**Exhibit 2.4**

 

***FINALEXECUTION VERSION***

 

**TRUSTINDENTURE**

 

**DATEDAS OF THE 12th DAY OF SEPTEMBER, 2007**

 

 

**BETWEEN**

 

**CANADIANSATELLITE RADIO HOLDINGS INC.**

 

**AND**

 

**CIBCMELLON TRUST COMPANY**

 

 

**PROVIDINGFOR THE ISSUE OF CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES**

 

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**TABLEOF CONTENTS**

 
| ** **                                                       | ** **                                           | ** ** | **Page** |
|------------------------------------------------------------------|------------------------------------------------------|------------|----------|
| ARTICLE 1  INTERPRETATION                                   |                                                 | 1          |
| 1.1                                                              | Definitions                                          |       | 1        |
| 1.2                                                              | Meaning of “Outstanding”                   |       | 7        |
| 1.3                                                              | Interpretation                                       |       | 8        |
| 1.4                                                              | Headings,  Etc.                                      |       | 8        |
| 1.5                                                              | Day not a  Business Day                              |       | 8        |
| 1.6                                                              | Applicable  Law                                      |       | 8        |
| 1.7                                                              | Monetary  References                                 |       | 8        |
| 1.8                                                              | Invalidity,  Etc.                                    |       | 8        |
| 1.9                                                              | Time of  Essence                                     |       | 8        |
| 1.10                                                             | Language                                             |       | 8        |
| 1.11                                                             | Successors  and Assigns                              |       | 9        |
| 1.12                                                             | Benefits of  Indenture                               |       | 9        |
| 1.13                                                             | References  to Acts of the Company                   |       | 9        |
| 1.14                                                             | No Personal  Liability                               |       | 9        |
| ARTICLE 2  THE DEBENTURES                                   |                                                 | 9          |
| 2.1                                                              | Limit of  Debentures                                 |       | 9        |
| 2.2                                                              | Terms of  Debentures of any Series                   |       | 9        |
| 2.3                                                              | Form of  Debentures                             |       | 11       |
| 2.4                                                              | Form and  Terms of Initial Debentures           |       | 11       |
| 2.5                                                              | Certification  and Delivery of Additional Debentures |       | 16       |
| 2.6                                                              | Issue of  Global Debentures                          |       | 17       |
| 2.7                                                              | Execution of  Debentures                             |       | 17       |
| 2.8                                                              | Certification                                        |       | 18       |
| 2.9                                                              | Interim  Debentures or Certificates                  |       | 18       |
| 2.10                                                             | Mutilation,  Loss, Theft or Destruction              |       | 18       |
| 2.11                                                             | Concerning  Interest                                 |       | 19       |
| 2.12                                                             | Debentures  to Rank *Pari Passu*                     |       | 19       |
| 2.13                                                             | Payments of  Amounts Due on Maturity                 |       | 19       |
| 2.14                                                             | U.S. Legend  on the Debentures                       |       | 20       |
| 2.15                                                             | Payment of  Interest                                 |       | 21       |
| 2.16                                                             | Withholding  Tax                                     |       | 22       |
| ARTICLE 3  REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP   |                                                 | 22         |
| 3.1                                                              | Fully  Registered Debentures                         |       | 22       |
| 3.2                                                              | Global  Debentures                                   |       | 23       |
| 3.3                                                              | Transferee  Entitled to Registration                 |       | 25       |
| 3.4                                                              | No Notice of  Trusts                                 |       | 25       |
| 3.5                                                              | Registers  Open for Inspection                       |       | 25       |
| 3.6                                                              | Exchanges of  Debentures                             |       | 25       |
| 3.7                                                              | Closing of  Registers                                |       | 25       |
| 3.8                                                              | Charges for  Registration, Transfer and Exchange     |       | 26       |
| 3.9                                                              | Ownership of  Debentures                             |       | 26       |
| ARTICLE 4  REDEMPTION, REPAYMENT AND PURCHASE OF DEBENTURES |                                                 | 27         |
| 4.1                                                              | Applicability  of Article                            |       | 27       |
| 4.2                                                              | Partial  Redemption                                  |       | 27       |

 

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| 4.3                                         | Notice of  Redemption                                     |   | 28 |
|---------------------------------------------|-----------------------------------------------------------|--------|----|
| 4.4                                         | Debentures  Due on Redemption Dates                       |   | 28 |
| 4.5                                         | Deposit of  Redemption Monies or Shares                   |   | 28 |
| 4.6                                         | Right to  Repay Redemption Price in Shares                |   | 29 |
| 4.7                                         | Failure to  Surrender Debentures Called for Redemption    |   | 31 |
| 4.8                                         | Cancellation  of Debentures Redeemed                      |   | 32 |
| 4.9                                         | Purchase of  Debentures by the Company                    |   | 32 |
| 4.10                                        | Right to  Repay Principal Amount in Shares                |   | 32 |
| ARTICLE 5  SUBORDINATION OF DEBENTURES |                                                      | 35     |
| 5.1                                         | Applicability  of Article                                 |   | 35 |
| 5.2                                         | Order of  Payment                                         |   | 35 |
| 5.3                                         | Subrogation  to Rights of Holders of Senior Indebtedness  |   | 36 |
| 5.4                                         | Obligation  to Pay Not Impaired                           |   | 36 |
| 5.5                                         | No Payment  if Senior Indebtedness in Default             |   | 36 |
| 5.6                                         | Payment on  Debentures Permitted                          |   | 37 |
| 5.7                                         | Confirmation  of Subordination                            |   | 37 |
| 5.8                                         | Knowledge of  Debenture Trustee                           |   | 38 |
| 5.9                                         | Debenture  Trustee May Hold Senior Indebtedness      |   | 38 |
| 5.10                                        | Rights of  Holders of Senior Indebtedness Not Impaired    |   | 38 |
| 5.11                                        | Altering the  Senior Indebtedness                         |   | 38 |
| 5.12                                        | Additional  Indebtedness                                  |   | 38 |
| 5.13                                        | Right of  Debentureholder to Convert Not Impaired         |   | 38 |
| 5.14                                        | Invalidated  Payments                                     |   | 38 |
| 5.15                                        | Contesting  Security                                      |   | 38 |
| ARTICLE 6  CONVERSION OF DEBENTURES    |                                                      | 39     |
| 6.1                                         | Applicability  of Article                                 |   | 39 |
| 6.2                                         | Notice of  Expiry of Conversion Privilege                 |   | 39 |
| 6.3                                         | Revival of  Right to Convert                              |   | 39 |
| 6.4                                         | Manner of  Exercise of Right to Convert                   |   | 39 |
| 6.5                                         | Adjustment  of Conversion Price and Minimum Trading Price |   | 40 |
| 6.6                                         | No  Requirement to Issue Fractional Shares                |   | 43 |
| 6.7                                         | Company to  Reserve Shares                                |   | 43 |
| 6.8                                         | Cancellation  of Converted Debentures                     |   | 44 |
| 6.9                                         | Certificate  as to Adjustment                             |   | 44 |
| 6.10                                        | Notice of  Special Matters                                |   | 44 |
| 6.11                                        | Protection  of Debenture Trustee                          |   | 44 |
| 6.12                                        | U.S. Legend  on Shares                                    |   | 44 |
| ARTICLE 7  COVENANTS OF THE COMPANY    |                                                      | 45     |
| 7.1                                         | To Pay  Principal, Premium (if any) and Interest, etc.    |   | 45 |
| 7.2                                         | To Pay  Debenture Trustee’s Remuneration             |   | 45 |
| 7.3                                         | To Give  Notice of Default                                |   | 45 |
| 7.4                                         | Preservation  of Existence, etc.                          |   | 45 |
| 7.5                                         | Keeping of  Books                                         |   | 45 |
| 7.6                                         | To Maintain  Listings                                     |   | 45 |
| 7.7                                         | To Provide  Financial Statements                          |   | 46 |
| 7.8                                         | Annual  Certificate of Compliance                         |   | 46 |
| 7.9                                         | No  Distributions on Shares if Event of Default           |   | 46 |
| 7.10                                        | Performance  of Covenants by Debenture Trustee            |   | 46 |

 

ii

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| ARTICLE 8  DEFAULT                       |                                                                   | 46     |
|-----------------------------------------------|------------------------------------------------------------------------|--------|
| 8.1                                           | Events of  Default                                                     |   | 46 |
| 8.2                                           | Notice of  Events of Default                                           |   | 48 |
| 8.3                                           | Waiver of  Default                                                     |   | 48 |
| 8.4                                           | Enforcement  by the Debenture Trustee                                  |   | 49 |
| 8.5                                           | No Suits by  Debentureholders                                          |   | 50 |
| 8.6                                           | Application  of Monies by Debenture Trustee                            |   | 50 |
| 8.7                                           | Notice of  Payment by Debenture Trustee                                |   | 51 |
| 8.8                                           | Debenture  Trustee May Demand Production of Debentures            |   | 51 |
| 8.9                                           | Remedies  Cumulative                                                   |   | 51 |
| 8.10                                          | Judgment  Against the Company                                          |   | 51 |
| 8.11                                          | Immunity of  Debenture Trustee and Others                              |   | 51 |
| ARTICLE 9  SATISFACTION AND DISCHARGE    |                                                                   | 52     |
| 9.1                                           | Cancellation  and Destruction                                          |   | 52 |
| 9.2                                           | Non-Presentation  of Debentures                                        |   | 52 |
| 9.3                                           | Repayment of  Unclaimed Monies or Shares                               |   | 52 |
| 9.4                                           | Discharge                                                              |   | 52 |
| 9.5                                           | Satisfaction                                                           |   | 53 |
| 9.6                                           | Continuance  of Rights, Duties and Obligations                         |   | 54 |
| ARTICLE 10  SUCCESSORS                   |                                                                   | 55     |
| 10.1                                          | Restrictions  on Amalgamation, Merger and Sale of Certain Assets, etc. |   | 55 |
| 10.2                                          | Vesting of  Powers in Successor                                        |   | 55 |
| ARTICLE 11  COMPULSORY ACQUISITION       |                                                                   | 56     |
| 11.1                                          | Definitions                                                            |   | 56 |
| 11.2                                          | Debenture  Offer for Debentures                                        |   | 56 |
| 11.3                                          | Debenture  Offeror’s Notice to Dissenting Shareholders            |   | 57 |
| 11.4                                          | Delivery of  Debenture Certificates                                    |   | 57 |
| 11.5                                          | Debenture  Offeror’s Notice to the Corporation                    |   | 57 |
| 11.6                                          | Payment of  Consideration to Debenture Trustee                         |   | 58 |
| 11.7                                          | Consideration  to be held in Trust                                     |   | 58 |
| 11.8                                          | Completion  of Transfer of Debentures to Debenture Offeror             |   | 58 |
| 11.9                                          | Demand for  Payment of Fair Value                                      |   | 58 |
| 11.10                                         | Obligation  to Acquire Debentures                                      |   | 59 |
| 11.11                                         | Communication  of Debenture Offer to the Company                       |   | 60 |
| ARTICLE 12  MEETINGS OF DEBENTUREHOLDERS |                                                                   | 60     |
| 12.1                                          | Right to  Convene Meeting                                              |   | 60 |
| 12.2                                          | Notice of  Meetings                                                    |   | 60 |
| 12.3                                          | Chairman                                                               |   | 61 |
| 12.4                                          | Quorum                                                                 |   | 61 |
| 12.5                                          | Power to  Adjourn                                                      |   | 62 |
| 12.6                                          | Show of  Hands                                                         |   | 62 |
| 12.7                                          | Poll                                                                   |   | 62 |
| 12.8                                          | Voting                                                                 |   | 62 |
| 12.9                                          | Proxies                                                                |   | 63 |
| 12.10                                         | Persons  Entitled to Attend Meetings                                   |   | 63 |
| 12.11                                         | Powers  Exercisable by Extraordinary Resolution                        |   | 63 |
| 12.12                                         | Meaning of “Extraordinary  Resolution”                       |   | 65 |
| 12.13                                         | Powers  Cumulative                                                     |   | 66 |
| 12.14                                         | Minutes                                                                |   | 66 |

 

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| 12.15                                                 | Instruments  in Writing                                                        |   | 66 |
|-------------------------------------------------------|--------------------------------------------------------------------------------|--------|----|
| 12.16                                                 | Binding  Effect of Resolutions                                                 |   | 66 |
| 12.17                                                 | Evidence of  Rights Of Debentureholders                                        |   | 66 |
| 12.18                                                 | Concerning  Serial Meetings                                                    |   | 66 |
| ARTICLE 13  NOTICES                              |                                                                           | 67     |
| 13.1                                                  | Notice to  Company                                                             |   | 67 |
| 13.2                                                  | Notice to  Debentureholders                                                    |   | 67 |
| 13.3                                                  | Notice to  Debenture Trustee                                                   |   | 67 |
| 13.4                                                  | Mail Service  Interruption                                                     |   | 67 |
| ARTICLE 14  CONCERNING THE DEBENTURE TRUSTEE     |                                                                           | 68     |
| 14.1                                                  | No Conflict  of Interest                                                       |   | 68 |
| 14.2                                                  | Replacement  of Debenture Trustee                                              |   | 68 |
| 14.3                                                  | Duties of  Debenture Trustee                                                   |   | 68 |
| 14.4                                                  | Reliance  Upon Declarations, Opinions, etc.                                    |   | 69 |
| 14.5                                                  | Evidence and  Authority to Debenture Trustee, Opinions, etc.                   |   | 69 |
| 14.6                                                  | Officer’s  Certificates Evidence                                          |   | 70 |
| 14.7                                                  | Experts,  Advisers and Agents                                                  |   | 70 |
| 14.8                                                  | Debenture  Trustee May Deal in Debentures                                 |   | 70 |
| 14.9                                                  | Investment  of Monies Held by Debenture Trustee                                |   | 70 |
| 14.10                                                 | Debenture  Trustee Not Ordinarily Bound                                        |   | 71 |
| 14.11                                                 | Debenture  Trustee Not Required to Give Security                               |   | 71 |
| 14.12                                                 | Debenture  Trustee Not Bound to Act on Company’s Request                  |   | 71 |
| 14.13                                                 | Conditions  Precedent to Debenture Trustee’s Obligations to Act Hereunder |   | 71 |
| 14.14                                                 | Authority to  Carry on Business                                                |   | 71 |
| 14.15                                                 | Compensation  and Indemnity                                                    |   | 72 |
| 14.16                                                 | Acceptance  of Trust                                                           |   | 72 |
| ARTICLE 15 SUPPLEMENTAL INDENTURES               |                                                                           | 72     |
| 15.1                                                  | Supplemental Indentures                                                        |   | 72 |
| ARTICLE 16  LIMITATION OF NON-CANADIAN OWNERSHIP |                                                                           | 73     |
| 16.1                                                  | Limitation  of Non-Canadian Ownership                                          |   | 73 |
| ARTICLE 17  EXECUTION AND FORMAL DATE            |                                                                           | 74     |
| 17.1                                                  | Execution                                                                      |   | 74 |
| 17.2                                                  | Formal Date                                                                    |   | 74 |

 

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THISINDENTURE made as of the 12th day of September, 2007.

 

BETWEEN:

 

**CANADIAN SATELLITE RADIO HOLDINGS INC.,**acorporation incorporated under the laws of Ontario and having its head officein the City of Toronto, in the Province of Ontario

 

AND

 

**CIBC MELLON TRUST COMPANY**, atrust company incorporated under the federal laws of Canada having an office inthe City of  Toronto, in the Province ofOntario (hereinafter called the “**DebentureTrustee**”)

 

WITNESSETHTHAT:

 

**WHEREAS**the Company (asdefined herein) deems it necessary for its corporate purposes to create andissue the Debentures (as defined herein) to be created and issued in the mannerhereinafter appearing;

 

**AND WHEREAS**the Company isduly authorized to create and issue the Debentures to be issued as hereinprovided;

 

**AND WHEREAS**, when certifiedby the Debenture Trustee and issued as provided in this Indenture, allnecessary steps in relation to the Company have been duly enacted, passedand/or confirmed and other proceedings taken and conditions complied with tomake the creation and issue of the Debentures proposed to be issued hereunderlegal, valid and binding on the Company in accordance with the laws relating tothe Company;

 

**AND WHEREAS**the foregoingrecitals are made as representations and statements of fact by the Company andnot by the Debenture Trustee;

 

**NOW THEREFORE**it is herebycovenanted, agreed and declared as follows:

 

# **ARTICLE 1INTERPRETATION**

#  

## **1.1**                                                                               Definitions

##  

Inthis Indenture and in the Debentures, unless there is something in the subjectmatter or context inconsistent therewith, the expressions following shall havethe following meanings, namely:

 

### (a)                                  “**this Indenture**”, “**this TrustIndenture**”,“**hereto**”,“**herein**”,“**hereby**”,“**hereunder**”,“**hereof**”and similar expressions refer to this Indenture and not to any particularArticle, Section, subsection, clause, subdivision or other portion hereof andinclude any and every instrument supplemental or ancillary hereto;

###  

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

###  

### (c)                                  “**affiliate**” when used to indicate arelationship with a Person or company has the same meaning as  set forth in the *Securities Act*(Ontario);

###  

### (d)                                 “**ApplicableSecurities Legislation**” means applicable securities laws (including rules,regulations, policies and instruments) in each of the Provinces of BritishColumbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, NovaScotia, Newfoundland and Labrador and Prince Edward Island;

 

### 

###  

### (e)                                  “**Bankruptcy Law**” means the Bankruptcy andInsolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), orthe Title 11, U.S. Code, each as amended, or any similar bankruptcy  or insolvency law, and other laws concerningformal or informal moratoria of debt or compositions with creditors, andproceedings seeking reorganization, arrangement, or other relief of debtors;

###  

### (f)                                    “**BeneficialHolder**”means any Person who holds a beneficial interest in a Global Debenture as shownon the books of the Depository or a Depository Participant;

###  

### (g)                                 “**Business Day**” means any day other than aSaturday, Sunday or a statutory holiday in the City of Toronto, Ontario;

###  

### (h)                                 “**Change of Control**” means a change ofcontrol involving the acquisition by any Person, or group of Persons actingjointly or in concert (other than the Principals and their Related Parties), of66 2/3% or more of the votes attaching, collectively, to: (i) outstandingShares; and (ii) Exchangeable Securities, but shall not include anycapital reorganization of the Company or a consolidation, amalgamation,arrangement or merger of the Company with or into any other Person, or a sale,conveyance or lease of the properties and assets of the Company as an entiretyor substantially as an entirety to any other Person, or a liquidation,dissolution or winding-up or other similar transaction of the Company, if theholders of the Shares and Exchangeable Securities immediately prior to theeffective time of such event or transaction, collectively hold directly orindirectly more than 331/3% of the equity interests of the continuing,successor or purchaser entity, as the case may be, immediately after theeffective time of such event or transaction;

###  

### (i)                                     “**Change ofControl Notice**”has the meaning ascribed thereto in Section 2.4(j);

###  

### (j)                                     “**Company**” means CanadianSatellite Radio Holdings Inc. and includes any successor to or of the Companywhich shall have complied with the provisions of Article 10;

###  

### (k)                                  “**Company’sAuditors**”or “**Auditors of the Company**” means a nationally recognized independent firm ofchartered accountants duly appointed as auditors of the Company;

###  

### (l)                                     “**ConversionPrice**”means the price at which each Share may be issued upon conversion of theDebentures which are by their terms convertible in accordance with theprovisions of Article 6 into fully-paid Shares, and without limiting thegenerality of the foregoing, the Conversion Price in effect on the date hereoffor each Share to be issued on conversion of the Initial Debentures is $5.92;

###  

### (m)                               “**Counsel**” means a barristeror solicitor or firm of barristers or solicitors retained or employed by theDebenture Trustee or retained or employed by the Company and in the case of theCompany, shall be Stikeman Elliott LLP or any other firm of barristers andsolicitors of recognized national standing in Canada;

###  

### (n)                                 “**Current MarketPrice**”means, for any date, the volume weighted average trading price of the Shares onthe Toronto Stock Exchange (or, if the Shares are not listed thereon, on suchstock exchange on which the Shares are listed as may be selected for suchpurpose by the Company and approved by the Debenture Trustee, or if the Sharesare not listed on any stock exchange, on the over-the-counter market) for 20consecutive trading days ending on the fifth trading day preceding theapplicable date;

###  

### (o)                                 “**Date ofConversion**”has the meaning ascribed thereto in Section 6.4(b);

###  

### (p)                                 “**Debentures**” means the debentures,notes or other evidences of indebtedness of the Company issued and certifiedhereunder, or deemed to be issued and certified hereunder, including, withoutlimitation, the Initial Debentures, and for the time being outstanding, whetherin definitive or interim form;

###  

2

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###  

### (q)                                 “**Debentureholders**” or “**holders**” means the Personsfor the time being entered in the register for Debentures as registered holdersof Debentures payable to a named payee or any transferees of such Persons,including, for greater certainty, in the case of any Global Debenture, theDepository or its nominees in whose name such Global Debenture is registered,as the case may be;

###  

### (r)                                    “**Depository**” means, with respectto the Debentures of any series issuable or issued in the form of oneor more Global Debentures, the Person designated as depository by the Companypursuant to Section 3.2 until a successor depository shall have becomesuch pursuant to the applicable provisions of this Indenture, and thereafter “**Depository**” shall mean eachPerson who is then a depository hereunder, and if at any time there is morethan one such Person, “**Depository**” as used with respect to theDebentures of any series shall mean each depository with respect to theone or more Global Debentures of such series;

###  

### (s)                                  “**DepositoryParticipant**”means, for any Debentures, a broker, dealer, bank, other financial institutionor other Person who participates directly in the book-entry registration andbook-based securities transfer system administered by the Depository for suchDebentures;

###  

### (t)                                    “**Event ofDefault**”has the meaning ascribed thereto in Section 8.1;

###  

### (u)                                 “**Exchangeable Securities**” means anysecurities that are exchangeable, directly or indirectly, for Shares includingthe Class B voting shares of the Company;

###  

### (v)                                 “**ExtraordinaryResolution**”has the meaning ascribed thereto in Section 12.12 ;

###  

### (w)                               “**FullyRegistered Debentures**” means Debentures registered in the names of the holders ofFully Registered Debentures;

###  

### (x)                                   “**generallyaccepted accounting principles**” means generally accepted accounting principles from timeto time approved by the Canadian Institute of Chartered Accountants;

###  

### (y)                                 “**GlobalDebenture**”means a global book-entry certificate evidencing a Debenture, which will bedelivered to a Depository and registered in the name of a Depository, or itsnominee, pursuant to Section 2.6 for purposes of being held by or onbehalf of the Depository as custodian for the Depository Participants;

###  

### (z)                                   “**GovernmentObligations**”means securities issued or guaranteed by the Government of Canada or anyprovince thereof;

###  

### (aa)                            “**InitialDebentures**”means the Debentures designated as “Series 2007 8.0% Convertible UnsecuredSubordinated Debentures due September 12, 2014” and described in Section 2.4;

###  

### (bb)                          “**Interest Obligation**” means, with respect toan Interest Payment Date, the amount of interest due on the Initial Debentures,on such Interest Payment Date;

###  

### (cc)                            “**InterestPayment Date**”means a date specified in a Debenture as the date on which an instalment ofinterest on such Debenture shall become due and payable;

###  

### (dd)                          “**LegendedDebentures**”means Debentures bearing the legend provided for in Section 2.14;

###  

### (ee)                            “**MaturityAccount**”means an account or accounts required to be established by the Company (andwhich shall be maintained by and subject to the control of the DebentureTrustee) for each series of Debentures pursuant to and in accordance withthis Indenture;

###  

3

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### (ff)                                “**Maturity Date**” has the meaningascribed thereto in Section 4.10(a);

###  

### (gg)                          “**Maturity Notice**” has the meaningascribed thereto in Section 4.10(b);

###  

### (hh)                          “**Minimum Trading Price**” means the minimumCurrent Market Price of the Shares at which the Company is permitted toexercise the Share Redemption Right or the Share Repayment Right pursuant to Section 4.6and Section 4.10, respectively, and without limiting the generality of theforegoing, the Minimum Trading Price in effect on the date hereof for theInitial Debentures is $3.00;

###  

### (ii)                                  “**Non-Canadian**” means a non-Canadian withinthe meaning of the *Direction to the CRTC(Ineligibility of Non-Canadians)*;

###  

### (jj)                                  “**Offer**” has the meaningascribed thereto in Section 2.4(j);

###  

### (kk)                            “**Offer Price**” has the meaningascribed thereto in Section 2.4(j);

###  

### (ll)                                  “**Officer’sCertificate**”means a certificate of the Company signed by any one authorized officer ordirector of the Company, in his or her capacity as an officer or director ofthe Company and not in his or her personal capacity;

###  

### (mm)                      “**PeriodicOffering**”means an offering of Debentures of a series from time to time, thespecific terms of which Debentures, including, without limitation, the rate orrates of interest, if any, thereon, the stated maturity or maturities thereofand the redemption provisions, if any, with respect thereto, are to bedetermined by the Company upon the issuance of such Debentures from time totime;

###  

### (nn)                          “**Person**” means anyindividual, partnership, limited partnership, association, body corporate,trust, joint venture, trustee, executor, administrator, legal representative,government, regulatory authority or other entity;

###  

### (oo)                          “**Principals**” means XM Satellite RadioHoldings, Inc., General Motors of Canada Limited, John I. Bitove and CSRInvestments Inc.;

###  

### (pp)                          “**Property Account**” means a segregated trustaccount with a “financial institution” as that term is defined in the Bank Act(Canada);

###  

### (qq)                          “**Recognized Stock Exchange**” means theToronto Stock Exchange or if the Shares are not listed on the Toronto StockExchange, any other stock exchange on which the Shares are then listed andposted for trading;

###  

### (rr)                                “**Redemption Date**” has the meaningattributed thereto in Section 4.3;

###  

### (ss)                            “**RedemptionNotice**”has the meaning attributed thereto in Section 4.3;

###  

### (tt)                                “**RedemptionPrice**”means, in respect of a Debenture, the amount, excluding interest, payable onthe Redemption Date fixed for such Debenture, which amount may be payableby the issuance of Shares as provided for in Section 4.6;

###  

### (uu)                          “**Related Party**” means:

 

#### (i)                  any controlling stockholder, 80% (or more) owned Subsidiary, orimmediate family member (in the case of an individual of any Principal;

 

4

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#### (ii)               anytrust, corporation, partnership, limited liability company or other entity, thebeneficiaries, stockholders, partners, members, owners or Persons beneficiallyholding an 80% or more controlling interest of which consist of any one or morePrincipals and/or such other Persons referred to in the immediately precedingclause (i);

####  

### (vv)                          “**Regulation S**” means Regulation Sadopted by the United States Securities and Exchange Commission under the 1933Act;

###  

### (ww)                      “**Restricted Subsidiary**” of a Person meansany Subsidiary of the referent Person that is not an Unrestricted Subsidiary;

###  

### (xx)                              “**Senior Creditor**” means a holder orholders of Senior Indebtedness and includes any representative orrepresentatives or trustee or trustees of any such holder or holders;

###  

### (yy)                          “**SeniorIndebtedness**”of any Person means, without duplication;

###  

#### (i)                  indebtedness for borrowed money of such Person;

####  

#### (ii)               purchasemoney obligations of such Person;

####  

#### (iii)            otherindebtedness of such Person which is evidenced by a note, bond, debenture orsimilar instrument;

####  

#### (iv)           allobligations of such Person under any financing lease;

####  

#### (v)              allobligations of such Person under any agreement, whether or not in writing,relating to any transaction that is a rate swap, basis swap, forward ratetransaction, commodity swap, commodity option, equity or equity index swap oroption, note or bill option, interest rate option, forward foreign exchangetransaction, cap, collar or floor transaction, currency swap, cross-currencyrate swap, swaption, currency option or any other, similar transaction(including any option to enter into any of the foregoing) or any combination ofthe foregoing, and, unless the context otherwise clearly requires, any masteragreement relating to or governing any or all of the foregoing, and in eachcase, the amount of such obligations included in Indebtedness shall be limitedto the amount that would be included in the financial statements of such Personas determined in accordance with generally accepted accounting principles;

####  

#### (vi)           everyreimbursement obligation of such Person with respect to letters of credit,bankers’ acceptances or similar facilities issued for the account of suchPerson; and

####  

#### (vii)        allobligations of the type referred to in paragraphs (i) to (vii) ofanother Person the payment of which such Person has guaranteed or is responsibleor liable for, directly or indirectly, as obligor, guarantor or otherwise orhas agreed to ensure that such other Person has sufficient funds therefor;

 

otherthan indebtedness evidenced by the Initial Debentures and all other existingand future Debentures or other instruments of the Company which, by the termsof the instrument creating or evidencing the indebtedness, are expressed to be *pari passu* with, or subordinate inright of payment to, the Debentures, and for greater certainty, excludes tradepayables and other current liabilities incurred in the ordinary course ofbusiness. For greater certainty, in the case of the Company, SeniorIndebtedness includes:

 

#### (viii)     the CreditAgreement, effective November 17, 2005, by and among the Company, CanadianSatellite Radio Inc., and XM Satellite Radio Holdings Inc.; and

 

#### (ix)             SeniorNotes;

 

5

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### (zz)                              “**Senior Notes**” means the 12.75% Senior Notesdue February 15, 2014, dated as of February 10, 2006;

###  

### (aaa)                      “**Senior Notes Indenture**” means the indenturerelating to the Senior Notes, dated February 10, 2006, by and among theCompany, the guarantors party thereto and The Bank of Nova Scotia Trust Companyof New York, as trustee;

###  

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

###  

### (ccc)                      “**Shares**” means the Class ASubordinate Voting Shares of the Company, as such Shares are constituted on thedate of execution and delivery of this Indenture; provided that in the event ofa change, subdivision, redivision, reduction, combination, consolidation,reclassification or capital reorganization of the Shares or any, consolidation,amalgamation, arrangement, merger of the Company with or into another Person,or the, sale, conveyance or lease of the properties and assets of the Companyas, or substantially as, an entirety to another Person or a liquidation,dissolution or winding-up of the Company or other similar transaction, or suchsuccessive changes, subdivisions, redivisions, reductions, combinations orconsolidations, reclassifications, capital reorganizations, consolidations,amalgamations, arrangements, mergers, sales, leases or conveyances orliquidations, dissolutions, windings-up or similar transactions, then, subjectto adjustments, if any, having been made in accordance with the provisions of Section 6.5,“Shares” shall mean the shares or other securities or property resulting fromsuch change, subdivision, redivision, reduction, combination or consolidation,reclassification, capital reorganization, consolidation, amalgamation,arrangement, merger, sale, lease or conveyance or liquidation, dissolution,winding-up or similar transaction;

###  

### (ddd)                   “**Share Issuance Request**” means a request forissuance of Shares (to be issued by the Company) made by the Debenture Trusteein accordance with the Share Interest Payment Election Notice.

###  

### (eee)                      “**Share Interest Payment Election**” means anelection by the Debentureholder to issue and deliver Shares to the DebentureTrustee in order to satisfy all or a part of an Interest Obligation in themanner described in the Share Interest Payment Election Notice.

###  

### (fff)                            “**Share Interest Payment Election Notice**”means a written notice made by the Debentureholder to the Debenture Trusteespecifying the Interest Obligation to which the election relates, substantiallyin the form of Schedule “F”;

###  

### (ggg)                   “**ShareRedemption Right**”has the meaning attributed thereto in Section 4.6(a);

###  

### (hhh)                   “**Share RepaymentRight**”has the meaning attributed thereto in Section 4.10(a);

###  

### (iii)                               “**Significant Subsidiary**” means anySubsidiary that would be a “significant subsidiary” as defined in Article 1,Rule 1-02 of Regulation S-X, promulgated pursuant to the 1933 Act, as suchRegulation is in effect on the date of this Indenture;

###  

### (jjj)                               “**Subsidiary**” means, in relationto the Company, any entity, including corporations, trusts, partnerships andlimited partnerships, which are controlled, directly or indirectly, by theCompany;

###  

### (kkk)                      “**Tax Act**” means the *Income TaxAct* (Canada), as amended from time to time;

###  

### (lll)                               “**Time of Expiry**” means the time ofexpiry of certain rights with respect to the conversion of Debentures under Article 6which is to be set forth for each series of Debentures which by theirterms are to be convertible;

###  

6

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### (mmm)             “**Toronto StockExchange**”means the Toronto Stock Exchange and any successor stock exchange thereto;

###  

### (nnn)                   “**trading day**” means, with respectto the Toronto Stock Exchange or other market for securities, any day on whichsuch exchange or market is open for trading or quotation;

###  

### (ooo)                   “**United States**” means the UnitedStates of America, its territories and possessions, any state of the UnitedStates and the District of Columbia;

###  

### (ppp)                   “**Unrestricted Subsidiary**” means anySubsidiary of the Company that is designated by the Board of Directors of theCompany as an Unrestricted Subsidiary pursuant to the Senior Notes Indenture;

###  

### (qqq)                   “**Voting Shares**” means collectively theShares and the Class B voting shares of the Company;

###  

### (rrr)                            “**WrittenDirection of the Company**” means an instrument in writing signed by any oneauthorized director or officer of the Company;

###  

### (sss)                      “**1933 Act**” means the *United States Securities Act*of 1933, asamended; and

###  

### (ttt)                            “**90% RedemptionRight**”has the meaning ascribed thereto in Section 2.4(j).

###  

## **1.2**                                                                               Meaning of “Outstanding”

##  

EveryDebenture certified and delivered by the Debenture Trustee hereunder shall bedeemed to be outstanding until it is cancelled, converted, redeemed orrepurchased or delivered to the Debenture Trustee for cancellation, conversion,redemption, repurchase or monies and/or Shares, as the case may be, forthe payment thereof shall have been set aside under Section 9.2, providedthat:

 

##### (a)                                  Debentures which have been partially redeemed, purchased orconverted shall be deemed to be outstanding only to the extent of theunredeemed, unpurchased or unconverted part of the principal amountthereof;

#####  

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

#####  

##### (c)                                  for the purposes of any provision of this Indenture entitlingholders of outstanding Debentures to vote, sign consents, requisitions or otherinstruments or take any other action under this Indenture, or to constitute aquorum of any meeting of Debentureholders, Debentures owned directly orindirectly, legally or equitably, by the Company or any affiliate of theCompany shall be disregarded except that:

#####  

###### (i)                  for the purpose of determining whether the Debenture Trustee shallbe protected in relying on any such vote, consent, requisition or otherinstrument or action, or on the holders of Debentures present or represented atany meeting of Debentureholders, only the Debentures which the DebentureTrustee knows are so owned shall be so disregarded; and

 

###### (ii)               Debenturesso owned which have been pledged in good faith other than to the Company or anyaffiliate of the Company shall not be so disregarded if the pledgee shallestablish to the satisfaction of the Debenture Trustee the pledgee’s right tovote such Debentures, sign consents, requisitions or other instruments or takesuch other actions in his or her discretion free from the control of theCompany or a Subsidiary of the Company.

 

###### 7

###### 

######  

## **1.3**                                                                               Interpretation

##  

Inthis Indenture:

 

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

#####  

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

#####  

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

#####  

##### (d)                                 words and terms denoting inclusiveness (such as “include” or “includes”or “including”), whether or not so stated, are not limited by and do not implylimitation of their context or the words or phrases which precede or succeedthem.

#####  

## **1.4**                                                                               Headings, Etc.

##  

Thedivision of this Indenture into Articles and Sections, the provision of a Tableof Contents and the insertion of headings are for convenience of reference onlyand shall not affect the construction or interpretation of this Indenture or ofthe Debentures.

 

## **1.5**                                                                               Day not a BusinessDay

##  

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

 

## **1.6**                                                                               Applicable Law

##  

ThisIndenture and the Debentures shall be governed by and construed in accordancewith the laws of the Province of Ontario and the laws of Canada applicabletherein and shall be treated in all respects as Ontario contracts.

 

## **1.7**                                                                               Monetary References

##  

Wheneverany amounts of money are referred to herein, such amounts shall be deemed to bein lawful money of Canada unless otherwise expressed.

 

## **1.8**                                                                               Invalidity, Etc.

##  

Anyprovision hereof which is prohibited or unenforceable shall be ineffective onlyto the extent of such prohibition or unenforceability, without invalidating theremaining provisions hereof.

 

## **1.9**                                                                               Time of Essence

##  

Timeshall be of the essence in this Indenture.

 

## **1.10**                                                                        Language

##  

Theparties acknowledge that they have requested this Indenture and all documents,notices, correspondence and legal proceedings arising from this Indenture orrelating hereto be drawn up in English, but without prejudice to any documents,notices, correspondence and legal proceedings which may from time to timebe drawn up in French. Les parties reconnaissent qu’elles ont exigé que cette convention soitrédigée en anglais, mais sans préjudice à tout document, tout avis, toutecorrespondance et toute procédure légale qui, de temps a autre, peuvent êtrerédigés en français.

 

8

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## **1.11**                                                                        Successors andAssigns

##  

Allcovenants and agreements in this Indenture by the Company shall bind itssuccessors and assigns, whether expressed or not.

 

## **1.12**                                                                        Benefits of Indenture

##  

Nothingin this Indenture or in the Debentures, express or implied, shall give to anyPerson, other than the parties hereto and their successors hereunder, anypaying agent, the holders of Debentures, the Debenture Trustee and (to theextent provided in Sections 1.14 and 8.11) the holders of Shares, anybenefit or any legal or equitable right, remedy or claim under this Indenture.

 

## **1.13**                                                                        References to Acts ofthe Company

##  

Forgreater certainty, where any reference is made in this Indenture, or in anyother instrument executed pursuant hereto or contemplated hereby to which theCompany is party, to an act to be performed by, an obligation or liability of,an asset or right of, or a covenant by, the Company, such reference shall beconstrued and applied for all purposes as if it referred to an act to beperformed by, an obligation or liability of, or a covenant by, the Company or aparty to whom the trustees of the Company have delegated the authority to perform suchact.

 

## **1.14**                                                                        No Personal Liability

##  

Theobligations of the Company under this Indenture or any Debenture are notpersonally binding upon any registered or beneficial holder of Shares, anyofficers or agents of the Company, or any annuitant under a plan of which ashareholder of the Company acts as trustee or carrier and, resort shall not behad to, nor shall recourse or satisfaction be sought from, any of such Personsor the private property of any such Persons. Any recourse against any of suchPersons in any manner in respect of any indebtedness, obligation or liabilityof the Company arising hereunder shall be limited to, and satisfied only outof, the assets of the Company.

 

# **ARTICLE 2THE DEBENTURES**

#  

## **2.1**                                                                               Limit of Debentures

##  

Theaggregate principal amount of Debentures authorized to be issued under thisIndenture is unlimited, but Debentures may be issued only upon and subjectto the conditions and limitations herein set forth.

 

## **2.2**                                                                               Terms of Debenturesof any Series

##  

TheDebentures may be issued in one or more series. There shall be establishedherein or in or pursuant to one or more indentures supplemental hereto, priorto the initial issuance of Debentures of any particular series:

 

##### (a)                                  the designation of the Debentures of the series (which need notinclude the term “Debentures”), which shall distinguish the Debentures of the series fromthe Debentures of all other series;

#####  

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

#####  

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

#####  

##### 9

##### 

#####  

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

#####  

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

#####  

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

#####  

##### (g)                                 the obligation, if any, of the Company to redeem, purchase or repayDebentures of the series pursuant to any mandatory redemption, sinkingCompany or analogous provisions or at the option of a holder thereof and theprice or prices at which, the period or periods within which, the date or dateson which, and any terms and conditions upon which, Debentures of the series shallbe redeemed, purchased or repaid, in whole or in part, pursuant to suchobligations;

#####  

##### (h)                                 if other than denominations of $1,000 and any integral multiplethereof, the denominations in which Debentures of the series shall beissuable;

#####  

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

#####  

##### (j)                                     any other events of default or covenants with respect to theDebentures of the series not otherwise described in this Indenture;

#####  

##### (k)                                  whether and under what circumstances the Debentures of the series willbe convertible into or exchangeable for securities of any Person;

#####  

##### (l)                                     the form and terms of the Debentures of the series;

#####  

##### (m)                               if applicable, that the Debentures of the series shall beissuable in whole or in part as one or more Global Debentures and, in suchcase, the Depository or Depositories for such Global Debentures in whose namethe Global Debentures will be registered, and any circumstances other than orin addition to those set forth in Section 2.9 or 3.2, as the case may be,in which any such Global Debenture may be exchanged for Fully RegisteredDebentures, or transferred to and registered in the name of a Person other thanthe Depository for such Global Debentures or a nominee thereof;

#####  

##### (n)                                 if other than Canadian currency, the currency in which theDebentures of the series are issuable; and

#####  

##### (o)                                 any other terms of the Debentures of the series (which termsshall not be inconsistent with the provisions of this Indenture).

#####  

AllDebentures of any one series shall be substantially identical, except as may otherwisebe established herein or, to the extent permitted herein, by or pursuant to aresolution of the directors of the Company, or an Officer’s Certificate or inan indenture supplemental hereto. All Debentures of any one series neednot be issued at the same time and may be issued from time to time,including pursuant to a Periodic Offering, consistent with the terms of thisIndenture, if so provided herein, or, to the extent permitted herein, by orpursuant to such resolution of the directors of the Company, Officer’sCertificate or in an indenture supplemental hereto.

 

10

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## **2.3**                                                                               Form ofDebentures

##  

Exceptin respect of the Initial Debentures, the form of which is provided forherein, the Debentures of each series shall be substantially in such form orforms (not inconsistent with this Indenture) as shall be established herein or,to the extent permitted herein, by or pursuant to one or more resolutions ofthe directors of the Company or to the extent established pursuant to, ratherthan set forth in, a resolution of the directors of the Company, in an Officer’sCertificate detailing such establishment) or in one or more indenturessupplemental hereto, in each case with such appropriate insertions, omissions,substitutions and other variations as are required or permitted by thisIndenture and may have imprinted or otherwise reproduced thereon suchlegend or legends or endorsements, not inconsistent with the provisions of thisIndenture, as may be required to comply with any law (including ApplicableSecurities Legislation) or with any rules or regulations pursuant thereto,or with any rules or regulations of any securities exchange or securitiesregulatory authority or to conform to general usage, all as may bedetermined by the trustee executing such Debentures, as conclusively evidencedby its execution of such Debentures.

 

## **2.4**                                                                               Form and Termsof Initial Debentures

##  

##### (a)                                  The InitialDebentures authorized for issue immediately are limitedto an aggregate principal amount of $20,000,000 and shall be designated as “Series 2007****8.0% Convertible Unsecured SubordinatedDebentures due September 12, 2014”.

 

##### (b)                                 The Initial Debentures shall be dated as of the date of closing ofthe Offering, shall mature on September 12, 2014****and shall bear interest from, and including, the date ofissue at the rate of 8.0% per annum, payable in arrears in equal (with theexception of the first interest payment and the last interest payment, whichwill include interest as set forth below) semi-annual payments on June 30and December 31 in each year, the first such payment to fall due on December 31,2007 and the last such payment (representing interest payable from the lastInterest Payment Date to, but excluding, the Maturity Date of the InitialDebentures) to fall due on September 12, 2014, payable after as well asbefore maturity and after as well as before default, with interest on amountsin default at the same rate, compounded semi-annually. The first interestpayment will include interest accrued from, and including September 12,2007 to, but excluding December 31, 2007, and will be equal to $24.11per $1,000 principal amount of the Initial Debentures.

#####  

##### (c)         (i)                                            Upon and subject to the provisions and conditions of Article 6,and subject to any Applicable Securities Legislation and any applicableregulatory or shareholder approvals (including any required approval of anyRecognized Stock Exchange) in respect of any matter relating to this Section 2.4(c),the Debentureholders shall have the irrevocable right, from time to time, tomake a Share Interest Payment Election in respect of all or any part ofany Interest Obligation by delivering a Share Interest Payment Election Noticeto the Debenture Trustee by no later than the day which is not less than five (5) BusinessDays prior to the Interest Payment Date to which the Share Interest PaymentElection relates. The Share Interest Payment Election Notice for the InitialDebentures shall be in the form of Schedule “F”.

 

###### (ii)                                  Upon receipt of a Share Interest Payment Election Notice deliveredin accordance with Section 2.4(c)(i), the Debenture Trustee shall,provided that any applicable regulatory or shareholder approvals have beenobtained and in accordance with this Section 2.4(c) and such ShareInterest Payment Election Notice delivered in accordance with Section 2.4(c),deliver Share Issuance Requests to the Company. The Company shall issue anddeliver to the Debenture Trustee that number of Shares obtained by dividing theinterest payment by the volume-weighted average trading price of the Shares onthe Toronto Stock Exchange for the ten (10) consecutive trading daysending five (5) days prior to the date of each interest payment, with anyfractional shares being paid in cash based on the Conversion Price. Inconnection with the Share Interest Payment Election, the Debenture Trusteeshall have the power to: (A) accept delivery of the Shares from theCompany and process the Shares in accordance with the Share Interest Payment ElectionNotice and (B) deliver the Shares to the Debentureholder, and (C) perform anyother action necessarily incidental thereto.

######  

###### 11

###### 

######  

###### (iii)                               The Debenture Trustee shall not incur any liability or be in any wayresponsible for the consequences of any loss caused by the transaction referredto in Section 2.4(c)(ii) and the Company indemnifies and savesharmless the Debenture Trustee and its officers, directors, employees andagents from and against any and all liabilities, losses, costs, claims,actions, expenses or demands whatsoever which may be brought against theDebenture Trustee or which it may suffer or incur as a result ofperforming its obligations set out in Section 2.4(c)(ii).

 

##### (d)                                 Upon and subject to the provisions and conditions of Article 6,and subject to any Applicable Securities Legislation and any applicableregulatory or shareholder approvals (including any required approval of anyRecognized Stock Exchange) and notwithstanding Section 2.4(b) and Section 2.4(c),in the event a payment of interest made in cash would result in a breach ordefault by the Company under any obligations of the Company, including theDebentures, then the Company shall, in exchange for or in lieu of paying suchinterest, use commercially reasonable efforts to satisfy its obligation byissuing and delivering to holders on the Interest Payment Date that number ofShares obtained by dividing the interest payment by that number of Sharesobtained by dividing the interest payment by 95% of the Current Market Price ofthe Shares on the Interest Payment Date. The Debenture Trustee shall have noobligation to calculate or verify the foregoing payment. The Company shallnotify the Debenture Trustee of any payment under this Section 2.4(d) byno later than the day which is not less than five (5) Business Days priorto the Interest Payment Date.

#####  

##### (e)                                  The Initial Debentures will be redeemable in accordance with theterms of Article 4, provided that the Initial Debentures will not be redeemablebefore the third (3rd) anniversary of the Closing Date, except inthe event of the satisfaction of certain conditions after a Change of Controlhas occurred as outlined herein. On and after the third (3rd)anniversary of the Closing Date, the Initial Debentures may be redeemed atthe option of the Company in whole or in part from time to time on noticeas provided for in Section 4.3 provided that the Current Market Price ofthe Shares on the date on which notice of redemption is given is in excess of150% of the Conversion Price and the Company shall have provided to theDebenture Trustee an Officer’s Certificate confirming such Current Market Price.In such event, the Initial Debentures will be redeemable at a Redemption Priceequal to the principal amount of Debentures and, in addition thereto, at thetime of redemption, the Company shall pay to the holder accrued and unpaidinterest up to but excluding the Redemption Date. The Redemption Notice for theInitial Debentures shall be in the form of Schedule “B”. Inconnection with the redemption of the Initial Debentures, the Company may, atits option and subject to the provisions of Section 4.6 and subject to anyapplicable regulatory or shareholder approvals, elect to satisfy its obligationto pay all or a portion of the aggregate Redemption Price of the InitialDebentures to be redeemed by issuing and delivering to the holders of suchInitial Debentures, such number of Shares as is obtained by dividing theaggregate Redemption Price of the outstanding Debentures which are to beredeemed by 95% of the Current Market Price in effect on the Redemption Date,provided that no fractional Shares will be issued on such redemption but inlieu thereof the Company shall satisfy such fractional interests by a cashpayment equal to the Current Market Price of a fractional interest. Interestaccrued and unpaid on the Debentures on the Redemption Date will be paid toholders of Debentures in the form of consideration and manner contemplatedin Section 4.5. If the Company elects to exercise such option, it shall sospecify and provide details in the Redemption Notice.

#####  

##### (f)                                    The Initial Debentures will be direct unsecured obligations of theCompany and will be subordinated to the Senior Indebtedness of the Company inaccordance with the provisions of Article 5. In accordance with Section 2.12,the Initial Debentures will rank *pari passu*with each other series of Debentures except for sinking Company provisions(if any) applicable to different series of Debentures.

#####  

##### 12

##### 

#####  

##### (g)                                 Upon and subject to the provisions and conditions of Article 6,the holder of each Initial Debenture shall have the right at such holder’soption, prior to the close of business on the earlier of the Maturity Date andthe last Business Day immediately preceding the date specified by the Companyfor redemption of the Initial Debentures by notice to the holders of InitialDebentures in accordance with Sections  2.4(e) and 4.3 (the earlierof which will be the “**Time of Expiry**” for the purposes of Article 6 in respect of the InitialDebentures), to convert any part, which is $1,000 or an integral multiplethereof, of the principal amount of such Debenture into Shares at theConversion Price in effect on the Date of Conversion.

#####  

TheConversion Price in effect on the date hereof for each Share to be issued uponthe conversion of Initial Debentures is $5.92 (being 115% of the TorontoStock Exchange closing price on the day prior to September 12, 2007) suchthat approximately 168.919 Shares will be issued for each $1,000 principalamount of Initial Debentures so converted. No adjustment in the number ofShares to be issued upon conversion will be made for distributions (with arecord date prior to the applicable Date of Conversion) on Shares issuable uponconversion or for interest accrued on the Initial Debentures which aresurrendered for conversion; however, holders converting their InitialDebentures will receive all interest which has accrued to but excluding the Dateof Conversion which has not been paid. The Conversion Price applicable to andthe Shares, securities or other property receivable on the conversion of theInitial Debentures is subject to adjustment pursuant to the provisions of Section 6.5.

 

Notwithstandingany other provisions of this Indenture, if an Initial Debenture is surrenderedfor conversion on an Interest Payment Date or during the five precedingBusiness Days, the Person or Persons entitled to receive Shares in respect ofthe Initial Debenture so surrendered for conversion shall not become the holderor holders of record of such Shares until the Business Day following suchInterest Payment Date.

 

##### (h)                                 On maturity of the Initial Debentures, the Company may, at itsoption and subject to the provisions of Section 4.10 and subject to anyapplicable regulatory or shareholder approvals, elect to satisfy its obligationto pay all or a portion of the aggregate principal amount of the InitialDebentures due on maturity by issuing and delivering to such holders of InitialDebentures Shares pursuant to the provisions of Section 4.10. If theCompany elects to exercise such option, it shall deliver a Maturity Notice tothe Debenture Trustee and the holders of the Initial Debentures and provide thenecessary details.

 

##### (i)                                     The Initial Debentures shall be issued as Fully RegisteredDebentures in denominations of $1,000 and integral multiples of $1,000. EachInitial Debenture and the certificate of the Debenture Trustee endorsed thereonshall be issued in substantially the form set out in Schedule “A”,with such insertions, omissions, substitutions or other variations as shall berequired or permitted by this Indenture, and may have imprinted orotherwise reproduced thereon such legend or legends or endorsements, notinconsistent with the provisions of this Indenture, as may be required tocomply with any law or with any rules or regulations pursuant thereto orwith any rules or regulations of any securities exchange or securitiesregulatory authority or to conform with general usage, all as may bedetermined by the directors of the Company executing such Initial Debenture inaccordance with Section 2.7 hereof, as conclusively evidenced by theirexecution of an Initial Debenture. Each Initial Debenture shall additionallybear such distinguishing letters and numbers as the Debenture Trustee shallapprove. Notwithstanding the foregoing, an Initial Debenture may be insuch other form or forms as from time to time may be approved by aresolution of the directors of the Company or as specified in an Officer’sCertificate. The Initial Debentures may be engraved, lithographed,printed, mimeographed or typewritten or partly in one form and partly inanother.

 

##### (j)                                     Within 30 days following the occurrence of a Change of Control, andsubject to the provisions and conditions of this Section 2.4(j) theCompany shall be obligated to offer to purchase the then outstanding InitialDebentures. The terms and conditions of such obligation are set forth below:

#####  

##### 13

##### 

#####  

###### (i)                                     Within 30 days following the occurrence of a Change of Control, theCompany shall deliver to the Debenture Trustee, and the Debenture Trustee shallpromptly deliver to the holders of the Initial Debentures a notice stating thatthere has been a Change of Control and specifying the circumstances surroundingsuch event (a “**Change of Control Notice**”) together with an offer in writing (the “**Offer**”) to purchaseall then outstanding Initial Debentures made in accordance with the requirementsof Applicable Securities Legislation at a price equal to 101% of the principalamount thereof plus accrued and unpaid interest, if any, on such InitialDebentures up to, but excluding, the date of acquisition by the Company or arelated party of such Debentures (the “**OfferPrice**”) which Offer shall, unless otherwiseprovided under Applicable Securities Legislation, be open for acceptancethereof for a period of not less than 35 days and not more than 60 days andshall provide for payment to all Debentureholders who accept the Offer notlater than the 60th day after the making of the Offer. The Change of ControlNotice shall specify (i) the provision of the Indenture pursuant to whichthe offer is being made and that all Initial Debentures validly tendered willbe accepted for payment; (ii) the Offer Price and date of acquisition bythe Company; (iii) that any Initial Debenture not tendered will continueto accrue interest in accordance with its terms; (iv) that any InitialDebenture accepted for payment pursuant to the Offer shall cease to accrueinterest on and after the date of acquisition by the Company unless the Companydefaults in the payment of the Offer Price; (v) that Debentureholderselecting to have an Initial Debenture purchased pursuant to the Offer will berequired to surrender the Initial Debenture to the Debenture Trustee at theaddress specified in the notice prior to the close of business on the BusinessDay immediately preceding the date of acquisition by the Company or, in thecase of the Global Debenture, that the purchase will take place in such manneras may be agreed upon by the Depository, the Debenture Trustee and theCompany and specified in the Offer; and (vi) that Debentureholders will beentitled to withdraw their election if the Debenture Trustee receives, notlater than the close of business on the third Business Day immediatelypreceding the date of acquisition by the Company, a facsimile transmission orletter setting forth the name of such Debentureholder, the principal amount ofDebentures delivered for purchase and a statement that such Debentureholder iswithdrawing his or her election to have such Initial Debentures purchased.

######  

###### (ii)                                  If 90% or more in aggregate principal amount of Initial Debenturesoutstanding on the date the Company provides the Change of Control Notice andthe Offer to holders of the Initial Debentures have been tendered for purchasepursuant to the Offer on the expiration thereof, the Company has the right andobligation upon written notice provided to the Debenture Trustee within 10 daysfollowing the expiration of the Offer, to redeem and shall redeem all theInitial Debentures remaining outstanding on the expiration of the Offer at theOffer Price (the “**90% RedemptionRight**”).

######  

###### (iii)                               Upon receipt of notice that the Company has exercised or isexercising the 90% Redemption Right and is acquiring the remaining InitialDebentures, the Debenture Trustee shall promptly provide written notice to eachDebentureholder that did not previously accept the Offer that:

######  

(A)                              the Company has exercised the 90% Redemption Right and is purchasingall outstanding Initial Debentures effective on the expiry of the Offer at theOffer Price, and shall include a calculation of the amount payable to suchholder as payment of the Offer Price;

 

(B)                                each such holder must transfer their Initial Debentures to theDebenture Trustee on the same terms as those holders that accepted the Offerand must send their respective Initial Debentures, duly endorsed for transfer,to the Debenture Trustee within 10 days after the sending of such notice; and

 

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(C)                                the rights of such holder under the terms of the Initial Debenturesand this Indenture cease to be effective as of the date of expiry of the Offerprovided the Company has, on or before the time of notifying the DebentureTrustee of the exercise of the 90% Redemption Right, paid the aggregate OfferPrice to, or to the order of, the Debenture Trustee and thereafter the InitialDebentures shall not be considered to be outstanding and each holder thereofshall not have any right except to receive such holder’s Offer Price uponsurrender and delivery of such holder’s Initial Debentures in accordance withthe Indenture.

 

Theform of notice to be provided to each Debentureholder that did notpreviously accept the Offer shall be prepared by the Company or counsel to theCompany, and the Debenture Trustee shall not be responsible for calculating anyamount payable to such holders.

 

###### (iv)                              The Company shall, on or before 11:00 a.m. (Toronto time) onthe date of the expiry of the Offer, deposit with the Debenture Trustee or anypaying agent to the order of the Debenture Trustee by electronic transfer, suchsums of money as may be sufficient to pay the aggregate Offer Price of theInitial Debentures to be purchased or redeemed by the Company on the expiry ofthe Offer. The Company shall also deposit with the Debenture Trustee a sum ofmoney sufficient to pay any charges or expenses which may be incurred bythe Debenture Trustee in connection with such purchase and/or redemption, asthe case may be. Every such deposit shall be irrevocable. From the sums sodeposited, the Debenture Trustee shall pay or cause to be paid to the holdersof such Initial Debentures, the Offer Price to which they are entitled on theCompany’s purchase or redemption. For greater certainty, the Company shall notbe permitted to satisfy the Offer Price payable pursuant to an Offer or theexercise of the 90% Redemption Right through the issuance of Shares.

######  

###### (v)                                 In the event that one or more of such Initial Debentures beingpurchased in accordance with this Section 2.4(j) becomes subject topurchase in part only, upon surrender of such Initial Debentures forpayment of the Offer Price, the Company shall execute and the Debenture Trusteeshall certify and deliver without charge to the holder thereof or upon theholder’s order, one or more new Initial Debentures for the portion of theprincipal amount of the Initial Debentures not purchased.

######  

###### (vi)                              Initial Debentures for which holders have accepted the Offer andInitial Debentures which the Company has elected to redeem in accordance withthis Section 2.4(j) shall become due and payable at the Offer Price on thedate of expiry of the Offer or, where has Company has elected to redeem inaccordance with this Section 2.4(j), on the date prescribed in the noticeprovided pursuant to Section 2.4(j)(iii) , in the same manner andwith the same effect as if it were the date of maturity specified in suchInitial Debentures, anything therein or herein to the contrary notwithstanding,and from and after such date of expiry of the Offer, if the money necessary topurchase or redeem the Initial Debentures shall have been deposited as providedin this Section 2.4(j) and affidavits or other proofs satisfactory to theDebenture Trustee as to the publication and/or mailing of such notices shallhave been lodged with it, interest on the Initial Debentures shall cease. Ifany question shall arise as to whether any notice has been given as aboveprovided and such deposit made, such question shall be decided by the DebentureTrustee whose decision shall be final and binding upon all parties in interest.

######  

###### (vii)                           In case the holder of any Initial Debenture to be purchased orredeemed in accordance with this Section 2.4(j)  shall fail on or before the date specified inSection 2.4(j)(i) or Section 2.4(j)(vi), as applicable, so tosurrender such holder’s Initial Debenture or shall not within such time acceptpayment of the monies payable, or give such receipt therefor, if any, as theDebenture Trustee may require, such monies may be set aside in trust,either in the deposit department of the Debenture Trustee or in a charteredbank, and such setting aside shall for all purposes be deemed a payment to theDebentureholder of the sum so set aside and the Debentureholder shall have noother right except to receive payment of the monies so paid and depositedwithout interest, upon surrender and delivery up of such holder’s InitialDebenture. In the event that any money required to be deposited hereunder withthe Debenture Trustee or any depository or paying agent on account ofprincipal, premium, if any, or interest, if any, on Initial Debentures issuedhereunder shall remain so deposited for a period of six years from the date ofexpiry of the Offer, then such monies, together with any accumulated interestthereon, shall at the end of such period be paid over or delivered over by theDebenture Trustee or such depository or paying agent to the Company and theDebenture Trustee shall not be responsible to Debentureholders for any amountsowing to them.

######  

###### 15

###### 

######  

###### (viii)                        Subject to the provisions above related to Initial Debenturespurchased in part, all Initial Debentures redeemed and paid under this Section 2.4(j)shall forthwith be delivered to the Debenture Trustee and cancelled and noInitial Debentures shall be issued in substitution therefor.

######  

###### (ix)                                The Company will publicly announce the aggregate principal amount ofInitial Debentures that were purchased under the Offer made pursuant to Section 2.4(j)(i) promptlyafter the date such Initial Debentures were acquired by the Company.

 

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

 

## **2.5**                                                                               Certification andDelivery of Additional Debentures

##  

TheCompany may from time to time request the Debenture Trustee to certify anddeliver Additional Debentures of any series by delivering to the DebentureTrustee the documents referred to below in this Section 2.5 whereupon theDebenture Trustee shall certify such Debentures and cause the same to bedelivered in accordance with the Written Direction of the Company referred tobelow or pursuant to such procedures acceptable to the Debenture Trustee as may bespecified from time to time by a Written Direction of the Company. The maturitydate, issue date, interest rate (if any) and any other terms of the Debenturesof such series shall be set forth in or determined by or pursuant to suchWritten Direction of the Company and such procedures. In certifying suchDebentures, the Debenture Trustee shall be entitled to receive and shall befully protected in acting and relying upon, unless and until such documentshave been superseded or revoked:

 

##### (a)                                  an Officer’s Certificate and/or executed supplemental indenture byor pursuant to which the form and terms of such Additional Debentures wereestablished;

#####  

##### (b)                                 a Written Direction of the Company requesting certification anddelivery of such Additional Debentures and setting forth delivery instructions,provided that, with respect to Debentures of a series subject to aPeriodic Offering:

#####  

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

######  

###### (ii)                                  the Debenture Trustee shall certify and deliver AdditionalDebentures of such series for original issue from time to time, in anaggregate principal amount not exceeding the aggregate principal amount, ifany, established for such series, pursuant to a Written Direction of theCompany or pursuant to procedures acceptable to the Debenture Trustee as may bespecified from time to time by a Written Direction of the Company;

######  

###### (iii)                               the maturity date or dates, issue date or dates, interest rate orrates (if any) and any other terms of Additional Debentures of such series shallbe determined by an executed supplemental indenture or by Written Direction ofthe Company or pursuant to such procedures; and

######  

###### 16

###### 

######  

###### (iv)           if providedfor in such procedures, such Written Direction of the Company may authorizecertification and delivery pursuant to electronic instructions from theCompany;

######  

##### (c)                                  an opinion of Counsel to the Company and the Debenture Trustee thatall legal requirements imposed by this Indenture in connection with theproposed issue of Additional Debentures have been complied with, subject to thedelivery of certain documents or instruments specified in such opinion; and

#####  

##### (d)                                 an Officer’s Certificate certifying that the Company is not indefault under this Indenture, that the terms and conditions for thecertification and delivery of Additional Debentures (including those set forthin Section 14.5), have been complied with subject to the delivery of anydocuments or instruments specified in such Officer’s Certificate and that noEvent of Default exists or will exist upon such certification and delivery.

#####  

## **2.6**                                                                               Issue of GlobalDebentures

##  

##### (a)                                  The Company may specify that the Debentures of a series areto be issued in whole or in part, as one or more Global Debentures registeredin the name of a Depository, or its nominee, designated by the Company in theWritten Direction of the Company delivered to the Debenture Trustee at the timeof issue of such Debentures. In the event the Company specifies that theDebentures of a series are to be issued as a Global Debenture, the Companyshall execute and the Debenture Trustee shall certify and deliver one or moreGlobal Debentures that shall:

#####  

###### (i)                  represent an aggregate amount equal to the principal amount of theoutstanding Debentures of such series to be represented by one or moreGlobal Debentures;

######  

###### (ii)               bedelivered by the Debenture Trustee as directed in the Written Direction of theCompany; and

######  

###### (iii)            beara legend substantially to the following effect:

######  

“ThisDebenture is a Global Debenture within the meaning of the Trust Indenture datedas of September 12, 2007 between Canadian Satellite Radio Holdings Inc.and CIBC Mellon Trust Company (the “**Indenture**”) andis registered in the name of a Depository or a nominee thereof. This Debenture may notbe transferred to or exchanged for Debentures registered in the name of anyPerson other than the Depository or a nominee thereof and no such transfer may beregistered except in the limited circumstances described in the Indenture. EveryDebenture authenticated and delivered upon registration of, transfer of, or inexchange for, or in lieu of, this Debenture shall be a Global Debenture subjectto the foregoing, except in such limited circumstances described in theIndenture.”

 

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

#####  

## **2.7**                                                                               Execution ofDebentures

##  

AllDebentures shall be signed (either manually, by manual signature that is sentby portable document format or by facsimile signature) by any one director orofficer of the Company, holding office at the time of signing. A facsimilesignature upon a Debenture shall for all purposes of this Indenture be deemedto be the signature of the Person whose signature it purports to be. Notwithstandingthat any Person whose signature, either manual or in facsimile, appears on aDebenture as a director or officer of the Company, may no longer hold suchoffice at the date of the Debenture or at the date of the certification anddelivery thereof, such Debenture shall be valid and binding upon the Companyand entitled to the benefits of this Indenture.

 

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## **2.8**                                                                               Certification

##  

NoDebenture shall be issued or, if issued, shall be obligatory or shall entitlethe holder to the benefits of this Indenture, until it has been manuallycertified by or on behalf of the Debenture Trustee substantially in the form setout in this Indenture, in the relevant supplemental indenture, or in some otherform approved by the Debenture Trustee. Such certification on anyDebenture shall be conclusive evidence that such Debenture is duly issued, is avalid obligation of the Company and the holder is entitled to the benefitsdescribed herein and therein.

 

Thecertificate of the Debenture Trustee signed on the Debentures, or interimDebentures hereinafter mentioned, shall not be construed as a representation orwarranty by the Debenture Trustee as to the validity of this Indenture or ofthe Debentures or interim Debentures or as to the issuance of the Debentures orinterim Debentures and the Debenture Trustee shall in no respect be liable oranswerable for the use made of the Debentures or interim Debentures or any ofthem or the proceeds thereof. The certificate of the Debenture Trustee signedon the Debentures or interim Debentures shall, however, be a representation andwarranty by the Debenture Trustee that the Debentures or interim Debentureshave been duly certified by or on behalf of the Debenture Trustee pursuant tothe provisions of this Indenture.

 

## **2.9**                                                                               Interim Debentures orCertificates

##  

Pendingthe delivery of definitive Debentures of any series to the DebentureTrustee, the Company may issue and the Debenture Trustee certify in lieuthereof interim Debentures in such forms and in such denominations and signedin such manner as provided herein, entitling the holders thereof to definitiveDebentures of the series when the same are ready for delivery; or theCompany may execute and the Debenture Trustee certify a temporaryDebenture for the whole principal amount of Debentures of the series thenauthorized to be issued hereunder and deliver the same to the Debenture Trusteeand thereupon the Debenture Trustee may issue its own interim certificatesin such form and in such amounts, not exceeding in the aggregate theprincipal amount of the temporary Debenture so delivered to it, as the Company,and the Debenture Trustee may approve entitling the holders thereof toreceive definitive Debentures of the series when the same are ready fordelivery; and, when so issued and certified, such interim or temporaryDebentures or interim certificates shall, for all purposes but withoutduplication, rank in respect of this Indenture equally with Debentures dulyissued hereunder and, pending the exchange thereof for definitive Debentures,the holders of the interim or temporary Debentures or interim certificatesshall be deemed without duplication to be Debentureholders and entitled to thebenefit of this Indenture to the same extent and in the same manner as thoughthe said exchange had actually been made. Forthwith after the Company shallhave delivered the definitive Debentures to the Debenture Trustee, theDebenture Trustee shall cancel such temporary Debentures, if any, and shallcall in for exchange all interim Debentures or certificates that shall havebeen issued and forthwith after such exchange shall cancel the same. No chargeshall be made by the Company or the Debenture Trustee to the holders of suchinterim or temporary Debentures or interim certificates for the exchangethereof. All interest paid upon interim or temporary Debentures or interimcertificates shall be noted thereon as a condition precedent to such paymentunless paid by cheque to the registered holders thereof.

 

## **2.10**                                                                        Mutilation, Loss,Theft or Destruction

##  

Incase any of the Debentures, whether a Global Debenture or a Fully RegisteredDebenture, issued hereunder shall become mutilated or be lost, stolen ordestroyed, the Company, in its discretion, may issue, and thereupon theDebenture Trustee shall certify and deliver, a new Debenture upon surrender andcancellation of the mutilated Debenture, or in the case of a lost, stolen ordestroyed Debenture, in lieu of and in substitution for the same, and thesubstituted Debenture shall be in a form approved by the Debenture Trusteeand shall be entitled to the benefits of this Indenture and rank equally inaccordance with its terms with all other Debentures issued or to be issuedhereunder. In case of loss, theft or destruction the applicant for asubstituted Debenture shall furnish to the Company and to the Debenture Trusteesuch evidence of the loss, theft or destruction of the Debenture as shall besatisfactory to them in their discretion and shall also furnish an indemnitysatisfactory to them in their discretion and any other documents required bythe Debenture Trustee in their discretion. The applicant shall pay allreasonable expenses incidental to the issuance of any substituted Debenture.

 

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## **2.11**                                                                        Concerning Interest

##  

##### (a)                                  Subject to Section 2.4(b) with respect to the calculationof interest in respect of the initial interest payment to be paid on theInitial Debentures, all Debentures issued hereunder, whether originally or uponexchange or in substitution for previously issued Debentures which are interestbearing, shall bear interest (i) from and including their issue date, or (ii) fromand including the last Interest Payment Date to which interest shall have beenpaid or made available for payment on the outstanding Debentures of thatseries, whichever shall be the later, or, in respect of Debentures subject to aPeriodic Offering, from and including their issue date or from and includingthe last Interest Payment Date to which interest shall have been paid or madeavailable for payment on such Debentures, in all cases, to and excluding thenext Interest Payment Date;

#####  

##### (b)                                 Unless otherwise specifically provided in the terms of theDebentures of any series, interest for any period of less than six months shallbe computed on the basis of a year of 365 days. Subject to Section 2.4(b) inrespect of the method for calculating the amount of interest to be paid on theInitial Debentures on the first Interest Payment Date in respect thereof, withrespect to any series of Debentures, whenever interest is computed on abasis of a year (the “**deemed year**”) which contains fewer days than the actual number of days in thecalendar year of calculation, such rate of interest shall be expressed as ayearly rate for purposes of the *Interest Act*(Canada) by multiplying such rate of interest by the actual numberof days in the calendar year of calculation and dividing it by the number ofdays in the deemed year.

#####  

## **2.12**                                                                        Debentures to Rank *Pari Passu*

##  

TheDebentures will be direct unsecured, subordinated obligations of the Company. EachDebenture of the same series of Debentures will rank *pari passu*with each other Debenture ofthe same series (regardless of their actual date or terms of issue) and,subject to statutory preferred exceptions, with all other present and futuresubordinated and unsecured indebtedness of the Company except for sinkingCompany provisions (if any) applicable to different series of Debenturesor other similar types of obligations of the Company.

 

## **2.13**                                                                        Payments of AmountsDue on Maturity

##  

Exceptas may otherwise be provided herein or in any supplemental indenture inrespect of any series of Debentures and subject to Section 4.10,payments of amounts due upon maturity of the Debentures will be made in thefollowing manner. The Company will establish and maintain with the DebentureTrustee a Maturity Account for each series of Debentures. Each suchMaturity Account shall be maintained by and be subject to the control of theDebenture Trustee for the purposes of this Indenture. On or before 11:00 a.m.(Toronto time) on the Business Day immediately prior to each Maturity Date forDebentures outstanding from time to time under this Indenture, the Company willdeliver to the Debenture Trustee funds for deposit in the applicable MaturityAccount in an amount sufficient to pay the cash amount payable in respect ofsuch Debentures (including the principal amount together with any accrued andunpaid interest thereon less any tax required by law to be withheld or deductedtherefrom). The Debenture Trustee, on behalf of the Company, will pay to eachholder entitled to receive payment the principal amount of and premium (if any)and accrued and unpaid interest on the Debenture (less any tax required to bewithheld or deducted therefrom), upon surrender of the Debenture at any branchof the Debenture Trustee designated for such purpose from time to time by theCompany and the Debenture Trustee. The delivery of such funds to the DebentureTrustee for deposit to the applicable Maturity Account will satisfy anddischarge the liability of the Company for the Debentures to which the deliveryof funds relates to the extent of the amount delivered (plus the amount of anytax withheld or deducted as aforesaid) and such Debentures will thereafter tothat extent not be considered as outstanding under this Indenture and suchholder will have no other right in regard thereto other than to receive out ofthe money so delivered or made available the amount to which it is entitled.

 

Paymentof funds to the Debenture Trustee upon maturity of the Debentures shall be madeby electronic transfer or pursuant to such other arrangements for the provisionof funds as may be agreeable between the Company and the Debenture Trusteein order to effect such maturity payment hereunder. The Debenture Trustee shalldisburse such maturity payments only upon receiving, at least one Business Dayprior to each Maturity Date, funds in an amount sufficient for the maturitypayment. Notwithstanding the foregoing, all payments in excess of$25 million in Canadian dollars (or such other amount as determined fromtime to time by the Canadian Payments Association) shall be made by the use ofthe Large Value Transfer System (“LVTS”). The Debenture Trustee shall have noobligation to disburse funds pursuant to this Section 2.13 until it hasreceived written confirmation satisfactory to it that the funds have beendeposited with it in sufficient amount to pay in full all amounts due andpayable on the applicable Maturity Date. The Debenture Trustee shall, if anyfunds are received by it in the form of uncertified cheques, be entitledto delay the time for release of such funds until such uncertified chequesshall be determined to have cleared the financial institution upon which thesame are drawn.

 

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## **2.14**                                                                        U.S. Legend on theDebentures

##  

##### (a)                                  The Debentures and the Shares issuable upon conversion thereof (orissuable in connection with the payment of interest or principal thereon) havenot been and will not be registered under the 1933 Act.****All Debentures and the Shares issuableupon conversion thereof (or issuable in connection with the payment of interestor principal thereon) issued and sold in the United States in reliance on anexemption from the registration requirements under the 1933 Act, as well as allDebentures and the Shares issuable upon conversion thereof (or issuable inconnection with the payment of interest or principal thereon) issued inexchange for or in substitution of the foregoing securities, shall bear, unlessotherwise directed by the Company, the following legend (the “**U.S. Legend**”):

#####  

“THESECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED (THE “*U.S. SECURITIES ACT*”).THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THECOMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERREDONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCEWITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) INACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACTPROVIDED BY (1) RULE 144 OR (2) RULE 144A THEREUNDER, IFAVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) INA TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACTOR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OFSECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANYAND THE DEBENTURE TRUSTEE AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OROTHER EVIDENCE OF EXEMPTION, IN EITHER CASE, REASONABLY SATISFACTORY TO THECOMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY INSETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE HOLDER AGREES NOTTO ENGAGE, DIRECTLY OR INDIRECTLY, IN HEDGING TRANSACTIONS INVOLVING THESESECURITIES UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT. PROVIDED THAT THECOMPANY IS A “FOREIGN ISSUER” WITHIN THE MEANING OF REGULATION S AT THE TIME OFSALE, AND PROVIDED THAT THE FOLLOWING PROCEDURE COMPLIES WITH U.S. SECURITIESLAWS AT THE TIME OF SALE, A NEW CERTIFICATE BEARING NO LEGEND MAY BEOBTAINED FROM THE COMPANY’S REGISTRAR AND TRANSFER AGENT UPON DELIVERY OF THISCERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THEREGISTRAR AND TRANSFER AGENT AND THE COMPANY, TO THE EFFECT THAT SUCH SALE ISBEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.SECURITIES ACT.”

 

provided,that if the Debentures or Shares, as the case may be, are being sold underclause (B) above, and provided that the Company is a “foreign issuer”within the meaning of Regulation S under the 1933 Act at the time of sale, theU.S. Legend may be removed by providing a declaration to the DebentureTrustee or the registrar and transfer agent for the Shares, as the case may be,as set forth in Schedule “E” hereto (or as the Company may prescribefrom time to time); and provided, further, that, if any such securities arebeing sold under clause (C)(1) above, the U.S. Legend may be removedby delivery to the Debenture Trustee or the registrar and transfer agent forthe Shares, as the case may be, of an opinion of counsel, of recognizedstanding reasonably satisfactory to the Company and the Debenture Trustee (ifthe opinion is being delivered to the Debenture Trustee), that the U.S. Legendis no longer required under applicable requirements of the 1933 Act or statesecurities laws. Provided that the Debenture Trustee or the registrar andtransfer agent for the Shares, as the case may be, obtains confirmationfrom the Company that such counsel is satisfactory to the Company, theDebenture Trustee or the registrar and transfer agent for the Shares, as thecase may be, shall be entitled to rely on such opinion of counsel withoutfurther inquiry.

 

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##### (b)                                 Prior to the issuance of the Debentures, the Company shall notifythe Debenture Trustee, in writing, concerning which Debentures are to bear theU.S. Legend. The Debenture Trustee will thereafter maintain a list of allregistered holders from time to time of Legended Debentures.

#####  

## **2.15**                                                                        Payment of Interest

##  

Thefollowing provisions shall apply to any series of Debentures, except asotherwise provided in Section 2.4(b), Section 2.4(c), Section 2.4(d) orspecified in a resolution of the directors of the Company, an Officer’sCertificate or a supplemental indenture relating to a particular series ofAdditional Debentures:

 

##### (a)                                  As interest becomes due on each Debenture (except at maturity, onconversion or on redemption or repurchase, when interest may at the optionof the Company be paid upon surrender of such Debenture) the Company, eitherdirectly or through the Debenture Trustee or any agent of the DebentureTrustee, shall send or forward by prepaid ordinary mail, electronic transfer offunds or such other means as may be agreed to by the Debenture Trustee,payment of such interest (less any tax required to be withheld therefrom) tothe order of the registered holder of such Debenture appearing on the registersmaintained by the Debenture Trustee at the close of business on the thirdBusiness Day prior to the applicable Interest Payment Date and addressed to theholder at the holder’s last address appearing on the register (or, in the caseof joint holders to the registered address of one of the joint holders), unlesssuch holder otherwise directs. If payment is made by cheque, such cheque shallbe forwarded at least three Business Days prior to each date on which interestbecomes due and if payment is made by other means (such as electronic transferof funds, provided the Debenture Trustee must receive confirmation of receiptof funds prior to being able to wire funds to holders), such payment shall bemade in a manner whereby the holder receives credit for such payment on thedate such interest on such Debenture becomes due. The mailing of such cheque orthe making of such payment by other means shall, to the extent of the sum representedthereby, plus the amount of any tax withheld as aforesaid, satisfy anddischarge all liability for interest on such Debenture, unless in the case ofpayment by cheque, such cheque is not paid at par on presentation. In the eventof non-receipt of any cheque for or other payment of interest by the Person towhom it is so sent as aforesaid, the Company will issue to such Person areplacement cheque or other payment for a like amount upon being furnished withsuch evidence of non-receipt as it shall reasonably require and upon beingindemnified to its satisfaction. Notwithstanding the foregoing, if the Companyis prevented by circumstances beyond its control (including, withoutlimitation, any interruption in mail service) from making payment of any interestdue on each Debenture in the manner provided above, the Company may makepayment of such interest or make such interest available for payment in anyother manner acceptable to the Debenture Trustee with the same effect as thoughpayment had been made in the manner provided above. If payment is made throughthe Debenture Trustee, at least one Business Day prior to each Interest PaymentDate or the date of mailing the cheques for the interest due on an InterestPayment Date, whichever is earlier, the Company shall deliver sufficient fundsto the Debenture Trustee by electronic transfer or make such other arrangementsfor the provision of funds as may be agreeable between the DebentureTrustee and the Company in order to effect such interest payment hereunder. TheDebenture Trustee shall disburse such interest payments only upon receiving, atleast one Business Day prior to each such date, funds in an amount sufficientfor the interest payment. Notwithstanding the foregoing, all payments in excessof $25 million in Canadian dollars (or such other amount as determinedfrom time to time by the Canadian Payments Association) shall be made by theuse of the LVTS. The Debenture Trustee shall have no obligation to disbursefunds pursuant to this Section 2.15(a) until it has received writtenconfirmation satisfactory to it that the funds have been deposited with it insufficient amount to pay in full all amounts due and payable with respect tosuch Interest Payment Date. The Debenture Trustee shall, if any funds arereceived by it in the form of uncertified cheques, be entitled to delaythe time for release of such funds until such uncertified cheques shall bedetermined to have cleared the financial institution upon which the same aredrawn.

#####  

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##### (b)                                 Notwithstanding Section 2.15(a), if a series of Debenturesis represented by a Global Debenture, then all payments of interest on theGlobal Debenture shall be made by electronic funds transfer to the Depositoryor its nominee for subsequent payment to Beneficial Holders of interests inthat Global Debenture, unless the Company and the Depository otherwise agree. Noneof the Company, the Debenture Trustee or any agent of the Debenture Trustee forany Debenture issued as a Global Debenture will be liable or responsible to anyPerson for any aspect of the records related to or payments made on account ofbeneficial interests in any Global Debenture or for maintaining, reviewing, orsupervising any records relating to such beneficial interests.

#####  

## **2.16**                                                                        Withholding Tax

##  

Forgreater certainty, the Company will be entitled to deduct and withhold anyapplicable taxes or similar charges (including interest, penalties or similaramounts in respect thereof) imposed or levied by or on behalf of the Canadiangovernment or of any province or territory thereof or any authority or agencytherein or thereof having power to tax, including pursuant to the Tax Act, fromany payment to be made on or in connection with the Debentures and, provided thatthe Company forthwith remits such withheld amount to such government, authorityor agency and files all required forms in respect thereof and, at the sametime, provides copies of such remittance and filing to the Debenture Trusteeand the relevant Debentureholder, the amount of any such deduction orwithholding will be considered an amount paid in satisfaction of the Company’sobligations under the Debentures and there is no obligation on the Company togross-up amounts paid to a holder in respect of such deductions orwithholdings. The Company shall provide the Debenture Trustee and the relevantDebentureholder with copies of receipts or other communications relating to theremittance of such withheld amount or the filing of such forms received from suchgovernment, authority or agency promptly after receipt thereof.

 

TheDebenture Trustee shall have no obligation to verify any payments under the TaxAct or any provision of provincial, state, local or foreign tax law. TheDebenture Trustee shall at all times be indemnified and held harmless by theCompany from and against any personal liabilities of the Debenture Trusteeincurred in connection with the failure of the Company or its agents, toreport, remit or withhold taxes as required by the Tax Act or otherwise failingto comply with the Tax Act. This indemnification shall survive the resignationor removal of the Debenture Trustee and the termination of this Indenturesolely to the extent that such liabilities have been incurred in connectionwith taxation years occurring during the term of this Indenture.

 

# **ARTICLE 3REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP**

 

## **3.1**                                                                               Fully RegisteredDebentures

 

##### (a)                                  With respect to each series of Debentures issuable as FullyRegistered Debentures, the Company shall cause to be kept by and at theprincipal office of the Debenture Trustee in Toronto, Ontario and by theDebenture Trustee or such other registrar as the Company, with the approval ofthe Debenture Trustee, may appoint at such other place or places, if any,as may be specified in the Debentures of such series or as theCompany may designate with the approval of the Debenture Trustee, aregister in which shall be entered the names and addresses of the holders ofFully Registered Debentures and particulars of the Debentures held by themrespectively and of all transfers of Fully Registered Debentures. Suchregistration shall be noted on the Debentures by the Debenture Trustee or otherregistrar unless a new Debenture shall be issued upon such transfer.

#####  

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##### 

 

##### (b)           Notransfer of a Fully Registered Debenture shall be valid unless made on suchregister referred to in Section 3.1(a) by the registered holder of suchDebenture or such holder’s executors, administrators or other legalrepresentatives or an attorney duly appointed by an instrument in writing inform and substance and execution satisfactory to the Debenture Trustee or otherregistrar upon surrender of the Debentures together with a duly executed formof transfer acceptable to the Debenture Trustee and upon compliance with suchother reasonable requirements as the Debenture Trustee or other registrar mayprescribe, nor unless the name of the transferee shall have been noted on theDebenture by the Debenture Trustee or other registrar.

 

## **3.2**                          GlobalDebentures

 

##### (a)           Withrespect to each series of Debentures issuable in whole or in part as one ormore Global Debentures, the Company shall cause to be kept by and at theprincipal offices of the Debenture Trustee in Toronto, Ontario or such otherregistrar as the Company, with the approval of the Debenture Trustee, mayappoint at such other place or places, if any, as the Company may designatewith the approval of the Debenture Trustee, a register in which shall beentered the name and address of the holder of each such Global Debenture (beingthe Depository, or its nominee, for such Global Debenture) as holder thereofand particulars of the Global Debenture held by it, and of all transfersthereof. If any Debentures of such series are at any time not Global Debentures,the provisions of Section 3.1 shall govern with respect to registrationsand transfers of such Debentures.

#####  

##### (b)           Notwithstandingany other provision of this Indenture, a Global Debenture may not betransferred by the registered holder thereof and accordingly, no securitycertificates shall be issued to Beneficial Holders of interests in such GlobalDebenture except in the following circumstances or as otherwise specified in aresolution of the directors of the Company, an Officer’s Certificate or supplementalindenture relating to a particular series of Debentures:

 

###### (i)            GlobalDebentures may be transferred by a Depository to a nominee of such Depositoryor by a nominee of a Depository to such Depository or to another nominee ofsuch Depository or by a Depository or its nominee to a successor Depository orits nominee;

 

###### (ii)           GlobalDebentures may be transferred at any time after the Depository for such GlobalDebentures (i) has notified the Debenture Trustee, or the Company has notifiedthe Debenture Trustee, that it is unwilling or unable to continue as Depositoryfor such Global Debentures, or (ii) ceases to be eligible to be a Depositoryunder Section 2.6(b), provided that at the time of such transfer theCompany has not appointed a successor Depository for such Global Debentures;

######  

###### (iii)          GlobalDebentures may be transferred at any time after the Company has determined, inits sole discretion, that the series of Debentures issued as such GlobalDebentures shall no longer be held in book-entry form and has communicated suchdetermination to the Debenture Trustee in writing;

######  

###### (iv)          GlobalDebentures may be transferred at any time after the Debenture Trustee hasdetermined that an Event of Default has occurred and is continuing with respectto the Debentures of the series issued as such Global Debenture, provided thatBeneficial Holders representing, in the aggregate, not less than 25% of theaggregate principal amount of the Debentures of such series issued as suchGlobal Debenture advise the Depository in writing, through the DepositoryParticipants, that the continuation of the book-entry only registration systemfor such series of Global Debentures is no longer in their best interest andalso provided that at the time of such transfer the Debenture Trustee has notwaived the Event of Default pursuant to Section 8.3;

######  

###### (v)           GlobalDebentures may be transferred if required by applicable law; or

 

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###### (vi)          GlobalDebentures may be transferred if the book-entry only registration system ceasesto exist.

######  

Fully Registered Debentures issued pursuant to this Section 3.2(b)shall be registered in such names and in such denominations as the Depository,pursuant to instructions from its Depository Participants or otherwise shallinstruct the Debenture Trustee provided that the aggregate principal amount ofFully Registered Debentures is equal to the principal amount of the GlobalDebenture so exchanged. The Debenture Trustee shall deliver such FullyRegistered Debentures to or as directed by the Beneficial Holders of the GlobalDebenture so exchanged. Upon exchange of a Global Debenture for Debentures indefinitive form such Global Debentures shall be cancelled by the DebentureTrustee.

 

##### (c)           Withrespect to the Global Debentures, unless and until definitive certificates havebeen issued to Beneficial Holders of interests in such Global Debenturespursuant to subsection 3.2(b):

#####  

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

######  

###### (ii)           therights of the Beneficial Holders shall be exercised only through the Depositoryand shall be limited to those established by law and agreements between suchBeneficial Holders and the Depository or the Depository Participants;

######  

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

######  

###### (iv)          wheneverthis Indenture requires or permits actions to be taken based upon instructionsor directions of Debentureholders evidencing a specified percentage of theoutstanding Debentures, the Depository shall be deemed to be counted in thatpercentage only to the extent that it has received instructions to such effectfrom the Beneficial Holders or the Depository Participants, and has deliveredsuch instructions to the Debenture Trustee.

 

##### (d)           Whenevera notice or other communication is required to be provided to Debentureholders,unless and until definitive certificate(s) have been issued to BeneficialHolders pursuant to this Section 3.2, the Debenture Trustee shall provideall such notices and communications to the Depository and the Depository shalldeliver such notices and communications to such Beneficial Holders inaccordance with Applicable Securities Legislation. Upon the termination of thebook-entry only registration system on the occurrence of one of the conditionsspecified in Section 3.2(b) with respect to a series of Debentures issuedhereunder, the Debenture Trustee shall notify all applicable BeneficialHolders, through the Depository, of the availability of definitive Debenturecertificates. Upon surrender by the Depository of the certificate(s)representing the Global Debentures and receipt of new registration instructionsfrom the Depository, the Debenture Trustee shall deliver the definitiveDebenture certificates for such Debentures to the holders thereof in accordancewith the new registration instructions and thereafter, the registration andtransfer of such Debentures will be governed by Section 3.1 and theremaining Sections of this Article 3.

#####  

##### (e)           Notwithstandinganything herein or in the terms of the Debentures to the contrary, neither theCompany nor the Debenture Trustee nor any agent thereof shall have anyresponsibility or liability for (i) any aspect of the records maintainedby any Depository relating to any securities entitlements or any otherinterests in the Debentures or to the depository system maintained by suchDepository, or payment made on account of any securities entitlements or anyother interest of any Person in any Global Debenture (other than the applicableDepository or its nominee), (ii) for maintaining, supervising or reviewingany records of any Depository or any Depository Participant relating to anyDebentures, or (iii) any advice or representation made by or with respectto any Depository and relating to the rules governing any Depository or anyaction to be taken by any Depository on its own direction or at the discretionof any of its Depository Participants.

 

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## **3.3**                          TransfereeEntitled to Registration

 

The transferee of a Debentureshall be entitled, after the appropriate form of transfer is lodged with theDebenture Trustee or other registrar and upon compliance with all otherconditions in that regard required by this Indenture or by law, to be enteredon the register as the owner of such Debenture free from all equities or rightsof set-off or counterclaim between the Company and the transferor or anyprevious holder of such Debenture, save in respect of equities of which theCompany is required to take notice by statute or by order of a court ofcompetent jurisdiction.

 

## **3.4**                          NoNotice of Trusts

 

Neither the Company nor theDebenture Trustee nor any registrar shall be bound to take notice of or see tothe execution of any trust (other than the trust created by this Indenture)whether express, implied or constructive, in respect of any Debenture, andsubject to Section 3.2(b) in respect of a Global Debenture, may transfer thesame on the direction of the Person registered as the holder thereof, whethernamed as trustee or otherwise, as though that Person were the Beneficial Holderthereof.

 

## **3.5**                          RegistersOpen for Inspection

 

The registers referred to inSections 3.1 and 3.2 shall during regular business hours be open forinspection by the Company, the Debenture Trustee or any Debentureholder. Everyregistrar, including the Debenture Trustee, shall from time to time whenrequested so to do by the Company or by the Debenture Trustee, in writing,furnish the Company or the Debenture Trustee, as the case may be, with a listof names and addresses of holders of registered Debentures entered on the registerkept by them and showing the principal amount and serial numbers of theDebentures held by each such holder, provided the Debenture Trustee shall beentitled to charge a reasonable fee to provide such a list.

 

## **3.6**                          Exchangesof Debentures

 

##### (a)           Subjectto Section 3.7, Debentures in any authorized form or denomination, otherthan Global Debentures, may be exchanged for Debentures in any other authorizedform or denomination, of the same series and date of maturity, bearing the sameinterest rate and of the same aggregate principal amount as the Debentures soexchanged.

#####  

##### (b)           Inrespect of exchanges of Debentures permitted by Section 3.6(a), Debenturesof any series may be exchanged only at the principal offices of the DebentureTrustee in the city of Toronto, Ontario or at such other place or places, ifany, as may be specified in the Debentures of such series and at such otherplace or places as may from time to time be designated by the Company with theapproval of the Debenture Trustee. Any Debentures tendered for exchange shallbe surrendered to the Debenture Trustee. The Company shall execute and theDebenture Trustee shall certify all Debentures necessary to carry out exchangesas aforesaid. All Debentures surrendered for exchange shall be cancelled.

#####  

##### (c)           Debenturesissued in exchange for Debentures which at the time of such issue have beenselected or called for redemption at a later date shall be deemed to have beenselected or called for redemption in the same manner and shall have notedthereon a statement to that effect.

 

## **3.7**                          Closingof Registers

 

##### (a)           Neitherthe Company nor the Debenture Trustee nor any other registrar shall be requiredto:

#####  

###### (i)            maketransfers or exchanges of, or convert any Fully Registered Debentures on anyInterest Payment Date for such Debentures or during the five preceding BusinessDays;

 

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###### (ii)           maketransfers or exchanges of, or convert any Debentures on the day of anyselection by the Debenture Trustee of Debentures to be redeemed or during thefive preceding Business Days; or

######  

###### (iii)          makeexchanges of any Debentures which will have been selected or called forredemption unless upon due presentation thereof for redemption such Debenturesshall not be redeemed.

######  

##### (b)           Subjectto any restriction herein provided, the Company with the approval of theDebenture Trustee may at any time close any register for any series ofDebentures, other than those kept at the principal offices of the DebentureTrustee in Toronto, Ontario, and transfer the registration of any Debenturesregistered thereon to another register (which may be an existing register) andthereafter such Debentures shall be deemed to be registered on such otherregister. Notice of such transfer shall be given to the holders of suchDebentures.

 

## **3.8**                          Chargesfor Registration, Transfer and Exchange

 

For each Debenture exchanged, registered, transferred or dischargedfrom registration, the Debenture Trustee or other registrar, except asotherwise herein provided, may make a reasonable charge for its services and inaddition may charge a reasonable sum for each new Debenture issued (suchamounts to be agreed upon from time to time by the Debenture Trustee and theCompany), and payment of such charges and reimbursement of the Debenture Trusteeor other registrar for any stamp taxes or governmental or other chargesrequired to be paid shall be made by the party requesting such exchange,registration, transfer or discharge from registration as a condition precedentthereto. Notwithstanding the foregoing provisions, no charge shall be made to aDebentureholder hereunder:

 

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

#####  

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

#####  

##### (c)           forany exchange of a Global Debenture as contemplated in Section 3.2(b); or

#####  

##### (d)           forany exchange of any Debenture resulting from a partial redemption underSection 4.2, a partial purchase under Section 4.9 or a partialconversion under Section 6.4.

#####  

## **3.9**                          Ownershipof Debentures

 

##### (a)           Unlessotherwise required by law, the Person in whose name any registered Debenture isregistered shall for all the purposes of this Indenture be and be deemed to bethe owner thereof and payment of or on account of the principal of and premium,if any, on such Debenture and interest thereon (including any Global Debenture)shall be made to such registered holder.

#####  

##### (b)           Theregistered holder for the time being of any registered Debenture shall beentitled to the principal, premium, if any, and/or interest evidenced by suchDebenture free from all equities or rights of set-off or counterclaim betweenthe Company and the original or any intermediate holder thereof and all Personsmay act accordingly and the receipt of any such registered holder (including bythe Depository or its nominee in the case of a Global Indenture) for any suchprincipal, premium or interest shall be a good discharge to the Company and/orthe Debenture Trustee and any registrar for the same and none of the Company,the Debenture Trustee nor any other registrar shall be bound to inquire intothe title of any such registered holder.

 

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##### (c)           WhereDebentures are registered in more than one name, the principal, premium, ifany, and interest from time to time payable in respect thereof may be paid tothe order of all such holders, failing written instructions from them to thecontrary, and the receipt of any one of such holders therefor shall be a validdischarge, to the Debenture Trustee, any registrar and to the Company.

#####  

##### (d)           In thecase of the death of one or more joint holders of any Fully RegisteredDebenture, the principal, premium, if any, and interest from time to timepayable thereon may be paid to the order of the survivor or survivors of suchregistered holders and the receipt of any such survivor or survivors thereforshall be a valid discharge to the Debenture Trustee and any registrar and tothe Company.

 

# **ARTICLE 4REDEMPTION, REPAYMENT AND PURCHASE OF DEBENTURES**

 

## **4.1**                          Applicabilityof Article

 

Subject to regulatory approval or any applicable shareholder approval,the Company shall have the right at its option to redeem, at any time followingthe third (3rd) anniversary of the Closing Date, either in whole orin part from time to time before the Maturity Date, either by payment of money,by issuance of Shares as provided in Section 4.6 or any combinationthereof, any Debentures issued hereunder of any series which by their terms aremade so redeemable (subject, however, to any applicable restriction on theredemption of Debentures of such series) at such rate or rates of premium, ifany, and on such date or dates and in accordance with such other provisions asshall have been determined at the time of issue of such Debentures and as shallhave been expressed in this Indenture, in the Debentures, in an Officer’sCertificate, or in a supplemental indenture authorizing or providing for theissue thereof, or in the case of Additional Debentures issued pursuant to aPeriodic Offering, in the Written Direction of the Company requesting thecertification and delivery thereof. Subject to regulatory approval or anyapplicable shareholder approval, the Company shall also have the right at itsoption to repay, either in whole or in part, on maturity, either by payment ofmoney in accordance with Section 2.13, by issuance of Shares as providedin Section 4.10 or any combination thereof, any Debentures issued hereunderof any series which by their terms are made so repayable on maturity (subjecthowever, to any applicable restriction on the repayment of the principal amountof the Debentures of such series) at such rate or rates of premium, if any, andon such date or dates and in accordance with such other provisions as shallhave been determined at the time of issue of such Debenture and shall have beenexpressed in this Indenture, in the Debentures, in an Officer’s Certificate, orin a supplemental indenture authorizing or providing for the issue thereof, orin the case of Additional Debentures issued pursuant to a Periodic Offering, inthe Written Direction of the Company requesting the certification and deliverythereof.

 

## **4.2**                          PartialRedemption

 

If less than all the Debentures of any series for the time beingoutstanding are at any time to be redeemed, or if a portion of the Debenturesbeing redeemed are being redeemed for cash and a portion of such Debentures arebeing redeemed by the payment of Shares pursuant to Section 4.6, theDebentures to be so redeemed shall be selected by the Debenture Trustee on a *pro rata* basis to the nearest multiple of$1,000 in accordance with the principal amount of the Debentures registered inthe name of each holder or in such other manner as the Debenture Trustee deemsequitable, subject (if applicable) to the approval of the Toronto StockExchange (or approval of any other stock exchange on which the Debentures maybe listed, if any), as may be required from time to time. Unless otherwisespecifically provided in the terms of any series of Debentures, no Debentureshall be redeemed in part unless the principal amount redeemed is $1,000 or amultiple thereof. For this purpose, the Debenture Trustee may make, and fromtime to time vary, regulations with respect to the manner in which suchDebentures may be drawn for redemption in part or for redemption in cash inpart and regulations so made shall be valid and binding upon all holders ofsuch Debentures notwithstanding the fact that as a result thereof one or moreof such Debentures may become subject to redemption in part only or for cashonly. In the event that one or more of such Debentures becomes subject toredemption in part only, upon surrender of any such Debentures for payment ofthe Redemption Price, together with accrued and unpaid interest to butexcluding the Redemption Date, the Company shall execute and the DebentureTrustee shall certify and deliver without charge to the holder thereof or uponthe holder’s order one or more new Debentures for the unredeemed part of theprincipal amount of the Debenture or Debentures so surrendered or, with respectto a Global Debenture, the Depository shall make notations on the GlobalDebenture of the principal amount thereof so redeemed which notation shall beauthenticated by the Debenture Trustee. Unless the context otherwise requires,the terms “**Debenture**” or “**Debentures**” as used in this Article 4 shallbe deemed to mean or include any part of the principal amount of any Debenturewhich in accordance with the foregoing provisions has become subject toredemption.

 

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## **4.3**                          Noticeof Redemption

 

Notice of redemption (the “**RedemptionNotice**”) of any series of Debentures shall be given to the DebentureTrustee and the holders of the Debentures so to be redeemed not more than 60days nor less than 30 days prior to the date fixed for redemption (the “**Redemption Date**”) in the manner provided inSection 13.2. Every Redemption Notice shall specify the aggregateprincipal amount of Debentures called for redemption, the Redemption Date, theRedemption Price and the amount of the accrued and unpaid interest to be paidthereon to but excluding the Redemption Date and the places of payment and shallstate that interest upon the principal amount of Debentures called forredemption shall cease to be payable from and after the Redemption Date. Inaddition, unless all the outstanding Debentures are to be redeemed for cash,the Redemption Notice shall specify:

 

##### (a)           thedistinguishing letters and numbers of the registered Debentures which are to beredeemed for cash and which are to be redeemed for other consideration (or ofsuch Debentures which as are registered in the name of such Debentureholder);

 

##### (b)           in thecase of a published notice, the distinguishing letters and numbers of theDebentures which are to be redeemed for cash and which are to be redeemed forother consideration or, if such Debentures are selected by terminal digit orother similar system, such particulars as may be sufficient to identify theDebentures so selected;

 

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

#####  

##### (d)           in allcases, the principal amounts of such Debentures or, if any such Debenture is tobe redeemed in part only, the principal amount of such part.

#####  

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

 

## **4.4**                          DebenturesDue on Redemption Dates

 

Notice having been given as aforesaid, all of the Debentures so calledfor redemption shall thereupon be and become due and payable at the RedemptionPrice, together with accrued and unpaid interest to but excluding theRedemption Date, on the Redemption Date specified in such notice, in the samemanner and with the same effect as if it were the Maturity Date specified insuch Debentures, anything therein or herein to the contrary notwithstanding,and from and after such Redemption Date, if the monies necessary to redeem, orthe Shares to be issued to redeem, such Debentures shall have been deposited asprovided in Section 4.5 and affidavits or other proof satisfactory to theDebenture Trustee as to the publication and/or mailing of such RedemptionNotices shall have been lodged with it, interest upon the Debentures shallcease. If any question shall arise as to whether any notice has been given asprovided in Section 4.3 and such deposit made, such question shall be decidedby the Debenture Trustee whose decision shall be final and binding upon allparties in interest. The Debenture Trustee shall have no obligation to verifyor calculate the Redemption Price.

 

## **4.5**                          Depositof Redemption Monies or Shares

 

Redemption of Debentures shall be provided for by the Companydepositing with the Debenture Trustee or any paying agent to the order of theDebenture Trustee, on or before 11:00 a.m. (Toronto time) on the Business Dayimmediately prior to the Redemption Date specified in such Redemption Notice,such sums of money, or certificates representing such Shares, or both, as thecase may be, as is sufficient to pay the Redemption Price of the Debentures socalled for redemption, plus such sum of money as is sufficient to pay accruedand unpaid interest thereon up to but excluding the Redemption Date, providedthe Company may elect to satisfy this requirement by providing the DebentureTrustee with a certified cheque or bank draft for such amounts required underthis Section 4.5 post-dated to the Redemption Date. The Company shall alsodeposit with the Debenture Trustee a sum of money sufficient to pay any chargesor expenses which may be incurred by the Debenture Trustee in connection withsuch redemption. Every such deposit shall be irrevocable. From the sums sodeposited, or certificates so deposited, or both, the Debenture Trustee shallpay or cause to be paid, or issue or cause to be issued, (i) in the caseof a Global Debenture, to the Depository upon the Depository making theappropriate notation in respect of the principal amount of the Debentures soredeemed, which notation shall be authenticated by the Debenture Trustee or(ii) in the case of Fully Registered Debentures to the holders of suchDebentures so called for redemption, upon surrender of such Debentures, theRedemption Price and interest (if any) to which they are respectively entitledon redemption.

 

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Payment of funds to the Debenture Trustee shall be made by electronictransfer or pursuant to such other arrangements for the provision of funds asmay be agreeable between the Debenture Trustee and the Company in order toeffect such redemption payment hereunder. The Debenture Trustee shall disbursesuch redemption proceeds only upon receiving, at least one Business Day priorto each Redemption Date, funds in an amount sufficient to pay the aggregateRedemption Price that is payable in cash and the aggregate amount of interest(if any) payable on redemption. Notwithstanding the foregoing, i) allpayments in excess of $25 million in Canadian dollars (or such otheramount as determined from time to time by the Canadian Payments Association)shall be made by the use of the LVTS; and ii) in the event that paymentmust be made to the Depository, the Company shall remit payment to theDebenture Trustee by LVTS. The Debenture Trustee shall have no obligation todisburse funds pursuant to this Section 4.5 unless it has received writtenconfirmation satisfactory to it that the funds have been deposited with it insufficient amount to pay the aggregate Redemption Price that is payable in cashand the aggregate amount of interest (if any) payable on redemption. TheDebenture Trustee shall, if any funds are received by it in the form ofuncertified cheques, be entitled to delay the time for release of such fundsuntil such uncertified cheques shall be determined to have cleared thefinancial institution upon which the same are drawn.

 

## **4.6**                          Right toRepay Redemption Price in Shares

 

##### (a)           Subjectto the other provisions of this Section 4.6 and receipt of any requiredregulatory or shareholder approvals, the Company may, at its option, inexchange for or in lieu of paying the Redemption Price in money, elect tosatisfy its obligation to pay all or any portion of the Redemption Price byissuing and delivering to holders on the Redemption Date that number of Sharesobtained by dividing the Redemption Price by 95% of the then Current MarketPrice of the Shares on the Redemption Date (the “**Share Redemption Right**”).The Debenture Trustee shall have no obligation to calculate or verify the ShareRedemption Right.

#####  

##### (b)           TheCompany shall exercise the Share Redemption Right by so specifying in theRedemption Notice which shall be delivered to the Debenture Trustee and theholders of Debentures not more than 60 days and not less than 40 days prior tothe Redemption Date. The Redemption Notice shall also specify the aggregateprincipal amount of Debentures in respect of which it is exercising the ShareRedemption Right.

#####  

##### (c)           TheCompany’s right to exercise the Share Redemption Right shall be conditionalupon the following conditions being met on the second Business Day immediatelypreceding the Redemption Date:

#####  

###### (i)            theissuance of the Shares on the exercise of the Share Redemption Right shall bemade in accordance with Applicable Securities Legislation and such Shares shallbe issued as Shares;

######  

###### (ii)           thelisting of such additional Shares on each stock exchange on which the Sharesare then listed;

######  

###### (iii)          theCompany being a reporting issuer in good standing under Applicable SecuritiesLegislation where the distribution of such Shares occurs;

######  

###### (iv)          noEvent of Default shall have occurred and be continuing;

 

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###### (v)           thereceipt by the Debenture Trustee of an Officer’s Certificate stating thatconditions (i), (ii), (iii) and (iv) above have been satisfied and settingforth the number of Shares to be delivered for each $1,000 principal amount ofDebentures and the Current Market Price of the Shares on the Redemption Date;and

######  

###### (vi)          thereceipt by the Debenture Trustee of an opinion of Counsel to the effect thatthe issuance of such Shares have been duly authorized by the Company and, whenissued and delivered pursuant to the terms of this Indenture in payment of theRedemption Price, will be validly issued as fully paid and non-assessable, thatconditions (i) and (ii) above have been satisfied and that, relying exclusivelyon certificates of good standing issued by the relevant securities authorities,condition (iii) above is satisfied, except that the opinion in respect ofcondition (iii) need not be expressed with respect to those provinces wherecertificates are not issued.

######  

If the foregoing conditions are not satisfied prior to the 5:00 p.m.(Toronto time) on the second Business Day immediately preceding the RedemptionDate, the Company shall pay the Redemption Price in cash in accordance withSection 4.5 unless the Debentureholder waives the conditions which are notsatisfied.

 

##### (d)           TheCompany’s right to exercise the Share Redemption Right shall be conditionalupon the Current Market Price of the Shares on the Redemption Date being notless than the Minimum Trading Price.

#####  

##### (e)           In theevent that the Company duly exercises its Share Redemption Right, the Companyshall on or before 11:00 a.m. (Toronto time) on the Redemption Date, deliver tothe Debenture Trustee, for delivery to and on account of the holders ofDebentures, upon the due presentation and surrender of the Debentures, theShares to which such holders are entitled.

#####  

##### (f)            Nofractional Shares shall be delivered upon the exercise of the Share RedemptionRight but, in lieu thereof, the Company shall pay to the Debenture Trustee forthe account of the holders, at the time contemplated in Section 4.6(e),the cash equivalent thereof determined on the basis of the Current Market Priceof the Shares on the Redemption Date (less any tax required to be deducted, ifany).

#####  

##### (g)           Aholder of Debentures shall be treated as the shareholder of record of theShares issued on due exercise by the Company of its Share Redemption Righteffective immediately after the close of business on the Redemption Date, andshall be entitled to all substitutions therefor, all income earned thereon oraccretions thereto and all dividends or distributions (including Sharedividends and dividends or distributions in kind) thereon and arisingthereafter, and in the event that the Debenture Trustee receives the same, itshall hold the same in trust for the benefit of such holder.

#####  

##### (h)           In theevent that the Company exercises its Share Repayment Right, the Company shallat all times reserve and keep available out of its authorized Shares (if thenumber thereof is or becomes limited), solely for the purpose of issue anddelivery upon the exercise of the Company’s Share Redemption Right as providedherein, and shall issue to Debentureholders to whom Shares will be issuedpursuant to exercise of the Share Redemption Right, such number of Shares asshall be issuable in such event. All Shares which shall be so issuable shall beduly and validly issued as fully paid and non-assessable.

#####  

##### (i)            TheCompany shall comply with all Applicable Securities Legislation regulating theissue and delivery of Shares upon exercise of the Share Redemption Right andshall cause to be listed and posted for trading such Shares on each stockexchange on which the Shares are then listed.

#####  

##### (j)            TheCompany shall from time to time promptly pay, or make provision satisfactory tothe Debenture Trustee for the payment of, all taxes and charges which may beimposed by the laws of Canada or any province or territory thereof (exceptincome tax or, withholding tax which shall be payable with respect to theissuance or delivery of Shares to holders of Debentures upon exercise of theShare Redemption Right pursuant to the terms of the Debentures and of thisIndenture.

 

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##### (k)           If theCompany elects to satisfy its obligation to pay all or any portion of theRedemption Price by issuing Shares in accordance with this Section 4.6 andif the Redemption Price (or any portion thereof) to which a holder is entitledis subject to withholding taxes and the amount of the cash payment of theRedemption Price, if any, is insufficient to satisfy such withholding taxes,the Debenture Trustee, on the Written Direction of the Company but for theaccount of the holder, shall sell, through the investment banks, brokers ordealers selected by the Company, out of the Shares issued by the Company forthis purpose, such number of Shares that together with the cash payment of theRedemption Price, if any, is sufficient to yield net proceeds (after payment ofall costs) to cover the amount of taxes required to be withheld, and shallremit same on behalf of the Company to the proper tax authorities within theperiod of time prescribed for this purpose under applicable laws. Any excessproceeds from such sale, after payment of all required withholding taxes, shallbe paid to the holder.

#####  

##### (l)            Eachcertificate representing Shares issued in payment of the Redemption Price ofDebentures bearing the U.S. Legend set forth in Section 2.14, as well asall certificates issued in exchange for or in substitution of the foregoingsecurities, shall bear the U.S. Legend set forth in Section 2.14; providedthat if the Shares are being sold outside the United States in accordance withRule 904 of Regulation S, and provided that the Company is a “foreign issuer”within the meaning of Regulation S at the time of sale, the U.S. Legend may beremoved by providing a declaration to the Debenture Trustee, as registrar andtransfer agent for the Shares, as set forth in Schedule “E” hereto (or as theCompany or the Debenture Trustee may prescribe from time to time); and providedfurther that, if any such securities are being sold within the United States inaccordance with Rule 144 under the 1933 Act, the U.S. Legend may be removed bydelivery to the Debenture Trustee, as registrar and transfer agent for theShares, of an opinion of counsel, of recognized standing reasonablysatisfactory to the Company, that the U.S. Legend is no longer required underapplicable requirements of the 1933 Act or state securities laws. Provided thatthe Debenture Trustee obtains confirmation from the Company that such counselis satisfactory to it, it shall be entitled to rely on such opinion of counselwithout further inquiry.

#####  

##### (m)          Accruedand unpaid interest on the Debentures on the Redemption Date will be paid toholders of Debentures, in cash, in the manner contemplated in Section 4.5.

 

## **4.7**                          Failureto Surrender Debentures Called for Redemption

 

In case the holder of any Debenture so called for redemption shall failon or before the Redemption Date so to surrender such holder’s Debenture, orshall not within such time accept payment of the redemption monies payable, ortake delivery of certificates representing such Shares issuable in respectthereof, or give such receipt therefor, if any, as the Debenture Trustee mayrequire, such redemption monies may be set aside in trust with or withoutinterest, or such certificates may be held in trust, either in the depositdepartment of the Debenture Trustee or in a chartered bank, and such settingaside shall for all purposes be deemed a payment to the Debentureholder of thesum or Shares so set aside and, to that extent, the Debenture shall thereafternot be considered as outstanding hereunder and the Debentureholder shall haveno other right except to receive payment out of the monies so paid anddeposited, or take delivery of the certificates so deposited, or both, uponsurrender and delivery up of such holder’s Debenture of the Redemption Price,as the case may be, of such Debenture plus any accrued but unpaid interestthereon to but excluding the Redemption Date. In the event that any money, orcertificates for Shares, required to be deposited hereunder with the DebentureTrustee or any depository or paying agent on account of Redemption Price, orinterest, if any, on Debentures issued hereunder shall remain so deposited fora period of six years from the Redemption Date, then such monies orcertificates for Shares, together with any accumulated interest thereon or anydistribution paid thereon, shall at the end of such period be paid over ordelivered over by the Debenture Trustee or such Depository or paying agent tothe Company on its demand, and thereupon the Debenture Trustee shall not beresponsible to Debentureholders for any amounts owing to them and subject toapplicable law, thereafter the holder of a Debenture in respect of which suchmoney was so repaid to the Company shall have no rights in respect thereofexcept to obtain payment of the money or certificates due from the Company,subject to any limitation period provided by the laws of Ontario.

 

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## **4.8**                          Cancellationof Debentures Redeemed

 

Subject to the provisions of Sections 4.2 and 4.9 as to Debenturesredeemed or purchased in part, all Debentures redeemed and paid under thisArticle 4 shall forthwith be delivered to the Debenture Trustee and cancelledand no Debentures shall be issued in substitution therefor.

 

## **4.9**                          Purchaseof Debentures by the Company

 

Unless otherwise specifically provided with respect to a particular seriesof Debentures, the Company may purchase Debentures in the market (which shallinclude purchases from or through an investment dealer or a firm holdingmembership on a Recognized Stock Exchange) or by tender or by private contract,at any price; provided that, if an Event of Default has occurred and iscontinuing, the Company will not have the right to purchase the Debentures byprivate contract. All Debentures so purchased may, at the option of theCompany, be delivered to the Debenture Trustee and shall be cancelled and noDebentures shall be issued in substitution therefor.

 

If, upon an invitation for tenders, more Debentures are tendered at thesame lowest price than the Company is prepared to accept, the Debentures to bepurchased by the Company shall be selected by the Debenture Trustee on a *pro rata* basis or in such other mannerconsented to by the Toronto Stock Exchange (or any other stock exchange onwhich the Debentures may be listed, if any) which the Debenture Trusteeconsiders appropriate, from the Debentures tendered by each tenderingDebentureholder who tendered at such lowest price. For this purpose theDebenture Trustee may make, and from time to time amend, regulations withrespect to the manner in which Debentures may be so selected, and regulationsso made shall be valid and binding upon all Debentureholders, notwithstandingthe fact that as a result thereof one or more of such Debentures become subjectto purchase in part only. The holder of a Debenture of which a part only ispurchased, upon surrender of such Debenture for payment, shall be entitled toreceive, without expense to such holder, one or more new Debentures for theunpurchased part so surrendered, and the Debenture Trustee shall certify anddeliver such new Debenture or Debentures upon receipt of the Debenture orDebentures so surrendered or, with respect to a Global Debenture, theDepository shall make notations on the Global Debenture of the principal amountthereof so purchased, which notations shall be authenticated by the DebentureTrustee.

 

## **4.10**                        Right toRepay Principal Amount in Shares

 

##### (a)           Subjectto the other provisions of this Section 4.10 and receipt of any requiredregulatory and shareholder approvals, the Company may, at its option, inexchange for or in lieu of paying the principal amount due on maturity inmoney, elect to satisfy its obligation to repay all or any portion of theprincipal amount of the Debentures outstanding by issuing and delivering toholders on the date of maturity of such Debentures (the “**Maturity Date**”) that number of Shares obtained by dividingthe principal amount of the Debentures by 95% of the Current Market Price ofthe Shares on the Maturity Date (the “**Share Repayment Right**”).

#####  

##### (b)           TheCompany shall exercise the Share Repayment Right by so specifying in a maturitynotice to holders of the Debentures substantially in the form of Schedule “C”(the “**Maturity Notice**”), which shall be delivered to the DebentureTrustee and the holders of Debentures not more than 60 days and not less than40 days prior to the Maturity Date.

#####  

##### (c)           TheCompany’s right to exercise the Share Repayment Right shall be conditional uponthe following conditions being met on the Business Day preceding the MaturityDate:

#####  

###### (i)            theissuance of the Shares on the exercise of the Share Repayment Right shall bemade in accordance with Applicable Securities Legislation;

######  

###### (ii)           thelisting of such additional Shares on each stock exchange on which the Sharesare then listed;

 

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###### (iii)          theCompany being a reporting issuer in good standing under Applicable SecuritiesLegislation where the distribution of such Shares occurs;

######  

###### (iv)          noEvent of Default shall have occurred and be continuing;

######  

###### (v)           thereceipt by the Debenture Trustee of an Officer’s Certificate stating thatconditions (i), (ii), (iii) and (iv) above have been satisfied and settingforth the number of Shares to be delivered for each $1,000 principal amount ofDebentures and the Current Market Price of the Shares on the Maturity Date; and

######  

###### (vi)          thereceipt by the Debenture Trustee of an opinion of Counsel to the effect thatsuch Shares have been duly authorized by the Company and, when issued anddelivered pursuant to the terms of this Indenture in payment of the principalamount of the Debentures outstanding will be validly issued as fully paid andnon-assessable, that conditions (i) and (ii) above have been satisfied andthat, relying exclusively on certificates of good standing issued by therelevant securities authorities, condition (iii) above is satisfied, exceptthat the opinion in respect of condition (iii) need not be expressed withrespect to those provinces where certificates of good standing are not issued.

######  

If the foregoing conditions are not satisfied prior to 5:00 p.m.(Toronto time) on the Business Day immediately preceding the Maturity Date, theCompany shall pay the principal amount of the Debentures outstanding in cash inaccordance with Section 2.13, unless the Debentureholder waives theconditions which are not satisfied.

 

##### (d)           TheCompany’s right to exercise the Share Repayment Right shall be conditional uponthe Current Market Price of the Shares on the Repayment Date being not lessthan the Minimum Trading Price.

#####  

##### (e)           In theevent that the Company duly exercises its Share Repayment Right, the Companyshall not less than two (2) Business Days prior to the Maturity Date, deliverto the Debenture Trustee, for delivery to and on account of the holders on theMaturity Date, upon the due presentation and surrender of the Debentures, theShares to which such holders are entitled. The Company shall also deposit withthe Debenture Trustee a sum of money sufficient to pay any charges or expenseswhich may be incurred by the Debenture Trustee in connection with the Share RepaymentRight. From the certificates so deposited in addition to amounts payable by theDebenture Trustee pursuant to Section 2.13, the Debenture Trustee shallpay or cause to be paid, to the holders of such Debentures, upon surrender ofsuch Debentures, the principal amount of and premium (if any) on the Debenturesto which they are respectively entitled on the Maturity Date and deliver tosuch holders the certificates to which such holders are entitled. The deliveryof such certificates to the Debenture Trustee will satisfy and discharge theliability of the Company for the Debentures to which the delivery ofcertificates relates to the extent of the amount delivered (plus the amount ofany certificates sold to pay applicable taxes in accordance with thisSection 4.10) and such Debentures will thereafter to that extent not beconsidered as outstanding under this Indenture and such holder will have noother right in regard thereto other than to receive out of the certificates sodelivered, the certificate(s) to which it is entitled.

#####  

##### (f)            Nofractional Shares shall be delivered upon the exercise of the Share RepaymentRight but, in lieu thereof, the Company shall pay to the Debenture Trustee forthe account of the holders, at the time contemplated in Section 4.10(e),the cash equivalent thereof determined on the basis of the Current Market Priceof the Shares on the Maturity Date (less any tax required to be deducted, ifany).

#####  

##### (g)           Aholder of Debentures shall be treated as the shareholder of record of the Sharesissued on due exercise by the Company of its Share Repayment Right effectiveimmediately after 5:00 p.m. (Toronto time) the close of business on theMaturity Date, and shall be entitled to all substitutions therefor, all incomeearned thereon or accretions thereto and all dividends or distributions(including share distributions and dividends or distributions in kind) thereonand arising thereafter, and in the event that the Debenture Trustee receivesthe same, it shall hold the same in trust for the benefit of such holder.

 

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##### (h)           TheCompany shall at all times reserve and keep available out of its authorizedShares (if the number thereof is or becomes limited), solely for the purpose ofissue and delivery upon the exercise of the Company’s Share Repayment Right asprovided herein, and shall issue to Debentureholders to whom Shares will beissued pursuant to exercise of the Share Repayment Right, such number of Sharesas shall be issuable in such event. All Shares issued upon exercise of theShare Repayment Right shall be duly and validly issued as fully paid andnon-assessable Shares.

#####  

##### (i)            TheCompany shall comply with all Applicable Securities Legislation regulating theissue and delivery of Shares upon exercise of the Share Repayment Right andshall cause to be listed and posted for trading such Shares on each stockexchange on which the Shares are then listed.

#####  

##### (j)            TheCompany shall from time to time promptly pay, or make provision satisfactory tothe Debenture Trustee for the payment of, all taxes and charges which may beimposed by the laws of Canada or any province or territory thereof (exceptincome tax or withholding tax) which shall be payable with respect to theissuance or delivery of Shares to holders of Debentures upon exercise of theShare Repayment Right pursuant to the terms of the Debentures and of thisIndenture.

#####  

##### (k)           If theCompany elects to satisfy its obligation to pay all or any portion of theprincipal amount of Debentures due on the Maturity Date by issuing Shares inaccordance with this Section 4.10 and if the principal amount (or anyportion thereof) to which a Debentureholder is entitled is subject towithholding taxes and the amount of the cash payment of the principal amountdue on the Maturity Date, if any, is insufficient to satisfy such withholdingtaxes, the Debenture Trustee, on the Written Direction of the Company but forthe account of the holder, shall sell, through the investment banks, brokers ordealers selected by the Company, out of the Shares issued by the Company forthis purpose, such number of Shares that together with the cash component ofthe principal amount due on the Maturity Date is sufficient to yield netproceeds (after payment of all costs) to cover the amount of taxes required tobe withheld, and shall remit same on behalf of the Company to the proper taxauthorities within the period of time prescribed for this purpose underapplicable laws. Any excess proceeds from such sale, after payment of allrequired withholding taxes, shall be paid to the holder.

#####  

##### (l)            Eachcertificate representing Shares issued in payment of the principal amount ofDebentures bearing the U.S. Legend set forth in Section 2.14, as well asall certificates issued in exchange for or in substitution of the foregoingsecurities, shall bear the U.S. Legend set forth in Section 2.14; providedthat if the Shares are being sold outside the United States in accordance withRule 904 of Regulation S, and provided that the Company is a “foreign issuer”within the meaning of Regulation S at the time of sale, the U.S. Legend may beremoved by providing a declaration to the Debenture Trustee, as registrar andtransfer agent for the Shares, as set forth in Schedule “E” hereto (or as theCompany or the Debenture Trustee may prescribe from time to time); and providedfurther that, if any such securities are being sold within the United States inaccordance with Rule 144 under the 1933 Act, the U.S. Legend may be removed bydelivery to the Debenture Trustee, as registrar and transfer agent for theShares, of an opinion of counsel, of recognized standing reasonablysatisfactory to the Company, that the U.S. Legend is no longer required underapplicable requirements of the 1933 Act or state securities laws. Provided thatthe Debenture Trustee obtains confirmation from the Company that such counselis satisfactory to it, it shall be entitled to rely on such opinion of counselwithout further inquiry.

#####  

##### (m)          Interestaccrued and unpaid on the Debentures on the Maturity Date will be paid toholders of Debentures, in cash, in the manner contemplated inSection 2.15.

 

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# **ARTICLE 5SUBORDINATION OF DEBENTURES**

 

## **5.1**                          Applicabilityof Article

 

The indebtedness, liabilities and obligations of the Company hereunder(except as provided in Section 14.15) or under the Debentures, whether onaccount of principal, interest or otherwise, but excluding the issuance ofShares or other securities upon any conversion pursuant to Article 6, upon anyredemption pursuant to Article 4, or at maturity pursuant to Article 4(collectively the “**Debenture Liabilities**”),shall be subordinated and postponed and subject in right of payment, to theextent and in the manner hereinafter set forth in the following sections ofthis Article 5, to the full and final payment of all Senior Indebtedness of theCompany and each holder of any such Debenture by his acceptance thereof agreesto and shall be bound by the provisions of this Article 5.

 

The Senior Indebtedness shall continue to be Senior Indebtedness andshall be entitled to the benefits of this Article 5 irrespective of anyamendment, modification or waiver of any term of such Senior Indebtedness andnotwithstanding that no express written subordination agreement may have beenentered into between the holders of such Senior Indebtedness and the DebentureTrustee or any of the Debentureholders.

 

## **5.2**                          Order ofPayment

##  

In the event of any voluntary or involuntary dissolution, winding-up orliquidation, or any bankruptcy, insolvency, receivership, creditor enforcementor realization or other similar proceedings relating to the Company or any ofits property (whether voluntary or involuntary, partial or complete) or anyother marshalling of the assets and liabilities of the Company, anyreorganization or any sale, distribution or other transfer of all orsubstantially all of the assets of the Company:

 

##### (a)           allSenior Indebtedness shall first be paid in full, or provision made for suchpayment, before any payment or distribution is made on account of DebentureLiabilities;

#####  

##### (b)           anypayment or distribution of assets of the Company, whether in cash, property orsecurities, to which the holders of the Debentures or the Debenture Trustee onbehalf of such holders would be entitled except for the provisions of thisArticle 5, shall be paid or delivered by the trustee in bankruptcy, receiver,assignee for the benefit of creditors, or other liquidating agent making suchpayment or distribution, directly to the holders of Senior Indebtedness ortheir representative or representatives, or to the trustee or trustees underany indenture pursuant to which any instruments evidencing any of such SeniorIndebtedness may have been issued, to the extent necessary to pay all Senior Indebtednessin full after giving effect to any concurrent payment or distribution, orprovision therefor, to the holders of such Senior Indebtedness before anypayment or distribution is made to the Debentureholders or the DebentureTrustee; and

#####  

##### (c)           the SeniorCreditors or a receiver or a receiver-manager of the Company or of all or partof its assets or any other enforcement agent may sell, mortgage, or otherwisedispose of the Company assets in whole or in part, free and clear of allDebenture Liabilities and without the approval of the Debentureholders or theDebenture Trustee or any requirement to account to the Debenture Trustee or theDebentureholders.

#####  

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

 

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

######  

###### (ii)           thetime or order of the attachment, perfection or crystallization of any securityconstituted by the Senior Security;

 

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###### (iii)          thetaking of any collection, enforcement or realization proceedings pursuant tothe Senior Indebtedness;

######  

###### (iv)          thedate of obtaining of any judgment or order of any bankruptcy court or any courtadministering bankruptcy, insolvency or similar proceedings as to theentitlement of the Senior Creditors, or any of them or the Debentureholders orother Trustee or any of them to any money or property of the Company;

######  

###### (v)           thefailure to exercise any power or remedy reserved to the Senior Creditors underdocuments evidencing the Senior Indebtedness or under the Senior Security or toinsist upon a strict compliance with any terms thereof;

######  

###### (vi)          whetherany Senior Security is now perfected, hereafter ceases to be perfected, isavoidable by any trustee in bankruptcy or like official or is otherwise setaside, invalidated or lapses;

######  

###### (vii)         the dateof giving or failing to give notice to or making demand upon the Company; or

######  

###### (viii)        any othermatter whatsoever.

######  

## **5.3**                          Subrogationto Rights of Holders of Senior Indebtedness

##  

Subject to the prior payment in full of all Senior Indebtedness, theholders of the Debentures shall be subrogated to the rights of the holders ofSenior Indebtedness or their representative or representatives, or the trusteeor trustees under any indenture pursuant to which any instrument evidencing anysuch Senior Indebtedness may have been issued, to receive payments ordistributions of assets of the Company to the extent of the application theretoof such payments or other assets which would have been received by the holdersof the Debentures but for the provisions hereof until the principal of,premium, if any, and interest on the Debentures shall be paid in full, and nosuch payments or distributions to the holders of the Debentures of cash,property or securities, which otherwise would be payable or distributable tothe holders of the Senior Indebtedness, shall, as between the Company, itscreditors other than the holders of Senior Indebtedness, and the holders ofDebentures, be deemed to be a payment by the Company to the holders of theSenior Indebtedness or on account of the Senior Indebtedness, it beingunderstood that the provisions of this Article 5 are and are intended solelyfor the purpose of defining the relative rights of the holders of theDebentures, on the one hand, and the holders of Senior Indebtedness, on theother hand.

 

The Debenture Trustee, for itself and on behalf of each of theDebentureholders, hereby waives any and all rights to require a Senior Creditorto pursue or exhaust any rights or remedies with respect to the Company or anyproperty and assets subject to the Senior Security or in any other manner torequire the marshalling of property, assets or security in connection with theexercise by the Senior Creditors of any rights, remedies or recourses availableto them.

 

## **5.4**                          Obligationto Pay Not Impaired

##  

Nothing contained in this Article 5 or elsewhere in this Indenture orin the Debentures is intended to or shall impair, as between the Company, itscreditors other than the holders of Senior Indebtedness, and the holders of theDebentures, the obligation of the Company, which is absolute and unconditional,to pay to the holders of the Debentures the principal of, premium, if any, andinterest on the Debentures, as and when the same shall become due and payablein accordance with their terms, or affect the relative rights of the holders ofthe Debentures and creditors of the Company other than the holders of theSenior Indebtedness, nor shall anything herein or therein prevent the DebentureTrustee or the holder of any Debenture from exercising all remedies otherwisepermitted by applicable law or under this Indenture upon default under thisIndenture, subject to the rights, if any, under this Article 5 of the holdersof Senior Indebtedness.

 

## **5.5**                          NoPayment if Senior Indebtedness in Default

##  

### (a)           Nopayment of any principal of, premium, if any, or interest (or any other amountspayable) in respect of the Debentures (including the Initial Debentures) or inrespect of any Redemption Price or Offer Price in respect of any suchDebentures may be made, and neither the Debenture Trustee nor anyDebentureholder will be entitled to institute proceedings (other than as may benecessary to preserve a limitation period) for the collection of, or receiveany payment or benefit (including, without limitation, by setoff, combinationof accounts or realization of security or otherwise in any manner whatsoever)on account of indebtedness represented by the Debentures:

 

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#### (i)            in amanner inconsistent with the terms (as they exist on the date of issue) of theDebentures;

####  

#### (ii)           at anytime when an event of default has occurred under Senior Indebtedness, and suchevent of default is continuing and notice of such event of default has beengiven by or on behalf of the holders of such Senior Indebtedness to the Companyunless and until such Senior Indebtedness has been paid and satisfied in fullor such event of default shall have been cured or waived in writing inaccordance with the provisions of such Senior Indebtedness;

####  

#### (iii)          if themaking of any such payment or the taking of any such action would create, bythe lapse of time or giving of notice, an event of default under any SeniorIndebtedness unless and until such Senior Indebtedness has been satisfied infull or the making of any such payment or taking of such action would no longercreate, by the lapse of time or giving of notice, an event of default under anySenior Indebtedness.

####  

### (b)           If,notwithstanding Section 5.2(b) or 5.5(a), the Debenture Trustee receivesany payment when such payment should have been paid to the holders of SeniorIndebtedness pursuant to Section 5.2(b) or is prohibited bySection 5.5(a), as the case may be, such payment shall be held in trustfor the benefit of, and shall be paid or delivered to, the holders of theSenior Indebtedness or their respective representative or representatives, orto the trustee or trustees under which any instruments evidencing such SeniorIndebtedness may have been issued, as their respective interests may appear, ascalculated by the Company, to the extent necessary to pay such SeniorIndebtedness in full, in cash, after giving effect to any other concurrentpayment or distribution to or for the benefit of the holders of such SeniorIndebtedness.

###  

## **5.6**                          Paymenton Debentures Permitted

##  

Nothing contained in this Article 5 or elsewhere in this Indenture, orin any of the Debentures, shall affect the obligation of the Company to make,or prevent the Company from making, at any time except as prohibited bySection 5.5, any payment of principal of, premium, if any, or interest onthe Debentures. The fact that any such payment is prohibited bySection 5.5 shall not prevent the failure to make such payment from beingan Event of Default hereunder. Nothing contained in this Article 5 or elsewherein this Indenture, or in any of the Debentures, shall prevent the conversion ofthe Debentures or, except as prohibited by Section 5.5, the application bythe Debenture Trustee of any monies deposited with the Debenture Trustee hereunderfor the purpose, to the payment of or on account of the Debenture Liabilities.

 

## **5.7**                          Confirmationof Subordination

##  

Each holder of Debentures by his or her acceptance of the Debenturesauthorizes and directs the Debenture Trustee on his or her behalf to take suchaction as may be necessary or appropriate to effect the subordination asprovided in this Article 5 and appoints the Debenture Trustee hisattorney-in-fact for any and all such purposes. Upon request of the Company,and upon being furnished with an Officer’s Certificate stating that one or morenamed Persons are Senior Creditors and specifying the amount and nature of theSenior Indebtedness of such Senior Creditor, the Debenture Trustee shall enterinto a written agreement or agreements with the Company and the Person orPersons named in such Officer’s Certificate providing that such Person orPersons are entitled to all the rights and benefits of this Article 5 as aSenior Creditor. Such agreement shall be conclusive evidence that theindebtedness specified therein is Senior Indebtedness, provided however,nothing herein shall impair the rights of any Senior Creditor who has notentered into such an agreement.

 

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## **5.8**                          Knowledgeof Debenture Trustee

 

Notwithstanding the provisions of this Article 5 or any provision inthis Indenture or in the Debentures, the Debenture Trustee will not be chargedwith knowledge of any Senior Indebtedness or of any default in the paymentthereof, or of the existence of any other fact that would prohibit the makingof any payment of monies to or by the Debenture Trustee, or the taking of anyother action by the Debenture Trustee, unless and until the Debenture Trusteehas received written notice thereof from the Company, any Debentureholder orany Senior Creditor.

 

## **5.9**                          DebentureTrustee May Hold Senior Indebtedness

 

The Debenture Trustee is entitled to all the rights set forth in thisArticle 5 with respect to any Senior Indebtedness at the time held by it, tothe same extent as any other holder of Senior Indebtedness, and nothing in thisIndenture deprives the Debenture Trustee of any of its rights as such holder ofSenior Indebtedness. The Debenture Trustee is the trustee under an indenturegoverning certain Senior Indebtedness of the Company.

 

## **5.10**                        Rightsof Holders of Senior Indebtedness Not Impaired

 

No right of any present or future holder of any Senior Indebtedness toenforce the subordination herein will at any time or in any way be prejudicedor impaired by any act or failure to act on the part of the Company or by anynon-compliance by the Company with the terms, provisions and covenants of thisIndenture, regardless of any knowledge thereof which any such holder may haveor be otherwise charged with.

 

## **5.11**                        Alteringthe Senior Indebtedness

 

The holders of the Senior Indebtedness have the right to extend, renew,modify or amend the terms of the Senior Indebtedness or any security thereforand to release, sell or exchange such security and otherwise to deal freelywith the Company, all without notice to or consent of the Debentureholders orthe Debenture Trustee and without affecting the provisions of this Article 5 orthe other liabilities and obligations of the parties to this Indenture or theDebentureholders or the Debenture Trustee.

 

## **5.12**                        AdditionalIndebtedness

 

This Indenture does not restrict the Company from incurring additionalSenior Indebtedness or other indebtedness for borrowed money (including anyindebtedness ranking *pari passu*with any Debentures) or otherwise or mortgaging, pledging or charging itsproperties to secure any indebtedness.

 

## **5.13**                        Right ofDebentureholder to Convert Not Impaired

 

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

 

## **5.14**                        InvalidatedPayments

 

In the event that any of the Senior Indebtedness shall be paid in fulland subsequently, for whatever reason, such formerly paid or satisfied SeniorIndebtedness becomes unpaid or unsatisfied, the terms and conditions of thisArticle 5 shall be reinstated and the provisions of this Article shall again beoperative until all Senior Indebtedness is repaid in full, provided that suchreinstatement shall not give the Senior Creditors any rights or recoursesagainst the Debenture Trustee or the Debentureholders for amounts paid to theDebentureholders subsequent to such payment or satisfaction in full and priorto such reinstatement.

 

## **5.15**                        ContestingSecurity

 

The Debenture Trustee, for itself and on behalf of theDebentureholders, agrees that it shall not contest or bring into question thevalidity, perfection or enforceability of any of the Senior Security, or therelative priority of the Senior Security.

 

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# **ARTICLE 6CONVERSION OF DEBENTURES**

 

## **6.1**                          Applicabilityof Article

 

Any Debentures issued hereunder of any series which by their terms areconvertible (subject, however, to any applicable restriction on the conversionof Debentures of such series) will be convertible into Shares, at suchconversion rate or rates, and on such date or dates and in accordance with suchother provisions as shall have been determined at the time of issue of suchDebentures and shall have been expressed in this Indenture (includingSection 3.7 hereof), in such Debentures, in an Officer’s Certificate, orin a supplemental indenture authorizing or providing for the issue thereof.

 

Such right of conversion shall extend only to the maximum number ofwhole Shares into which the aggregate principal amount of the Debenture orDebentures surrendered for conversion at any one time by the holder thereof maybe converted. Fractional interests in Shares shall be adjusted for in the mannerprovided in Section 6.6.

 

## **6.2**                          Noticeof Expiry of Conversion Privilege

 

Notice of the expiry of the conversion privileges of the Debenturesshall be given by or on behalf of the Company, not more than 60 days and notless than 30 days prior to the date fixed for the Time of Expiry, in the mannerprovided in Section 13.2.

 

## **6.3**                          Revivalof Right to Convert

 

If the redemption of any Debenture called for redemption by the Companyis not made or the payment of the purchase price of any Debenture which has beentendered in acceptance of an offer by the Company to purchase Debentures forcancellation is not made, in the case of a redemption upon due surrender ofsuch Debenture or in the case of a purchase on the date on which such purchaseis required to be made, as the case may be, then, provided the Time of Expiryhas not passed, the right to convert such Debentures shall revive and continueas if such Debenture had not been called for redemption or tendered inacceptance of the Company’s offer, respectively.

 

## **6.4**                          Mannerof Exercise of Right to Convert

 

##### (a)           Theholder of a Debenture desiring to convert such Debenture in whole or in partinto Shares shall surrender such Debenture to the Debenture Trustee at itsprincipal office in Toronto, Ontario together with the conversion notice in theform attached hereto as Schedule “D” or any other written notice in a formsatisfactory to the Debenture Trustee, in either case duly executed by theholder or his executors or administrators or other legal representatives or hisor her or their attorney duly appointed by an instrument in writing in form andexecuted in a manner satisfactory to the Debenture Trustee, exercising his orher right to convert such Debenture in accordance with the provisions of thisArticle; provided that with respect to a Global Debenture, the obligation tosurrender a Debenture to the Debenture Trustee shall be satisfied if theDebenture Trustee makes notation on the Global Debenture of the principalamount thereof so converted and the Debenture Trustee is provided with allother documentation which it may request. Thereupon such Debentureholder or,subject to payment of all applicable stamp or security transfer taxes andwithholding taxes or other governmental charges and compliance with all reasonablerequirements of the Debenture Trustee, his or her nominee(s) or assignee(s)shall be entitled to be entered in the books of the Company as at the Date ofConversion (or such later date as is specified in Section 6.4(b)) as theholder of the number of Shares into which such Debenture is convertible inaccordance with the provisions of this Article 6 and, as soon as practicablethereafter, the Company shall deliver to such Debentureholder or, subject asaforesaid, his or her nominee(s) or assignee(s), a certificate or certificatesfor such Shares and make or cause to be made any payment of interest to whichsuch holder is entitled in accordance with Section 6.4(e) hereof.

 

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##### (b)           Forthe purposes of this Article, a Debenture shall be deemed to be surrendered forconversion on the date (the “**Dateof Conversion**”) on which it isso surrendered when the register of the Debenture Trustee is open and inaccordance with the provisions of this Article 6 or, in the case of a GlobalDebenture which the Debenture Trustee received notice of and all necessarydocumentation in respect of the exercise of the conversion rights and, in thecase of a Debenture so surrendered by post or other means of transmission, onthe date on which it is received by the Debenture Trustee at its officespecified in Section 6.4(a); provided that if a Debenture is surrenderedfor conversion on a day on which the register of Shares is closed, the Personor Persons entitled to receive Shares shall become the holder or holders ofrecord of such Shares as at the date on which such register is next reopened.

#####  

##### (c)           Anypart, being $1,000 or an integral multiple thereof, of a Debenture in adenomination in excess of $1,000 may be converted as provided in this Article 6and all references in this Indenture to conversion of Debentures shall bedeemed to include conversion of such part.

#####  

##### (d)           Upon aholder of any Debenture exercising his or her right of conversion in respect ofonly a part of the Debenture and surrendering such Debenture to the DebentureTrustee, in accordance with Section 6.4(a) the Debenture Trustee shallcancel the same and shall without charge forthwith certify and deliver to theholder a new Debenture or Debentures in an aggregate principal amount equal tothe unconverted part of the principal amount of the Debenture so surrenderedor, with respect to a Global Debenture, the Debenture Trustee shall makenotations on the Global Debenture of the principal amount thereof so converted.

#####  

##### (e)           Theholder of a Debenture surrendered for conversion in accordance with thisSection 6.4 shall be entitled (subject to any applicable restriction onthe right to receive interest on conversion of Debentures of any series) toreceive accrued and unpaid interest in respect thereof up to but excluding theDate of Conversion and the Shares issued upon such conversion shall rank onlyin respect of distributions or dividends declared in favour of shareholders ofrecord on and after the Date of Conversion or such later date as such holdershall become the holder of record of such Shares pursuant toSection 6.4(b), from which applicable date they will for all purposes beand be deemed to be issued and outstanding as fully paid and non-assessableShares.

#####  

##### (f)            Uponconversion of any Global Debentures, the Depository shall make notations on theGlobal Debentures of the principal amount of Debentures so converted, whichnotations shall be authenticated by the Debenture Trustee, and the Company andthe Debenture Trustee shall cause to be deposited with the Depository theShares into which the Debentures have been converted.

#####  

## **6.5**                          Adjustmentof Conversion Price and Minimum Trading Price

##  

The Conversion Price and Minimum Trading Price in effect at any dateshall be subject to adjustment from time to time as set forth below.

 

##### (a)           If andwhenever at any time prior to the Time of Expiry the Company shall (i)subdivide or redivide the outstanding Shares into a greater number of Shares,(ii) reduce, combine or consolidate the outstanding Shares into a smallernumber of Shares, or (iii) issue Shares (or securities convertible into orexchangeable for Shares) to the holders of all or substantially all of theoutstanding Shares by way of a dividend or distribution (other than the issue ofShares (or securities convertible into or exchangeable for Shares) to holdersof Shares who have elected to receive dividends or distributions in the form ofsecurities of the Company in lieu of cash dividends or cash distributions paidin the ordinary course on the securities of the Company), the Conversion Pricein effect on the effective date of such subdivision, redivision, reduction,combination or consolidation or on the record date for such issue of Shares byway of a dividend or distribution, as the case may be, in the case of any ofthe events referred to in (i), (ii) and (iii) above, shall be adjustedimmediately so that it shall equal the price determined by multiplying theConversion Price in effect on the date immediately preceding the effective dateof such event by a fraction, the numerator of which shall be the total numberof Shares outstanding on such date before giving effect to any event referredto in any of (i), (ii) or (iii) above and the denominator of which shall be thetotal number of Shares outstanding immediately after giving effect to suchevent. Such adjustment shall be made successively whenever any event referredto in this Section 6.5(a) shall occur. Any such issue of Shares by way ofa dividend or distribution shall be deemed to have been made on the record datefor the dividend or distribution for the purpose of calculating the number ofoutstanding Shares under subsections (b) and (c) of this Section 6.5.

 

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##### (b)           If andwhenever at any time prior to the Time of Expiry the Company shall fix a recorddate for the issuance of options, rights or warrants to all or substantiallyall the holders of its outstanding Shares entitling them, for a period expiringnot more than 45 days after such record date, to subscribe for or purchaseShares (or securities convertible into or exchangeable for Shares) at a priceper Share (or having a conversion or exchange price per Share) less than 95% ofthe Current Market Price of a Share on such record date, the Conversion Priceshall be adjusted immediately after such record date so that it shall equal theprice determined by multiplying the Conversion Price in effect on such recorddate by a fraction, of which the numerator shall be the total number of Sharesoutstanding on such record date plus a number of Shares equal to the quotientobtained by dividing the aggregate price of the total number of additionalShares offered for subscription or purchase (or the aggregate conversion orexchange price of the convertible securities so offered) by such Current MarketPrice per Share, and of which the denominator shall be the total number ofShares outstanding on such record date plus the total number of additionalShares offered for subscription or purchase (or into which the convertiblesecurities so offered are convertible). Such adjustment shall be madesuccessively whenever such a record date is fixed. To the extent that any suchoptions, rights or warrants are not so issued or any such options, rights orwarrants are not exercised prior to the expiration thereof, the ConversionPrice shall be re-adjusted to the Conversion Price which would then be ineffect if such record date had not been fixed or to the Conversion Price whichwould then be in effect if only the number of Shares (or securities convertibleinto Shares) actually issued upon the exercise of such options, rights orwarrants were included in such fraction, as the case may be.

#####  

##### (c)           If andwhenever at any time prior to the Time of Expiry the Company shall fix a recorddate for the making of a distribution to all or substantially all the holdersof its outstanding Shares of (i) Shares of any class other than Shares andother than Shares distributed to holders of Shares who have elected to receivedividends or distributions in the form of such Shares in lieu of dividends ordistributions paid in the ordinary course, (ii) rights, options or warrants(excluding rights, options or warrants entitling the holders thereof for aperiod of not more than 45 days to subscribe for or purchase Shares orsecurities convertible into or exchangeable for Shares), (iii) evidences of itsindebtedness, or (iv) assets (excluding dividends or distributions paid in theordinary course) then, in each such case, the Conversion Price shall beadjusted immediately after such record date so that it shall equal the pricedetermined by multiplying the Conversion Price in effect on such record date bya fraction, of which the numerator shall be the total number of Shares outstandingon such record date multiplied by the Current Market Price per Share on suchrecord date, less the fair market value as determined by the directors of theCompany, but subject to the prior written consent of the Toronto Stock Exchange(or such other stock exchange on which the Shares may be listed, if any), whichdetermination shall be conclusive) of such Shares or rights, options orwarrants or evidences of indebtedness or assets so distributed, and of whichthe denominator shall be the total number of Shares outstanding on such recorddate multiplied by such Current Market Price per Share. Such adjustment shallbe made successively whenever such a record date is fixed. To the extent thatsuch distribution is not so made, the Conversion Price shall be re-adjusted tothe Conversion Price which would then be in effect if such record date had notbeen fixed or to the Conversion Price which would then be in effect if onlysuch Shares or rights, options or warrants or evidences of indebtedness orassets actually distributed were included in such fraction, as the case may be.In clause (iv) of this subsection (c), the term “dividends or distributionspaid in the ordinary course” shall include the value of any securities or otherproperty or assets distributed in lieu of cash dividends or distributions paidin the ordinary course at the option of shareholders.

 

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##### (d)           If andwhenever at any time prior to the Time of Expiry, there is a reclassificationof the Shares or a capital reorganization of the Company other than asdescribed in Section 6.5(a) or a consolidation, amalgamation, arrangementor merger of the Company with or into any other Person or a sale, conveyance orlease of the properties and assets of the Company as an entirety orsubstantially as an entirety to any other Person or a liquidation, dissolutionor winding-up or other similar transaction of the Company, any holder of aDebenture who has not exercised its right of conversion prior to the effectivedate of such reclassification, capital reorganization, consolidation,amalgamation, arrangement or merger, sale, conveyance or lease or liquidation,dissolution or winding-up or other similar transaction, upon the exercise ofsuch right thereafter, shall be entitled to receive and shall accept, in lieuof the number of Shares then sought to be acquired by it, the number of Shares,shares or other securities or property of the Company or of the Personresulting from such reclassification, capital reorganization, merger,amalgamation, arrangement or consolidation, or to which such sale, conveyanceor lease may be made or which holders of Shares receive pursuant to suchliquidation, dissolution or winding-up or other similar transaction, as thecase may be, that such holder of a Debenture would have been entitled toreceive on such reclassification, capital reorganization, consolidation,amalgamation, arrangement or merger, sale, conveyance or lease or liquidation,dissolution or winding-up or other similar transaction, if, on the record dateor the effective date thereof, as the case may be, the holder had been theregistered holder of the number of Shares sought to be acquired by it and towhich it was entitled to acquire upon the exercise of the conversion right. Ifdetermined appropriate by the directors of the Company, to give effect to or toevidence the provisions of this Section 6.5(d), the Company, itssuccessor, or such purchasing Person, as the case may be, shall, prior to orcontemporaneously with any such reclassification, capital reorganization,consolidation, amalgamation, arrangement, merger, sale, conveyance or lease orliquidation, dissolution or winding-up or other similar transaction, enter intoan indenture which shall provide, to the extent possible, for the applicationof the provisions set forth in this Indenture with respect to the rights andinterests thereafter of the holder of Debentures to the end that the provisionsset forth in this Indenture shall thereafter correspondingly be madeapplicable, as nearly as may reasonably be, with respect to any Shares, sharesor other securities or property to which a holder of Debentures is entitled onthe exercise of its conversion rights thereafter. Any indenture entered intobetween the Company and the Debenture Trustee pursuant to the provisions ofthis Section 6.5(d), shall be a supplemental indenture entered intopursuant to the provisions of Article 15. Any indenture entered into betweenthe Company, any successor to the Company or such purchasing Person or otherentity and the Debenture Trustee shall provide for adjustments which shall beas nearly equivalent as may be practicable to the adjustments provided in thisSection 6.5(d), and which shall apply to successive reclassifications,capital reorganizations, amalgamations, consolidations, arrangements, mergers,sales, conveyances, leases, liquidations, dissolutions, winding-ups or othersimilar transactions.

#####  

##### (e)           In anycase in which this Section 6.5 shall require that an adjustment shall becomeeffective immediately after a record date for an event referred to herein, theCompany may defer, until the occurrence of such event, issuing to the holder ofany Debenture converted after such record date and before the occurrence ofsuch event the additional Shares issuable upon such conversion by reason of theadjustment required by such event; provided, however, that the Company shalldeliver to such holder an appropriate instrument evidencing such holder’s rightto receive such additional Shares upon the occurrence of the event requiringsuch adjustment and the right to receive any distributions made on suchadditional Shares declared in favour of holders of record of Shares on andafter the Date of Conversion or such later date as such holder would, but forthe provisions of this Section 6.5(e), have become the holder of record ofsuch additional Shares pursuant to Section 6.4(b).

 

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

#####  

##### (g)           In theevent of any question arising with respect to the adjustments provided in thisSection 6.5, such question shall be conclusively determined by a firm ofnationally recognized chartered accountants appointed by the Company (who maybe the Company’s Auditors) and acceptable to the Debenture Trustee; suchchartered accountants shall have access to all necessary records of the Companyand such determination shall be binding upon the Company, the DebentureTrustee, and the Debentureholders.

 

##### (h)           Incase the Company shall take any action affecting the Shares other than actiondescribed in this Section 6.5, which in the opinion of the directors ofthe Company, would materially affect the rights of Debentureholders, theConversion Price shall be adjusted in such manner and at such time, by actionof directors of the Company, subject to the prior written consent of theToronto Stock Exchange or, if the Debentures are not listed thereon, such otherexchange on which the Debentures are then listed (if any), as the directors ofthe Company, in their sole discretion may determine to be equitable in thecircumstances. Failure of such directors to make such an adjustment shall beconclusive evidence that they have determined that it is equitable to make noadjustment in the circumstances.

 

##### (i)            Noadjustment in the Conversion Price shall be made in respect of any eventdescribed in Sections 6.5(a), 6.5(b) or 6.5(c) other than the eventsdescribed in Sections 6.5(a)(i) or 6.5(a)(ii) if the holders of theDebentures are entitled to participate in such event on the same terms *mutatis mutandis* as if they had converted their Debenturesprior to the effective date or record date, as the case may be, of such event.

 

##### (j)            Exceptas stated above in this Section 6.5, no adjustment will be made in theConversion Price for any Debentures as a result of the issuance of Shares atless than the Current Market Price for such Shares on the date of issuance orthe then applicable Conversion Price.

 

## **6.6**                          NoRequirement to Issue Fractional Shares

 

The Company shall not be required to issue fractional Shares upon theconversion of Debentures pursuant to this Article 6. If more than one Debentureshall be surrendered for conversion at one time by the same holder, the numberof whole Shares issuable upon conversion thereof shall be computed on the basisof the aggregate principal amount of such Debentures to be converted. If anyfractional interest in a Share would, except for the provisions of thisSection 6.6, be deliverable upon the conversion of any principal amount ofDebentures, the Company shall, in lieu of delivering any Share certificaterepresenting such fractional interest, make a cash payment to the holder ofsuch Debenture of an amount equal to the fractional interest of such Sharewhich would have been issuable multiplied by the Current Market Price on theConversion Date.

 

## **6.7**                          Companyto Reserve Shares

 

The Company covenants with the Debenture Trustee that it will at alltimes reserve and keep available out of its authorized Shares, solely for thepurpose of issue upon conversion of Debentures as provided in this Article 6,and conditionally allot to Debentureholders who may exercise their conversionrights hereunder, such number of Shares as shall then be issuable upon theconversion of all outstanding Debentures. The Company covenants with theDebenture Trustee that all Shares which shall be so issuable shall be duly andvalidly issued as fully-paid and non-assessable.

 

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## **6.8**                          Cancellationof Converted Debentures

 

Except as set forth in Section 6.4(f), all Debentures converted inpart, all Debentures converted in whole or in part under the provisions of thisArticle 6 shall be forthwith delivered to and cancelled by the DebentureTrustee and no Debenture shall be issued in substitution therefor.

 

## **6.9**                          Certificateas to Adjustment

 

The Company shall from time to time immediately after the occurrence ofany event which requires an adjustment or readjustment as provided inSection 6.5, deliver an Officer’s Certificate to the Debenture Trusteespecifying the nature of the event requiring the same and the amount of theadjustment necessitated thereby and setting forth in reasonable detail themethod of calculation and the facts upon which such calculation is based, whichcertificate and the amount of the adjustment specified therein shall beverified by an opinion of a firm of nationally recognized chartered accountantsappointed by the Company (who may be the Company’s Auditors) and acceptable tothe Debenture Trustee and shall be conclusive and binding on all parties ininterest. When so verified, the Company shall, except in respect of anysubdivision, redivision, reduction, combination or consolidation of the Sharesreferred to in Sections 6.5(a)(i) or 6.5(a)(ii) forthwith give notice tothe Debentureholders in the manner provided in Section 13.2 specifying theevent requiring such adjustment or readjustment and the results thereof,including the resulting Conversion Price; provided that, if the Company haspreviously given notice under this Section 6.9 covering all the relevantfacts in respect of such event and if the Debenture Trustee approves, no suchnotice need be given under this Section 6.9.

 

## **6.10**                        Noticeof Special Matters

 

The Company covenants with the Debenture Trustee that so long as anyDebenture remains outstanding, it will give notice to the Debenture Trustee,and to the Debentureholders in the manner provided in Section 13.2, of itsintention to fix a record date for any event referred to inSections 6.5(a), (b) or (c) (other than the subdivision, redivision,reduction, combination or consolidation of its Shares referred to in Sections6.5(a)(i) or 6.5(a)(ii) which may give rise to an adjustment in the ConversionPrice, and, in each case, such notice shall specify the particulars of suchevent and the record date and the effective date for such event; provided thatthe Company shall only be required to specify in such notice such particularsof such event as shall have been fixed and determined on the date on which suchnotice is given. Such notice shall be given not less than fourteen (14) days ineach case prior to such applicable record date.

 

## **6.11**                        Protectionof Debenture Trustee

 

Subject to Section 14.3, the Debenture Trustee:

 

##### (a)           shallnot at any time be under any duty or responsibility to any Debentureholder todetermine whether any facts exist which may require any adjustment in theConversion Price, or with respect to the nature or extent of any suchadjustment when made, or with respect to the method employed in making thesame;

 

##### (b)           shallnot be accountable with respect to the validity or value (or the kind oramount) of any Shares or of any Shares, shares or other securities or propertywhich may at any time be issued or delivered upon the conversion of anyDebenture; and

 

##### (c)           shallnot be responsible for any failure of the Company to make any cash payment orto issue, transfer or deliver Shares, Shares or share certificates upon thesurrender of any Debenture for the purpose of conversion, or to comply with anyof the covenants contained in this Article 6.

 

## **6.12**                        U.S.Legend on Shares

 

Each certificate representing Shares issued upon conversion ofDebentures pursuant to this Article 6 bearing the U.S. Legend set forth inSection 2.14, as well as all certificates issued in exchange for or insubstitution of the foregoing securities, shall also bear the U.S. Legend setforth in Section 2.14; provided that if the Shares are being sold outsidethe United States in accordance with Rule 904 of Regulation S, and providedthat the Company is a “foreign issuer” within the meaning of Regulation S atthe time of sale, the U.S. Legend may be removed by providing a declaration tothe registrar and transfer agent for the Shares, as set forth in Schedule “E”hereto (or as the Company may prescribe from time to time); and providedfurther that, if any such securities are being sold within the United States inaccordance with an exemption from the registration requirements under the 1933Act, the U.S. Legend may be removed by delivery to the registrar and transferagent for the Shares, of an opinion of counsel, of recognized standingreasonably satisfactory to the Company and the registrar and transfer agent forthe Shares, that the U.S. Legend is no longer required under applicablerequirements of the 1933 Act or state securities laws. Provided that theDebenture Trustee obtains confirmation from the Company that such counsel issatisfactory to it, it shall be entitled to rely on such opinion of counselwithout further inquiry.

 

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# **ARTICLE 7COVENANTS OF THE COMPANY**

 

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

 

## **7.1**                          To PayPrincipal, Premium (if any) and Interest, etc.

 

The Company will duly and punctually pay or cause to be paid to everyDebentureholder all amounts payable in respect of the Debentures of which it isthe holder including the principal of, premium (if any) and interest accrued onthe Debentures and/or if, applicable, the Redemption Price and the Offer Priceon the dates, at the places and in the manner described herein and in theDebentures.

 

## **7.2**                          To PayDebenture Trustee’s Remuneration

 

The Company will pay the Debenture Trustee reasonable remuneration forits services as Debenture Trustee hereunder and will repay to the DebentureTrustee on demand all monies which shall have been paid by the DebentureTrustee in connection with the execution of the trusts hereby created and suchmonies including the Debenture Trustee’s remuneration, shall be payable out ofany funds coming into the possession of the Debenture Trustee in priority topayment of any principal of the Debentures or interest thereon. Suchremuneration shall continue to be payable until the trusts hereof be finallywound up and whether or not the trusts of this Indenture shall be in the courseof administration by or under the direction of a court of competentjurisdiction.

 

## **7.3**                          To GiveNotice of Default

 

The Company shall notify the Debenture Trustee immediately uponobtaining knowledge of any default or Event of Default hereunder.

 

## **7.4**                          Preservationof Existence, etc.

 

Subject to the express provisions hereof, the Company will carry on andconduct its activities, and cause its Subsidiaries to carry on and conduct theirbusinesses, in a proper and business-like manner, and will do or cause to bedone all things necessary to maintain its existence.

 

## **7.5**                          Keepingof Books

 

The Company will keep or cause to be kept proper books of record andaccount, in accordance with Canadian generally accepted accounting principles.

 

## **7.6**                          ToMaintain Listings

 

The Company will use its best efforts to maintain the listing of theShares on the Toronto Stock Exchange, and to maintain the Company’s status as a“reporting issuer” not in default of the requirements of the ApplicableSecurities Legislation; provided that, for greater certainty, the foregoingcovenant shall not prevent or restrict the Company from carrying out atransaction to which Article 10 would apply if carried out in compliance withArticle 10 even if as a result of such transaction the Company ceases to be a “reportingissuer” in all or any of the provinces of Canada or the Shares cease to belisted on the Toronto Stock Exchange or any other stock exchange.

 

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## **7.7**                          ToProvide Financial Statements

 

The Company will furnish to the Debenture Trustee a copy of allconsolidated financial statements of the Company, whether annual or interim andthe report, if any, of the Company’s auditors thereon and all annual orperiodic financial reports of the Company, which are furnished to the holdersof Shares promptly upon the distribution thereof to the holders of the Shares,provided that the Company shall not be required to furnish such statementswhere holders of Debentures have elected not to receive them in accordance withApplicable Securities Legislation.

 

## **7.8**                          AnnualCertificate of Compliance

 

The Company shall deliver to the Debenture Trustee, within 120 daysafter the end of each calendar year, an Officer’s Certificate certifying thatafter reasonable investigation and inquiry, the Company has complied with allcovenants, conditions or other requirements contained in this Indenture, thenon-compliance with which could, with the giving of notice, lapse of time orotherwise, constitute an Event of Default hereunder, or if such is not thecase, setting forth with reasonable particulars the circumstances of anyfailure to comply and steps taken or proposed to be taken to eliminate such circumstancesand remedy such Event of Default, as the case may be.

 

## **7.9**                          NoDistributions on Shares if Event of Default

 

The Company shall not declare or make any distribution to the holdersof its issued and outstanding Shares after the occurrence of a default or anEvent of Default unless and until such default shall have been cured or waivedor shall have ceased to exist. In addition, the Company shall not declare anydistribution to the holders of its issued and outstanding Shares if at the timethe trustees of the Company or a committee thereof resolves to make the saiddeclaration, the Company has actual knowledge that the paying of saiddistribution on the applicable distribution payment date will result in adefault or an Event of Default.

 

## **7.10**                        Performanceof Covenants by Debenture Trustee

 

If the Company shall fail to perform any of its covenants contained inthis Indenture, the Debenture Trustee may notify the Debentureholders of suchfailure on the part of the Company or may itself perform any of the covenantscapable of being performed by it, but (subject to Section 8.2 andSection 14.3) shall be under no obligation to do so or to notify theDebentureholders. All sums so expended or advanced by the Debenture Trusteeshall be repayable as provided in Section 7.2. No such performance,expenditure or advance by the Debenture Trustee shall be deemed to relieve theCompany of any default hereunder.

 

# **ARTICLE 8DEFAULT**

 

## **8.1**                          Eventsof Default

 

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

 

##### (a)           defaultfor 30 days in the payment when due of interest (in cash or Shares) on theDebentures;

#####  

##### (b)           defaultin the payment when due (at maturity, upon redemption or otherwise) of theprincipal of, or premium, if any, on the Debentures;

#####  

##### (c)           failureby the Company or any of its Restricted Subsidiaries to comply with theprovisions of Section 2.4(j) and Section 10.1 hereof;

 

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##### (d)                                 default in the observance or performance of any material covenant orcondition in the Indenture by the Company for a period of 30 days after noticein writing has been given to the Company by the Debenture Trustee or by theholders of not less than 25% of the principal amount of the Debenturesspecifying such default and requiring the Company to remedy such default;

 

##### (e)                                  default under any mortgage, indenture or instrument under whichthere may be issued or by which there may be secured or evidenced anyindebtedness for money borrowed by the Company or any of its RestrictedSubsidiaries (or the payment of which is guaranteed by the Company or any ofits Restricted Subsidiaries), whether such indebtedness or guarantee nowexists, or is created after the date of this Indenture, if that default:

 

###### (i)                  is caused by a failure to pay principal of, or interest or premium,if any, on, such Indebtedness prior to the expiration of the grace periodprovided in such indebtedness on the date of such default (a “Payment Default”);or

 

###### (ii)               resultsin the acceleration of such indebtedness prior to its express maturity,

 

and, in each case, the principal amount ofany such indebtedness, together with the principal amount of any other suchindebtedness under which there has been a Payment Default or the maturity ofwhich has been so accelerated, aggregates US$10.0 million or more;

 

##### (f)                                    failure by the Company or any of its Restricted Subsidiaries****to pay final non-appealable judgments forthe payment of money entered by a court or courts of competent jurisdictionaggregating in excess of US$10.0 million, which judgments are not paid,discharged or stayed for a period of 60 days;

 

##### (g)                                 the Company or any of its Restricted Subsidiaries that is aSignificant Subsidiary or any group of Restricted Subsidiaries of the Companythat, taken together, would constitute a Significant Subsidiary pursuant to orwithin the meaning of Bankruptcy Law:

 

###### (i)                  commences a voluntary case,

 

###### (ii)               consentsto the entry of an order for relief against it in an involuntary case,

 

###### (iii)            consentsto the appointment of a custodian of it or for all or substantially all of itsproperty,

 

###### (iv)           makesa general assignment for the benefit of its creditors, or

 

###### (v)              generallyis not paying its debts as they become due; or

 

##### (h)                                 a court of competent jurisdiction enters an order or decree underany Bankruptcy Law that:

 

###### (i)                  is for relief against the Company or any of its RestrictedSubsidiaries that is a Significant Subsidiary or any group of RestrictedSubsidiaries of the Company that, taken together, would constitute aSignificant Subsidiary in an involuntary case;

 

###### (ii)               appointsa custodian of the Company or any of its Restricted Subsidiaries that is aSignificant Subsidiary, or any group of Restricted Subsidiaries of the Companythat, taken together, would constitute a Significant Subsidiary or for all orsubstantially all of the property of the Company or any of its RestrictedSubsidiaries that is a Significant Subsidiary or any group of RestrictedSubsidiaries of the Company that, taken together, would constitute aSignificant Subsidiary; or

######  

###### 47

###### 

######  

###### (iii)            ordersthe liquidation of the Company or any of its Restricted Subsidiaries that is aSignificant Subsidiary or any group of Restricted Subsidiaries of the Companythat, taken together, would constitute a Significant Subsidiary;

 

###### and the order or decree remains unstayed andin effect for 60 consecutive days.

######  

Upon the occurrence of any Event of Default,the Debenture Trustee may, in its discretion, and shall, upon receipt of arequest in writing signed by the holders of not less than 25% in principalamount of the Debentures then outstanding, subject to the provisions ofSection 8.3, by notice in writing to the Company declare the principal of,premium, if any, and interest on all Debentures (and, where such a declarationis based upon a voluntary winding-up or liquidation of the Company, thepremium, if any, on the Debentures then outstanding which would have beenpayable upon the redemption thereof by the Company on the date of suchdeclaration) then outstanding and all other monies outstanding hereunder to bedue and payable and the same shall forthwith become immediately due and payableto the Debenture Trustee and, subject to Section 5.5, the Company shallforthwith pay to the Debenture Trustee for the benefit of the Debentureholderssuch principal, premium, if any, accrued and unpaid interest and interest onamounts in default on the Debentures and all other monies outstandinghereunder, together with subsequent interest at the rate borne by theDebentures on such principal, interest and such other monies from the date ofsuch declaration until payment is received by the Debenture Trustee, suchsubsequent interest to be payable at the times and places and in the moniesmentioned in and according to the tenor of the Debentures. Such payment whenmade shall be deemed to have been made in discharge of the Company’sobligations hereunder and any monies so received by the Debenture Trustee shallbe applied in the manner provided in Section 8.6.

 

For greater certainty, for the purpose ofthis Section 8.1, if an Event of Default under Section 8.1(a) orSection 8.1(b) has occurred only with respect to Debentures of aparticular series, references to Debentures in this Section 8.1 shall onlyrefer to Debentures of such particular series.

 

For the purposes of this Article 8, if anEvent of Default under Section 8.1(a) or Section 8.1(b) has occurredonly with respect to Debentures of a particular series, then this Article 8shall apply *mutatis mutandis* to the Debentures ofsuch series and references in this Article 8 to the Debentures shall mean onlyDebentures of such series and references to the Debentureholders shall referonly to the Debentureholders of such series, as applicable.

 

## **8.2**                                                                               Notice of Events ofDefault

##  

If an Event of Default shall occur and becontinuing the Debenture Trustee shall, within 30 days after it receiveswritten notice of the occurrence (or otherwise becomes aware) of such Event ofDefault, give notice of such Event of Default to the Debentureholders in themanner provided in Section 13.2, provided that notwithstanding theforegoing, unless the Debenture Trustee shall have been requested to do so bythe holders of at least 25% of the principal amount of the Debentures thenoutstanding, the Debenture Trustee shall not be required to give such notice ifthe Debenture Trustee in good faith shall have determined that the withholdingof such notice is in the best interests of the Debentureholders and shall haveso advised the Company in writing. For greater certainty, the Debenture Trusteecan assume that there is no Event of Default unless it is notified in writing,such notification to distinctly specify the nature of the default.

 

Where notice of the occurrence of any Eventof Default is given by the Debenture Trustee under this Section 8.2 andthe Event of Default is thereafter cured, the Debenture Trustee shall, within20 calendar days after becoming aware of the curing of the Event ofDefault give notice to the Debentureholders in the manner provided inSection 13.2 that the Event of Default is no longer continuing and shallso advise the Company in writing in the manner provided by Section 13.1.

 

## **8.3**                                                                               Waiver of Default

##  

Upon the happening of any Event of Defaulthereunder:

 

##### (a)                                  the holders of the Debentures shall have the power (in addition tothe powers exercisable by Extraordinary Resolution as hereinafter provided) byrequisition in writing by the holders of more than 50% of the principal amountof Debentures then outstanding, to instruct the Debenture Trustee to waive anyEvent of Default and to cancel any declaration made by the Debenture Trusteepursuant to Section 8.1 and the Debenture Trustee shall thereupon waivethe Event of Default and cancel such declaration, or either, upon such termsand conditions as shall be prescribed in such requisition; provided thatnotwithstanding the foregoing if the Event of Default has occurred by reason ofthe non-observance or non-performance by the Company of any covenant applicableonly to one or more series of Debentures, then the holders of more than 50% ofthe principal amount of the outstanding Debentures of that series shall beentitled to exercise the foregoing power and the Debenture Trustee shall so actand it shall not be necessary to obtain a waiver from the holders of any otherseries of Debentures; and

#####  

##### 48

##### 

#####  

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

#####  

No such act or omission either of theDebenture Trustee or of the Debentureholders shall extend to or be taken in anymanner whatsoever to affect any subsequent Event of Default or the rightsresulting therefrom.

 

## **8.4**                                                                               Enforcement by theDebenture Trustee

##  

Subject to the provisions of Article 5 andSection 8.3 and to the provisions of any Extraordinary Resolution that maybe passed by the Debentureholders, if the Company shall fail to pay to theDebenture Trustee, forthwith after the same shall have been declared to be dueand payable under Section 8.1, the principal of, premium (if any) andinterest on all Debentures then outstanding, together with any other amountsdue hereunder, the Debenture Trustee may in its discretion and shall upon receiptof a request in writing signed by the holders of not less than 25% in principalamount of the Debentures then outstanding and upon being Companyed andindemnified to its reasonable satisfaction against all costs, expenses andliabilities to be incurred, proceed in its name as trustee hereunder to obtainor enforce payment of such principal of, premium (if any) and interest on allthe Debentures then outstanding together with any other amounts due hereunderby such proceedings authorized by this Indenture or by law or equity as theDebenture Trustee in such request shall have been directed to take, or if suchrequest contains no such direction, or if the Debenture Trustee shall actwithout such request, then by such proceedings authorized by this Indenture orby suit at law or in equity as the Debenture Trustee shall deem expedient.

 

The Debenture Trustee shall be entitled andempowered, either in its own name or as Debenture Trustee of an express trust,or as attorney-in-fact for the holders of the Debentures, or in any one or moreof such capacities, to file such proof of debt, amendment of proof of debt,claim, petition or other document as may be necessary or advisable in order tohave the claims of the Debenture Trustee and of the holders of the Debenturesallowed in any insolvency, bankruptcy, liquidation or other judicialproceedings relative to the Company or its creditors or relative to oraffecting the Company’s property. The Debenture Trustee is hereby irrevocablyappointed (and the successive respective holders of the Debentures by takingand holding the same shall be conclusively deemed to have so appointed theDebenture Trustee) the true and lawful attorney-in-fact of the respectiveholders of the Debentures with authority to make and file in the respectivenames of the holders of the Debentures or on behalf of the holders of theDebentures as a class, subject to deduction from any such claims of the amountsof any claims filed by any of the holders of the Debentures themselves, anyproof of debt, amendment of proof of debt, claim, petition or other document inany such proceedings and to receive payment of any sums becoming distributableon account thereof, and to execute any such other papers and documents and todo and perform any and all such acts and things for and on behalf of suchholders of the Debentures, as may be necessary or advisable in the opinion ofthe Debenture Trustee, in order to have the respective claims of the DebentureTrustee and of the holders of the Debentures against the Company or itsproperty allowed in any such proceeding, and to receive payment of or onaccount of such claims; provided, however, that subject to Section 8.3,nothing contained in this Indenture shall be deemed to give to the DebentureTrustee, unless so authorized by Extraordinary Resolution, any right to acceptor consent to any plan of reorganization or otherwise by action of anycharacter in such proceeding to waive or change in any way any right of anyDebentureholder.

 

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

 

All rights of action hereunder may beenforced by the Debenture Trustee without the possession of any of theDebentures or the production thereof on the trial or other proceedings relatingthereto. Any such suit or proceeding instituted by the Debenture Trustee shallbe brought in the name of the Debenture Trustee as trustee of an express trust,and any recovery of judgment shall be for the rateable benefit of the holdersof the Debentures subject to the provisions of this Indenture. In anyproceeding brought by the Debenture Trustee (and also any proceeding in which adeclaratory judgment of a court may be sought as to the interpretation orconstruction of any provision of this Indenture, to which the Debenture Trusteeshall be a party) the Debenture Trustee shall be held to represent all theholders of the Debentures, and it shall not be necessary to make any holders ofthe Debentures parties to any such proceeding.

 

## **8.5**                                                                               No Suits byDebentureholders

##  

No holder of any Debenture shall have anyright to institute any action, suit or proceeding at law or in equity for thepurpose of enforcing payment of the principal of, premium (if any) or intereston the Debentures or for the execution of any trust or power hereunder or forthe appointment of a liquidator or receiver or for a receiving order under the *Bankruptcy and Insolvency Act*(Canada) orto have the Company wound up or to file or prove a claim in any liquidation orbankruptcy proceeding or for any other remedy hereunder, unless: (a) suchholder shall previously have given to the Debenture Trustee written notice ofthe happening of an Event of Default hereunder; and (b) the Debentureholders byExtraordinary Resolution or by written instrument signed by the holders of at least25% in principal amount of the Debentures then outstanding shall have made arequest to the Debenture Trustee and the Debenture Trustee shall have beenafforded reasonable opportunity either itself to proceed to exercise the powershereinbefore granted or to institute an action, suit or proceeding in its namefor such purpose; and (c) the Debentureholders or any of them shall havefurnished to the Debenture Trustee, when so requested by the Debenture Trustee,sufficient funds and security and indemnity satisfactory to it against thecosts, expenses and liabilities to be incurred therein or thereby; and (d) theDebenture Trustee shall be entitled to act and shall have failed to act withina reasonable time after such notification, request and offer of indemnity andsuch notification, request and offer of indemnity are hereby declared in everysuch case, at the option of the Debenture Trustee, to be conditions precedentto any such proceeding or for any other remedy hereunder by or on behalf of theholder of any Debentures.

 

## **8.6**                                                                               Application of Moniesby Debenture Trustee

##  

##### (a)                                  Except as herein otherwise expressly provided, any monies receivedby the Debenture Trustee from the Company pursuant to the foregoing provisionsof this Article 8, or as a result of legal or other proceedings or from anytrustee in bankruptcy or liquidator of the Company, shall be applied, togetherwith any other monies in the hands of the Debenture Trustee available for suchpurpose, as follows:

#####  

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

######  

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

 

###### (iii)            third,in payment of the surplus, if any, of such monies to the Company or itsassigns; provided, however, that no payment shall be made pursuant to clause(ii) above in respect of the principal of, premium (if any) or interest on anyDebenture held, directly or indirectly, by or for the benefit of the Company orany affiliate (other than any Debenture pledged for value and in good faith toa Person other than the Company or any affiliate but only to the extent of suchPerson’s interest therein) except subject to the prior payment in full of theprincipal, premium (if any) and interest (if any) on all Debentures which arenot so held.

 

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##### (b)                                 The Debenture Trustee shall not be bound to apply or make anypartial or interim payment of any monies coming into its hands if the amount soreceived by it, after reserving thereout such amount as the Debenture Trusteemay think necessary to provide for the payments mentioned inSection 8.6(a), is insufficient to make a distribution of at least 2% ofthe aggregate principal amount of the outstanding Debentures, but it may retainthe money so received by it and invest or deposit the same as provided inSection 14.9 until the money or the investments representing the same,with the income derived therefrom, together with any other monies for the timebeing under its control shall be sufficient for the said purpose or until itshall consider it advisable to apply the same in the manner hereinbefore setforth. The foregoing shall not, however, apply to a final payment indistribution hereunder.

#####  

## **8.7**                                                                               Notice of Payment byDebenture Trustee

##  

Not less than 15 days notice shall be givenin the manner provided in Section 13.2 by the Debenture Trustee to theDebentureholders of any payment to be made under this Article 8. Such noticeshall state the time when and place where such payment is to be made and alsothe liability under this Indenture to which it is to be applied. After the dayso fixed, unless payment shall have been duly demanded and have been refused,the Debentureholders will be entitled to interest only on the balance (if any)of the principal monies, premium (if any) and interest due (if any) to them,respectively, on the Debentures, after deduction of the respective amountspayable in respect thereof on the day so fixed.

 

## **8.8**                                                                               Debenture Trustee MayDemand Production of Debentures

##  

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

 

## **8.9**                                                                               Remedies Cumulative

##  

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

 

## **8.10**                                                                        Judgment Against theCompany

##  

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

 

## **8.11**                                                                        Immunity of DebentureTrustee and Others

##  

The Debentureholders and the DebentureTrustee hereby waive and release any right, cause of action or remedy now orhereafter existing in any jurisdiction against any past, present or futureofficer or director of the Company or holder of Shares of the Company or of anysuccessor thereto, for the payment of the principal of or premium or intereston any of the Debentures or for any breach of any covenant, agreement,representation or warranty by the Company contained herein or in theDebentures.

 

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# **ARTICLE 9SATISFACTION AND DISCHARGE**

#  

## **9.1**                                                                               Cancellation andDestruction

##  

All Debentures shall forthwith after paymentthereof, whether on the Maturity Date, Redemption Date, the date of a change ofControl or on any other payment date, be delivered to the Debenture Trustee andcancelled by it. All Debentures cancelled or required to be cancelled underthis or any other provision of this Indenture shall be destroyed by theDebenture Trustee and, if required by the Company, the Debenture Trustee shallfurnish to it a destruction certificate setting out the designating numbers ofthe Debentures so destroyed.

 

## **9.2**                                                                               Non-Presentation ofDebentures

##  

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

 

##### (a)                                  the Company shall be entitled to pay or deliver to the DebentureTrustee and direct it to set aside; or

#####  

##### (b)                                 in respect of monies or Shares in the hands of the Debenture Trusteewhich may or should be applied to the payment of the Debentures, the Companyshall be entitled to direct the Debenture Trustee to set aside; or

#####  

##### (c)                                  if the redemption was pursuant to notice given by the DebentureTrustee, the Debenture Trustee may itself set aside;

#####  

the principal, premium (if any) or theinterest, as the case may be, on such holder’s Debentures in trust to be paidto the holder of such Debenture upon due presentation or surrender thereof inaccordance with the provisions of this Indenture; and thereupon the principal,premium (if any) or the interest payable on or represented by each Debenture inrespect whereof such monies or Shares, if applicable, have been set aside shallbe deemed to have been paid and the holder thereof shall thereafter have noright in respect thereof except that of receiving delivery and payment of themonies or Shares, if applicable, so set aside by the Debenture Trustee upon duepresentation and surrender thereof, subject always to the provisions ofSection 9.3.

 

## **9.3**                                                                               Repayment ofUnclaimed Monies or Shares

##  

Subject to applicable law, any monies orShares, if applicable, set aside under Section 9.2 and not claimed by andpaid to holders of Debentures as provided in Section 9.2 within six yearsafter the date of such setting aside shall be repaid and delivered to theCompany by the Debenture Trustee and thereupon the Debenture Trustee shall bereleased from all further liability with respect to such monies or Shares, ifapplicable, and thereafter the holders of the Debentures in respect of whichsuch monies or Shares, if applicable, were so repaid to the Company shall haveno rights in respect thereof except to obtain payment and delivery of themonies or Shares, if applicable, from the Company subject to any limitationprovided by the laws of the Province of Ontario.

 

## **9.4**                                                                               Discharge

##  

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

 

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## **9.5**                                                                               Satisfaction

##  

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

#####  

###### (i)                  the Company has deposited or caused to be deposited with the DebentureTrustee as trust funds or property in trust for the purpose of making paymenton such Debentures, an amount in money or Shares, if applicable, sufficient topay, satisfy and discharge the entire amount of principal, premium, if any, andinterest, if any, on the Debentures to the Maturity Date, or any repayment dateor Redemption Dates, as the case may be, of such Debentures; or

######  

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

######  

(A)                              if the Debentures are issued in Canadian dollars, such amount inCanadian dollars of direct obligations of, or obligations the principal andinterest of which are guaranteed by, the Government of Canada or Shares, ifapplicable; or

 

(B)                                if the Debentures are issued in a currency or currency unit otherthan Canadian dollars, cash in the currency or currency unit in which theDebentures are payable and/or such amount in such currency or currency unit ofdirect obligations of, or obligations the principal and interest of which areguaranteed by, the government that issued the currency or currency unit inwhich the Debentures are payable or Shares, if applicable;

 

as will, together with the income to accruethereon, be sufficient to pay and discharge the entire amount of principal,premium, if any and accrued and unpaid interest to the Maturity Date,Redemption Date or any repayment date, as the case may be, of all suchDebentures;

 

and in either event:

 

###### (iii)            theCompany has paid, caused to be paid or made provisions to the satisfaction ofthe Debenture Trustee for the payment of all other sums payable with respect toall of such Debentures (together with all applicable expenses of the DebentureTrustee in connection with the payment of such Debentures); and

######  

###### (iv)           theCompany has delivered to the Debenture Trustee an Officer’s Certificate statingthat all conditions precedent herein provided relating to the payment,satisfaction and discharge of all such Debentures have been complied with.

######  

Any deposits with the Debenture Trusteereferred to in this Section 9.5 shall be irrevocable, subject toSection 9.6, and shall be made under the terms of an escrow and/or trustagreement in form and substance satisfactory to the Debenture Trustee and itsCounsel and which provides for the due and punctual payment of the principalof, and interest and premium, if any, and all other amounts owing on theDebentures being satisfied.

 

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##### (b)                                 Upon the satisfaction of the conditions set forth in thisSection 9.5 with respect to all the outstanding Debentures, or all theoutstanding Debentures of any series, as applicable, the terms and conditionsof such Debentures, including the terms and conditions with respect thereto setforth in this Indenture (other than those contained in Article 2, Article 4,Article 5, Article 6, Section 8.4 and Article 10 and the provisions ofArticle 1 pertaining to the foregoing provisions) shall no longer be bindingupon or applicable to the Company.

#####  

##### (c)                                  Any funds or obligations deposited with the Debenture Trusteepursuant to this Section 9.5 shall be denominated in the currency ordenomination of the Debentures in respect of which such deposit is made.

#####  

##### (d)                                 If the Debenture Trustee is unable to apply any money or securitiesin accordance with this Section 9.5 by reason of Article 5 or any legalproceeding or any order or judgment of any court or governmental authorityenjoining, restraining or otherwise prohibiting such application, the Company’sobligations under this Indenture and the affected Debentures shall be revivedand reinstated as though no money or securities had been deposited pursuant tothis Section 9.5 until such time as the Debenture Trustee is permitted toapply all such money or securities in accordance with this Section 9.5,provided that if the Company has made any payment in respect of principal,premium or interest on Debentures or, as applicable, other amounts because ofthe reinstatement of its obligations, the rights of the Company shall besubrogated to the rights of the holders of such Debentures to receive suchpayment from the money or securities held by the Debenture Trustee.

#####  

## **9.6**                                                                               Continuance ofRights, Duties and Obligations

##  

##### (a)                                  Where trust funds or trust property have been deposited pursuant toSection 9.5, the holders of Debentures and the Company shall continue tohave and be subject to their respective rights, duties and obligations underArticle 2, Article 4, Article 5, Article 6 and Article 10 and the provisions ofArticle 1 pertaining to the foregoing.

#####  

##### (b)                                 In the event that, after the deposit of trust funds or trustproperty pursuant to Section 9.5 in respect of a series of Debentures (the“**Defeased Debentures**”), any holder of any of the Defeased Debentures from time to timeconverts its Debentures to Shares or other securities of the Company inaccordance with Subsection 2.4(h), Article 6 or any other provision ofthis Indenture, the Debenture Trustee shall upon receipt of a Written Directionof the Company return to the Company the proportionate amount of the funds orother trust property deposited with the Debenture Trustee pursuant toSection 9.5 in respect of the Defeased Debentures which is applicable tothe Defeased Debentures so converted (which amount shall be based on theapplicable principal amount of the Defeased Debentures being converted inrelation to the aggregate outstanding principal amount of all the DefeasedDebentures).

#####  

##### (c)                                  In the event that, after the deposit of trust funds or trustproperty pursuant to Section 9.5, the Company is required to make an Offerto purchase any outstanding Debentures pursuant to Subsection 2.4(j) inrelation to Initial Debentures or to make an offer to purchase Debenturespursuant to any other similar provisions relating to any other series ofDebentures, the Company shall be entitled to use any trust money or trustproperty deposited with the Debenture Trustee pursuant to Section 9.5 forthe purpose of paying to any holders of Defeased Debentures who have acceptedany such offer of the Company the Total Offer Price payable to such holders inrespect of such Offer in respect of Initial Debentures (or the total offerprice payable in respect of an offer relating to any other series ofDebentures). Upon receipt of a Written Direction from the Company, theDebenture Trustee shall be entitled to pay to such holder from such trust moneyor trust property deposited with the Debenture Trustee pursuant toSection 9.5 in respect of the Defeased Debentures the amount which isapplicable to the Defeased Debentures held by such holders who have acceptedany such offer (which amount shall be based on the applicable principal amountof the Defeased Debentures held by accepting offerees in relation to theaggregate outstanding principal amount of all the Defeased Debentures).

#####  

##### 54

##### 

#####  

# **ARTICLE 10SUCCESSORS**

#  

## **10.1**                                                                        Restrictions onAmalgamation, Merger and Sale of Certain Assets, etc.

##  

Subject to the provisions of Article 11, theCompany shall not enter into any transaction or series of transactions wherebyall or substantially all of its undertaking, property or assets would becomethe property of any other Person (herein called a “**Successor**”) whether by way of reorganization, consolidation,amalgamation, arrangement, merger, conveyance, lease, sale or otherwise,unless:

 

##### (a)                                  prior to or contemporaneously with the consummation of suchtransaction the Company and the Successor shall have executed such instrumentsand done such things as, in the opinion of Counsel, are necessary or advisableto establish that upon the consummation of such transaction:

#####  

###### (i)                  the Successor will have assumed by way of supplemental indenture allthe covenants and obligations of the Company under this Indenture in respect ofthe Debentures;

######  

###### (ii)               theDebentures will be valid and binding obligations of the Successor entitling theholders thereof, as against the Successor, to all the rights ofDebentureholders under this Indenture;

######  

###### (iii)            theSuccessor is a corporation, partnership, limited liability company or trustorganized or existing under the laws of Canada or any province or territorythereof; and

######  

###### (iv)           in thecase of an entity organized otherwise than under the laws of the Province ofOntario, the Successor shall attorn to the jurisdiction of the courts of theProvince of Ontario;

######  

##### (b)                                 such transaction, in the opinion of Counsel, shall be on such termsas to substantially preserve and not impair any of the rights and powers of theDebenture Trustee or of the Debentureholders hereunder;

#####  

##### (c)                                  no condition or event shall exist as to the Company (at the time ofsuch transaction) or the Successor (immediately after such transaction) andafter giving full effect thereto or immediately after the Successor shallbecome liable to pay the principal monies, premium, if any, interest and othermonies due or which may become due hereunder, which constitutes or would withthe giving of notice or lapse of time constitute an Event of Default hereunder;and

#####  

##### (d)                                 the Company shall have delivered to the Debenture Trustee an Officer’sCertificate confirming that all requirements of this Article 10 have beencomplied with in respect of such transaction or series of transactions.

#####  

## **10.2**                                                                        Vesting of Powers inSuccessor

##  

Whenever the conditions of Section 10.1shall have been duly observed and performed, any Successor formed by orresulting from such transaction or series of transactions shall succeed to, andbe substituted for, and may exercise every right and power of the Company underthis Indenture with the same effect as though the Successor had been named asthe Company herein and thereafter, except in the case of a lease or othersimilar disposition of property to the Successor, the Company shall be relievedof all obligations and covenants under this Indenture and the Debenturesforthwith upon the Company delivering to the Debenture Trustee an opinion ofCounsel to the effect that the transaction or series of transactions shall notresult in any material adverse tax consequences to the Company or the Successor.The Debenture Trustee will, at the expense of the Successor, execute anydocuments which it may be advised by Counsel are necessary or advisable foreffecting or evidencing such release and discharge.

 

55

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# **ARTICLE 11COMPULSORY ACQUISITION**

#  

## **11.1**                                                                        Definitions

##  

In this Article:

 

##### (a)                                  “**Associate**” has the meaning set forth in the *SecuritiesAct*(Ontario);

#####  

##### (b)                                 “**Debenture Offer**” means an offer to acquire outstanding Debentures where, as of thedate of the offer to acquire, the Debentures that are subject to the offer toacquire, together with the Debenture Offeror’s Debentures, constitute in theaggregate 20% or more of the outstanding principal amount of the Debentures;

#####  

##### (c)                                  “**Debenture Offeror**” means a Person, or two or more Persons acting jointly or inconcert, who make a Debenture Offer to acquire Debentures;

#####  

##### (d)                                 “**Debenture Offeror’sDebentures**” means Debentures beneficially owned, orover which control or direction is exercised, on the date of a Debenture Offerby the Debenture Offeror or any affiliate or Associate of the DebentureOfferor.

#####  

##### (e)                                  “**Debenture Offeror’s Notice**” means the notice described in Section 11.3; and

#####  

##### (f)                                    “**DissentingDebentureholders**” means a Debentureholder who doesnot accept a Debenture Offer referred to in Section 11.2 and includes anyassignee of the Debenture of such Debentureholder to whom such a DebentureOffer is made, whether or not such assignee is recognized under this Indenture;and

#####  

##### (g)                                 “**offer to acquire**” includes an acceptance of an offer to sell.

#####  

## **11.2**                                                                        Debenture Offer forDebentures

##  

If a Debenture Offer for all of theoutstanding Debentures (other than Debentures held by or on behalf of theDebenture Offeror or an affiliate or Associate of the Debenture Offeror) ismade and:

 

##### (a)                                  within the time provided in the Debenture Offer for its acceptanceor within 60 days after the date the Debenture Offer is made, whichever periodis the shorter, the Debenture Offer is accepted by Debentureholdersrepresenting at least 90% of the outstanding principal amount of the Debenturesas of the date of the Debenture Offer, other than the Debenture Offeror’sDebentures;

#####  

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

#####  

##### (c)                                  the Debenture Offeror complies with Sections 11.3 and 11.6;

#####  

then the Debenture Offeror is entitled toacquire, and the Dissenting Debentureholders are required to sell to theDebenture Offeror, the Debentures held by the Dissenting Debentureholders forthe same consideration per Debenture of the same series as those held by theDissenting Debentureholders payable or paid, as the case may be, under theDebenture Offer, and otherwise on the same terms and subject to the conditionsset forth in this Article 11, provided that holders of Debentures will have theright to elect to be paid the fair value of their Debentures by providingnotice to the Debenture Offeror within 20 days after the Debenture Offeror’sNotice is given.

 

56

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## **11.3**                                                                        Debenture Offeror’sNotice to Dissenting Shareholders

##  

Where a Debenture Offeror is entitled toacquire Debentures held by Dissenting Debentureholders pursuant toSection 11.2 and the Debenture Offeror wishes to exercise such right, theDebenture Offeror shall send by registered mail within 30 days after the dateof termination of the Debenture Offer a notice (the “**Debenture Offeror’s Notice**”) to each DissentingDebentureholder stating that:

 

##### (a)                                  Debentureholders holding at least 90% of the outstanding principalamount of the Debentures as of the date of the Debenture Offer, other thanDebenture Offeror’s Debentures, have accepted the Debenture Offer;

#####  

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

#####  

##### (c)                                  Dissenting Debentureholders must elect to:

#####  

###### (i)                  transfer their respective Debentures to the Debenture Offeror on theterms on which the Debenture Offeror acquired the applicable series ofDebentures of the Debentureholders who accepted the Debenture Offer within 20days after the date of the sending of the Debenture Offeror’s Notice; or

######  

###### (ii)               demandpayment of fair value for their Debentures by notifying the Debenture Offerorwithin 20 calendar days after the date of receiving the Debenture Offeror’sNotice;

######  

##### (d)                                 any Dissenting Debentureholderswho fails to notify the Debenture Offeror of its election as described under Section 11.3(c) will be deemed to have electedto transfer his or her Debentures to the Debenture Offeror on the same terms onwhich the Debenture Offeror acquired Debentures from Debentureholders whoaccepted the Debenture Offer.

#####  

## **11.4**                                                                        Delivery of DebentureCertificates

##  

##### (a)                                  A Dissenting Debentureholder to whom a Debenture Offeror’s Notice issent pursuant to Section 11.3 shall, within 20 days after receiving theDebenture Offeror’s Notice,

#####  

###### (i)                  in the case of Fully Registered Debentures, send his or herDebenture certificate(s) to the Debenture Trustee duly endorsed for transfer;and

######  

###### (ii)               electto:

######  

(A)                              transfer his or her Debentures to the Debenture Offeror for the sameconsideration per Debenture of the applicable series payable or paid, as thecase may be, under the Debenture Offer; or

 

(B)                                demand payment from the Debenture Offeror of fair value for suchDebentures.

 

##### (b)                                 Any Dissenting Debentureholder who fails to notify the DebentureOfferor in accordance with Section 11.4(a) is deemed to have elected totransfer the Debentures to the Debenture Offeror on the same terms on which theDebenture Offeror acquired Debentures of the applicable series fromDebentureholders who accepted the Debenture Offer.

#####  

## **11.5**                                                                        Debenture Offeror’sNotice to the Corporation

##  

Concurrently with sending the DebentureOfferor’s Notice under Section 11.3, the Debenture Offeror (if other than theCompany) shall send to the Company a notice of adverse claim disclosing thename and address of the Debenture Offeror and the name of each of theDissenting Debentureholders.

 

57

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## **11.6**                                                                        Payment ofConsideration to Debenture Trustee

##  

Within 20 days after the Debenture Offerorsends a Debenture Offeror’s Notice pursuant to Section 11.3, the DebentureOfferor shall pay or transfer to the Debenture Trustee, or to such other Personas the Debenture Trustee may direct, the cash or other consideration that wouldbe payable if all Dissenting Debentureholders elected to accept the DebentureOffer in accordance with Section 11.4(a)(ii)(A). The acquisition by theDebenture Offeror of all Debentures held by all Dissenting Debentureholdersshall be effective as of the time of such payment or transfer.

 

## **11.7**                                                                        Consideration to beheld in Trust

##  

The Debenture Trustee, or the Person directedby the Debenture Trustee, shall hold in trust for the DissentingDebentureholders the cash or other consideration they or it receives underSection 11.6. The Debenture Trustee, or such Persons, shall deposit suchcash in a separate account in a Canadian chartered bank, or other bodycorporate, any of whose deposits are insured by the Canada Deposit InsuranceCorporation, and shall place such other consideration in the custody of aCanadian chartered bank or such other body corporate.

 

## **11.8**                                                                        Completion ofTransfer of Debentures to Debenture Offeror

##  

Within 30 days after the date of the sendingof a Debenture Offeror’s Notice pursuant to Section 11.3, the DebentureTrustee, if the Debenture Offeror has complied with Section 11.6, shall:

 

##### (a)                                  do all acts and things and execute and cause to be executed allinstruments as in the Debenture Trustee’s opinion (relying on the advice ofCounsel) may be necessary or desirable to cause the transfer of the Debenturesof the Dissenting Debentureholders who have made or are deemed to have made anelection under Section 11.4(a)(ii)(A) to the Debenture Offeror;

#####  

##### (b)                                 send to each Dissenting Debentureholder who has made or deemed tohave made an election under Section 11.4(a)(ii)(A) and, if applicable hascomplied with Section 11.4(a)(i), the consideration to which suchDissenting Debentureholder is entitled under this Article 11; and

#####  

##### (c)                                  send to each Dissenting Debentureholder who has made or deemed tohave made an election under Section 11.4(a)(ii)(A) but has not compliedwith Section 11.4(a)(i), if applicable, a notice stating that:

#####  

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

######  

###### (ii)               theDebenture Trustee or some other Person designated in such notice are holding intrust the consideration to which the Dissenting Debentureholder is entitled toreceive for such Debentures; and

######  

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

######  

and the Debenture Trustee is hereby appointedthe agent and attorney of the Dissenting Debentureholders for the purposes ofgiving effect to the foregoing provisions.

 

## **11.9**                                                                        Demand for Payment ofFair Value

##  

##### (a)                                  If a Dissenting Debentureholder has elected to demand payment of thefair value for his or her Debentures pursuant to Section 11.4(a)(ii)(B), theDebenture Offeror may, within 20 calendar days after it has paid the cash ortransferred the other consideration to the Trustee under Section 11.6, apply toa court to fix the fair value of the Debentures of that DissentingDebentureholder.

#####  

##### 58

##### 

#####  

##### (b)                                 If a Debenture Offeror fails to apply to a court under Section11.9(a), a Dissenting Debentureholder may apply to a court for the same purposewithin a further period of 20 calendar days.

#####  

##### (c)                                  Where no application is made to a court under Section 11.9(b) withinthe period set out in that Section, a Dissenting Debentureholder is deemed tohave elected to transfer his or her Debentures to the Debenture Offeror on thesame terms on which the Debenture Offeror acquired Subject Debentures of theapplicable series from Debentureholders who accepted the Debenture Offer.

#####  

##### (d)                                 An application under Section 11.9(a) or 11.9(b) shall be made to acourt having jurisdiction in the Province of Ontario.

#####  

##### (e)                                  A Dissenting Debentureholder is not required to give security forcosts in an application made under Section 11.9(a) or 11.9(b).

#####  

##### (f)                                    On an application under Section 11.9(a) or 11.9(b):

#####  

###### (i)                  all Dissenting Debentureholders that have elected pursuant toSection 11.4(a)(ii)(B) whose Debentures have not been acquired by the DebentureOfferor shall be joined as parties and are bound by the decision of the court;and

######  

###### (ii)               theDebenture Offeror shall notify each affected Dissenting Debentureholder of thedate, place and consequences of the application and of their right to appearand be heard in person or by legal counsel.

######  

##### (g)                                 On an application to a court under Section 11.9(a) or 11.9(b) thecourt may determine whether any other Person is a Dissenting Debentureholderwho should be joined as a party, and the court shall then fix a fair value foreach series of Debentures held by the Dissenting Debentureholders.

#####  

##### (h)                                 A court may in its discretion appoint one or more appraisers toassist the court in fixing a fair value for each series of Debentures of aDissenting Debentureholder.

#####  

##### (i)                                     The final order of the court shall be made against the DebentureOfferor in favour of each Dissenting Debentureholder in the amount for eachseries of Debentures as fixed by the court.

#####  

##### (j)                                     In connection with proceedings under this Section 11.9, a court maymake any order it thinks fit and, without limiting the generality of theforegoing, it may:

#####  

###### (i)                  fix the amount of money or other consideration that is required tobe held in trust under Section 11.7;

######  

###### (ii)               orderthat money or other consideration be held in trust by a Person other than theDebenture Trustee; and

######  

###### (iii)            allowa reasonable rate of interest on the amount payable to each DissentingDebentureholder from the date they send or deliver notice to the DebentureOfferor under Section 11.4 until the date of payment.

######  

## **11.10**                                                                 Obligation to AcquireDebentures

##  

### (a)                                  If a DebentureOfferor (other than the Company) becomes entitled to acquire the Debentures ofDissenting Debentureholders pursuant to Section 11.1 and a DissentingDebentureholder does not receive a Debenture Offeror’s Notice in accordancewith Section 11.2, such Dissenting Debentureholder may:

###  

###### (i)                  within 90 calendar days after the date of termination of theDebenture Offer; or

######  

###### 59

###### 

######  

###### (ii)               ifsuch Dissenting Debentureholder did not receive a Debenture Offer, within 90calendar days after the later of:

######  

(A)                              the date of termination of the Debenture Offer; or

 

(B)                                the date on which such Dissenting Debentureholder learned of theDebenture Offer,

 

require the Debenture Offeror to acquiretheir Debentures.

 

##### (b)                                 If a Dissenting Debentureholder requires a Debenture Offeror (otherthan the Company) to acquire its Debentures under Section 11.10(a), theDebenture Offeror shall acquire such Debentures on the same terms on which theDebenture Offeror acquired Debentures of the applicable series fromDebentureholders who accepted the Debenture Offer.

#####  

## **11.11**                                                                 Communication of DebentureOffer to the Company

##  

A Debenture Offeror cannot make a DebentureOffer for Debentures unless, concurrent with the communication of the DebentureOffer to any Debentureholder, a copy of the Debenture Offer is provided to theCompany in the manner provided for in Section 13.1.

 

# **ARTICLE 12MEETINGS OF DEBENTUREHOLDERS**

#  

## **12.1**                                                                        Right to ConveneMeeting

##  

The Debenture Trustee or the Company may atany time and from time to time, and the Debenture Trustee shall, on receipt ofa written request of the Company or a written request signed by the holders ofnot less than 25% of the principal amount of the Debentures then outstandingand upon receiving funding and being indemnified to its reasonable satisfactionby the Company or by the Debentureholders signing such request against thecosts which may be incurred in connection with the calling and holding of suchmeeting, convene a meeting of the Debentureholders. In the event of theDebenture Trustee failing, within 30 days after receipt of any such request andsuch funding and indemnity, to give notice convening a meeting, the Company orsuch Debentureholders, as the case may be, may convene such meeting. Every suchmeeting shall be held in the City of Toronto, Ontario or at such other place asmay be approved or determined by the Debenture Trustee.

 

## **12.2**                                                                        Notice of Meetings

##  

##### (a)                                  At least 21 days’ and not more than 60 days’ notice of any meetingshall be given to the Debentureholders in the manner provided inSection 13.2 and a copy of such notice shall be sent by post to theDebenture Trustee in the manner provided by Section 13.3, unless themeeting has been called by it. Such notice shall state the time when and theplace where the meeting is to be held and shall state briefly the generalnature of the business to be transacted thereat and it shall not be necessaryfor any such notice to set out the terms of any resolution to be proposed orany of the provisions of this Article 12. The accidental omission to givenotice of a meeting to any holder of Debentures shall not invalidate anyresolution passed at any such meeting. A holder may waive notice of a meetingeither before or after the meeting.

#####  

##### (b)                                 If the business to be transacted at any meeting by ExtraordinaryResolution or otherwise, or any action to be taken or power exercised byinstrument in writing under Section 12.15, especially affects the rightsof holders of Debentures of one or more series in a manner or to an extentdiffering in any material way from that in or to which the rights of holders ofDebentures of any other series are affected (determined as provided inSections 12.2(c) and (d)), then:

#####  

###### (i)                  a reference to such fact, indicating each series of Debentures inthe opinion of the Debenture Trustee so especially affected (hereinafterreferred to as the “**especiallyaffected series**”) shall be made in the notice ofsuch meeting, and in any such case the meeting shall be and be deemed to be andis herein referred to as a “**Serial Meeting**”; and

######  

###### 60

###### 

######  

###### (ii)               theholders of Debentures of an especially affected series shall not be bound byany action taken at a Serial Meeting or by instrument in writing underSection 12.15 unless in addition to compliance with the other provisionsof this Article 12:

######  

(A)                              at such Serial Meeting: (I) there are Debentureholders present inperson or by proxy and representing at least 25% in principal amount of theDebentures then outstanding of such series, subject to the provisions of thisArticle 12 as to quorum at adjourned meetings; and (II) the resolution ispassed by the affirmative vote of the holders of more than 50% (or in the caseof an Extraordinary Resolution not less than 66 2/3%) of the principalamount of the Debentures of such series then outstanding voted on the resolution;or

 

(B)                                in the case of action taken or power exercised by instrument inwriting under Section 12.15, such instrument is signed in one or morecounterparts by the holders of not less than 66 2/3% in principal amountof the Debentures of such series then outstanding.

 

##### (c)                                  Subject to Section 12.2(d), the determination as to whether anybusiness to be transacted at a meeting of Debentureholders, or any action to betaken or power to be exercised by instrument in writing underSection 12.15, especially affects the rights of the Debentureholders ofone or more series in a manner or to an extent differing in any material wayfrom that in or to which it affects the rights of Debentureholders of any otherseries (and is therefore an especially affected series) shall be determined byan opinion of Counsel, which shall be binding on all Debentureholders, theDebenture Trustee and the Company for all purposes hereof.

#####  

##### (d)                                 A proposal:

#####  

###### (i)                  to extend the Maturity Date of Debentures of any particular seriesor to reduce the principal amount thereof, the rate of interest or redemptionpremium thereon or to impair any conversion right thereof;

######  

###### (ii)               tomodify or terminate any covenant or agreement which by its terms is effectiveonly so long as Debentures of a particular series are outstanding; or

######  

###### (iii)            toreduce with respect to Debentureholders of any particular series any percentagestated in this Section 12.2 or Sections 12.4, 12.12 and 12.15;

######  

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

 

## **12.3**                                                                        Chairman

##  

An individual, who need not be aDebentureholder, nominated in writing by the Company (if the Company convenesthe meeting) or the Debenture Trustee (in any other case) shall be chairman ofthe meeting and if no individual is so nominated, or if the individual sonominated is not present within 15 minutes from the time fixed for the holdingof the meeting, a majority of the Debentureholders present in person or byproxy shall choose some individual present to be chairman.

 

## **12.4**                                                                        Quorum

##  

Subject to the provisions ofSection 12.12, at any meeting of the Debentureholders a quorum shallconsist of one or more Debentureholders present in person or by proxy andrepresenting at least 25% in principal amount of the outstanding Debenturesand, if the meeting is a Serial Meeting, at least 25% of the Debentures thenoutstanding of each especially affected series. If a quorum of theDebentureholders shall not be present within 30 minutes from the time fixed forholding any meeting, the meeting, if summoned by the Debentureholders orpursuant to a request of the Debentureholders, shall be dissolved, but in anyother case the meeting shall be adjourned and reconvened on the same day in thenext week (unless such day is not a Business Day in which case it shall beadjourned and reconvened on the next following Business Day thereafter) at thesame time and place and no notice shall be required to be given in respect ofsuch adjourned meeting. At the reconvened meeting, the Debentureholders presentin person or by proxy shall, subject to the provisions of Section 12.12,constitute a quorum and may transact the business for which the meeting wasoriginally convened notwithstanding that they may not represent 25% of theprincipal amount of the outstanding Debentures or of the Debentures thenoutstanding of each especially affected series. Any business may be broughtbefore or dealt with at a reconvened meeting which might have been broughtbefore or dealt with at the original meeting in accordance with the noticecalling the same. No business shall be transacted at any meeting unless therequired quorum be present at the commencement of business.

 

61

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## **12.5**                                                                        Power to Adjourn

##  

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

 

## **12.6**                                                                        Show of Hands

##  

Every question submitted to a meeting shall,subject to Section 12.7, be decided in the first place by a majority ofthe votes given on a show of hands except that votes on Extraordinary Resolutionsshall be given in the manner hereinafter provided. At any such meeting, unlessa poll is duly demanded as herein provided, a declaration by the chairman thata resolution has been carried or carried unanimously or by a particularmajority or lost or not carried by a particular majority shall be conclusiveevidence of the fact. The chairman of any meeting shall be entitled, both on ashow of hands and on a poll, to vote in respect of the Debentures, if any, heldby him or which are represented by a proxy given in his favour.

 

## **12.7**                                                                        Poll

##  

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

 

## **12.8**                                                                        Voting

##  

On a show of hands every Person who ispresent and entitled to vote, whether as a Debentureholder or as proxy for oneor more Debentureholders or both, shall have one vote. On a poll, eachDebentureholder present in person or represented by a proxy duly appointed byan instrument in writing shall be entitled to one vote in respect of each$1,000 principal amount of Debentures of which he shall then be the holder. Inthe case of any Debenture denominated in a currency or currency unit other thanCanadian dollars, the principal amount thereof for these purposes shall becomputed in Canadian dollars on the basis of the conversion of the principalamount thereof at the applicable spot buying rate of exchange for such othercurrency or currency unit as reported by the Bank of Canada at the close ofbusiness on the Business Day next preceding the meeting. Any fractional amountsresulting from such conversion shall be rounded to the nearest $1,000. A proxyneed not be a Debentureholder. In the case of joint holders of a Debenture, anyone of them present in person or by proxy at the meeting may vote in theabsence of the other or others but in case more than one of them be present inperson or by proxy, they shall vote together in respect of the Debentures ofwhich they are joint holders.

 

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## **12.9**                                                                        Proxies

##  

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

 

##### (a)                                  the form of the instrument appointing a proxy, which shall be inwriting, and the manner in which the same shall be executed and the productionof the authority of any Person signing on behalf of a Debentureholder;

#####  

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

#####  

##### (c)                                  the deposit of instruments appointing proxies at some approved placeor places other than the place at which the meeting is to be held and enablingparticulars of such instruments appointing proxies to be mailed, faxed, or sentby other electronic means before the meeting to the Company or to the DebentureTrustee at the place where the same is to be held and for the voting of proxiesso deposited as though the instruments themselves were produced at the meeting.

#####  

Any regulations so made shall be binding andeffective and the votes given in accordance therewith shall be valid and shallbe counted. Save as such regulations may provide, the only Persons who shall berecognized at any meeting as the holders of any Debentures, or as entitled tovote or be present at the meeting in respect thereof, shall be Debentureholdersand their authorized representatives and Persons whom Debentureholders have byinstrument in writing duly appointed as their proxies.

 

## **12.10**                                                                 Persons Entitled toAttend Meetings

##  

The Company and the Debenture Trustee, bytheir respective trustees, employees, officers and directors, the Auditors ofthe Company and the legal advisers of the Company, the Debenture Trustee or anyDebentureholder may attend any meeting of the Debentureholders, but shall haveno vote as such.

 

## **12.11**                                                                 Powers Exercisable byExtraordinary Resolution

##  

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

 

##### (a)                                  power to authorize the Debenture Trustee to grant extensions of timefor payment of any principal, premium or interest on the Debentures, whether ornot the principal, premium, or interest, the payment of which is extended, isat the time due or overdue;

#####  

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

#####  

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

#####  

##### 63

##### 

#####  

##### (d)                                 power to sanction any scheme for the reconstruction, reorganizationor recapitalization of the Company or for the consolidation, amalgamation ormerger of the Company with any other Person or for the sale, leasing, transferor other disposition of all or substantially all of the undertaking, propertyand assets of the Company or any part thereof, provided that no such sanctionshall be necessary in respect of any such transaction if the provisions of Section 10.1shall have been complied with;

#####  

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

#####  

##### (f)                                    power to waive, and direct the Debenture Trustee to waive, anydefault hereunder and/or cancel any declaration made by the Debenture Trusteepursuant to Section 8.1 either unconditionally or upon any conditionspecified in such Extraordinary Resolution;

#####  

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

#####  

##### (h)                                 power to direct any Debentureholder who, as such, has brought anyaction, suit or proceeding to stay or discontinue or otherwise deal with thesame upon payment, if the taking of such suit, action or proceeding shall havebeen permitted by Section 8.5, of the costs, charges and expensesreasonably and properly incurred by such Debentureholder in connectiontherewith;

#####  

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

#####  

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

#####  

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

#####  

##### (l)                                     power to sanction the exchange of the Debentures for or theconversion thereof into Shares, bonds, debentures or other securities orobligations of the Company or of any other Person formed or to be formed;

#####  

##### (m)                               power to authorize the distribution in specie of any shares orsecurities received pursuant to a transaction authorized under the provisionsof Section 12.11(l);

#####  

##### 64

##### 

#####  

##### (n)                                 power to require the Debenture Trustee to exercise any power, rightor remedy or authority given to it by this Indenture in any manner specified insuch Extraordinary Resolution, or to refrain from exercising any such power,right, remedy or authority;

#####  

##### (o)                                 power to sanction any modification, abrogation, alteration,compromise or arrangement of the rights of the Debentureholders against theCompany, or against its property, whether such rights arise under thisIndenture or the Debentures or otherwise; and

#####  

##### (p)                                 power to amend, alter or repeal any Extraordinary Resolutionpreviously passed or sanctioned by the Debentureholders or by any committeeappointed pursuant to Section 12.11(j).

#####  

Notwithstanding the foregoing provisions ofthis Section 12.11 none of such provisions shall in any manner allow orpermit any amendment, modification, abrogation or addition to the provisions ofArticle 5 which could reasonably be expected to detrimentally affect therights, remedies or recourse of the priority of the Senior Creditors.

 

## **12.12**                                                                 Meaning of “ExtraordinaryResolution”

##  

##### (a)                                  The expression “**ExtraordinaryResolution**” when used in this Indenture means,subject as hereinafter in this Article provided, a resolution proposed to bepassed as an Extraordinary Resolution at a meeting of Debentureholders(including a reconvened meeting) duly convened for the purpose and held inaccordance with the provisions of this Article at which the holders of not lessthan 25% of the principal amount of the Debentures then outstanding, and if themeeting is a Serial Meeting, at which holders of not less than 25% of theprincipal amount of the Debentures then outstanding of each especially affectedseries, are present in person or by proxy and passed by the affirmative votesof the holders of not less than 66 2/3% of the principal amount of theDebentures, and if the meeting is a Serial Meeting by the affirmative vote ofthe holders of not less than 66 2/3% of each especially affected series,in each case present or represented by proxy at the meeting and voted upon on apoll on such resolution.

#####  

##### (b)                                 If, at any such meeting, the holders of not less than 25% of theprincipal amount of the Debentures then outstanding and, if the meeting is aSerial Meeting, 25% of the principal amount of the Debentures then outstandingof each especially affected series, in each case are not present in person orby proxy within 30 minutes after the time appointed for the meeting, then themeeting, if convened by or on the requisition of Debentureholders, shall bedissolved but in any other case it shall stand adjourned and shall bereconvened to such date, being not less than 14 nor more than 60 days later,and at such place and time as may be appointed by the chairman. Not less than10 days notice shall be given of the time and place of such reconvened meetingin the manner provided in Section 13.2. Such notice shall state that atthe reconvened meeting the Debentureholders present in person or by proxy shallform a quorum. At the reconvened meeting the Debentureholders present in personor by proxy shall form a quorum and may transact the business for which themeeting was originally convened and a resolution proposed at such reconvenedmeeting and passed thereat by the affirmative vote of holders of not less than66 2/3% of the principal amount of the Debentures and, if the meeting is aSerial Meeting, by the affirmative vote of the holders of not less than66 2/3% of the principal amount of the Debentures of each especiallyaffected series, in each case present or represented by proxy at the meetingand voted upon on a poll shall be an Extraordinary Resolution within themeaning of this Indenture, notwithstanding that the holders of not less than25% in principal amount of the Debentures then outstanding, and if the meetingis a Serial Meeting, holders of not less than 25% of the principal amount ofthe Debentures then outstanding of each especially affected series, are notpresent in person or by proxy at such adjourned meeting.

#####  

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

#####  

##### 65

##### 

#####  

## **12.13**                                                                 Powers Cumulative

##  

Any one or more of the powers in thisIndenture stated to be exercisable by the Debentureholders by ExtraordinaryResolution or otherwise may be exercised from time to time and the exercise ofany one or more of such powers from time to time shall not be deemed to exhaustthe rights of the Debentureholders to exercise the same or any other such poweror powers thereafter from time to time.

 

## **12.14**                                                                 Minutes

##  

Minutes of all resolutions and proceedings atevery meeting as aforesaid shall be made and duly entered in books to be fromtime to time provided for that purpose by the Debenture Trustee at the expenseof the Company, and any such minutes as aforesaid, if signed by the chairman ofthe meeting at which such resolutions were passed or proceedings had, or by thechairman of the next succeeding meeting of the Debentureholders, shall be *prima facie* evidence of the matterstherein stated and, until the contrary is proved, every such meeting, inrespect of the proceedings of which minutes shall have been made, shall bedeemed to have been duly held and convened, and all resolutions passed thereator proceedings taken thereat to have been duly passed and taken.

 

## **12.15**                                                                 Instruments inWriting

##  

All actions which may be taken and all powersthat may be exercised by the Debentureholders at a meeting held as hereinbeforein this Article 12 provided may also be taken and exercised by the holders of66 2/3% of the principal amount of all the outstanding Debentures and, ifthe meeting at which such actions might be taken would be a Serial Meeting, bythe holders of 66 2/3% of the principal amount of the Debentures thenoutstanding of each especially affected series, by an instrument in writingsigned in one or more counterparts and the expression “**Extraordinary Resolution**” when used in thisIndenture shall include an instrument so signed.

 

## **12.16**                                                                 Binding Effect ofResolutions

##  

Every resolution and every ExtraordinaryResolution passed in accordance with the provisions of this Article 12 at ameeting of Debentureholders shall be binding upon all the Debentureholders,whether present at or absent from such meeting, and every instrument in writingsigned by Debentureholders in accordance with Section 12.15 shall bebinding upon all the Debentureholders, whether signatories thereto or not, andeach and every Debentureholder and the Debenture Trustee (subject to theprovisions for its indemnity herein contained) shall be bound to give effectaccordingly to every such resolution, Extraordinary Resolution and instrumentin writing.

 

## **12.17**                                                                 Evidence of Rights OfDebentureholders

##  

##### (a)                                  Any request, direction, notice, consent or other instrument whichthis Indenture may require or permit to be signed or executed by theDebentureholders may be in any number of concurrent instruments of similartenor signed or executed by such Debentureholders.

#####  

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

#####  

## **12.18**                                                                 Concerning SerialMeetings

##  

Subject to Section 12.2(d), if in theopinion of Counsel any business to be transacted at any meeting, or any actionto be taken or power to be exercised by instrument in writing underSection 12.15, does not adversely affect the rights of the holders ofDebentures of one or more series, the provisions of this Article 12 shall applyas if the Debentures of such series were not outstanding and no notice of anysuch meeting need be given to the holders of Debentures of such series. Withoutlimiting the generality of the foregoing, a proposal to modify or terminate anycovenant or agreement which is effective only so long as Debentures of aparticular series are outstanding shall be deemed not to adversely affect therights of the holders of Debentures of any other series.

 

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# **ARTICLE 13NOTICES**

#  

## **13.1**                                                                        Notice to Company

##  

Any notice to the Company under theprovisions of this Indenture shall be valid and effective if delivered to theCompany at 590 King Street West, Suite 300, Toronto, Ontario M5V 1M3,Attention: Chief Financial Officer, and a copy delivered to Stikeman ElliottLLP, 199 Bay Street, Suite 5300, Toronto, Ontario M5L 1B9, Attention:  Mr. Dee Rajpal, or if given by registeredletter, postage prepaid, to such offices and so addressed and if mailed, shallbe deemed to have been effectively given three days following the mailingthereof. The Company may from time to time notify the Debenture Trustee inwriting of a change of address which thereafter, until changed by like notice,shall be the address of the Company for all purposes of this Indenture.

 

## **13.2**                                                                        Notice toDebentureholders

##  

All notices to be given hereunder withrespect to the Debentures shall be deemed to be validly given to the holdersthereof if sent by first class mail, postage prepaid, by letter or circularaddressed to such holders at their post office addresses appearing in any ofthe registers hereinbefore mentioned and shall be deemed to have beeneffectively given three days following the day of mailing. Accidental error oromission in giving notice or accidental failure to mail notice to anyDebentureholder shall not invalidate any action or proceeding founded thereon.

 

If any notice given in accordance with theforegoing paragraph would be unlikely to reach the Debentureholders to whom itis addressed in the ordinary course of post by reason of an interruption inmail service, whether at the place of dispatch or receipt or both, the Companyshall give such notice by publication at least once in the City of Toronto (orin such of those cities as, in the opinion of the Debenture Trustee, is sufficientin the particular circumstances), each such publication to be made in a dailynewspaper of general circulation in the designated city.

 

Any notice given to Debentureholders bypublication shall be deemed to have been given on the day on which publicationshall have been effected at least once in each of the newspapers in whichpublication was required.

 

All notices with respect to any Debenture maybe given to whichever one of the holders thereof (if more than one) is namedfirst in the registers hereinbefore mentioned, and any notice so given shall besufficient notice to all holders of such Debenture.

 

## **13.3**                                                                        Notice to DebentureTrustee

##  

Any notice to the Debenture Trustee under theprovisions of this Indenture shall be valid and effective if delivered to theDebenture Trustee at 320 Bay Street, P.O. Box 1, Toronto, Ontario, M5H 4A6,Attention: Executive Director, Corporate Trust or if given by registeredletter, postage prepaid, to such office and so addressed and, if mailed, shallbe deemed to have been effectively given three days following the mailingthereof.

 

## **13.4**                                                                        Mail ServiceInterruption

##  

If by reason of any interruption of mailservice, actual or threatened, any notice to be given to the Debenture Trusteewould reasonably be unlikely to reach its destination by the time notice bymail is deemed to have been given pursuant to Section 13.3, such noticeshall be valid and effective only if delivered at the appropriate address inaccordance with Section 13.3.

 

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# **ARTICLE 14CONCERNING THE DEBENTURE TRUSTEE**

#  

## **14.1**                                                                        No Conflict ofInterest

##  

The Debenture Trustee represents to theCompany that at the date of execution and delivery by it of this Indenturethere exists no material conflict of interest in the role of the DebentureTrustee as a fiduciary hereunder but if, notwithstanding the provisions of thisSection 14.1, such a material conflict of interest exists, or hereafterarises, the validity and enforceability of this Indenture, and the Debentures issuedhereunder, shall not be affected in any manner whatsoever by reason only thatsuch material conflict of interest exists or arises but the Debenture Trusteeshall, within 30 days after ascertaining that it has a material conflict ofinterest, either eliminate such material conflict of interest or resign in themanner and with the effect specified in Section 14.2. The Companyacknowledges that the Debenture Trustee is the trustee under an indenturecovering certain Senior Indebtedness of the Company.

 

## **14.2**                                                                        Replacement ofDebenture Trustee

##  

The Debenture Trustee may resign its trustand be discharged from all further duties and liabilities hereunder by givingto the Company 90 days notice in writing or such shorter notice as the Companymay accept as sufficient. If at any time a material conflict of interest existsin the Debenture Trustee’s role as a fiduciary hereunder the Debenture Trusteeshall, within 30 days after ascertaining that such a material conflict ofinterest exists, either eliminate such material conflict of interest or resignin the manner and with the effect specified in this Section 14.2. Thevalidity and enforceability of this Indenture and of the Debentures issuedhereunder shall not be affected in any manner whatsoever by reason only thatsuch a material conflict of interest exists. In the event of the DebentureTrustee resigning or being removed or being dissolved, becoming bankrupt, goinginto liquidation or otherwise becoming incapable of acting hereunder, theCompany shall forthwith appoint a new Debenture Trustee unless a new DebentureTrustee has already been appointed by the Debentureholders. Failing suchappointment by the Company, the retiring Debenture Trustee or anyDebentureholder may apply to a Judge of the Superior Court of Ontario, on suchnotice as such Judge may direct at the Company’s expense, for the appointmentof a new Debenture Trustee but any new Debenture Trustee so appointed by theCompany or by the Court shall be subject to removal as aforesaid by theDebentureholders and the appointment of such new Debenture Trustee shall beeffective only upon such new Debenture Trustee becoming bound by this Indenture.Any new Debenture Trustee appointed under any provision of thisSection 14.2 shall be a corporation authorized to carry on the business ofa trust company in all of the Provinces and Territories of Canada. On any newappointment the new Debenture Trustee shall be vested with the same powers,rights, duties and responsibilities as if it had been originally named hereinas Debenture Trustee.

 

Any company into which the Debenture Trusteemay be merged or, with or to which it may be consolidated or amalgamated, orany company resulting from any merger, consolidation or amalgamation to whichthe Debenture Trustee shall be a party, shall be the successor trustee underthis Indenture without the execution of any instrument or any further act. Nevertheless,upon the written request of the successor Debenture Trustee or of the Company,the Debenture Trustee ceasing to act, upon receipt of all outstanding amountsowing to it under this Indenture, shall execute and deliver an instrumentassigning and transferring to such successor Debenture Trustee, upon the trustsherein expressed, all the rights, powers and trusts of the Debenture Trustee soceasing to act, and shall duly assign, transfer and deliver all property andmoney held by such Debenture Trustee to the successor Debenture Trustee soappointed in its place. Should any deed, conveyance or instrument in writingfrom the Company be required by any new Debenture Trustee for more fully andcertainly vesting in and confirming to it such estates, properties, rights,powers and trusts, then any and all such deeds, conveyances and instruments inwriting shall on request of said new Debenture Trustee, be made, executed,acknowledged and delivered by the Company.

 

## **14.3**                                                                        Duties of DebentureTrustee

##  

In the exercise of the rights, duties andobligations prescribed or conferred by the terms of this Indenture, theDebenture Trustee shall act honestly and in good faith and exercise that degreeof care, diligence and skill that a reasonably prudent trustee would exercisein comparable circumstances.

 

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## **14.4**                                                                        Reliance UponDeclarations, Opinions, etc.

##  

In the exercise of its rights, duties andobligations hereunder the Debenture Trustee may, if acting in good faith, rely,as to the truth of the statements and accuracy of the opinions expressedtherein, upon statutory declarations, opinions, reports or certificatesfurnished pursuant to any covenant, condition or requirement of this Indentureor required by the Debenture Trustee to be furnished to it in the exercise ofits rights and duties hereunder, if the Debenture Trustee examines such statutorydeclarations, opinions, reports or certificates and determines that they complywith Section 14.5, if applicable, and with any other applicablerequirements of this Indenture. The Debenture Trustee may nevertheless, in itsdiscretion, require further proof in cases where it deems further proofdesirable. Without restricting the foregoing, the Debenture Trustee may rely onan opinion of Counsel satisfactory to the Debenture Trustee notwithstandingthat it is delivered by a solicitor or firm which acts as solicitors for theCompany.

 

The Debenture Trustee shall have noobligation to ensure or verify compliance with any applicable laws orregulatory requirements on the issue or transfer of any Debentures or Sharesprovided such issue or transfer is effected in accordance with the terms ofthis Indenture. The Debenture Trustee shall be entitled to process alltransfers, redemptions and conversions upon the presumption that such transfer,redemption or conversion is permissible pursuant to all applicable laws andregulatory requirements if such transfer, redemption or conversion is effectedin accordance with the terms of this Indenture. The Debenture Trustee shallhave no obligation to ensure that legends appearing on the Debentures or Sharescomply with regulatory requirements or securities laws of any applicablejurisdiction.

 

## **14.5**                                                                        Evidence andAuthority to Debenture Trustee, Opinions, etc.

##  

The Company shall furnish to the DebentureTrustee evidence of compliance with the conditions precedent provided for inthis Indenture relating to any action or step required or permitted to be takenby the Company or the Debenture Trustee under this Indenture or as a result ofany obligation imposed under this Indenture, including without limitation, thecertification and delivery of Debentures hereunder, the satisfaction anddischarge of this Indenture and the taking of any other action to be taken bythe Debenture Trustee at the request of or on the application of the Company,forthwith if and when (a) such evidence is required by any other Section ofthis Indenture to be furnished to the Debenture Trustee in accordance with theterms of this Section 14.5, or (b) the Debenture Trustee, in the exerciseof its rights and duties under this Indenture, gives the Company written noticerequiring it to furnish such evidence in relation to any particular action orobligation specified in such notice. Such evidence of compliance shall consistof:

 

##### (a)                                  a certificate made by any one officer or director of the Company,stating that any such condition precedent has been complied with in accordancewith the terms of this Indenture;

#####  

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

#####  

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

#####  

Whenever such evidence relates to a matterother than the certificates and delivery of Debentures and the satisfaction anddischarge of this Indenture, and except as otherwise specifically providedherein, such evidence may consist of a report or opinion of any solicitor,auditor, accountant, engineer or appraiser or any other Person whosequalifications give authority to a statement made by him, provided that if suchreport or opinion is furnished by a trustee, officer or employee of the Companyit shall be in the form of a statutory declaration. Such evidence shall be, sofar as appropriate, in accordance with the immediately preceding paragraph ofthis Section.

 

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

 

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The Company shall furnish to the DebentureTrustee at any time if the Debenture Trustee reasonably so requires, itscertificate that the Company has complied with all covenants, conditions orother requirements contained in this Indenture, the non-compliance with whichwould, with the giving of notice or the lapse of time, or both, or otherwise,constitute an Event of Default, or if such is not the case, specifying thecovenant, condition or other requirement which has not been complied with andgiving particulars of such non-compliance. The Company shall, whenever theDebenture Trustee so requires, furnish the Debenture Trustee with evidence byway of statutory declaration, opinion, report or certificate as specified bythe Debenture Trustee as to any action or step required or permitted to betaken by the Company or as a result of any obligation imposed by thisIndenture.

 

## **14.6**                                                                        Officer’sCertificates Evidence

##  

Except as otherwise specifically provided orprescribed by this Indenture, whenever in the administration of the provisionsof this Indenture the Debenture Trustee shall deem it necessary or desirablethat a matter be proved or established prior to taking or omitting any actionhereunder, the Debenture Trustee, if acting in good faith, may rely upon an Officer’sCertificate.

 

## **14.7**                                                                        Experts, Advisers andAgents

##  

The Debenture Trustee may:

 

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

#####  

##### (b)                                 employ or retain such agents and other assistants as it mayreasonably require for the proper discharge of its duties hereunder, and maypay reasonable remuneration for all services performed for it (and shall be entitledto receive reasonable remuneration for all services performed by it) in thedischarge of the trusts hereof and compensation for all disbursements, costsand expenses made or incurred by it in the discharge of its duties hereunderand in the management of the trusts hereof and any solicitors employed orconsulted by the Debenture Trustee may, but need not be, solicitors for theCompany.

#####  

## **14.8**                                                                        Debenture Trustee MayDeal in Debentures

##  

The Debenture Trustee may, in its personal orother capacity, buy, sell, lend upon and deal in the Debentures and generallycontract and enter into financial transactions with the Company or otherwise,without being liable to account for any profits made thereby.

 

## **14.9**                                                                        Investment of MoniesHeld by Debenture Trustee

##  

The Debenture Trustee may retain any cashbalance held in connection with this Indenture and may, but need not, hold thesame in its deposit department, the deposit department of one of its affiliatesor the deposit department of a Canadian chartered bank; but the DebentureTrustee, its affiliates or a Canadian chartered bank shall not be liable toaccount for any profit to the Company or any other person or entity other thanat a rate, if any, established from time to time by the Debenture Trustee, itsaffiliates or a Canadian chartered bank.

 

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For the purpose of this Section 14.9, “**affiliate**” means affiliated companies within the meaning ofthe *Business Corporations Act* (Ontario) (“**OBCA**”); and includes Canadian Imperial Bank of Commerce,CIBC Mellon Global Securities Services Company and Mellon Bank, N.A. and eachof their affiliates within the meaning of the OBCA.

 

## **14.10**                                                                 Debenture Trustee NotOrdinarily Bound

##  

Except as provided in Section 8.2 and asotherwise specifically provided herein, the Debenture Trustee shall not,subject to Section 14.3, be bound to give notice to any Person of theexecution hereof, nor to do, observe or perform or see to the observance orperformance by the Company of any of the obligations herein imposed upon theCompany or of the covenants on the part of the Company herein contained, nor inany way to supervise or interfere with the conduct of the Company’s business,unless the Debenture Trustee shall have been required to do so in writing bythe holders of not less than 25% of the aggregate principal amount of theDebentures then outstanding or by any Extraordinary Resolution of theDebentureholders passed in accordance with the provisions contained in Article12, and then only after it shall have been funded and indemnified to itssatisfaction against all actions, proceedings, claims and demands to which itmay render itself liable and all costs, charges, damages and expenses which itmay incur by so doing.

 

## **14.11**                                                                 Debenture Trustee NotRequired to Give Security

##  

The Debenture Trustee shall not be requiredto give any bond or security in respect of the execution of the trusts andpowers of this Indenture or otherwise in respect of the premises.

 

## **14.12**                                                                 Debenture Trustee NotBound to Act on Company’s Request

##  

Except as in this Indenture otherwisespecifically provided, the Debenture Trustee shall not be bound to act inaccordance with any direction or request of or on behalf of the Company until aduly authenticated copy of the instrument or resolution containing suchdirection or request shall have been delivered to the Debenture Trustee, andthe Debenture Trustee shall be empowered to act upon any such copy purportingto be authenticated and believed by the Debenture Trustee to be genuine.

 

## **14.13**                                                                 Conditions Precedentto Debenture Trustee’s Obligations to Act Hereunder

##  

The obligation of the Debenture Trustee tocommence or continue any act, action or proceeding for the purpose of enforcingthe rights of the Debenture Trustee and of the Debentureholders hereunder shallbe conditional upon the Debentureholders furnishing when required by notice inwriting by the Debenture Trustee, sufficient funds to commence or continue suchact, action or proceeding and indemnity reasonably satisfactory to theDebenture Trustee to protect and hold harmless the Debenture Trustee againstthe costs, charges and expenses and liabilities to be incurred thereby and anyloss and damage it may suffer by reason thereof.

 

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

 

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

 

## **14.14**                                                                 Authority to Carry onBusiness

##  

The Debenture Trustee represents to theCompany that at the date of execution and delivery by it of this Indenture itis authorized to carry on the business of a trust company in the Provinces andTerritories of Canada, but if, notwithstanding the provisions of thisSection 14.14, it ceases to be so authorized to carry on business, thevalidity and enforceability of this Indenture and the securities issuedhereunder shall not be affected in any manner whatsoever by reason only of suchevent but the Debenture Trustee shall, within 90 days after ceasing to beauthorized to carry on the business of trust company in the Province ofOntario, either become so authorized or resign in the manner and with theeffect specified in Section 14.2.

 

71

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## **14.15**                                                                 Compensation andIndemnity

##  

##### (a)                                  The Company shall pay to the Debenture Trustee from time to timecompensation for its services hereunder as agreed separately by the Company andthe Debenture Trustee, and shall pay or reimburse the Debenture Trustee uponits request for all reasonable expenses, disbursements and advances incurred ormade by the Debenture Trustee in the administration or execution of its dutiesunder this Indenture (including the reasonable and documented compensation anddisbursements of its Counsel and all other advisers and assistants notregularly in its employ), both before any default hereunder and thereafteruntil all duties of the Debenture Trustee under this Indenture shall be finallyand fully performed. The Debenture Trustee’s compensation shall not be limitedby any law on compensation of a trustee of an express trust.

#####  

##### (b)                                 The Company hereby indemnifies and saves harmless the DebentureTrustee and its directors, officers and employees from and against any and allloss, damages, charges, expenses, claims, demands, actions or liabilitywhatsoever which may be brought against the Debenture Trustee or which it maysuffer or incur as a result of or arising out of the performance of its dutiesand obligations hereunder save only in the event of the negligent failure toact, or the wilful misconduct or bad faith of the Debenture Trustee. Thisindemnity will survive the termination or discharge of this Indenture and theresignation or removal of the Debenture Trustee. The Debenture Trustee shallnotify the Company promptly of any claim for which it may seek indemnity. TheCompany shall defend the claim and the Debenture Trustee shall co-operate inthe defence. The Debenture Trustee may have separate counsel and the Companyshall pay the reasonable fees and expenses of such Counsel. The Company neednot pay for any settlement made without its consent, which consent must not beunreasonably withheld. This indemnity shall survive the resignation or removalof the Debenture Trustee or the discharge of this Indenture.

#####  

##### (c)                                  The Company need not reimburse any expense or indemnify against anyloss or liability incurred by the Debenture Trustee through negligence, wilfulmisconduct or bad faith.

#####  

## **14.16**                                                                 Acceptance of Trust

##  

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

 

# **ARTICLE 15SUPPLEMENTAL INDENTURES**

#  

## **15.1**                                                                        SupplementalIndentures

##  

From time to time the Debenture Trustee and,when authorized by a resolution of the directors of the Company and subject toany stock exchange on which the Debentures may be listed, the Company, may, andthey shall when required by this Indenture, execute, acknowledge and deliver bytheir proper officers deeds or indentures supplemental hereto which thereaftershall form part hereof, for any one or more of the following purposes:

 

##### (a)                                  providing for the issuance of Additional Debentures under thisIndenture;

#####  

##### (b)                                 changing or eliminating any restrictions on the payment of theprincipal of or the premium, if any, on the Debentures provided that in theopinion of the Debenture Trustee (relying upon an opinion of Counsel) therights of the Debentureholders are in no way prejudiced thereby;

#####  

##### 72

##### 

#####  

##### (c)                                  adding to the covenants of the Company herein contained for theprotection of the Debentureholders, or of the Debentures of any series, orproviding for events of default, in addition to those herein specified;

#####  

##### (d)                                 making such provisions not inconsistent with this Indenture as maybe necessary or desirable with respect to matters or questions arisinghereunder, including the making of any modifications in the form of theDebentures which do not affect the substance thereof and which in the opinionof the Debenture Trustee relying on an opinion of Counsel will not beprejudicial to the interests of the Debentureholders;

#####  

##### (e)                                  altering the provisions of the Indenture in respect of the exchangeor transfer of Debentures;

#####  

##### (f)                                    evidencing the succession, or successive successions, of others tothe Company and the covenants of and obligations assumed by any such successorin accordance with the provisions of this Indenture;

#####  

##### (g)                                 giving effect to any action by, or any direction from, theDebentureholders permitted to be taken or given, as the case may be, by theDebentureholders under this Indenture; and

#####  

##### (h)                                 for any other purpose not inconsistent with the terms of thisIndenture, provided that in the opinion of the Trustee (relying upon an opinionof Counsel) the rights of the Debentureholders are in no way prejudicedthereby.

#####  

Unless the supplemental indenture requiresthe consent or concurrence of Debentureholders or the holders of a particularseries of Debentures, as the case may be, by an ordinary resolution orExtraordinary Resolution, the consent or concurrence of Debentureholders or theholders of a particular series of Debentures, as the case may be, shall not berequired in connection with the execution, acknowledgement or delivery of asupplemental indenture. The Company and the Debenture Trustee may amend any ofthe provisions of this Indenture related to matters of United States law or theissuance of Debentures into the United States in order to ensure that suchissuances can be made in accordance with applicable law in the United Stateswithout the consent or approval of the Debentureholders. Further, the Companyand the Debenture Trustee may without the consent or concurrence of theDebentureholders or the holders of a particular series of Debentures, as thecase may be, by supplemental indenture or otherwise, make any changes orcorrections in this Indenture which it shall have been advised by Counsel arerequired for the purpose of curing or correcting any ambiguity or defective orinconsistent provisions or clerical omissions or clerical mistakes or manifesterrors contained herein or in any indenture supplemental hereto or any WrittenDirection of the Company provided for the issue of Debentures, providing thatin the opinion of the Debenture Trustee (relying upon an opinion of Counsel)the rights of the Debentureholders are in no way prejudiced thereby.

 

# **ARTICLE 16LIMITATION OF NON-CANADIAN OWNERSHIP**

#  

## **16.1**                                                                        Limitation ofNon-Canadian Ownership

##  

At no time may Non-Canadians be thebeneficial owners of more than 33.3% of the Voting Shares. This 33.3%limitation is and shall be applied with respect to the issued and outstandingVoting Shares of the Company on both a non-diluted basis and a fully-dilutedbasis and shall include any Shares which are issued upon conversion, redemptionor repayments of the Debentures. Upon receipt of written direction of theCompany,  the Debenture Trustee may, (i)with respect to Global Debentures, request the Depository (or its nominee inwhose name such Global Debentures are registered) to require declarations as tothe jurisdictions in which beneficial owners of such Global Debentures areresident, and (ii) with respect to Fully Registered Debentures, requiredeclarations as to the jurisdictions in which beneficial owners of such FullyRegistered Debentures are resident. If the Company becomes aware that thebeneficial owners of 33.3% of the Voting Shares then outstanding are, or maybe, Non Canadians or that such a situation is imminent, the Company shall makea public announcement thereof and shall notify the Debenture Trustee in writingand the Debenture Trustee shall not accept a subscription for Debentures fromor issue or register a transfer of Debentures to any Person unless the Personprovides a declaration that such Person is not a Non-Canadian. If,notwithstanding the foregoing, the Company determines that more than 33.3% ofthe Shares are held by Non-Canadians, the Company shall send a notice toNon-Canadian holders of Debentures, chosen in inverse order to the order ofacquisition or registration of the Debentures or in any other manner theCompany considers equitable and practicable, requiring them to sell theirDebentures or a portion thereof within a specified period of not less than 60days. If the holders of Debentures receiving such notice have not sold thespecified number of Debentures or provided the Company with satisfactoryevidence that they are not Non Canadians within such period, the Company shall,on behalf of such Persons, sell such Debentures and, in the interim, rightsattached to such Debentures shall be suspended. Upon such a sale, the affectedholders shall cease to be holders of the Debentures and their rights shall belimited to receiving the net proceeds of sale upon surrender of suchDebentures.

 

73

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# **ARTICLE 17EXECUTION AND FORMAL DATE**

 

## **17.1**                                                                        Execution

 

This Indenture may be simultaneously executedin several counterparts, each of which when so executed shall be deemed to bean original and such counterparts together shall constitute one and the sameinstrument.

 

## **17.2**                                                                        Formal Date

 

For the purpose of convenience this Indenturemay be referred to as bearing the formal date of September 12, 2007irrespective of the actual date of execution hereof.

 

IN WITNESS whereof the parties hereto haveexecuted these presents under their respective corporate seals and the hands oftheir proper officers in that behalf. 

 
| ** ** | ** ** | **CANADIAN SATELLITE RADIO HOLDINGS INC.** |
|------------|------------|--------------------------------------------|
| ** ** | ** ** | ** **                                 |
|       |       | By:                                        | *  “Michael  Washinushi”* |
|       |       |                                       |   Authorized  Signatory |
| ** ** | ** ** | ** **                                 |
| ** ** | ** ** | ** **                                 |
| ** ** | ** ** | **CIBC MELLON TRUST COMPANY**              |
| ** ** | ** ** | ** **                                 |
|       |       | By:                                        | *  “Geralyn  Krowles”* |
|       |       |                                       |   Authorized  Signatory |
|       |       |                                       |   |
|       |       |                                       |   |
|       |       | By:                                        | *  “Moran  Chiu”* |
|       |       |                                       |   Authorized  Signatory |
|            |            |                                            |  |  |  |  |

 

74

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** **

**SCHEDULE “A”**

 

**TO THE COMPANY INDENTURE BETWEEN**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC. AND**

 

**CIBC MELLON TRUST COMPANY**

 

**FORM OF DEBENTURE**

 

----

 

**SCHEDULE “A”**

 

**[*****Legend applicable toUnited States resident Debentureholders only***

 

**THESECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED (THE “*U.S. SECURITIES ACT*”).THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THECOMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERREDONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCEWITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) INACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACTPROVIDED BY (1) RULE 144 OR (2) RULE 144A THEREUNDER, IFAVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) INA TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACTOR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OFSECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANYAND THE DEBENTURE TRUSTEE AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OROTHER EVIDENCE OF EXEMPTION, IN EITHER CASE, REASONABLY SATISFACTORY TO THECOMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY INSETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE HOLDER AGREES NOTTO ENGAGE, DIRECTLY OR INDIRECTLY, IN HEDGING TRANSACTIONS INVOLVING THESESECURITIES UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT. PROVIDED THAT THECOMPANY IS A “FOREIGN ISSUER” WITHIN THE MEANING OF REGULATION S AT THE TIME OFSALE, AND PROVIDED THAT THE FOLLOWING PROCEDURE COMPLIES WITH U.S. SECURITIESLAWS AT THE TIME OF SALE, A NEW CERTIFICATE BEARING NO LEGEND MAY BEOBTAINED FROM THE COMPANY’S REGISTRAR AND TRANSFER AGENT UPON DELIVERY OF THISCERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THEREGISTRAR AND TRANSFER AGENT AND THE COMPANY, TO THE EFFECT THAT SUCH SALE ISBEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.SECURITIES ACT.]**

 

**[*Legend applicable to non-United States resident Debentureholders only:***

 

**UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THISSECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND ADAY AFTER SEPTEMBER 12, 2007]**

 

THE SECURITIES REPRESENTED BY THISCERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAIDSECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES OF THE TSX SINCE THEY ARENOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCHSECURITIES IS NOT ‘GOOD DELIVERY’ IN SETTLEMENT OF TRANSACTIONS ON THE TSX.

 
| **No. **• | ** ** | **$**• |   |
|---------------------|------------|-------------|--------|

 

**CANADIAN SATELLITE RADIO HOLDINGSINC.**

 

**SERIES 2007 8.0% CONVERTIBLEUNSECURED SUBORDINATED DEBENTUREDUE SEPTEMBER 12, 2014**

 

Registered in the name of: •

 

**CANADIAN SATELLITERADIO HOLDINGS INC.**(the “**Company**”) for value received herebyacknowledges itself indebted and, subject to the provisions of the trustindenture (the “**Indenture**”) datedas of September 12, 2007, (the “**Closing Date**”)between the Company and CIBC Mellon Trust Company (the “**Debenture Trustee**”), promises to pay to theregistered holder hereof on September 12, 2014 (the “**Maturity Date**”) or on such earlier date asthe principal amount hereof may become due in accordance with theprovisions of the Indenture the principal sum of • Dollars ($•) in lawful money of Canada on presentation and surrender of thisInitial Debenture at the principal office of the Debenture Trustee in Toronto,Ontario in accordance with the terms of the Indenture and, subject ashereinafter provided, to pay interest on the principal amount hereof from, andincluding, the date hereof, or from, and including, the last Interest PaymentDate to which interest shall have been paid or made available for paymenthereon, whichever is later, at the rate of 8.0% per annum, in like money, inarrears in equal (with the exception of the first interest payment which willinclude interest from, and including, September 12, 2007 as set forthbelow) semi-annual instalments (less any tax required by law to be deducted) onJune 30 and December 31 in each year commencing on December 31,2007 and the last payment (representing interest payable from the last InterestPayment Date to, but excluding, the Maturity Date) to fall due on the MaturityDate and, should the Company at any time make default in the payment of anyprincipal, premium (if any) or interest, to pay interest on the amount indefault at the same rate, in like money and on the same dates. The firstinterest payment will include interest accrued from, and including, September 12,2007 to, but excluding December 31, 2007, and will be equal to $24.11foreach $1,000 principal amount of the Initial Debentures.

 

----

 

Interest hereon shall be payable by chequemailed by prepaid ordinary mail or by electronic transfer of funds to theregistered holder hereof and, subject to the provisions of the Indenture, themailing of such cheque or payment by electronic funds transfer shall, to the extentof the sum represented thereby (plus the amount of any tax withheld andremitted), satisfy and discharge all liability for interest on this InitialDebenture.

 

The Debentureholder may elect, from timeto time, subject to any Applicable Securities Legislation and any requiredregulatory or shareholder approval, to receive all or part of the amountof interest due (the “**Interest Obligation**”)on such Interest Payment Date in that number of Shares obtained by dividing theinterest payment by the volume-weighted average trading price of the Class ASubordinate Voting Shares of the Company (the “**Shares**”)on the Toronto Stock Exchange for the ten (10) consecutive trading daysending five (5) days prior to the date of each interest payment, with anyfractional shares being paid in cash based on the Conversion Price (the “**Share Interest Payment Election**”). The Debenture Trustee, onexercise by the Debentureholder of a Share Interest Payment Election,shall:  (a) accept delivery of theShares from the Company and process the Shares in accordance with the ShareInterest Payment Election Notice, (b) deliver the Shares to theDebentureholder, and (c) perform any other action necessarilyincidental thereto.

 

Subject to any Applicable SecuritiesLegislation and any required regulatory or shareholder approval, in the event apayment of interest made in cash would result in a breach or default by theCompany under any obligations of the Company, including the Debentures, thenthe Company shall, in exchange for or in lieu of paying such interest, usecommercially reasonable efforts to satisfy its obligation by issuing anddelivering to holders on the Interest Payment Date that number of Sharesobtained by dividing the interest payment by that number of Shares obtained bydividing the interest payment by 95% of the Current Market Price of the Shareson the Interest Payment Date.

 

Neither the Trust’s making of the ShareInterest Payment Election nor the consummation of sales of Shares will (a) resultin the holders of the Initial Debentures not being entitled to receive on theapplicable Interest Payment Date cash in an aggregate amount equal to theinterest payable on such Interest Payment Date, or (b) entitle suchholders to receive any Shares in satisfaction of the Interest Obligation.

 

This Debenture is one of the Series 2007****8.0% Convertible Unsecured Subordinated Debentures due September 12,2014 (referred to herein as the “**InitialDebenture**”) of the Company issued under the provisions of theIndenture. The Initial Debentures authorized for issue are limited to anaggregate principal amount of $20,000,000 in lawful money of Canada. Referenceis hereby expressly made to the Indenture for a description of the terms andconditions upon which the Initial Debentures are issued and held and the rightsand remedies of the holders of the Initial Debentures and of the Company and ofthe Debenture Trustee, all to the same effect as if the provisions of theIndenture were herein set forth to all of which provisions the holder of this InitialDebenture by acceptance hereof assents. To the extent that anything containedherein is inconsistent with or conflicts with the provisions of the Indenture,the provisions of the Indenture shall govern.

 

A2

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The Initial Debentures are issuable only indenominations of $1,000 and integral multiples thereof. Upon compliance withthe provisions of the Indenture, Debentures of any denomination may beexchanged for an equal aggregate principal amount of Debentures in any otherauthorized denomination or denominations. The whole, or if this InitialDebenture is a denomination in excess of $1,000, any part which is $1,000or an integral multiple thereof, of the principal of this Initial Debenture isconvertible, at the option of the holder hereof, upon surrender of this InitialDebenture at the principal office of the Debenture Trustee in Toronto, Ontario,at any time prior to the close of business on the Maturity Date or, if thisInitial Debenture is called for redemption on or prior to such date, then up tobut not after 5:00 p.m. (Toronto time) on the last Business Dayimmediately preceding the date specified for redemption of this InitialDebenture, into Shares (without adjustment for interest accrued hereon or fordividends or distributions on Shares issuable upon conversion) at a conversionprice of $5.92 (the “**Conversion Price**”)per Share, being a rate of approximately 168.919 Shares for each $1,000principal amount of Initial Debentures, all subject to the terms and conditionsand in the manner set forth in the Indenture. No Debentures may beconverted during the five Business Days preceding and including June 30and December 31 in each year as the registers of the Debenture Trusteewill be closed during such periods. The Indenture makes provision for theadjustment of the Conversion Price in the events therein specified. Nofractional Shares will be issued on any conversion but in lieu thereof, theCompany will satisfy such fractional interest by a cash payment equal to themarket price of such fractional interest determined in accordance with theIndenture. Holders converting their Debentures will receive accrued and unpaidinterest thereon. If a Debenture is surrendered for conversion on an InterestPayment Date or during the five preceding Business Days, the Person or Personsentitled to receive Shares in respect of the Debenture so surrendered forconversion shall not become the holder or holders of record of such Sharesuntil the Business Day following such Interest Payment Date.

 

This Initial Debenture may be redeemedat the option of the Company on the terms and conditions set out in theIndenture at the redemption price therein and herein set out provided that thisInitial Debenture is not redeemable before the third (3rd)anniversary of the Closing Date, except in the event of the satisfaction ofcertain conditions after a Change of Control has occurred. On and after thethird (3rd) anniversary of the Closing Date, the Initial Debenturesare redeemable at the option of the Company provided that the Current MarketPrice of the Shares on the date on which notice of redemption is given is inexcess of 150% of the Conversion Price at a price equal to the principal amountof Debentures and, in addition thereto, at the time of redemption, the Companyshall pay to the holder accrued and unpaid interest thereon. The Company may,on notice as provided in the Indenture, at its option so long as the CurrentMarket Price of the Shares on the Redemption Date is greater than the MinimumShare Price, and subject to any applicable regulatory or shareholder approvals,elect to satisfy its obligation to pay all or any portion of the applicableRedemption Price by the issue of that number of Shares obtained by dividing theapplicable Redemption Price by 95% of the Current Market Price of the Shares onthe Redemption Date.

 

Upon the occurrence of a Change of Control ofthe Company, the Company is required to make an offer to purchase all of theInitial Debentures at a price equal to 101% of the principal amount of suchInitial Debentures plus accrued and unpaid interest (if any) up to, butexcluding, the date the Initial Debentures are so repurchased (the “**Offer**”). If 90% or more of the principalamount of all Initial Debentures outstanding on the date the Company providesnotice of a Change of Control to the Debenture Trustee have been tendered forpurchase pursuant to the Offer, the Company has the right to redeem and shallredeem all the remaining outstanding Initial Debentures effective as of thesame date and at the same price.

 

If a takeover bid for Initial Debentures,within the meaning of the Applicable Securities Legislation, is made and 90% ormore of the principal amount of all the Initial Debentures (other than InitialDebentures held at the date of the takeover bid by or on behalf of theDebenture Offeror, Associates or Affiliates of the Debenture Offeror or anyoneacting jointly or in concert with the Debenture Offeror) are taken up and paidfor by the Debenture Offeror, the Debenture Offeror will be entitled to acquirethe Initial Debentures of those holders who did not accept the offer on thesame terms as the Debenture Offeror acquired the first 90% of the principalamount of the Initial Debentures provided that the holders of InitialDebentures will have the right to be paid the fair value of their InitialDebentures if they complied with the applicable procedures in the TrustIndenture.

 

The Company may, on notice as provided in theIndenture, at its option so long as the Current Market Price of the Shares onthe Maturity Date is greater than the Minimum Share Price and subject to anyapplicable regulatory or shareholder approvals, elect to satisfy the obligationto repay all or any portion of the principal amount of this Initial Debenturedue on the Maturity Date by the issue of that number of Shares obtained bydividing the principal amount of this Initial Debenture by 95% of the CurrentMarket Price on the Maturity Date.

 

A3

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

 

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

 

The Indenture contains provisions makingbinding upon all holders of Debentures outstanding thereunder (or in certaincircumstances specific series of Debentures) resolutions passed atmeetings of such holders held in accordance with such provisions andinstruments signed by the holders of a specified majority of Debenturesoutstanding (or specific series), which resolutions or instruments may havethe effect of amending the terms of this Initial Debenture or the Indenture.

 

The Indenture contains certain restrictionson holders of Debentures that are non-Canadians within the meaning of the *Direction to the CRTC (Ineligibility of Non-Canadians)* (“**Non-Canadian**”) including provisions that allow the Companyto refuse to issue or register a transfer of Debentures to Non-Canadians or tocompel Non-Canadians to sell their Debentures.

 

The Indenture contains provisions disclaimingany personal liability on the part of holders of Shares, officers anddirectors of the Company in respect of any obligation or claim arising out ofthe Indenture or this Debenture.

 

This Initial Debenture may only betransferred, upon compliance with the conditions prescribed in the Indenture,in one of the registers to be kept at the principal office of the DebentureTrustee in Toronto, Ontario and in such other place or places and/or by suchother registrars (if any) as the Company with the approval of the DebentureTrustee may designate. No transfer of this Initial Debenture shall bevalid unless made on the register by the registered holder hereof or hisexecutors or administrators or other legal representatives, or his or theirattorney duly appointed by an instrument in form and substancesatisfactory to the Debenture Trustee or other registrar, and upon compliancewith such reasonable requirements as the Debenture Trustee and/or otherregistrar may prescribe and upon surrender of this Initial Debenture forcancellation. Thereupon a new Initial Debenture or Initial Debentures in thesame aggregate principal amount shall be issued to the transferee in exchangehereof.

 

This Initial Debenture shall not becomeobligatory for any purpose until it shall have been certified by the DebentureTrustee under the Indenture.

 

If any of the provisions of this Debentureare inconsistent with the provisions of the Indenture, the provisions of theIndenture shall take precedence and shall govern.

 

Capitalized words or expressions used in thisInitial Debenture shall, unless otherwise defined herein, have the meaningascribed thereto in the Indenture.

 

**IN WITNESS WHEREOFCANADIAN SATELLITE RADIO HOLDINGS INC.**has caused this Debenture to be signed by its authorized representativesas of the 12th day of September, 2007. 

 

 
| ** ** | ** ** | **CANADIAN SATELLITE RADIO HOLDINGS INC.** |
|------------|------------|--------------------------------------------|
| ** ** | ** ** | ** **                                 |
|       |       |                                       | By: |   |
|       |       |                                       |

 

**(FORM OF DEBENTURE TRUSTEE’SCERTIFICATE)**

 

This Initial Debenture is one of the Series 2007****8.0% Convertible Unsecured Subordinated Debentures due September 12,2014 referred to in the Indenture within mentioned. 

 

A4

----

 

 
| **CIBC MELLON TRUST COMPANY** |   |
|-------------------------------|--------|
| ** **                    |   |
| ** **                    |   |
|                          | By:    |   |   |   |
|                          |   |    (Authorized  Officer) |   |
|                               |        |  |  |  |

 

 

**(FORM OF REGISTRATION PANEL)**

 

(No writing hereon except by DebentureTrustee or other registrar)

 
| **Date of Registration** | ** ** | **In Whose Name Registered** | ** ** | **Signature of Debenture Trustee  or Registrar** | ** ** |
|------------------------------------|------------|---------------------------------------------|------------|----------------------------------------------------------------------|------------|
| ** **                         | ** ** | ** **                                  | ** ** | ** **                                                           | ** ** |
| ** **                         | ** ** | ** **                                  | ** ** | ** **                                                           | ** ** |
| ** **                         | ** ** | ** **                                  | ** ** | ** **                                                           | ** ** |
| ** **                         | ** ** | ** **                                  | ** ** | ** **                                                           | ** ** |

 

A5

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**FORM OF ASSIGNMENT**

 

FOR VALUE RECEIVED, the undersigned herebysells, assigns and transfers unto                                                                     ,whose address and social insurance number, if applicable, are set forth below,this Initial Debenture (or $                            principal amount hereof*) of CANADIAN SATELLITE RADIO HOLDINGS INC.standing in the name(s) of the undersigned in the register maintained by theCompany with respect to such Initial Debenture and does hereby irrevocablyauthorize and direct the Debenture Trustee to transfer such Initial Debenturein such register, with full power of substitution in the premises.

 
| Dated:                                                 |                                              |
|--------------------------------------------------------|---------------------------------------------------|
|                                                   |
| Address of Transferee:                                 |                                              |
|                                                   | (Street Address, City, Province and Postal  Code) |
|                                                   |
| Social Insurance Number of Transferee, if  applicable: |                                              |
|                                                        |                                                   |  |  |

 

 

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*If less than the full principal amount ofthe within Initial Debenture is to be transferred, indicate in the spaceprovided the principal amount (which must be $1,000 or an integral multiplethereof, unless you hold an Initial Debenture in a non-integral multiple of1,000 by reason of your having exercised your right to exchange upon the makingof an Offer, in which case such Initial Debenture is transferable only in itsentirety) to be transferred.

 

1.                                       The signature(s) to this assignment must correspond with the name(s)as written upon the face of this Initial Debenture in every particular withoutalteration or any change whatsoever. The signature(s) must be guaranteed by aCanadian chartered bank or trust company or by a member of an acceptableMedallion Guarantee Program. Notarized or witnessed signatures are notacceptable as guaranteed signatures. The Guarantor must affix a stamp bearingthe actual words: “**SIGNATURE GUARANTEED**”.

 

2.                                       The registered holder of this Initial Debenture is responsible forthe payment of any documentary, stamp or other transfer taxes that may bepayable in respect of the transfer of this Debenture. 

 
| Signature  of Guarantor:         |                                                     |
|----------------------------------|----------------------------------------------------------|
|                             |                                                     |
|                             |                                                     |
|                             |                                                     |   |
|   Authorized  Officer  |   Signature  of transferring registered holder |
|                             |                                                     |
|                             |                                                     |
|   Name  of Institution |                                                     |   |
|                                  |                                                          |  |  |

 

A6

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**EXHIBIT “1”TO THE DEBENTURE**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC.**

 

**SERIES 2007 8.0% CONVERTIBLEUNSECURED SUBORDINATED DEBENTURESDUE SEPTEMBER 12, 2014**

 

Initial Principal Amount:  $•

 

Authorization:                                                  

 

**ADJUSTMENTS**

 
| **Date**   | ** ** | **Amount of Increase** | ** ** | **Amount of  Decrease** | ** ** | **New Principal  Amount** | ** ** | **Authorization** | ** ** |
|------------|------------|----------------------------------|------------|------------------------------|------------|--------------------------------|------------|-------------------|------------|
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                       | ** ** | ** **                   | ** ** | ** **                     | ** ** | ** **        | ** ** |

 

A7

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**SCHEDULE “B”**

 

**TO THE COMPANY INDENTURE BETWEEN**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC. AND**

 

**CIBC MELLON TRUST COMPANY**

 

**FORM OF REDEMPTION NOTICE**

 

----

 

**SCHEDULE “B”**

 

**Form of Redemption NoticeCANADIAN SATELLITE RADIO HOLDINGS INC.**

 

**Series 2007 8.0% CONVERTIBLEUNSECURED SUBORDINATED DEBENTURESDUE SEPTEMBER 12, 2014**

 

**REDEMPTION NOTICE**

 

To:                              Holders of 8.0% Convertible Unsecured Subordinated Debentures due September 12,2014 (the “**Debentures**”) ofCanadian Satellite Radio Holdings Inc. (the “**Company**”)

 

And to:       CIBCMellon Trust Company (the “**Debenture Trustee**”)

 

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

 

Notice is hereby given pursuant to Section 4.3of the trust indenture (the “**Indenture**”)dated as of September 12, 2007 between the Company and CIBC Mellon TrustCompany (the “**Debenture Trustee**”),as trustee, that the aggregate principal amount of $• of the $• of Debentures outstanding will be redeemed as of • (the “**Redemption Date**”),upon payment of a redemption amount of $• for each $1,000principal amount of Debentures, being equal to the aggregate of (i) $• (the “**Redemption Price**”),and (ii) all accrued and unpaid interest hereon to but excluding theRedemption Date (collectively, the “**TotalRedemption Price**”). The Debentures are not redeemable before thethird (3rd) anniversary of the Closing Date (as such term is defined in theDebenture), except in the event of the satisfaction of certain conditions aftera Change of Control has occurred.

 

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

 

**CIBC Mellon Trust Company**Attention: Corporate Restructures

199 Bay StreetCommerce Court WestSecurities LevelToronto, OntarioM5L 1G9

 

The interest upon the principal amount ofDebentures called for redemption shall cease to be payable from and after theRedemption Date, unless payment of the Total Redemption Price shall not be madeon presentation for surrender of such Debentures at the above-mentionedcorporate trust office on or after the Redemption Date or prior to the settingaside of the Total Redemption Price pursuant to the Indenture.

 

**[Pursuant to Section 4.6of the Indenture, the Company hereby irrevocably elects to satisfy itsobligation to pay to the holders of Debentures $**•**of the Redemption Price payable to holdersof Debentures in accordance with this notice by issuing and delivering to theholders that number of Shares obtained by dividing the Redemption Price by 95%of the Current Market Price of the Shares on the Redemption Date.]**

 

No fractional Shares shall be delivered uponthe exercise by the Company of the above-mentioned redemption right but, inlieu thereof, the Company shall pay the cash equivalent thereof determined onthe basis of the Current Market Price of Shares on the Maturity Date (less anytax required to be deducted, if any).

 

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In this connection, upon presentation andsurrender of the Debentures for payment on the Redemption Date, the Companyshall, on the Redemption Date, make the delivery to the Debenture Trustee, atthe above-mentioned corporate trust office, for delivery to and on account ofthe holders, of certificates representing the Shares to which holders areentitled together with the cash equivalent in lieu of fractional Shares, cashfor all accrued and unpaid interest up to, but excluding, the Redemption Date,and, if only a portion of the Debentures are to be redeemed by issuing Shares,cash representing the balance of the Redemption Price.

 

DATED: 

 

 
| **CANADIAN SATELLITE RADIO  HOLDINGS INC.** |
|---------------------------------------------|
| ** **                                  |
| ** **                                  |
| ** **                                  | ** ** |
|   (Authorized  Signatory)         |

 

B2

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**SCHEDULE “C”**

 

**TO THE COMPANY INDENTURE BETWEEN**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC. AND**

 

**CIBC MELLON TRUST COMPANY**

 

**FORM OF MATURITY NOTICE**

 

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**SCHEDULE “C”**

 

**Form of Maturity Notice**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC.**

 

•**% CONVERTIBLEUNSECURED SUBORDINATED DEBENTURES DUE**•

 

**MATURITY NOTICE**

 

To:                              Holders of •% ConvertibleUnsecured Subordinated Debentures due • (the “**Debentures**”) ofCanadian Satellite Radio Holdings Inc. (the “**Company**”)

 

And to:       CIBCMellon Trust Company (the “**Debenture Trustee**”)

 

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

 

Notice is hereby given pursuant to Section 4.10(b) ofthe trust indenture (the “**Indenture**”)dated as of June 22, 2007, as the same may be amended, supplementedor restated between the Company and CIBC Mellon Trust Company, as trustee (the “**Debenture Trustee**”), that the Debenturesare due and payable as of • (the “**Maturity Date**”)and the Company elects to satisfy its obligation to pay to holders ofDebentures the principal amount of all of the Debentures outstanding on theMaturity Date by issuing and delivering to the holders that number of Sharesequal to **[the number obtained by dividingsuch principal amount of the Debentures by 95% of the Current Market Price ofShares on the Maturity Date]**.

 

No fractional Shares shall be delivered onexercise by the Company of the above mentioned repayment right but, in lieuthereof, the Company shall pay the cash equivalent thereof determined on thebasis of the Current Market Price of Shares on the Maturity Date (less any taxrequired to be deducted, if any).

 

In this connection, upon presentation andsurrender of the Debentures for payment on the Maturity Date, the Companyshall, on the Maturity Date, make delivery to the Debenture Trustee, Attention:Corporate Restructures, 199 Bay Street, Commerce Court West, Securities Level,Toronto, Ontario, M5L 1G9 for delivery to and on account of the holders, ofcertificates representing the Shares to which holders are entitled togetherwith the cash equivalent in lieu of fractional Shares, cash for all accrued andunpaid interest up to, but excluding, the Maturity Date and if only a portionof the Debentures are to be repaid by issuing Shares, cash representing thebalance of the principal amount due on the Maturity Date.

 

DATED: 

 
| **CANADIAN SATELLITE RADIO  HOLDINGS INC.** |
|---------------------------------------------|
| ** **                                  |
| ** **                                  |
| ** **                                  | ** ** |
|   (Authorized  Signatory)         |

 

----

 

**SCHEDULE “D”**

 

**TO THE COMPANY INDENTURE BETWEEN**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC. AND**

 

**CIBC MELLON TRUST COMPANY**

 

**FORM OF NOTICE OF CONVERSION**

 

----

 

**SCHEDULE “D”**

 

**Form of Notice of Conversion**

 

**CONVERSION NOTICE**

 

TO:                            CANADIAN SATELLITE RADIO HOLDINGS INC.

 

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

 

The undersigned registered holder of Series 2007****8.0% Convertible Unsecured Subordinated Debentures due September 12,2014 bearing Certificate No. •irrevocably elects to convert such Debentures (or $• principalamount thereof*) in accordance with the terms of the Indenturereferred to in such Debentures and tenders herewith the Debentures, and, ifapplicable, directs that the Shares of Canadian Satellite Radio Holdings Inc.issuable upon a conversion be issued and delivered to the Person indicatedbelow. (If Shares are to be issued in the name of a Person other than the holder,all requisite transfer taxes must be tendered by the undersigned). 

 
| Dated: |   |                              |   |
|--------|--------|-----------------------------------|--------|
|   |   | (Signature  of Registered Holder) |

 

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*                                         If less than the full principal amount of the Debentures, indicatein the space provided the principal amount (which must be $1,000 or integralmultiples thereof).

 

NOTE:            IfShares are to be issued in the name of a Person other than the holder, thesignature must be guaranteed by a chartered bank, a trust company or by amember of an acceptable Medallion Guarantee Program. The Guarantor must affix astamp bearing the actual words: “**SIGNATUREGUARANTEED**”.

 

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

 
| Name:                            |   |   |
|----------------------------------|--------|--------|
|                             |
|                             |   |
|                             |   |
| (Address)                        |
|                             |
|                             |   |
|                             |   |
| (City, Province and Postal Code) |
|                             |
| Name of guarantor:               |   |   |
|                             |
| Authorized signature:            |   |   |
|                                  |        |        |  |  |  |

 

----

 

**SCHEDULE “E”**

 

**TO THE COMPANY INDENTURE BETWEEN**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC. AND**

 

**CIBC MELLON TRUST COMPANY**

 

**FORM OF DECLARATION FORREMOVAL OF LEGEND**

 

----

 

**SCHEDULE “E”**

 

**FORM OF DECLARATION FORREMOVAL OF LEGEND**

 

TO:                            CIBC Mellon Trust Company, as trustee and registrar of the Series 20078.0% Convertible Unsecured Subordinated Debentures due September 12, 2014,and

 

TO:                            The Registrar and Transfer Agent of the Shares of Canadian SatelliteRadio Holdings Inc.

 

**[The undersigned (a) acknowledges thatthe sale of the securities of Canadian Satellite Radio Holdings Inc. (the “Company”)to which this declaration relates is being made in reliance on Rule 904 ofRegulation S under the *United StatesSecurities Act of 1933*, as amended (the “1933 Act”) and (b) certifiesthat (1) it is not an affiliate of the Company (as defined in Rule 405under the 1933 Act), (2) the offer of such securities was not made to aperson in the United States, and either (A) at the time the buy order wasoriginated, the buyer was outside the United States, or the seller and anyperson acting on its behalf reasonably believe that the buyer was outside theUnited States, or (B) the transaction was executed on or through thefacilities of the Toronto Stock Exchange and neither the seller nor any personacting on its behalf knows that the transaction has been prearranged with abuyer in the United States, (3) neither the seller nor any affiliate ofthe seller nor any person acting on any of their behalf has engaged or will engagein any directed selling efforts in the United States in connection with theoffer and sale of such securities, (4) the sale is bona fide and not forthe purpose of “washing off” the resale restrictions imposed because thesecurities are “restricted securities” (as such term is defined in Rule 144(a)(3) underthe 1933 Act), (5) the seller does not intend to replace the securitiessold in reliance on Rule 904 of the 1933 Act with fungible unrestrictedsecurities, and (6) the contemplated sale is not a transaction, or part ofa series of transactions which, although in technical compliance withRegulation S, is part of a plan or scheme to evade the registrationprovisions of the 1933 Act. Terms used herein have the meanings given to themby Regulation S.]**

 

 
| Dated: |   |   | By:    |   |
|--------|--------|--------|--------|--------|
|   |   |   |   |   |
|   | Name:  |   |
|   |   |   |
|   | Title: |   |

 

----

 

**SCHEDULE “F”**

 

**TO THE COMPANY INDENTURE BETWEEN**

 

**CANADIAN SATELLITE RADIO HOLDINGSINC. AND**

 

**CIBC MELLON TRUST COMPANY**

 

**FORM OF SHARE INTERESTPAYMENT ELECTION NOTICE**

 

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**SCHEDULE “F”**

 

**Form of Share InterestPayment Election Notice**

 

**SHARE INTEREST PAYMENT ELECTIONNOTICE**

 

TO:                            CANADIAN SATELLITE RADIO HOLDINGS INC.

 

And to:       CIBCMellon Trust Company (the “**Debenture Trustee**”)

 

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

 

The undersigned registered holder of Series 2007****8.0% Convertible Unsecured Subordinated Debentures due September 12,2014 bearing Certificate No. •irrevocably elects to receive all of the amount of the interest due on theInterest Payment Date set out below in Shares in accordance with the terms ofthe Indenture referred to in such Debentures and tenders herewith theDebentures, and, if applicable, directs that the Shares of Canadian SatelliteRadio Holdings Inc. issuable in satisfaction of such Interest Obligation beissued and delivered to the Person indicated below. (If Shares are to be issuedin the name of a Person other than the holder, all requisite transfer taxesmust be tendered by the undersigned). 

 

 
| Dated:                  |                                     |   |                                          |
|-------------------------|------------------------------------------|--------|-----------------------------------------------|
|                    |                                     |   |   (Signature  of Registered Holder) |
|                    |                                     |   |                                          |
| Interest  Payment Date: |                                     |   |                                          |
|                    | (June 30/December 31,  [year]) |   |                                          |
|                         |                                          |        |                                               |  |

 

 

NOTE:            IfShares are to be issued in the name of a Person other than the holder, thesignature must be guaranteed by a chartered bank,  a trust company or by amember of an acceptable Medallion Guarantee Program. The Guarantor must affix astamp bearing  the actual words: “**SIGNATUREGUARANTEED**”.

 

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

 
| Name:                            |   |   |
|----------------------------------|--------|--------|
|                             |
|                             |   |
| (Address)                        |
|                             |
|                             |   |
|                             |   |
| (City, Province and Postal Code) |
|                             |
| Name of guarantor:               |   |   |
|                             |
| Authorized signature:            |   |   |
|                                  |        |        |  |  |  |

 

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