


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



 


		(i)	Notwithstanding anything contained in this Clause 2.3 to the contrary,
the Corporation shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required
by this Clause 2.3, as and to the extent that in their good faith judgment the Board of Directors shall determine to be advisable,
in order that any:



 


		(i)	consolidation or subdivision of Common Shares;



 


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



 


		(iii)	stock dividends; or



 


		(iv)	issuance of rights, options or warrants referred to in this Clause 2.3,




 


			hereafter made by the Corporation to holders of its Common Shares, subject to applicable
taxation laws, shall not be taxable to such Shareholders or shall subject such Shareholders to a lesser amount of tax.



 




    	- 18 -



    	 



    

  


		(j)	Whenever an adjustment to the Exercise Price is made pursuant to this Clause
2.3, the Corporation shall:



 


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



 


		(ii)	promptly file with the Rights Agent and with each transfer agent for
the Common Shares a copy of such certificate and mail a brief summary thereof to each holder of Rights who requests a copy.



 


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



 


		2.4	Date on Which Exercise
Is Effective



 


Each Person in whose
name any certificate for Common Shares or other securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the absolute holder of record of the Common Shares or other securities, if applicable, represented
thereon, and such certificate shall be dated the date upon which the Rights Certificate evidencing such Rights was duly surrendered
in accordance with Subclause 2.2(d) (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 shall be deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Share transfer books of the Corporation are open.


 


		2.5	Execution, Authentication,
Delivery and Dating of Rights Certificates



 


		(a)	The Rights Certificates shall be executed on behalf of the Corporation
by any of its Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer or any Vice-President, its Corporate
Secretary or any 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
shall bind the Corporation, notwithstanding that such individuals or any of them have ceased to hold such offices either before
or after the countersignature and delivery of such Rights Certificates.



 


		(b)	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 shall 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 Subclause 2.2(c) hereof. No
Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid.



 


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



 


		2.6	Registration, Transfer
and Exchange



 


		(a)	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, at its office in the City of Calgary, is hereby appointed registrar for
the Rights (the "Rights Registrar") for the purpose of maintaining the Rights Register for the Corporation and
registering Rights and transfers of Rights as herein provided and the Rights Agent hereby accepts such appointment. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register
at all reasonable times.



 




    	- 19 -



    	 



    

 


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 Subclause 2.6(c), 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 shall be the valid obligations of the Corporation, and such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer or exchange.



 


		(c)	Every Rights Certificate surrendered for registration of transfer or
exchange shall 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 Clause 2.6, the Corporation may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses
(including the reasonable fees and expenses of the Rights Agent) connected therewith.



 


		2.7	Mutilated, Destroyed, Lost
and Stolen Rights Certificates



 


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



 


		(b)	If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time: 



 


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



 


		(ii)	such security or indemnity as may be reasonably 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
shall execute and upon the Corporation's request the Rights Agent shall countersign and deliver, in lieu of any such destroyed,
lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.


 


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



 


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



 


		2.8	Persons Deemed Owners of
Rights



 


The Corporation, the
Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name a Rights Certificate
(or, prior to the Separation Time, the associated 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 Right shall mean the registered holder of such Right (or, prior to the Separation Time, of the associated Common Share).


 




    	- 20 -



    	 



    

 


 










 


		2.9	Delivery and Cancellation of Certificates



 


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


 


		2.10	Agreement of Rights Holders



 


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


 


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



 


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



 


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



 


		(e)	that such holder of Rights has waived his right to receive any fractional
Rights or any fractional shares or other securities upon exercise of a Right (except as provided herein);



 


		(f)	that, subject to the provisions of Clause 5.4, without the approval
of any holder of Rights or Voting Shares and upon the sole authority of the Board of Directors, acting in good faith, this Agreement
may be supplemented or amended from time to time pursuant to and as provided herein; 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 or any other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of preliminary or permanent injunctions or other order, decree
or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission,
or any statute, rule, regulations or executive order promulgated or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation.



 


		2.11	Rights Certificate Holder Not Deemed a Shareholder



 


No holder, as such, of
any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder
of any Common Share or any other share or security of the Corporation which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed or confer upon
the holder of any Right or Rights Certificate, as such, any right, title, benefit or privilege of a holder of Common Shares or
any other shares or securities of the Corporation or any right to vote at any meeting of shareholders of the Corporation whether
for the election of directors or otherwise or upon any matter submitted to holders of Common Shares or any other shares of the
Corporation at any meeting thereof, or to give or withhold consent to any action of the Corporation, or to receive notice of any
meeting or other action affecting any holder of Common Shares or any other shares of the Corporation except as expressly provided
herein, or to receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights evidenced by Rights
Certificates shall have been duly exercised in accordance with the terms and provisions hereof.


 




    	- 21 -



    	 



    

 


ARTICLE
3

ADJUSTMENTS TO THE RIGHTS


 


		3.1	Flip-in Event



 


		(a)	Subject to Subclause 3.1(b) and Clause 5.1, in the event that
prior to the Expiration Time a Flip-in Event shall occur, each Right shall constitute, effective at the close of business on the
tenth Trading Day after the Stock Acquisition Date, the right to purchase from the Corporation, upon exercise thereof in accordance
with the terms hereof, that number of Common Shares 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 Clause 2.3 in the event that after such consummation
or occurrence, an event of a type analogous to any of the events described in Clause 2.3 shall have occurred). 



 


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



 


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



 


		(ii)	a transferee or other successor in title, directly or indirectly, (a
"Transferee") of Rights held by an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any
other Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such other Person), where such
Transferee becomes a transferee concurrently with or subsequent to the Acquiring Person becoming such in a transfer that the Board
of Directors acting in good faith has determined is part of a plan, arrangement or scheme of an Acquiring Person (or any Affiliate
or Associate of an Acquiring Person or any other Person acting jointly or in concert with an Acquiring Person or any Affiliate
or Associate of such other Person), that has the purpose or effect of avoiding Subclause 3.1(b)(i),



 


shall become null and void without
any further action, and any holder of such Rights (including any Transferee) shall thereafter have no right to exercise such Rights
under any provision of this Agreement and further shall thereafter not have any other rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The holder of any Rights represented by a Rights Certificate which
is submitted to the Rights Agent upon exercise or for registration or transfer or exchange which does not contain the necessary
certifications set forth in the Rights Certificate establishing that such Rights are not null and void under this Subclause 3.1(b),
shall be deemed to be an Acquiring Person for the purposes of this Clause 3.1 and such Rights shall become null and void.


 


		(c)	From and after the Separation Time, the Corporation shall do all such
acts and things as shall be necessary and within its power to ensure compliance with the provisions of this Clause 3.1, including
without limitation, all such acts and things as may be required to satisfy the requirements of the Alberta Business Corporations
Act, the Securities Act and the securities laws or comparable legislation of each of the provinces of Canada in respect of the
issue of Common Shares upon the exercise of Rights in accordance with this Agreement.



 




    	- 22 -



    	 



    

 


		(d)	Any Rights Certificate that represents Rights Beneficially Owned by
a Person described in either Subclause 3.1(b)(i) or (ii) or transferred to any nominee of any such Person, and any Rights
Certificate issued upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence,
shall contain the following legend:



 


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


 


provided, however, that the Rights
Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend
but shall impose such legend only if instructed to do so by the Corporation in writing or if a holder fails to certify upon transfer
or exchange in the space provided on the Rights Certificate that such holder is not a Person described in such legend and provided
further that the fact that such legend does not appear on a certificate is not determinative of whether any Rights represented
thereby are void under this Clause.


 


ARTICLE
4

THE RIGHTS AGENT


 


		4.1	General



 


		(a)	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 ("Co-Rights Agents") as it may deem necessary or desirable.
In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents
shall be as the Corporation may determine with the approval of the Rights Agent and the Co-Rights Agent. The Corporation agrees
to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties hereunder (including the fees and disbursements of any expert
or advisor retained by the Rights Agent). The Corporation also agrees to indemnify the Rights Agent, and its officers, directors,
employees and agents for, and to hold it and them harmless against, any loss, liability or expense, incurred without gross negligence,
bad faith or wilful misconduct on the part of the Rights Agent or such persons, for anything done or omitted by the Rights Agent
or such persons in connection with the acceptance and administration of this Agreement, including legal costs and expenses, which
right to indemnification will survive the termination of this Agreement and the resignation or removal of the Rights Agent.



 


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



 


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



 




    	- 23 -



    	 



    

 


		4.2	Merger, Amalgamation or Consolidation or Change of Name of Rights Agent



 


		(a)	Any corporation into which the 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 is a party, or any corporation succeeding to the shareholder or stockholder services business of the
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 Clause 4.4 hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned but not delivered, any 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 have not been countersigned, any successor Rights Agent may countersign such Rights Certificates
in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates and in this Agreement.



 


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



 


		4.3	Duties of Rights Agent



 


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


 


		(a)	the Rights Agent may retain and consult with legal counsel (who may
be legal counsel for the Corporation) and the opinion of such counsel will be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion and the Rights Agent
may also consult with such other experts as the Rights Agent may reasonably consider necessary or appropriate to properly carry
out the duties and obligations imposed under this Agreement (at the expense of the Corporation) and the Rights Agent shall be entitled
to act and rely in good faith on the advice of any such expert;



 


		(b)	whenever in the performance of its duties under this Agreement, the
Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking
or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by a Person believed by the Rights Agent to be
the Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, any Vice-President, Treasurer, Corporate
Secretary or any Assistant 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 its own gross negligence,
bad faith or wilful misconduct;



 


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



 




    	- 24 -



    	 



    

 


		(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 certificate for a Common Share 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 Subclause 3.1(b) hereof) or any adjustment required under the provisions of Clause 2.3
hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated
by Clause 2.3 describing any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty
as to the authorization of any Common Shares to be issued pursuant to this Agreement or any Rights or as to whether any Common
Shares will, when issued, be duly and validly authorized, executed, issued and delivered and 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 individual believed by the Rights Agent to be the Chairman
of the Board, President, Chief Executive Officer, Chief Financial Officer, any Vice-President, Treasurer, Corporate Secretary or
any Assistant Secretary of the Corporation, and to apply to such individuals for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any
such individual. It is understood that instructions to the Rights Agent shall, except where circumstances make it impractical or
the Rights Agent otherwise agrees, be given in writing and, where not in writing, such instructions shall be confirmed in writing
as soon as practicable after the giving of such instructions;



 


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



 


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



 


		4.4	Change of Rights Agent



 


The Rights Agent may
resign and be discharged from its duties under this Agreement upon 60 days notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of Common Shares by registered or certified mail and
to the holders of Rights in accordance with Clause 5.9. The Corporation may remove the Rights Agent upon 30 days notice in writing,
mailed to the Rights Agent and to each transfer agent of the Common Shares by registered or certified mail and to the holders of
Rights in accordance with Clause 5.9. If the Rights Agent should resign or be removed or otherwise become incapable of acting,
the Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent, then by prior written notice to the Corporation the resigning Rights Agent or the holder of any Rights (which holder
shall, with such notice, submit such holder's Rights Certificate, if any, for inspection by the Corporation), may apply, at the
Corporation's expense, to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Corporation or by such a court, shall be a corporation incorporated under the laws of Canada or a province
thereof authorized to carry on the business of a trust company in the Province of Alberta. 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 shall, upon payment in full of any outstanding amounts owing by the
Corporation to the Rights Agent under this Agreement, deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Corporation will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares, and mail a notice thereof in writing to the holders of the Rights in accordance
with Clause 5.9. Failure to give any notice provided for in this Clause 4.4, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of any successor Rights Agent,
as the case may be.


 




    	- 25 -



    	 



    

 


ARTICLE
5

MISCELLANEOUS


 


		5.1	Redemption and Waiver



 


		(a)	The Board of Directors acting in good faith may, with the prior approval
of the holders of Voting Shares or of the holders of Rights given in accordance with Subclause 5.1(i) or (j), as the case
may be, at any time prior to the occurrence of a Flip-in Event as to which the application of Clause 3.1 has not been waived
pursuant to the provisions of this Clause 5.1, 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 Clause 2.3 in the event that an event of the type analogous to any of the events described in Clause 2.3 shall have
occurred (such redemption price being herein referred to as the "Redemption Price").



 


		(b)	The Board of Directors acting in good faith may, with the prior approval
of the holders of Voting Shares given in accordance with Subclause 5.1(i), determine, at any time prior to the occurrence
of a Flip-in Event as to which the application of Clause 3.1 has not been waived pursuant to this Clause 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 to all holders of record of Voting Shares and otherwise than in the circumstances set forth in Subclause 5.1(d),
to waive the application of Clause 3.1 to such Flip-in Event. In the event that the Board of Directors proposes such a waiver,
the Board of Directors shall extend the Separation Time to a date subsequent to and not more than ten Business Days following the
meeting of shareholders called to approve such waiver.



 


		(c)	The Board of Directors acting in good faith may, until the occurrence
of a Flip-in Event upon prior written notice delivered to the Rights Agent, determine to waive the application of Clause 3.1
to such particular Flip-in Event provided that the Flip-in Event would occur by reason of a Take-over Bid made by way of take-over
bid circular sent to all holders of Voting Shares (which for greater certainty shall not include the circumstances described in
Subclause 5.1(d)); provided that if the Board of Directors waives the application of Clause 3.1 to a particular Flip-in
Event pursuant to this Subclause 5.1(c), the Board of Directors shall be deemed to have waived the application of Clause 3.1
to any other Flip-in Event subsequently occurring by reason of any Take-over Bid which is made by means of a take-over bid circular
to all holders of Voting Shares prior to the expiry of any Take-over Bid in respect of which a waiver is, or is deemed to have
been, granted under this Subclause 5.1(c).



 


		(d)	Notwithstanding the provisions of Subclauses 5.1(b) and (c) hereof, the Board of Directors
may waive the application of Clause 3.1 in respect of the occurrence of any Flip-in Event if the Board of Directors has determined
within ten Trading Days following a Stock Acquisition Date that a Person became an Acquiring Person by inadvertence and
without any intention to become, or knowledge that it would become, an Acquiring Person under this Agreement, and in the event
such waiver is granted by the Board of Directors, such Stock Acquisition Date shall be deemed not to have occurred. Any such waiver
pursuant to this Subclause 5.1(d) must be on the condition that such Person, within 14 days after the foregoing determination
by the Board of Directors or such earlier or later date as the Board of Directors may determine (the "Disposition Date"),
has reduced its Beneficial Ownership of Voting Shares such that the Person is no longer an Acquiring Person. If the Person remains
an Acquiring Person at the close of business on the Disposition Date, the Disposition Date shall be deemed to be the date of occurrence
of a further Stock Acquisition Date and Clause 3.1 shall apply thereto.



 




    	- 26 -



    	 



    

 


		(e)	The Board of Directors, shall, without further formality, be deemed
to have elected to redeem the Rights at the Redemption Price on the date that a Person which has made a Permitted Bid, a Competing
Permitted Bid, a Take-Over Bid in respect of which the Board of Directors has waived, or is deemed to have waived, pursuant to
Subclause 5.1(c) the application of Clause 3.1, takes up and pays for Voting Shares in connection with such Permitted
Bid, Competing Permitted Bid or Take-over bid, as the case may be.



 


		(f)	Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn
or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors
may elect to redeem all the outstanding Rights at the Redemption Price. Upon the Rights being redeemed pursuant to this Subclause 5.1(f),
all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates
representing the number of Rights held by each holder of record of Common Shares as of the Separation Time had not been mailed
to each such holder and for all purposes of this Agreement the Separation Time shall be deemed not to have occurred.



 


		(g)	If the Board of Directors elects or is deemed to have elected to redeem
the Rights, and, in circumstances in which Subclause 5.1(a) is applicable, such redemption is approved by the holders of Voting
Shares or the holders of Rights in accordance with Subclause 5.1(i) or (j), as the case may be, the right to exercise the
Rights, will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price.



 


		(h)	Within 10 Business Days after the Board of Directors elects or
is deemed to elect, to redeem the Rights or if Subclause 5.1(a) is applicable within 10 Business Days after the holders of
Common Shares of the holders of Rights have approved a redemption of Rights in accordance with Subclause 5.1(i) or (j), as
the case may be, the Corporation shall give notice of redemption to the holders of the then outstanding Rights by mailing such
notice to each such holder at his last address as it appears upon the registry books of the Rights Agent or, prior to the Separation
Time, on the registry books of the transfer agent for the Voting Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption 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 specifically set forth in this Clause 5.1 or in connection with the purchase of Common Shares
prior to the Separation Time.



 


		(i)	If a redemption of Rights pursuant to Subclause 5.1(a) or a waiver
of a Flip-in Event pursuant to Subclause 5.1(b) is proposed at any time prior to the Separation Time, such redemption or waiver
shall be submitted for approval to the holders of Voting Common Shares. Such approval shall be deemed to have been given if the
redemption or waiver is approved by the affirmative vote of a majority of the votes cast by Independent Shareholders represented
in person or by proxy at a meeting of such holders duly held in accordance with applicable laws and the Corporation's by-laws.



 


		(j)	If a redemption of Rights pursuant to Subclause 5.1(a) is proposed
at any time after the Separation Time, such redemption shall be submitted for approval to the holders of Rights. Such approval
shall be deemed to have been given if the redemption is approved by holders of Rights by a majority of the votes cast by the holders
of Rights represented in person or by proxy at and entitled to vote at a meeting of such holders. For the purposes hereof, each
outstanding Right (other than Rights which are Beneficially Owned by any Person referred to in Subclauses (i) to (v) inclusive
of the definition of Independent Shareholders) shall be entitled to one vote, and the procedures for the calling, holding and conduct
of the meeting shall be those, as nearly as may be, which are provided in the Corporation's by-laws and the Alberta Business
Corporations Act, with respect to meetings of shareholders of the Corporation. 



 




    	- 27 -



    	 



    

 


		5.2	Expiration



 


No Person shall have
any rights whatsoever pursuant to this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent
as specified in Clause 4.1 of this Agreement.


 


		5.3	Issuance of New Rights Certificates



 


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


 


		5.4	Supplements and Amendments



 


		(a)	The Corporation may make amendments to this Agreement to correct any
clerical or typographical error or which are required to maintain the validity of this Agreement as a result of any change in any
applicable legislation or regulations or rules thereunder. The Corporation may, prior to the date of the meeting of unitholders
of the Trust to be held on August 31, 2010 (or such other date as may be determined by the chairman of the meeting or the
Board of Directors of the Corporation), supplement or amend any of the provisions of this Agreement and the Rights without the
approval of any Holders of Rights or Common Shares in order to make any changes which the Board of Directors acting in good faith
may deem necessary or desirable. Notwithstanding anything in this Clause 5.4 to the contrary, no such supplement or amendment shall
be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto. 



 


		(b)	Subject to Subclause 5.4(a), the Corporation may, with the prior
approval of the holders of Voting Shares obtained as set forth below, at any time before the Separation Time, supplement, amend,
vary, rescind or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely
affect the interests of the holders of Rights generally). Such consent shall be deemed to have been given if the action requiring
such approval is authorized by the affirmative vote of a majority of the votes cast by Independent Shareholders present or represented
at and entitled to be voted at a meeting of the holders of Voting Shares duly called and held in compliance with applicable laws
and the articles and by-laws of the Corporation.



 


		(c)	Subject to Subclause 5.4(a), the Corporation may, with the prior approval
of the holders of Rights, at any time on or after the Separation Time, supplement, amend, vary, rescind or delete any of the provisions
of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of
Rights generally), provided that no such amendment, variation or deletion shall be made to the provisions of Article 4 except
with the written concurrence of the Rights Agent thereto.



 


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



 


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



 


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



 




    	- 28 -



    	 



    

 


		(ii)	if made after the Separation Time, be submitted to the holders of Rights
at a meeting to be called for on a date not later than immediately following the next meeting of shareholders of the Corporation
and the holders of Rights may, by resolution passed by the majority referred to in Subclause 5.4(d), confirm or reject such amendment.



 


Any such amendment shall be effective
from the date of the resolution of the Board of Directors adopting such amendment, until it is confirmed or rejected or until it
ceases to be effective (as described in the next sentence) and, where such amendment is confirmed, it continues in effect in the
form so confirmed. If such amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders
or holders of Rights as required, then such amendment shall cease to be effective from and after the termination of the meeting
(or any adjournment of such 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 this Agreement to substantially the same effect shall be effective until confirmed by the shareholders
or holders of Rights as the case may be.


 


		(f)	The Corporation shall provide the Rights Agent with notice in writing of any amendment, variation
or deletion to this Agreement referred to in this Section 5.4 within five Business Days of effecting such amendment, variation
or deletion.



 


		5.5	Fractional Rights and Fractional Shares



 


		(a)	The Corporation shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. After the Separation Time, in lieu of issuing fractional Rights,
the Corporation shall pay to the holders of record of the Rights Certificates (provided the Rights represented by such Rights Certificates
are not void pursuant to the provisions of Subclause 3.1(b), at the time such fractional Rights would otherwise be issuable), an
amount in cash equal to the fraction of the Market Price of one whole Right that the fraction of a Right that would otherwise be
issuable is of one whole Right.



 


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



 


		(c)	The Rights Agent shall have no obligation to make any payments in lieu of issuing fractions of
Rights or Common Shares pursuant to Subsection 5.5(a) or (b), respectively, unless and until the Corporation shall have provided
to the Rights Agent the amount of cash to be paid in lieu of issuing such fractional Rights or Common Shares, as the case may be.



 


		5.6	Rights of Action



 


Subject to the terms
of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights. Any holder of Rights, without the consent of the Rights Agent or of the holder
of any other Rights, may, on such holder's own behalf and for such holder's own benefit and the benefit of other holders of Rights
enforce, and may institute and maintain any suit, action or proceeding against the Corporation to enforce such holder's right to
exercise such holder's Rights, or Rights to which such holder is entitled, 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.


 




    	- 29 -



    	 



    

 


		5.7	Regulatory Approvals



 


Any obligation of the
Corporation or action or event contemplated by this Agreement shall be subject to the receipt of any requisite approval or consent
from any governmental or regulatory authority, including without limiting the generality of the foregoing, any necessary approvals
of The Toronto Stock Exchange, or any other applicable stock exchange or market.


 


		5.8	Notice of Proposed Actions



 


In
case the Corporation shall propose after the Separation Time and prior to the Expiration Time to effect the liquidation,
dissolution or winding up of the Corporation or the sale of all or substantially all of the Corporation's
assets, then, in each such case, the Corporation shall give to each holder of a Right, in accordance
with Clause 5.9 hereof, a notice of such proposed action, which shall specify the date on which such Flip-in Event, liquidation,
dissolution, or winding up is to take place, and such notice shall be so given at least 20 Business Days prior to the date of taking
of such proposed action by the Corporation.


 


		5.9	Notices



 


		(a)	Notices or demands authorized or required by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights to or on the Corporation shall be sufficiently given or made if delivered,
sent by registered or certified mail, postage prepaid (until another address is filed in writing with the Rights Agent), or sent
by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:



 


Vermilion Energy Inc.


3500, 520 - 3 Avenue
S.W.


Calgary, Alberta T2P
0R3


 


		Attention:	Chief Financial Officer



		Facsimile:	(403) 269-4880



 


		(b)	Notices or demands authorized or required by this Agreement to be given
or made by the Corporation or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered,
sent by registered or certified mail, postage prepaid (until another address is filed in writing with the Corporation), or sent
by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:



 


Computershare Trust
Company of Canada


600, 530 - 8th
Avenue S.W.


Calgary, Alberta T2P
3S8


 


		Attention:	General Manager,



Client Services


		Facsimile:	(403) 267-6529



 


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



 


		(d)	Any notice given or made in accordance with this Clause 5.9 shall
be deemed to have been given and to have been received on the day of delivery, if so delivered, on the third Business Day (excluding
each day during which there exists any general interruption of postal service due to strike, lockout or other cause) following
the mailing thereof, if so mailed, and on the day of telegraphing, telecopying or sending of the same by other means of recorded
electronic communication (provided such sending is during the normal business hours of the addressee on a Business Day and if not,
on the first Business Day thereafter). Each of the Corporation and the Rights Agent may from time to time change its address for
notice by notice to the other given in the manner aforesaid.



 




    	- 30 -



    	 



    

 


		5.10	Costs of Enforcement



 


The Corporation agrees
that if the Corporation fails to fulfil any of its obligations pursuant to this Agreement, then the Corporation will reimburse
the holder of any Rights for the costs and expenses (including legal fees) incurred by such holder, on a solicitor and his own
client basis, to enforce his rights pursuant to any Rights or this Agreement.


 


		5.11	Successors



 


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


 


		5.12	Benefits of this Agreement



 


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


 


		5.13	Governing Law



 


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


 


		5.14	Severability



 


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


 


		5.15	Effective Date and Expiration Time



 


		(a)	This Agreement is effective from the Record Time.



 


		(b)	At or prior to the annual meeting of shareholders of the Corporation in the year 2013, provided
that a Flip-in Event has not occurred prior to such time, the Board of Directors shall submit a resolution ratifying the continued
existence of this Agreement to the Independent Shareholders for their consideration and, if thought desirable, approval. Unless
a majority of the votes cast by the Independent Shareholders who vote in respect of such resolution are voted in favour of the
continued existence of this Agreement, the Board of Directors shall, immediately upon the confirmation of the results of the votes
on such resolution and without further formality, be deemed to elect to redeem the rights at the Redemption Price.



 


		5.16	Determinations and Actions by the Board of Directors



 


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


 




    	- 31 -



    	 



    

 


		5.17	Declaration as to Non-Canadian Holders



 


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


 


		5.18	Time of the Essence



 


Time shall be of the
essence in this Agreement.


 


		5.19	Execution in Counterparts



 


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


 


	 	VERMILION ENERGY INC.
	 	 	 
	 	By:	(Signed) "Curtis Hicks"
	 	 	Executive Vice President and Chief Financial Officer
	 	 	 
	 	COMPUTERSHARE TRUST COMPANY OF CANADA
	 	 	 
	 	By:	(Signed) "Patricia Selby"
	 	 	Relationship Manager
	 	 	 
	 	By:	(Signed) "Robyn Hall"
	 	 	Manager, Client Services


 




    	- 32 -



    	 



    

 


ATTACHMENT 1


 


VERMILION ENERGY INC.


 


SHAREHOLDER RIGHTS PLAN AGREEMENT


 


[Form of Rights Certificate]


 


	Certificate No.  ______	__________Rights


 


THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE CORPORATION, AND AMENDMENT OR TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBCLAUSE 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, MAY BECOME
VOID.


 


Rights Certificate


 


This certifies that __________________________,
or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered
holder thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan Agreement, dated as of September
1, 2010, as the same may be amended or supplemented from time to time (the "Shareholder Rights Agreement"), between
Vermilion Energy Inc., a corporation duly organized under the Business Corporations Act (Alberta), (the "Corporation")
and Computershare Trust Company of Canada, a trust company incorporated under the laws of Canada (the "Rights Agent")
(which term shall include any successor Rights Agent under the Shareholder Rights Agreement), to purchase from the Corporation
at any time after the Separation Time (as such term is defined in the Shareholder Rights Agreement) and prior to the Expiration
Time (as such term is defined in the Shareholder Rights Agreement), one fully paid common share of the Corporation (a "Common
Share") at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form
of Election to Exercise (in the form provided hereinafter) duly executed and submitted to the Rights Agent at its principal office
in any of the cities of Calgary and Toronto. Until adjustment thereof in certain events as provided in the Shareholder Rights
Agreement, the Exercise Price shall be:


 


		(a)	until the Separation Time, an amount equal to three times the Market Price (as such term is defined
in the Shareholder Rights Agreement), from time to time, per Common Share; and



 


		(b)	from and after the Separation Time, an amount equal to three times the Market Price, as at the
Separation Time, per Common Share.



 


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


 


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


 


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


 




    	 



    	 



    

 


Subject to the
provisions of the Shareholder 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 will be issued upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Shareholder Rights Agreement.


 


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


 




    	- 2 -



    	 



    

 


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


 


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


 


	Date:	 	 


 


VERMILION ENERGY INC. 


 


	By:	 	 


 


Countersigned:


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


	By:	 	 
	 	Authorized Signature	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 


 




    	- 3 -



    	 



    

 


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	 
	 	 	 	 	 
	 	 	 	(Please print name of Signatory)	 


 


Signature Guarantee:


 


The signature on this assignment must correspond
with the name as written upon the face of the certificate(s), in every particular, without alteration or enlargement, or any change
whatsoever and must be guaranteed by a major Canadian Schedule 1 chartered bank or a member of an acceptable Medallion Signature
Guarantee Program (STAMP, SEMP, MSP). The Guarantor must affix a stamp bearing the actual words "Signature Guaranteed"


 


In the USA, signature guarantees must be
done by members of a "Medallion Signature Guarantee Program" only.


 


Signature guarantees are not accepted from
Treasury Branches, Credit Union or Caisses Populaires unless they are members of the Stamp Medallion Program.


 


 






 


CERTIFICATE


(To be completed if true.)


 


The undersigned party transferring Rights
hereunder, 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 a Person acting jointly or in concert with any of the foregoing. Capitalized terms shall have
the meaning ascribed thereto in the Shareholder Rights Agreement.


 


 


	 	Signature
	 	 	 
	 	(Please print name of Signatory)	 


 





 



 


(To be attached to each Rights Certificate.)


 




    	 



    	 



    

 


FORM OF ELECTION TO EXERCISE


 


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


 


	TO:	 	 


 


The undersigned hereby irrevocably
elects to exercise  whole Rights ________________________________represented by the attached Rights Certificate to purchase the Common Shares or
other securities, if applicable, issuable upon the exercise of such Rights and requests that certificates for such securities
be issued in the name of:


 


	 
	(Name)
	 
	(Address)
	 
	(City and Province)
	 
	Social Insurance Number or other taxpayer identification number.


 


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


 


	 
	(Name)
	 
	(Address)
	 
	(City and Province)
	 
	Social Insurance Number or other taxpayer identification number.


 


	Dated:	 	 	 
	 	 	Signature
	 	 	 
	 	 	(Please print name of Signatory)


 


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


 


Signature must be guaranteed by a Canadian
chartered bank or trust company, a member firm of a recognized stock exchange in Canada a registered national securities exchange
in the United States, a member of the Investment Dealers Association of Canada or National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in Canada or the United States or a member of the Securities
Transfer Association Medallion (Stamp) Program.


 





 



 




    	 



    	 



    

 


CERTIFICATE


 


(To be completed if true.)


 


The undersigned party exercising Rights
hereunder, 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 a Person acting jointly or in concert with any of the foregoing. Capitalized terms shall have
the meaning ascribed thereto in the Shareholder Rights Agreement.


 


	 	Signature
	 	 	 
	 	(Please print name of Signatory)	 


 





 



 


(To be attached to each Rights Certificate.)


 




    	 



    	 



    

 


NOTICE


 


In the event the certification set forth
above in the Forms of Assignment and 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 Shareholder
Rights Agreement). No Rights Certificates shall be issued in exchange for a Rights Certificate owned or deemed to have been owned
by an Acquiring Person or an Affiliate or Associate thereof, or by a Person acting jointly or in concert with an Acquiring Person
or an Affiliate or Associate thereof.