Exhibit 10.21





EXHIBIT 10.21




IVANHOE ENERGY INC.




- and -




MACQUARIE CAPITAL MARKETS CANADA LTD.




- and -




CIBC MELLON TRUST COMPANY




SPECIAL WARRANT INDENTURE




Providing for the Issue of

Special Warrants




Dated as of January 26, 2010





 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	Article 1 INTERPRETATION
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	1.2 Words Importing the Singular
	 	 	8	 
	1.3 Interpretation Not Affected by Headings, Etc.
	 	 	8	 
	1.4 Day Not a Business Day
	 	 	8	 
	1.5 Time of the Essence
	 	 	8	 
	1.6 Currency
	 	 	8	 
	1.7 Applicable Law
	 	 	9	 
	1.8 Severability
	 	 	9	 
	1.9 Conflicts
	 	 	9	 
	 
	 	 	 	 
	Article 2 THE SPECIAL WARRANTS
	 	 	9	 
	2.1 Creation and Issue of Special Warrants
	 	 	9	 
	2.2 Terms of Special Warrants
	 	 	10	 
	2.3 Form of Special Warrant Certificates
	 	 	10	 
	2.4 Signing of Special Warrant Certificates
	 	 	12	 
	2.5 Certification by Trustee
	 	 	12	 
	2.6 Special Warrants to Rank Pari Passu
	 	 	13	 
	2.7 Issue in Substitution for Lost Certificates, Etc.
	 	 	13	 
	2.8 Cancellation of Surrendered Special Warrants
	 	 	13	 
	2.9 Global Special Warrant Certificate and Book-Entry Only System
	 	 	14	 
	2.10 Special Warrantholder not a Shareholder
	 	 	15	 
	 
	 	 	 	 
	Article 3 REGISTRATION, TRANSFER AND OWNERSHIP OF SPECIAL WARRANTS AND EXCHANGE OF SPECIAL WARRANT
CERTIFICATES
	 	 	15	 
	3.1 Registration and Transfer of Fully Registered Special Warrant Certificates
	 	 	15	 
	3.2 Registration and Transfer of Global Special Warrant Certificates
	 	 	16	 
	3.3 Certain Transfers by Persons in the United States
	 	 	17	 
	3.4 Other Registration and Transfer Matters
	 	 	18	 
	3.5 Exchange of Special Warrant Certificates
	 	 	19	 
	3.6 No Charges for Transfer or Exchange
	 	 	19	 
	3.7 Ownership of Special Warrants
	 	 	19	 
	 
	 	 	 	 
	Article 4 CONVERSION OF SPECIAL WARRANTS
	 	 	20	 
	4.1 Conversion by Holder
	 	 	20	 
	4.2 Conversion by Trustee
	 	 	21	 
	4.3 Effect of Conversion
	 	 	21	 
	4.4 No Fractional Common Shares or Warrants
	 	 	22	 
	4.5 Recording
	 	 	23	 
	4.6 Securities Restrictions
	 	 	23	 
	4.7 Adjustments
	 	 	26	 
	 
	 	 	 	 
	Article 5 COVENANTS
	 	 	32	 
	5.1 General Covenants
	 	 	32	 
	5.2 Remuneration and Expenses of Trustee
	 	 	34	 
	5.3 Securities Qualification Requirements
	 	 	34	 
	5.4 Performance of Covenants by Trustee
	 	 	35	 
	 
	 	 	 	 






 


 









 





	 	 	 	 	 
	Article 6 ESCROWED FUNDS
	 	 	35	 
	6.1 Initial Escrowed Funds and Distribution Amounts
	 	 	35	 
	6.2 Qualified Investments
	 	 	35	 
	6.3 Release of Escrowed Funds Upon Conversion of Special Warrants Prior to Receipt of
Release and Payment Certificate
	 	 	36	 
	6.4 Release of Escrowed Funds Upon Receipt of Release and Payment Certificate
	 	 	37	 
	6.5 Release of Escrowed Funds on Termination
	 	 	37	 
	6.6 Direction
	 	 	38	 
	6.7 Early Termination of any Investment of the Escrowed Funds
	 	 	38	 
	6.8 Method of Disbursement and Delivery
	 	 	38	 
	6.9 Acknowledgements
	 	 	38	 
	6.10 Miscellaneous
	 	 	39	 
	6.11 Tax Reporting
	 	 	41	 
	 
	 	 	 	 
	Article 7 ENFORCEMENT
	 	 	41	 
	7.1 Suits by Special Warrantholder
	 	 	41	 
	7.2 Limitation of Liability
	 	 	41	 
	 
	 	 	 	 
	Article 8 MEETINGS OF SPECIAL WARRANTHOLDERS
	 	 	41	 
	8.1 Right to Convene Meetings
	 	 	41	 
	8.2 Notice
	 	 	42	 
	8.3 Chairman
	 	 	42	 
	8.4 Quorum
	 	 	42	 
	8.5 Power to Adjourn
	 	 	43	 
	8.6 Show of Hands
	 	 	43	 
	8.7 Poll
	 	 	43	 
	8.8 Voting
	 	 	43	 
	8.9 Regulations
	 	 	44	 
	8.10 The Company and Trustee may be Represented
	 	 	45	 
	8.11 Powers Exercisable by Extraordinary Resolution
	 	 	45	 
	8.12 Meaning of “Extraordinary Resolution”
	 	 	46	 
	8.13 Powers Cumulative
	 	 	47	 
	8.14 Minutes
	 	 	47	 
	8.15 Instruments in Writing
	 	 	47	 
	8.16 Binding Effect of Resolutions
	 	 	47	 
	8.17 Holdings by the Company and Subsidiaries Disregarded
	 	 	48	 
	 
	 	 	 	 
	Article 9 SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS
	 	 	48	 
	9.1 Provision for Supplemental Indentures for Certain Purposes
	 	 	48	 
	9.2 Successor Entities
	 	 	49	 
	 
	 	 	 	 
	Article 10 CONCERNING TRUSTEE
	 	 	49	 
	10.1 Trust Indenture Legislation
	 	 	49	 
	10.2 Rights and Duties of Trustee
	 	 	50	 
	10.3 Evidence, Experts and Advisers
	 	 	51	 
	10.4 Documents, Money, Etc. held by Trustee
	 	 	52	 
	10.5 Action by Trustee to Protect Interests
	 	 	52	 
	10.6 Trustee not Required to Give Security
	 	 	52	 
	10.7 Protection of Trustee
	 	 	52	 
	10.8 Replacement of Trustee
	 	 	54	 






 


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	10.9 Conflict of Interest
	 	 	55	 
	10.10 Acceptance of Duties and Obligations
	 	 	55	 
	 
	 	 	 	 
	Article 11 GENERAL
	 	 	55	 
	11.1 Notice to the Company and the Trustee
	 	 	55	 
	11.2 Notice to Special Warrantholders
	 	 	57	 
	11.3 Satisfaction and Discharge of Indenture
	 	 	57	 
	11.4 Sole Benefit of Parties and Special Warrantholders
	 	 	57	 
	11.5 Discretion of Directors
	 	 	58	 
	11.6 Counterparts and Formal Date
	 	 	58	 
	11.7 Assignment
	 	 	58	 







 


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SPECIAL WARRANT INDENTURE





THIS INDENTURE dated as of the 26th day of January, 2010



BETWEEN:




IVANHOE ENERGY INC., a company incorporated under the laws of the Yukon Territory




(the “Company”)



AND:





MACQUARIE CAPITAL MARKETS CANADA LTD., a company incorporated under the laws of
Ontario




(the “Agent”)



AND:





CIBC MELLON TRUST COMPANY, a trust company existing under the laws of Canada




(the “Trustee”)



WHEREAS:




	A.	 	The Company proposes to create and issue Special Warrants (as hereinafter defined) to be
constituted and issued as herein provided;







	B.	 	The Company is authorized to create and issue the Special Warrants as herein provided and to
complete the transactions contemplated herein;







	C.	 	All things necessary have been done and performed to make the Special Warrant Certificates
(as hereinafter defined), when certified by the Trustee and issued and delivered as herein
provided, legal, valid and binding obligations of the Company with the benefits of and subject
to the terms of this Indenture;

	 
	D.	 	The foregoing recitals are made as representations by the Company and not by the Trustee; and







	E.	 	The Trustee has agreed to enter into this Indenture (as hereinafter defined) and to hold all
rights, interests and benefits contained herein for and on behalf of those persons who from
time to time become holders of Special Warrants issued pursuant to this Indenture.






 


 









 





NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable consideration mutually given, the
receipt and sufficiency of which are hereby acknowledged, by each of the Company and the Trustee,
the Company hereby appoints the Trustee as agent for the
Special Warrantholders (as hereinafter defined), to hold all rights, interests and benefits
contained herein for and on behalf of those persons who from time to time become holders of Special
Warrants issued pursuant to this Indenture, and the Company and the Trustee hereby covenant, agree
and declare as follows:



ARTICLE 1

INTERPRETATION




1.1 Definitions




In this Indenture and in the Special Warrant Certificates, unless there is something in the
subject matter or context inconsistent therewith:




“Adjustment Period” means the period commencing on the date hereof and ending at the
Time of Expiry.




“Agency Agreement” means the agency agreement dated as of January 12, 2010 between
the Company and the Agent.




“Agent” means Macquarie Capital Markets Canada Ltd.




“Applicable Legislation” means such provisions of any statute of Canada or of a
province or territory thereof, and of regulations under any such statute, relating
to trust indentures or to the rights, duties and obligations of corporations and of
trustees under trust indentures, as are from time to time in force and applicable to
this Indenture.




“Applicable Securities Laws” means, collectively, the applicable securities laws of
the Qualifying Jurisdictions, the securities laws of the United States and the
states thereof, the regulations, rules, rulings and orders made thereunder, the
applicable policy statements issued by the securities regulatory authorities in the
Qualifying Jurisdictions, the United States Securities and Exchange Commission and
the securities legislation and policies of each other relevant jurisdiction.




“Beneficial Holder” means any person who holds a beneficial interest in a Global
Special Warrant Certificate as shown on the books of the Depository or a
Participant.




“Book-Entry Only System” means the book-based securities transfer system
administered by a Depository in accordance with its operating procedures in force
from time to time.




“Business Day” means any day that is not a Saturday, Sunday or statutory holiday in
Vancouver, British Columbia, or a day when the principal office of the Trustee in
such city is not generally open to the public for the transaction of business.


 


2









 






“Common Shares” means the fully paid and non-assessable common shares of the Company
as constituted on the date hereof, provided that, in the event of any adjustment
pursuant to Section 4.7 hereof, Common Shares will thereafter mean or include, as
the case may be, the shares, other securities or property resulting from such
adjustment.




“Company” means Ivanhoe Energy Inc. and includes any successor corporation to or of
the Company.




“Company’s auditors” means the firm of accountants appointed by the shareholders of
the Company as the auditors of the Company from time to time.




“Conversion Date” means with respect to:




	 	(i)	 	any Special Warrant exchanged by the holder thereof pursuant to
Section 4.1(a) hereof, the day on which the Special Warrant Certificate
representing such Special Warrant is surrendered to the Trustee in accordance
with the provisions of Section 4.1 hereof; and







	 	(ii)	 	any Special Warrant exchanged by the Trustee in accordance with
Section 4.2(a) hereof, the day on which the Trustee is required to exchange
such Special Warrant pursuant to Section 4.2(a) hereof.







“counsel” means a barrister or solicitor or an attorney-at-law or a firm of
barristers and solicitors or attorneys-at-law, who may be counsel for the Company,
acceptable to the Trustee, acting reasonably.




“Current Market Price” of a Common Share at any date means the price per share equal
to the volume weighted average price at which the Common Shares have traded on the
TSX for any 20 consecutive Trading Days immediately preceding such date or, if the
Common Shares are not listed on the TSX, on any other stock exchange or securities
market on which the Common Shares are then listed as may be selected by the
directors, or, if the Common Shares are not listed on any stock exchange, then on
the over-the-counter market, with the weighted average price per Common Share being
determined by dividing the aggregate sale price of all Common Shares sold on such
stock exchange or market, as the case may be, during the such 20 consecutive Trading
Day period by the aggregate number of Common Shares so sold or, if not traded on any
recognized market or exchange, as determined by the directors, acting reasonably.




“Depository” means CDS Clearing and Depository Services Inc. (“CDS”), or its
successor, or any other depository offering a book based securities registration and
transfer system similar to that administered by CDS which the Company, with the
consent of the Trustee, acting reasonably, may designate.




“director” means a director of the Company for the time being, and reference without
more to an action by the directors means an action by the directors of the
Company as a board or, to the extent empowered, by a committee of the board, in each
case by resolution duly passed.


 


3









 






“Earnings” means any income (including interest or gains) net of any related
expenses derived from investing the Initial Escrowed Funds.




“Effective Date” means the date of this Indenture.




“Escrow Agent” means the role of the Trustee to, inter alia, hold and disburse the
Escrowed Funds on behalf of the Company and the Special Warrantholders pursuant to
the terms and conditions of this Indenture.




“Escrowed Funds” at any time means the aggregate of the Initial Escrowed Funds and
any Earnings derived from time to time from holding the Initial Escrowed Funds less
any amounts released to the Company and the Agent from time to time pursuant to
Section 6.3.




“Expiry Date” means the earliest of:




	 	(i)	 	the date which is the first Business Day following the
Qualification Date; and

	 
	 	(ii)	 	the Release Deadline.







“Extraordinary Resolution” has the meaning attributed thereto in Sections 8.12 and
8.15 hereof.




“Final Prospectus” means the (final) short form prospectus of the Company which
qualifies the distribution of the Underlying Securities in the Qualifying
Jurisdictions and includes any amendments or supplements thereto.




“Final Receipt” means the final decision document in respect of the Final Prospectus
issued in accordance with Multilateral Instrument 11-102 — Passport System and
National Policy 11-202 — Process for Prospectus Reviews in Multiple Jurisdictions by
the Ontario Securities Commission and the Company’s principal regulator on its own
behalf and on behalf of the regulators in the Qualifying Jurisdictions (other than
the Ontario Securities Commission).




“Fully Registered Special Warrant Certificate” means a Special Warrant Certificate
other than a Global Special Warrant Certificate.




“Global Special Warrant Certificate” means a Special Warrant Certificate that is
issued to and registered in the name of the Depository or its nominee.




“Initial Escrowed Funds” means an amount equal to the aggregate Issue Price received
from the issue of the Special Warrants.




“Issue Price” means $3.00 per Special Warrant.


 


4









 






“National Policy 11-202” means National Policy 11-202 — Process for Prospectus
Reviews in Multiple Jurisdictions.




“Option” has the meaning ascribed thereto in the Agency Agreement.




“Option Special Warrants” means any special warrants of the Company issued pursuant
to the exercise of the Option, such special warrants to have substantially the same
terms and conditions as the Special Warrants.




“Participant” means a person recognized by the Depository as a participant in the
Book-Entry Only System administered by the Depository.




“Passport System” means the passport review system established under Multilateral
Instrument 11-102 Passport System.




“Person” includes an individual, corporation, partnership, trustee, unincorporated
organization or any other entity whatsoever, and words importing persons have a
similar extended meaning.




“Qualification Date” means the date on which the British Columbia Securities
Commission as the principal regulator under National Policy 11-202 and the Passport
System has issued the Final Receipt.




“Qualified Investments” means short term interest bearing or discount debt
obligations issued or guaranteed by the Government of Canada, by a Province of
Canada or, provided that such obligation is rated at least R-1 (high) by DBRS Inc.
or an equivalent rating service, by a Canadian chartered bank (which may include a
Canadian chartered bank which is an Affiliate (as defined in Section 6.2(b)) of the
Trustee).




“Qualifying Jurisdictions” means the provinces of Canada where purchasers of Special
Warrants are located and any other jurisdiction in Canada in which the Company is
required to file the Final Prospectus pursuant to the Agency Agreement, or
otherwise.




“Regulation D” means Regulation D under the U.S. Securities Act.




“Regulation S” means Regulation S under the U.S. Securities Act.




“Release and Payment Certificate” means a certificate executed by the Company in the
form attached as Schedule C hereto and addressed to the Trustee and the Agent and
acknowledged by the Agent confirming that the Release Condition has been satisfied
and directing the Trustee to release the Escrowed Funds in satisfaction of the
commission payable to the Agent pursuant to the Agency Agreement, and the remainder
to the Company.


 


5









 






“Release Condition” means the filing and clearance of the Final Prospectus, as
evidenced by the Final Receipt.




“Release Deadline” means 5:00 p.m. (Toronto time) on the date which is 30 days from
the date of this Indenture.




“SEC” means the Securities and Exchange Commission in the United States.




“Securities Commissions” means, collectively, the securities regulatory authorities
of the Qualifying Jurisdictions.




“Share Rate” means the Common Shares issuable pursuant to the conversion of the
Special Warrants in accordance with Section 2.2 hereof, subject to adjustment in
accordance with Section 4.7 hereto.




“Special Warrant Certificate” means a certificate representing one or more Special
Warrants substantially in the form of the certificate attached hereto as Schedule A.




“Special Warrantholder” or “holders” means the persons for the time being entered in
a register of holders described in Section 3.1 hereof as holders of Special
Warrants.




“Special Warrantholders’ Request” means an instrument, signed in one or more
counterparts by Special Warrantholders who hold in the aggregate not less than 10%
of the total number of Special Warrants then outstanding, requesting the Trustee to
take some action or proceeding specified therein.




“Special Warrants” means the special warrants created and issued pursuant to
Sections 2.1(a) and 2.1(b) hereof and authorized for issue hereunder and represented
by Special Warrant Certificates issued and certified in accordance with the
provisions hereof and that have not at the particular time expired, or been
converted into Underlying Securities.




“Subsidiary of the Company” means any corporation or other corporate entity of which
Voting Shares carrying more than 50% of the votes attached to all outstanding Voting
Shares of such corporation are owned, directly or indirectly, other than by way of
security only, by one or more of the Company and any Subsidiary of the Company,
regardless of whether the Company or such Subsidiary of the Company is not
contractually or otherwise prohibited or restricted from exercising sufficient of
the voting rights attached to such Voting Shares to elect at least a majority of the
directors of such corporation.




“Termination Payment Time” means 5:00 p.m. (Toronto time) on the second Business Day
after the Release Deadline if the Release Condition has not been satisfied at or
prior to the Release Deadline.


 


6









 






“this Special Warrant Indenture”, “this Indenture”, “hereto”, “hereunder”, “hereof”,
“herein”, “hereby” and similar expressions mean or refer to this Special Warrant
Indenture and any indenture, deed or instrument supplemental or ancillary hereto,
and the expressions “article”, “section”, “subsection”, “paragraph”, “subparagraph”,
“clause” and “subclause” followed by a number mean the specified article, section,
subsection, paragraph, subparagraph, clause or subclause of this Indenture.




“Time of Expiry” means 5:00 p.m. (Toronto time) on the Expiry Date.




“Trading Day”, with respect to any stock exchange or over-the-counter market, means
a day on which shares may be traded through the facilities of such stock exchange or
in such over-the-counter market and otherwise means a day on which shares may be
traded through the facilities of the principal stock exchange on which the Common
Shares are then listed (or, if the Common Shares are not then listed on any stock
exchange, then in the over-the-counter market).




“Trustee” means CIBC Mellon Trust Company, including its successors and assigns.




“TSX” means the Toronto Stock Exchange.




“Underlying Securities” means the Common Shares and Warrants issuable pursuant to
the Special Warrants at or before the Time of Expiry.




“United States” means the United States, as that term is defined in Rule 902(1) of
Regulation S.




“U.S. Accredited Investor” means an “Accredited Investor” as defined in Rule 501(a)
of Regulation D.




“U.S. Person” means a U.S. person, as that term is defined in Rule 902(k) Regulation
S.




“U.S. Purchaser” means (i) a person in the United States, or (ii) a U.S. Person or
person purchasing on behalf, or for the benefit or account, of any U.S. Person or
person in the United States.




“U.S. Securities Act” means the United States Securities Act of 1933, as amended.




“Voting Shares” of any corporation means shares of one or more classes or series of
a class of shares of such corporation carrying voting rights under all circumstances
(and not by reason of the happening of a contingency) sufficient if exercised to
elect all of the directors of such corporation, irrespective of whether or not
 shares of any other class or classes will have or may have the right to vote for
directors by reason of the happening of any contingency.


 


7









 






“Warrant Indenture” means the warrant indenture among the Company, the Agent and the
Trustee to be dated as of the date hereof which will govern the Warrants.




“Warrants” means the Common Share purchase warrants of the Company, with each whole
Warrant entitling the holder thereof, subject to the terms and conditions of the
Warrant Indenture, to purchase one (1) Share at a price of $3.16 at any time on or
before the first anniversary of the Effective Date.




“Written Order of the Company”, “Written Request of the Company”, “Written Consent
of the Company”, “Written Direction of the Company” and “Certificate of the Company”
mean a written order, request, consent, direction and certificate, respectively,
signed in the name of the Company by any director or officer of the Company or by
any other individual to whom such signing authority is delegated by the directors
from time to time, and may consist of one or more instruments so executed
respectively.



1.2 Words Importing the Singular




Words importing the singular include the plural and vice versa and words importing a
particular gender or neuter include both genders and neuter.



1.3 Interpretation Not Affected by Headings, Etc.




The division of this Indenture into articles, sections, subsections, paragraphs,
subparagraphs, clauses and subclauses, the provision of a table of contents and the insertion of
headings are for convenience of reference only and will not affect the construction or
interpretation of this Indenture.



1.4 Day Not a Business Day




If the day on or before which any action which would otherwise be required to be taken
hereunder is not a Business Day in the place where the action is required to be taken, that action
will be required to be taken on or before the requisite time on the next succeeding day that is a
Business Day.



1.5 Time of the Essence




Time will be of the essence in all respects in this Indenture and the Special Warrant
Certificates.



1.6 Currency




All dollar amounts herein and in the Special Warrant Certificates are expressed in Canadian
dollars.


 


8









 





1.7 Applicable Law




This Indenture and the Special Warrant Certificates will be construed and enforced in
accordance with the laws prevailing in the Province of British Columbia and the federal laws of
Canada applicable therein and will be treated in all respects as British Columbia contracts.



1.8 Severability




If any provision of this Indenture shall be held by any court of competent jurisdiction to be
invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect
the validity or enforceability of the remaining provisions, or part thereof, of this Indenture and
such remaining provisions, or part thereof, shall remain enforceable and binding.



1.9 Conflicts




In the event of any conflict or inconsistency between the provisions of this Indenture and the
Special Warrant Certificates, the provisions of this Indenture will govern.



ARTICLE 2

THE SPECIAL WARRANTS




2.1 Creation and Issue of Special Warrants





	 	(a)	 	Creation of Special Warrants: 41,666,667 Special Warrants entitling
the holders thereof to be issued, subject to adjustment in accordance with the
provisions of this Indenture, an aggregate of (i) 41,666,667 Common Shares and (ii)
10,416,667 Warrants, together with such additional indeterminate number of Underlying
Securities as may be required to be issued pursuant to any adjustment required to be
made by the provisions of Section 4.7 hereof on the terms and subject to the conditions
herein provided, are hereby created and authorized for issue at a price of $3.00 for
each Special Warrant.







	 	(b)	 	Certification of Special Warrants: Upon the issue of the Special
Warrants and upon receipt of the issue price therefor, one or more Global Special
Warrant Certificates will be executed by the Company and delivered to the Trustee,
certified by the Trustee upon the Written Order of the Company and delivered by the
Trustee to the Company or to the order of the Company pursuant to a Written Direction
of the Company, without any further act of or formality on the part of the Company and
without the Trustee receiving any consideration therefor.





 


9









 










2.2 Terms of Special Warrants





	 	(a)	 	Conversion Terms: Subject to Section 4.7 hereof, each Special Warrant
issued hereunder will entitle the holder thereof, upon the conversion thereof in
accordance with the provisions of Article 4 hereof, and without payment of any
additional consideration, to be issued, one (1) Common Share and one quarter of one
(0.25) of one Warrant.







	 	(b)	 	Adjustment: The number of Underlying Securities issued upon the
conversion of the Special Warrants in accordance with the provisions hereof will be
adjusted in accordance with Section 4.7 hereof.






2.3 Form of Special Warrant Certificates





	 	(a)	 	Form: The Special Warrants (including the certificate of the Trustee
endorsed thereon) shall be issued pursuant to one or more Global Special Warrant
Certificates substantially in the form of the certificate attached hereto as
Schedule A, will be dated as of the date of issuance, will bear such distinguishing
letters and numbers as the Company, with the approval of the Trustee and the
Depository, may prescribe and such legends as permitted under this Indenture and will
be issuable in any whole number denomination.







	 	(b)	 	Production: The Global Special Warrant Certificates may be engraved,
lithographed or printed (the expression “printed” including for purposes hereof both
original typewritten material as well as mimeographed, mechanically, photographically,
photostatically or electronically reproduced, typewritten or other written material),
or partly in one form and partly in another, as the Company may determine.







	 	(c)	 	Legends: Certificates representing Special Warrants, as well as all
certificates issued in exchange for or in substitution of such certificates
representing Special Warrants, will, if directed by the Company, bear the following
legend:







“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE MAY 26, 2010.”


 


10









 






	 	(d)	 	Additional United States Legend: Certificates representing Special
Warrants originally issued to a U.S. Person, a person in the United States, or a person
purchasing for the account or benefit of a U.S. Person or a person in the United
States, as well as all certificates issued in exchange for or in substitution of such
certificates representing Special Warrants, will bear the following additional legend:







“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.
SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES
FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES
MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH
CANADIAN LAWS AND REGULATIONS, (C) INSIDE THE UNITED STATES,
PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED
STATES, OR (D) INSIDE OR OUTSIDE THE UNITED STATES, PURSUANT TO
ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LEGISLATION AFTER PROVIDING A LEGAL
OPINION SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER IS EXEMPT
FROM OR OTHERWISE NOT SUBJECT TO REGISTRATION UNDER THE U.S.
SECURITIES ACT AND APPLICABLE SECURITIES LAWS.”




	 	(e)	 	Global Special Warrant Certificate Legend: Special Warrant Certificates
in the form of a Global Special Warrant Certificate, as well as all certificates issued
in exchange for or in substitution of such certificates representing Special Warrants,
will, if directed by the Company, bear the following legend:







“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF CDS CLEARING AND DEPOSITARY SERVICES INC. (“CDS”)
TO IVANHOE ENERGY INC. (THE “ISSUER”) 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.”


 


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	 	(f)	 	Registration of the Special Warrants and the Underlying Securities:
The Trustee understands and acknowledges that the Special Warrants and the Underlying
Securities have not been and will not be registered under the U.S. Securities Act or
applicable state securities laws and the Special Warrants must not be converted in the
United States unless the Special Warrants and the Underlying Securities have been
registered under the U.S. Securities Act and any applicable state securities laws or
unless an exemption from such registration is available.







	 	(g)	 	Rights: Each Special Warrant will entitle the holder thereof to such
other rights and privileges which are set forth in this Indenture.






2.4 Signing of Special Warrant Certificates





	 	(a)	 	Signing Officers: The Special Warrant Certificates will be signed by
any one officer of the Company or any one director or by any other individual to whom
such signing authority is delegated by the directors from time to time.







	 	(b)	 	Signatures: The signature of any officer of the Company or director or
any individual referred to in Section 2.4(a) hereof may be a manual signature,
engraved, lithographed or printed in facsimile and Special Warrant Certificates bearing
such facsimile signature will, subject to Section 2.5 hereof, be binding on the Company
as if they had been manually signed by such officer of the Company or director or
individual.







	 	(c)	 	No Longer Officer: Notwithstanding that any individual whose manual or
facsimile signature appears on a Special Warrant Certificate as one of the officers of
the Company or directors referred to in Section 2.4(a) hereof no longer holds the same
or any other office with, or is no longer a director of, the Company at the date of
issue of any Special Warrant Certificate or at the date of certification or delivery
thereof, such Special Warrant Certificate will, subject to Section 2.5 hereof, be valid
and binding on the Company.






2.5 Certification by Trustee





	 	(a)	 	Certification: No Special Warrant Certificate will be issued or, if
issued, will be valid for any purpose or entitle the holder to the benefits hereof or
thereof until it has been certified by manual signature by or on behalf of the Trustee
substantially in the form of the certificate attached hereto as Schedule A or in such
other form as may be approved by the Trustee. The certification by the Trustee on a
Special Warrant Certificate will be conclusive evidence as against the Company that
such Special Warrant Certificate has been issued hereunder and that the holder thereof
is entitled to the benefits hereof.







	 	(b)	 	Certification No Representation: The certification by the Trustee on
any Special Warrant Certificate issued hereunder will not be construed as a
representation or warranty by the Trustee as to the validity of this Indenture or such
Special Warrant Certificate (except the due certification thereof) or as to the
performance
by the Company of the obligations thereof under this Indenture, and the Trustee will
in no respect be liable or answerable for the use made of any Special Warrant
Certificate or of the consideration therefor, except as otherwise specified herein.





 


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2.6 Special Warrants to Rank Pari Passu




All Special Warrants will rank pari passu, whatever may be the actual dates of issue of the
Special Warrant Certificates by which they are represented. All Special Warrants will also rank
pari passu with the Option Special Warrants.



2.7 Issue in Substitution for Lost Certificates, Etc.





	 	(a)	 	Substitution: If any Special Warrant Certificate becomes mutilated or
is lost, destroyed or stolen, the Company, subject to applicable law and to
Section 2.7(b) hereof, will issue, and thereupon the Trustee will certify and deliver,
a new Special Warrant Certificate of like denomination and tenor and bearing the
applicable legends as the one mutilated, lost, destroyed or stolen in exchange for and
in place of and on surrender and cancellation of such mutilated certificate or in lieu
of and in substitution for such lost, destroyed or stolen certificate and the Special
Warrants evidenced thereby will be entitled to the benefits hereof and will rank
equally in accordance with its terms with all other Special Warrants issued or to be
issued hereunder.







	 	(b)	 	Cost of Substitution: The applicant for the issue of a new Special
Warrant Certificate pursuant to this Section 2.7 will bear the reasonable cost of the
issue thereof and, in the case of loss, destruction or theft, will as a condition
precedent to the issue thereof:







	 	(i)	 	furnish to the Company and to the Trustee such evidence
of ownership and of the loss, destruction or theft of the Special Warrant
Certificate to be replaced as is satisfactory to the Company and to the
Trustee in their discretion, acting reasonably;







	 	(ii)	 	if so requested, furnish an indemnity and surety bond in
amount and form satisfactory to the Company and to the Trustee in their
discretion, acting reasonably; and







	 	(iii)	 	if so requested, pay the reasonable charges of the
Company and the Trustee in connection therewith.






2.8 Cancellation of Surrendered Special Warrants




All Special Warrant Certificates surrendered to the Trustee in accordance with the provisions
of this Indenture will be cancelled by the Trustee and, if requested in writing by the Company, the
Trustee will furnish the Company with a cancellation certificate identifying each Special Warrant
Certificate so cancelled, the number of Special Warrants represented thereby and the number of
Underlying Securities, if any, issued pursuant to such Special Warrants.


 


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2.9 Global Special Warrant Certificate and Book-Entry Only System





	 	(a)	 	Global Special Warrant Certificate: Unless the Book-Entry Only System
is terminated or required to do so by applicable law:







	 	(i)	 	Special Warrant Certificates will only be issued in the
form of one or more Global Special Warrant Certificates, which will be
registered in the name of and deposited with the Depository or its nominee;
and







	 	(ii)	 	Beneficial Holders shall not be entitled to have Special
Warrants registered in their names, shall not receive or be entitled to
receive Special Warrant Certificates in definitive form and shall not be
considered owners or holders thereof under this Indenture or any
supplemental indenture except in circumstances where the Depository resigns
or is removed from its responsibility and the Trustee is unable or does not
wish to locate a qualified successor. Beneficial interests in a Global
Special Warrant Certificate will be represented only through the Book-Entry
Only System. Transfers of Special Warrants between Participants shall occur
in accordance with the Depository’s rules and procedures and pursuant to an
exemption under Applicable Securities Laws. The Company and the Trustee
shall not have any responsibility or liability for any aspects of the
records relating to or payments made by the Depository, or its nominee, on
account of the beneficial interests in the Special Warrants. Nothing herein
shall prevent the owners of beneficial interests in the Special Warrants
from voting such Special Warrants using duly executed proxies.







	 	(b)	 	Certain Actions, Notices and Payments: All references herein to actions
by, notices given or payments made to Special Warrantholders shall, where Special
Warrants are held through the Depository, refer to actions taken by, or notices given
or payments made to, the Depository upon instruction from the Participants in
accordance with its rules and procedures. For the purposes of any provision hereof
requiring or permitting actions with the consent of or at the direction of Special
Warrantholders evidencing a specified percentage of the aggregate Special Warrants
outstanding, such direction or consent may be given by holders of Special Warrants
acting through the Depository and the Participants owning Special Warrants evidencing
the requisite percentage of the Special Warrants. The rights of a Special Warrantholder
whose Special Warrants are held through the Depository shall be exercised only through
the Depository and the Participants and shall be limited to those established by law
and agreements between such holders and the Depository and the Participants upon
instructions from the Participants. Each of the Trustee and the Company may deal with
the Depository for all purposes as the authorized representative of the respective
Special Warrantholders and such dealing with the Depository shall constitute
satisfaction or performance, as applicable, of their respective obligations hereunder.
For so long as Special Warrants are held through the Depository, if any notice or other
communication is required to be given to Special Warrantholders, the Trustee will
give such notices and communications to the Depository.





 


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	 	(c)	 	Resignation or Removal of the Depository: If the Depository resigns or
is removed from its responsibility as depository and the Trustee is unable or does not
wish to locate a qualified successor, the Depository shall surrender the Global Special
Warrant Certificates to the Trustee with instructions for registration of Special
Warrants in the name and in the amount specified by the Depository and the Company
shall issue and the Trustee shall certify and deliver the aggregate number of Special
Warrants then outstanding in the form of Fully Registered Special Warrant Certificates
representing such Special Warrants.






2.10 Special Warrantholder not a Shareholder




Except as provided in Sections 4.7 and 5.1(m), nothing in this Indenture or in the holding of
a Special Warrant represented by a Special Warrant Certificate, or otherwise, will, in itself, be
construed as conferring on any Special Warrantholder any right or interest whatsoever as a
shareholder of the Company, including but not limited to any right to vote at, to receive notice
of, or to attend, any meeting of shareholders.



ARTICLE 3

REGISTRATION, TRANSFER AND OWNERSHIP OF SPECIAL WARRANTS AND

EXCHANGE OF SPECIAL WARRANT CERTIFICATES




3.1 Registration and Transfer of Fully Registered Special Warrant Certificates





	 	(a)	 	Register: With respect to Special Warrants issued pursuant to Fully
Registered Special Warrant Certificates, the Company will cause to be kept by the
Trustee at its principal office in Vancouver, British Columbia:







	 	(i)	 	a register of holders in which will be entered the names
and addresses of the holders of Special Warrants and particulars of the
Special Warrants held by them; and







	 	(ii)	 	a register of transfers in which all transfers of Special
Warrants and the date and other particulars of each transfer will be
entered.







	 	(b)	 	Transfer: Subject to Section 3.3, no transfer of any Fully Registered
Special Warrant Certificates will be valid unless entered on the register of transfers
referred to in Section 3.1(a) hereof, or on any branch register maintained pursuant to
Section 3.4(e) hereof, upon surrender to the Trustee of the Special Warrant Certificate
representing such Special Warrant, with a properly completed transfer form in
substantially the form attached to the Special Warrant Certificate executed by the
registered holder or the executors, administrators or other legal representatives
thereof or the attorney thereof duly appointed by an instrument in writing in form and
executed in a manner satisfactory to the Trustee, acting reasonably, and, upon
compliance with such requirements and such other
reasonable requirements as the Trustee may prescribe, such transfer will be duly
noted on one of such registers by the Trustee.





 


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3.2 Registration and Transfer of Global Special Warrant Certificates





	 	(a)	 	Register: With respect to Special Warrants issuable in whole or in
part as one or more Global Special Warrant Certificates, the Company shall cause to be
kept by and at the principal offices of the Trustee in Vancouver, British Columbia a
register in which shall be entered the name and address of the holder of each such
Global Special Warrant Certificate (being the Depository, or its nominee, for such
Global Special Warrant Certificate) as holder thereof and particulars of the Global
Special Warrant Certificate held by it, and of all transfers thereof. If any Special
Warrants are at any time not represented by a Global Special Warrant Certificate, the
provisions of Section 3.1 shall govern with respect to registrations and transfers of
such Special Warrants.







	 	(b)	 	Transfer: Notwithstanding any other provision of this Indenture, a
Global Special Warrant Certificate may not be transferred by the registered holder
thereof and accordingly, no definitive certificates shall be issued to Beneficial
Holders except in the following circumstances or as otherwise specified in a resolution
of the directors of the Company or supplemental indenture relating to the Special
Warrants:







	 	(i)	 	Global Special Warrant Certificates 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 Special Warrant Certificates may be transferred at
any time after the Depository for such Global Special Warrant Certificates
(a) has notified the Trustee, or the Company has notified the Trustee, that
it is unwilling or unable to continue as Depository for such Global Warrant
Certificates, or (b) ceases to be eligible to be a Depository, provided that
at the time of such transfer the Company has not appointed a successor
Depository for such Global Special Warrant Certificates;







	 	(iii)	 	Global Special Warrant Certificates may be transferred
at any time after the Company has determined, in its sole discretion, to
terminate the Book-Entry Only System in respect of such Global Special
Warrant Certificates and has communicated such determination to the Trustee
in writing;







	 	(iv)	 	Global Special Warrant Certificates may be transferred if
required by applicable law; or







	 	(v)	 	Global Special Warrant Certificates may be transferred if
the Book-Entry Only System ceases to exist.





 


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	 	(c)	 	Certain Matters in respect of the Book-Entry Only System: With respect
to the Global Special Warrant Certificates, unless and until definitive certificates
have been issued to Beneficial Holders pursuant to subsection 3.2(b):







	 	(i)	 	the Company and the Trustee may deal with the Depository
for all purposes as the sole holder of such Special Warrants 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 between such Beneficial Holders and the Depository or the
Participants;







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







	 	(iv)	 	whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Special Warrantholders
evidencing a specified percentage of the outstanding Special Warrants, 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 Participant, and has delivered such instructions to the
Trustee; and







	 	(v)	 	upon surrender by the Depository of the certificate(s)
representing the Global Special Warrant Certificates and receipt of new
registration instructions from the Depository, the Trustee shall deliver
Fully Registered Warrant Certificates for such Special Warrants to the
holders thereof in accordance with the new registration instructions and
thereafter, the registration and transfer of such Special Warrants will be
governed by Section 3.1 and the remaining Sections of this Article 3.






3.3 Certain Transfers by Persons in the United States





	 	(a)	 	If the Special Warrant Certificate surrendered pursuant to Section 3.1(b) or
Section 3.2(b) hereof bears the legend set forth in Section 2.3(d) hereof and:







	 	(i)	 	the holder thereof is selling Special Warrants
represented thereby outside the United States in compliance with the
requirements of Rule 904 of Regulation S and in compliance with applicable
Canadian laws and regulations, and provided that the Company is a “foreign
issuer” within the meaning of Regulation S at the time of sale, the Trustee
will not register such transfer unless the holder thereof delivers to the
Trustee a declaration in the form set forth as Schedule B hereof, together
with such additional information as the Trustee may reasonably request, in
which case the Special Warrant Certificate representing the Special Warrants
transferred to the transferee will only bear the legend set forth in
Section 2.3(c) hereof; or





 


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	 	(ii)	 	the holder thereof is selling Special Warrants
represented thereby in compliance with the requirements of Rule 144 under
the U.S. Securities Act, the legend set forth in Section 2.3(d) hereof may
be removed by delivery to the Trustee and the Company of an opinion of
counsel, of recognized standing reasonably satisfactory to the Company, that
such legend is no longer required under applicable requirements of the U.S.
Securities Act or state securities laws.






3.4 Other Registration and Transfer Matters





	 	(a)	 	Register of Transfers: The transferee of any Special Warrant will,
after surrender to the Trustee of the Special Warrant Certificate representing such
Special Warrant as required by Section 3.1(b) hereof and upon compliance with all other
conditions in respect thereof required by this Indenture or by law, be entitled to be
entered on the register of holders referred to in Section 3.1(a) hereof, or on any
branch register of holders maintained pursuant to Section 3.4(e) hereof, as the owner
of such Special Warrant free from all equities or rights of set-off or counterclaim
between the Company and the transferor or any previous holder of such Special Warrant,
except in respect of equities of which the Company is required to take notice by
statute or by order of a court of competent jurisdiction.







	 	(b)	 	Refusal of Registration: The Company will be entitled, and may direct
the Trustee, to refuse to recognize any transfer, or enter the name of any transferee,
of any Special Warrant on the registers referred to in Section 3.1(a) hereof or on any
branch register maintained pursuant to Section 3.4(e) hereof if such transfer would
constitute a violation of the securities laws of any jurisdiction or the instruments,
rules, regulations or policies of any regulatory authority (including the TSX or any
other stock exchange or securities market upon which the Common Shares are listed and
posted for trading or which an application has been made to list the Common Shares)
having jurisdiction.







	 	(c)	 	No Notice of Trusts: Subject to applicable law, neither the Company
nor the Trustee will be bound to take notice of or see to the execution of any trust,
whether express, implied or constructive, in respect of any Special Warrant, and may
transfer any Special Warrant 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.







	 	(d)	 	Inspection: The registers referred to in Section 3.1(a) hereof, and
any branch register maintained pursuant to Section 3.4(e) hereof, will be open for
inspection by the Company, the Agent and any Special Warrantholder during the normal
business hours of the Trustee. The Trustee will from time to time when requested to do
so in writing by the Company or any Special Warrantholder (upon payment of the
reasonable charges of the Trustee) furnish the Company or such Special Warrantholder
with a list of the names and addresses of holders of Special Warrants entered on such
registers and showing the number of Special Warrants held by each such holder.





 


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	 	(e)	 	Location of Registers: The Company may at any time and from time to
time change the place at which the registers referred to in Section 3.1(a) hereof are
kept, cause branch registers of holders or transfers to be kept, in each case subject
to the approval of the Trustee, at other places and close such branch registers or
change the place at which such branch registers are kept. Notice of all such changes or
closures will be given by the Company to the Trustee, the Agent and to the holders of
Special Warrants in accordance with Section 11.2 hereof.






3.5 Exchange of Special Warrant Certificates





	 	(a)	 	Exchange: One or more Special Warrant Certificates (other than Global
Special Warrant Certificates) may at any time prior to the Time of Expiry, on
compliance with the reasonable requirements of the Trustee, be exchanged for one or
more Special Warrant Certificates of different denominations representing in the
aggregate the same number of Special Warrants as the Special Warrant Certificate or
Special Warrant Certificates being exchanged.







	 	(b)	 	Place of Exchange: Special Warrant Certificates may be exchanged only
at the principal offices of the Trustee in Vancouver, British Columbia or Toronto,
Ontario or at any other place designated by the Company with the approval of the
Trustee.







	 	(c)	 	Cancellation: Any Special Warrant Certificate tendered for exchange
pursuant to this Section 3.5 will be surrendered to the Trustee and cancelled.







	 	(d)	 	Execution: The Company will sign all Special Warrant Certificates in
accordance with Section 2.4 hereof necessary to carry out exchanges pursuant to this
Section 3.5 and such Special Warrant Certificates will be certified by the Trustee.







	 	(e)	 	Special Warrant Certificates: Special Warrant Certificates exchanged
for Special Warrant Certificates that bear any of the legends set forth in Section 2.3
hereof will bear the same legends.






3.6 No Charges for Transfer or Exchange




No charge will be levied on a presenter of a Special Warrant Certificate pursuant to this
Indenture for the transfer of any Special Warrant or the exchange of any Special Warrant
Certificate. All costs of such transfer or exchange will be borne by the Company.



3.7 Ownership of Special Warrants





	 	(a)	 	Owner: Except with respect to Global Special Warrant Certificates, the
Company and the Trustee may deem and treat the person in whose name any Special Warrant
is registered as the absolute owner of such Special Warrant for all purposes, and such
person will for all purposes of this Indenture be and be deemed to be the absolute
owner thereof, and the Company and the Trustee will not be affected by any notice or
knowledge to the contrary, except as may
otherwise be set forth herein or as required by statute or by order of a court of
competent jurisdiction.





 


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	 	(b)	 	Rights of Registered Holder: The registered holder of any Special
Warrant will be entitled to the rights represented thereby free from all equities and
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 issue and
delivery to any such registered holder of the Underlying Securities issuable pursuant
thereto will be a good discharge to the Company and the Trustee therefor, and neither
the Company nor the Trustee will be bound to inquire into the title of any such
registered holder.






ARTICLE 4

CONVERSION OF SPECIAL WARRANTS




4.1 Conversion by Holder





	 	(a)	 	Conversion: Subject to the limitation set forth in Section 4.1(b)
hereof and Section 4.7 hereof, the holder of any Special Warrant may at any time prior
to the Time of Expiry exercise the right thereby conferred to be issued Underlying
Securities by surrendering to the Trustee at the principal office of the Trustee in
Vancouver, British Columbia or Toronto, Ontario, or to any other person or at any other
place designated by the Company with the approval of the Trustee, during normal
business hours on a Business Day at such place, the Special Warrant Certificate
representing such Special Warrant, with a completed and executed notice of conversion
substantially in the form attached to such Special Warrant Certificate.







	 	(b)	 	Surrender: Any Special Warrant Certificate with a completed and
executed notice of conversion referred to in Section 4.1(a) hereof will be deemed to
have been surrendered to the Trustee only on personal delivery thereof to, or, if sent
by mail or other means of transmission, on actual receipt thereof by, the Trustee or
one of the other persons at the office or one of the other places specified in
Section 4.1(a) hereof.







	 	(c)	 	Notice of Conversion: Any notice of conversion referred to in
Section 4.1(a) hereof must be signed by the Special Warrantholder, or the executors,
administrators or other legal representatives thereof or the attorney thereof duly
appointed by an instrument in writing in form and executed in a manner satisfactory to
the Trustee, acting reasonably, and, if any Underlying Securities thereby issuable are
to be issued to a person or persons other than the Special Warrantholder, must specify
the name or names and the address or addresses of each such person or persons and the
number of Underlying Securities to be issued to each such person if more than one is so
specified (and, in this case, the signature appearing on the notice of conversion must
be Signature Guaranteed by a Schedule I Canadian chartered bank or a member of a
Medallion Guarantee program, with the stamp affixed thereon bearing the actual words
“Signature
Guarantee” or “Signature Medallion Guaranteed” and otherwise be in accordance with
industry standards).





 


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	 	(d)	 	Conversion of Less than All: The holder of any Special Warrants may
exercise his right to acquire a number of Underlying Securities less than the aggregate
number which the holder is entitled to acquire pursuant to the surrendered Special
Warrant Certificate(s). In the event of any conversion of a number of Special Warrants
less than the number which the holder is entitled to convert, the holder of the Special
Warrants upon such conversion will, in addition, be entitled to receive, without charge
therefor, a new Special Warrant Certificate(s) in respect of the balance of the Special
Warrants represented by the surrendered Special Warrant Certificate(s) and which were
not then converted, and with respect to a Global Special Warrant Certificate, the
Depository shall make notations on the Global Special Warrant Certificate of the
Special Warrants so converted.






4.2 Conversion by Trustee





	 	(a)	 	Conversion by Trustee: If any Special Warrant has not been converted
pursuant to Section 4.1 hereof prior to the Qualification Date, such Special Warrant
will be converted by the Trustee for and on behalf of the holder thereof and, without
any action on the part of the holder thereof (including the surrender of any Special
Warrant Certificate), and the Special Warrants will be deemed to have been converted
into Underlying Securities on the first Business Day following the Qualification Date.







	 	(b)	 	Rights on Conversion by Trustee: The holder of any Special Warrant
converted pursuant to Section 4.2(a) hereof will have no further rights as a Special
Warrantholder except to receive the certificates representing the Underlying Securities
issued upon the conversion thereof to such holder in accordance with Sections 4.3 and
4.4 hereof.







	 	(c)	 	Direction of Trustee: By taking delivery of a Special Warrant
Certificate, the holder of the Special Warrants represented thereby is deemed to have
irrevocably authorized and directed the Trustee to convert such Special Warrants
pursuant to, and in accordance with, Section 4.2(a) hereof.






4.3 Effect of Conversion





	 	(a)	 	Effect of Conversion: Upon the conversion of any Special Warrants in
accordance with Section 4.1 or Section 4.2 hereof, the Underlying Securities thereby
issuable will be deemed to have been issued, and the person or persons to whom such
Underlying Securities are to be issued will be deemed to have become the holder or
holders of record thereof, on the Conversion Date, unless the transfer registers
maintained by or on behalf of the Company for the Common Shares are closed on that
date, in which case such Underlying Securities will be deemed to have been issued, and
such person or persons will be deemed to have become the holder or holders of record
thereof, on the date on which such transfer
registers are reopened, but such Underlying Securities will be issued on the basis
of the number of Underlying Securities to which such person or persons were entitled
on the Conversion Date. The certificates representing the Underlying Securities
which are issued to a holder of Special Warrants upon the conversion of Special
Warrants by the Trustee pursuant to Section 4.2(a) hereof will be issued in the name
of such holder.





 


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	 	(b)	 	Certificates and Customer Confirmations: Within three Business Days
after the Conversion Date:







	 	(i)	 	the Trustee will mail to the person or persons in whose
name or names the Underlying Securities thereby issued have been issued, at
the respective addresses thereof, or, if so specified, deliver to such
person or persons at the place where a Special Warrant Certificate
representing Special Warrants was surrendered, certificates representing the
Underlying Securities so issued; and







	 	(ii)	 	in the case of the conversion of Special Warrants under a
Global Special Warrant Certificate, the Company shall cause the Depository
to be entered and issued, as the case may be, to the person or person in
whose name or names such Underlying Securities have been issued, a
Book-Entry Only System customer confirmation.







	 	(c)	 	Issue to Other than Holder: If any Underlying Securities issuable
pursuant to any Special Warrants are to be issued to a person or persons other than the
Special Warrantholder, the Special Warrantholder must pay to the Company an amount
equal to all exigible transfer taxes or other government charges, and neither the
Company nor the Trustee will be required to issue or deliver any certificates
representing any such Underlying Securities unless or until such amount has been so
paid or the Special Warrantholder has established to the satisfaction of the Company in
its discretion, acting reasonably, that such taxes and charges have been paid or that
no such taxes or charges are owing.






4.4 No Fractional Common Shares or Warrants





	 	(a)	 	The Company will not, whether pursuant to an adjustment in accordance with
Section 4.7 hereof or under any other circumstance, be obligated after the aggregation
of the number of Common Shares and Warrants to be issued to each holder of Special
Warrants to issue any fraction of a Common Share or Warrant on the conversion of
Special Warrants. If a holder of a Special Warrant would otherwise be entitled to a
fractional Common Share or Warrant pursuant to the conversion of the Special Warrants,
the number of Common Shares and Warrants to be issued will be rounded down to the next
whole number, if the holder is entitled to receive less than 0.5 of a Common Share or
Warrant and rounded up to the next whole number, if the holder is entitled to receive
0.5 or more of a Common Share or Warrant, and the holder of such Special Warrants will
not be entitled to any cash compensation in respect of such fraction.





 


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	 	(b)	 	For the purpose of Section 4.4(a), in the case of a holder of Special Warrants
exercising Special Warrants represented by more than one Special Warrant Certificate,
the fractional interest of such holder will be the fractional interest of a Common
Share or Warrant such Special Warrantholder would otherwise be entitled to receive if
the Special Warrants being exercised were represented by one Special Warrant
Certificate.






4.5 Recording




The Trustee will record the particulars of each Special Warrant converted, which particulars
will include the name and address of each person to whom Underlying Securities are thereby issued,
the number of Underlying Securities so issued and the Conversion Date in respect thereof. Within
three Business Days after each Conversion Date, the Trustee will provide such particulars in
writing to the Company.



4.6 Securities Restrictions





	 	(a)	 	General: No Common Shares or Warrants will be issued pursuant to the
conversion of any Special Warrant if the issue of such Common Shares or Warrants would
constitute a violation of the securities laws of any jurisdiction and, without limiting
the generality of the foregoing, the certificates representing the Underlying
Securities thereby issued will bear such legend or legends as may, in the opinion of
counsel to the Company, be necessary or advisable in order to avoid a violation of any
securities laws of any jurisdiction or to comply with the requirements of any stock
exchange on which the Common Shares are then listed, provided that if, at any time, in
the opinion of counsel to the Company, such legend or legends are no longer necessary
or advisable in order to avoid a violation of any such laws or requirements, or the
holder of any such legended certificate, at such holder’s expense, provides the Company
with evidence satisfactory in form and substance to the Company (which may include an
opinion of counsel satisfactory to the Company) to the effect that such holder is
entitled to sell or otherwise transfer such Common Shares or Warrants in a transaction
in which such legend or legends are not required, such legended certificate may
thereafter be surrendered to the Company in exchange for a certificate which does not
bear such legend or legends.







	 	(b)	 	Canadian Legends: Certificates representing Underlying Securities
issued upon the conversion of Special Warrants on or prior to the date that is four
months and a day following the date of issuance of the Special Warrants, and without
the British Columbia Securities Commission, as the principal regulator under National
Policy 11-202 and the Passport System, having issued a receipt for the Final
Prospectus, will bear the legend provided in subsection 4.6(d) and the following
legend:







“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE MAY 26, 2010.”


 


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And the Common Shares forming part of the Underlying Securities shall also bear the
following legend:




“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE
TORONTO STOCK EXCHANGE BUT CANNOT BE TRADED THROUGH THE FACILITIES
OF THE EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT
“GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK
EXCHANGE”




	 	(c)	 	U.S. Legends: If the Special Warrant Certificate representing the
Special Warrants converted in accordance with this Article 4 bears the legend set forth
in Section 2.3(d) hereof, then any certificate representing Underlying Securities
issued upon the conversion thereof, will bear the following legend:







“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.
SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES
FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE
THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER
THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH CANADIAN LAWS AND
REGULATIONS, (C) INSIDE THE UNITED STATES, PURSUANT TO THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER, IF AVAILABLE, IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS OF THE UNITED STATES, OR (D) INSIDE OR OUTSIDE THE
UNITED STATES, PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER
THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LEGISLATION AFTER PROVIDING A LEGAL OPINION SATISFACTORY TO THE
COMPANY THAT SUCH TRANSFER IS EXEMPT FROM OR OTHERWISE NOT SUBJECT
TO REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE
SECURITIES LAWS.”;


 


24









 






provided that, if such Common Shares or Warrants are being sold outside the United
States in compliance with the requirements of Rule 904 of Regulation S and in
compliance with Canadian local laws and regulations, and provided that
the Company is a “foreign issuer” within the meaning of Regulation S at the time of
sale, any such legend may be removed by providing a declaration to the registrar and
transfer agent for the Common Shares and Warrants in the form set forth in Schedule
B hereof, together with such additional information as the registrar and transfer
agent may request (and the Company hereby covenants and agrees to use reasonable
commercial efforts to cause the registrar and transfer agent for the Underlying
Securities to deliver certificates representing Underlying Securities bearing no
such legend within three Business Days of the date of delivery of such a
declaration), and provided, further, that, if any such Common Shares or Warrants are
being sold in the United States pursuant to Rule 144 under the U.S. Securities Act,
the legend may be removed by delivery to the Company of an opinion of counsel, of
recognized standing reasonably satisfactory to the Company, that such legend is no
longer required under applicable requirements of the U.S. Securities Act or state
securities laws.




	 	(d)	 	Book-Entry Only System Legend: Certificates representing Underlying
Securities issued upon the conversion of Special Warrants where such Special Warrants
were previously held pursuant to a Global Special Warrant Certificate, as well as all
certificates issued in exchange for or in substitution of such certificates
representing Underlying Securities, will, if directed by the Company, bear the
following legend:







“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF CDS CLEARING AND DEPOSITARY SERVICES INC. (“CDS”)
TO IVANHOE ENERGY INC. (THE “ISSUER”) 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.”


 


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4.7 Adjustments





	 	(a)	 	Adjustment: The rights of the holder of any Special Warrant, including
the number of Underlying Securities issuable upon the conversion or deemed
conversion of such Special Warrant, will be adjusted from time to time in the events
and in the manner provided in, and in accordance with the provisions of, this
section.







	 	(b)	 	Triggering Events: The Share Rate in effect at any date will be subject
to adjustment from time to time as follows:







	 	(i)	 	Share Reorganization: If, and whenever at any
time during the Adjustment Period, the Company will (A) subdivide, redivide
or change the outstanding Common Shares into a greater number of shares, (B)
reduce, consolidate or combine the outstanding Common Shares into a lesser
number of shares, or (C) issue Common Shares (or securities convertible or
exchangeable into Common Shares) to all or substantially all of the holders
of Common Shares by way of a stock dividend or other distribution, then, in
each such event, the Share Rate will, on the record date for such event or,
if no record date is fixed, the effective date of such event, be adjusted so
that it will equal the rate determined by multiplying the Share Rate in
effect immediately prior to such date by a fraction, of which the
denominator will be the total number of Common Shares outstanding on such
date before giving effect to such event, and of which the numerator will be
the total number of Common Shares outstanding on such date after giving
effect to such event (including Common Shares into which such convertible or
exchangeable securities by way of stock dividend may be issued). Such
adjustment will be made successively whenever any such event will occur. Any
such issue of Common Shares by way of a stock dividend or other distribution
will be deemed to have been made on the record date for such stock dividend
or other distribution for the purpose of calculating the number of
outstanding Common Shares under Sections 4.7(b)(i) and (ii) hereof.







	 	(ii)	 	Rights Offering: If, and whenever at any time
during the Adjustment Period, the Company will fix a record date for the
issue of rights, options or warrants to all or substantially all of the
holders of Common Shares entitling the holders thereof, within a period
expiring not more than 45 days after the record date for such issue, to
subscribe for or purchase Common Shares (or securities convertible into or
exchangeable for Common Shares) at a price per share (or having a conversion
or exchange price per share) less than 95% of the Current Market Price on
the earlier of such record date and the date on which the Company announces
its intention to make such issue, then, in each such case, the Share Rate
will be adjusted immediately after such record date so that it will equal
the rate determined by multiplying the Share Rate in effect on such record
date by a fraction, of which the denominator will be the total number of
Common Shares outstanding on such record date plus the number arrived at
when (A) either the product of (1) the number of Common Shares offered for
subscription and (2) the price at which 





 


26









 











those
Common Shares are offered, or the product of (3) the conversion price thereof and (4) the maximum
number of Common Shares for or into which the convertible or exchangeable
securities so offered pursuant to the rights offering may be converted or
exchanged, as the case may be, is divided by (B) the Current Market Price on
the record date, and of which the numerator will be the total number of
Common Shares outstanding on such record date plus the total number of
additional Common Shares so offered for subscription or purchase (or into or
for which the convertible or exchangeable securities so offered are
convertible or exchangeable). Any Common Shares owned by or held for the
account of the Company or any Subsidiary of the Company will be deemed not
to be outstanding for the purpose of any such computation. Such adjustment
will be made successively whenever such a record date is fixed, provided
that if two or more such record dates or record dates referred to in
Section 4.7(b)(iii) hereof are fixed within a period of 25 Trading Days,
such adjustment will be made successively as if each of such record dates
occurred on the earliest of such record dates. To the extent that any such
rights, options or warrants are not exercised prior to the expiration
thereof, the Share Rate will then be readjusted to the Share Rate 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 rights, options or warrants, as the case
may be.




	 	(iii)	 	Distribution: If, and whenever at any time
during the Adjustment Period, the Company will fix a record date for the
making of a distribution to all or substantially all of the holders of
Common Shares of (A) shares of any class other than Common Shares whether of
the Company or any other corporation, (B) rights, options or warrants to
acquire Common Shares or securities exchangeable for or convertible into
Common Shares or property or other assets of the Company (other than rights,
options or warrants exercisable by the holders thereof within a period
expiring not more than 45 days after the record date for such issue or
distribution to acquire Common Shares or securities exchangeable for or
convertible into Common Shares at a price per share, or at an exchange or
conversion price per share in the case of securities exchangeable for or
convertible into Common Shares, of at least 95% of the Current Market Price
of the Common Shares on such record date), (C) evidences of indebtedness, or
(D) cash, securities or other property or assets (other than cash dividends
paid in the ordinary course), then, in each such case, the Share Rate will
be adjusted immediately after such record date so that it will equal the
rate determined by multiplying the Share Rate in effect on such record date
by a fraction, of which the denominator will be the total number of Common
Shares outstanding on such record date multiplied by the Current Market
Price on the earlier of such record date and the date on which the Company
announces its intention to make such distribution, less the aggregate fair
market value (as determined by the directors, acting





 


27









 











reasonably, at the time such distribution is authorized) of such shares or
rights, options or warrants or evidences of indebtedness or cash, securities
or other property or assets so distributed, and of which the numerator will
be the total number of Common Shares outstanding on such record date
multiplied by such Current Market Price. Any Common Shares owned by or held
for the account of the Company or any Subsidiary of the Company will be
deemed not to be outstanding for the purpose of any such computation. Such
adjustment will be made successively whenever such a record date is fixed,
provided that if two or more such record dates or record dates referred to
in Section 4.7(b)(ii) hereof are fixed within a period of 25 Trading Days,
such adjustment will be made successively as if each of such record dates
occurred on the earliest of such record dates. To the extent that any such
rights, options or warrants so distributed are not exercised prior to the
expiration thereof, the Share Rate will then be readjusted to the Share Rate
which would then be in effect based upon such rights, options or warrants or
evidences of indebtedness or cash, securities or other property or assets
actually distributed or based upon the number or amount of securities or the
property or assets actually issued or distributed upon the exercise of such
rights, options or warrants, as the case may be.




	 	(c)	 	Reclassifications: If and whenever at any time during the Adjustment
Period, there is (A) any reclassification of the outstanding Common Shares, any change
of the Common Shares into other shares or any other reorganization of the Company
(other than as described in Section 4.7(b) hereof), (B) any consolidation,
amalgamation, arrangement, merger or other form of business combination of the Company
with or into any other corporation, trust, partnership or other entity resulting in any
reclassification of the outstanding Common Shares, any change of the Common Shares into
other shares or any other reorganization of the Company, or (C) any sale, conveyance,
lease, exchange or transfer of the undertaking or assets of the Company as an entirety
or substantially as an entirety to another corporation or entity, then, in each such
event, each holder of any Special Warrant which is thereafter exchanged will be
entitled to receive, and will accept, in lieu of the number of Underlying Securities to
which such holder was theretofore entitled upon such exchange, the kind and number or
amount of shares or other securities or property which such holder would have been
entitled to receive as a result of such event if, on the effective date of such event
in (A), (B) or (C), such holder had been the registered holder of the number of
Underlying Securities to which such holder was theretofore entitled upon such
conversion or exchange. If necessary as a result of any such event, appropriate
adjustments will be made in the application of the provisions set forth in this
Section 4.7(c) with respect to the rights and interests thereafter of the holders of
Special Warrants to the end that the provisions set forth in this Section 4.7(c) will
thereafter correspondingly be made applicable, as nearly as may reasonably be, in the
relation to any shares or other securities or 





 


28









 











property thereafter deliverable upon the
exercise of any Special Warrant. Any such adjustments will be set
forth in an indenture supplemental hereto with the successor to the Company or such
corporation or other entity, as applicable, contemporaneously with such
reclassification, consolidation, amalgamation, arrangement, merger, other form of
business combination or other event and which supplemental indenture will be
approved by the directors, acting reasonably, and will for all purposes be
conclusively deemed to be an appropriate adjustment and such supplemental indenture
will provide for adjustments which will be as nearly equivalent as may be
practicable to the adjustments provided in this Section 4.7 and which will apply to
successive reclassifications, reorganizations, amalgamations, mergers, other forms
of business combination or other events.




	 	(d)	 	Deferral of Adjustment: In any case in which this Section 4.7 will
require that an adjustment will become effective immediately after a record date for or
an effective date of an event referred to herein, the Company may defer, until the
occurrence and consummation of such event, issuing to the holder of any Special Warrant
exchanged after such record date or effective date and before the occurrence and
consummation of such event the additional Common Shares or other securities or property
issuable upon such exchange by reason of the adjustment required by such event,
provided, however, that the Company will 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 and consummation of such event and the
right to receive any dividend or other distribution in respect of such additional
Common Shares or other securities or property declared in favour of the holders of
record of Common Shares or of such other securities or property on or after the
Conversion Date or such later date as such holder would, but for the provisions of this
subsection, have become the holder of record of such additional Common Shares or of
such other securities or property pursuant to Section 4.3(a) hereof.







	 	(e)	 	Adjustments Cumulative: The adjustments provided for in this
Section 4.7 (in both the number of Common Shares and of securities to be received on an
exercise of the Special Warrants) are cumulative, will, in the case of any adjustment
to the Share Rate, be computed to the nearest one one-hundredth of a Common Share and
will apply (without duplication) to successive subdivisions, consolidations,
distributions, issues or other events resulting in any adjustment under the provisions
of this Section 4.7, provided that, notwithstanding any other provision of this
section, no adjustment of the Share Rate will be required (i) unless such adjustment
would require an increase or decrease of at least 1% in the Share Rate then in effect
(provided, however, that any adjustment which by reason of this Section 4.7(e) is not
required to be made will be carried forward and taken into account in any subsequent
adjustment), (ii) if, in respect of any event described in this Section 4.7 (other than
the events referred to in clauses (A) and (B) of Section 4.7(b)(i) hereof and in
Section 4.7(c) hereof), the holders of Special Warrants are entitled to participate in
such event, or are entitled to participate within 45 days in a comparable event, on the
same terms, with the necessary 





 


29









 











changes, as if the Special Warrants had been exercised
prior to or on the effective date of or record date for such event, (iii) in respect of any Common
Shares issuable or issued pursuant to any stock option or any stock option or stock
purchase plan in force from time to time for directors, officers or employees of the
Company or of Subsidiaries of the Company, or (iv) in respect of any Underlying
Securities issuable or issued pursuant to the conversion of Special Warrants. After
any adjustment pursuant to this Section 4.7, the term “Common Shares” where used in
this Indenture will be interpreted to mean securities of any class or classes which,
as a result of such adjustment and all prior adjustments pursuant to this Section,
the Special Warrantholder is entitled to receive upon the exercise of its Special
Warrant, and the number of Underlying Securities indicated by any exercise made
pursuant to a Special Warrant will be interpreted to mean the number of Common
Shares or other property or securities a Special Warrantholder is entitled to
receive, as a result of such adjustment and all prior adjustments pursuant to this
Section 4.7, upon the full exercise of a Special Warrant;




	 	(f)	 	Resolution of Questions: If any question arises with respect to the
adjustments provided in this Section 4.7, such question will be conclusively determined
by the Company’s auditors or, if they are unable or unwilling to act, by such firm of
chartered accountants as is appointed by the Company and is acceptable to the Trustee.
Such accountants will have access to all necessary records of the Company and such
determination will be binding upon the Company, the Trustee and the Special
Warrantholders.







	 	(g)	 	Other Actions: If, and whenever at any time during the Adjustment
Period, the Company will take any action affecting or relating to the Common Shares,
other than any action described in this Section 4.7, which in the opinion of the
directors would prejudicially affect the rights of holders of Special Warrants, the
Share Rate will, subject to receipt of any applicable regulatory approvals, be adjusted
by the directors in such manner, if any, and at such time, as the directors may
reasonably determine to be equitable in the circumstances to such holders.







	 	(h)	 	Additional Actions: As a condition precedent to the taking of any
action which would require an adjustment in any of the rights under the Special
Warrants, the Company will take any action which may, in the opinion of counsel to the
Company, be necessary in order that the Company, or any successor to the Company or
successor to the undertaking or assets of the Company, will have unissued and reserved
in its authorized capital and will be obligated to and may validly and legally issue
all the Common Shares or other securities or property which the holders of Special
Warrants would be entitled to receive thereafter on the exercise thereof in accordance
with the provisions hereof.





 


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	 	(i)	 	Notice to Trustee: The Company covenants with the Trustee that at
least ten Business Days before the earlier of the effective date of or record date for
any event referred to in this Section 4.7 that requires or might require an adjustment
in any of the rights under the Special Warrants, the Company will:







	 	(i)	 	file with the Trustee a Certificate of the Company
specifying the particulars of such event and, to the extent determinable,
any adjustment required and the computation of such adjustment; and







	 	(ii)	 	give notice to the Special Warrantholders of the
particulars of such event and, to the extent determinable, any adjustment
required, in accordance with Section 11.2(a) hereof.







Such notice will set forth such particulars as have been determined at the date
such notice is given. If any adjustment for which such notice is given is not then
determinable, promptly after such adjustment is determinable the Company will:




	 	(iii)	 	file with the Trustee a Certificate of the Company
showing the computation of such adjustment; and







	 	(iv)	 	give notice to the Special Warrantholders of such
adjustment in accordance with Section 11.2(a) hereof.







Where a notice pursuant to this Section 4.7(i) has been given, the Trustee will be
entitled to act and rely on any adjustment calculation of the Company or of the
Company’s auditors.




	 	(j)	 	Duty of Trustee: Subject to Section 10.2(a) hereof, the Trustee will
not:







	 	(i)	 	at any time be under any duty or responsibility to any
Special Warrantholder to determine whether any facts exist which may require
any adjustment in the Share Rate, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed in
making such adjustment;







	 	(ii)	 	be accountable with respect to the validity or value (or
the kind or amount) of any Common Shares, Warrants or of any shares or other
securities or property which may at any time be issued or delivered upon the
exercise of any Special Warrant; or







	 	(iii)	 	be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver Underlying Securities,
share certificates or warrant certificates upon the surrender of any Special
Warrants for the purpose of exercise, or to comply with any of the covenants
contained in this Section 4.7.





 


31









 










ARTICLE 5

COVENANTS




5.1 General Covenants




The Company represents, warrants and covenants with the Trustee that so long as any Special
Warrants remain outstanding:




	 	(a)	 	Authorization and Issue of Special Warrants: The Company is duly
authorized to create and issue the Special Warrants and, when issued and countersigned
as herein provided, they will be valid and enforceable against the Company in
accordance with the terms herein.







	 	(b)	 	Maintenance: The Company will use its commercially reasonable efforts
to at all times maintain its corporate existence and keep or cause to be kept proper
books of account in accordance with generally accepted accounting principles in the
United States or Canada or in accordance with international financial reporting
standards.







	 	(c)	 	Reservation of Common Shares: The Company will reserve and
conditionally allot and keep available sufficient unissued Common Shares to enable it
to satisfy its obligations on the conversion of the Special Warrants including the
issuance of Common Shares underlying the Warrants.







	 	(d)	 	Issue of Underlying Securities: The Company will cause the Underlying
Securities from time to time issued pursuant to the conversion of the Special Warrants,
and the certificates representing such Underlying Securities, to be issued and
delivered in accordance with the provisions of this Indenture and the terms hereof and
all Common Shares and Warrants that are issued on the conversion of the Special
Warrants will be fully paid and non-assessable shares and warrants respectively.







	 	(e)	 	Open Registers: The Company will cause the Trustee to keep open the
registers of holders and registers of transfers referred to in Section 3.1 hereof as
required by such Section and will not take any action or omit to take any action which
would have the effect of preventing the Special Warrantholders from converting any of
the Special Warrants or receiving any of the Underlying Securities issuable upon such
conversion.







	 	(f)	 	Filings: The Company will make all requisite filings, including filings
with appropriate securities commissions and stock exchanges, in connection with the
conversion of the Special Warrants and the issue of the Underlying Securities in
connection therewith.







	 	(g)	 	Notice of Receipt: Upon the issuance of a receipt therefor, the Company
will send or cause to be sent to each Special Warrantholder a commercial copy of the
Final Prospectus and written notice specifying the date that the Special Warrants
expire
and such notice will be sent within one Business Day after the British Columbia
Securities Commission, as the principal regulator under National Policy 11-202 and
the Passport System, issues the Final Receipt.





 


32









 











	 	(h)	 	General Performance: The Company, using reasonable commercial efforts,
will well and truly perform and carry out all acts and things to be done by it as
provided in this Indenture or in order to consummate the transactions contemplated
hereby and it will do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, all other acts, deeds and assurances in law as the Trustee
may reasonably require for the better accomplishing and effecting of the intentions and
provisions of this Indenture, including without limitation, to execute and deliver the
Warrant Indenture as of the date hereof.







	 	(i)	 	Reporting Issuer Status: The Company will use its commercially
reasonable efforts to maintain its status as a reporting issuer in each of the
Qualifying Jurisdictions and not be in default in any material respect of the
applicable requirements of the applicable securities laws of each of the Qualifying
Jurisdictions.







	 	(j)	 	Listing or Quotation of Common Shares: The Company will use
commercially reasonable efforts to maintain the listing of its Common Shares on TSX and
the quotation of its Common Shares on the NASDAQ Stock Market for a period of 18 months
from the date hereof.







	 	(k)	 	Final Prospectus: The Company will use commercially reasonable efforts
to file and cause the Ontario Securities Commission, and the British Columbia
Securities Commission, as the principal regulator under National Policy 11-202 and the
Passport System, to issue the Final Receipt as soon as reasonably practicable.







	 	(l)	 	Disclosure Documentation: The Company will provide to Special
Warrantholders copies of all documentation required to be provided by applicable law to
registered holders of Common Shares, as if such Special Warrantholders were registered
shareholders of the Company.







	 	(m)	 	Notice of Distribution: It will give written notice to the Trustee and
each Special Warrantholder specifying the particulars of each payment or distribution
made in accordance with Section 4.7, within three Business Days of such payment or
distribution.






Any notices or deliveries required to be provided to holders of Special Warrants hereunder will be
sent by prepaid mail or delivery to each holder of Special Warrants at the address of such holder
appearing on the register of Special Warrants maintained hereunder.


 


33









 





5.2 Remuneration and Expenses of Trustee




The Company will pay to the Trustee from time to time reasonable remuneration for the services
of the Trustee hereunder and will, on the request of the Trustee, pay to or reimburse the Trustee
for all reasonable expenses, disbursements and advances made or incurred by the Trustee in the
administration or execution of the duties and obligations hereof (including reasonable compensation
and disbursements of its counsel and other advisers and assistants not regularly in the employment
thereof), both before any default hereunder and thereafter until all duties of the Trustee
hereunder have been finally and fully performed, except any such expense, disbursement or advance
that arises out of or results from gross negligence, fraud, wilful misconduct or bad faith of the
Trustee.



5.3 Securities Qualification Requirements





	 	(a)	 	Compliance with Laws: If, in the opinion of counsel, any instrument
(not including a prospectus, except as contemplated by Section 5.1(j) hereof) is
required to be filed with, or any permission, order or ruling is required to be
obtained from, any securities regulatory authority or any stock exchange or any other
actions are required under any applicable law of the Qualifying Jurisdictions or any
stock exchange rules before any securities or property, including Underlying Securities
which a Special Warrantholder is entitled to receive pursuant to the conversion or
deemed conversion of a Special Warrant may properly and legally be issued and delivered
upon the conversion or deemed conversion of a Special Warrant, the Company covenants
that it will use reasonable efforts to file such instrument, obtain such permission,
order or ruling or take all such other actions at its expense, as is required or
appropriate in the circumstances.







	 	(b)	 	Notice of Issue: The Company will give written notice of, and will make
all necessary filings in respect of, the issue of the Underlying Securities pursuant to
the conversion or deemed conversion of Special Warrants, in such detail as may be
required, to any stock exchange upon which the Common Shares may be listed or to the
securities regulatory authority in any of the Qualifying Jurisdictions if there is
therein any applicable law, ruling or order requiring the giving of any such notice or
the making of any such filings in order that the subsequent disposition of the
Underlying Securities so issued will not be subject to the prospectus requirements of
such applicable law, ruling or order (subject to any hold periods applicable to
Underlying Securities issued pursuant to the conversion of Special Warrants prior to
the Qualification Date).







	 	(c)	 	No U.S. Registration: The Company has no obligation to register or
qualify the Special Warrants or the Underlying Securities under the U.S. Securities Act
or the securities laws of any state of the United States.





 


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5.4 Performance of Covenants by Trustee




If the Company fails to perform any of the obligations thereof under this Indenture, the
Trustee may notify the Special Warrantholders of such failure or may itself perform any of such
obligations capable of being performed by the Trustee, but will not be bound to do so or to notify
the Special Warrantholders that it is so doing. All amounts expended or advanced by the Trustee in
so doing will be repayable as provided in Section 5.2 hereof. No such performance, expenditure or
advance by the Trustee will relieve the Company of any default or of its continuing obligations
hereunder.



ARTICLE 6

ESCROWED FUNDS




6.1 Initial Escrowed Funds and Distribution Amounts




The Company will deposit or cause to be deposited the Initial Escrowed Funds with the Trustee
forthwith upon receipt thereof and the Trustee will accept and hold the Escrowed Funds in escrow
for and on behalf of the persons who have an interest therein pursuant hereto, will disburse and
deal with the Escrowed Funds in the manner contemplated by this Article 6 and at all times will
keep the Escrowed Funds in a segregated account, all on the terms and subject to the conditions
hereof. The Company acknowledges and agrees that it is a condition of the payment by the holders of
Special Warrants of the Issue Price therefor that the Escrowed Funds are held in escrow by the
Trustee in accordance with the provisions of this Article 6. The Trustee will retain the Escrowed
Funds for the benefit of the holders of Special Warrants and, upon the delivery of the Release and
Payment Certificate to the Trustee and satisfaction of the Release Condition, retroactively for the
benefit of the Company, in accordance with the provisions of this Article 6.



6.2 Qualified Investments





	 	(a)	 	Investment Directions: The Trustee will invest the Escrowed Funds in
Qualified Investments in its name in accordance with such directions as it may receive
from the Company from time to time. Any such direction will be in writing and will
specify the Qualified Investments to be made including, if applicable, the name of the
issuer. Any such direction will be provided to the Trustee no later than 9:00 a.m.
(Toronto time) on the day on which the investment is to be made. Any such direction
received by the Trustee after 9:00 a.m. (Toronto time) or received on a non-Business
Day, will be deemed to have been given prior to 9:00 a.m. (Toronto time) the next
Business Day. Any direction from the Company for the release of the Escrowed Funds must
be received prior to 11:00 a.m. (Toronto time) on the day on which the release of
Escrowed Funds is to be made. Any such direction for the release of Escrowed Funds
received after 11:00 a.m. (Toronto time) or on a non-Business Day, will be handled on a
commercially reasonable efforts basis and may result in Escrowed Funds being released
on the next Business Day.





 


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	 	(b)	 	Absence of Directions: In the event that the Trustee does not receive a
direction or only a partial direction to invest the Escrowed Funds in Qualified
Investments, the
Trustee may hold cash balances constituting part or all of the Escrowed Funds and
may, but need not, invest same in its deposit department, the deposit department of
one of its Affiliates, or the deposit department of a Canadian chartered bank; but
the Trustee, its Affiliates or a Canadian chartered bank will 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 Trustee,
its Affiliates or a Canadian chartered bank. For the purpose of this Section,
“Affiliate” means affiliated companies within the meaning of the Business
Corporations Act (British Columbia) (“BCBCA”); and includes Canadian Imperial Bank
of Commerce, CIBC Mellon Global Securities Services Company and Mellon Bank, N.A.
and each of their affiliates within the meaning of the BCBCA.







	 	(c)	 	Accounts: The Trustee will maintain accurate books, records and
accounts of the transactions effected or controlled by the Trustee hereunder and the
receipt, investment, re-investment and disbursement of the property hereunder and will
provide to the Company records and statements thereof periodically upon written
request.






6.3 Release of Escrowed Funds Upon Conversion of Special Warrants Prior to Receipt of Release and
Payment Certificate



If, at any time prior to the receipt by the Trustee of the Release and Payment Certificate, a
holder of Special Warrants elects to convert such Special Warrants into Underlying Securities
pursuant to Section 4.1 hereof, the Trustee will:




	 	(a)	 	notify the Company and the Agent in writing of the conversion of such Special
Warrants;







	 	(b)	 	subject to receiving a Certificate of the Company as to the amount of the
commission payable to the Agent in respect of the Special Warrants so converted, notify
the Company and the Agent in writing of the total amount of Escrowed Funds that will
remain in escrow after deducting an amount of the Escrowed Funds equal to, but not
exceeding, the aggregate Issue Price of the Special Warrants so converted, plus a pro
rata portion of any Earnings;







	 	(c)	 	provided that the total amount of Escrowed Funds that will remain in escrow
after such deduction will be not less than an amount equal to (i) the product obtained
by multiplying the number of unconverted Special Warrants by the Issue Price, plus (ii)
a pro rata portion of any Earnings, immediately liquidate any Qualified Investment of
the Escrowed Funds to the extent necessary to release to the Company and the Agent an
amount of the Escrowed Funds equal to, but not exceeding, the aggregate Issue Price of
the Special Warrants so converted, plus a pro rata portion of any Earnings; and







	 	(d)	 	release and deliver (i) to the Written Direction of the Company an amount of
the Escrowed Funds equal to, but not exceeding, the aggregate Issue Price of the
Special Warrants so converted, plus a pro rata portion of any Earnings, less an
amount equal to the commission payable to the Agent in respect of the converted
Special Warrants, and (ii) to, or to the written direction of the Agent, an amount
of the Escrowed Funds equal to the commission payable to the Agent in respect of the
converted Special Warrants.





 


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6.4 Release of Escrowed Funds Upon Receipt of Release and Payment Certificate





	 	(a)	 	Delivery of Certificate: Upon satisfaction of the Release Condition on
or before the Release Deadline, the Company will forthwith cause the Release and
Payment Certificate in the form attached as Schedule C hereto, executed by the Company
and acknowledged by the Agent to be delivered to the Trustee by facsimile or courier to
the address of the Trustee set out in Section 11.1. The Trustee will be entitled to act
and rely upon, and will be protected in acting and relying upon the Release and Payment
Certificate received from the Company.







	 	(b)	 	Liquidation of Qualified Investments: Upon receipt of the Release and
Payment Certificate, the Trustee will immediately liquidate any Qualified Investment of
the Escrowed Funds, as soon as reasonably practicable given standard business
investment standards.







	 	(c)	 	Release of Escrowed Funds: The Escrowed Funds will, as soon as
reasonably practicable following receipt by the Trustee of the Release and Payment
Certificate and the liquidation of any Qualified Investment of the Escrowed Funds, be
released and delivered by the Trustee as directed in the Release and Payment
Certificate.






6.5 Release of Escrowed Funds on Termination




If the Release Condition has not been satisfied at or prior to the Release Deadline, on the
Release Deadline, the Trustee will forthwith (and, in any event, no later than the Termination
Payment Time) return to each Special Warrantholder an amount equal to the Issue Price of each
Special Warrant held by such Special Warrantholder plus its pro rata share of any Earnings. For
greater certainty, a Special Warrantholder who has previously converted all or a portion of such
holder’s Special Warrants pursuant to Section 4.1(a) shall not be entitled to receive any Earnings
in respect of such Special Warrants so converted. In the event that the Escrowed Funds are not
sufficient to fund the return to each Special Warrantholder of an amount equal to the Issue Price
of each Special Warrant held by such Special Warrantholder plus its pro rata share of any Earnings
on the Release Deadline, the Company will fund any such shortfall at the time of payment of the
Escrowed Funds to the Special Warrantholders. Payment made in accordance with this Article 6 will
be made in accordance with Section 6.8 hereof and the Trustee will mail such payment to such
Special Warrantholders at their address last appearing on the register of the Special Warrants
maintained by the Trustee. All Special Warrant Certificates representing Special Warrants in
respect of which the aggregate Issue Price plus a pro rata share of any Earnings have been paid to
the holder thereof will be deemed to have been cancelled as and from the Termination Payment Time
and the Trustee will record the deemed cancellation of such Special Warrant Certificates on the
register of the Special Warrants. Upon the Written
Request of the Company, the Trustee will furnish the Company with a certificate identifying
the Special Warrant Certificates deemed to have been cancelled. All Special Warrants represented by
Special Warrant Certificates which have been deemed to have been cancelled pursuant to this
Section 6.5 will be without further force and effect whatsoever.


 


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6.6 Direction




In order to permit the Trustee to carry out its obligations under this Article 6, the Company
hereby specifically authorizes and directs the Trustee to make any stipulated payment or to take
any stipulated action in accordance with the provisions of this Indenture.



6.7 Early Termination of any Investment of the Escrowed Funds




In making any payment pursuant to this Indenture, the Trustee has the authority to liquidate
any investments in order to make payments contemplated under this Article 6 and will not be liable
for any loss sustained in the escrow account for early termination of any investment of the
Escrowed Funds necessary to enable the Trustee to make such payment.



6.8 Method of Disbursement and Delivery





	 	(a)	 	Method of Disbursement: All disbursements of money made in accordance
with the provisions of this Article 6 will be made by cheque drawn upon a Canadian
Schedule I chartered bank or by official cheque or wire transfer drawn upon the account
of the Trustee made payable to or to the order of the persons entitled to disbursement
and in the correct amount, and if not so directed, by wire transfer as may be directed
in writing by the Special Warrantholders, the Company or the Agent (less all amounts
required to be withheld by the Company by law, including without limitation, under the
Income Tax Act (Canada), as directed by the Company).







	 	(b)	 	Discharge of Trustee Upon Delivery: If the Trustee delivers any such
wire transfer or cheque as required under subsection 6.8(a), the Trustee will have no
further obligation or liability for the amount represented thereby, unless any such
wire transfer or cheque is not paid on due presentation; provided that in the event of
the non-receipt of such wire transfer or cheque by the payee, or the loss or
destruction of such cheque, the Trustee, upon being furnished with reasonable evidence
of such non-receipt, loss or destruction and funding and indemnity reasonably
satisfactory to it, will initiate a new wire transfer or issue to such payee a
replacement cheque for the amount of such wire transfer or cheque.






6.9 Acknowledgements





	 	(a)	 	Receipt of Initial Escrow Funds: The Trustee will acknowledge receipt
from the Company of the Initial Escrowed Funds by providing a written receipt and the
Trustee hereby confirms that such funds will, upon receipt, be deposited in a
segregated account in the name of the Company designated as “CIBC Mellon Trust Company
in trust for Ivanhoe Energy Inc. — Special Warrants” or as
otherwise directed by the Company and, pending the satisfaction of the Release
Condition, will be used in accordance with Section 6.2 and Section 10.4 hereof.





 


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	 	(b)	 	Company Direction to Trustee: The Company hereby:







	 	(i)	 	acknowledges that the amount to be received by the
Trustee pursuant to subsection 6.9(a) will represent the aggregate Issue
Price received by the Company for the Special Warrants; and







	 	(ii)	 	irrevocably directs the Trustee to retain such amounts in
accordance with the terms of this Indenture pending payment of such amounts
in accordance with the terms of this Indenture.






6.10 Miscellaneous





	 	(a)	 	Scope of Trustee’s Obligations and Duties: The Trustee will disburse
Escrowed Funds according to this Indenture only to the extent that Escrowed Funds have
been deposited with it. The Trustee will be protected in acting and relying upon any
written notice, request, waiver, consent, certificates, receipts, statutory declaration
or other paper or document furnished to it, not only as to its due execution and the
validity and 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. The Trustee will have no duties except those which are
expressly set forth herein, and it will not be bound by any notice of a claim or demand
with respect to, or any waiver, modification, amendment, termination or rescission of
this Indenture, unless received by it in writing, and signed by the parties hereto and
if its duties herein are affected, unless it will have given its prior written consent
thereto. The duties and obligations of the Trustee will be determined solely by the
provisions hereof and, accordingly, the Trustee will not be responsible except for the
performance of such duties and obligations as it has undertaken herein. The Trustee
will retain the right not to act and will not be held liable for refusing to act unless
it has received clear and reasonable instructions which comply with the terms of this
Indenture. Such documentation must not require the exercise of any discretion or
independent judgment. The Trustee is acting hereunder as Escrow Agent at the request of
the Company and the Special Warrantholders and will not be responsible as Escrow Agent
except for its duties of receiving, holding and disbursing the Escrowed Funds pursuant
to the terms and conditions of this Indenture. Any certificate of a party referred to
herein, unless otherwise specified, will, in the case of the Company, refer to a
certificate signed in the name of the Company by any officer or director of the
Company, and, in the case of any other party, refer to a certificate of an authorized
officer of such party. The Trustee will not be liable for any error in judgment or for
any act done or step taken or omitted by it in good faith or for any mistake, in fact
or law, or for anything which it may do or refrain from doing in connection therewith,
except arising out of its own gross negligence or wilful misconduct. In the event of
any disagreement arising regarding the terms of this Indenture, the Trustee will be
entitled, at its option, to
refuse to comply with any or all demands whatsoever until the dispute is settled,
either by agreement amongst the various parties or by a court of competent
jurisdiction. None of the provisions of this Indenture will require the 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.
The Trustee will not be responsible for any losses which may occur as a result of
the investment of the Escrowed Funds where the Escrowed Funds have been invested in
accordance with the terms of this Indenture.





 


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	 	(b)	 	Special Warrantholders’ Rights Against Escrowed Funds: In addition to
the other rights granted to holders of Special Warrants in this Indenture, until the
release of the Escrowed Funds pursuant to the terms of this Indenture, each holder of
Special Warrants has a pro rata claim against the Escrowed Funds, which claim will
subsist until such time as the Underlying Securities issuable upon the deemed
conversion of the Special Warrants are issued or such amount is paid to such holder in
full. In the event that, prior to the release of the Escrowed Funds in accordance with
the terms of this Indenture, the Company: (i) makes a general assignment for the
benefit of creditors or any proceeding is instituted by the Company seeking relief on
behalf thereof as a debtor, or to adjudicate the Company a bankrupt or insolvent, or
seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition
of the Company or the debts of the Company under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking appointment of a receiver,
receiver and manager, trustee, custodian or similar official for the Company or any
substantial part of the property and assets of the Company or the Company takes any
corporate action to authorize any of the actions set forth above; or (ii) is declared
bankrupt, or a receiver, receiver and manager, trustee, custodian or similar official
is appointed for the Company or any substantial part of its property and assets of the
Company or an encumbrancer legally takes possession of any substantial part of the
property or assets of the Company or a distress or execution or any similar process is
levied or enforced against such property and assets and remains unsatisfied for such
period as would permit such property or such part thereof to be sold thereunder, the
right of each holder of Special Warrants to be issued Common Shares or Warrants upon
the deemed conversion of the Special Warrants of such holder will terminate and such
holder will be entitled to assert a claim against the Escrowed Funds and Earnings in an
amount equal to its pro rata share of the Escrowed Funds and Earnings less any
withholding tax or charges required to be withheld in respect thereof.







	 	(c)	 	Unclaimed Amounts: In the event that the Trustee holds any amount of
interest or other distributable amount which is unclaimed or which cannot be paid for
any reason other than the negligence or wilful misconduct of the Trustee, the Trustee
will be under no obligation to invest or reinvest the same but will only be obligated
to hold the same on behalf of the person or persons entitled thereto in a current or
other non-interest bearing account pending payment to the person or persons entitled
thereto. The Trustee will, as and when required by law, and may
at any time prior to such required time, pay all or part of such interest or other
distributable amount so held to the Public Trustee of British Columbia (or other
appropriate official or agency), whose receipt will be good discharge and release of
the Trustee for such amounts.





 


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	 	(d)	 	Reliance: The Trustee will be entitled to act and rely absolutely on
the Release and Payment Certificate and will be entitled to release the Escrowed Funds
upon the receipt of the Release and Payment Certificate as provided for in this
Indenture.






6.11 Tax Reporting




The Trustee will prepare, file and, to the extent required, mail to the Company and Special
Warrantholders any tax filings, forms or elections required in connection with amounts distributed
by the Trustee to the Company or the Special Warrantholders in accordance with this Indenture as
directed from time to time by the Company pursuant to a Written Direction of the Company.



ARTICLE 7

ENFORCEMENT




7.1 Suits by Special Warrantholder




All or any of the rights conferred on the holder of any Special Warrant by the terms of the
Special Warrant Certificate representing such Special Warrant or of this Indenture may be enforced
by such holder by appropriate legal proceedings but without prejudice to the right which is hereby
conferred on the Trustee to proceed in the name thereof or on behalf of the holders of Special
Warrants to enforce each and every provision herein contained for the benefit of the Special
Warrantholders.



7.2 Limitation of Liability




The obligations hereunder are not personally binding on, nor will resort hereunder be had to
the private property of, any past, present or future director, shareholder, officer, employee or
agent of the Company, but only the property of the Company or any successor entity will be bound in
respect hereof.



ARTICLE 8

MEETINGS OF SPECIAL WARRANTHOLDERS




8.1 Right to Convene Meetings





	 	(a)	 	Convening of Meeting: The Trustee may at any time and from time to time
convene a meeting of Special Warrantholders (which meeting will include the holders of
Option Special Warrants and for purposes of this Article 8, Special Warrantholders
includes holders of Option Special Warrants and Special Warrants includes Option
Special Warrants), and will do so on receipt of a
Written Request of the Company or a Special Warrantholders’ Request and on being
funded and indemnified to its reasonable satisfaction by the Company or by one or
more of the Special Warrantholders signing such Special Warrantholders’ Request
against the costs which it may incur in connection with calling and holding such
meeting.





 


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	 	(b)	 	Failure to Convene: If the Trustee fails, within ten days after receipt
of such Written Request of the Company or Special Warrantholders’ Request, funding and
indemnification, to give notice convening a meeting, the Company or any of such Special
Warrantholders, as the case may be, may convene such meeting.







	 	(c)	 	Place of Meeting: Every such meeting will be held in Vancouver, British
Columbia, or such other place as is approved or determined by the Trustee and the
Company.






8.2 Notice





	 	(a)	 	Notice: At least 21 days’ notice of any meeting must be given to the
Special Warrantholders in the manner provided for in Section 11.2, to the Trustee
(unless the meeting has been called by it) and to the Company (unless the meeting has
been called by it).







	 	(b)	 	Contents: The notice of the meeting must state the time when and the
place where the meeting is to be held and must state briefly the general nature of the
business to be transacted thereat, and will contain such information as is reasonably
necessary to enable the Special Warrantholders to make a reasoned decision on the
matter, but it will not be necessary for the notice to set out the terms of any
resolution to be proposed or any of the provisions of this article.






8.3 Chairman




An individual (who need not be a Special Warrantholder) designated in writing by the Trustee,
or by the Company in the case of a meeting called by the Company, will be chairman of the meeting
or, if no individual is so designated or the individual so designated is not present within 15
minutes after the time fixed for the holding of the meeting, the Special Warrantholders present in
person or by proxy may choose an individual present to be chairman.



8.4 Quorum





	 	(a)	 	Quorum: Subject to the provisions of Section 8.12 hereof, at any
meeting of Special Warrantholders a quorum will consist of two or more Special
Warrantholders, present in person or represented by proxy at the commencement of the
meeting, who hold in the aggregate not less than 25% of the total number of Special
Warrants then outstanding.





 


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	 	(b)	 	No Quorum: If a quorum of Special Warrantholders is not present within
30 minutes after the time appointed for holding a meeting, the meeting, if convened
by Special Warrantholders or on a Special Warrantholders’ Request, will be
dissolved, but, subject to Section 8.12 hereof, in any other case will stand
adjourned to the same day in the next week (unless such day is not a Business Day,
in which case it will be adjourned to the next following Business Day) at the same
time and place and no notice of the adjournment need be given.







	 	(c)	 	Adjourned Meeting: At the adjourned meeting the Special Warrantholders
present in person or by proxy will form a quorum and may transact any business for
which the meeting was originally convened notwithstanding the number of Special
Warrants that they hold.






8.5 Power to Adjourn




The chairman of a meeting at which a quorum of Special Warrantholders is present may, with the
consent of the meeting, adjourn the meeting, and no notice of such adjournment need be given except
as the meeting prescribes.



8.6 Show of Hands




Every question submitted to a meeting, other than an Extraordinary Resolution, will be decided
in the first place by a majority of the votes given on a show of hands and, 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
will be conclusive evidence of the fact.



8.7 Poll





	 	(a)	 	Extraordinary Resolution: On every Extraordinary Resolution, and on
every other question submitted to a meeting on which a poll is directed by the chairman
or requested by one or more Special Warrantholders acting in person or by proxy and
holding in the aggregate not less than 5% of the total number of Special Warrants then
outstanding, a poll will be taken in such manner as the chairman directs.







	 	(b)	 	Other: Questions other than those required to be determined by
Extraordinary Resolution will be decided by a majority of the votes cast on the poll.






8.8 Voting




On a show of hands each person present and entitled to vote, whether as a Special
Warrantholder or as proxy for one or more absent Special Warrantholder, or both, will have one
vote, and on a poll each Special Warrantholder present in person or represented by a proxy duly
appointed by instrument in writing will be entitled to one vote in respect of each Special Warrant
held by such holder. A proxy need not be a Special Warrantholder.


 


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8.9 Regulations





	 	(a)	 	Ability to Make: The Trustee, or the Company with the approval of the
Trustee, may from time to time make or vary such regulations as it thinks fit:







	 	(i)	 	for the form of instrument appointing a proxy, the manner
in which it must be executed and verification of the authority of a person
who executes it on behalf of a Special Warrantholder;







	 	(ii)	 	governing the places at which and the times by which
voting certificates or instruments appointing proxies must be deposited;







	 	(iii)	 	generally for the calling of meetings of Special
Warrantholders and the conduct of business thereof;







	 	(iv)	 	for the issue of voting certificates by any bank, trust
company or other depositary satisfactory to the Trustee stating that the
Special Warrant Certificates specified therein have been deposited with it
by a named person and will remain on deposit until after the meeting, which
voting certificate will entitle the persons named therein to be present and
vote at any such meeting and at any adjournment thereof or to appoint a
proxy or proxies to represent them and vote for them at any such meeting and
at any adjournment thereof in the same manner and with the same effect as
though the persons so named in such voting certificates were the actual
holders of the Special Warrant Certificates specified therein; and







	 	(v)	 	for the deposit of voting certificates and instruments
appointing proxies at some approved place or places other than the place at
which the meeting is to be held and authorizing particulars of such
instruments appointing proxies to be sent by mail, facsimile or other means
of prepaid, transmitted, recorded communication before the meeting to the
Company or to the Trustee at the place where the meeting is to be held and
for voting pursuant to instruments appointing proxies so deposited as though
the instruments themselves were produced at the meeting.







Any regulations so made will be binding and effective and the votes given in
accordance therewith will be valid and will be counted.




	 	(b)	 	Recognition: Except as such regulations provide, the only persons who
will be recognized at a meeting as the holders of any Special Warrants, or as entitled
to vote or, subject to Section 8.10 hereof, to be present at the meeting in respect
thereof, will be the registered holders of such Special Warrants or their duly
appointed proxies and their counsel.





 


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8.10 The Company and Trustee may be Represented




The Company and the Trustee by their respective employees, officers or directors, and the
counsel of the Company and the Trustee, may attend any meeting of Special Warrantholders, but will
not be entitled to vote thereat, whether in respect of any Special Warrants held by them or
otherwise.



8.11 Powers Exercisable by Extraordinary Resolution




In addition to all other powers conferred on them by the other provisions of this Indenture or
by law, the Special Warrantholders at a meeting will, subject to Section 8.12 have the power,
exercisable from time to time by Extraordinary Resolution:




	 	(a)	 	to agree to or sanction any modification, abrogation, alteration or compromise
of the rights of the Special Warrantholders or (subject to the prior consent of the
Trustee therefor) the Trustee in its capacity as Special Warrant agent and trustee
hereunder or on behalf of Special Warrantholders against the Company which shall be
agreed to by the Company whether such rights arise under this Indenture or under the
Special Warrant Certificates or otherwise;

	 
	 	(b)	 	to amend, alter or repeal any Extraordinary Resolution previously passed;







	 	(c)	 	subject to arrangements as to financing and indemnity satisfactory to the
Trustee, to direct or authorize the Trustee to enforce any obligation of the Company
under this Indenture or to enforce any right of the Special Warrantholders in any
manner specified in the Extraordinary Resolution;







	 	(d)	 	to direct or authorize the Trustee to refrain from enforcing any obligation or
right referred to in Section 8.11(c) hereof;







	 	(e)	 	to waive and direct the Trustee to waive any default by the Company in
complying with any provision of this Indenture, either unconditionally or on any
condition specified in the Extraordinary Resolution;







	 	(f)	 	to appoint a committee with power and authority to exercise, and to direct the
Trustee to exercise, on behalf of the Special Warrantholders, such of the powers of the
Special Warrantholders as are exercisable by Extraordinary Resolution;







	 	(g)	 	to restrain any Special Warrantholder from taking or instituting any suit,
action or proceeding against the Company for the enforcement of any obligation of the
Company under this Indenture or to enforce any rights of the Special Warrantholders;







	 	(h)	 	to direct any Special Warrantholder who, as such, has brought any suit, action
or proceeding, to stay or discontinue or otherwise deal therewith on payment of the
costs, charges and expenses reasonably and properly incurred by him in connection
therewith;





 


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	 	(i)	 	to assent to any change in or omission from the provisions contained in the
Special Warrant Certificates and this Indenture or any ancillary or supplemental
instrument which may be agreed to by the Company, and to authorize the Special
Warrantholders to concur in and execute any ancillary or supplemental indenture
embodying the change or omission;







	 	(j)	 	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 shares or other securities of the Company; and







	 	(k)	 	from time to time and at any time to remove the Trustee and appoint a
successor, agent or trustee.






8.12 Meaning of “Extraordinary Resolution”





	 	(a)	 	Meaning: The expression “Extraordinary Resolution” when used in this
Indenture means, subject to the provisions of this Section 8.12 and of Sections 8.15
and 8.16 hereof, a motion proposed at a meeting of Special Warrantholders duly convened
for that purpose and held in accordance with the provisions of this Article 8 at which
there are present in person or by proxy Special Warrantholders holding in the aggregate
at least 25% of the total number of Special Warrants then outstanding and passed by the
affirmative votes of Special Warrantholders who hold in the aggregate not less than 66
2/3% of the total number of Special Warrants represented at the meeting and voted on
the motion.







	 	(b)	 	Quorum: If, at a meeting called for the purpose of considering an
Extraordinary Resolution, the quorum required by Section 8.12(a) hereof is not present
within 30 minutes after the time appointed for the meeting, the meeting, if convened by
Special Warrantholders or on a Special Warrantholders’ Request, will be dissolved, but
in any other case will stand adjourned to such day, being not less than ten Business
Days or more than 30 Business Days later, and to such place and time, as is appointed
by the chairman.







	 	(c)	 	Notice: Not less than seven Business Days’ notice must be given to the
Special Warrantholders of the time and place of such adjourned meeting.







	 	(d)	 	Form of Notice: The notice must state that at the adjourned meeting the
Special Warrantholders present in person or by proxy will form a quorum but it will not
be necessary to set forth the purposes for which the meeting was originally called or
any other particulars.







	 	(e)	 	Quorum at Adjourned Meeting: At the adjourned meeting the Special
Warrantholders present in person or by proxy will form a quorum and may transact any
business for which the meeting was originally convened, and a motion proposed at such
adjourned meeting and passed by the requisite vote as provided in Section 8.12(a)
hereof will be an Extraordinary Resolution within the meaning of this Indenture
notwithstanding that Special Warrantholders holding in
the aggregate 25% of the total number of Special Warrants outstanding may not be
present in person or by proxy.







	 	(f)	 	Poll: Votes on an Extraordinary Resolution must always be given on a
poll and no demand for a poll on an Extraordinary Resolution will be necessary.





 


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8.13 Powers Cumulative




Any one or more of the powers, and any combination of the powers, in this Indenture stated to
be exercisable by the Special Warrantholders by Extraordinary Resolution or otherwise, may be
exercised from time to time, and the exercise of any one or more of such powers or any combination
of such powers from time to time will not prevent the Special Warrantholders from exercising such
power or powers or combination of powers thereafter from time to time.



8.14 Minutes




Minutes of all resolutions passed and proceedings taken at every meeting of Special
Warrantholders will be made and duly entered in books from time to time provided for such purpose
by the Trustee at the expense of the Company, and any such minutes, if signed by the chairman of
the meeting at which such resolutions were passed or such proceedings were taken, will 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 have been so made, entered and signed will be deemed
to have been duly convened and held, and all resolutions passed and proceedings taken thereat to
have been duly passed and taken.



8.15 Instruments in Writing




Any action that may be taken and any power that may be exercised by Special Warrantholders at
a meeting held as provided in this Article 8 may also be taken and exercised by Special
Warrantholders who hold in the aggregate not less than 50% of the total number of Special Warrants
at the time outstanding or in the case of an Extraordinary Resolution, Special Warrantholders who
hold in the aggregate not less than 66 2/3% of the total number of Special Warrants at the time
outstanding, by their signing, each in person or by attorney duly appointed in writing, an
instrument in writing in one or more counterparts, and the expression “Extraordinary Resolution”
when used in this Indenture includes a resolution embodied in an instrument so signed.



8.16 Binding Effect of Resolutions




Every resolution and every Extraordinary Resolution passed in accordance with the provisions
of this Article 8 at a meeting of Special Warrantholders will be binding on all Special
Warrantholders, whether present at or absent from the meeting and whether voting for or against the
resolution or abstaining, and every instrument in writing signed by Special Warrantholders in
accordance with Section 8.15 hereof will be binding on all Special Warrantholders, whether
signatories thereto or not, and every Special Warrantholder and the
Trustee (subject to the provisions for its indemnity herein contained) will be bound to give
effect accordingly to every such resolution and instrument in writing.


 


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8.17 Holdings by the Company and Subsidiaries Disregarded




In determining whether Special Warrantholders holding the required total number of Special
Warrants are present in person or by proxy for the purpose of constituting a quorum, or have voted
or consented to a resolution, Extraordinary Resolution, consent, waiver, Special Warrantholders’
Request or other action under this Indenture, a Special Warrant held by the Company or by a
Subsidiary of the Company will be deemed to be not outstanding. The Company will provide the
Trustee with a certificate of the Company providing details of any Special Warrants held by the
Company or by a Subsidiary of the Company upon the written request of the Trustee.



ARTICLE 9

SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS




9.1 Provision for Supplemental Indentures for Certain Purposes




From time to time the Company (when authorized by the directors and subject to any applicable
regulatory approvals) and the Trustee may, subject to the provisions hereof, and will when so
directed hereby, execute and deliver by their proper officers indentures or instruments
supplemental hereto, which thereafter will form part hereof, for any or all of the following
purposes:




	 	(a)	 	increasing the number of Special Warrants authorized for issue hereunder and
the corresponding number of Underlying Securities to which Special Warrantholders are
entitled;







	 	(b)	 	setting forth any adjustments resulting from the application of the provisions
of Section 4.7 hereof;







	 	(c)	 	adding hereto such additional covenants and enforcement provisions as in the
opinion of counsel are necessary or advisable, and are not in the opinion of the
Trustee, relying on the advice of counsel, prejudicial to the interests of the Special
Warrantholders or any of them;







	 	(d)	 	giving effect to any Extraordinary Resolution passed as provided in Article 8
hereof;







	 	(e)	 	making such provisions not inconsistent with this Indenture as are (i)
necessary or desirable with respect to matters or questions arising hereunder or for
the purpose of obtaining a listing or quotation of the Common Shares on a stock
exchange or over-the-counter market, and (ii) not, in the opinion of counsel,
prejudicial to the interests of the Special Warrantholders;





 


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	 	(f)	 	adding to, deleting or altering the provisions hereof in respect of the
transfer of Special Warrants or the conversion of Special Warrant Certificates, and
making any modification in the form of the Special Warrant Certificates that does not
affect the substance thereof;







	 	(g)	 	modifying any provision of this Indenture (including, without limitation,
making any modification which increases the number or amount of Common Shares issuable
pursuant to the Special Warrants) or relieving the Company from any obligation,
condition or restriction herein contained, except that no such modification or relief
will be or become operative or effective if, in the opinion of counsel, it would impair
any right of the Special Warrantholders or of the Trustee, and the Trustee may in its
uncontrolled discretion decline to enter into any such supplemental indenture which, in
its opinion, will not afford adequate protection to the Trustee when it becomes
operative; and







	 	(h)	 	for any other purpose not inconsistent with the terms of this Indenture,
including the correction or rectification of any ambiguity, defective or inconsistent
provision, error or omission herein, if in the opinion of counsel, the rights of the
Trustee and of the Special Warrantholders are not prejudiced thereby.






9.2 Successor Entities




In the case of the consolidation, amalgamation, arrangement, merger, other form of business
combination or transfer of the undertaking or assets of the Company as an entirety, or
substantially as an entirety, to another corporation or other entity, the successor corporation or
other entity resulting from such consolidation, amalgamation, arrangement, merger, other form of
business combination or transfer (if not the Company) will be bound by the provisions hereof and
for the due and punctual performance and observance of each and every covenant and obligation
contained in this Indenture to be performed by the Company and will execute and deliver to the
Trustee a supplemental indenture and such other instruments as are satisfactory in form to the
Trustee and in the opinion of counsel are necessary or advisable to evidence the express assumption
by the successor corporation of such obligations.



ARTICLE 10

CONCERNING TRUSTEE




10.1 Trust Indenture Legislation




If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
a mandatory requirement of Applicable Legislation, the mandatory requirement will prevail. The
Company, the Agent and the Trustee each will at all times in relation to this Indenture and any
action to be taken hereunder observe and comply with and be entitled to the benefits of Applicable
Legislation.


 


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10.2 Rights and Duties of Trustee





	 	(a)	 	Duty of Trustee: In the exercise of the rights and duties prescribed or
conferred by the terms of this Indenture, the Trustee will act honestly and in good
faith and will exercise that degree of care, diligence and skill that a reasonably
prudent special warrant agent would exercise in comparable circumstances. The Trustee
will not be bound to give any notice or do or take any act, action or proceeding by
virtue of the powers conferred on it hereby unless and until it will have been required
so to do under the terms hereof; nor will the Trustee be required to take notice of any
default hereunder, unless and until notified in writing of such default, which notice
will distinctly specify the default desired to be brought to the attention of the
Trustee and, in the absence of any such notice, the Trustee may for all purposes of
this Indenture conclusively assume that no default has been made in the observance or
performance of any of the representations, warranties, covenants, agreements or
conditions contained therein. Any such notice will in no way limit any discretion
herein given to the Trustee to determine whether or not the Trustee will take action
with respect to any default.







	 	(b)	 	No Relief From Liability: No provision of this Indenture will be
construed to relieve the Trustee from liability for its own negligent act, negligent
failure to act, wilful misconduct or bad faith.







	 	(c)	 	Actions: The obligation of the Trustee to commence or continue any act,
action or proceeding in connection herewith, including without limitation, for the
purpose of enforcing any right of the Trustee or the Special Warrantholders hereunder
is on the condition that the Trustee will have received a Special Warrantholders’
Request specifying the act, action or proceeding which the Trustee is requested to take
and, when required by notice to the Special Warrantholders by the Trustee, the Trustee
is furnished by one or more Special Warrantholders with sufficient funds to commence or
continue such act, action or proceeding and an indemnity reasonably satisfactory to the
Trustee to protect and hold it harmless against the costs, charges, expenses and
liabilities to be incurred thereby and any loss and damage it may suffer by reason
thereof.







	 	(d)	 	Funding: No provision of this Indenture will require the 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 it is so
indemnified.







	 	(e)	 	Deposit of Special Warrants: The Trustee may, before commencing or at
any time during the continuance of any such act, action or proceeding, require the
Special Warrantholder at whose instance it is acting to deposit with the Trustee the
Special Warrant Certificates held by them, for which certificates the Trustee will
issue receipts.







	 	(f)	 	Restriction: Every provision of this Indenture that relieves the
Trustee of liability or entitles it to rely on any evidence submitted to it is subject
to the provisions of (i) Applicable Legislation, (ii) this Section 10.2(f) and (iii)
Section 10.3 hereof.





 


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10.3 Evidence, Experts and Advisers





	 	(a)	 	Evidence: In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Company will furnish to the Trustee such
additional evidence of compliance with any provision hereof, and in such form, as is
prescribed by Applicable Legislation or as the Trustee reasonably requires by written
notice to the Company.







	 	(b)	 	Reliance by Trustee: In the exercise of any right or duty hereunder the
Trustee, if it is acting in good faith, may act and rely, as to the truth of any
statement or the accuracy of any opinion expressed therein, on any statutory
declaration, opinion, report, certificate or other evidence furnished to the Trustee
pursuant to the provisions hereof or of Applicable Legislation or pursuant to a request
of the Trustee, if such evidence complies with Applicable Legislation and the Trustee
examines such evidence and determines that it complies with the applicable requirements
of this Indenture.







	 	(c)	 	Statutory Declaration: Whenever Applicable Legislation requires that
evidence referred to in Section 10.3(a) hereof be in the form of a statutory
declaration, the Trustee may accept such statutory declaration in lieu of a Certificate
of the Company required by any provision hereof. Any such statutory declaration may be
made by any one or more of the Chairman, President, Chief Financial Officer or
Secretary of the Company or by any other officer(s) or director(s) of the Company to
whom such authority is delegated by the directors from time to time. In addition, the
Trustee may act and rely and will be protected in acting and relying upon any
resolution, certificate, direction, instruction, statement, instrument, opinion,
report, notice, request, consent, order, letter, telegram, cablegram or other paper or
document believed by it to be genuine and to have been signed, sent or presented by or
on behalf of the proper party or parties.







	 	(d)	 	Proof of Execution: Proof of the execution of any document or
instrument in writing, including a Special Warrantholders’ Request, by a Special
Warrantholder may be made by the certificate of a notary public, or other officer with
similar powers, that the person signing such instrument acknowledged to him the
execution thereof, or by an affidavit of a witness to such execution, or in any other
manner that the Trustee considers adequate.







	 	(e)	 	Experts: The Trustee may employ or retain such counsel, accountants,
appraisers, or other experts or advisers as it reasonably requires for the purpose of
determining and discharging its rights and duties hereunder and may pay the reasonable
remuneration and disbursements for all services so performed by any of them, without
taxation of costs of any counsel, and will not be responsible for any misconduct or
negligence on the part of any of them who has been selected with due care by the
Trustee. The Trustee may act and rely and will be protected in acting or not acting and
relying in good faith on the opinion or advice of or information obtained from any
counsel, accountant or other expert or advisor,
whether retained or employed by the Company or by the Trustee, in relation to any
matter arising in the administration of the duties and obligations hereof.





 


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10.4 Documents, Money, Etc. held by Trustee




Any security, document of title or other instrument that may at any time be held by the
Trustee subject to the provisions of this Indenture hereof may be placed in the deposit vaults of
the Trustee or of any Canadian chartered bank or deposited for safekeeping with any such bank.



The Trustee shall maintain accurate books, records and accounts of the transactions effected
or controlled by the Trustee hereunder and the receipt, investment, reinvestment and disbursement
of the property hereunder and shall provide to the Company records and statements thereof
periodically upon request.



10.5 Action by Trustee to Protect Interests




The Trustee will have power to institute and to maintain such actions and proceedings as it
considers necessary or expedient to protect or enforce its interests and the interests of the
Special Warrantholders.



10.6 Trustee not Required to Give Security




The Trustee will not be required to give any bond or security in respect of the execution of
the duties and obligations and powers of this Indenture.



10.7 Protection of Trustee





	 	(a)	 	Protection: By way of supplement to the provisions of any applicable
law for the time being relating to Agent, it is expressly declared and agreed that:







	 	(i)	 	the Trustee will not be liable for or by reason of, or
required to substantiate, any statement of fact, representation or recital
in this Indenture or in the Special Warrant Certificates (except the
representation contained in Section 10.9 hereof or in the certificate of the
Trustee on the Special Warrant Certificates or other representation of the
Trustee made herein or therein), but all such statements or recitals are and
will be deemed to be made by the Company;







	 	(ii)	 	nothing herein contained will impose on the Trustee any
obligation to see to, or to require evidence of, the registration or filing
(or renewal thereof) of this Indenture or any instrument ancillary or
supplemental hereto;







	 	(iii)	 	the Trustee will not be bound to give notice to any
person of the execution hereof;







	 	(iv)	 	the Trustee will not incur any liability or
responsibility whatsoever or be in any way responsible for the consequence
of any breach by the Company
of any obligation or warranty herein contained or of any act of any
director, officer, employee or agent of the Company;





 


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	 	(v)	 	the Trustee, in its personal or any other capacity, may
buy, lend upon and deal in securities of the Company and in the Special
Warrants and generally may contract and enter into financial transactions
with the Company or any related corporation without being liable to account
for any profit made thereby;







	 	(vi)	 	the Trustee will incur no liability with respect to the
delivery or non-delivery of any certificate or certificates whether
delivered by hand, mail or any other means provided that they are sent in
accordance with the provisions hereof;







	 	(vii)	 	if the Trustee delivers any cheque as required
hereunder, the Trustee will have no further obligation or liability for the
amount represented thereby, unless any such cheque is not honoured on
presentation, provided that in the event of the non-receipt of such cheque
by the payee, or the loss or destruction thereof, the Trustee, upon being
furnished with reasonable evidence of such non-receipt, loss or destruction
and, if required by the Trustee, an indemnity reasonably satisfactory to it,
will issue to such payee a replacement cheque for the amount of such cheque;
and







	 	(viii)	 	the Trustee will disburse funds in accordance with the provisions hereof
only to the extent that funds have been deposited with it.







	 	(b)	 	Indemnity: In addition to and without limiting any protection of the
Trustee hereunder or otherwise by law, the Company agrees to indemnify the Trustee,
employees, directors and officers (each an “Indemnified Person”), and save each
Indemnified Person harmless from all liabilities, suits, damages, costs, expenses and
actions which may be brought against or suffered by it arising out of or connected with
the performance by the Trustee of its duties hereunder, except to the extent that such
liabilities, suits, damages, costs and actions are attributable to the gross
negligence, fraud, wilful misconduct or bad faith of the Trustee or an Indemnified
Person. Notwithstanding any other provision hereof, this indemnity will survive any
removal or resignation of the Trustee, discharge of this Indenture and termination of
any duties and obligations hereunder.







	 	(c)	 	Notice to Trustee: The Trustee will not be bound to give any notice or
do or take any act, action or proceeding by virtue of the powers conferred on it hereby
unless and until it will have been required to do so under the terms hereof; nor will
the Trustee be required to take notice of any default hereunder, unless and until
notified in writing of such default, which notice will describe the default desired to
be brought to the attention of the Trustee and in the absence of any such notice the
Trustee may for all purposes of this Indenture conclusively assume that no default has
been made in the observance or performance of any of the representations, warranties,
covenants, agreements or conditions contained herein.
Any such notice will in no way limit the discretion herein given to the Trustee to
determine whether or not the Trustee will take action with respect to any default.





 


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10.8 Replacement of Trustee





	 	(a)	 	Resignation: The Trustee may resign and be discharged from all further
duties and liabilities hereunder, except as provided in this Section 10.8, by giving to
the Company and the Special Warrantholders not less than 60 Business Days notice in
writing or, if a new Trustee has been appointed, such shorter notice as the Company
accepts as sufficient, provided that such resignation and discharge will be subject to
the appointment of a successor thereto in accordance with the provisions hereof.







	 	(b)	 	Removal: The Special Warrantholders by Extraordinary Resolution may at
any time remove the Trustee and appoint a new Trustee.







	 	(c)	 	Appointment of New Trustee: If the Trustee so resigns or is so removed
or is dissolved, becomes bankrupt, goes into liquidation or otherwise becomes incapable
of acting hereunder, the Company will forthwith appoint a new Trustee, unless a new
Trustee has already been appointed by the Special Warrantholders.







	 	(d)	 	Failure to Appoint: Failing such appointment by the Company, the
retiring Trustee or any Special Warrantholder may apply, at the expense of the Company,
to the British Columbia Supreme Court, on such notice as the Court directs, for the
appointment of a new Trustee.







	 	(e)	 	New Trustee: Any new Trustee appointed under this Section must be a
corporation authorized to carry on the business of a transfer agent or trust company in
the Provinces of Ontario and British Columbia and, if required by the Applicable
Legislation of any other province, in such other province. On any such appointment, the
new Trustee will be vested with the same powers, rights, duties and responsibilities as
if it had been originally named herein as Trustee without any further assurance,
conveyance, act or deed, but there will be immediately executed, at the expense of the
Company, all such conveyances or other instruments as, in the opinion of counsel, are
necessary or advisable for the purpose of assuring the transfer of such powers, rights,
duties and responsibilities to the new Trustee. The predecessor Trustee will transfer,
deliver and pay over to the successor new Trustee, who will be entitled to receive, all
monies, securities, records or other property held by the predecessor Trustee pursuant
to the terms hereof and the predecessor Trustee will thereupon be discharged as Trustee
hereunder. Any new Trustee so appointed by the Company or by the Court will be subject
to removal as aforesaid by the Special Warrantholders and by the Company.







	 	(f)	 	Notice of New Trustee: On the appointment of a new Trustee, the Company
will promptly give notice thereof to the Special Warrantholders in accordance with
Section 11.2(a) hereof.





 


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	 	(g)	 	Successor Trustee: A corporation into or with which the Trustee is
merged or consolidated or amalgamated, or a corporation succeeding to the business of
the Trustee, will be the successor to the Trustee hereunder without any further act on
its part or on the part of any party hereto if such corporation would be eligible for
appointment as a new Trustee under Section 10.8(e) hereof.







	 	(h)	 	Certificates: A Special Warrant Certificate certified but not delivered
by a predecessor Trustee may be delivered by the new or successor Trustee in the name
of the predecessor Trustee or successor Trustee.






10.9 Conflict of Interest




The Trustee represents to the Company that, at the time of the execution and delivery hereof,
no material conflict of interest exists between its role as Trustee hereunder and its role in any
other capacity and if a material conflict of interest arises hereafter it will, within 90 days
after ascertaining that it has such material conflict of interest, either eliminate the conflict of
interest or resign its duties and obligations hereunder.



10.10 Acceptance of Duties and Obligations




The Trustee hereby accepts the duties and obligations in this Indenture declared and provided
for and agrees to perform them on the terms and conditions herein set forth. The Trustee accepts
the duties and responsibilities under this Indenture solely as custodian, bailee and agent. No
trust is intended to be or will be created hereby and the Trustee will owe no duties hereunder as a
trustee. Neither the Trustee nor any person related to the Trustee will be appointed a receiver or
receiver and manager or liquidator of all or any part of the assets or undertaking of the Company.
The Trustee will not be required to give any bond or security in respect of the execution of the
trusts and powers on this Indenture or otherwise in respect of the premises.



ARTICLE 11

GENERAL




11.1 Notice to the Company and the Trustee





	 	(a)	 	Company: Unless herein otherwise expressly provided, a notice to be
given hereunder to the Company or the Trustee will be validly given if delivered or if
sent by registered letter, postage prepaid, or if sent by facsimile transmission (if
receipt of such transmission is confirmed):







	 	(i)	 	if to the Company:







Ivanhoe Energy Inc.

654-999 Canada Place

Vancouver, British Columbia V6C 3E1




Attention: Corporate Secretary


Facsimile: (604) 682-2060


 


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	 	(ii)	 	if to the Agent:

	 
	 	 	 	Macquarie Capital Markets Canada Ltd.

2020, 335 8th Avenue S.W.

Calgary, Alberta T2P 1C9


Attention: Thomas Ebbern

Facsimile: (403) 269-7870

	 
	 	(iii)	 	if to the Trustee:

	 
	 	 	 	CIBC Mellon Trust Company

1600 — 1066 West Hastings Street

Vancouver, British Columbia V6E 3X1

	 
	 	 	 	Attention: Corporate Trust Department

Facsimile: (604) 688-4301







and any such notice delivered or sent in accordance with the foregoing will be
deemed to have been received on the date of delivery or facsimile transmission or,
if mailed, on the second Business Day following the day of the mailing of the
notice. The original of any document sent by facsimile transmission to the Trustee
will be subsequently mailed to the Trustee.




	 	(b)	 	Change of Address: The Company, the Agent or the Trustee, as the case
may be, may from time to time notify the other in the manner provided in
Section 11.1(a) hereof of a change of address which, from the effective date of such
notice and until changed by like notice, will be the address of the Company, the Agent
or the Trustee, as the case may be, for all purposes of this Indenture.







	 	(c)	 	Postal Interruption: If, by reason of a strike, lockout or other work
stoppage, actual or threatened, involving Canadian postal employees, a notice to be
given to the Trustee or to the Company hereunder could reasonably be considered
unlikely to reach or likely to be delayed in reaching its destination, the notice will
be valid and effective only if it is delivered to an officer of the party to which it
is addressed. Any notice delivered in accordance with the foregoing will be deemed to
have been received on the date of delivery to such officer.





 


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11.2 Notice to Special Warrantholders





	 	(a)	 	Notice: Unless herein otherwise expressly provided, a notice to be
given hereunder to Special Warrantholders will be deemed to be validly given if the
notice is sent by ordinary surface or air mail, postage prepaid, addressed to the
Special Warrantholders or delivered (or so mailed to certain Special Warrantholders and
so delivered to the other Special Warrantholders) at their
respective addresses appearing on any of the registers of holders described in
Section 3.1 hereof, provided, however, that if, by reason of a strike, lockout or
other work stoppage, actual or threatened, involving Canadian postal employees, the
notice could reasonably be considered unlikely to reach or likely to be delayed in
reaching its destination, the notice will be valid and effective if it is printed
once in the national edition of the Globe & Mail. All notices may be given to
whichever of the holders of a Special Warrant (if more than one) is named first in
the appropriate register hereinbefore provided, and any notice so given shall be
sufficient notice to all holders of such Special Warrant and any other persons (if
any) interested in such Special Warrant.







	 	(b)	 	Date of Notice: A notice so given by mail or so delivered will be
deemed to have been given on the fifth Business Day after it has been mailed or on the
day on which it has been delivered, as the case may be, and a notice so given by
publication will be deemed to have been given on the day on which it has been published
as required. In determining under any provision hereof the date when notice of a
meeting or other event must be given, the date of giving notice will be included and
the date of the meeting or other event will be excluded. Accidental error or omission
in giving notice or accidental failure to mail notice to any Special Warrantholder will
not invalidate any action or proceeding founded thereon.






11.3 Satisfaction and Discharge of Indenture




If all certificates representing Underlying Securities required to be issued in compliance
with the provisions hereof have been issued hereunder in accordance with such provisions, if all
payments required to be made in compliance with the provisions of this Indenture have been made in
accordance with such provisions and payment to the Trustee of the fees and other remuneration
payable to the Trustee have been made, this Indenture will cease to be of further effect and, on
demand of and at the cost and expense of the Company and on delivery to the Trustee of a
Certificate of the Company stating that all conditions precedent to the satisfaction and discharge
of this Indenture have been complied with and on payment to the Trustee of the fees and other
remuneration payable to the Trustee, the Trustee will execute proper instruments acknowledging the
satisfaction of and discharging this Indenture, provided that if the Trustee has not then performed
any of its obligations hereunder, any such satisfaction and discharge of the Company’s obligations
hereunder shall not affect or diminish the rights of any Special Warrantholder or the Company
against the Trustee.



11.4 Sole Benefit of Parties and Special Warrantholders




Nothing in this Indenture or the Special Warrant Certificates, expressed or implied, will give
or be construed to give to any person other than the parties hereto and the Special Warrantholders,
as the case may be, any legal or equitable right, remedy or claim under this Indenture or the
Special Warrant Certificates, or under any covenant or provision herein or therein contained, all
such covenants and provisions being for the sole benefit of the parties hereto and the Special
Warrantholders.


 


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11.5 Discretion of Directors




Any matter provided herein to be determined by the directors will be determined by the
directors in their sole discretion, acting reasonably, and a determination so made will be
conclusive.



11.6 Counterparts and Formal Date




This Indenture may be executed in several counterparts, each of which when so executed will be
deemed to be an original and such counterparts together will constitute one and the same instrument
and notwithstanding the date of their execution will be deemed to be dated as of this Indenture.



11.7 Assignment




This Indenture may not be assigned by either party hereto without the consent in writing of
the other party. This Indenture shall enure to and bind the parties and their lawful successors and
permitted assigns.



[Remainder of page intentionally blank]



 


58









 







IN WITNESS WHEREOF the parties hereto have executed this Special Warrant Indenture as of the day
and year first above written.



	 	 	 	 	 
	IVANHOE ENERGY INC.	 	 
	 
	 	 	 	 
	Per:

	 	(signed) “Beverly A. Bartlett”
 

Name: Beverly A. Bartlett
	 	 
	 

	 	Title:   Vice President & Corporate Secretary	 	 
	 
	 	 	 	 
	MACQUARIE CAPITAL MARKETS CANADA LTD.	 	 
	 
	 	 	 	 
	Per:

	 	(signed) David Vetters
 

Name: David Vetters
	 	 
	 

	 	Title:   Managing Director	 	 
	 
	 	 	 	 
	Per:

	 	(signed) Josh Woitas
 

Name: Josh Woitas
	 	 
	 

	 	Title:   Senior Manager	 	 
	 
	 	 	 	 
	CIBC MELLON TRUST COMPANY	 	 
	 
	 	 	 	 
	Per:

	 	(signed) Tricia Murphy
 

Name: Tricia Murphy 


Title:   Manager, Client Relations
	 	 
	 
	 	 	 	 
	Per:

	 	(signed) Margot Sulymka
 

Name: Margot Sulymka
	 	 
	 

	 	Title:   Associate Manager, Corporate Trust	 	 







 


59









 







SCHEDULE A TO THE SPECIAL WARRANT INDENTURE DATED AS OF

JANUARY 25, 2010 AMONG IVANHOE ENERGY INC. MACQUARIE CAPITAL

 MARKETS CANADA LTD. AND

CIBC MELLON TRUST COMPANY



SPECIAL WARRANT CERTIFICATE




UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE
SECURITY BEFORE MAY •, 2010.”;



UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITARY
SERVICES INC. (“CDS”) TO IVANHOE ENERGY INC. (THE “ISSUER”) 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.



THE FOLLOWING LEGEND FOR U.S. PURCHASERS ONLY




THE SPECIAL WARRANTS (AS DEFINED BELOW), THE COMMON SHARES (AS DEFINED BELOW) AND THE WARRANTS (AS
DEFINED BELOW) ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND SUCH SPECIAL WARRANTS MAY NOT BE EXERCISED WITHIN THE UNITED STATES OR BY OR ON BEHALF
OF ANY PERSON IN THE UNITED STATES UNLESS REGISTERED UNDER THE SECURITIES ACT AND THE SECURITIES
LAWS OF ALL APPLICABLE STATES OF THE UNITED STATES OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. “UNITED STATES” IS AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.



“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY,
(B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES
ACT AND IN COMPLIANCE WITH CANADIAN LAWS AND REGULATIONS, (C) INSIDE THE UNITED STATES, PURSUANT TO
THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, OR (D) INSIDE OR OUTSIDE
THE UNITED STATES, PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LEGISLATION AFTER PROVIDING A LEGAL OPINION SATISFACTORY TO THE
COMPANY THAT SUCH TRANSFER IS EXEMPT FROM OR OTHERWISE NOT SUBJECT TO REGISTRATION UNDER THE U.S.
SECURITIES ACT AND APPLICABLE SECURITIES LAWS.”


 


 









 





	 	 	 
	Certificate Number:                     

	 	Number of Special Warrants:                     






SPECIAL WARRANTS




convertible into Common Shares and Warrants of




IVANHOE ENERGY INC.




THIS IS TO CERTIFY THAT, for value received,                      (the “holder”) is the
registered holder of the number of special warrants (“Special Warrants”) of Ivanhoe Energy Inc.
(the “Company”) specified above and is thereby entitled, without payment of any additional
consideration, to be issued fully paid and non-assessable common shares of the Company (“Common
Shares”) and common share purchase warrants of the Company (“Warrants” and together with the Common
Shares, the “Underlying Securities”)) on the first Business Day following the Qualification Date
(as defined in the Special Warrant Indenture hereinafter referred to) on the basis of one (1)
Common Share and one quarter of one (0.25) Warrant for each one Special Warrant, subject to
adjustment in accordance with the provisions of the Special Warrant Indenture.



This Special Warrant Certificate represents Special Warrants issued under the provisions of a
special warrant indenture (which indenture, together with all instruments supplemental or ancillary
thereto, is herein referred to as the “Special Warrant Indenture”) dated as of January •, 2010
among the Company, Macquarie Capital Markets Canada Ltd. and CIBC Mellon Trust Company (the
“Trustee”). Reference is hereby made to the Special Warrant Indenture for particulars of the rights
of the holders of the Special Warrants, the Company and the Trustee in respect thereof and of the
terms and conditions upon which the Special Warrants are issued and held, all to the same effect as
if the provisions of the Special Warrant Indenture were herein set forth in full, to all of which
the holder, by acceptance hereof, assents. In the event of a conflict between the provisions of
this Special Warrant Certificate and the Special Warrant Indenture, the terms of the Special
Warrant Indenture will govern. The Company will furnish to the holder, on request, a copy of the
Special Warrant Indenture. Terms used in this Special Warrant Certificate and not otherwise defined
herein have the meanings assigned to them in the Special Warrant Indenture.



An amount equal to the aggregate Issue Price paid for the Special Warrants has been deposited
in escrow with the Trustee, pending satisfaction of the Release Condition. Provided the Release
Condition is satisfied at or prior to the Release Deadline, the Escrowed Funds will be released as
directed by the Company in satisfaction of the commission payable to the Agent pursuant to the
Agency Agreement and the remainder to the Company. If the Release Condition is not satisfied at or
prior to the Release Deadline, the Trustee will return to each Special Warrantholder an amount
equal to the Issue Price paid by such holder and such holder’s pro rata entitlement to Earnings
less applicable withholding taxes, if any. If a Special Warrantholder elects to convert any Special
Warrants into Underlying Securities prior to the satisfaction of the Release Condition, the
aggregate Issue Price deposited in escrow in respect of the converted Special Warrants, together
with Earnings in respect thereof, will be released from escrow as directed by the Company for the
Company’s use in its absolute discretion and such
holder will no longer be entitled to the return of any Escrowed Funds if the Release Condition
is not satisfied by the Release Deadline.


 


2









 





The Special Warrants represented by this Special Warrant Certificate may be converted by the
holder at any time after the Effective Date and prior to the Time of Expiry; provided that if such
Special Warrants have not been converted as hereinafter provided prior to the Qualification Date,
such Special Warrants will be deemed to be converted into Underlying Securities by the Trustee for
and on behalf of the holder on the first Business Day following the Qualification Date without the
taking of any action by the holder, including the surrender of this Special Warrant Certificate,
which will thereupon be cancelled by the Trustee.



The holder of this Special Warrant and any transferee hereof are cautioned that in the event
that the Special Warrants are deemed to be converted, certificates representing the Underlying
Securities, will be mailed or delivered to the latest address of record of the registered holder or
to the direction of the registered holder, and the Company and the Trustee are not bound to take
notice of any transfers or assignments unless the transferee is a duly registered holder of the
Special Warrant prior to such mailing or delivery.



On and after the date of any conversion of the Special Warrants represented by this Special
Warrant Certificate, the holder will have no rights as a Special Warrantholder except to receive
certificates representing the Underlying Securities issued upon the conversion thereof to such
holder and as set forth in the Indenture.



The Company will not be obligated after the aggregation of the number of Underlying Securities
to be issued to a holder of Special Warrants to issue any fraction of an Underlying Securities on
the conversion of Special Warrants. If a holder of Special Warrants would otherwise be entitled to
a fractional Underlying Securities pursuant to the Special Warrants, the number of Underlying
Securities to be issued will be rounded down to the next whole number, if the holder is entitled to
receive less than 0.5 of an Underlying Securities and rounded up to the next whole number, if the
holder is entitled to receive 0.5 or more of an Underlying Securities, and the holder of such
Special Warrants will not be entitled to any cash compensation in respect of such fraction.



No Underlying Securities will be issued pursuant to any conversion of any Special Warrant if
the issue of such security would constitute a violation of the securities laws of the applicable
jurisdiction.



The Special Warrant Indenture provides for adjustments to the rights of the holders of Special
Warrants on the happening of certain stated events, including the subdivision or consolidation of
the outstanding Common Shares, certain distributions of Common Shares or of securities convertible
into or exchangeable for Common Shares or of other securities or assets of the Company, certain
offerings of rights, warrants or options and certain capital reorganizations.



The Special Warrant Indenture contains provisions making binding on all holders of Special
Warrants outstanding thereunder resolutions passed by holders of a specified majority
of all outstanding Special Warrants at meetings of such holders held in accordance with such
provisions and instruments in writing signed by holders of a specified majority of all outstanding
Special Warrants.


 


3









 





On presentation at the principal office of the Trustee in Vancouver, British Columbia, or
Toronto, Ontario, subject to the provisions of the Special Warrant Indenture and on compliance with
the reasonable requirements of the Trustee, one or more Special Warrant Certificates may be
exchanged at no cost to the holder for one or more Special Warrant Certificates of different
denominations representing in the aggregate the same number of Special Warrants as the Special
Warrant Certificate or Special Warrant Certificates being exchanged.



The Special Warrants represented by this Special Warrant Certificate may only be transferred,
upon compliance with the conditions prescribed in the Special Warrant Indenture, on the register of
transfers to be kept at the principal office of the Trustee in Vancouver, British Columbia, or
Toronto, Ontario by the holder or the executors, administrators or other legal representatives
thereof or the attorney thereof appointed by an instrument in writing in form and executed in a
manner satisfactory to the Trustee and, upon compliance with such requirements and such other
reasonable requirements as the Trustee may prescribe, such transfer will be duly recorded on such
register of transfers by the Trustee. Notwithstanding the foregoing, the Company will be entitled,
and may direct the Trustee, to refuse to record any transfer of any Special Warrant on such
register if such transfer would constitute a violation of the securities laws of any jurisdiction.



The holding of this Special Warrant Certificate will not constitute the holder a shareholder
of the Company or entitle such holder to any right or interest in respect thereof except as
otherwise provided in the Special Warrant Indenture.



This Special Warrant Certificate will not be valid for any purpose until it has been certified
by or on behalf of the Trustee for the time being under the Special Warrant Indenture. Time is of
the essence hereof.



The Special Warrant Certificate will be construed and enforced in accordance with the laws
prevailing in the Province of British Columbia and the federal laws of Canada applicable therein
and will be treated in all respects as a British Columbia contract.



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




 


4









 







IN WITNESS WHEREOF the Company has caused this Special Warrant Certificate to be signed by its
officers or other individuals duly authorized in that behalf as of January 25, 2010.



	 	 	 	 	 
	 	IVANHOE ENERGY INC.

 	 
	 	By:  	 	 




This Special Warrant Certificate is one of the Special Warrant Certificates referred to in the
Special Warrant Indenture.



	 	 	 	 	 
	 	CIBC MELLON TRUST COMPANY

 	 
	 	By:  	 	 




Countersigned by the Trustee as of this 25th day of January, 2010.




 


5









 







TO: IVANHOE ENERGY INC. (the “Company”)




NOTICE OF CONVERSION




The undersigned holder of the Special Warrants represented by this Special Warrant Certificate
hereby exercises the right thereof to be issued the Underlying Securities which are issuable
pursuant to the conversion of such Special Warrants on the terms specified in such Special Warrant
Certificate and in the Special Warrant Indenture.




The undersigned certifies that (check applicable box(es), if any)



	 	 	 	 	 	 	 
	 

	 	o
	 	A
	 	The undersigned holder (i) at the time of exercise of the
Special Warrants is not in the United States; (ii) it is not
a U.S. person, and is not exercising the Special Warrants on
behalf of a U.S. person; and (iii) did not execute or deliver
this exercise form in the United States.

	 
	 	 	 	 	 	 
	 

	 	o
	 	B
	 	The undersigned holder (i) purchased the Special Warrants
directly from the Company pursuant to a written subscription
agreement for the purchase of Special Warrants, (ii) is
exercising the Special Warrants solely for its own account
and not on behalf of any other Person; and (iii) was an
“Accredited Investor”, as that term is defined in Regulation
D under the U.S. Securities Act, both on the date the Special
Warrants were purchased from the Company and on the date of
exercise of the Special Warrants.

	 
	 	 	 	 	 	 
	 

	 	o
	 	C
	 	The undersigned holder has delivered to the Company an
opinion of counsel (which will not be sufficient unless it is
from counsel of recognized standing and such opinion is in
form and substance satisfactory to the Company) to the effect
that an exemption form the registration requirements of the
U.S. Securities Act and applicable state securities laws is
available.







			
	Note:	 	Certificates representing Underlying Securities will not be registered or delivered to an
address in the United States unless Box B or C above is checked.







 


 









 





The undersigned hereby irrevocably directs that the said Underlying Securities be issued,
registered and delivered as follows:



	 	 	 	 	 	 	 
	 	 	 	 	Number of Common	 	 
	Name(s) in Full	 	Address(es)	 	Shares	 	Number of Warrants
	                                        

	 	                                        

	 	                                        
	 	                                        
	                                        

	 	                                        
	 	                                        
	 	                                        
	                                        

	 	                                        
	 	                                        
	 	                                        






(Please print full name in which certificates representing the Underlying Securities are to be
issued. If any Underlying Securities are to be issued to a person or persons other than the holder,
the holder must pay to the Trustee, all exigible transfer taxes or other government charges.



DATED this
 _____ 
day of                     , 20
 _____.



	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 

Signature of Registered Holder
	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

Signature Guaranteed

	)	 	 	 

Name of Registered Holder
	 	 
	 

	 	 	)	 	 	 	 	 






o Please check if the certificates representing the Underlying Securities are to be delivered at
the office where this Special Warrant Certificate is surrendered, failing which such certificates
will be mailed to the address set out above. Certificates will be delivered or mailed as soon as
practicable after the surrender of this Special Warrant Certificate to the Trustee.



Instructions:




	1.	 	The registered holder may exercise its right to receive Underlying Securities on exercise
hereof by completing this form and surrendering this form and the Special Warrant Certificate
representing the Special Warrants being exercised to the Trustee.







	2.	 	If the Notice of Conversion indicates that the Underlying Securities are to be issued to a
person or persons other than the registered holder of the Special Warrant Certificate, the
signature of such registered holder on the Notice of Conversion must be guaranteed by a
Schedule I Canadian chartered bank, or a member of a recognized Medallion Guarantee program.
The stamp affixed thereon by the guarantor must bear the actual words “Signature Guaranteed”
or “Medallion Guaranteed” and otherwise be in accordance with industry standards.







 


2









 







FORM OF TRANSFER



CIBC MELLON TRUST COMPANY

1600 — 1066 West Hastings Street

Vancouver, British Columbia V6E 3X1




FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers to         
                
        
                
                
                
                
                
       
                
               
               
             
  
                
               
               
              
(print name and address) the Special Warrants
represented by this Special Warrant Certificate and hereby appoints    
                 
                    
                    
as its attorney with full power of substitution to transfer the Special Warrants on the appropriate
register of the Trustee.



DATED this
 _____ 
day of                     , 201
 _____.



	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 

Signature of Transferor
	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

Signature Guaranteed

	)	 	 	 

Name of Transferor
	 	 
	 

	 	 	)	 	 	 	 	 






CERTAIN REQUIREMENTS RELATING TO TRANSFERS





	1.	 	In the case of any transfer of Special Warrants to a Person resident in, or otherwise subject
to the securities laws of, any province or territory of Canada, either the transferee must be
an Accredited Investor within the meaning of such applicable securities laws in Canada or the
transfer must otherwise be exempt from the prospectus and registration requirements of
applicable securities laws in Canada.







	2.	 	The Special Warrant Indenture contains certain other requirements relating to the transfer of
Special Warrants, including, among other things, a requirement in certain cases that a written
opinion of U.S. counsel of recognized standing be delivered in connection with the transfer of
Special Warrants by a U.S. Person or a person in the United States or a person holding Special
Warrants for the account or benefit of a U.S. Person or a person in the United States, to a
person in the United States or for the account or benefit of a U.S. Person or a person in the
United States.







	3.	 	The signature of the transferor must correspond in every particular with the surname and the
first name(s) or initials shown on the face of this certificate and the endorsement must be
signature guaranteed, in either case, by a Schedule 1 Canadian chartered bank, a firm which is
a member of a recognized stock exchange in Canada, a national securities exchange in the
United States, or the National Association of Securities dealers or a member of a recognized
medallion program. The stamp affixed thereon by the guarantor must bear the actual words
“signature guarantee”, or “medallion guaranteed” and otherwise be in accordance with industry
standards.







 


 









 







SCHEDULE B TO THE SPECIAL WARRANT INDENTURE DATED AS OF

JANUARY •, 2010 AMONG IVANHOE ENERGY INC., MACQUARIE CAPITAL 

MARKETS CANADA LTD. AND

CIBC MELLON TRUST COMPANY



DECLARATION FOR REMOVAL OF LEGEND





			
	To:	 	IVANHOE ENERGY INC. (the “Company”) and its
Registrar/Transfer Agent for the subject securities.






The
undersigned (a) represents and warrants that the sale of
                    
[specify the number
of Common Shares, Warrants or Special Warrants] of the
Company’s                      [Common
Shares, Warrants or Special Warrants] to which this declaration relates is being made in reliance
on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”), and (b) certifies that (1) the undersigned is not an “affiliate” of the Company
as that term is defined in Rule 405 of the U.S. Securities Act, (2) the offer of such securities
was not made to a person in the United States and either (A) at the time the buy order was
originated, the buyer was outside the United States, or the seller and any person acting on its
behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was
executed in, on or through the facilities of a “designated offshore securities market” (which
includes the Toronto Stock Exchange) and neither the seller nor any person acting on its behalf
knows that the transaction has been prearranged with a buyer in the United States, (3) neither the
seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or
will engage in any “directed selling efforts” in the United States in connection with the offer and
sale of such securities, (4) the sale is bona fide and not for the purpose of “washing off” the
resale restrictions imposed because the securities are “restricted securities” (as that term is
described in Rule 144(a)(3) under the U.S. Securities Act), (5) the seller does not intend to
replace the securities sold in reliance on Rule 904 of the U.S. Securities Act with fungible
unrestricted securities and (6) the contemplated sale is not a transaction, or part of a series of
transactions which, although in technical compliance with Regulation S, is part of a plan or scheme
to evade the registration provisions of the U.S. Securities Act. Terms used herein have the
meanings given to them by Regulation S under the U.S. Securities Act.



	 	 	 	 	 
	By:

	 	 	 	Date:                                         
	 

	 	 	 	 
	 

	 	Signature	 	 






	 	 	 	 	 
	Name (please print)
	 	 	 	 
	 

	 	 

	 	 






 


 









 





AFFIRMATION BY SELLER’S BROKER-DEALER (IF ANY)




We have read the foregoing representations of our customer,                                          (the
“Seller”), with regard to our sale, for such Seller’s account, of the securities of the Company
described therein, and on behalf of ourselves we certify and affirm that (A) we have no knowledge
that the transaction had been prearranged with a buyer in the United States, (B) the transaction
was executed on or through the facilities of the Toronto Stock Exchange and (C) neither we, nor any
person acting on our behalf, engaged in any directed selling efforts in connection with the offer
and sale of such securities. Terms used herein have the meanings given to them by Regulation S.



	 	 	 	 	 
	 	 	 
	Name of Firm	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Officer
	 	 
	 
	 	 	 	 
	Date:                                                             	 	 







 


2









 







SCHEDULE C TO THE SPECIAL WARRANT INDENTURE DATED AS OF

JANUARY __, 2010 AMONG IVANHOE ENERGY INC., MACQUARIE CAPITAL 

MARKETS CANADA LTD. AND

CIBC MELLON TRUST COMPANY



RELEASE AND PAYMENT CERTIFICATE




	 	 	 
	TO:

	 	CIBC Mellon Trust Company (the “Trustee”), as Trustee relating to
the issue of special warrants (“Special Warrants”) of Ivanhoe
Energy Inc. (the “Company”)
	 
	 	 
	AND TO:

	 	Macquarie Capital Markets Canada Ltd. (the “Agent”)






This Release and Payment Certificate is being provided pursuant to Section 6.3(a) of the
Special Warrant Indenture (the “Indenture”) dated January 25, 2010 among the Company, the Trustee
and the Agent. Capitalized terms not defined herein have the meaning ascribed to them in the
Indenture.



The undersigned,                     , the                      of the Company, hereby certifies
for and on behalf of the Company and not in a personal capacity that the Release Condition has been
met.




The Company hereby directs the Trustee to release the Escrowed Funds as follows:




	 	(1)	 	in satisfaction of the commission payable to the Agent pursuant
to the Agency Agreement:






	 	 	 	 	 
	 

	 	Amount:
	 	$                    
	 
	 	 	 	 
	 

	 	Wire Instructions:
	 	                                                            
	 

	 	 	 	                                                            
	 

	 	 	 	                                                            







	 	(2)	 	with respect to any Escrowed Funds not allocated to (1) above,
to the Company:






	 	 	 	 	 
	 

	 	Amount:
	 	$                    
	 
	 	 	 	 
	 

	 	Wire Instructions:
	 	                                                            
	 

	 	 	 	                                                            
	 

	 	 	 	                                                            





 


 









 





DATED at Vancouver, British Columbia, this
 _____ 
day of
 _____, 2010.



	 	 	 	 	 
	IVANHOE ENERGY INC.	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	ACKNOWLEDGED by

MACQUARIE CAPITAL MARKETS CANADA LTD.	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 







 


2