Document:

APOLLO
      GOLD CORPORATION

     

     

    -
      and
      -

     

    CIBC
      MELLON TRUST COMPANY

     

     

     

    SHAREHOLDER
      RIGHTS PLAN AGREEMENT

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      Table
        of
        Contents

       

      
        
          
            	 	
                    Page

                  
	
                    Article 1
                      INTERPRETATION

                  	
                    2

                  
	 	 
	
                    1.1

                  	
                    Certain
                      Definitions

                  	
                    2

                  
	 	 	 
	
                    1.2

                  	
                    Currency

                  	
                    11

                  
	 	 	 
	
                    1.3

                  	
                    Descriptive
                      Headings

                  	
                    11

                  
	 	 	 
	
                    1.4

                  	
                    References
                      to Agreement

                  	
                    11

                  
	 	 	 
	
                    1.5

                  	
                    Grandfather
                      Provision

                  	
                    12

                  
	 	 	 
	
                    1.6

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

                  	
                    12

                  
	 	 	 
	
                    1.7

                  	
                    Acting
                      Jointly or in Concert

                  	
                    12

                  
	 	 	 
	
                    Article 2
                      THE RIGHTS

                  	
                    13

                  
	 	 
	
                    2.1

                  	
                    Legend
                      on Certificates

                  	
                    13

                  
	 	 	 
	
                    2.2

                  	
                    Execution,
                      Authentication, Delivery and Dating of Rights Certificates

                  	
                    13

                  
	 	 	 
	
                    2.3

                  	
                    Registration,
                      Registration of Transfer and Exchange

                  	
                    14

                  
	 	 	 
	
                    2.4

                  	
                    Mutilated,
                      Destroyed, Lost and Stolen Rights Certificates

                  	
                    14

                  
	 	 	 
	
                    2.5

                  	
                    Persons
                      Deemed Owners of Rights

                  	
                    15

                  
	 	 	 
	
                    2.6

                  	
                    Delivery
                      and Cancellation of Certificates

                  	
                    15

                  
	 	 	 
	
                    2.7

                  	
                    Agreement
                      of Rights Holders

                  	
                    16

                  
	 	 	 
	
                    2.8

                  	
                    Rights
                      Certificate Holder Not Deemed a Shareholder

                  	
                    16

                  
	 	 	 
	
                    Article 3
                      EXERCISE OF THE RIGHTS

                  	
                    17

                  
	 	 
	
                    3.1

                  	
                    Initial
                      Exercise Price; Exercise of Rights; Detachment of Rights

                  	
                    17

                  
	 	 	 
	
                    3.2

                  	
                    Adjustments
                      to Exercise Prices; Number of Rights

                  	
                    19

                  
	 	 	 
	
                    Article 4
                      ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
                      TRANSACTIONS

                  	
                    25

                  
	 	 
	
                    4.1

                  	
                    Flip-in
                      Event

                  	
                    25

                  
	 	 	 
	
                    Article 5
                      THE RIGHTS AGENT

                  	
                    26

                  
	 	 
	
                    5.1

                  	
                    General

                  	
                    26

                  
	 	 	 
	
                    5.2

                  	
                    Merger
                      or Amalgamation or Change of Name of Rights Agent

                  	
                    27

                  
	 	 	 
	
                    5.3

                  	
                    Duties
                      of Rights Agent

                  	
                    27

                  
	 	 	 
	
                    5.4

                  	
                    Change
                      of Rights Agent

                  	
                    29

                  
	 	 	 
	
                    Article 6
                      MISCELLANEOUS

                  	
                    30

                  
	 	 
	
                    6.1

                  	
                    Redemption
                      and Waiver

                  	
                    30

                  
	 	 	 
	
                    6.2

                  	
                    Expiration

                  	
                    32

                  
	 	 	 
	
                    6.3

                  	
                    Shareholder
                      Review

                  	
                    32

                  
	 	 	 
	
                    6.4

                  	
                    Issuance
                      of New Rights Certificate

                  	
                    32

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            Table
              of
              Contents

             

            
              
                
                  	 	
                          Page

                        

                

              

            

          

          
            	
                    6.5

                  	
                    Fractional
                      Rights and Fractional Shares

                  	
                    32

                  
	 	 	 
	
                    6.6

                  	
                    Supplements
                      and Amendments

                  	
                    33

                  
	 	 	 
	
                    6.7

                  	
                    Rights
                      of Action

                  	
                    34

                  
	 	 	 
	
                    6.8

                  	
                    Notice
                      of Proposed Actions

                  	
                    35

                  
	 	 	 
	
                    6.9

                  	
                    Notices

                  	
                    35

                  
	 	 	 
	
                    6.10

                  	
                    Costs
                      of Enforcement

                  	
                    36

                  
	 	 	 
	
                    6.11

                  	
                    Successors

                  	
                    36

                  
	 	 	 
	
                    6.12

                  	
                    Benefits
                      of this Agreement

                  	
                    36

                  
	 	 	 
	
                    6.13

                  	
                    Governing
                      Law

                  	
                    36

                  
	 	 	 
	
                    6.14

                  	
                    Language

                  	
                    37

                  
	 	 	 
	
                    6.15

                  	
                    Approvals

                  	
                    37

                  
	 	 	 
	
                    6.16

                  	
                    Declaration
                      as to Non-Canadian Holders

                  	
                    37

                  
	 	 	 
	
                    6.17

                  	
                    Counterparts

                  	
                    37

                  
	 	 	 
	
                    6.18

                  	
                    Severability

                  	
                    37

                  
	 	 	 
	
                    6.19

                  	
                    Effective
                      Date

                  	
                    37

                  
	 	 	 
	
                    6.20

                  	
                    Successors

                  	
                    38

                  
	 	 	 
	
                    6.21

                  	
                    Time
                      of the Essence

                  	
                    38

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

             

          

        

      

    

    SHAREHOLDER
      RIGHTS PLAN AGREEMENT

     

    MEMORANDUM
      OF AGREEMENT
      made as
      of the 17th
      day of
January,
      2007.

     

    BETWEEN:

     

    APOLLO
      GOLD CORPORATION,
      a
      corporation existing under the laws of the Yukon Territory,

    (hereinafter
      called the "Corporation")

     

    OF
      THE
      FIRST PART

     

    -
      and
      -

     

    CIBC
      MELLON TRUST COMPANY,
      a trust
      company existing under the laws of Canada, as Rights Agent

    (hereinafter
      called the "Rights Agent")

     

    OF
      THE
      SECOND PART

     

    WHEREAS
      in order
      to maximize shareholder value and ensure equal treatment of shareholders in
      transactions affecting control of the Corporation, the Board of Directors of
      the
      Corporation has determined that it is advisable for the Corporation to adopt
      a
      shareholder rights plan (the "Rights
      Plan");

     

    AND
      WHEREAS
      in order
      to implement the Rights Plan the Board of Directors of the Corporation
      has:

     

    1. Authorized
      the issuance of one right (a "Right")
      in
      respect of each Common Share (as hereinafter defined) of the Corporation
      outstanding at the Close of Business on January
      17, 2007 (the
      "Record
      Time"),
      such
      distribution to be made to Shareholders of record at the Record Time;
      and

     

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

     

    AND
      WHEREAS
      each
      Right entitles the holder thereof, after the Separation Time, to purchase
      securities of the Corporation (or, in certain cases, of certain other entities)
      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 holders of Rights, and the Rights Agent is willing so to act,
      in
      connection with the issuance, transfer, exchange and replacement of Rights
      Certificates (as hereinafter defined), the exercise of Rights and other matters
      referred to herein;

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    ARTICLE 1

    INTERPRETATION

     

    1.1 Certain
      Definitions

     

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

     

    
      	 	
              (a)

            	
              "Acquiring
                Person"
                means, subject to section 1.5,
                any Person who is the Beneficial Owner of 20% or more of the outstanding
                Voting Shares of the Corporation; 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 of the Corporation as a result of one or any combination
                of:

            

    

     

    
      	 	
              (A)

            	
              an
                acquisition or redemption by the Corporation or a Subsidiary of the
                Corporation of Voting Shares of the Corporation that, by reducing
                the
                number of Voting Shares of the Corporation outstanding, increases
                the
                percentage of outstanding Voting Shares of the Corporation Beneficially
                Owned by such Person to 20% or
                more;

            

    

     

    
      	 	
              (B)

            	
              share
                acquisitions made pursuant to a Permitted Bid or a Competing Permitted
                Bid
                ("Permitted
                Bid Acquisitions");

            

    

     

    
      	 	
              (C)

            	
              share
                acquisitions in respect of which the Board of Directors has waived
                the
                application of section 4.1
                pursuant to the provisions of subsection 6.1(f),
                6.1(g)
                or
                6.1(h)
                or
                that were made on or prior to the date of this Agreement ("Exempt
                Acquisitions");
                or

            

    

     

    
      	 	
              (D)

            	
              share
                acquisitions pursuant to Pro-Rata
                Acquisitions;

            

    

     

    provided,
      however, that if a Person shall become the Beneficial Owner of 20% or more
      of
      the Voting Shares of the Corporation then outstanding by reason of share
      acquisitions or redemptions by the Corporation or a Subsidiary of the
      Corporation, Permitted Bid Acquisitions, Exempt Acquisitions, Pro-Rata
      Acquisitions or Convertible Security Acquisition and, after such share
      acquisitions or redemptions by the Corporation or a Subsidiary of the
      Corporation or Permitted Bid Acquisitions, Exempt Acquisitions or Pro-Rata
      Acquisitions, such Person, while such Person is the Beneficial Owner of 20%
      of
      more of the Voting Shares of the Corporation then outstanding, becomes the
      Beneficial Owner of an additional 1% of outstanding Voting Shares of the
      Corporation other than pursuant to such share acquisitions or redemptions or
      pursuant to Permitted Bid Acquisitions or through Exempt Acquisitions or as
      a
      result of a Pro-Rata Acquisition, then as of the date such Person becomes the
      Beneficial Owner of such additional outstanding Voting Shares, such Person
      shall
      be an "Acquiring
      Person";

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iii)

            	
              for
                the period of 10 days after the Disqualification Date (as hereinafter
                defined), any Person who becomes the Beneficial Owner of 20% or more
                of
                the outstanding Voting Shares of the Corporation as a result of such
                Person becoming disqualified from relying on clause 1.1(d)(iv) hereof
                where such disqualification results solely because such Person has
                made or
                proposes to make a Take-over Bid in respect of securities of the
                Corporation alone or by acting jointly or in concert with any other
                Person
                the first date of public announcement (which, for purposes of this
                definition, shall include, without limitation, a report filed pursuant
                to
                the Securities Act) by such Person or the Corporation of the intent
                of
                such Person to commence such a Take-over Bid being herein referred
                to as
                the "Disqualification
                Date";
                and

            

    

     

    
      	 	
              (iv)

            	
              an
                underwriter or member of a banking or selling group that acquires
                Shares
                from the Corporation in connection with the distribution of
                securities.

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

            	
              "Associate"
                means any spouse of such specified Person or any person of the same
                or
                opposite sex to whom such specified Person is married or with whom
                such
                specified Person is living in a conjugal relationship outside marriage,
                or
                any relative of such specified Person, such spouse or other person
                who has
                the same home as such specified
                Person;

            

    

     

    
      	 	
              (d)

            	
              Subject
                to section 1.5,
                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, directly or indirectly the right to acquire (whether
                such
                right is exercisable immediately or upon the occurrence of a contingency)
                within 60 days pursuant to any agreement, arrangement or understanding
                (other than customary agreements with and between underwriters and
                banking
                group or selling group members with respect to a distribution of
                securities and other than pledges of securities in the ordinary course
                of
                business) or upon the exercise of any conversion right, exchange
                right,
                share purchase right (other than a Right), warrant or option ;
                and

            

    

     

    
      	 	
              (iii)

            	
              any
                securities that are Beneficially Owned, directly or indirectly, within
                the
                meaning of the foregoing provisions of this subsection 1.1(d)
                by
                any other Person with which such Person is acting jointly or in
                concert;

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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:

     

    
      	 	
              (iv)

            	
              because
                (A) the holder of such security has agreed to deposit or tender such
                security to a Take-Over Bid made by such Person or any of such Person's
                Affiliates or Associates or to any other Person referred to in clause
                (iii) of this definition pursuant to a Permitted Lock-Up Agreement
                or (B)
                such security has been deposited or tendered pursuant to any Take-over
                Bid
                made by such Person or made by any of such Person's Affiliates or
                Associates or any other Person referred to in clause (iii) of this
                definition until such deposited security has been taken up or paid
                for,
                whichever shall occur first;

            

    

     

    
      	 	
              (v)

            	
              because
                such Person holds such security; provided
                that:

            

    

     

    
      	 	
              (A)

            	
              the
                ordinary business of such Person (the "Investment
                Manager")
                is the management of investment funds for others and such security
                is held
                by the Investment Manager in the ordinary course of such business
                in the
                performance of such Investment Manager's duties for the managed account
                of
                any other Person; or

            

    

     

    
      	 	
              (B)

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

            

    

     

    
      	 	
              (C)

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

            

    

     

    
      	 	
              (D)

            	
              such
                Person (the "Administrator")
                is the administrator or trustee of one or more pension funds or plans
                (a
                "Plan"),
                or is a Plan, registered under the laws of Canada or any Province
                thereof
                or the laws of the United States of America or any State thereof;
                or

            

    

     

    
      	 	
              (E)

            	
              such
                person is a Crown Agent or agency;

            

    

     

    provided,
      in any of the above cases mentioned in clauses A, B, C, D or E above, that
      the
      Investment Manager, the Trust Company, the Statutory Body, the Administrator
      or
      the Plan, or Crown Agency, as the case may be, is not then making a Take-over
      Bid or has not then announced a current intention to make a Take-over Bid,
      other
      than an Offer to Acquire Voting Shares or other securities (x) 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, (y) pursuant to a distribution by the Corporation
      or (z) by means of a Permitted Bid;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (vi)

            	
              because
                such Person is a Client of the same Investment Manager as another
                Person
                on whose account the Investment Manager holds such security, or because
                such Person is 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 because such Person is a Plan with the same Administrator
                as
                another Plan on whose account the Administrator holds such securities;
                or

            

    

     

    
      	 	
              (vii)

            	
              because
                such Person is a Client of an Investment Manager and such security
                is
                owned at law or in equity by the Investment Manager or because such
                Person
                is an Estate Account or an Other Account of a Trust Company and such
                security is owned at law or in equity by the Trust Company or such
                Person
                is a Plan and such security is owned at law or in equity by the
                Administrator; or

            

    

     

    
      	 	
              (viii)

            	
              because
                such Person is the registered holder of securities as a result of
                carrying
                on the business of or acting as a nominee of a securities
                depository.

            

    

     

    For
      purposes of this Agreement in determining the percentage of the outstanding
      Voting Shares with respect to which a Person is or is deemed to be the
      Beneficial Owner, any unissued Voting Shares as to which such Person is deemed
      the Beneficial Owner pursuant to this subsection 1.1(d)
      shall be
      deemed outstanding.

     

    
      	 	
              (e)

            	
              "Board
                of Directors"
                means the board of directors of the Corporation, or if duly constituted
                and whenever duly empowered, the executive committee of the board
                of
                directors of the Corporation;

            

    

     

    
      	 	
              (f)

            	
              "Business
                Day"
                means any day other than a Saturday, a Sunday or a day on which banking
                institutions in Toronto, Ontario are authorized or obligated by law
                to
                close;

            

    

     

    
      	 	
              (g)

            	
              "Close
                of Business"
                on
                any given date means the time of such date (or, if such date is not
                a
                Business Day, the time on the next succeeding Business Day) at which
                the
                offices of the transfer agent for the Common Shares in Toronto (or,
                after
                the Separation Time, the offices of the Rights Agent in Toronto)
                are
                closed to the public;

            

    

     

    
      	 	
              (h)

            	
              "Common
                Shares",
                when used with reference to the Corporation, shall mean the Common
                Shares
                in the capital of the Corporation;

            

    

     

    
      	 	
              (i)

            	
              "Competing
                Permitted Bid"
                means a Take-over Bid that:

            

    

     

    
      	 	
              (i)

            	
              is
                made after a Permitted Bid has been made and prior to the expiry
                of the
                Permitted Bid;

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              satisfies
                all components of the definition of a Permitted Bid other than the
                requirement in clause (ii) thereof;
                and

            

    

     

    
      	 	
              (iii)

            	
              contains,
                and the take-up and payment for securities tendered or deposited
                is
                subject to, irrevocable and unqualified provisions that no Voting
                Shares
                shall be taken up or paid for pursuant to the Take-over Bid prior
                to the
                Close of Business on a date that is no earlier than the later of
                (i) 35
                days after the date of the Take-over Bid, and (ii) the 60th day after
                the
                earliest date on which any other Permitted Bid that is then in existence
                was made.

            

    

     

    
      	 	
              (j)

            	
              "controlled":
                a
                body corporate is "controlled" by another Person if, and only
                if:

            

    

     

    
      	 	
              (i)

            	
              securities
                entitled to vote in the election of directors carrying more than
                50% of
                the votes for the election of directors are held, directly or indirectly,
                by or for the benefit of the other Person;
                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",
      "under
      common control with"
      shall
      be interpreted accordingly.

     

    
      	 	
              (k)

            	
              "Convertible
                Security"
                means, with respect to any security, a security convertible into
                or
                exchangeable for the first-mentioned
                security.

            

    

     

    
      	 	
              (l)

            	
              "Convertible
                Security Acquisition"
                means the acquisition of Voting Shares upon the exercise of a Convertible
                Security received by a Person pursuant to a Permitted Bid Acquisition,
                an
                Exempt Acquisition or a Pro-Rata
                Acquisition.

            

    

     

    
      	 	
              (m)

            	
              "Exempt
                Acquisition"
                shall have the meaning ascribed thereto in subclause
                1.1(a)(ii)(C);

            

    

     

    
      	 	
              (n)

            	
              "Exercise
                Price"
                shall mean, as of any date, the price at which a holder of a Right
                may
                purchase the securities issuable upon exercise of such Right. Until
                adjustment thereof in accordance with the terms hereof, the Exercise
                price
                for each Right shall be $100;

            

    

     

    
      	 	
              (o)

            	
              "Expiration
                Time"
                shall mean the earlier of

            

    

     

    
      	 	
              (i)

            	
              the
                Termination Time; and

            

    

     

    
      	 	
              (ii)

            	
              subject
                to section 6.19,
                the Close of Business on the 5th anniversary of the date
                hereof;

            

    

     

    
      	 	
              (p)

            	
              "Flip-in
                Event"
                shall mean a transaction occurring subsequent to the date of this
                Agreement as a result of or pursuant to which any Person shall become
                an
                Acquiring Person, provided that a Flip-in Event shall be deemed to
                occur
                at the Close of Business on the 10th day (or such earlier day as
                the Board
                of Directors may determine) after the Share Acquisition
                Date;

            

    

     

    
      	 	
              (q)

            	
              "Independent
                Shareholders"
                means holders of Voting Shares of the Corporation other than Voting
                Shares
                of the Corporation Beneficially Owned
                by:

            

    

     

    
      	 	
              (i)

            	
              any
                Acquiring Person;

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (ii)

            	
              any
                Offeror, other than a person described in subclause 1.1(d)(v)
                hereof;

            

    

     

    
      	 	
              (iii)

            	
              any
                Associate or Affiliate of any such Acquiring Person or and
                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 and any similar
                plan
                or trust for the benefit of employees of the Corporation unless the
                beneficiaries of the plan or trust direct the manner in which the
                Voting
                Shares are to be voted or withheld from voting or direct whether
                the
                Voting Shares are to be tendered to a Take-over
                Bid.

            

    

     

    
      	 	
              (r)

            	
              "Market
                Price"
                per share of any securities on any date of determination shall mean
                the
                average of the daily closing prices per share of such securities
                (determined as described below) on each of the 20 consecutive Trading
                Days
                through and including the Trading Day immediately preceding such
                date;
                provided, however, that if an event of a type analogous to any of
                the
                events described in section 3.2
                shall have caused the closing price in respect of any Trading Day
                used to
                determine the Market Price not to be fully comparable with the closing
                price on such date of determination or, if the date of determination
                is
                not a Trading Day, on the immediately preceding Trading Day, each
                such
                closing price so used shall be appropriately adjusted in a manner
                analogous to the applicable adjustment provided for in section
                3.2
                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 share
                of
                such securities as reported by the principal stock exchange in Canada
                on
                which such securities are listed and posted for
                trading;

            

    

     

    
      	 	
              (ii)

            	
              if
                the securities are not listed and posted for trading on any stock
                exchange
                in Canada, the last sale price, regular way, or, in case no such
                sale
                takes place on such date, the average of the closing bid and asked
                prices,
                regular way, for each share of such securities as reported in the
                principal consolidated transaction reporting system with respect
                to
                securities listed or admitted to trading on the principal national
                securities exchange in the United States on which such securities
                are
                listed or admitted to trading;

            

    

     

    
      	 	
              (iii)

            	
              if
                for any reason none of such prices is available on such day or the
                securities are not listed and posted for trading on a stock exchange
                in
                Canada or a national securities exchange in the United States, the
                last
                quoted price, or if not so quoted, the average of the reported high
                bid
                and low asked prices for each share of such securities in an
                over-the-counter market then in use;
                or

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (iv)

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

            

    

     

    provided,
      however, that if on any such date the securities are not traded on any exchange
      or in the over-the-counter market, the closing price per share of such
      securities on such date shall mean the fair value per share of such securities
      on such date determined by a recognized investment dealer or investment banker
      with respect to the fair value per share of such securities.

     

    
      	 	
              (s)

            	
              "Permitted
                Bid"
                means a Take-over Bid that complies with the following
                provisions:

            

    

     

    
      	 	
              (i)

            	
              the
                Take-over Bid is made by way of a Take-over Bid circular delivered
                to all
                holders of Voting Shares of the Corporation or registered on the
                books of
                the Corporation;

            

    

     

    
      	 	
              (ii)

            	
              the
                Take-over Bid shall contain, and the take up and payment for securities
                tendered or deposited thereunder shall be subject to, an irrevocable
                and
                unqualified condition that no Shares shall be taken up or paid for
                pursuant to the Take-over Bid prior to the Close of Business or a
                date
                which is not less than 60 days following the date of the Take-over
                Bid;

            

    

     

    
      	 	
              (iii)

            	
              the
                Take-over Bid shall contain irrevocable and unqualified provisions
                that
                all Shares may be deposited pursuant to the Take-over Bid at any
                time
                prior to the Close of Business on the date referred to in clause
                (ii)
                hereof and that all Shares deposited pursuant to the Take-over Bid
                may be
                withdrawn at any time prior to the Close of Business on such
                date;

            

    

     

    
      	 	
              (iv)

            	
              the
                Take-over Bid shall contain an irrevocable and unqualified condition
                that
                not less than 50 percent of the then outstanding Voting Shares owned
                by
                Independent Shareholders must be deposited to the Take-over Bid and
                not
                withdrawn at the Close of Business on the date referred to in clause
                (iii)
                hereof;

            

    

     

    
      	 	
              (v)

            	
              the
                Take-over Bid shall contain an irrevocable and unqualified provision
                that,
                should the condition referred to in clause (iv) hereof be met, the
                Offeror
                will make a public announcement of that fact, the Take-over Bid will
                be
                extended on the same terms for a period of not less than 10 Business
                Days
                from the date of such public
                announcement;

            

    

     

    The
      term
      "Permitted
      Bid"
      shall
      include a Competing Permitted Bid.

     

    
      	 	
              (t)

            	
              "Permitted
                Bid Acquisitions"
                shall have the meaning ascribed thereto in subclause
                1.1(a)(ii)(B);

            

    

     

    
      	 	
              (u)

            	
              "Permitted
                Lock-Up Agreement"
                means an agreement between an Offeror, any of its Affiliates or Associates
                or any other Person acting jointly or in concert with the Offeror
                and a
                Person (the "Locked-up
                Person")
                who is not an Affiliate or Associate of the Offeror or a Person acting
                jointly or in concert with the Offeror whereby the Locked-up Person
                agrees
                to deposit or tender Voting Shares held by the Locked-up Person to
                the
                Offeror's Take-over Bid or to any Take-over Bid made by any of the
                Offeror's Affiliates or Associates or made by any other Person acting
                jointly or in concert with the Offeror (the "Lock-up
                Bid"),
                provided that:

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

            	
              the
                agreement:

            

    

     

    
      	 	
              (A)

            	
              permits
                the Locked-up Person to withdraw the Voting Shares from the agreement
                in
                order to tender or deposit the Voting Shares to another Take-over
                Bid or
                to support another transaction that contains an offering price for
                each
                Voting Share that is higher than the offering price contained in
                or
                proposed to be contained in the Lock-up
                Bid;

            

    

     

    
      	 	
              (B)

            	
              (a)
                permits the Locked-up Person to withdraw the Voting Shares from the
                agreement in order to tender or deposit the Voting Shares to another
                Take-over Bid or to support another transaction that contains an
                offering
                price for each Voting Share that exceeds by as much as or more than
                a
                specified amount (the "Specified
                Amount")
                the offering price for each Voting Share contained in or proposed
                to be
                contained in the Lock-up Bid; and (b) does not by its terms provide
                for a
                Specified Amount that is greater than 7% of the offering price contained
                in or proposed to be contained in the Lock-up Bid;
                and

            

    

     

    
      	 	
              (ii)

            	
              no
                "break-up" fees, "top-up" fees, penalties or other amounts that exceed
                in
                the aggregate one half of the cash equivalent of any amount in excess
                of
                the amount offered under the Lock-up Bid and that the Locked-up Person
                receives pursuant to another Take-over Bid or transaction shall be
                payable
                pursuant to the agreement in the event that the Locked-up Person
                fails to
                tender Voting Shares pursuant thereto in order to accept the Take-over
                Bid
                or support another transaction.

            

    

     

    
      	 	
              (v)

            	
              "Person"
                shall include any individual, firm, partnership, association, trust,
                trustee, executor, administrator, legal personal representative,
                group,
                body corporate, corporation, unincorporated organization, syndicate
                or
                other entity;

            

    

     

    
      	 	
              (w)

            	
              "Pro
                Rata Acquisition"
                shall mean an acquisition of Voting Shares of the Corporation (i)
                as a
                result of a stock dividend, a stock split, or other event pursuant
                to
                which such Person receives or acquires Voting Shares of the Corporation
                or
                Convertible Securities on the same pro rata basis as all other holders
                of
                Voting Shares of the same class or series of the Corporation, or
                (ii)
                pursuant to a regular dividend reinvestment or other plan of the
                Corporation made available by the Corporation to the holders of Voting
                Shares of the Corporation to subscribe for or purchase Voting Shares
                of
                the Corporation or Convertible Securities, provided that such rights
                are
                acquired directly from the Corporation and not from any other Person,
                or
                (iv) pursuant to a distribution by the Corporation of Voting Shares,
                or
                securities convertible into or exchangeable for Voting Shares or
                Convertible Securities, pursuant to a prospectus or a securities
                exchange
                take-over, bid circular, or to an amalgamation, merger or other statutory
                procedure requiring shareholders' approval, or (v) pursuant to a
                distribution by the Corporation of Voting Shares or Convertible Securities
                by way of a private placement by the Corporation or upon the exercise
                by
                an individual employee of stock options granted under a stock option
                plan
                of the Corporation or rights to purchase securities granted under
                a share
                purchase plan of the Corporation, provided that (1) all necessary
                stock
                exchange approvals for such private placement, stock option plan
                or share
                purchase plan have been obtained and such private placement, stock
                option
                plan or share purchase plan complies with the terms and conditions
                of such
                approvals and (2) such Person does not become the Beneficial Owner
                of more
                than 25% of the Voting Shares outstanding immediately prior to the
                distribution, and in making this determination the Voting Shares
                to be
                issued to such Person in the distribution shall be deemed to be held
                by
                such Person but shall not be included in the aggregate number of
                outstanding Voting Shares immediately prior to the
                distribution.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (x)

            	
              "Record
                Time"
                shall mean 5:00 p.m. (Toronto time) on January
                17, 2007;

            

    

     

    
      	 	
              (y)

            	
              "Right"
                shall have the meaning ascribed thereto in the recitals
                hereto;

            

    

     

    
      	 	
              (z)

            	
              "Rights
                Agent"
                means CIBC Mellon Trust Company, and includes any successor Rights
                Agent
                hereunder;

            

    

     

    
      	 	
              (aa)

            	
              "Rights
                Certificates"
                shall mean the certificates representing the Rights after the Separation
                Time, which shall be in the form attached hereto as Exhibit
                A;

            

    

     

    
      	 	
              (bb)

            	
              "Securities
                Act"
                means the Securities Act, R.S.O. 1990, c. S5, as amended, and the
                regulations and rules thereunder, and any comparable or successor
                laws or
                regulations thereto;

            

    

     

    
      	 	
              (cc)

            	
              "Separation
                Time"
                shall mean, subject to section 6.1,
                the Close of Business on the eighth Trading Day after the earlier
                of:

            

    

     

    
      	 	
              (i)

            	
              the
                Share Acquisition Date; and

            

    

     

    
      	 	
              (ii)

            	
              the
                date of the commencement of, or first public announcement (provided
                such
                announcement is made after the Record Time) of the intent of any
                Person
                (other than the Corporation or any Subsidiary of the Corporation)
                to
                commence a Take-over Bid (other than a Permitted Bid), or such later
                time
                as may be determined by the Board of
                Directors;

            

    

     

    provided
      that, if the foregoing results in the Separation Time being prior to the Record
      Time, the Separation Time shall be the Record Time and provided further that,
      if
      any Take-over Bid referred to in clause (ii) of this subsection 1.1(cc)
      expires,
      or is cancelled, terminated or otherwise withdrawn prior to the Separation
      Time,
      such Take-over Bid shall be deemed, for the purposes of this subsection
1.1(cc),
      never
      to have been made;

     

    
      	 	
              (dd)

            	
              "Shares"
                means shares in the capital of the
                Corporation;

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ee)

            	
              "Share
                Acquisition Date"
                means the first date of public announcement (including a report filed
                pursuant to the Securities Act by the Corporation or an Acquiring
                Person)
                of facts indicating that a Person has become an Acquiring
                Person;

            

    

     

    
      	 	
              (ff)

            	
              "Subsidiary"
                of
                a Person shall have the meaning ascribed thereto in the Securities
                Act;

            

    

     

    
      	 	
              (gg)

            	
              "Take-over
                Bid"
                means an Offer to Acquire Voting Shares of the Corporation or other
                securities of the Corporation if, assuming that the Voting Shares
                of the
                Corporation subject to the Offer to Acquire are acquired 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 Voting Shares
                of the
                Corporation then outstanding;

            

    

     

    
      	 	
              (hh)

            	
              "Termination
                Time"
                means the time at which the right to exercise Rights shall terminate
                pursuant to sections 6.1,
                6.3,
                6.6
                or
                6.19;

            

    

     

    
      	 	
              (ii)

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

            

    

     

    
      	 	
              (jj)

            	
              "Voting
                Share",
                when used with reference to the Corporation, means any share in the
                capital of the Corporation to which is attached a right to vote for
                the
                election of all directors, generally, and when used with reference
                to any
                Person other than the Corporation, shall mean a Common Share of such
                Person and any other share of capital stock or voting interests of
                such
                Person entitled to vote generally in the election of all
                directors.

            

    

     

    1.2 Currency

     

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

     

    1.3 Descriptive
      Headings

     

    Descriptive
      headings appear herein for convenience only and shall not control or affect
      the
      meaning or construction of any of the provisions hereof.

     

    1.4 References
      to Agreement

     

    References
      to "this
      Agreement",
      "hereto",
      "herein",
      "hereby",
      "hereunder",
      "hereof"
      and
      similar expressions refer to this Agreement and not to any particular Article,
      section, subsection, clause, subclause, subdivision or other portion hereof
      and
      include any and every instrument supplemental or ancillary hereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    1.5 Grandfather
      Provision

     

    For
      the
      purposes of determining whether a Person is an Acquiring Person and interpreting
      the definition of Acquiring Person, a Person shall not be and shall not be
      deemed to be an Acquiring Person if such Person (a "Grandfathered
      Person")
      is the
      Beneficial Owner of 20% or more of the outstanding Voting Shares of the
      Corporation determined as at the Record Time; provided, however, that this
      exception shall not be, and shall cease to be, applicable to a Grandfathered
      Person in the event that a Grandfathered Person shall, after the Record Time,
      become the Beneficial Owner of an additional 1% of the outstanding Voting Shares
      of the Corporation other than pursuant to share acquisitions or redemptions
      by
      the Corporation or a Subsidiary of the Corporation, Permitted Bid Acquisitions,
      Exempt Acquisitions, Pro-Rata Acquisitions or Convertible Security Acquisition;
      provided further that, in the event that this exception shall cease to be
      applicable to a Grandfathered Person as aforesaid, such a Grandfathered Person
      shall be and shall be deemed to be an Acquiring Person as at and from the time
      that this exception shall not be so applicable.

     

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

     

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

     

    The
      percentage of outstanding Voting Shares Beneficially Owned by any Person shall,
      for the purposes of this Agreement, be and be deemed to be the product
      determined by the formula:

     

    
      	 	100 	
              X

            	A	 
	 	 	 	B	 

    

     

    where:

     

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

     

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

     

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

     

    1.7 Acting
      Jointly or in Concert

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    ARTICLE 2

     

    THE
      RIGHTS

     

    2.1 Legend
      on Certificates

     

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

     

    Until
      the
      Separation Time (as defined in the 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 the 17th
      day of
January,
      2007 (the
      "Rights
      Agreement"),
      between the Corporation and CIBC Mellon Trust Company, as rights agent, the
      terms of which are hereby incorporated herein by reference and a copy of which
      may be inspected during normal business hours at the principal executive offices
      of the Corporation. Under certain circumstances, as set forth in the Rights
      Agreement, such Rights may be terminated, may expire, may become void (if,
      in
      certain cases, they are "Beneficially
      Owned"
      by an
      "Acquiring
      Person",
      as
      such terms are defined in the Rights Agreement, whether currently held by or
      on
      behalf of such Person or any subsequent holder) or may be evidenced by separate
      certificates and may no longer be evidenced by this certificate. The Corporation
      will mail or arrange for the mailing of a copy of the Rights Agreement to the
      holder of this certificate without charge as soon as is practicable after the
      receipt of a written request therefor.

     

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

     

    2.2 Execution,
      Authentication, Delivery and Dating of Rights Certificates

     

    
      	 	
              (a)

            	
              The
                Rights Certificates shall be executed on behalf of the Corporation
                by any
                of the Chairman of the Board, the President or any Vice-President
                (including any Senior Vice-President), together with any other of
                such
                persons or together with any one of the Secretary, the Treasurer,
                any
                Assistant Secretary or any Assistant Treasurer, under the corporate
                seal
                of the Corporation, which shall be reproduced thereon. The signature
                of
                any of the officers of the Corporation 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 prior
                to 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 in writing of such Separation Time and will
                deliver Rights Certificates executed by the Corporation to the Rights
                Agent for countersignature and disclosure statements describing the
                Rights, and the Rights Agent shall manually in a manner satisfactory
                to
                the Corporation countersign and mail such Rights Certificates and
                disclosure statements to the holders of the Rights pursuant to subsection
                3.1(c).
                No Rights Certificate shall be valid for any purpose until countersigned
                by the Rights Agent as aforesaid.

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (c)

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

            

    

     

    2.3 Registration,
      Registration of Transfer and Exchange

     

    
      	 	
              (a)

            	
              After
                the Separation Time, the Corporation will cause to be kept a register
                (the
                "Rights
                Register")
                in which, subject to such reasonable regulations as it may prescribe,
                the
                Corporation will provide for the registration and transfer of Rights.
                The
                Rights Agent is hereby appointed the "Rights
                Registrar"
                for the purpose of maintaining the Rights Register for the Corporation
                and
                registering Rights and transfers of Rights as herein provided. 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. 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 subsection
                (c)
                of
                this section 2.3,
                the Corporation will execute, and the Rights Agent will manually
                countersign and deliver, in the name of the holder or the designated
                transferee or transferees, as required pursuant to the holder's
                instructions, one or more new Rights Certificates evidencing the
                same
                aggregate number of Rights as did the Rights Certificates so
                surrendered.

            

    

     

    
      	 	
              (b)

            	
              All
                Rights issued upon any registration of transfer or exchange of Rights
                Certificates shall be 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 section 2.3,
                the Corporation may require the payment of a sum sufficient to cover
                any
                tax or other governmental charge that may be imposed in relation
                thereto
                and any other expenses (including the fees and expenses of the Rights
                Agent) in connection therewith or in relation
                thereto.

            

    

     

    2.4 Mutilated,
      Destroyed, Lost and Stolen Rights Certificates

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

            	
              such
                security or indemnity as may be required by each of them in their
                sole
                discretion 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 its 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
                section 2.4,
                the Corporation may require the payment of a sum sufficient to cover
                any
                tax or other governmental charge that may be imposed in relation
                thereto
                and any other expenses (including the fees and expenses of the Rights
                Agent) in connection therewith.

            

    

     

    
      	 	
              (d)

            	
              Every
                new Rights Certificate issued pursuant to this section 2.4
                in
                lieu of any destroyed, lost or stolen Rights Certificate 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 by the Corporation
                hereunder.

            

    

     

    2.5 Persons
      Deemed Owners of Rights

     

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

     

    2.6 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 that the Corporation may have acquired in any manner
      whatsoever, and all Rights Certificates so delivered shall be promptly cancelled
      by the Rights Agent. No Rights Certificate shall be countersigned in lieu of
      or
      in exchange for any Rights Certificates cancelled as provided in this section
      2.6,
      except
      as expressly permitted by this Agreement. The Rights Agent shall destroy all
      cancelled Rights Certificates and upon written request by the Corporation,
      deliver a certificate of destruction to the Corporation.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    2.7 Agreement
      of Rights Holders

     

    Every
      holder of Rights, by accepting the same, consents and agrees with 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 the
                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 Share
                representing such Right;

            

    

     

    
      	 	
              (c)

            	
              that
                after the Separation Time, the Rights Certificates will be transferable
                only upon registration of the transfer 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 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 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
                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 upon exercise of a Right (except
                as
                provided herein);

            

    

     

    
      	 	
              (f)

            	
              that
                subject to the provisions of Section 6.6,
                without the approval of any holder of Rights 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 any preliminary
                or
                permanent injunction or other order, decree or ruling issued by a
                court of
                competent jurisdiction or by a governmental, regulatory or administrative
                agency or commission, or any statute, rule, regulation or executive
                order
                promulgated or enacted by a governmental authority, prohibiting or
                otherwise restraining performance of such
                obligations.

            

    

     

    2.8 Rights
      Certificate Holder Not Deemed a Shareholder

     

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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    ARTICLE 3

     

    EXERCISE
      OF THE RIGHTS

     

    3.1 Initial
      Exercise Price; Exercise of Rights; Detachment of Rights

     

    
      	 	
              (a)

            	
              Subject
                to adjustment as herein set forth, from and after the Separation
                Time and
                prior to the Expiration Time, each Right will entitle the holder
                thereof
                to purchase one Common Share for the Exercise Price (which Exercise
                Price
                and number of 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)

            	
              for
                administrative purposes, each Right will be evidenced by the certificate
                for the associated Share registered in the name of the holder thereof
                (which certificates shall also be deemed to be Rights Certificates)
                and
                will be transferable only together with, and will be transferred
                by a
                transfer of, such associated 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 the Rights shall be separate from and
                independent of Shares.

            

    

     

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

     

    
      	 	
              (A)

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

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (B)

            	
              a
                disclosure statement describing the
                Rights;

            

    

     

    provided
      that a Nominee shall be sent the materials provided for in subclauses (A) and
      (B) only in respect of all Common Shares held of record by it that are not
      Beneficially Owned by an Acquiring Person.

     

    
      	 	
              (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 Toronto or at any other office of
                the
                Rights Agent in the cities designated from time to time for such
                purpose
                by the Corporation) the Rights Certificate evidencing such Rights
                together
                with:

            

    

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

            	
              payment
                by certified cheque, banker's draft or money order payable to the
                order of
                the Rights Agent, of a sum equal to the applicable Exercise Price
                multiplied by the number of Rights being exercised and a sum sufficient
                to
                cover any transfer tax or charge that 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 the relevant Shares
                in a name
                other than that of the holder of the Rights being
                exercised.

            

    

     

    
      	 	
              (e)

            	
              Upon
                receipt of the Rights Certificate that is accompanied
                by:

            

    

     

    
      	 	
              (i)

            	
              a
                completed Election to Exercise that does not indicate that such Right
                is
                null and void as provided by subsection 4.1(b);
                and

            

    

     

    
      	 	
              (ii)

            	
              payment
                as set forth in subsection 3.1(d),

            

    

     

    the
      Rights Agent will thereupon promptly:

     

    
      	 	
              (iii)

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

            

    

     

    
      	 	
              (iv)

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

            

    

     

    
      	 	
              (v)

            	
              after
                receipt of such certificate, deliver the same to or to the order
                of the
                registered holder of such Rights Certificate, registered in such
                name or
                names as may be designated by such holder;

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (vi)

            	
              when
                appropriate, after receipt, deliver such cash to or to the order
                of the
                registered holder of the Rights Certificate;
                and

            

    

     

    
      	 	
              (vii)

            	
              tender
                to the Corporation all payments received on exercise of the
                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 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 Shares delivered upon exercise of Rights shall, at the time of
                delivery of the certificates representing such Shares (subject to
                payment
                of the Exercise Price), be duly and validly authorized, issued and
                delivered as fully paid and
                non-assessable;

            

    

     

    
      	 	
              (ii)

            	
              take
                all such action as may be necessary and within its power to comply
                with
                any applicable requirements of the Securities Act and any other applicable
                law, rule or regulation, in connection with the issuance and delivery
                of
                the Rights Certificates and the issuance of any Shares upon exercise
                of
                Rights;

            

    

     

    
      	 	
              (iii)

            	
              use
                reasonable efforts to cause all Shares issued upon exercise of Rights
                to
                be listed on the principal exchanges on which the Shares of such
                class or
                series were traded prior to the Share Acquisition
                Date;

            

    

     

    
      	 	
              (iv)

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

            

    

     

    
      	 	
              (v)

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

            

    

     

    3.2 Adjustments
      to Exercise Prices; Number of Rights

     

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

     

    
      	 	
              (a)

            	
              In
                the event the Corporation shall at any time after the Record Time
                and
                prior to the Expiration Time:

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (i)

            	
              declare
                or pay a dividend on the Common Shares payable in Common Shares (or
                other
                securities exchangeable for or convertible into or giving a right
                to
                acquire Common Shares) other than pursuant to any optional stock
                dividend
                program;

            

    

     

    
      	 	
              (ii)

            	
              subdivide
                or change the outstanding Common Shares into a greater number of
                Shares;

            

    

     

    
      	 	
              (iii)

            	
              combine
                or change the outstanding Common Shares into a smaller number of
                Shares;
                or

            

    

     

    
      	 	
              (iv)

            	
              issue
                any Common Shares (or other securities exchangeable for or convertible
                into or giving a right to acquire Common Shares in respect of, in
                lieu of
                or in exchange for existing Common Shares in a reclassification,
                amalgamation, merger, arrangement or consolidation, except as otherwise
                provided in this section 3.2,

            

    

     

    the
      Exercise Price in effect at the time of the record date for such dividend or
      of
      the effective date of such subdivision, combination or other change, and the
      number and kind of Shares or other securities, as the case may be, issuable
      on
      such date, shall be proportionately adjusted so that the holder of any Right
      exercised after such time shall be entitled to receive, upon payment of the
      applicable Exercise Price then in effect, the aggregate number and kind of
      Shares or other securities, as the case may be, that, if such Right had been
      exercised immediately prior to such date and at a time when the Share transfer
      books of the Corporation were open, he would have been entitled to receive
      by
      virtue of such dividend, subdivision, combination or reclassification,
      amalgamation, merger, arrangement or consolidation. If an event occurs that
      would require an adjustment under both this section 3.2and
      section 4.1,
      the
      adjustment provided for in this section 3.2shall
      be
      in addition to, and shall be made prior to, any adjustment required pursuant
      to
      section 4.1.

     

    
      	 	
              (b)

            	
              In
                case the Corporation shall at any time after the Record Time and
                prior to
                the Expiration Time fix a record date for the issuance of rights,
                options
                or warrants to all holders of Common Shares entitling them to subscribe
                for or purchase (for a period expiring within 45 calendar days after
                such
                record date) Common Shares (or shares having the same rights, privileges
                and preferences as Common Shares ("equivalent
                common shares"))
                or securities convertible into Common Shares or equivalent common
                shares
                at a price per Common Share or per equivalent common share (or having
                a
                conversion price per share, if a security convertible into Common
                Shares
                or equivalent common shares) less than the Market Price per Common
                Share
                on such record date, the Exercise Price in respect of the Rights
                to be in
                effect after such record date shall be determined by multiplying
                the
                Exercise Price in respect of the Rights in effect immediately prior
                to
                such record date by a fraction:

            

    

     

    
      	 	
              (i)

            	
              the
                numerator of which 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 and/or equivalent
                common shares so to be offered (and/or the aggregate initial conversion
                price of the convertible securities so to be offered) would purchase
                at
                such Market Price per Common Share;
                and

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              the
                denominator of which shall be the number of Common Shares outstanding
                on
                such record date, plus the number of additional Common Shares and/or
                equivalent common shares to be offered for subscription or purchase
                (or
                into which the convertible securities so to be offered are initially
                convertible).

            

    

     

    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 the Rights. Such adjustment shall be made
      successively whenever such a record date is fixed and, in the event that such
      rights or warrants are not so issued, the Exercise Price in respect of the
      Rights shall be adjusted to be the Exercise Price that would then be in effect
      if such record date had not been fixed. The granting of the right to purchase
      Common Shares or equivalent Common Shares (whether from treasury or otherwise)
      pursuant to any distribution or interest reinvestment plan and/or any share
      purchase plan providing for the reinvestment of dividends payable on securities
      of the Corporation and/or the investment of periodic optional payments and/or
      employee benefit or similar plans (so long as such right to purchase is in
      no
      case evidenced by the delivery of rights or warrants) shall not be deemed to
      constitute an issue of rights or warrants by the Corporation; provided, however,
      that in the case of any dividend reinvestment plan, 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
                case the Corporation shall at any time after the Record Time and
                prior to
                the Expiration Time fix a record date for a distribution to all holders
                of
                Common Shares (including any such distribution made in connection
                with a
                merger in which the Corporation is the continuing corporation) of
                evidences of indebtedness, cash (other than a dividend paid in the
                ordinary course or dividends paid in Common Shares, but including
                any
                dividend payable in securities other than Common Shares), assets
                or
                subscription rights or warrants (excluding those referred to in subsection
                3.2(b)),
                the Exercise Price in respect of the Rights to be in effect after
                such
                record date shall be determined by multiplying the Exercise Price
                in
                respect of the Rights in effect immediately prior to such record
                date by a
                fraction:

            

    

     

    
      	 	
              (i)

            	
              the
                numerator of which shall be the Market Price per Common Share on
                such
                record date, less the fair market value (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 the Rights) of the portion of the cash,
                assets or
                evidences of indebtedness so to be distributed or of such subscription
                rights or warrants applicable to a Common Share;
                and

            

    

     

    
      	 	
              (ii)

            	
              the
                denominator of which shall be such Market Price per Common
                Share.

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

       

    

    Such
      adjustments shall be made successively whenever such a record date is fixed
      and,
      in the event that such distribution is not so made, the Exercise Price in
      respect of the Rights shall be adjusted to be the Exercise Price in respect
      of
      the Rights that would have been in effect if such record date had not been
      fixed.

     

    For
      the
      purposes hereof, "dividends paid in the ordinary course" means cash dividends
      paid at regular intervals in any fiscal year of the Corporation to the extent
      that such cash dividends do not exceed, in the aggregate, the greatest
      of,

     

    
      	 	
              (iii)

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

            

    

     

    
      	 	
              (iv)

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

            

    

     

    
      	 	
              (v)

            	
              100%
                of the aggregate consolidated net income of the corporation, before
                extraordinary items, for its immediately preceding fiscal
                year.

            

    

     

    
      	 	
              (d)

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

            

    

     

    
      	 	
              (i)

            	
              three
                years from the date of the transaction that mandates such adjustment;
                and

            

    

     

    
      	 	
              (ii)

            	
              the
                Termination Date.

            

    

     

    
      	 	
              (e)

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

            

    

     

    
      	 	
              (f)

            	
              All
                Rights originally issued by the Corporation subsequent to any adjustment
                made to an Exercise Price hereunder shall evidence the right to purchase,
                at the adjusted Exercise Price, the respective number of Common Shares,
                purchasable from time to time hereunder upon exercise of the Rights,
                all
                subject to further adjustment as provided
                herein.

            

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (g)

            	
              Unless
                the Corporation shall have exercised its election as provided in
                subsection 3.2(h),
                upon each adjustment of an Exercise Price as a result of the calculations
                made in subsections 3.2(b)
                and (c),
                each Right outstanding immediately prior to the making of such adjustment
                shall thereafter evidence the right to purchase, at the adjusted
                Exercise
                Price, that number of Common Shares, (calculated to the nearest one
                ten-thousandth), obtained by:

            

    

     

    
      	 	
              (i)

            	
              multiplying:

            

    

     

    
      	 	
              (A)

            	
              the
                number of such Shares covered by a Right immediately prior to this
                adjustment; by

            

    

     

    
      	 	
              (B)

            	
              the
                relevant Exercise Price in effect immediately prior to such adjustment
                of
                the relevant Exercise Price; and

            

    

     

    
      	 	
              (ii)

            	
              dividing
                the product so obtained by the relevant Exercise Price in effect
                immediately after such adjustment of the relevant Exercise
                Price.

            

    

     

    
      	 	
              (h)

            	
              The
                Corporation may elect on or after the date of any adjustment of an
                Exercise Price to adjust the number of Rights, in lieu of any adjustment
                in the number of Shares purchasable upon the exercise of a Right.
                Each of
                the Rights outstanding after the adjustment in the number of Rights
                shall
                be exercisable for the number and kind of Shares for which such a
                Right
                was exercisable immediately prior to such adjustment. Each Right
                held of
                record prior to such adjustment of the number of Rights shall become
                that
                number of Rights (calculated to the nearest one ten-thousandth) obtained
                by dividing the relevant Exercise Price in effect immediately prior
                to
                adjustment of the relevant Exercise Price by the relevant Exercise
                Price
                in effect immediately after adjustment of the relevant Exercise Price.
                The
                Corporation shall make a public announcement of its election to adjust
                the
                number of Rights, indicating the record date for the adjustment,
                and, if
                known at the time, the amount of the adjustment to be made. This
                record
                date may be the date on which the relevant Exercise Price is adjusted
                or
                any day thereafter, but, if the Rights Certificates have been issued,
                shall be at least 10 days later than the date of the public announcement.
                If Rights Certificates have been issued, upon each adjustment of
                the
                number of Rights pursuant to this subsection 3.2(h),
                the Corporation shall, as promptly as is practicable, cause to be
                distributed to holders of record of Rights Certificates on such record
                date, Rights Certificates evidencing, subject to section 6.4,
                the additional Rights to which such holders shall be entitled as
                a result
                of such adjustment, or, at the option of the Corporation, shall cause
                to
                be distributed to such holders of record in substitution and replacement
                for the Rights Certificates held by such holders prior to the date
                of
                adjustment, and upon surrender thereof, if required by the Corporation,
                new Rights Certificates evidencing all the Rights to which such holders
                shall be entitled after such adjustment. Rights Certificates to be
                so
                distributed shall be issued, executed and countersigned in the manner
                provided for herein and may bear, at the option of the Corporation,
                the
                relevant adjusted Exercise Price and shall be registered in the names
                of
                holders of record of Rights Certificates on the record date specified
                in
                the public announcement.

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (j)

            	
              In
                any case in which this section 3.2
                shall require that an adjustment in an Exercise Price be made effective
                as
                of a record date for a specified event, the Corporation may elect
                to
                defer, until the occurrence of such event, the issuance to the holder
                of
                any Right exercised after such record date of the number of Shares
                and
                other securities of the Corporation, if any, issuable upon such exercise
                over and above the number of Shares and other securities of the
                Corporation, if any, issuable upon such exercise on the basis of
                the
                relevant Exercise Price in effect prior to such adjustment; provided,
                however, that the Corporation shall deliver to such holder a due
                bill or
                other 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.

            

    

     

    
      	 	
              (k)

            	
              Notwithstanding
                anything in this section 3.2
                to
                the contrary, the Corporation shall be entitled to make such reductions
                in
                each Exercise Price, in addition to those adjustments expressly required
                by this section 3.2,
                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 Shares;

            

    

     

    
      	 	
              (ii)

            	
              issuance
                wholly for cash of any Shares at less than the applicable Market
                Price;

            

    

     

    
      	 	
              (iii)

            	
              issuance
                wholly for cash of any Common Shares or securities that by their
                terms are
                convertible into or exchangeable for
                Shares;

            

    

     

    
      	 	
              (iv)

            	
              stock
                dividends; or

            

    

     

    
      	 	
              (v)

            	
              issuance
                of rights, options or warrants referred to in this section 3.2.
                   hereafter made by the Corporation to holders of its
                Shares,

            

    

     

    shall
      not
      be taxable to such shareholders.

     

    
      	 	
              (l)

            	
              Whenever
                an adjustment to the Exercise Price or a change in the securities
                purchasable upon exercise of the Rights is made at any time after
                the
                Separation Time pursuant to this section 3.2,
                the Corporation shall promptly:

            

    

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

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

            

    

     

    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 of
      change.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

    

    ARTICLE 4

     

    ADJUSTMENTS
      TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

     

    4.1 Flip-in
      Event

     

    
      	 	
              (a)

            	
              Subject
                to subsection 4.1(b)
                and section 6.1,
                in the event that prior to the Expiration Time a Flip-in Event shall
                occur, each Right shall constitute, effective on and after the Share
                Acquisition Date, the right to purchase from the Corporation, upon
                payment
                of the relevant Exercise Price and otherwise exercising such Right
                in
                accordance with the terms hereof, that number of Common Shares having
                an
                aggregate Market Price on the date of consummation or occurrence
                of such
                Flip-in Event equal to twice the relevant Exercise Price for an amount
                in
                cash equal to the relevant Exercise Price (such right to be appropriately
                adjusted in a manner analogous to the applicable adjustments provided
                for
                in section 3.2
                upon each occurrence after the Share Acquisition Date of any event
                analogous to any of the events described in section 3.2).

            

    

     

    
      	 	
              (b)

            	
              Notwithstanding
                anything in this Agreement to the contrary, upon the occurrence of
                any
                Flip-in Event, any Rights that are Beneficially Owned
                by:

            

    

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

            	
              a
                transferee or other successor in title directly or indirectly (a
                "Transferee")
                of Rights held by an Acquiring Person (or any Affiliate or Associate
                of an
                Acquiring Person or any Person acting jointly or in concert with
                an
                Acquiring Person or any Affiliate or Associate of an Acquiring Person)
                who
                becomes a Transferee concurrently with or subsequent to the Acquiring
                Person becoming an Acquiring Person

            

    

     

    shall
      become null and void without any further action, and any holder of such Rights
      (including any Transferee) shall not have any right whatsoever to exercise
      such
      Rights under any provision of this Agreement and shall not have thereafter
      any
      other rights whatsoever with respect to such Rights, whether under any provision
      of this Agreement or otherwise.

     

    
      	 	
              (c)

            	
              Any
                Rights Certificate that represents Rights Beneficially Owned by a
                Person
                described in either clauses (i) or (ii) of subsection 4.1(b)
                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 Beneficially Owned by a
      Person who was an Acquiring Person or who was an Affiliate or an Associate
      of an
      Acquiring Person (as such terms are defined in the Rights Agreement) or was
      acting jointly or in concert with any of them. This Rights Certificate and
      the
      Rights represented hereby shall become void in the circumstances specified
      in
      subsection 4.1(b)
      of the
      Rights Agreement."

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

    

    provided
      that the Rights Agent shall not be under any responsibility to ascertain the
      existence of facts that would require the imposition of such legend but shall
      be
      required to impose such legend only if instructed in writing to do so by the
      Corporation or if a holder fails to certify upon transfer or exchange in the
      space provided on the Rights Certificate that such holder is not a Person
      described in either clauses (i) or (ii) of subsection 4.1(b).

     

    
      	 	
              (d)

            	
              In
                the event that there shall not be sufficient Shares authorized for
                issuance to permit the exercise in full of the Rights in accordance
                with
                this section 4.1,
                the Corporation shall take all such action as may be necessary to
                authorize additional Shares for issuance upon the exercise of the
                Rights.

            

    

     

    ARTICLE 5

     

    THE
      RIGHTS AGENT

     

    5.1 General

     

    
      	 	
              (a)

            	
              The
                Corporation hereby appoints the Rights Agent to act as agent for
                the
                Corporation and the holders of Rights in accordance with the terms
                and
                conditions hereof, and the Rights Agent hereby accepts such appointment.
                The Corporation may from time to time appoint one or more co-Rights
                Agents
                as it may deem necessary or desirable subject to the approval of
                the
                Rights Agent. In the event the Corporation appoints one or more co-Rights
                Agents, the respective duties of the Rights Agents and co-Rights
                Agents
                shall be as the Corporation may determine with the approval of the
                Rights
                Agent. The Corporation agrees to pay to the Rights Agent reasonable
                compensation for all services rendered by it hereunder and, from
                time to
                time, on demand of the Rights Agent, its reasonable expenses and
                counsel
                fees and other disbursements incurred in the execution and administration
                of this Agreement and the exercise and performance of its duties
                hereunder
                (including the reasonable fees and other disbursements of any expert
                retained by the Rights Agent with the approval of the Corporation,
                such
                approval not to be unreasonably withheld). The Corporation also agrees
                to
                indemnify the Rights Agent, its officers, directors, employees and
                agents,
                for, and to hold them harmless against, any loss, liability, cost,
                claim,
                action, damage, charges, counsel fees, payments or expense, incurred
                without negligence, bad faith or wilful misconduct on the part of
                the
                Rights Agent, for anything done, suffered or omitted by the Rights
                Agent
                in connection with the acceptance, execution and administration of
                this
                Agreement, including the costs and expenses of defending against
                any claim
                of liability, which right to indemnification will survive the termination
                of this Agreement or the resignation or removal of the Rights Agent.
                Any
                liability of the Rights Agent will be limited in the aggregate to
                an
                amount equal to the annual fee paid by the Company pursuant to this
                Agreement. The Corporation shall inform the Rights Agent in a reasonably
                timely manner of events which may materially affect the administration
                of
                this Agreement by the Rights Agent and at any time, upon request,
                shall
                provide to the Rights Agent an incumbency certificate with respect
                to the
                then current directors of the
                Corporation.

            

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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
                Shares, Rights Certificate, certificate for other securities of the
                Corporation, instrument of assignment or transfer, power of attorney,
                endorsement, affidavit, letter, notice, direction, consent, certificate,
                statement or other paper or document believed by it to be genuine
                and to
                be signed, executed and, where necessary, verified or acknowledged,
                by the
                proper Person or Persons.

            

    

     

    5.2 Merger
      or Amalgamation or Change of Name of Rights Agent

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

            	
              In
                case at any time the name of the Rights Agent is changed and at such
                time
                any of the Rights Certificates 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.

            

    

     

    5.3 Duties
      of Rights Agent

     

    The
      Rights Agent undertakes the duties and obligations imposed by this Agreement
      upon the following terms and conditions, by all of which the Corporation and
      the
      holders of Rights Certificates, by their acceptance thereof, 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. The Rights Agent may also, with the approval of the Corporation
                (such approval not to be unreasonably withheld), consult with such
                other
                experts as the Rights Agent shall consider necessary or appropriate
                to
                properly carry out the duties and obligations imposed under this
                Agreement
                (at the Corporation's expense) and the Rights Agent shall be entitled
                to
                act and rely in good faith on the advice of any such
                expert;

            

    

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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, the President or any Vice-President
                and by the Treasurer or any Assistant Treasurer or the 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 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
                Shares or the Rights Certificates (except its countersignature thereof)
                or
                be required to verify the same, but all such statements and recitals
                are
                and will be deemed to have been made by the Corporation
                only;

            

    

     

    
      	 	
              (e)

            	
              the
                Rights Agent will not be under any responsibility in respect of the
                validity of this Agreement or the execution and delivery hereof (except
                the due authorization, execution and delivery hereof by the Rights
                Agent)
                or in respect of the validity or execution of any Share certificate
                or
                Rights Certificate (except its countersignature thereof); nor will
                it be
                responsible for any breach by the Corporation of any covenant or
                condition
                contained in this Agreement or in any Rights Certificate; nor will
                it be
                responsible for any change in the exercisability of the Rights (including
                the Rights becoming void pursuant to subsection 4.14.1(b))
                or any adjustment required under the provisions of section 3.2
                or
                responsible for the manner, method or amount of any such adjustment
                or the
                ascertaining of the existence of facts that would require any such
                adjustment (except with respect to the exercise of Rights after receipt
                of
                the certificate contemplated by section 3.2
                describing any such adjustment); nor will it by any act hereunder
                be
                deemed to make any representation or warranty as to the authorization
                of
                any Shares to be issued pursuant to this Agreement or any Rights
                or as to
                whether any Shares will, when issued, be duly and validly authorized,
                executed, issued and delivered as fully paid and
                nonassessable;

            

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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
                with
                respect to the performance of its duties hereunder from any Person
                believed by the Rights Agent to be the Chairman of the Board, the
                President, any Vice-President or the Secretary or any Assistant-Secretary
                or the Treasurer or any Assistant-Treasurer of the Corporation, and
                to
                apply to such Persons for advice or instructions in connection with
                its
                duties, and it shall not be liable for any action taken or suffered
                by it
                in good faith in accordance with instructions of any such Person;
                it being
                understood that instructions to the Rights Agent shall, except where
                circumstances make it impracticable or the Rights Agent otherwise
                agrees,
                be given in writing and, where not in writing, such instructions
                shall be
                confirmed in writing as soon as reasonably possible 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 Shares, Rights
                or
                other securities of the Corporation or become pecuniarily interested
                in
                any transaction in which the Corporation may be interested, or contract
                with or lend money to the Corporation or otherwise act as fully and
                freely
                as though it were not the Rights Agent under this Agreement. Nothing
                herein 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.

            

    

     

    5.4 Change
      of Rights Agent

     

    The
      Rights Agent may resign and be discharged from its duties under this Agreement
      upon 60 days' notice in writing (or such lesser notice as is acceptable to
      the
      Corporation (mailed to the Corporation and to each transfer agent of Shares
      by
      registered or certified mail, and to the holders of Rights in accordance with
      section 6.9,
      all of
      which shall be at the Corporation's expense. The Corporation may remove the
      Rights Agent upon 30 days notice in writing, mailed to the Rights Agent and
      to
      each transfer agent of the Shares by registered or certified mail. If the Rights
      Agent should resign or be removed or otherwise become incapable of acting,
      the
      Corporation will appoint a successor to the Rights Agent. If the Corporation
      fails to make such appointment within a period of 30 days after such removal
      or
      after it has been notified in writing of such resignation or incapacity by
      the
      resigning or incapacitated Rights Agent or by the holder of any Rights (which
      holder shall, with such notice, submit such holder's Rights Certificate for
      inspection by the Corporation), then, by prior written notice to the Corporation
      the resigning Rights Agent, at the Corporation's expense, may apply to any
      court
      of competent jurisdiction for the appointment of a new Rights Agent. Any
      successor Rights Agent, whether appointed by the Corporation or by such a court,
      shall be a corporation incorporated under the laws of Canada or a province
      thereof authorized to carry on the business of a trust company in the Province
      of Ontario. After appointment, the successor Rights Agent 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 deliver and transfer to the successor Rights
      Agent upon receipt of all outstanding fees and expenses owing by the Corporation
      to the predecessor Rights Agent under this Agreement, any property at the time
      held by it hereunder and execute and deliver any further assurance, conveyance,
      act or deed necessary for such 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 Shares, and mail a
      notice thereof in writing to the holders of the Rights. Failure to give any
      notice provided for in this section 5.4,
      however, or any defect therein, shall not affect the legality or validity of
      the
      resignation or removal of the Rights Agent or the appointment of the successor
      Rights Agent, as the case may be.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

       

    

    ARTICLE 6

    MISCELLANEOUS

     

    6.1 Redemption
      and Waiver

     

    
      	 	
              (a)

            	
              Subject
                to the prior consent of the holders of Voting Shares obtained in
                accordance with section 6.6,
                the Board of Directors may, at its option, at any time prior to the
                occurrence of a Flip-in Event as to which the application of section
                4.1
                has not been waived pursuant to this section 6.1,
                elect to redeem all but not less than all of the then outstanding
                Rights
                at a redemption price of $.0001 per Right appropriately adjusted
                in a
                manner analogous to the applicable adjustment provided for in section
                3.2
                in
                the event that an event of the type analogous to any of the events
                described in section 3.2
                shall have occurred (such redemption price being herein referred
                to as the
                "Redemption Price").

            

    

     

    
      	 	
              (b)

            	
              If
                before the occurrence of a Flip-in Event a Person acquires, pursuant
                to a
                Permitted Bid or a Competing Permitted Bid, outstanding Voting Shares
                other than Voting Shares Beneficially Owned by such Person at the
                date of
                the Permitted Bid or the Competing Permitted Bid, the Board of Directors
                of the Corporation shall, immediately upon such acquisition and without
                further formality be deemed to have elected to redeem the Rights
                at the
                Redemption Price.

            

    

     

    
      	 	
              (c)

            	
              Where
                a Take-over Bid that is not a Permitted Bid or a Competing Permitted
                Bid
                is withdrawn or otherwise terminated after the Separation Time has
                occurred and prior to the occurrence of a Flip-in Event, the Board
                of
                Directors may elect to redeem all the outstanding Rights at the Redemption
                Price. Upon the Rights being redeemed pursuant to section 6.1(c),
                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 Voting Shares as
                of the
                Separation Time had not been mailed to each such holder and for all
                purposes of this Agreement the Separation Time shall be deemed not
                to have
                occurred.

            

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (d)

            	
              Within
                ten Business Days after the Board of Directors electing or being
                deemed to
                have elected to redeem the Rights or, if section 6.1(a)
                is
                applicable, within 10 Business Days after the holders of Voting Shares
                or
                the holders of Rights have approved a redemption of Rights in accordance
                with section 6.1,
                the Corporation shall give notice of such redemption to the holders
                of the
                then outstanding Rights by mailing such notice to each such holder
                at his
                last address as it appears on the Rights Register (as defined in
                section
                2.3(a))
                or, prior to the Separation Time, on the register of Shares maintained
                by
                the Corporation's transfer agent. Each such notice of redemption
                shall
                state the method by which the payment of the Redemption Price shall
                be
                made. The Corporation may not redeem, acquire or purchase for any
                value
                any Rights at any time in any manner other than that specifically
                set
                forth in this section 6.1
                or
                in connection with the purchase of Voting Shares prior to the Separation
                Time.

            

    

     

    
      	 	
              (e)

            	
              If
                the Board of Directors elects to or is deemed to have elected to
                redeem
                the Rights and, in circumstances where section 6.1(a)
                is applicable, such redemption is approved by the holders of Voting
                Shares
                or the holders of Rights in accordance with section 6.6,
                (A) the right to exercise the Rights will thereupon without further
                action
                and without notice terminate and the only right thereafter of the
                holder
                of a Right shall be to receive the Redemption Price and (B) no further
                Rights shall thereafter be issued.

            

    

     

    
      	 	
              (f)

            	
              The
                Board of Directors may, in respect of any Flip-in Event, waive the
                application of section 4.1
                to
                that Flip-in Event provided that both of the following conditions
                are
                satisfied: (i) the Board of Directors has determined that the Acquiring
                Person became an Acquiring Person by inadvertence and without any
                intent
                or knowledge that it would become an Acquiring Person; and (ii) such
                Acquiring Person has reduced its Beneficial Ownership of Voting Shares
                such that at the time of waiver pursuant to this section 6.1(f)
                it
                is no longer an Acquiring Person.

            

    

     

    
      	 	
              (g)

            	
              The
                Board of Directors may, until a Flip-in Event shall have occurred,
                upon
                written notice delivered to the Rights Agent determine to waive the
                application of section 4.1
                to
                a Flip-in Event but only if such Flip-in Event occurs by reason of
                a
                Take-over Bid made by way of a take-over bid circular to all holders
                of
                record of Voting Shares which are subject to the Take-over Bid (which,
                for
                greater certainty, does not include the circumstances described in
                section
                6.1(f));
                provided however, that if the Board of Directors waives the application
                of
                section 4.1
                to
                a particular Flip-in Event pursuant to this section 6.1(g),
                the Board of Directors shall be deemed to have waived the application
                of
                section 4.1
                to
                any other Flip-in Event occurring by reason of any Take-over Bid
                which is
                made by means of a take-over bid circular to all holders of record
                of the
                class or classes of Voting Shares which are subject to the Take-over
                Bid
                prior to the expiry of any Take-over Bid in respect of which a waiver
                is,
                or is deemed to have been, granted under this section 6.1(g).

            

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (h)

            	
              The
                Board of Directors may, with the prior consent of the holders of
                Voting
                Shares given in accordance with section 6.6,
                determine, at any time prior to the occurrence of a Flip-in Event
                as to
                which the application of section 4.1
                has not been waived pursuant to this section 6.1,
                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 Subsection 6.1(f),
                to waive the application of section 4.1
                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 10 Business Days following the
                meeting of shareholders called to approve such
                waiver.

            

    

     

    
      	 	
              (i)

            	
              The
                Corporation shall give prompt written notice to the Rights Agent
                of any
                waiver of the application of section 4.1
                made by the Board of Directors under this section 6.1.

            

    

     

    6.2 Expiration

     

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

     

    6.3 Shareholder
      Review

     

    At
      the
      first annual meeting of shareholders of the Corporation following the third
      anniversary of the date of this Agreement, provided that a Flip-in Event has
      not
      occurred prior to such time, the Board of Directors shall submit a resolution
      to
      the holders of Voting Shares of the Corporation for their consideration and,
      if
      thought advisable, approval, ratifying the continued existence of the Rights.
      Unless a majority of the votes cast by 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
      by the Chairman of such shareholders meeting of the result of the vote on such
      resolution and without further formality, be deemed to have elected to redeem
      the Rights at the Redemption Price.

     

    6.4 Issuance
      of New Rights Certificate

     

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

     

    6.5 Fractional
      Rights and Fractional Shares

     

    
      	 	
              (a)

            	
              The
                Corporation shall not be required to issue fractions of Rights or
                to
                distribute Rights Certificates that evidence fractional Rights. In
                lieu of
                such fractional Rights, there shall be paid to the registered holders
                of
                the Rights Certificates with regard to which such fractional Right
                would
                otherwise be issuable, an amount in cash equal to the same fraction
                of the
                Market Price of a whole Right. The Rights Agent shall have no obligation
                to make any payments in lieu of fractional Rights unless the Corporation
                shall have provided the Rights Agent with the necessary funds to
                pay in
                full all amounts payable in accordance with section 3.1(e).

            

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (b)

            	
              The
                Corporation shall not be required to issue fractions of Shares upon
                exercise of the Rights or to distribute certificates that evidence
                fractional Shares. In lieu of issuing fractional 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 same fraction of the Market Price of a whole
                Share.

            

    

     

    6.6 Supplements
      and Amendments

     

    
      	 	
              (a)

            	
              The
                Corporation may make, without the approval of the holders of Rights
                or
                Voting Shares, any amendments to this Agreement (i) to correct any
                clerical or typographical error or (ii) which are required to maintain
                the
                validity and effectiveness of the Agreement as a result of any change
                in
                any applicable laws, rules or regulatory requirements. The Corporation
                may, prior to the date of the shareholders' meeting referred to in
                section
                6.19,
                supplement, amend, vary, rescind or delete any of the provisions
                of this
                Agreement without the approval of any holders of Rights or Voting
                Shares
                (whether or not such action would materially adversely affect the
                interest
                of the holders of Rights generally) where the Board of Directors
                acting in
                good faith deemed such action necessary or desirable. Notwithstanding
                anything in this section 6.6
                to
                the contrary, no amendment shall be made to the provisions of Article
                5
                except with the written concurrence of the Rights Agent to such supplement
                or amendment.

            

    

     

    
      	 	
              (b)

            	
              Subject
                to Subsection 6.6(a),
                the Corporation may, with the prior consent of the holders of Voting
                Shares obtained as set forth below, at any time before the Separation
                Time, amend, vary or rescind any of the provisions of this Agreement
                and
                the Rights (whether or not such action would materially adversely
                affect
                the interests of the holders of Rights generally). Such consent shall
                be
                deemed to have been given in provided by the holders of Voting Shares
                at a
                special meeting called and held in compliance with applicable laws,
                rules
                and regulatory requirements and the requirements in the articles
                and
                by-laws of the Corporation. Subject to compliance with any requirements
                imposed by the foregoing, consent shall be given if the proposed
                amendment, variation or rescission is approved by the affirmative
                vote of
                a majority of the votes cast by Independent Shareholders represented
                in
                person or by proxy at the special
                meeting.

            

    

     

    
      	 	
              (c)

            	
              The
                Corporation may, with the prior consent of the holders of Rights
                obtained
                as set forth below, at any time after the Separation Time and before
                the
                Expiration Time, amend, vary or rescind any of the provisions of
                this
                Agreement and the Rights (whether or not such action would materially
                adversely affect the interests of the holders of Rights generally).
                Such
                consent shall be deemed to have been given if provided by the holders
                of
                Rights at a special meeting of holders of Rights called and held
                in
                compliance with applicable laws and regulatory requirements and,
                to the
                extent possible, with the requirements in the articles and by-laws
                of the
                Corporation applicable to meetings of holders of Voting Shares, applied
                mutatis
                mutandis.
                Subject to compliance with any requirements imposed by the foregoing,
                consent shall be given if the proposed amendment, variation or rescission
                is approved by the affirmative vote of a majority of the votes cast
                by
                holders of Rights (other than holders of Rights whose Rights have
                become
                null and void pursuant to section 4.1(b)),
                represented in person or by proxy at the special
                meeting.

            

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (d)

            	
              Any
                amendments made by the Corporation to this Agreement pursuant to
                Subsection 6.6(a)
                which are required to maintain the validity and effectiveness of
                this
                Agreement as a result of any change in any applicable laws, rules
                or
                regulatory requirements shall:

            

    

     

    
      	 	
              (i)

            	
              if
                made before the Separation Time, be submitted to the holders of Voting
                Shares of the Corporation at the next meeting of shareholders and
                the
                shareholders may, by the majority referred to in section 6.6(b)confirm
                or reject such amendment; and

            

    

     

    
      	 	
              (ii)

            	
              if
                made after the Separation Time, be submitted to the holders of Rights
                at a
                meeting to be called for on a date not later than immediately following
                the next meeting of shareholders of the Corporation and the holders
                of
                Rights may, by resolution passed by the majority referred to in section
                6.6(c),
                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 or is not submitted to the shareholders of the Corporation or
      holders of Rights as required, then such amendment shall cease to be effective
      from and after the termination of the meeting at which it was rejected or to
      which it should have been but was not submitted or from and after the date
      of
      the meeting of holders of Rights that should have been but was not held, and
      no
      subsequent resolution of the Board of Directors to amend this Agreement to
      substantially the same effect shall be effective until confirmed by the
      shareholders of the Corporation or holders of Rights as the case may
      be.

     

    
      	 	
              (e)

            	
              The
                Corporation shall be required to provide the Rights Agent with notice
                in
                writing of any such amendment, rescission or variation to this Agreement
                as referred to in this section 6.6
                within five days of effecting such amendment, rescission or
                variation.

            

    

     

    6.7 Rights
      of Action

     

    Subject
      to the terms of this Agreement, all rights of action in respect of this
      Agreement, other than rights of action vested solely in the Rights Agent, are
      vested in the respective holders of the Rights; and any holder of any Rights,
      without the consent of the Rights Agent or of the holder of any other Rights,
      may, on such holder's own behalf and for such holder's own benefit and the
      benefit of other holders of Rights, enforce, and may institute and maintain
      any
      suit, action or proceeding against the Corporation to enforce, or otherwise
      act
      in respect of, such holder's right to exercise such holder's Rights in the
      manner provided in such holder's Rights Certificate and in this Agreement.
      Without limiting the 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.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

    

    6.8 Notice
      of Proposed Actions

     

    In
      case
      the Corporation shall propose after the Separation Time and prior to the
      Expiration Time:

     

    
      	 	
              (a)

            	
              to
                effect or permit (in cases where the Corporation's permission is
                required)
                any Flip-in Event; or

            

    

     

    
      	 	
              (b)

            	
              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 section 6.9,
      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
      such proposed action.

     

    6.9 Notices

     

    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 or sent by first class mail, postage
      prepaid, or by fax (with, in the case of fax, an original copy of the notice
      or
      demand sent by first class mail, postage prepaid, to the Corporation following
      the giving of the notice or demand by fax) addressed (until another address
      is
      filed in writing with the Rights Agent) as follows:

     

    Apollo
      Gold Corporation

    5655
      S.
      Yosemite Street, Suite 200

    Greenwood
      Village, CO

    80111-3220

    

    Attention: President

    Fax: (720)
      482-0957

    

    Any
      notice or demand 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 or sent by first-class mail, postage
      prepaid, or by fax (with, in the case of fax, an original copy of the notice
      or
      demand sent by first class mail, postage prepaid, to the Corporation following
      the giving of the notice or demand by fax) addressed (until another address
      is
      filed in writing with the Corporation) as follows:

     

    CIBC
      Mellon Trust Company

    320
      Bay
      Street, P.O. Box 1

    Toronto,
      Ontario

    M5H
      4A6

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    Attention: Vice
      President, Client Services

    Fax: (416)
      643-5570

    

    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, or by fax (with, in the case of fax, an original copy of the notice
      or
      demand sent by first class mail, postage prepaid, to the Corporation following
      the giving of the notice or demand by fax) addressed to such holder at the
      address of such holder as it appears upon the registry books of the Rights
      Agent
      or, prior to the Separation Time, on the registry books of the Corporation
      for
      the Common Shares. If mail service is or is threatened to be interrupted at
      a
      time when the Corporation or the Rights Agent wishes to give a notice or demand
      hereunder to or on the holders of the Rights, the corporation or the Rights
      Agent may, notwithstanding the foregoing provisions of this section 6.9,
      give
      such notice by means of publication once in each of two successive weeks in
      the
      business section of the Financial Post or in such other publication or
      publications as may be designated by the Corporation and notice so published
      shall be deemed to have been given on the date on which the first publication
      of
      such notice in any such publication has taken place. Any notice that is mailed
      in the manner herein provided shall be deemed given, whether or not the holder
      receives the notice.

    

    6.10 Costs
      of Enforcement

     

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

     

    6.11 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.

     

    6.12 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; but this Agreement shall
      be for the sole and exclusive benefit of the Corporation, the Rights Agent
      and
      the holders of the Rights.

     

    6.13 Governing
      Law

     

    This
      Agreement and each Right issued hereunder shall be deemed to be a contract
      made
      under the laws of the Province of Ontario 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.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    6.14 Language

     

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

     

    6.15 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, and shall be subject to approval by
      ordinary resolution of the shareholders of the Corporation.

     

    6.16 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 with
      the
      securities laws or comparable legislation of a jurisdiction outside Canada,
      the
      Board of Directors acting in good faith may take such actions as it may deem
      appropriate to ensure that such compliance is not required, including without
      limitation establishing procedures for the issuance to an appropriate Canadian
      resident acting as a fiduciary (a "Fiduciary")
      of
      Rights or securities issuable on exercise of Rights, the holding thereof in
      trust for the Person entitled thereto (but reserving to the Fiduciary or to
      the
      Fiduciary and the Corporation as the Corporation may determine, absolute
      instrument discretion with respect thereto) and the sale thereof and remittance
      of the proceeds of such sale, if any, to the persons entitled thereto. 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 and any province
      or
      territory thereof in which such issue or delivery would be unlawful without
      registration of the relevant Persons or securities for such
      purposes.

     

    6.17 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 but one and the same
      instrument.

     

    6.18 Severability

     

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

     

    6.19 Effective
      Date

     

    This
      Agreement is in full force and effect in accordance with its terms from the
      date
      hereof. If this Agreement is not confirmed by the requisite number of votes
      cast
      by the holders of Common Shares of the Corporation represented in person or
      by
      proxy at the 2006 annual meeting of shareholders of the Corporation who vote
      in
      respect of confirmation of this Agreement at such meeting, then this Agreement
      and any then outstanding Rights shall be of no further force and effect from
      the
      date of the 2006 annual meeting of shareholders of the Corporation.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    6.20 Successors

     

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

     

    6.21 Time
      of the Essence

     

    Time
      shall be of the essence in this Agreement.

     

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

     

    
      	 	 	 
	 	APOLLO
              GOLD CORPORATION.
	 
 	 
 	 
 
	 	Per:  	
              /s/
                R. David Russell

            
	 	 	
              

            
	 	 	 
	 	Per:	
              /s/
                Melvyn Williams

            
	 	
              

            
	 	 

    

    
      
        	 	 	 
	 	CIBC
                MELLON TRUST COMPANY
	 
 	 
 	 
 
	 	Per:  	
                /s/
                  Charito Sunga

              
	 	 	
                

              
	 	 	 
	 	Per:	
                /s/
                  Bruce Cornish

              
	 	
                

              
	 	 

      

    

    

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    [FORM
      OF
      RIGHTS CERTIFICATE]

     

    Certificate
      No.             
                  
      Rights

     

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

     

    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 January
      17, 2007,
      (the
      "Rights Agreement") between Apollo Gold Corporation, a corporation subsisting
      under the Business Corporations Act (Yukon) (the "Corporation") and CIBC Mellon
      Trust Company, a trust company existing under the laws of Canada as rights
      agent
      (the "Rights Agent", which term shall include any successor Rights Agent under
      the Rights Agreement) to purchase from the Corporation at any time after the
      Separation Time (as such term is defined in the Rights Agreement) and prior
      to
      the close of business on the ►
      day of
►,
      200►,
      one
      fully paid and non-assessable Common Share of the Corporation (a "Common Share")
      at the Exercise Price referred to below, upon presentation and surrender of
      this
      Rights Certificate together with the Form of Election to Exercise duly executed
      and submitted to the Rights Agent at its principal office in any of the cities
      of Toronto and Vancouver. The Exercise Price shall initially be $100.00
      (Canadian) per Right and shall be subject to adjustment in certain events as
      provided in the Rights Agreement.

     

    In
      certain circumstances described in the Rights Agreement, each Right evidenced
      hereby may entitle the registered holder thereof to purchase or receive assets,
      debt securities or other equity securities of the Corporation (or a combination
      thereof), all as provided in the Rights Agreement.

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Subject
      to the provisions of the Rights Agreement, the Rights evidenced by this Rights
      Certificate (i) may be, and under certain circumstances are required to be,
      redeemed by the Corporation at a redemption price of $0.0001 per Right or (ii)
      may be exchanged at the option of the Corporation in whole or in part for debt
      or equity securities or other assets (or a combination thereof) of the
      Corporation.

     

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

     

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

     

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

     

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

     

    Date:
                                                                    
      

     

    
      	APOLLO GOLD
              CORPORATION	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	 	 	 	By:	 
	 	
              

            	 	 	 	
              

            

    

    

      Countersigned:

    

    
      
        	CIBC MELLON TRUST
                COMPANY	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	 	 	 	By:	 
	 	
                
Authorized
                Signature	 	 	 	
                

              
	 	 	 	 	 	 

      

    

    

      
        
          
          

        

        
          A
            - 2

          
            

          

        

         

      

    

     

    (To
      be
      attached to each Rights Certificate)

     

    FORM
      OF ELECTION TO EXERCISE

     

    TO:                        
      Apollo
      Gold Corporation

     

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

     

                                                                                               
      

    (NAME)

     

                                                                                               
      

    (ADDRESS)

     

                                                                                               
      

    (CITY
      AND
      STATE OR PROVINCE)

     

                                                                                               
      

    (SOCIAL
      INSURANCE 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
      STATE OR PROVINCE)

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

            

    

    
      
        
        

      

      
        A
          - 3

        
          

        

      

      
        
        

      

    

     

     

      
        

      

    

    (To
      be
      completed if true)

     

    The
      undersigned hereby represents, for the benefit of all holders of Rights and
      Common Shares, that the Rights evidenced by this Rights Certificate are not,
      and, to the knowledge of the undersigned, have never been, Beneficially Owned
      by
      an Acquiring Person or an Affiliate or Associate thereof or any Person acting
      jointly or in concert with any of the foregoing or any Affiliate or Associate
      of
      such Person (as defined in the Rights Agreement).

    
      
        	 	 	 
	 	 
	 
 	 
 	 
 
	 	  	 
	 	
                
Signature
	 	 
	 	
                 

              

      

    

    
    

    
      
        

      
NOTICE

     

    In
      the
      event the certification set forth in the Form of Election to Exercise is not
      completed, the Corporation will deem the Beneficial Owner of the Rights
      evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
      or Associate thereof (as defined in the Rights Agreement) and accordingly such
      Rights shall be null and void.

     

    
      
        
        

      

      
        A
          - 4

        
          

        

      

      
        
        

      

    

    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.

    
      
        	 	 	 
	 	 
	 
 	 
 	 
 
	Date:                                        
                	  	 
	
                Signature
                  Guaranteed:

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

              

      

    

    
    

    Signature
      must be guaranteed by a major Canadian Schedule 1 Chartered Bank, major Canadian
      Trust Company, or a member of a recognized Medallion Program.

     

    
      
        

      
(to
      be
      completed if true)

     

    The
      undersigned hereby represents, for the benefit of all holders of Rights and
      Common Shares, that the Rights evidenced by this Rights Certificate are not,
      and, to the knowledge of the undersigned, have never been, Beneficially Owned
      by
      an Acquiring Person or an Affiliate or Associate thereof or any Person acting
      jointly or in concert with any of the foregoing (as defined in the Rights
      Agreement).

    
      
        	 	 	 
	 	 
	 
 	 
 	 
 
	 	  	 
	 	
                
Signature
	 	 
	 	
                 

              

      

    

     

    
      
        

      
NOTICE

     

    In
      the
      event the certification set forth in the Form of Assignment is not completed,
      the Corporation will deem the Beneficial Owner of the Rights evidenced by this
      Rights Certificate to be an Acquiring Person or an Affiliate or Associate
      thereof (as defined in the Rights Agreement) and accordingly such Rights shall
      be null and void.

     

    
      
        
        

      

      
        A
          - 5EXHIBIT 10.29

                      MEDSTRONG INTERNATIONAL CORPORATION
                         AMENDMENT TO WARRANT AGREEMENT

      Amendment (this "Amendment"), dated as of January 12, 2006, to the Warrant
Agreement (the "Agreement") made and entered into as of July 31, 2001, between
Medstrong International Corporation, a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company, as Warrant Agent ("Warrant Agent").

      WITNESSETH:

      WHEREAS, the Company has outstanding 4,302,000 warrants (OTC Bulletin
Board symbol: MDSIW.OB, the "Warrants") to purchase shares of Common Stock, par
value $.001 per share, of the Company ("Common Stock"); and

      WHEREAS, pursuant to the Agreement, the Warrant Agent is acting as agent
on behalf of the Company with respect to the issuance, registration,
registration of transfer, exchange and exercise of the Warrants; and

      WHEREAS, following the 1 for 75 reverse stock split effective November 2,
2006 (the "Reverse Split"), each 75 Warrants entitled entitled the holder
thereof to purchase one share of Common Stock at an exercise price of $30.00
("Per Share Exercise Price"), at any time until December 31, 2009; and

      WHEREAS, under the terms of the Warrant Agreement, following the Reverse
Split, if the common stock traded for at least five consecutive trading days at
a price of $112.50 (the "Redemption Trigger Trading Price") or more, the Company
had the right to call the Warrants at a price of $.75 per Warrant share of
Common Stock unless an investor chose to exercise his or her Warrants at that
time; and

      WHEREAS, the Company believes it is appropriate to further amend the terms
of the Warrants and Agreement by reducing the Exercise Price and the Redemption
Trigger Trading Price.

<PAGE>

      NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Company and the
Warrant Agent, the parties hereto agree as follows:

Section 1. Amendments.

      1.1 The parties hereby agree to amend the first paragraph of Section 8 of
the Agreement to read in its entirety as follows:

      " 8. Redemption. (a) The Warrants may be redeemed at the option of
Company, subject to the conditions set forth below in this Section 8, at any
time, by Redemption Notice given within thirty (30) days, after the occurrence
of a "Redemption Event". A Redemption Event shall be the fifth consecutive
trading day upon which the Common Stock has been trading at $22.50 per share,
determined by the taking the average price between the "bid" and the "ask" of
the Common Stock on each such day, at a price of $.75 per share of Common Stock
subject to the Warrants to be redeemed, plus any dividends declared but unpaid
thereon, subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting such shares
occurring after January 12, 2007 (the "Redemption Price")."

      1.2   The parties agree to amend the Exercise Price of the Warrants (as
            defined in the Agreement) set forth in Exhibit A to the Agreement,
            from and after January 12, 2007, to be $18.75 per share of Common
            Stock of the Company.

Section 2. Miscellaneous.

      2.1 Limited Effect. Except as expressly amended and modified by this
Amendment, all of the terms and provisions of the Agreement are and shall
continue to remain in full force and effect in accordance with the terms
thereof.

<PAGE>

      2.2 Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

      2.3 Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles.

      IN WITNESS HEREOF, the Company and the Warrant Agent, by their respective
duly authorized officers, have caused this Amendment to be executed as of the
day and year first above written.

                                         MEDSTRONG INTERNATIONAL CORPORATION

                                         By:
                                            ------------------------------
                                         Title: President & CEO

                                         AMERICAN STOCK TRANSFER & TRUST COMPANY

                                         By:
                                            ------------------------------
                                         Title: President & CEO

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