Exhibit 4.2


 


[FORM OF GLOBAL NOTE]


 


[Insert Global Security
Legend, if required pursuant to the Indenture]


 


[Insert Private Placement
Legend, if required pursuant to the Indenture]


 


[Insert Canadian Private
Placement Legend, if required pursuant to the Indenture]


 


BIOVAIL CORPORATION


 


5.375% Senior Convertible Notes due 2014


 


	
  No. [·]

  	
  CUSIP NO. 09067J AC3

  	
   

  
	
   

  	
  ISIN US09067JAC36

  	
  US$[·]

  



 


Biovail Corporation, a corporation duly
organized and validly existing under the laws of Canada (herein called the “Company”,
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received hereby promises to pay to [Cede &
Co.], or registered assigns, the principal sum of [·] United States Dollars ($·) [INCLUDE IF SECURITY IS A GLOBAL SECURITY — (which amount may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary, in accordance with the rules and
procedures of the Depositary)] on August 1, 2014.


 


Reference is made to the further provisions
of this Security set forth on the reverse hereof, including, without
limitation, provisions giving the Holder of this Security the right to convert
this Security in certain circumstances and the ability and the obligation of
the Company to make an offer to repurchase this Security upon certain events on
the terms and subject to the limitations referred to on the reverse hereof and
as are more fully specified in the Indenture. 
Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.


 


This Security shall be deemed to be a
contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with and governed by the laws of said
State.


 


This Security shall not be valid or become
obligatory for any purpose until the certificate of authentication hereon shall
have been manually signed by the Trustee or a duly authorized authenticating
agent under the Indenture.


 

















 


IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.


 


 


	
   

  	
   

  	
  BIOVAIL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE’S
  CERTIFICATE OF AUTHENTICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  THE BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  
						



 

















 


[Reverse
of Security]


 


BIOVAIL CORPORATION


 


5.375% Senior Convertible Notes due 2014


 


This Security is one of a duly authorized
issue of Securities of the Company, designated as its 5.375% Senior Convertible
Notes due 2014 (herein called the “Securities”),
all issued or to be issued under and pursuant to an Indenture dated as of June 10,
2009 (herein called the “Indenture”),
between the Company and  The Bank of
New York  Mellon (herein called the “Trustee”) and BNY Trust Company of Canada (herein called the
“Co-Trustee”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Company, the Trustee, the Co-Trustee and the Holders of the
Securities.  Terms used herein which are
defined in the Indenture have the meanings assigned to them in the Indenture.


 


The indebtedness evidenced by the Securities
is senior unsecured indebtedness of the Company and ranks equally with the
Company’s other senior unsecured indebtedness.


 


Interest.  The Company will
pay interest on the principal amount of this Security at the rate of 5.375% per
annum.  The Company will pay interest
semiannually in arrears on February 1 and August 1 of each year,
commencing on February 1, 2010.


 


Interest will be paid to the person in whose
name a Security is registered at the close of business on or, as the case may
be, immediately preceding the relevant Interest Payment Date. Interest
(including any Additional Interest Amounts) on the Securities shall be computed
on the basis of a 360-day year of twelve 30-day months.  Each rate of interest which is calculated
with reference to a period that is less than the actual number of days in the
calendar year of calculation is, for the purposes of the Interest Act
(Canada), equivalent to the yearly rate of interest payable on the Securities
multiplied by the actual number of days in the year and divided by 360.  The amount of interest payable for any period
shorter than a full quarterly period for which interest is computed will be
computed on the basis of the actual number of days elapsed in the period.


 


The Holder of this Security at 5:00 p.m.,
New York City time, on a Regular Record Date shall be entitled to receive
interest (including Additional Interest Amounts and Additional Amounts, if
any), on this Security on the corresponding Interest Payment Date. The Holder
of this Security at 5:00 p.m., New York City time, on a Regular Record
Date will receive payment of interest (including Additional Interest Amounts
and Additional Amounts, if any) payable on the corresponding Interest Payment
Date notwithstanding the conversion of this Security at any time after 5:00 p.m.,
New York City time, on such Regular Record Date. If this Security is
surrendered for conversion during the period after 5:00 p.m., New York
City time, on any Regular Record Date to 9:00 a.m., New York City time, on
the immediately following Interest


 

















 


Payment Date, it must be
accompanied by payment of an amount equal to the interest (including Additional
Interest Amounts and Additional Amounts, if any) that the Holder is to receive
on the Securities on the corresponding Interest Payment Date, subject to the
exceptions set forth in Section 13.03(b) of the Indenture. Except
where this Security is surrendered for conversion and must be accompanied by
payment as described above, no interest (including Additional Interest Amounts
or Additional Amounts, if any) thereon will be payable by the Company on any
Interest Payment Date subsequent to the date of conversion, and delivery of the
cash and Common Shares, if applicable, pursuant to Article XIII of the
Indenture, together with any cash payment for any fractional shares, upon
conversion will be deemed to satisfy the Company’s obligation to pay the
principal amount of the Securities and accrued and unpaid interest (including
Additional Interest Amounts or Additional Amounts, if any) to, but not
including, the related Conversion Date.


 


Method of Payment.  By no later than
10:00 a.m., New York City time, on the date on which any principal of or
interest (including Additional Interest Amounts or Additional Amounts, if any)
on any Security is due and payable, the Company shall deposit with the Paying
Agent money sufficient to pay such amount. 
The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.  Payments in respect of
Securities represented by a Global Security (including principal and interest
(including Additional Interest Amounts and Additional Amounts, if any)) will be
made by wire transfer of immediately available funds to the accounts specified
by the Depositary.  The Company will pay
principal of Physical Securities at the office or agency designated by the
Company in The Borough of Manhattan, The City of New York.  Interest (including Additional Interest
Amounts and Additional Amounts, if any) on Physical Securities will be payable (i) to
Holders having an aggregate principal amount of $5,000,000 or less, by check
mailed to the Holders of these Securities and (ii) to Holders having an
aggregate principal amount of more than $5,000,000, either by check mailed to
each Holder or, upon application by a Holder to the Security Registrar not
later than two days prior to the relevant Regular Record Date, by wire transfer
in immediately available funds to that Holder’s account within the United
States, which application shall remain in effect until the Holder notifies the
Security Registrar, in writing, to the contrary.


 


Additional Amounts.  The Company shall
pay to the Holders such Additional Amounts as may become payable under Section 10.10
of the Indenture.


 


Redemption
For Tax Reasons; Notice of Election by Holder.  Subject to the terms of the Indenture, the
Company may, at its option, redeem the Securities, in whole but not in part,
for an amount equal to 100% of the Principal Amount of the Securities, plus
accrued and unpaid interest (including Additional Interest Amounts or
Additional Amounts, if any) to, but excluding, the Redemption Date (the “Redemption Price”), if the Company has
become or would become obligated to pay to the Holders Additional Amounts
(which are more than a de minimis
amount) as a result of any amendment or change occurring after June 3,
2009 in the laws or any regulations of Canada or any Canadian political
subdivision or taxing authority, or any change


 

















 


occurring
after June 3, 2009 in the interpretation or application of any such laws
or regulations by any legislative body, court, governmental agency, taxing
authority or regulatory authority (including the enactment of any legislation
and the publication of any judicial decision or regulatory or administrative
determination); provided, the Company cannot
avoid these obligations by taking reasonable measures available to it and that
it delivers to the Trustee and the Co-Trustee an opinion of Canadian legal
counsel specializing in taxation and an Officers’ Certificate attesting to such
change and obligation to pay Additional Amounts (such a redemption, referred to
herein as a “Tax Redemption”).


 


Upon receiving a Notice of Redemption with
respect to a Tax Redemption, each Holder who does not wish to have the Company
redeem its Securities pursuant to Article XI of the Indenture can elect to
(i) convert its Securities pursuant to Article XIII of the Indenture
or (ii) not have its Securities redeemed, provided that no Additional
Amounts will be payable on any payment of interest or principal with respect to
the Securities after such Redemption Date. 
All future payments will be subject to the deduction or withholding of
any Canadian Taxes required by law to be deducted or withheld.


 


Where no such election is made, the Holder
will have its Securities redeemed without any further action.  If a Holder does not elect to convert its
Securities pursuant to Article XIII of the Indenture but wishes to elect
to not have its Securities redeemed, such Holder must deliver to the Paying
Agent designated by the Company for such purpose in the Notice of Redemption, a
written Notice of Election (the “Notice of Election”)
in the form provided on the back of this Security (or a facsimile thereof), or
any other form of written notice substantially similar to the Notice of
Election, in each case, duly completed and signed, so as to be received by the
Paying Agent no later than the close of business on the fifth Business Day
prior to the Redemption Date.


 


A Holder may withdraw any Notice of Election
by delivering to the Company (if the Company is acting as its own Paying
Agent), or to a Paying Agent designated by the Company in the Notice of
Redemption, a written notice of withdrawal prior to the close of business on
the Business Day prior to the Redemption Date.


 


Redemption
at the Option of the Company.  At any time on or after August 2, 2012,
the Company may redeem the Securities, in whole or from time to time in part,
for cash at a Redemption Price equal to 100% of the Principal Amount being
redeemed plus accrued and unpaid interest to, but excluding, the Redemption
Date, if the Closing Sale Price of the Common Shares is equal to or greater
than 130% of the Conversion Price then in effect for at least 20 Trading Days
in the period of 30 consecutive Trading Days ending on the Trading Day prior to
the date of mailing of the Notice of Redemption (as defined below) (such a
redemption, referred to herein as an “Optional
Redemption”).


 


Others
Matters Relating to Redemption.  Written notice of any Tax Redemption or
Optional Redemption will be provided at least 30 days but not more than 60 days
prior to the Redemption Date to each Holder of Securities to be redeemed;


 

















 


provided
that, in the case of a Tax Redemption, (i) in no event will the Company be
obligated to give notice of redemption earlier than 60 days prior to the
earliest date on or from which it would be obligated to pay any Additional
Amounts, and (ii) at the time the Company gives the notice, the
circumstances creating its obligation to pay such Additional Amounts remain in
effect.


 


If cash sufficient to pay the Redemption
Price of all Securities (or portions thereof) to be redeemed on the Redemption
Date is deposited with the Paying Agent on or before the Redemption Date and
certain other conditions are satisfied, on and after such Redemption Date, such
Securities (or portions thereof) will cease to be outstanding and interest
(including Additional Interest Amounts or Additional Amounts, if any) on such
Securities will cease to accrue (whether or not book-entry transfer of such
Securities is made or whether or not such Securities are delivered to the
Paying Agent).


 


If a Redemption Date is after a Regular
Record Date for the payment of interest but on or prior to the corresponding
Interest Payment Date, then the interest payable on such Interest Payment Date
will be paid to the Holder of record of such Securities on the relevant Regular
Record Date, and the amount paid to the Holder who presents the Securities for
redemption shall be 100% of the Principal Amount of such Securities.


 


Offer to Purchase By the Company
upon a Fundamental Change.  Subject to the terms and conditions of the
Indenture, in the event of a Fundamental Change with respect to the Company at
any time prior to August 1, 2014, the Company will be required to make an
offer to purchase for cash (the “Fundamental
Change Purchase Offer”) all outstanding Securities at a purchase
price equal to the Principal Amount plus accrued but unpaid interest, including
Additional Interest Amounts or Additional Amounts, if any (the “Fundamental Change Purchase Price”), up to,
but excluding, the Fundamental Change Purchase Date.  The “Fundamental
Change Purchase Date” will be a date specified by the Company that
is no later than the 30th calendar day following the date of the
Fundamental Change Notice (as defined below).


 


Within 30 calendar days after the occurrence
of a Fundamental Change with respect to the Company, the Company shall mail to
the Trustee, the Co-Trustee and all Holders of the Securities at their
addresses shown in the Security Register, and to beneficial owners of the
Securities as may be required by applicable law, a notice (the “Fundamental Change Notice”) of the occurrence of such Fundamental
Change and the Fundamental Change Purchase Offer arising as a result thereof.


 


To accept the Fundamental Change Purchase
Offer, a Holder of Securities must deliver to the Paying Agent designated by
the Company for such purpose in the Fundamental Change Purchase Notice, on or
before the Business Day immediately preceding the Fundamental Change Purchase
Date, (i) written notice of acceptance of the Fundamental Change Purchase
Offer in the form set forth in the Fundamental Change Purchase Offer Acceptance
Notice on the back of this Security (the “Fundamental Change
Purchase Notice”), or any other form of written notice substantially
similar to the Fundamental Change Purchase Notice, in each case, duly completed
and signed, with 


 

















 


appropriate signature
guarantee, and (ii) such Securities that the Holder wishes to tender for
purchase by the Company pursuant to the Fundamental Change Purchase Offer,
together with the necessary endorsements for transfer to the Company.


 


Holders have the right to withdraw any
Fundamental Change Purchase Notice by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture.


 


If the Fundamental Change Purchase Date is
after a Regular Record Date but on or prior to the corresponding Interest
Payment Date, then the interest payable on such date will be paid to the Holder
of record of the Security on the relevant Regular Record Date and the
Fundamental Change Purchase Price payable to the Holder who presents the
Security for repurchase shall be 100% of the Principal Amount of such Security.


 


Conversion.  Subject to and in
compliance with the provisions of the Indenture (including without limitation
the conditions of conversion of this Security set forth in Section 13.01
thereof), the Holder hereof has the right, at its option, to convert the
Principal Amount hereof or any portion of such principal which is $1,000 or an
integral multiple thereof, into, subject to Section 13.02 of the
Indenture, Common Shares at the initial conversion rate of 67.0880 Common
Shares per $1,000 Principal Amount of Securities (the “Conversion Rate”) (equivalent to a
Conversion Price of $14.91), subject to adjustment in certain events described
in the Indenture.  Upon conversion of a
Security, the Company will have the right to elect to deliver cash or a
combination of cash and Common Shares for the Securities surrendered instead of
delivering only Common Shares (plus cash in lieu of fractional Common Shares),
as set forth in the Indenture.  No fractional
shares will be issued upon any conversion, but an adjustment and payment in
cash will be made, as provided in the Indenture, in respect of any fraction of
a Common Share which would otherwise be issuable upon the surrender of any
Securities for conversion.  The Trustee
will initially act as Conversion Agent. 
A Holder may convert fewer than all of such Holder’s Securities so long
as the Securities converted are an integral multiple of $1,000 Principal
Amount.


 


Amendment
and Waiver.  The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Securities under the Indenture at any time by the Company, the Trustee and the
Co-Trustee with the consent of the Holders of not less than a majority in
aggregate Principal Amount of the Outstanding Securities.  The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate Principal Amount
of the Outstanding Securities, on behalf of the Holders of all the Securities,
to waive compliance by the Company with certain provisions of the Indenture and
certain past Defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.


 

















 


Defaults
and Remedies.  If an Event of Default shall occur and be continuing,
the Principal Amount plus accrued but unpaid interest (including Additional
Interest Amounts or Additional Amounts, if any) may be declared due and payable
in the manner and with the effect provided in the Indenture.


 


As provided in and subject to the provisions
of the Indenture, the Holder of this Security shall not have the right to
institute any proceeding with respect to the Indenture or for the appointment
of a receiver or trustee or for any other remedy thereunder, unless (i) such
Holder shall have previously given the Trustee and the Co-Trustee written
notice of a continuing Event of Default with respect to the Securities, (ii) the
Holders of not less than 25% in aggregate Principal Amount of the Outstanding
Securities shall have made written request to the Trustee and Co-Trustee to
institute proceedings in respect of such Event of Default and offered the
Trustee and Co-Trustee reasonable indemnity satisfactory to them, (iii) the
Trustee and Co-Trustee shall not have received from the Holders of a majority
in Principal Amount of Outstanding Securities a direction inconsistent (in
their opinion) with such request, and (iv) the Trustee and the Co-Trustee
shall have failed to institute any such proceeding for 60 days after receipt of
such notice, request and offer of indemnity referred to above.  The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any Default in
the payment of the Redemption Price or Fundamental Change Purchase Price or
payment of said principal hereof and interest (including Additional Interest
Amounts, if any) hereon after the respective due dates expressed herein or for
the enforcement of any conversion right.


 


No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
Principal Amount, Redemption Price or Fundamental Change Purchase Price of, and
interest, including Additional Interest Amounts or Additional Amounts, if any,
on, this Security at the times, place and rate, and in the coin, currency or
shares, herein prescribed.  Notwithstanding
the foregoing, prior to the occurrence of a Fundamental Change, the Company
may, with the consent of the holders of not less than a majority in aggregate
Principal Amount of the Securities, amend the obligation of the Company to
repurchase Securities upon a Fundamental Change.


 


Transfers;
Denomination Exchange.  As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in The City of
New York, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate Principal Amount, will be issued to the designated transferee or
transferees.


 


The Securities are issuable only in
registered form in denominations of $1,000 and any integral multiple of $1,000
above that amount, as provided in the Indenture and subject to certain
limitations therein set forth. 
Securities are exchangeable


 

















 


for a like aggregate
Principal Amount of Securities of a different authorized denomination, as
requested by the Holder surrendering the same.


 


No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.


 


Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee, the Co-Trustee and any
agent of the Company, the Trustee or the Co-Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee,
the Co-Trustee nor any such agent shall be affected by notice to the contrary.


 


No
Recourse Against Others.  No director, officer, employee, shareholder or Affiliate, as
such, of the Company from time to time shall have any liability for any
obligations of the Company under the Securities or the Indenture.  Each Holder by accepting a Security waives
and releases all such liability.


 


Authentication.  No Security shall be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication executed by the Trustee.


 


Governing
Law; Indenture to Control.  This Security shall be governed by and
construed in accordance with the laws of the State of New York.


 


In the case of any conflict between the
provisions of this Security and the Indenture, the provisions of the Indenture
shall control.  All terms used in this
Security that are defined in the Indenture shall have the meanings assigned to
them in the Indenture.