Exhibit
4.1


 


EXECUTION
VERSION


 


BIOVAIL
CORPORATION


 


as
Issuer


 


AND


 


THE
BANK OF NEW YORK MELLON


 


as
Trustee


 


AND


 


BNY
TRUST COMPANY OF CANADA


 


as
Co-Trustee


 






 


Indenture


 


Dated
as of June 10, 2009


 






 


5.375%
Senior Convertible Notes due 2014


 

















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL
  APPLICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01  Definitions

  	
   

  	
  1

  
	
  Section 1.02  Compliance
  Certificates and Opinions

  	
   

  	
  11

  
	
  Section 1.03  Form of
  Documents Delivered to Trustee and Co-Trustee

  	
   

  	
  11

  
	
  Section 1.04  Acts
  of Holders; Record Dates

  	
   

  	
  12

  
	
  Section 1.05  Notices,
  Etc., to Trustee, Co-Trustee, Company and Stock Transfer Agent

  	
   

  	
  13

  
	
  Section 1.06  Notice
  to Holders; Waiver

  	
   

  	
  13

  
	
  Section 1.07  Conflict
  with Trust Indenture Act

  	
   

  	
  13

  
	
  Section 1.08 Effect of Headings and Table of Contents

  	
   

  	
  13

  
	
  Section 1.09  Successors
  and Assigns

  	
   

  	
  13

  
	
  Section 1.10  Separability
  Clause

  	
   

  	
  14

  
	
  Section 1.11  Benefits
  of Indenture

  	
   

  	
  14

  
	
  Section 1.12  Governing
  Law

  	
   

  	
  14

  
	
  Section 1.13  Legal
  Holiday

  	
   

  	
  14

  
	
  Section 1.14  No
  Recourse Against Others

  	
   

  	
  14

  
	
  Section 1.15  Force
  Majeure

  	
   

  	
  14

  
	
  Section 1.16  Counterparts

  	
   

  	
  14

  
	
  Section 1.17  Waiver
  of Jury Trial

  	
   

  	
  15

  
	
  Section 1.18  Consent
  to Service of Process

  	
   

  	
  15

  
	
  Section 1.19  Conversion
  of Currency

  	
   

  	
  16

  
	
  Section 1.20  Calculations
  in Respect of the Securities

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE SECURITIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01  Forms
  Generally

  	
   

  	
  17

  
	
  Section 2.02  [Reserved]

  	
   

  	
  17

  
	
  Section 2.03  [Reserved]

  	
   

  	
  17

  
	
  Section 2.04  [Reserved]

  	
   

  	
  18

  
	
  Section 2.05  Legends

  	
   

  	
  18

  
	
  Section 2.06  Title;
  Amount and Issue of Securities; Principal and Interest

  	
   

  	
  19

  
	
  Section 2.07  Denominations

  	
   

  	
  20

  
	
  Section 2.08  Execution,
  Authentication, Delivery and Dating

  	
   

  	
  20

  
	
  Section 2.09  Temporary
  Securities

  	
   

  	
  21

  
	
  Section 2.10  Paying
  Agent; Registrar

  	
   

  	
  21

  
	
  Section 2.11  Transfer
  and Exchange of Securities Generally

  	
   

  	
  22

  
	
  Section 2.12  Special
  Transfer and Exchange Provisions

  	
   

  	
  23

  
	
  Section 2.13
   Mutilated, Destroyed, Lost and Stolen
  Securities

  	
   

  	
  26

  



 


i

















 


	
  Section 2.14  Persons
  Deemed Owners

  	
   

  	
  26

  
	
  Section 2.15  Book-Entry
  Provisions for Global Securities

  	
   

  	
  27

  
	
  Section 2.16  Cancellation

  	
   

  	
  27

  
	
  Section 2.17  Defaulted
  Interest

  	
   

  	
  28

  
	
  Section 2.18  CUSIP
  Numbers

  	
   

  	
  29

  
	
  Section 2.19  Ranking

  	
   

  	
  29

  
	
  Section 2.20  Sinking
  Fund

  	
   

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OPTIONAL REDEMPTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01  Company’s
  Right to Redeem; Notices to Trustee and Co-Trustee

  	
   

  	
  29

  
	
  Section 3.02  Selection
  of Securities to be Redeemed

  	
   

  	
  30

  
	
  Section 3.03  Notice
  of Optional Redemption

  	
   

  	
  30

  
	
  Section 3.04  Effect
  of Notice of Optional Redemption

  	
   

  	
  31

  
	
  Section 3.05  Deposit
  of Redemption Price

  	
   

  	
  31

  
	
  Section 3.06  No
  Redemption Upon Acceleration

  	
   

  	
  32

  
	
  Section 3.07  Securities
  Redeemed in Part

  	
   

  	
  32

  
	
  Section 3.08  Repayment
  to the Company

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01  Satisfaction
  and Discharge of Indenture

  	
   

  	
  32

  
	
  Section 4.02  Application
  of Trust Money

  	
   

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01  Events
  of Default

  	
   

  	
  33

  
	
  Section 5.02  Acceleration
  of Maturity; Rescission and Annulment

  	
   

  	
  35

  
	
  Section 5.03  Other
  Remedies

  	
   

  	
  36

  
	
  Section 5.04  Collection
  of Indebtedness and Suits for Enforcement by Trustee or Co-Trustee

  	
   

  	
  36

  
	
  Section 5.05  Trustee
  and Co-Trustee May File Proofs of Claim

  	
   

  	
  37

  
	
  Section 5.06  Application
  of Money Collected

  	
   

  	
  37

  
	
  Section 5.07  Limitation
  on Suits

  	
   

  	
  37

  
	
  Section 5.08  Unconditional
  Right of Holders to Receive Payment

  	
   

  	
  38

  
	
  Section 5.09  Restoration
  of Rights and Remedies

  	
   

  	
  38

  
	
  Section 5.10  Rights
  and Remedies Cumulative

  	
   

  	
  38

  
	
  Section 5.11  Delay
  or Omission Not Waiver

  	
   

  	
  39

  
	
  Section 5.12  Control
  by Holders

  	
   

  	
  39

  
	
  Section 5.13  Waiver
  of Past Defaults

  	
   

  	
  39

  
	
  Section 5.14
   Undertaking for Costs

  	
   

  	
  39

  



 


ii

















 


	
  Section 5.15  Waiver
  of Stay or Extension Laws

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE TRUSTEE AND THE CO-TRUSTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01  Certain
  Duties and Responsibilities

  	
   

  	
  40

  
	
  Section 6.02  Notice
  of Defaults

  	
   

  	
  40

  
	
  Section 6.03  Certain
  Rights of Trustee

  	
   

  	
  40

  
	
  Section 6.04  Not
  Responsible for Recitals

  	
   

  	
  42

  
	
  Section 6.05  May Hold
  Securities

  	
   

  	
  42

  
	
  Section 6.06  Money
  Held in Trust

  	
   

  	
  42

  
	
  Section 6.07  Compensation
  and Reimbursement

  	
   

  	
  42

  
	
  Section 6.08  Disqualification;
  Conflicting Interests

  	
   

  	
  43

  
	
  Section 6.09  Corporate
  Trustee Required; Eligibility

  	
   

  	
  43

  
	
  Section 6.10  Resignation
  and Removal; Appointment of Successor

  	
   

  	
  44

  
	
  Section 6.11  Acceptance
  of Appointment by Successor

  	
   

  	
  45

  
	
  Section 6.12  Merger,
  Conversion, Consolidation or Succession to Business

  	
   

  	
  45

  
	
  Section 6.13  Preferential
  Collection of Claims Against

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REPORTS BY TRUSTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01  Preservation
  of Information; Communications to Holders

  	
   

  	
  46

  
	
  Section 7.02  Reports
  by Trustee and Co-Trustee

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01  Company May Consolidate, etc., Only on
  Certain Terms

  	
   

  	
  46

  
	
  Section 8.02  Successor
  Substituted

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01  Supplemental Indentures Without Consent Of
  Holders

  	
   

  	
  47

  
	
  Section 9.02  Supplemental
  Indentures with Consent of Holders

  	
   

  	
  48

  
	
  Section 9.03  Execution
  of Supplemental Indentures

  	
   

  	
  49

  
	
  Section 9.04  Effect
  of Supplemental Indentures

  	
   

  	
  50

  
	
  Section 9.05  Conformity
  with Trust Indenture Act

  	
   

  	
  50

  
	
  Section 9.06
   Reference in Securities to
  Supplemental Indentures

  	
   

  	
  50

  



 


iii

















 


	
  ARTICLE X

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01  Payments

  	
   

  	
  50

  
	
  Section 10.02  Maintenance
  of Office or Agency

  	
   

  	
  50

  
	
  Section 10.03  Money
  for Security Payments to be Held in Trust

  	
   

  	
  51

  
	
  Section 10.04  Statement
  by Officers as to Default

  	
   

  	
  52

  
	
  Section 10.05  Existence

  	
   

  	
  52

  
	
  Section 10.06  Resale
  of Certain Securities

  	
   

  	
  52

  
	
  Section 10.07  Book-Entry
  System

  	
   

  	
  52

  
	
  Section 10.08  Company
  to Furnish Trustee and Co-Trustee Names and Addresses of Holders

  	
   

  	
  53

  
	
  Section 10.09  Reports
  by Company and Delivery of Certain Information

  	
   

  	
  53

  
	
  Section 10.10  Payment
  of Additional Amounts

  	
   

  	
  54

  
	
  Section 10.11  Additional
  Interest Amount

  	
   

  	
  56

  
	
  Section 10.12  Information
  for IRS Filings

  	
   

  	
  56

  
	
  Section 10.13  Further
  Instruments and Acts

  	
   

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01  Redemption
  for Tax Reasons; Notices to Trustee and Co-Trustee; Notice of Election

  	
   

  	
  57

  
	
  Section 11.02  Notice
  of Tax Redemption

  	
   

  	
  58

  
	
  Section 11.03  Effect
  of Notice of Tax Redemption

  	
   

  	
  59

  
	
  Section 11.04  Deposit
  of Redemption Price

  	
   

  	
  59

  
	
  Section 11.05  Securities
  Redeemed in Part

  	
   

  	
  59

  
	
  Section 11.06  Repayment
  to the Company

  	
   

  	
  60

  
	
  Section 11.07  Other
  Repurchases

  	
   

  	
  60

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OFFER TO PURCHASE UPON A FUNDAMENTAL CHANGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01  Offer
  to Purchase Upon a Fundamental Change

  	
   

  	
  60

  
	
  Section 12.02  Effect
  of Fundamental Change Purchase Notice

  	
   

  	
  64

  
	
  Section 12.03  Deposit
  of Fundamental Change Purchase Price

  	
   

  	
  64

  
	
  Section 12.04  Security
  Purchased in Part

  	
   

  	
  65

  
	
  Section 12.05  Covenant
  to Comply with Securities Laws upon Repurchase of Securities

  	
   

  	
  65

  
	
  Section 12.06  Repayment
  to the Company

  	
   

  	
  65

  



 


iv

















 


	
  ARTICLE XIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CONVERSION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.01  Right
  to Convert

  	
   

  	
  66

  
	
  Section 13.02  Conversion
  Procedure

  	
   

  	
  67

  
	
  Section 13.03  Company
  to Deliver Common Shares, Cash or Combination Thereof

  	
   

  	
  69

  
	
  Section 13.04  Conversion
  Rate Adjustments

  	
   

  	
  71

  
	
  Section 13.05  Adjustments
  Upon Certain Fundamental Changes

  	
   

  	
  80

  
	
  Section 13.06  Effect
  of Reclassification, Consolidation, Merger or Sale

  	
   

  	
  82

  
	
  Section 13.07  Taxes
  on Shares Issued

  	
   

  	
  83

  
	
  Section 13.08
   Reservation of Shares; Shares to be
  Fully Paid; Compliance with Governmental Requirements; Listing of Common
  Shares

  	
   

  	
  83

  
	
  Section 13.09  Responsibility
  of Conversion Agent, Trustee and Co-Trustee

  	
   

  	
  84

  
	
  Section 13.10  Notice
  to Holders Prior to Certain Actions

  	
   

  	
  85

  
	
  Section 13.11  Company
  Determination Final

  	
   

  	
  85

  



 


 


Exhibit A
—  Form of Security


Exhibit B
—  Form of Certificate of Transfer


Exhibit C
—  Common Share Legends


 


v














 


INDENTURE,
dated as of June 10, 2009, between BIOVAIL CORPORATION, a corporation duly
organized and subsisting under the laws of Canada, as Issuer (herein called the
“Company”),
having its principal office at 7150 Mississauga Road, Mississauga, Ontario, Canada,
L5N 8M5 (Facsimile No. (905) 286-3370), Attention: Senior Vice-President
and Associate General Counsel, and THE BANK OF NEW YORK MELLON, a New York
banking corporation, as Trustee (herein called the “Trustee”), and BNY TRUST COMPANY
OF CANADA, a Canadian trust corporation, as Co-Trustee (herein called the “Co-Trustee”).


 


The Company has duly authorized the creation
of an issue of 5.375% Senior Convertible Notes due 2014 (each a “Security”
and collectively, the “Securities”) of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.


 


All things necessary to make this Indenture a
valid and binding agreement of the Company have been done and all things
necessary to make the Securities, when executed by the Company and
authenticated and delivered hereunder, the valid and binding obligations of the
Company, have been done.


 


The Company, the Trustee and the Co-Trustee
agree, for the benefit of each other and for the equal and ratable benefit of
all Holders of the Securities, as follows:


 


ARTICLE
I


 


DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION


 


Section 1.01  Definitions.  For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:


 


(a)           the
terms defined in this Article I have the meanings assigned to them in this
Article I and include the plural as well as the singular;


 


(b)           all
other terms used herein that are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;


 


(c)           all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP;


 


(d)           unless
otherwise noted, references to “U.S. Dollars” or “$” shall mean the currency of
the United States of America; and


 


(e)           the
words “herein,”
“hereof”
and “hereunder”
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.


 


“Act,” when used with respect to any Holder, has the meaning
specified in Section 1.04.


 


“Additional Amounts” has the meaning specified in Section 10.10.


 

















 


“Additional Interest Amount” means a one-time payment of 50
basis points made by the Company to the Holders (or, with respect to any
Securities that have been previously converted, to the Holders of such
converted Securities at the time of such conversion) in the circumstances
described in Section 10.11.  The
amount of the payment to any Holder (or previous Holder in the case of
previously converted Securities) shall be determined by applying 50 basis
points to the current principal amount of such Holder’s Securities then
outstanding (or to the principal amount of such previous Holder’s converted Securities
immediately prior to their conversion in the case of previously converted
Securities).


 


“Additional Interest Notice”
has the meaning specified in Section 10.11.


 


“Additional Securities” means additional Securities which may
be issued after the Issue Date pursuant to this Indenture (other than in
exchange for, or in replacement of, Outstanding Securities).  All references herein to “Securities” shall
be deemed to include Additional Securities to the extent any have been issued.


 


“Additional Shares” has the meaning specified in Section 13.05.


 


“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. 
For the purposes of this definition, “control” when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.


 


“Agent Members” has the meaning specified in Section 2.15.


 


“Bid
Solicitation Agent” means J.P. Morgan Securities Inc. or such other
Person as may be appointed, from time to time, by the Company to solicit market
bid quotations for the Securities in accordance with Section 13.01(a)(ii).


 


“Applicable Procedures” has the meaning specified in Section 2.12.


 


“Board of Directors” means, with respect to any Person,
either the board of directors of such Person or any duly authorized committee
of that board.


 


“Board Resolution” means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee and the Co-Trustee.


 


“Business Day” means any day other than a Saturday, a Sunday
or a day on which banking institutions in either the City of New York or in the
City of Toronto are authorized or obligated by law, or executive order or
governmental decree to be closed.


 


“Canadian Private Placement
Legend” has the meaning specified in Section 2.05.


 


2

















 


“Canadian Securities Laws” means the securities laws, rules,
regulations and written policy statements of any province or territory of
Canada, as the same may be amended from time to time.


 


“Canadian Taxes” has the meaning specified in Section 10.10.


 


“Capital Stock” means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, including, without limitation, with respect to partnerships, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.


 


“Closing Sale Price” of a Common Share on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date as reported
in composite transactions for the principal United States securities exchange
on which the Common Shares are traded or, if the Common Shares are not listed
on a United States national or regional securities exchange, as reported by the
NASDAQ System or by the National Quotation Bureau Incorporated.


 


“Commission”
means the United States Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.


 


“Common
Equity” of any Person means capital stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person
or (ii) if such Person is not a corporation, vote or otherwise participate
in the selection of the governing body, partners, managers or others that will
control the management or policies of such Person.


 


“Common
Shares” means the common shares without par value of the Company as
it exists on the date of this Indenture.


 


“Company”
means the Person named as the “Company” in the first paragraph of this
instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter “Company” shall mean
such successor Person.


 


“Company
Request” or “Company Order”
means a written request or order signed in the name of the Company (i) by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its Chief Operating Officer, its Chief Financial Officer or any Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary or (ii) by an authorized signatory (by virtue of a
power of attorney, Board Resolution or other similar instrument), and delivered
to the Trustee.


 


“Continuing
Director” means, at any date, a member of the Company’s Board of
Directors (i) who was a member of such board on June 10, 2009 or (ii) who
was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Company’s Board of Directors was 


 


3

















 


recommended or endorsed by
at least a majority of the directors who were Continuing Directors at the time
of such nomination or election or such lesser number comprising a majority of a
nominating committee comprised of independent directors if authority for such
nominations or elections has been delegated to a nominating committee whose
authority and composition have been approved by at least a majority of the
directors who were Continuing Directors at the time such committee was
formed.  (Under this definition, if the
Board of Directors of the Company as of the date of this Indenture were to
approve a new director or directors and then resign, no Fundamental Change
would occur even though the current Board of Directors would thereafter cease
to be in office.)


 


“Conversion
Agent” means the Trustee or such other office or agency designated
by the Company where Securities may be presented for conversion.


 


“Conversion
Date” has the meaning specified in Section 13.02.


 


“Conversion
Notice” has the meaning specified in Section 13.02.


 


“Conversion
Price” means, at any time, $1,000 divided by the Conversion Rate in
effect at such time, rounded to three decimal places (rounded up if the fourth
decimal place thereof is 5 or more and otherwise rounded down).


 


“Conversion
Rate” has the meaning specified in the Securities.


 


“Corporate
Trust Office” means (i) with respect to the Trustee, the
principal office of the Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution
of this Indenture is located at 101 Barclay Street, New York, NY 10286, 4-East,
Attention: Global Trust Services (Facsimile No.: (212) 815-5366) or at any
other time at such other address as the Trustee may designate from time to time
by notice to the Company, and (ii) with respect to the Co-Trustee, the
principal office of the Co-Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of the
execution of this Indenture is located at Suite 1101, 4 King Street West,
Toronto, Ontario, Canada M5H 1B6 or at any other time at such other address as
the Co-Trustee may designate from time to time by notice to the Company.


 


“corporation”
means a corporation, association, company, joint-stock company or business
trust.


 


“Co-Trustee” means the Person named as the “Co-Trustee”
in the first paragraph of this Indenture until a successor Co-Trustee shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter “Co-Trustee”
shall mean such successor Co-Trustee.


 


“Cure Period”
has the meaning specified in Section 10.11.


 


“Current
Market Price” has the meaning specified in Section 13.04.


 


“Daily VWAP” means the per
share volume-weighted average price as displayed under the heading “Bloomberg
VWAP” on Bloomberg page “BVF <equity> VAP” in respect of the period
from 9:30 a.m. to 4:00 p.m. (New York City time) on such Trading Day
(or if such 


 


4

















 


volume-weighted average
price is unavailable, the market value of one Common Share on such Trading Day
on the Toronto Stock Exchange (such price to be converted into U.S. dollars
based on the Bank of Canada noon exchange rate as reported for conversion into
U.S. dollars on such date) or otherwise as the Company’s Board of Directors
determines in good faith using a volume-weighted method); provided
that after the consummation of a Fundamental Change in which the consideration
is comprised entirely of cash, “Daily VWAP” means the cash price per Common
Share received by holders of the Company’s Common Shares in such Fundamental
Change.


 


“Default”
means any event that is, or with the passage of time or the giving of notice or
both would become, an Event of Default.


 


“Defaulted Interest”
has the meaning specified in Section 2.17.


 


“Depositary”
means The Depository Trust Company until a successor Depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Depositary” shall mean such successor Depositary.


 


“Effective Date”
has the meaning specified in Section 13.05.


 


“Event of
Default” has the meaning specified in Section 5.01.


 


“Exchange
Act” means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.


 


“Excluded Holder”
has the meaning specified in Section 10.10.


 


“Excluded Taxes”
has the meaning specified in Section 10.10.


 


“Ex-Dividend
Date” means, with respect to any dividend or distribution, the first
date on which the Common Shares trade in the regular way without the right to
receive such dividend or distribution on the New York Stock Exchange, the
Toronto Stock Exchange or such other national or regional exchange or market on
which the Common Shares are then listed or quoted.


 


“fair
market value” has the meaning specified in Section 13.04.


 


“Fundamental
Change” has the meaning specified in Section 12.01.


 


“Fundamental
Change Notice” has the meaning specified in Section 12.01.


 


“Fundamental Change
Purchase Date” has the meaning specified in Section 12.01.


 


“Fundamental
Change Purchase Notice” has the meaning specified in Section 12.01.


 


“Fundamental
Change Purchase Offer” has the meaning specified in Section 12.01.


 


5

















 


“Fundamental
Change Purchase Price” has the meaning specified in Section 12.01.


 


“GAAP”
means generally accepted accounting principles in the United States, as in
effect from time to time.


 


“Global
Security” means a Security in global form registered in the Security
Register in the name of a Depositary or a nominee thereof.


 


“Global Security Legend”
has the meaning specified in Section 2.05.


 


“Holder”
or “Securityholder” means a Person
in whose name a Security is registered in the Security Register.


 


“Indenture”
means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument
and any such supplemental indenture, respectively.


 


“Ineligible Consideration”
has the meaning set forth in Section 13.06.


 


“Initial Dividend Threshold”
has the meaning specified in Section 13.04.


 


“Interest
Payment Date” means each February 1 and August 1 of each
year.


 


“Issue Date”
means the date the Securities are originally executed and authenticated as set
forth in the applicable Security issued under this Indenture.


 


“Judgment Currency”
has the meaning specified in Section 1.19.


 


“Market Disruption Event”
means (i) a failure by the primary United States national securities
exchange on which the Common Shares are listed (or the Toronto Stock Exchange
if the Common Shares are not then listed on a United States national securities
exchange) or admitted to trading to open during its regular trading session or (ii) the
occurrence or existence prior to 1:00 p.m. on any Trading Day for the
Common Shares for an aggregate one half hour period of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Shares or in any
options, contracts or future contracts relating to the Common Shares.


 


“Maturity”
means, when used with respect to any Security, the date on which the Principal
Amount, Redemption Price or Fundamental Change Purchase Price of such Security
becomes due and payable as therein or herein provided, whether at the Stated Maturity,
Redemption Date or Fundamental Change Purchase Date, or by declaration of
acceleration or otherwise.


 


“Measurement Period”
has the meaning specified in Section 13.01.


 


6

















 


“Notice of
Default” has the meaning specified in Section 5.01.


 


“Notice of Election”
has the meaning specified in Section 11.01.


 


“Notice of Optional
Redemption” has the meaning specified in Section 3.03.


 


“Notice of Redemption”
means a Notice of Optional Redemption or a Notice of Tax Redemption.


 


“Notice of Tax Redemption”
has the meaning specified in Section 11.02.


 


“Offering” means
the initial offering of the Securities by the Company.


 


“Offering Memorandum”
means the confidential offering memorandum, dated June 3, 2009, pursuant to
which the Securities were offered and sold in the Offering.


 


“Officers’
Certificate” means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer
or any Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee and the Co-Trustee.  One of the
officers signing an Officers’ Certificate given pursuant to Section 10.04
shall be the principal executive, financial or accounting officer of the
Company.


 


“Opinion of
Counsel” means a written opinion of counsel, who may be external or
in-house counsel for the Company.


 


“Optional Redemption”
has the meaning set forth in Section 3.01.


 


“Outstanding,”
when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture,
except:


 


(i)            Securities
theretofore cancelled by the Trustee or delivered to the Trustee or the
Co-Trustee for cancellation;


 


(ii)           Securities,
or portions thereof, for which payment in the necessary amount has been
theretofore deposited with the Trustee, the Co-Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities; and


 


(iii)          Securities
which have been paid, or Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee or the Co-Trustee proof satisfactory to it that such
Securities are held by a protected purchaser in whose hands such Securities are
valid obligations of the Company;


 


7

















 


provided, however, that, in
determining whether the Holders of the requisite Principal Amount of the
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee and the Co-Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
or the Co-Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee or the Co-Trustee the pledgee’s right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.


 


“Paying
Agent” means any Person authorized by the Company to pay the
principal of, or interest (including Additional Interest Amounts or Additional
Amounts, if any) on, or the Redemption Price or Fundamental Change Purchase
Price of, any Securities on behalf of the Company.  The Trustee shall initially be the Paying
Agent.


 


“Person”
means any individual, corporation, partnership, limited liability company,
joint venture, trust, unincorporated organization or government or any agency
or political subdivision thereof.


 


“Physical
Securities” means permanent certificated Securities in registered
form issued in denominations of $1,000 Principal Amount and integral multiples
thereof.


 


“Principal
Amount” of a Security means the principal amount as set forth on the
face of the Security.


 


“Private Placement Legend”
has the meaning specified in Section 2.05.


 


“Rate(s) of
Exchange” has the meaning specified in Section 1.19.


 


“Record
Date” has the meaning specified in Section 13.04.


 


“Redemption
Date” means, when used with respect to any Security to be redeemed,
the date fixed for redemption pursuant to this Indenture.


 


“Redemption Price”
means, when used with respect to any Security to be redeemed, the price at
which it is to be redeemed pursuant to this Indenture.


 


“Reference Property”
has the meaning set forth in Section 13.06.


 


“Regular
Record Date” for the payment of interest on the Securities
(including Additional Interest Amounts or Additional Amounts, if any), means January 15
(whether or not a Business Day) next preceding an Interest Payment Date on February 1
and July 15 (whether or not a Business Day) next preceding an Interest
Payment Date on August 1.


 


“Required Currency”
has the meaning set forth in Section 1.19.


 


8

















 


“Responsible
Officer” means any officer of the Trustee or the Co-Trustee within
the Corporate Trust Office of the Trustee or the Co-Trustee, as applicable,
with direct responsibility for the administration of this Indenture and also,
with respect to a particular matter, any other officer of the Trustee or the
Co-Trustee to whom such matter is referred because of such officer’s knowledge
and familiarity with the particular subject.


 


“Restricted
Global Security” means a Global Security that bears the Private
Placement Legend.


 


“Restricted Physical Security” means a
Physical Security that bears the Private Placement Legend.


 


“Rule 144”
means Rule 144 under the Securities Act, as the same may be amended from
time to time.


 


“Securities
Act” means the United States Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.


 


“Security”
or “Securities” have the
respective meanings specified in the first paragraph of this Indenture.


 


“Security
Register” has the meaning specified in Section 2.10.


 


“Security
Registrar” has the meaning specified in Section 2.10.


 


“Share Price”
has the meaning specified in Section 13.05.


 


“Significant Subsidiary”
has the meaning set forth in Rule 1-02(w) of Regulation S-X under the
Exchange Act.


 


“Special Interest Payment
Date” has the meaning specified in Section 2.17.


 


“Special Record Date”
has the meaning specified in Section 2.17.


 


“Spin-Off”
has the meaning specified in Section 13.04.


 


“Stated
Maturity” when used with respect to any Security, means August 1,
2014.


 


“Stock
Transfer Agent” means CIBC Mellon Trust Company at its offices in
Toronto, Ontario, Canada and BNY Mellon Shareowner Services at its offices in
New York, New York, or such other Person or Persons designated by the Company
as a transfer agent for the Common Shares.


 


“Subsidiary”
means a corporation more than 50% of the outstanding voting stock of which is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.  For the purposes of this definition, “voting stock” means stock which ordinarily
has voting power for the election of directors, 


 


9

















 


whether at all times or only
so long as no senior class of stock has such voting power by reason of any
contingency.


 


“Successor
Company” has the meaning specified in Section 8.01.


 


“Trading Day”
means a day during which (i) trading in the Common Shares generally
occurs, (ii) there is no Market Disruption Event and (iii) a Closing
Sale Price for the Common Shares may be obtained for that day.


 


“Tax Act” means
the Income Tax Act (Canada), as amended, and
any reference thereto includes a reference to an equivalent provision of a
Canadian, provincial or territorial income tax statute, as amended.


 


“Tax Redemption”
has the meaning set forth in Section 11.01.


 


“Trading Price”
means, as of any date of determination, the average of the secondary market bid
quotations per $1,000 Principal Amount of Securities obtained by the Bid
Solicitation Agent for $5,000,000 Principal Amount of Securities at
approximately 3:30 p.m., New York City time, on such date of determination
from three independent nationally-recognized securities dealers selected by the
Company; provided, that if at least three such
bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such
bids are obtained, then the Trading Price, as of such determination date, shall
mean the average of such two bids, and if only one bid can reasonably be
obtained by the Bid Solicitation Agent, then the Trading Price, as of such
determination date, shall mean such one bid; provided,
however, that if the Bid Solicitation
Agent, through the exercise of reasonable efforts, is unable to obtain at least
one bid for $5,000,000 Principal Amount of Securities from an independent
nationally-recognized securities dealer, then the Trading Price per $1,000
Principal Amount of Securities for such date of determination shall be deemed
to be less than 98% of the product of the Closing Sale Price of the Common
Shares on such date of determination and the Conversion Rate in effect as of
such date of determination.


 


“Trigger
Event” has the meaning specified in Section 13.04.


 


“Trust
Indenture Act” means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.


 


“Trustee”
means the Person named as the “Trustee”
in the first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Trustee” shall mean
such successor Trustee.


 


“Unrestricted Global Security” means a
Global Security that does not bear the Private Placement Legend.


 


“Unrestricted Physical Security” means
a Physical Security that does not bear the Private Placement Legend.


 


10

















 


“Vice President” when used
with respect to the Company, means any vice president, whether or not
designated by a number or a word or words added before or after the title “vice president”.


 


Section 1.02  Compliance Certificates and Opinions.  Upon any application or request by the
Company to the Trustee or the Co-Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee and the Co-Trustee,
as applicable, such certificates and opinions as may be required under the
Trust Indenture Act and as may otherwise be required hereunder.  Each such certificate or opinion shall be
given in the form of an Officers’ Certificate, if to be given by an officer of
the Company, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirement set forth in this Indenture.


 


Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:


 


(a) 
a statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;


 


(b) 
a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;


 


(c) 
a statement that, in the opinion of each such individual, such individual has
made such examination or investigation as is necessary to enable such
individual to express an informed opinion as to whether or not such covenant or
condition has been complied with; and


 


(d) 
a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.


 


Section 1.03  Form of Documents Delivered to
Trustee and Co-Trustee.  In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.


 


Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous.  Any Opinion of Counsel may
contain customary assumptions, limitations and qualifications and be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.


 


11














 


Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.


 


Section 1.04 
Acts of Holders; Record Dates.


 


(a)  Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in, and evidenced by, one or
more instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and the Co-Trustee and, where it is
hereby expressly required, to the Company. 
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument
or instruments.  Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee, the Co-Trustee and the Company, if made in
the manner provided in this Section.


 


(b)  The fact and date of the execution
by any Person of any such instrument or writing may be proved by the affidavit
of a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof.  Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.  The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee or
the Co-Trustee reasonably deems sufficient.


 


(c)  The Company may, in the
circumstances permitted by the Trust Indenture Act, fix any day as the record
date for the purpose of determining the Holders entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders.  If not set by the Company
prior to the first solicitation of a Holder made by any Person in respect of
any such action, or, in the case of any such vote, prior to such vote, the
record date for any such action or vote shall be the 30th day (or, if later,
the date of the most recent list of Holders required to be provided pursuant to
Section 10.08) prior to such first solicitation or vote, as the case may
be.  With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled
to give or take, or vote on, the relevant action.


 


(d)  The ownership of Securities shall
be proved by the Security Register.


 


(e)  Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee, the Co-Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.


 


12

















 


Section 1.05  Notices, Etc., to Trustee, Co-Trustee and
Company.  Any request, demand,
authorization, direction, notice, consent, waiver or other Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with:


 


(a) 
the Trustee by any Holder or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing (which may be
via facsimile) and sent to the Trustee at its Corporate Trust Office, with a
copy to the Co-Trustee at its Corporate Trust Office; or


 


(b) 
the Company by the Trustee, the Co-Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company, addressed to
it at the address of its principal office specified in the first paragraph of
this Indenture or at any other address previously furnished in writing to the Trustee
or the Co-Trustee by the Company, Attention: Senior Vice-President and
Associate General Counsel.  In case by
reason of the suspension of regular mail service or by reason of any other
cause it shall be impracticable to give such notice by mail, then such
notification via facsimile shall constitute a sufficient notification for every
purpose hereunder.


 


Section 1.06  Notice to Holders; Waiver.  Where this Indenture provides for notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at such Holder’s address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice.  In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the sufficiency
of such notice with respect to other Holders. 
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice.  Waivers of notice by Holders
shall be filed with the Trustee and the Co-Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.  In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee and the Co-Trustee shall constitute a
sufficient notification for every purpose hereunder.


 


Section 1.07  Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Indenture, the latter provision shall
control.  If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or to be excluded, as the case may be.


 


Section 1.08  Effect of Headings and Table of Contents.  The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.


 


Section 1.09  Successors and Assigns.  All covenants and agreements in this
Indenture 


 


13

















 


by the Company shall bind its successors and assigns, whether so
expressed or not.


 


Section 1.10  Separability Clause.  In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.


 


Section 1.11  Benefits of Indenture.  Except as provided in Section 1.14,
nothing in this Indenture or in the Securities, express or implied, shall give
to any Person, other than the parties hereto and their respective successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.


 


Section 1.12  Governing Law.  This Indenture and the Securities shall be
governed by and construed in accordance with the laws of the State of New York.


 


Section 1.13  Legal Holiday.  If any Interest Payment Date (other than an
Interest Payment Date coinciding with the Stated Maturity or earlier required
Fundamental Change Purchase Date or Redemption Date) falls on a day that is not
a Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, and no interest on such payment will accrue for the
period from the Interest Payment Date to such next succeeding Business
Day.  If the Stated Maturity or earlier
required Fundamental Change Purchase Date or Redemption Date would fall on a
day that is not a Business Day, the required payment of interest, if any
(including Additional Interest Amounts and Additional Amounts, if any), and
principal will be made on the next succeeding Business Day, and no interest on
such payment will accrue for the period from and after the Stated Maturity or
earlier required Fundamental Change Purchase Date or Redemption Date to such
next succeeding Business Day.  If any
other specified date (including a date for giving notice) falls on a day that
is not a Business Day, the action required to be taken on such specified date
shall be taken on the next succeeding Business Day.


 


Section 1.14  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 this Indenture. 
Each Holder by accepting a Security waives and releases all such
liability.  This waiver and release are
part of the consideration for the Securities. 
Each of such directors, officers, employers, shareholders and Affiliates
of the Company is a third party beneficiary of this Section 1.14.


 


Section 1.15  Force Majeure.  In no event shall the Trustee or the
Co-Trustee be responsible or liable for any failure or delay in the performance
of its obligations hereunder arising out of or caused by, directly or
indirectly, forces beyond its control, including, without limitation, strikes,
work stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Trustee and the Co-Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.


 


Section 1.16  Counterparts.  This instrument may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.


 


14

















 


Section 1.17  Waiver of Jury Trial.  EACH OF THE COMPANY, THE TRUSTEE AND THE
CO-TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE
TRANSACTIONS CONTEMPLATED THEREBY.


 


Section 1.18  Consent to Service of Process.  The Company irrevocably submits to the
nonexclusive jurisdiction of any New York State or Federal court sitting in The
City of New York over any suit, action or proceeding arising out of or relating
to this Indenture or any Security.  The
Company irrevocably waives, to the fullest extent permitted by law, any
objection which it may have to the laying of the venue of any such suit, action
or proceeding brought in such a court and any claim that any such suit, action
or proceeding brought in such a court has been brought in any inconvenient
forum.  The Company agrees that final
judgment in any such suit, action or proceeding brought in such a court shall
be conclusive and binding upon the Company and may be enforced in the courts of
Canada (or any other courts to the jurisdiction of which the Company is
subject) by a suit upon such judgment, provided
that service of process is effected upon the Company in the manner specified in
the following paragraph or as otherwise permitted by law; provided, however,
that the Company does not waive, and the foregoing provisions of this sentence
shall not constitute or be deemed to constitute a waiver of, (i) any right
to appeal any such judgment, to seek any stay or otherwise to seek
reconsideration or review of any such judgment or (ii) any stay of
execution or levy pending an appeal from, or a suit, action or proceeding for
reconsideration or review of, any such judgment.


 


As long as any of the Securities remain outstanding, the Company will
at all times have an authorized agent in The Borough of Manhattan, The City of
New York upon whom process may be served in any legal action or proceeding
arising out of or relating to the Indenture or any Security.  Service of process upon such agent together
with the mailing of a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the address of the Company set forth in
the first paragraph of this Indenture or to any other address of which the
Company shall have given written notice to the Trustee or the Co-Trustee shall
to the extent permitted by law be deemed in every respect effective service of
process upon the Company in any such legal action or proceeding.  The Company hereby appoints CT Corporation
System as its agent for such purpose, and covenants and agrees that service of
process in any such legal action or proceeding may be made upon it at the
office of such agent at 111 Eighth Avenue, New York, New York 10011 (or at such
other address in The Borough of Manhattan, The City of New York, as the Company
may designate by written notice to the Trustee).  The Company irrevocably waives, to the
fullest extent permitted by law, all claim of error by reason of any such
service (but does not waive any right to assert lack of subject matter
jurisdiction) and agrees that such service (i) shall be deemed in every
respect effective service of process upon the Company in any such suit, action
or proceeding and (ii) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service upon and personal delivery to the
Company.


 


Nothing in this Section shall affect the right of the Trustee, the
Co-Trustee or any Holder to serve process in any manner permitted by law or
limit the right of the Trustee or the Co-Trustee to bring proceedings against
the Company in the courts of any jurisdiction or jurisdictions.


 


15

















 


Section 1.19  Conversion of Currency.


 


(a)  The Company covenants and agrees
that the following provisions shall apply to conversion of currency in the case
of the Securities and this Indenture:


 


(i) 
If for the purposes of obtaining judgment in, or enforcing the judgment of, any
court in any country, it becomes necessary to convert into any other currency
(the “Judgment Currency”) an
amount due or contingently due under the Securities and this Indenture (the “Required Currency”), then the conversion
shall be made at the Rate of Exchange prevailing on the Business Day before the
day on which a final judgment which is not appealable or is not appealed is
given or the order of enforcement is made, as the case may be (unless a court
shall otherwise determine).


 


(ii) 
If there is a change in the Rate of Exchange prevailing between the Business
Day before the day on which the judgment referred to in (i) above is given
or an order of enforcement is made, as the case may be (or such other date as a
court shall determine), and the date of receipt of the amount due, the Company
shall pay such additional (or, as the case may be, such lesser) amount, if any,
as may be necessary so that the amount paid in the Judgment Currency, when
converted at the Rate of Exchange prevailing on the date of receipt, will
produce the amount in the Required Currency originally due.


 


(b)  In the event of the winding-up of
the Company at any time while any amount or damages owing under the Securities
and this Indenture, or any judgment or order rendered in respect thereof, shall
remain outstanding, the Company shall indemnify and hold the Holders, the
Trustee and the Co-Trustee harmless against any deficiency arising or resulting
from any variation in rates of exchange between (1) the date as of which
the equivalent of the amount in the Required Currency (other than under this Section 1.19(b))
is calculated for the purposes of such winding-up and (2) the final date
for the filing of proofs of claim in such winding-up.  For the purpose of this Section 1.19(b) the
final date for the filing of proofs of claim in the winding-up of the Company
shall be the date fixed by the liquidator or otherwise in accordance with the
relevant provisions of applicable law as being the latest practicable date as
at which liabilities of the Company may be ascertained for such winding-up
prior to payment by the liquidator or otherwise in respect thereto.


 


(c)  The obligations contained in
Sections 1.19(a)(ii) and 1.19(b) shall constitute separate and
independent obligations of the Company from its other obligations under the
Securities and this Indenture, shall give rise to separate and independent
causes of action against the Company, shall apply irrespective of any waiver or
extension granted by any Holder, the Trustee or the Co-Trustee from time to
time and shall continue in full force and effect notwithstanding any judgment
or order or the filing of any proof of claim in the winding-up of the Company
for a liquidated sum in respect of amounts due hereunder (other than under Section 1.19(b) above)
or under any such judgment or order.  Any
such deficiency as aforesaid shall be deemed to constitute a loss suffered by
the Holders, the Trustee or the Co-Trustee, as the case may be, and no proof or
evidence of any actual loss shall be required by the Company or the applicable
liquidator.  In the case of Section 1.19(b) above,
the amount of such deficiency shall not be deemed to be reduced by any
variation in rates of exchange occurring between the said final date and the
date of any liquidating distribution.


 


16

















 


(d) 
The term “Rate(s) of Exchange”
shall mean the Bank of Canada noon rate for purchases on the relevant date of
the Required Currency with the Judgment Currency, as reported by Telerate on
screen 3194 (or such other means of reporting the Bank of Canada noon rate as
may be agreed upon by each of the parties to this Indenture) and includes any
premiums and costs of exchange payable.


 


Section 1.20  Calculations in Respect of the Securities.  Except as otherwise expressly provided in
this Indenture, the Company will be responsible for making all calculations
called for in respect of the Securities. 
These calculations include, but are not limited to, determinations of
the Closing Sale Price of the Common Shares, accrued interest payable on the
Securities and the Conversion Rate of the Securities and any adjustments to the
Conversion Rate, the Conversion Price or otherwise.  The Company shall make all such calculations
in good faith and, absent manifest error, the Company’s calculations shall be
final and binding on the Holders. The Company shall provide a schedule of its
calculations to each of the Trustee, the Co-Trustee and the Conversion Agent,
and each of the Trustee, the Co-Trustee and the Conversion Agent is entitled to
rely conclusively upon the accuracy of the Company’s calculations without
independent verification.  The Trustee
and the Co-Trustee shall forward the Company’s calculations to any Holder upon
the written request of such Holder.


 


ARTICLE
II


 


THE SECURITIES


 


Section 2.01  Forms Generally.  The Securities and the Trustee’s certificate
of authentication shall be substantially in the
respective forms set forth in Exhibit A hereto.  The terms and provisions contained in the
form of Security shall constitute, and are hereby expressly made, a part of
this Indenture and to the extent applicable, the Company, the Trustee, the
Co-Trustee and the Conversion Agent, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby.  Any of the Securities,
including any Global Securities, may have such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends (including those set forth in Section 2.05)
or endorsements placed thereon as may be required to comply with the rules of
any securities exchange or Depositary therefor, the Internal Revenue Code of
1986, as amended, and the regulations thereunder, and the Tax Act, or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof.


 


The Securities shall be initially issued in the form of one or more
permanent Global Securities in registered form in substantially the form set
forth in Exhibit A hereto.  The
aggregate Principal Amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary, as hereinafter provided.


 


Section 2.02  [Reserved]


 


Section 2.03  [Reserved]


 


17

















 


Section 2.04  [Reserved]


 


Section 2.05  Legends.


 


(a)  Subject to Section 2.12, all
Securities originally issued hereunder (and all Securities issued in exchange
therefor or substitution thereof) shall bear the legend set forth below (the “Private Placement Legend”):


 


THIS
SECURITY AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY OTHER SECURITIES LAWS. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE DATE
PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THERETO (THE “RESALE RESTRICTION TERMINATION DATE”), EXCEPT (A) TO BIOVAIL
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (B) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE REGISTRATION TERMINATION DATE. THIS SECURITY AND ANY RELATED
DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY
THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS
SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY
THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.


 


18

















 


(b)  Until October 13, 2009, all
Securities originally issued hereunder (and all Securities issued in exchange
therefor or substitution thereof) shall bear the legend set forth below (the “Canadian Private Placement Legend”):


 


UNLESS
PERMITTED BY APPLICABLE SECURITIES LEGISLATION IN CANADA, THE HOLDER OF THIS
SECURITY MAY NOT TRADE THIS SECURITY IN CANADA BEFORE OCTOBER 13, 2009.


 


(c)  Each Global Security shall bear a
legend in substantially the following form (the “Global Security Legend”):


 


THIS
SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS
SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO ARTICLE II OF THE INDENTURE, (II) THIS SECURITY MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO ARTICLE II OF THE
INDENTURE, (III) THIS SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO ARTICLE II OF THE INDENTURE AND (IV) THIS
SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.


 


Section 2.06  Title;
Amount and Issue of Securities; Principal and Interest.  The Securities shall be known and designated
as the “5.375% Senior Convertible Notes due 2014” of the Company.  The aggregate Principal Amount of Securities
that may be authenticated and delivered under this Indenture is initially
limited to $350,000,000, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other
Securities pursuant to Section 2.08, Section 2.09, Section 2.11,
Section 2.13, Section 11.05, Section 12.04 and Section 13.02,
provided that Additional
Securities with the same terms and with the same CUSIP numbers as the
Securities issued on the date of this Indenture may be issued in an unlimited
aggregate principal amount from time to time thereafter pursuant to Section 2.08;
provided that such Additional
Securities must be part of the same issue as the Securities issued on the date
of this Indenture for U.S. federal income tax purposes.  The Principal Amount shall be payable on August 1,
2014, unless earlier converted, redeemed or purchased.  The Securities and the Additional Securities,
if any, will be treated as a single class for purposes of this Indenture.


 


The Securities shall bear interest at a rate of 5.375% per year.  Interest on the Securities shall accrue from
the Issue Date.  Interest shall be
payable semiannually in arrears on February 1 and August 1, beginning
February 1, 2010.  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 


 


19

















 


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.


 


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.


 


A Holder of any 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 or Additional Amounts, if any), on such Security on the
corresponding Interest Payment Date. 
Holders of Securities  at 5:00 p.m.,
New York City time, on a Regular Record Date will receive payment of interest
(including Additional Interest Amounts or Additional Amounts, if any) payable
on the corresponding Interest Payment Date notwithstanding the conversion of
such Securities at any time after the close of business on such Regular Record
Date.  Securities 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 must be accompanied by payment of an amount
equal to the interest (including Additional Interest Amounts and Additional
Amounts, if any) payable on the Securities so converted on the corresponding
Interest Payment Date, subject to exceptions as set forth in Section 13.03(b).  Except where Securities are surrendered for
conversion and must be accompanied by payment as described in the immediately
preceding sentence, no interest, 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 hereunder, 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 and Additional Interest Amounts or Additional
Amounts, if any, to, but not including, the related Conversion Date.


 


Section 2.07  Denominations.  The Securities shall be issuable only in
registered form without coupons and in denominations of $1,000 and any integral
multiple of $1,000 above that amount.


 


Section 2.08  Execution, Authentication, Delivery and
Dating.  The Securities shall be executed
on behalf of the Company by any of its Chairman of the Board, its Chief
Executive Officer, its Chief Operating Officer, its Chief Financial Officer,
one of its Vice Presidents, its Secretary or one 


 


20

















 


of its Assistant Secretaries. 
The signature of any of these officers on the Securities may be manual
or facsimile.


 


Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.


 


At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities. 
The Company Order shall specify the amount of Securities to be
authenticated, and shall further specify the amount of such Securities to be
issued as a Global Security or as Physical Securities.  The Trustee, in accordance with such Company
Order, shall authenticate and deliver such Securities as is in this Indenture
provided and not otherwise.


 


Each Security shall be dated the date of its authentication.


 


No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Exhibit A
hereto executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.


 


Section 2.09  Temporary Securities.  Pending the preparation of Physical
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the Physical Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.


 


If temporary Securities are issued, the Company will cause Physical
Securities to be prepared without unreasonable delay.  After the preparation of Physical Securities,
the temporary Securities shall be exchangeable for Physical Securities upon
surrender of the temporary Securities at any office or agency of the Company
designated pursuant to Section 10.02, without charge to the Holder.  Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount of
Physical Securities of authorized denominations.  Until so exchanged the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
Physical Securities.


 


Section 2.10  Paying Agent; Registrar.  The Company shall maintain an office or
agency where Securities may be presented for registration of transfer or for
exchange (the “Security Registrar”)
and an office or agency where Securities may be presented to the Paying Agent
for payment.  The Company shall cause
each of the Registrar and the Paying Agent to maintain an office or agency in
The Borough of Manhattan, The City of New York. 
The Security Registrar shall keep a


 


21














 


register
of the Securities and of their transfer and exchange (the “Security Register”).  The Company may have one or more
co-registrars and one or more additional paying agents.  The term “Paying
Agent” includes any additional paying agent and the term “Security Registrar” includes any
co-registrar.


 


The Company initially appoints the Trustee as the Paying Agent and the
Security Registrar.  The Company may,
however, change the Paying Agent or Security Registrar without prior notice to
the Holders, and the Company may act as the Paying Agent and Security
Registrar.


 


Section 2.11  Transfer
and Exchange of Securities Generally.


 


(a)  Upon surrender for
registration of transfer of any Security at an office or agency of the Company
designated pursuant to Section 10.02 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate Principal Amount and tenor,
each such Security bearing such legends as may be required by Section 2.12
and Section 2.15 of this Indenture.


 


(b)  All Securities
issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture as the Securities surrendered upon such
registration of transfer or exchange.


 


(c)  Subject to Section 2.12,
every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee or the Co-Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.


 


(d)  No service charge
shall be made for any registration of transfer or exchange of Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section 2.09
and Section 9.06 not involving any transfer.


 


(e)  The Company shall
not be required to exchange or register a transfer of any Security (i) during
the 15 day period immediately preceding the mailing of any Notice of Redemption
of any Security, (ii) after any Notice of Redemption has been given to
Holders, except where such Notice of Redemption provides that such Security is
to be redeemed only in part, the Company shall be required to exchange or
register a transfer of the portion thereof not to be redeemed, (iii) that
has been surrendered for conversion or (iv) as to which a Fundamental
Change Purchase Notice has been delivered and not withdrawn, except where such
Fundamental Change Purchase Notice provides that such Security is to be
purchased only in part, the Company shall be required to exchange or register a
transfer of the portion thereof not to be purchased.


 


(f)  Neither the
Trustee, the Co-Trustee nor any of their respective agents shall (i) 


 


22

















 


have any duty to monitor
compliance with or with respect to any federal or state or other securities or
tax laws or (ii) have any duty to obtain documentation on any transfers or
exchanges other than as specifically required hereunder.


 


Section 2.12  Special
Transfer and Exchange Provisions.


 


(a)  Transfer and Exchange of Beneficial Interests in the
Global Securities.  So long as
the Global Securities remain outstanding and are held by or on behalf of the
Depositary, transfers and exchanges of beneficial interests in the Global
Securities shall be made in accordance with the provisions of this Section 2.12(a) and
in accordance with the rules and procedures of the Depositary to the
extent applicable (the “Applicable Procedures”).


 


(i) 
No restrictions shall apply with respect to the transfer or registration of
transfer of (A) a beneficial interest in a Restricted Global Security to a
transferee that takes delivery in the form of a beneficial interest in an
Unrestricted Global Security or (B) a beneficial interest in an
Unrestricted Global Security to a transferee that takes delivery in the form of
a beneficial interest in an Unrestricted Global Security; provided that any transfer described in
this clause (i) shall be made in accordance with the Applicable
Procedures.  Neither the Trustee nor the
Co-Trustee shall be deemed to have knowledge of such transfers.


 


(ii) 
Any transfer or exchange of a beneficial interest in a Restricted Global
Security to a transferee that will take delivery in the form of a beneficial
interest in an Unrestricted Global Security shall be registered, subject to the
Applicable Procedures, only in accordance with this clause (ii).  Upon (A) receipt by the Security
Registrar of (w) instructions given in accordance with the Applicable
Procedures from the Depositary or its nominee on behalf of an owner of a
beneficial interest in a Restricted Global Security to transfer such beneficial
interest to a Person that will take delivery in the form of a beneficial
interest in an Unrestricted Global Security or to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global Security, (x) a
written order of the Depositary or its nominee given in accordance with the
Applicable Procedures containing account and other information with respect to
such transfer or exchange, (y) a certificate of the transferor of the
beneficial interest in the Restricted Global Security substantially in the form
of Exhibit B hereto, including the applicable certifications in item (2) thereof,
and (z) if the Security Registrar so requests, an Opinion of Counsel in
form reasonably acceptable to the Security Registrar to the effect that such
transfer or exchange is in compliance with the Securities Act and, if such
transfer or exchange is being effected prior to October 13, 2009,
applicable Canadian Securities Laws, and (B) satisfaction of all other
applicable conditions imposed by this Indenture and the Applicable Procedures,
the Security Registrar shall (1) reflect in the Security Register a
decrease in the principal amount of such Restricted Global Security and an
increase in the principal amount of such Unrestricted Global Security, each
such adjustment to be equal to the beneficial interest transferred pursuant to
this clause (ii), and (2) instruct the Depositary to make the
corresponding adjustment to its records and debit and credit the accounts of
the appropriate Agent Members in accordance with the Applicable Procedures.


 


23

















 


(iii)  Any transfer or exchange of a beneficial interest in an
Unrestricted Global Security to a transferee that will take delivery in the
form of a beneficial interest in a Restricted Global Security shall be
registered, subject to the Applicable Procedures, only in accordance with this
clause (iii).  Upon (A) receipt by
the Security Registrar of (w) instructions given in accordance with the
Applicable Procedures from the Depositary or its nominee on behalf of an owner
of a beneficial interest in an Unrestricted Global Security to transfer such
beneficial interest to a Person that will take delivery in the form of a
beneficial interest in a Restricted Global Security or to exchange such
beneficial interest for a beneficial interest in a Restricted Global Security, (x) a
written order of the Depositary or its nominee given in accordance with the
Applicable Procedures containing account and other information with respect to
such transfer or exchange, and (y) a certificate of the transferor of the
beneficial interest in the Unrestricted Global Security substantially in the
form of Exhibit B hereto, including the applicable certifications in item (1) thereof,
and (B) satisfaction of all other applicable conditions imposed by this
Indenture and the Applicable Procedures, the Security Registrar shall (1) reflect
in the Security Register a decrease in the principal amount of such
Unrestricted Global Security and an increase in the principal amount of such
Restricted Global Security, each such adjustment to be equal to the beneficial
interest transferred pursuant to this clause (iii), and (2) instruct the
Depositary to make the corresponding adjustment to its records and debit and
credit the accounts of the appropriate Agent Members in accordance with the
Applicable Procedures.


 


(b) 
Transfer and Exchange of Beneficial Interests in
the Global Securities for Physical Securities.  A holder of a beneficial interest in a Global
Security may transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Physical Security and may exchange such beneficial
interest for a Physical Security only upon the occurrence of any of the events
set forth in clauses (A), (B) and (C) of Section 2.15(b) and
satisfaction of the conditions set forth in this Section 2.12(b).  Upon the occurrence of any such preceding
event and receipt by the Security Registrar of the documentation referred to in
the appropriate subparagraph of this Section 2.12(b), the Trustee shall
cause the aggregate Principal Amount of the applicable Global Security to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Physical Security in the appropriate Principal Amount.  Any Physical Security issued in exchange for
a beneficial interest pursuant to this Section 2.12(b) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Security Registrar through instructions from the Depositary and the Agent
Members.  The foregoing requirements
shall apply to all transfers and exchanges pursuant to this Section 2.12(b).


 


(i) 
A holder of a beneficial interest in a Restricted Global Security may transfer
such beneficial interest to a Person who takes delivery thereof in the form of
a Restricted Physical Security upon the receipt by the Security Registrar of a
certificate from such holder substantially in the form of Exhibit B
hereto, including the applicable certifications in item (1) thereof.  Any Physical Security issued in exchange for
a beneficial interest in a Restricted Global Security pursuant to this Section 2.12(b)(i) shall
bear the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.


 


24

















 


(ii) 
A holder of a beneficial interest in a Restricted Global Security may transfer
such beneficial interest to a Person who takes delivery thereof in the form of
an Unrestricted Physical Security or may exchange such beneficial interest for
Unrestricted Physical Securities upon the receipt by the Security Registrar of
a certificate from such holder substantially in the form of Exhibit B
hereto, including the applicable certifications in item (2) thereof, and,
if the Security Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Security Registrar to the effect that such transfer or
exchange is in compliance with the Securities Act and, if such transfer or
exchange is being effected prior to October 13, 2009, applicable Canadian
Securities Laws.  Any Unrestricted
Physical Securities issued in exchange for a beneficial interest in a
Restricted Global Security pursuant to this Section 2.12(b)(ii) shall
not bear the Private Placement Legend.


 


(iii) 
Other than the restrictions on transfer set forth in the Canadian Private
Placement Legend, if applicable, no restrictions shall apply with respect to
the transfer or exchange of a beneficial interest in an Unrestricted Global
Security.


 


(c)  Transfer and Exchange of Physical Securities for
Physical Securities.  Upon
request by a Holder of Physical Securities and such Holder’s compliance with
the provisions of this Section 2.12(c), the Security Registrar shall
register the transfer or exchange of Physical Securities.  Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Security
Registrar the Physical Securities duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Security Registrar duly
executed by such Holder or by its attorney, duly authorized in writing.  In addition, the requesting Holder shall
provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section 2.12(c).


 


(i) 
Any Restricted Physical Security may be transferred to a Person who takes
delivery thereof in the form of a Restricted Physical Security if the Security
Registrar receives a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (1) thereof.


 


(ii) 
Any Restricted Physical Security may be transferred to a Person who takes
delivery thereof in the form of an Unrestricted Physical Security or exchanged
for Unrestricted Physical Securities if the Security Registrar receives a
certificate substantially in the form of Exhibit B hereto, including the
applicable certifications in item (2) thereof, and, if the Security
Registrar so requests, an Opinion of Counsel in form reasonably acceptable to
the Security Registrar to the effect that such transfer or exchange is in
compliance with the Securities Act and, if such transfer or exchange is being
effected prior to October 13, 2009, applicable Canadian Securities
Laws.  Any Unrestricted Physical Security
issued in exchange for a Restricted Physical Security pursuant to this Section 2.12(c)(ii) shall
not bear the Private Placement Legend.


 


(iii) 
Other than the restrictions on transfer set forth in the Canadian Private
Placement Legend, if applicable, no restrictions shall apply with respect to
the transfer of an Unrestricted Physical Security.


 


25

















 


(d)  General. 
By its acceptance of any Security bearing the Private Placement Legend,
the Canadian Private Placement Legend and/or the Global Security Legend, each
Holder of such a Security acknowledges the restrictions on transfer of such
Security set forth in this Indenture and in such legends and agrees that it
will transfer such Security only as provided in this Indenture.  The Security Registrar shall retain, in accordance
with its customary procedures, copies of all letters, notices and other written
communications received pursuant to this Section 2.12.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Security Registrar.


 


Section 2.13  Mutilated,
Destroyed, Lost and Stolen Securities. 
If any mutilated Security is surrendered to the Trustee or the
Co-Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of like tenor and Principal Amount
and bearing a number not contemporaneously outstanding.


 


If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and Principal Amount and bearing a number not contemporaneously outstanding.


 


In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.


 


Upon the issuance of any new Security under this Section 2.12, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.


 


Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.


 


The provisions of this Section 2.12 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.


 


Section 2.14  Persons
Deemed Owners.  Prior to due
presentment of a 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 such Security is registered as the owner of such
Security for the purpose of receiving payment of principal on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee, 


 


26

















 


the
Co-Trustee nor any agent of the Company, the Trustee or the Co-Trustee shall be
affected by notice to the contrary.


 


Section 2.15  Book-Entry
Provisions for Global Securities.


 


(a)  Any Global
Securities shall (i) be registered in the name of the Depositary or the
nominee of such Depositary, (ii) be deposited with the Trustee as
custodian for the Depositary, at its Corporate Trust Office, and (iii) bear
the Global Note Legend.  Members of, or
participants in, the Depositary (“Agent
Members”) shall have no rights under this Indenture with respect to
any Global Security held on their behalf by the Depositary, or the Trustee as
its custodian, and the Depositary may be treated by the Company, the Trustee,
the Co-Trustee and any agent of the Company, the Trustee or the Co-Trustee as
the absolute owner of any Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee, the Co-Trustee or any agent of the
Company, the Trustee or the Co-Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and the Agent Members, the operation of
customary practices governing the exercise of the rights of any Holder.


 


(b)  Transfers of the
Global Securities shall be limited to transfers in whole, but not in part, to
the Depositary, its successors or their respective nominees.  Physical Securities shall be transferred to
beneficial owners in exchange for their beneficial interests in the Global
Securities only if (A) the Depositary has notified the Company (or in the
case of clause (ii) below the Company becomes aware) that the Depositary (i) is
unwilling or unable to continue as Depositary for such Global Security or (ii) has
ceased to be a clearing agency registered under the Exchange Act when the
Depositary is required to be so registered and, in both such cases, no
successor Depositary shall have been appointed within 90 days of such
notification or of the Company becoming aware of such event, as applicable (B) there
shall have occurred and be continuing an Event of Default with respect to such
Global Security and the Outstanding Securities shall have become due and
payable pursuant to Section 5.02 and any Holder requests that Physical
Securities be issued or (C) the Company has determined in its sole
discretion that the Securities shall no longer be represented by Global
Securities.  Any such transfer or
exchange of interests of beneficial owners in a Global Security, in whole or in
part, for Physical Securities shall be in accordance with the rules and
procedures of the Depositary and the provisions of Section 2.12.


 


(c)  The Holder of the
Global Securities may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.


 


Section 2.16  Cancellation.  The Company at any time may deliver to the
Trustee or the Co-Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee or the Co-Trustee for
cancellation any Securities previously authenticated hereunder which the
Company has not issued and sold.  The
Trustee or the Co-Trustee shall cancel and dispose of all Securities
surrendered for registration of transfer, exchange, payment, purchase,
redemption, conversion (pursuant to Article XIII hereof) or cancellation
in accordance with their customary practices. 
If the Company shall 


 


27

















 


acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee or the Co-Trustee for
cancellation.  The Company may not issue
new Securities to replace Securities it has paid in full or delivered to the
Trustee or the Co-Trustee for cancellation.


 


Section 2.17  Defaulted
Interest.  Any interest (including
Additional Interest Amounts and Additional Amounts, if any) on any Security
which is payable, but is not paid when the same becomes due and payable and
such nonpayment continues for a period of 30 days, shall forthwith cease to be
payable to the Holder on the Regular Record Date, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate set
forth in Section 10.01 (such defaulted interest and interest thereon
herein collectively called “Defaulted Interest”) shall be
paid by the Company, at its election in each case, as provided in clause (a) or
(b) below:


 


(a)  The Company may
elect to make payment of any Defaulted Interest to the Persons in whose names
the Securities (or their respective predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee and the
Co-Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date (not less than 30 days after such notice) of the
proposed payment (the “Special Interest Payment Date”), and at the
same time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Section 2.16(a)  provided.  Thereupon the Trustee shall fix a record date
(the “Special Record Date”) for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the Special Interest Payment Date and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company
of such Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date and Special Interest Payment Date therefor to be given in
the manner provided for in Section 12.02, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date therefor
having been so given, such Defaulted Interest shall be paid on the Special
Interest Payment Date to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to Section 2.16(b).


 


(b)  The Company may
make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.


 


Subject to the foregoing provisions of this Section 2.17, each
Security delivered under this Indenture upon registration of, transfer of or in
exchange for or in lieu of any other 


 


28

















 


Security shall carry the
rights to interest (including Additional Interest Amounts and Additional
Amounts, if any) accrued and unpaid, and to accrue, which were carried by such
other Security.


 


Section 2.18  CUSIP
Numbers.  The Company, in issuing the
Securities, may use “CUSIP” numbers (if then generally in use), and, if so, the
Trustee and the Co-Trustee shall use “CUSIP” numbers in notices as a
convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such notice shall not be affected by any defect in or
omission of such numbers.  The Company
will promptly notify the Trustee and the Co-Trustee of any change in the “CUSIP”
numbers.


 


Section 2.19  Ranking.  The indebtedness of the Company arising under
or in connection with this Indenture and every outstanding Security issued
under this Indenture from time to time constitutes and will constitute a senior
unsecured general obligation of the Company, ranking equally with other
existing and future unsecured senior and unsubordinated Indebtedness of the
Company and ranking senior in right of payment to any future Indebtedness of
the Company that is expressly made subordinate to the Securities by the terms
of such Indebtedness.  For purposes of
this Section 2.19 only, “Indebtedness” means,
without duplication, the principal or face amount of (a) all obligations
for borrowed money, (b) all obligations evidenced by debentures, notes or
other similar instruments, (c) all obligations in respect of letters of
credit or bankers acceptances or similar instruments (or reimbursement
obligations with respect thereto), (d) all obligations to pay the deferred
purchase price of property or services, (e) all obligations as lessee
which are capitalized in accordance with generally accepted accounting
principles and (f) all Indebtedness of others guaranteed by the Company or
any of its Subsidiaries or for which the Company or any of its Subsidiaries is
legally responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds or to invest in, others).


 


Section 2.20  Sinking
Fund.  The Securities shall not have
the benefit of a sinking fund.


 


ARTICLE
III


 


OPTIONAL REDEMPTION


 


Section 3.01  Company’s
Right to Redeem; Notices to Trustee and Co-Trustee.


 


(a)  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 (such redemption,
an “Optional Redemption”).


 


(b)  If the Company
elects to redeem Securities pursuant to an Optional Redemption, it shall notify
the Trustee and the Co-Trustee in writing of the Redemption Date, the Principal
Amount of Securities to be redeemed, the Conversion Price and the Redemption 


 


29

















 


Price payable on the
Redemption Date. The Company shall give such notice to the Trustee and the
Co-Trustee at least 30 days but no more than 60 days before the Redemption Date
(unless shorter notice shall be satisfactory to the Trustee or Co-Trustee, as
applicable).


 


(c)  In connection with
any Optional Redemption, the Company shall furnish to the Trustee and the
Co-Trustee an Officers’ Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, to the Optional Redemption have been
complied with.


 


Section 3.02  Selection
of Securities to be Redeemed.  If, in
the case of an Optional Redemption, fewer than all of the Outstanding
Securities are to be redeemed, the Trustee (on behalf of the Trustee and
Co-Trustee) shall select the Securities to be redeemed in Principal Amounts of
$1,000 or integral multiples thereof. The Trustee may select the Securities by
lot, pro rata or by any other method the Trustee considers fair and appropriate
or in any manner required by the Depositary.


 


If a portion of a Holder’s Securities is selected for partial
redemption and the Holder thereafter surrenders a portion of such Securities
for conversion before termination of the conversion right with respect to the
portion of the Security so selected for redemption, the portion of such
Security surrendered for conversion shall be deemed (so far as may be), solely
for purposes of determining the aggregate Principal Amount of Securities to be
redeemed by the Company, to be the portion selected for redemption.


 


Securities which have been converted during a selection of Securities
to be redeemed may be treated by the Trustee and the Co-Trustee as outstanding
for the purpose of such selection. Nothing in this Section 3.02 shall
affect the right of any Holder to convert any Security pursuant to Article XIII
before the termination of the conversion right with respect thereto.


 


Section 3.03  Notice of
Optional Redemption.


 


(a)  At least 30 days
but not more than 60 days before a Redemption Date in connection with an
Optional Redemption, the Company shall provide a notice of redemption (a “Notice of Optional Redemption”) to each
Holder of Securities to be redeemed at such Holder’s address kept by the
Security Registrar.


 


(b)  The Notice of
Optional Redemption shall identify the Securities to be redeemed and shall
state:


 


(i) 
the Redemption Date;


 


(ii) 
the Redemption Price;


 


(iii) 
the applicable Conversion Rate as of the Trading Day prior to the date of the
mailing of the Notice of Optional Redemption;


 


(iv) 
the name and address of the Paying Agent and the Conversion Agent;


 


(v) 
that Securities called for redemption must be surrendered to the Paying Agent
for cancellation to collect the Redemption Price;


 


30


















 


(vi) 
that the Securities called for redemption may be converted at any time before
5:00 p.m., New York City time, on the second Business Day prior to the
Redemption Date;


 


(vii) 
that Holders who wish to convert their Securities must satisfy the requirements
set forth in Article XIII;


 


(viii) 
that, unless the Company defaults in making payment of the Redemption Price for
the Securities (or portions thereof) called for redemption, any interest
(including Additional Interest Amounts or Additional Amounts, if any) on
Securities (or portions thereof) called for redemption will cease to accrue on
and after the Redemption Date, and the only remaining right of the Holder will
be to receive payment of the Redemption Price upon presentation and surrender
to the Paying Agent of the Securities;


 


(ix) 
if fewer than all the outstanding Securities are to be redeemed, the
certificate number (if such Securities are held other than in global form) and
Principal Amounts of the particular Securities to be redeemed; and


 


(x) 
the CUSIP number or numbers for the Securities called for redemption.


 


(c)  at the Company’s request, the
Trustee shall give the Notice of Optional Redemption in the Company’s name and
at the Company’s expense; provided, however, that the Company makes such request at least five
Business Days (unless a shorter period shall be satisfactory to the Trustee or
the Co-Trustee, as applicable) prior to the date by which such Notice of
Optional Redemption must be given to the Holders in accordance with this Section 3.03;
provided, further,
that the text of the Notice of Optional Redemption shall be prepared by the
Company in consultation with the Trustee.


 


Section 3.04  Effect of Notice of Optional Redemption.  Once a Notice of Optional Redemption is
given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in such notice, except for
Securities that are converted in accordance with the provisions of Article XIII.  Upon surrender to the Paying Agent, such
redeemed Securities shall be paid at the Redemption Price stated in the Notice
of Optional Redemption. Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.


 


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 Security on the relevant Regular Record
Date, and the amount paid to the Holder who presents the Security for
redemption shall be 100% of the Principal Amount of such Security.


 


Section 3.05  Deposit of Redemption Price.  Prior to 10:00 a.m., New York City time,
on the applicable Redemption Date, the Company shall deposit with the Paying
Agent an amount of cash (in immediately available funds if deposited on such
Redemption Date) sufficient to pay the aggregate Redemption Price of all
Securities (or portions thereof) to be redeemed on such Redemption Date, other
than Securities or portions of Securities called for redemption which on or
prior thereto have been delivered by the Company to the Trustee or the
Co-Trustee for cancellation or have been


 


31

















 


converted.


 


If, on such Redemption Date, the Paying Agent
holds, in accordance with the terms of this Indenture, cash sufficient to pay
the Redemption Price of any Securities for which a Notice of Optional
Redemption has been given, then on and after such Redemption Date, such
Securities 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 and
whether or not such Securities are delivered to the Paying Agent), and the
rights of the Holders in respect thereof shall terminate (other than the right
to receive the Redemption Price upon delivery of such Securities).  Nothing herein shall preclude the withholding
of any taxes required by law to be withheld or deducted.


 


Section 3.06  No Redemption Upon Acceleration.  Notwithstanding the foregoing, the Company
may not redeem the Securities if the Principal Amount of Securities has been
accelerated, and such acceleration has not been rescinded on or prior to such
Redemption Date (except in the case of an acceleration resulting from a Default
by the Company in the payment of the Redemption Price with respect to such
Securities).


 


Section 3.07  Securities Redeemed in Part.  Any Security which is to be redeemed only in
part shall be surrendered at the office of the Paying Agent and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal to
the unredeemed portion of the Security surrendered.


 


Section 3.08  Repayment to the Company.  To the extent that the aggregate amount of
cash deposited by the Company pursuant to the foregoing exceeds the aggregate
Redemption Price of the Securities or portions thereof which the Company is
redeeming as of the Redemption Date, then, promptly after the Redemption Date,
the Paying Agent shall return any such excess to the Company.  If such money is then held by the Company or
an Affiliate of the Company in trust and is not required for such purpose, it
shall be discharged from such trust.


 


ARTICLE
IV


 


SATISFACTION AND DISCHARGE


 


Section 4.01  Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee and
Co-Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when


 


(a) 
either:


 


(i) 
all Securities theretofore authenticated and delivered (other than (A) Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.13 and (B) Securities for whose payment
money has theretofore been deposited with the Trustee or the Co-Trustee in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from 


 


32

















 


such trust as provided in Section 10.03)
have been delivered to the Trustee or the Co-Trustee for cancellation; or


 


(ii) 
all such Securities not theretofore delivered to the Trustee or Co-Trustee for
cancellation have become due and payable, and the Company has deposited or
caused to be deposited with the Trustee or the Co-Trustee as trust funds in
trust for this purpose an amount sufficient to pay and discharge the entire
indebtedness evidenced by such Securities not theretofore delivered to the
Trustee or the Co-Trustee for cancellation;


 


(b) 
the Company has paid or caused to be paid all other sums payable hereunder by
the Company; and


 


(c) 
the Company has delivered to the Trustee and the Co-Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.


 


Notwithstanding the satisfaction and
discharge of this Indenture, the obligations of the Company to the Trustee and
the Co-Trustee under Section 6.07 and, if money shall have been deposited
with the Trustee and the Co-Trustee pursuant to Section 4.01(a)(ii), the
obligations of the Trustee and the Co-Trustee under Section 4.02 and the
last paragraph of Section 10.03 shall survive such satisfaction and
discharge.


 


Section 4.02  Application of Trust Money.  Subject to the provisions of the last
paragraph of Section 10.03, all money deposited with the Trustee and the
Co-Trustee pursuant to Section 4.01 shall be held in trust and applied by
them, in accordance with the provisions of the Securities and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee and Co-Trustee may
determine, to the Persons entitled thereto, of the principal and interest
(including Additional Interest Amounts or Additional Amounts, if any), for
whose payment such money has been deposited with the Trustee or the Co-Trustee.


 


ARTICLE
V


 


REMEDIES


 


Section 5.01  Events of Default.  “Event of Default,” wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):


 


(a) 
default in the payment of the Principal Amount, Redemption Price or Fundamental
Change Purchase Price on any Security when it becomes due and payable;


 


(b) 
default in the payment of interest or Additional Interest Amounts or Additional
Amounts, if any, upon any Security when such amounts become due and payable and
continuance of such default for a period of 30 days;


 


33

















 


(c) 
default in the performance of any covenant, agreement or condition of the
Company in this Indenture or the Securities (other than a default specified in
Sections 5.01(a) or 5.01 (b)), and continuance of such default for a
period of 60 days after there has been given, by registered or certified mail,
to the Company by the Trustee or the Co-Trustee, or to the Company, the Trustee
and the Co-Trustee by the Holders of at least 25% in aggregate Principal Amount
of the Outstanding Securities a written notice specifying such default and
requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;


 


(d) 
failure by the Company to convert Securities into cash, Common Shares or a
combination of cash and Common Shares, at the Company’s election, upon exercise
of a Holder’s conversion right and such failure continues for five Business
Days or more;


 


(e) 
default in the payment of any indebtedness (other than indebtedness that is
non-recourse to the Company or its Subsidiaries) for borrowed money by the
Company or any of its Subsidiaries (all or substantially all of the outstanding
voting securities of which are owned, directly or indirectly, by the Company)
in an outstanding principal amount in excess of $25,000,000 (or the equivalent
thereof in any other currency or currency unit) when such amounts become due at
final maturity or upon acceleration, and such indebtedness is not discharged or
such default in payment or acceleration is not cured, rescinded or annulled
within 10 days after written notice, by registered or certified mail, to the
Company by the Trustee or the Co-Trustee specifying such default and requiring
it to be remedied and stating that such notice is a “Notice of Default”
hereunder;


 


(f) 
the rendering of a final judgment or judgments (not subject to appeal and not
covered by insurance) against the Company or any of its Subsidiaries in excess
of $25,000,000 (or the equivalent thereof in any other currency or currency
unit) which remains unstayed, undischarged or unbonded for a period of 60 days;


 


(g) 
failure by the Company to give notice of a Fundamental Change as set forth in Section 12.01(b) or
notice of certain transactions as set forth under Section 13.01(a)(iv);


 


(h) 
failure by the Company to comply with its obligations under Article VIII;


 


(i) 
the entry by a court having jurisdiction in the premises of (i) a decree
or order for relief in respect of the Company or any of its Significant
Subsidiaries of a voluntary case or proceeding under any applicable U.S. or
Canadian federal, state or provincial bankruptcy, insolvency, reorganization or
other similar law, (ii) a decree or order adjudging the Company or any of
its Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any of its Significant Subsidiaries under
any applicable U.S. or Canadian federal, state or provincial law or (iii) a
decree or order appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any of its
Significant Subsidiaries or of any substantial part of its or their property,
or ordering the winding up or liquidation of its or their affairs, and


 


34

















 


the continuance of any such
decree or order for relief or any such other appointment, decree or order
unstayed and in effect for a period of 60 consecutive days; or


 


(j) 
the commencement by the Company or any of its Significant Subsidiaries of a
voluntary case or proceeding under any applicable U.S. or Canadian federal,
state or provincial bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a bankrupt or insolvent,
or the consent by any of them to the entry of a decree or order for relief in
respect of the Company or any of its Significant Subsidiaries in an involuntary
case or proceeding under any applicable U.S. or Canadian federal, state or
provincial bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding against it
or any of them, or the filing by it or any of them of a petition or answer or
consent seeking reorganization or relief under any applicable U.S. or Canadian
federal, state or provincial law, or the consent by it or any of them to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any of its Significant Subsidiaries or of
any substantial part of its or their property, or the making by it or any of
them of an assignment for the benefit of creditors.


 


Section 5.02  Acceleration of Maturity; Rescission and
Annulment.


 


(a)  If an Event of Default (other than
those specified in Section 5.01(i) and Section 5.01(j) with
respect to the Company or any of its Significant Subsidiaries) occurs and is
continuing, then and in every such case the Trustee and the Co-Trustee or the
Holders of not less than 25% in aggregate Principal Amount of the Outstanding
Securities may declare the Principal Amount plus accrued and unpaid interest,
including Additional Interest Amounts or Additional Amounts, if any, on all the
Outstanding Securities to be immediately due and payable, by a notice in
writing to the Company (and to the Trustee and the Co-Trustee if given by
Holders), and upon any such declaration such Principal Amount plus accrued but
unpaid interest, including Additional Interest Amounts or Additional Amounts,
if any, shall become immediately due and payable.


 


Notwithstanding the foregoing, in the case of
an Event of Default specified in Section 5.01(i) and Section 5.01(j) with
respect to the Company or any of its Significant Subsidiaries, the Principal
Amount plus accrued but unpaid interest, including Additional Interest Amounts
or Additional Amounts, if any, on all Outstanding Securities will ipso facto become due and payable without
any declaration or other Act on the part of any Holder, the Trustee or the
Co-Trustee.


 


(b)  At any time after such a declaration
of acceleration has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee or the Co-Trustee as hereinafter
in this Article V provided, the Holders of a majority in aggregate
Principal Amount of the Outstanding Securities, by written notice to the
Company and the Trustee and the Co-Trustee, may rescind and annul such
declaration and its consequences if:


 


(i) 
the Company has paid or deposited with the Trustee or the Co-Trustee a sum
sufficient to pay:


 


35

















 


(A) the Principal
Amount plus accrued but unpaid interest, including Additional Interest Amounts
or Additional Amounts, if any, or Redemption Price or Fundamental Change
Purchase Price, as applicable, on any Securities which have become due
otherwise than by such declaration of acceleration, and interest on any such
amounts that are overdue at the rate of 1.00% per annum from the required
payment date, and


 


(B) all sums paid or
advanced by the Trustee or Co-Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee and the
Co-Trustee, their respective agents and counsel, and any other amounts due the
Trustee and the Co-Trustee under Section 6.07; and


 


(ii) 
all Events of Default, other than the non-payment of the Principal Amount plus
accrued but unpaid interest, including Additional Interest Amounts or
Additional Amounts, if any, on Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 5.13.


 


No such rescission shall affect any
subsequent default or impair any right consequent thereon.


 


Section 5.03  Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may, but shall not be obligated to, pursue any
available remedy to collect the payment of the Principal Amount plus accrued
but unpaid interest, including Additional Interest Amounts or Additional
Amounts, if any, on the Securities or to enforce the performance of any provision
of the Securities or this Indenture.  The
Trustee or the Co-Trustee may maintain a proceeding even if the Trustee or the
Co-Trustee, as applicable, does not possess any of the Securities or does not
produce any of the Securities in the proceeding.  A delay or omission by the Trustee, the
Co-Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver
of, or acquiescence in, the Event of Default. 
No remedy is exclusive of any other remedy.  All available remedies are cumulative.


 


Section 5.04  Collection of Indebtedness and Suits for
Enforcement by Trustee or Co-Trustee. 
The Company covenants that if:


 


(a)  default is made in the payment of
any interest, including Additional Interest Amounts, on any Security when such
amounts become due and payable and such default continues for a period of 30
days, or


 


(b)  default is made in the payment of
the Principal Amount plus accrued but unpaid interest (including Additional
Interest Amounts or Additional Amounts, if any) at the Stated Maturity thereof
or in the payment of the Redemption Price or Fundamental Change Purchase Price
in respect of any Security,


 


the Company will, upon demand of the Trustee or the Co-Trustee, pay to
the Trustee or the Co-Trustee, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, the Co-Trustee and their respective
agents and


 


36

















 


counsel.


 


Section 5.05  Trustee and Co-Trustee May File Proofs
of Claim.  In case of any judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee and the Co-Trustee shall be entitled
and empowered, by intervention in such proceeding or otherwise, to take any and
all actions authorized under the Trust Indenture Act in order to have claims of
the Holders, the Trustee and the Co-Trustee allowed in any such
proceeding.  In particular, the Trustee
and the Co-Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and the Co-Trustee and, in
the event that the Trustee and the Co-Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee and the Co-Trustee
any amount due to them for the reasonable compensation, expenses, disbursements
and advances of the Trustee, the Co-Trustee, their respective agents and
counsel and any other amounts due the Trustee and Co-Trustee under Section 6.07.


 


No provision of this Indenture shall be
deemed to authorize the Trustee or the Co-Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee or the Co-trustee to vote in
respect of the claim of any Holder in any such proceeding.


 


Section 5.06  Application of Money Collected.  Any money collected by the Trustee or the
Co-Trustee pursuant to this Article V shall be applied in the following
order, at the date or dates fixed by the Trustee and the Co-Trustee and, in
case of the distribution of such money to Holders, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:


 


FIRST: 
To the payment of all amounts due the Trustee and the Co-Trustee under Section 6.07;


 


SECOND: 
To the payment of the amounts then due and unpaid on the Securities for
the Principal Amount, Redemption Price, Fundamental Change Purchase Price or
interest, including Additional Interest Amounts or Additional Amounts, if any,
as the case may be, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities; and


 


THIRD: 
To the Company.


 


Section 5.07  Limitation on Suits.  No Holder of any Security shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder (other than in the case of an Event of Default specified in Section 5.01(a) or
Section 5.01(b)), unless:


 


(a)  such Holder has previously given
written notice to the Trustee and the Co-Trustee of a continuing Event of
Default;


 


37

















 


(b)  the Holders of not less than 25% in
aggregate Principal Amount of the Outstanding Securities shall have made
written request to the Trustee and the Co-Trustee to institute proceedings in
respect of such Event of Default in their own names as Trustee and Co-Trustee,
respectively, hereunder;


 


(c)  such Holder or Holders have offered
to the Trustee and the Co-Trustee indemnity reasonably satisfactory to them
against the costs, expenses and liabilities to be incurred in compliance with
such request;


 


(d)  the Trustee and the Co-Trustee for
60 days after their receipt of such notice, request and offer of indemnity have
failed to institute any such proceeding; and


 


(e)  no direction inconsistent with such
written request (in the opinion of the Trustee and the Co-Trustee) has been
given to the Trustee or the Co-Trustee during such 60-day period by the Holders
of a majority in aggregate Principal Amount of the Outstanding Securities;


 


it being understood and intended that no one or more
Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders.


 


Section 5.08  Unconditional Right of Holders to Receive
Payment.  Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of the
Principal Amount, Redemption Price, Fundamental Change Purchase Price or
interest, including Additional Interest Amounts or Additional Amounts, if any,
in respect of the Securities held by such Holder, on or after the respective
due dates expressed in the Securities or on or after any Redemption Date or
Fundamental Change Purchase Date, as applicable, and to convert the Securities
in accordance with Article XIII hereof, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
such Holder.  For purposes of
clarification, prior to the occurrence of a Fundamental Change, the provisions
relating to the right to receive payment upon a Fundamental Change Purchase
Date may be modified in the manner set forth in Section 9.02.


 


Section 5.09  Restoration of Rights and Remedies.  If the Trustee, the Co-Trustee or any Holder
has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason
or has been determined adversely to the Trustee, the Co-Trustee or to such
Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee, the Co-Trustee and the Holders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee, the Co-Trustee and the
Holders shall continue as though no such proceeding had been instituted.


 


Section 5.10  Rights and Remedies Cumulative.  Except as otherwise provided with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities
in the last paragraph of Section 2.13, no right or remedy herein conferred
upon or reserved to the Trustee, the Co-Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right


 


38

















 


and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. 
The assertion or employment of any right or remedy hereunder or
otherwise shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.


 


Section 5.11  Delay or Omission Not Waiver.  No delay or omission of the Trustee, the
Co-Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article V
or by law to the Trustee, the Co-Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee, the
Co-Trustee or by the Holders, as the case may be.


 


Section 5.12  Control by Holders.  The Holders of a majority in aggregate
Principal Amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee and the Co-Trustee or exercising any trust or power
conferred on the Trustee and the Co-Trustee, provided that:


 


(a)  such direction shall not be in
conflict with any rule of law or with this Indenture; and


 


(b)  the Trustee or the Co-Trustee may
take any other action deemed proper by the Trustee or the Co-Trustee,
respectively, which is not inconsistent with such direction.


 


Section 5.13  Waiver of Past Defaults.  The Holders of not less than a majority in
aggregate Principal Amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past Default hereunder and its
consequences, except a Default:


 


(a)  described in Section 5.01(a) or
Section 5.01(b); or


 


(b)  in respect of a covenant or
provision hereof which under Article IX cannot be modified or amended
without the consent of the Holder of each Outstanding Security affected.


 


Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.


 


Section 5.14  Undertaking for Costs.  In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee or the
Co-Trustee for any action taken or omitted by it as Trustee or Co-Trustee,
respectively, in either case in respect of the Securities, a court may require
any party litigant in such suit to file an undertaking to pay the costs of the
suit, and the court may assess reasonable costs, including reasonable attorney’s
fees and expenses, against any party litigant in the suit having due regard to
the merits and good faith of the claims or defenses made by the party litigant;
but the provisions of this Section 5.14 shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee or the
Co-Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% in Principal Amount of the Outstanding Securities
or to any suit instituted by any Holder for the enforcement of the payment of
the Principal Amount or accrued but unpaid interest, including Additional
Interest Amounts or Additional Amounts,


 


39

















 


if any, on any Security on or after the Stated Maturity of such
Security or the Redemption Price or Fundamental Change Purchase Price.


 


Section 5.15  Waiver of Stay or Extension Laws.  The Company covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay, or
impede the execution of any power herein granted to the Trustee or the
Co-Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.


 


ARTICLE
VI


 


THE TRUSTEE AND THE CO-TRUSTEE


 


Section 6.01  Certain Duties and Responsibilities.  The duties and responsibilities of the
Trustee shall be as provided by the Trust Indenture Act and as set forth
herein.  For purposes of this Article VI,
unless expressly stated otherwise, provisions applicable to the Trustee shall
be applicable to the Co-Trustee.  In case
an Event of Default with respect to the Securities has occurred (which has not
been cured or waived), the Trustee shall exercise the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person’s own affairs. 
Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers. 
Except during the continuance of an Event of Default, the Trustee need
perform only those duties as are specifically set forth in this Indenture, and
no duties, covenants or obligations of the Trustee shall be implied in this
Indenture.  Whether or not herein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of, or affording protection to, the Trustee
shall be subject to the provisions of this Section 6.01.


 


Section 6.02  Notice of Defaults.  The Trustee shall give the Holders notice of
any Default hereunder within 90 days after the occurrence thereof or, if later,
within 15 days after it is known to the Trustee, unless such Default shall have
been cured or waived before the giving of such notice; provided that (except in the case of any
Default in the payment of Principal Amount, interest, including Additional
Interest Amounts or Additional Amounts, if any, on any of the Securities or the
Redemption Price or Fundamental Change Purchase Price), the Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Trustee in good faith determines that the withholding of such notice is in
the interest of the Holders of Securities.


 


Section 6.03  Certain Rights of Trustee.  Subject to the provisions of Section 6.01:


 


(a)  the Trustee may conclusively rely
and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed or presented by


 


40
















 


the proper party or parties;


 


(b)  any written request or direction of
the Company mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;


 


(c)  whenever in the administration of
this Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers’ Certificate;


 


(d)  the Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;


 


(e)  the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;


 


(f)  the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit; and if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney, at the sole cost of the
Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation;


 


(g)  the Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Trustee shall not be responsible for
any willful misconduct or gross negligence on the part of any agent or attorney
appointed with due care by it hereunder;


 


(h)  the Trustee shall not be charged
with knowledge of any Default or Event of Default (other than a payment Default
under Section 5.01(a) or Section 5.01(b)) with respect to the
Securities unless a Responsible Officer of the Trustee shall have received
written notice of such Default or Event of Default from the Company or any
other obligor on such Securities or by any Holder of such Securities;


 


(i)  the Trustee shall not be liable for
any action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;


 


(j)  the rights, disclaimers, privileges,
protections, immunities and benefits given 


 


41

















 


to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee and The
Bank of New York Mellon in each of its capacities hereunder (including as
Conversion Agent), and each agent, custodian and other Person employed to act
hereunder;


 


(k)  the Trustee may request that the
Company deliver an Officers’ Certificate setting forth the names of individuals
and/or titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers’ Certificate may be signed by any
person authorized to sign an Officers’ Certificate, including any person specified
as so authorized in any such certificate previously delivered and not
superseded;


 


(l)  in no event shall the Trustee be
responsible or liable for special, indirect, or consequential loss or damage of
any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action; and


 


(m)  the Trustee, Co-Trustee and the
Conversion Agent, respectively, shall not be liable and shall be held harmless
with respect to information received from the Company, the Bid Solicitation
Agent and any Holder and information received from other third parties that
would be reasonable to rely upon.


 


Section 6.04  Not Responsible for Recitals.  The recitals contained herein and in the
Securities, except the Trustee’s certificates of authentication, shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
their correctness.  The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities.  The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.


 


Section 6.05  May Hold Securities.  The Trustee, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Section 6.08
and Section 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.


 


Section 6.06  Money Held in Trust.  Money held by the Trustee in trust hereunder
need not be segregated from other funds except to the extent required by
applicable law.  The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.


 


Section 6.07  Compensation and Reimbursement.  The Company agrees.


 


(a)  to pay to the Trustee (which for
purposes of this Section 6.07(a) shall include its officers,
directors, employees and agents as well as the officers, directors, employees
and agents of the Co-Trustee) from time to time such compensation for all
services rendered by it hereunder as the Company and the Trustee shall from
time to time agree in writing (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);


 


(b)  except as otherwise expressly
provided herein, to reimburse the Trustee upon


 


42

















 


its request for all expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its agents and in-house and outside counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence or bad
faith;


 


(c)  to indemnify the Trustee, the
Co-Trustee and The Bank of New York Mellon in any other role hereunder
(including when acting as Conversion Agent) and any predecessor Trustee for,
and to hold it harmless against, any loss, liability, claim, damage or expense
including taxes (other than taxes based upon, measured by or determined by the
income or capital of the Trustee) incurred without gross negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the reasonable costs and
expenses of defending itself against any claim (whether assessed by the
Company, by any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder; and


 


(d)  the Trustee shall notify the Company
promptly of any claim asserted against it. 
Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations under this Section 6.07.  The Company shall defend the claim, and the
Trustee shall cooperate in the defense. 
The Trustee may at its option have separate counsel of its own choosing,
and the Company shall pay the reasonable fees and expenses of such
counsel.  The Company need not pay for
any settlement made without its written consent, which consent shall not be unreasonably
withheld.


 


The obligations of the Company under this Section 6.07
shall survive the resignation or removal of the Trustee and the satisfaction
and discharge of this Indenture.  To
secure the Company’s payment obligations in this Section 6.07, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except such money or property held in trust to pay
principal and interest on the Securities. 
Such lien shall survive the resignation or removal of the Trustee and
the satisfaction and discharge of this Indenture.  When the Trustee incurs expenses or renders
services after a Default or an Event of Default specified in Section 5.01(i) and
Section 5.01(j) occurs, the expenses and the compensation for the
services (including the fees and expenses of its agents and in-house and
outside counsel) are intended to constitute expenses of administration under
United States Code, Title 11 or any other similar foreign, federal or state law
for the relief of debtors.


 


Section 6.08  Disqualification; Conflicting Interests.  If the Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.


 


Section 6.09  Corporate Trustee Required; Eligibility.  There shall at all times be a Trustee
hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 and a Co-Trustee authorized to conduct business in Ontario and
Canada.  If such Person publishes reports
of condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority, then for the purposes of this Section 6.09,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.  If 


 


43

















 


at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 6.09, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article VI.


 


Section 6.10  Resignation and Removal; Appointment of
Successor.


 


(a)  No resignation or removal of the
Trustee and no appointment of a successor Trustee pursuant to this Article VI
shall become effective until the acceptance of appointment by the successor
Trustee under Section 6.11.


 


(b)  The Trustee may resign at any time
by giving written notice thereof to the Company.  If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction at the expense of the Trustee for the
appointment of a successor Trustee.


 


(c)  The Trustee may be removed at any
time by Act of the Holders of a majority in aggregate Principal Amount of the
Outstanding Securities, delivered to the Trustee and to the Company.  If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
notice of removal, the Trustee being removed may petition, at the expense of
the Company, any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities.


 


(d)  If at any time:


 


(i) 
the Trustee shall fail to comply with Section 6.08 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or


 


(ii) 
the Trustee shall cease to be eligible under Section 6.09 and shall fail
to resign after written request therefor by the Company or by any such Holder,
or


 


(iii) 
the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent, or


 


(iv) 
a receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,


 


then, in any such case, (A) the Company by a
Company Order may remove the Trustee or (B) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of such Holder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.


 


(e)  If the Trustee shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
office of the Trustee for any cause, the Company, by a Company Order, shall
promptly appoint a successor Trustee.  If
no successor Trustee shall have been so appointed by the Company and accepted
appointment in the manner hereinafter provided within 90 days following such
resignation, removal, incapability or vacancy, any Holder who has been a


 


44

















 


bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.


 


(f)  The Company shall give notice of
each resignation and each removal of the Trustee and each appointment of a
successor Trustee to all Holders in the manner provided in Section 1.06.  Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.


 


(g)  If a Trustee is removed with or
without cause, all fees and expenses (including the fees and expenses of
counsel) of the Trustee incurred in the administration of the trust or in the
performance of the duties hereunder prior to such removal shall be paid to the
Trustee.


 


Section 6.11  Acceptance of Appointment by Successor.  Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.  Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.


 


No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article VI.


 


Section 6.12  Merger, Conversion, Consolidation or
Succession to Business.  Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article VI, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.  In case any Securities
shall have been authenticated but not delivered by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.


 


Section 6.13  Preferential Collection of Claims Against.  If and when the Trustee shall be or become a
creditor of the Company (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).


 


45

















 


ARTICLE
VII


 


REPORTS BY TRUSTEE


 


Section 7.01  Preservation of Information;
Communications to Holders.


 


(a)  The Trustee and the Co-Trustee
shall preserve, in as current a form as is reasonably practicable, the names
and addresses of Holders contained in the most recent list furnished to the
Trustee and the Co-Trustee as provided in Section 10.08 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar.  The Trustee and the
Co-Trustee may destroy any list furnished to them as provided in Section 10.08
upon receipt of a new list so furnished.


 


(b)  The rights of Holders to
communicate with other Holders with respect to their rights under this
Indenture or under the Securities and the corresponding rights and duties of
the Trustee and the Co-Trustee shall be as provided by the Trust Indenture Act.


 


(c)  Every Holder of Securities, by
receiving and holding the same, agrees with the Company, the Trustee and the
Co-Trustee that neither the Company, the Trustee nor the Co-Trustee nor any
agent of any of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust Indenture
Act.


 


Section 7.02  Reports by Trustee and Co-Trustee.


 


(a)  The Trustee and the Co-Trustee
shall transmit to Holders such reports concerning the Trustee and the
Co-Trustee and their actions under this Indenture as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant
thereto.  Reports so required to be
transmitted at stated intervals of not more than 12 months shall be transmitted
no later than September 15 in each calendar year, commencing on September 15,
2009.  Each such report shall be dated as
of a date not more than 60 days prior to the date of transmission.


 


(b)  A copy of each such report shall,
at the time of such transmission to Holders, be filed by the Trustee or the
Co-Trustee with each stock exchange upon which the Securities are listed, if
any, with the Commission, if applicable, and with the Company.  The Company shall notify the Trustee and the
Co-Trustee promptly (and in any event within 10 days) whenever the Securities
become listed on any stock exchange or of any delisting thereof.


 


ARTICLE
VIII


 


CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE


 


Section 8.01  Company May Consolidate, etc., Only
on Certain Terms.  The Company shall
not, without the consent of any Holder of Securities, amalgamate, consolidate
or combine with or merge with or into any other Person or sell, transfer or
lease all or substantially all of its properties and assets, substantially as
an entirety to another Person, unless:


 


(a)  the resulting, surviving or transferee
Person (the “Successor Company”) 


 


46

















 


shall be a corporation, partnership, limited liability company or trust
organized and existing under the laws of the United States of America, any
State thereof, the District of Columbia or the laws of Canada or any province
or territory thereunder, and the Successor Company (if not the Company) shall
expressly assume, by supplemental indenture, executed and delivered to the
Trustee and the Co-Trustee, in form reasonably satisfactory to the Trustee and
the Co-Trustee, all the obligations of the Company under the Securities and
this Indenture;


 


(b)  immediately after giving effect to
such transaction, no Default shall have occurred and be continuing; and


 


(c)  the Company or the Successor
Company shall have delivered to the Trustee and the Co-Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that (i) such
amalgamation, consolidation, merger or transfer, and if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with the provisions of this Indenture, including this Article VIII
and Article IX, and (ii) the transaction will not result in the
Successor Company being required to pay any Additional Amounts in respect of
any payments in respect of the Securities in accordance with Section 10.10.


 


Section 8.02  Successor Substituted.  The Successor Company will succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture, other than in the case of a lease of all or substantially all
of the Company’s consolidated assets.


 


ARTICLE
IX


 


SUPPLEMENTAL INDENTURES


 


Section 9.01  Supplemental Indentures Without Consent Of
Holders.  Without the consent of any
Holder, the Company, when authorized by a Board Resolution, and the Trustee and
the Co-Trustee, at any time and from time to time, may amend, modify or
supplement this Indenture or the Securities, in form satisfactory to the
Trustee and the Co-Trustee, for any of the following purposes:


 


(a)  to evidence the succession of
another Person to the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or


 


(b)  to add to the covenants of the
Company for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; or


 


(c)  to provide for a successor Trustee
or successor Co-Trustee with respect to the Securities; or


 


(d)  to add any additional Events of
Default with respect to the Securities; or


 


(e)  to cure any ambiguity or defect, to
correct or supplement any provision herein which may be inconsistent with any
other provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture; or


 


47

















 


(f)  to reduce the Conversion Price; provided, however, that such reduction in the Conversion
Price is in accordance with the terms of this Indenture or shall not adversely
affect the interests of the Holders of Securities (after taking into account
tax and other consequences of such reduction) in any material respect; or


 


(g)  to supplement any of the provisions
of this Indenture to such extent as shall be necessary to permit or facilitate
the discharge of the Securities; provided, however,
that such change or modification does not adversely affect the interests of the
Holders of the Securities in any material respect; or


 


(h)  to add to the covenants of the
Company for the benefit of the Holders or to surrender any right or power
herein conferred upon the Company; or


 


(i)  to make any change that does not
materially adversely affect the rights of any Holder; or


 


(j)  to add or modify any other
provisions herein with respect to matters or questions arising hereunder which
the Company, the Trustee and the Co-Trustee may deem necessary or desirable and
which would not reasonably be expected to adversely affect the interests of the
Holders of Securities in any material respect; or


 


(k)  to conform this Indenture or the
Securities to the description thereof under the caption “Description of notes”
in the Offering Memorandum; or


 


(l)  to comply with any requirements of
the Commission in connection with the qualification of this Indenture under the
Trust Indenture Act or any applicable requirements of the Canada
Business Corporations Act.


 


Section 9.02  Supplemental Indentures with Consent of
Holders.


 


(a)  With the consent of the Holders of
not less than a majority in aggregate Principal Amount of the Outstanding
Securities, by Act of said Holders delivered to the Company, the Trustee and
the Co-Trustee, the Company, when authorized by a Board Resolution, and the
Trustee and Co-Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture; provided,
however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:


 


(i) 
extend the Stated Maturity of any Security; or


 


(ii) 
reduce the Principal Amount of, or reduce the interest rate on, or extend the
stated time for payment of interest on, any Security, excluding in each case
Additional Interest Amounts and Additional Amounts if any, or


 


(iii) 
reduce the Redemption Price or Fundamental Change Purchase Price of any
Security; or


 


48

















 


(iv) 
after the occurrence of a Fundamental Change, make any change that adversely
affects the right of Holders of the Securities to require the Company to
purchase such Securities in accordance with the terms thereof and this
Indenture; or


 


(v) 
make any change that impairs the right of Holders of Securities to convert any
Security; or


 


(vi) 
change the currency of any payment amount of any Security from U.S. Dollars or
Common Shares as provided herein; or


 


(vii) 
make any change that impairs the right of Holders to institute suit for payment
of the Securities; or


 


(viii) 
reduce the percentage in aggregate Principal Amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture; or


 


(ix) 
modify the obligation of the Company to maintain an agency in The City of New
York as required under this Indenture; or


 


(x) 
change the ranking of the Securities in any manner that adversely affects the
rights of Holders under this Indenture; or


 


(xi)  modify any of the provisions of this Section 9.02
or Section 5.13, except to increase the percentage in aggregate Principal
Amount of the Outstanding Securities, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided for in
this Indenture, or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.


 


(b)  The Holders of not less than a
majority in aggregate Principal Amount of the Outstanding Securities may, on
behalf of the Holders of all of the Securities, waive any past default and its
consequences under this Indenture, except a default (i) in the payment of
the Principal Amount of or any interest, including Additional Interest Amounts
and Additional Amounts, if any, on or with respect to the Securities or (ii) in
respect of a covenant or provision that cannot be modified without the consent
of the Holder of each Security affected thereby as set forth in Section 9.02(a).


 


It shall not be necessary for any Act of
Holders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.


 


Section 9.03  Execution of Supplemental Indentures.  In executing, or accepting the additional
trusts created by, any supplemental indenture permitted by this Article IX
or the


 


49














 


modifications thereby of the trusts created by this Indenture, the
Trustee and the Co-Trustee shall be provided with, and (subject to Section 6.01)
shall be fully protected in relying upon, in addition to the documents required
by Section 1.02, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and such
other conclusions as the Trustee and the Co-Trustee may require.  Subject to the preceding sentence, the
Trustee and the Co-Trustee shall sign such supplemental indenture if the same
does not affect the Trustee’s and the Co-Trustee’s own rights, duties or
immunities under this Indenture or otherwise or subject either of them to undue
risk.  The Trustee and the Co-Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee’s and the Co-Trustee’s own rights, duties or
immunities under this Indenture or otherwise.


 


Section 9.04  Effect of Supplemental Indentures.  Upon the execution of any supplemental
indenture under this Article IX, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.


 


Section 9.05  Conformity with Trust Indenture Act.  Every supplemental indenture executed
pursuant to this Article IX shall conform to the requirements of the Trust
Indenture Act and any applicable requirements of the Canada Business Corporations Act.


 


Section 9.06  Reference in Securities to Supplemental
Indentures.  Securities authenticated
and delivered after the execution of any supplemental indenture pursuant to
this Article IX shall bear a notation in a form approved by the Trustee
and the Co-Trustee as to any matter provided for in such supplemental
indenture.  If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee, the Co-Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee and the Co-Trustee in exchange for Outstanding Securities.


 


ARTICLE
X


 


COVENANTS


 


Section 10.01  Payments.  The Company shall duly and punctually make
all payments in respect of the Securities and this Indenture in accordance with
the terms of the Securities and this Indenture. 
The Company shall, to the fullest extent permitted by law, pay interest
on overdue payments of Principal Amount, plus accrued but unpaid interest,
including Additional Interest Amounts or Additional Amounts, if any, Redemption
Price and Fundamental Change Purchase Price at the rate of 1% per annum from
the required payment date of such overdue payment.


 


Any payments made or due pursuant to this
Indenture shall be considered paid on the applicable date due if by 10:00 a.m.,
New York City time, on such date the Paying Agent holds, in accordance with
this Indenture, cash sufficient to pay all such amounts then due.  Payment of the principal of and interest,
including Additional Interest Amounts or Additional Amounts, if any, on the
Securities shall be in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.


 


Section 10.02  Maintenance of Office or Agency.  The Company shall maintain in The 


 


50

















 


Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, repurchase or conversion
and where notices and demands pursuant to this Section 10.02 to or upon
the Company in respect of the Securities and this Indenture may be served,
which shall initially be the Corporate Trust Office of the Trustee.  The Company shall give prompt written notice
to the Trustee and the Co-Trustee of the location, and any change in the
location, of such office or agency.  If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee or the Co-Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.


 


The Company may also from time to time
designate one or more other offices or agencies (in or outside The Borough of
Manhattan, The City of New York) where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The Borough of Manhattan, The
City of New York, for such purposes.  The
Company shall give prompt written notice to the Trustee and the Co-Trustee of
any such designation or rescission and of any change in the location of any
such other office or agency.


 


Section 10.03  Money for Security Payments to be Held in
Trust.  If the Company shall at any
time act as its own Paying Agent, it shall, on or before each due date of any
payment in respect of any of the Securities, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to make the
payment so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and shall promptly notify the Trustee
and the Co-Trustee of its action or failure so to act.


 


Whenever the Company shall have one or more
Paying Agents, it will, on or prior to each due date of any payment in respect
of any Securities, deposit with any one or more Paying Agents a sum sufficient
to pay such amount, such sum to be held as provided by the Trust Indenture Act,
and (unless such Paying Agent is the Trustee or the Co-Trustee) the Company
will promptly notify the Trustee and the Co-Trustee of its action or failure so
to act.


 


The Company shall cause each Paying Agent
other than the Trustee or the Co-Trustee to execute and deliver to the Trustee
and the Co-Trustee an instrument in which such Paying Agent shall agree with
the Trustee and the Co-Trustee, subject to the provisions of this Section 10.03,
that such Paying Agent will (a) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (b) during the
continuance of any Default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities, upon the
written request of the Trustee or the Co-Trustee, forthwith pay to the Trustee
or the Co-Trustee all sums held in trust by such Paying Agent as such.


 


The Company may at any time, for the purpose
of obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee or the Co-Trustee all sums held in trust by the Company or such Paying
Agent, such sums to be held by the Trustee or the Co-Trustee, as applicable,
upon 


 


51

















 


the same trusts as those
upon which such sums were held by the Company or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee or the Co-Trustee, such Paying
Agent shall be released from all further liability with respect to such money.


 


Any money deposited with the Trustee, the
Co-Trustee or any Paying Agent, or then held by the Company, in trust for the
making of payments in respect of any Security and remaining unclaimed for two
years after such payment has become due shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee, the Co-Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee, the
Co-Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be repaid to the Company.


 


Section 10.04  Statement by Officers as to Default.  The Company shall deliver to the Trustee and
the Co-Trustee, within 90 days after the end of each fiscal year of the Company
ending after the date hereof, an Officers’ Certificate, stating whether or not
to the knowledge of the signers thereof the Company is in Default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in Default, specifying all
such Defaults and the nature and status thereof of which they may have
knowledge.


 


The Company shall deliver to the Trustee and
the Co-Trustee, as soon as possible and in any event within five days after the
Company becomes aware of the occurrence of any Event of Default or an event
which, with notice or the lapse of time or both, would constitute an Event of
Default, an Officers’ Certificate setting forth the details of such Event of
Default or default and the action which the Company proposes to take with
respect thereto.


 


Section 10.05  Existence.  Subject to Article VIII hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be
required to preserve any such right or franchise if the Board of Directors of
the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.


 


Section 10.06  Resale of Certain Securities.  During the period beginning on the Issue Date
and ending on the date that is one year from the Issue Date, the Company shall
not resell any Securities which constitute “restricted
securities” under Rule 144 that have been reacquired by the Company.  The Trustee and the Co-Trustee shall have no
responsibility in respect of the Company’s performance of its agreement in the
preceding sentence.


 


Section 10.07  Book-Entry System.  If the Securities cease to trade in the
Depositary’s 


 


52

















 


book-entry settlement system, the Company covenants and agrees that it
shall use reasonable efforts to make such other book entry arrangements that it
determines are reasonable for the Securities.


 


Section 10.08  Company to Furnish Trustee and Co-Trustee
Names and Addresses of Holders.  The
Company will furnish or cause to be furnished to the Trustee and the
Co-Trustee:


 


(a)  semi-annually, not later than 10 days after each Regular
Record Date, a list, in such form as the Trustee and the Co-Trustee may
reasonably require, of the names and addresses of the Holders as of such
Regular Record Date; and


 


(b)  at such other times as the Trustee or the Co-Trustee may
request in writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;


 


provided,
however, that no such list need be furnished so long as the Trustee or the
Co-Trustee is acting as Security Registrar.


 


Section 10.09  Reports by Company and Delivery of Certain
Information.  The Company shall file with the Trustee and the Co-Trustee, (A) such
information, documents and other reports, and such summaries thereof, as the
Company may be required to file or furnish pursuant to the Trust Indenture Act
(at the times and in the manner provided in the Trust Indenture Act) and (B) within
15 days after the Company files or furnishes the same with the Commission, such
information, documents and other reports, and such summaries thereof, as the
Company may be required to file or furnish with the Commission pursuant to Section 13
or 15(d) of the Exchange Act; provided
that (a) delivery of materials to the Trustee and the Co-Trustee by
electronic means shall be deemed to be “filed” with the Trustee and the
Co-Trustee for purposes of this Section 10.09; (b) so long as such
filings by the Company are available on the Commission’s Electronic Data
Gathering, Analysis and Retrieval system (EDGAR), the Ontario Securities
Commission’s System for Electronic Document Analysis and Retrieval (SEDAR) or any other website maintained by the
securities regulatory authorities in the United States or Canada, such
materials shall be deemed to be “filed” with the Trustee and the Co-Trustee for
purposes of this Section 10.09; and (c) the Company need not furnish
to the Trustee or the Co-Trustee confidential portions of any information,
documents or reports filed or furnished with the Commission, the Ontario
Securities Commission or any other securities regulatory authority on a
confidential basis.  Notwithstanding the
foregoing, it shall not be the responsibility of the Trustee or Co-Trustee to
monitor postings of the Company on EDGAR, SEDAR or any other website referred
to in this Section 10.09, it being understood that, due to the public
availability of the information contained on such websites, any Person,
including without limitation any Holder, may obtain such information directly
from such website.


 


In the event that, while Securities remain Outstanding, the
Company is no longer subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company will continue to file with the
Trustee and the Co-Trustee, within 15 days after the time periods required for
the filing or furnishing of such forms by the Commission, (a) annual
reports on Form 40-F or Form 20-F, as applicable, or any successor
form, and (b) current reports on Form 6-K, or any successor form,
which, regardless of applicable requirements shall, at a minimum, contain such 


 


53

















 


information required to be provided in quarterly reports
under the laws of Canada or any province thereof to securityholders of a
corporation with securities listed on the Toronto Stock Exchange, whether or
not the Company has securities listed on such exchange; and such reports will
be prepared in accordance with Canadian disclosure requirements.


 


Delivery of reports, information and documents to the
Trustee and the Co-Trustee under this Section 10.09 is for informational
purposes only, and the receipt by the Trustee and Co-Trustee of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee and the
Co-Trustee are entitled to rely exclusively on Officers’ Certificates).


 


If (a) the Securities and the Common Shares issuable
upon conversion of the Securities are Outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities
Act, as applicable, and (b) the Company is not subject to Section 13
or 15(d) of the Exchange Act or exempt from such reporting requirements
pursuant to Rule 12g3-2(b) thereunder, then the Company shall make
available to any Holder, beneficial owner of such Common Shares or prospective
purchaser of the Securities or such Common Shares designated by such Holder or
beneficial owner, upon the request of such Holder, owner or prospective
purchaser, at or prior to the time of resale by such Holder, the information
required by Rule 144A(d)(4) under the Securities Act, provided that such information is necessary to permit such
Holders or beneficial owners of Common Shares issuable upon conversion of the
Securities, as applicable, to effect resales under Rule 144A.


 


Section 10.10  Payment of Additional Amounts.  All payments made by or on behalf of the
Company under or with respect to the Securities (including, without limitation,
any Additional Interest Amount) will be made free and clear of, and without
withholding or deduction for, or on account of, any present or future tax,
duty, levy, impost, assessment or other governmental charge (including, without
limitation, penalties, interest and other liabilities related thereto) imposed
or levied by or on behalf of the Government of Canada or of any province or
territory thereof or by any authority or agency therein or thereof having power
to tax, including without limitation any taxes imposed under Part XIII of
the Tax Act (“Canadian Taxes”),
unless the Company is required by law or the interpretation or administration
thereof, to withhold or deduct any amounts for, or on account of, Canadian
Taxes.  If the Company is so required to
withhold or deduct any amount for, or on account of, Canadian Taxes from any
payment made under or with respect to the Securities, the Company will make
such withholding or deduction and pay as additional interest such additional
amounts (“Additional Amounts”) as
may be necessary so that the net amount received by each Holder (other than an
Excluded Holder) after such withholding or deduction (including any withholding
or deduction required to be made in respect of any Additional Amounts) will not
be less than the amount the Holder (other than an Excluded Holder) would have
received if such Canadian Taxes had not been withheld or deducted and similar
payment (the term “Additional Amounts” shall also include any such similar payments)
will also be made by the Company to Holders (other than Excluded Holders) of
Securities that are exempt from withholding but are required to pay Canadian
Taxes directly on amounts otherwise subject to withholding; provided, however,
that no Additional Amounts will be payable with respect to:


 


54

















 


(a)  a payment made to a Holder or
former Holder of Securities (an “Excluded
Holder”) in respect of the beneficial owner thereof:


 


(i) 
with which the Company does not deal at arm’s length (within the meaning of the
Tax Act) at the time of making such payment; or


 


(ii) 
that is subject to such Canadian Taxes by reason of its failure to comply with
any certification, identification, information, documentation or other
reporting requirement if compliance is required by law, regulation,
administrative practice or an applicable treaty as a precondition to exemption
from, or a reduction in the rate of deduction or withholding of, such Canadian
Taxes (provided that in the case
of any imposition or change in any such certification, identification,
information, documentation or other reporting requirement which applies
generally to Holders of Securities who are not residents of Canada, at least 60
days prior to the effective date of any such imposition or change, the Company
shall give written notice, in the manner provided in this Indenture, to the
Trustee, the Co-Trustee and the Holders of the Securities then outstanding of
such imposition or change, as the case may be, and provide the Trustee, the
Co-Trustee and such Holders with such forms or documentation, if any, as may be
required to comply with such certification, identification, information,
documentation, or other reporting requirement); or


 


(iii) 
that is subject to such Canadian Taxes by reason of its carrying on a trade or
business in Canada or any province or territory thereof, having a permanent
establishment in any such jurisdiction, being organized under the laws of any
such jurisdiction, being or being deemed to be resident in any such
jurisdiction or otherwise being connected with any such jurisdiction otherwise
than by the mere holding of such Securities or the receipt of payments or
exercise of any enforcement rights, thereunder; or


 


(b)  any estate, inheritance, gift,
sales, excise, transfer, personal property or similar tax, assessment or
governmental charge (“Excluded Taxes”).


 


The Company will (A) make such
withholding or deduction for Canadian Taxes (other than Excluded Taxes in
respect of payments made to a Holder (other than an Excluded Holder) under or
with respect to the Securities) and (B) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law.


 


The Company will furnish to the Trustee and
the Co-Trustee, within 30 days after the date the payment of any Canadian Taxes
is due pursuant to applicable law in respect of such Securities, certified
copies of tax receipts evidencing such payment by the Company.


 


The Company will indemnify and hold harmless
each Holder of any Securities (other than an Excluded Holder) from any Canadian
Taxes (other than Excluded Taxes) in respect of which any Additional Amounts
are payable by but not paid by the Company, including any Canadian Taxes (other
than Excluded Taxes) levied or imposed on the Holder with respect to any
indemnity payment.


 


55

















 


Additional Amounts will be paid in cash
semi-annually on the applicable February 1 or August 1, at Maturity,
on any Redemption Date, on a Conversion Date or on any Fundamental Change
Purchase Date.


 


Whenever in this Indenture there is
mentioned, in any context, the payment of principal and interest or any other
amount payable under, or with respect to, any Security, such mention shall be
deemed to include mention of the payment of Additional Amounts provided for in
this Section to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof.


 


Anything in this Indenture to the contrary
notwithstanding, the covenants and provisions of this Section 10.10 shall
survive any termination or discharge of this Indenture, and the repayment of
all or any of the Securities, and shall remain in full force and effect.


 


Section 10.11  Additional Interest Amount.  The Additional Interest Amounts shall be
payable to Holders of the Securities (or, with respect to any Securities that
have been previously converted, to the Holders of such converted Securities at
the time of such conversion) if at any time during the six months to one year
following the Issue Date, the Company fails to timely file any document or
report that the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act, as applicable; provided that the Company will have 14 calendar days (the “Cure Period”), in the aggregate, to cure
all such missed filings. In the event the Company has not so cured a missed
filing within the Cure Period, the Additional Interest Amount will be payable
on the Interest Payment Date following the expiration of the Cure Period.  In the event that the Company is required to
pay Additional Interest Amounts to Holders, the Company will provide written
notice in the form of an Officers’ Certificate (the “Additional Interest Notice”) to the Trustee and the Co-Trustee
of its obligation to pay Additional Interest Amounts no later than 10 calendar
days prior to the proposed Interest Payment Date for Additional Interest
Amounts (or, in the event the expiration of the Cure Period occurs within 10 days
prior to the proposed Interest Payment Date for Additional Amounts, promptly
following expiration of the Cure Period), and the Additional Interest Notice
shall set forth the amount of Additional Interest Amounts to be paid by the
Company on such Interest Payment Date. Neither the Trustee nor the Co-Trustee
shall at any time be under any duty or responsibility to any Holder to
determine the Additional Interest Amounts, or with respect to the nature,
extent or calculation of the amount of Additional Interest Amounts when made,
or with respect to the method employed in such calculation of the Additional
Interest Amounts.


 


Section 10.12  Information for IRS Filings.  The Company shall provide to the Trustee and
the Co-Trustee on a timely basis such information and documentation as the
Trustee, the Co-Trustee or the Holders may require with respect to the Internal
Revenue Service and the Holders.


 


Section 10.13  Further Instruments and Acts.  Upon reasonable request of the Trustee or the
Co-Trustee, or as otherwise necessary, the Company will execute and deliver
such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.


 


56

















 


ARTICLE
XI


 


REDEMPTION


 


Section 11.01  Redemption for Tax Reasons; Notices to
Trustee and Co-Trustee; Notice of Election.


 


(a)  The Company may, at its option,
redeem the Securities, in whole but not in part, at a Redemption Price 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, 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 determined by the
Company 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 onwards in an interpretation or application of 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) (such redemption, a “Tax
Redemption”); 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.  In such event, the Company will give the
Trustee, the Co-Trustee and the Holders of the Securities notice of this
redemption pursuant to Section 11.02.


 


(b)  If the Company elects to redeem
Securities pursuant to a Tax Redemption, it shall notify the Trustee and the
Co-Trustee in writing of the Redemption Date and the Redemption Price payable
on such Redemption Date.  The Company
shall give such notice to the Trustee and Co-Trustee at least 45 days but no
more than 60 days before the Redemption Date (unless shorter notice shall be
satisfactory to the Trustee or Co-Trustee, as applicable); provided
that (a) 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 such Additional Amounts and (b) at the time
the Company gives the notice, the circumstances creating its obligation to pay
such Additional Amounts remain in effect.


 


(c)  Upon receiving a Notice of Tax
Redemption, each Holder who does not wish to have the Company redeem its
Securities pursuant to this Section 11.01 can elect to (A) convert
its Securities pursuant to Article XIII or (B) not have its
Securities redeemed, provided that
after such Redemption Date, such Holders shall be deemed to be Excluded Holders
in respect of any payment of interest or principal with respect to the
Securities after such Redemption Date and no Additional Amounts will be payable
by the Company in respect of any such payment after such Redemption Date.  Securities and portions of Securities that
are to be redeemed are convertible by the Holder until 5:00 p.m., New York
City time, on the Business Day immediately preceding the 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 but wishes to elect to not have its
Securities redeemed pursuant to clause (B) of the preceding paragraph,
such Holder must deliver to the Company (if the Company is acting as its own
Paying Agent), or to a Paying Agent designated by the Company for such purpose
in the 


 


57

















 


notice of redemption, a
written Notice of Election upon Tax Redemption (the “Notice of
Election”) on the back of the Securities, 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 a Business Day at least five Business Days 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.


 


Section 11.02  Notice of Tax Redemption.


 


At least 30 days but not more than 60 days
before a Redemption Date in connection with a Tax Redemption, the Company shall
provide a notice of redemption to each Holder of Securities to be redeemed at
such Holder’s address kept by the Security Registrar (a “Notice of
Tax Redemption”); provided that (a) in
no event will the Company be obligated to give any Notice of Tax Redemption
earlier than 60 days prior to the earliest date on or from which it would be
obligated to pay any such Additional Amounts and (b) at the time the
Company gives the Notice of Tax Redemption, the circumstances creating its
obligation to pay such Additional Amounts remain in effect.


 


The notice of redemption shall identify the
Securities to be redeemed and shall state:


 


(i) 
the Redemption Date;


 


(ii) 
the Redemption Price;


 


(iii) 
the then current Conversion Rate;


 


(iv) 
the name and address of the Paying Agent and Conversion Agent;


 


(v) 
that Securities called for redemption may be converted at any time prior to
5:00 p.m., New York City time, on the Business Day preceding the
Redemption Date;


 


(vi) 
that Holders who want to convert their Securities must satisfy the requirements
set forth in Article XIII;


 


(vii) 
that Securities called for redemption must be surrendered to the Paying Agent
for cancellation to collect the Redemption Price;


 


(viii) 
that, unless the Company defaults in making payment of such Redemption Price,
any interest (including Additional Interest Amounts or Additional Amounts, if
any) on Securities called for redemption will cease to accrue on and after the
Redemption Date and the only remaining right of the Holder will be to receive
payment of the Redemption Price upon presentation and surrender to the Paying
Agent of the Securities;


 


58

















 


(ix) 
the CUSIP number(s) of the Securities;


 


(x) 
that Holders may elect not to have their Securities redeemed or converted and
the procedures for delivering a Notice of Election; and


 


(xi)  any other information the Company wants to
present.


 


At the Company’s request, the Trustee or the
Co-Trustee shall give the Notice of Tax Redemption in the Company’s name and at
the Company’s expense; provided, however, that the Company makes such request at least five
Business Days (unless a shorter period shall be satisfactory to the Trustee or
the Co-Trustee, as applicable) prior to the date by which such Notice of Tax
Redemption must be given to Holders in accordance with this Section 11.02;
provided, further,
that the text of the Notice of Tax Redemption shall be prepared by the Company.


 


Section 11.03  Effect of Notice of Tax Redemption.  Once Notice of Tax Redemption is given,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price stated in the notice, except for Securities which
are converted in accordance with the terms of this Indenture.  Upon surrender to the Paying Agent, such
redeemed Securities shall be paid at the Redemption Price stated in the notice.  Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.


 


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 Security on the relevant Regular
Record Date, and the amount paid to the Holder who presents the Security for
redemption shall be 100% of the Principal Amount of such Security.


 


Section 11.04  Deposit of Redemption Price.  Prior to 10:00 a.m., New York City time
on the Redemption Date, the Company shall deposit with the Paying Agent an
amount of cash (in immediately available funds if deposited on the Redemption
Date) sufficient to pay the aggregate Redemption Price of all Securities (or
portions thereof) to be redeemed on the Redemption Date, other than Securities
or portions of Securities called for redemption which on or prior thereto have
been delivered by the Company to the Trustee or the Co-Trustee for cancellation
or have been converted.


 


If, on the Redemption Date, the Paying Agent
holds, in accordance with the terms of this Indenture, cash sufficient to pay
the Redemption Price of any Securities for which Notice of Tax Redemption has
been given, then on and after the applicable Redemption Date, such Securities
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), and the rights of the
Holders in respect thereof shall terminate (other than the right to receive the
Redemption Price upon delivery of such Securities).  Nothing herein shall preclude the withholding
of any taxes required by law to be withheld or deducted.


 


Section 11.05  Securities Redeemed in Part.  Any Security which is to be redeemed only in
part shall be surrendered at the office of the Paying Agent and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new


 


59














 


Security or Securities, of any authorized denomination as requested by
such Holder in aggregate Principal Amount equal to the unredeemed portion of
the Security surrendered.


 


Section 11.06  Repayment to the Company.  To the extent that the aggregate amount of
cash deposited by the Company pursuant to Section 11.04 exceeds the
aggregate Redemption Price of the Securities or portions thereof which the
Company is redeeming as of the Redemption Date, then, promptly after the
Redemption Date, the Paying Agent shall return any such excess to the
Company.  If such money is then held by
the Company or an Affiliate of the Company in trust and is not required for
such purpose, it shall be discharged from such trust.


 


Section 11.07  Other Repurchases.  The Company may, from time to time, at its
option (and nothing contained in this Indenture shall limit the Company’s right
to), repurchase the Securities in open market purchases or negotiated
transactions, without any prior notice to any Holders, provided that in exercising
its right under this Section 11.07, the Company complies with all
applicable federal and state securities laws.


 


ARTICLE
XII


 


OFFER TO PURCHASE UPON A FUNDAMENTAL
CHANGE


 


Section 12.01  Offer to Purchase Upon a Fundamental
Change.


 


(a)  General.  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 (a “Fundamental Change Purchase Offer”) on the
Fundamental Change Purchase Date all outstanding Securities in integral
multiples of $1,000 Principal Amount at a price equal to the Principal Amount
of the Securities to be purchased plus accrued but unpaid interest, including
Additional Interest Amounts and Additional Amounts, if any (the “Fundamental Change Purchase Price”), up to
but excluding the Fundamental Change Purchase Date, subject to satisfaction by
or on behalf of any Holder of the requirements set forth in Section 12.01(c).  The “Fundamental
Change Purchase Date” shall be a date specified by the Company that
is no later than the 30th calendar day following the date of the
Fundamental Change Notice.


 


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


 


The Company shall mail to the Trustee, the
Co-Trustee and each Holder 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 in accordance with Section 12.01(b).


 


A “Fundamental
Change” shall be deemed to have occurred at the time after the
Securities are originally issued that any of the following occurs:


 


60

















 


(i) 
a “person” or “group” within the meaning of Section 13(d) of the
Exchange Act, other than the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or any such Subsidiary, files a Schedule
13D, Schedule TO or any other schedule, form or report under the Exchange Act
or applicable Canadian Securities Laws disclosing that such person or group has
become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act or applicable Canadian Securities Laws, of Common Equity
of the Company representing more than 50% of the voting power of the Company’s
Common Equity entitled to vote generally in the election of directors, unless
such beneficial ownership arises as a result of a revocable proxy delivered in
response to a public proxy or consent solicitation made pursuant to the
applicable rules and regulations under the Exchange Act or applicable
Canadian Securities Laws; provided
that no person or group shall be deemed to be the beneficial owner of any
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such person or group until such tendered securities are accepted for
purchase or exchange under such offer;


 


(ii) 
consummation of any share exchange, consolidation, amalgamation, merger,
statutory arrangement or other similar combination involving the Company
pursuant to which the Common Shares will be converted into cash, securities or
other property or any sale, lease or other transfer in one transaction or a
series of related transactions of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, taken as a whole, to any Person
other than one of the Company’s wholly-owned Subsidiaries; provided, however,
that a transaction where the holders of more than 50% of all classes of the
Company’s Common Equity immediately prior to such transaction own, directly or
indirectly, more than 50% of all classes of Common Equity of the continuing or
surviving corporation or transferee or the parent thereof immediately after
such event shall not be a Fundamental Change;


 


(iii) 
Continuing Directors cease to constitute at least a majority of the Company’s
Board of Directors; or


 


(iv) 
the shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.


 


A Fundamental Change will not be deemed to
have occurred, however, if at least 90% of the consideration, excluding cash
payments for fractional shares, in the transaction or transactions otherwise
constituting the Fundamental Change consists of common shares or American
Depositary Shares that are traded or listed on, or immediately after the
transaction or event will be traded or listed on a U.S. national securities
exchange or the Toronto Stock Exchange.


 


(b)  Notice
of Fundamental Change. 
Within 30 calendar days after the occurrence of a Fundamental Change,
the Company shall mail the Fundamental Change Notice by first-class mail to the
Trustee, the Co-Trustee and each Holder of Securities at its address shown in
the Security Register (and to beneficial owners as required by applicable law).  The Fundamental Change Notice shall include a
form of Fundamental Change purchase notice (the “Fundamental
Change Purchase Notice”) to be completed by the Holder and shall
state:


 


61

















 


(i) 
the events causing a Fundamental Change and the expected date of such
Fundamental Change;


 


(ii) 
that a Fundamental Change Purchase Offer is being made pursuant to Article XII
and that all Securities validly tendered and not withdrawn will be purchased
pursuant to the terms of such Article XII;


 


(iii) 
the date by which the Fundamental Change Purchase Notice pursuant to this Section 12.01
must be delivered to the Paying Agent in order for a Holder to accept the
Fundamental Change Purchase Offer;


 


(iv) 
the Fundamental Change Purchase Date;


 


(v) 
the Fundamental Change Purchase Price;


 


(vi) 
the name and address of the Paying Agent and the Conversion Agent;


 


(vii) 
the conversion rights, if any, of the Securities;


 


(viii) 
the Conversion Rate for conversion of the Securities applicable on the
Fundamental Change Purchase Date;


 


(ix) 
(A) that Securities as to which a Fundamental Change Purchase Notice has
been given may be converted pursuant to Article XIII hereof only if the
Fundamental Change Purchase Notice has been withdrawn in accordance with the
provisions of Section 12.02 and (B) the procedures for withdrawing a
Fundamental Change Purchase Notice;


 


(x) 
that Securities must be surrendered to the Paying Agent for cancellation to
collect payment of the Fundamental Change Purchase Price;


 


(xi)  that the Fundamental Change Purchase Price
for any Security as to which a Fundamental Change Purchase Notice has been duly
given and not withdrawn will be paid promptly following the later of the
Fundamental Change Purchase Date and the time of surrender of such Security as
described in clause (x) of this Section 12.01;


 


(xii)  the procedures the Holder must follow to
exercise rights under this Section 12.01;


 


(xiii)  the CUSIP number or numbers of the
Securities; and


 


(xiv)  any other information the Company wants to
present.


 


At the Company’s request, the Trustee or the
Co-Trustee shall give such Fundamental Change Company Notice in the Company’s
name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental
Change Company Notice shall be prepared by the Company.


 


62

















 


(c)  Fundamental
Change Purchase Notice.  To accept
the Fundamental Change Purchase Offer, a Holder of Securities must deliver to
the Company (if the Company is acting as its own Paying Agent), or to a Paying
Agent designated by the Company for such purpose in the Fundamental Change
Notice and the Trustee and the Co-Trustee, at least two Business Days prior to
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 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 on the back of the Securities.


 


Such notice shall state, among other things (A) that
if certificated Securities have been issued, the certificate numbers (or, if
the Securities are not certificated, the notice must comply with the Depositary’s
procedures), (B) the portion of the principal amount of Securities to be
purchased, which must be in $1,000 multiples, and (C) that the Securities
are to be purchased by the Company pursuant to the applicable provisions of the
Securities and the Indenture.


 


The delivery of such Security to the Paying
Agent with, or at any time after delivery of, the Fundamental Change Purchase
Notice (together with all necessary endorsements) at the offices of the Paying
Agent shall be a condition to the receipt by the Holder of the Fundamental
Change Purchase Price therefor; provided, however,
that such purchase price shall be so paid pursuant to this Section 12.01
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Fundamental Change
Purchase Notice.


 


The Company shall purchase from the Holder
thereof, pursuant to this Section 12.01, a portion of a Security, so long
as the Principal Amount of such portion is $1,000 or an integral multiple
thereof.  Provisions of this Indenture
that apply to the repurchase of all of a Security also apply to the repurchase
of such portion of such Security.


 


Any purchase by the Company contemplated
pursuant to the provisions of this Section 12.01 shall be consummated by
the delivery of the Fundamental Change Purchase Price to be received by the
Holder promptly following the later of the Fundamental Change Purchase Date and
the time of delivery of the Security; provided, however, that if the Fundamental Change Purchase Notice is
delivered after a date which is two Business Days prior to the Fundamental
Change Purchase Date, such payment may be made as promptly after such
Fundamental Change Purchase Date as is practicable.


 


Notwithstanding anything contained herein to
the contrary, any Holder delivering to the Paying Agent the Fundamental Change
Purchase Notice contemplated by this Section 12.01(c) shall have the
right to withdraw such Fundamental Change Purchase Notice at any time prior to
the close of business on the Fundamental Change Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 12.02.


 


63

















 


The Paying Agent shall promptly notify the
Company of the receipt by it of any Fundamental Change Purchase Notice or
written notice of withdrawal thereof.


 


Section 12.02  Effect of Fundamental Change Purchase
Notice.  Upon receipt by the Paying
Agent of the Fundamental Change Purchase Notice specified in Section 12.01(c),
the Holder of the Security in respect of which such Fundamental Change Purchase
Notice was given shall (unless such Fundamental Change Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Fundamental Change Purchase Price with respect to such
Security.  Such Fundamental Change
Purchase Price shall be paid to such Holder, subject to receipt of funds and/or
Securities by the Paying Agent, promptly following the later of (a) the
Fundamental Change Purchase Date with respect to such Security (provided, the conditions in Section 12.01(c) have
been satisfied) and (b) the time of book-entry transfer or delivery of
such Security to the Paying Agent by the Holder thereof in the manner required
by Section 12.01(c).  Securities in
respect of which a Fundamental Change Purchase Notice has been given by the
Holder thereof may not be converted pursuant to Article XIII hereof on or
after the date of the delivery of such Fundamental Change Purchase Notice
unless such Fundamental Change Purchase Notice has first been validly withdrawn
as specified in the following two paragraphs.


 


A Fundamental Change Purchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent in accordance with the procedures set forth in the Fundamental
Change Company Notice at any time prior to the close of business on the
Fundamental Change Purchase Date specifying:


 


(i) 
the Principal Amount of the Security with respect to which such notice of withdrawal
is being submitted;


 


(ii) 
the certificate number, if any, of the Physical Security in respect of which
such notice of withdrawal is being submitted (if the Security is a Global
Security, the withdrawal notice must comply with the Applicable Procedures);
and


 


(iii) 
the Principal Amount, if any, of such Security which remains subject to the
original Fundamental Change Purchase Notice and which has been or will be
delivered for repurchase by the Company.


 


There shall be no purchase of any Securities
pursuant to Section 12.01 if there has occurred (prior to, on or after, as
the case may be, the giving, by the Holders of such Securities, of the required
Fundamental Change Purchase Notice) and is continuing an Event of Default
(other than an Event of Default that is cured by the payment of the Fundamental
Change Purchase Price with respect to such Securities).  The Paying Agent will promptly return to the
respective Holders any Securities (A) with respect to which a Fundamental
Change Purchase Notice has been withdrawn in compliance with this Indenture, or
(B) held by it during the continuance of an Event of Default (other than a
default in the payment of the Fundamental Change Purchase Price with respect to
such Securities) in which case, upon such return, the Fundamental Change
Purchase Notice with respect thereto shall be deemed to have been withdrawn.


 


Section 12.03  Deposit of Fundamental Change Purchase
Price.  Prior to 10:00 a.m., 


 


64

















 


New York City time, on the Business Day following the Fundamental
Change Purchase Date, the Company shall deposit with the Paying Agent an amount
of cash (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Fundamental Change Purchase Price of all
Securities (or portions thereof) to be redeemed on the Fundamental Change
Purchase Date, other than Securities or portions of Securities called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee or the Co-Trustee for cancellation or have been converted.


 


If, on the Business Day following the Fundamental Change Purchase Date,
the Paying Agent holds, in accordance with the terms of this Indenture, cash
sufficient to pay the Fundamental Change Purchase Price of any Securities for
which a Fundamental Change Purchase Notice has been tendered and not withdrawn
pursuant to Section 12.02, then, effective as of the Fundamental Change
Purchase Date, such Securities 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), and
the rights of the Holders in respect thereof shall terminate (other than the
right to receive the Fundamental Change Purchase Price upon delivery of such
Securities).  Nothing herein shall
preclude the withholding of any taxes required by law to be withheld or deducted.


 


Section 12.04  Security Purchased in Part.  Any Security which is to be purchased only in
part shall be surrendered at the office of the Paying Agent and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal
to, and in exchange for, the portion of the Principal Amount of the Security so
surrendered which is not purchased.


 


Section 12.05  Covenant to Comply with Securities Laws
upon Repurchase of Securities.  In
connection with any offer to repurchase Securities under Section 12.01 (provided that such
offer or repurchase constitutes an “issuer tender offer” for purposes of Rule 13e-4
(which term, as used herein, includes any successor provision thereto) under
the Exchange Act at the time of such offer or purchase), and subject to any
exemptions under applicable law, the Company shall (a) comply with Rule 13e-4
and Rule 14e-1 (or any successor provision) under the Exchange Act, (b) file
the related Schedule TO (or any successor schedule, form or report) under the
Exchange Act, (c) otherwise comply with all U.S. federal and state
securities laws so as to permit the rights and obligations under Section 12.02
to be exercised in the time and in the manner specified in Section 12.02
and (d) comply with any applicable Canadian Securities Laws which may then
be applicable in the event of a fundamental change.


 


To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Article XII, the Company’s compliance
with such laws and regulations including the extension of the payment or notice
periods contemplated by this Article XII, shall not in and of itself cause
a breach of their obligations under this Article XII.


 


Section 12.06  Repayment to the Company.  To the extent that the aggregate amount of
cash deposited by the Company pursuant to Section 12.03 exceeds the
aggregate Fundamental Change Purchase Price of the Securities or portions
thereof which the Company is obligated to purchase as of the Fundamental Change
Purchase Date, then, promptly after the Fundamental Change Purchase Date, 


 


65

















 


the Paying Agent shall return any such excess to the Company.  If such money is then held by the Company or
an Affiliate of the Company in trust and is not required for such purpose, it
shall be discharged from such trust.


 


ARTICLE
XIII


 


CONVERSION


 


Section 13.01  Right to Convert.


 


(a)  Subject to, and upon compliance
with, the provisions of this Indenture, each Holder shall have the right, at
such Holder’s option, at any time following the Issue Date of the Securities
hereunder through prior to the close of business on the Business Day
immediately preceding the Stated Maturity (or such earlier Fundamental Change
Purchase Date or Redemption Date as may be applicable) to convert the Principal
Amount of any such Securities, or any portion of such Principal Amount which is
in a denomination of $1,000 or an integral multiple thereof, at the Conversion
Rate then in effect, subject to prior repurchase or redemption of the
Securities, under any of the following circumstances:


 


(i) 
Conversion Upon Satisfaction of Market Price
Condition.  A Holder may
surrender all or a portion of its Securities for conversion during any fiscal
quarter (and only during such fiscal quarter) commencing after June 30,
2009, and prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Stated Maturity, if the Closing Sale Price of the
Common Shares is greater than or equal to 130% of the applicable Conversion
Price then in effect for at least 20 Trading Days during the period of the 30
consecutive Trading Days ending on, and including, the last Trading Day of the
preceding fiscal quarter.


 


(ii) 
Conversion Upon Satisfaction of Trading
Price Condition.  A Holder may
surrender all or a portion of its Securities during the five Business Day
period immediately following a five consecutive Trading Day period (the “Measurement Period”) in which the Trading
Price, as determined following a request by a Holder in accordance with the
procedures described herein, for each Trading Day of such Measurement Period
was less than 98% of the product of the Closing Sale Price of the Common Shares
on such Trading Day and the applicable Conversion Rate in effect on such
Trading Day.  In connection with any
potential conversion pursuant to this Section 13.01(a)(ii), the Bid Solicitation
Agent shall have no obligation to determine the Trading Price unless the
Company has requested such determination, and the Company shall have no
obligation to request such determination unless a Holder has provided the
Company with reasonable evidence that the Trading Price would be less than 98%
of the product of the Closing Sale Price of the Common Shares and the
applicable Conversion Rate.  At such time
as the Company has determined that a Holder has provided such evidence to the
Company, the Company shall instruct the Bid Solicitation Agent to determine the
Trading Price beginning on the next Trading Day and on each successive Trading
Day until the Trading Price is greater than or equal to 98% of the product of
the Closing Sale Price of the Common Shares and the applicable Conversion
Rate.  After receiving from a Holder any
materials that purport to constitute such “reasonable evidence,” the Company 


 


66

















 


shall promptly determine
whether such material does constitute “reasonable evidence” for purposes of
this clause (ii); provided that
absent manifest error, the Company’s determination shall be binding and
final.  The Company shall not be
obligated to give any instructions to the Bid Solicitation Agent until the
Company has completed its determination, which it shall do promptly.


 


(iii) 
Conversion Upon Notice of Redemption.  A Holder of may convert all or a portion of
its Securities at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Redemption Date, if such Security has
been called for redemption pursuant to Article III or Article XI
hereof, after which time the Holder’s right to convert the Securities will
expire unless the Company defaults on the payment of the Redemption Price.


 


(iv) 
Conversion Upon Specified Corporate
Transactions.  If the Company
becomes a party to a transaction in clause (b) of the definition of
Fundamental Change (without giving effect to the last paragraph in Section 12.01(a)),
the Company shall notify Holders at least 30 calendar days prior to the
anticipated effective date for such transaction (or shall otherwise provide a
Fundamental Change Chance Notice as provided in Section 12.01(b), if
applicable).  Upon receipt of such notice,
a Holder may surrender its Securities for conversion at any time until 45
calendar days after the actual effective date of such transaction (or if such
transaction also constitutes a Fundamental Change, the related Fundamental
Change Purchase Date).  In addition, a
Holder may surrender all or a portion of its Securities for conversion if a
Fundamental Change of the type described in clauses (a), (c) or (d) of
the definition of Fundamental Change occurs. 
In such event, a Holder may surrender Securities for conversion at any
time beginning on the actual effective date of such Fundamental Change until
and including the date which is 30 calendar days after the actual effective
date of such Fundamental Change or, if later, the Fundamental Change Purchase Date
corresponding to such Fundamental Change. 
If the transaction also constitutes a Fundamental Change, the Company
shall be required, subject to certain conditions, to offer to purchase for cash
all of a Holder’s Securities in accordance with Article XII.  Notwithstanding the foregoing, a Security in
respect of which a Holder has delivered a Fundamental Change Purchase Notice
may be converted only if such Fundamental Change Repurchase Notice is withdrawn
in accordance with Article XII prior to the close of business on the
Fundamental Change Purchase Date.


 


(v) 
Conversion at Stated Maturity.  A Holder may surrender all or a portion of
its Securities at any time during the period beginning 25 Trading Days before
the Stated Maturity and until 5:00 p.m., New York City time, on the
Business Day immediately preceding the Stated Maturity.


 


(b)  In the event of the occurrence of
any of the events in clauses (i), (ii) and (iv) of Section 13.02(a),
the Company shall provide prompt written notice in the form of an Officers’
Certificate of such event to the Trustee, the Co-Trustee and the Conversion
Agent.


 


Section 13.02  Conversion Procedure.


 


(a)  Each Security shall be convertible
at the office of the Conversion Agent.


 


67

















 


(b)  In order to exercise the conversion
privilege with respect to any Securities in certificated form, the Holder of
any such Securities to be converted, in whole or in part, shall:


 


(i) 
complete and manually sign the conversion notice provided on the back of the
Security (the “Conversion Notice”)
or facsimile of the Conversion Notice and deliver such Conversion Notice, which
shall be irrevocable, to the Conversion Agent;


 


(ii) 
surrender the Security to the Conversion Agent;


 


(iii) 
furnish appropriate endorsements and transfer documents, if required;


 


(iv) 
pay any transfer or similar tax, if required pursuant to Section 13.07 or
otherwise; and


 


(v) 
pay funds equal to interest, including Additional Interest Amounts and
Additional Amounts, if any, payable on the next Interest Payment Date to which
such Holder is not entitled.


 


The date on which the Holder satisfies all of
the requirements set forth in clauses (i) through (v) above is
the “Conversion Date.”  Such Conversion Notice shall also state the
name or names (with address or addresses) in which any certificate or
certificates for Common Shares which shall be issuable on such conversion shall
be issued.  All such Securities
surrendered for conversion shall, unless the Common Shares issuable on conversion
are to be issued in the same name as the registration of such Securities, be
duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the Holder or its duly authorized
attorney.


 


In order to exercise the conversion privilege
with respect to any interest in Securities in global form, the Holder must
complete the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, furnish appropriate endorsements
and transfer documents if required by the Company, the Trustee, the Co-Trustee
or Conversion Agent, and pay the funds, if any, required to be paid under Section 13.02(b)(v) and
any transfer or similar taxes required pursuant to Section 13.07 or otherwise.


 


(c)  As promptly as practicable after
the later of (i) the Conversion Date (but in no event later than five
Business Days after the Conversion Date) or (ii) the date all the
calculations necessary to make such payment and delivery have been made (but in
no event later than as specified in Section 13.03), subject to compliance
with any restrictions on transfer if Common Shares issuable on conversion are
to be issued in a name other than that of the Holder (as if such transfer were
a transfer of the Securities (or portion thereof) so converted), the Company
shall issue and shall deliver to such Holder at the office of the Conversion
Agent, a check or cash and a certificate or certificates for the number of full
Common Shares issuable in accordance with the provisions of this Article XIII,
if applicable.  In case any Securities of
a denomination greater than $1,000 shall be surrendered for partial conversion,
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of the Securities so surrendered, without charge to him, new Securities
in authorized denominations in an aggregate Principal Amount equal to the
unconverted portion of the surrendered Securities.


 


68

















 


Each conversion shall be deemed to have been
effected as to any such Securities (or portion thereof) on the date on which
the requirements set forth above in this Section 13.02 have been satisfied
as to such Securities (or portion thereof), and the person in whose name any
certificate or certificates for Common Shares shall be issuable upon such
conversion shall be deemed to have become on said date the Holder of record of
the Common Shares represented thereby; provided, however,
that in case of any such surrender on any date when the stock transfer books of
the Company shall be closed, the person or persons in whose name the
certificate or certificates for such Common Shares are to be issued shall be
deemed to have become the record holder thereof for all purposes on the next
day on which such stock transfer books are open, but such conversion shall be
at the Conversion Price in effect on the date upon which such Securities shall
be surrendered.


 


(d)  Upon the conversion of an interest
in Global Securities, the Trustee or the Co-Trustee (or any other Conversion
Agent appointed by the Company) shall make a notation on such Global Securities
as to the reduction in the Principal Amount represented thereby. The Company
shall notify the Trustee and the Co-Trustee in writing of any conversions of
Securities effected through any Conversion Agent other than the Trustee or the
Co-Trustee.


 


(e)  Unless the Company shall provide
otherwise, each share certificate representing Common Shares issued upon
conversion of the Securities that contain the Private Placement Legend or the
Canadian Private Placement Legend shall bear the applicable legends in
substantially the form of Exhibit C hereto.


 


Section 13.03  Company to Deliver Common Shares, Cash or
Combination Thereof.


 


(a)  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 as set forth below in lieu of
delivering only Common Shares.  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.


 


The Company will give notice of its election
to deliver part or all of the conversion consideration in cash to the Holder
converting the Securities within two Business Days following the Company’s
receipt of the Holder’s notice of conversion. 
To the extent such election differs from the most recent election
previously provided to the Trustee, the Co-Trustee or the Conversion Agent, the
Company shall also notify the Trustee, the Co-Trustee or the Conversion Agent,
as applicable, of such election.  The
amount of cash to be delivered per Security will be equal to the number of
Common Shares in respect of which the cash payment is being made multiplied by
the average of the Daily VWAP prices of the Common Shares for the 20 trading
days commencing one day after (i) the date of the Company’s notice of
election to deliver all or part of the conversion consideration in cash if it
has not given a Redemption Notice, (ii) the conversion date, in the case
of conversion following a Notice of Redemption by the Company specifying the
Company’s intention to deliver cash upon conversion for conversions following
the Redemption Notice or (iii) the 22nd scheduled Trading Day prior to the
Stated Maturity, in the case of conversion during the period beginning 25
Trading Days before the Stated Maturity.


 


69














 


If the Company elects to deliver cash in lieu
of some or all of the Common Shares issuable upon conversion, it will make the
payment, including delivery of the Common Shares, through the Conversion Agent,
to Holders surrendering Securities no later than the 14th Business Day
following the Conversion Date. 
Otherwise, the Company will deliver the Common Shares, together with any
cash payment for fractional shares, as described below, through the Conversion
Agent no later than the fifth business day following the Conversion Date.


 


The Company may not deliver cash in lieu of
any Common Shares issuable upon a Conversion Date (other than in lieu of
fractional shares) if there has occurred and is continuing an Event of Default
under the Indenture, other than an Event of Default that is cured by the
payment of the conversion consideration.


 


If the Company calls Securities for
redemption, a Holder may convert the Securities only until 5:00 p.m., New
York City time, on the Business Day immediately preceding the Redemption Date
unless the Company fails to pay the Redemption Price.  Subject to Section 13.02, if a Holder
has submitted Securities for purchase upon a Fundamental Change, such Holder
may convert such Securities only if such Holder withdraws the purchase election
made by such Holder prior to conversion.


 


Upon conversion, a Holder will not receive
any separate cash payment for accrued and unpaid interest and Additional
Interest Amounts or Additional Amounts, if any, unless such conversion occurs
between a Regular Record Date and the Interest Payment Date to which it
relates.  The Company will not issue
fractional Common Shares upon conversion of Securities.  Instead, the Company will pay cash in lieu of
fractional shares based on the Closing Sale Price of the Common Shares on the
Trading Day immediately prior to the Conversion Date.


 


The Company’s delivery to the Holder of
Common Shares, cash, or a combination of cash and Common Shares, as applicable,
together with any cash payment for any fractional share, into which a Security
is convertible, will be deemed to satisfy the Company’s obligation to pay:


 


(i) 
the principal amount of the Security; and


 


(ii) 
accrued and unpaid interest and Additional Interest Amounts or Additional
Amounts, if any, to, but not including, the Conversion Date.


 


Accrued and unpaid interest and Additional
Interest Amounts or Additional Amounts, if any, to, but not including, the
Conversion Date will be deemed to be paid in full rather than cancelled,
extinguished or forfeited.


 


(b)  Notwithstanding anything to the
contrary in this Article XIII, if Securities are converted after 5:00 p.m.,
New York City time, on a Regular Record Date, Holders of such Securities at
5:00 p.m., New York City time, on such Regular Record Date will receive
the interest and Additional Interest Amounts or Additional Amounts, if any,
payable on such Securities on the corresponding Interest Payment Date
notwithstanding the conversion. 
Securities 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 must be accompanied by
payment of an amount equal to the interest 


 


70

















 


(including Additional Interest Amounts or Additional Amounts, if any)
payable on the Securities so converted on such corresponding Interest Payment
Date; provided that no such payment need be
made:


 


(i) 
if the Company has specified a Redemption Date that is after a Regular Record
Date and on or prior to the corresponding Interest Payment Date;


 


(ii) 
if the Company has specified a Fundamental Change Purchase Date that is after a
Regular Record Date and on or prior to the corresponding Interest Payment Date;
or


 


(iii) 
to the extent of any overdue interest, if any overdue interest exists at the
time of Conversion with respect to such Security.


 


If a Holder converts Securities, the Company
will pay any documentary, stamp or similar issue or transfer tax due on the issue
of any of its Common Shares upon the conversion, unless the tax is due because
the Holder requests any shares to be issued in a name other than the Holder’s
name, in which case the Holder will pay such tax.


 


(c)  [Reserved.]


 


(d)  The Company will not issue
fractional Common Shares upon conversion of Securities.  If multiple Securities shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate Principal Amount of the Securities (or specified portions thereof to
the extent permitted hereby) so surrendered. 
If any fractional Common Share would be issuable upon the conversion of
any Securities, the Company shall make payment therefor in cash equal to the
fraction of a Common Share otherwise issuable multiplied by the Current Market
Price to the Holder of such Securities.


 


Section 13.04  Conversion Rate Adjustments.  The Conversion Rate shall be adjusted from
time to time by the Company as follows, except that the Company shall not make
any adjustment to the Conversion Rate if Holders may participate, as a result
of holding the Securities, in the transaction described below without having to
convert their Securities.


 


(a)  If the Company, at any time or from
time to time while any of the Securities are outstanding, pays a dividend or
makes a distribution in Common Shares to all holders of its outstanding Common
Shares, or if the Company subdivides or combines its Common Shares, then the Conversion
Rate will be adjusted based on the following formula:


 





 


where,


 


71

















 


CR0         =     the Conversion
Rate in effect immediately prior to the Ex-Dividend Date of such dividend or
distribution or the effective date of such subdivision or combination, as
applicable


 


CR'          =     the Conversion Rate in
effect immediately after such Ex-Dividend Date or effective date, as applicable


 


OS0         =     the number of
Common Shares outstanding immediately prior to such Ex-Dividend Date or
effective date, as applicable


 


OS'          =     the number of Common Shares
outstanding immediately prior to such Ex-Dividend Date or effective date, as
applicable, after giving pro forma effect to such dividend, distribution,
subdivision or combination


 


Such adjustment shall become effective
immediately after 9:00 a.m., New York City time, on the Business Day
following the Record Date for such dividend or distribution, or the date fixed
for determination for such Common Share subdivision or combination.  If any dividend or distribution of the type
described in this Section 13.04(a) is declared but not so paid or
made, the Conversion Rate shall again be adjusted to the Conversion Rate which
would then be in effect if such dividend or distribution had not been declared.


 


(b)  If the Company, at any time or from
time to time while any of the Securities are outstanding, distributes to
holders of all or substantially all of its outstanding Common Shares certain rights
or warrants to purchase Common Shares at a price per Common Share less than the
Closing Sale Price of the Common Shares on the Record Date for shareholders
entitled to receive such rights and warrants, which rights or warrants are
exercisable for not more than 60 days, the Conversion Rate shall be adjusted
based on the following formula (provided
that the Conversion Rate shall be readjusted to the extent that such rights or
warrants are not exercised prior to their expiration):


 





 


where,


 


CR0         =     the Conversion
Rate in effect immediately prior to the Ex-Dividend Date of such distribution


 


CR'          =     the Conversion Rate in
effect immediately after such Ex-Dividend Date


 


OS0          =    the number of Common Shares outstanding immediately
after such Ex-Dividend Date


 


72

















 


X             =     the total number of Common
Shares issuable pursuant to such rights or warrants


 


Y             =     the number of Common Shares
equal to the quotient of (a) the aggregate price payable to exercise all
such rights or warrants and (b) the average of the Closing Sale Price of
the Common Shares for the 10 consecutive Trading Days ending on the Trading Day
immediately preceding the date of announcement for the issuance of such rights
or warrants


 


Such adjustment shall become effective
immediately after 9:00 a.m., New York City time, on the Business Day
following the date of announcement of the issuance of such rights or warrants.


 


To the extent that Common Shares are not
delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of the delivery
of only the number of Common Shares actually delivered.  In the event that such rights or warrants are
not so issued, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would then be in effect if the date fixed for the determination of
shareholders entitled to receive such rights or warrants had not been
fixed.  In determining whether any rights
or warrants entitle the holders to subscribe for or purchase Common Shares at
less than such Closing Sale Price, and in determining the aggregate offering
price of such Common Shares, there shall be taken into account any
consideration received for such rights or warrants and any amount payable on
exercise or conversion thereof, the value of such consideration, if other than
cash, to be determined in good faith by the Board of Directors of the Company.


 


For the purposes of this Section 13.04(c),
rights or warrants distributed by the Company to all holders of the Common
Shares entitling them to subscribe for or purchase shares of the Company’s
Capital Stock (either initially or under certain circumstances), which rights
or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be
transferred with such Common Shares; (ii) are not exercisable; and (iii) are
also issued in respect of future issuances of Common Shares, shall be deemed
not to have been distributed for purposes of this Section 13.04(c) (and
no adjustment to the Conversion Price under this Section 13.04(c) will
be required) until the occurrence of the earliest Trigger Event, whereupon such
rights and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Rate shall be made under this
Section 13.04(c).  If any such right
or warrant, including any such existing rights or warrants distributed prior to
the date of this Indenture, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
record date with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without exercise
by any of the holders thereof). In addition, in the event of any distribution
(or deemed distribution) of rights or warrants, or any Trigger Event or other
event (of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Rate under this Section 13.04(c) was
made, (A) in the case of any 


 


73

















 


such rights or warrants which
shall all have been redeemed or purchased without exercise by any holders
thereof, the Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case
may be, as though it were a cash distribution, equal to the per share
redemption or purchase price received by a holder of Common Shares with respect
to such rights or warrants (assuming such holder had retained such rights or
warrants), made to all applicable holders of Common Shares as of the date of
such redemption or repurchase, and (B) in the case of such rights or
warrants which shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.


 


(c)  If the Company, at any time or from
time to time while the Securities are outstanding, distributes to holders of
all or substantially of the Common Shares, Common Shares, evidences of
indebtedness or assets or property, including securities, but excluding:


 


(i) 
dividends or distributions referred to in Section 13.04(a);


 


(ii) 
rights or warrants referred to in Section 13.04(c); and


 


(iii) 
dividends or distributions paid exclusively in cash;


 


then the Conversion Rate shall be adjusted based on
the following formula:


 





 


where,


 


CR0         =     the Conversion Rate in
effect immediately prior to the Ex-Dividend Date for such distribution


 


CR'          =     the Conversion Rate in
effect immediately after such Ex-Dividend Date


 


SP0          =     the Current Market Price of the Common Shares on the
Trading Day immediately preceding such Ex-Dividend Date


 


FMV       =     the fair market value (as determined by the Board of
Directors of the Company) of the Common Shares, evidences of indebtedness,
assets or property distributed with respect to each outstanding Common Share on
the Record Date for such distribution


 


Such adjustment shall become effective
immediately prior to 9:00 a.m., New York City time, on the Business Day
following the Record Date for such distribution.  If the Board of Directors of the Company
determines the fair market value of any distribution for 


 


74

















 


purposes of this Section 13.04(c) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Shares.


 


To the extent that the Company has a rights
plan in effect upon conversion of the Securities into Common Shares, a Holder
shall receive, in addition to the Common Shares, the rights under the rights
plan unless such rights are in respect of Ineligible Consideration or such
rights have separated from the Common Shares at the time of conversion, in
which case the Conversion Rate will be adjusted as if the Company distributed
to all holders of Common Shares, Common Shares, evidences of indebtedness or
assets or property as described in this Section 13.04(c), subject to
readjustment in the event of the expiration, termination or redemption of such
rights.


 


With respect to an adjustment pursuant to
this Section 13.04(c) where there has been a payment of a dividend or
other distribution on the Common Shares or common shares of any class or
series, or similar equity interest, of or relating to a Subsidiary or other
business unit (a “Spin-Off”), the
Conversion Rate in effect immediately before 5:00 p.m., New York City
time, on the effective date of the Spin-Off shall be increased based on the
following formula in lieu of the formula above:


 





 


where,


 


CR0         =     the Conversion
Rate in effect immediately prior to 5:00 p.m., New York City time, on the
effective date of the Spin-Off


 


CR'          =     the Conversion Rate in
effect immediately after the effective date of the Spin-Off


 


FMV0     =     the average of
the Closing Sale Prices of the Common Shares or similar equity interest
distributed to holders of Common Shares applicable to one Common Share over the
10 consecutive Trading-Day period commencing on, and including, the effective
date of the Spin-Off


 


MP0        =     the average of
the Closing Sale Prices of the Common Shares over the 10 consecutive
Trading-Day period commencing on, and including, the effective date of the
Spin-Off


 


The adjustment to the Conversion Rate under
the preceding paragraph will occur on the 10th Trading Day from, and including,
the effective date of the Spin-Off and shall be applied on a retroactive basis
from, and including, the effective date of the Spin-Off; provided
that in respect of any conversion occurring prior to the effective date of the
Spin-Off with respect to which the settlement date would occur during the 10
Trading Days from, and including, the 


 


75

















 


effective date of any
Spin-Off, references with respect to the Spin-Off to the 10 consecutive
Trading-Day period shall be deemed replaced with such lesser number of Trading
Days as have elapsed between the effective date of such Spin-Off and the
settlement date in determining the applicable Conversion Rate; provided, further, that
in respect of any conversion occurring prior the effective date of the Spin-Off
with respect to which the settlement date would occur during the three Trading
Days from, and including, the effective date of such Spin-Off, references to
the 10 consecutive Trading-Day period shall be deemed replaced with a three
consecutive Trading-Day period with such adjustment to the Conversion Rate
being applied on a retroactive basis from, and including, the effective date of
the Spin-Off.


 


(d)  (i)   If any regular,
quarterly cash dividend or distribution made to all or substantially all
holders of Common Shares is in excess of $0.09 per Common Share (the “Initial Dividend Threshold”), the
Conversion Rate shall be adjusted based on the following formula:


 





 


where,


 


CR0         =     the Conversion
Rate in effect immediately prior to the Ex-Dividend Date for such dividend or
distribution


 


CR'          =     the Conversion Rate in
effect immediately after such Ex-Dividend Date


 


SP0          =     the Current
Market Price of the Common Shares on the Trading Day immediately preceding such
Ex-Dividend Date


 


C             =     the amount in cash per share
the Company distributes to holders of Common Shares in excess of the Initial
Dividend Threshold


 


The Initial Dividend Threshold is subject to
adjustment in a manner inversely proportional to adjustments to the Conversion
Rate; provided, that no adjustment will be
made to the dividend threshold amount for any adjustment made to the Conversion
Rate under this Section 13.04(d)(i)or Section 13.04(d)(ii).


 


(ii) 
If any cash dividend or distribution that is not a regular, quarterly cash
dividend or distribution is made to all or substantially all holders of Common
Shares, the Conversion Rate shall be adjusted based on the following formula:


 





 


76

















 


where,


 


CR0         =     the Conversion
Rate in effect immediately prior to the Ex-Dividend Date for such dividend or
distribution


 


CR'          =     the Conversion Rate in
effect immediately after such Ex-Dividend Date


 


SP0          =     the Current
Market Price of the Common Shares on the Trading Day immediately preceding such
Ex-Dividend Date


 


C             =     the amount in cash per share
the Company distributes to holders of Common Shares


 


(e)  If the Company or any of its
Subsidiaries makes a payment in respect of a tender or exchange offer for the
Common Shares, to the extent that the cash and value of any other consideration
included in the payment per Common Share exceeds the Closing Sale Price of the
Common Shares on the Trading Day next succeeding the last date on which tenders
or exchanges may be made pursuant to such tender or exchange offer, the
Conversion Rate shall be increased based on the following formula:


 





 


where,


 


CR0         =     the Conversion
Rate in effect immediately prior to the effective date of the adjustment


 


CR'          =     the Conversion Rate in
effect immediately after the effective date of the adjustment


 


AC          =     the fair market value (as
determined by the Board of Directors) of the aggregate consideration paid or
payable for shares accepted for purchase or exchange in such tender or exchange
offer


 


OS0          =    the number of Common Shares outstanding on the
Trading Day immediately preceding the date such tender or exchange offer
expires


 


OS'          =     the number of Common Shares
outstanding less any Common Shares accepted for purchase or exchange in the
tender or exchange offer at the time such tender or exchange offer expires


 


77

















 


SP'           =     the Current Market Price of
the Common Shares on the Trading Day next succeeding the date such tender or
exchange offer expires


 


The adjustment to the Conversion Rate under
this Section 13.04(e) shall occur on the 10th Trading Day from, and
including, the Trading Day next succeeding the date such tender or exchange
offer expires and shall be applied on a retroactive basis from, and including,
the Trading Day next succeeding the date such tender or exchange offer expires;
provided that in respect of any
conversion occurring prior to the date such tender or exchange offer expires
with respect to which the settlement date would occur during the 10 Trading
Days from, and including, the Trading Day next succeeding the date such tender
or exchange offer expires, references with respect to the tender or exchange
offer to the 10 consecutive Trading-Day period shall be deemed replaced with
such lesser number of Trading Days as have elapsed between the Trading Day next
succeeding the date such tender or exchange offer expires and the settlement
date in determining the applicable Conversion Rate.


 


If the Company is obligated to repurchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such tender or
exchange had not been made.


 


(f)  For purposes of this Section 13.04,
the following terms shall have the meaning indicated:


 


(i) 
“Current Market Price” on any date
means the average of the Closing Sale Prices per Common Share for the 10
consecutive Trading Days ending on the date of determination.


 


(ii) 
“fair market value” shall mean the
amount which a willing buyer would pay a willing seller in an arm’s length
transaction.


 


(iii) 
“Record Date” shall mean, with
respect to any dividend, distribution or other transaction or event in which
the holders of Common Shares have the right to receive any cash, securities or
other property or in which the Common Shares (or other applicable security)  is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).


 


(g)  Notwithstanding the foregoing
provisions of this Section 13.04, the applicable Conversion Rate need not
be adjusted:


 


(i) 
upon the issuance of any Common Shares pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on the
securities of the Company and the investment of additional optional amounts in
Common Shares under any plan;


 


78














 


(ii)     upon the issuance of any
Common Shares or options or rights to purchase Common Shares pursuant to any
present or future employee, director or consultant benefit plan or program of,
or assumed by, the Company or any of its Subsidiaries;


 


(iii)    upon the issuance of any
Common Shares pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security not described in clause (ii) above and
outstanding as of the Issue Date;


 


(iv)    for a change in the par
value of the Common Shares; or


 


(v)     for accrued and unpaid
interest (including Additional Interest Amounts and Additional Amounts, if
any).


 


(h)  Subject to subsection (i) below, the Company
may make such increases in the Conversion Rate, in addition to any adjustments
required by Section 13.04(a), Section 13.04(b), Section 13.04(c), Section 13.04(d)
or Section 13.04(e) as the Company’s Board of Directors considers to be
advisable to avoid or diminish any income tax to holders of Common Shares or
rights to purchase Common Shares resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes.


 


(i)  To
the extent permitted by applicable law and the continued listing requirements
of the securities exchanges on which the Common Shares are then listed, the
Company from time to time may increase the Conversion Rate by any amount for
any period of time if the period is at least 20 days and the Company’s Board of
Directors shall have made a determination that such increase would be in the
best interests of the Company, which determination shall be conclusive.  Whenever the Conversion Rate is increased
pursuant to the preceding sentence, the Company shall mail to Holders a notice
of the increase at least 15 days prior to the date the increased Conversion
Rate takes effect, and such notice shall state the increased Conversion Rate
and the period during which it will be in effect.


 


(j)  No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least 1% in such rate; provided, however, that
any adjustments which by reason of this Section 13.04(j) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this Article
XIII shall be made by the Company and shall be made to the nearest cent or to
the nearest 1/10,000th of a share, as the case may be.  No adjustment need be made for rights to
purchase Common Shares pursuant to a Company plan for reinvestment of dividends
or interest.  To the extent the
Securities become convertible into cash, assets, property or securities (other
than Common Shares) of the Company, no adjustment need be made thereafter as to
the cash, assets, property or such securities. Interest will not accrue on the
cash.


 


(k)  Whenever the Conversion Rate is adjusted as
herein provided, the Company shall promptly file with the Trustee, the
Co-Trustee and any Conversion Agent an Officers’ Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. 
Unless and until a Responsible Officer of each of the Trustee and the
Co-Trustee shall have received such Officers’ Certificate, neither the Trustee
nor the Co-Trustee shall be deemed to have knowledge of any adjustment of the 


 


79

















 


Conversion Rate and may assume without inquiry that the last Conversion
Rate of which each had knowledge is still in effect.  Promptly after delivery of such certificate,
the Company shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date on which each
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Rate to each Holder at such Holder’s last address appearing on
the Security Register, within 20 days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.


 


(l)  In
any case in which this Section 13.04 provides that an adjustment shall become
effective immediately after a Record Date for an event, the Company may defer
until the occurrence of such event (i) issuing to the Holder of any Securities
converted after such Record Date and before the occurrence of such event the
additional Common Shares issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Shares issuable
upon such conversion before giving effect to such adjustment and (ii) paying to
such Holder any amount in cash in lieu of any fraction pursuant to Section 13.03.


 


(m)  For purposes of this Section 13.04, the number
of Common Shares at any time outstanding shall not include Common Shares held
in the treasury of the Company so long as the Company does not pay any dividend
or make any distribution on Common Shares held in the treasury of the Company,
but shall include Common Shares issuable in respect of scrip certificates
issued in lieu of fractions of Common Shares.


 


(n)  No
adjustment to the Conversion Rate shall be made pursuant to this Section 13.04
if the Holders of the Securities may participate in the transaction that would
otherwise give rise to an adjustment pursuant to this Section 13.04; subject to
the prior written consent of the Toronto Stock Exchange.


 


(o)  Whenever any provision of this Indenture
requires a calculation of an average of Closing Sale Prices or Daily VWAP over
a span of multiple days, the Company shall make appropriate adjustments
(determined in good faith by the Board of Directors) to account for any
adjustment to the Conversion Rate that becomes effective, or any event
requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of
the event occurs at any time during the period from which the average is to be
calculated.


 


Section 13.05 
Adjustments Upon Certain Fundamental Changes.


 


(a)  If
a Holder elects to convert Securities pursuant to Section 13.01(a)(iv) in
connection with a transaction described therein and the transaction also
constitutes a Fundamental Change, the Conversion Rate for such Securities shall
be increased by an additional number of Common Shares (the “Additional
Shares”) as described below. Any conversion occurring at a time when the
Securities would be convertible in light of the expected or actual occurrence
of a Fundamental Change will be deemed to have occurred in connection with such
Fundamental Change notwithstanding the fact that a Security may then be
convertible because another condition to conversion has been satisfied.


 


(b)  The number of Additional Shares will be
determined by reference to the table attached as Schedule A hereto, based on
the date on which the Fundamental Change occurs or 


 


80

















 


becomes effective (the “Effective Date”) and the
price (the “Share Price”) paid per Common Share in the Fundamental
Change.  If the Fundamental Change is a
transaction described in clause (ii) of the definition of Fundamental Change,
and holders of Common Shares receive only cash in that Fundamental Change, the
Share Price shall be the cash amount paid per Common Share.  Otherwise, the Share Price shall be the
average of the Closing Sale Prices of Common Shares over the five Trading-Day
period ending on the Trading Day preceding the Effective Date of the
Fundamental Change.


 


(c)  The Share Prices set forth in the first row of
the table in Schedule A hereto shall be adjusted as of any date on which the
Conversion Rate of the Securities is otherwise adjusted.  The adjusted Share Prices shall equal the
Share Prices applicable immediately prior to such adjustment, multiplied by a
fraction, the numerator of which is the Conversion Rate immediately prior to
the adjustment giving rise to the Share Price adjustment and the denominator of
which is the Conversion Rate as so adjusted. The number of Additional Shares
will be adjusted in the same manner as the Conversion Rate as set forth in Section
13.04.


 


(d)  The table in Schedule A hereto sets forth the
hypothetical Share Price and the number of Additional Shares to be received per
$1,000 Principal Amount of Securities. 
The exact Share Prices and Effective Dates may not be set forth in the
table in Schedule A, in which case:


 


(i)      If the Share Price is
between two Share Price amounts in the table or the Effective Date is between
two Effective Dates in the table, the number of Additional Shares will be
determined by a straight-line interpolation between the number of Additional
Shares set forth for the higher and lower Share Price amounts and the two
dates, as applicable, based on a 365-day year.


 


(ii)     If the Share Price is
greater than $62.00 per Common Share (subject to adjustment), no Additional
Shares will be issued upon conversion.


 


(iii)    If the Share Price is
less than $11.83 per Common Share (subject to adjustment), no Additional Shares
will be issued upon conversion.


 


Notwithstanding the foregoing, in no event
will the total number of Common Shares issuable upon conversion exceed 84.5309
Common Shares per $1,000 Principal Amount of Securities, subject to adjustments
in the same manner as the Conversion Rate as set forth in Section 13.04.


 


(e)  If
the Company is a party to any reclassification of the Common Shares (other than
changes resulting from a subdivision or combination) or a consolidation,
amalgamation, merger, binding share exchange, statutory arrangement, sale or
conveyance of all or substantially all of the Company’s consolidated assets to
another person or entity or other similar combination involving the Company, in
each case pursuant to which the Common Shares are convertible into Reference
Property, then, pursuant to Section 13.06, at the effective time of such
transaction, the Securities will be convertible only into the Reference
Property, if applicable (provided such Reference Property is not Ineligible
Consideration).  If the Company is
required to increase the Conversion Rate for Securities converted in connection
with such Fundamental Change by 


 


81





















 


Additional Shares as a result of such Fundamental Change, Securities so
surrendered for conversion shall be settled as follows:


 


(i)      if the date on which the
Securities are surrendered for conversion is prior to the third Trading Day
immediately preceding the Effective Date of the Fundamental Change, the Company
shall (A) deliver the amount of Common Shares, based on the Conversion Rate
then in effect without regard to the number of Additional Shares to be added to
the Conversion Rate as described above in this Section 13.05  , on the third Trading Day immediately
following the applicable Conversion Date; and (B) as soon as practicable
following the Effective Date of the Fundamental Change, deliver an amount of
Reference Property equal to the amount of Reference Property that would have
been issuable in respect of the Additional Shares pursuant to such Fundamental
Change; provided, such Reference
Property is not Ineligible Consideration; and


 


(ii)     if the date on which the
Securities are surrendered for conversion is on or after the third Trading Day
immediately preceding the Effective Date of the Fundamental Change, the Company
shall deliver an amount of Reference Property equal to the amount of Reference
Property that would have been issuable upon conversion of the Securities
immediately after giving effect to the Fundamental Change based on the
Conversion Rate as increased by the Additional Shares; provided, such Reference Property is not
Ineligible Consideration.


 


(f)  If
a Holder converts Securities prior to the effective date of any Fundamental
Change that would result in an adjustment to the Conversion Rate and the
Fundamental Change does not occur, the Holder will not be entitled to any
Additional Shares.


 


Section 13.06 
Effect of Reclassification, Consolidation, Merger or Sale.  If the Company is a party to any
reclassification of the Common Shares (other than changes resulting from a
subdivision or combination) or a consolidation, amalgamation, merger, binding
share exchange, statutory arrangement, sale or conveyance of all or
substantially all of the Company’s consolidated assets to another person or
entity or other similar combination involving the Company, in each case
pursuant to which the Common Shares are converted into cash, securities or other
property, then at the effective time of such transaction the Company or the
successor or purchasing person, as the case may be, shall execute with the
Trustee and the Co-Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) providing that the Securities shall be convertible into
the kind and amount of cash, securities or other property receivable upon such
transaction by a Holder had such Holder converted its Securities immediately
prior to such transaction solely for Common Shares (the “Reference Property”).  If such transaction causes the Common Shares
to be converted into the right to receive more than a single type of
consideration (determined based in part upon any form of shareholder election),
the Reference Property into which the Securities will be convertible shall be
deemed to be the weighted average of the types and amounts of consideration
received by the holders of Common Shares that affirmatively make such an
election.  If Holders would otherwise be
entitled to receive, upon conversion of the Securities, any property (including
cash) or securities that would not constitute “prescribed securities” for the
purposes of clause 212(1)(b)(vii)(E) of the Income
Tax Act (Canada) as it applied on December 31, 2007 (referred to
herein as “Ineligible Consideration”),
such Holders shall not be entitled to receive such Ineligible Consideration but
the Company or the successor or acquirer, as the case may 


 


82

















 


be, shall have the right (at the sole option of the Company or the
successor or acquirer, as the case may be) to deliver either such Ineligible
Consideration or “prescribed securities” for the purposes of clause
212(1)(b)(vii)(E) of the Income Tax Act
(Canada) as it applied on December 31, 2007 with a market value (as
conclusively determined by the Company’s Board of Directors) equal to the
market value of such Ineligible Consideration. 
Such supplemental indenture shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article XIII.  If, in the case of
any such reclassification, consolidation, amalgamation, merger, binding share
exchange, statutory arrangement, sale or conveyance or other similar
combination, the cash, securities or other property receivable thereupon by a
holder of Common Shares includes cash, securities or other property of a
corporation other than the successor or purchasing corporation, as the case may
be, in such transaction, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing.


 


The Company shall give notice to the Holders at least 30 days prior to
the effective date of any transaction set forth in this Section 13.06 in
writing and by release to a business newswire stating the consideration into
which the Securities will be convertible after the effective date of such
transaction.  After such notice, the
Company or the successor or acquirer, as the case may be, may not change the
consideration to be delivered upon conversion of the Security except in
accordance with any other provision of this Indenture.


 


The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Security Register maintained by the Security Registrar, within
20 days after execution thereof.  Failure
to deliver such notice shall not affect the legality or validity of such
supplemental indenture.  The above
provisions of this Section 13.06 shall similarly apply to successive
reclassifications, consolidations, amalgamations, mergers, binding share
exchanges, statutory arrangements, sales or conveyances or other similar
combinations.  If this Section 13.06
applies to any event or occurrence, Section 13.04 shall not apply.


 


Section 13.07 
Taxes on Shares Issued. 
Any issue of share certificates on conversions of Securities shall be
made without charge to the converting Holder for any documentary, transfer,
stamp or any similar tax in respect of the issue thereof, and the Company shall
pay any and all documentary, stamp or similar issue or transfer taxes that may
be payable in respect of the issue or delivery of Common Shares on conversion
of Securities pursuant hereto.  The
Company shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issue and delivery of Common
Shares in any name other than that of the Holder of any Securities converted,
and the Company shall not be required to issue or deliver any such share
certificate unless and until the person or persons requesting the issue thereof
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.


 


Section 13.08 
Reservation of Shares; Shares to be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Shares.  The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or shares held in
treasury, sufficient Common Shares to provide for the conversion of the
Securities from time to time as such Securities are presented for conversion
(assuming that, at the time of the computation of such number of shares 


 


83

















 


or Securities, all such Securities would be held by a single Holder).


 


Before taking any action that would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the Common Shares issuable upon
conversion of the Securities, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue Common Shares at such adjusted Conversion Price.


 


The Company covenants that all Common Shares that may be issued upon
conversion of Securities shall be newly issued shares or treasury shares, shall
be duly authorized, validly issued, fully paid and non-assessable and shall be
free from preemptive rights and free from any lien or adverse claim.


 


The Company shall use its reasonable efforts to list or cause to have
quoted any Common Shares to be issued upon conversion of Securities on each
national Securities exchange or over-the-counter or other domestic market on
which the Common Shares are then listed or quoted.


 


Section 13.09 
Responsibility of Conversion Agent, Trustee and Co-Trustee.  The Trustee, the Co-Trustee and The Bank of
New York Mellon, as Conversion Agent, or any other Conversion Agent shall not
at any time be under any duty or responsibility to any Holder to determine the
Conversion Rate, any adjustment to the Conversion Rate, or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. 
The Trustee, the Co-Trustee and The Bank of New York Mellon, as
Conversion Agent, or any other Conversion Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any Common Shares,
or of any securities, cash or property, which may at any time be issued or
delivered upon the conversion of any Securities; and the Trustee, the
Co-Trustee and The Bank of New York Mellon, as Conversion Agent, or any other
Conversion Agent make no representations and shall be held harmless with
respect thereto.  Neither the Trustee,
the Co-Trustee nor any Conversion Agent shall be responsible for any failure of
the Company to issue, transfer or deliver any Common Shares or share
certificates or other securities or property or cash upon the surrender of any
Securities for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article XIII.  Without limiting the generality of the
foregoing, neither the Trustee, the Co-Trustee nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 13.06
relating either to the kind or amount of cash, securities or property
receivable by Holders upon the conversion of their Securities after any event
referred to in such Section 13.06 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 6.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers’ Certificate (which the Company shall
be obligated to file with the Trustee and the Co-Trustee prior to the execution
of any such supplemental indenture) with respect thereto.  Nothing herein shall require the Trustee,
Co-Trustee or any Conversion Agent to monitor whether conditions exist under
which a conversion can be done or a Fundamental Change is occurring.


 


84

















 


Section 13.10 
Notice to Holders Prior to Certain Actions.  In case,


 


(a)
 the Company shall declare a dividend (or
any other distribution) on its Common Shares that would require an adjustment
in the Conversion Rate pursuant to Section 13.04; or


 


(b)
 the Company shall authorize the granting
to the holders of all or substantially all of its Common Shares of rights or
warrants to subscribe for or purchase any share of any class or any other
rights or warrants; or


 


(c)
 of any reclassification or
reorganization of the Common Shares of the Company (other than a subdivision or
combination of its outstanding Common Shares, or a change in par value, or from
par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any shareholders of the Company is required, or of the sale or transfer of
all or substantially all of the assets of the Company or any of its Significant
Subsidiaries; or


 


(d)
 of the voluntary or involuntary
dissolution, liquidation or winding up of the Company or any of its Significant
Subsidiaries;


 


then,
in each case, the Company shall cause to be filed with the Trustee, the
Co-Trustee and the Conversion Agent and to be mailed to each Holder of
Securities at such Holder’s address appearing on the Security Register, as
promptly as practicable but in any event at least 15 days prior to the
applicable date hereinafter specified, a notice stating (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Shares of record to be entitled to such dividend,
distribution or rights are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective or occur, and the
date as of which it is expected that holders of Common Shares of record shall
be entitled to exchange their Common Shares for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.


 


Section 13.11 
Company Determination Final. 
Any determination that the Company or its Board of Directors must make
pursuant to this Article XIII shall be conclusive if made in good faith and in
accordance with the provisions of this Article XIII, absent manifest error, and
set forth in a Board Resolution.


 


85

















 


IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed as of the day and year first above
written.


 


 


	
   

  	
  BIOVAIL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Margaret Mulligan

  
	
   

  	
   

  	
  Name:

  	
  Margaret
  Mulligan

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Arlene Thelwell

  
	
   

  	
   

  	
  Name:

  	
  Arlene
  Thelwell

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BNY
  TRUST COMPANY OF CANADA, 

  as Co-Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Angela Ikhimokpa

  
	
   

  	
   

  	
  Name:

  	
  Angela
  Ikhimokpa

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  



 

















 


	
   

  	
  THE BANK OF NEW YORK
  MELLON,

  
	
   

  	
  as Conversion Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Arlene Thelwell

  
	
   

  	
   

  	
  Name:

  	
  Arlene
  Thelwell

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  



 






 










 


SCHEDULE A


 


The following table sets forth the hypothetical
Share Price and the number of Additional Shares to be received per $1,000
Principal Amount of Securities pursuant to Section 13.05  of this Indenture:


 


Share Price


 


	
  Effective

  	
   

  	
   

  	
   

  
	
  date

  	
   

  	
  $11.83

  	
   

  	
  $14.00

  	
   

  	
  $18.00

  	
   

  	
  $22.00

  	
   

  	
  $26.00

  	
   

  	
  $30.00

  	
   

  	
  $34.00

  	
   

  	
  $38.00

  	
   

  	
  $42.00

  	
   

  	
  $46.00

  	
   

  	
  $50.00

  	
   

  	
  $54.00

  	
   

  	
  $58.00

  	
   

  	
  $62.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6/10/2009

  	
   

  	
  17.4429

  	
   

  	
  13.4883

  	
   

  	
  7.1732

  	
   

  	
  4.2054

  	
   

  	
  2.6671

  	
   

  	
  1.8005

  	
   

  	
  1.2749

  	
   

  	
  0.9333

  	
   

  	
  0.6983

  	
   

  	
  0.5284

  	
   

  	
  0.4006

  	
   

  	
  0.3014

  	
   

  	
  0.2227

  	
   

  	
  0.1592

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/2010

  	
   

  	
  17.4429

  	
   

  	
  12.9779

  	
   

  	
  6.1952

  	
   

  	
  3.2193

  	
   

  	
  1.8210

  	
   

  	
  1.1182

  	
   

  	
  0.7369

  	
   

  	
  0.5126

  	
   

  	
  0.3686

  	
   

  	
  0.2690

  	
   

  	
  0.1954

  	
   

  	
  0.1385

  	
   

  	
  0.0929

  	
   

  	
  0.0557

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/2011

  	
   

  	
  17.4429

  	
   

  	
  12.0927

  	
   

  	
  4.6660

  	
   

  	
  1.7941

  	
   

  	
  0.7569

  	
   

  	
  0.3940

  	
   

  	
  0.2569

  	
   

  	
  0.1924

  	
   

  	
  0.1527

  	
   

  	
  0.1233

  	
   

  	
  0.0995

  	
   

  	
  0.0794

  	
   

  	
  0.0622

  	
   

  	
  0.0471

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/2012

  	
   

  	
  17.4429

  	
   

  	
  11.1382

  	
   

  	
  2.3109

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/2013

  	
   

  	
  17.4429

  	
   

  	
  9.6280

  	
   

  	
  1.7182

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/2014

  	
   

  	
  17.4429

  	
   

  	
  4.3406

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  



 


A-1






 










 


EXHIBIT A


 


[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.


 


A-1

















 


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

  



 


A-2

















 


[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.


 


(a)  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 


 


A-3

















 


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.


 


(b)  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.


 


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


 


(d)  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”).


 


A-4

















 


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.


 


(e)  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”).


 


(f)  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).


 


A-5

















 


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.


 


(g)  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.


 


(h)  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 


 


A-6

















 


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.


 


(i)  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.


 


(j)  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



 


A-7

















 


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.


 


(k)  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.


 


(l)  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.


 


(m)  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 


 


A-8

















 


certificate of authentication executed by the Trustee.


 


(n)  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.


 


A-9














 


Biovail Corporation


 


5.375% Senior Convertible Notes
Due 2014


 


	
  CUSIP
  No.

  	
   

  



 


ASSIGNMENT FORM


 


Principal Amount Being Assigned: $                           


 


If you want to assign this Security, fill in
the form below and have your signature guaranteed:


 


I or we assign and transfer this Security to:


 


	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type
  name, address and zip code and social security or tax ID number of assignee)

  
	
   

  
	
  and
  irrevocably appoint                                                                     
  (“agent”) to transfer this Security on
  the books of the Company.  The agent
  may substitute another to act for him.

  



 


	
  Date:

  	
   

  	
     Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side of this
  Security)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  	
   

  
					



 


	
  Note:

  	
   

  	
  Signatures must be
  guaranteed by an “eligible guarantor institution” meeting the requirements of
  the Security Registrar, which requirements include membership or
  participation in the Security Transfer Agent Medallion Program (“STAMP”)
  or such other “signature guarantee program” as may be determined by the
  Security Registrar in addition to, or in substitution for, STAMP, all in
  accordance with the Securities Exchange Act of 1934, as amended.

  



 


 


A-10

















 


Biovail Corporation


 


5.375% Senior Convertible Notes
due 2014


 


	
  CUSIP
  No.

  	
   

  



 


CONVERSION NOTICE


 


Principal Amount of this Security: $                           


 


If you want to convert this Security into
Common Shares of the Company and, if applicable, cash or a combination of
Common Shares and cash (at the Company’s election), check the box: o


 


To convert only part of this Security, state
the Principal Amount to be converted (which must be $1,000 or an integral
multiple of $1,000):


 


$                                                


 


Fill in the form below with the social
security or tax ID no., name, address and zip code of the person to whom you
want the Common Shares certificate(s) and Securities (if any) to be
delivered:


 


	
   

  
	
  (Insert social security or tax ID no.)

  
	
   

  
	
   

  
	
   

  
	
  (Print or type name, address and zip code)

  



 


	
  Date:

  	
   

  	
     Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side of this
  Security, if applicable)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  	
   

  
					



 


	
  Note:

  	
   

  	
  Signatures must be
  guaranteed by an “eligible guarantor institution” meeting the requirements of
  the Security Registrar, which requirements include membership or
  participation in the Security Transfer Agent Medallion Program (“STAMP”)
  or such other “signature guarantee program” as may be determined by the
  Security Registrar in addition to, or in substitution for, STAMP, all in
  accordance with the Securities Exchange Act of 1934, as amended.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Physical Securities
  have been issued, the certificate numbers shall be stated in this notice.

  



 


A-11

















 


Biovail Corporation


 


5.375% Senior Convertible Notes
due 2014


 


	
  CUSIP
  No.

  	
   

  



 


FUNDAMENTAL CHANGE PURCHASE OFFER
ACCEPTANCE NOTICE


 


Principal Amount of this Security: $                           


 


If you elect to have this Security purchased
by the Company pursuant to the applicable provisions of the Indenture, check
the box: o


 


If you elect to have only part of this
Security purchased by the Company, state the Principal Amount to be purchased
(which must be $1,000 or an integral multiple of $1,000):


 


$                                                


 


The undersigned hereby accepts the
Fundamental Change Purchase Offer pursuant to the applicable provisions of the
Securities.


 


	
  Date:

  	
   

  	
     Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side of this
  Security, if applicable)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  	
   

  
					



 


	
  Note:

  	
   

  	
  Signatures must be
  guaranteed by an “eligible guarantor institution” meeting the requirements of
  the Security Registrar, which requirements include membership or
  participation in the Security Transfer Agent Medallion Program (“STAMP”)
  or such other “signature guarantee program” as may be determined by the
  Security Registrar in addition to, or in substitution for, STAMP, all in
  accordance with the Securities Exchange Act of 1934, as amended.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Physical Securities
  have been issued, the certificate numbers shall be stated in this notice.

  



 


A-12

















 


Biovail Corporation


 


5.375% Senior Convertible Notes
due 2014


 


	
  CUSIP
  No.

  	
   

  



 


NOTICE OF ELECTION UPON TAX
REDEMPTION


 


Principal Amount of this Security: $                           


 


If you elect not to have this Security
redeemed by the Company, check the box: o


 


If you elect to have only part of this
Security redeemed by the Company, state the Principal Amount to be redeemed
(which must be $1,000 or an integral multiple of $1,000):


 


$                                                


 


	
  Date:

  	
   

  	
     Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side of this
  Security)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  	
   

  
					



 


Note:                  Signatures must
be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Security Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Security
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.


 


If
Physical Securities have been issued, the certificate numbers shall be stated
in this notice.


 


A-13














 


EXHIBIT B


 


[FORM OF CERTIFICATE OF TRANSFER]


 


                     ,
        


 


The Bank of New York Mellon

101 Barclay Street

Floor 4E

New York, NY 10286

Attention:  Global Trust
Services

Fax: (212) 815-5802 or
(212) 815-5366


 


Re:                             Biovail
Corporation — 5.375% Senior Convertible Notes due 2014


 


Reference is hereby made to the Indenture,
dated as of June 10, 2009 (the “Indenture”), between Biovail
Corporation, a corporation duly organized and existing under the laws of
Canada, as Issuer (the “Company”),
and The Bank of New York Mellon, as Trustee, and BNY Trust Company of Canada,
as Co-Trustee.  Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.


 


                                  ,
(the “Transferor”)
owns and proposes to exchange or transfer the Securities or interest in such
Securities specified in Annex A hereto, in the principal amount of US$                                 
(the “Transfer”),
to                                              
(the “Transferee”),
as further specified in Annex A hereto. 
In connection with the Transfer, the Transferor hereby certifies that:


 


1.              o           Check if Transferee will take
delivery of a beneficial interest in a Restricted Global Security or a
Restricted Physical Security.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act of 1933, as
amended (the “Securities
Act”), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Physical Security is being transferred to a
Person that the Transferor reasonably believes is purchasing the beneficial
interest or Physical Security for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a “qualified institutional buyer” within the
meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A,
and such Transfer is in compliance with any applicable blue sky securities laws
of any applicable state of the United States. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Physical Security will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend and in the Indenture.


 


B-1

















 


2.              o            Check if Transferee will take
delivery of a beneficial interest in an Unrestricted Global Security or an
Unrestricted Physical Security.


 


(a)         o            Check if
Transfer is Pursuant to Regulation S.  The Transfer is being effected pursuant to
and in accordance with Rule 904 under the Securities Act and the
Transferor hereby further certifies that (i) the Transfer is not being
made to a person in the United States and (x) at the time the buy order
was originated, the Transferee was outside the United States or such Transferor
and any Person acting on its behalf reasonably believed that the Transferee was
outside the United States or (y) the transaction was executed in, on or
through the facilities of a designated offshore securities market and neither
such Transferor nor any Person acting on its behalf knows that the transaction
was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in the United States in contravention of the
requirements of Rule 904(a) of Regulation S under the Securities Act,
and (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Physical Security will not be subject to the
restrictions on transfer enumerated in the Private Placement Legend and in the
Indenture.  The Transferee is in Canada o Yes o No.


 


(b)         o            Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue
sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Physical Security will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend and in the
Indenture.


 


This certificate and the statements contained
herein are made for your benefit and the benefit of the Company.


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature guarantee*:

  	
   

  	
   

  	
   

  	
   

  
							



 






*                                         Participant is
a recognized Signature guarantee Medallion Program (or other signature
guarantor acceptable to the Security Registrar).


 


B-2

















 


ANNEX A TO CERTIFICATE OF TRANSFER


 


1.              The Transferor owns and
proposes to transfer the following:


 


[CHECK ONE]


 


(a)         o            a beneficial interest in:


 


(i)             o            a
Restricted Global Security, or


 


(ii)          o            an
Unrestricted Global Security, or


 


(b)         o            a Restricted Physical Security


 


(c)          o            an
Unrestricted Physical Security


 


2.              After the Transfer the
Transferee will hold:


 


[CHECK ONE]


 


(a)         o            a beneficial interest in:


 


(i)             o            a
Restricted Global Security, or


 


(ii)          o            an
Unrestricted Global Security, or


 


(b)         o            a Restricted Physical Security


 


(c)          o            an
Unrestricted Physical Security


 


B-3

















 


EXHIBIT C


 


[COMMON SHARE LEGENDS]


 


THE COMMON SHARES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE.  THE
HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE COMMON SHARES EVIDENCED HEREBY EXCEPT (A) TO
BIOVAIL CORPORATION OR TO ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER, IT
WILL FURNISH TO CIBC MELLON TRUST COMPANY, AS STOCK TRANSFER AGENT (OR ANY
SUCCESSOR STOCK TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT
WILL DELIVER TO EACH PERSON TO WHOM THE COMMON SHARES EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 
AS USED HEREIN, THE TERM “UNITED STATES” HAS THE MEANING GIVEN TO IT BY
REGULATION S UNDER THE SECURITIES ACT.


 


[CANADIAN PRIVATE PLACEMENT
LEGEND - INCLUDE IF SECURITY IS ISSUED BEFORE OCTOBER 13, 2009 —
UNLESS PERMITTED BY APPLICABLE SECURITIES LEGISLATION IN CANADA, THE HOLDER OF
THIS SECURITY MAY NOT TRADE THIS SECURITY IN CANADA BEFORE OCTOBER 13,
2009.]


 


C-1

















 


Certain
Sections of this Indenture relating to

Sections 310 through 318 of the

Trust Indenture Act of 1939:


 


	
  Trust
  Indenture 

  Act Section

  	
   

  	
   

  	
   

  	
  Indenture

  Section

  
	
  §
  310

  	
  (a)(1)

  	
   

  	
   

  	
   

  	
  6.09

  
	
   

  	
  (a)(2)

  	
   

  	
   

  	
   

  	
  6.09

  
	
   

  	
  (a)(3)

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
   

  	
  (a)(4)

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  6.08

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  6.10

  
	
  §
  311

  	
  (a)

  	
   

  	
   

  	
   

  	
  6.13

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  6.13

  
	
  §
  312

  	
  (a)

  	
   

  	
   

  	
   

  	
  10.08

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.01(a)

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  7.01(b)

  
	
   

  	
  (c)

  	
   

  	
   

  	
   

  	
  7.01(c)

  
	
  §
  313

  	
  (a)

  	
   

  	
   

  	
   

  	
  7.02(a)

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  7.02(a)

  
	
   

  	
  (c)

  	
   

  	
   

  	
   

  	
  7.02(a)

  
	
   

  	
  (d)

  	
   

  	
   

  	
   

  	
  7.02(b)

  
	
  §
  314

  	
  (a)

  	
   

  	
   

  	
   

  	
  10.09

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
   

  	
  (c)(1)

  	
   

  	
   

  	
   

  	
  1.02

  
	
   

  	
  (c)(2)

  	
   

  	
   

  	
   

  	
  1.02

  
	
   

  	
  (c)(3)

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
   

  	
  (d)

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
   

  	
  (e)

  	
   

  	
   

  	
   

  	
  1.02

  
	
  §
  315

  	
  (a)

  	
   

  	
   

  	
   

  	
  6.01

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  6.02

  
	
   

  	
  (c)

  	
   

  	
   

  	
   

  	
  6.01

  
	
   

  	
  (d)

  	
   

  	
   

  	
   

  	
  6.01

  
	
   

  	
  (e)

  	
   

  	
   

  	
   

  	
  5.14

  
	
  §
  316

  	
  (a)(last
  sentence)

  	
   

  	
   

  	
   

  	
  1.01

  
	
   

  	
  (a)(1)(A)

  	
   

  	
   

  	
   

  	
  5.12

  
	
   

  	
  (a)(1)(B)

  	
   

  	
   

  	
   

  	
  5.13

  
	
   

  	
  (a)(2)

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  5.08

  
	
   

  	
  (c)

  	
   

  	
   

  	
   

  	
  1.04(c)

  
	
  §
  317

  	
  (a)(1)

  	
   

  	
   

  	
   

  	
  5.03

  
	
   

  	
  (a)(2)

  	
   

  	
   

  	
   

  	
  5.05

  
	
   

  	
  (b)

  	
   

  	
   

  	
   

  	
  10.03

  
	
  §
  318

  	
  (a)

  	
   

  	
   

  	
   

  	
  1.07

  



 






Note:  This reconciliation and
tie shall not, for any purpose, be deemed to be a part of this Indenture.


 


C-2