Document:

EX-10.2

July 1, 2005

Name

Address

Dear Name:

Pursuant to the terms and conditions of the Fulton Financial Corporation 2004 Stock Option and
Compensation Plan (the ‘Plan’), you have been granted      shares of Restricted Stock (the
‘Award’) as outlined below:

	 	 	 
	Granted To:

Grant Date:

	 	Name

July 1, 2005

Vesting Schedule: This Award will vest in its entirety on the fifth anniversary of the date of
grant.

Provided, however, the Plan provides that the Award will vest immediately upon termination of your
employment due to your death or disability, or in the event of a change in control as defined in
section 2.05 of the Plan. In addition, upon your retirement at the minimum age of 55 and with at
least ten (10) years of continuous employment as defined in section 7.04 of the Plan, an Award
granted to you under this agreement that remains subject to forfeiture, shall become fully vested,
to the same extent and in the same manner as if such Award had become vested by passage of time.

Very truly yours,

R. Scott Smith, Jr.

President and Chief Operating Officer

By my signature below, I hereby acknowledge receipt of this Award, which has been granted to me on
the date shown above, in accordance with the terms and conditions of the Plan. I further
acknowledge having received a copy of the Prospectus for the Plan and agree to conform to all the
terms and conditions of the Prospectus and the Plan.

Signature:      Date:     

NameEmployment Agreement Extension

EMPLOYMENT
AGREEMENT EXTENSION

WHEREAS,
SmartMetric, Inc. and Colin Hendrick have entered into an Employment Agreement
dated June 30, 2004; and

 

WHEREAS,
such Employment Agreement expires June 30, 2005;

 

NOW,
THEREFORE, the parties have agreed as follows:

 

	1.  	
      The
      Employment Agreement dated June 30, 2004 by and between SmartMetric, Inc.
      and Colin Hendrick shall be extended for an additional year, to expire
      June 30, 2006;

	 	 

	2.  	
      The
      remaining terms of such Employment Agreement shall remain in full force
      and effect.

 

Dated
this 24th day of
June 2005.

	
      SMARTMETRIC,
      INC.
	 
	 	 
	 	 
	
      By:
      /s/ Colin Hendrick
	
      /s/
      Colin Hendrick

	
      Colin
      Hendrick
	
      Colin
      HendrickEXHIBIT 10.1

                           NON-NEGOTIABLE SUBORDINATED
                           ---------------------------
                                 PROMISSORY NOTE
                                 ---------------

Date: March 31, 2005                                                 $900,000.00

         FOR VALUE RECEIVED, Selas Heat Technology Company LLC (the "Maker"), a
Delaware limited liability company, promises to pay to the order of Selas
Corporation of America (the "Holder"), a Pennsylvania corporation having a place
of business at 1260 Red Fox Road, Arden Hills, MN 55112, with payment to be made
at such address or such other place as may be designated by the Holder in
writing, the principal sum of Nine Hundred Thousand Dollars ($900,000.00), with
interest thereon at the rate of eight percent (8%) per annum from the date
hereof until the principal sum is paid in full. Accrued interest on the unpaid
principal balance hereof shall be due and payable commencing July 1, 2005 and on
the first day of each October, January, April and July thereafter. The principal
sum hereof will be paid in twelve (12) equal quarterly installments each in the
amount of $75,000 commencing on April 1, 2006 and first day of each July,
October, January and April thereafter. The principal sum hereunder is subject to
reduction in certain circumstances as described in the Purchase Agreement, as
hereinafter defined, and such a reduction shall reduce the earliest payments of
principal due hereunder.

         This Note shall, at the option of the Holder, become immediately due
and payable without notice or demand, upon the happening of any one of the
following (each, a "Default"): (a) failure to pay within ten (10) days of the
date when due any amount as herein set forth; (b) insolvency (however evidenced)
or the commission of any act of bankruptcy by the Maker; (c) the making of a
general assignment for the benefit of creditors by the Maker; (d) the filing of
any petition or the commencement of any proceeding by or against the Maker for
any relief under any bankruptcy or insolvency laws, or any laws relating to the
relief of debtors; or (e) the suspension of the transaction of the usual
business of the Maker.

         The Maker hereby waives presentment, demand for payment, notice of
dishonor and any or all other notices or demands in connection with the
delivery, acceptance, performance, default or enforcement of this Note and
hereby consents to any extensions of time, renewals, forbearances, releases of
any party to this Note, waivers or modifications that may be granted or
consented to by the Holder in respect of the time of payment or any other
provisions of this Note. No waiver or modification of the terms hereof shall be
valid unless in writing and signed by the Holder hereof, and then only to the
extent therein set forth.

         If at any time the rate of interest charged by the Holder hereof shall
exceed the maximum rate of interest permitted by an applicable law or
regulation, then, for such time as the rate would be excessive, its application
shall be suspended and there shall be charged instead the maximum rate of
interest permissible under such law or regulation.

<PAGE>

         This Note may be prepaid in whole or in part at any time and from time
to time without premiums or penalties. Any such prepayments shall be applied
first to accrued and unpaid interest and then to the outstanding principal sum.

         Notwithstanding anything to the contrary herein, all present and future
indebtedness, obligations and liabilities of Maker under this Note shall be
subject and subordinate in right and priority of payment to all present and
future indebtedness, obligations and liabilities of Maker to Maker's current
lender in respect of borrowed money ("Current Senior Lender") under and pursuant
to the notes, documents, agreements and instruments executed and/or delivered
between Maker and Current Senior Lender and such notes, documents, agreements
and instruments, as any of them may have been and may hereafter be from time to
time amended, collectively, the "Current Senior Credit Documents", and/or to any
lender or lenders who may hereafter provide loans and/or credit facilities to
supplement, refinance or replace the credit facilities provided to Maker by
Current Senior Lender under the Current Senior Credit Documents (such
indebtedness, obligations and liabilities owed to Current Senior Lender under
the Current Senior Credit Documents and owed to any such supplemental,
replacement or refinancing lender or lenders in connection with such
supplemental, replacement or refinancing loans and/or credit facilities,
collectively, the "Senior Indebtedness"); provided that notwithstanding such
subordination, Holder may receive and retain payments hereunder (including all
regularly scheduled payments of principal and/or interest) for so long as Maker
is not in default, or by such payment would become in default, under the terms
of the Current Senior Credit Documents, or the credit agreements, documents,
agreement or instruments representing any such supplemental, replacement or
refinancing loans or credit facilities (collectively, as any of them may have
been and may hereafter be from time to time amended, the "Senior Credit
Documents"), and as a result of such default, Maker would be prohibited under
the Senior Credit Documents from making such payment; provided, however, that
Maker shall make any such payment promptly after any such default is cured. By
acceptance of this Note, the Holder covenants and agrees, for itself and on
behalf of its successors and permitted assigns, to execute and deliver from time
to time any subordination or inter-creditor agreement reasonably required by any
Senior Lender to further evidence the foregoing subordination.

         This Promissory Note is given pursuant and subject to the terms of that
certain Asset Purchase Agreement between Maker and the Holder dated as of the
date hereof (the "Purchase Agreement"). The terms and conditions of the Purchase
Agreement are incorporated herein by reference. All capitalized terms used
herein not otherwise defined shall have the same meanings as set forth in the
Purchase Agreement. In the event of a conflict or inconsistency between the
provisions of this Promissory Note and the provisions of the Purchase Agreement,
the provisions of the Purchase Agreement will prevail. Maker may at its option
set off against any amounts payable under this Promissory Note any unpaid amount
owing to Maker by Holder pursuant to the terms of the Purchase Agreement.

         In addition to the principal and interest provided for above, Maker
also promises to pay to the order of and reimburse Holder on demand for all
costs and expenses, including without

<PAGE>

limitation attorneys' fees, incurred by Holder at any time to enforce, protect,
preserve, or defend Holder's rights hereunder after the occurrence and during
the continuance of a Default, and this Note shall evidence Maker's obligations
to pay and reimburse Holder for such costs and expenses.

                                     SELAS HEAT TECHNOLOGY COMPANY LLC

                                     By:  /s/ David Bovenizer
                                          ----------------------------
                                          David Bovenizer, ManagerExhibit 4.8

SHAREHOLDERS RIGHTS PLAN AGREEMENT

DATED AS OF

MARCH 28, 2005

BETWEEN

BIRCH MOUNTAIN RESOURCES LTD.

AND

COMPUTERSHARE TRUST COMPANY OF CANADA

TABLE OF CONTENTS

	
    Article 1 INTERPRETATION 
	2
	 	
    1.1 Certain
    Definitions 
	2
	 	
    1.2 Currency
	13
	 	
    1.3 Headings 
    
	14
	 	
    1.4 References to
    Agreement 
	14
	 	
    1.7 Acting Jointly
    or in Concert 
	15
	 	
    1.8 Generally
    Accepted Accounting Principles 
	15
	
    Article 2 THE RIGHTS 
	16
	 	
    2.1 Legend on Common
    Share Certificates 
	16
	 	
    2.2 Initial Exercise
    Price; Exercise of Rights; Detachment of Rights 
	16
	 	
    2.3 Adjustments to
    Exercise Price; Number of Rights 
	16
	 	
    2.4 Date on Which
    Exercise is Effective 
	19
	 	
    2.5 Execution,
    Authentication, Delivery and Dating of Rights Certificates 
	23
	 	
    2.6 Registration,
    Registration of Transfer and Exchange 
	23
	 	
    2.7 Mutilated,
    Destroyed, Lost and Stolen Rights Certificates 
	24
	 	
    2.8 Persons Deemed
    Owners 
	24
	 	
    2.9 Delivery and
    Cancellation of Certificates 
	25
	 	
    2.10 Agreement of
    Rights Holders 
	25
	 	
    2.11 Rights
    Certificate Holder not Deemed a Shareholder 
	26
	
    Article 3 ADJUSTMENTS TO THE RIGHTS IN THE
    EVENT OF CERTAIN TRANSACTIONS 
	26
	 	
    3.1 Flip-in Event
    
	26
	 	
    3.2 Exchange Option
    
	28
	 	
    3.3 Fiduciary Duties
    of the Board of Directors of the Corporation 
	29
	
    Article 4 THE RIGHTS AGENT 
	29
	 	
    4.1 General 
    
	29
	 	
    4.2 Merger or
    Amalgamation or Change of Name of Rights Agent 
	30
	 	
    4.3 Duties of Rights
    Agent 
	30
	 	
    4.4 Change of Rights
    Agent 
	32
	
    Article 5 MISCELLANEOUS 
	32
	 	
    5.1 Redemption and
    Waiver 
	33
	 	
    5.2 Expiration
    
	34
	 	
    5.3 Issuance of New
    Rights Certificates 
	34
	 	
    5.4 Supplements and
    Amendments 
	34
	 	
    5.5 Fractional
    Rights and Fractional Shares
	36
	 	
    5.6 Rights of Action
    
	36
	 	
    5.7 Regulatory
    Approvals
	36
	 	
    5.8 Unlawful
    Distributions 
	36
	 	
    5.9 Notices 
    
	37
	 	
    5.10 Costs of
    Enforcement 
	38
	 	
    5.11 Successors
    
	38
	 	
    5.12 Benefits of
    this Agreement 
	38
	 	
    5.13 Governing Law
    
	38
	 	
    5.14 Severability
    
	38
	 	
    5.15 Effective Date
    and Renewal 
	38
	 	
    5.16 Determinations
    and Actions by the Board of Directors
	39
	 	
    5.17 Time of the
    Essence 
	39
	 	
    5.18 Execution in
    Counterparts 
	39
	 	
    5.19 Language 
    
	39
	 	
    5.20 Declaration as
    to Non-Canadian Holders 
	39

-i-

 

THIS SHAREHOLDERS RIGHTS PLAN AGREEMENT made as of the 28th
day of March, 2005.

BETWEEN:

 

  
  	BIRCH MOUNTAIN RESOURCES LTD., a corporation
      incorporated 

      under the Business Corporations Act (Alberta),
	 
	
      (hereinafter referred to as the
      "Corporation")

	
      OF THE FIRST PART

	
      - and -

	 
	
      COMPUTERSHARE TRUST COMPANY OF CANADA,
      a trust 

      company incorporated under the laws of Canada

	
      

	 
	
      (hereinafter referred to as the "Rights
      Agent")

	
      OF THE SECOND PART

  

WHEREAS the Board of Directors has determined that it is
in the best interests of the Corporation and all of its shareholders to adopt a
shareholder rights plan;

AND WHEREAS in order to implement the adoption of a
shareholder rights plan, the Board of Directors has:

1.     authorized the issuance and
distribution of one Right in respect of each Common Share outstanding 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 and the Expiration Time;

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

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

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

-1-

ARTICLE 1

INTERPRETATION

1.1     Certain Definitions

In this Agreement:

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

	 	 	 
	 	
    i.

	

the Corporation or any Subsidiary of the Corporation;

    
	 	 	 
	 	
    ii.

	

any Person who becomes the Beneficial Owner of 20% or more of the outstanding
Voting Shares as a result of any one or more Voting Share Reductions, Permitted
Bid Acquisitions, Exempt Acquisitions or Pro Rata Acquisitions; provided that if
a Person shall become the Beneficial Owner of 20% or more of the outstanding
Voting Shares by reason of any one or more Voting Share Reductions, Permitted
Bid Acquisitions, Exempt Acquisitions or Pro Rata Acquisitions and, if
thereafter, such Person, while such Person is the Beneficial Owner of 20% or
more of the outstanding Voting Shares, becomes the Beneficial Owner of
additional Voting Shares which result in an increase of such Person's Beneficial
Ownership of Voting Shares by more than 1% of the number of such Voting Shares
outstanding as at the time of the acquisition (other than pursuant to one or
more Permitted Bid Acquisitions, Exempt Acquisitions or Pro Rata Acquisitions),
then, as of the date such Person becomes the Beneficial Owner of such additional
outstanding Voting Shares, such Person shall be an "Acquiring Person";

    
	 	 	 
	 	
    iii.

	

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

            
	 	 	 
	 	
    iv.

	

            
            an underwriter or member of a banking or selling group that becomes
            the Beneficial Owner of 20% or more of the outstanding Voting Shares
            in connection with a bona fide distribution to the public of
            securities;

        
	 	 	 
	
    
    b.

	

        "Affiliate", when used to indicate a
        relationship with a specified Person, means a Person that, directly or
        indirectly (including through one or more intermediaries), controls, is
        controlled by or is under common control with, such specified Person;

	 	 	 
	
    c.

	
        "Associate", when used to indicate a
        relationship with a specified Person, means:

	 	 	 
	 	
    i.

	

            
            any body corporate of which such specified Person owns at law or in
            equity shares or securities currently convertible into or
            exchangeable for shares carrying more than 10% of the voting rights
            exercisable with respect to the election of directors under all
            circumstances or by reason of the occurrence of an event that has
            occurred and is continuing, or a currently exercisable option or
            right to 

            

-2-

	 	 	
            purchase such shares or such convertible or exchangeable securities,
    and with whom such specified Person is acting jointly or in concert;
	 	 	
             
	 	
    ii.

	
            
            any partner of such specified Person;

            
	 	 	 
	 	
    iii.

	
            
            any trust or estate in which such specified Person has a beneficial
            interest and with whom such specified Person is acting jointly or in
            concert, or in which such specified Person has a 50% or greater
            beneficial interest or in respect of which such specified Person
            serves as a trustee or in a similar capacity provided, however, that
            a Person shall not be an Associate of a trust by reason only of the
            fact that such Person serves as trustee or in a similar capacity in
            relation to such trust if such Person is duly licensed to carry on
            the business of a trust company under the laws of Canada or any
            province thereof or if the ordinary business of such Person includes
            the management of investment funds for unaffiliated investors and
            such Person acts as trustee or in a similar capacity in relation to
            such trust in the ordinary course of such business;

            
	 	 	 
	 	
    iv.

	
            
            a spouse of such specified Person or any Person of the same or
            opposite sex with whom such specified Person is living in a conjugal
            relationship outside marriage or a child of such specified Person;
            and

            
	 	 	 
	 	
    v.

	
            
            any relative of such specified Person or of a spouse or other Person
            mentioned in paragraph 1.1(c)(iv), if that relative has the same
            residence as such specified Person;

        
	 	 
	
    
    d.

	

        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 is the direct or indirect owner at law
            or in equity and, for the purpose of this paragraph (i) a Person
            shall be deemed to be the Beneficial Owner of all securities:

	 	 	 	 
	 	 	
    (1)

	

                
                owned by a partnership of which the
                Person is a partner;

                
	 	 	 	 
	 	 	
    (2)

	
                
                owned by a trust of which the Person has a beneficial interest
                and which is acting jointly or in concert with that Person or of
                which the Person has a 50% or greater beneficial interest;

                
	 	 	 	 
	 	 	
    (3)

	
                
                owned jointly or in common with others; and

                
	 	 	 	 
	 	 	
    (4)

	
                
                which are directly or indirectly owned at law or in equity by an
                Associate of such Person;

            
	 	 	 
	 	
    ii.

	

            
            any securities as to which such Person or any or of such Person's
            Affiliates or Associates has or shares, directly or indirectly:

                
	 	 	 
	 	 	

                
                (1)

                	
    
    the right to acquire (whether such right is exercisable immediately or after
    the lapse or passage of time and whether or not on condition or the
    occurrence of any contingency or otherwise) pursuant to any agreement,
    arrangement, pledge or understanding (whether or not in writing) (other than
    customary agreements with and between underwriters and banking 

-3-

	 	 	
                 	
    
    group or selling group members with respect to a bona fide public offering
    of securities and other than pledges of securities in the ordinary course of
    business that meet all of the conditions specified in Rule 13d-3(d)(3) under
    the 1934 Exchange Act other than the condition in Rule 13d-3(d)(3)(ii) and
    other than a pledge agreement with a registered securities dealer relating
    to the extension of credit for purchases of securities on margin in the
    ordinary course of the dealer's business), or upon the exercise of any
    conversion right, exchange right, purchase right (other than a Right),
    warrant or option, or otherwise; or

	 	 	
                 	 
	 	 	
                
                (2)

            	
    
    the right to vote (whether such right is exercisable immediately or after
    the lapse or passage of time and whether or not on condition or the
    occurrence of any contingency or otherwise), pursuant to any agreement,
    arrangement, pledge or understanding (whether or not in writing), or
    otherwise (other than pledges of securities in the ordinary course of
    business that meet all of the circumstances specified in Rule 13-3(d)(3)
    under the 1934 Exchange Act other than the condition in Rule 13d-3(d)(3)(ii)
    and other than a pledge agreement with a registered securities dealer
    relating to the extension of credit for purchases of securities on margin in
    the ordinary course of the dealer's business); and

	 	 	 
	 	
    iii.

	

            
            any securities which are Beneficially Owned
            within the meaning of paragraphs (i) or (ii) of this definition by
            any other Person with which such Person or any of such Person's
            Affiliates or Associates is acting jointly or in concert or has any
            agreement, arrangement, or understanding, other than a pledge,
            (whether or not in writing) (other than customary agreements with
            and between underwriters and banking group or selling group members
            with respect to a bona fide public offering of such securities) with
            respect to or for the purpose of acquiring, holding, voting or
            disposing of any Voting Shares;

            
	 	 	 
	 	
    iv.

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

            
	 	 	 
	 	
    v.

	
            
            solely because such security has been deposited or tendered pursuant
            to any Take-over Bid made by such Person, any of such Person's
            Affiliates or Associates or any other Person referred to in
            paragraph (iii) or (iv) of this definition until such deposited or
            tendered security has been unconditionally accepted for payment or
            exchange or taken up and paid for, whichever shall first occur;

            
	 	 	 
	 	
    vi.

	
            
            solely because such Person, any of such Person's Affiliates or
            Associates or any other Person referred to in paragraph (iii) of
            this definition has or shares the power to vote or direct the voting
            of such security pursuant to a revocable proxy given in response to
            a public proxy solicitation;

            
	 	 	 
	 	
    vii.

	
            
            solely because such Person, any of such Person's Affiliates or
            Associates or any other Person referred to in paragraph (iii) of
            this definition has or shares the power to vote or direct the voting
            of such security in connection with or in order to participate in a
            public proxy solicitation;

            

-4-

	 	
    viii.

	
            
            solely because any such Person, any of such Person's Affiliates or
            Associates or any other Person referred to in paragraph (iii) of
            this definition has an agreement, arrangement or understanding
            (whether or not in writing) with respect to a shareholder proposal
            or a matter or matters to come before a meeting of shareholders,
            including the election of directors;

            
	 	 	 
	 	
    ix.

	
            
            solely because such Person, any of such
            Person's Affiliates or Associates or any other Person referred to in
            paragraph (iii) of this definition holds or exercises voting or despositive power over such security provided that:

                
	 	 	 	 
	 	 	

                
                (1)

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

	 	 	 	 
	 	 	
                
                (2)

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

	 	 	
                 	 
	 	 	
                
                (3)

            	
    
    the Investment Manager or the Trust Company, as the case may be, does not
    make or propose to make a Take-over Bid by means of a take-over bid circular
    or any other means, other than an Offer to Acquire Voting Shares or other
    securities by means of a distribution by the Corporation or by means of
    ordinary market transactions (including prearranged trades) executed through
    the facilities of a stock exchange or organized over-the-counter market,
    alone or acting jointly or in concert with any other Person;

	 	 	 
	 	
    x.

	

            
            solely because such Person is a Client of the
            same Investment Manager as another Person on whose account the
            Investment Manager holds or exercises voting or despositive power
            over such security, or solely 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 or exercises voting
            or despositive power over such security;

            
	 	 	 
	 	
    xi.

	
            
            solely because such Person, any of such
            Person's Affiliates or Associates or any other Person referred to in
            paragraph (iii) of this definition would be the Beneficial Owner as
            defined in paragraphs (i) to (iii) of this definition of such
            security provided that such Person is:

                
	 	 	 	 
	 	 	

                
                (1)

                	
    a Crown agent or agency; or

-5-

	 	 	
    (2)

	
                
                the administrator or the trustee of one or more pension funds or
                plans registered under the laws of Canada or any Province
                thereof;

                
	 	 	 	 
	 	 	
    (3)

	
                
                and such securities are held solely for the purposes of its
                activity as a Person described in subparagraphs (1) or (2)
                above, provided that such Person is precluded by its governing
                legislation from owning more than 30% of the shares of any
                company including the Corporation or, where not so precluded, is
                generally so precluded and in such event does not own more than
                30% of the shares of the Corporation; holds its Voting Shares
                for investment purposes; and is not acting jointly or in concert
                with any other Person. For greater certainty, and without
                limitation to the generality of Section 5.14, if, for any
                reason, the existence of this paragraph (xi) of this definition
                is judicially determined to affect the validity or
                enforceability of this Agreement, it is the expressed desire of
                the parties to this Agreement that this paragraph (xi) of this
                definition be severed from the balance of this Agreement and
                that in such circumstances the provisions of subsection 5.1(e)
                shall apply mutatis mutandis and the reference therein to the 10
                days shall be read to be 60 days or such later date as the Board
                of Directors may determine;

        
	
    
    e.

	

        "Board of Directors" means the board of
        directors of the Corporation or any duly constituted and empowered
        committee thereof;

	 	 	 
	
    
    f.

	
        "Business Corporations Act" means the 
        Business Corporations Act (Alberta), R.S.A. 2000, c. B-9, as amended
        from time to time, and the regulations made thereunder, as in effect on
        the date of this Agreement or as the same may be amended, re-enacted or
        replaced by any comparable or successor laws or regulations thereto;

	 	 	 
	
    g.

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

	 	 	 
	
    h.

	
        "Canadian Dollar Equivalent" of any amount
        which is expressed in the currency of any other country means, on any
        date, the Canadian dollar equivalent of such amount determined by
        multiplying such amount by the Exchange Rate on such date;

	 	 	 
	
    i.

	
        "close of business" on any given date means
        the time on such date (or, if such date is not a Business Day, the time
        on the next succeeding Business Day) at which the Calgary office of the
        principal transfer agent for the Common Shares (or, after the Separation
        Time, the Calgary office of the Rights Agent) is closed to the public;

	 	 
	
    
    j.

	
        "Common Shares" means the common shares
        without par value in the capital of the Corporation and any other shares
        in the capital of the Corporation into which such shares may be
        subdivided, consolidated, reclassified or changed; provided, however,
        that "common shares", when used with reference to any Person other than
        the Corporation, shall mean the class or classes of shares (or similar
        equity interest) with the greatest per share voting power entitled to
        vote generally in the election of all directors of such other Person or
        the equity securities or other equity interest having power (whether or
        not exercised) to control or direct the management of such other Person;
        if such other Person is a Subsidiary of another Person, "such other
        Person" as used herein shall mean the Person or Persons which ultimately
        control such first-mentioned Person;

-6-

	
    
    k.

	
        "Competing Permitted Bid" means a Take-over
        Bid made while another Permitted Bid is in existence and that satisfies
        all of the provisions of a Permitted Bid except that the condition set
        forth in subparagraph 1.1(ah)(ii)(1)(a) may provide that the Voting
        Shares may be taken up or paid for on a date which is not earlier than
        the later of 35 days after the date of the Take-over Bid or the earliest
        date on which Voting Shares may be taken up or paid for under any other
        Permitted Bid that is then in existence for the Voting Shares;

	 	 	 
	
    l.

	
        "controlled": a corporation shall be deemed
        to be "controlled" by another Person or Persons if:

	 	 	 
	 	
    i.

	

            
            securities entitled to vote in the election of directors carrying
            more than 50 percent of the votes for the election of directors are
            held, directly or indirectly, by or for the benefit of the other
            Person or Persons; and

            
	 	 	 
	 	
    ii.

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

 

            
	 	 	 
	 	
    iii.

	
            
            and "control", "controls" and
            "controlling" shall be interpreted accordingly;

        
	 	 	 
	
    m.

	

        "Co-Rights Agents" has the meaning ascribed
        thereto in subsection 4.1(a);

	 	 	 
	
    n.

	
        "Disqualification Date" means the first
        date of public announcement (which, for purposes of this definition,
        shall include, without limitation, a report filed pursuant to Section
        176 or 177 of the Securities Act (Alberta), Section 111 or 112 of
        the Securities Act (British Columbia) or Section 13(d) under the
        1934 Exchange Act) that any Person has made or proposes to make a
        Take-over Bid alone or acting jointly or in concert with any other
        Person;

	 	 
	
    
    o.

	
        "Dividend Reinvestment Acquisition" means
        an acquisition of Voting Shares pursuant to a Dividend Reinvestment
        Plan;

	 	 	 
	
    
    p.

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

	 	 	 
	 	
    i.

	

            
            dividends paid in respect of shares of any class of the Corporation;

            
	 	 	 
	 	
    ii.

	
            
            proceeds of redemption of shares of the Corporation;

            
	 	 	 
	 	
    iii.

	
            
            interest paid on evidences of indebtedness of the Corporation; or

            
	 	 	 
	 	
    iv.

	
            
            optional cash payments;

        
	 	 	 
	 	

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

	 	 	 
	
    q.

	
        "Election to Exercise" has the meaning
        ascribed thereto in subsection 2.2(d);

	 	 	 
	
    r.

	
        "Exchange Rate" means, on any date:

	 	 	 
	 	
    i.

	

            
            if on such date the Bank of Canada sets an average noon spot rate of
            exchange for the conversion of another currency into Canadian
            dollars, such rate, and

            

-7-

	 	
    ii.

	
            
            in any other case, the rate for such date for the conversion of that
            other currency into Canadian dollars which is calculated in the
            manner which shall be determined by the Board of Directors from time
            to time acting in good faith;

        
	 	 
	
    s.

	

        "Exempt Acquisition" means a share
        acquisition in respect of which the Board of Directors has waived the
        application of Section 3.1 pursuant to the provisions of subsection
        5.1(d) or 5.1(e) or which was made on or prior to the date of this
        Agreement;

	 	 	 
	
    
    t.

	
        "Exercise Price" means the price at which a
        holder may purchase the securities issuable upon exercise of one whole
        Right and, until adjustment thereof in accordance with the terms hereof,
        the Exercise Price shall be an amount equal to one half of the Market
        Price of the Common Shares at the time the Right is exercised;

	 	 	 
	
    u.

	
        "Expansion Factor" has the meaning ascribed
        thereto in subsection 2.3(a);

	 	 	 
	
    v.

	
        "Expiration Time" means the earlier of:

	 	 	 
	 	
    i.

	

            
            the Termination Time; or

            
	 	 	 
	 	
    ii.

	
            
            the close of the first annual meeting of shareholders of the
            Corporation following the second anniversary of the Record Time and
            every second annual meeting thereafter, subject to renewal of this
            Agreement in accordance with subsection 5.15(b) hereof;

        
	 	 
	
    w.

	

        "Flip-in Event" means a transaction in or
        pursuant to which any Person becomes an Acquiring Person;

	 	 	 
	
    x.

	
        "holder" has the meaning ascribed thereto
        in Section 2.8;

	 	 	 
	
    y.

	
        "Independent Shareholders" means holders of
        Voting Shares other than:

	 	 	 
	 	
    i.

	

            
            any Acquiring Person;

            
	 	 	 
	 	
    ii.

	
            
            any Offeror;

            
	 	 	 
	 	
    iii.

	
            
            any Associate or Affiliate of any Acquiring
            Person or Offeror;

            
	 	 	 
	 	
    iv.

	
            
            any Person acting jointly or in concert with
            any Acquiring Person, any Offeror or any Associate or Affiliate of
            any Acquiring Person or Offeror; and

            
	 	 	 
	 	
    v.

	
            
            any employee benefit plan, deferred profit sharing plan, stock
            participation plan or trust for the benefit of employees of the
            Corporation or any Subsidiary of the Corporation but excluding in
            any event a plan or trust in respect of which the employee directs
            the manner in which Voting Shares are to be voted and directs
            whether the Voting Shares are to be tendered to a Take-over Bid;

        
	 	 	 
	
    z.

	

        "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 analogous to any of the events described in
        Section 2.3 shall have caused the closing price in respect of 

-8-

	 	
    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
    2.3 in order to make it fully comparable with the closing price on such date
    of determination or, if the date of determination is not a Trading Day, on
    the immediately preceding Trading Day. The closing price per share of any
    securities on any date shall be:

	 	 	 
	 	
    i.

	

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

            
	 	 	 
	 	
    ii.

	
            
            if for any reason none of such prices is available on such day or
            the securities are not listed or admitted to trading on a Canadian
            stock exchange, the closing board lot sale price or, if no such sale
            takes place on such date, the average of the closing bid and asked
            prices, as reported by the principal securities exchange (as
            determined by the Board of Directors) located outside of Canada on
            which such securities are listed or admitted to trading; or

            
	 	 	 
	 	
    iii.

	
            
            if for any reason none of such prices is available on such day or
            the securities are not listed or admitted to trading on a Canadian
            stock exchange or a securities exchange located outside of Canada,
            the last quoted price, or if not so quoted, the average of the high
            bid and low asked prices for each share of such securities in the
            over-the-counter market, as reported by any reporting system then in
            use (as determined by the Board of Directors); or

            
	 	 	 
	 	
    iv.

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

            
	 	 	 
	 	
    v.

	
            
            provided, however, that if for any reason none of such prices is
            available on any such date, the closing price per share of such
            securities on such date shall mean the fair value per share of such
            securities on such date as determined in good faith by the Board of
            Directors, after consultation with a nationally or internationally
            recognized Canadian investment dealer or investment banker with
            respect to the fair value per share of such securities. The Market
            Price shall be expressed in Canadian dollars and, if initially
            determined in respect of any day forming part of the 20 consecutive
            Trading Day period in any other currency, such amount shall be
            translated into Canadian dollars at the Canadian Dollar Equivalent
            thereof on the relevant Trading Day.

            
	 	 	 
	 	
    vi.

	
            
            Notwithstanding the foregoing, where the Board of Directors is
            satisfied that the Market Price of securities as determined herein
            was affected by an anticipated or actual Take-over Bid or by
            improper manipulation, the Board of Directors may, acting in good
            faith, determine the Market Price of securities, such determination
            to be based on a finding as to the price at which a holder of
            securities of that class could reasonably have expected to dispose
            of his securities immediately prior to 

        

-9-

	 	 	
    
            the relevant date excluding any change in price reasonably
    attributable to the anticipated or actual Take-over Bid or to the improper
    manipulation;

	 	 	 
	
    aa.

	

        "1933 Securities Act" means the Securities
        Act of 1933 of the United States, as amended, and the rules and
        regulations thereunder, as in effect on the date of this Agreement or as
        the same may be amended, re-enacted or replaced by any comparable or
        successor laws or regulations thereto;

	 	 	 
	
    ab.

	
        "1934 Exchange Act" means the Securities
        Exchange Act of 1934 of the United States, as amended, and the rules and
        regulations thereunder, as in effect on the date of this Agreement or as
        the same may be amended, re-enacted or replaced by any comparable or
        successor laws or regulations thereto;

	 	 	 
	
    ac.

	
        "Nominee" has the meaning ascribed thereto
        in subsection 2.2(c);

	 	 	 
	
    ad.

	
        "Offer to Acquire" shall include:

	 	 	 
	 	i.	

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

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

        
	 	 	 
	 	

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

	 	 	
         
	
        ae.	
        "Offeror" means a Person who has announced
        an intention to make or who has made a Take-over Bid;

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

	 	 	
         
	
        ag. 	
        "ordinary course dividends" means cash
        dividends paid in any fiscal year of the Corporation to the extent that
        such cash dividends, in the aggregate, do not exceed the greatest of:

	 	 	

             
	 	i.	

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

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

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

        
	 	 	

         
	
    
        ah. 
	

        "Permitted Bid" means a Take-over Bid made
        by an Offeror by way of a Take-over Bid circular which also complies
        with the following additional provisions:

	 	 	

             
	 	i.	

            
            the Take-over Bid is made for all of the Voting
            Shares (other than those Voting Shares owned by the Offeror) by
            sending a Take-over Bid circular to all holders  

            

-10-

	 	 	
            
            
            of record of Voting Shares wherever resident as registered on the
            books of the Corporation, other than the Offeror;

	 	 	
             
	 	ii.	
            
            the Take-over Bid contains, and the take up and
            payment for securities tendered or deposited thereunder shall be
            subject to, an irrevocable and unqualified provision that:

                
	 	 	

                 	

                 
	 	 	

                
                (1) 

                    	

                
                no Voting Shares will be taken up or paid for pursuant to the
                Take-over Bid:
	 	 	

                     	

                     	

                     
	 	 	

                     

                    	

                    a.	

                    
                    prior to the close of business on the 60th day following the
                    date of the Take-over Bid; and
	 	 	
                     	
                     	
                     
	 	 	
                     

                	
                    b.	
                    
                    
                    if less than 50% of the Voting Shares
                    held by Independent Shareholders have been deposited
                    pursuant to the Take-over Bid and not withdrawn;

	 	 	

                 	

                 
	 	 	

                
                (2) 

                	

                

                
                unless the Take-over Bid is withdrawn in accordance with
                applicable law, Voting Shares may be deposited pursuant to such
                Take-over Bid at any time during the period described in
                subparagraph (ii)(1)(a) of this definition and that any Voting
                Shares deposited pursuant to the Take-over Bid may be withdrawn
                until taken up and paid for; and

	 	 	
                 	
                 
	 	 	
                
                (3)  

        	
                
                
                if more than 50% of the Voting Shares held by Independent
                Shareholders have been deposited pursuant to a Take-over Bid and
                not withdrawn, the Offeror will make a
                public announcement of that fact and the Take-over Bid will
                remain open for deposits and tenders of Voting Shares for not
                less than ten Business Days from the date of such public
                announcement;

	 	 
	
    
        ai. 
	

        "Permitted Bid Acquisition" means an
        acquisition made pursuant to a Permitted Bid or a Competing Permitted
        Bid;

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

	 	 	
         
	
        ak. 	
        "Pro Rata Acquisition" means an
        acquisition by a Person of Beneficial Ownership of Voting Shares as a
        result of: a Dividend Reinvestment Acquisition; a stock dividend, a
        stock split or other event pursuant to which a Person becomes Beneficial
        Owner of Voting Shares on the same pro rata basis as all other holders
        of Voting Shares; the acquisition or exercise by such Person of rights
        to purchase Voting Shares distributed to such Person in the course of a
        distribution to all holders of Voting Shares pursuant to a bona fide
        rights offering or pursuant to a prospectus; or a distribution to the
        public of Voting Shares or securities convertible into or exchangeable
        for Voting Shares (and the conversion or exchange of such convertible or
        exchangeable securities), made pursuant to a prospectus or a
        distribution by way of a private placement; provided that the Person
        does not thereby acquire a greater percentage of such Voting Shares, or
        securities convertible into or exchangeable for Voting Shares, so
        offered than the Person's percentage of Voting Shares Beneficially Owned
        immediately prior to such acquisition;

	 	 	
         
	
        al. 	
        "Record Time" means 5:00 p.m. (Calgary
        time) on May 17, 2005;

-11-

	
        am. 	
        "Redemption Price" has the meaning
        ascribed thereto in subsection 5.1(a);

	 	 	
         
	
        an. 	
        "Right" means a right to purchase a Common
        Share, upon the terms and subject to the conditions set forth in this
        Agreement;

	 	 	
         
	
    
        ao. 
	
        "Rights Certificate" has the meaning
        ascribed thereto in subsection 2.2(c) and shall be in substantially the
        form of Exhibit A to this Agreement;

	 	 	
         
	
    
        ap. 
	
        "Rights Register" has the meaning ascribed
        thereto in subsection 2.6(a);

	 	 	
         
	
    
        aq. 
	
        "Securities Act (Alberta)" shall mean the
        Securities Act, R.S.A. 2000, c. S-4, as amended, and the
        regulations and rules thereunder, as in effect on the date of this
        Agreement or as the same may be amended, re-enacted or replaced by any
        comparable or successor laws or regulations or rules thereto;

	 	 
	
        ar. 	
        "Securities Act (British Columbia)" shall
        mean the Securities Act, R.S.B.C. 1996, c. 418, as amended, and
        the regulations and rules thereunder, as in effect on the date of this
        Agreement or as the same may be amended, re-enacted or replaced by any
        comparable or successor laws or regulations or rules thereto;

	 	 
	
        as. 	
        "Separation Time" means the close of
        business on the tenth Trading Day after the earlier of:

	 	 	

             
	 	i.	

            
            the Stock Acquisition Date; and

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

        
	 	 	

         
	 	

        or such earlier or later time as may be determined by
        the Board of Directors, provided that:

	 	 	

                 	

                 
	 	 	

                
                (1) 

                	

                

                
                if any Take-over Bid referred to in paragraph (ii) of this
                definition expires, or is canceled, terminated or otherwise
                withdrawn prior to the Separation Time, such Take-over Bid shall
                be deemed, for the purposes of this definition, never to have
                been made; and

	 	 	
                 	
                 
	 	 	
                
                (2) 

        	
                
                
                if the Board of Directors determines pursuant to subsection
                5.1(d) or 5.1(e) to waive the application of Section 3.1 to a
                Flip-in Event, the Separation Time in respect of such Flip-in
                Event shall be deemed never to have occurred;

	 	 
	
        at. 	

        "Special Meeting" means a special meeting
        of the holders of Voting Shares called by the Board of Directors for the
        purpose of:

	 	 	

             
	 	i.	

            
            ratifying the distribution and the continued
            existence of the Rights in accordance with subsection 5.4(f); or

            
	 	 	
             
	 	ii.	
            
            approving an amendment, variation or rescission
            of any of the provisions of this Agreement pursuant to subsections
            5.4(b), 5.4(c) or 5.4(e);

        

-12-

	
    
        au. 
	

        "Stock Acquisition Date" means the first
        date of public announcement (which, for purposes of this definition,
        shall include, without limitation, a report filed pursuant to Section
        176 of the Securities Act (Alberta), Section 111 of the Securities Act
        (British Columbia) or Section 13(d) of the 1934 Exchange Act) by or on
        behalf of the Corporation or an Acquiring Person indicating that a
        Person has become an Acquiring Person;

	 	 
	
        av. 	
        "Subsidiary" a corporation shall be deemed
        to be a Subsidiary of another corporation if:

	 	i.	

            
            it is controlled by:

                
	 	 	

                 	

                 
	 	 	

                
                (1) 

                	

                
                that other; or
	 	 	
                 	
                 
	 	 	
                
                (2) 

                	
                
                that other and one or more corporations each of which is
                controlled by that other; or
	 	 	
                 	
                 
	 	 	
                
                (3) 

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

             
	 	ii.	

            
            it is a Subsidiary of a corporation that is that
            other's Subsidiary;

        
	 	 	

         
	
        aw. 	

        "Take-over Bid" means an Offer to Acquire
        Voting Shares or other securities if, assuming the Voting Shares or
        other securities subject to the Offer to Acquire are acquired at the
        date of the Offer to Acquire by the Person making the Offer to Acquire,
        such Voting Shares (including all Voting Shares that may be acquired
        upon exercise of all rights of conversion, exchange or purchase
        attaching to the other securities) together with the Offeror's
        Securities would constitute in the aggregate 20% or more of the
        outstanding Voting Shares at the date of the Offer to Acquire;

	 	 	
         
	
    
        ax. 
	
        "Termination Time" means the time at which
        the right to exercise Rights shall terminate pursuant to Section 3.2 or
        Section 5.1;

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

	 	 
	ba.	
        "Voting Shares" means the Common Shares and
        any other shares of capital stock or voting interests of the Corporation
        entitled to vote generally in the election of all directors; and

	 	 
	bb.	
        "Voting Share Reduction" means an acquisition
        or redemption by the Corporation or a Subsidiary of the Corporation of
        Voting Shares which, by reducing the number of Voting Shares outstanding
        or which may be voted, increases the proportionate number of Voting
        Shares Beneficially Owned by such Person to 15% or more of the
        outstanding Voting Shares.

1.2     Currency

-13-

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

1.3     Headings

The division of this Agreement into Articles, Sections,
subsections, paragraphs and subparagraphs and the insertion of headings,
subheadings and a table of contents are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement.

1.4     References to Agreement

References to "this Agreement", "hereto", "herein", "hereby",
"hereunder", "hereof" and similar expressions refer to this Agreement, as
amended or supplemented from time to time, and not to any particular Article,
Section, subsection, paragraph, subparagraph or other provision hereof and
include any and every instrument supplemental or ancillary hereto. Unless the
context otherwise requires, references in this Agreement to an Article, Section,
subsection, paragraph, subparagraph or Exhibit by number, letter or otherwise
refer to the Article, Section, subsection, paragraph, subparagraph or Exhibit,
respectively, bearing that designation in this Agreement

1.5     Grandfathered Person

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"):

        	 	
            
            a.

	

        
        is the Beneficial Owner of more than 20% of the outstanding Voting
        Shares determined as at the Record Time, or

            
	 	 	 
	 	
            
            b.

	
        
        becomes the Beneficial Owner of more than 20% of the outstanding Voting
        Shares after the Record Time and such Person's Beneficial Ownership of
        Voting Shares does not exceed the number of Voting Shares Beneficially
        Owned by such Person immediately prior to the Record Time by more than
        1% of the issued and outstanding Voting Shares as at the Record Time;

            

provided, however, that this exception shall not be, and
shall cease to be, applicable to a Grandfathered Person in the event that such
Grandfathered Person shall after the Record Time become the Beneficial Owner of
additional Voting Shares constituting 5% or more of the outstanding Voting
Shares otherwise than pursuant to one or more Permitted Bid Acquisitions, Exempt
Acquisitions or Pro Rata Acquisitions, provided further, however, that such
Grandfathered Person shall not become an Acquiring Person as a result of one or
more Voting Share Reductions; and provided further that, if 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 purposes of this Agreement:

        	 	
            a. 

             
	

        
        in determining the percentage of outstanding
        Voting Shares Beneficially Owned by any Person, all unissued Voting
        Shares as to which such Person is deemed the Beneficial Owner shall be
        deemed to be outstanding; and

            

-14-

	 	
    
    b.

	
        
        the percentage of outstanding Voting Shares Beneficially Owned by any
        Person shall 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 outstanding Voting Shares.

1.7     Acting Jointly or in Concert

For the purposes of this Agreement, whether Persons are
acting jointly or in concert is a question of fact in each circumstance,
however, a Person shall be deemed to be acting jointly or in concert with
another Person if such Person would be deemed to be acting jointly or in concert
with such other Person for purposes of section 159 of the Securities Act
(Alberta), section 96 of the Securities Act (British Columbia) and any other
applicable law, as such sections exist on the date of this Agreement and any
other applicable law. Notwithstanding the foregoing, and for greater certainty,
the phrase, "acting jointly or in concert", wherever used in this Agreement,
shall not include conduct:

        	 	
            a.

	

        
        unrelated to Voting Shares of the Corporation; or

            
	 	 	 
	 	
            b.

	
        
        consisting solely of:

            
	 	 	 	 
	 	 	

            
            i.

            	
            
            voting or directing the vote of securities of the Corporation
            pursuant to a revocable proxy given in response to a public proxy
            solicitation;

	 	 	 	 
	 	 	
            
            ii.

            	
            voting or directing the vote of securities of the Corporation in
            connection with or in order to participate in a public proxy
            solicitation made or to be made; or
	 	 	 	 
	 	 	
            
            iii.

            	
            having an agreement, arrangement or understanding with respect to a
            shareholder proposal or a matter or matters to come before a meeting
            of shareholders, including the election of directors.

1.8     Generally Accepted Accounting
Principles 

Wherever in this Agreement reference is made to generally
accepted accounting principles, such reference shall be deemed to be the
recommendations at the relevant time of the Canadian Institute of Chartered
Accountants, or any successor institute, applicable on a consolidated basis
(unless otherwise specifically provided herein to be applicable on an
unconsolidated basis) as at the date on which a calculation is made or required
to be made in accordance with generally accepted accounting principles. Where
the character or amount of any asset or liability or item of revenue or expense
is required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any
document, such determination or calculation shall, to the extent applicable and
except as otherwise specified herein or as otherwise agreed in writing by the
parties, be made in accordance with generally accepted accounting principles
applied on a consistent basis. 

-15-

ARTICLE 2

THE RIGHTS

2.1     Legend on Common Share
Certificates

Certificates representing Common Shares issued after the
Record Time but prior to 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 March 28, 2005 (the "Rights Agreement"), between Birch
  Mountain Resources Ltd. (the "Corporation") and Computershare Trust Company of
  Canada, as rights agent, as amended from time to time, the terms of which are
  incorporated herein by reference and a copy of which may be inspected during
  normal business hours at the principal office of the Corporation. Under
  certain circumstances as set out in the Rights Agreement, the Rights may be
  amended, redeemed, may expire, may become null and void or may be evidenced by
  separate certificates and no longer evidenced by this certificate. The
  Corporation will mail or arrange for the mailing of a copy of the Rights
  Agreement to the holder of this certificate without charge as soon as
  practicable after the receipt of a written request therefore."

        

Certificates representing Common Shares that are issued and
outstanding at the Record Time shall also 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     Initial Exercise Price; Exercise
of Rights; Detachment of Rights

        
        	
         	
        
        a. 
            	
        
        Subject to adjustment as herein set forth, each Right will entitle the
        holder thereof, from and after the Separation Time and prior to the
        Expiration Time, to purchase, for the Exercise Price, one Common Share.
        Notwithstanding any other provision of this Agreement, any Rights held
        by the Corporation or any of its Subsidiaries shall be void.

            
	
         	
         	
         
	
         	
        
        b. 

            	
        
        Until the Separation Time:

            
	

             	

             	

             	

             
	

             	

             	

            
            i. 

            	

            
            the Rights shall not be exercisable and no Right may be exercised;
            and
	
             	
             	
             	
             
	
             	
             	
            
            ii. 

            	
            
            each Right will be evidenced by the certificate for the associated
            Common Share and will be transferable only together with, and will
            be transferred by a transfer of, such associated Common Share.

	

         	

         	

         
	

         	

        
        c. 

            	

        
        From and after the Separation Time and prior to the Expiration Time:

            
	

             	

             	

             	

             
	

             	

             	

            
            i. 

            	

            
            the Rights shall be exercisable; and
	
             	
             	
             	
             
	
             	
             	
            
            ii. 

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

    Promptly following the Separation Time, the Corporation
    will prepare and the Rights Agent will mail or arrange to be mailed to each
    holder of record of Rights as of the Separation Time (other 

    -16-

                

    
than an Acquiring Person and, in respect of any Rights
    Beneficially Owned by such Acquiring Person which are not held of record by
    such Acquiring Person, the holder of record of such Rights (a "Nominee")),
    at such holder's address as shown by the records of the Corporation (the
    Corporation hereby agreeing to furnish copies of such records to the Rights
    Agent for this purpose):

                	 	 	 	
                    (1)

	

                
                a rights certificate ("Rights Certificate") representing the
                number of Rights held by such holder at the Separation Time and
                having such markers 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 of any
                self-regulatory organization, stock exchange or quotation system
                on which the Rights may from time to time be listed or traded,
                or to conform to usage; and

                    
	 	 	 	 	 
	 	 	 	
                    (2)

	
                
                a disclosure statement describing the Rights;

                    

    provided that a Nominee shall be sent the materials
    provided for in subparagraphs (1) and (2) above in respect of all Common
    Shares held of record by it which 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 principal office in the city of Calgary 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; and

	 	 	 	 
	 	 	
            
            ii.

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

	 	 	 
	 	
            e. 	

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

            
	 	 	 	 
	 	 	

            
            i.

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

-17-

	 	 	
            
            ii.

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

	 	 	 	 
	 	 	
            
            iii.

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

	 	 	 	 
	 	 	
            
            iv.

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

	 	 	 	 
	 	 	
            
            v.

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

	 	 	 
	 	
        f.

	

        
        If the holder of any Rights shall exercise less than all the Rights
        evidenced by such holder's Rights Certificate, a new Rights Certificate
        evidencing the Rights remaining unexercised (subject to Section 5.5)
        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 securities delivered upon exercise of Rights shall,
            at the time of delivery of the certificates for such securities
            (subject to payment of the Exercise Price), be duly and validly
            authorized, executed, issued and delivered as fully paid and
            non-assessable;

            
	 	 	 	 
	 	 	
        ii.

	
            
            take all such action as may be necessary and within its power to
            comply with any applicable requirements of the Business Corporations
            Act, the Securities Act (Alberta), the Securities Act (British
            Columbia) and any other applicable law in connection with the
            issuance and delivery of the Rights, the Rights Certificates and the
            issuance of any securities upon exercise of Rights;

            
	 	 	 	 
	 	 	
        iii.

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

            
	 	 	 	 
	 	 	
        iv.

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

            
	 	 	 	 
	 	 	
        v.

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

            

-18-

	 	 	
        vi.

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

    

2.3     Adjustments to Exercise Price;
Number of Rights

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

        	 	
            a.	

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

            
	 	 	 	 
	 	 	
            i.

	

            
            declare or pay a dividend on its 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 Common Shares;

            
	 	 	 	 
	 	 	
            iii.

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

            
	 	 	 	 
	 	
            
            except as otherwise provided in this Section 2.3, the
    Exercise Price and the number of Rights outstanding, or, if the payment or
    effective date therefor shall occur after the Separation Time, the
    securities purchasable upon exercise of Rights shall be adjusted as of the
    payment or effective date such that:

	 	 	 	 	 
	 	

                 

                    	 	
    (1)

	
    if the Exercise Price and number of Rights outstanding are to be adjusted;
	 	 
	 	 	 	 	

                    
                    (a)

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

	 	 	 	 	 	 
	 	 	 	 	
                    
                    (b)

                	
    
    each Right held prior to such adjustment will become that number of Rights
    equal to the Expansion Factor;

	 	 	 	 	 	 
	 	 	 	 	
    
    and the adjusted number of Rights will be deemed to be distributed among the
    Common Shares with respect to which the original Rights were associated (if
    they remain outstanding) and the shares issued in respect of such dividend,
    subdivision, change, combination or issuance,

-19-

	 	 	 	 	
    
    so that each such Common Share (or other capital stock) will have exactly
    one Right associated with it; and

	 	 	 	 	 
	 	 	 	
    (2)

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

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

	
    
    If the Corporation shall at any time after the Record Time and prior to the
    Separation Time fix a record date for the issuance of rights, options or
    warrants to all holders of Common Shares entitling them (for a period
    expiring within 60 calendar days after such record date) to subscribe for or
    purchase Common Shares (or securities convertible into or exchangeable for
    or carrying a right to purchase Common Shares) at a price per Common Share
    (or, if a security convertible into or exchangeable for or carrying a right
    to purchase or subscribe for Common Shares having a conversion, exchange or
    exercise price, including the price required to be paid to purchase such
    convertible or exchangeable security or right per share) less than the
    Market Price per Common Share on such record date, the Exercise Price to be
    in effect after such record date shall be adjusted to that price determined
    by multiplying the Exercise Price in effect immediately prior to such record
    date by a fraction:

	 	 	 	 	 
	 	 	
    i.

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

	 	 	 	 	 
	 	 	
    ii.

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

	 	 	 	 	 
	 	 	
    
    If 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 shall be
        adjusted to be the Exercise Price which would then be in effect if such
        record date had not been fixed.

-20-

	 	 	
    
    For purposes of this Agreement, the granting of the
        right to purchase Common Shares (whether from treasury shares or
        otherwise) pursuant to any dividend or interest reinvestment plan and/or
        any Common Share purchase plan providing for the reinvestment of
        dividends or interest payable on securities of the Corporation and/or
        the investment of periodic optional payments and/or employee benefit,
        stock option or similar plans (so long as such right to purchase is in
        no case evidenced by the delivery of rights or warrants) 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 percent of the current market price per share (determined as
        provided in such plans) of the Common Shares.

	 	 	 	 	 
	 	
    c.

	
    
    If the Corporation shall at any time after the
        Record Time and prior to the Separation Time fix a record date for a
        distribution to all holders of Common Shares (including any such
        distribution made in connection with a merger or amalgamation in which
        the Corporation is the continuing corporation) of evidences of
        indebtedness, cash (other than an ordinary course dividend or a dividend
        referred to in paragraph 2.3(a)(i)), assets, rights or warrants
        (excluding those referred to in subsection 2.3(b)), the Exercise Price
        to be in effect after such record date shall be determined by
        multiplying the Exercise Price in effect immediately prior to such
        record date by a fraction:

	 	 	 	 	 
	 	 	
    i.

	
    
    the numerator of which shall be the 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 Rights), on a per share basis, of the portion of the cash,
    assets, evidences of indebtedness, rights, options or warrants so to be
    distributed; and

	 	 	 	 	 
	 	 	
    ii.

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

	 	 	 	 	 
	 	
    d.

	
    Each adjustment made pursuant to this Section 2.3 shall be made as of:
	 	 	 	 	 
	 	 	
    i.

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

	 	 	 	 	 
	 	 	
    ii.

	
    
    the record date for the applicable distribution, in the case of an
    adjustment made pursuant to subsection (b) or (c) above, subject to
    readjustment to reverse the same if such distribution shall not be made.

	 	 	 	 	 
	 	
    e.

	
    
    Notwithstanding anything herein to the contrary,
        no adjustment in the Exercise Price shall be required unless such
        adjustment would require an increase or decrease of at least one percent
        in the Exercise Price; provided, however, that any adjustments which by
        reason of this subsection 2.3(e) are not required to be made shall be
        carried forward and taken into account in any subsequent adjustment. All
        calculations under this Section 2.3 shall be made to the nearest cent or
        to the nearest hundredth of a share. Notwithstanding

-21-

	 	 	
    the first sentence of this subsection 2.3(e), any
    adjustment required by this Section 2.3 shall be made no later than the
    earlier of: (i) three years from the
        date of the transaction which mandates such adjustments; and (ii) the
        Termination Date. Whenever an adjustment to the Exercise Price is made
        pursuant to this Section 2.3, the Corporation shall:

	 	 	 	 
	 	 	
    i.

	
    promptly prepare a certificate setting forth such adjustment and a brief
    statement of the facts accounting for such adjustment,
	 	 	 	 	 
	 	 	
    ii.

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

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

	 	 	 	 	 
	 	
    g.

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

	 	 	 	 	 
	 	
    h.

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

	 	 	 	 	 
	 	
    i.

	
    
    In any case in which this Section 2.3 shall
        require that an adjustment in the Exercise Price be made effective as of
        a record date for a specified event, the Corporation may elect to defer
        until the occurrence of such event the issuance to the holder of any
        Right exercised after such record date the number of Common Shares and
        other securities of the Corporation, if any, issuable upon such exercise
        over and above the number of Common Shares and other securities of the
        Corporation, if any, issuable upon such exercise on the basis of the
        Exercise Price in effect prior to such adjustment; provided, however,
        that the Corporation shall deliver to such holder an appropriate
        instrument evidencing such holder's right to receive such additional
        shares (fractional or otherwise) or securities upon the occurrence of
        the event requiring such adjustment.

	 	 	 	 	 
	 	
    j.

	
    
    Notwithstanding anything in this Section 2.3 to
        the contrary, the Corporation shall be entitled to make such reductions
        in the Exercise Price, in addition to those adjustments

-22-

	 	 	
    expressly required by this Section 2.3, as and to the extent that the Board
    of Directors shall in good faith determine to be advisable in order that any
    (i) consolidation or subdivision of the Common Shares, (ii) issuance
        wholly or in part for cash of Common Shares or securities that by their
        terms are convertible into or exchangeable for Common Shares, (iii)
        stock dividends or (iv) issuance of rights, options or warrants referred
        to in this Section 2.3, hereafter made by the Corporation to holders of
        its Common Shares shall not be taxable to such shareholders.
	 	 	 
	 	
    k.

	
    The Corporation covenants and agrees that, after the Separation Time, it
    will not, except as permitted by Section 5.1 or Section 5.3, take (or permit
    any Subsidiary of the Corporation to take) any action if at the time such
    action is taken it is reasonably foreseeable that such action will diminish
    substantially or otherwise eliminate the benefits intended to be afforded by
    the Rights.
	 	 	 	 	 
	 	
    l.

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

	
    If the Corporation shall at any time after the Record Time and prior to the
    earlier of the Separation Time and the Expiration Time issue any Common
    Shares other than in a transaction referred to in subsection 2.3(a) each
    such Common Share so issued shall automatically have one new Right
    associated with it, which Right shall be evidenced by the certificate
    representing such share.

2.4     Date on Which Exercise is
Effective

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

2.5     Execution, Authentication,
Delivery and Dating of Rights Certificates

        
        	 	
            a.

	
        
        The Rights Certificates shall be executed on behalf of the Corporation
        by any two of its officers or directors. The signature of any of these
        officers or directors 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 or
        directors 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 the Rights

            

-23-

	 	 	
    
        Agent shall manually countersign and send such Rights Certificates to
    the holders of the Rights pursuant to subsection 2.2(c). No Rights
    Certificate shall be valid for any purpose until countersigned by the Rights
    Agent as aforesaid.

	 	 	 
	 	
        c.

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

    

2.6     Registration, 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 registrar for the Rights (the "Rights Registrar") for the
        purpose of maintaining the Rights Register for the Corporation and
        registering Rights and transfers of Rights as herein provided and the
        Rights Agent hereby accepts such appointment. If 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.

            
	 	 	 
	 	
            b.

	
        
        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 subsections 2.6(d) and
        3.1(b), the Corporation will execute, and the Rights Agent will manually
        countersign and deliver, in the name of the holder or the designated
        transferee or transferees, as required pursuant to the holder's
        instructions, one or more new rights Certificates evidencing the same
        aggregate number of Rights as did the Rights Certificates so
        surrendered.

            
	 	 	 
	 	
            c.

	
        
        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.

            
	 	 	 
	 	
            d.

	
        
        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 2.6, the
        Corporation may require the payment of a sum sufficient to cover any tax
        or other governmental charge that may be imposed in relation thereto and
        any other expenses (including the fees and expenses of the Rights Agent)
        connected therewith.

            

2.7     Mutilated, Destroyed, Lost and
Stolen Rights Certificates

        
        	 	
            a.

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

            
	 	 	 
	 	
            b.

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

            
	 	 	 
	 	 	

            
            i.

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

-24-

	 	 	
            
            ii.

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

        
	 	 	 
	 	
        c.

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

        
	 	 	 
	 	
        d.

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

    

2.8     Persons Deemed Owners

The Corporation, the Rights Agent and any agent of the
Corporation or the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and 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 Common Shares).

2.9     Delivery and Cancellation of
Certificates

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

2.10     Agreement of Rights Holders

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

        	 	
            a.

	

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

            
	 	 	 
	 	
            b.

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

            

-25-

	 	
    c.

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

        
	 	 	 
	 	
    e.

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

        
	 	 	 
	 	
    f.

	
        
        that, 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 any governmental
        authority, prohibiting or otherwise restraining performance of such
        obligation.

    

2.11     Rights Certificate Holder not
Deemed a Shareholder

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

ARTICLE 3

ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS

3.1     Flip-in Event

        
        -26-

        
	 	
        a.

	
        
        Subject to subsection 3.1(b), Section 3.2 and subsections 5.1(d) and
        5.1(e), if prior to the Expiration Time a Flip-in Event occurs, each
        Right shall constitute, effective at the close of business on the tenth
        Trading Day after the Stock Acquisition Date, the right to purchase from
        the Corporation, upon payment of the Exercise Price and otherwise
        exercising such Right in accordance with the terms hereof, that number
        of Common Shares having an aggregate Market Price on the date of
        occurrence of such Flip-in Event equal to twice the Exercise Price for
        an amount in cash equal to the Exercise Price (such Right to be
        appropriately adjusted in a manner analogous to the applicable
        adjustment provided for in Section 2.3 in the event that after the Stock
        Acquisition Date an event of a type analogous to any of the events
        described in Section 2.3 shall have occurred).

        
	 	 	 
	 	
        b.

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

            
	 	 	 	 
	 	 	

            
            i.

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

	 	 	 	 
	 	 	
            
            ii.

        	
    
        a transferee of Rights, direct or indirect, of an Acquiring Person (or
    of any Affiliate or Associate of an Acquiring Person or of any Person acting
    jointly or in concert with an Acquiring Person or any Associate or Affiliate
    of an Acquiring Person) who becomes a transferee in a transfer that the
    Board of Directors has determined is part of a plan, arrangement or scheme
    of an Acquiring Person (or any Affiliate or Associate of an Acquiring Person
    or any Person acting jointly or in concert with an Acquiring Person or any
    Associate or Affiliate of an Acquiring Person), that has the purpose or
    effect of avoiding paragraph 3.1(b)(i);

	 	 	 
	 	 	

        
        shall become null and void without any further
        action, and any holder of such Rights (including any transferee of, or
        other successor to, such Rights, whether directly or indirectly) shall
        not have any right whatsoever to exercise such Rights under any
        provision of this Agreement and shall not have thereafter any right
        whatsoever with respect to such Rights, whether under any provision of
        this Agreement or otherwise. The holder of any Rights represented by a
        Rights Certificate which is submitted to the Rights Agent upon exercise
        or for registration of transfer or exchange which does not contain the
        necessary certifications set forth in the Rights Certificate
        establishing that such Rights are not void under this subsection 3.1(b)
        shall be deemed to be an Acquiring Person for the purposes of this
        subsection 3.1(b) and such Rights shall become null and void.

        
	 	 	 
	 	
        c.

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

            
	 	 	 
	 	 	

             

        	
    
        "The Rights represented by this Rights
            Certificate were Beneficially Owned by a Person who was an Acquiring
            Person or an Affiliate or an Associate of an Acquiring Person (as
            such terms are defined in the Rights Agreement) or by a Person
            acting jointly or in concert with any of them. This Rights
            Certificate and the Rights represented hereby are void in the
            circumstances specified in subsection 3.1(b) of the Rights
            Agreement."

-27-

	 	 	

        
        provided that the Rights Agent shall not be under any
        responsibility to ascertain the existence of facts that would require
        the imposition of such legend but shall be required to impose such
        legend only if instructed to do so in writing 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 paragraph 3.1(b)(i) or (ii).

        
	 	 	 
	 	
        d.

	
        
        In the event that there shall not be sufficient Common Shares authorized
        for issuance to permit the exercise in full of the Rights in accordance
        with this Section 3.1, the Corporation shall take all such action as may
        be necessary to authorize additional Common Shares for issuance upon the
        exercise of the Rights, failing which the Board of Directors shall
        consider the exercise of the options set forth in Section 3.2.

        
	 	 	 
	 	
        e.

	
        
        From and after the Separation Time, the Corporation shall do all such
        acts and things as shall be necessary and within its power to ensure
        compliance with the provisions of this Section 3.1, including without
        limitation, all such acts and things as may be required to satisfy the
        requirements of the Business Corporations Act, the Securities Act
        (Alberta), the Securities Act (British Columbia) and any other
        applicable law in respect of the issue of Common Shares upon the
        exercise of Rights in accordance with this Agreement.

    

3.2     Exchange Option

        
        	 	
            a.

	
        
        Subject to receipt by the Corporation of any necessary regulatory
        approvals, if the Board of Directors acting in good faith shall
        determine that conditions exist which would eliminate or otherwise
        materially diminish in any respect the benefits intended to be afforded
        to the holders of Rights pursuant to this Agreement the Board of
        Directors may, at its option and without seeking the approval of holders
        of Common Shares or Rights, at any time after a Flip-in Event has
        occurred, authorize the Corporation to issue or deliver in respect of
        each Right which is not void pursuant to subsection 3.1(b), either:

            
	 	 	 	 
	 	 	
            i.

	

            
            in return for the Exercise Price and the Right, debt, equity or
            other securities or property or assets (or a combination thereof)
            having a value equal to twice the Exercise Price; or

            
	 	 	 	 
	 	 	
            ii.

	
            
            in return for the Right, subject to any amounts that may be required
            to be paid under applicable law, cash, debt, equity or other
            securities or property or assets (or a combination thereof) having a
            value equal to the Exercise Price;

            
	 	 	 
	 	 	

        
        in full and final settlement of all rights, title and
        interest in and to the Rights; provided that the value of any debt,
        equity or other securities or properties or assets shall be determined
        by a nationally or internationally recognized Canadian firm of
        investment dealers or investment bankers selected by the Board of
        Directors. To the extent that the Board of Directors determines in good
        faith that some action need be taken pursuant to this Section 3.2, the
        Board of Directors may suspend the exercisability of the Rights for a
        period of up to ninety days following the date of the occurrence of the
        relevant Flip-in Event in order to decide the appropriate form of
        distribution to be made and to determine the value thereof. In the event
        of any such suspension, the Corporation shall notify the Rights Agent
        and issue as promptly as practicable a public announcement stating that
        the exercisability of the Rights has been temporarily suspended.

            
	 	 	 
	 	
            b.

	
        
        If the Board of Directors authorizes the exchange of debt, equity or
        other securities or property or assets (or a combination thereof)
        pursuant to subsection 3.2(a), without any

            

-28-

	 	 	
    
        further action or notice the only right thereafter of a holder of Rights
    shall be to receive upon due exercise of the Rights such debt, equity or
    other securities or property or assets (or a combination thereof) in
    accordance with the determination of the Board of Directors. Within 10
    Business Days after the Board of Directors has authorized the exchange of
    such debt, equity or other securities or property or assets (or a
    combination thereof) pursuant to subsection 3.2(a), the Corporation shall
    give notice of such exchange to the holders of Rights in accordance with
    Section 5.9. Each such notice will state the method by which the exchange of
    debt, equity or other securities or property or assets (or a combination
    thereof) for Rights will be effected.

	 	 	 
	 	
        c.

	
        
        If there shall not be sufficient securities
        authorized but unissued to permit the exchange in full of such Rights
        pursuant to this Section 3.2, the Corporation shall take all such action
        as may be necessary to authorize additional securities for issuance upon
        the exchange of Rights.

        
	 	 	 
	 	
        d.

	
        
        The Corporation shall not be required to issue
        fractions of securities or to distribute certificates evidencing
        fractional securities. In lieu of issuing such fractional securities,
        subject to subsection 5.5(b), there shall be paid to the registered
        holders of Rights to whom such fractional securities would otherwise be issuable, an amount in cash equal to the same fraction of the Market
        Price of a whole security.

    

3.3     Fiduciary Duties of the Board of
Directors of the Corporation 

Nothing contained in this Article 3 shall be considered to
affect the obligation of the Board of Directors to exercise its fiduciary
duties. Without limiting the generality of the foregoing, nothing contained
herein shall be construed to suggest or imply that the Board of Directors shall
not be entitled to recommend that holders of the Voting Shares reject or accept
any Take-over Bid or take any other action (including, without limitation, the
commencement, prosecution, defence or settlement of any litigation and the
submission of additional or alternative Take-over Bids or other proposals to the
shareholders of the Corporation with respect to any Take-over Bid) that the
Board of Directors believes is necessary or appropriate in the exercise of its
fiduciary duties.

ARTICLE 4

THE RIGHTS AGENT

4.1     General

        
        	 	
            a.

	
        
        The Corporation hereby appoints the Rights Agent
        to act as agent for the Corporation in accordance with the terms and
        conditions hereof, and the Rights Agent hereby accepts such appointment.
        The Corporation may from time to time appoint such co-Rights Agents
        ("Co-Rights Agents") as it may deem necessary or desirable. In the event
        the Corporation appoints one or more Co-Rights Agents, the respective
        duties of the Rights Agents and the Co-Rights Agents shall be as the
        Corporation may determine. The Corporation agrees to pay to the Rights
        Agent reasonable compensation for all services rendered by it hereunder
        and, from time to time, on demand of the Rights Agent, its reasonable
        expenses and counsel fees and other disbursements incurred in the
        administration and execution of this Agreement and the exercise and
        performance of its duties hereunder, including the reasonable fees and
        disbursements of any expert retained by the Rights Agent. The
        Corporation also agrees to indemnify the Rights Agent for, and to hold
        it harmless against, any loss, liability, costs, claims, actions,
        damages or expenses, incurred without negligence, bad faith or wilful
        default on the part of the Rights Agent,

            

-29-

	 	 	
    
        for anything done or suffered or omitted by the Rights Agent in
    connection with the acceptance, execution and administration of this
    Agreement and the performance of its duties hereunder, 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 of the Rights Agent.

	 	 	 
	 	
        b.

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

        
	 	 	 
	 	
        c.

	
        
        The Corporation shall inform the Rights Agent in a reasonably timely
        manner of events which may materially affect the administration of this
        Agreement by the Rights Agent.

    

4.2     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, statutory
        arrangement or consolidation to which the Rights Agent or any successor
        Rights Agent is a party, or any corporation succeeding to the
        shareholder or stockholder services business of the Rights Agent or any
        successor Rights Agent, will be the successor to the Rights Agent under
        this Agreement without the execution or filing of any paper or any
        further act on the part of any of the parties hereto, provided that such
        corporation would be eligible for appointment as a successor Rights
        Agent under the provisions of Section 4.4. If at the time any successor
        Rights Agent succeeds to the agency created by this Agreement, any of
        the Right 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 if at that time any of the Right Certificates have
        not been countersigned, any successor Rights Agent may countersign such
        Right 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
        Right Certificates will have the full force provided in the Right
        Certificates and in this Agreement.

            
	 	 	 
	 	
            b.

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

            

4.3     Duties of Rights Agent

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

-30-

        
	 	
    a.

	

        
        the Rights Agent may consult with legal counsel (who may be legal
        counsel for the Corporation) and the opinion of such counsel will be
        full and complete authorization and protection to the Rights Agent as to
        any action taken, suffered 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 and the Rights Agent shall be
        entitled to rely in good faith on the advice of any such expert;

        
	 	 	 
	 	
    b.

	
        
        whenever in the performance of its duties under this Agreement the
        Rights Agent deems it necessary or desirable that any fact or matter be
        proved or established by the Corporation prior to taking or suffering
        any action hereunder, such fact or matter (unless other evidence in
        respect thereof 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, the President or any
        Vice President, or the Secretary or 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 default;

        
	 	 	 
	 	
    d.

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

        
	 	 	 
	 	
    e.

	
        
        the Rights Agent will not be under any
        responsibility in respect of the validity of this Agreement or the
        authorization, execution and delivery hereof (except the due
        authorization, execution and delivery hereof by the Rights Agent) or in
        respect of the validity or execution of any Common Share certificate or
        Rights Certificate (except its countersignature thereof); nor will it be
        responsible for any breach by the Corporation of any covenant or
        condition contained in this Agreement or in any Rights Certificate; nor
        will it be responsible for any change in the exercisability of the
        Rights (including the Rights becoming void pursuant to subsection
        3.1(b)) or any adjustment required under the provisions of Section 2.3
        or be 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 2.3
        describing any such adjustment); nor will it by any act hereunder be
        deemed to make any representation or warranty as to the authorization of
        any Common Shares to be issued pursuant to this Agreement or any Rights
        or as to whether any Common Shares will, when issued, be duly and
        validly authorized, executed, issued and delivered and fully paid and
        non-assessable;

        
	 	 	
         
	 	
    f.

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

        

-31-

	 	
    g.

	
        
        the Rights Agent is hereby authorized and directed to accept written
        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, President, a Vice President or the Secretary or any Assistant
        Secretary of the Corporation, and to apply to such individual 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 reliance
        upon instructions of any such individual;

        
	 	 	 
	 	
    h.

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

        
	 	 	 
	 	
    i.

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

    

4.4     Change of Rights Agent

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

-32-

ARTICLE 5

MISCELLANEOUS

5.1     Redemption and Waiver

        
        	 	
            a.

	
        
        The Board of Directors acting in good faith may, at its option, at any
        time prior to the occurrence of a Flip-in Event, elect to redeem all but
        not less than all of the then outstanding Rights at a redemption price
        of $0.0001 per Right appropriately adjusted in a manner analogous to the
        applicable adjustment provided for in Section 2.3 if an event of the
        type analogous to any of the events described in Section 2.3 shall have
        occurred (such redemption price being herein referred to as the
        "Redemption Price"). The redemption of the Rights by the Board of
        Directors may be made effective at such time, on such basis and with
        such conditions as the Board of Directors in its sole discretion may
        establish.

            
	 	 	 
	 	
            b.

	
        
        If the Board of Directors elects or is deemed to have elected to redeem
        the Rights, the right to exercise the Rights will thereupon, without
        further action and without notice, terminate and the only right
        thereafter of the holders of Rights shall be to receive the Redemption
        Price.

            
	 	 	 
	 	
            c.

	
        
        Within 10 days after the Board of Directors electing or having been
        deemed to have elected to redeem the Rights, the Corporation shall give
        notice of redemption to the holders of the Rights in accordance with
        Section 5.9. Each such notice of redemption will state the method by
        which the payment of the Redemption Price will be made. The Corporation
        may not redeem, acquire or purchase for value any Rights at any time in
        any manner other than that specifically set forth in this Section 5.1 or
        other than in connection with the purchase of Common Shares prior to the
        Separation Time.

            
	 	 	 
	 	
            d.

	
        
        The Board of Directors may prior to the occurrence of a Flip-in Event
        determine, upon prior written notice to the Rights Agent, to waive the
        application of Section 3.1 to any particular Flip-in Event.

            
	 	 	 
	 	
            e.

	
        
        The Board of Directors may waive the application of Section 3.1 in
        respect to the occurrence of any Flip-in Event if the Board of Directors
        has determined within ten Trading Days following a Stock Acquisition
        Date that a Person became an Acquiring Person by inadvertence and
        without any intention to become, or knowledge that it would become, an
        Acquiring Person under this Agreement and, in the event that such a
        waiver is granted by the Board of Directors, such Stock Acquisition Date
        shall be deemed not to have occurred. Any such waiver pursuant to this
        subsection 5.1(e) must be on the condition that such Person, within 10
        days after the foregoing determination by the Board of Directors or such
        earlier or later date as the Board of Directors may determine (the
        "Disposition Date"), has reduced its Beneficial Ownership of Voting
        Shares such that the Person is no longer an Acquiring Person. If the
        Person remains an Acquiring Person at the close of business on the
        Disposition Date, the Disposition Date shall be deemed to be the date of
        occurrence of a further Stock Acquisition Date and Section 3.1 shall
        apply thereto.

            
	 	 	 
	 	
            f.

	
        
        If a Person makes a Permitted Bid or a Competing Permitted Bid pursuant
        to which more than 50 percent of the then outstanding Voting Shares
        (other than those Voting Shares Beneficially Owned by the Persons making
        the Permitted Bid or the Competing Permitted Bid, at the date of the
        Permitted Bid or the Competing Permitted Bid) are taken up and paid for
        by such Person, then the Board of Directors shall, immediately upon the

            

-33-

	 	 	
        consummation of such acquisition, without further formality, be deemed
    to have elected to redeem the Rights at the Redemption Price on the expiry
    date of the Permitted Bid or Competing Permitted Bid, as the case may be.
	 	 	 
	 	
        g.

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

        
	 	 	 
	 	
        h.

	
        
        Upon the Rights being redeemed pursuant to subsection 5.1(g), all the
        provisions of this Agreement shall continue to apply as if the
        Separation Time had not occurred and Rights Certificates representing
        the number of Rights held by each holder of record of Common Shares as
        of the Separation Time had not been mailed to each such holder and for
        all purposes of this Agreement, the Separation Time shall be deemed not
        to have occurred.

    

5.2     Expiration

No Person shall have any rights whatsoever pursuant to or
arising out of this Agreement or in respect of any Right after the Expiration
Time, except the Rights Agent as specified in subsections 4.1(a) and (b).

5.3     Issuance of New Rights
Certificates

Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board 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.

5.4     Supplements and Amendments

        
        	 	
            a.

	
        
        Without the approval of any holders of Voting
        Shares or Rights, the Corporation may make amendments to this Agreement
        to correct any clerical or typographical error or which are required to
        maintain the validity of the Agreement as a result of any change in any
        applicable legislation or regulations thereunder. The Corporation may,
        prior to the date of the shareholders' meeting referred to in subsection
        5.4(f), supplement or amend this Agreement without the approval of any
        holders of Rights or Voting Shares in order to make any changes which
        the Board of Directors acting in good faith may deem necessary or
        desirable. Notwithstanding anything in this Section 5.4 to the contrary,
        no supplement or amendment shall be made to the provisions of Article 4
        except with the written concurrence of the Rights Agent to such change,
        supplement or amendment.

            
	 	 	 
	 	
            b.

	
        
        Subject to subsection 5.4(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 if the
        action requiring such approval 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 Stock Acquisition
        Date amend, vary or rescind any of the provisions of this Agreement and
        the Rights (whether or not such action would materially

            

-34-

	 	 	
    
        adversely affect the interests of the holders of Rights generally),
    provided that no such amendment, variation or deletion shall be made to the
    provisions of Article 4 except with the written concurrence of the Rights
    Agent thereto. Such consent shall be deemed to have been given if such
    amendment, variation or deletion is authorized by the affirmative votes of
    the holders of Rights present or represented at and entitled to vote at a
    meeting of the holders and representing 50 percent plus one of the votes
    cast in respect thereof.

	 	 	 
	 	
        d.

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

        
	 	 	 
	 	
        e.

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

            
	 	 	 	 
	 	 	

            
            i.

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

	 	 	 	 
	 	 	
            
            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 subsection
    5.4(d), confirm or reject such amendment.

	 	 	 
	 	 	

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

        
	 	 	 
	 	
        f.

	
        
        In conjunction with the Corporation's next annual
        general meeting of shareholders, the Board of Directors shall call and
        hold a Special Meeting of holders of Voting Shares to consider and, if
        thought appropriate, ratify the distribution and the continued existence
        of the Rights. The Special Meeting shall be held on a date fixed by the
        Board of Directors, which date shall be no later than that date which is
        one year after the date of this Agreement. The Board of Directors shall
        fix a record date for determining the holders of Voting Shares entitled
        to receive notice of the Special Meeting in accordance with all
        applicable laws and the articles and by-laws of the Corporation. Unless
        a majority of the

    

-35-

	 	 	
    
        votes cast on such resolution are voted in favour of
        the continued existence of the Rights, then 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, without further
        formality, be deemed to have elected to redeem the Rights at the
        Redemption Price.

5.5     Fractional Rights and Fractional
Shares

        
        	 	
            a.

	
        
        The Corporation shall not be required to issue
        fractions of Rights or to distribute Rights Certificates which evidence
        fractional Rights. In lieu of such fractional Rights, there shall be
        paid to the registered holders of the Rights Certificates with regard to
        which such fractional Rights would otherwise be issuable an amount in
        cash equal to the same fraction of the Market Price of a whole Right
        determined on the date on which such fractional Right would otherwise be
        issuable.

            
	 	 	 
	 	
            b.

	
        
        The Corporation shall not be required to issue fractions of Common
        Shares upon exercise of the Rights or to distribute certificates which
        evidence fractional Common Shares. Fractions of Common Shares may, at
        the election of the Corporation, be evidenced by scrip certificates or
        in lieu of issuing fractional Common Shares, the Corporation shall pay
        to the registered holders of Rights Certificates, at the time such
        Rights are exercised as herein provided, an amount in cash equal to the
        same fraction of the Market Price of one Common Share at the date of
        such exercise.

            

5.6     Rights of Action

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

5.7     Regulatory Approvals

Any obligation of the Corporation or action or event
contemplated by this Agreement shall be subject to the receipt of any requisite
approval or consent from any governmental or regulatory authority, and, without
limitation, all necessary approvals of the principal Canadian stock exchange and
the principal securities exchange located outside of Canada on which the Common
Shares are listed or admitted to trading, shall be obtained to the issuance of
Common Shares upon the exercise of Rights under subsection 2.2(d).

Notwithstanding any provision of this Agreement to the
contrary, any amendment to this Agreement will be subject to the prior written
consent of the principal Canadian stock exchange and the principal securities
exchange located outside of Canada on which the Common Shares are listed or
admitted to trading, if and as required.

5.8     Unlawful Distributions

-36-

If in the opinion of the Board of Directors (who may rely
upon the advice of counsel) any action or event contemplated by this Agreement
would require compliance by the Corporation with the securities laws or
comparable legislation of a jurisdiction outside Canada, 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 a Canadian resident trustee of
Rights or securities issuable on exercise of Rights, the holding thereof in
trust for the Persons entitled thereto (but reserving to the trustee or to the
trustee and the Corporation, as the Corporation may determine, absolute
investment discretion with respect thereto) and the sale thereof and remittance
of 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, in which such
issue or delivery would be unlawful without registration of the relevant Persons
or securities for such purposes. Notwithstanding the foregoing, to the extent
that the issuance or delivery of the Rights or securities issuable on exercise
of Rights to Persons who are citizens, residents or nationals of any such
jurisdiction in which such issue or delivery would be so unlawful, such Rights
or securities shall be issued and delivered to such Persons to the extent the
same may be so issued and delivered in reliance upon applicable exemptions from
registration requirements in such jurisdictions.

5.9     Notices

Any notice or demand 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, addressed (until another address is filed in
writing with the Rights Agent) as follows:

    
        Birch Mountain Resources Ltd.

       
    Suite 300, 250 Sixth Avenue SW

       
    Bow Valley Square 4

       
    Calgary AB, T2P 3H7

    
       
    Attention: President

Any such notice or demand shall be deemed to have been
received if delivered, on the date of delivery, or if sent by prepaid first
class mail, on the fifth Business Day after mailing thereof, except in the
interruption of regular mail service, in which case such notice shall be
delivered.

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, addressed (until another address is filed in
writing with the Corporation) as follows:

    Computershare Trust Company Of Canada

   

600, 530 - 8th Avenue SW

    Calgary, Alberta

    T2P 3S8

    Attention: Equity Services

Any such notice or demand shall be deemed to have been
received if delivered, on the date of delivery, or if sent by prepaid first
class mail, on the fifth Business Day after mailing thereof, except in the
interruption of regular mail service, in which case such notice shall be
delivered.

-37-

Any notice or demand authorized or required by this Agreement
to be given or made by the Corporation or the Rights Agent to or on the holder
of any Rights shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as it appears upon the register of the Rights Agent or, prior to the
Separation Time, on the register of the Corporation for its Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. In the event of any interruption
of mail service, such notice required or permitted to be given hereunder will be
deemed to be sufficiently given by advertisement of such notice in daily
newspapers published in the city of Calgary.

5.10     Costs of Enforcement

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

5.11     Successors

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

5.12     Benefits of this Agreement

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

5.13     Governing Law

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

5.14     Severability

If any Section, subsection, paragraph, subparagraph or other
provision hereof or the application hereof to any circumstances or any right
hereunder shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such Section, subsection, paragraph, subparagraph or other
provision or such right shall be ineffective only as to such jurisdiction and to
the extent of such invalidity or unenforceability in such jurisdiction without
invalidating or rendering unenforceable or ineffective the remaining Sections,
subsections, paragraphs, subparagraphs and other provisions hereof or rights
hereunder in such jurisdiction or the application of such Section, subsection,
paragraph, subparagraph or other provision or rights hereunder in any other
jurisdiction or to circumstances other than those as to which it is specifically
held invalid or unenforceable.

5.15     Effective Date and Renewal

        
        	 	
            a.

	
        
        This Agreement is effective and in full force and effect in accordance
        with its terms from the Record Time. If this Agreement is not approved,
        ratified and confirmed by resolution

            

-38-

	 	 	
    
        passed by a majority of votes cast by Independent Shareholders who vote
    in person or by proxy in respect of the ratification, approval and
    confirmation of this Agreement at a meeting to be held no later than one
    year after the date of this Agreement then this Agreement and all
    outstanding Rights shall be of no further force and effect from the earlier
    of: (a) the date of such meeting; and (b) one year after the date of this
    Agreement.

	 	 	 
	 	
        b.

	
        
        This Agreement may be renewed for such further term and, subject to
        necessary regulatory approvals, with such amendments as may be approved
        by the Board of Directors and submitted to the shareholders of the
        Corporation for ratification and approval at the first annual meeting of
        shareholders of the Corporation following the second anniversary of the
        Record Time.

    

5.16     Determinations and Actions by
the Board of Directors

The Board of Directors shall have the power and authority to
administer and amend this Agreement and to exercise all rights and powers
specifically granted hereunder to the Board of Directors or the Corporation, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to interpret the provisions
of this Agreement and to make all calculations and determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not to redeem the Rights or to amend this Agreement
in accordance with the terms hereof). All such actions, calculations and
determinations (including, for purposes of paragraph ii. below, all omissions
with respect to the foregoing) which are done or made by the Board of Directors,
in good faith, shall: (i) be final, conclusive and binding on the Corporation,
the Rights Agent, the holders of the Rights and all other parties, provided that
no amendment to this Agreement shall be binding on the Rights Agent unless the
Rights Agent shall have agreed in writing to such amendment; and (ii) not
subject the Board of Directors or any director of the Corporation to any
liability to the holders of the Rights. 

5.17     Time of the Essence

Time shall be of the essence in this Agreement.

5.18     Execution in Counterparts

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

5.19     Language

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

5.20     Declaration as to Non-Canadian
Holders

If, in the opinion of the Board of Directors (which may rely
upon the advice of counsel), any action or event contemplated by this Agreement
would require compliance by the Corporation with the securities 

-39-

laws or comparable legislation of a jurisdiction outside
Canada, the Board of Directors acting in good faith shall take such actions as
it may deem appropriate to ensure such compliance. In no event shall the
Corporation or the Rights Agent be required to issue or deliver Rights or
securities issuable on exercise of Rights to Persons who are citizens, residents
or nationals of any jurisdiction other than Canada in which such issue or
delivery would be unlawful without registration of the relevant Persons or
securities for such purposes.

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

 

	 	
    BIRCH MOUNTAIN RESOURCES LTD.

	 	
    

     

    Per:
	
    

     

    /s/ Douglas J. Rowe

	 	 	 
	 	 	 
	 	 	 
	 	
    COMPUTERSHARE TRUST COMPANY OF CANADA

	 	
    

     

    Per
	
    

     

    /s/ Dennis Watt

	 	 	 
	 	 	 
	 	
    Per:
	
    /s/ Bonnie Steedman

-40-

EXHIBIT A

[Form of Rights Certificate]

	

Certificate No.

    

    	
    

    __________ Rights

    	 	

    

    THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET
    FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
    (SPECIFIED IN SECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT),
    RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR TRANSFEREES OF AN
    ACQUIRING PERSON OR ITS AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED
    IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT) OR ANY PERSON ACTING JOINTLY OR IN
    CONCERT WITH ANY OF THEM MAY BECOME VOID.

        	 

    

Rights Certificate

This certifies that                          
, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement, dated as of the 28th
day of March, 2005 (the "Rights Agreement") between Birch Mountain Resources
Ltd., a corporation incorporated under the Business Corporations Act
(Alberta) (the "Corporation") and Computershare Trust Company of Canada, a trust
company, 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 Expiration Time (as such term is defined
in the Rights Agreement), one fully paid common share of the Corporation (a
"Common Share") at the Exercise Price referred to below, upon presentation and
surrender of this Rights Certificate together with the Form of Election to
Exercise duly executed and submitted to the Rights Agent at its principal office
in the city of Calgary. Until adjustment thereof in certain events as provided
in the Rights Agreement, the Exercise Price is equal to one half of the Market
Price of the Common Shares at the time the Rights are exercised.

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

The 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 thereof
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 principal office of the
Corporation and are available upon written request.

The 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 the date evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate shall
be exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised. No fractional Common Shares will be issued
upon the exercise of any Rights evidenced hereby, but in lieu thereof a cash
payment will be made as provided in the Rights Agreement.

-41-

Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at a redemption
price of $0.0001 per Right, subject to adjustment in certain events, under
certain circumstances at its option.

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

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

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

	
    DATE:
	 	 	
    BIRCH MOUNTAIN RESOURCES LTD.

	 	 	 	 	 
	 	 	 	
    

    Per:
	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
    Per:
	 

 

	

Countersigned:

    
	

    
	

COMPUTERSHARE TRUST COMPANY OF CANADA

    
	

    
	

    
	 	 
	

Per:

    

    	 
	
 

    	

      Authorized Signature

-42-

 

FORM OF ASSIGNMENT

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

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                                                   attorney, to transfer the within Rights
Certificate on the books of the within-named Corporation, with full power of
substitution.

	

Date:

    

                        	 	 	 
	
                         

                        	 	 	

    
                        Signature

                        

            	

                Signature Guarantee:

                	

            

            (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 member firm of a stock
exchange in Canada, a registered national securities exchange in the United
States, a member of the Investment Dealers Association of Canada or National
Association of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in Canada or the United States.

	
 

    
	

(To be completed by the assignor 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 by any Person acting jointly or in concert therewith. Capitalized terms shall
have the meaning ascribed thereto in the Rights Agreement.

 

	 	 
	 	
                        

                        Signature

                        
	 	
                        

                        
	 	
                         

    
	 	

 

                        
	 	
                        

                        
                        (please print name of Signator)

                        

                        

                        -43-

FORM OF ELECTION TO EXERCISE

TO:                                                                   

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

	 	
 

    
	 	
 

    
	 	
 

    
	 	
 

    
	 	
 

    
	 	

Address

    
	 	
  

    
	 	

Social Insurance, Social Security or Other Taxpayer
Identification Number

    

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

	 	
 

    
	 	
 

    
	 	
 

    
	 	
 

    
	 	
 

    
	 	

Address

    
	 	
  

    
	 	

Social Insurance, Social Security or Other Taxpayer
Identification Number

    

 

	

Date:

    

                        	 	 	 
	
                         

                        	 	 	

    
                        Signature

	

    Signature Guaranteed:

    	
            

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

            

            

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

-44-

	 
	

(To be completed by exercisor 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 by any Person acting jointly or in concert therewith. Capitalized terms shall
have the meaning ascribed thereto in the Rights Agreement.

 

	 	 
	 	
                        

                        Signature

                        
	 	
                        

                        
	 	
                         

    
	 	

 

                        
	 	
                        

                        
                        (please print name of Signatory)

                        

 

NOTICE

In the event the Certificate set forth above in the
applicable Forms of Assignment or Election is not completed, the Corporation
will deem the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof and,
in the case of an Assignment, will affix a legend to that effect on any Rights
Certificates issued in exchange for this Rights Certificate. Capitalized terms
shall have the meaning ascribed thereto in the Rights Agreement.

-45-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]