Common use of Initial Exercise Price; Exercise of Rights; Detachment of Rights Clause in Contracts

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAlta. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAlta. Promptly following the Separation Time, TransAlta will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta (TransAlta hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price as at the Business Day immediately preceding the Separation Time (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time and, in respect of such convertible security converted into Common Shares after the Separation Time and prior to the Expiration Time, promptly after such conversion, the Corporation will prepare or cause to be prepared and the Rights Agent will mail to the holder so converting (other than 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time and, in respect of each Convertible Security converted into Common Shares after the Separation Time and prior to the Expiration Time, promptly after such conversion, (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “"Nominee”")), ) at such holder’s 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and with the Exercise Price and number of Common Shares are being subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of Section 3.1(b) and, in respect of any Rights Beneficially Owned 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share Unit for the Exercise Price (and with the Exercise Price and number of Common Shares are Units subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Trust 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 of TransAlta Unit registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaUnit. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaUnits. Promptly following the Separation Time, TransAlta the Trust will prepare and the Rights Agent will mail to each holder of record of Common Shares Units as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of Subsection 3.1(b) and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), at such holder’s 's address as shown by the records of TransAlta the Trust (TransAlta the Trust hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company 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 of TransAlta the Company registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Company. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Company. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta (TransAlta hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to Subsection 3.1(a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):): (x) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or 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 standard usage; and (y) a disclosure statement prepared by the Company describing the Rights, provided that a Nominee shall be sent the materials provided for in clauses (x) and (y) 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: (i) the Rights Certificate evidencing such Rights; (ii) an election to exercise such Rights (an "Election to Exercise") substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or 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 (iii) payment by certified cheque, banker's draft or money order payable to the order of the Company, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised. (e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Subsection 2.2(d)(ii), which 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)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the Company's transfer agent certificates representing the number of such Common Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Common Shares in accordance with Subsection 5.5(b); (iii) after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder; (iv) when appropriate, after receipt, deliver the cash referred to in Subsection 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and (v) tender to the Company all payments received on exercise of Rights. (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns. (g) The Company covenants and agrees that it will: (i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable; (ii) take all such action as may be necessary and within its power to comply with the requirements of the Business Corporations Act, the Securities Act (British Columbia), the securities laws or comparable legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights; (iii) use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date; (iv) cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; (v) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and (vi) after the Separation Time, except as permitted by Section 5.1, 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta Canadian Superior 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 of TransAlta Canadian Superior registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaCanadian Superior. Promptly following the Separation Time, TransAlta Canadian Superior will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta Canadian Superior (TransAlta Canadian Superior hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and with the Exercise Price and number of Common Shares are being subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 Voting Share of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaVoting Share. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaVoting Shares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Voting Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of Section 3.1(b) hereof and, in respect of any Rights Beneficially Owned 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company 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 of TransAlta the Company registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Company. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Company. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time and, in respect of each Convertible Security converted into Common Shares after the Separation Time and prior to the Expiration Time promptly after such conversion to the holder so converting (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “"Nominee”")), at such holder’s address as shown by the records of TransAlta (TransAlta hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company 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 of TransAlta the Company registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Company. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Company. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta (TransAlta hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a1) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share purchase, for the Exercise Price Price, one New Unit (and the which Exercise Price and number of Common Shares New Units are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Trust or any of its Subsidiaries shall be void. New Units shall be in book-entry form only. (b2) Until the Separation Time, , (i) the Rights shall not be exercisable and no Right may be exercised; and , and (ii) for administrative purposes, each Right will be evidenced by the any certificate issued for the associated Common Share of TransAlta Unit registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaUnit. (c3) From and after the Separation Time and prior to the Expiration Time: (i) , the Rights shall may be exercisable; and (ii) exercised and the registration and transfer of the Rights shall be separate from and independent of Common Shares of TransAltaUnits. Promptly following the Separation Time, TransAlta the Trust will prepare and the Rights Agent will mail to each holder of record of Common Shares Units as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), at such holder’s address as shown by the records of TransAlta the Trust or of the registrar and transfer agent of the Units (TransAlta the Trust hereby agreeing to furnish copies of such records to the Rights Agent for this purpose): (a) a Rights Certificate, in substantially the form set out in Exhibit “A” hereto, appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Trust may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation or judicial or administrative order made pursuant thereto or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to standard usage, and (b) a disclosure statement prepared by the Trust describing the Rights, provided that (i) a Nominee shall be sent the materials provided for in Clauses (a) and (b) in respect of all Units held of record by it which are not Beneficially Owned by an Acquiring Person. (4) Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent at its office in the City of Montreal, Canada or at any other office of the Rights Agent in the cities designated (with the approval of the Rights Agent) from time to time for that purpose by the Trust: (a) the Rights Certificate evidencing such Rights; (b) an instrument satisfactory to the Trust and to the Rights Agent evidencing the holder’s election to exercise the Rights (an “Election to Exercise”) substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or his executors or administrators or other personal representatives or his legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and (c) payment by certified cheque, banker’s draft or money order payable to the order of the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for New Units in a name other than that of the holder of the Rights being exercised. (5) Upon receipt of a duly completed Election to Exercise which does not indicate that such Right is null and void as provided by Subsection 3.01(2), accompanied by all instruments and payments set forth in Subsection 2.02(4), the Rights Agent (unless otherwise instructed in writing by the Trust) will thereupon promptly: (a) register the number of New Units to be purchased in the securities register of the Trust in such name or names as may be designated by such holder of Rights or, upon written request of such holder, requisition from the transfer agent of the Trust certificates for the number of New Units to be purchased (the Trust hereby irrevocably agreeing to authorize its transfer agent to comply with all such requisitions), (b) after receipt of any certificates referred to in Clause 2.02(5)(a), deliver such certificates 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,

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to Subsection 3.1(a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company 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 and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to Subsection 3.1(a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):): (x) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or 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 standard usage; and (y) a disclosure statement prepared by the Company describing the Rights, provided that a Nominee shall be sent the materials provided for in clauses (x) and (y) 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: (i) the Rights Certificate evidencing such Rights; an election to exercise such Rights (an "Election to Exercise") substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or 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 by certified cheque, banker's draft or money order payable to the order of the Company, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised. (e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Subsection 2.2(d)(ii), which 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)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the Company's transfer agent certificates representing the number of such Common Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Common Shares in accordance with Subsection 5.5(b); (iii) after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder; (iv) when appropriate, after receipt, deliver the cash referred to in Subsection 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and (v) tender to the Company all payments received on exercise of Rights. (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns. (g) The Company covenants and agrees that it will: (i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non- assessable; (ii) take all such action as may be necessary and within its power to comply with the requirements of the Business Corporations Act, the Securities Act (British Columbia), the securities laws or comparable legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights; (iii) use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date; (iv) cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; (v) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and (vi) after the Separation Time, except as permitted by Section 5.1, 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and with the Exercise Price and number of Common Shares are being subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta NOVA 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 of TransAlta NOVA registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaNOVA. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaNOVA. Promptly following the Separation Time, TransAlta NOVA will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of subsection 3.1(b) and, in respect of any Rights Beneficially Owned 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 's address as shown by the records of TransAlta NOVA (TransAlta NOVA hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forthforth and subject to Section 3.1, each Right will shall entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth belowbelow and are subject to Section 3.1). Notwithstanding any other provision of this Agreement, any Rights held Beneficially Owned by TransAlta the Corporation or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will shall be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAlta. Promptly following the Separation Time, TransAlta Shares. (d) The Corporation will prepare or cause to be prepared and the Rights Agent will mail to to: (i) each holder of record of Common Shares as of the Separation Time, promptly following the Separation Time; and (ii) in the case of the issuance of Common Shares pursuant to the exercise of Options after the Separation Time and prior to the Expiration Time, each holder of record so exercising, promptly after such exercise (in each case, other than an Acquiring Excluded Person and, in respect of any Rights Beneficially Owned by such Acquiring Excluded Person which are not held of record by such Acquiring Excluded Person, the holder of record of such Rights (a “Nominee”)) of such Rights), at such holder’s address as shown by the records of TransAlta or available to the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Corporation or any of its Subsidiaries shall be void.. Table of Contents (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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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”’)), and to each holder of Convertible Shares (other than an Acquiring Person or the Nominee of an Acquiring Person) at such holder’s address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to Subsection 3.1(a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to Subsection 3.1(a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will Will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose): (A) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or 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 standard usage; and (B) a disclosure statement prepared by the Company describing the Rights, provided that a Nominee shall be sent the materials provided for in clauses (A) and (B) 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: (i) the Rights Certificate evidencing such Rights; (ii) an election to exercise such Rights (an “Election to Exercise”) substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or 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 (iii) payment by certified cheque, banker's draft or money order payable to the order of the Company, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised. (e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Subsection 2.2(d)(ii), which 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)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the Company's transfer agent certificates representing the number of such Common Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Common Shares in accordance with Subsection 5.5(b); (iii) after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder; (iv) when appropriate, after receipt, deliver the cash referred to in Subsection 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and (v) tender to the Company all payments received on exercise of Rights. (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns. (g) The Company covenants and agrees that it will: (i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable; (ii) use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date; (iii) cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; (iv) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and (v) after the Separation Time, except as permitted by Section 5.1, 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.

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, each Right will entitle the holder thereof to purchase one Common Share for the Exercise Price (and the which Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent be a Rights Certificate) or by Book Entry Form registration for the associated Common Share and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (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 of TransAltaShares. Promptly In the event that the Corporation determines to issue Rights Certificates, then promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person andor any other Person whose Rights are or become void pursuant to the provisions of subsection 4(b) and other than, in respect of any Rights Beneficially Owned by such Acquiring Person or such other Person which are not held of record by such Acquiring Person (or such other Person, as applicable), the holder of record of such Rights (a “Nominee”)), at such holder’s address as shown by on the records of TransAlta the Corporation (TransAlta and the Corporation hereby agreeing agrees to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta or any of its Subsidiaries shall be voidPrice. (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 Voting Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaVoting Share. (c) From and after 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 of TransAltaVoting Shares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Voting Shares as of the Separation Time or who subsequently becomes a holder of record of Voting Shares upon the exercise of rights attaching to Convertible Securities outstanding at the Voting Share Acquisition Date (other than an Acquiring Person and, in respect and any holder of any record of Rights which are 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 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):),

Initial Exercise Price; Exercise of Rights; Detachment of Rights. ‌ (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth belowherein). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 Shareholder will be entitled to one Right for each Share held (subject to adjustment as set forth herein) and each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time:Time:‌ (i) the Rights shall be exercisableexercisable and the Rights may be exercised; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Shares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share Unit for the Exercise Price (and the Exercise Price and number of Common Shares Units are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta Inovalis 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 Units of TransAlta Inovalis registered in the name of the holder thereof or the nominee of such holder (which certificate Unit shall also be deemed to represent a Rights CertificateRight) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share Unit of TransAltaInovalis. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares Units of TransAltaInovalis. Promptly following the Separation Time, TransAlta Inovalis will prepare and the Rights Agent will mail to each holder of record of Common Shares Units as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), ) at such holder’s address as shown by the records of TransAlta Inovalis (TransAlta Inovalis hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forthforth (including without limitation any adjustment described in Article 3), each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share purchase, for the Exercise Price (and the Exercise Price and number of Price, one Common Shares are subject to adjustment as set forth below)Share. Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (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 of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail or arrange to be mailed to each holder of record of Common Shares as of the Separation Time or who subsequently becomes a holder of record of Common Shares upon the exercise of rights attaching to Convertible Securities outstanding at the Stock Acquisition Date (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), at such holder’s address as shown by the records of TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose): A. 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 Company 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 B. a disclosure statement describing the Rights; provided that a Nominee shall be sent the materials provided for in paragraphs (A) and (B) above in respect of all Common Shares held of record by it which are not Beneficially Owned by an Acquiring Person. In order for the Company to determine whether any Person is holding Common Shares which are Beneficially Owned by another Person, the Company may require such first mentioned Person to furnish such information and documents as the Company deems necessary. (d) Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent at its principal office in the city of Vancouver, 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, banker’s draft or money order payable to the order of the Company, 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 or 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 Company if the Company 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 Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) after receipt of such certificate, deliver the Common Shares referred to in subclause 2.2 (e)(i) 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 Company 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 Company 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 Company 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 (British Columbia), the Securities Act (British Columbia), the Securities Act (Alberta), the Securities Act (Ontario) the 1933 Securities Act, the 1934 Exchange Act and any other applicable laws 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 and/or quotation systems on which the Common Shares were listed and 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; and (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 Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates or certificates for Common Shares, provided that the Company 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth belowherein). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 Shareholder will be entitled to one Right for each Share held (subject to adjustment as set forth herein) and each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisableexercisable and the Rights may be exercised; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Shares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price as at the Business Day immediately preceding the day of exercise of the Right (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price as at the Business Day immediately preceding the day of exercise of the Right (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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”")), and to each holder of Convertible Shares (other than an Acquiring Person or the Nominee of an Acquiring Person) at such holder’s 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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”’)), and to each holder of Convertible Shares (other than an Acquiring Person or the Nominee of an Acquiring Person) at such holder’s address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to Subsection 3.1 (a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):): (x) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or 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 standard usage; and (y) a disclosure statement prepared by the Company describing the Rights, provided that a Nominee shall be sent the materials provided for in clauses (x) and (y) 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: (i) the Rights Certificate evidencing such Rights; (ii) an election to exercise such Rights (an “Election to Exercise”) substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or 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 (iii) payment by certified cheque, banker’s draft or money order payable to the order of the Company, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised. (e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Subsection 2.2(d)(ii), which 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)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the Company’s transfer agent certificates representing the number of such Common Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Common Shares in accordance with Subsection 5.5(b); (iii) after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder; (iv) when appropriate, after receipt, deliver the cash referred to in Subsection 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and (v) tender to the Company all payments received on exercise of Rights. (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns. (g) The Company covenants and agrees that it will: (i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable; (ii) take all such action as may be necessary and within its power to comply with the requirements of the Canada Business Corporations Act, the Securities Act (British Columbia), the securities laws or comparable legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights; (iii) use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date; (iv) cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; (v) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and (vi) after the Separation Time, except as permitted by Section 5.1, 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Corporation. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder Shareholder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), at such holder’s address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company 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 represented and evidenced by the certificate for the associated Common Share of TransAlta the Company registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAlta.the Company. Silvercorp/Shareholder Rights Plan (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltathe Company. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned 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 TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose): (i) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or 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 (ii) a disclosure statement describing the Rights, provided that a Nominee shall be sent the materials provided for in (i) and (ii) in respect of all Common Shares of the Company 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: (i) the Rights Certificate evidencing such Rights; (ii) an election to exercise such Rights (an “Election to Exercise”) substantially in the form attached to the Rights Certificate appropriately completed and 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 (iii) payment by certified cheque, banker’s draft or money order payable to the order of the Company, 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. Silvercorp/Shareholder Rights Plan (e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Clause 2.2(d)(ii), which does not indicate that such Right is null and void as provided by Subsection 3.1(b), and payment as set forth in Clause 2.2(d)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the transfer agent certificates representing the number of such Common Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Common Shares; (iii) after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or to the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder; (iv) when appropriate, after receipt, deliver the cash referred to in Clause 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and (v) tender to the Company all payments received on the exercise of the Rights. (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns. (g) The Company covenants and agrees that it will: (i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable; (ii) take all such action as may be necessary and within its power to comply with the requirements of the Company Act and the Securities Act, and the applicable securities laws or comparable legislation of each of the provinces and territories of Canada, the U.S. Securities Act, the U.S. Exchange Act and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights; (iii) use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date; (iv) take all such action as may be necessary and within its power to cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; Silvercorp/Shareholder Rights Plan (v) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and (vi) after the Separation Time, except as permitted by Section 5.1, 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder Shareholder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “"Nominee”")), at such holder’s 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Class A Share for the Exercise Price or the U.S. Dollar Equivalent as at the Business Day immediately preceding the day of exercise of the Right (and the Exercise Price and number of Common Class A Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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) provided the Record Time occurs prior to the Separation Time, each Right Right, when issued, will be evidenced by the certificate for the associated Common Share of TransAlta the Corporation registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltathe Corporation. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Subordinate Voting Share for the Exercise Price (and the Exercise Price and number of Common Subordinate Voting Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta Subordinate Voting Shares registered in the name of the holder thereof or the nominee of such holder (which certificate Subordinate Voting Share shall also be deemed to represent a Rights CertificateRight) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaSubordinate Voting Share. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaSubordinate Voting Shares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Subordinate Voting Shares as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), ) at such holder’s address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 of TransAlta Shares registered in the name of the holder thereof or the nominee of such holder (which certificate Common Share shall also be deemed to represent a Rights CertificateRight) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time Time, and in respect of each Convertible Security converted into Common Shares after the Separation time and prior to the Expiration time, promptly after such conversion, (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), ) at such holder’s address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

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 purchase, for the Exercise Price, one Common Share for the Exercise Price (and the which Exercise Price and number of Common Shares are subject to adjustment as set forth belowherein). Notwithstanding any other provision of this Agreement, any Rights held Beneficially Owned by TransAlta the Corporation or any of its Subsidiaries shall be void. (b) Until the Separation Time, (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administrative purposes, each Right will be evidenced by the certificate Certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate Certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) , the Rights shall may be exercisable; and (ii) exercised and the registration and transfer of the Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time or, in the case of the conversion or exercise of conversion rights, exchange rights, share purchase rights (other than Rights), warrants or options into Common Shares after the Separation Time and prior to the Close of Business on the 10th Business Day following the exchange or exercise, the Rights Agent will mail to each holder of record so converting, exchanging or exercising (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “"Nominee”")), at such holder’s 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):), (i) a Rights Certificate, in substantially the form set out in Exhibit A hereto, appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation or judicial or administrative order made pursuant thereto or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to standard usage; and (ii) a disclosure statement prepared by the Corporation describing the Rights, provided that a Nominee shall be sent the materials provided for in Clauses (i) and (ii) 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 office in the City of Vancouver or at any other office of the Rights Agent in the cities designated (with the approval of the Rights Agent) from time to time for that purpose by the Corporation: (i) the Rights Certificate evidencing such Rights; (ii) an election to exercise such Rights (an "Election to Exercise") substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or 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 (iii) payment by certified cheque or money order payable to the order of the Corporation, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of the transfer or delivery of Rights Certificates or the issuance or delivery of Certificates in a name other than that of the holder of the Rights being exercised. (e) Upon receipt of a Rights Certificate, with an Election to Exercise appropriately completed and duly executed which does not indicate that such Right is null and void as provided by Subsection 3.01(b), accompanied by payment as set forth in Subsection 2.02(d)(iii), the Rights Agent (unless otherwise instructed in writing by the Corporation in the event that the Corporation is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the transfer agent for the Corporation's Common Shares Certificates for the number of Common Shares to be purchased (the Corporation hereby irrevocably agreeing to authorize its transfer agent to comply with all such requisitions); (ii) after receipt of any Certificates referred to in Subsection 2.02(e)(i), deliver such Certificates 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) after receipt, deliver such cash referred to in Subsection 2.02(e)(iii) 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the which Exercise Price and number of Common Shares are subject to adjustment as set forth below)) or its U.S. Dollar Equivalent. Notwithstanding any other provision of this Agreement, any Rights held by TransAlta 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 , and (ii) for administrative purposes, each Right will be evidenced by the certificate for the associated Common Voting Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAlta. (c) Voting Share. From and after the Separation Time and prior to the Expiration Time: (i) , the Rights shall may be exercisable; and (ii) exercised and the registration and transfer of the Rights shall be separate from and independent of Common Shares of TransAltaVoting Shares. Promptly following the Separation Time, TransAlta the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Voting Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of Subsection 3.1(b) and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)Rights), at such holder’s 's address as shown by the records of TransAlta the Corporation (TransAlta the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):): a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation or judicial or administrative order made pursuant thereto or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage; and a disclosure statement prepared by the Corporation describing the Rights; provided, however, that a nominee shall be sent the materials provided for in Clauses (i) and (ii) above only in respect of Voting Shares held of record by it which are not Beneficially Owned by an Acquiring Person. In order for the Corporation to determine whether any Person is holding Voting Shares which are Beneficially Owned by another Person, the Corporation may require such first-mentioned Person to furnish such information and documentation as the Corporation deems necessary or appropriate to make such determination. 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 Toronto, Ontario or, with the approval of the Rights Agent, at any other office of the Rights Agent in the cities designated from time to time for that purpose by the Corporation: the Rights Certificate evidencing such Rights with an election to exercise (an "Election to Exercise") substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or his executors or administrators or other personal representatives or his legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and payment by certified cheque, banker's draft or money order payable to the order of the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Voting Shares in a name other than that of the holder of the Rights being exercised. Upon receipt of a Rights Certificate, with a completed Election to Exercise appropriately completed and duly executed which does not indicate that such Right is null and void as provided by Subsection 3.1(b), accompanied by payment as set forth in Clause 2.2(d)(ii), the Rights Agent (unless otherwise instructed in writing by the Corporation) will thereupon promptly: requisition from the transfer agent of the Common Shares certificates for the number of Common Shares to be purchased (the Corporation hereby irrevocably agreeing to authorize its transfer agent to comply with all such requisitions); after receipt of such certificates referred to in Clause 2.2(e)(i), deliver such certificates 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; when appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuing fractional Common Shares; after receipt, deliver such cash referred to in Clause 2.2(e)(iii) to or to the order of the registered holder of the Rights Certificate; and tender to the Corporation all payments received on exercise of the Rights. In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns. The Corporation covenants and agrees that it will: 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; take all such action as may be necessary and within its power to comply with any applicable requirements of the Canada Business Corporations Act, the Securities Act (Ontario), the Securities Act of 1933 and the Exchange Act of 1934 and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights; use reasonable efforts to cause all Common Shares issued upon the TSX and each other stock exchange on which the Common Shares are then listed or admitted to trading at that time; cause to be reserved and kept available out if its authorized and unissued Common Shares the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; and pay when due and payable any and all Canadian and United States federal, provincial and state transfer taxes (not in the nature of income or withholding taxes) and charges which may be payable in respect of the original issuance or delivery of the Rights Certificates or certificates for Common Shares, provided that the Corporation shall not be required to pay any transfer tax or charge which may be payable in respect of the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and with the Exercise Price and number of Common Shares are being subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta Angiotech 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 of TransAlta Angiotech registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaAngiotech. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaAngiotech. Promptly following the Separation Time, TransAlta Angiotech will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of Subsection 3.1(b) hereof and, in respect of any Rights Beneficially Owned 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 TransAlta Angiotech (TransAlta Angiotech hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

Initial Exercise Price; Exercise of Rights; Detachment of Rights. ‌ (a) Subject to Subsection 3.1(a) and adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and the Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta the Company or any of its Subsidiaries shall be void. (b) Until the Separation Time,: (i) the Rights shall not be exercisable and no Right may be exercised; and (ii) for administration purposes, each Right will be evidenced by the certificate for the associated Common Share of TransAlta registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaShare. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaShares. Promptly following the Separation Time, TransAlta the Company will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, 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 's address as shown by the records of TransAlta the Company (TransAlta the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):): (x) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or 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 standard usage; and (y) a disclosure statement prepared by the Company describing the Rights, provided that a Nominee shall be sent the materials provided for in clauses (x) and (y) 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: (i) the Rights Certificate evidencing such Rights; (ii) an election to exercise such Rights (an "Election to Exercise") substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or 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 (iii) payment by certified cheque, banker's draft or money order payable to the order of the Company, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised. (e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Subsection 2.2(d)(ii), which 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)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly: (i) requisition from the Company's transfer agent certificates representing the number of such Common Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions); (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Common Shares in accordance with Subsection 5.5(b); (iii) after receipt of the certificates referred to in Subsection 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder; (iv) when appropriate, after receipt, deliver the cash referred to in Subsection 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and (v) tender to the Company all payments received on exercise of Rights. (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns. (g) The Company covenants and agrees that it will: (i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable; (ii) take all such action as may be necessary and within its power to comply with the requirements of the Business Corporations Act, the Securities Act (British Columbia), t he 1 933 Securities Act, the 1934 Exchange Act, the securities laws or comparable legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights; (iii) use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date; (iv) cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; (v) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and (vi) after the Separation Time, except as permitted by Section 5.1, 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.

Initial Exercise Price; Exercise of Rights; Detachment of Rights. (a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (and with the Exercise Price and number of Common Shares are being subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by TransAlta NOVA 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 of TransAlta NOVA registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share of TransAltaNOVA. (c) From and after the Separation Time and prior to the Expiration Time: (i) the Rights shall be exercisable; and (ii) the registration and transfer of Rights shall be separate from and independent of Common Shares of TransAltaNOVA. Promptly following the Separation Time, TransAlta NOVA will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of subsection 3.1(b) and, in respect of any Rights Beneficially Owned 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 TransAlta NOVA (TransAlta NOVA hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):