Exhibit
4.4


 





 


 


TRUST
INDENTURE


 


Providing for the Issue of
Convertible Unsecured Subordinated Debentures


 


Dated  December 17, 2009


 

















 


TABLE OF
CONTENTS


 


	
  ARTICLE
  1 INTERPRETATION

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Meaning of “Outstanding”

  	
  10

  
	
  1.3

  	
  Interpretation

  	
  11

  
	
  1.4

  	
  Headings, etc.

  	
  11

  
	
  1.5

  	
  Day not a Business Day

  	
  12

  
	
  1.6

  	
  Applicable Law

  	
  12

  
	
  1.7

  	
  Monetary References

  	
  12

  
	
  1.8

  	
  Currency of Payment

  	
  12

  
	
  1.9

  	
  All Payments Net of Taxes

  	
  12

  
	
  1.10

  	
  Accounting Terms

  	
  12

  
	
  1.11

  	
  Calculations

  	
  12

  
	
  1.12

  	
  Language

  	
  13

  
	
  1.13

  	
  Successors and Assigns

  	
  13

  
	
  1.14

  	
  Time of Essence

  	
  13

  
	
  1.15

  	
  Invalidity/Severability

  	
  13

  
	
  1.16

  	
  Entire Agreement

  	
  13

  
	
  1.17

  	
  Benefits of Indenture

  	
  13

  
	
  1.18

  	
  Schedules

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2 THE DEBENTURES

  	
  14

  
	
  2.1

  	
  Limit of Debentures

  	
  14

  
	
  2.2

  	
  Terms of Debentures of any Series

  	
  14

  
	
  2.3

  	
  Form of Debentures

  	
  16

  
	
  2.4

  	
  Form and Terms of Initial
  Debentures

  	
  16

  
	
  2.5

  	
  Certification and Delivery of
  Additional Debentures

  	
  24

  
	
  2.6

  	
  Issue of Global Debentures

  	
  25

  
	
  2.7

  	
  Execution of Debentures

  	
  26

  
	
  2.8

  	
  Certification

  	
  26

  
	
  2.9

  	
  Interim Debentures or
  Certificates

  	
  26

  
	
  2.10

  	
  Mutilation, Loss, Theft or
  Destruction

  	
  27

  
	
  2.11

  	
  Concerning Interest

  	
  27

  
	
  2.12

  	
  Debentures to Rank Pari Passu

  	
  28

  
	
  2.13

  	
  Payments of Amounts Due on
  Maturity

  	
  28

  
	
  2.14

  	
  Payment of Interest

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP

  	
  30

  
	
  3.1

  	
  Fully Registered Debentures

  	
  30

  
	
  3.2

  	
  Global Debentures

  	
  30

  
	
  3.3

  	
  Transferee Entitled to
  Registration

  	
  32

  
	
  3.4

  	
  No Notice of Trusts

  	
  32

  
	
  3.5

  	
  Registers Open for Inspection

  	
  33

  
	
  3.6

  	
  Exchanges of Debentures

  	
  33

  
	
  3.7

  	
  Closing of Registers

  	
  33

  
	
  3.8

  	
  Charges for Registration,
  Transfer and Exchange

  	
  34

  
	
  3.9

  	
  Ownership of Debentures

  	
  34

  



 

















 


	
  ARTICLE
  4 REDEMPTION AND PURCHASE OF DEBENTURES, CERTAIN PAYMENTS ON MATURITY

  	
  36

  
	
  4.1

  	
  Applicability of Article

  	
  36

  
	
  4.2

  	
  Partial Redemption

  	
  36

  
	
  4.3

  	
  Notice of Redemption

  	
  37

  
	
  4.4

  	
  Debentures Due on Redemption
  Dates

  	
  37

  
	
  4.5

  	
  Deposit of Redemption Monies or
  Common Shares

  	
  38

  
	
  4.6

  	
  Right to Repay Redemption Price
  in Common Shares

  	
  38

  
	
  4.7

  	
  Failure to Surrender Debentures
  Called for Redemption

  	
  41

  
	
  4.8

  	
  Cancellation of Debentures
  Redeemed

  	
  41

  
	
  4.9

  	
  Purchase of Debentures by the
  Company

  	
  42

  
	
  4.10

  	
  Deposit of Maturity Monies

  	
  42

  
	
  4.11

  	
  Right to Repay Principal Amount
  in Common Shares

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5 SUBORDINATION OF DEBENTURES

  	
  45

  
	
  5.1

  	
  Applicability of Article

  	
  45

  
	
  5.2

  	
  Order of Payment

  	
  46

  
	
  5.3

  	
  Subrogation to Rights of Holders
  of Senior Indebtedness

  	
  47

  
	
  5.4

  	
  Obligation to Pay Not Impaired

  	
  47

  
	
  5.5

  	
  No Payment if Senior Indebtedness
  in Default

  	
  48

  
	
  5.6

  	
  Payment on Debentures Permitted

  	
  48

  
	
  5.7

  	
  Confirmation of Subordination

  	
  49

  
	
  5.8

  	
  Knowledge of Debenture Trustee

  	
  49

  
	
  5.9

  	
  Debenture Trustee May Hold
  Senior Indebtedness

  	
  49

  
	
  5.10

  	
  Rights of Holders of Senior
  Indebtedness Not Impaired

  	
  49

  
	
  5.11

  	
  Altering the Senior Indebtedness

  	
  50

  
	
  5.12

  	
  Additional Indebtedness

  	
  50

  
	
  5.13

  	
  Right of Debentureholder to
  Convert Not Impaired

  	
  50

  
	
  5.14

  	
  Invalidated Payments

  	
  50

  
	
  5.15

  	
  Contesting Security

  	
  50

  
	
  5.16

  	
  Obligations Created by
  Article 5

  	
  51

  
	
  5.17

  	
  No Set-Off

  	
  51

  
	
  5.18

  	
  Amendments to Article 5

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6 CONVERSION OF DEBENTURES

  	
  52

  
	
  6.1

  	
  Applicability of Article

  	
  52

  
	
  6.2

  	
  Notice of Expiry of Conversion
  Privilege

  	
  52

  
	
  6.3

  	
  Revival of Right to Convert

  	
  52

  
	
  6.4

  	
  Manner of Exercise of Right to
  Convert

  	
  52

  
	
  6.5

  	
  Adjustment of Conversion Price

  	
  54

  
	
  6.6

  	
  No Requirement to Issue
  Fractional Common Shares

  	
  58

  
	
  6.7

  	
  Company to Reserve Common Shares

  	
  58

  
	
  6.8

  	
  Cancellation of Converted
  Debentures

  	
  58

  
	
  6.9

  	
  Certificate as to Adjustment

  	
  58

  
	
  6.10

  	
  Notice of Special Matters

  	
  59

  
	
  6.11

  	
  Protection of Debenture Trustee

  	
  59

  
	
  6.12

  	
  Payment of Cash in Lieu of Common
  Shares

  	
  59

  



 


2

















 


	
  ARTICLE
  7 COVENANTS OF THE COMPANY

  	
  60

  
	
  7.1

  	
  To Pay Principal and Interest

  	
  60

  
	
  7.2

  	
  To Pay Debenture Trustee’s
  Remuneration

  	
  60

  
	
  7.3

  	
  To Give Notice of Default

  	
  60

  
	
  7.4

  	
  Preservation of Existence, etc.

  	
  60

  
	
  7.5

  	
  Keeping of Books

  	
  61

  
	
  7.6

  	
  Reporting Requirements

  	
  61

  
	
  7.7

  	
  Performance of Covenants by
  Debenture Trustee

  	
  61

  
	
  7.8

  	
  Maintain Listing

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8 DEFAULT

  	
  61

  
	
  8.1

  	
  Events of Default

  	
  61

  
	
  8.2

  	
  Notice of Events of Default

  	
  63

  
	
  8.3

  	
  Waiver of Default

  	
  63

  
	
  8.4

  	
  Enforcement by the Debenture
  Trustee

  	
  64

  
	
  8.5

  	
  No Suits by Debentureholders

  	
  65

  
	
  8.6

  	
  Application of Monies by
  Debenture Trustee

  	
  66

  
	
  8.7

  	
  Notice of Payment by Debenture
  Trustee

  	
  67

  
	
  8.8

  	
  Debenture Trustee May Demand
  Production of Debentures

  	
  67

  
	
  8.9

  	
  Remedies Cumulative

  	
  67

  
	
  8.10

  	
  Judgment Against the Company

  	
  67

  
	
  8.11

  	
  Immunity of Directors, Officers
  and Others

  	
  68

  
	
  8.12

  	
  Subordination

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  9 SATISFACTION AND DISCHARGE

  	
  68

  
	
  9.1

  	
  Cancellation and Destruction

  	
  68

  
	
  9.2

  	
  Non-Presentation of Debentures

  	
  68

  
	
  9.3

  	
  Repayment of Unclaimed Monies

  	
  69

  
	
  9.4

  	
  Discharge

  	
  69

  
	
  9.5

  	
  Satisfaction

  	
  69

  
	
  9.6

  	
  Continuance of Rights, Duties and
  Obligations

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  10 COMMON SHARE INTEREST PAYMENT ELECTION

  	
  71

  
	
  10.1

  	
  Common Share Interest Payment
  Election

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11 SUCCESSORS

  	
  75

  
	
  11.1

  	
  Company may Consolidate, etc.,
  only on Certain Terms

  	
  75

  
	
  11.2

  	
  Successor Substituted

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  12 COMPULSORY ACQUISITION

  	
  76

  
	
  12.1

  	
  Definitions

  	
  76

  
	
  12.2

  	
  Offer for Debentures

  	
  77

  
	
  12.3

  	
  Offeror’s Notice to Dissenting
  Debentureholders

  	
  77

  
	
  12.4

  	
  Delivery of Debenture
  Certificates

  	
  77

  
	
  12.5

  	
  Payment of Consideration to
  Debenture Trustee

  	
  78

  
	
  12.6

  	
  Consideration to be held in Trust

  	
  78

  
	
  12.7

  	
  Completion of Transfer of
  Debentures to Offeror

  	
  78

  
	
  12.8

  	
  Communication of Offer to the
  Company

  	
  79

  



 


3

















 


	
  ARTICLE
  13 MEETINGS OF DEBENTUREHOLDERS

  	
  79

  
	
  13.1

  	
  Right to Convene Meeting

  	
  79

  
	
  13.2

  	
  Notice of Meetings

  	
  79

  
	
  13.3

  	
  Chairman

  	
  81

  
	
  13.4

  	
  Quorum

  	
  81

  
	
  13.5

  	
  Power to Adjourn

  	
  81

  
	
  13.6

  	
  Show of Hands

  	
  81

  
	
  13.7

  	
  Poll

  	
  82

  
	
  13.8

  	
  Voting

  	
  82

  
	
  13.9

  	
  Proxies

  	
  82

  
	
  13.10

  	
  Persons Entitled to Attend
  Meetings

  	
  83

  
	
  13.11

  	
  Powers Exercisable by
  Extraordinary Resolution

  	
  83

  
	
  13.12

  	
  Meaning of “Extraordinary
  Resolution”

  	
  85

  
	
  13.13

  	
  Powers Cumulative

  	
  86

  
	
  13.14

  	
  Minutes

  	
  86

  
	
  13.15

  	
  Instruments in Writing

  	
  86

  
	
  13.16

  	
  Binding Effect of Resolutions

  	
  86

  
	
  13.17

  	
  Evidence of Rights Of
  Debentureholders

  	
  86

  
	
  13.18

  	
  Concerning Serial Meetings

  	
  87

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  14 NOTICES

  	
  87

  
	
  14.1

  	
  Notice to the Company

  	
  87

  
	
  14.2

  	
  Notice to Debentureholders

  	
  87

  
	
  14.3

  	
  Notice to Debenture Trustee

  	
  88

  
	
  14.4

  	
  Mail Service Interruption

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  15 CONCERNING THE DEBENTURE TRUSTEE

  	
  88

  
	
  15.1

  	
  No Conflict of Interest

  	
  88

  
	
  15.2

  	
  Replacement of Debenture Trustee

  	
  89

  
	
  15.3

  	
  Duties of Debenture Trustee

  	
  89

  
	
  15.4

  	
  Reliance Upon Declarations,
  Opinions, etc.

  	
  90

  
	
  15.5

  	
  Evidence and Authority to
  Debenture Trustee, Opinions, etc.

  	
  90

  
	
  15.6

  	
  Debenture Trustee May Rely on
  a Certificate

  	
  91

  
	
  15.7

  	
  Experts, Advisers and Agents

  	
  91

  
	
  15.8

  	
  Debenture Trustee May Deal
  in Debentures

  	
  92

  
	
  15.9

  	
  Investment of Monies Held by
  Debenture Trustee

  	
  92

  
	
  15.10

  	
  Debenture Trustee will Disburse
  Only Monies Deposited

  	
  92

  
	
  15.11

  	
  Debenture Trustee Not Ordinarily
  Bound

  	
  92

  
	
  15.12

  	
  Debenture Trustee Not Required to
  Give Security

  	
  93

  
	
  15.13

  	
  Debenture Trustee Not Bound to
  Act on the Company’s Request

  	
  93

  
	
  15.14

  	
  Debenture Trustee Not Bound to
  Act

  	
  93

  
	
  15.15

  	
  Debenture Trustee Protected in
  Acting

  	
  93

  
	
  15.16

  	
  Conditions Precedent to Debenture
  Trustee’s Obligations to Act Hereunder

  	
  94

  
	
  15.17

  	
  Authority to Carry on Business

  	
  94

  
	
  15.18

  	
  Compensation and Indemnity

  	
  94

  
	
  15.19

  	
  Acceptance of Trust

  	
  95

  
	
  15.20

  	
  Third Party Interests

  	
  95

  
	
  15.21

  	
  Anti-Money Laundering

  	
  95

  
	
  15.22

  	
  Privacy Laws

  	
  96

  



 


4

















 


	
  15.23

  	
  Withholding Obligation

  	
  96

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  16 SUPPLEMENTAL INDENTURES

  	
  97

  
	
  16.1

  	
  Supplemental Indentures

  	
  97

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  17 EXECUTION AND FORMAL DATE

  	
  98

  
	
  17.1

  	
  Execution

  	
  98

  
	
  17.2

  	
  Formal
  Date

  	
  98

  



 


SCHEDULE
A  FORM OF GLOBAL DEBENTURE


 


SCHEDULE
B  FORM OF REDEMPTION NOTICE


 


SCHEDULE
C  FORM OF MATURITY NOTICE


 


SCHEDULE
D  FORM OF NOTICE OF CONVERSION


 


SCHEDULE
E  FORM OF NOTICE OF PUT EXERCISE


 


5

















 


TRUST
INDENTURE


 


THIS TRUST
INDENTURE made as of the 17th day of December, 2009,


 


BETWEEN:


 


ATLANTIC POWER CORPORATION, a corporation continued under
the laws of the Province of British Columbia


 


(the “Company”)


 


- and -


 


COMPUTERSHARE TRUST COMPANY
OF CANADA,
a trust company authorized to carry on business in all of the provinces and
territories of Canada


 


(the “Debenture
Trustee”)


 


WHEREAS the Company deems it
advisable to create and issue the Debentures to be created and issued in the
manner as herein provided;


 


AND
WHEREAS
the Company, under the laws relating thereto, is duly authorized to create and
issue the Debentures to be issued as herein provided;


 


AND
WHEREAS
all necessary steps in relation to the Company have been duly enacted, passed
and/or confirmed and other proceedings taken and conditions complied with to
make the Debentures, when certified by the Debenture Trustee and issued as in
this Indenture provided, legal, valid and binding obligations of the Company;


 


AND
WHEREAS
the foregoing recitals are made as representations and statements of fact by
the Company and not by the Debenture Trustee;


 


NOW
THEREFORE
it is hereby covenanted, agreed and declared as follows:


 


ARTICLE 1

INTERPRETATION


 


1.1                                                                               Definitions


 


In this
Indenture and in the Debentures, unless there is something in the subject
matter or context inconsistent therewith, the expressions following shall have
the following meanings, namely:


 


(a)                                                          “90% Redemption Right”  has
the meaning ascribed thereto in Section 2.4(i)(iv);


 

















 


(b)                                                         “Additional Debentures” means Debentures of any one or more series,
other than the first series of Debentures being the Initial Debentures, issued
under this Indenture;


 


(c)                                                          “Affiliate”
of any specified Person means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person.  For purposes of this definition,
“control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise;


 


(d)                                                         “Applicable
Laws” means any and all laws, including all federal, state,
provincial and local statutes, codes, ordinances, decrees, rules, regulations
and municipal by-laws and all judicial, arbitral, administrative, ministerial,
departmental or regulatory judgments, orders, decisions, rulings or awards or
other requirements of any other governmental entity, binding on or affecting
the Person referred to in the context in which the term was used;


 


(e)                                                          “Applicable Securities Legislation” means applicable securities laws
(including rules, regulations, policies and instruments) in each of the
provinces and territories of Canada;


 


(f)                                                            “Authorized
Officer” means
authorized officer(s) of the Manager, and after the Management
Internalization, authorized officer(s) of the Company;


 


(g)                                                         “Bankruptcy
Law” means Title 11, United States Code, or any similar federal or
state law for the relief of debtors, or the Bankruptcy
and Insolvency Act (Canada) or any other Canadian federal or
provincial law or foreign law relating to bankruptcy, insolvency, winding up,
liquidation, reorganization or relief of debtors;


 


(h)                                                         “Beneficial Holder” means any person who holds a beneficial
interest in a Global Debenture as shown on the books of the Depository or a
Depository Participant;


 


(i)                                                             “Business
Day” means any day other than a Saturday, Sunday or other day on
which banking institutions in the Province of Ontario are authorized or
required by law to close;


 


(j)                                                             “Canadian Dollars”, “C$” or “$” means the lawful
money in Canada;


 


(k)                                                          “Capital
Stock” means:  (i) in the
case of a corporation, corporate stock or equity interests; (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock; (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (iv) 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, the issuing
Person;


 


2

















 


(l)                                                             “Cash
Change of Control” means a Change of Control in which 10% or more of
the consideration for the Common Shares in the transaction or transactions constituting
a Change of Control consists of: (i) cash, other than cash payments for
fractional Common Shares and cash payments made in respect of dissenter’s
appraisal rights; (ii) equity securities that are not traded or intended
to be traded immediately following such transactions on a stock exchange; or (iii) other
property that is not traded or intended to be traded immediately following such
transactions on a stock exchange;


 


(m)                                                       “Cash
Change of Control Conversion Period” has the meaning ascribed
thereto in Section 2.4(j)(i);


 


(n)                                                         “Certificate” means a written certificate signed by any
one of the Chief Executive Officer or Chief Financial Officer of the Manager,
and after the Management Internalization, a written certificate signed by any
one of the Chief Executive Officer or Chief Financial Officer of the Company;


 


(o)                                                         “Change of Control” will be deemed to occur upon the occurrence
of any of the following events:


 


(i)                 the acquisition by any Person or group of persons
acting jointly or in concert (within the meaning of the Securities
Act (Ontario)) of ownership of, or voting control or direction over,
50% or more of the Common Shares; or


 


(ii)              the sale or other transfer of all or substantially all
of the consolidated assets of the Company;


 


and a “Change of Control” will not include a sale, merger,
reorganization or similar transaction if the previous holders of the Common
Shares hold at least 50% of the voting control or direction in such merged,
reorganized or other continuing entity;


 


(p)                                                         “Change of Control Notice”
has the meaning attributed to it in Section 2.4(i)(ii);


 


(q)                                                         “Common
Share”  means common
shares in the capital of the Company, as such common shares are constituted on
the date of execution and delivery of this Indenture; provided that in the event
of a change or a subdivision, revision, reduction, combination or consolidation
thereof, any reclassification, capital reorganization, consolidation,
amalgamation, arrangement, merger, sale or conveyance or liquidation,
dissolution or winding-up, or such successive changes, subdivisions,
redivisions, reductions, combinations or consolidations, reclassifications,
capital reorganizations, consolidations, amalgamations, arrangements, mergers,
sales or conveyances or liquidations, dissolutions or windings-up, then,
subject to adjustments,  if any, having
been made in accordance with the provisions of Section 6.5, “Common Shares” shall mean the shares or
other securities or property resulting from such change, subdivision,
redivision, reduction, combination or consolidation, reclassification, capital
reorganization, consolidation, amalgamation, arrangement, merger, sale or
conveyance or liquidation, dissolution or winding-up;


 


3

















 


(r)                                                            “Common Share Bid Request” means a request for bids to
purchase Common Shares (to be issued by the Company on the Common Share
Delivery Date) made by the Debenture Trustee in accordance with the Common
Share Interest Payment Election Notice and which shall make the acceptance of
any bid conditional upon the acceptance of sufficient bids to result in
aggregate net proceeds from such issue and sale of Common Shares which,
together with the cash payments by the Company, if any, equal the Interest
Obligation;


 


(s)                                                          “Common Share Delivery Date”
means a date not less than one Business Day prior to the applicable
Interest Payment Date, upon which Common Shares are delivered by the Company to
the Debenture Trustee for sale pursuant to Common Share Purchase Agreements
(together with the cash payments by the Company, if any, required to be made in
order to pay in full the applicable Interest Obligation);


 


(t)                                                            “Common Share Interest Payment Election”
means an election by the Company to raise funds to satisfy all or
part of an Interest Obligation on the applicable Interest Payment Date by the
delivery of Common Shares in the manner described in the Common Share Interest
Payment Election Notice;


 


(u)                                                         “Common Share Interest Payment Election Amount”
means the sum of (i) the amount of the aggregate net proceeds
resulting from the sale of Common Shares on the Common Share Delivery Date
pursuant to acceptable bids obtained pursuant to the Common Share Bid Request;
and (ii) the cash payments by the Company, if any, including any cash
amount paid by the Company in respect of fractional Common Shares pursuant to Section 10.1(g),
which sum shall be equal to the aggregate amount of the Interest Obligation in
respect of which the Common Share Interest Payment Election Notice was
delivered;


 


(v)                                                         “Common Share Interest Payment Election Notice”
means a written notice made by the Company to the Debenture Trustee
specifying:


 


(i)                                   the Interest Obligation to which the election
relates;


 


(ii)                                the Common Share Interest Payment Election
Amount;


 


(iii)                             the investment banks, brokers or dealers
(i) through which the Debenture Trustee shall seek bids to purchase the
Common Shares and the conditions of such bids, which may include the minimum
number of Common Shares, minimum price per Common Share, timing for closing for
bids and such other matters as the Company may specify, or (ii) with which
the Company will establish an account or accounts for the purpose of selling
Common Shares; and


 


(iv)                            that the Debenture Trustee
shall accept through the investment banks, brokers or dealers selected by the
Company only those bids which comply with such notice;


 


(w)                                                       “Common Share Proceeds Investment”
has the meaning attributed thereto in Section 10.1(h);


 


4






 










 


(x)                                                         “Common Share Purchase Agreement”
means an agreement in customary form among the Company, the
Debenture Trustee and the Persons making acceptable bids pursuant to a Common
Share Bid Request, providing for the purchase of Common Shares, which complies with
all Applicable Laws, including the Applicable Securities Legislation and the rules and
regulations of any stock exchange on which the Debentures or Common Shares are
then listed;


 


(y)                                                         “Common Share
Redemption Right”
has the meaning ascribed thereto in Section 4.6(a);


 


(z)                                                           “Common
Share Repayment Right” has the meaning ascribed thereto in Section 4.11(a);


 


(aa)                                                    “Company” has the meaning attributed to it in the
recitals;


 


(bb)                                                  “Company’s Auditors” or “Auditors of the Company” means an independent firm of
chartered accountants duly appointed as auditors of the Company;


 


(cc)                                                    “Conversion Price” means (i) with respect to the Initial
Debentures, the C$13.00 amount
for which each Common Share may be issued from time to time upon the conversion
of the Initial Debentures, as adjusted in accordance with the provisions of Article 6
and (ii) for any other series of Debentures which are by their terms
convertible, the amount set upon their creation, as adjusted in accordance with
the provisions of Article 6;


 


(dd)                                                  “Counsel” means a barrister or solicitor or firm of
barristers or solicitors retained or employed by the Debenture Trustee or
retained or employed by the Company and acceptable to the Debenture Trustee,
acting reasonably;


 


(ee)                                                  “Current Market Price” means the volume weighted average price of
the Common Shares on the TSX for the 20 consecutive trading days ending on the
fifth trading day preceding the date of the applicable event (or, if not listed
thereon, on such stock exchange on which Common Shares are listed or, if the
Common Shares are not listed on any stock exchange, then on the
over-the-counter market) or, if there is no market, fair value as determined by
an independent financial advisor;


 


(ff)                                                       “Date of Conversion” has the meaning ascribed thereto in Section 6.4(b);


 


(gg)                                                 “Debenture Liabilities” means the indebtedness, liabilities and
obligations of the Company under Debentures issued under this Indenture of any
series, including on account of principal, interest or otherwise but excluding
the issuance of Common Shares upon any Conversion pursuant to Article 6,
upon any redemption pursuant to Article 4, or at maturity pursuant to Article 4;


 


(hh)                                                 “Debenture Trustee” means Computershare Trust Company of Canada
and includes any successor or successors or any other trustee subsequently
appointed pursuant to Section 15.2;


 


(ii)                                                         “Debentureholders” or “holders” means the Persons for the time being
entered in the register for Debentures as registered holders of Debentures;


 


5

















 


(jj)                                                         “Debentures” means the debentures, notes or other
evidence of indebtedness of the Company issued and certified hereunder, or
deemed to be issued and certified hereunder, including, without limitation, the
Initial Debentures, and for the time being outstanding, whether in definitive
or interim form or in the form of Global Debentures;


 


(kk)                                                  “Depository” means, with respect to the Debentures of
any series issuable or issued in the form of one or more Global Debentures, the
Person designated as depository by the Company pursuant to Section 2.6(a) until
a successor depository shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Depository” shall mean each Person who is then a
depository hereunder, and if at any time there is more than one such Person, “Depository” as used with respect to the
Debentures of any series shall mean each depository with respect to the Global
Debentures of such series and, in the case of the Initial Debentures, the
Depository shall initially be the CDS Clearing and Depository Services Inc. (“CDS”);


 


(ll)                                                       “Depository
Participant” means a broker, dealer, bank, other financial
institution or other person for whom from time to time, a Depository effects
book entries for a Global Debenture deposited with the Depository;


 


(mm)                                            “Directors” means the directors of the Company on the
date hereof or such directors as may, from time to time, be appointed or
elected directors of the Company pursuant to the Company’s articles and by-laws,
and applicable laws, and “Director”
means any one of them, and reference to action by the Directors means action by
the Directors as a board;


 


(nn)                                                  “Effective
Date” has the meaning ascribed thereto in Section 2.4(j)(i);


 


(oo)                                                  “Event of Default” has the meaning ascribed thereto in Section 8.1;


 


(pp)                                                  “Extraordinary Resolution” has the meaning ascribed thereto
in Section 13.12;


 


(qq)                                                  “Fair
Market Value” means, with respect to any asset or property, the
price which could be negotiated in an arm’s-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of
whom is under undue pressure or compulsion to complete the transaction;


 


(rr)                                                       “Freely Tradeable” means, in respect of any Common Shares or
any other securities of the Company or any other Person, as the case may be,
which securities (i) may be issued without the necessity of filing a
prospectus or any other similar offering document (other than such prospectus
or similar offering document that has already been filed) under Applicable
Securities Legislation and such issue does not constitute a distribution (other
than a distribution already qualified by prospectus or similar offering
document or that is otherwise exempt from prospectus requirements) under Applicable
Securities Legislation; and (ii) can be traded by the holder thereof
without any restriction under Applicable Securities Legislation, such as hold
periods, except in the case of a control distribution (as defined in the
Applicable Securities Legislation);


 


6

















 


(ss)                                                    “Fully Registered
Debentures” means
Debentures registered as to both principal and interest;


 


(tt)                                                        “generally accepted accounting principles  or
GAAP” means generally accepted accounting principles in Canada or
the United States, as amended from time to time, as applicable to the Company
and for greater certainty includes International Financial Reporting Standards
as and to the extent applicable to the Company;


 


(uu)                                                  “Global Debenture” means a Debenture that is issued to and
registered in the name of the Depository, or its nominee, pursuant to Section 2.6
for purposes of being held by or on behalf of the Depository as custodian for
participants in the Depository’s book-entry only registration system;


 


(vv)                                                  “Government Obligations” means short-term Canadian government
obligations;


 


(ww)                                           “guarantee” means a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business) direct or indirect, in any manner (including, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
indebtedness or other obligations;


 


(xx)                                                      “Initial Debentureholders” means the Persons for the time
being entered into the register of Debentures as registered holders of the
Initial Debentures;


 


(yy)                                                  “Initial Debentures” means the Debentures designated as “6.25%
Convertible Unsecured Subordinated Debentures” and described in Section 2.4;


 


(zz)                                                     “Interest Obligation” means the obligation of the Company to pay
interest on the Debentures, as and when the same becomes due;


 


(aaa)                                              “Interest Payment Date” means a date specified for a series of
Debentures as the date on which an instalment of interest on such Debentures
shall be due and payable and which , for the Initial Debentures shall be
semi-annually on the 15th day of March and September in each
year, commencing on September 15, 2010 computed on the basis of a 360-day
year composed of twelve 30-day months;


 


(bbb)                                           “Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Personal Property Security Act (Ontario)
(or equivalent statutes) of any jurisdiction); provided that in no event will
an operating lease be deemed to constitute a Lien;


 


(ccc)                                              “Make
Whole Premium” has the meaning ascribed thereto in Section 2.4(j)(i);


 


(ddd)                                           “Make
Whole Premium Shares” has the meaning ascribed thereto in Section 2.4(j)(ii);


 


7

















 


(eee)                                              “Management
Internalization”
means the termination of the management agreement between the Company and the
Manager and the hiring by the Company of employees of the Manager all of which
is expected to be effective before the end of 2009;


 


(fff)                                                    “Manager” means Atlantic Power Management, LLC, the
manager of the Company;


 


(ggg)                                           “Material
Adverse Effect” means  (i) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, financial condition, or assets of the Company on a
consolidated basis; or (ii) a material adverse effect upon the legality,
validity, binding effect or enforceability of this Indenture against the
Company;


 


(hhh)                                           “Maturity Account” means an account or accounts required to be
established by the Company (and which shall be maintained by and subject to the
control of the Debenture Trustee) for each series of Debentures pursuant to and
in accordance with this Indenture;


 


(iii)                                                     “Maturity Date” for a Debenture means the date of maturity
for such Debenture as prescribed in this Indenture or in any supplement hereto;


 


(jjj)                                                     “Offering” means the public offering by short form
prospectus dated December 10, 2009 of $75,000,000 aggregate principal
amount of Initial Debentures and up to an additional $11,250,000 principal
amount of Initial Debentures pursuant to an over-allotment option;


 


(kkk)                                            “Ordinary Resolution” has the same meaning as “Extraordinary
Resolution” except that references in the latter to “662/3%” shall become references to “a majority” for the purposes of defining
“Ordinary Resolution”;


 


(lll)                                                     “Periodic Offering” means an offering of Debentures of a series
from time to time, the specific terms of which Debentures, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption and conversion provisions, if any,
with respect thereto, are to be determined by the Company upon the issuance of
such Debentures from time to time;


 


(mmm)                                  “Person” includes an individual, corporation,
company, limited liability company, partnership, joint venture, association,
trust, trustee, unincorporated organization or government or any agency or
political subdivision thereof;


 


(nnn)                                           “Privacy
Laws” has the meaning ascribed thereto in Section 15.22;


 


(ooo)                                           “Put Date”  has
the meaning ascribed thereto in Section 2.4(i)(i);


 


(ppp)                                           “Put Price”  has
the meaning ascribed thereto in Section 2.4(i)(i);


 


(qqq)                                           “Put Right”  has
the meaning ascribed thereto in Section 2.4(i)(i);


 


(rrr)                                                   “Redemption Date” has the meaning ascribed thereto in Section 4.3;


 


8

















 


(sss)                                              “Redemption Notice” has the meaning ascribed thereto in Section 4.3;


 


(ttt)                                                    “Redemption Price” means, in respect of a Debenture, the
amount, excluding interest, payable on the Redemption Date fixed for such
Debenture;


 


(uuu)                                           “Representative”
means the trustee, agent or representative (if any) for an issue of Senior
Indebtedness;


 


(vvv)                                           “Senior Creditor” means a holder or holders of Senior
Indebtedness and includes any agent or agents or representative or
representatives or trustee or trustees of any such holder or holders;


 


(www)                                   “Senior
Indebtedness” means  all
obligations, liabilities and indebtedness of the Company which would, in
accordance with GAAP, be classified upon a consolidated balance sheet of the
Company as liabilities of the Company and, whether or not so classified, shall
include (without duplication): (a) indebtedness of the Company for borrowed
money; (b) obligations of the Company evidenced by bonds, debentures,
notes or other similar instruments; (c) obligations of the Company arising
pursuant or in relation to bankers’ acceptances, letters of credit and letters
of guarantee (including payment and reimbursement obligations in respect
thereof) or indemnities issued in connection therewith; (d) obligations of
the Company under any swap, hedging or other similar contracts or arrangements;
(e) obligations of the Company under guarantees, indemnities, assurances,
legally binding comfort letters or other contingent obligations relating to the
Senior Indebtedness or other obligations of any other Person which would
otherwise constitute Senior Indebtedness within the meaning of this definition;
(f) all indebtedness of the Company representing the deferred purchase
price of any property including, without limitation, purchase money mortgages; (g) accounts
payable to trade creditors; (h) all renewals, extensions and refinancing
of any of the foregoing; and (i) all costs and expenses incurred by or on
behalf of the holder of any Senior Indebtedness in enforcing payment or
collection of any such Senior Indebtedness including enforcing any security
interest securing the same.


 


(xxx)                                             “Senior Security” means all mortgages, liens, pledges,
charges (whether fixed or floating), security interests or other encumbrances
of any kind, contingent or absolute, held by or on behalf of any Senior
Creditor and in any manner securing any Senior Indebtedness;


 


(yyy)                                           “Stock
Price” has the meaning ascribed thereto in Section 2.4(j)(ii);


 


(zzz)                                            “Subsidiary”
has the meaning ascribed thereto in National Instrument 45-106 — Prospectus and
Registration Exemptions;


 


(aaaa)                                        “Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, in
each case in effect on the date hereof;


 


(bbbb)                                    “this Indenture”, “this Trust Indenture”, “hereto”, “herein”, “hereby”, “hereunder”, “hereof” and similar expressions refer to this
Indenture and not to any 


 


9

















 


particular Article, Section, subsection, clause, subdivision or other
portion hereof and include any and every instrument supplemental or ancillary
hereto;


 


(cccc)                                        “Time of Expiry” means the time of expiry of certain rights
with respect to the conversion of Debentures under Article 6 which is to
be set forth for each series of Debentures which by their terms are to be
convertible;


 


(dddd)                                    “Total Put Price”  has
the meaning ascribed thereto in Section 2.4(i)(i);


 


(eeee)                                        “trading day” means, with respect to the TSX or other
market for securities, any day on which such exchange or market is open for
trading or quotation;


 


(ffff)                                                “TSX” means the Toronto Stock Exchange or its successor or successors;


 


(gggg)                                    “U.S.” means the United States of America, its territories and possessions
and States of the U.S.;


 


(hhhh)                                    “U.S. Tax Code” means the United States Internal Revenue
Code of 1986;


 


(iiii)                                                “Voting
Stock” of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the board of
directors, managers or trustees, as the case may be, of such Person;


 


(jjjj)                                                    “Written Direction” means an instrument in writing signed by any
one of the Chief Executive Officer or Chief Financial Officer of the Manager,
or after the Management Internalization, an instrument in writing signed by any
one of the Chief Executive Officer or Chief Financial Officer of the Company.


 


1.2                                                                               Meaning
of “Outstanding”


 


Every Debenture certified and delivered by
the Debenture Trustee hereunder shall be deemed to be outstanding until it is
cancelled, converted, redeemed or delivered to the Debenture Trustee for
cancellation, conversion or redemption or monies and/or Common Shares or other
applicable securities or property, as the case may be, for the payment thereof
shall have been set aside under Section 9.2, provided that:


 


(a)                                                          Debentures which have been
partially redeemed, purchased or converted shall be deemed to be outstanding
only to the extent of the unredeemed, unpurchased or unconverted part of the
principal amount thereof;


 


(b)                                                         when a new Debenture has been
issued in substitution for a Debenture which has been lost, stolen or
destroyed, only one of such Debentures shall be counted for the purpose of
determining the aggregate principal amount of Debentures outstanding; and


 


(c)                                                          for the purposes of any provision
of this Indenture entitling holders of outstanding Debentures to vote, sign
consents, requisitions or other instruments or take any other action under this
Indenture, or to constitute a quorum of any meeting of Debentureholders,
Debentures owned directly or indirectly, legally or equitably, by the Company
shall be disregarded except that:


 


10

















 


(i)                       for the purpose of determining
whether the Debenture Trustee shall be protected in relying on any such vote,
consent, acquisition or other instrument or action, or on the holders of
Debentures present or represented at any meeting of Debentureholders, only the
Debentures which the Debenture Trustee knows are so owned shall be so
disregarded;


 


(ii)                    Debentures so owned which have been pledged
in good faith other than to the Company or a Subsidiary of the Company shall
not be so disregarded if the pledgee shall establish to the satisfaction of the
Debenture Trustee the pledgee’s right to vote such Debentures, sign consents,
requisitions or other instruments or take such other actions in his or her
discretion free from the control of the Company or a Subsidiary of the Company;
and


 


(iii)                 Debentures so owned shall not be disregarded if they
are the only Debentures outstanding.


 


1.3                                                                               Interpretation


 


In this Indenture:


 


(a)                                                          words importing the singular
number or masculine gender shall include the plural number or the feminine or
neuter genders, respectively, and vice versa;


 


(b)                                                         all references to Articles and
Schedules refer, unless otherwise specified, to articles of and schedules to
this Indenture;


 


(c)                                                          all references to Sections,
subsections or clauses refer, unless otherwise specified, to sections,
subsections or clauses of this Indenture;


 


(d)                                                         words and terms denoting
inclusiveness (such as “include” or “includes” or “including”), whether or not so stated, are not limited by and do not imply
limitation of their context or the words or phrases which precede or succeed
them;


 


(e)                                                          unless otherwise indicated,
reference to any agreement or other instrument in writing means such agreement
or other instrument in writing as amended, modified, replaced or supplemented
from time to time;


 


(f)                                                            unless otherwise indicated,
reference to a statute shall be deemed to be a reference to such statute as
amended, re-enacted or replaced from time to time; and


 


(g)                                                         unless otherwise indicated, time
periods within which a payment is to be made or any other action is to be taken
hereunder shall be calculated by including the day on which the period
commences and excluding the day on which the period ends.


 


1.4                                                                               Headings,
etc.


 


The division of this Indenture into
Articles and Sections, the provision of a Table of Contents and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation of this Indenture or of the Debentures.


 


11

















 


1.5                                                                               Day
not a Business Day


 


In the event that any day on which any
action required to be taken hereunder is not a Business Day, then such action
shall be required to be taken on or before the requisite time on the next
succeeding day that is a Business Day.


 


1.6                                                                               Applicable
Law


 


This Indenture and the Debentures shall be
construed in accordance with the laws of the Province of Ontario and the laws
of Canada applicable therein and shall be treated in all respects as Ontario
contracts.  The Company hereby
irrevocably attorns to the jurisdiction of the courts of the Province of
Ontario.


 


1.7                                                                               Monetary
References


 


Whenever any amounts of money are referred
to herein, such amounts shall be deemed to be in lawful money of Canada unless
otherwise expressed.


 


1.8                                                                               Currency
of Payment


 


Unless otherwise indicated in a
supplemental indenture with respect to any particular series of Debentures, all
payments to be made under this Indenture or a supplemental indenture shall be
made in Canadian dollars.


 


1.9                                                                               All
Payments Net of Taxes


 


For greater certainty, any and all payments
to be made pursuant to this Indenture of or on account of principal, premium,
if any, and interest or any deemed interest on the Debentures (including upon
redemption, purchase or conversion of the Debentures) or of any other amount, whether
paid or payable in money, Common Shares or other securities or property, shall
be made subject to the deduction of any and all applicable taxes or
withholdings.


 


1.10                                                                        Accounting
Terms


 


Except as hereinafter provided or as
otherwise indicated in this Indenture, all calculations required or permitted
to be made hereunder pursuant to the terms of this Indenture shall be made in
accordance with GAAP.


 


1.11                                                                        Calculations


 


The Company shall be responsible for making
all calculations called for hereunder including, without limitation,
calculations of Current Market Price. The Company shall make such calculations
in good faith and, absent manifest error, the Company’s calculations shall be
final and binding on holders and the Trustee. The Company will provide a
schedule of its calculations to the Trustee and the Trustee shall be entitled
to rely conclusively on the accuracy of such calculations without independent
verification.


 


12

















 


1.12                                                                        Language


 


Each of the parties hereto hereby
acknowledges that it has consented to and requested that this Indenture and all
documents relating thereto, including, without limiting the generality of the
foregoing, the form of Debenture attached hereto as Schedule A, be drawn up in the English language only.


 


Les parties aux présentes reconnaissent
avoir accepté  et demandé  que le présent acte de fiducie et tous les
documents s’y rapportant, y compris, sans restreindre la portée générale de ce
qui précède, le formulaire de débenture joint aux présentes à titre d’annexe A,
soient rédigés en langue anglaise seulement.


 


1.13                                                                        Successors
and Assigns


 


All covenants and agreements in this
Indenture by the Company shall bind its respective successors and assigns,
whether expressed or not.  All covenants
and agreements in this Indenture by the Trustee shall bind its successors,
whether expressed or not.


 


1.14                                                                        Time
of Essence


 


Time shall be of the essence of this
Indenture.


 


1.15                                                                        Invalidity/Severability


 


In case any provision in this Indenture or in
the Debentures shall be invalid, illegal, prohibited or unenforceable, such
provision shall be deemed to be severed herefrom or therefrom and shall be
ineffective only to the extent of such prohibition or unenforceability.  The validity, legality and enforceability of
the remaining provisions shall not in any way be affected, prejudiced or
impaired thereby.


 


1.16                                                                        Entire
Agreement


 


This Indenture and all supplemental
indentures and Schedules hereto and thereto, any Written Direction establishing
the terms of Debentures pursuant to Section 2.2 and the Debentures issued
hereunder and thereunder, together constitute the entire agreement between the
parties hereto with respect to the indebtedness created hereunder and
thereunder and under the Debentures and supersedes as of the date hereof all
prior memoranda, agreements, negotiations, discussions and term sheets, whether
oral or written, with respect to the indebtedness created hereunder or
thereunder and under the Debentures.


 


1.17                                                                        Benefits
of Indenture


 


Nothing in this Indenture or in the
Debentures, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any paying agent, the holders of
Debentures, the Senior Creditors (to the extent provided in Article 5 only),
and (to the extent provided in Section 8.11) the holders of Common Shares,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.


 


13

















 


1.18                                                                        Schedules


 


The following Schedules form part of this
Indenture:


 


	
  Schedule A

  	
  —

  	
  Form of Global Debenture

  
	
  Schedule B

  	
  —

  	
  Form of Redemption Notice

  
	
  Schedule C

  	
  —

  	
  Form of Maturity Notice

  
	
  Schedule D

  	
  —

  	
  Form of Notice of Conversion

  
	
  Schedule E

  	
  —

  	
  Form of Notice of Put Exercise

  



 


ARTICLE 2


THE DEBENTURES


 


2.1                                                                               Limit
of Debentures


 


Subject to the limitation in respect of the
Initial Debentures set out in Section 2.4(a), the aggregate principal
amount of Debentures authorized to be issued under this Indenture is unlimited;
provided, however that Debentures may be issued only upon and subject to the
conditions and limitations herein set forth.


 


2.2                                                                               Terms
of Debentures of any Series


 


The Debentures may be issued in one or more
series.  There shall be established
herein or in or pursuant to one or more indentures supplemental hereto or
pursuant to a Written Direction,  prior to the
initial issuance of Debentures of any particular series (other than the Initial
Debentures, which are provided for in Section 2.4):


 


(a)                                                          the designation of the Debentures
of the series (which need not include the term “Debentures”), which shall distinguish the Debentures of
the series from the Debentures of all other series;


 


(b)                                                         any limit upon the aggregate
principal amount of the Debentures of the series that may be certified and delivered
under this Indenture (except for Debentures certified and delivered upon
registration of, transfer of, amendment of, or in exchange for, or in lieu of,
other Debentures of the series pursuant to Sections 2.9, 2.10, 3.2, 3.3 and
3.6);


 


(c)                                                          the date or dates on which the
principal of the Debentures of the series is payable;


 


(d)                                                         the rate or rates at which the
Debentures of the series shall bear interest, if any, the date or dates from
which such interest shall accrue, on which such interest shall be payable and
on which a record, if any, shall be taken for the determination of holders to
whom such interest shall be payable and/or the method or methods by which such
rate or rates or date or dates shall be determined;


 


(e)                                                          the place or places where the
principal of and any interest on Debentures of the series shall be payable or
where any Debentures of the series may be surrendered for registration of
transfer or exchange;


 


14






 










 


(f)                                                            the right, if any, of the Company
to redeem Debentures of the series, in whole or in part, at its option and the
period or periods within which, the price or prices at which and any terms and
conditions upon which, Debentures of the series may be so redeemed, pursuant to
any sinking fund or otherwise;


 


(g)                                                         the obligation, if any, of the
Company to redeem, purchase or repay Debentures of the series pursuant to any
mandatory redemption, sinking fund or analogous provisions or at the option of
a holder thereof and the price or prices at which, the period or periods within
which, the date or dates on which, and any terms and conditions upon which,
Debentures of the series shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligations;


 


(h)                                                         if other than denominations of
$1,000 and any integral multiple thereof, the denominations in which Debentures
of the series shall be issuable;


 


(i)                                                             subject to the provisions of this
Indenture, any trustees, Depositories, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Debentures of the series;


 


(j)                                                             any other events of default or
covenants with respect to the Debentures of the series;


 


(k)                                                          whether and under what
circumstances the Debentures of the series will be convertible into or
exchangeable, in whole or in part, for securities of any Person;


 


(l)                                                             whether the Debentures of the
series will be guaranteed by any Person and the terms of any such guarantee;


 


(m)                                                       the form and terms of the Debentures
of the series;


 


(n)                                                         if applicable, that the Debentures
of the series shall be issuable in whole or in part as one or more Global
Debentures and, in such case, the Depository or Depositories for such Global
Debentures in whose name, or whose nominee’s name, the Global Debentures will
be registered, and any circumstances other than or in addition to those set
forth in Section 2.9 or 3.2 or those applicable with respect to any
specific series of Debentures, as the case may be, in which any such Global
Debenture may be exchanged for Fully Registered Debentures, or transferred to
and registered in the name of a person other than the Depository for such
Global Debentures or a nominee thereof;


 


(o)                                                         if other than Canadian currency,
the currency in which the Debentures of the series are issuable; and


 


(p)                                                         any other terms of the Debentures
of the series (which terms shall not be inconsistent with the provisions of
this Indenture).


 


All Debentures of any one series shall be substantially identical,
except as may otherwise be established herein or by or pursuant to a resolution
of the Directors, in a Certificate or in an indenture supplemental hereto.  All Debentures of any one series need not be
issued at the same time and may be issued from time to time, including pursuant
to a Periodic Offering, consistent with the terms of 


 


15

















 


this Indenture, if so provided herein, by or pursuant to such
resolution of the Directors, in a Certificate or in an indenture supplemental
hereto.


 


2.3                                                                               Form of
Debentures


 


Except in respect of the Initial Debentures,
the form of which is provided for herein, the Debentures of each series shall
be substantially in such form or forms (not inconsistent with this Indenture)
as shall be established herein or by or pursuant to one or more resolutions of
the Directors (as set forth in a resolution of the Directors or to the extent
established pursuant to, rather than set forth in, a resolution of the
Directors, in a Certificate  detailing such
establishment)  or in one or more indentures
supplemental hereto, in each case, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have imprinted or otherwise reproduced thereon such legend
or legends or endorsements, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law, or with any rules or
regulations pursuant thereto or with any rules or regulations of any
securities exchange or securities regulatory authority or to conform to general
usage, all as may be determined by the Directors or Authorized Officer
executing such Debentures on behalf of the Company , as conclusively evidenced
by his or her execution of such Debentures. 
The Debenture Trustee shall not be required to ensure compliance with
any law or with any rules or regulations pursuant thereto or with any rules or
regulations of any securities exchange or securities regulatory authority or to
conform to general usage in connection with the issue, transfer or conversion
of the Debentures.  The responsibility
for compliance with the foregoing shall be that of the Company or the holder,
as applicable.


 


2.4                                                                               Form and
Terms of Initial Debentures


 


(a)                                                          The first series of Debentures (the
“Initial
Debentures”)
authorized for issue immediately is limited to an aggregate principal amount of
not more than $86,250,000
and shall be designated as “6.25% Convertible Unsecured Subordinated
Debentures”.


 


(b)                                                         The Initial Debentures shall be
dated as of the date of closing of the Offering and shall mature on March 15, 2017 (the “Maturity  Date”).


 


(c)                                                          The Initial Debentures shall bear
interest from the date of issue at the rate of 6.25% per annum, payable
semi-annually in arrears on the 15th day of March and September in
each year computed on the basis of a 360-day year composed of twelve 30-day
months.  The first such payment will fall
due on  September 15,
2010 and the last such payment (representing interest payable from and
including the last Interest Payment Date to, but excluding, the Maturity Date
or the earlier date of redemption or conversion of the Initial Debentures) will
fall due on the Maturity Date or the earlier date of redemption or conversion,
payable after as well as before maturity and after as well as before default,
with interest on amounts in default at the same rate, compounded semi-annually, computed on the basis of a 360-day year
composed of twelve 30-day months.  For
certainty, the first interest payment will include interest accrued and unpaid
from and including December 17, 2009 up to, but excluding, September 15,
2010 which will be equal to $46.53 for each $1,000 principal amount of the
Initial Debentures.


 


16

















 


(d)                                                         The Initial Debentures will be
redeemable at the option of the Company in accordance with the terms of Article 4,
provided that the Initial Debentures will not be redeemable on or prior to December 31,
2012 (except in certain limited circumstances following a Change of Control as
provided herein).  After December 31,
2012 and prior to December 31, 2014, the Initial Debentures may be
redeemed by the Company, in whole at any time or in part from time to time, on
notice as provided for in Section 4.3, provided that the Current Market
Price is not less than 125% of the Conversion Price at the time notice of
redemption is given.  On or after December 31,
2014 and prior to the Maturity Date, the Initial Debentures may be redeemed by
the Company, in whole at any time or in part from time to time, on notice as
provided for in Section 4.3.  In
such circumstances, the Initial Debentures will be redeemable at a price equal
to their principal amount plus accrued and unpaid interest.  The Redemption Notice for the Initial
Debentures shall be substantially in the form of Schedule B.  In
connection with the redemption of the Initial Debentures, the Company may, at
its option and subject to the provisions of Section 4.6 and subject to
regulatory approval, elect to satisfy its obligation to pay all or a portion of
the aggregate Redemption Price of the Initial Debentures to be redeemed by
issuing and delivering to the holders of such Initial Debentures, such number
of Freely Tradeable Common Shares as is obtained by dividing the principal amount
of the Initial Debentures which are to be redeemed by 95% of the Current Market
Price on the Redemption Date. If the Corporation elects to exercise such
option, it shall so specify and provide details in the Redemption Notice.


 


(e)                                                          The Initial Debentures will be
subordinated to the Senior Indebtedness in accordance with the provisions of Article 5.  In accordance with Section 2.12, the
Initial Debentures will rank pari passu
with each other series of Debentures issued under this Indenture or under indentures
supplemental to this Indenture (regardless of their actual date or terms of
issue) and, except as prescribed by law, with all other present and future
subordinated indebtedness and unsecured indebtedness of the Company, other than
Senior Indebtedness.


 


(f)                                                            Upon and subject to the provisions
and conditions of Article 6, the holder of each Initial Debenture shall
have the right, at such holder’s option, at any time prior to the close of
business on the earlier of: (i) the Maturity Date; and (ii) the last
Business Day immediately preceding the Redemption Date specified by the Company
for redemption of the Initial Debentures by notice to the holders of Initial
Debentures in accordance with Sections 2.4(d) and 4.3 (the earlier of
which will be the “Time of Expiry” for the purposes of Article 6 in respect of the Initial
Debentures), to convert the whole or, in the case of a Debenture of a
denomination in excess of $1,000, any part which is $1,000 or an integral
multiple thereof, of the principal amount of such Debenture into Common Shares
at the Conversion Price in effect on the Date of Conversion (as defined in Section 6.4(b)).  To the extent a redemption is a redemption in
part only of the Initial Debentures, such right to convert, if not exercised
prior to the applicable Time of Expiry, shall survive as to any Initial
Debentures not redeemed or converted and be applicable to the next succeeding
Time of Expiry.


 


The Conversion Price in effect on the date hereof
for each Common Share to be issued upon the conversion of Initial Debentures
shall be equal to $13.00 per



 


17

















 


Common Share being a conversion ratio of
approximately 76.9231 Common Shares for each $1,000 principal amount of Initial
Debentures so converted.  No adjustment
to the Conversion Price will be made for dividends or distributions payable on
Common Shares issuable upon conversion or for interest accrued or accruing on
Initial Debentures surrendered for conversion. 
Holders converting their Initial Debentures will receive interest which
has accrued but not been paid from the date of the most recent Interest Payment
Date on which interest was paid in full in accordance with this Indenture to,
but not including, the Date of Conversion. 
The Conversion Price applicable to, and the Common Shares, securities or
other property receivable on the conversion of, the Initial Debentures is
subject to adjustment pursuant to the provisions of Section 6.5.


 


(g)                                                         The Initial Debentures shall be
issued in denominations of $1,000 and integral multiples of $1,000 and the
Debenture Trustee is hereby appointed as registrar and transfer agent for the
Initial Debentures.  Each Initial
Debenture and the certificate of the Debenture Trustee endorsed thereon shall
be issued in substantially the form set out in Schedule A, with such insertions, omissions, substitutions or other
variations as shall be required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or endorsements,
not inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto or
with any rules or regulations of any securities exchange or securities
regulatory authority or to conform with general usage, all as may be determined
by the Directors or an Authorized Officer executing such Initial Debenture in
accordance with Section 2.7 hereof, as conclusively evidenced by his or
her execution of an Initial Debenture. 
Each Initial Debenture shall additionally bear such distinguishing
letters and numbers as the Debenture Trustee shall approve.  Notwithstanding the foregoing, an Initial
Debenture may be in such other form or forms as may, from time to time, be,
approved by a resolution of the Directors or as specified in a
Certificate.  The Initial Debentures may
be engraved, lithographed, printed, mimeographed or typewritten or partly in
one form and partly in another.


 


The Initial Debentures shall be issued as one or
more Global Debentures and the Global Debentures will be registered in the name
of the Depository which, as of the date hereof, shall be CDS (or any nominee of
the Depository).  No Beneficial Holder
will receive definitive certificates representing its interest in Debentures
except as provided in Section 3.2. 
A Global Debenture may be exchanged for Debentures in registered form
that are not Global Debentures, or transferred to and registered in the name of
a Person other than the Depository for such Global Debentures or a nominee
thereof as provided in Section 3.2.


 


(h)                                                         Upon and subject to the provisions
and conditions of Article 10, and provided no Event of Default has
occurred and is continuing, the Company may elect, from time to time, to raise
funds to satisfy all or part of an Interest Obligation on the Initial
Debentures on any Interest Payment Date (including, for greater certainty,
following conversion or upon maturity or redemption) by delivering Common
Shares to an agent, including the Debenture Trustee, for sale through the
facilities of a registered broker/dealer.


 


18

















 


(i)                                                             Subject to Applicable Securities
Legislation and any required regulatory approval, upon the occurrence of a
Change of Control and subject to the provisions and conditions of this Section 2.4(i) and
Article 5, Debentureholders have a right to require the Company to
purchase all of their Initial Debentures. 
The terms and conditions of such right are set forth below.


 


(i)         Upon the occurrence of a Change of Control,
each holder of Initial Debentures shall have the right (the “Put Right”) to require the Company to
purchase, on the date (the “Put Date”) which is 30 days following the date upon which the
Debenture Trustee delivers a Change of Control Notice (as defined below) to the
holders of Initial Debentures, all or any part of such holder’s Initial
Debentures at a price equal to 100% of the principal amount thereof (the “Put Price”) plus accrued and unpaid
interest, if any, on such Initial Debenture up to, but excluding, the Put Date
(collectively, the “Total Put Price”).


 


(ii)        The Company will, as soon as practicable,
and in any event no later than two Business Days after the occurrence of a
Change of Control, give written notice to the Debenture Trustee of the Change
of Control.  The Debenture Trustee will,
as soon as practicable thereafter, and in any event no later than four Business
Days after receiving notice from the Company of the Change of Control, provide
written notice to the holders of Initial Debentures of the Change of Control (a
“Change
of Control Notice”).  The Change
of Control Notice shall include a description of the Change of Control, details
of the Debentureholders’ Put Right under the terms of the Indenture (including
identifying the Put Date), a statement that each holder will be entitled to
withdraw his election to require the Company to purchase if the Debenture
Trustee receives, no later than the close of business on the third Business Day
immediately preceding the Put Date, a facsimile transmission or letter setting
forth the name of such holder, the principal amount of the Initial Debentures
tendered for purchase and a statement that such holder is withdrawing his
election to have the Initial Debentures purchased and a description of the
rights of the Company to redeem untendered Initial Debentures in accordance
with Section 2.4(i)(iv) hereof.


 


(iii)       To exercise the Put Right the
Debentureholder must deliver to the Debenture Trustee, not less than five
Business Days prior to the Put Date, written notice of the holder’s exercise of
such right in the form attached as Schedule E.


 


(iv)       If 90% or more in aggregate principal
amount of Initial Debentures outstanding on the date the Company provides
notice of a Change of Control to the Debenture Trustee have been tendered for
purchase pursuant to the Put Right on the Put Date, the Company shall have the
right, upon written notice provided to the Debenture Trustee within 10 days
following the Put Date, to redeem all the remaining outstanding Initial
Debentures effective as of the Put Date at the Total Put Price (the “90%
Redemption Right”).


 


(v)        Upon receipt of notice that the Company
shall exercise the 90% Redemption Right and acquire the remaining Initial
Debentures, the Debenture Trustee shall as soon as reasonably practicable
provide written notice to all Debentureholders that did not previously exercise
the Put Right that:


 


19

















 


(A)                              the Company has exercised the 90%
Redemption Right and will purchase all outstanding Initial Debentures effective
as of the Put Date at the Total Put Price, including a calculation of such
holder’s Total Put Price;


 


(B)                                each holder must transfer their
Initial Debentures to the Debenture Trustee on the same terms as those holders
that exercised the Put Right and must send their respective Initial Debentures,
duly endorsed for transfer, to the Debenture Trustee within 10 days after the
sending of such notice and the Depository shall make notations on the Global
Debenture of the principal amount thereof so transferred; and


 


(C)                                the rights of such holder under
the terms of the Initial Debentures and this Indenture shall cease to be
effective as of the Put Date provided the Company has paid the Total Put Price
to, or to the order of, the Debenture Trustee and thereafter the Initial
Debentures shall not be considered to be outstanding and the holder shall not
have any right except to receive such holder’s Total Put Price upon surrender
and delivery of such holder’s Initial Debentures in accordance with the
Indenture.


 


(vi)       The Company shall, on or before 11:00 a.m.
(Toronto time) on the Business Day immediately prior to the Put Date, deposit
with the Debenture Trustee or any paying agent to the order of the Debenture
Trustee, such sums of money as may be sufficient to pay the Total Put Price of
the Initial Debentures to be purchased or redeemed by the Company on the Put
Date, provided the Company may elect to satisfy this requirement by providing
the Debenture Trustee with a certified cheque or wire transfer for such amounts
required under this Section 2.4(i)(vi). 
The Company shall also deposit with the Debenture Trustee a sum of money
sufficient to pay any charges or expenses that may be incurred by the Debenture
Trustee in connection with such purchase and/or redemption, as the case may
be.  Every such deposit shall be
irrevocable.  From the sums so deposited,
the Debenture Trustee shall pay or cause to be paid to the holders of such
Initial Debentures, the Total Put Price to which they are entitled (less any
tax required by law to be deducted in respect of accrued and unpaid interest)
on the Company’s purchase or redemption.


 


(vii)      In the event that one or more of such
Initial Debentures being purchased in accordance with this Section 2.4(i) becomes
subject to purchase in part only, upon surrender of such Initial Debentures for
payment of the Total Put Price, the Depository shall make notations on the
Global Debenture of the principal amount thereof so purchased.


 


(viii)     Initial Debentures for which holders have
exercised the Put Right and Initial Debentures which the Company has elected to
redeem in accordance with the 90% Redemption Right shall become due and payable
at the Total Put Price on the Put Date, in the same manner and with the same
effect as if it were the date of maturity specified in such Initial Debentures,
anything therein or herein to the contrary notwithstanding, and from and after
such Put Date, if the money necessary to purchase or redeem the Initial Debentures
shall have 


 


20

















 


been deposited as provided in this Section 2.4(i) and
affidavits or other proofs satisfactory to the Debenture Trustee as to the
publication and/or mailing of such notices shall have been lodged with it,
interest on the Initial Debentures shall cease. 
If any question shall arise as to whether any notice has been given as
above provided and such deposit made, such question shall be decided by the Debenture
Trustee whose decision shall be final and binding upon all parties in interest.


 


(ix)       In case the holder of any Initial Debenture
to be purchased or redeemed in accordance with this Section 2.4(i) shall
fail on or before the Put Date to surrender such holder’s Initial Debenture or
shall not within such time accept payment of the money payable; or give such
receipt therefor, if any, as the Debenture Trustee may require, such monies may
be set aside in trust, either in the deposit department of the Debenture
Trustee or in a chartered bank, and such setting aside shall for all purposes
be deemed a payment to the Debentureholder of the sum so set aside and, to that
extent, the Initial Debenture shall thereafter not be considered as outstanding
hereunder and the Debentureholder shall have no other right except to receive
payment of the monies so paid and deposited, upon surrender and delivery up of
such holder’s Initial Debenture, of the Total Put Price.  In the event that any money required to be
deposited hereunder with the Debenture Trustee or any depository or paying
agent on account of the Total Put Price shall remain so deposited for a period
of six years from the Put Date, then such monies shall at the end of such
period be paid over or delivered over by the Debenture Trustee or such depository
or paying agent to the Company and the Debenture Trustee shall not be
responsible to Debentureholders for any amounts owing to them.


 


(x)        Subject to the provisions above related to
Initial Debentures purchased in part, all Initial Debentures redeemed and paid
under this Section 2.4(i) shall forthwith be delivered to the
Debenture Trustee and cancelled and no Initial Debentures shall be issued in
substitution therefor.


 


(j)                                                             In addition to the requirements of
Section 2.4(i) in respect of a Change of Control, the following
provisions shall apply in respect of the occurrence of a Cash Change of
Control:


 


(i)         In the event of the occurrence of a Cash
Change of Control, then subject to regulatory approval, during the period (the “Cash Change of Control Conversion Period”)
beginning 10 trading days before the anticipated effective date of the Change
of Control (the “Effective Date”)
and ending on the date that is 30 days after the Change of Control Notice and
Change of Control Purchase Offer are delivered or mailed to holders of Initial
Debentures in accordance with Section 2.4(i), holders of Initial
Debentures will be entitled to convert their Initial Debentures, in whole or in
part, and receive, in addition to the number of Common Shares (or cash or other
property or securities in substitution therefor) that such holders are entitled
to receive upon such conversion in accordance with the provisions and
conditions of Sections 2.4(f) and 2.4(j) and Article 6, an
additional number of Common Shares (or cash or other property or securities in
substitution 


 


21

















 


therefor) per $1,000 principal amount of Initial Debentures converted
as set forth below (the “Make Whole Premium”).


 


(ii)        The number of additional Common Shares per
$1,000 principal amount of Initial Debentures constituting the Make Whole
Premium (the “Make Whole Premium Shares”)
shall be determined by reference to the table following subsection (iii) below,
based on the actual Effective Date and the price (the “Stock Price”) paid per Common Share in the
transaction constituting the Change of Control. If holders of Common Shares
receive only cash in the transaction constituting the Change of Control, the
Stock Price shall be the cash amount paid per Common Share. Otherwise, the
Stock Price shall be equal to the Current Market Price of the Common Shares
immediately preceding the actual Effective Date of such transaction.
Notwithstanding the foregoing, in no circumstances can the effective Conversion
Price (calculated by dividing $1,000 by the number of Common Shares issuable
upon conversion, including the maximum number of Make Whole Premium Shares
hereunder) be less than the maximum permitted discounted price permitted by the
TSX at the time of announcement of the Offering (estimated by the Company to be
$8.92), prior to any
adjustments that may be made to the Stock Price to correspond to an adjustment
to the Conversion Price under this Indenture.


 


(iii)       The following table shows the number of
Make Whole Premium Shares for each hypothetical Stock Price and Effective Date
set forth below, expressed as additional Common Shares per $1,000 principal
amount of Debentures. For the avoidance of doubt, the Company shall not be
obliged to pay the Make Whole Premium otherwise than by issuance of Common
Shares upon conversion of the Initial Debentures in accordance with the
provisions and conditions of Section 2.4(f) and Article 6. If
the Stock Price or Effective Date are not set forth on the table then: (i) if
the actual Stock Price on the Effective Date is between two Stock Prices on the
table or the Effective Date is between two Effective Dates on the table, the
number of Make Whole Premium Shares will be determined by a straight-line
interpolation between the amounts set forth for the two Stock Prices and the
two Effective Dates on the table based on a 365-day year, as applicable, (ii) if
the Stock Price on the Effective Date exceeds $17.50 per Common Share, subject to adjustment as set
forth herein, the number of Make Whole Premium Shares to be issued will be
zero, and (iii) if the Stock Price on the Effective Date is less than $10.44 per Common Share, subject to
adjustment as set forth herein, the number of Make Whole Premium Shares to be
issued will be zero.


 


22

















 


Make Whole Premium Upon a
Cash Change of Control


(Number of Additional
Common Shares per $1,000 Initial Debenture)


 


	
  Effective

  	
   

  	
  Stock Price

  	
   

  
	
  Date

  	
   

  	
  $10.44

  	
   

  	
  $10.50

  	
   

  	
  $10.75

  	
   

  	
  $11.00

  	
   

  	
  $11.25

  	
   

  	
  $11.50

  	
   

  	
  $11.75

  	
   

  
	
  15-Dec-09

  	
   

  	
  18.86

  	
   

  	
  18.45

  	
   

  	
  16.46

  	
   

  	
  14.63

  	
   

  	
  12.94

  	
   

  	
  11.38

  	
   

  	
  9.95

  	
   

  
	
  15-Mar-10

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  14.26

  	
   

  	
  12.60

  	
   

  	
  11.08

  	
   

  	
  9.67

  	
   

  
	
  15-Mar-11

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.69

  	
   

  
	
  15-Mar-12

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.18

  	
   

  
	
  15-Mar-13

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.18

  	
   

  
	
  15-Mar-14

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.18

  	
   

  
	
  15-Mar-15

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.18

  	
   

  
	
  15-Mar-16

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.18

  	
   

  
	
  15-Mar-17

  	
   

  	
  18.86

  	
   

  	
  18.31

  	
   

  	
  16.10

  	
   

  	
  13.99

  	
   

  	
  11.97

  	
   

  	
  10.03

  	
   

  	
  8.18

  	
   

  



 


	
  Effective

  	
   

  	
  Stock Price

  	
   

  
	
  Date

  	
   

  	
  $12.00

  	
   

  	
  $12.50

  	
   

  	
  $13.00

  	
   

  	
  $14.00

  	
   

  	
  $15.00

  	
   

  	
  $17.50

  	
   

  	
  $20.00

  	
   

  
	
  15-Dec-09

  	
   

  	
  8.64

  	
   

  	
  6.38

  	
   

  	
  4.54

  	
   

  	
  1.92

  	
   

  	
  0.54

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-10

  	
   

  	
  8.40

  	
   

  	
  6.18

  	
   

  	
  4.38

  	
   

  	
  1.87

  	
   

  	
  0.53

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-11

  	
   

  	
  7.50

  	
   

  	
  5.46

  	
   

  	
  3.84

  	
   

  	
  1.59

  	
   

  	
  0.45

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-12

  	
   

  	
  7.06

  	
   

  	
  5.12

  	
   

  	
  3.56

  	
   

  	
  1.53

  	
   

  	
  0.48

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-13

  	
   

  	
  6.75

  	
   

  	
  4.83

  	
   

  	
  3.33

  	
   

  	
  1.32

  	
   

  	
  0.37

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-14

  	
   

  	
  6.41

  	
   

  	
  4.20

  	
   

  	
  2.72

  	
   

  	
  0.94

  	
   

  	
  0.23

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-15

  	
   

  	
  6.41

  	
   

  	
  3.08

  	
   

  	
  1.15

  	
   

  	
  0.15

  	
   

  	
  0.14

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-16

  	
   

  	
  6.41

  	
   

  	
  3.08

  	
   

  	
  1.30

  	
   

  	
  0.23

  	
   

  	
  0.17

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  15-Mar-17

  	
   

  	
  6.41

  	
   

  	
  3.08

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  



 


(iv)       The Stock Prices set forth in the first row
of table above will be adjusted as of any date on which the Conversion Price of
the Initial Debentures is adjusted. The adjusted Stock Prices will equal the
Stock Prices applicable immediately preceding such adjustment multiplied by a
fraction, the numerator of which is the Conversion Price immediately preceding
the adjustment giving rise to the Stock Price adjustment and the denominator of
which is the Conversion Price as so adjusted. The number of additional Make
Whole Premium Shares set forth in the table above will be adjusted in the same
manner as the Conversion Price as set forth in Section 6.5 hereof, other
than as a result of an adjustment of the Conversion Price by adding the Make
Whole Premium as described above.


 


(v)        Notwithstanding the foregoing, if the Date
of Conversion of any Initial Debentures occurs during the period beginning on
the 10th trading day prior to the Effective Date and
ending at the close of business on the actual Effective Date, the holders of
such Initial Debentures shall, on conversion of their Initial Debentures, only
be entitled to receive that number of Make Whole Premium Shares (as may be
adjusted pursuant to Section 6.5) on the Business Day immediately
following the actual Effective Date and, for greater certainty, only if the
Change of Control occurs.


 


(vi)       The Make Whole Premium Shares shall be
deemed to have been issued to a holder of Initial Debentures who exercises
conversion rights on or prior to the Effective Date upon conversion of Initial
Debentures on the Business Day 


 


23

















 


immediately following the Effective Date. Section 6.5 shall apply
to such conversion and, for greater certainty, the former holders of Initial
Debentures in respect of which the Make Whole Premium Shares are issuable shall
be entitled to receive and shall accept, in lieu of the Make Whole Premium
Shares, the number of shares or other securities or cash or other property of
the Company or of the Person or other entity resulting from the transaction
that constitutes the Cash Change of Control that such holders would have been
entitled to receive if such holders had been the registered holders of the
applicable number of Make Whole Premium Shares on the Effective Date.


 


(vii)      Except as otherwise provided in this Section 2.4(i),
all other provisions of this Indenture applicable to a conversion of Initial
Debentures shall apply to a conversion of Initial Debentures during the Cash
Change of Control Conversion Period.


 


(k)                                                          The Debenture Trustee shall be
provided with the documents and instruments referred to in Sections 2.5(b), (c) and
(d) with respect to the Initial Debentures prior to the issuance of the
Initial Debentures.


 


2.5                                                                               Certification
and Delivery of Additional Debentures


 


The Company
may from time to time request the Debenture Trustee to certify and deliver
Additional Debentures of any series by delivering to the Debenture Trustee the
documents referred to below in this Section 2.5 whereupon the Debenture
Trustee shall certify such Additional Debentures and cause the same to be
delivered in accordance with the Written Direction referred to below or
pursuant to such procedures acceptable to the Debenture Trustee as may be
specified from time to time by a Written Direction.  The maturity date, issue date, interest rate
(if any) and any other terms of the Additional Debentures of such series shall
be set forth in a supplemental indenture or determined by or pursuant to such
Written Direction.  In certifying such
Additional Debentures, the Debenture Trustee shall be entitled to receive and
shall be fully protected in relying upon, unless and until such documents have
been superseded or revoked:


 


(a)                                                          a Certificate  and/or executed supplemental indenture by
or pursuant to which the form and terms of such Additional Debentures are
established;


 


(b)                                                         a Written Direction, addressed to
the Debenture Trustee, requesting certification and delivery of such Additional
Debentures and setting forth delivery instructions, provided that, with respect
to Additional Debentures of a series subject to a Periodic Offering:


 


(i)         such Written Direction may be delivered by
the Company to the Debenture Trustee prior to the delivery to the Debenture
Trustee of such Additional Debentures of such series for certification and
delivery;


 


(ii)        the Debenture Trustee shall certify and
deliver Additional Debentures of such series for original issue from time to
time, in an aggregate principal amount not exceeding the aggregate principal
amount, if any, established for such series, pursuant to a Written Direction or
pursuant to procedures acceptable to the Debenture Trustee as may be specified
from time to time by a Written Direction;


 


24






 










 


(iii)          the maturity date or dates, issue date or
dates, interest rate or rates (if any) and any other terms of Additional
Debentures of such series shall be determined by an executed supplemental
indenture or by a Written Direction or pursuant to such procedures; and


 


(iv)          if provided for in such procedures, such
Written Direction may authorize certification and delivery pursuant to oral or
electronic instructions from the Company which oral or electronic instructions
shall be promptly confirmed in writing.


 


(c)                                                          an opinion of Counsel that all
requirements imposed by this Indenture or by law in connection with the
proposed issue of Additional Debentures have been complied with, subject to the
delivery of certain documents or instruments specified in such opinion; and


 


(d)                                                         a Certificate addressed to
Debenture Trustee, certifying that the Company is not in default under this
Indenture, that the terms and conditions for the certification and delivery of
Additional Debentures (including those set forth in Section 15.5), have
been complied with subject to the delivery of any documents or instruments
specified in such Certificate and that no Event of Default exists or will exist
upon such certification and delivery.


 


2.6                                                                               Issue
of Global Debentures


 


(a)                                                          The Company may specify that the
Debentures of a series are to be issued in whole or in part as one or more
Global Debentures registered in the name of a Depository, or its nominee,
designated by the Company in a Written Direction delivered to the Debenture
Trustee at the time of issue of such Debentures, and in such event the Company
shall execute and the Debenture Trustee shall certify and deliver one or more
Global Debentures that shall:


 


(i)            represent an aggregate amount equal to the
principal amount of the outstanding Debentures of such series to be represented
by one or more Global Debentures;


 


(ii)           be delivered to such Depository or pursuant
to such Depository’s instructions; and


 


(iii)          bear a legend in substantially the
following form subject to modification as required by the Depository:


 


“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”)
TO ATLANTIC POWER CORPORATION (THE “COMPANY”) OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS &
CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS
IS 


 


25

















 


REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST
IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION
OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS
CERTIFICATE.”


 


(b)                                                         Each Depository designated for a
Global Debenture must, at the time of its designation and at all times while it
serves as such Depository, be a clearing agency registered or designated under
the securities legislation of the jurisdiction where the Depository has its
principal offices.


 


2.7                                                                               Execution
of Debentures


 


All Debentures shall be signed (either
manually or by facsimile signature) by any one Director of the Company or
Authorized Officer  holding office
at the time of signing.  A facsimile
signature upon a Debenture shall for all purposes of this Indenture be deemed
to be the signature of the person whose signature it purports to be.  Notwithstanding that any person whose
signature, either manual or in facsimile, appears on a Debenture as a Director
of the Company or Authorized Officer  may no longer
hold such office at the date of the Debenture or at the date of the
certification and delivery thereof, such Debenture shall be valid and binding
upon the Company and entitled to the benefits of this Indenture.


 


2.8                                                                               Certification


 


No Debenture shall be issued or, if issued,
shall be obligatory or shall entitle the holder to the benefits of this
Indenture, until it has been manually certified by or on behalf of the
Debenture Trustee substantially in the form set out in this Indenture, in the
relevant supplemental indenture, or in some other form approved by the
Debenture Trustee.  Such certification on
any Debenture shall be conclusive evidence that such Debenture is duly issued,
is a valid obligation of the Company and the holder is entitled to the benefits
hereof.


 


The certificate of the Debenture Trustee
signed on the Debentures, or interim Debentures hereinafter mentioned, shall
not be construed as a representation or warranty by the Debenture Trustee as to
the validity of this Indenture or of the Debentures or interim Debentures or as
to the issuance of the Debentures or interim Debentures and the Debenture
Trustee shall in no respect be liable or answerable for the use made of the
Debentures or interim Debentures or any of them or the proceeds thereof.  The certificate of the Debenture Trustee signed
on the Debentures or interim Debentures shall, however, be a representation and
warranty by the Debenture Trustee that the Debentures or interim Debentures
have been duly certified by or on behalf of the Debenture Trustee pursuant to
the provisions of this Indenture.


 


2.9                                                                               Interim
Debentures or Certificates


 


Pending the delivery of definitive
Debentures of any series to the Debenture Trustee, the Company may issue and
the Debenture Trustee may certify in lieu thereof interim Debentures in such
forms and in such denominations and signed in such manner as provided herein,
entitling the 


 


26

















 


holders
thereof to definitive Debentures of the series when the same are ready for
delivery; or the Company may execute and the Debenture Trustee may certify a
temporary Debenture for the whole principal amount of Debentures of the series
then authorized to be issued hereunder and the Company may deliver the same to
the Debenture Trustee and thereupon the Debenture Trustee may issue its own
interim certificates in such form and in such amounts, not exceeding in the
aggregate the principal amount of the temporary Debenture so delivered to it,
as the Company, and the Debenture Trustee may approve entitling the holders
thereof to definitive Debentures of the series when the same are ready for
delivery; and, when so issued and certified, such interim or temporary
Debentures or interim certificates shall, for all purposes but without
duplication, rank in respect of this Indenture equally with Debentures duly
issued hereunder and, pending the exchange thereof for definitive Debentures,
the holders of the interim or temporary Debentures or interim certificates
shall be deemed without duplication to be Debentureholders and entitled to the
benefit of this Indenture to the same extent and in the same manner as though
the said exchange had actually been made. 
Forthwith after the Company shall have delivered the definitive
Debentures to the Debenture Trustee, the Debenture Trustee shall cancel such
temporary Debentures, if any, and shall call in for exchange all interim
Debentures or certificates that shall have been issued and forthwith after such
exchange shall cancel the same.  No
charge shall be made by the Company or the Debenture Trustee to the holders of
such interim or temporary Debentures or interim certificates for the exchange
thereof.  All interest paid upon interim
or temporary Debentures or interim certificates shall be noted thereon as a
condition precedent to such payment unless paid by cheque to the registered
holders thereof.


 


2.10                                                                        Mutilation,
Loss, Theft or Destruction


 


In case any of the Debentures issued
hereunder shall become mutilated or be lost, stolen or destroyed  and in the absence of the Company’s
receipt of any notice that such Debenture has been acquired by a bona fide purchaser, the Company, in its
discretion, may issue, and thereupon the Debenture Trustee shall certify and
deliver, a new Debenture upon surrender and cancellation of the mutilated
Debenture, or in the case of a lost, stolen or destroyed Debenture, in lieu of
and in substitution for the same, and the substituted Debenture shall be in a
form approved by the Debenture Trustee and shall be entitled to the benefits of
this Indenture and rank equally in accordance with its terms with all other
Debentures issued or to be issued hereunder. 
The new or substituted Debenture may have endorsed upon it the fact that
it is in replacement of a previous Debenture. 
In case of loss, theft or destruction, the applicant for a substituted
Debenture shall furnish to the Company and to the Debenture Trustee such
evidence of the loss, theft or destruction of the Debenture and such other
documents as shall be satisfactory to them in their discretion and shall also
furnish an indemnity and surety bond. 
The applicant shall pay all reasonable expenses incidental to the
issuance of any substituted Debenture.


 


2.11                                                                        Concerning
Interest


 


(a)                                                          Except as may otherwise be
provided in this Indenture or in any supplemental indenture or in a Written
Direction in respect of a series of Debentures and subject to Section 2.4(c) with
respect to the calculation of interest in respect of the initial interest
payment to be paid on the Initial Debentures, all Debentures issued hereunder,
whether originally or upon exchange or in substitution for previously issued
Debentures which are interest bearing, shall bear interest (i) from their
issue date, or (ii) from and including the last Interest Payment Date in
respect of which interest shall have been paid or made available for payment on
the outstanding Debentures of that series, whichever shall be the later, or, in
respect of Debentures 


 


27

















 


subject to a Periodic Offering, from their issue date or from and
including
the last Interest
Payment Date in respect of which interest shall have been paid or made
available for payment on such Debentures, in all cases, to but excluding the
next Interest Payment Date.  All interest
shall accrue from day to day and shall be payable in arrears for the actual
number of days lapsed in the relevant interest period. Interest payable in a
calendar year shall be payable semi-annually in arrears. Interest on all
Debentures issued hereunder shall cease to accrue on, but not including, the
Maturity Date, Redemption Date or Date of Conversion, as applicable, for such
Debentures, unless, upon due presentation, payment of principal or delivery of
amounts, securities or other property payable or deliverable hereunder and payment
of any accrued and unpaid interest or other amounts payable hereunder is
improperly withheld or refused.


 


(b)                                                         Unless otherwise specifically
provided in the terms of the Debentures of any series, interest shall be
computed on the basis of a 360-day year composed of twelve 30-day months.  With respect to any series of Debentures,
whenever interest is computed on a basis of a year (the “deemed year”) which contains fewer days than
the actual number of days in the calendar year of calculation, such rate of interest
shall be expressed as a yearly rate for purposes of the Interest Act (Canada) by multiplying such rate
of interest by the actual number of days in the calendar year of calculation
and dividing it by the number of days in the deemed year.


 


2.12                                                                        Debentures
to Rank Pari Passu


 


The Debentures will be direct unsecured
obligations of the Company.  Each
Debenture of the same series of Debentures will rank pari passu with each other Debenture of the same series
(regardless of their actual date or terms of issue) and, subject to statutory
preferred exceptions, with all other present and future subordinated
indebtedness and unsecured indebtedness of the Company, other than Senior
Indebtedness.  The payment of the
principal of, and interest on,  the
Debentures shall, as provided in Article 5, be subordinated and postponed
in right of payment to all Senior Indebtedness.


 


2.13                                                                        Payments
of Amounts Due on Maturity


 


Except as may otherwise be provided in this
Indenture or any supplemental indenture in respect of any series of Debentures
and subject to Section 4.11, payments of amounts due upon maturity of the
Debentures will be made in the following manner.  The Company will establish and maintain with
the Debenture Trustee a Maturity Account for each series of Debentures.  Each such Maturity Account shall be
maintained by and be subject to the control of the Debenture Trustee for the
purposes of this Indenture.  On or before
11:00 a.m. (Toronto time) on the Business Day immediately prior to each
Maturity Date for Debentures outstanding from time to time under this
Indenture, the Company will deposit in the applicable Maturity Account an
amount sufficient to pay the cash amount payable in respect of such Debentures
(including the principal amount and premium (if any), together with any accrued
and unpaid interest thereon less any tax required or permitted by law to be
deducted or withheld), provided the Company may elect to satisfy this
requirement by providing the Debenture Trustee with one or more certified
cheques, or with funds by electronic transfer, for such amounts required under
this Section 2.13.  The Debenture
Trustee, on behalf of the Company, will pay to each holder entitled to receive
payment the principal amount of and premium (if any) and accrued and unpaid interest
on the Debenture, upon surrender of the Debenture at any branch of the
Debenture Trustee designated for such purpose from time to time by the Company
and 


 


28

















 


the Debenture
Trustee.  The deposit or the making
available of such amounts to the applicable Maturity Account will satisfy and
discharge the liability of the Company for the Debentures to which the deposit
or making available of funds relates to the extent of the amount deposited or
made available (plus the amount of any tax deducted as aforesaid) and such
Debentures will thereafter to that extent not be considered as outstanding
under this Indenture and such holder will have no other right in regard thereto
other than to receive out of the money so deposited or made available the
amount to which such holder is entitled.


 


2.14                                                                        Payment
of Interest


 


The following provisions shall apply to
Debentures, except as otherwise provided in Section 2.4(c) or
permitted by Article 10 or specified in a resolution of the
Directors, a Certificate  or a
supplemental indenture or Written Direction relating to a particular series of
Additional Debentures:


 


(a)                                                          As interest becomes due on each
Debenture (except at maturity, on redemption or conversion, when interest may
at the option of the Company be paid upon surrender of such Debenture) the
Company, either directly or through the Debenture Trustee or any agent of the
Debenture Trustee, shall send or forward by prepaid ordinary mail, electronic
transfer of funds or such other means as may be agreed to by the Debenture
Trustee, payment of such interest (less any tax required or permitted to be
withheld therefrom) to the order of the registered holder of such Debenture
appearing on the registers maintained by the Debenture Trustee at the close of
business on the fifth Business Day prior to the applicable Interest Payment
Date and addressed to the holder at the holder’s last address appearing on the
register, unless such holder otherwise directs. 
If payment is made by cheque, such cheque shall be forwarded at least
three days prior to each date on which interest becomes due and if payment is
made by other means (such as electronic transfer of funds), such payment shall
be made in a manner whereby the holder receives credit for such payment on the
date such interest on such Debenture becomes due.  The mailing of such cheque or the making of
such payment by other means shall, to the extent of the sum represented
thereby, plus the amount of any withholding tax withheld as aforesaid, satisfy
and discharge all liability for interest on such Debenture, unless in the case
of payment by cheque, such cheque is not paid at par on presentation.  In the event of non-receipt of any cheque for
or other payment of interest by the person to whom it is so sent as aforesaid,
the Company or the Debenture Trustee will issue to such person a replacement
cheque or other payment for a like amount upon being furnished with such
evidence of non-receipt as it shall reasonably require and upon being indemnified
to its satisfaction.  Notwithstanding the
foregoing, if the Company is prevented by circumstances beyond its control
(including, without limitation, any interruption in mail service) from making
payment of any interest due on each Debenture in the manner provided above, the
Company may make payment of such interest or make such interest available for
payment (less any tax required or permitted to be withheld therefrom) in any
other manner acceptable to the Debenture Trustee with the same effect as though
payment had been made in the manner provided above.


 


(b)                                                         Notwithstanding Section 2.14(a),
if a series of Debentures is represented by a Global Debenture, then all
payments of interest on the Global Debenture shall be made by 


 


29

















 


electronic funds transfer or cheque made payable to the Depository or
its nominee for subsequent payment (less applicable taxes, if any) to
Beneficial Holders of interests in the applicable Global Debenture, unless the
Company and the Depository otherwise agree. 
None of the Company, the Debenture Trustee or any agent of the Debenture
Trustee for any Debenture issued as a Global Debenture will be liable or
responsible to any person for any aspect of the records related to or payments
made on account of beneficial interests in any Global Debenture or for
maintaining, reviewing, or supervising any records relating to such beneficial
interests.


 


ARTICLE 3


REGISTRATION,
TRANSFER, EXCHANGE AND OWNERSHIP


 


3.1                                                                               Fully
Registered Debentures


 


(a)                                                          With respect to each series of
Debentures issuable as Fully Registered Debentures, the Company shall cause to
be kept by and at the principal offices of the Debenture Trustee in Toronto,
Ontario and by the Debenture Trustee or such other registrar as the Company,
with the approval of the Debenture Trustee, may appoint at such other place or
places, if any, as may be specified in the Debentures of such series or as the
Company may designate with the approval of the Debenture Trustee, a register in
which shall be entered the names and last known addresses of the holders of
Fully Registered Debentures and particulars of the Debentures held by them
respectively and of all transfers of Fully Registered Debentures.  Such registration shall be noted on the
Debentures by the Debenture Trustee or other registrar unless a new Debenture
shall be issued upon such transfer.


 


(b)                                                         No transfer of a Fully Registered
Debenture shall be valid unless made on such register referred to in Section 3.1(a) by
the registered holder or such holder’s executors, administrators or other legal
representatives or an attorney duly appointed by an instrument in writing in
form and execution satisfactory to the Debenture Trustee or other registrar
upon surrender of the Debentures together with a duly executed form of transfer
acceptable to the Debenture Trustee and upon compliance with such other
reasonable requirements as the Debenture Trustee or other registrar may
prescribe, nor unless the name of the transferee shall have been noted on the
Debenture by the Debenture Trustee or other registrar.


 


3.2                                                                               Global
Debentures


 


(a)                                                          With respect to each series of
Debentures issuable in whole or in part as one or more Global Debentures, the
Company shall cause to be kept by and at the principal offices of the Debenture
Trustee in Toronto and by the Debenture Trustee or such other registrar as the
Company, with the approval of the Debenture Trustee, may appoint at such other
place or places, if any, as the Company may designate with the approval of the
Debenture Trustee, a register in which shall be entered the name and address of
the holder of each such Global Debenture (being the Depository, or its nominee,
for such Global Debenture) as holder thereof and particulars of the Global
Debenture held by it, and of all transfers thereof.  If any Debentures of such series are at any
time not Global Debentures, the provisions of Section 3.1 shall govern
with respect to registrations and transfers of such Debentures.


 


30

















 


(b)                                                         Notwithstanding any other
provision of this Indenture, a Global Debenture may not be transferred by the
registered holder thereof and accordingly, no definitive certificates shall be
issued to Beneficial Holders of Debentures, except in the following
circumstances or as otherwise specified in a resolution of the Directors, a
Certificate or supplemental indenture relating to a particular series of
Additional Debentures:


 


(i)            Global Debentures may be transferred by a
Depository to a nominee of such Depository or by a nominee of a Depository to
such Depository or to another nominee of such Depository or by a Depository or
its nominee to a successor Depository or its nominee;


 


(ii)           Global Debentures may be transferred at any
time after the Depository for such Global Debentures (i) has notified the
Company that it is unwilling or unable to continue as Depository in connection
with Global Debentures, or (ii) if at any time the Depository ceases to be
a clearing agency or otherwise ceases to be eligible to be a Depository under Section 2.6(b) and
the Company has not appointed a successor Depository for such Global
Debentures;


 


(iii)          Global Debentures may be transferred at any
time after the Company has determined, in its sole discretion, to terminate the
book-entry only registration system in respect of such Global Debentures and
has communicated such determination to the Debenture Trustee in writing;


 


(iv)          Global Debentures may be transferred at any
time after the Debenture Trustee has determined that an Event of Default has
occurred and is continuing with respect to the Debentures of the series issued
as a Global Debenture, provided that Beneficial Holders of the Debentures
representing, in the aggregate, not less than 25% of the aggregate principal
amount of the Debentures of such series advise the Depository in writing,
through the Depository Participants, that the continuation of the book-entry
only registration system for such series of Debentures is no longer in their
best interest and also  provided
that at the time of such transfer the Debenture Trustee has not waived the
Event of Default pursuant to Section 8.3;


 


(v)           Global Debentures may be transferred if
required by applicable law; and


 


(vi)          Global Debentures may be transferred if the
book-entry only registration system ceases to exist.


 


(c)                                                          With respect to the Global
Debentures, unless and until definitive certificates have been issued to
Beneficial Holders pursuant to subsection 3.2(b):


 


(i)            the Company and the Debenture Trustee may
deal with the Depository for all purposes (including paying interest on the
Debentures) as the sole holder of such series of Debentures and the authorized
representative of the Beneficial Holders;


 


(ii)           the rights of the Beneficial Holders shall
be exercised only through the Depository and shall be limited to those
established by law and agreements 


 


31

















 


between such
Beneficial Holders and the Depository or the Depository Participants;


 


(iii)          the Depository will make book-entry
transfers among the Depository Participants; and


 


(iv)          whenever this Indenture requires or permits
actions to be taken based upon instruction or directions of Debentureholders
evidencing a specified percentage of the outstanding Debentures, the Depository
shall be deemed to be counted in that percentage only to the extent that it has
received instructions to such effect from the Beneficial Holders or the
Depository Participant, and has delivered such instructions to the Debenture
Trustee.


 


(d)                                                         Whenever a notice or other
communication is required to be provided to Debentureholders, unless and until
definitive certificate(s) have been issued to Beneficial Holders pursuant
to this Section 3.2, the Debenture Trustee shall provide all such notices
and communications to the Depository and the Depository shall deliver such
notices and communications to such Beneficial Holders in accordance with
Applicable Securities Legislation.  Upon
the termination of the book-entry only registration system on the occurrence of
one of the conditions specified in Section 3.2(b) with respect to a
series of Debentures issued hereunder, the Debenture Trustee shall notify all
applicable Depository Participants and Beneficial Holders, through the
Depository, of the availability of definitive Debenture certificates.  Upon surrender by the Depository of the
certificate(s) representing the Global Debentures and receipt of new
registration instructions from the Depository, the Debenture Trustee shall
deliver the definitive Debenture certificates for such Debentures to the
holders thereof in accordance with the new registration instructions and
thereafter, the registration and transfer of such Debentures will be governed
by Section 3.1 and the remaining Sections of this Article 3.


 


3.3                                                                               Transferee
Entitled to Registration


 


The transferee of a Debenture shall be
entitled, after the appropriate form of transfer is lodged with the Debenture
Trustee or other registrar and upon compliance with all other conditions in
that behalf required by this Indenture or by law, to be entered on the register
as the owner of such Debenture free from all equities or rights of set-off or
counterclaim between the Company and the transferor or any previous holder of
such Debenture, save in respect of equities of which the Company is required to
take notice by statute or by order of a court of competent jurisdiction.


 


3.4                                                                               No
Notice of Trusts


 


Neither the Company, the Debenture Trustee
nor any registrar shall be bound to take notice of or see to the execution of
any trust (other than that created by this Indenture) whether express, implied
or constructive, in respect of any Debenture, and may transfer the same on the
direction of the person registered as the holder thereof, whether named as
trustee or otherwise, as though that person were the beneficial owner thereof.


 


32

















 


3.5                                                                               Registers
Open for Inspection


 


The registers referred to in Sections 3.1
and 3.2 shall, during regular business hours of the Debenture Trustee, be open
for inspection by the Company, the Debenture Trustee or any Debentureholder,
subject to applicable laws.  Every
registrar, including the Debenture Trustee, shall from time to time when
requested so to do by the Company or by the Debenture Trustee, in writing,
furnish the Company or the Debenture Trustee, as the case may be, with a list
of names and addresses of holders of registered Debentures entered on the
register kept by them and showing the principal amount and serial numbers of
the Debentures held by each such holder, provided the Debenture Trustee shall
be entitled to charge a reasonable fee to provide such a list.


 


3.6                                                                               Exchanges
of Debentures


 


(a)                                                          Subject to Section 3.7,
Debentures in any authorized form or denomination, other than Global Debentures,
may be exchanged for Debentures in any other authorized form or denomination,
of the same series and date of maturity, bearing the same interest rate and of
the same aggregate principal amount as the Debentures so exchanged.


 


(b)                                                         In respect of exchanges of
Debentures permitted by Section 3.6(a), Debentures of any series may be
exchanged only at the principal offices of the Debenture Trustee in Toronto or
at such other place or places, if any, as may be specified in the Debentures of
such series and at such other place or places as may from time to time be
designated by the Company with the approval of the Debenture Trustee.  Any Debentures tendered for exchange shall be
surrendered to the Debenture Trustee. 
The Company shall execute and the Debenture Trustee shall certify all
Debentures necessary to carry out exchanges as aforesaid.  All Debentures surrendered for exchange shall
be cancelled.


 


(c)                                                          Debentures issued in exchange for
Debentures which at the time of such issue have been selected or called for
redemption at a later date shall be deemed to have been selected or called for
redemption in the same manner and shall have noted thereon a statement to that
effect.


 


3.7                                                                               Closing
of Registers


 


(a)                                                          Neither the Company nor the
Debenture Trustee nor any registrar shall be required to:


 


(i)            make transfers or exchanges or conversions
of Fully Registered Debentures on any Interest Payment Date for such Debentures
or during the five preceding Business Days;


 


(ii)           make transfers or exchanges of any Debentures
on the day of any selection by the Debenture Trustee of Debentures to be
redeemed or during the five preceding Business Days; or


 


(iii)          make exchanges of any Debentures which will
have been selected or called for redemption unless upon due presentation
thereof for redemption such Debentures shall not be redeemed.


 


 


33

















 


(b)                                                         Subject to any restriction herein
provided, the Company with the approval of the Debenture Trustee may at any
time close any register for any series of Debentures, other than those kept at
the principal offices of the Debenture Trustee in Toronto, and transfer the
registration of any Debentures registered thereon to another register (which
may be an existing register) and thereafter such Debentures shall be deemed to
be registered on such other register. 
Notice of such transfer shall be given to the holders of such
Debentures.


 


3.8                                                                               Charges
for Registration, Transfer and Exchange


 


For each Debenture exchanged, registered,
transferred or discharged from registration, the Debenture Trustee or other
registrar, except as otherwise herein provided, may make a reasonable charge
for its services and in addition may charge a reasonable sum for each new
Debenture issued (such amounts as agreed upon by the Debenture Trustee and the
Company from time to time), and payment of such charges and reimbursement of
the Debenture Trustee or other registrar for any stamp taxes or governmental or
other charges required to be paid shall be made by the party requesting such
exchange, registration, transfer or discharge from registration as a condition
precedent thereto.  Notwithstanding the
foregoing provisions, no charge shall be made to a Debentureholder hereunder:


 


(a)                                                          for any exchange, registration,
transfer or discharge from registration of any Debenture applied for within a
period of two months from the date of the first delivery of Debentures of that
series or, with respect to Debentures subject to a Periodic Offering, within a
period of two months from the date of delivery of any such Debenture;


 


(b)                                                         for any exchange of any interim or
temporary Debenture or interim certificate that has been issued under Section 2.9
for a definitive Debenture;


 


(c)                                                          for any exchange of a Global
Debenture as contemplated in Section 3.2;


 


(d)                                                         for any conversion of any
Debenture resulting from a partial redemption under Section 4.2;


 


(e)                                                          for any conversion of any
Debenture resulting from a partial conversion under Section 6.4(d); or


 


(f)                                                            for any conversion of any
Debenture resulting from a partial purchase under Section 2.4(i).


 


3.9                                                                               Ownership
of Debentures


 


(a)                                                          Unless otherwise required by law,
the person in whose name any registered Debenture is registered shall for all
the purposes of this Indenture be and be deemed to be the owner thereof and
payment of or on account of the principal of and premium, if any, on such
Debenture and, interest thereon, shall be made to such registered holder.


 


34














 


(b)                                                         Neither the Company nor the
Debenture Trustee shall have any liability for:


 


(i)                                    any aspect of the records
relating to the beneficial ownership of the Debentures held by a Depository or
of the payments relating thereto; or


 


(ii)                                 maintaining, supervising or
reviewing any such records relating to the Debentures.


 


The rules governing Depositories provide that they act as the
agent and depository for Depository Participants.  As a result, such Depository Participants
must look solely to the Depository and Beneficial Holders of Debentures must
look solely to the Depository Participants for the payment of principal and
interest on the Debentures paid by or on behalf of the Company to the
Depository.


 


(c)                                                          Beneficial Holders of Debentures:


 


(i)                                    may not have Debenture
certificates registered in their name;


 


(ii)                                 may not have physical
certificates representing their interest in the Debentures;


 


(iii)                              may not be able to sell the
Debentures to institutions required by law to hold certificates for securities
they own; and


 


(iv)                             may be unable to pledge
Debentures as security.


 


(d)                                                         The registered holder for the time
being of any registered Debenture shall be entitled to the principal, premium,
if any, and/or interest evidenced by such instruments, respectively, free from
all equities or rights of set-off or counterclaim between the Company and the
original or any intermediate holder thereof and all Persons may act accordingly
and the receipt of any such registered holder for any such principal, premium
or interest shall be a good discharge to the Company and/or the Debenture
Trustee for the same and neither the Company nor the Debenture Trustee shall be
bound to inquire into the title of any such registered holder.


 


(e)                                                          Where Debentures are registered in
more than one name, the principal, premium, if any, and interest (in the case
of Fully Registered Debentures) from time to time payable in respect thereof
may be paid to the order of all such holders, failing written instructions from
them to the contrary, and the receipt of any one of such holders therefor shall
be a valid discharge, to the Debenture Trustee, any registrar and to the
Company.


 


(f)                                                            In the case of the death of one or
more joint holders of any Debenture the principal, premium, if any, and
interest from time to time payable thereon may be paid to the order of the
survivor or survivors of such registered holders and the receipt of any such
survivor or survivors therefor shall be a valid discharge to the Debenture
Trustee and any registrar and to the Company.


 


35

















 


ARTICLE 4


REDEMPTION
AND PURCHASE OF DEBENTURES,


CERTAIN
PAYMENTS ON MATURITY


 


4.1                                                                               Applicability
of Article


 


Subject to Applicable Laws and any required
regulatory approval, the Company shall have the right at its option to redeem,
either in whole or in part before maturity by payment of money any Debentures
issued hereunder of any series which by their terms are made so redeemable
(subject, however, to any applicable restriction on the redemption of Debentures
of such series) at such rate or rates of premium, if any, and on such date or
dates and in accordance with such other provisions as shall have been
determined at the time of issue of such Debentures and as shall have been
expressed in this Indenture, in the Debentures, in a Certificate, or in a
supplemental indenture authorizing or providing for the issue thereof, or in
the case of Additional Debentures issued pursuant to a Periodic Offering, in a
Written Direction requesting the certification and delivery thereof.


 


Subject to regulatory approval and Article 5,
the Company shall also have the right at its option to repay, either in whole
or in part, on redemption or maturity, either by payment of money in accordance
with Section 2.13, by issuance of Freely Tradeable Common Shares as
provided in Section 4.6 or 4.11, as applicable, or any combination
thereof, the principal amount of any Debentures issued hereunder of any series
which by their terms are made so repayable on redemption or maturity (subject
however, to any applicable restriction on the repayment of the principal amount
of the Debentures of such series) at such rate or rates of premium, if any, and
on such date or dates and in accordance with such other provisions as shall
have been determined at the time of issue of such Debenture and shall have been
expressed in this Indenture, in the Debentures, in a Certificate, or in a
supplemental indenture authorizing or providing for the issue thereof, or in
the case of Additional Debentures issued pursuant to a Periodic Offering, in a
Written Direction requesting the certification and delivery thereof.


 


4.2                                                                               Partial
Redemption


 


If less than all the Debentures of any
series for the time being outstanding are at any time to be redeemed or if a
portion of the Debentures being redeemed are being redeemed for cash and a
portion of such debentures are being redeemed by the payment of Freely
Tradeable Common Shares pursuant to Section 4.6, the Debentures to be so
redeemed shall be selected by the Debenture Trustee on a pro rata basis to the nearest multiple of
$1,000 in accordance with the principal amount of the Debentures registered in
the name of each holder, or in such other manner as the Debenture Trustee deems
equitable, subject to the approval of the TSX or such other exchange on which
the Debentures are then listed, as may be required from time to time.  Unless otherwise specifically provided in the
terms of any series of Debentures, no Debenture shall be redeemed in part
unless the principal amount redeemed is $1,000 or a multiple thereof.  For this purpose, the Debenture Trustee may
make, and from time to time vary, regulations with respect to the manner in
which such Debentures may be drawn for redemption and regulations so made shall
be valid and binding upon all holders of such Debentures notwithstanding the
fact that as a result thereof one or more of such Debentures may become subject
to redemption in part only or for cash only. 
In the event that one or more of such Debentures becomes subject to redemption
in part only, upon surrender of any such Debentures for payment of the
Redemption Price, together with interest accrued to but excluding the
Redemption Date, the Company shall execute and the Debenture Trustee shall
certify and deliver without charge to the holder thereof or upon the holder’s
order one or more new Debentures for the 


 


36

















 


unredeemed
part of the principal amount of the Debenture or Debentures so surrendered or,
with respect to a Global Debenture, the Depository shall make notations on the
Global Debenture of the principal amount thereof so redeemed.  Unless the context otherwise requires, the
terms “Debenture” or “Debentures” as used in this Article 4
shall be deemed to mean or include any part of the principal amount of any
Debenture which in accordance with the foregoing provisions has become subject
to redemption.


 


4.3                                                                               Notice
of Redemption


 


Notice of redemption (the “Redemption Notice”) of Debentures of any
series shall be given to the holders of the Debentures so to be redeemed not
more than 60 days nor less than 30 days prior to the date fixed for redemption
(the “Redemption Date”) in the
manner provided in Section 14.2. 
Every such notice shall specify the aggregate principal amount of
Debentures called for redemption, the Redemption Date, the Redemption Price,
together with accrued and unpaid interest to but excluding the Redemption Date,
if applicable the portion to be redeemed for cash and the portion to be
redeemed by issuing Freely Tradeable Common Shares and the places of payment
and shall state that interest upon the principal amount of Debentures called
for redemption shall cease to accrue and be payable from and after the
Redemption Date.  In addition, unless all
the outstanding Debentures are to be redeemed, the Redemption Notice shall
specify:


 


(a)                                                          the distinguishing letters and
numbers of the registered Debentures which are to be redeemed (or of such
thereof as are registered in the name of such Debentureholder);


 


(b)                                                         in the case of a published notice,
the distinguishing letters and numbers of the Debentures which are to be
redeemed or, if such Debentures are selected pro rata or by other similar system, such particulars
as may be sufficient to identify the Debentures so selected;


 


(c)                                                          in the case of a Global Debenture,
that the redemption will take place in such manner as may be agreed upon by the
Depository, the Debenture Trustee and the Company; and


 


(d)                                                         in all cases, the principal
amounts of such Debentures or, if any such Debenture is to be redeemed in part
only, the principal amount of such part.


 


In the event that all Debentures to be redeemed are registered
Debentures, publication shall not be required.


 


4.4                                                                               Debentures
Due on Redemption Dates


 


Notice having been given as aforesaid, all
the Debentures so called for redemption shall thereupon be and become due and
payable at the Redemption Price, together with accrued and unpaid interest to
but excluding the Redemption Date (less any taxes required or permitted to be
deducted or withheld), on the Redemption Date specified in such notice, in the
same manner and with the same effect as if it were the date of maturity
specified in such Debentures, anything therein or herein to the contrary
notwithstanding, and from and after such Redemption Date, if the monies
necessary to redeem such Debentures shall have been deposited as provided in Section 4.5
and affidavits or other proof satisfactory to the Debenture Trustee as to the
publication and/or mailing of such notices shall have been lodged with it,
interest upon the Debentures shall cease. 
If any question 


 


37

















 


shall arise as
to whether any notice has been given as above provided and such deposit made,
such question shall be decided by the Debenture Trustee whose decision shall be
final and binding upon all parties in interest.


 


4.5                                                                               Deposit
of Redemption Monies or Common Shares


 


Redemption of Debentures shall be provided
for by the Company depositing with the Debenture Trustee or any paying agent to
the order of the Debenture Trustee, on or before 11:00 a.m. (Toronto) time
on the Business Day immediately prior to the Redemption Date specified in such
notice, such sums of money, or certificates representing such Common Shares, or
both as the case may be, as may be sufficient to pay the Redemption Price of
the Debentures so called for redemption, plus a sum of money sufficient to pay
accrued and unpaid interest thereon up to but excluding the Redemption Date,
provided the Company may elect to satisfy this requirement by providing the
Debenture Trustee with one or more certified cheques  or wire transfer  for such amounts required under
this Section 4.5 post-dated to the Redemption Date, or by providing the
Debenture Trustee with such funds through electronic transfer of funds on the
Business Day immediately prior to the Redemption Date.  The Company shall also deposit with the
Debenture Trustee a sum of money sufficient to pay any charges or expenses that
may be incurred by the Debenture Trustee in connection with such
redemption.  Every such deposit shall be
irrevocable.  From the sums so deposited,
or certificates so deposited, or both, the Debenture Trustee shall pay or cause
to be paid, or issue or cause to be issued, to the holders of such Debentures
so called for redemption, upon surrender of such Debentures, the principal,
premium (if any) and interest (if any) to which they are respectively entitled
on redemption, less applicable taxes, if any. 
The Company may pay the interest hereunder in accordance with Article 10.


 


4.6                                                                               Right
to Repay Redemption Price in Common Shares


 


(a)                                                          Subject to the receipt of any
required regulatory approvals and the other provisions of this Section 4.6,
the Company may, at its option, in exchange for or in lieu of paying the
Redemption Price in money, elect to satisfy its obligation to pay all or any
portion of the principal amount of Debentures due upon redemption by issuing
and delivering to holders on the Redemption Date that number of Freely
Tradeable Common Shares obtained by dividing the principal amount of the
Debentures (or applicable portion thereof to be satisfied by the issuance and
delivery of Freely Tradeable Common Shares) by 95% of the Current Market Price
on the Redemption Date (the “Common Share
Redemption Right”).


 


(b)                                                         The Company shall exercise the
Common Share Redemption Right by providing notice of the Company’s decision to
exercise the Common Share Redemption Right to the holders of the Debentures so
to be redeemed not more than 60 days nor less than 40 days prior to the
Redemption Date in the manner provided in Section 14.2 Notice shall also
specify the aggregate principal amount of Debentures in respect of which it is
exercising the Common Share Redemption Right in such notice.


 


(c)                                                          The Company’s right to exercise
the Common Share Redemption Right shall be conditional upon the following
conditions being met on the Business Day preceding the Redemption Date:


 


38

















 


(i)                                    the issuance of the Common
Shares on the exercise of the Common Share Redemption Right shall be made in
accordance with Applicable Securities Legislation and such Common Shares shall
be issued as Freely Tradeable Common Shares;


 


(ii)                                 such additional Freely
Tradeable Common Shares shall be listed on each stock exchange on which the
Common Shares are then listed, the TSX or national securities exchange or
quoted in an inter-dealer quotation system of any registered national
securities association;


 


(iii)                              the Company shall be a reporting
issuer (or equivalent) in good standing under Applicable Securities Legislation
where the distribution of such Freely Tradeable Common Shares occurs;


 


(iv)                             no Event of Default shall have
occurred and be continuing;


 


(v)                                the Debenture Trustee shall
have received a Certificate stating that conditions (i), (ii), (iii) and (iv) above
have been satisfied and setting forth the number of Common Shares to be
delivered for each $1,000 principal amount of Debentures and the Current Market
Price on the Redemption Date; and


 


(vi)                             the Debenture Trustee shall
have received an opinion of Counsel to the effect that such Common Shares have
been duly authorized and, when issued and delivered pursuant to the terms of
this Indenture in payment of the Redemption Price, will be validly issued as
fully paid and non-assessable, that conditions (i) and (ii) above
have been satisfied and that, relying exclusively on a list of issuers in
default maintained by the relevant securities authorities, condition (iii) above
is satisfied, except that the opinion in respect of condition (iii) need
not be expressed with respect to those provinces where certificates are not
issued.


 


If the foregoing conditions are not satisfied prior to the close of
business on the Business Day preceding the Redemption Date, the Company shall
pay the Redemption Price in cash in accordance with Section 4.5 unless the
Debentureholder waives the conditions which are not satisfied. The Company may
not change the form of components or percentage of consideration to be paid for
the Debentures except as described in the preceding sentence. When the Company
determines the actual number of the Common Shares to be issued pursuant to the
Company’s exercise of its Common Share Redemption Right, it will issue a press
release on a national newswire disclosing the Current Market Price and such
actual number of Common Shares.


 


(d)                                                         In the event that the Company duly
exercises its Common Share Redemption Right, upon presentation and surrender of
the Debentures for payment on the Redemption Date, at any place where a
register is maintained pursuant to Article 3 or any other place specified
in the Redemption Notice, the Company shall on or before 11:00 a.m.
(Toronto time) on the Business Day immediately prior to the Redemption Date make
delivery to the Debenture Trustee, for delivery to and on account of the
holders, of 


 


39

















 


certificates representing the Freely Tradeable Common Shares to which
such holders are entitled.


 


(e)                                                          No fractional Freely Tradeable
Common Shares shall be delivered upon the exercise of the Common Share
Redemption Right but, in lieu thereof, the Company shall pay to the Debenture
Trustee for the account of the holders, at the time contemplated in Section 4.6(d),
the cash equivalent thereof determined on the basis of the Current Market Price
of the Common Shares on the Redemption Date (less any tax required to be
deducted, if any).


 


(f)                                                            A holder shall be treated as the
shareholder of record of the Freely Tradeable Common Shares issued on due
exercise by the Company of its Common Share Redemption Right effective
immediately after the close of business on the Redemption Date, and shall be
entitled to all substitutions therefor, all income earned thereon or accretions
thereto and all dividends or distributions (including distributions and
dividends in kind) thereon and arising thereafter, and in the event that the
Debenture Trustee receives the same, it shall hold the same in trust for the
benefit of such holder.


 


(g)                                                         The Company shall reserve and keep
available out of its authorized Common Shares (if the number thereof is or
becomes limited), solely for the purpose of issue and delivery upon the
exercise of the Company’s Common Share Redemption Right as provided herein, and
shall issue to Debentureholders to whom Freely Tradeable Common Shares will be
issued pursuant to exercise of the Common Share Redemption Right, such number
of Freely Tradeable Common Shares as shall be issuable in such event. All
Freely Tradeable Common Shares which shall be so issuable shall be duly and
validly issued as fully paid and non-assessable.


 


(h)                                                         The Company shall comply with all
Applicable Securities Legislation regulating the issue and delivery of Freely
Tradeable Common Shares upon exercise of the Common Share Redemption Right and
shall cause to be listed and posted for trading such Common Shares on each
stock exchange on which the Common Shares are then listed.


 


(i)                                                             The Company shall from time to
time promptly pay, or make provision satisfactory to the Debenture Trustee for
the payment of, all taxes and charges which may be imposed by the laws of
Canada or any province thereof (except income tax, withholding tax or security
transfer tax, if any) which shall be payable with respect to the issuance or
delivery of Freely Tradeable Common Shares to holders upon exercise of the
Common Share Redemption Right pursuant to the terms of the Debentures and of
this Indenture.


 


(j)                                                             If the Company elects to satisfy
its obligation to pay all or any portion of the Redemption Price by issuing
Freely Tradeable Common Shares in accordance with this Section 4.6 and if
the Redemption Price (or any portion thereof) to which a holder is entitled is
subject to withholding taxes and the amount of the cash payment of the
Redemption Price, if any, is insufficient to satisfy such withholding taxes,
the Debenture Trustee, on a Written Direction but for the account of the
holder, shall sell, through the investment banks, brokers or dealers selected
by the Company, out of the 


 


40

















 


Freely Tradeable Common Shares issued by the Company for this purpose,
such number of Freely Tradeable Common Shares that together with the cash
payment of the Redemption Price, if any, is sufficient to yield net proceeds
(after payment of all costs) to cover the amount of taxes required to be
withheld, and shall remit same on behalf of the Company to the proper tax
authorities within the period of time prescribed for this purpose under
applicable laws.


 


4.7                                                                               Failure
to Surrender Debentures Called for Redemption


 


In case the holder of any Debenture so
called for redemption shall fail on or before the Redemption Date to so
surrender such holder’s Debenture, or shall not within such time accept payment
of the Redemption Price payable or take delivery of Common Shares and/or
certificates representing such Common Shares issuable in respect thereof, or
give such receipt therefor, if any, as the Debenture Trustee may require, such
redemption monies may be set aside in trust, without interest, or such
certificates may be held in trust, either in the deposit department of the
Debenture Trustee or in a chartered bank, and such setting aside shall for all
purposes be deemed a payment to the Debentureholder of the sum so set aside
and, to that extent, the Debenture shall thereafter not be considered as
outstanding hereunder and the Debentureholder shall have no other right except
to receive payment out of the monies so paid and deposited or take delivery of
the Common Shares and/or certificates so deposited, or both, upon surrender and
delivery of such holder’s Debenture of the Redemption Price, as the case may
be, of such Debenture, plus accrued interest and unpaid interest to the
Redemption Date.  In the event that any
money, or Common Shares and/or certificates representing Common Shares,
required to be deposited hereunder with the Debenture Trustee or any depository
or paying agent on account of principal, premium, if any, or interest, if any,
on Debentures issued hereunder shall remain so deposited for a period of six
years from the Redemption Date, then such monies shall at the end of such
period be paid over or delivered over by the Debenture Trustee or such
depository or paying agent to the Company on its demand, and thereupon the
Debenture Trustee shall not be responsible to Debentureholders for any amounts
owing to them and subject to applicable law, thereafter the holder of a
Debenture in respect of which such money or Common Shares and/or certificates
was so repaid to the Company shall have no rights in respect thereof except to
obtain payment of the money or Common Shares and/or certificates due from the
Company, subject to any limitation period provided by the laws of the Province
of Ontario.  Notwithstanding the foregoing, the
Debenture Trustee will pay any remaining funds prior to the expiry of six years
after the Redemption Date to the Company upon receipt from the Company, of an
unconditional letter of credit from a Canadian chartered bank in an amount equal
to or in excess of the amount of the remaining funds.  If the remaining funds are paid to the
Company prior to the expiry of six years after the Redemption Date, the Company
shall reimburse the Debenture Trustee for any amounts required to be paid by
the Debenture Trustee to a holder of a Debenture pursuant to the redemption
after the date of such payment of the remaining funds to the Company but prior
to six years after the redemption.


 


4.8                                                                               Cancellation
of Debentures Redeemed


 


Subject to the provisions of Sections 4.2
and 4.9 as to Debentures redeemed or purchased in part, all Debentures redeemed
and paid whose obligations have been satisfied under this Article 4 shall
forthwith be delivered to the Debenture Trustee and cancelled and no Debentures
shall be issued in substitution therefor.


 


41

















 


4.9                                                                               Purchase
of Debentures by the Company


 


Unless otherwise specifically provided with
respect to a particular series of Debentures, the Company or an Affiliate may,
if the Company is not at the time in default hereunder, at any time and from
time to time, purchase Debentures in the market (which shall include purchases
from or through an investment dealer or a firm holding membership on a
recognized stock exchange) or by tender or by private contract, at any
price.  All Debentures so purchased may,
at the option of the Company or such Affiliate, be delivered to the Debenture
Trustee and shall be cancelled and no Debentures shall be issued in
substitution therefor.


 


If, upon an invitation for tenders, more
Debentures than the Company or an Affiliate is prepared to accept are tendered
at the same lowest price, the Debentures to be purchased by the Company or such
Affiliate shall be selected by the Debenture Trustee, in such manner (which may
include selection by lot, selection on a pro
rata basis, random selection by computer or any other method)
consented to by the TSX or such other exchange on which the Debentures are then
listed which the Debenture Trustee considers appropriate, from the Debentures
tendered by each tendering Debentureholder who tendered at such lowest
price.  For this purpose the Debenture
Trustee may make, and from time to time amend, regulations with respect to the
manner in which Debentures may be so selected, and regulations so made shall be
valid and binding upon all Debentureholders, notwithstanding the fact that as a
result thereof one or more of such Debentures become subject to purchase in
part only or not subject to purchase at all. 
The holder of a Debenture of which a part only is purchased, upon
surrender of such Debenture for payment, shall be entitled to receive, without
expense to such holder, one or more new Debentures for the unpurchased part so
surrendered, and the Debenture Trustee shall certify and deliver such new
Debenture or Debentures upon receipt of the Debenture so surrendered or, with
respect to a Global Debenture, the Depository shall make notations on the
Global Debenture of the principal amount thereof so purchased.


 


4.10                                                                        Deposit
of Maturity Monies


 


Subject to Section 4.11, payment on
maturity of Debentures shall be provided for by the Company depositing with the
Debenture Trustee or any paying agent to the order of the Debenture Trustee, on
or before 11:00 a.m. (Toronto time) on the Business Day immediately prior
to the Maturity Date such sums of money and/or Common Shares as may be
sufficient to pay the principal amount of the Debentures, together with a sum
of money sufficient to pay all accrued and unpaid interest thereon up to but
excluding the Maturity Date, provided the Company may elect to satisfy this
requirement by providing the Debenture Trustee with one or more certified
cheques or with funds by electronic transfer, for such amounts required under
this Section 4.10.  The Company
shall also deposit with the Debenture Trustee a sum of money sufficient to pay
any charges or expenses which may be incurred by the Debenture Trustee in
connection therewith.  Every such deposit
shall be irrevocable.  From the sums so
deposited, the Debenture Trustee shall pay or cause to be paid to the holders
of such Debentures, upon surrender of such Debentures, the principal, premium
(if any) and interest (if any) to which they are respectively entitled on
maturity.


 


4.11                                                                        Right
to Repay Principal Amount in Common Shares


 


(a)                                                          Subject to the receipt of any
required regulatory approvals and the other provisions of this Section 4.11,
the Company may, at its option, in exchange for or in lieu of repaying the
principal amount of Debentures in money, elect to satisfy its obligation to pay
all or any portion of the principal amount of Debentures outstanding at the 


 


42

















 


Maturity Date by issuing and delivering to holders on the Maturity Date
that number of Freely Tradeable Common Shares obtained by dividing the
principal amount of the Debentures (or applicable portion thereof to be
satisfied by the issuance and delivery of Freely Tradeable Common Shares) by
95% of the Current Market Price on the Maturity Date (the “Common Share Repayment Right”).


 


(b)                                                         The Company shall exercise the
Common Share Repayment Right by so specifying in the Maturity Notice, which
shall be delivered to the Debenture Trustee and the holders of Debentures not
more than 60 days and not less than 40 days prior to the Maturity Date, and
which shall also specify the aggregate principal amount of Debentures in
respect of which it is exercising the Common Share Repayment Right on the
Maturity Date.


 


(c)                                                          The Company’s right to exercise
the Common Share Repayment Right shall be conditional upon the following
conditions being met on the Business Day preceding the Maturity Date:


 


(i)                                    the issuance of the Common
Shares on the exercise of the Common Share Repayment Right shall be made in
accordance with Applicable Securities Legislation and such Common Shares shall
be issued as Freely Tradeable Common Shares;


 


(ii)                                 such additional Freely
Tradeable Common Shares shall be listed on each stock exchange on which the
Common Shares are then listed, the TSX or a national securities exchange or
quoted in an inter-dealer quotation system of any registered national
securities association;


 


(iii)                              the Company shall be a
reporting issuer in good standing under Applicable Securities Legislation where
the distribution of such Freely Tradeable Common Shares occurs;


 


(iv)                             no Event of Default shall have
occurred and be continuing;


 


(v)                                the Debenture Trustee shall
have received a Certificate stating that conditions (i), (ii), (iii) and (iv) above
have been satisfied and setting forth the number of Common Shares to be
delivered for each $1,000 principal amount of Debentures and the Current Market
Price of the Common Shares on the Maturity Date; and


 


(vi)                             the Debenture Trustee shall
have received an opinion of Counsel to the effect that such Common Shares have
been duly authorized and, when issued and delivered pursuant to the terms of
this Indenture in payment of the principal amount of the Debentures outstanding
will be validly issued as fully paid and non-assessable, that conditions (i) and
(ii) above have been satisfied and that, relying exclusively on a list of
issuers in default maintained by the relevant securities authorities, condition
(iii) above is satisfied, except that the opinion in respect of condition (iii) need
not be expressed with respect to those provinces where certificates are not
issued.


 


43

















 


If the foregoing conditions are not satisfied prior to the close of
business on the Business Day preceding the Maturity Date, the Company shall pay
the principal amount of the Debentures outstanding in cash in accordance with Section 2.13,
unless the Debentureholder waives the conditions which are not satisfied. The
Company may not change the form of components or percentages of consideration
to be paid for the Debentures once it has given the notice required to be given
to Debentureholders hereunder, except as described in the preceding sentence.
When the Company determines the actual number of Common Shares to be issued
pursuant to the exercise of its Common Share Repayment Right, it will issue a
press release on a national newswire disclosing the Current Market Price and
such actual number of Common Shares.


 


(d)                                                         In the event that the Company duly
exercises its Common Share Repayment Right, upon presentation and surrender of
the Debentures for payment on the Maturity Date, at any place where a register
is maintained pursuant to Article 3 or any other place specified in the
Maturity Notice, the Company shall on or before 11:00 a.m. (Toronto time)
on the Business Day immediately prior to the Maturity Date make the delivery to
the Trustee Debenture for delivery to and on account of the holders, of
certificates representing the Freely Tradeable Common Shares to which such holders
are entitled. The Company shall also deposit with the Debenture Trustee a sum
of money sufficient to pay any charges or expenses which may be incurred by the
Debenture Trustee in connection with the Common Share Repayment Right. Every
such deposit shall be irrevocable. From the certificates so deposited in
addition to amounts payable by the Debenture Trustee pursuant to Section 2.13,
the Debenture Trustee shall pay or cause to be paid, to the holders of such
Debentures, upon surrender of such Debentures, the principal amount of and
premium (if any) on the Debentures to which they are respectively entitled on
maturity and deliver to such holders the certificates to which such holders are
entitled. The delivery of such certificates to the Debenture Trustee will
satisfy and discharge the liability of the Company for the Debentures to which
the delivery of certificates relates to the extent of the amount delivered
(plus the amount of any certificates sold to pay applicable taxes in accordance
with this Section 4.11) and such Debentures will thereafter to that extent
not be considered as outstanding under this Indenture and such holder will have
no other right in regard thereto other than to receive out of the certificates
so delivered, the certificate(s) to which it is entitled.


 


(e)                                                          No fractional Freely Tradeable
Common Shares shall be delivered upon the exercise of the Common Share
Repayment Right but, in lieu thereof, the Company shall pay to the Debenture
Trustee for the account of the holders, at the time contemplated in Section 4.11(d),
the cash equivalent thereof determined on the basis of the Current Market Price
of the Common Shares on the Maturity Date (less any tax required to be
deducted, if any).


 


(f)                                                            A holder shall be treated as the
shareholder of record of the Freely Tradeable Common Shares issued on due
exercise by the Company of its Common Share Repayment Right effective
immediately after the close of business on the Maturity Date, and shall be
entitled to all substitutions therefor, all income earned thereon or accretions
thereto and all dividends or distributions (including distributions and
dividends in kind) thereon and arising thereafter, and in the event that the
Debenture


 


44














 


Trustee receives the same, it shall hold the same in trust for the
benefit of such holder.


 


(g)                                                         The Company shall at all times
reserve and keep available out of its authorized Common Shares (if the number
thereof is or becomes limited), solely for the purpose of issue and delivery
upon the exercise of the Company’s Common Share Repayment Right as provided
herein, and shall issue to Debentureholders to whom Freely Tradeable Common
Shares will be issued pursuant to exercise of the Common Share Repayment Right,
such number of Freely Tradeable Common Shares as shall be issuable in such
event. All Freely Tradeable Common Shares which shall be so issuable shall be
duly and validly issued as fully paid and non-assessable.


 


(h)                                                         The Company shall comply with all
Applicable Securities Legislation regulating the issue and delivery of Freely
Tradeable Common Shares upon exercise of the Common Share Repayment Right and
shall cause to be listed and posted for trading such Freely Tradeable Common
Shares on each stock exchange on which the Common Shares are then listed.


 


(i)                                                             The Company shall from time to
time promptly pay, or make provision satisfactory to the Debenture Trustee for
the payment of, all taxes and charges which may be imposed by the laws of
Canada or any province thereof (except income tax, withholding tax or security
transfer tax, if any) which shall be payable with respect to the issuance or
delivery of Freely Tradeable Common Shares to holders upon exercise of the
Common Share Repayment Right pursuant to the terms of the Debentures and of
this Indenture.


 


(j)                                                             If the Company elects to satisfy
its obligation to pay all or any portion of the principal amount of Debentures
due on maturity by issuing Freely Tradeable Common Shares in accordance with
this Section 4.11 and if the amount (or any portion thereof) to which a
holder is entitled is subject to withholding taxes and the amount of the cash
payment of the amount due on maturity, if any, is insufficient to satisfy such
withholding taxes, the Debenture Trustee, on a Written Direction but for the
account of the holder, shall sell, through the investment banks, brokers or
dealers selected by the Company, out of the Freely Tradeable Common Shares
issued by the Company for this purpose, such number of Freely Tradeable Common
Shares that together with the cash component of the amount due on maturity is
sufficient to yield net proceeds (after payment of all costs) to cover the
amount of taxes required to be withheld, and shall remit same on behalf of the
Company to the proper tax authorities within the period of time prescribed for
this purpose under applicable laws.


 


ARTICLE 5


SUBORDINATION
OF DEBENTURES


 


5.1                                                                               Applicability
of Article


 


The Debenture Liabilities of the Company
under any Debentures issued hereunder of any series, shall be subordinated and
postponed and subject in right of payment, to the extent and in the manner
hereinafter set forth in the following sections of this Article 5, to the
full and final payment of all existing and future Senior Indebtedness and the
termination of all related 


 


45

















 


commitments
and the expiration or termination of any letters of credit or other similar
instruments issued in connection therewith and each holder of any such Debenture
by his acceptance thereof agrees to and shall be bound by the provisions of
this Article 5.


 


5.2                                                                               Order
of Payment


 


Upon the distribution of the assets of the
Company upon any dissolution, winding-up, liquidation, bankruptcy, insolvency,
receivership, creditor enforcement or realization or other similar proceedings
relating to the Company or any of its property (whether voluntary or
involuntary, partial or complete) or any other marshalling of the assets and
liabilities of the Company:


 


(a)                                                          all existing and future Senior
Indebtedness shall first be paid in full and all related commitments shall have
been terminated and all letters of credit or other similar instruments issued
in connection therewith shall have expired or shall have been terminated before
any payment is made on account of Debenture Liabilities;


 


(b)                                                         any payment or distribution of
assets of the Company, whether in cash, property or securities, to which the
holders of the Debentures or the Debenture Trustee on behalf of such holders
would be entitled except for the provisions of this Article 5, shall be
paid or delivered by the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, or other liquidating agent making such payment or
distribution, directly to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness may have been issued, to the extent necessary to pay all Senior Indebtedness
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and


 


(c)                                                          the Senior Creditors or a receiver
or a receiver-manager of the Company or of all or part of its assets or any
other enforcement agent may sell, mortgage, or otherwise dispose of the Company’s
assets in whole or in part, free and clear of all Liens securing the Debenture
Liabilities (if any) and without the approval of the Debentureholders or the
Debenture Trustee, but subject to the requirement to account to the Debenture
Trustee or the Debentureholders for any surplus from any such disposition.


 


The rights and priority of the Senior Indebtedness
and the subordination pursuant hereto shall not be affected by:


 


(a)                                                          whether or not the Senior
Indebtedness is secured;


 


(b)                                                         the time, sequence or order of
creating, granting, executing, delivering of, or registering, perfecting or
failing to register or perfect any security notice, caveat, financing statement
or other notice in respect of the Senior Security;


 


(c)                                                          the time or order of the
attachment, perfection or crystallization of any security constituted by the
Senior Security;


 


46

















 


(d)                                                         the taking of any collection,
enforcement or realization proceedings pursuant to the Senior Security or any
release of any Senior Security;


 


(e)                                                          the date of obtaining of any
judgment or order of any bankruptcy court or any court administering
bankruptcy, insolvency or similar proceedings as to the entitlement of the
Senior Creditors, or any of them or the Debentureholders or any of them to any
money or property of the Company;


 


(f)                                                            the failure to exercise any power
or remedy reserved to the Senior Creditors under the Senior Security or to
insist upon a strict compliance with any terms thereof;


 


(g)                                                         whether any Senior Security is now
perfected, hereafter ceases to be perfected, is avoidable by any trustee in
bankruptcy or like official or is otherwise set aside, invalidated or lapses;


 


(h)                                                         the date of giving or failing to
give notice to or making demand upon the Company;


 


(i)                                                             any amendment, modification,
increase, extension, renewal, replacement of any Senior Indebtedness or Senior
Security; or


 


(j)                                                             any other matter whatsoever.


 


5.3                                                                               Subrogation
to Rights of Holders of Senior Indebtedness


 


After all Senior Indebtedness of the
Company is paid in full and all related commitments are terminated and letters
of credit or other similar instruments issued in connection therewith have
expired or terminated and until the Debentures are paid in full, the
Debentureholders’ rights hereunder shall be subrogated to the rights of the
existing and future holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to Senior Indebtedness. A
distribution made under this Article 5 to the existing and future holders
of such Senior Indebtedness of the Company which otherwise would have been made
to Debentureholders is not, as between the Company and the Debentureholders, a
payment by the Company to such Debentureholders, it being understood that the
provisions of this Article 5 are and are intended solely for the purpose
of defining the relative rights of the holders of the Debentures, on the one
hand, and the holders of Senior Indebtedness, on the other hand.


 


The Debenture Trustee, on behalf of each of
the Debentureholders, hereby waives any and all rights to require a Senior
Creditor to pursue or exhaust any rights or remedies with respect to the
Company or any property and assets subject to the Senior Security or in any
other manner to require the marshalling of property, assets or security in
connection with the exercise by the Senior Creditors of any rights remedies or
recourses available to them.


 


5.4                                                                               Obligation
to Pay Not Impaired


 


Subject at all times to the terms and
provisions of this Article 5, nothing contained in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal, premium, if any, and
interest on the Debentures, as and when the same shall become due and payable
in accordance with their terms, or affect the relative rights of the 


 


47

















 


holders of the
Debentures and creditors of the Company other than the holders of the Senior
Indebtedness nor, subject to the terms and provisions of this Article 5,
shall anything herein or therein prevent the Debenture Trustee or the holder of
any Debenture from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article 5 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.


 


5.5                                                                               No
Payment if Senior Indebtedness in Default


 


Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, or any other enforcement of any Senior Indebtedness,
then, except as provided in Section 5.8, all such Senior Indebtedness
shall first be paid in full, or shall first have been duly provided for, before
any payment is made on account of the Debenture Liabilities.


 


In case of a circumstance constituting a default or event of default
with respect to any Senior Indebtedness permitting (whether at that time or
upon notice, lapse of time, or satisfaction of any other condition precedent) a
Senior Creditor to demand payment or accelerate the maturity thereof where the
notice of such default or event of default has been given by or on behalf of
the holders of Senior Indebtedness to the Company or the Company otherwise has
knowledge thereof, unless and until such default or event of default shall have
been cured or waived or shall have ceased to exist or the Senior Indebtedness
has been paid in full, no payment (by purchase of Debentures or otherwise)
shall be made by the Company (except as provided in Section 5.8) with
respect to the Debenture Liabilities and neither the Trustee nor the holders of
Debentures shall be entitled to demand, institute proceedings for the
collection of (which shall, for certainty include proceedings related to an
adjudication or declaration as to the insolvency or bankruptcy of the Company
and other similar creditor proceedings), or receive any payment or benefit
(including without limitation by set-off, combination of accounts or otherwise
in any manner whatsoever) on account of the Debentures after the happening of
such a default or event of default (except as provided in Section 5.8),
and unless and until such default or event of default shall have been cured or
waived or shall have ceased to exist or the Senior Indebtedness has been paid
in full, such payments shall be held in trust for the benefit of, and, if and
when such Senior Indebtedness shall have become due and payable, shall be paid
over to, the holders of the Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing an amount of the Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.


 


The fact that any payment hereunder is
prohibited by this Section 5.5 shall not prevent the failure to make such
payment from being an Event of Default hereunder.


 


5.6                                                                               Payment
on Debentures Permitted


 


Except as provided by Section 5.5,
nothing contained in this Article 5 or elsewhere in this Indenture, or in
any of the Debentures, shall affect the obligation of the Company to make, or
prevent the Company from making, at any time except during the pendency of any
dissolution, winding up or liquidation of the Company or reorganization
proceeding specified in Section 5.2 affecting the affairs of the Company
any payment of principal of or interest on the Debentures.  For greater certainty, except as provided in Section 5.5,
the Company shall not be prevented from making any payment of principal of or
interest on the Debentures on each Interest Payment Date, on the 


 


48

















 


Maturity Date
or on the Redemption Date.  The fact that
any payment in respect of the Debentures is prohibited by this Article 5
or under any instrument relating to Senior Indebtedness shall not prevent the
failure to make such payment from being an Event of Default hereunder.  Nothing contained in this Article 5 or
elsewhere in this Indenture, or in any of the Debentures, shall prevent the
conversion of the Debentures or, except as prohibited by Section 5.5, the
application by the Debenture Trustee of any monies deposited with the Debenture
Trustee hereunder for the purpose, to the payment of or on account of the
Debenture Liabilities.


 


5.7                                                                               Confirmation
of Subordination


 


Each holder of Debentures by his acceptance
thereof authorizes and directs the Debenture Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 5 and appoints the Debenture Trustee his
attorney-in-fact for any and all such purposes. 
This power of attorney, being coupled with an interest and rights, shall
be irrevocable.  Upon request of the
Company, and upon being furnished a Certificate stating that one or more named
persons are Senior Creditors and specifying the amount and nature of the Senior
Indebtedness of such Senior Creditor, the Debenture Trustee shall enter into a
written acknowledgement, confirmation and/or agreement with the Company and/or
the person or persons named in such Certificate, acknowledging, confirming
and/or providing that such person or persons are entitled to all the rights and
benefits of this Article 5 as a Senior Creditor.  Such instruments shall be conclusive evidence
that the indebtedness specified therein is Senior Indebtedness.  However, nothing herein shall impair the
rights of any Senior Creditor who has not entered into such an agreement or
instrument.


 


5.8                                                                               Knowledge
of Debenture Trustee


 


Notwithstanding the provisions of this Article 5
or any provision in this Indenture or in the Debentures, the Debenture Trustee
will not be charged with knowledge of any Senior Indebtedness or of any default
in the payment thereof or any other default or event of default, or of the
existence of any other fact that would prohibit the making of any payment of
monies to or by the Debenture Trustee, or the taking of any other action by the
Debenture Trustee, unless and until the Debenture Trustee has received written
notice thereof from the Company, any Debentureholder, any Senior Creditor or a
trustee on behalf of anyone or more Senior Creditors, and such notice to the
Debenture Trustee shall be deemed to be notice to holders of the
Debentures.  The Debenture Trustee will
notify holders of Debentures as soon as reasonably practical of such notice.


 


5.9                                                                               Debenture
Trustee May Hold Senior Indebtedness


 


The Debenture Trustee is entitled to all
the rights set forth in this Article 5 with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture deprives the Debenture
Trustee of any of its rights as such holder.


 


5.10                                                                        Rights
of Holders of Senior Indebtedness Not Impaired


 


No right of any present or future holder of
any Senior Indebtedness to enforce the subordination herein will at any time or
in any way be prejudiced or impaired by any act or failure to act on the part
of the Company or by any non-compliance by the Company with the terms,
provisions 


 


49

















 


and covenants
of this Indenture, regardless of any knowledge thereof which any such holder
may have or be otherwise charged with.


 


5.11                                                                        Altering
the Senior Indebtedness


 


The holders of the Senior Indebtedness have
the right to extend, renew, increase, modify or amend the terms of the Senior
Indebtedness (including increasing the principal amount of the Senior
Indebtedness) or the Senior Security and to release, sell or exchange the
Senior Security and otherwise to deal freely with the Company and the Company’s
Subsidiaries, all without notice to or consent of the Debentureholders or the
Debenture Trustee and without affecting the liabilities and obligations of the
parties to this Indenture or the Debentureholders or the Debenture Trustee.


 


5.12                                                                        Additional
Indebtedness


 


This Indenture does not restrict the
Company from incurring additional indebtedness for borrowed money or otherwise
or mortgaging, pledging or charging its real or personal property or properties
to secure any indebtedness or other financing.


 


5.13                                                                        Right
of Debentureholder to Convert Not Impaired


 


The subordination of the Debentures to the
Senior Indebtedness and the provisions of this Article 5 do not impair in
any way the right of a Debentureholder to convert its Debentures pursuant to Article 6.


 


5.14                                                                        Invalidated
Payments


 


In the event that any of the Senior Indebtedness shall be paid in full
and any related commitments shall be terminated and any letters of credit or
other similar instruments issued in connection therewith shall have been
terminated or otherwise expired and subsequently, for whatever reason, such
formerly paid or satisfied Senior Indebtedness becomes unpaid or unsatisfied,
such commitments are reinstated or such letters of credit or other instruments
become effective and are outstanding, the terms and conditions of this Article 5
shall be reinstated and the provisions of this Article shall again be
operative until all Senior Indebtedness is repaid in full and any related
commitments shall be terminated and any letters of credit or other similar
instruments issued in connection therewith shall have been terminated or
otherwise expired, provided that such reinstatement shall not give the Senior
Creditors any rights or recourses against the Debenture Trustee or the
Debentureholders for amounts paid to the Debentureholders subsequent to such
payment or satisfaction in full and prior to such reinstatement.


 


5.15                                                                        Contesting
Security


 


The Debenture Trustee, for itself and on
behalf of the Debentureholders, agrees that it shall not contest or bring into
question the validity, perfection or enforceability of any of the Senior
Security or Senior Indebtedness, or the relative priority of the Senior
Security or Senior Indebtedness including, without limitation, pursuant to this
Indenture, any Debentures or any Guarantee.


 


50

















 


5.16                                                                        Obligations
Created by Article 5


 


The Company
and the Debenture Trustee, in its capacity as trustee hereunder and not in its
corporate personal capacity, agree, and each holder by its acceptance of a
Debenture likewise agrees, that:


 


(a)                                                          the provisions of this Article 5
are an inducement and consideration to each holder of Senior Indebtedness to
give or continue credit to the Company, the Company’s Subsidiaries or others or
to acquire Senior Indebtedness;


 


(b)                                                         each holder of Senior Indebtedness
may accept the benefit of this Article 5 on the terms and conditions set
forth in this Article 5 by giving or continuing credit to the Company, the
Company’s Subsidiaries or others or by acquiring or having outstanding as of
the date hereof Senior Indebtedness, in each case without notice to the
Debenture Trustee and without establishing actual reliance on this Article 5;
and


 


(c)                                                          each obligation created by this Article 5
is created for the benefit of the holders of Senior Indebtedness and is hereby
declared to be created in trust for those holders by the Company, the Debenture
Trustee and each holder of a Debenture and shall be binding on the Company, the
Debenture Trustee and each holder of a Debenture whether or not any confirmation
described in Section 5.7 is requested, executed or delivered.


 


5.17                                                                        No
Set-Off


 


Each of the Company and the Debenture
Trustee agrees, and each holder of a Debenture, by his acceptance thereof,
likewise agrees, that it shall have no rights of set-off or counterclaim with
respect to the principal of, premium, if any, and interest on the Debentures at
any time when any payment of, or in respect of, such amounts to the Debenture
Trustee or the holder of a Debenture is prohibited by this Article 5 or is
otherwise required to be paid to the holders of Senior Indebtedness or their
representative or to the trustee under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have been issued, as
their respective interests may appear.


 


5.18                                                                        Amendments
to Article 5


 


Each of the Company and the Debenture
Trustee (relying on the opinion of Counsel) agrees, and each holder of a
Debenture, by his acceptance thereof, likewise agrees, not to make any changes
to this Indenture or the Debentures, including this Article 5 or the
definition of Senior Indebtedness, which prejudice the rights of the holders of
Senior Indebtedness under this Article 5 without the consent of the
holders of Senior Indebtedness or their representative or the trustee under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued.


 


51

















 


ARTICLE 6

CONVERSION OF DEBENTURES


 


6.1                                                                               Applicability
of Article


 


Any Debentures issued hereunder of any
series which by their terms are convertible (subject, however, to any
applicable restriction of the conversion of Debentures of such series) will be
convertible into Freely Tradeable Common Shares or, if applicable, other
securities or property, at such exchange rate or rates, and on such date or
dates and in accordance with such other provisions as shall have been
determined at the time of issue of such Debentures and shall have been
expressed in this Indenture, in such Debentures, in a  Certificate,
or in a supplemental indenture authorizing or providing for the issue thereof.


 


Such right of conversion shall extend only
to the maximum number of whole Common Shares into which the aggregate principal
amount of the Debenture or Debentures surrendered for conversion at any one
time by the holder thereof may be converted. 
Fractional interests in Common Shares shall be adjusted for in the
manner provided in Section 6.6.


 


6.2                                                                               Notice
of Expiry of Conversion Privilege


 


Notice of the expiry of the conversion
privileges of the Debentures shall be given by or on behalf of the Company, not
more than 60 days and not less than 30 days prior to the date fixed for the
Time of Expiry, in the manner provided in Section 14.2.


 


6.3                                                                               Revival
of Right to Convert


 


If the redemption of any Debenture called
for redemption by the Company is not made or the payment of the purchase price
of any Debenture which has been tendered pursuant to the Put Right or in
acceptance of any offer by the Company to purchase Debentures for cancellation
is not made, in the case of a redemption upon due surrender of such Debenture
or in the case of a purchase on the date on which such purchase is required to
be made, as the case may be, then, the right to convert such Debenture shall
revive and continue as if such Debenture had not been called for redemption or
tendered in acceptance of the Company’s offer, respectively.


 


6.4                                                                               Manner
of Exercise of Right to Convert


 


(a)                                                          The holder of a Debenture desiring
to convert such Debenture in whole or in part into Common Shares shall
surrender such Debenture to the Debenture Trustee at its principal offices in
Toronto together with the conversion form attached hereto as Schedule D duly executed by the holder or his or her
executors or administrators or other legal representatives or his, her or their
attorney duly appointed by an instrument in writing in form and executed in a
manner satisfactory to the Debenture Trustee, exercising his or her right to
convert such Debenture in accordance with the provisions of this Article 6;
provided that with respect to a Global Debenture, the obligation to surrender a
Debenture to the Debenture Trustee shall be satisfied if the Debenture Trustee
makes notation on the Global Debenture of the principal amount thereof so
converted and the Debenture Trustee is provided with all other documentation
which it may request.  Thereupon, subject
to payment of all applicable stamp or security transfer, income, withholding or
other taxes or other governmental 


 


52

















 


charges and compliance with all reasonable requirements of the
Debenture Trustee (including, for greater certainty, the withholding obligation
of the Debenture Trustee pursuant to Section 15.23 hereof), the Conversion
Price shall have been paid and such Debentureholder or his or her nominee(s) or
assignee(s) shall be entitled to be entered in the books of the Company on
the Business Day immediately after the Date of Conversion (or such later date
as is specified in Section 6.4(b)), as the holder of the number of Common
Shares into which such Debenture is convertible, net of applicable withholding
taxes, if any, in accordance with the provisions of this Article and, as
soon as practicable thereafter, the Company shall (i) deliver or cause to
be delivered to the Debentureholder, or subject as aforesaid, his or her
nominee(s) or assignee(s) such certificate or certificates for such
Common Shares; and (ii) make or cause to be made any payment of interest
to which such holder is entitled in accordance with Section 6.4(e) hereof
or in respect of fractional Common Shares as provided in Section 6.6.


 


(b)                                                         For the purposes of this Article,
a Debenture shall be deemed to be surrendered for conversion on the date on
which it is so surrendered in proper form when the register of the Debenture
Trustee is open and in accordance with the provisions of this Article or,
in the case of a Global Debenture, on the date on which the Debenture Trustee
received notice of and all necessary documentation in respect of the exercise
of the conversion rights and, in the case of a Debenture so surrendered by post
or other means of transmission, on the date on which it is received in proper
form by the Debenture Trustee at its office specified in Section 6.4(a);
provided that if a Debenture is surrendered for conversion on a day on which
the register of Common Shares is closed, the Person or Persons entitled to
receive Common Shares shall become the holder or holders of record of such
Common Shares as at the date on which such registers are next reopened (in each
case the “Date of Conversion”).


 


(c)                                                          Any part, being $1,000 (in the
currency of the applicable Debenture) or an integral multiple thereof, of a
Debenture in a denomination in excess of $1,000 (in the currency of the
applicable Debenture) may be converted as provided in this Article 6 and
all references in this Indenture to conversion of Debentures shall be deemed to
include conversion of such parts.


 


(d)                                                         The holder of any Debenture of
which only a part is converted shall, upon the exercise of his or her right of
conversion, surrender such Debenture to the Debenture Trustee, and the
Debenture Trustee shall cancel the same and shall without charge forthwith
certify and deliver to the holder a new Debenture or Debentures in an aggregate
principal amount equal to the unconverted part of the principal amount of the
Debenture so surrendered or, with respect to a Global Debenture, the Depository
shall make notations on the Global Debentures of the principal amount thereof
so converted.


 


(e)                                                          The holder of a Debenture
surrendered for conversion in accordance with this Section 6.4 shall be
entitled (subject to any applicable restriction on the right to receive
interest on conversion of Debentures of any series) to receive accrued and
unpaid interest in respect thereof from and including the most recent Interest
Payment Date to which interest has been paid to, but not including, the Date of
Conversion of such Debenture (less applicable withholding taxes, if any)  and the Common Shares issued 


 


53

















 


upon such conversion shall rank only in respect of distributions or
dividends declared in favour of holders of Common Shares of record on and after
the Date of Conversion or such later date as such holder shall become the
holder of record of such Common Shares pursuant to Section 6.4(b), from
which applicable date they will for all purposes be and be deemed to be issued
and outstanding as fully paid and non-assessable Common Shares.


 


6.5                                                                               Adjustment
of Conversion Price


 


The Conversion
Price in effect at any date shall be subject to adjustment from time to time as
set forth below.


 


(a)                                                          If and whenever at any time prior
to the Time of Expiry the Company shall (i) subdivide or redivide the
outstanding Common Shares into a greater number of Common Shares, (ii) reduce,
combine or consolidate the outstanding Common Shares into a smaller number of
Common Shares, or (iii) issue Common Shares (or other securities
convertible into or exchangeable for Common Shares) to the holders of all or
substantially all of the outstanding Common Shares by way of a stock dividend
or other distribution (other than the issue of Common Shares to holders of
Common Shares who have elected to receive dividends in the form of Common
Shares in lieu of cash dividends paid in the ordinary course on the Common
Shares), the Conversion Price in effect on the effective date of such
subdivision, redivision, reduction, combination or consolidation or on the
record date for such issue of Common Shares by way of a stock dividend or other
distribution, as the case may be, shall in the case of any of the events
referred to in (i) and (iii) above be decreased in proportion to the
number of outstanding Common Shares resulting from such subdivision, redivision
or dividend or distribution, or shall, in the case of any of the events
referred to in (ii) above, be increased in proportion to the number of
outstanding Common Shares resulting from such reduction, combination or consolidation.  Such adjustment shall be made successively
whenever any event referred to in this Section 6.5(a) shall
occur.  Any such issue of Common Shares
by way of a stock dividend or other distribution shall be deemed to have been
made on the record date for the stock dividend or other distribution for the
purpose of calculating the number of outstanding Common Shares under
subsections (b) and (c) of this Section 6.5.  Upon any adjustment to the Conversion Price
as set out in this Section 6.5(a), the number of Common Shares to be
issued upon conversion shall, in the case of any of the events referred to in (i) or
(iii) above, be increased in proportion to the number of outstanding
Common Shares resulting from such subdivision, redivision, dividend or distribution,
or shall, in the case of any of the events referred to in (ii) above, be
decreased in proportion to the number of outstanding Common Shares resulting
from such reduction, combination or consolidation.


 


(b)                                                         If and whenever at any time prior
to the Time of Expiry, the Company shall fix a record date for the issuance of
options, rights or warrants to all or substantially all the holders of its
outstanding Common Shares entitling them, for a period expiring not more than
45 days after such record date, to subscribe for or purchase Common Shares (or
securities convertible into or exchangeable for Common Shares) at a price per
Common Share (or having a conversion price per Common Share) less than 95% of
the Current Market Price of the Common Shares on such record date, the


 


54














 


Conversion Price shall be adjusted immediately after such record date
so that it shall equal the price determined by multiplying the Conversion Price
in effect on such record date by a fraction, of which the numerator shall be
the total number of Common Shares outstanding on such record date plus a number
of Common Shares equal to the number arrived at by dividing the aggregate price
of the total number of additional Common Shares offered for subscription or
purchase (or the aggregate conversion price of the convertible or exchangeable
securities so offered) by such Current Market Price per Common Share, and of
which the denominator shall be the total number of Common Shares outstanding on
such record date plus the total number of additional Common Shares offered for
subscription or purchase (or into which the convertible or exchangeable
securities so offered are convertible or exchangeable).  Such adjustment shall be made successively
whenever such a record date is fixed.  To
the extent that any such options, rights or warrants are not so issued or any
such options, rights or warrants are not exercised prior to the expiration
thereof, the Conversion Price shall be re-adjusted to the Conversion Price
which would then be in effect if such record date had not been fixed or to the
Conversion Price which would then be in effect based upon the number of Common
Shares (or securities convertible into or exchangeable for Common Shares)
actually issued upon the exercise of such options, rights or warrants, as the
case may be.


 


(c)                                                          If and whenever at any time prior
to the Time of Expiry, the Company shall fix a record date for the making of a
distribution to all or substantially all the holders of its outstanding Common
Shares of any (i) securities, (ii) rights, options or warrants
(excluding rights, options or warrants entitling the holders thereof for a
period of not more than 45 days to subscribe for or purchase Common Shares or
securities convertible into or exchangeable for Common Shares), (iii) evidences
of its indebtedness, or (iv) assets (excluding cash dividends and
equivalent dividends in securities paid in lieu of cash dividends in the
ordinary course) then, in each such case, the Conversion Price shall be
adjusted immediately after such record date so that it shall equal the price
determined by multiplying the Conversion Price in effect on such record date by
a fraction, of which the numerator shall be the total number of Common Shares
outstanding on such record date multiplied by the Current Market Price per Common
Share on such record date, less the fair market value (as determined by the
Directors, which determination shall be conclusive) of such Common Shares,
securities or assets so distributed, and of which the denominator shall be the
total number of Common Shares outstanding on such record date multiplied by
such Current Market Price per Common Share. 
Such adjustment shall be made successively whenever such a record date
is fixed.  To the extent that such
distribution is not so made, the Conversion Price shall be re-adjusted to the
Conversion Price which would then be in effect if such record date had not been
fixed or to the Conversion Price which would then be in effect based upon such
Common Shares, securities or assets actually distributed, as the case may
be.  In clause (ii) of this Section 6.5(c) the
term “dividends or equivalent dividends paid in the ordinary course” shall
include the value of any securities or other property or assets distributed in
lieu of cash dividends paid in the ordinary course at the option of holders of
Common Shares.


 


(d)                                                         If and whenever at any time prior
to the Time of Expiry, there is a reclassification of the Common Shares or a
capital reorganization of the Company other than as 


 


55

















 


described in Section 6.5(a) or a consolidation, amalgamation,
arrangement or merger of the Company with or into any other Person or other
entity, or a sale or conveyance of the property and assets of the Company as an
entirety or substantially as an entirety to any other Person or other entity or
a liquidation, dissolution or winding-up of the Company, any holder of a
Debenture who has not exercised its right of conversion prior to the effective
date of such reclassification, capital reorganization, consolidation,
amalgamation, arrangement or merger, sale or conveyance or liquidation,
dissolution or winding-up or other similar transaction, upon the exercise of
such right thereafter, shall be entitled to receive and shall accept, in lieu
of the number of Common Shares then sought to be acquired by it, the kind and
amount of securities or property of the Company or of the Person or other
entity resulting from such reclassification, capital reorganization, merger,
amalgamation, arrangement or consolidation or other similar transaction, or to
which such sale or conveyance may be made or which holders of Common Shares
receive pursuant to such liquidation, dissolution or winding-up, as the case
may be, that such holder of a Debenture would have been entitled to receive on
such reclassification, capital reorganization, consolidation, amalgamation,
arrangement or merger, sale or conveyance or liquidation, dissolution or
winding-up or other similar transaction, if, on the record date or the
effective date thereof, as the case may be, the holder had been the registered
holder of the number of Common Shares sought to be acquired by it and to which
it was entitled to acquire upon the exercise of the conversion right prior to
the effective date of such reclassification, capital reorganization,
consolidation, amalgamation, arrangement or merger, sale or conveyance or
liquidation, dissolution or winding-up or other similar transaction.  If determined appropriate by the Directors,
to give effect to or to evidence the provisions of this Section 6.5(d),
the Company, its successor, or such purchasing Person or other entity, as the
case may be, shall, prior to or contemporaneously with any such
reclassification, capital reorganization, consolidation, amalgamation, arrangement,
merger, sale or conveyance or liquidation, dissolution or winding-up or other
similar transaction, enter into an indenture which shall provide, to the extent
possible, for the application of the provisions set forth in this Indenture
with respect to the rights and interests thereafter of the holder of Debentures
to the end that the provisions set forth in this Indenture shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, with
respect to the kind and amount of securities or property of the Company or
other securities or property to which a holder of Debentures is entitled on the
exercise of its acquisition rights thereafter. 
Any indenture entered into between the Company and the Debenture Trustee
pursuant to the provisions of this Section 6.5(d) shall be a
supplemental indenture entered into pursuant to the provisions of Article 16.  Any indenture entered into between the
Company, any successor to the Company or such purchasing Person or other
entity, the Company and the Debenture Trustee shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided in this Section 6.5(d) and which shall apply to successive
reclassifications, capital reorganizations, amalgamations, arrangements,
consolidations, mergers, sales or conveyances or other similar transactions.


 


(e)                                                          In any case in which this Section 6.5
shall require that an adjustment shall become effective immediately after a
record date for an event referred to herein, the Company may defer, until the
occurrence of such event, issuing to the holder of any Debenture 


 


56

















 


converted after such record date and before the occurrence of such
event the additional Common Shares or other securities or property issuable
upon such conversion by reason of the adjustment required by such event before
giving effect to such adjustment; provided, however, that the Company shall
deliver to such holder an appropriate instrument evidencing such holder’s right
to receive such additional Common Shares or other securities or property upon
the occurrence of the event requiring such adjustment and the right to receive
any distributions made on such additional Common Shares or other securities or
property declared in favour of holders of record of Common Shares on and after
the Date of Conversion or such later date as such holder would, but for the
provisions of this Section 6.5(e), have become the holder of record of
such additional Common Shares pursuant to Section 6.4(b).


 


(f)                                                            The adjustments provided for in
this Section 6.5 are cumulative and shall apply to successive
subdivisions, redivisions, reductions, combinations, consolidations,
distributions, issues or other events resulting in any adjustment under the
provisions of this Section, provided that, notwithstanding any other provision
of this Section, no adjustment of the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price then in effect; provided however, that any adjustments which
by reason of this Section 6.5(f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.


 


(g)                                                         For the purpose of calculating the
number of Common Shares outstanding, Common Shares owned by or for the benefit
of the Company shall not be counted.


 


(h)                                                         In the event of any question
arising with respect to the adjustments provided in this Section 6.5, such
question shall be conclusively determined by a firm of chartered accountants
appointed by the Company and acceptable to the Debenture Trustee (who may be
the auditors of the Company); such accountants shall have access to all
necessary records of the Company and such determination shall be binding upon
the Company,
the Debenture
Trustee, and the Debentureholders.


 


(i)                                                             In case the Company shall take any
action, or any event shall occur, affecting the Common Shares other than action
described in this Section 6.5, which in the opinion of the Directors,
would materially affect the rights of Debentureholders, the Conversion Price
and the Common Shares or other securities or property issuable or deliverable
upon a conversion of Debentures, as applicable, shall be adjusted in such
manner and at such time, by action of the Directors, subject to, as required,
the prior written consent of the TSX (or, if the Debentures are not listed
thereon, such other exchange on which the Debentures are then listed), as the
Directors, in their sole discretion may determine to be equitable in the
circumstances.  Failure of the Directors
to make such an adjustment shall be conclusive evidence that they have
determined that it is equitable to make no adjustment in the circumstances.


 


(j)                                                             Subject to, as required, the prior
written consent of the TSX (or, if the Debentures are not listed thereon, such
other exchange on which the Debentures are then listed), no adjustment in the
Conversion Price shall be made in respect of any event described in Sections
6.5(a), 6.5(b) or 6.5(c) other than the events described in 6.5(a)(i) or



 


57

















 


6.5(a)(ii) if the holders of the Debentures are entitled to
participate in such event on the same terms mutatis mutandis as though and with the same effect as if they
had converted their Debentures prior to the effective date or record date, as
the case may be, of such event.


 


(k)                                                          Except as stated above in this Section 6.5,
no adjustment will be made in the Conversion Price for any Debentures as a
result of the issuance of Common Shares at less than the Current Market Price
for such Common Shares on the date of issuance.


 


6.6                                                                               No
Requirement to Issue Fractional Common Shares


 


The Company shall not be required to cause
the issuance of fractional Common Shares upon the conversion of Debentures
pursuant to this Article.  If more than
one Debenture shall be surrendered for conversion at one time by the same
holder, the number of whole Common Shares issuable upon conversion thereof
shall be computed on the basis of the aggregate principal amount of such
Debentures to be converted.  If any
fractional interest in a Common Share would, except for the provisions of this
Section, be deliverable upon the conversion of any principal amount of
Debentures, the Company shall, in lieu of delivering, or causing the delivery
of, any certificate representing such fractional interest, make a cash payment
to the holder of such Debenture of an amount equal to the Current Market Price
of such fractional interest.


 


6.7                                                                               Company
to Reserve Common Shares


 


The Company covenants with the Debenture
Trustee that it will at all times reserve and keep available out of its
authorized Common Shares (if the number thereof is or becomes limited), solely
for the purpose of issuing such Common Shares in connection with a conversion
of Debentures, such number of Common Shares as shall then be deliverable by the
Company upon the conversion of all outstanding Debentures at that time, to
enable and permit the Company to perform its obligation hereunder to deliver
the requisite number of Common Shares to Debentureholders who exercise their
conversion rights hereunder.  The Company
covenants with the Debenture Trustee that all Common Shares, which shall be so
issuable, shall be duly and validly issued as fully-paid and non-assessable
upon receipt by the Company of the Conversion Price.  The Company further covenants with the
Debenture Trustee that it shall take all actions and do all things necessary or
desirable to enable and permit the Company, in accordance with applicable law,
to perform all of its obligations hereunder.


 


6.8                                                                               Cancellation
of Converted Debentures


 


All Debentures converted in whole or in
part under the provisions of this Article shall be forthwith delivered to
and cancelled by the Debenture Trustee and, subject to the provisions of Section 6.4
as to Debentures converted in part, no Debenture shall be issued in
substitution therefor.


 


6.9                                                                               Certificate
as to Adjustment


 


The Company shall from time to time
immediately after it has acquired actual knowledge of the occurrence of any
event which requires an adjustment or readjustment as provided in Section 6.5,
deliver a Certificate to the Debenture Trustee specifying the nature of the
event requiring the same and the amount of the adjustment necessitated thereby
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based, which 


 


58

















 


certificate
and the amount of the adjustment specified therein may be relied upon by the
Debenture Trustee and shall be verified by an opinion of a nationally
recognized firm of chartered accountants appointed by the Company and
acceptable to the Debenture Trustee (who may be the auditors of  the Company) and shall be conclusive and
binding on all parties in interest.  When
so approved, the Company shall, except in respect of any subdivision,
redivision, reduction, combination or consolidation of Common Shares, forthwith
give notice to the Debentureholders in the manner provided in Section 14.2
specifying the event requiring such adjustment or readjustment and the results
thereof, including the resulting Conversion Price; provided that, if the
Company has given notice under this Section 6.9 covering all the relevant
facts in respect of such event and if the Debenture Trustee approves, no such
notice need be given under this Section 6.9.


 


6.10                                                                        Notice
of Special Matters


 


The Company covenants with the Debenture
Trustee that so long as any Debenture remains outstanding, it will give written
notice to the Debenture Trustee, and to the Debentureholders in the manner
provided in Section 14.2, of its intention to fix a record date for any
event referred to in Section 6.5(a), (b) or (c) or (d) (other
than the subdivision, redivision, reduction, combination or consolidation of
its Common Shares) which may give rise to an adjustment in the Conversion
Price, and, in each case, such notice shall specify the particulars of such
event and the record date and the effective date for such event; provided that
the Company shall only be required to specify in such notice such particulars
of such event as shall have been fixed and determined on the date on which such
notice is given.  Such notice shall be given
not less than fourteen (14) days in each case prior to such applicable record
date.


 


6.11                                                                        Protection
of Debenture Trustee


 


Subject to Section 15.3,
the Debenture Trustee:


 


(a)                                                          shall not at any time be under any
duty or responsibility to any Debentureholder to determine whether any facts
exist which may require any adjustment in the Conversion Price, or with respect
to the nature or extent of any such adjustment when made, or with respect to
the method employed in making the same;


 


(b)                                                         shall not be accountable with
respect to the validity or value (or the kind or amount) of any Common Shares
or other securities or property which may at any time be issued or delivered
upon the conversion of any Debenture; and


 


(c)                                                          shall not be responsible for any
failure of the Company to make any cash payment or to issue, transfer or
deliver Common Shares upon the surrender of any Debenture for the purpose of
conversion, or to comply with any of the covenants contained in this Article.


 


6.12                                                                        Payment
of Cash in Lieu of Common Shares


 


Upon conversion, the Company may offer and
the converting holder may agree to the delivery of cash for all or a portion of
the Debentures surrendered in lieu of Common Shares.


 


59

















 


ARTICLE 7

COVENANTS OF THE COMPANY


 


The Company hereby covenants and agrees
with the Debenture Trustee for the benefit of the Debenture Trustee and the
Debentureholders, that so long as any Debentures remain outstanding:


 


7.1                                                                               To
Pay Principal and Interest


 


Subject at all times to the provisions of Article 5
hereof, the Company will duly and punctually pay or cause to be paid to every
Debentureholder the principal of and interest accrued on the Debentures of
which it is the holder on the dates, at the places and in the manner mentioned
herein and in the Debentures.


 


7.2                                                                               To
Pay Debenture Trustee’s Remuneration


 


The Company will pay the Debenture Trustee
reasonable remuneration for its services as Debenture Trustee hereunder and
will repay to the Debenture Trustee on demand all monies which shall have been
paid by the Debenture Trustee in connection with the execution of the trusts
hereby created and such monies including the Debenture Trustee’s remuneration,
shall be payable out of any funds coming into the possession of the Debenture
Trustee in priority to any of the Debentures or interest thereon.  Any amount due under this Section 7.2
and unpaid thirty days after written request for such payment shall bear
interest from the expiration of such thirty days at a rate per annum equal to
the then rate charged by the Debenture Trustee under similar indentures from
time to time, payable on demand.  Such
remuneration shall continue to be payable until the trusts hereof be finally
wound up and whether or not the trusts of this Indenture shall be in the course
of administration by or under the direction of a court of competent
jurisdiction.


 


7.3                                                                               To
Give Notice of Default


 


The Company shall notify the Debenture
Trustee in writing immediately upon obtaining knowledge of any Event of Default
hereunder.


 


7.4                                                                               Preservation
of Existence, etc.


 


Subject to Article 11 hereof, the
Company shall, and shall cause each of its Subsidiaries in which it directly or
indirectly owns more than 50% of the total voting or equity interests and (to
the extent that the Company has any direct or indirect contractual or other
approval rights over the actions of such Subsidiary) to preserve, renew and
maintain in full force and effect its legal existence and good standing under
the laws of the jurisdiction of its organization; and, except where failure to
do so would not have a Material Adverse Effect, take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business.


 


60

















 


7.5                                                                               Keeping
of Books


 


The Company will keep or cause to be kept
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Company
in accordance with generally accepted accounting principles.


 


7.6                                                                               Reporting
Requirements


 


In the event that the Company has Global
Debentures outstanding, the Company  will
provide the Depository with copies of continuous disclosure documents furnished
to holders of its Common Shares under Applicable Securities Legislation.


 


7.7                                                                               Performance
of Covenants by Debenture Trustee


 


If the Company shall fail to perform any of
its covenants contained in this Indenture, the Debenture Trustee may notify the
Debentureholders of such failure on the part of the Company or may itself
perform any of the covenants capable of being performed by it, but (subject to
Sections 8.2 and 15.3) shall be under no obligation to do so or to notify the
Debentureholders.  All sums so expended
or advanced by the Debenture Trustee shall be repayable as provided in Section 7.2.  No such performance, expenditure or advance
by the Debenture Trustee shall be deemed to relieve the Company of any default
hereunder or from its continuing indebtedness.


 


7.8                                                                               Maintain
Listing


 


The Company shall use commercially
reasonable efforts to ensure that the Common Shares and the Debentures,
respectively, are listed and posted for trading on the TSX and/or the New York
Stock Exchange, and shall maintain such listing and posting for trading of the
Common Shares and the Debentures, respectively, on the TSX and/or the New York
Stock Exchange, and to maintain the Company’s status as a “reporting issuer”
not in default of Applicable Securities Legislation; provided that the
foregoing covenant shall not prevent or restrict the Company from carrying out
a transaction to which Article 11 would apply if carried out in compliance
with Article 11 even if as a result of such transaction the Company ceases
to be a “reporting issuer” in all or any of the provinces and territories of
Canada or the Common Shares or Debentures cease to be listed on the TSX or any
other stock exchange.


 


ARTICLE 8


DEFAULT


 


8.1                                                                               Events
of Default


 


Each of the
following events constitutes, and is herein sometimes referred to as, an “Event of Default”:


 


(a)                                                          failure for 15 days to pay
interest on the Debentures when due;


 


(b)                                                         failure to pay principal or
premium, if any, on the Debentures when due whether at maturity, upon
redemption, by declaration or otherwise (whether such payment is due in cash,
Common Shares or other securities or property or a combination thereof);


 


61

















 


(c)                                                          default in the delivery, when due,
of all cash and any Common Shares or other consideration, including any Make Whole
Premium, payable on conversion with respect to the Debentures, which default
continues for 15 days;


 


(d)                                                         the Company fails to comply with Article 11
hereof;


 


(e)                                                          the Company, pursuant to or within
the meaning of any Bankruptcy Law:


 


(i)                                     commences a voluntary case or
proceeding;


 


(ii)                                  consents to the entry of an
order for relief against it in an involuntary case or proceeding;


 


(iii)                               consents to the appointment of
a custodian of it or for any substantial part of its property; or


 


(iv)                              makes a general assignment for
the benefit of its creditors;


 


or takes any comparable action under any
foreign laws relating to insolvency;


 


(f)                                                            a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that:


 


(i)                                     is for relief against the
Company in an involuntary case;


 


(ii)                                  appoints a custodian of the
Company or for any substantial part of the property of the Company; or


 


(iii)                               orders the winding up or
liquidation of the Company;


 


or any similar relief is granted under any
foreign laws and the order or decree remains unstayed and in effect for 90
days;


 


(g)                                                         if a resolution is passed for the
winding-up or liquidation of the Company except in the course of carrying out
or pursuant to a transaction in respect of which the conditions of Section 11.1
are duly observed and performed;


 


(h)                                                         if, after the date of this
Indenture, any proceedings with respect to the Company are taken with respect
to a compromise or arrangement, with respect to creditors of the Company
generally, under the applicable legislation of any jurisdiction; or


 


(i)                                                             default in the observance or
performance of any other material covenant of this Indenture by the Company for
a period of 30 days after notice in writing has been given by the Debenture
Trustee to the Company specifying such default and requiring the Company to
remedy such default.


 


In each and every such event the Debenture
Trustee may, in its discretion, and shall, upon receipt of a request in writing
signed by the holders of not less than 25% in principal amount of the Debentures
then outstanding, and upon being indemnified to its reasonable satisfaction
against all fees, costs, expenses and liabilities to be incurred, subject to
the provisions of Section 8.3, by notice 


 


62

















 


in writing to
the Company declare the principal of (and premium, if any) and interest on all
Debentures then outstanding and all other monies outstanding hereunder to be
due and payable and the same shall forthwith become immediately due and payable
to the Debenture Trustee, and the Company shall subject to Article 5
forthwith pay to the Debenture Trustee for the benefit of the Debentureholders
such principal, premium, if any, accrued and unpaid interest and interest on
amounts in default on such Debenture and all other monies outstanding
hereunder, together with subsequent interest at the rate borne by the
Debentures on such principal, interest and such other monies from the date of
such declaration until payment is received by the Debenture Trustee, such subsequent
interest to be payable at the times and places and in the monies mentioned in
and according to the tenor of the Debentures. 
Such payment when made shall be deemed to have been made in discharge of
the Company’s obligations hereunder and any monies so received by the Debenture
Trustee shall be applied in the manner provided in Section 8.6.


 


For greater certainty, for the purposes of
this Section 8.1, a series of Debentures shall be in default in respect of
an Event of Default if such Event of Default relates to a default in the
payment of principal, premium, if any, or interest on the Debentures of such
series in which case references to Debentures in this Section 8.1 refer to
Debentures of that particular series.


 


For purposes of this Article 8, where
the Event of Default refers to an Event of Default with respect to a particular
series of Debentures as described in this Section 8.1, then this Article 8
shall apply mutatis mutandis to
the Debentures of such series and references in this Article 8 to the
Debentures shall mean Debentures of the particular series and references to the
Debentureholders shall refer to the Debentureholders of the particular series,
as applicable.


 


8.2                                                                               Notice
of Events of Default


 


If an Event of Default shall occur and be continuing
the Debenture Trustee shall, within 30 days after it receives written notice of
the occurrence of such Event of Default, give notice of such Event of Default
to the Debentureholders in the manner provided in Section 14.1; provided
that the Debenture Trustee shall be entitled to rely on such notice and shall
not be subject to any liability as a result of its inadvertent failure to
provide such notice.  Notwithstanding the
foregoing, unless the Debenture Trustee shall have been requested to do so by
the holders of at least 25% of the principal amount of the Debentures then
outstanding, the Debenture Trustee shall not be required to give such notice if
the Debenture Trustee in good faith shall have determined that the withholding
of such notice is in the best interests of the Debentureholders and shall have
so advised the Company in writing.


 


When notice of the occurrence of an Event
of Default has been given and the Event of Default is thereafter cured, notice
that the Event of Default is no longer continuing shall be given by the
Debenture Trustee to the Debentureholders within 15 days after the Debenture
Trustee receives written notice that the Event of Default has been cured.


 


8.3                                                                               Waiver
of Default


 


Upon the
happening of any Event of Default hereunder:


 


(a)                                                          the holders of the Debentures
shall have the power (in addition to the powers exercisable by Extraordinary
Resolution as hereinafter provided) by requisition in writing by the holders of
a majority of the principal amount of Debentures then 


 


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outstanding or by Ordinary Resolution of Debentureholders at a meeting
held in accordance with Article 13 hereof, to instruct the Debenture
Trustee to waive any Event of Default and to cancel any declaration made by the
Debenture Trustee pursuant to Section 8.1 and the Debenture Trustee shall
thereupon waive the Event of Default and cancel such declaration, or either,
upon such terms and conditions as shall be prescribed in such requisition;
provided that notwithstanding the foregoing, if the Event of Default has
occurred by reason of the non-observance or non-performance by the Company of
any covenant applicable only to one or more series of Debentures, then the
holders of more than 50% of the principal amount of the outstanding Debentures
of that series shall be entitled to exercise the foregoing power and the
Debenture Trustee shall so act and it shall not be necessary to obtain a waiver
from the holders of any other series of Debentures; and


 


(b)                                                         the Debenture Trustee, so long as
it has not become bound to declare the principal and interest on the Debentures
then outstanding to be due and payable, or to obtain or enforce payment of the
same, shall have power to waive any Event of Default if, in the Debenture
Trustee’s opinion, relying on the opinion of Counsel, the same shall have been
cured or adequate satisfaction made therefor, and in such event to cancel any
such declaration theretofore made by the Debenture Trustee in the exercise of
its discretion, upon such terms and conditions as the Debenture Trustee may
deem advisable.


 


No such act or
omission either of the Debenture Trustee or of the Debentureholders shall
extend to or be taken in any manner whatsoever to affect any subsequent Event
of Default or the rights resulting therefrom.


 


8.4                                                                               Enforcement
by the Debenture Trustee


 


Subject to the provisions of Section 8.3
and to the provisions of any Extraordinary Resolution that may be passed by the
Debentureholders, if the Company shall fail to pay to the Debenture Trustee,
forthwith after the same shall have been declared to be due and payable under Section 8.1,
the principal of and premium (if any) and interest on all Debentures then
outstanding, together with any other amounts due hereunder, the Debenture Trustee
may in its discretion and shall upon receipt of a request in writing signed by
the holders of not less than 25% in principal amount of the Debentures then
outstanding and upon being funded and indemnified to its reasonable
satisfaction against all costs, expenses and liabilities to be incurred,
proceed in its name as trustee hereunder to obtain or enforce payment of such
principal of and premium (if any) and interest on all the Debentures then
outstanding together with any other amounts due hereunder by such proceedings
authorized by this Indenture or by law or equity as the Debenture Trustee in
such request shall have been directed to take, or if such request contains no
such direction, or if the Debenture Trustee shall act without such request, then
by such proceedings authorized by this Indenture or by suit at law or in equity
as the Debenture Trustee shall deem expedient.


 


The Debenture Trustee shall be entitled and
empowered, either in its own name or as trustee of an express trust, or as
attorney-in-fact for the holders of the Debentures, or in any one or more of
such capacities, to file such proof of debt, amendment of proof of debt, claim,
petition or other document as may be necessary or advisable in order to have
the claims of the Debenture Trustee and of the holders of the Debentures
allowed in any insolvency, bankruptcy, liquidation or other judicial
proceedings relative to the Company or its creditors or relative to or
affecting its


 


64














 


property.  The Debenture Trustee
is hereby irrevocably appointed (and the successive respective holders of the
Debentures by taking and holding the same shall be conclusively deemed to have
so appointed the Debenture Trustee) the true and lawful attorney-in-fact of the
respective holders of the Debentures with authority to make and file in the
respective names of the holders of the Debentures or on behalf of the holders
of the Debentures as a class, subject to deduction from any such claims of the
amounts of any claims filed by any of the holders of the Debentures themselves,
any proof of debt, amendment of proof of debt, claim, petition or other
document in any such proceedings and to receive payment of any sums becoming
distributable on account thereof, and to execute any such other papers and
documents and to do and perform any and all such acts and things for and on
behalf of such holders of the Debentures, as may be necessary or advisable in
the opinion of the Debenture Trustee, in order to have the respective claims of
the Debenture Trustee and of the holders of the Debentures against the Company
or its property allowed in any such proceeding, and to receive payment of or on
account of such claims; provided, however, that subject to Section 8.3,  nothing contained in this Indenture shall
be deemed to give to the Debenture Trustee, unless so authorized by
Extraordinary Resolution, any right to accept or consent to any plan of
reorganization or otherwise by action of any character in such proceeding to waive
or change in any way any right of any Debentureholder.


 


The
Debenture Trustee shall also have the power at any time and from time to time
to institute and to maintain such suits and proceedings as it may be advised
shall be necessary or advisable to preserve and protect its interests and the
interests of the Debentureholders.


 


All
rights of action hereunder may be enforced by the Debenture Trustee without the
possession of any of the Debentures or the production thereof at the trial or
other proceedings relating thereto.  Any
such suit or proceeding instituted by the Debenture Trustee shall be brought in
the name of the Debenture Trustee as trustee of an express trust, and any
recovery of judgment shall be for the rateable benefit of the holders of the
Debentures subject to the provisions of this Indenture.  In any proceeding brought by the Debenture
Trustee (and also any proceeding in which a declaratory judgment of a court may
be sought as to the interpretation or construction of any provision of this Indenture,
to which the Debenture Trustee shall be a party) the Debenture Trustee shall be
held to represent all the holders of the Debentures, and it shall not be
necessary to make any holders of the Debentures parties to any such proceeding.


 


8.5                                                                               No
Suits by Debentureholders


 


No
holder of any Debenture shall have any right to institute any action, suit or
proceeding at law or in equity for the purpose of enforcing payment of the
principal of or premium (if any) or interest on the Debentures or for the
execution of any trust or power hereunder or for the appointment of a
liquidator or receiver or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or
any other bankruptcy, insolvency or analogous laws, or to have the Company
wound up or to file or prove a claim in any liquidation or bankruptcy
proceeding or for any other remedy hereunder, unless: (a) such holder
shall previously have given to the Debenture Trustee written notice of the
happening of an Event of Default hereunder; and (b) the Debentureholders
by Extraordinary Resolution or by written instrument signed by the holders of
at least 25% in principal amount of the Debentures then outstanding shall have
made a request to the Debenture Trustee and the Debenture Trustee shall have
been afforded reasonable opportunity either itself to proceed to exercise the
powers hereinbefore granted or to institute an action, suit or proceeding in
its name for such purpose; and (c) the Debentureholders or any of them
shall have furnished to the Debenture Trustee, when so requested by the
Debenture Trustee, sufficient funds and security and indemnity satisfactory to
it 


 


65

















 


against the costs, expenses and liabilities to be incurred therein or
thereby; and (d) the Debenture Trustee shall have failed to act within a
reasonable time after such notification, request and offer of indemnity and
such notification, request and offer of indemnity are hereby declared in every
such case, at the option of the Debenture Trustee, to be conditions precedent
to any such proceeding or for any other remedy hereunder by or on behalf of the
holder of any Debentures.


 


8.6                                                                               Application
of Monies by Debenture Trustee


 


(a)                                                          Except as herein otherwise
expressly provided, any monies received by the Debenture Trustee from the
Company pursuant to the foregoing provisions of this Article 8, or as a
result of legal or other proceedings or from any trustee in bankruptcy or
liquidator of the Company, shall be applied, together with any other monies in
the hands of the Debenture Trustee available for such purpose, as follows:


 


(i)                                     first, in payment or in
reimbursement to the Debenture Trustee of its compensation, costs, charges,
expenses, borrowings, advances or other monies furnished or provided by or at
the instance of the Debenture Trustee in or about the execution of its trusts
under, or otherwise in relation to, this Indenture, with interest thereon as
herein provided;


 


(ii)                                  second, but subject as
hereinafter in this Section 8.6 provided, in payment, rateably and
proportionately to (and in the case of applicable withholding taxes, if any, on
behalf of) the holders of Debentures, of the principal of and premium (if any)
and accrued and unpaid interest and interest on amounts in default on the
Debentures which shall then be outstanding in the priority of principal first
and then premium and then accrued and unpaid interest and interest on amounts
in default unless otherwise directed by Extraordinary Resolution and in that
case in such order or priority as between principal, premium (if any) and
interest as may be directed by such resolution; and


 


(iii)                               third, in payment of the
surplus, if any, of such monies to the Company or its assigns; provided,
however, that no payment shall be made pursuant to clause (ii) above in
respect of the principal, premium or interest on any Debenture held, directly
or indirectly, by or for the benefit of the Company or any of its Significant
Entities (other than any Debenture pledged for value and in good faith to a
person other than the Company or any of its Significant Entities but only to
the extent of such person’s interest therein) except subject to the prior
payment in full of the principal, premium (if any) and interest (if any) on all
Debentures which are not so held.


 


(b)                                                         The Debenture Trustee shall
not be bound to apply or make any partial or interim payment of any monies
coming into its hands if the amount so received by it, after reserving thereout
such amount as the Debenture Trustee may think necessary to provide for the
payments mentioned in Section 8.6(a), is insufficient to make a
distribution of at least 2% of the aggregate principal amount of the
outstanding Debentures, but it may retain the money so received by it and
invest or deposit the same as provided in Section 15.9 until the money or
the investments representing the same, with the income derived therefrom,
together with any other monies for the time being under its control shall be
sufficient for the said purpose or until it shall consider 


 


66

















 


it advisable to apply the same in the manner
hereinbefore set forth.  The foregoing
shall, however, not apply to a final payment or distribution hereunder.


 


8.7                                                                               Notice
of Payment by Debenture Trustee


 


Not
less than 15 days notice shall be given in the manner provided in Section 14.2
by the Debenture Trustee to the Debentureholders of any payment to be made
under this Article 8.  Such notice
shall state the time when and place where such payment is to be made and also
the liability under this Indenture to which it is to be applied.  After the day so fixed, unless payment shall
have been duly demanded and have been refused, the Debentureholders will be
entitled to interest only on the balance (if any) of the principal monies,
premium (if any) and interest due (if any) to them, respectively, on the
Debentures, after deduction of the respective amounts payable in respect
thereof on the day so fixed.


 


8.8                                                                               Debenture
Trustee May Demand Production of Debentures


 


The
Debenture Trustee shall have the right to demand production of the Debentures
in respect of which any payment of principal, interest or premium required by
this Article 8 is made and may cause to be endorsed on the same a
memorandum of the amount so paid and the date of payment, but the Debenture
Trustee may, in its discretion, dispense with such production and endorsement,
upon such indemnity being given to it and to the Company as the Debenture
Trustee shall deem sufficient.


 


8.9                                                                               Remedies
Cumulative


 


No
remedy herein conferred upon or reserved to the Debenture Trustee, or upon or
to the holders of Debentures is intended to be exclusive of any other remedy,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or now existing or hereafter to exist by law
or by statute.


 


8.10                                                                        Judgment
Against the Company


 


The
Company covenants and agrees with the Debenture Trustee that, in case of any
judicial or other proceedings to enforce the rights of the Debentureholders,
judgment may be rendered against it in favour of the Debentureholders or in
favour of the Debenture Trustee, as trustee for the Debentureholders, for any
amount which may remain due in respect of the Debentures and premium (if any)
and the interest thereon and any other monies owing hereunder.


 


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8.11                                                                        Immunity
of Directors, Officers and Others


 


The Debentureholders and the Debenture Trustee hereby
waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any past, present or future officer,
director or employee of the Company or holder of Common Shares of the Company
or of any successor for the payment of the principal of or premium or interest
on any of the Debentures or on any covenant, agreement, representation or
warranty by the Company contained herein or in the Debentures.


 


8.12                                                                        Subordination


 


This Article 8
and the powers, rights and authority granted to the Debenture Trustee
hereunder, are subject to the terms and provisions of Article 5.


 


ARTICLE 9

SATISFACTION AND DISCHARGE


 


9.1                                                                               Cancellation
and Destruction


 


Subject
to applicable retention requirements, all Debentures shall forthwith after
payment thereof be delivered to the Debenture Trustee and cancelled by it.  All Debentures cancelled or required to be
cancelled under this or any other provision of this Indenture shall be
destroyed by the Debenture Trustee and, if required by the Company, the Debenture
Trustee shall furnish to it a destruction certificate setting out the
designating numbers of the Debentures so destroyed.


 


9.2                                                                               Non-Presentation
of Debentures


 


In case
the holder of any Debenture shall fail to present the same for payment on the
date on which the principal, premium (if any) or the interest thereon or
represented thereby becomes payable either at maturity or otherwise or shall
not accept payment on account thereof and give such receipt therefor, if any,
as the Debenture Trustee may require:


 


(a)                                                          the Company shall be entitled
to pay or deliver to the Debenture Trustee and direct the Debenture Trustee to
set aside;


 


(b)                                                         in respect of monies in the
hands of the Debenture Trustee which may or should be applied to the payment of
the Debentures, the Company shall be entitled to direct the Debenture Trustee
to set aside; or


 


(c)                                                          if the redemption was pursuant
to notice given by the Debenture Trustee, the Debenture Trustee may itself set
aside the monies or Common Shares, as the case may be (after deduction of any
applicable withholding taxes), in trust to be paid or delivered to the holder
of such Debenture upon due presentation or surrender thereof in accordance with
the provisions of this Indenture; and thereupon the principal or premium (if
any) or the interest payable on or represented by each Debenture in respect
whereof such monies or Common Shares have been set aside shall be deemed to
have been paid and the holder thereof shall thereafter have no right in respect
thereof except that of receiving delivery and payment of the monies or Common
Shares, if applicable, (less applicable withholding taxes, if any), so set
aside by the 


 


68

















 


Debenture Trustee upon due presentation and surrender
thereof, subject always to Section 9.3.


 


9.3                                                                               Repayment
of Unclaimed Monies


 


Subject to applicable law, any monies set aside under Section 9.2
and not claimed by and paid to holders of Debentures as provided in Section 9.2
within six years after the date of such setting aside shall be repaid and
delivered to the Company by the Debenture Trustee and thereupon the Debenture
Trustee shall be released from all further liability with respect to such
monies or Common Shares, if applicable, and thereafter the holders of the
Debentures in respect of which such monies or Common Shares, if applicable,
were so repaid to the Company shall have no rights in respect thereof except to
obtain payment and delivery of the monies or Common Shares, if applicable, from
the Company subject to any limitation provided by the laws of the Province of
Ontario.  Notwithstanding the foregoing,
the Debenture Trustee will pay any remaining funds prior to the expiry of six
years after the setting aside described in Section 9.2 to the Company upon
receipt from the Company, of an unconditional letter of credit from a Canadian
chartered bank in an amount equal to or in excess of the amount of the
remaining funds. If the remaining funds are paid to the Company prior to the
expiry of ten years after such setting aside, the Company shall reimburse the
Debenture Trustee for any amounts so set aside which are required to be paid by
the Debenture Trustee to a holder of a Debenture after the date of such payment
of the remaining funds to the Company but prior to ten years after such setting
aside.


 


9.4                                                                               Discharge


 


The
Debenture Trustee shall at the written request of the Company release and
discharge this Indenture and execute and deliver such instruments as it shall
be advised by Counsel are requisite for that purpose and to release the Company
from its covenants herein contained (other than the provisions relating to the
indemnification of the Debenture Trustee), upon proof being given to the
reasonable satisfaction of the Debenture Trustee that the principal and premium
(if any) of and interest (including interest on amounts in default, if any), on
all the Debentures and all other monies payable hereunder have been paid or
satisfied or that all the Debentures having matured or having been duly called
for redemption, payment of the principal of and interest (including interest on
amounts in default, if any) on such Debentures and of all other monies payable
hereunder has been duly and effectually provided for in accordance with the
provisions hereof.


 


9.5                                                                               Satisfaction


 


(a)                                                          The Company shall be deemed to
have fully paid, satisfied and discharged all of the outstanding Debentures of
any series and the Debenture Trustee, at the expense of the Company, shall
execute and deliver proper instruments acknowledging the full payment,
satisfaction and discharge of such Debentures, when, with respect to all of the
outstanding Debentures or all of the outstanding Debentures of any series, as
applicable, either:


 


(i)                                     the Company has deposited or
caused to be deposited with the Debenture Trustee as trust funds or property in
trust for the purpose of making payment on such Debentures, an amount in money
or Common Shares, if applicable, sufficient to pay, satisfy and discharge the
entire amount of principal, premium, if any, and interest, if any, to maturity
or any repayment date or 


 


69

















 


Redemption Dates, or any Change of Control Purchase
Date or upon conversion or otherwise, as the case may be, of such Debentures
(including the maximum amount that may be payable as a Make Whole Premium); or


 


(ii)                                  the Company has deposited or
caused to be deposited with the Debenture Trustee as trust property in trust
for the purpose of making payment on such Debentures:


 


(A)                              if the Debentures are issued
in Canadian dollars, such amount in Canadian dollars of direct obligations of,
or obligations the principal and interest of which are guaranteed by, the
Government of Canada or Common Shares, if applicable; or


 


(B)                                if the Debentures are issued
in a currency other than Canadian Dollars, cash in the currency in which the
Debentures are payable and/or such amount in such currency of direct
obligations of, or obligations the principal and interest of which are
guaranteed by, the Government of Canada or the government that issued the
currency in which the Debentures are payable or Common Shares, if applicable,


 


as will, together with the income to accrue thereon
and reinvestment thereof, be sufficient to pay and discharge the entire amount
of principal and accrued and unpaid interest to maturity or any repayment date,
as the case may be, of all such Debentures, provided that, for the purposes of Section 9.5(a)(ii)(B),
the Debenture Trustee will be entitled to rely on an opinion of Counsel or such
other advisor satisfactory to it in making such a determination; or


 


(iii)                               all Debentures authenticated
and delivered (other than (A) Debentures which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.9
and (B) Debentures for whose payment has been deposited in trust and
thereafter repaid to the Company as provided in Section 9.3) have been
delivered to the Debenture Trustee for cancellation;


 


so long as in any such event:


 


(iv)                              the Company has paid, caused
to be paid or made provisions to the satisfaction of the Debenture Trustee for
the payment of all other sums payable or which may be payable (including the
maximum amount that may be payable as a Make Whole Premium) with respect to all
of such Debentures (together with all applicable expenses of the Debenture Trustee
in connection with the payment of such Debentures); and


 


(v)                                 the Company has delivered to
the Debenture Trustee a Certificate stating that all conditions precedent
herein provided relating to the payment, satisfaction and discharge of all such
Debentures have been complied with.


 


Any deposits with the Debenture Trustee referred to in
this Section 9.5 shall be irrevocable, subject to Section 9.6, and
shall be made under the terms of an escrow and/or trust agreement in form and
substance satisfactory to the Debenture Trustee 
and the Company and which provides for the due and punctual payment of
the principal of, and interest and premium, if any, on the Debentures being
satisfied.  In the event that the
Debenture Trustee enters into any such agreement contemplated by this Section 9.5(a),
the Debenture Trustee shall be deemed to have completely and 


 


70

















 


satisfactorily discharged its duties and obligations
under this indenture with respect to the Debentures being satisfied and all
future duties and obligations of the Debenture Trustee with respect to the
satisfied Debentures shall be governed solely pursuant to the terms of the new
escrow and/or trust agreement, as applicable.


 


(b)                                                         Notwithstanding anything to the
contrary in Section 9.5(a), the Debenture Trustee shall not be obligated
to accept holdings of any nature or kind which it does not hold for its clients
in the ordinary course of business.


 


(c)                                                          Upon the satisfaction of the
conditions set forth in this Section 9.5 with respect to all the
outstanding Debentures, or all the outstanding Debentures of any series, as
applicable, the terms and conditions of the Debentures, including the terms and
conditions with respect thereto set forth in this Indenture (other than those
contained in Article 2, Article 4, Section 15.18 and the other
provisions of this Indenture pertaining to the foregoing provisions) shall no
longer be binding upon or applicable to the Company.


 


(d)                                                         Any funds or obligations
deposited with the Debenture Trustee pursuant to this Section 9.5 shall be
denominated in the currency or denomination of the Debentures in respect of
which such deposit is made.


 


(e)                                                          If the Debenture Trustee is
unable to apply any money or securities in accordance with this Section 9.5
by reason of any legal proceeding or any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s obligations under this Indenture and the affected
Debentures shall be revived and reinstated as though no money or securities had
been deposited pursuant to this Section 9.5 until such time as the
Debenture Trustee is permitted to apply all such money or securities in
accordance with this Section 9.5, provided that if the Company has made
any payment in respect of principal, premium or interest on Debentures or, as
applicable, other amounts because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Debentures to
receive such payment from the money or securities held by the Debenture
Trustee.


 


9.6                                                                               Continuance
of Rights, Duties and Obligations


 


Where
trust funds or trust property have been deposited pursuant to Section 9.5,
the holders of Debentures and the Company shall continue to have and be subject
to their respective rights, duties and obligations under Article 2, Article 4,
Section 15.18 and the other provisions of this Indenture pertaining to the
foregoing provisions.


 


ARTICLE 10

COMMON SHARE INTEREST PAYMENT ELECTION


 


10.1                                                                        Common
Share Interest Payment Election


 


(a)                                                          Provided that no Event of
Default has occurred and is continuing and that all necessary regulatory
approvals have been obtained (including any required approval of any stock
exchange on which the Debentures or Common Shares are then listed), 


 


71





















 


the Company shall have the right, at any time and from
time to time, to make a Common Share Interest Payment Election in respect of
any Interest Obligation, in whole or in part, by delivering a Common Share
Interest Payment Election Notice to the Debenture Trustee no later than the
earlier of: (i) the date required by applicable law or the rules of
any stock exchange on which the Debentures or Common Shares are then listed,
and (ii) the day which is 15 Business Days prior to the Interest Payment
Date to which the Common Share Interest Payment Election relates.


 


(b)                                                         Upon receipt of a Common Share
Interest Payment Election Notice, the Debenture Trustee shall, as directed in
writing by the Company, as agent of the Company, in accordance with this Article 10
and such Common Share Interest Payment Election Notice: (i) deliver Common
Share Bid Requests to the investment banks, brokers or dealers (each, a “Broker”) identified by the Company,
in its absolute discretion, in the Common Share Interest Payment Election
Notice, or (ii) agree to the Company establishing an account or accounts
(in the name of the Debenture Trustee, if necessary) with a Broker identified
by the Company, in its absolute discretion, in the Common Share Interest
Payment Election Notice for the purpose of such Broker selling Freely Tradeable
Common Shares on behalf of the Company in accordance with the terms hereof
(which Broker shall notify the Company and the Debenture Trustee as such Common
Shares are sold and the settlement rules prescribed by securities
regulatory policies shall apply in respect of the payment for such Common
Shares).  The Broker shall send copies of
the monthly statements and transaction slips in respect of all sales of Common
Shares to the Company (with a duplicate copy to the Debenture Trustee, or as it
may otherwise in writing direct), as soon as reasonably practicable after
preparation thereof.  All fees payable in
respect of such accounts shall be paid by the Company; provided, however, that
it shall be a condition precedent to the Company establishing such an account
with one or more Brokers that all necessary legal, regulatory and other
requirements have been satisfied by the Company and the Debenture Trustee, if
applicable, and the Company shall assume, to the maximum extent permitted
herein and at law, all responsibility for administering such account(s).


 


In
connection with the Common Share Interest Payment Election, the Debenture
Trustee shall have the power to: (i) accept delivery of the Common Shares
from the Company and process the Common Shares in accordance with the Common
Share Interest Payment Election Notice, (ii) accept bids with respect to,
and consummate sales of, such Common Shares, each as the Company shall direct
in its absolute discretion through the Broker identified by the Company in the
Common Share Interest Payment Election Notice, (iii) invest the proceeds
of such sales in Canadian Government Obligations which mature prior to the
applicable Interest Payment Date, (iv) deliver proceeds to holders of
Debentures to satisfy all or a portion of the Company’s Interest Obligations,
as directed by the Company in the Common Share Interest Payment Election Notice,
and (v) perform any other action necessarily incidental thereto as
directed by the Company in its absolute discretion.  The Common Share Interest Payment Election
Notice shall, where the Debenture Trustee delivers Common Share Bid Requests,
direct the Debenture Trustee to solicit and accept only, and each Common Share
Bid Request shall provide that the acceptance of any bid is conditional on the
acceptance of, sufficient bids to result in aggregate net proceeds from such
issue and sale of Common Shares which, together with the 


 


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cash
payments to be made by the Company, if any, equal the Interest Obligation on
the Common Share Delivery Date.


 


(c)                                                          The Common Share Interest
Payment Election Notice shall provide confirmation from the Company that all
necessary regulatory approvals have been obtained and shall also provide for,
and all bids, if any, shall be subject to, the right of the Company, by
delivering written notice to the Debenture Trustee at any time prior to the
consummation of such delivery and sale of the Common Shares on the Common Share
Delivery Date, to withdraw the Common Share Interest Payment Election (which
shall have the effect of withdrawing each related Common Share Bid Request),
whereupon the Company shall be obliged to pay in cash the Interest Obligation
in respect of which the Common Share Interest Payment Election Notice has been
delivered.


 


(d)                                                         Any sale of Common Shares
pursuant to this Article 10 may be made to one or more Persons whose bids
are solicited, but all such sales with respect to a particular Common Share
Interest Payment Election shall take place concurrently on the Common Share
Delivery Date.


 


(e)                                                          The amount receivable in cash
by a holder of a Debenture in respect of the Interest Obligation or the
entitlement thereto will not be affected by whether or not the Company elects
to satisfy the Interest Obligation pursuant to a Common Share Interest Payment
Election.


 


(f)                                                            The Debenture Trustee shall
inform the Company promptly following receipt of any bid or bids for Common
Shares solicited pursuant to the Common Share Bid Requests.  The Debenture Trustee shall accept such bid
or bids as the Company, in its absolute discretion, shall direct by a Written
Direction, provided that the aggregate net proceeds of all sales of Common
Shares through the facilities of a registered broker/dealer resulting from the
acceptance of such bids, together with the amount of any cash payment by the
Company, on the Common Share Delivery Date, must be equal to the related Common
Share Interest Payment Election Amount in connection with any bids so
accepted.  The Company, the Debenture
Trustee (if required by the Company in its absolute discretion) and the
applicable bidders shall, not later than the Common Share Delivery Date, enter
into Common Share Purchase Agreements in a form satisfactory to the Debenture
Trustee and shall comply with all Applicable Securities Legislation, including
the securities rules and regulations of any stock exchange on which the
Debentures or Common Shares are then listed. 
The Company shall pay all fees and expenses in connection with the
Common Share Purchase Agreements including the fees and commissions charged by
the investment banks, brokers and dealers and the fees of the Debenture
Trustee.


 


(g)                                                         Provided that (i) all
conditions specified in each Common Share Purchase Agreement to the closing of
all sales thereunder have been satisfied, other than the delivery of the Common
Shares to be sold thereunder against payment of the purchase price thereof, and
(ii) the purchasers under each Common Share Purchase Agreement shall be
ready, willing and able to perform thereunder, in each case on the Common Share
Delivery Date, the Company shall, on the Common Share Delivery Date, deliver to
the Debenture Trustee the Common Shares to be sold on such date through the 


 


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facilities of a registered broker/dealer, an amount in
cash equal to the value of any fractional Common Shares and a Certificate to
the effect that all conditions precedent to such sales, including those set
forth in this Indenture and in each Common Share Purchase Agreement, have been
satisfied.  Upon such deliveries, the
Debenture Trustee shall consummate such sales through the facilities of a
registered broker/dealer on such Common Share Delivery Date by the delivery of
the Common Shares to such purchasers against payment to the Debenture Trustee
in immediately available funds of the purchase price therefor in an aggregate
amount equal to the Common Share Interest Payment Election Amount (less any
amount attributable to any fractional Common Shares), whereupon the sole right
of a holder of Debentures to receive such holder’s portion of the Common Share
Interest Payment Election Amount will be to receive same from the Debenture
Trustee out of the proceeds of such sales of Common Shares plus any amount
received by the Debenture Trustee from the Company attributable to any
fractional Common Shares in full satisfaction of the Interest Obligation and
the holder will have no further recourse to the Company in respect of the
Interest Obligation.


 


(h)                                                         The Debenture Trustee shall,
on the Common Share Delivery Date, use the sale proceeds of the Common Shares
(together with any cash received from the Company in lieu of any fractional
Common Shares) to purchase, on the direction of the Company in writing,
Canadian Government Obligations which mature prior to the applicable Interest
Payment Date and which the Debenture Trustee is required to hold until maturity
(the “Common
Share Proceeds Investment”) and shall, on such date, deposit the balance, if
any, of such sale proceeds in the Property Account for such Debentures.  The Debenture Trustee shall hold such Common
Share Proceeds Investment (but not income earned thereon) under its exclusive
control in an irrevocable trust for the benefit of the holders of the
Debentures.  At least one Business Day
prior to the Interest Payment Date, the Debenture Trustee shall deposit amounts
from the proceeds of the Common Share Proceeds Investment in the Property
Account to bring the balance of the Property Account to the Common Share
Interest Payment Election Amount.  On the
Interest Payment Date, the Debenture Trustee shall pay the amount held in the Property
Account to the holders of record of the Debentures on the record date of such
Interest Payment Date (less any tax required to be withheld or deducted, if
any) and, provided that there is no Event of Default, shall remit amounts, if
any, in respect of income earned on the Common Share Proceeds Investment or
otherwise in excess of the Common Share Interest Payment Election Amount to the
Company.


 


(i)                                                             Neither the making of a Common
Share Payment Election nor the consummation of sales of Common Shares on a
Common Share Delivery Date shall (i) result in the holders of the
Debentures not being entitled to receive on the applicable Interest Payment
Date cash in an aggregate amount equal to the Interest Obligation payable on
such date or (ii) entitle or require such holders to receive any Freely
Tradeable Common Shares in satisfaction of such Interest Obligation.


 


(j)                                                             No fractional Common Shares
will be issued in satisfaction of interest but in lieu thereof the Company will
satisfy such fractional interest by a cash payment equal to the market price of
such fractional interest (less any tax required to be deducted, if any).


 


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ARTICLE 11

SUCCESSORS


 


11.1                                                                        Company
may Consolidate, etc., only on Certain Terms


 


(a)                                                          The Company may not, without
the consent of the holders, consolidate with or amalgamate or merge with or
into, or undertake a reorganization or arrangement with, any Person (other than
a directly or indirectly wholly-owned Subsidiary of the Company) or sell,
convey, transfer or lease all or substantially all of the properties and assets
of the Company to another Person (other than a directly or indirectly
wholly-owned Subsidiary of the Company) unless:


 


(i)                                     the Person formed by such
consolidation or into which the Company is amalgamated or merged, or who is the
successor resulting from such reorganization or arrangement or the Person which
acquires by sale, conveyance, transfer or lease all or substantially all of the
properties and assets of the Company is a corporation, organized and existing
under the laws of Canada or any province or territory thereof or the laws of
the United States or any state thereof and such corporation (if other than the
Company or the continuing corporation resulting from such a transaction of the
Company with another corporation under the laws of Canada or any province or
territory thereof) expressly assumes, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
obligations of the Company under the Debentures and this Indenture and the
performance or observance of every covenant and provision of this Indenture and
the Debentures required on the part of the Company to be performed or observed
and the conversion rights shall be provided for in accordance with Article 6,
by supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the Person (if other than the Company or the
continuing corporation resulting from such a transaction, formed by such
consolidation or into which the Company shall have been merged or who is the
successor or by the Person which shall have acquired the Company’s assets;


 


(ii)                                  after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing; and


 


(iii)                               if the Company or the
continuing corporation resulting from such transaction will not be the
resulting, continuing or surviving corporation, the Company shall have, at or
prior to the effective date of such consolidation, amalgamation, merger or
sale, conveyance, transfer or lease, delivered to the Trustee a Certificate and
an opinion of Counsel, each stating that such consolidation, merger or transfer
or other transaction complies with this Article 11 and, if a supplemental
indenture is required in connection with such transaction, such supplemental indenture
complies with this Article 11, and that all conditions precedent herein
provided for relating to such transaction have been complied with.


 


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(b)                                                         For purposes of the foregoing,
the sale, conveyance, transfer or lease (in a single transaction or a series of
related transactions) of the properties or assets of one or more Subsidiaries
of the Company (other than to the Company or another wholly-owned Subsidiary of
the Company), which, if such properties or assets were directly owned by the
Company, would constitute all or substantially all of the properties and assets
of the Company and its Subsidiaries, taken as a whole, shall be deemed to be
the sale, conveyance, transfer or lease of all or substantially all of the
properties and assets of the Company.


 


11.2                                                                        Successor
Substituted


 


Upon
any consolidation, reorganization or arrangement of the Company with, or
amalgamation or merger of the Company into, any other Person or any sale,
conveyance, transfer or lease of all or substantially all of the properties and
assets of the Company and its Subsidiaries, taken as a whole, in accordance
with Section 11.1, the successor Person formed by such transaction shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, and except for obligations the predecessor Person may have under a
supplemental indenture entered into pursuant to Section 11.1(a)(iii), the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Debentures.


 


ARTICLE 12

COMPULSORY ACQUISITION


 


12.1                                                                        Definitions


 


In this Article:


 


(a)                                                          “Affiliate” and “Associate” shall have their respective
meanings set forth in the Securities Act (Ontario);


 


(b)                                                         “Dissenting
Debentureholders” means a Debentureholder who does not accept an Offer
referred to in Section 12.2 and includes any assignee of the Debenture of
a Debentureholder to whom such an Offer is made, whether or not such assignee
is recognized under this Indenture;


 


(c)                                                          “Offer” means an offer to acquire
outstanding Debentures where, as of the date of the offer to acquire, the
Debentures that are subject to the offer to acquire, together with the Offeror’s
Debentures, constitute in the aggregate 20% or more of the outstanding
principal amount of the Debentures;


 


(d)                                                         “offer to
acquire”
includes an offer to purchase, or a satisfaction of an offer to sell, an
acceptance of an offer to sell whether or not such offer to sell has been
solicited or any combination thereof and the Person accepting an offer to sell
shall be deemed to be making an offer to acquire to the Person that made the
offer to sell;


 


(e)                                                          “Offeror” means a Person, or two or
more Persons acting jointly or in concert, who make an Offer to acquire
Debentures;


 


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(f)                                                            “Offeror’s
Debentures” means Debentures beneficially owned, or over which control or
direction is exercised, on the date of an Offer by the Offeror, any Affiliate
or Associate of the Offeror or any person or the Company acting jointly or in
concert with the Offeror; and


 


(g)                                                         “Offeror’s
Notice”
means the notice described in Section 12.3.


 


12.2                                                                        Offer
for Debentures


 


If an Offer for outstanding Debentures of a series
(other than Debentures held by or on behalf of the Offeror or an Affiliate or
Associate of the Offeror) is made and:


 


(a)                                                          not more than 4 months after
the date the Offer is made, the Offer is accepted by Debentureholders
representing at least 90% of the outstanding principal amount of the
Debentures, other than the Offeror’s Debentures;


 


(b)                                                         the Offeror is bound to take
up and pay for, or has taken up and paid for the Debentures of the
Debentureholders who accepted the Offer; and


 


(c)                                                          the Offeror complies with
Sections 12.3 and 12.5;


 


the
Offeror is entitled to acquire, and the Dissenting Debentureholders are
required to sell to the Offeror, the Debentures held by the Dissenting
Debentureholder for the same consideration per Debenture payable or paid, as
the case may be, under the Offer.


 


12.3                                                                        Offeror’s
Notice to Dissenting Debentureholders


 


Where
an Offeror is entitled to acquire Debentures held by Dissenting
Debentureholders pursuant to Section 12.2 and the Offeror wishes to
exercise such right, the Offeror shall send by registered mail within 10  days after the date of termination of the
Offer a notice (the “Offeror’s Notice”)
to each Dissenting Debentureholder stating that:


 


(a)                                                          Debentureholders holding at
least 90% of the principal amount of all outstanding Debentures, other than
Offeror’s Debentures, have accepted the Offer;


 


(b)                                                         the Offeror is bound to take
up and pay for, or has taken up and paid for, the Debentures of the
Debentureholders who accepted the Offer;


 


(c)                                                          Dissenting Debentureholders
must transfer their respective Debentures to the Offeror on the terms on which
the Offeror acquired the Debentures of the Debentureholders who accepted the Offer
within 21  days after the date of the sending of the Offeror’s
Notice; and


 


(d)                                                         Dissenting Debentureholders
must send their respective Debenture certificate(s) to the Trustee within
21 days after the date of the sending of the Offeror’s Notice.


 


12.4                                                                        Delivery
of Debenture Certificates


 


A
Dissenting Debentureholder to whom an Offeror’s Notice is sent pursuant to Section 12.3
shall, within 21  days after the
date of receiving the Offeror’s Notice with respect to the 


 


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election in Section 12.3(c), in the case of Fully Registered
Debentures, send his or her Debenture certificate(s) to the Debenture
Trustee duly endorsed for transfer.


 


12.5                                                                        Payment
of Consideration to Debenture Trustee


 


Within
21  days after the Offeror sends an
Offeror’s Notice pursuant to Section 12.3, the Offeror shall pay or
transfer to the Debenture Trustee, or to such other person as the Debenture
Trustee may direct, the cash or other consideration that would be payable if
all Dissenting Debentureholders elected to accept the Offer in accordance with Section 12.3.  The acquisition by the Offeror of all
Debentures held by all Dissenting Debentureholders shall be effective as of the
time of such payment or transfer.


 


12.6                                                                        Consideration
to be held in Trust


 


The
Debenture Trustee, or the person directed by the Debenture Trustee, shall hold
in trust for the Dissenting Debentureholders the cash or other consideration
they or it receives under Section 12.5. 
The Debenture Trustee, or such person, shall deposit cash in a separate
account in a Canadian chartered bank, or other body corporate, which may
include an Affiliate of the Debenture Trustee, any of whose deposits are
insured by the Canada Deposit Insurance Corporation, and shall place other consideration
in the custody of a Canadian chartered bank or such other body corporate.


 


12.7                                                                        Completion
of Transfer of Debentures to Offeror


 


Within
30  days after the date of the
sending of an Offeror’s Notice pursuant to Section 12.3, the Debenture
Trustee, if the Offeror has complied with Section 12.5, shall:


 


(a)                                                          do all acts and things and
execute and cause to be executed all instruments as in the Debenture Trustee’s
opinion may be necessary or desirable to cause the transfer of the Debentures
of the Dissenting Debentureholders to the Offeror;


 


(b)                                                         send to each Dissenting
Debentureholder who has made or deemed to have made an election and, if
applicable has complied with Section 12.4, the consideration to which such
Dissenting Debentureholder is entitled under this Article 12 net of
applicable withholding taxes, if applicable; and


 


(c)                                                          send to each Dissenting
Debentureholder a notice stating that:


 


(i)                                     his or her Debentures have
been transferred to the Offeror;


 


(ii)                                  the Debenture Trustee or some
other Person designated in such notice are holding in trust the consideration
to which the Dissenting Debentureholder is entitled to receive for such
Debentures if the Debentureholder elected to receive the consideration payable
or paid under the Offer; and


 


(iii)                               the Debenture Trustee, or such
other Person, will send the consideration to such Dissenting Debentureholder as
soon as possible after receiving such Dissenting Debentureholder’s Debenture
certificate(s) or such other documents as the Debenture Trustee or such
other Person may require in lieu thereof,


 


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and the
Debenture Trustee is hereby appointed the agent and attorney, and is granted
power of attorney with respect to the Debentures, of the Dissenting Debentureholders
for the purposes of giving effect to the foregoing provisions, including,
without limitation, the power and authority to execute such transfers as may be
necessary or desirable in respect of the book-entry only registration system of
the Depository.


 


12.8                                                                        Communication
of Offer to the Company


 


An
Offeror cannot make an Offer for Debentures unless, concurrent with the
communication of the Offer to any Debentureholder, a copy of the Offer is
provided to the Company.


 


ARTICLE 13

MEETINGS OF DEBENTUREHOLDERS


 


13.1                                                                        Right
to Convene Meeting


 


The
Debenture Trustee or the Company may at any time and from time to time, and the
Debenture Trustee shall, on receipt of a written request of the Company or a
written request signed by the holders of not less than 25% of the principal
amount of the Debentures then outstanding and upon receiving funding and being
indemnified to its reasonable satisfaction by the Company or by the
Debentureholders signing such request against the costs which may be incurred
in connection with the calling and holding of such meeting, convene a meeting
of the Debentureholders.  In the event of
the Debenture Trustee failing, within 30  days
after receipt of any such request and such funding and indemnification, to give
notice convening a meeting, the Company or such Debentureholders, as the case
may be, may convene such meeting.  Every
such meeting shall be held in the City of Toronto or at such other place as may
be approved or determined by the Debenture Trustee.


 


13.2                                                                        Notice
of Meetings


 


(a)                                                          At least 21 days notice of any
meeting shall be given to the Debentureholders in the manner provided in Section 14.2
and a copy of such notice shall be sent by post to the Debenture Trustee,
unless the meeting has been called by it. 
Such notice shall state the time when and the place where the meeting is
to be held and shall state briefly the general nature of the business to be
transacted thereat and it shall not be necessary for any such notice to set out
the terms of any resolution to be proposed or any of the provisions of this
Article.  The accidental omission to give
notice of a meeting to any holder of Debentures shall not invalidate any
resolution passed at any such meeting.  A
holder may waive notice of a meeting either before or after the meeting.


 


(b)                                                         If the business to be
transacted at any meeting by Extraordinary Resolution or otherwise, or any
action to be taken or power exercised by instrument in writing under Section 13.15,
especially affects the rights of holders of Debentures of one or more series in
a manner or to an extent differing in any material way from that in or to which
the rights of holders of Debentures of any other series are affected
(determined as provided in Sections 13.2(c) and (d)), then:


 


(i)                                     a reference to such fact,
indicating each series of Debentures in the opinion of the Debenture Trustee,
as advised by counsel, so especially affected 


 


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(hereinafter referred to as the “especially
affected series”) shall be made in the notice of such meeting, and in
any such case the meeting shall be and be deemed to be and is herein referred
to as a “Serial
Meeting”;
and


 


(ii)                                  the holders of Debentures of
an especially affected series shall not be bound by any action taken at a Serial
Meeting or by instrument in writing under Section 13.15 unless in addition
to compliance with the other provisions of this Article 13:


 


(A)                              at such Serial Meeting: (I) there
are Debentureholders present in person or by proxy and representing at least
25% in principal amount of the Debentures then outstanding of such series,
subject to the provisions of this Article 13 as to quorum at adjourned
meetings; and (II) the resolution is passed by the affirmative vote of the
holders of more than 50% (or in the case of an Extraordinary Resolution not
less than 66 2/3%) of the principal amount of the Debentures of such series
then outstanding voted on the resolution; or


 


(B)                                in the case of action taken or
power exercised by instrument in writing under Section 13.15, such
instrument is signed in one or more counterparts by the holders of not less
than 66 2/3% in principal amount of the Debentures of such series then
outstanding.


 


(c)                                                          Subject to Section 13.2(d),
the determination as to whether any business to be transacted at a meeting of
Debentureholders, or any action to be taken or power to be exercised by
instrument in writing under Section 13.15, especially affects the rights
of the Debentureholders of one or more series in a manner or to an extent
differing in any material way from that in or to which it affects the rights of
Debentureholders of any other series (and is therefore an especially affected
series) shall be determined by an opinion of Counsel, which shall be binding on
all Debentureholders, the Debenture Trustee and the Company for all purposes
hereof.


 


(d)                                                         A proposal:


 


(i)                                     to extend the maturity of
Debentures of any particular series or to reduce the principal amount thereof,
the rate of interest or any redemption premium thereon or to impair any conversion
right thereof;


 


(ii)                                  to modify or terminate any
covenant or agreement which by its terms is effective only so long as
Debentures of a particular series are outstanding; or


 


(iii)                               to reduce with respect to
Debentureholders of any particular series any percentage stated in this Section 13.2
or Sections 13.4, 13.12 and 13.15,


 


shall be deemed to especially affect the rights of the
Debentureholders of such series in a manner differing in a material way from
that in which it affects the rights of holders of Debentures of any other
series, whether or not a similar extension, reduction, modification or
termination is proposed with respect to Debentures of any or all other series.


 


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13.3                                                                        Chairman


 


Some
person, who need not be a Debentureholder, nominated in writing by the Company
(in case it convenes the meeting) or the Debenture Trustee (in any other case)
shall be chairman of the meeting and if no person is so nominated, or if the
person so nominated is not present within 15 minutes from the time fixed for
the holding of the meeting, a majority of the Debentureholders present in
person or by proxy shall choose some person present to be chairman.


 


13.4                                                                        Quorum


 


Subject
to the provisions of Section 13.12, at any meeting of the Debentureholders
a quorum shall consist of not less than two Debentureholders present in person
or by proxy and representing at least 25% in principal amount of the
outstanding Debentures and, if the meeting is a Serial Meeting, at least 25% of
the Debentures then outstanding of each especially affected series.  If a quorum of the Debentureholders shall not
be present within 30 minutes from the time fixed for holding any meeting, the
meeting, if summoned by the Debentureholders or pursuant to a request of the
Debentureholders, shall be dissolved, but in any other case the meeting shall
be adjourned to the same day in the next week (unless such day is not a
Business Day in which case it shall be adjourned to the next following Business
Day thereafter) at the same time and place, to the extent possible, and no
notice shall be required to be given in respect of such adjourned meeting.  At the adjourned meeting, the
Debentureholders present in person or by proxy shall, subject to the provisions
of Section 13.12, constitute a quorum and may transact the business for
which the meeting was originally convened notwithstanding that they may not
represent 25% of the principal amount of the outstanding Debentures or of the
Debentures then outstanding of each especially affected series.  Any business may be brought before or dealt
with at an adjourned meeting which might have been brought before or dealt with
at the original meeting in accordance with the notice calling the same.  No business shall be transacted at any
meeting unless the required quorum be present at the commencement of business.


 


13.5                                                                        Power
to Adjourn


 


The
chairman of any meeting at which a quorum of the Debentureholders is present
may, with the consent of the holders of a majority in principal amount of the
Debentures represented thereat, adjourn any such meeting and no notice of such
adjournment need be given except such notice, if any, as the meeting may
prescribe.


 


13.6                                                                        Show
of Hands


 


Every
question submitted to a meeting shall, subject to Section 13.7, be decided
in the first place by a majority of the votes given on a show of hands except
that votes on Extraordinary Resolutions shall be given in the manner
hereinafter provided.  At any such
meeting, unless a poll is duly demanded as herein provided, a declaration by
the chairman that a resolution has been carried or carried unanimously or by a
particular majority or lost or not carried by a particular majority shall be
conclusive evidence of the fact.  The
chairman of any meeting shall be entitled, both on a show of hands and on a
poll, to vote in respect of the Debentures, if any, held by him.


 


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13.7                                                                        Poll


 


On
every Extraordinary Resolution, and on any other question submitted to a meeting
when demanded by the chairman or by one or more Debentureholders or proxies for
Debentureholders, a poll shall be taken in such manner and either at once or
after an adjournment as the chairman shall direct.  Questions other than Extraordinary Resolutions
shall, if a poll be taken, be decided by the votes of the holders of a majority
in principal amount of the Debentures and of each especially affected series,
if applicable, represented at the meeting and voted on the poll.


 


13.8                                                                        Voting


 


On a show of hands every person who is present and
entitled to vote, whether as a Debentureholder or as proxy for one or more
Debentureholders or both, shall have one vote. 
On a poll each Debentureholder present in person or represented by a
proxy duly appointed by an instrument in writing shall be entitled to one vote
in respect of each $1,000 principal amount of Debentures of which he or she
shall then be the holder. A proxyholder need not be a Debentureholder.  In the case of joint holders of a Debenture,
any one of them present in person or by proxy at the meeting may vote in the
absence of the other or others but in case more than one of them be present in
person or by proxy, they shall vote together in respect of the Debentures of
which they are joint holders.


 


13.9                                                                        Proxies


 


A
Debentureholder may be present and vote at any meeting of Debentureholders by
an authorized representative.  The
Company (in case it convenes the meeting) or the Debenture Trustee (in any
other case) for the purpose of enabling the Debentureholders to be present and
vote at any meeting without producing their Debentures, and of enabling them to
be present and vote at any such meeting by proxy and of lodging instruments
appointing such proxies at some place other than the place where the meeting is
to be held, may from time to time make and vary such regulations as it shall
think fit providing for and governing any or all of the following matters:


 


(a)                                                          the form of the instrument
appointing a proxy, which shall be in writing, and the manner in which the same
shall be executed and the production of the authority of any person signing on
behalf of a Debentureholder;


 


(b)                                                         the deposit of instruments
appointing proxies at such place as the Debenture Trustee, the Company or the
Debentureholder convening the meeting, as the case may be, may, in the notice
convening the meeting, direct and the time, if any, before the holding of the
meeting or any adjournment thereof by which the same must be deposited; and


 


(c)                                                          the deposit of instruments
appointing proxies at some approved place or places other than the place at
which the meeting is to be held and enabling particulars of such instruments
appointing proxies to be mailed, faxed or sent by other electronic means before
the meeting to the Company or to the Debenture Trustee at the place where the
same is to be held and for the voting of proxies so deposited as though the
instruments themselves were produced at the meeting.


 


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Any
regulations so made shall be binding and effective and the votes given in
accordance therewith shall be valid and shall be counted.  Save as such regulations may provide, the
only persons who shall be recognized at any meeting as the holders of any Debentures,
or as entitled to vote or be present at the meeting in respect thereof, shall
be Debentureholders and persons whom Debentureholders have by instrument in
writing duly appointed as their proxies.


 


13.10                                                                 Persons
Entitled to Attend Meetings


 


The
Company, the Manager (if prior to the Management Internalization) and the
Debenture Trustee, by their respective officers, directors, employees and
agents (as applicable), the Auditors of the Company and the legal advisers of
the Company, the Debenture Trustee or any Debentureholder may attend any
meeting of the Debentureholders, but shall have no vote as such.


 


13.11                                                                 Powers
Exercisable by Extraordinary Resolution


 


In addition to the powers conferred upon them by any
other provisions of this Indenture or by applicable law, a meeting of the
Debentureholders shall have the following powers exercisable from time to time
by Extraordinary Resolution, subject in the case of the matters in paragraphs
(a), (b), (c), (d) and (l) to receipt of the prior approval of the
TSX or such other exchange on which the Debentures are then listed:


 


(a)                                                          power to authorize the
Debenture Trustee to grant extensions of time for payment of any principal,
premium or interest on the Debentures, whether or not the principal, premium,
or interest, the payment of which is extended, is at the time due or overdue;


 


(b)                                                         power to sanction any
modification, abrogation, alteration, compromise or arrangement of the rights
of the Debentureholders or the Debenture Trustee against the Company, or
against its property, whether such rights arise under this Indenture or the
Debentures or otherwise;


 


(c)                                                          power to assent to any
modification of or change in or addition to or omission from the provisions
contained in this Indenture or any Debenture which shall be agreed to by the
Company and to authorize the Debenture Trustee to concur in and execute any
indenture supplemental hereto embodying any modification, change, addition or
omission;


 


(d)                                                         power to sanction any scheme
for the reconstruction, reorganization or recapitalization of the Company or for
the consolidation, amalgamation or merger of the Company with any other Person
or for the sale, leasing, transfer or other disposition of all or substantially
all of the undertaking, property and assets of the Company or any part thereof,
provided that no such sanction shall be necessary in respect of any such
transaction if the provisions of Section 11.1 shall have been complied
with;


 


(e)                                                          power to direct or authorize
the Debenture Trustee to exercise any power, right, remedy or authority given
to it by this Indenture in any manner specified in any such Extraordinary
Resolution or to refrain from exercising any such power, right, remedy or
authority;


 


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(f)                                                            power to waive, and direct the
Debenture Trustee to waive, any default hereunder and/or cancel any declaration
made by the Debenture Trustee pursuant to Section 8.1 either
unconditionally or upon any condition specified in such Extraordinary
Resolution;


 


(g)                                                         power to restrain any
Debentureholder from taking or instituting any suit, action or proceeding for
the purpose of enforcing payment of the principal, premium or interest on the
Debentures, or for the execution of any trust or power hereunder;


 


(h)                                                         power to direct any
Debentureholder who, as such, has brought any action, suit or proceeding to
stay or discontinue or otherwise deal with the same upon payment, if the taking
of such suit, action or proceeding shall have been permitted by Section 8.5,
of the costs, charges and expenses reasonably and properly incurred by such
Debentureholder in connection therewith;


 


(i)                                                             power to assent to any
compromise or arrangement with any creditor or creditors or any class or
classes of creditors, whether secured or otherwise, and with holders of any
Common Shares or other securities of the Company;


 


(j)                                                             power to appoint a committee
with power and authority (subject to such limitations, if any, as may be
prescribed in the resolution) to exercise, and to direct the Debenture Trustee
to exercise, on behalf of the Debentureholders, such of the powers of the
Debentureholders as are exercisable by Extraordinary Resolution or other
resolution as shall be included in the resolution appointing the
committee.  The resolution making such appointment
may provide for payment of the expenses and disbursements of and compensation
to such committee.  Such committee shall
consist of such number of persons as shall be prescribed in the resolution
appointing it and the members need not be themselves Debentureholders.  Every such committee may elect its chairman
and may make regulations respecting its quorum, the calling of its meetings,
the filling of vacancies occurring in its number and its procedure
generally.  Such regulations may provide
that the committee may act at a meeting at which a quorum is present or may act
by minutes signed by the number of members thereof necessary to constitute a
quorum.  All acts of any such committee
within the authority delegated to it shall be binding upon all Debentureholders.  Neither the committee nor any member thereof
shall be liable for any loss arising from or in connection with any action
taken or omitted to be taken by them in good faith;


 


(k)                                                          power to remove the Debenture
Trustee from office and to appoint a new Debenture Trustee or Debenture Trustees
provided that no such removal shall be effective unless and until a new
Debenture Trustee or Debenture Trustees shall have become bound by this
Indenture;


 


(l)                                                             power to sanction the
conversion of the Debentures for or the conversion thereof into Common Shares,
bonds, debentures or other securities or obligations of the Company or of any
other Person formed or to be formed;


 


(m)                                                       power to authorize the
distribution in
specie of
any securities received pursuant to a transaction authorized under the provisions
of Section 13.11(l); and


 


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(n)                                                         power to amend, alter or
repeal any Extraordinary Resolution previously passed or sanctioned by the
Debentureholders or by any committee appointed pursuant to Section 13.11(j).


 


Notwithstanding the foregoing provisions of
this Section 13.11, none of such provisions shall in any manner allow or
permit any amendment, modification, abrogation or addition to the provisions of
Article 5 which could reasonably be expected to detrimentally affect the
rights, remedies or recourse of the priority of the Senior Creditors.


 


13.12                                                                 Meaning
of “Extraordinary Resolution”


 


(a)                                                          The expression “Extraordinary
Resolution”
when used in this Indenture means, subject as hereinafter in this Article provided,
a resolution proposed to be passed as an Extraordinary Resolution at a meeting
of Debentureholders (including an adjourned meeting) duly convened for the
purpose and held in accordance with the provisions of this Article at
which the holders of not less than 25% of the principal amount of the
Debentures then outstanding, and if the meeting is a Serial Meeting, at which
holders of not less than 25% of the principal amount of the Debentures then
outstanding of each especially affected series, are present in person or by
proxy and passed by the favourable votes of the holders of not less than 662/3% of the principal amount of
the Debentures, and if the meeting is a Serial Meeting by the affirmative vote
of the holders of not less than 662/3% of each especially affected series, in
each case present or represented by proxy at the meeting and voted upon on a
poll on such resolution.


 


(b)                                                         If, at any such meeting, the
holders of not less than 25% of the principal amount of the Debentures then
outstanding and, if the meeting is a Serial Meeting, 25% of the principal
amount of the Debentures then outstanding of each especially affected series,
in each case are not present in person or by proxy within 30 minutes after the
time appointed for the meeting, then the meeting, if convened by or on the
requisition of Debentureholders, shall be dissolved but in any other case it
shall stand adjourned to such date, being not less than 14 nor more than 60
days later, and to such place and time as may be appointed by the
chairman.  Not less than 10 days notice shall
be given of the time and place of such adjourned meeting in the manner provided
in Section 14.2.  Such notice shall
state that at the adjourned meeting the Debentureholders present in person or
by proxy shall form a quorum.  At the
adjourned meeting the Debentureholders present in person or by proxy shall form
a quorum and may transact the business for which the meeting was originally
convened and a resolution proposed at such adjourned meeting and passed thereat
by the affirmative vote of holders of not less than 662/3% of the principal amount of
the Debentures and, if the meeting is a Serial Meeting, by the affirmative vote
of the holders of not less than 662/3% of the principal amount of the Debentures
of each especially affected series, in each case present or represented by
proxy at the meeting voted upon on a poll shall be an Extraordinary Resolution
within the meaning of this Indenture, notwithstanding that the holders of not
less than 25% in principal amount of the Debentures then outstanding, and if
the meeting is a Serial Meeting, at which holders of not less than 25% of the
principal amount of the Debentures then outstanding of each especially affected
series, are not present in person or by proxy at such adjourned meeting.


 


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(c)                                                          Votes on an Extraordinary
Resolution shall always be given on a poll and no demand for a poll on an
Extraordinary Resolution shall be necessary.


 


13.13                                                                 Powers
Cumulative


 


Any one or more of the powers in this
Indenture stated to be exercisable by the Debentureholders by Extraordinary
Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers from time to time shall not be deemed to exhaust
the rights of the Debentureholders to exercise the same or any other such power
or powers thereafter from time to time.


 


13.14                                                                 Minutes


 


Minutes of all resolutions and proceedings
at every meeting as aforesaid shall be made and duly entered in books to be
from time to time provided for that purpose by the Debenture Trustee at the
expense of the Company, and any such minutes as aforesaid, if signed by the
chairman of the meeting at which such resolutions were passed or proceedings
had, or by the chairman of the next succeeding meeting of the Debentureholders,
shall be prima facie evidence of
the matters therein stated and, until the contrary is proved, every such
meeting, in respect of the proceedings of which minutes shall have been made,
shall be deemed to have been duly held and convened, and all resolutions passed
thereat or proceedings taken thereat to have been duly passed and taken.


 


13.15                                                                 Instruments
in Writing


 


All actions which may be taken and all
powers that may be exercised by the Debentureholders at a meeting held as
hereinbefore in this Article provided may also be taken and exercised by
the holders of 662/3% of the principal amount of
all the outstanding Debentures and, if the meeting at which such actions might
be taken would be a Serial Meeting, by the holders of 662/3% of the principal amount of
the Debentures then outstanding of each especially affected series, by an
instrument in writing signed in one or more counterparts and the expression “Extraordinary Resolution” when used in this
Indenture shall include an instrument so signed.


 


13.16                                                                 Binding
Effect of Resolutions


 


Every resolution and every Extraordinary
Resolution passed in accordance with the provisions of this Article at a
meeting of Debentureholders shall be binding upon all the Debentureholders,
whether present at or absent from such meeting, and every instrument in writing
signed by Debentureholders in accordance with Section 13.15 shall be
binding upon all the Debentureholders, whether signatories thereto or not, and
each and every Debentureholder and the Debenture Trustee (subject to the
provisions for its indemnity herein contained) shall be bound to give effect
accordingly to every such resolution, Extraordinary Resolution and instrument
in writing.


 


13.17                                                                 Evidence
of Rights Of Debentureholders


 


(a)                                                          Any request, direction,
notice, consent or other instrument which this Indenture may require or permit
to be signed or executed by the Debentureholders may be in any number of
concurrent instruments of similar tenor signed or executed by such
Debentureholders.


 


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(b)                                                         The Debenture Trustee may, in
its discretion, require proof of execution in cases where it deems proof
desirable and may accept such proof as it shall consider proper.


 


13.18                                                                 Concerning
Serial Meetings


 


If in the opinion of Counsel any business
to be transacted at any meeting, or any action to be taken or power to be
exercised by instrument in writing under Section 13.15, does not adversely
affect the rights of the holders of Debentures of one or more series, the
provisions of this Article 13 shall apply as if the Debentures of such
series were not outstanding and no notice of any such meeting need be given to
the holders of Debentures of such series. 
Without limiting the generality of the foregoing, a proposal to modify
or terminate any covenant or agreement which is effective only so long as
Debentures of a particular series are outstanding shall be deemed not to
adversely affect the rights of the holders of Debentures of any other series.


 


ARTICLE 14

NOTICES


 


14.1                                                                        Notice
to the Company


 


Any notice to the Company or any Guarantor
or to the Debenture Trustee (on its own account or on behalf of the
Debentureholders) under the provisions of this Indenture shall be valid and
effective if delivered to the Company at 355 Burrard Street, Suite 1900, Vancouver, BC, V6C 2G8,
Attention: Chief Executive Officer, Fax (604)
682-7131, with a copy delivered to the Manager (if deliver is to
occur prior to the Management Internalization) at: 200 Clarendon Street, 25th Floor, Boston, MA, 02116, Attention: Chief
Executive Officer, Fax: (617) 531-6370
a copy delivered to Goodmans LLP, if on or before December 22, 2009 at
250 Yonge Street, Suite 2400, Toronto, Ontario, M5B 2M6, and if after
December 22, 2009 at Bay Adelaide Centre, 333 Bay Street, Suite 3400,
Toronto, Ontario M5H 2S7  Attention:
William Gorman, Fax: (416) 979-1234 and a copy delivered to the Debenture
Trustee at 100 University Avenue, 9th Floor, Toronto,
Ontario, M5J 2Y1, Attention: Manager, Corporate Trust, Fax: (416) 981-9777 or
if given by registered letter, postage prepaid, or facsimile transmission to
such offices and so addressed and if mailed, shall be deemed to have been
effectively given three days following the mailing thereof or if sent by
facsimile transmission on the first Business Day after confirmed
transmission.  The Company may from time
to time notify the Debenture Trustee in writing of a change of address which
thereafter, until changed by like notice, shall be the address of the Company
for all purposes of this Indenture.


 


14.2                                                                        Notice
to Debentureholders


 


All notices to be given hereunder with
respect to the Debentures shall be deemed to be validly given to the holders
thereof if sent by first class mail, postage prepaid, by letter or circular
addressed to such holders at their post office addresses appearing in any of
the registers hereinbefore mentioned and shall be deemed to have been
effectively given three days following the day of mailing.  Any notice to be given hereunder with respect
to the Debentures delivered or served by telecopier or courier shall be deemed
to have been given or served on the day upon which it is delivered.  Accidental error or omission in giving notice
or accidental failure to mail or otherwise deliver notice to any
Debentureholder or the inability of the Company to give or mail or otherwise
deliver any notice due to any event beyond the reasonable control of the
Company shall not invalidate any action or proceeding founded thereon.


 


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If any notice given in accordance with the
foregoing paragraph would be unlikely to reach the Debentureholders to whom it
is addressed in the ordinary course of post by reason of an interruption in
mail service, whether at the place of dispatch or receipt or both, the Company
shall give such notice by publication at least once in the City of Toronto,
Ontario (or in such of those cities as, in the opinion of the Debenture
Trustee, is sufficient in the particular circumstances), such publication to be
made in a daily newspaper of general circulation in the designated city.


 


Any notice given to Debentureholders by
publication shall be deemed to have been given on the day on which publication
shall have been effected at least once in the newspaper in which publication
was required.


 


All notices with respect to any Debenture
may be given to whichever one of the holders thereof (if more than one) is
named first in the registers hereinbefore mentioned, and any notice so given
shall be sufficient notice to all holders having an interest in such Debenture.


 


14.3                                                                        Notice
to Debenture Trustee


 


Any notice to the Debenture Trustee under
the provisions of this Indenture shall be valid and effective if delivered to
the Debenture Trustee at its principal office in the City of Toronto, 100 University Avenue, 9th Floor, Toronto, Ontario M5J 2Y1,  Attention:
Director, Corporate Trust Department or if given by registered letter, postage
prepaid, to such office and so addressed and, if mailed, shall be deemed to
have been effectively given three days following the mailing thereof.  The Debenture Trustee may from time to time
notify the Company in writing of a change of address which thereafter, until by
like notice shall be the address of the Debenture Trustee to receive notices
from the Company.


 


14.4                                                                        Mail
Service Interruption


 


If by reason of any interruption of mail
service, actual or threatened, any notice to be given to the Debenture Trustee
would reasonably be unlikely to reach its destination by the time notice by
mail is deemed to have been given pursuant to Section 14.3, such notice
shall be valid and effective only if delivered at the appropriate address in
accordance with Section 14.3.


 


ARTICLE 15

CONCERNING THE DEBENTURE TRUSTEE


 


15.1                                                                        No
Conflict of Interest


 


The Company acknowledges that the Debenture
Trustee is acting as indenture trustee with respect to the 11% secured
subordinated notes issued by the Company and the 6.50% secured convertible
debentures of the Company.  The Company
hereby agrees and consents to the appointment of the Debenture Trustee pursuant
to this indenture.


 


Other than as disclosed above in this Section 15.1,
the Debenture Trustee represents to the best of its knowledge to the Company
that at the date of execution and delivery by it of this Indenture there exists
no material conflict of interest in the role of the Debenture Trustee as a
fiduciary hereunder but if, notwithstanding the provisions of this Section 15.1,
such a material conflict of interest exists, or hereafter arises, the validity
and enforceability of this Indenture, and the Debentures issued hereunder,
shall not be affected in any manner whatsoever by reason only that 


 


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such material
conflict of interest exists or arises but the Debenture Trustee shall, within
30 days after ascertaining that it has a material conflict of interest, either
eliminate such material conflict of interest or resign in the manner and with
the effect specified in Section 15.2.


 


15.2                                                                        Replacement
of Debenture Trustee


 


The Debenture Trustee may resign its trust
and be discharged from all further duties and liabilities hereunder by giving
to the Company 30 days notice in writing or such shorter notice as the Company
may accept as sufficient.  If at any time
a material conflict of interest exists in the Debenture Trustee’s role as a
fiduciary hereunder the Debenture Trustee shall, within 30 days after
ascertaining that such a material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in this Section 15.2.  The
validity and enforceability of this Indenture and of the Debentures issued
hereunder shall not be affected in any manner whatsoever by reason only that
such a material conflict of interest exists. 
In the event of the Debenture Trustee resigning or being removed or
being dissolved, becoming bankrupt, going into liquidation or otherwise
becoming incapable of acting hereunder, the Company shall forthwith appoint a
new Debenture Trustee unless a new Debenture Trustee has already been appointed
by the Debentureholders.  Failing such
appointment by the Company, the retiring Debenture Trustee or any
Debentureholder may apply to a Judge of the Ontario Superior Court of Justice,
on such notice as such Judge may direct at the Company’s expense, for the
appointment of a new Debenture Trustee but any new Debenture Trustee so
appointed by the Company or by the Court shall be subject to removal as
aforesaid by the Debentureholders and the appointment of such new Debenture
Trustee shall be effective only upon such new Debenture Trustee becoming bound
by this Indenture.  Any new Debenture
Trustee appointed under any provision of this Section 15.2 shall be a
corporation authorized to carry on the business of a trust company in all of
the provinces and territories of Canada. 
On any new appointment the new Debenture Trustee shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as Debenture Trustee.


 


Any company into which the Debenture
Trustee may be merged or, with or to which it may be consolidated, amalgamated
or sold, or any company resulting from any merger, consolidation, sale or
amalgamation to which the Debenture Trustee shall be a party, or any company succeeding
to the corporate trust business of the Debenture Trustee shall be the successor
trustee under this Indenture without the execution of any instrument or any
further act.  Nevertheless, upon the
written request of the successor Debenture Trustee or of the Company, the
Debenture Trustee ceasing to act shall execute and deliver an instrument
assigning and transferring to such successor Debenture Trustee, upon the trusts
herein expressed, all the rights, powers and trusts of the Debenture Trustee so
ceasing to act, and shall duly assign, transfer and deliver all property and
money held by such Debenture Trustee to the successor Debenture Trustee so
appointed in its place.  Should any deed,
conveyance or instrument in writing from the Company be required by any new
Debenture Trustee for more fully and certainly vesting in and confirming to it
such estates, properties, rights, powers and trusts, then any and all such
deeds, conveyances and instruments in writing shall on request of said new
Debenture Trustee, be made, executed, acknowledged and delivered by the
Company.


 


15.3                                                                        Duties
of Debenture Trustee


 


In the exercise of the rights, duties and
obligations prescribed or conferred by the terms of this Indenture, the
Debenture Trustee shall act honestly and in good faith and exercise that 


 


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degree of
care, diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances.


 


15.4                                                                        Reliance
Upon Declarations, Opinions, etc.


 


In the exercise of its rights, duties and
obligations hereunder the Debenture Trustee may, if acting in good faith, act
and rely, as to the truth of the statements and accuracy of the opinions
expressed therein, upon statutory declarations, opinions, reports or certificates
furnished pursuant to any covenant, condition or requirement of this Indenture
or required by the Debenture Trustee to be furnished to it in the exercise of
its rights and duties hereunder, if the Debenture Trustee examines such
statutory declarations, opinions, reports or certificates and determines that
they comply with Section 15.5, if applicable, and with any other
applicable requirements of this Indenture. 
The Debenture Trustee may nevertheless, in its discretion, require
further proof in cases where it deems further proof desirable.  Without restricting the foregoing, the
Debenture Trustee may act and rely on an opinion of Counsel satisfactory to the
Debenture Trustee notwithstanding that it is delivered by a solicitor or firm
which acts as solicitors for the Company.


 


15.5                                                                        Evidence
and Authority to Debenture Trustee, Opinions, etc.


 


The Company shall furnish to the Debenture
Trustee evidence of compliance with the conditions precedent provided for in
this Indenture relating to any action or step required or permitted to be taken
by the Company or the Debenture Trustee under this Indenture or as a result of
any obligation imposed under this Indenture, including without limitation, the
certification and delivery of Debentures hereunder, the satisfaction and
discharge of this Indenture and the taking of any other action to be taken by
the Debenture Trustee at the request of or on the application of the Company,
forthwith if and when (a) such evidence is required by any other Section of
this Indenture to be furnished to the Debenture Trustee in accordance with the
terms of this Section 15.5, or (b) the Debenture Trustee, in the
exercise of its rights and duties under this Indenture, gives the Company
written notice requiring it to furnish such evidence in relation to any
particular action or obligation specified in such notice.


 


Such evidence
shall consist of:


 


(a)                                                          a Certificate, stating that
any such condition precedent has been complied with in accordance with the
terms of this Indenture;


 


(b)                                                         in the case of a condition
precedent compliance with which is, by the terms of this Indenture, made
subject to review or examination by a solicitor, an opinion of Counsel that
such condition precedent has been complied with in accordance with the terms of
this Indenture; and


 


(c)                                                          in the case of any such
condition precedent compliance with which is subject to review or examination
by auditors or accountants, an opinion or report of the Auditors of the Company
whom the Debenture Trustee for such purposes hereby approves, that such
condition precedent has been complied with in accordance with the terms of this
Indenture.


 


Whenever such evidence relates to a matter
other than the certificates and delivery of Debentures and the satisfaction and
discharge of this Indenture, and except as otherwise specifically 


 


90

















 


provided
herein, such evidence may consist of a report or opinion of any solicitor,
auditor, accountant, engineer or appraiser or any other person whose qualifications
give authority to a statement made by him, provided that if such report or
opinion is furnished by a trustee, officer or employee of the Company it shall
be in the form of a statutory declaration. 
Such evidence shall be, so far as appropriate, in accordance with the
immediately preceding paragraph of this Section 15.5.


 


Each statutory declaration, certificate,
opinion or report with respect to compliance with a condition precedent
provided for in the Indenture shall include (a) a statement by the person
giving the evidence that he has read and is familiar with those provisions of
this Indenture relating to the condition precedent in question, (b) a
brief statement of the nature and scope of the examination or investigation
upon which the statements or opinions contained in such evidence are based, (c) a
statement that, in the belief of the person giving such evidence, he has made
such examination or investigation as is necessary to enable him to make the
statements or give the opinions contained or expressed therein, and (d) a
statement whether in the opinion of such person the conditions precedent in
question have been complied with or satisfied.


 


The Company shall furnish to the Debenture
Trustee at any time if the Debenture Trustee reasonably so requires, a
Certificate affirming compliance with all covenants, conditions or other
requirements contained in this Indenture, the non-compliance with which would,
with the giving of notice or the lapse of time, or both, or otherwise,
constitute an Event of Default, or if such is not the case, specifying the
covenant, condition or other requirement which has not been complied with and
giving particulars of such non-compliance. 
The Company shall, whenever the Debenture Trustee so requires, furnish
the Debenture Trustee with evidence by way of statutory declaration, opinion,
report or certificate as specified by the Debenture Trustee as to any action or
step required or permitted to be taken by the Company or as a result of any
obligation imposed by this Indenture.


 


15.6                                                                        Debenture
Trustee May Rely on a Certificate


 


Except as otherwise specifically provided
or prescribed by this Indenture, whenever in the administration of the
provisions of this Indenture the Debenture Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or omitting
any action hereunder, the Debenture Trustee, if acting in good faith, may act
and rely upon a Certificate.


 


15.7                                                                        Experts,
Advisers and Agents


 


The Debenture
Trustee may:


 


(a)                                                          employ or retain and act and
rely on the opinion or advice of or information obtained from any solicitor,
auditor, valuator, engineer, surveyor, appraiser or other expert or advisor,
whether obtained by the Debenture Trustee or by the Company, or otherwise, and
shall not be liable for acting, or refusing to act, in good faith on any such
opinion or advice and may pay proper and reasonable compensation for all such
legal and other advice or assistance as aforesaid; and


 


(b)                                                         employ such agents and other
assistants as it may reasonably require for the proper discharge of its duties
hereunder, and may pay reasonable remuneration for all services performed for
it (and shall be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and compensation for all
disbursements, costs and expenses made or incurred by it in the discharge of 


 


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its duties hereunder and in the management of the
trusts hereof, and any solicitors employed or consulted by the Debenture
Trustee may, but need not be, solicitors for the Company.


 


15.8                                                                        Debenture
Trustee May Deal in Debentures


 


Subject to Sections 15.1 and 15.3, the
Debenture Trustee may, in its personal or other capacity, buy, sell, lend upon
and deal in the Debentures and generally contract and enter into financial
transactions with the Company or otherwise, without being liable to account for
any profits made thereby.


 


15.9                                                                        Investment
of Monies Held by Debenture Trustee


 


Upon receipt of a Written Direction, the
Debenture Trustee shall invest the funds in Government Obligations in its name
in accordance with such direction.  Any
such Written Direction shall be in writing and shall be provided to the
Debenture Trustee no later than 9:00 a.m. on the day on which the
investment is to be made.  Any such
direction received by Debenture Trustee after 9:00 a.m. or received on a
non-Business Day, shall be deemed to have been given prior to 9:00 a.m.
the next Business Day.  For the purpose
of this Section, “Business Day”
shall not include any day on which banks are not open for business in Toronto,
Ontario.


 


In addition to a Written Direction to
invest cash in Government Obligations, the Debenture Trustee may hold cash
balances constituting part or all of the funds and may, but need not, invest
same in its deposit department or the deposit department of one of its
Affiliates; provided that the Debenture Trustee and its Affiliates shall not be
liable to account for any profit to any parties to this Indenture or to any
other person or entity other than at a rate, if any, established from time to
time by the Debenture Trustee or one of its Affiliates.  For the purpose of this Section, “Affiliate” means affiliated companies
within the meaning of the Business
Corporations Act (Ontario) (“OBCA”)
and includes Computershare Investor Services Inc. and each of their affiliates
within the meaning of the OBCA.


 


The Debenture Trustee shall not be held
liable for any losses incurred in the investment of any funds in Government
Obligations.


 


15.10                                                                 Debenture
Trustee will Disburse Only Monies Deposited


 


The Debenture Trustee will disburse monies
according to this Indenture only to the extent that monies have been deposited
with it.


 


15.11                                                                 Debenture
Trustee Not Ordinarily Bound


 


Except as provided in Section 8.2 and
as otherwise specifically provided herein, the Debenture Trustee shall not,
subject to Section 15.3, be bound to give notice to any person of the
execution hereof, nor to do, observe or perform or see to the observance or
performance by the Company of any of the obligations herein imposed upon the
Company or of the covenants on the part of the Company herein contained, nor in
any way to supervise or interfere with the conduct of the Company’s business,
unless the Debenture Trustee shall have been required to do so in writing by
the holders of not less than 25% of the aggregate principal amount of the
Debentures then outstanding or by any Extraordinary Resolution of the
Debentureholders passed in accordance with the provisions 


 


92

















 


contained in Article 13,
and then only after it shall have been funded and indemnified to its
satisfaction against all actions, proceedings, claims and demands to which it
may render itself liable and all costs, charges, damages and expenses which it
may incur by so doing.


 


15.12                                                                 Debenture
Trustee Not Required to Give Security


 


The Debenture Trustee shall not be required
to give any bond or security in respect of the execution of the trusts and
powers of this Indenture or otherwise in respect of the premises.


 


15.13                                                                 Debenture
Trustee Not Bound to Act on the Company’s Request


 


Except as in this Indenture otherwise
specifically provided, the Debenture Trustee shall not be bound to act in
accordance with any direction or request of the Company or of the Directors
until a duly authenticated copy of the instrument or resolution containing such
direction or request shall have been delivered to the Debenture Trustee, and
the Debenture Trustee shall be empowered to act upon any such copy purporting
to be authenticated and believed by the Debenture Trustee to be genuine.


 


15.14                                                                 Debenture
Trustee Not Bound to Act


 


The Debenture Trustee shall retain the
right not to act and shall not be liable for refusing to act if, due to a lack
of information or for any other reason whatsoever, the Debenture Trustee, in
its sole judgment and acting reasonably, determines that such act might cause
it to be in non-compliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline.  Further, should the Debenture Trustee, in its
sole judgment and acting reasonably, determine at any time that its acting
under this Indenture has resulted in its being in non-compliance with any applicable
anti-money laundering or anti-terrorist legislation, regulation or guideline,
then it shall have the right to resign on 30 days’ written notice to the
Company or any shorter period of time as agreed to by the Company,
notwithstanding the provisions of Section 15.2 of this Indenture, provided
that:


 


(a)                                                          the Debenture Trustee’s
written notice shall describe, if permissible by applicable legislation, the
circumstances of such non-compliance; and


 


(b)                                                         if such circumstances are
rectified to the Debenture Trustee’s satisfaction within such 30 day period,
then such resignation shall not be effective.


 


15.15                                                                 Debenture
Trustee Protected in Acting


 


The Debenture Trustee may act and rely, and
shall be protected in acting and relying absolutely, upon any resolution,
Certificate, statement, instrument, opinion, report, notice, request, consent,
order, letter, facsimile transmission, directions or other paper document
believed in good faith by it to be genuine and to have been signed, sent or
presented by or on behalf of the proper party or parties.  The Debenture Trustee shall be protected in
acting and relying upon any written notice, request, waiver, consent,
certificate, receipt, statutory declaration, affidavit or other paper or
document furnished to it, not only as to its due execution and the validity and
the effectiveness of its provisions but also as to the truth and acceptability
of any information therein contained which it in good faith believes to be
genuine and what it purports to be.


 


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15.16                                                                 Conditions
Precedent to Debenture Trustee’s Obligations to Act Hereunder


 


The obligation of the Debenture Trustee to
commence or continue any act, action or proceeding for the purpose of enforcing
the rights of the Debenture Trustee and of the Debentureholders hereunder shall
be conditional upon the Debentureholders furnishing when required by notice in
writing by the Debenture Trustee, sufficient funds to commence or continue such
act, action or proceeding and indemnity reasonably satisfactory to the
Debenture Trustee to protect and hold harmless the Debenture Trustee against
the costs, charges and expenses and liabilities to be incurred thereby and any
loss and damage it may suffer by reason thereof.


 


None of the provisions contained in this
Indenture shall require the Debenture Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers unless indemnified as
aforesaid.


 


The Debenture Trustee may, before
commencing or at any time during the continuance of any such act, action or
proceeding require the Debentureholders at whose instance it is acting to
deposit with the Debenture Trustee the Debentures held by them for which
Debentures the Debenture Trustee shall issue receipts.


 


15.17                                                                 Authority
to Carry on Business


 


The Debenture Trustee represents to the
Company that at the date of execution and delivery by it of this Indenture it
is authorized to carry on the business of a trust company in all of the
provinces and territories of Canada but if, notwithstanding the provisions of
this Section 15.13, it ceases to be so authorized to carry on business,
the validity and enforceability of this Indenture and the securities issued
hereunder shall not be affected in any manner whatsoever by reason only of such
event but the Debenture Trustee shall, within 90 days after ceasing to be
authorized to carry on the business of a trust company in any of the provinces
or territories of Canada either become so authorized or resign in the manner
and with the effect specified in Section 15.2.


 


15.18                                                                 Compensation
and Indemnity


 


(a)                                                          The Company shall pay to the
Debenture Trustee from time to time compensation for its services hereunder as
agreed separately by the Company and the Debenture Trustee, and shall pay and
reimburse the Debenture Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Debenture Trustee in the
administration or execution of its duties under this Indenture (including the
reasonable and documented compensation and disbursements of its Counsel and all
other advisers and assistants not regularly in its employ), both before any
default hereunder and thereafter until all duties of the Debenture Trustee
under this Indenture shall be finally and fully performed.  The Debenture Trustee’s compensation shall
not be limited by any law on compensation of a trustee of an express trust.


 


(b)                                                         The Company hereby indemnifies
and saves harmless the Debenture Trustee and its directors, officers and
employees and agents (collectively, the “Indemnified Parties” and each an “Indemnified
Party”)
from and against any and all loss, damages, charges, expenses, claims, demands,
actions or liability whatsoever which may be brought against an Indemnified
Party or which it may suffer or incur as a result of or arising out of the
performance of its duties and obligations hereunder save only in the


 


94


















 


event of the negligent failure to act, or the wilful
misconduct or bad faith of an Indemnified Party.  This indemnity will survive the termination
or discharge of this Indenture and the resignation or removal of the Debenture
Trustee.  An Indemnified Party shall
notify the Company promptly of any claim for which it may seek indemnity.  The Company shall defend the claim and the
Indemnified Party shall co-operate in the defence.  An Indemnified Party may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
Counsel.  The Company need not pay for
any settlement made without its consent, which consent must not be unreasonably
withheld.  This indemnity shall survive
the resignation or removal of the Debenture Trustee or the discharge of this
Indenture.


 


(c)                                                          The Company need not reimburse
any expense or indemnify against any loss or liability incurred by any
Indemnified Party through any of such party’s negligence, wilful misconduct or
bad faith.


 


15.19                                                                 Acceptance
of Trust


 


The Debenture Trustee hereby accepts the
trusts in this Indenture declared and provided for and agrees to perform the
same upon the terms and conditions herein set forth and to hold all rights,
privileges and benefits conferred hereby and by law in trust for the various
persons who shall from time to time be Debentureholders, subject to all the
terms and conditions herein set forth.


 


15.20                                                                 Third
Party Interests


 


Each party to this Indenture (in this
paragraph referred to as a “representing party”)
hereby represents to the Debenture Trustee that any account to be opened by, or
interest to held by, the Debenture Trustee in connection with this Indenture,
for or to the credit of such representing party, either (i) is not
intended to be used by or on behalf of any third party; or (ii) is
intended to be used by or on behalf of a third party, in which case such
representing party hereby agrees to complete, execute and deliver forthwith to
the Debenture Trustee a declaration, in the Debenture Trustee’s prescribed form
or in such other form as may be satisfactory to it, as to the particulars of
such third party.


 


15.21                                                                 Anti-Money
Laundering


 


The Debenture Trustee shall retain the
right not to act and shall not be liable for refusing to act if, due to a lack
of information or for any other reason whatsoever, the Debenture Trustee, in
its sole judgment, acting reasonably, determines that such act might cause it
to be in noncompliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline. Further, should the
Debenture Trustee, in its sole judgment, acting reasonably, determine at any
time that its acting under this Indenture has resulted in its being in
non-compliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline, then it shall have the right to resign on
10 days’ prior written notice sent to the Company provided that (i) the
Debenture Trustee’s written notice shall describe the circumstances of such
non-compliance; and (ii) if such circumstances are rectified to the
Debenture Trustee’s satisfaction within such 10-day period, then such
resignation shall not be effective.


 


95

















 


15.22                                                                 Privacy
Laws


 


The parties acknowledge that federal and/or
provincial legislation that addresses the protection of individuals’ personal
information (collectively, “Privacy Laws”)
applies to certain obligations and activities under this Indenture.
Notwithstanding any other provision of this Indenture, neither party shall take
or direct any action that would contravene, or cause the other to contravene,
applicable Privacy Laws. The Company shall, prior to transferring or causing to
be transferred personal information to the Debenture Trustee, obtain and retain
required consents of the relevant individuals to the collection, use and
disclosure of their personal information, or shall have determined that such
consents either have previously been given upon which the parties can rely or
are not required under the Privacy Laws. The Debenture Trustee shall use
commercially reasonable efforts to ensure that its services hereunder comply
with Privacy Laws. Specifically, the Debenture Trustee agrees: (a) to have
a designated chief privacy officer; (b) to maintain policies and
procedures to protect personal information and to receive and respond to any
privacy complaint or inquiry; (c) to use personal information solely for
the purposes of providing its services under or ancillary to this Indenture and
to comply with applicable laws and not to use it for any other purpose except
with the consent of or direction from the Company or the individual involved or
as permitted by Privacy Laws; (d) not to sell or otherwise improperly
disclose personal information to any third party; and (e) to employ
administrative, physical and technological safeguards to reasonably secure and
protect personal information against loss, theft, or unauthorized access, use
or modification.


 


15.23                                                                 Withholding
Obligation


 


(a)                                                          For greater certainty, the Debenture
Trustee shall, as directed by the Company, withhold, from any payment made to a
holder of a Debenture pursuant to the terms of this Indenture, whether of
interest or other amounts, and including with respect to delivery of Common
Shares or other securities or property upon conversion of Debentures, the
amount of any applicable withholding taxes required or permitted to be withheld
in respect of such payment, and the Debenture Trustee shall remit such withheld
amounts to the appropriate governmental authority, as and when required.


 


(b)                                                         In connection with the
Debenture Trustee’s obligation to withhold pursuant to Section 15.23(a) above,
to the extent any payment to be made to a holder of a Debenture pursuant to the
terms of this Indenture is to be satisfied by the Company delivering, or
causing the delivery of, Common Shares or other securities or property to the
Debentureholder (including, without limitation, the delivery of Common Shares
or other securities or property upon a conversion of Debentures pursuant to Article 6),
the Debenture Trustee shall, subject to Applicable Laws, upon a Written
Direction but for the account of the Debentureholder, sell, through the
investment banks, registered brokers or registered dealers or other Persons
selected by the Company, out of the Common Shares or other securities or
property issued on conversion pursuant to Article 6 or otherwise, such
number of Common Shares or other securities that is sufficient to yield net
proceeds (after payment of all costs) to cover the amount of applicable
withholding taxes required to be withheld, and the Debenture Trustee shall
withhold such net proceeds and remit such amounts to the appropriate
governmental authority, as and when required. 
Any amounts of net proceeds (after payment of all costs) in excess of
the amount required to cover applicable withholding taxes will be remitted to
the Debentureholder.


 


96





















 


(c)                                                          For the purposes of
determining the appropriate withholdings to be made from any payment to be made
to a holder of a Debenture, the Company and the Debenture Trustee agree to
co-operate and to provide each other with any relevant information they have
with respect to the holders of the Debentures. 
For greater certainty, the parties acknowledge and agree that the
withholding tax obligations with respect to a conversion of Debentures may be
different than those in connection with interest or other payments on the
Debentures.


 


ARTICLE 16

SUPPLEMENTAL INDENTURES


 


16.1                                                                        Supplemental
Indentures


 


From time to time the Debenture Trustee
and, when authorized by a resolution of the Directors, the Company, may, and
shall when required by this Indenture, subject to the prior written approval of
the TSX, as required, execute, acknowledge and deliver by its proper officers,
deeds or indentures supplemental hereto which thereafter shall form part
hereof, for any one or more of the following purposes:


 


(a)                                                          providing for the issuance of
Additional Debentures under this Indenture;


 


(b)                                                         adding to the covenants of the
Company herein contained for the protection of the Debentureholders, or of the
Debentures of any series, or providing for events of default, in addition to
those herein specified;


 


(c)                                                          making such provisions not
inconsistent with this Indenture as may be necessary or desirable with respect
to matters or questions arising hereunder, including the making of any
modifications in the form of the Debentures which do not affect the substance
thereof and which in the opinion of the Debenture Trustee (relying on an
opinion of Counsel), will not be prejudicial to the interests of the
Debentureholders;


 


(d)                                                         evidencing the succession, or
successive successions, of others to the Company and the covenants of and
obligations assumed by any such successor in accordance with the provisions of
this Indenture;


 


(e)                                                          giving effect to any
Extraordinary Resolution passed as provided in Article 13; and


 


(f)                                                            for any other purpose not
inconsistent with the terms of this Indenture, provided that, in the opinion of
the Debenture Trustee (relying on an opinion of Counsel), the rights of the
Debentureholders are in no way prejudiced thereby.


 


Unless the supplemental indenture requires
the consent or concurrence of Debentureholders or the holders of a particular
series of Debentures, as the case may be, by Extraordinary Resolution, the
consent or concurrence of Debentureholders or the holders of a particular
series of Debentures, as the case may be, shall not be required in connection
with the execution, acknowledgement or delivery of a supplemental
indenture.  The Company and the Debenture
Trustee (relying on the opinion of Counsel) may amend any of the provisions of
this Indenture related to matters of United States law or the issuance of
Debentures into the United States in order to ensure that such issuances can be
properly done in accordance with applicable law in the 


 


97

















 


United States
without the consent or approval of the Debentureholders.  Further, the Company  and the Debenture Trustee may without the
consent or concurrence of the Debentureholders or the holders of a particular
series of Debentures, as the case may be, by supplemental indenture or
otherwise, make any changes or corrections in this Indenture which it shall
have been advised by Counsel are required for the purpose of curing or
correcting any ambiguity or defective or inconsistent provisions or clerical
omissions or mistakes or manifest errors contained herein or in any indenture
supplemental hereto or a Written Direction provided for the issue of
Debentures, providing that in the opinion of the Debenture Trustee (relying
upon an opinion of Counsel) the rights of the Debentureholders and the Senior
Creditors are in no way prejudiced thereby.


 


ARTICLE 17

EXECUTION AND FORMAL DATE


 


17.1                                                                        Execution


 


This Indenture may be simultaneously
executed in several counterparts, each of which when so executed shall be
deemed to be an original and such counterparts together shall constitute one
and the same instrument.


 


17.2                                                                        Formal
Date


 


For the purpose of convenience this
Indenture may be referred to as bearing the formal date of December 17,
2009 irrespective of the actual date of execution hereof.


 


98

















 


IN WITNESS whereof the parties hereto have
executed these presents by the hands of their proper officers.


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


 


	
  Per: 

  	
  /s/ Chris Nitsis

  	
   

  
	
   

  	
  Name:
  Chris Nitsis

  	
   

  
	
   

  	
  Title:
  Professional, Corporate Trust

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/ Daniel Marz

  	
   

  
	
   

  	
  Name: Daniel
  Marz

  	
   

  
	
   

  	
  Title:
  Professional, Corporate Trust

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATLANTIC POWER
  CORPORATION, by its manager, ATLANTIC POWER 

  MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/ Barry Welch

  	
   

  
	
   

  	
  Name: Barry
  Welch

  	
   

  
	
   

  	
  Title:   President and Chief
  Executive Officer

  	
   

  



 


 


Signature Page — Trust Indenture


 














 


SCHEDULE
“A”


 


TO
THE TRUST INDENTURE AMONG


 


 


ATLANTIC
POWER CORPORATION


 


-
and -


 


COMPUTERSHARE
TRUST COMPANY OF CANADA


 


Form of
Debenture


 

















 


SCHEDULE A



FORM OF GLOBAL DEBENTURE


 


UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND
DEPOSITORY SERVICES INC. (“CDS”) TO
ATLANTIC POWER CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE
NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO.,
HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER
OR DEAL WITH THIS CERTIFICATE.


 


	
  Certificate
  No. ·

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CUSIP
  No. 04878QAM5

  	
   

  	
  CDN$·

  
	
  ISIN No. CA04878QAM56

  	
   

  	
   

  



 


ATLANTIC
POWER CORPORATION

(A corporation continued under and governed by the laws of the Province of
British Columbia)


 


6.25%
CONVERTIBLE UNSECURED SUBORDINATED DEBENTURE

DUE MARCH 15, 2017


 


ATLANTIC POWER CORPORATION (“the Company”) for value received hereby
acknowledges itself indebted and, subject to the provisions of the trust
indenture (the “Indenture”) dated
as of December 17, 2009 between the Company and Computershare Trust
Company of Canada (the “Debenture Trustee”),
promises to pay to the registered holder hereof on March 15, 2017 (the “Maturity Date”) or on such earlier date as
the principal amount hereof may become due in accordance with the provisions of
the Indenture the principal sum of seventy-five million dollars in lawful money
of Canada (CDN$75,000,000)
on presentation and surrender of this Debenture at the principal offices of the
Debenture Trustee in Toronto, Ontario in accordance with the terms of the
Indenture and, subject as hereinafter provided, to pay interest on the
principal amount hereof from the date hereof, or from the last Interest Payment
Date to which interest shall have been paid or made available for payment
hereon, whichever is later, at the rate of 6.25% per annum, in like money, in
arrears semi-annually (less any withholding tax required or permitted by law to
be deducted) on March 15 and September 15 in each year commencing on September 15,
2010 and the last payment (representing interest payable from the last Interest
Payment Date to, but excluding, the Maturity Date or the earlier date of
redemption) to fall due on the Maturity Date and, should the Company at any
time make default in the payment of any principal, premium or interest, to pay
interest on the amount in default at the same rate, in like money and on the
same dates.  For certainty, the first
interest payment will include interest accrued from December 17, 2009 to, but excluding, September


 

















 


15, 2010,
which will be equal to CDN$46.53
for each CDN$1,000 principal amount of the Initial Debentures.


 


Reference is hereby expressly made to the
Indenture for a description of the terms and conditions upon which the Initial
Debentures are or are to be issued and held and the rights and remedies of the
holders of the Initial Debentures and of the Company and of the Debenture
Trustee, all to the same effect as if the provisions of the Indenture were
herein set forth, and to all of which provisions the holder of this Initial
Debenture by acceptance hereof assents. 
To the extent that the terms and conditions stated in this Debenture
conflict with the terms and conditions of the Indenture, the latter shall
prevail.  All capitalized terms used
herein have the meaning ascribed thereto in the Indenture unless otherwise
indicated.


 


Interest hereon shall be payable by
electronic transfer of funds to the registered holder hereof or such other
means provided in the Indenture and, subject to the provisions of the
Indenture, the sending of such electronic transfer of funds shall, to the
extent of the sum represented thereby (plus the amount of any tax withheld),
satisfy and discharge all liability for interest on this Initial Debenture.


 


This Initial Debenture is one of the
Debentures of the Company issued or issuable in one or more series under the
provisions of the Indenture.  The Initial
Debentures authorized for issue immediately are limited to an aggregate
principal amount of eighty-six million two hundred and fifty thousand dollars  in lawful money of Canada (CDN$86,250,000).  The Initial Debentures are issuable only in
denominations of CDN$1,000 and integral multiples thereof.  Upon compliance with the provisions of the
Indenture, Debentures of any denomination may be exchanged for an equal
aggregate principal amount of Debentures in any other authorized denomination
or denominations.


 


Any part, being CDN$1,000 or an integral
multiple thereof, of the principal of this Initial Debenture, provided that the
principal amount of this Initial Debenture is in a denomination in excess of
CDN$1,000, is convertible, at the option of the holder hereof, upon surrender
of this Initial Debenture at the principal offices of the Debenture Trustee in
the City of Toronto, Ontario, at any time prior to the close of business on the
Maturity Date or, if this Initial Debenture is called for redemption on or
prior to such date, then up to but not after the close of business on the last
Business Day immediately preceding the date specified for redemption of this
Initial Debenture, into Common Shares (without adjustment for interest accrued
hereon or for dividends, distributions or interest payments on the Common
Shares issuable upon conversion)  at
a conversion price of CDN$13.00 per Common
Share (the “Conversion Price”), being a
conversion ratio of approximately 76.9231 for each CDN$1,000 principal amount
of Debentures so converted, all subject to the terms and conditions and in the
manner set forth in the Indenture.  The
Indenture makes provision for the adjustment of the Conversion Price in the events
therein specified.  No fractional Common
Shares will be issued on any conversion but in lieu thereof, the Company will
satisfy such fractional interest by a cash payment equal to the market price of
such fractional interest determined in accordance with the Indenture.  No adjustment to the Conversion Price will be
made for dividends or distributions payable on Common Shares issuable upon
conversion or for interest accrued or accruing on Initial Debentures surrendered
for conversion.  Holders converting their
Initial Debentures will receive interest which has accrued and is unpaid in
respect thereof from the most recent Interest Payment Date to which interest
has been paid to, but not including, the Date of Conversion.


 


This Initial Debenture may be redeemed at
the option of the Company on the terms and conditions set out in the Indenture
at the Redemption Price therein and herein set out provided that this Initial
Debenture is not redeemable prior to or on December 31, 2012.  After December 31, 


 


2

















 


2012 and prior
to December 31, 2014, this Initial Debenture is redeemable at the option
of the Company provided that the Current Market Price is at least 125% of
Conversion Price.  On or after December 31,
2014 and prior to the Maturity Date, the Initial Debentures may be redeemed at
any time by the Company.  In such
circumstances, the Initial Debentures will be redeemable at a price equal to
their principal amount plus accrued and unpaid interest.  In connection with the redemption of the
Initial Debentures, the Company may, at its option and subject to regulatory
approval, elect to satisfy its obligation to pay all or a portion of the
aggregate principal amount of Debentures due upon redemption of the Initial
Debentures by issuing and delivering to the holders of such Initial Debentures,
such number of Freely Tradeable Common Shares as is obtained by dividing the
principal amount of the Initial Debentures which are to be redeemed by 95% of
the Current Market Price on the Redemption Date. If the Company elects to
exercise such option, it shall so specify and provide details in the Redemption
Notice.


 


Upon the occurrence of a Change of Control,
each holder of Initial Debentures may subject to the terms and provisions of Section 2.4(i) and
Article 5 of the Indenture require the Company to purchase the whole or
any part of such holder’s Initial Debentures at a price equal to 100% of the
principal amount of such Initial Debentures plus accrued and unpaid interest up
to, but excluding, the date the Initial Debentures are so repurchased (the “Put Right”).  The Company shall satisfy such purchase price
by payment in cash.  If 90% or more of
the principal amount of all Initial Debentures outstanding on the date the
Company provides notice of a Change of Control to the Debenture Trustee have
been tendered for purchase pursuant to the Put Right, the Company has the right
to redeem all the remaining outstanding Initial Debentures on the same date and
at the same price.


 


If an Offer for outstanding Debentures of a
series (other than Debentures held by or on behalf of the Offeror, Associates
or Affiliates of the Offeror or anyone acting jointly or in concert with the
Offeror) is made and 90% or more of the outstanding principal amount of the
Debentures is taken up and paid for by the Offeror, the Offeror wil1 be
entitled to acquire the Debentures of those holders who did not accept the
offer on the same terms as the Offeror acquired the first 90% of the principal
amount of the Debentures.


 


The Company may, on notice as provided in
the Indenture, at its option and subject to any applicable regulatory approval,
elect to satisfy the obligation to repay all or any portion of the principal
amount of this Initial Debenture due on the Maturity Date by the issue of that
number of Freely Tradeable Common Shares obtained by dividing the principal
amount of the outstanding Initial Debentures which have matured by 95% of the
Current Market Price on the Maturity Date.


 


The indebtedness evidenced by this Initial
Debenture, and by all other Initial Debentures now or hereafter certified and
delivered under the Indenture, is a direct unsecured obligation of the
Corporation, and is subordinated in right of payment, to the extent and in the
manner provided in the Indenture, to the prior payment in full of all Senior
Indebtedness, whether outstanding at the date of the Indenture or thereafter
created, incurred, assumed or guaranteed.


 


The principal hereof may become or be
declared due and payable before the stated maturity in the events, in the
manner, with the effect and at the times provided in the Indenture.


 


Any payment of money to any holder of
Debentures will be reduced by the amount of applicable withholding taxes, if
any.  The Indenture contains provisions
making binding upon all holders of Debentures outstanding thereunder (or in
certain circumstances specific series of Debentures) resolutions passed at
meetings of such holders held in accordance with such provisions 


 


3

















 


and
instruments signed by the holders of a specified majority of Debentures
outstanding (or specific series), which resolutions or instruments may have the
effect of amending the terms of this Initial Debenture or the Indenture.


 


This Initial Debenture may only be
transferred, upon compliance with the conditions prescribed in the Indenture,
in one of the registers to be kept at the principal offices of the Debenture
Trustee in Toronto and in such other place or places and/or by such other
registrars (if any) as the Company with the approval of the Debenture Trustee
may designate.  No transfer of this
Initial Debenture shall be valid unless made on the register by the registered
holder hereof and upon compliance with such reasonable requirements as the
Debenture Trustee and/or other registrar may prescribe and upon surrender of
this Initial Debenture for cancellation. 
Thereupon a new Initial Debenture or Initial Debentures in the same
aggregate principal amount shall be issued to the transferee in exchange
hereof.


 


This Initial Debenture shall not become
obligatory for any purpose until it shall have been certified by the Debenture
Trustee under the Indenture.


 


The Indenture and this Debenture shall be
governed by, and construed in accordance with, the laws of the Province of
Ontario and the federal laws of Canada applicable therein.


 


Capitalized words or expressions used in
this Initial Debenture shall, unless otherwise defined herein, have the meaning
ascribed thereto in the Indenture.  In the event that the terms and conditions stated in
this Debenture conflict, or are inconsistent, with the terms and conditions of
the Indenture, the Indenture shall prevail and take priority.


 


[The
remainder of this page has been intentionally left blank.]


 


4

















 


IN WITNESS WHEREOF ATLANTIC POWER
CORPORATION has caused this Debenture to be signed by its authorized
signatories as of the 17th day of
December, 2009.


 


	
   

  	
  ATLANTIC POWER CORPORATION, by its Manager, ATLANTIC
  POWER MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


5














 


(FORM OF DEBENTURE TRUSTEE’S CERTIFICATE)


 


This Initial
Debenture is one of the 6.25%
Convertible Secured Debentures due March 15,
2017 referred to in the Indenture within mentioned.


 


	
   

  	
  COMPUTERSHARE
  TRUST COMPANY OF CANADA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized
  Officer)

  	
   

  



 


 


(FORM OF REGISTRATION PANEL)


 


(No writing hereon except by Debenture Trustee or
other registrar)


 


	
   

  	
  Signature
  of Debenture Trustee or Registrar

  
	
   

  	
   

  
	
   

  	
   

  



 


 


CDS & Co.

85 Richmond Street West

Toronto, Ontario

M5H 2C9


 


	
   

  	
  Date of
  Registration:

  	
   

  	
   

  
	
   

  
	
  In Whose
  Name Registered:    CDS & Co.

  



 

















 


FORM OF ASSIGNMENT


 


FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ·, whose address, if applicable, is set
forth below, this Initial Debenture (or $· principal amount hereof*) of ATLANTIC
POWER CORPORATION standing in the name(s) of the undersigned in the
register maintained by ATLANTIC POWER CORPORATION with respect to such Initial
Debenture and does hereby irrevocably authorize and direct the Debenture
Trustee to transfer such Initial Debenture in such register, with full power of
substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Address
  of Transferee:

  	
   

  	
   

  
	
   

  	
  (Street
  Address, City, Province and Postal Code)

  
					



 






(*) If less
than the full principal amount of the within Initial Debenture is to be transferred,
indicate in the space provided the principal amount (which must be CDN$1,000 or
an integral multiple thereof, unless you hold an Initial Debenture in a
non-integral multiple of CDN$1,000, in which case such Initial Debenture is
transferable only in its entirety) to be transferred.


 


 


	
   

  	
   

  
	
   

  	
  Signature
  of transferring registered holder

  



 

















 


EXHIBIT “1”

TO CDS GLOBAL DEBENTURE

ATLANTIC POWER CORPORATION


 


6.25% CONVERTIBLE SECURED DEBENTURES


 


	
  Initial
  Principal Amount:

  	
  CDN$75,000,000

  	
   

  	
   

  	
   

  	
  CUSIP No. 04878QAM5

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ISIN No. CA04878QAM56

  



 


	
  Signature
  of the Debenture Trustee:

  	
   

  	
   

  



 


ADJUSTMENTS


 




	
  Date

  	
   

  	
  Amount of

  Increase

  	
   

  	
  Amount of

  Decrease

  	
   

  	
  New Principal

  Amount

  	
   

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 

















 


SCHEDULE “B”


 


TO THE TRUST INDENTURE AMONG


 


 


ATLANTIC POWER CORPORATION


 


- and -


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


Form of Redemption Notice


 

















 


SCHEDULE B



FORM OF REDEMPTION NOTICE


 


To:                              Holders of 6.25% Convertible Secured
Debentures (the “Debentures”) of
Atlantic Power Corporation (the “Company”)


 


Note:                   All capitalized terms used herein have the meaning
ascribed thereto in the Indenture mentioned below, unless otherwise indicated.


 


Notice
is hereby given pursuant to Section 4.3 of the trust indenture (the “Indenture”) dated as of December 17,
2009 between the Company and Computershare Trust Company of Canada (the “Debenture Trustee”), that the aggregate
principal amount of CDN$· of the CDN$· of Debentures outstanding will be redeemed
as of ·, 20· (the “Redemption Date”), upon payment of a
redemption amount of CDN$· for each CDN$1,000 principal
amount of Debentures, being equal to the aggregate of (i) CDN$· (the “Redemption
Price”), and (ii) accrued and unpaid interest on such redeemed
Debentures to but excluding the Redemption Date, in each case less any
withholding taxes required to be deducted (collectively, the “Total Redemption Price”).


 


The
Total Redemption Price will be payable upon presentation and surrender of the
Debentures called for redemption at the following corporate trust office:


 


Computershare Trust Company of Canada

100 University Ave., 9th Floor

Toronto, Ontario, M5J 2Y1

Attention:  ·


 


The
interest upon the principal amount of Debentures called for redemption shall
cease to be payable from and after the Redemption Date, unless payment of the
Redemption Price shall not be made on presentation for surrender of such
Debentures at the above-mentioned corporate trust office on or after the
Redemption Date or prior to the setting aside of the Redemption Price pursuant
to the Indenture.


 


 


	
  DATED:

  	
   

  	
   

  
	
   

  	
   

  
	
  ATLANTIC POWER CORPORATION

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  



 

















 


SCHEDULE “C”

TO THE TRUST INDENTURE AMONG


 


 


ATLANTIC POWER CORPORATION


 


- and -


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


Form of Maturity Notice


 

















 


SCHEDULE C



FORM OF MATURITY NOTICE


 


TO:                                                                            Holders of  6.25%
Convertible Secured Debentures due March 15, 2017 (the “Debentures”) of Atlantic Power Corporation (the “Company”)


 


AND TO:                                             Computershare Trust Company of
Canada, as Debenture Trustee


 


NOTE:                                                            All capitalized terms used
herein have the meaning ascribed thereto in the Indenture mentioned below,
unless otherwise indicated.


 


Notice is
hereby given pursuant to the Trust Indenture (the “Indenture”)
dated as of December 17, 2009 between the Company and Computershare Trust
Company of Canada, as debenture trustee (the “Debenture
Trustee”), that the Debentures are due and payable as of March 15,
2017 (the “Maturity Date”) and the Company
hereby advises the holders of Debentures that it will deliver to holders of
Debentures a cash payment upon presentation and surrender of the Debentures
representing any principal amount and all accrued and unpaid interest to the
Maturity Date, to which the holder is entitled.


 


DATED:                                                  ·


 


 


	
   

  	
   

  	
  ATLANTIC POWER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
   

  



 














 


SCHEDULE “D”


 


 


 TO THE
TRUST INDENTURE  AMONG


 


 


ATLANTIC POWER CORPORATION


 


- and -


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


 


Form of Notice of Conversion


 

















 


SCHEDULE D



FORM OF NOTICE OF CONVERSION


 


TO:                            ATLANTIC POWER CORPORATION


 


Note:                   All capitalized terms used herein have the
meaning ascribed thereto in the Indenture mentioned below, unless otherwise
indicated.


 


The
undersigned registered holder of 6.25% Convertible Secured Debentures in the
principal amount of CDN$· irrevocably elects to convert
such Debentures (or CDN$· principal amount thereof*) in
accordance with the terms of the Indenture referred to in such Debentures and
tenders herewith the Debentures, and, if applicable, directs that the Common
Shares of Atlantic Power Corporation
issuable upon a conversion (net of applicable withholding taxes, if any) be
issued and delivered to the person indicated below.  (If Common Shares are to be issued in the
name of a person other than the holder, all requisite transfer taxes must be
tendered by the undersigned.)


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature
  of Registered Holder)

  



 






(*) If less
than the full principal amount of the Debentures, indicate in the space
provided the principal amount (which must be CDN$1,000 or integral multiples
thereof).


 


(Print name in
which Common Shares are to be issued, delivered and registered)


 


	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Address)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City,
  Province and Postal Code)

  	
   

  
	
   

  	
   

  	
   

  
	
  Name
  of guarantor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized
  signature:

  	
   

  	
   

  



 

















 


SCHEDULE “E”


 


 


TO THE TRUST INDENTURE AMONG


 


 


ATLANTIC POWER CORPORATION


 


- and -


 


COMPUTERSHARE TRUST COMPANY OF CANADA


 


Form of Notice of Put Exercise


 

















 


SCHEDULE E



FORM OF NOTICE OF PUT EXERCISE


 


(Change of Control)


 


PUT EXERCISE


 


TO:                            ATLANTIC POWER CORPORATION
(the “Company”)


 


Note:                   All capitalized terms used herein have the
meaning ascribed thereto in the Indenture mentioned below, unless otherwise
indicated.


 


The
undersigned registered holder of 6.25% Convertible Secured Debentures in the
principal amount of CDN$· irrevocably elects to put
such Debentures (or CDN$· principal amount thereof*) to
the Company to be purchased by the Company on · (the “Put
Date”) in accordance with the terms of the Indenture referred to in
such Debentures at a price of CDN$· for each CDN$1,000 principal
amount of Debentures plus all accrued and unpaid interest thereon (net of
applicable withholding tax, if any) to, but excluding, the Put Date
(collectively, the “Total Put Price”)
and tenders herewith the Debentures,


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature
  of Registered Holder)

  



 






(*)                                 If less than the full principal amount of
the Debentures, indicate in the space provided the principal amount (which must
be CDN$1,000 or integral multiples thereof).


 


The total Put
Price (after deduction of applicable taxes) will be payable upon presentation
and surrender of the Debentures with this form on or after the Put Date at the
following corporate trust office:


 


Computershare Trust Company of Canada

100 University Ave., 9th Floor

Toronto, Ontario M5J 2Y1


 


The interest
upon the principal amount of Debentures put to the Company shall cease to be
payable from and after the Put Date unless payment of the Total Put Price shall
not be made on presentation for surrender of such Debentures at the above
mentioned corporate trust office on or after the Put Date or prior to the setting
aside of the Total Put Price pursuant to the Indenture dated December 17,
2009 between the Company and Computershare Trust Company of Canada as trustee.