Document:

Exhibit 4.1

Exhibit 4.1

DEBENTURE INDENTURE

DATED AS OF THE 9th DAY OF JUNE, 2011

AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

PROVIDING FOR THE ISSUE OF DEBENTURES

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 INTERPRETATION
	 	 	1	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	1	 
	1.2 Meaning of “Outstanding”
	 	 	8	 
	1.3 Interpretation:
	 	 	8	 
	1.4 Headings, Etc
	 	 	9	 
	1.5 Time of Essence
	 	 	9	 
	1.6 Monetary References
	 	 	9	 
	1.7 Invalidity, Etc
	 	 	9	 
	1.8 Language
	 	 	9	 
	1.9 Successors and Assigns
	 	 	9	 
	1.10 Severability
	 	 	9	 
	1.11 Entire Agreement
	 	 	9	 
	1.12 Benefits of Indenture
	 	 	9	 
	1.13 Applicable Law and Attornment
	 	 	10	 
	1.14 Currency of Payment
	 	 	10	 
	1.15 Non-Business Days
	 	 	10	 
	1.16 Accounting Terms
	 	 	10	 
	1.17 Calculations
	 	 	10	 
	1.18 Schedules
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 2 THE DEBENTURES
	 	 	11	 
	 
	 	 	 	 
	2.1 Limit of Debentures
	 	 	11	 
	2.2 Terms of Debentures of any Series
	 	 	11	 
	2.3 Form of Debentures
	 	 	12	 
	2.4 Form and Terms of Initial Debentures
	 	 	12	 
	2.5 Certification and Delivery of Additional Debentures
	 	 	19	 
	2.6 Issue of Global Debentures
	 	 	20	 
	2.7 Execution of Debentures
	 	 	21	 
	2.8 Certification
	 	 	21	 
	2.9 Interim Debentures or Certificates
	 	 	21	 
	2.10 Mutilation, Loss, Theft or Destruction
	 	 	21	 
	2.11 Concerning Interest
	 	 	22	 
	2.12 Debentures to Rank Pari Passu
	 	 	22	 
	2.13 Payments of Amounts Due on Maturity
	 	 	22	 
	2.14 U.S. Legend on the Debentures
	 	 	23	 
	2.15 Payment of Interest
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
	 	 	24	 
	 
	 	 	 	 
	3.1 Definitive Debentures
	 	 	24	 
	3.2 Global Debentures
	 	 	24	 
	3.3 Transferee Entitled to Registration
	 	 	27	 
	3.4 No Notice of Trusts
	 	 	27	 
	3.5 Registers Open for Inspection
	 	 	27	 
	3.6 Exchanges of Debentures
	 	 	27	 
	3.7 Closing of Registers
	 	 	27	 
	3.8 Charges for Registration, Transfer and Exchange
	 	 	28	 
	3.9 Ownership of Debentures
	 	 	28	 

 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 4 REDEMPTION AND PURCHASE OF DEBENTURES
	 	 	29	 
	 
	 	 	 	 
	4.1 Applicability of Article
	 	 	29	 
	4.2 Partial Redemption
	 	 	29	 
	4.3 Notice of Redemption
	 	 	30	 
	4.4 Debentures Due on Redemption Dates
	 	 	30	 
	4.5 Deposit of Redemption Monies or Common Shares
	 	 	30	 
	4.6 Right to Repay Redemption Price in Common Shares
	 	 	31	 
	4.7 Failure to Surrender Debentures Called for Redemption
	 	 	33	 
	4.8 Cancellation of Debentures Redeemed
	 	 	33	 
	4.9 Purchase of Debentures by the Corporation
	 	 	33	 
	4.10 Right to Repay Principal Amount in Common Shares
	 	 	34	 
	 
	 	 	 	 
	ARTICLE 5 SUBORDINATION OF DEBENTURES
	 	 	36	 
	 
	 	 	 	 
	5.1 Applicability of Article
	 	 	36	 
	5.2 Order of Payment
	 	 	37	 
	5.3 Subrogation to Rights of Holders of Senior Indebtedness
	 	 	38	 
	5.4 Obligation to Pay Not Impaired
	 	 	38	 
	5.5 No Payment if Senior Indebtedness in Default
	 	 	38	 
	5.6 Payment on Debentures Permitted
	 	 	39	 
	5.7 Confirmation of Subordination
	 	 	39	 
	5.8 Knowledge of Trustee
	 	 	39	 
	5.9 Trustee May Hold Senior Indebtedness
	 	 	39	 
	5.10 Rights of Holders of Senior Indebtedness Not Impaired
	 	 	39	 
	5.11 Altering the Senior Indebtedness
	 	 	40	 
	5.12 Additional Indebtedness
	 	 	40	 
	5.13 Right of Debentureholder to Convert Not Impaired
	 	 	40	 
	5.14 Invalidated Payments
	 	 	40	 
	5.15 Contesting Security
	 	 	40	 
	 
	 	 	 	 
	ARTICLE 6 CONVERSION OF DEBENTURES
	 	 	40	 
	 
	 	 	 	 
	6.1 Applicability of Article
	 	 	40	 
	6.2 Notice of Expiry of Conversion Privilege
	 	 	40	 
	6.3 Revival of Right to Convert
	 	 	41	 
	6.4 Manner of Exercise of Right to Convert
	 	 	41	 
	6.5 Adjustment of Conversion Price
	 	 	42	 
	6.6 No Requirement to Issue Fractional Common Shares
	 	 	46	 
	6.7 Corporation to Reserve Common Shares
	 	 	46	 
	6.8 Cancellation of Converted Debentures
	 	 	46	 
	6.9 Certificate as to Adjustment
	 	 	46	 
	6.10 Notice of Special Matters
	 	 	46	 
	6.11 Protection of Trustee
	 	 	47	 
	6.12 U.S. Legend on Common Shares
	 	 	47	 
	 
	 	 	 	 
	ARTICLE 7 COVENANTS OF THE CORPORATION
	 	 	47	 
	 
	 	 	 	 
	7.1 To Pay Principal, Premium (if any) and Interest
	 	 	47	 
	7.2 To Pay Trustee’s Remuneration
	 	 	47	 
	7.3 To Give Notice of Default
	 	 	47	 
	7.4 Preservation of Existence, etc
	 	 	48	 
	7.5 Keeping of Books
	 	 	48	 
	7.6 Annual Certificate of Compliance
	 	 	48	 
	7.7 Performance of Covenants by Trustee
	 	 	48	 
	7.8 SEC Notice
	 	 	48	 
	7.9 No Dividends on Common Shares if Event of Default
	 	 	48	 
	7.10 Maintain Listing
	 	 	48	 

 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 8 DEFAULT
	 	 	49	 
	 
	 	 	 	 
	8.1 Events of Default
	 	 	49	 
	8.2 Notice of Events of Default
	 	 	50	 
	8.3 Waiver of Default
	 	 	50	 
	8.4 Enforcement by the Trustee
	 	 	51	 
	8.5 No Suits by Debentureholders
	 	 	51	 
	8.6 Application of Monies by Trustee
	 	 	52	 
	8.7 Notice of Payment by Trustee
	 	 	52	 
	8.8 Trustee May Demand Production of Debentures
	 	 	53	 
	8.9 Remedies Cumulative
	 	 	53	 
	8.10 Judgment Against the Corporation
	 	 	53	 
	8.11 Immunity of Directors, Officers and Others
	 	 	53	 
	 
	 	 	 	 
	ARTICLE 9 SATISFACTION AND DISCHARGE
	 	 	53	 
	 
	 	 	 	 
	9.1 Cancellation and Destruction
	 	 	53	 
	9.2 Non-Presentation of Debentures
	 	 	53	 
	9.3 Repayment of Unclaimed Monies or Common Shares
	 	 	54	 
	9.4 Discharge
	 	 	54	 
	9.5 Satisfaction
	 	 	54	 
	9.6 Continuance of Rights, Duties and Obligations
	 	 	56	 
	 
	 	 	 	 
	ARTICLE 10 COMMON SHARE INTEREST PAYMENT ELECTION
	 	 	56	 
	 
	 	 	 	 
	10.1 Common Share Interest Payment Election
	 	 	56	 
	 
	 	 	 	 
	ARTICLE 11 SUCCESSORS
	 	 	58	 
	 
	 	 	 	 
	11.1 Corporation may Consolidate, Etc., Only on Certain Terms
	 	 	58	 
	11.2 Successor Substituted
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 12 COMPULSORY ACQUISITION
	 	 	59	 
	 
	 	 	 	 
	12.1 Definitions
	 	 	59	 
	12.2 Offer for Debentures
	 	 	60	 
	12.3 Offeror’s Notice to Dissenting Shareholders
	 	 	60	 
	12.4 Delivery of Debenture Certificates
	 	 	61	 
	12.5 Payment of Consideration to Trustee
	 	 	61	 
	12.6 Consideration to be held in Trust
	 	 	61	 
	12.7 Completion of Transfer of Debentures to Offeror
	 	 	61	 
	12.8 Communication of Offer to Trust
	 	 	61	 
	 
	 	 	 	 
	ARTICLE 13 MEETINGS OF DEBENTUREHOLDERS
	 	 	62	 
	 
	 	 	 	 
	13.1 Right to Convene Meeting
	 	 	62	 
	13.2 Notice of Meetings
	 	 	62	 
	13.3 Chairman
	 	 	63	 
	13.4 Quorum
	 	 	63	 
	13.5 Power to Adjourn
	 	 	63	 
	13.6 Show of Hands
	 	 	64	 
	13.7 Poll
	 	 	64	 
	13.8 Voting
	 	 	64	 
	13.9 Proxies
	 	 	64	 
	13.10 Persons Entitled to Attend Meetings
	 	 	65	 

 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	13.11 Powers Exercisable by Extraordinary Resolution
	 	 	65	 
	13.12 Meaning of “Extraordinary Resolution”
	 	 	66	 
	13.13 Powers Cumulative
	 	 	67	 
	13.14 Minutes
	 	 	67	 
	13.15 Instruments in Writing
	 	 	67	 
	13.16 Binding Effect of Resolutions
	 	 	67	 
	13.17 Evidence of Rights Of Debentureholders
	 	 	68	 
	13.18 Concerning Serial Meetings
	 	 	68	 
	 
	 	 	 	 
	ARTICLE 14 NOTICES
	 	 	68	 
	 
	 	 	 	 
	14.1 Notice to Corporation
	 	 	68	 
	14.2 Notice to Debentureholders
	 	 	68	 
	14.3 Notice to Trustee
	 	 	69	 
	14.4 Mail Service Interruption
	 	 	69	 
	 
	 	 	 	 
	ARTICLE 15 CONCERNING THE TRUSTEE
	 	 	69	 
	 
	 	 	 	 
	15.1 No Conflict of Interest
	 	 	69	 
	15.2 Replacement of Trustee
	 	 	69	 
	15.3 Duties of Trustee
	 	 	70	 
	15.4 Reliance Upon Declarations, Opinions, etc
	 	 	70	 
	15.5 Evidence and Authority to Trustee, Opinions, etc
	 	 	70	 
	15.6 Officers’ Certificates Evidence
	 	 	71	 
	15.7 Experts, Advisers and Agents
	 	 	71	 
	15.8 Trustee May Deal in Debentures
	 	 	71	 
	15.9 Investment of Monies Held by Trustee
	 	 	72	 
	15.10 Trustee Not Ordinarily Bound
	 	 	72	 
	15.11 Trustee Not Required to Give Security
	 	 	72	 
	15.12 Trustee Not Bound to Act on Trust’s Request
	 	 	72	 
	15.13 Conditions Precedent to Trustee’s Obligations to Act Hereunder
	 	 	72	 
	15.14 Authority to Carry on Business
	 	 	73	 
	15.15 Compensation and Indemnity
	 	 	73	 
	15.16 Acceptance of Trust
	 	 	73	 
	15.17 Third Party Interests
	 	 	73	 
	15.18 Anti-Money Laundering
	 	 	74	 
	15.19 Privacy Laws
	 	 	74	 
	15.20 Force Majeure; Limitation of Trustee Liability
	 	 	74	 
	 
	 	 	 	 
	ARTICLE 16 SUPPLEMENTAL INDENTURES
	 	 	74	 
	 
	 	 	 	 
	16.1 Supplemental Indentures
	 	 	74	 
	 
	 	 	 	 
	ARTICLE 17 EXECUTION AND FORMAL DATE
	 	 	76	 
	 
	 	 	 	 
	17.1 Execution
	 	 	76	 
	17.2 Formal Date
	 	 	76	 

SCHEDULES

	 	 	 	 	 
	Schedule “A” — Form of Debenture
	 	 	 	 
	Schedule “B” — Form of Redemption Notice
	 	 	 	 
	Schedule “C” — Form of Maturity Notice
	 	 	 	 
	Schedule “D” — Form of Notice of Conversion
	 	 	 	 
	Schedule “E” — Form of Certificate of Transfer
	 	 	 	 
	Schedule “F” — Form of Certificate of Exchange
	 	 	 	 
	Schedule “G” — Common Share Legends
	 	 	 	 

 

-iv-

 

THIS INDENTURE made as of the 9th day of June, 2011.

BETWEEN:

IVANHOE ENERGY INC.., a corporation existing under the laws of Yukon
and having its head office in the Vancouver, in the Province of
British Columbia (hereinafter called “Ivanhoe” or the “Corporation”)

AND

BNY TRUST COMPANY OF CANADA, a trust company organized under the
laws of Canada having an office in the City of Calgary, in the
Province of Alberta (hereinafter called the “Trustee”)

WITNESSETH THAT:

WHEREAS the Corporation wishes to create and issue the Debentures in the manner and subject to
the terms and conditions of this Indenture;

NOW THEREFORE THIS INDENTURE WITNESSES that in consideration of the respective covenants and
agreements contained herein and for other good and valuable consideration (the receipt and
sufficiency of which are acknowledged), the Corporation and the Trustee covenant and agree, for the
benefit of each other and for the equal and rateable benefit of the holders, as follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions

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

	(a)	 	“this Indenture”, “this Convertible Debenture Indenture”, “hereto”, “herein”, “hereby”,
“hereunder”, “hereof” and similar expressions refer to this Indenture and not to any
particular Article, Section, subsection, clause, subdivision or other portion hereof and
include any and every instrument supplemental or ancillary hereto;

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

	(c)	 	“Applicable Period” means any period announced by the Board of Directors as a period of time
for which a cash dividend or distribution will be declared and paid by the Corporation to the
holders of all or substantially all of the outstanding Common Shares;

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

	(e)	 	“Auditors of the Corporation” means an independent firm of chartered accountants duly
appointed as auditors of the Corporation;

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

	(g)	 	“Board of Directors” means the board of directors of the Corporation or any committee
thereof;

 

 

 

	(h)	 	“Business Day” means any day other than a Saturday, Sunday or any other day that the Trustee
in Calgary, Alberta is not generally open for business;

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

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

	(k)	 	“Change of Control” means the acquisition by any Person, or group of Persons acting jointly
or in concert (within the meaning of MI 62-104), of voting control or direction of an
aggregate of 50% or more of the outstanding Common Shares, but shall not include a sale,
merger, reorganization, arrangement, combination or other similar transaction if the previous
holders of Common Shares hold at least 50% of the voting control or direction in such merged,
reorganized, arranged, combined or other continuing entity immediately following completion of
such transaction;

	 
	(l)	 	“Change of Control Notice” has the meaning ascribed thereto in Section 2.4(j)(i);

	 
	(m)	 	“Change of Control Purchase Date” has the meaning ascribed thereto in Section 2.4(j)(i);

	 
	(n)	 	“Change of Control Purchase Offer” has the meaning ascribed thereto in Section 2.4(j)(i);

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

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

	(q)	 	“Common Share Delivery Date” means a date, not more than 90 days and not less than one
Business Day prior to the applicable Interest Payment Date, upon which Common Shares are
issued by the Corporation and delivered to the Trustee for sale pursuant to Common Share
Purchase Agreements;

	(r)	 	“Common Share Interest Payment Election” means an election to satisfy an Interest Obligation
on the applicable Interest Payment Date in the manner described in the Common Share Interest
Payment Election Notice;

	(s)	 	“Common Share Interest Payment Election Amount” means the sum of the amount of the aggregate
proceeds resulting from the sale of Common Shares on the Common Share Delivery Date pursuant
to acceptable bids obtained pursuant to the Common Share Bid Requests, together with any
amount paid by
the Corporation in respect of fractional Common Shares pursuant to Section 10.1(g), that is
equal to the aggregate amount of the Interest Obligation in respect of which the Common
Share Interest Payment Election Notice was delivered;

 

2

 

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

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

	 
	 	(ii)	 	the Common Share Interest Payment Election Amount;

	 	(iii)	 	the investment banks, brokers or dealers through which the Trustee shall seek
bids to purchase the Common Shares and the conditions of such bids, which may include
the minimum number of Common Shares, minimum price per Common Share, timing for closing
for bids and such other matters as the Corporation may specify; and

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

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

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

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

	 
	(x)	 	“Common Share Repayment Right” has the meaning attributed thereto in Section 4.10(a);

	(y)	 	“Conversion Price” means the dollar amount for which each Common Share may be issued from
time to time upon the conversion of Debentures or any series of Debentures which are by their
terms convertible in accordance with the provisions of Article 6;

	(z)	 	“Counsel” means a barrister or solicitor or firm of barristers or solicitors retained or
employed by the Trustee or retained or employed by the Corporation and reasonably acceptable
to the Trustee;

	(aa)	 	“Current Market Price” means, generally, the volume weighted average trading price of the
Common Shares on the Toronto Stock Exchange, if the Common Shares are listed on the Toronto
Stock Exchange, for the 20 consecutive trading days ending five trading days preceding the
applicable date. If the Common Shares are not listed on the Toronto Stock Exchange, reference
shall be made for the purpose of the above calculation to the principal securities exchange or
market on which the Common Shares are listed or quoted or if no such prices are available
“Current Market Price” shall be the fair value of a Common Share as reasonably determined by
the Board of Directors;

	(bb)	 	“Daily Conversion Value” means, for each of the 10 consecutive trading days during the
related Observation Period, one-tenth (1/10th) of the product of (i) the Conversion Rate on
such day and (ii) the VWAP of the Common Shares on such trading day;

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

	 
	(dd)	 	“Debenture Liabilities” has the meaning ascribed thereto in Section 5.1;

 

3

 

	(ee)	 	“Debentureholders” or “holders” means the Persons for the time being entered in the register
for Debentures as registered holders of Debentures or any transferees of such Persons by
endorsement or delivery;

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

	 
	(gg)	 	“Defeased Debentures” has the meaning ascribed thereto in Section 9.6(b);

	(hh)	 	“Definitive Debenture” means a certificated Debenture fully registered in the name of the
holder thereof;

	(ii)	 	“Depository” means, with respect to the Debentures of any series issuable or issued in whole
or in part in the form of one or more Global Debentures, the person designated as depository
by the Corporation pursuant to Section 3.2 until a successor depository shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Depository” shall
mean each person who is then a depository hereunder, and if at any time there is more than one
such person, “Depository” as used with respect to the Debentures of any series shall mean each
depository with respect to the Global Debentures of such series;

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

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

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

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

	(nn)	 	“Freely Tradeable” means, in respect of shares of capital of any class of any corporation,
 shares which: (i) are issuable without the necessity of filing a prospectus or any other
similar offering document (other than such prospectus or similar offering document that has
already been filed) under Applicable Securities Legislation and such issue does not constitute
a distribution (other than a distribution already qualified by prospectus or similar offering
document) under Applicable Securities Legislation; and (ii) can be traded by the holder
thereof without any restriction under Applicable Securities Legislation, such as hold periods,
except in the case of a control distribution (as defined in National Instrument 45-102 -
“Resale of Securities” of the Canadian Securities Administrators), or a transaction or series
of transaction incidental to a control distribution;

	(oo)	 	“generally accepted accounting principles” or “GAAP” means generally accepted accounting
principles from time to time approved by the Canadian Institute of Chartered Accountants
(including as further described in Section 1.16);

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

	 
	(qq)	 	“Global Note Legend” means the legend identified as such in Exhibit A;

	(rr)	 	“Government Obligations” means securities issued or guaranteed by the Government of Canada or
any province thereof;

	(ss)	 	“Guarantees” means any guarantee, undertaking to assume, endorse, contingently agree to
purchase, or to provide funds for the payment of, or otherwise become liable in respect of,
any indebtedness, liability or obligation of any Person;

 

4

 

	(tt)	 	“Initial Debentures” means the Debentures designated as “5.75% Convertible Unsecured
Subordinated Debentures” and described in Section 2.4;

	 
	(uu)	 	“Interest Account” has the meaning ascribed thereto in Section 10.1(h);

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

	(ww)	 	“Interest Payment Date” means a date specified in a Debenture as the date on which interest
on such Debenture shall become due and payable;

	(xx)	 	“Ivanhoe” or the “Corporation” means Ivanhoe Energy Inc. and includes any successor to or of
Ivanhoe which shall have complied with the provisions of Article 11;

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

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

	(aaa)	 	“Material Subsidiary” means any Subsidiary of the Corporation which has consolidated assets
equal to or greater than 5.0% of the consolidated assets of the Corporation and its
Subsidiaries;

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

	 
	(ccc)	 	“Maturity Date” means the date specified for maturity of any Debentures;

	 
	(ddd)	 	“Maturity Notice” has the meaning ascribed thereto in Section 2.4(g);

	(eee)	 	“MI 62-104” means Multilateral Instrument 62-104 — Take-Over Bids and Issuer Bids of the
Canadian Securities Administrators;

	(fff)	 	“Non-Recourse Debt” means any indebtedness, liabilities or other obligations (including
purchase money obligations), and guarantees, indemnities, endorsements (other than
endorsements for collection in the ordinary course of business) or other contingent
obligations in respect of obligations of another person and, in each case, incurred to finance
the creation, development, construction or acquisition of real and tangible personal property
(including fixtures) and any increases in or extensions, renewals or refunding of any such
indebtedness, liabilities and obligations, provided that the recourse of the lender thereof or
any agent, trustee, receiver or other person acting on behalf of the lender in respect of such
indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all
circumstances to the real and tangible personal property (including fixtures) created,
developed, constructed or acquired in respect of which such indebtedness, liabilities and
obligations have been incurred and to any receivables, inventory, equipment, chattel paper,
intangibles and other rights or collateral arising from or connected with such property (and,
for certainty, shall include the shares or other ownership interests of a Subsidiary of the
Corporation which holds only such property and other rights and collateral arising from or
connected therewith) and to which the lender has recourse;

	(ggg)	 	“Observation Period” means, in respect of any Initial Debentures as to which a Cash
Conversion Option applies: (a) for conversions that occur on or after the 12th scheduled
trading day prior to the Maturity Date, the 10 consecutive trading day period beginning on,
and including, the 12th scheduled trading day prior to the Maturity Date; and (b) in all other
cases, the 10 consecutive trading day period beginning on, and including, the third trading
day after the related Date of Conversion.

	 
	(hhh)	 	“Offer Price” has the meaning ascribed thereto in Section 2.4(j)(i);

 

5

 

	(iii)	 	“Offeror’s Notice” has the meaning ascribed thereto in Section 12.3;

	 
	(jjj)	 	“Offering” means the public offering by short form prospectus dated June 2, 2011 of up to
$57,500,000 aggregate principal amount of Initial Debentures;

	 
	(kkk)	 	“Officers’ Certificate” means a certificate of the Corporation signed by any two authorized
officers or directors of the Corporation, in their capacities as officers or directors of the
Corporation, and not in their personal capacities;

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

	 
	(mmm)	 	“Person” includes an individual, corporation, company, partnership, joint venture,
association, trust, trustee, unincorporated organization or government or any agency or
political subdivision thereof (and for the purposes of the definition of “Change of Control”,
in addition to the foregoing, “Person” shall include any syndicate or group that would be
deemed to be a “Person” under MI 62-104);

	 
	(nnn)	 	“Privacy Laws” has the meaning ascribed thereto in Section 15.19;

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

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

	 
	(qqq)	 	“Redemption Price” means, in respect of a Debenture, the amount, including accrued and
unpaid interest up to (but excluding) the Redemption Date fixed for such Debenture, payable on
the Redemption Date, which amount may be payable by the issuance of Freely Tradeable Common
Shares as provided for in Section 4.6;

	 
	(rrr)	 	“Regulation S” means Regulation S adopted by the United States Securities and Exchange
Commission under the 1933 Act;

	 
	(sss)	 	“Restricted Definitive Debenture” means a Definitive Debenture that bears the U.S. Legend;

	 
	(ttt)	 	“Restricted Global Debenture” means a Global Debenture that bears the U.S. Legend;

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

	 
	(vvv)	 	“Senior Indebtedness” means all obligations, liabilities and indebtedness of the Corporation
and its subsidiaries, whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed or guaranteed which would, in accordance with GAAP, be classified upon a
consolidated statement of financial position of the Corporation as liabilities of the
Corporation and its subsidiaries and, whether or not so classified, includes (without
duplication): (a) indebtedness of the Corporation or its Subsidiaries for borrowed money; (b)
obligations of the Corporation or its Subsidiaries evidenced by bonds, debentures, commercial
paper, notes or other similar instruments; (c) obligations of the Corporation or its
Subsidiaries arising pursuant or in relation to bankers’ acceptances, letters of credit,
letters of guarantee, financial leases, performance bonds and surety bonds (including payment
and reimbursement obligations in respect thereof) or indemnities issued in connection
therewith; (d) obligations of the Corporation or its Subsidiaries under any swap, hedging or
other similar contracts or arrangements; (e) obligations of the Corporation or its
Subsidiaries under Guarantees, indemnities, assurances, legally binding comfort letters or
other contingent obligations relating to the Senior Indebtedness or other obligations of any
other person which would otherwise constitute Senior Indebtedness within the meaning of this
definition; (f) all indebtedness of the Corporation or its Subsidiaries representing the
deferred purchase price of any property including, without
limitation, purchase money mortgages; (g) indebtedness to trade creditors; (h) all renewals,
extensions, restructurings, refundings and refinancings of any of the foregoing; (i) all
accrued and unpaid interest, fees and other amounts in respect of any of the foregoing; and
(j) all costs and expenses incurred by or on behalf of any senior creditor in enforcing
payment or collection of any such Senior Indebtedness, including enforcing any security
interest securing the same; provided that “Senior Indebtedness” shall not include any
indebtedness that would otherwise be Senior Indebtedness if it is expressly stated to be
subordinate to or rank pari passu with the Debentures;

 

6

 

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

	 
	(xxx)	 	“Serial Meeting” has the meaning ascribed thereto in Section 13.2(b)(i);

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

	 
	(zzz)	 	“Subsidiary” has the meaning ascribed thereto in the Securities Act (Alberta);

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

	 
	(bbbb)	 	“Total Offer Price” has the meaning ascribed thereto in Section 2.4(j)(i);

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

	 
	(dddd)	 	“Trustee” means BNY Trust Company of Canada, or its successor or successors for the time
being as trustee hereunder;

	 
	(eeee)	 	“Unclaimed Funds Return Date” has the meaning ascribed thereto in Section 2.4(j)(vii);

	 
	(ffff)	 	“United States” or “U.S.” means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia;

	 
	(gggg)	 	“Unrestricted Definitive Debenture” means a Definitive Debenture that bears the U.S. Legend;

	 
	(hhhh)	 	“Unrestricted Global Debenture” means a Global Debenture that does not bear the U.S. Legend;

	 
	(iiii)	 	“U.S. Legend” has the meaning ascribed thereto in Section 2.14(a);

	 
	(jjjj)	 	“VWAP” means for the Common Shares the per Common Share volume-weighted average price on the
Toronto Stock Exchange (or if the Common Shares are no longer traded on the Toronto Stock
Exchange, on such other exchange as the Common Shares are then traded) in respect of the
period from the scheduled open of trading until the scheduled close of trading of the primary
trading session on such trading day; provided, however, that if such volume-weighted average
price is unavailable, “VWAP” means the average of the market value of one Common Share on such
trading day as determined by three investment banks selected by the Corporation for this
purpose, using a volume-weighted method and converted, if necessary, into Canadian dollars at
the relevant exchange rate). In each case, the “VWAP” will be determined without regard to
after hours trading or any other trading outside of the primary trading session; and

	 
	(kkkk)	 	“Written Direction of the Corporation” means an instrument in writing signed by any one
officer or director of the Corporation;

	 
	(llll)	 	“1933 Act” means the United States Securities Act of 1933, as amended; and

	 
	(mmmm)	 	“90% Redemption Right” has the meaning ascribed thereto in Section 2.4(j)(ii).

 

7

 

1.2 Meaning of “Outstanding”

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

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

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

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

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

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

1.3 Interpretation:

In this Indenture:

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

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

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

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

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

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

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

 

8

 

1.4 Headings, Etc

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

1.5 Time of Essence

Time shall be of the essence of this Indenture.

1.6 Monetary References

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

1.7 Invalidity, Etc.

Any provision hereof which is prohibited or unenforceable shall be ineffective only to the
extent of such prohibition or unenforceability, without invalidating the remaining provisions
hereof.

1.8 Language

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

1.9 Successors and Assigns

All covenants and agreements of the Corporation in this Indenture and the Debentures shall
bind its successors and assigns, whether so expressed or not. All covenants and agreements of the
Trustee in this Indenture shall bind its successors.

1.10 Severability

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

1.11 Entire Agreement

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

1.12 Benefits of Indenture

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

 

9

 

1.13 Applicable Law and Attornment

This Indenture, any supplemental indenture and the Debentures shall be governed by and
interpreted in accordance with the laws of the Province of Alberta and the federal laws of Canada
applicable therein and shall be treated in all respects as Alberta contracts. With respect to any
suit, action or proceedings relating to this Indenture, any supplemental indenture or any
Debenture, the Corporation, the Trustee and each holder irrevocably submit and attorn to the
non-exclusive jurisdiction of the courts of the Province of Alberta. The parties hereto hereby
waive any right they may have to require a trial by jury of any proceeding commenced in
connection herewith.

1.14 Currency of Payment

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

1.15 Non-Business Days

Whenever any payment to be made hereunder shall be due, any period of time would begin or end,
any calculation is to be made or any other action is to be taken on, or as of, or from a period
ending on, a day other than a Business Day, such payment shall be made, such period of time shall
begin or end, such calculation shall be made and such other action shall be taken, as the case may
be, unless otherwise specifically provided herein, on or as of the next succeeding Business Day
without any additional interest, cost or charge to the Corporation.

1.16 Accounting Terms

Except as hereinafter provided or as otherwise indicated in this Indenture, all calculations
required or permitted to be made hereunder pursuant to the terms of this Indenture shall be made in
accordance with GAAP. For greater certainty, GAAP shall include any accounting standards, including
International Financial Reporting Standards, that may from time to time be approved for general
application by the Canadian Institute of Chartered Accountants.

1.17 Calculations

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

1.18 Schedules

The following Schedules are incorporated into and form part of this Indenture:

Schedule “A” — Form of Debenture

Schedule “B” — Form of Redemption Notice

Schedule “C” — Form of Maturity Notice

Schedule “D” — Form of Notice of Conversion

Schedule “E” — Form of Certificate of Transfer

Schedule “F” — Form of Certificate of Exchange

Schedule “G” — Common Share Legends

In the event of any inconsistency between the provisions of any Section of this Indenture and
the provisions of the Schedules which form a part hereof, the provisions of this Indenture shall
prevail to the extent of the inconsistency.

 

10

 

ARTICLE 2

THE DEBENTURES

2.1 Limit of Debentures

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

2.2 Terms of Debentures of any Series

The Debentures may be issued in one or more series. There shall be established herein or in or
pursuant to one or more indentures supplemental hereto, prior to the initial issuance of Debentures
of any particular series:

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

	(b)	 	any limit upon the aggregate principal amount of the Debentures of the series that may be
certified and delivered under this Indenture (except for Debentures certified and delivered
upon registration of, transfer of, amendment of, or in exchange for, or in lieu of, other
Debentures of the series pursuant to Sections 2.9, 2.10, 3.2, 3.3 and 3.6 and Article 4 and
Article 6);

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

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

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

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

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

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

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

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

 

11

 

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

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

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

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

2.3 Form of Debentures

Except in respect of the Initial Debentures, the form of which is provided for herein, the
Debentures of each series shall be substantially in such form or forms (not inconsistent with this
Indenture) as shall be established herein or by or pursuant to one or more resolutions of the Board
of Directors (or to the extent established pursuant to, rather than set forth in, a resolution of
the Board of Directors, in an Officers’ Certificate detailing such establishment) or in one or more
indentures supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent
with the provisions of this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto or with any rules or regulations of any securities exchange or
securities regulatory authority or to conform to general usage, all as may be determined by the
directors or officers of the Corporation executing such Debentures on behalf of the Corporation, as
conclusively evidenced by their execution of such Debentures.

2.4 Form and Terms of Initial Debentures

	(a)	 	The first series of Debentures (the “Initial Debentures”) authorized for issue immediately is
limited to an aggregate principal amount of up to $82,500,000 and shall be designated as
“5.75% Convertible Unsecured Subordinated Debentures”.

	(b)	 	The Initial Debentures shall be dated as of the date of issue of the Initial Debentures and
shall mature on June 30, 2016 (the “Maturity Date” for the Initial Debentures).

	(c)	 	The Initial Debentures shall bear interest from the date of issue at the rate of 5.75% per
annum (based on a year of 365 days and the actual number of days in the relevant interest
period), payable in arrears in equal (with the exception of the first interest payment, which
will include interest from and including the date of issue of the Initial Debentures as set
forth below) semi-annual payments in arrears on June 30 and December 31 in each year, the
first such payment to fall due on December 31, 2011 and the last such payment (representing
interest payable from the last Interest Payment Date to, but excluding, the Maturity Date of
the Initial Debentures) to fall due on June 30, 2016, payable after as well as before maturity
and
after as well as before default, with interest on amounts in default at the same rate,
compounded semi-annually. For certainty, the first interest payment will include interest
accrued from and including the date of issue of the Initial Debentures to, but excluding,
December 31, 2011, which will be equal to $32.29 for each $1,000 principal amount of Initial
Debentures. Any payment required to be made on any day that is not a Business Day will be
made on the next succeeding Business Day. The record dates for the payment of interest on
the Initial Debentures will be June 15 and December 15 in each year (or the first Business
Day prior to such date if not a Business Day).

 

12

 

	(d)	 	The Initial Debentures will be redeemable in accordance with the terms of Article 4, provided
that the Initial Debentures will not be redeemable before June 30, 2014, except in the event
of the satisfaction of certain conditions after a Change of Control has occurred as outlined
herein. On and after June 30, 2014 and at any time prior to the Maturity Date, provided that
the Current Market Price at the time of the Redemption Notice is at least 125% of the
Conversion Price, the Initial Debentures may be redeemed at the option of the Corporation in
whole or in part from time to time on notice as provided for in Section 4.3 at a Redemption
Price equal to their principal amount plus accrued and unpaid interest thereon up to (but
excluding) the Redemption Date. The Redemption Notice for the Initial Debentures shall be
substantially in the form of Schedule “B”. In connection with the redemption of the Initial
Debentures, the Corporation may, at its option and subject to the provisions of Section 4.6
and subject to regulatory approval, elect to satisfy its obligation to pay all or a portion of
the aggregate Redemption Price of the Initial Debentures to be redeemed by issuing and
delivering to the holders of such Initial Debentures, such number of Freely Tradeable Common
Shares as is obtained by dividing the aggregate Redemption Price by 95% of the Current Market
Price in effect on the Redemption Date. If the Corporation elects to exercise such option, it
shall so specify and provide details in the Redemption Notice.

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

	(f)	 	Upon and subject to the provisions and conditions of Article 6 and Section 3.7, the holder of
each Initial Debenture shall have the right at such holder’s option, at any time prior to the
close of business on the earlier of (i) the Business Day immediately preceding the Maturity
Date of the Initial Debentures; (ii) if the Initial Debentures are called for redemption, on
the Business Day immediately preceding the date specified by the Corporation for redemption of
the Initial Debentures; or (iii) if subject to repurchase pursuant to a Change of Control, on
the Business Day immediately preceding the payment date, subject to the satisfaction of
certain conditions, by notice to the holders of Initial Debentures in accordance with Sections
2.4(d) and 4.3 (the earlier of which will be the “Time of Expiry” for the purposes of Article
6 in respect of the Initial Debentures), to convert any part, being $1,000 or an integral
multiple thereof, of the principal amount of a Debenture into Common Shares at the Conversion
Price in effect on the Date of Conversion. To the extent a redemption is a redemption in part
only of the Initial Debentures, such right to convert, if not exercised prior to the
applicable Time of Expiry, shall survive as to any Initial Debentures not redeemed or
converted and be applicable to the next succeeding Time of Expiry.

The Conversion Price in effect on the date hereof for each Common Share to be issued upon
the conversion of Initial Debentures shall be equal to $3.36 such that approximately
297.6190 Common Shares shall be issued for each $1,000 principal amount of Initial
Debentures so converted. Except as provided below, no adjustment in the number of Common
Shares to be issued upon conversion will be made for dividends or distributions on Common
Shares issuable upon conversion, the record date for the payment of which precedes the date
upon which the holder becomes a holder of Common Shares in accordance with Article 6, or for
interest accrued on Initial Debentures surrendered. No fractional Common Shares will be
issued, and holders will receive a cash payment in satisfaction of any fractional interest
based on the Current Market Price as of the Date of Conversion. The Conversion Price
applicable to, and the Common Shares, securities or other property receivable on the
conversion of, the Initial Debentures is subject to adjustment pursuant to the provisions of
Section 2.4(k) and Section 6.5.

The Conversion Price will not be adjusted for accrued interest, and holders converting
Debentures shall not receive accrued and unpaid interest on such Debentures to the Date of
Conversion.

 

13

 

Notwithstanding any other provisions of this Indenture, if a Debenture is surrendered for
conversion on an Interest Payment Date or during the five preceding Business Days, the
person or persons entitled to receive Common Shares in respect of the Debenture so
surrendered for conversion shall not become the holder or holders of record of such Common
Shares until the Business Day following such Interest Payment Date.

A Debenture in respect of which a holder has accepted a notice in respect of a Change of
Control Purchase Offer pursuant to the provisions of Section 2.4(j) may be surrendered for
conversion only if such notice is withdrawn in accordance with this Indenture.

	(g)	 	On redemption or maturity of the Initial Debentures, the Corporation may, at its option and
subject to the provisions of Section 4.6 and Section 4.10, as applicable, and subject to
regulatory approval, elect to satisfy its obligation to pay all or a portion of the aggregate
principal amount of the Initial Debentures due on redemption or maturity, together with all
accrued but unpaid interest thereon, by issuing and delivering to such holders of Initial
Debentures Freely Tradeable Common Shares pursuant to the provisions of Sections 4.6 and 4.10,
as applicable. If the Corporation elects to exercise such option, it shall provide details in
the Redemption Notice or deliver a maturity notice (the “Maturity Notice”) to the holders of
the Initial Debentures in substantially the form of Schedule “C” and provide the necessary
details.

	(h)	 	The Initial Debentures shall be issued in denominations of $1,000 and integral multiples of
$1,000. Each Initial Debenture and the certificate of the Trustee endorsed thereon shall be
issued in substantially the form set out in Schedule “A” (provided that Initial Debentures
issued in the form of Definitive Debentures shall be issued without the Global Note Legends
and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto),
with such insertions, omissions, substitutions or other variations as shall be required or
permitted by this Indenture, and may have imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as
may be required to comply with any law or with any rules or regulations pursuant thereto or
with any rules or regulations of any securities exchange or securities regulatory authority or
to conform with general usage, all as may be determined by the Board of Directors executing
such Initial Debenture in accordance with Section 2.7, as conclusively evidenced by their
execution of an Initial Debenture. Each Initial Debenture shall additionally bear such
distinguishing letters and numbers as the Trustee shall approve. Notwithstanding the
foregoing, an Initial Debenture may be in such other form or forms as may, from time to time,
be, approved by a resolution of the Board of Directors, or as specified in an Officers’
Certificate. The Initial Debentures may be engraved, lithographed, printed, mimeographed or
typewritten or partly in one form and partly in another.

The Initial Debentures shall be issued in the form of one or more Global Debentures and one
or more Definitive Debentures at the option of the Issuer.

The Global Debentures will be registered in the name of the Depository which, as of the date
hereof, shall be CDS Clearing and Depository Services Inc. (or any nominee of the
Depository). No beneficial holder will receive definitive certificates representing their
interest in Debentures except as provided in this Section 2.4(h) and Section 3.2. A Global
Debenture may be exchanged for Definitive Debentures, or transferred to and registered in
the name of a person other than the Depository for such Global Debentures or a nominee
thereof, as provided in Section 3.2.

The Definitive Debentures will be registered in the names of each holders thereof as
provided in Section 3.1. A Definitive Debenture may be exchanged, or transferred to and
registered in the name of a person other than the registered holder thereof, as provided in
Section 3.2.

	(i)	 	Upon and subject to the provisions of Article 10, the Corporation may elect, from time to
time, to satisfy its Interest Obligation on the Initial Debentures on any Interest Payment
Date (including, for greater certainty, following conversion or upon maturity or redemption)
by delivering: (i) cash, (ii) Freely Tradeable
Common Shares; or (iii) a combination of (i) and (ii) to the Trustee pursuant to the Common
Share Interest Payment Election.

 

14

 

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

	 	(i)	 	Within 30 days following the occurrence of a Change of Control, the Corporation
shall deliver to the Trustee, and the Trustee shall promptly deliver to the holders of
the Initial Debentures, a notice stating that there has been a Change of Control and
specifying the date on which such Change of Control occurred and the circumstances or
events giving rise to such Change of Control (a “Change of Control Notice”) together
with an offer in writing (the “Change of Control Purchase Offer”) to purchase, on the
Change of Control Purchase Date (as defined below), all (or any portion actually
tendered to such offer) of the Initial Debentures then outstanding from the holders
thereof made in accordance with the requirements of Applicable Securities Legislation
at a price per Initial Debenture equal to 100% of the principal amount thereof (the
“Offer Price”) plus accrued and unpaid interest on such Initial Debentures up to, but
excluding, the Change of Control Purchase Date (collectively, the “Total Offer Price”).
If such Change of Control Purchase Date is after a record date for the payment of
interest on the Initial Debentures but on or prior to an Interest Payment Date, then
the interest payable on such date will be paid to the holder of record of the
Debentures on the relevant record date. The “Change of Control Purchase Date” shall be
the date that is 30 Business Days after the date that the Change of Control Notice and
Change of Control Purchase Offer are delivered to holders of Initial Debentures.

	 	(ii)	 	If 90% or more in aggregate principal amount of Initial Debentures outstanding
on the date the Corporation provides the Change of Control Notice and the Change of
Control Purchase Offer to holders of the Initial Debentures have been tendered for
purchase pursuant to the Change of Control Purchase Offer on the expiration thereof,
the Corporation has the right upon written notice provided to the Trustee within 10
days following the expiration of the Change of Control Purchase Offer, to redeem all
the Initial Debentures remaining outstanding on the expiration of the Change of Control
Purchase Offer at the Total Offer Price as at the Change of Control Purchase Date (the
“90% Redemption Right”).

	 	(iii)	 	Upon receipt of notice that the Corporation has exercised or is exercising the
90% Redemption Right and is acquiring the remaining Initial Debentures, the Trustee
shall promptly provide written notice to each Debentureholder that did not previously
accept the Offer that:

	 	(A)	 	the Corporation has exercised the 90% Redemption Right and is
purchasing all outstanding Initial Debentures effective on the expiry of the
Change of Control Purchase Offer at the Total Offer Price, and shall include a
calculation of the amount payable to such holder as payment of the Total Offer
Price as at the Change of Control Purchase Date;

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

	 	(C)	 	the rights of such holder under the terms of the Initial
Debentures and this Indenture cease effective as of the date of expiry of the
Change of Control Purchase Offer provided the Corporation has, on or before the
time of notifying the Trustee of the exercise of the 90% Redemption Right, paid
the Total Offer Price to, or to the order of, the Trustee and thereafter the
Initial Debentures shall not be considered to be outstanding and the holder
shall not have any right except to receive such holder’s Total Offer Price upon
surrender and delivery of such holder’s Initial Debentures in accordance with
the Indenture.

 

15

 

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

	 	(v)	 	In the event that one or more of such Initial Debentures being purchased in
accordance with this Section 2.4(j) becomes subject to purchase in part only, upon
surrender of such Initial Debentures for payment of the Total Offer Price, the
Corporation shall execute and the Trustee shall certify and deliver without charge to
the holder thereof or upon the holder’s order, one or more new Initial Debentures for
the portion of the principal amount of the Initial Debentures not purchased.

	 	(vi)	 	Initial Debentures for which holders have accepted the Change of Control
Purchase Offer and Initial Debentures which the Corporation has elected to redeem in
accordance with this Section 2.4(j) shall become due and payable at the Total Offer
Price on the Change of Control Purchase Date, in the same manner and with the same
effect as if it were the date of maturity specified in such Initial Debentures,
anything therein or herein to the contrary notwithstanding, and from and after the
Change of Control Purchase Date, if the money necessary to purchase or redeem, or the
Common Shares necessary to purchase or redeem, the Initial Debentures shall have been
deposited as provided in this Section 2.4(j) and affidavits or other proofs
satisfactory to the Trustee as to the publication and/or mailing of such notices shall
have been lodged with it, interest on the Initial Debentures shall cease. If any
question shall arise as to whether any notice has been given as above provided and such
deposit made, such question shall be decided by the Trustee whose decision shall be
final and binding upon all parties in interest.

	 	(vii)	 	In case the holder of any Initial Debenture to be purchased or redeemed in
accordance with this Section 2.4(j) shall fail on or before the Change of Control
Purchase Date to so surrender such holder’s Initial Debenture or shall not within such
time accept payment of the monies payable, to take delivery of certificates
representing such Common Shares issuable in respect thereof, or give such receipt
therefor, if any, as the Trustee may require, such monies may be set aside in trust, or
such certificates may be held in trust, without interest, either in the deposit
department of the Trustee or in a chartered bank, and such setting aside shall for all
purposes be deemed a payment to the Debentureholder of the sum or the Common Shares so
set aside and the Debentureholder shall have no other right except to receive payment
of the monies so paid and deposited, or take delivery of the certificates so deposited,
or both, upon surrender and delivery of such holder’s Initial Debenture. In the event
that any money or certificates representing Common Shares required to be deposited
hereunder with the Trustee or any depository or paying agent on account of principal,
premium, if any, or interest, if any, on Initial Debentures issued hereunder shall
remain so deposited for a period of six years from the Change of Control Purchase Date,
then such monies, or certificates representing Common Shares, together with any
accumulated interest thereon, or any distributions paid thereon, shall at the end of
such period be paid over or delivered over by the Trustee or such depository or paying
agent to the Corporation and the Trustee shall not be responsible to Debentureholders
for any amounts owing to them. Notwithstanding the foregoing, the Trustee will pay any
remaining funds deposited hereunder on that date which is five years less one day after
the Change of Control Purchase Date (the “Unclaimed Funds Return Date”) to the
Corporation upon receipt from the Corporation of an unconditional letter of credit from
a Canadian chartered bank in an amount equal to or in excess of the amount of the
remaining funds. If the remaining funds are paid to the Corporation prior to the
Unclaimed Funds Return
Date, the Corporation shall reimburse the Trustee for any amounts required to be
paid by the Trustee to a holder of a Debenture pursuant to the Change of Control
Purchase Offer after the date of such payment of the remaining funds to the
Corporation but prior to the Unclaimed Funds Return Date.

 

16

 

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

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

	 	(i)	 	In the event of the occurrence of a Cash Change of Control, then subject to
regulatory approval, during the period (the “Cash Change of Control Conversion Period”)
beginning 10 trading days before the anticipated effective date of the Change of
Control (the “Effective Date”) and ending on the date that is 30 days after the Change
of Control Notice and Change of Control Purchase Offer are delivered or mailed to
holders of Initial Debentures in accordance with Section 2.4(j), holders of Initial
Debentures will be entitled to convert their Initial Debentures, in whole or in part,
and receive, in addition to the number of Common Shares (or cash or other property or
securities in substitution therefor) that such holders are entitled to receive upon
such conversion in accordance with the provisions and conditions of Section 2.4(f),
2.4(k)(v) and (vi) and Article 6, an additional number of Common Shares (or cash or
other property or securities in substitution therefor) per $1,000 principal amount of
Initial Debentures converted as set forth below (the “Make Whole Premium”).

	 	(ii)	 	The number of additional Common Shares per $1,000 principal amount of Initial
Debentures constituting the Make Whole Premium (the “Make Whole Premium Shares”) shall
be determined by reference to the table following subsection (iii) below, based on the
Effective Date and the price (the “Stock Price”) paid per Common Share in the
transaction constituting the Change of Control. If holders of Common Shares receive
only cash in the transaction constituting the Change of Control, the Stock Price shall
be the cash amount paid per Common Share. Otherwise, the Stock Price shall be equal to
the Current Market Price of the Common Shares immediately preceding the Effective Date;
provided that for the purposes of this Section 2.4(k)(ii) and the determination of
Current Market Price, the applicable period shall be calculated based on the 5
consecutive trading days ending 5 trading days preceding the applicable date.
Notwithstanding the foregoing, in no circumstances can the effective Conversion Price
(calculated by dividing $1,000 by the number of Common Shares issuable upon conversion,
including the maximum number of Make Whole Premium Shares hereunder) be less than the
maximum permitted discounted price permitted by the Toronto Stock Exchange at the time
of announcement of the Offering ($1.99), prior to any adjustments that may be made to
the Stock Price to correspond to an adjustment to the Conversion Price under this
Indenture.

	 	(iii)	 	The following table shows the number of Make Whole Premium Shares for each
hypothetical Stock Price and Effective Date set forth below, expressed as additional
Common Shares per $1,000 principal amount of Debentures. For the avoidance of doubt,
the Corporation shall not be obliged to pay the Make Whole Premium otherwise than by
issuance of Common Shares upon conversion of the Initial Debentures in accordance with
the provisions and conditions of Section 2.4(f) and Article 6. If the Stock Price or
Effective Date are not set forth on the table then: (i) if the actual Stock Price on
the Effective Date is between two Stock Prices on the table or the Effective Date is
between two Effective Dates on the table, the number of Make Whole Premium Shares will
be determined by a straight-line interpolation between the amounts set forth for the
two Stock Prices and the two Effective Dates on the table based on a 365-day year, as
applicable, (ii) if the Stock Price on the Effective Date exceeds $10.00 per Common
Share, subject to adjustment as set forth herein, the number of Make Whole Premium
Shares to be issued will be zero, and (iii) if the Stock Price on the Effective Date is
less than $2.42 per Common Share, subject to adjustment as set forth herein, the number
of Make Whole Premium Shares to be issued will be zero.

 

17

 

Make Whole Premium Upon a Cash Change of Control

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

Stock Price

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	$2.42	 	 	$2.60	 	 	$2.75	 	 	$3.00	 	 	$3.50	 	 	$4.00	 	 	$5.00	 	 	$6.00	 	 	$8.00	 	 	$10.00	 
	06/09/11
	 	 	115.6041	 	 	 	115.6041	 	 	 	115.6041	 	 	 	88.4167	 	 	 	67.5283	 	 	 	53.5930	 	 	 	36.6593	 	 	 	27.3998	 	 	 	18.0363	 	 	 	13.5151	 
	06/30/12
	 	 	115.6041	 	 	 	103.6951	 	 	 	92.5224	 	 	 	77.6250	 	 	 	56.0238	 	 	 	42.1506	 	 	 	26.2394	 	 	 	18.3551	 	 	 	11.2884	 	 	 	8.2878	 
	06/30/13
	 	 	115.6041	 	 	 	94.7031	 	 	 	82.2303	 	 	 	65.8308	 	 	 	42.3989	 	 	 	28.1568	 	 	 	13.5129	 	 	 	7.7220	 	 	 	3.9503	 	 	 	2.8302	 
	06/30/14
	 	 	115.6041	 	 	 	90.7485	 	 	 	76.2190	 	 	 	56.6779	 	 	 	27.0782	 	 	 	9.6261	 	 	 	0.3011	 	 	 	—	 	 	 	—	 	 	 	—	 
	06/30/15
	 	 	115.6041	 	 	 	89.8473	 	 	 	74.6060	 	 	 	54.2371	 	 	 	25.2602	 	 	 	8.8335	 	 	 	0.2744	 	 	 	—	 	 	 	—	 	 	 	—	 
	06/30/16
	 	 	115.6041	 	 	 	86.9288	 	 	 	65.9534	 	 	 	35.6557	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 

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

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

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

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

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

	(m)	 	Notwithstanding Section 2.4(f) and subject to Applicable Securities Legislation, upon the
conversion of the Initial Debentures by a holder thereof in accordance with Article 6, in lieu
of delivering Common Shares, the Corporation may elect to pay the holder cash at the option of
the Corporation (the “Cash Conversion Option”). If the Corporation elects the Cash Conversion
Option:

	 	(i)	 	it will notify the Trustee in accordance with Article 14:

	 	(A)	 	for conversions that occur on or after the 12th trading day
prior to the Maturity Date, by notice to all registered holders of Initial
Debentures delivered prior to such trading day (which will apply to all such
conversions of Initial Debentures); and

	 	(B)	 	in all other cases, on the business day immediately following
the related Date of Conversion;

 

18

 

	 	(ii)	 	the Corporation shall pay cash to the converting holder of Initial Debentures
in an amount equal to the sum of the Daily Conversion Values for each of the 10
consecutive trading days during the related Observation Period;

	 	(iii)	 	the Corporation shall pay the cash to the Trustee, on behalf of the converting
holder of the Initial Debentures, no later than the third Business Day following the
last day of the related Observation Period;

	 	(iv)	 	such election by the Corporation of the Cash Conversion Option in respect of
the converting holder of Initial Debentures shall be irrevocable; and

	 	(v)	 	if the notice of the Corporation’s election of the Cash Conversion Option has
not been delivered in accordance with Section 2.4(m)(i), the Corporation will no longer
have the right to elect the Cash Conversion Option and the Corporation will satisfy its
obligations under Article 6 through the delivery of Common Shares in accordance with
Article 6 of the Indenture.

Notwithstanding any election by the Corporation to invoke or suspend the Cash Conversion
Option or any election by a holder of Initial Debentures to convert Initial Debentures into
Common Shares, the Cash Conversion Option shall be immediately suspended if and for so long
as any default, event of default or acceleration has occurred and is continuing under any of
the Senior Indebtedness or if the payment of such Cash Conversion Option would reasonably be
expected to result in such a default or event of default.

2.5 Certification and Delivery of Additional Debentures

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

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

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

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

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

 

19

 

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

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

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

	(d)	 	an Officers’ Certificate (which Officers’ Certificate shall be in such form that satisfies
all applicable laws) certifying that the Corporation is not in default under this Indenture,
that the terms and conditions for the certification and delivery of Additional Debentures
(including those set forth in Section 15.5), have been complied with subject to the delivery
of any documents or instruments specified in such Officers’ Certificate and that no Event of
Default exists or will exist upon such certification and delivery.

2.6 Issue of Global Debentures

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

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

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

(iii) bear a legend substantially to the following effect:

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

TRANSFERS OF THIS DEBENTURE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF CDS & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE. ”

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

 

20

 

2.7 Execution of Debentures

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

2.8 Certification

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

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

2.9 Interim Debentures or Certificates

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

2.10 Mutilation, Loss, Theft or Destruction

In case any of the Debentures issued hereunder shall become mutilated or be lost, stolen or
destroyed, the Corporation, in its discretion, may issue, and thereupon the Trustee shall certify
and deliver, a new Debenture upon surrender and cancellation of the mutilated Debenture, or in the
case of a lost, stolen or destroyed Debenture, in lieu of and in substitution for the same, and the
substituted Debenture shall be in a form approved by the Trustee and shall be entitled to the
benefits of this Indenture and rank equally in accordance with its terms with all other Debentures
issued or to be issued hereunder. In case of loss, theft or destruction the applicant for a
substituted
Debenture shall furnish to the Corporation and to the Trustee such evidence of the loss, theft
or destruction of the Debenture as shall be satisfactory to them in their discretion and shall also
furnish an indemnity and surety bond satisfactory to them in their discretion. The applicant shall
pay all reasonable expenses incidental to the issuance of any substituted Debenture.

 

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2.11 Concerning Interest

	(a)	 	All Debentures issued hereunder, whether originally or upon exchange or in substitution for
previously issued Debentures which are interest bearing, shall bear interest (i) from and
including their issue date, or (ii) from and including the last Interest Payment Date to which
interest shall have been paid or made available for payment on the outstanding Debentures of
that series, whichever shall be the later, or, in respect of Debentures subject to a Periodic
Offering, from and including their issue date or from and including the last Interest Payment
Date to which interest shall have been paid or made available for payment on such Debentures,
in all cases, to and excluding the next Interest Payment Date.

	(b)	 	Unless otherwise specifically provided in the terms of the Debentures of any series, interest
for any period shall be computed on the basis of a year of 365 days and the actual number of
days elapsed in such period. With respect to any series of Debentures, for the purposes
disclosure under the Interest Act (Canada), whenever interest is computed on the basis of a
year (the “deemed year”) which contains fewer days than the actual number of days in the
calendar year of calculation, such rate of interest shall be expressed as a yearly rate for
purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual
number of days in such calendar year of calculation and dividing it by the number of days in
the deemed year.

2.12 Debentures to Rank Pari Passu

The Debentures will be direct unsecured obligations of the Corporation. Each Debenture of the
same series of Debentures will rank pari passu with each other Debenture of the same series
(regardless of their actual date or terms of issue) and, subject to statutory preferred exceptions,
with all other present and future subordinated and unsecured indebtedness of the Corporation, other
than Senior Indebtedness.

2.13 Payments of Amounts Due on Maturity

Except as may otherwise be provided herein or in any supplemental indenture in respect of any
series of Debentures and subject to Section 4.10, payments of amounts due upon maturity of the
Debentures will be made in the following manner. The Corporation will establish and maintain with
the Trustee a Maturity Account for each series of Debentures. Each such Maturity Account shall be
maintained by and be subject to the control of the Trustee for the purposes of this Indenture. On
or before 11:00 a.m. (Calgary time) on the Business Day immediately prior to each Maturity Date for
Debentures outstanding from time to time under this Indenture, the Corporation will deliver to the
Trustee a certified cheque or wire transfer for deposit in the applicable Maturity Account in an
amount sufficient to pay the cash amount payable in respect of such Debentures (including the
principal amount together with any accrued and unpaid interest thereon less any tax required by law
to be deducted), provided the Corporation may elect to satisfy this requirement by providing the
Trustee with a cheque for such amounts required under this Section 2.13 post-dated to the
applicable Maturity Date. The Trustee, on behalf of the Corporation, will pay to each holder
entitled to receive payment the principal amount of and premium (if any) and accrued and unpaid
interest on the Debenture, upon surrender of the Debenture at any branch of the Trustee designated
for such purpose from time to time by the Corporation and the Trustee. The delivery of such funds
to the Trustee for deposit to the applicable Maturity Account will satisfy and discharge the
liability of the Corporation for the Debentures to which the delivery of funds relates to the
extent of the amount delivered (plus the amount of any tax deducted as aforesaid) and such
Debentures will thereafter to that extent not be considered as outstanding under this Indenture and
such holder will have no other right in regard thereto other than to receive out of the money so
delivered or made available the amount to which it is entitled.

 

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2.14 U.S. Legend on the Debentures

	(a)	 	The Debentures and the Common Shares issuable upon conversion thereof have not been and will
not be registered under the 1933 Act. All Initial Debentures originally issued and sold in the
United States in reliance on an exemption from registration under Rule 144A under the 1933 Act
shall bear the following legend (the “U.S. Legend”):

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR UNDER ANY STATE SECURITIES LAWS.
THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF IVANHOE ENERGY
INC. (THE “CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH
RULE 904 OF REGULATION S UNDER THE 1933 ACT, (C) IN ACCORDANCE WITH (I) RULE 144A, IF
AVAILABLE, OR (II) RULE 144, IF AVAILABLE, AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS, OR (D) UNDER AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY
NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
CANADA.;”

2.15 Payment of Interest

The following provisions shall apply to Debentures, except as otherwise provided in Section
2.4(b) or specified in a resolution of the Board of Directors, an Officers’ Certificate or a
supplemental indenture relating to a particular series of Additional Debentures:

	(a)	 	As interest becomes due on each Debenture (except, subject to certain exceptions set forth
herein including in Section 2.4(b), on conversion or on redemption, when interest may at the
option of the Corporation be paid upon surrender of such Debenture), the Corporation, either
directly or through the Trustee or any agent of the Trustee, shall send or forward by prepaid
ordinary mail, electronic transfer of funds or such other means as may be agreed to by the
Trustee, payment of such interest (less any tax required to be withheld therefrom) to the
order of the registered holder of such Debenture appearing on the registers maintained by the
Trustee at the close of business on the fifth Business Day prior to the applicable Interest
Payment Date and addressed to the holder at the holder’s last address appearing on the
register, unless such holder otherwise directs. If payment is made by cheque, such cheque
shall be forwarded at least three days prior to each date on which interest becomes due and if
payment is made by other means (such as electronic transfer of funds, provided the Trustee
must receive confirmation of receipt of funds prior to being able to wire funds to holders),
such payment shall be made in a manner whereby the holder receives credit for such payment on
the date such interest on such Debenture becomes due. The mailing of such cheque or the making
of such payment by other means shall, to the extent of the sum represented thereby, plus the
amount of any tax withheld as aforesaid, satisfy and discharge all liability for interest on
such Debenture, unless in the case of payment by cheque, such cheque is not paid at par on
presentation. In the event of non-receipt of any cheque for or other payment of interest by
the person to whom it is so sent as aforesaid, the Corporation will issue to such person a
replacement cheque or other payment for a like amount upon being furnished with such evidence
of non-receipt as it shall reasonably require and upon being indemnified to its satisfaction.
Notwithstanding the foregoing, if the Corporation is prevented by circumstances beyond its
control (including, without limitation, any interruption in mail service) from making payment
of any interest due on each Debenture in the manner provided above, the Corporation may make
payment of such interest or make such interest available for payment in any other manner
acceptable to the Trustee with the same effect as though payment had been made in the manner
provided above.

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

 

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ARTICLE 3

REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP

3.1 Definitive Debentures

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

	(b)	 	No transfer of a Definitive Debenture shall be valid unless made on such register referred to
in Section 3.1(a) by the registered holder or such holder’s executors, administrators or other
legal representatives or an attorney duly appointed by an instrument in writing in form and
executed in a manner satisfactory to the Trustee or other registrar upon surrender of the
Debentures together with a duly executed form of transfer acceptable to the Trustee and upon
compliance with such other reasonable requirements as the Trustee or other registrar may
prescribe, or unless the name of the transferee shall have been noted on the Debenture by the
Trustee or other registrar. Subject to the foregoing, the provisions of Section 3.2(e) shall
apply to the transfer and exchange of Definitive Debentures.

3.2 Global Debentures

	(a)	 	With respect to each series of Debentures issuable in whole or in part as one or more Global
Debentures, the Corporation shall cause to be kept by and at the principal offices of the
Trustee in Calgary, Alberta and Toronto, Ontario and by the Trustee or such other registrar as
the Corporation, with the approval of the Trustee, may appoint at such other place or places,
if any, as the Corporation may designate with the approval of the Trustee, a register in which
shall be entered the name and address of the holder of each such Global Debenture (being the
Depository, or its nominee, for such Global Debenture) as holder thereof and particulars of
the Global Debenture held by it, and of all transfers thereof.

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

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

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

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

 

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

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

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

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

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

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

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

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

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

	(e)	 	Notwithstanding any other provisions of this Indenture or the Debentures, transfers and
exchanges of Definitive Debentures and beneficial interests in Global Debentures shall be made
in accordance with this subsection 3.2(e).

	 	(i)	 	Transfer of Beneficial Interests in the Same Global Debenture. Except as may be
required by the Trustee or the Depository, no written orders or instructions shall be
required to be delivered to the Trustee to effect a transfer of a beneficial interest
in a Global Debenture to Persons who take delivery thereof in the form of a beneficial
interest in the same Global Debenture.

 

25

 

	 	(ii)	 	Transfer and Exchange of Beneficial Interests in a Restricted Global Debenture
for Beneficial Interests in an Unrestricted Global Debenture. A beneficial interest in
a Restricted Global Debenture may be exchanged by any holder thereof for a beneficial
interest in an Unrestricted Global Debenture or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Debenture if the Trustee receives the following:

	 	(A)	 	if the holder of such beneficial interest in a Restricted
Global Debenture proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Debenture, a certificate from
such holder in the form of Schedule F hereto, including the certifications in
item (1)(a) thereof; or

	 	(B)	 	if the holder of such beneficial interest in a Restricted
Global Debenture proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Debenture, a certificate from such holder in the form of
Schedule E hereto, including the certifications in items (2) or (3) thereof;

and, in each such case set forth in this subsection 3.2(e)(ii), if the Corporation
so requests, an opinion of counsel in form reasonably acceptable to the Corporation
to the effect that such transfer or exchange is in compliance with the 1933 Act.

	 	(iii)	 	Transfer and Exchange of Beneficial Interests in an Unrestricted Global
Debenture for Beneficial Interests in a Restricted Global Debenture. A beneficial
interest in an Unrestricted Global Debenture may be exchanged by any holder thereof for
a beneficial interest in a Restricted Global Debenture or transferred to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted Global
Debenture if the Trustee receives the following:

	 	(A)	 	if the holder of such beneficial interest in an Unrestricted
Global Debenture
proposes to exchange such beneficial interest for a beneficial interest in a
Restricted Global Debenture, a certificate from such holder in the form of
Schedule F hereto, including the certifications in item (2) thereof; or

	 	(B)	 	if the holder of such beneficial interest in an Unrestricted
Global Debenture
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest in a Restricted Global
Debenture, a certificate from such holder in the form of Schedule E hereto,
including the certifications in item (1) thereof.

	 	(iv)	 	Transfer of Restricted Definitive Debenture for Restricted Definitive
Debenture. A Restricted Definitive Debenture may be transferred to a Person who takes
delivery thereof in the form of a Restricted Definitive Debenture if the Trustee
receives a certificate to the effect set forth in Schedule E hereto, including the
certifications in item (1) thereof.

	 	(v)	 	Transfer and Exchange of Restricted Definitive Debentures for Unrestricted
Definitive Debentures. A Restricted Definitive Debenture may be exchanged by the holder
thereof for an Unrestricted Definitive Debenture or transferred to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Debenture if the Trustee
receives the following:

	 	(A)	 	if the holder of such Restricted Definitive Debenture proposes
to exchange such Debenture for an Unrestricted Definitive Debenture, a
certificate from such holder in the form of Schedule F hereto, including the
certifications in item (1)(b) thereof; or

	 	(B)	 	if the holder of such Restricted Definitive Debenture proposes
to transfer such Debenture to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Debenture, a certificate from such holder in
the form of Schedule E hereto, including the certifications in item (2) or (3)
thereof;
and, in each such case set forth in this subsection 3.2(e)(v), if the Corporation
so requests, an opinion of counsel in form reasonably acceptable to the Corporation
to the effect that such transfer or exchange is in compliance with the 1933 Act.

 

26

 

3.3 Transferee Entitled to Registration

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

3.4 No Notice of Trusts

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

3.5 Registers Open for Inspection

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

3.6 Exchanges of Debentures

	(a)	 	Subject to Section 3.1, 3.2 and 3.7, Debentures in any authorized form or denomination, other
than Global Debentures, may be exchanged for Debentures in any other authorized form or
denomination, of the same series and date of maturity, bearing the same interest rate and of
the same aggregate principal amount as the Debentures so exchanged.

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

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

3.7 Closing of Registers

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

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

 

27

 

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

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

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

3.8 Charges for Registration, Transfer and Exchange

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

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

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

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

	(d)	 	for any exchange of any Debenture resulting from a partial redemption under Section 4.2.

3.9 Ownership of Debentures

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

	(b)	 	The registered holder for the time being of any registered Debenture shall be entitled to the
principal, premium, if any, and/or interest evidenced by such instruments, respectively, free
from all equities or rights of set-off or counterclaim between the Corporation and the
original or any intermediate holder thereof and all persons may act accordingly and the
receipt of any such registered holder for any such principal, premium or interest shall be a
good discharge to the Trustee, any registrar and to the Corporation for the same and none
shall be bound to inquire into the title of any such registered holder.

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

 

28

 

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

ARTICLE 4

REDEMPTION AND PURCHASE OF DEBENTURES

4.1 Applicability of Article

Subject to regulatory approval, Section 2.4(d) and Article 5, the Corporation shall have the
right at its option to redeem, either in whole at any time or in part from time to time before
maturity, either by payment of money, by issuance of Freely Tradeable Common Shares as provided in
Section 4.6 or any combination thereof, any Debentures issued hereunder of any series which by
their terms are made so redeemable (subject, however, to any applicable restriction on the
redemption of Debentures of such series) at such rate or rates of premium, if any, and on such date
or dates and in accordance with such other provisions as shall have been determined at the time of
issue of such Debentures and as shall have been expressed in this Indenture, in the Debentures, in
an Officers’ Certificate, or in a supplemental indenture authorizing or providing for the issue
thereof, or in the case of Additional Debentures issued pursuant to a Periodic Offering, in the
Written Direction of the Corporation requesting the certification and delivery thereof.

Subject to regulatory approval and Article 5, the Corporation shall also have the right at its
option to repay, either in whole or in part, on maturity, either by payment of money in accordance
with Section 2.13, by issuance of Freely Tradeable Common Shares as provided in Section 4.10 or any
combination thereof, any Debentures issued hereunder of any series which by their terms are made so
repayable on maturity (subject however, to any applicable restriction on the repayment of the
principal amount of the Debentures of such series) at such rate or rates of premium, if any, and on
such date or dates and in accordance with such other provisions as shall have been determined at
the time of issue of such Debenture and shall have been expressed in this Indenture, in the
Debentures, in an Officers’ Certificate, or in a supplemental indenture authorizing or providing
for the issue thereof, or in the case of Additional Debentures issued pursuant to a Periodic
Offering, in the Written Direction of the Corporation requesting the certification and delivery
thereof.

4.2 Partial Redemption

If less than all the Debentures of any series for the time being outstanding are at any time
to be redeemed, or if a portion of the Debentures being redeemed are being redeemed for cash and a
portion of such Debentures are being redeemed by the payment of Freely Tradeable Common Shares
pursuant to Section 4.6, the Debentures to be so redeemed shall be selected by the Trustee on a pro
rata basis to the nearest multiple of $1,000 in accordance with the principal amount of the
Debentures registered in the name of each holder or in such other manner as the Trustee deems
equitable, subject to the approval of the Toronto Stock Exchange or such other exchange on which
the Debentures are then listed, as may be required from time to time. Unless otherwise specifically
provided in the terms of any series of Debentures, no Debenture shall be redeemed in part unless
the principal amount redeemed is $1,000 or a multiple thereof. For this purpose, the Trustee may
make, and from time to time vary, regulations with respect to the manner in which such Debentures
may be drawn for redemption and regulations so made shall be valid and binding upon all holders of
such Debentures notwithstanding that as a result thereof one or more of such Debentures may become
subject to redemption in part only or for cash only. In the event that one or more of such
Debentures becomes subject to redemption in part only, upon surrender of any such Debentures for
payment of the Redemption Price, together with interest accrued to but excluding the Redemption
Date, the Corporation shall execute and the Trustee shall certify and deliver without charge to the
holder thereof or upon the holder’s order one or more new Debentures for the unredeemed part of the
principal amount of the Debenture or Debentures so surrendered or, with respect to a Global
Debenture, the Depository shall make notations on the Global Debenture of the principal amount
thereof so redeemed. Unless the context otherwise requires, the terms “Debenture” or “Debentures”
as used in this Article 4 shall be deemed to mean or include any part of the principal amount of
any Debenture which in accordance with the foregoing provisions has become subject to redemption.

 

29

 

4.3 Notice of Redemption

Notice of redemption (the “Redemption Notice”) of any series of Debentures shall be given to
the holders of the Debentures so to be redeemed not more than 60 days nor less than 30 days prior
to the date fixed for redemption (the “Redemption Date”) in the manner provided in Section 14.2.
Every such notice shall specify the aggregate principal amount of Debentures called for redemption,
the Redemption Date, the Redemption Price and the places of payment and shall state that interest
upon the principal amount of Debentures called for redemption shall cease to be payable from and
after the Redemption Date. In addition, unless all the outstanding Debentures are to be redeemed,
the Redemption Notice shall specify:

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

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

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

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

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

4.4 Debentures Due on Redemption Dates

Notice having been given as aforesaid, all the Debentures so called for redemption shall
thereupon be and become due and payable at the Redemption Price, together with accrued interest to
but excluding the Redemption Date, on the Redemption Date specified in such notice, in the same
manner and with the same effect as if it were the date of maturity specified in such Debentures,
anything therein or herein to the contrary notwithstanding, and from and after such Redemption
Date, if the monies necessary to redeem, or the Common Shares to be issued to redeem, such
Debentures shall have been deposited as provided in Section 4.5 and affidavits or other proof
satisfactory to the Trustee as to the publication and/or mailing of such notices shall have been
lodged with it, interest upon the Debentures shall cease. If any question shall arise as to whether
any notice has been given as above provided and such deposit made, such question shall be decided
by the Trustee whose decision shall be final and binding upon all parties in interest.

4.5 Deposit of Redemption Monies or Common Shares

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

 

30

 

4.6 Right to Repay Redemption Price in Common Shares

	(a)	 	Subject to the receipt of any required regulatory approvals and the other provisions of this
Section 4.6, the Corporation may, at its option, in exchange for or in lieu of paying the
Redemption Price in money, elect to satisfy its obligation to pay all or any portion of the
Redemption Price by issuing and delivering to holders on the Redemption Date that number of
Freely Tradeable Common Shares obtained by dividing the Redemption Price (or applicable
portion thereof to be satisfied by the issuance and delivery of Freely Tradeable Common
Shares) by 95% of the then Current Market Price of the Common Shares (which will be calculated
based on the 20 consecutive trading days ending five days before the Redemption Date) (the
“Common Share Redemption Right”).

	(b)	 	The Corporation shall exercise the Common Share Redemption Right by so specifying in the
Redemption Notice and shall also specify the aggregate principal amount of Debentures in
respect of which it is exercising the Common Share Redemption Right in such notice.

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

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

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

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

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

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

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

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

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

 

31

 

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

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

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

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

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

	(j)	 	If the Corporation elects to satisfy its obligation to pay all or any portion of the
Redemption Price by issuing Freely Tradeable Common Shares in accordance with this Section 4.6
and if the Redemption Price (or any portion thereof) to which a holder is entitled is subject
to withholding taxes and the amount of the cash payment of the Redemption Price, if any, is
insufficient to satisfy such withholding taxes, the Trustee, on the Written Direction of the
Corporation but for the account of the holder, shall sell, through the investment banks,
brokers or dealers selected by the Corporation, out of the Freely Tradeable Common Shares
issued by the Corporation for this purpose, such number of Freely Tradeable Common Shares that
together with the cash payment of the Redemption Price, if any, is sufficient to yield net
proceeds (after payment of all costs) to cover the amount of taxes required to be withheld,
and shall remit same on behalf of the Corporation to the proper tax authorities within the
period of time prescribed for this purpose under applicable laws.

	(k)	 	Each certificate representing Freely Tradeable Common Shares issued in payment of the
Redemption Price of Debentures bearing the U.S. Legend, as well as all certificates issued in
exchange for or in substitution of the foregoing securities, shall bear the U.S. Legend;
provided that if the Freely Tradeable Common Shares are being sold in compliance with the
requirements of Rule 904 of Regulation S, and provided that the Corporation is a “foreign
issuer” within the meaning of Regulation S at the time of sale, the U.S. Legend may be removed
by providing a declaration to the Trustee, as registrar and transfer agent for the

 

32

 

 Common
Shares, substantially as set forth in Schedule “E” hereto (or as the Corporation or the
Trustee may prescribe from time to time), together with any other evidence reasonably
requested by the Corporation or Trustee, which evidence may include an opinion
of counsel of recognized standing, in form and substance reasonably
satisfactory to the Corporation or the Trustee, to the effect that the U.S.
Legend is no longer required pursuant to the requirements of the 1933 Act or
applicable state securities laws; and provided further that, if any such
securities are being sold within the United States in accordance with Rule 144
under the 1933 Act, the U.S. Legend may be removed by delivery to the Trustee,
as registrar and transfer agent for the Common Shares, of an opinion of
counsel, of recognized standing, or other evidence reasonably satisfactory to
the Corporation, that the U.S. Legend is no longer required under applicable
requirements of the 1933 Act or applicable state securities laws. Provided
that the Trustee obtains confirmation from the Corporation that such counsel
is satisfactory to it, it shall be entitled to rely on such opinion of counsel
without further inquiry.

4.7 Failure to Surrender Debentures Called for Redemption

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

4.8 Cancellation of Debentures Redeemed

Subject to the provisions of Sections 4.2 and 4.9 as to Debentures redeemed or purchased in
part, all Debentures redeemed and paid under this Article 4 shall forthwith be delivered to the
Trustee and cancelled and no Debentures shall be issued in substitution for those redeemed.

4.9 Purchase of Debentures by the Corporation

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

 

33

 

If, upon an invitation for tenders, more Debentures are tendered at the same lowest price than
the Corporation is prepared to accept, the Debentures to be purchased by the Corporation shall be
selected by the Trustee on a pro rata basis or in such other manner as consented to by the Toronto
Stock Exchange or such other exchange on which the Debentures are then listed which the Trustee
considers appropriate, from the Debentures tendered by each tendering Debentureholder who tendered
at such lowest price. For this purpose the Trustee may make, and from time to time amend,
regulations with respect to the manner in which Debentures may be so selected, and regulations so
made shall be valid and binding upon all Debentureholders, notwithstanding the fact that as a
result thereof one or more of such Debentures become subject to purchase in part only. The holder
of a Debenture of which a part only is purchased, upon surrender of such Debenture for payment,
shall be entitled to receive, without expense to such holder, one or more new Debentures for the
unpurchased part so surrendered, and the Trustee shall certify and deliver such new Debenture or
Debentures upon receipt of the Debenture so surrendered or, with respect to a Global Debenture, the
Depository shall make notations on the Global Debenture of the principal amount thereof so
purchased.

4.10 Right to Repay Principal Amount in Common Shares

	(a)	 	Subject to the receipt of any required regulatory approvals and the other provisions of this
Section 4.10, the Corporation may, at its option, in exchange for or in lieu of repaying the
Debentures in money, elect to satisfy its obligation to repay the principal amount of all or
any portion of the principal amount of the Debentures outstanding by issuing and delivering to
holders on the Maturity Date of such Debentures that number of Freely Tradeable Common Shares
obtained by dividing the principal amount of the Debentures (or applicable portion thereof to
be satisfied by the issuance and delivery of Freely Tradeable Common Shares) together with all
accrued and unpaid interest thereon by 95% of the then Current Market Price of the Common
Shares (which will be calculated based on the 20 consecutive trading days ending five trading
days before the Maturity Date) (the “Common Share Repayment Right”); provided that all accrued
and unpaid interest thereon shall be payable to the holder in cash.

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

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

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

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

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

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

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

 

34

 

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

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

	(d)	 	In the event that the Corporation duly exercises its Common Share Repayment Right, upon
presentation and surrender of the Debentures for payment on the Maturity Date, at any place
where a register is maintained pursuant to Article 3 or any other place specified in the
Maturity Notice, the Corporation shall on or before 11:00 a.m. (Calgary time) on the Business
Day immediately prior to the Maturity Date make the delivery to the Trustee for delivery to
and on account of the holders, of certificates representing the Freely Tradeable Common Shares
to which such holders are entitled. The Corporation shall also deposit with the Trustee a sum
of money sufficient to pay any charges or expenses which may be incurred by the Trustee in
connection with the Common Share Repayment Right. Every such deposit shall be irrevocable.
From the certificates so deposited in addition to amounts payable by the Trustee pursuant to
Section 2.13, the Trustee shall pay or cause to be paid, to the holders of such Debentures,
upon surrender of such Debentures, the principal amount of and premium (if any) on the
Debentures to which they are respectively entitled on maturity and deliver to such holders the
certificates to which such holders are entitled. The delivery of such certificates to the
Trustee will satisfy and discharge the liability of the Corporation for the Debentures to
which the delivery of certificates relates to the extent of the amount delivered (plus the
amount of any certificates sold to pay applicable taxes in accordance with this Section 4.10)
and such Debentures will thereafter to that extent not be considered as outstanding under this
Indenture and such holder will have no other right in regard thereto other than to receive out
of the certificates so delivered, the certificate(s) to which it is entitled.

	(e)	 	No fractional Freely Tradeable Common Shares shall be delivered upon the exercise of the
Common Share Repayment Right but, in lieu thereof, the Corporation shall pay to the Trustee
for the account of the holders, at the time contemplated in Section 4.10(d), the cash
equivalent thereof determined on the basis of the Current Market Price of the Common Shares on
the Maturity Date (less any tax required to be deducted, if any).

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

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

 

35

 

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

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

	(j)	 	If the Corporation elects to satisfy its obligation to pay all or any portion of the
principal amount of Debentures due on maturity together with all accrued and unpaid interest
thereon by issuing Freely Tradeable Common Shares in accordance with this Section 4.10 and if
the amount (or any portion thereof) to which a holder is entitled is subject to withholding
taxes and the amount of the cash payment of the amount due on maturity, if any, is
insufficient to satisfy such withholding taxes, the Trustee, on the Written Direction of the
Corporation but for the account of the holder, shall sell, through the investment banks,
brokers or dealers selected by the Corporation, out of the Freely Tradeable Common Shares
issued by the Corporation for this purpose, such number of Freely Tradeable Common Shares that
together with the cash component of the amount due on maturity is sufficient to yield net
proceeds (after payment of all costs) to cover the amount of taxes required to be withheld,
and shall remit same on behalf of the Corporation to the proper tax authorities within the
period of time prescribed for this purpose under applicable laws.

	(k)	 	Each certificate representing Freely Tradeable Common Shares issued in payment of the
Debentures bearing the U.S. Legend, as well as all certificates issued in exchange for or in
substitution of the foregoing securities, shall bear the U.S. Legend; provided that if the
Freely Tradeable Common Shares are being sold in compliance with the requirements of Rule 904
of Regulation S, and provided that the Corporation is a “foreign issuer” within the meaning of
Regulation S at the time of sale, the U.S. Legend may be removed by providing a declaration to
the Trustee, as registrar and transfer agent for the Common Shares, substantially as set forth
in Schedule “E” hereto (or as the Corporation or the Trustee may prescribe from time to time),
together with any other evidence reasonably requested by the Corporation or Trustee, which
evidence may include an opinion of counsel of recognized standing, in form and substance
reasonably satisfactory to the Corporation or the Trustee, to the effect that the U.S. Legend
is no longer required pursuant to the requirements of the 1933 Act or applicable state
securities laws; and provided further that, if any such securities are being sold within the
United States in accordance with Rule 144 under the 1933 Act, the U.S. Legend may be removed
by delivery to the Trustee, as registrar and transfer agent for the Common Shares, of an
opinion of counsel, of recognized standing, that the U.S. Legend is no longer required under
applicable requirements of the 1933 Act or applicable state securities laws. Provided that the
Trustee obtains confirmation from the Corporation that such counsel is satisfactory to it, it
shall be entitled to rely on such opinion of counsel without further inquiry.

ARTICLE 5

SUBORDINATION OF DEBENTURES

5.1 Applicability of Article

The indebtedness, liabilities and obligations of the Corporation hereunder (except as provided
in Section 15.15) or under the Debentures, whether on account of principal, premium, if any,
interest or otherwise, but excluding the issuance of Common Shares upon any conversion pursuant to
Article 6, upon any redemption pursuant to Article 4, or at maturity pursuant to Article 4
(collectively, the “Debenture Liabilities”), shall be subordinated and postponed and subject in
right of payment, to the extent and in the manner hereinafter set forth in the following Sections
of this Article 5, to the full and final payment of all Senior Indebtedness, and each holder of any
such Debenture by his acceptance thereof agrees to and shall be bound by the provisions of this
Article 5.

 

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5.2 Order of Payment

In the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation,
reorganization or other similar proceedings relative to the Corporation, or to its property or
assets, or in the event of any proceedings for voluntary liquidation, dissolution or voluntary
winding-up of the Corporation, whether or not involving insolvency or bankruptcy, or any
marshalling of the assets and liabilities of the Corporation:

	(a)	 	all Senior Indebtedness shall first be paid in full, or provision made for such payment,
before any payment is made on account of Debenture Liabilities;

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

	(c)	 	the Senior Creditors or a receiver or a receiver-manager of the Corporation or of all or part
of its assets or any other enforcement agent may sell, mortgage, or otherwise dispose of the
Corporation’s assets in whole or in part, free and clear of all Debenture Liabilities and
without the approval of the Debentureholders or the Trustee or any requirement to account to
the Trustee or the Debentureholders.

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

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

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

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

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

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

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

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

	 
	 	(viii)	 	the date of giving or failing to give notice to or making demand upon the Corporation; or

	 
	 	(ix)	 	any other matter whatsoever.

 

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5.3 Subrogation to Rights of Holders of Senior Indebtedness

Subject to the prior payment in full of all Senior Indebtedness, the holders of the Debentures
shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Corporation to the extent of the application thereto of such
payments or other assets which would have been received by the holders of 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 no such payments or distributions to the holders of the Debentures of cash,
property or securities, which otherwise would be payable or distributable to the holders of the
Senior Indebtedness, shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holders of Debentures, be deemed to be a payment by the Corporation to
the holders of the Senior Indebtedness or on account of the Senior Indebtedness, it being
understood that the provisions of this Article 5 are and are intended solely for the purpose of
defining the relative rights of the holders of the Debentures, on the one hand, and the holders of
Senior Indebtedness, on the other hand.

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

5.4 Obligation to Pay Not Impaired

Nothing contained in this Article 5 or elsewhere in this Indenture or in the Debentures is
intended to or shall impair, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holders of the Debentures, the obligation of the Corporation, which is
absolute and unconditional, to pay to the holders of the Debentures the principal of, premium, if
any, and interest on the Debentures, as and when the same shall become due and payable in
accordance with their terms, or affect the relative rights of the holders of the Debentures and
creditors of the Corporation other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article 5 of the holders of Senior Indebtedness.

5.5 No Payment if Senior Indebtedness in Default

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

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

 

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

5.6 Payment on Debentures Permitted

Nothing contained in this Article 5 or elsewhere in this Indenture, or in any of the
Debentures, shall affect the obligation of the Corporation to make, or prevent the Corporation from
making, at any time except as prohibited by Sections 5.2 or 5.5, any payment of principal of or,
premium, if any, or interest on the Debentures. The fact that any such payment is prohibited by
Sections 5.2 or 5.5 shall not prevent the failure to make such payment from being an Event of
Default hereunder. Nothing contained in this Article 5 or elsewhere in this Indenture, or in any of
the Debentures, shall prevent the conversion of the Debentures or, except as prohibited by Sections
5.2 or 5.5, the application by the Trustee of any monies deposited with the Trustee hereunder for
the purpose, to the payment of or on account of the Debenture Liabilities.

5.7 Confirmation of Subordination

Each holder of Debentures by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effect the subordination as
provided in this Article 5 and appoints the Trustee his attorney-in-fact for any and all such
purposes. Upon request of the Corporation, and upon being furnished an Officers’ Certificate
stating that one or more named persons are Senior Creditors and specifying the amount and nature of
the Senior Indebtedness of such Senior Creditor, the Trustee shall enter into a written agreement
or agreements with the Corporation and the person or persons named in such Officers’ Certificate
providing that such person or persons are entitled to all the rights and benefits of this Article 5
as a Senior Creditor and for such other matters, such as an agreement not to amend the provisions
of this Article 5 and the definitions herein without the consent of such Senior Creditor, as the
Senior Creditor may reasonably request. Such agreement shall be conclusive evidence that the
indebtedness specified therein is Senior Indebtedness, however, nothing herein shall impair the
rights of any Senior Creditor who has not entered into such an agreement.

5.8 Knowledge of Trustee

Notwithstanding the provisions of this Article 5 or any provision in this Indenture or in the
Debentures contained, the Trustee will not be charged with knowledge of any Senior Indebtedness or
of any default in the payment thereof, or of the existence of any Event of Default or any other
fact that would prohibit the making of any payment of monies to or by the Trustee, or the taking of
any other action by the Trustee, unless and until the Trustee has received written notice thereof
from the Corporation, any Debentureholder or any Senior Creditor.

5.9 Trustee May Hold Senior Indebtedness

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

5.10 Rights of Holders of Senior Indebtedness Not Impaired

No right of any present or future holder of any Senior Indebtedness to enforce the
subordination herein will at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any non-compliance by the Corporation with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.

 

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5.11 Altering the 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 therefor and to release, sell or exchange such
security and otherwise to deal freely with the Corporation, all without notice to or consent of the
Debentureholders or the Trustee and without affecting the liabilities and obligations of the
parties to this Indenture or the Debentureholders.

5.12 Additional Indebtedness

This Indenture does not restrict the Corporation from incurring additional indebtedness for
borrowed money or other obligations or liabilities (including Senior Indebtedness) or mortgaging,
pledging or charging its properties to secure any indebtedness or obligations or liabilities.

5.13 Right of Debentureholder to Convert Not Impaired

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

5.14 Invalidated Payments

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

5.15 Contesting Security

The Trustee, for itself and on behalf of the Debentureholders, agrees that it shall not
contest or bring into question the validity, perfection or enforceability of any of the Senior
Indebtedness, the Senior Security, or the relative priority of the Senior Security.

ARTICLE 6

CONVERSION OF DEBENTURES

6.1 Applicability of Article

Any Debentures issued hereunder of any series which by their terms are convertible (subject,
however, to any applicable restriction of the conversion of Debentures of such series) will be
convertible into Common Shares or other securities of the Corporation, at such conversion rate or
rates, and on such date or dates and in accordance with such other provisions as shall have been
determined at the time of issue of such Debentures and shall have been expressed in this Indenture
(including Sections 2.4(f), 2.4(k) and 3.7 hereof), in such Debentures, in an Officers’
Certificate, or in a supplemental indenture authorizing or providing for the issue thereof.

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

6.2 Notice of Expiry of Conversion Privilege

Notice of the expiry of the conversion privileges of the Debentures shall be given by or on
behalf of the Corporation, not more than 60 days and not less than 40 days prior to the date fixed
for the Time of Expiry, in the manner provided in Section 14.2.

 

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6.3 Revival of Right to Convert

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

6.4 Manner of Exercise of Right to Convert

	(a)	 	The holder of a Debenture desiring to convert such Debenture in whole or in part into Common
Shares shall surrender such Debenture to the Trustee at either of its principal offices in the
City of Calgary, Alberta or the City of Toronto, Ontario together with the conversion notice
attached hereto as Schedule “D” or any other written notice in a form satisfactory to the
Trustee, in either case duly executed by the holder or his executors or administrators or
other legal representatives or his or their attorney duly appointed by an instrument in
writing in form and executed in a manner satisfactory to the Trustee, exercising his right to
convert such Debenture in accordance with the provisions of this Article; provided that with
respect to a Global Debenture, the obligation to surrender a Debenture to the Trustee shall be
satisfied if the Trustee makes notation on the Global Debenture of the principal amount
thereof so converted and the Trustee is provided with all other documentation which it may
request. Thereupon such Debentureholder or, subject to payment of all applicable stamp or
security transfer taxes or other governmental charges and compliance with all reasonable
requirements of the Trustee, his nominee(s) or assignee(s) shall be entitled to be entered in
the books of the Corporation as at the Date of Conversion (or such later date as is specified
in Section 6.4(b)) as the holder of the number of Common Shares into which such Debenture is
convertible in accordance with the provisions of this Article and, as soon as practicable
thereafter, the Corporation shall deliver to such Debentureholder or, subject as aforesaid,
his nominee(s) or assignee(s), a certificate or certificates for such Common Shares and make
or cause to be made any payment of interest to which such holder is entitled in accordance
with Section 6.4(e) hereof.

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

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

	(d)	 	The holder of any Debenture of which only a part is converted shall, upon the exercise of his
right of conversion surrender such Debenture to the Trustee in accordance with Section 6.4(a),
and the Trustee shall cancel the same and shall without charge forthwith certify and deliver
to the holder a new Debenture or Debentures in an aggregate principal amount equal to the
unconverted part of the principal amount of the Debenture so surrendered or, with respect to a
Global Debenture, the Depository shall make notations on the Global Debentures of the
principal amount thereof so converted.

	(e)	 	The holder of a Debenture surrendered for conversion in accordance with this Section 6.4
shall not be entitled to receive accrued and unpaid interest in respect thereof to the Date of
Conversion and the Common Shares issued upon such conversion shall rank only in respect of
distributions or dividends declared in favour of shareholders of record on and after the Date
of Conversion or such later date as such holder shall become the holder of record of such
Common Shares pursuant to Section 6.4(b), from which
applicable date they will for all purposes be and be
deemed to be issued and outstanding as fully paid and
non-assessable Common Shares.

 

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6.5 Adjustment of Conversion Price

Subject to the requirements of the Toronto Stock Exchange, the Conversion Price in effect at any
date shall be subject to adjustment from time to time as set forth below.

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

	(b)	 	If and whenever at any time prior to the Time of Expiry the Corporation shall fix a record
date for the payment of a cash dividend or distribution to the holders of all or substantially
all of the outstanding Common Shares in respect of any Applicable Period, the Conversion Price
shall be adjusted immediately after such record date so that it shall be equal to the price
determined by multiplying the Conversion Price in effect on such record date by a fraction, of
which the denominator shall be the Current Market Price per Common Share on such record date
and of which the numerator shall be the Current Market Price per Common Share on such record
date minus the amount in cash per Common Share distributed to holders of Common Shares. Such
adjustment shall be made successively whenever such a record date is fixed. To the extent that
any such cash dividend or distribution is not paid, the Conversion Price shall be re-adjusted
to the Conversion Price which would then be in effect if such record date had not been fixed.

	(c)	 	If and whenever at any time prior to the Time of Expiry the Corporation shall fix a record
date for the issuance of options, rights or warrants to all or substantially all the holders
of its outstanding Common Shares entitling them, for a period expiring not more than 45 days
after such record date, to subscribe for or purchase Common Shares (or securities convertible
into Common Shares) at a price per share (or having a conversion or exchange price per share)
less than 95% of the Current Market Price of a Common Share on such record date, the
Conversion Price shall be adjusted immediately after such record date so that it shall equal
the price determined by multiplying the Conversion Price in effect on such record date by a
fraction, of which the numerator shall be the total number of Common Shares outstanding on
such record date plus a number of Common Shares equal to the number arrived at by dividing the
aggregate price of the total number of additional Common Shares offered for subscription or
purchase (or the aggregate conversion or exchange price of the convertible securities so
offered) by such Current Market Price per Common Share, and of which the denominator shall be
the total number of Common Shares outstanding on such record date plus the total number of
additional Common Shares offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made successively whenever
such a record date is fixed. To the extent that any such options, rights or warrants are not
so issued or any such options, rights or warrants are not exercised prior to the expiration
thereof, the Conversion Price shall be re-adjusted to the Conversion Price which would then be
in effect if such record date had not been fixed or to the Conversion Price which would then
be in effect based upon the number of Common Shares (or
securities convertible into Common Shares) actually issued upon the exercise of such
options, rights or warrants were included in such fraction, as the case may be.

 

42

 

	(d)	 	If and whenever at any time prior to the Time of Expiry, there is a reclassification of the
Common Shares or a capital reorganization of the Corporation other than as described in
Section 6.5(a) or a consolidation, amalgamation, arrangement, binding share exchange, merger
of the Corporation with or into any other Person or other entity or acquisition of the
Corporation or other combination pursuant to which the Common Shares are converted into or
acquired for cash, securities or other property; or a sale or conveyance of the property and
assets of the Corporation as an entirety or substantially as an entirety to any other Person
(other than a direct or indirect wholly-owned subsidiary of the Corporation) or other entity
or a liquidation, dissolution or winding-up of the Corporation, any holder of a Debenture who
has not exercised its right of conversion prior to the effective date of such
reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger,
share exchange, acquisition, combination, sale or conveyance or liquidation, dissolution or
winding-up, upon the exercise of such right thereafter, shall be entitled to receive and shall
accept, in lieu of the number of Common Shares then sought to be acquired by it, such amount
of cash or the number of shares or other securities or property of the Corporation or of the
Person or other entity resulting from such merger, amalgamation, arrangement, acquisition,
combination or consolidation, or to which such sale or conveyance may be made or which holders
of Common Shares receive pursuant to such liquidation, dissolution or winding-up, as the case
may be, that such holder of a Debenture would have been entitled to receive on such
reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger,
share exchange, acquisition, combination, sale or conveyance or liquidation, dissolution or
winding-up, if, on the record date or the effective date thereof, as the case may be, the
holder had been the registered holder of the number of Common Shares sought to be acquired by
it and to which it was entitled to acquire upon the exercise of the conversion right. If
determined appropriate by the Board of Directors, to give effect to or to evidence the
provisions of this Section 6.5(d), the Corporation, its successor, or such purchasing Person
or other entity, as the case may be, shall, prior to or contemporaneously with any such
reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger,
share exchange, acquisition, combination, sale or conveyance or liquidation, dissolution or
winding-up, enter into an indenture which shall provide, to the extent possible, for the
application of the provisions set forth in this Indenture with respect to the rights and
interests thereafter of the holder of Debentures to the end that the provisions set forth in
this Indenture shall thereafter correspondingly be made applicable, as nearly as may
reasonably be, with respect to any cash, shares or other securities or property to which a
holder of Debentures is entitled on the exercise of its acquisition rights thereafter. Any
indenture entered into between the Corporation and the Trustee pursuant to the provisions of
this Section 6.5(d) shall be a supplemental indenture entered into pursuant to the provisions
of Article 16. Any indenture entered into between the Corporation, any successor to the
Corporation or such purchasing Person or other entity and the Trustee shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments
provided in this Section 6.5(d) and which shall apply to successive reclassifications, capital
reorganizations, amalgamations, consolidations, mergers, share exchanges, acquisitions,
combinations, sales or conveyances. For greater certainty, nothing in this Section 6.5(d)
shall affect or reduce the requirement for any Person to make a Change of Control Purchase
Offer or to pay the Make Whole Premium in accordance with Section 2.4, and notice of any
transaction to which this Section 6.5(d) applies shall be given in accordance with Section
6.10.

	(e)	 	If the Corporation shall make a distribution to all holders of Common Shares of shares in the
capital of the Corporation, other than Common Shares, or evidences of indebtedness or other
assets of the Corporation, including securities (but excluding (x) any issuance of rights or
warrants for which an adjustment was made pursuant to Section 6.5(c), and (y) any dividend or
distribution paid exclusively in cash for which an adjustment was made pursuant to Section
6.5(b)) (the “Distributed Securities”), then in each such case (unless the Corporation
distributes such Distributed Securities to the holders of Debentures on such dividend or
distribution date (as if each holder had converted such Debenture into Common Shares
immediately preceding the record date with respect to such distribution)) the Conversion Price
in effect immediately preceding the ex-distribution date fixed for the dividend or
distribution shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately preceding such ex-distribution date by
a fraction of which the denominator shall be the 5 day VWAP for the Common Shares immediately
prior to the ex-distribution date and of which the numerator shall be the 5
day VWAP for the Common Shares for the first 5 trading days that occur immediately post the
ex-distribution date. Such adjustment shall be made successively whenever any such
distribution is made and shall become effective 5 Business Days immediately after the
ex-distribution date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.

 

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Notwithstanding the foregoing, if the securities distributed by the Corporation to all
holders of its Common Shares consist of capital stock of, or similar equity interests in, a
Subsidiary or other business of the Corporation (the “Spinoff Securities”), the Conversion
Price shall be adjusted, unless the Corporation makes an equivalent distribution to the
holders of Debentures, so that the same shall be equal to the rate determined by multiplying
the Conversion Price in effect on the record date fixed for the determination of
shareholders entitled to receive such distribution by a fraction, the denominator of which
shall be the sum of (A) the weighted average trading price of one Common Share over the 20
consecutive trading day period (the “Spinoff Valuation Period”) commencing on and including
the fifth trading day after the date on which ex-dividend trading commences for such
distribution on the Toronto Stock Exchange, or such other national or regional exchange or
market on which the Common Shares are then listed or quoted and (B) the product of (i) the
weighted average trading price (calculated in substantially the same way as the Current
Market Price is calculated for the Common Shares) over the Spinoff Valuation Period of the
Spinoff Securities or, if no such prices are available, the fair market value of the Spinoff
Securities as reasonably determined by the Board of Directors (which determination shall be
conclusive and shall be evidenced by an Officers’ Certificate delivered to the Trustee)
multiplied by (ii) the number of Spinoff Securities distributed in respect of one Common
Share and the numerator of which shall be the weighted average trading price of one Common
Share over the Spinoff Valuation Period, such adjustment to become effective immediately
preceding the opening of business on the 25th trading day after the date on which
ex-dividend trading commences; provided, however, that the Corporation may in lieu of the
foregoing adjustment elect to make adequate provision so that each holder of Debentures
shall have the right to receive upon conversion thereof the amount of such Spinoff
Securities that such holder of Debentures would have received if such Debentures had been
converted on the record date with respect to such distribution.

	(f)	 	If any issuer bid made by the Corporation or any of its Subsidiaries for all or any portion
of Common Shares shall expire, then, if the issuer bid shall require the payment to
shareholders of consideration per Common Share having a fair market value (determined as
provided below) that exceeds the Current Market Price per Common Share on the last date (the
“Expiration Date”) tenders could have been made pursuant to such issuer bid (as it may be
amended) (the last time at which such tenders could have been made on the Expiration Date is
hereinafter sometimes called the “Expiration Time”), the Conversion Price shall be adjusted so
that the same shall equal the rate determined by multiplying the Conversion Price in effect
immediately preceding the close of business on the Expiration Date by a fraction of which (i)
the denominator shall be the sum of (A) the fair market value of the aggregate consideration
(the fair market value as determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and which shall be evidenced by an Officers’
Certificate delivered to the Trustee) payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the issuer bid) of all Common Shares validly tendered
and not withdrawn as of the Expiration Time (the Common Shares deemed so accepted, up to any
such maximum, being referred to as the “Purchased Common Shares”) and (B) the product of the
number of Common Shares outstanding (less any Purchased Common Shares and excluding any Common
Shares held in the treasury of the Corporation) at the Expiration Time and the Current Market
Price per Common Share on the Expiration Date and (ii) the numerator of which shall be the
product of the number of Common Shares outstanding (including Purchased Common Shares but
excluding any Common Shares held in the treasury of the Corporation) at the Expiration Time
multiplied by the Current Market Price per Common Share on the Expiration Date, such increase
to become effective immediately preceding the opening of business on the day following the
Expiration Date. In the event that the Corporation is obligated to purchase Common Shares
pursuant to any such issuer bid, but the Corporation is permanently prevented by applicable
law from effecting any or all such purchases or any or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would have been in
effect based upon the number of Common Shares actually purchased, if any. If
the application of this clause (f) of Section 6.5 to any issuer bid would result in a
decrease in the Conversion Price, no adjustment shall be made for such issuer bid under this
clause (f).

 

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For purposes of this Section 6.5(f), the term “issuer bid” shall mean an issuer bid under
Applicable Securities Legislation or a take-over bid under Applicable Securities Legislation
by a Subsidiary of the Corporation for the Common Shares and all references to “purchases”
of Common Shares in issuer bids (and all similar references) shall mean and include the
purchase of Common Shares in issuer bids and all references to “tendered Common Shares” (and
all similar references) shall mean and include Common Shares tendered in issuer bids.

	(g)	 	In any case in which this Section 6.5 shall require that an adjustment shall become effective
immediately after a record date for an event referred to herein, the Corporation may defer,
until the occurrence of such event, issuing to the holder of any Debenture converted after
such record date and before the occurrence of such event the additional Common Shares issuable
upon such conversion by reason of the adjustment required by such event before giving effect
to such adjustment; provided, however, that the Corporation shall deliver to such holder an
appropriate instrument evidencing such holder’s right to receive such additional Common Shares
upon the occurrence of the event requiring such adjustment and the right to receive any
distributions made on such additional Common Shares declared in favour of holders of record of
Common Shares on and after the Date of Conversion or such later date as such holder would, but
for the provisions of this Section 6.5(g), have become the holder of record of such additional
Common Shares pursuant to Section 6.4(b).

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

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

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

	(k)	 	In case the Corporation shall take any action affecting the Common Shares other than action
described in this Section 6.5, which in the opinion of the Board of Directors, would
materially affect the rights of Debentureholders, the Conversion Price shall be adjusted in
such manner and at such time, by action of the Board of Directors, subject to the prior
written consent of the Toronto Stock Exchange or such other exchange on which the Debentures
are then listed, as the Board of Directors, in their sole discretion may determine to be
equitable in the circumstances. Failure of the directors to make such an adjustment shall be
conclusive evidence that they have determined that it is equitable to make no adjustment in
the circumstances.

	(l)	 	Subject to the prior written consent of the Toronto Stock Exchange or such other exchange on
which the Debentures are then listed, no adjustment in the Conversion Price shall be made in
respect of any event described in Sections 6.5(a), 6.5(b), 6.5(c), 6.5(e) or 6.5(f) other than
the events described in 6.5(a)(i) or 6.5(a)(ii) if the holders of the Debentures are entitled
to participate in such event on the same terms mutatis mutandis as if they had converted their
Debentures prior to the effective date or record date, as the case may be, of such event.

 

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

6.6 No Requirement to Issue Fractional Common Shares

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

6.7 Corporation to Reserve Common Shares

The Corporation covenants with the Trustee that it will at all times reserve and keep
available out of its authorized Common Shares (if the number thereof is or becomes limited), solely
for the purpose of issue upon conversion of Debentures as in this Article provided, and
conditionally allot to Debentureholders who may exercise their conversion rights hereunder, such
number of Common Shares as shall then be issuable upon the conversion of all outstanding
Debentures. The Corporation covenants with the Trustee that all Common Shares which shall be so
issuable shall be duly and validly issued as fully-paid and non-assessable.

6.8 Cancellation of Converted Debentures

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

6.9 Certificate as to Adjustment

The Corporation shall from time to time immediately after the occurrence of any event which
requires an adjustment or readjustment as provided in Section 6.5, deliver an Officers’ Certificate
to the Trustee specifying the nature of the event requiring the same and the amount of the
adjustment necessitated thereby and setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based, which certificate and the amount of the
adjustment specified therein shall be verified by an opinion of a firm of nationally recognized
chartered accountants appointed by the Corporation and acceptable to the Trustee (who may be the
Auditors of the Corporation) and shall be conclusive and binding on all parties in interest. When
so approved, the Corporation shall, except in respect of any subdivision, redivision, reduction,
combination or consolidation of the Common Shares, forthwith give notice to the Debentureholders in
the manner provided in Section 14.2 specifying the event requiring such adjustment or readjustment
and the results thereof, including the resulting Conversion Price; provided that, if the
Corporation has given notice under this Section 6.9 covering all the relevant facts in respect of
such event and if the Trustee approves, no such notice need be given under this Section 6.9.

6.10 Notice of Special Matters

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

 

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In addition, the Corporation covenants with the Trustee that so long as any Debenture remains
outstanding, it will give notice to the Trustee, and to the Debentureholders in the manner provided
in Section 14.2, at least 30 days prior to the (i) effective date of any transaction referred to in
Section 6.5(d) stating the consideration into which the Debentures will be convertible after the
effective date of such transaction, and (ii) Expiration Date of any transaction referred to in
Section 6.5(f) stating the consideration paid per Common Share in such transaction.

6.11 Protection of Trustee

Subject to Section 15.3, the Trustee:

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

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

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

6.12 U.S. Legend on Common Shares

	(a)	 	Each certificate representing Common Shares issued upon conversion of Debentures bearing the
U.S. Legend shall have imprinted or otherwise reproduced thereon such legend or legends in
substantially the form of Schedule “G” attached hereto.

ARTICLE 7

COVENANTS OF THE CORPORATION

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

7.1 To Pay Principal, Premium (if any) and Interest

The Corporation will duly and punctually pay or cause to be paid to every Debentureholder the
principal of, premium (if any) and interest accrued on the Debentures of which it is the holder on
the dates, at the places and in the manner mentioned herein and in the Debentures.

7.2 To Pay Trustee’s Remuneration

The Corporation will pay the Trustee reasonable remuneration for its services as Trustee
hereunder and will repay to the Trustee on demand all monies which shall have been paid by the
Trustee in connection with the execution of the trusts hereby created and such monies including the
Trustee’s remuneration, shall be payable out of any funds coming into the possession of the Trustee
in priority to payment of any principal of the Debentures or interest or premium thereon. Such
remuneration shall continue to be payable until the trusts hereof be finally wound up and whether
or not the trusts of this Indenture shall be in the course of administration by or under the
direction of a court of competent jurisdiction.

7.3 To Give Notice of Default

The Corporation shall notify the Trustee immediately upon obtaining knowledge of any Event of
Default hereunder.

 

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7.4 Preservation of Existence, etc.

Subject to the express provisions hereof, the Corporation will carry on and conduct its
activities, and cause its Subsidiaries to carry on and conduct their businesses, in a business-like
manner and in accordance with good business practices; and, subject to the express provisions
hereof, it will do or cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights.

7.5 Keeping of Books

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

7.6 Annual Certificate of Compliance

The Corporation shall deliver to the Trustee, within 120 days after the end of each calendar
year, (and at any reasonable time upon demand by the Trustee) an Officers’ Certificate as to the
knowledge of such officers of the Corporation who execute the Officers’ Certificate of the
Corporation’s compliance with all conditions and covenants in this Indenture certifying that after
reasonable investigation and inquiry, the Corporation has complied with all covenants, conditions
or other requirements contained in this Indenture, the non-compliance with which could, with the
giving of notice, lapse of time or otherwise, constitute an Event of Default hereunder, or if such
is not the case, setting forth with reasonable particulars the circumstances of any failure to
comply and steps taken or proposed to be taken to eliminate such circumstances and remedy such
Event of Default, as the case may be.

7.7 Performance of Covenants by Trustee

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

7.8 SEC Notice

The Corporation covenants that, in the event that it shall begin, or thereafter cease, to file
as a “foreign issuer” with the U.S. Securities and Exchange Commission, the Corporation shall
promptly deliver to the Trustee an Officers’ Certificate (in a form provided by the Trustee)
certifying such status and other information as the Trustee may reasonably require at such given
time.

7.9 No Dividends on Common Shares if Event of Default

The Corporation shall not declare or pay any dividend to the holders of its issued and
outstanding Common Shares after the occurrence of an Event of Default unless and until such default
shall have been cured or waived or shall have ceased to exist.

7.10 Maintain Listing

The Corporation will use reasonable commercial efforts to maintain the listing of the Common
Shares and the Debentures on the Toronto Stock Exchange, and to maintain the Corporation’s status
as a “reporting issuer” not in default of the requirements of the Applicable Securities
Legislation; provided that the foregoing covenant shall not prevent or restrict the Corporation
from carrying out a transaction to which Article 11 would apply if carried out in compliance with
Article 11 even if as a result of such transaction the Corporation ceases to be a “reporting
issuer” in all or any of the provinces of Canada or the Common Shares or Debentures cease to be
listed on the Toronto Stock Exchange or any other stock exchange.

 

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ARTICLE 8

DEFAULT

8.1 Events of Default

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

	(a)	 	failure for 30 days to pay interest on the Debentures when due;

	(b)	 	failure to pay principal or premium, if any, when due on the Debentures whether at maturity,
upon redemption or a Change of Control, by declaration or otherwise;

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

	(d)	 	default in the observance or performance of any covenant or condition of the Indenture by the
Corporation and the failure to cure (or obtain a waiver for) such default for a period of 30
days after notice in writing has been given by the Trustee or from holders of not less than
25% in aggregate principal amount of the Debentures to the Corporation specifying such default
and requiring the Corporation to rectify such default or obtain a waiver for same;

	(e)	 	if a decree or order of a Court having jurisdiction is entered adjudging the Corporation a
bankrupt or insolvent under the Bankruptcy and Insolvency Act (Canada) or any other
bankruptcy, insolvency or analogous laws, or issuing sequestration or process of execution
against, or against any substantial part of, the property of the Corporation, or appointing a
receiver of, or of any substantial part of, the property of the Corporation or ordering the
winding-up or liquidation of its affairs, and any such decree or order continues unstayed and
in effect for a period of 60 days;

	(f)	 	if the Corporation institutes proceedings to be adjudicated a bankrupt or insolvent, or
consents to the institution of bankruptcy or insolvency proceedings against it under the
Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or analogous laws,
or consents to the filing of any such petition or to the appointment of a receiver of, or of
any substantial part of, the property of the Corporation or makes a general assignment for the
benefit of creditors, or admits in writing its inability to pay its debts generally as they
become due;

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

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

then: (x) in each and every such event listed above, the Trustee may, in its discretion, and shall,
upon receipt of a request in writing signed by the holders of not less than 25% in principal amount
of the Debentures then outstanding, subject to the provisions of Section 8.3, by notice in writing
to the Corporation declare the principal of and interest and premium, if any, on all Debentures
then outstanding and all other monies outstanding hereunder to be due and payable and the same
shall thereupon forthwith become immediately due and payable to the Trustee, and (y) on the
occurrence of an Event of Default under Sections 8.1(e), 8.1(f) or 8.1(g), the principal of and
interest and premium, if any, on all Debentures then outstanding hereunder and all other monies
outstanding hereunder, shall automatically without any declaration or other act on the part of the
Trustee or any Debentureholder become immediately due and payable to the Trustee and, in either
case, upon such amounts becoming due and payable in either (x) or (y) above, the Corporation shall
forthwith pay to the Trustee for the benefit of the Debentureholders such principal, accrued and
unpaid interest and premium, if any, and interest on amounts in default on such
Debenture and all other monies outstanding hereunder, together with subsequent interest at the rate
borne by the Debentures on such principal, interest, premium and such other monies from the date of
such declaration or event until payment is received by the Trustee, such subsequent interest to be
payable at the times and places and in the manner mentioned in and according to the tenor of the
Debentures. Such payment when made shall be deemed to have been made in discharge of the
Corporation’s obligations hereunder and any monies so received by the Trustee shall be applied in
the manner provided in Section 8.6.

 

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

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

8.2 Notice of Events of Default

If an Event of Default shall occur and be continuing the Trustee shall, within 30 days after
it receives written notice of the occurrence of such Event of Default, give notice of such Event of
Default to the Debentureholders in the manner provided in Section 13.2, provided that
notwithstanding the foregoing, unless the Trustee shall have been requested to do so by the holders
of at least 25% of the principal amount of the Debentures then outstanding, the Trustee shall not
be required to give such notice if the Trustee in good faith shall have determined that the
withholding of such notice is in the best interests of the Debentureholders and shall have so
advised the Corporation in writing.

8.3 Waiver of Default

Upon the happening of any Event of Default hereunder:

	(a)	 	the holders of the Debentures shall have the power (in addition to the powers exercisable by
Extraordinary Resolution as hereinafter provided) by requisition in writing by the holders of
more than 50% of the principal amount of Debentures then outstanding, to instruct the Trustee
to waive any Event of Default and to cancel any declaration made by the Trustee pursuant to
Section 8.1 and the Trustee shall thereupon waive the Event of Default and cancel such
declaration, or either, upon such terms and conditions as shall be prescribed in such
requisition; provided that notwithstanding the foregoing if the Event of Default has occurred
by reason of the non-observance or non-performance by the Corporation of any covenant
applicable only to one or more series of Debentures, then the holders of more than 50% of the
principal amount of the outstanding Debentures of that series shall be entitled to exercise
the foregoing power and the Trustee shall so act and it shall not be necessary to obtain a
waiver from the holders of any other series of Debentures; and

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

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

 

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8.4 Enforcement by the Trustee

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

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

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

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

8.5 No Suits by Debentureholders

No holder of any Debenture shall have any right to institute any action, suit or proceeding at
law or in equity for the purpose of enforcing payment of the principal of or interest on the
Debentures or for the execution of any trust or power hereunder or for the appointment of a
liquidator or receiver or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or
to have the Corporation wound up or to file or prove a claim in any liquidation or bankruptcy
proceeding or for any other remedy hereunder, unless: (a) such holder shall previously have given
to the Trustee written notice of the happening of an Event of Default hereunder; and (b) the
Debentureholders by Extraordinary Resolution or by written instrument signed by the holders of
at least 25% in principal amount of the Debentures then outstanding shall have made a request to
the Trustee and the Trustee shall have been afforded reasonable opportunity either itself to
proceed to exercise the powers hereinbefore granted or to institute an action, suit or proceeding
in its name for such purpose; and (c) the Debentureholders or any of them shall have furnished to
the Trustee, when so requested by the Trustee, sufficient funds and security and indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby;
and (d) the Trustee shall have failed to act within a reasonable time after such notification,
request and offer of indemnity and such notification, request and offer of indemnity are hereby
declared in every such case, at the option of the Trustee, to be conditions precedent to any such
proceeding or for any other remedy hereunder by or on behalf of the holder of any Debentures.

 

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8.6 Application of Monies by Trustee

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

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

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

	 	(iii)	 	third, in payment of the surplus, if any, of such monies to the Corporation or
its assigns;

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

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

8.7 Notice of Payment by Trustee

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

 

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8.8 Trustee May Demand Production of Debentures

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

8.9 Remedies Cumulative

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

8.10 Judgment Against the Corporation

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

8.11 Immunity of Directors, Officers and Others

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

ARTICLE 9

SATISFACTION AND DISCHARGE

9.1 Cancellation and Destruction

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

9.2 Non-Presentation of Debentures

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

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

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

 

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

the monies or Common Shares, as the case may be, in trust to be paid to the holder of such
Debenture upon due presentation or surrender thereof in accordance with the provisions of this
Indenture; and thereupon the principal of, premium (if any) or the interest payable on or
represented by each Debenture in respect whereof such monies or Common Shares, if applicable, have
been set aside shall be deemed to have been paid and the holder thereof shall thereafter have no
right in respect thereof except that of receiving delivery and payment of the monies or Common
Shares, if applicable, so set aside by the Trustee upon due presentation and surrender thereof,
subject always to the provisions of Section 9.3.

9.3 Repayment of Unclaimed Monies or Common Shares

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

9.4 Discharge

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

9.5 Satisfaction

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

	 	(i)	 	the Corporation has deposited or caused to be deposited with the Trustee as
trust funds or property in trust for the purpose of making payment on such Debentures,
an amount in money or Common Shares, if applicable, sufficient to pay, satisfy and
discharge the entire amount of principal of, premium, if any, and interest, if any, to
maturity, or any repayment date or Redemption Dates, or any Change of Control Purchase
Date, or upon conversion or otherwise as the case may be, of such Debentures (including
the maximum amount that may be payable as a Make Whole Premium);

 

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

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

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

as will be sufficient to pay and discharge the entire amount of principal of,
premium, if any (including the maximum amount that may be payable as a Make Whole
Premium) on, and accrued and unpaid interest to maturity or any repayment date, as
the case may be, of all such Debentures; or

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

so long as in any such event:

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

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

Any deposits with the Trustee referred to in this Section 9.5 shall be irrevocable, subject
to Section 9.6, and shall be made under the terms of an escrow and/or trust agreement in
form and substance satisfactory to the Trustee and which provides for the due and punctual
payment of the principal of, premium, if any, and interest on the Debentures being
satisfied.

	(b)	 	Upon the satisfaction of the conditions set forth in this Section 9.5 with respect to all the
outstanding Debentures, or all the outstanding Debentures of any series, as applicable, the
terms and conditions of the Debentures, including the terms and conditions with respect
thereto set forth in this Indenture (other than those contained in Articles Article 2 and
Article 4 and the provisions of Article 1 pertaining to Articles Article 2 and Article 4)
shall no longer be binding upon or applicable to the Corporation.

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

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

 

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9.6 Continuance of Rights, Duties and Obligations

	(a)	 	Where trust funds or trust property have been deposited pursuant to Section 9.5, the holders
of Debentures and the Corporation shall continue to have and be subject to their respective
rights, duties and obligations under Article 2 and Article 4.

	(b)	 	In the event that, after the deposit of trust funds or trust property 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 time converts its Debentures to Common Shares or other
securities of the Corporation in accordance with Subsection 2.4(d) (in respect of Initial
Debentures or the comparable provision of any other series of Debentures), Article 6 or any
other provision of this Indenture, the Trustee shall upon receipt of a Written Direction of
the Corporation return to the Corporation from time to time the proportionate amount of the
trust funds or other trust property deposited with the Trustee pursuant to Section 9.5 in
respect of the Defeased Debentures which is applicable to the Defeased Debentures so converted
(which amount shall be based on the applicable principal amount of the Defeased Debentures
being converted in relation to the aggregate outstanding principal amount of all the Defeased
Debentures).

	(c)	 	In the event that, after the deposit of trust funds or trust property pursuant to Section
9.5, the Corporation is required to make a Change of Control Purchase Offer to purchase any
outstanding Debentures pursuant to Subsection 2.4(j) (in respect of Initial Debentures or the
comparable provision of any other series of Debentures), in relation to Initial Debentures or
to make an offer to purchase Debentures pursuant to any other similar provisions relating to
any other series of Debentures, the Corporation shall be entitled to use any trust money or
trust property deposited with the Trustee pursuant to Section 9.5 for the purpose of paying to
any holders of Defeased Debentures who have accepted any such offer of the Corporation the
Total Offer Price payable to such holders in respect of such Change of Control Purchase Offer
in respect of Initial Debentures (or the total offer price payable in respect of an offer
relating to any other series of Debentures). Upon receipt of a Written Direction from the
Corporation, the Trustee shall be entitled to pay to such holder from such trust money or
trust property deposited with the Trustee pursuant to Section 9.5 in respect of the Defeased
Debentures which is applicable to the Defeased Debentures held by such holders who have
accepted any such offer to the Corporation (which amount shall be based on the applicable
principal amount of the Defeased Debentures held by accepting offerees in relation to the
aggregate outstanding principal amount of all the Defeased Debentures).

ARTICLE 10

COMMON SHARE INTEREST PAYMENT ELECTION

10.1 Common Share Interest Payment Election

	(a)	 	Provided that the Corporation is not in default under this Indenture and that all applicable
regulatory approvals have been obtained (including any required approval of any stock exchange
on which the Debentures or Common Shares are then listed), the Corporation shall have the
right, from time to time (including following conversion, at the time of redemption, or at the
time of maturity), to make a Common Share Interest Payment Election in respect of any Interest
Obligation by delivering a Common Share Interest Payment Election Notice to the Trustee no
later than the earlier of (i) the date required by applicable law or the rules of any stock
exchange on which the Debentures or Common Shares are then listed, and (ii) the day which is
15 Business Days prior to the Interest Payment Date to which the Common Share Interest Payment
Election relates. Such Common Share Interest Payment Election Notice shall provide that all
or a portion of the Interest Obligation may be paid by the Corporation in Common Shares, and
if only a portion of the Interest Obligation is to be paid in Common Shares, the Common Share
Interest Payment Election shall state such portion to be paid in Common Shares and such
portion to be paid in cash.

 

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	(b)	 	Upon receipt of a Common Share Interest Payment Election Notice, the Trustee shall, in
accordance with this Article 10 and such Common Share Interest Payment Election Notice,
deliver Common Share Bid Requests to the investment banks, brokers or dealers identified by
the Corporation, in its absolute discretion, in the Common Share Interest Payment Election
Notice. In connection with the Common Share Interest Payment Election, the Trustee shall: (i)
accept delivery of the Common Shares from the Corporation and process the Common Shares in
accordance with the Common Share Interest Payment Election Notice; (ii) accept bids with
respect to, and consummate sales of, such Common Shares, each as the Corporation shall direct
in its absolute discretion through the investment banks, brokers or dealers identified by the
Corporation in the Common Share Interest Payment Election Notice; (iii) invest the proceeds of
such sales on the direction of the Corporation in Government Obligations which mature prior to
an applicable Interest Payment Date and use such proceeds to pay the Interest Obligation in
respect of which the Common Share Interest Payment Election was made; and (iv) perform any
other action necessarily incidental thereto as directed by the Corporation in its absolute
discretion. The Common Share Interest Payment Election Notice shall direct the Trustee to
solicit and accept only, and each Common Share Bid Request shall provide that the acceptance
of any bid is conditional on the acceptance of, sufficient bids to result in aggregate
proceeds from such issue and sale of Common Shares which, together with the cash payments by
the Corporation in lieu of fractional Common Shares, if any, equal the Interest Obligation on
the Common Share Delivery Date.

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

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

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

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

	(g)	 	Provided that: (i) all conditions specified in each Common Share Purchase Agreement to the
closing of all sales thereunder have been satisfied, other than the delivery of the Common
Shares to be sold thereunder against payment of the purchase price thereof; and (ii) the
purchasers under each Common Share Purchase Agreement shall be ready, willing and able to
perform thereunder, in each case on the Common Share Delivery Date, the Corporation shall, on
the Common Share Delivery Date, deliver to the Trustee the Common Shares to be sold on such
date, an amount in cash equal to the value of any fractional Common Shares and an Officers’
Certificate to the effect that all conditions precedent to such sales, including those set
forth in

 

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 this Indenture and in each Common Share Purchase Agreement, have been satisfied. Upon
such deliveries, the Trustee shall consummate such sales on such Common Share Delivery Date by
the delivery of the Common Shares to such purchasers against payment to the Trustee in
immediately available funds of the purchase price therefor in an aggregate amount equal to
the Common Share Interest Payment Election Amount (less any amount attributable to any
fractional Common Shares), whereupon the sole right of a holder of Debentures to receive
such holder’s portion of the Common Share Interest Payment Election Amount will be to
receive same from the Trustee out of the proceeds of such sales of Common Shares plus any
amount received by the Trustee from the Corporation attributable to any fractional Common
Shares in full satisfaction of the Interest Obligation and the holder will have no further
recourse to the Corporation in respect of the Interest Obligation.

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

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

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

ARTICLE 11

SUCCESSORS

11.1 Corporation may Consolidate, Etc., Only on Certain Terms

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

	 	(i)	 	the Person formed by such consolidation or into which the Corporation is
amalgamated or merged, or the Person which acquires by sale, conveyance, transfer or
lease all or substantially all of the properties and assets of the Corporation is a
corporation, organized and existing under the laws of Canada or any province or
territory thereof or the laws of the United States or any state thereof and such
corporation (if other than the Corporation or the continuing corporation resulting from
the amalgamation of the Corporation with another corporation under the laws of Canada
or any province or territory thereof) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the
obligations of the Corporation under the Debentures and this Indenture and the
performance or observance of every covenant and
provision of this Indenture and the Debentures required on the part of the
Corporation to be performed or observed and the conversion rights shall be provided
for in accordance with Article 4, by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by the Person (if other than the
Corporation or the continuing corporation resulting from the amalgamation of the
Corporation with another corporation under the laws of Canada or any province or
territory thereof) formed by such consolidation or into which the Corporation shall
have been merged or by the Person which shall have acquired the Corporation’s
assets;

 

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

	 	(iii)	 	if the Corporation or the continuing corporation resulting from the
amalgamation or merger of the Corporation with another Person under the laws of Canada
or any province or territory thereof or the laws of the United States or any state
thereof will not be the resulting, continuing or surviving corporation, the Corporation
shall have, at or prior to the effective date of such consolidation, amalgamation,
merger or sale, conveyance, transfer or lease, delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation, merger or
transfer complies with this Article and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture complies with this
Article, and that all conditions precedent herein provided for relating to such
transaction have been complied with.

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

11.2 Successor Substituted

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

ARTICLE 12

COMPULSORY ACQUISITION

12.1 Definitions

In this Article:

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

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

 

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	(c)	 	“Offer” means an offer to acquire outstanding Debentures, which is a takeover bid for
Debentures within the meaning ascribed thereto in MI 62-104, where as of the date of the offer
to acquire, the Debentures that are subject to the offer to acquire, together with the
Offeror’s Debentures, constitute in the aggregate 20% or more of the outstanding principal
amount of the Debentures;

	 
	(d)	 	“offer to acquire” includes an acceptance of an offer to sell;

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

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

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

12.2 Offer for Debentures

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

	(a)	 	within the time provided in the Offer for its acceptance or within 120 days after the date
the Offer is made, whichever period is the shorter, the Offer is accepted by Debentureholders
representing at least 90% of the outstanding principal amount of the Debentures, other than
the Offeror’s Debentures;

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

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

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

12.3 Offeror’s Notice to Dissenting Shareholders

Where an Offeror is entitled to acquire Debentures held by Dissenting Debentureholders
pursuant to Section 12.2 and the Offeror wishes to exercise such right, the Offeror shall send by
registered mail within 30 days after the date of termination of the Offer a notice (the “Offeror’s
Notice”) to each Dissenting Debentureholder stating that:

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

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

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

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

 

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12.4 Delivery of Debenture Certificates

A Dissenting Debentureholder to whom an Offeror’s Notice is sent pursuant to Section 12.3
shall, within 21 days after the sending of the Offeror’s Notice, send his or her Debenture
certificate(s) to the Trustee duly endorsed for transfer.

12.5 Payment of Consideration to Trustee

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

12.6 Consideration to be held in Trust

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

12.7 Completion of Transfer of Debentures to Offeror

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

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

	(b)	 	send to each Dissenting Debentureholder who has complied with Section 12.4 the consideration
to which such Dissenting Debentureholder is entitled under this Article 12; and

	(c)	 	send to each Dissenting Debentureholder who has not complied with Section 12.4 a notice
stating that:

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

	 	(ii)	 	the Trustee or some other person designated in such notice are holding in trust
the consideration for such Debentures; and

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

and the Trustee is hereby appointed the agent and attorney of the Dissenting
Debentureholders for the purposes of giving effect to the foregoing provisions.

12.8 Communication of Offer to Trust

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

 

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ARTICLE 13

MEETINGS OF DEBENTUREHOLDERS

13.1 Right to Convene Meeting

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

13.2 Notice of Meetings

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

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

	 	(i)	 	a reference to such fact, indicating each series of Debentures in the opinion
of the Trustee so especially affected (hereinafter referred to as the “especially
affected series”) shall be made in the notice of such meeting, and in any such case the
meeting shall be and be deemed to be and is herein referred to as a “Serial Meeting” ;
and

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

	 	(A)	 	at such Serial Meeting: (I) there are Debentureholders present
in person or by proxy and representing at least 25% in principal amount of the
Debentures then outstanding of such series, subject to the provisions of this
Article 13 as to quorum at adjourned meetings; and (II) the resolution is
passed by the affirmative vote of the holders of more than 50% (or in the case
of an Extraordinary Resolution not less than 662/3%) of the principal amount of
the Debentures of such series then outstanding voted on the resolution; or

	 	(B)	 	in the case of action taken or power exercised by instrument in
writing under Section 13.15, such instrument is signed in one or more
counterparts by the holders of not less than 662/3% in principal amount of the
Debentures of such series then outstanding.

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

 

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	(d)	 	A proposal:

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

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

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

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

13.3 Chairman

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

13.4 Quorum

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

13.5 Power to Adjourn

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

 

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13.6 Show of Hands

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

13.7 Poll

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

13.8 Voting

On a show of hands every person who is present and entitled to vote, whether as a
Debentureholder or as proxy for one or more Debentureholders or both, shall have one vote. On a
poll each Debentureholder present in person or represented by a proxy duly appointed by an
instrument in writing shall be entitled to one vote in respect of each $1,000 principal amount of
Debentures of which he shall then be the holder. In the case of any Debenture denominated in a
currency or currency unit other than Canadian dollars, the principal amount thereof for these
purposes shall be computed in Canadian dollars on the basis of the conversion of the principal
amount thereof at the applicable spot buying rate of exchange for such other currency or currency
unit as reported by the Bank of Canada at the close of business on the Business Day next preceding
the meeting. Any fractional amounts resulting from such conversion shall be rounded to the nearest
$100. A proxy need not be a Debentureholder. In the case of joint holders of a Debenture, any one
of them present in person or by proxy at the meeting may vote in the absence of the other or others
but in case more than one of them be present in person or by proxy, they shall vote together in
respect of the Debentures of which they are joint holders.

13.9 Proxies

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

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

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

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

 

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

13.10 Persons Entitled to Attend Meetings

The Corporation and the Trustee, by their respective officers and directors, the Auditors of
the Corporation and the legal advisors of the Corporation, the Trustee or any Debentureholder may
attend any meeting of the Debentureholders, but shall have no vote as such.

13.11 Powers Exercisable by Extraordinary Resolution

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

13.12 Meaning of “Extraordinary Resolution”

	(a)	 	The expression “Extraordinary Resolution” when used in this Indenture means, subject as
hereinafter in this Article provided, a resolution proposed to be passed as an Extraordinary
Resolution at a meeting of Debentureholders (including an adjourned meeting) duly convened for
the purpose and held in accordance with the provisions of this Article at which the holders of
not less than 25% of the principal amount of the Debentures then outstanding, and if the
meeting is a Serial Meeting, at which holders of not less than 25% of the principal amount of
the Debentures then outstanding of each especially affected series, are present in person or
by proxy and passed by the favourable votes of the holders of not less than 66 2/3% of the
principal amount of the Debentures, and if the meeting is a Serial Meeting by the affirmative
vote of the holders of not less than 662/3% of each especially affected series, in each case
present or represented by proxy at the meeting and voted upon on a poll on such resolution.

 

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

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

13.13 Powers Cumulative

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

13.14 Minutes

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

13.15 Instruments in Writing

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

13.16 Binding Effect of Resolutions

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

 

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13.17 Evidence of Rights Of Debentureholders

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

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

13.18 Concerning Serial Meetings

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

ARTICLE 14

NOTICES

14.1 Notice to Corporation

Any notice to the Corporation under the provisions of this Indenture shall be valid and
effective if delivered to the Corporation at: 654 — 999 Canada Place, Vancouver, British Columbia,
V6C 3E1, Attention: Chief Financial Officer, and a copy delivered to Macleod Dixon LLP, 3700, 400 -
3rd Avenue SW, Calgary, AB T2P 4H2 Attention: Marcus W. Archer, or if given by
registered letter, postage prepaid, to such offices and so addressed and if mailed, shall be deemed
to have been effectively given three days following the mailing thereof. The Corporation may from
time to time notify the Trustee in writing of a change of address which thereafter, until changed
by like notice, shall be the address of the Corporation for all purposes of this Indenture.

14.2 Notice to Debentureholders

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

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

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

 

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

14.3 Notice to Trustee

Any notice to the Trustee under the provisions of this Indenture shall be valid and effective
if delivered to the Trustee at its principal office in the City of Calgary, at Suite 310, 250 -
6th Avenue SW, Calgary, Alberta, T2P 3H7 or if given by registered letter, postage
prepaid, to such office and so addressed and, if mailed, shall be deemed to have been effectively
given three days following the mailing thereof.

14.4 Mail Service Interruption

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

ARTICLE 15

CONCERNING THE TRUSTEE

15.1 No Conflict of Interest

The Trustee represents to the Corporation that at the date of execution and delivery by it of
this Indenture there exists no material conflict of interest in the role of the Trustee as a
fiduciary hereunder but if, notwithstanding the provisions of this Section 15.1, such a material
conflict of interest exists, or hereafter arises, the validity and enforceability of this
Indenture, and the Debentures issued hereunder, shall not be affected in any manner whatsoever by
reason only that such material conflict of interest exists or arises but the Trustee shall, within
30 days after ascertaining that it has a material conflict of interest, either eliminate such
material conflict of interest or resign in the manner and with the effect specified in Section
15.2.

15.2 Replacement of Trustee

The Trustee may resign its trust and be discharged from all further duties and liabilities
hereunder by giving to the Corporation 90 days notice in writing or such shorter notice as the
Corporation may accept as sufficient. If at any time a material conflict of interest exists in the
Trustee’s role as a fiduciary hereunder the Trustee shall, within 30 days after ascertaining that
such a material conflict of interest exists, either eliminate such material conflict of interest or
resign in the manner and with the effect specified in this Section 15.2. The validity and
enforceability of this Indenture and of the Debentures issued hereunder shall not be affected in
any manner whatsoever by reason only that such a material conflict of interest exists. In the event
of the Trustee resigning or being removed or being dissolved, becoming bankrupt, going into
liquidation or otherwise becoming incapable of acting hereunder, the Corporation shall forthwith
appoint a new Trustee unless a new Trustee has already been appointed by the Debentureholders.
Failing such appointment by the Corporation, the retiring Trustee or any Debentureholder may apply
to a Judge of the Court of Queen’s Bench of Alberta, on such notice as such Judge may direct at the
Corporation’s expense, for the appointment of a new Trustee but any new Trustee so appointed by the
Corporation or by the Court shall be subject to removal as aforesaid by the Debentureholders and
the appointment of such new Trustee shall be effective only upon such new Trustee becoming bound by
this Indenture. Any new Trustee appointed under any provision of this Section 15.2 shall be a
corporation authorized to carry on the business of a trust company in all of the Provinces of
Canada. On any new appointment the new Trustee shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named herein as Trustee.

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

 

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15.3 Duties of Trustee

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

15.4 Reliance Upon Declarations, Opinions, etc.

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

15.5 Evidence and Authority to Trustee, Opinions, etc.

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

Such evidence shall consist of:

	(a)	 	a certificate made by any two officers or directors of the Corporation, stating that any such
condition precedent has been complied with in accordance with the terms of this Indenture;

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

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

 

70

 

Whenever such evidence relates to a matter other than the certificates and delivery of
Debentures and the satisfaction and discharge of this Indenture, and except as otherwise
specifically provided herein, such evidence may consist of a report or opinion of any solicitor,
auditor, accountant, engineer or appraiser or any other person whose qualifications give authority
to a statement made by him, provided that if such report or opinion is furnished by a trustee,
officer or employer of the Corporation it shall be in the form of a statutory declaration. Such
evidence shall be, so far as appropriate, in accordance with the immediately preceding paragraph of
this Section.

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

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

15.6 Officers’ Certificates Evidence

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

15.7 Experts, Advisers and Agents

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

	(b)	 	The Trustee may employ such agents and other assistants as it may reasonably require for the
proper discharge of its duties hereunder, and may pay reasonable remuneration for all services
performed for it (and shall be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and compensation for all disbursements,
costs and expenses made or incurred by it in the discharge of its duties hereunder and in the
management of the trusts hereof and any solicitors employed or consulted by the Trustee may,
but need not be, solicitors for the Corporation. The Trustee shall not be responsible for the
actions of such agents provided that it has selected such agents with due care and in a
commercially reasonable manner.

15.8 Trustee May Deal in Debentures

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

 

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15.9 Investment of Monies Held by Trustee

Unless otherwise provided in this Indenture, any monies held by the Trustee, which, under the
trusts of this Indenture, may or ought to be invested or which may be on deposit with the Trustee
or which may be in the hands of the Trustee, may be invested and reinvested in the name or under
the control of the Trustee in securities in which, under the laws of the Province of Alberta,
trustees are authorized to invest trust monies, provided that such securities are expressed to
mature within two years or such shorter period selected to facilitate any payments expected to be
made under this Indenture, after their purchase by the Trustee, and unless and until the Trustee
shall have declared the principal of and interest on the Debentures to be due and payable, the
Trustee shall so invest such monies at the Written Direction of the Corporation given in a
reasonably timely manner. Pending the investment of any monies as hereinbefore provided, such
monies may be deposited in the name of the Trustee in any chartered bank of Canada or, with the
consent of the Corporation, in the deposit department of the Trustee or any other loan or trust
company authorized to accept deposits under the laws of Canada or any Province thereof at the rate
of interest, if any, then current on similar deposits.

Unless and until the Trustee shall have declared the principal of and interest on the
Debentures to be due and payable, the Trustee shall pay over to the Corporation all interest
received by the Trustee in respect of any investments or deposits made pursuant to the provisions
of this Section.

15.10 Trustee Not Ordinarily Bound

Except as provided in Section 8.2 and as otherwise specifically provided herein, the Trustee
shall not, subject to Section 15.3, be bound to give notice to any person of the execution hereof,
nor to do, observe or perform or see to the observance or performance by the Corporation of any of
the obligations herein imposed upon the Corporation or of the covenants on the part of the
Corporation herein contained, nor in any way to supervise or interfere with the conduct of the
Corporation’s business, unless the Trustee shall have been required to do so in writing by the
holders of not less than 25% of the aggregate principal amount of the Debentures then outstanding
or by any Extraordinary Resolution of the Debentureholders passed in accordance with the provisions
contained in Article 13, and then only after it shall have been funded and indemnified to its
satisfaction against all actions, proceedings, claims and demands to which it may render itself
liable and all costs, charges, damages and expenses which it may incur by so doing.

15.11 Trustee Not Required to Give Security

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

15.12 Trustee Not Bound to Act on Trust’s Request

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

15.13 Conditions Precedent to Trustee’s Obligations to Act Hereunder

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

 

72

 

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

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

15.14 Authority to Carry on Business

The Trustee represents to the Corporation that at the date of execution and delivery by it of
this Indenture it is authorized to carry on the business of a trust company in each of the
provinces of Canada but if, notwithstanding the provisions of this Section 15.14, it ceases to be
so authorized to carry on business, the validity and enforceability of this Indenture and the
securities issued hereunder shall not be affected in any manner whatsoever by reason only of such
event but the Trustee shall, within 90 days after ceasing to be authorized to carry on the business
of a trust company in any of the provinces of Canada, either become so authorized or resign in the
manner and with the effect specified in Section 15.2.

15.15 Compensation and Indemnity

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

	(b)	 	The Corporation hereby indemnifies and saves harmless the Trustee and its directors, officers
and employees from and against any and all loss, damages, charges, expenses, claims, demands,
actions or liability whatsoever which may be brought against the Trustee or which it may
suffer or incur as a result of or arising out of the performance of its duties and obligations
hereunder save only in the event of gross negligence, wilful misconduct or bad faith of the
Trustee. This indemnity will survive the termination or discharge of this Indenture and the
resignation or removal of the Trustee. The Trustee shall notify the Corporation promptly of
any claim for which it may seek indemnity. The Corporation shall defend the claim and the
Trustee shall co-operate in the defence. The Trustee may have separate Counsel and the
Corporation shall pay the reasonable fees and expenses of such Counsel. The Corporation need
not pay for any settlement made without its consent, which consent must not be unreasonably
withheld. This indemnity shall survive the resignation or removal of the Trustee or the
discharge of this Indenture.

15.16 Acceptance of Trust

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

15.17 Third Party Interests

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

 

73

 

15.18 Anti-Money Laundering

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

15.19 Privacy Laws

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

15.20 Force Majeure; Limitation of Trustee Liability

	(a)	 	In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work stoppages, accidents,
acts of war (declared or undeclared) or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, fire, riot, embargo and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware) services,
government action, including any laws, ordinances, regulations or the like which delay,
restrict or prohibit the providing of the services contemplated by this Indenture; it being
understood that the Trustee shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable under the
circumstances.

	 
	(b)	 	The Trustee shall not be liable for any consequential, punitive or special damages;

ARTICLE 16

SUPPLEMENTAL INDENTURES

16.1 Supplemental Indentures

Subject to the approval of the Toronto Stock Exchange, from time to time the Trustee and, when
authorized by a resolution of the directors of Corporation, the Corporation, may, and they shall
when required by this Indenture,
execute, acknowledge and deliver by their proper officers deeds or indentures supplemental
hereto which thereafter shall form part hereof, for any one or more of the following purposes:

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

 

74

 

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

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

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

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

	 
	(f)	 	for any other purpose not inconsistent with the terms of this Indenture.

Unless the supplemental indenture requires the consent or concurrence of Debentureholders or
the holders of a particular series of Debentures, as the case may be, by Extraordinary Resolution,
the consent or concurrence of Debentureholders or the holders of a particular series of Debentures,
as the case may be, shall not be required in connection with the execution, acknowledgement or
delivery of a supplemental indenture. The Corporation and the Trustee may amend any of the
provisions of this Indenture related to matters of United States law or the issuance of Debentures
into the United States in order to ensure that such issuances can be made in accordance with
applicable law in the United States without the consent or approval of the Debentureholders.
Further, the Corporation and the Trustee may without the consent or concurrence of the
Debentureholders or the holders of a particular series of Debentures, as the case may be, by
supplemental indenture or otherwise, make any changes or corrections in this Indenture which it
shall have been advised by Counsel are required for the purpose of curing or correcting any
ambiguity or defective or inconsistent provisions or clerical omissions or mistakes or manifest
errors contained herein or in any indenture supplemental hereto or any Written Direction of the
Corporation provided for the issue of Debentures, providing that in the opinion of the Trustee
(relying upon an opinion of Counsel) the rights of the Debentureholders are in no way prejudiced
thereby.

 

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ARTICLE 17

EXECUTION AND FORMAL DATE

17.1 Execution

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

17.2 Formal Date

For the purpose of convenience this Indenture may be referred to as bearing the formal date of
June 9, 2011 irrespective of the actual date of execution hereof.

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

	 	 	 	 	 	 	 
	 	 	IVANHOE ENERGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	(signed) “Greg G. Phaneuf”
 

Name: Greg G. Phaneuf
	 	 
	 

	 	 	 	Title Senior Vice President, Corporate Development	 	 
	 
	 	 	 	 	 	 
	 	 	BNY TRUST COMPANY OF CANADA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	(signed) “Robert Solis”
 

Name: Robert Solis
	 	 
	 

	 	 	 	Title: Vice President Corporate Trust	 	 

 

76

 

SCHEDULE “A”

TO THE CONVERTIBLE DEBENTURE INDENTURE AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

FORM OF DEBENTURE

 

 

 

FORM OF DEBENTURE

[GLOBAL DEBENTURE LEGEND]

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

TRANSFERS OF THIS DEBENTURE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CDS & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.

[INSERT U.S. LEGEND, IF APPLICABLE]

CUSIP •

ISIN •

			
	 	 	 
	 
	 	[U.S. RULE 144A — CUSIP •]
	 
	 	[U.S. RULE 144A — ISIN •]
	No. •
	 	$•

IVANHOE ENERGY INC.

(A corporation incorporated under the laws of Yukon)

5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

Ivanhoe Energy Inc. (the “Corporation” or the “Issuer”) for value received hereby acknowledges
itself indebted and, subject to the provisions of the Debenture Indenture (the “Indenture”) dated
as of June 9, 2011 among the Corporation and BNY Trust Company of Canada (the “Trustee”), promises
to pay to the registered holder hereof on June 30, 2016 or on such earlier date as the principal
amount hereof may become due in accordance with the provisions of the Indenture (any such date, the
“Maturity Date”) the principal sum of • Dollars ($•) in lawful money of Canada on
presentation and surrender of this Initial Debenture at the main branch of the Trustee in Calgary,
Alberta or in Toronto, Ontario in accordance with the terms of the Indenture and, subject as
hereinafter provided, to pay interest on the principal amount hereof from the date hereof, or from
the last Interest Payment Date to which interest shall have been paid or made available for payment
hereon, whichever is later, at the rate of 5.75% per annum (based on a 365-day year and the actual
number of days elapsed in that period), in like money, in arrears in equal (with the exception of
the first interest payment which will include interest from June 9, 2011 as set forth below)
semi-annual instalments (less any tax required by law to be deducted) on June 30 and December 31 in
each year commencing on December 31, 2011 and the last payment (representing interest payable from
the last Interest Payment Date to, but excluding, the Maturity Date) to fall due on the Maturity
Date and, should the Corporation at any time make default in the payment of any principal, premium,
if any, or interest, to pay interest on the amount in default at the same rate, in like money and
on the same dates. For certainty, the first interest payment will include interest accrued from
June 9, 2011 to, but excluding December 31, 2011, which will be equal to $32.29 for each $1,000
principal amount of the Initial Debentures. For the purposes of disclosure under the Interest Act
(Canada),
whenever interest is computed under this Initial Debenture on the basis of a year (the “deemed
year”) which contains fewer days than the actual number of days in the calendar year of
calculation, such rate of interest shall be expressed as a yearly rate by multiplying such rate of
interest by the actual number of days in such calendar year of calculation and dividing it by the
number of days in the deemed year.

 

A-1

 

The Corporation may elect, from time to time, to satisfy interest hereon by delivering: (i)
cash, (ii) freely tradeable Common Shares of the Corporation; or (iii) a combination of (i) and
(ii), and delivery of such cash or freely tradeable Common Shares, or any combination thereof (plus
the amount of any tax required to be withheld), shall satisfy and discharge all liability for
interest on this Initial Debenture.

This Initial Debenture is one of the 5.75% Convertible Unsecured Subordinated Debentures
(referred to herein as the “Initial Debentures”) of the Corporation issued or issuable in one or
more series under the provisions of the Indenture. The Initial Debentures authorized for issue
immediately are limited to an aggregate principal amount of $82,500,000 in lawful money of Canada.
Reference is hereby expressly made to the Indenture for a description of the terms and conditions
upon which the Initial Debentures are or are to be issued and held and the rights and remedies of
the holders of the Initial Debentures and of the Corporation and of the Trustee, all to the same
effect as if the provisions of the Indenture were herein set forth to all of which provisions the
holder of this Initial Debenture by acceptance hereof assents.

The Initial Debentures are issuable only in denominations of $1,000 and integral multiples
thereof. Upon compliance with the provisions of the Indenture, Debentures of any denomination may
be exchanged for an equal aggregate principal amount of Debentures in any other authorized
denomination or denominations.

Any part, being $1,000 or an integral multiple thereof, of the principal of this Initial
Debenture, provided that the principal amount of this Initial Debenture is in a denomination in
excess of $1,000, is convertible, at the option of the holder hereof, upon surrender of this
Initial Debenture at the principal office of the Trustee in Calgary, Alberta or in Toronto,
Ontario, at any time prior to the close of business on the Maturity Date or, if this Initial
Debenture is called for redemption on or prior to such date, then, to the extent so called for
redemption, up to but not after the close of business on the last Business Day immediately
preceding the date specified for redemption of this Initial Debenture, into Common Shares (without
adjustment for interest accrued hereon or for dividends or distributions on Common Shares issuable
upon conversion) at a conversion price of $3.36 (the “Conversion Price”) per Common Share, being a
rate of approximately 297.6190 Common Shares for each $1,000 principal amount of Initial
Debentures, all subject to the terms and conditions and in the manner set forth in the Indenture.
No Initial Debentures may be converted during the five Business Days preceding and including
December 31 and June 30 in each year, commencing December 31, 2011, as the registers of the Trustee
will be closed during such periods. The Indenture makes provision for the adjustment of the
Conversion Price in the events therein specified. No fractional Common Shares will be issued on any
conversion but in lieu thereof, the Corporation will satisfy such fractional interest by a cash
payment equal to the market price of such fractional interest determined in accordance with the
Indenture. Holders converting their Debentures will not receive accrued and unpaid interest
thereon. If a Debenture is surrendered for conversion on an Interest Payment Date or during the
five preceding Business Days, the person or persons entitled to receive Common Shares in respect of
the Debentures so surrendered for conversion shall not become the holder or holders of record of
such Common Shares until the Business Day following such Interest Payment Date.

This Initial Debenture may be redeemed at the option of the Corporation on the terms and
conditions set out in the Indenture at the redemption price therein and herein set out provided
that this Initial Debenture is not redeemable before June 30, 2014, except in the event of the
satisfaction of certain conditions after a Change of Control has occurred. On and after June 30,
2014, and provided that the Current Market Price of the Common Shares of the Corporation is at
least 125% of the Conversion Price of the Initial Debentures, the Initial Debentures are redeemable
at the option of the Corporation at a price equal to $1,000 per Initial Debenture plus accrued and
unpaid interest and otherwise on the terms and conditions described in the Indenture. The
Corporation may, on notice as provided in the Indenture, at its option and subject to any
applicable regulatory approval, elect to satisfy its obligation to pay all or any portion of the
applicable Redemption Price by the issue of that number of Common Shares obtained by dividing the
applicable Redemption Price by 95% of the volume weighted average trading price of the Common
Shares on the Toronto Stock Exchange or such other stock exchange on which the Initial Debentures
may be listed for the 20 consecutive trading days ending five trading days before the Redemption
Date.

 

A-2

 

Upon the occurrence of a Change of Control of the Corporation, the Corporation is required to
make an offer to purchase all of the Initial Debentures at a price equal to 100% of the principal
amount of such Initial Debentures plus accrued and unpaid interest (if any) up to, but excluding,
the date the Initial Debentures are so repurchased (the “Change of Control Purchase Offer”). If 90%
or more of the principal amount of all Debentures outstanding on the date the Corporation provides
notice of a Change of Control to the Trustee have been tendered for purchase pursuant to the Change
of Control Purchase Offer, the Corporation has the right to redeem all the remaining outstanding
Initial Debentures on the same date and at the same price.

In addition to the requirement for the Corporation to make a Change of Control Purchase Offer
in the event of a Change of Control, if a Change of Control occurs in which 10% or more of the
consideration for the Common Shares in the transaction or transactions constituting a Change of
Control consists of:

	 	(i)	 	cash, other than cash payments for fractional Common Shares and cash payments
made in respect of dissenter’s appraisal rights;

	 	(ii)	 	equity securities that are not traded or intended to be traded immediately
following such transactions on a recognized stock exchange; or

	 	(iii)	 	other property that is not traded or intended to be traded immediately
following such transactions on a recognized stock exchange,

then subject to regulatory approvals, during the period beginning ten trading days before the
anticipated date on which the Change of Control becomes effective and ending 30 days after the
Change of Control Purchase Offer is delivered, holders of Debentures will be entitled to convert
their Debentures, subject to certain limitations, and receive, in addition to the number of Common
Shares they would otherwise be entitled to receive, an additional number of Common Shares per
$1,000 principal amount of Debentures calculated in accordance with the terms of the Indenture.

If an offer is made for the Initial Debentures which is a take-over bid for the Initial
Debentures within the meaning of applicable Canadian securities laws and 90% or more of the
principal amount of all the Initial Debentures (other than Initial Debentures held at the date of
the offer by or on behalf of the Offeror, associates or affiliates of the Offeror or anyone acting
jointly or in concert with the Offeror) are taken up and paid for by the Offeror, the Offeror will
be entitled to acquire the Initial Debentures of those holders who did not accept the offer on the
same terms as the Offeror acquired the first 90% of the principal amount of the Initial Debentures.

The Corporation may, on notice as provided in the Indenture, at its option and subject to any
applicable regulatory approval, elect to satisfy the obligation to repay all or any portion of the
principal amount of this Initial Debenture due on the Maturity Date, together with all accrued and
unpaid interest thereon, by the issue of that number of Freely Tradeable Common Shares obtained by
dividing the principal amount of this Initial Debenture (or that portion to be paid for in Common
Shares pursuant to the exercise by the Corporation of the Common Share Repayment Right), together
with all accrued and unpaid interest thereon, by 95% of the volume weighted average trading price
of the Common Shares on the Toronto Stock Exchange or other stock exchange on which the Debentures
may be listed for the 20 consecutive trading days ending five trading days before the Maturity
Date.

Subject to Applicable Securities Legislation, upon conversion of this Initial Debenture, in
lieu of delivering Common Shares, the Corporation may elect to use the Cash Conversion Option. If
the Corporation elects the Cash Conversion Option, settlement amounts under the Cash Conversion
Option will be computed in accordance with Section 2.4(m) of the Indenture. Pursuant to the Cash
Conversion Option, the Corporation will pay cash no later than the third business day following the
last day of the related Observation Period.

Notwithstanding any election by the Corporation to invoke or suspend the Cash Conversion
Option or any election by a holder of this Initial Debenture to convert this Initial Debenture into
Common Shares, the Cash Conversion Option shall be immediately suspended if and for so long as any
default, event of default or acceleration has occurred and is continuing under any of the Senior
Indebtedness or if the payment of such Cash Conversion Option would reasonably be expected to
result in such a default or event of default.

 

A-3

 

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

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

The Indenture contains provisions making binding upon all holders of Debentures outstanding
thereunder (or in certain circumstances specific series of Debentures) resolutions passed at
meetings of such holders held in accordance with such provisions and instruments signed by the
holders of a specified majority of Debentures outstanding (or specific series), which resolutions
or instruments may have the effect of amending the terms of this Initial Debenture or the
Indenture.

The Indenture contains provisions disclaiming any personal liability on the part of holders of
Common Shares and officers, directors and employees of the Corporation in respect of any obligation
or claim arising out of the Indenture or this Debenture.

This Initial Debenture may only be transferred, upon compliance with the conditions prescribed
in the Indenture, in one of the registers to be kept at the principal office of the Trustee in the
City of Calgary, Alberta or the City of Toronto, Ontario and in such other place or places and/or
by such other registrars (if any) as the Corporation with the approval of the Trustee may
designate. No transfer of this Initial Debenture shall be valid unless made on the register by the
registered holder hereof or his executors or administrators or other legal representatives, or his
or their attorney duly appointed by an instrument in form and substance satisfactory to the Trustee
or other registrar, and upon compliance with such reasonable requirements as the Trustee and/or
other registrar may prescribe and upon surrender of this Initial Debenture for cancellation.
Thereupon a new Initial Debenture or Initial Debentures in the same aggregate principal amount
shall be issued to the transferee in exchange hereof.

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

Capitalized words or expressions used in this Initial Debenture shall, unless otherwise
defined herein, have the meaning ascribed thereto in the Indenture.

IN WITNESS WHEREOF IVANHOE ENERGY INC. has caused this Debenture to be signed by its
authorized representatives as of the • day of •, •.

	 	 	 	 	 	 	 
	 	 	IVANHOE ENERGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 

 

A-4

 

(FORM OF TRUSTEE’S CERTIFICATE)

This Initial Debenture is one of the 5.75% Convertible Unsecured Subordinated Debentures due
June 30, 2016 referred to in the Indenture within mentioned.

	 	 	 	 	 
	BNY TRUST COMPANY OF CANADA	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

(Authorized Officer)
	 	 

(FORM OF REGISTRATION PANEL)

(No writing hereon except by Trustee or other registrar)

	 	 	 	 	 
	Date of Registration	 	In Whose Name Registered	 	Signature of Trustee or Registrar
	 	 	 	 	 

 

A-5

 

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _____, whose address and social insurance number, if applicable, are set forth below,
this Initial Debenture (or $_____ principal amount hereof*) of IVANHOE ENERGY INC. standing in
the name(s) of the undersigned in the register maintained by the Corporation with respect to such
Initial Debenture and does hereby irrevocably authorize and direct the Trustee to transfer such
Initial Debenture in such register, with full power of substitution in the premises.

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

	 	 	 	 	 

	 	 	 
	*	 	If less than the full principal amount of the within Initial Debenture is to be transferred,
indicate in the space provided the principal amount (which must be $1,000 or an integral multiple
thereof, unless you hold an Initial Debenture in a non-integral multiple of $1,000 by reason of
your having exercised your right to exchange upon the making of a Change of Control Purchase Offer,
in which case such Initial Debenture is transferable only in its entirety) 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 without alteration or any change whatsoever. The
signature(s) must be guaranteed by a Canadian chartered bank or trust company or by a member
of an acceptable Medallion Guarantee Program. Notarized or witnessed signatures are not
acceptable as guaranteed signatures. The Guarantor must affix a stamp bearing the actual
words: “SIGNATURE GUARANTEED”.

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

	 	 	 	 	 
	Signature of Guarantor:
	 	 	 	 
	 
	 	 	 	 
	 

Authorized Officer

	 	 

Signature of transferring registered holder
	 	 
	 
	 	 	 	 
	 

Name of Institution

	 	 	 	 

 

A-6

 

EXHIBIT “1”

TO CDS GLOBAL DEBENTURE

IVANHOE ENERGY INC.

5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

DUE JUNE 30, 2016

			
	 	 	 
	
Initial Principal Amount: $•
	 	CUSIP •
	 
	 	ISIN CA •

Authorization:                                         

ADJUSTMENTS

	 	 	 	 	 	 	 	 	 
	Date	 	Amount of Increase	 	Amount of Decrease	 	New Principal Amount	 	Authorization
	 	 	 	 	 	 	 	 	 

 

A-7

 

SCHEDULE “B”

TO THE CONVERTIBLE DEBENTURE INDENTURE BETWEEN

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

FORM OF REDEMPTION NOTICE

 

 

 

SCHEDULE “B”

Form of Redemption Notice

IVANHOE ENERGY INC.

5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

REDEMPTION NOTICE

	To:	 	Holders of 5.75% Convertible Unsecured Subordinated Debentures (the
“Debentures”) of Ivanhoe Energy Inc. (the “Corporation”)

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

Notice is hereby given pursuant to Section 4.3 of the convertible debenture indenture (the
“Indenture”) dated as of June 9, 2011 among the Corporation and BNY Trust Company of Canada (the
“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 $1,000 principal amount of Debentures, being equal to the aggregate of
(i) $3.36 (the “Redemption Price”), and (ii) all accrued and unpaid interest hereon to but
excluding the Redemption Date (collectively, the “Total Redemption Price”).

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

BNY Trust Company of Canada

11th Floor, 320 Bay Street

Toronto, Ontario

M5H 4A6

Attention: Operations Department

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

Pursuant to Section 4.6 of the Indenture, the Corporation hereby irrevocably elects to satisfy
its obligation to pay $3.36 of the Redemption Price payable to holders of Debentures in accordance
with this notice by issuing and delivering to the holders that number of Freely Tradeable Common
Shares obtained by dividing the Redemption Price by 95% of the Current Market Price of the Common
Shares.

No fractional Common Shares shall be delivered upon the exercise by the Corporation of the
above-mentioned redemption right but, in lieu thereof, the Corporation shall pay the cash
equivalent thereof determined on the basis of the Current Market Price of Common Shares on the
Redemption Date (less any tax required to be deducted, if any).

In this connection, upon presentation and surrender of the Debentures for payment on the
Redemption Date, the Corporation shall, on the Redemption Date, make the delivery to the Trustee,
at the above-mentioned corporate trust office, for delivery to and on account of the holders, of
certificates representing the Freely Tradeable Common Shares to which holders are entitled together
with the cash equivalent in lieu of fractional Common Shares, cash for 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 Freely Tradeable Common Shares, cash representing the balance of the
Redemption Price.

 

B-1

 

DATED:

	 	 	 
	IVANHOE ENERGY INC.
	 	 
	 
	 	 
	 

(Authorized Director or Officer of

	 	 
	Ivanhoe Energy Inc.)
	 	 

 

B-2

 

SCHEDULE “C”

TO THE CONVERTIBLE DEBENTURE INDENTURE AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

FORM OF MATURITY NOTICE

 

 

 

SCHEDULE “C”

Form of Maturity Notice

IVANHOE ENERGY INC.

5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

MATURITY NOTICE

	To:	 	Holders of 5.75% Convertible Unsecured Subordinated Debentures (the
“Debentures”) of Ivanhoe Energy Inc. (the “Corporation”)

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

Notice is hereby given pursuant to Section 4.10(b) of the convertible debenture indenture (the
“Indenture”) dated as of June 9, 2011 among the Corporation and BNY Trust Company of Canada, as
trustee (the “Trustee”), that the Debentures are due and payable as of June 30, 2016 (the “Maturity
Date”) and the Corporation elects to satisfy its obligation to repay to holders of Debentures the
principal amount of all of the Debentures outstanding on the Maturity Date, together with all
accrued and unpaid interest thereon, by issuing and delivering to the holders that number of Freely
Tradeable Common Shares equal to the number obtained by dividing such principal amount of the
Debentures and accrued and unpaid interest thereon by 95% of the Current Market Price of Common
Shares on the Maturity Date.

No fractional Common Shares shall be delivered on exercise by the Corporation of the above
mentioned repayment right but, in lieu thereof, the Corporation shall pay the cash equivalent
thereof determined on the basis of the Current Market Price of Common Shares on the Maturity Date
(less any tax required to be deducted, if any).

In this connection, upon presentation and surrender of the Debentures for payment on the
Maturity Date, the Corporation shall, on the Maturity Date, make delivery to the Trustee, at its
principal trust office in Calgary, Alberta or in Toronto, Ontario, for delivery to and on account
of the holders, of certificates representing the Freely Tradeable Common Shares to which holders
are entitled together with the cash equivalent in lieu of fractional Common Shares, and if only a
portion of the Debentures are to be repaid by issuing Freely Tradeable Common Shares, cash
representing the balance of the principal amount, premium (if any) and interest due on the Maturity
Date.

DATED:

	 	 	 
	IVANHOE ENERGY INC.
	 	 
	 
	 	 
	 

(Authorized Director or Officer of

	 	 
	Ivanhoe Energy Inc.)
	 	 

 

C-1

 

SCHEDULE “D”

TO THE CONVERTIBLE DEBENTURE INDENTURE AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

FORM OF NOTICE OF CONVERSION

 

 

 

SCHEDULE “D”

Form of Notice of Conversion

CONVERSION NOTICE

	TO:	 	IVANHOE ENERGY INC.

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

The undersigned registered holder of 5.75% Convertible Unsecured Subordinated Debentures
irrevocably elects to convert such Debentures (or $• principal amount thereof*) in accordance
with the terms of the Indenture referred to in such Debentures and tenders herewith the Debentures,
and, if applicable, directs that the Common Shares of Ivanhoe Energy Inc. issuable upon a
conversion be issued and delivered to the person indicated below. (If Common Shares are to be
issued in the name of a person other than the holder, all requisite transfer taxes must be tendered
by the undersigned).

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 

	 	 

(Signature of Registered Holder)
	 	 

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

	 
	NOTE:	 	If Common Shares are to be issued in the name of a person other than the holder, the
signature must be guaranteed by a chartered bank, a trust company or by a member of an
acceptable Medallion Guarantee Program. The Guarantor must affix a stamp bearing the actual
words: “SIGNATURE GUARANTEED”.

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

	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	(Address)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	(City, Province and Postal Code)	 	 
	 
	 	 	 	 	 	 
	Name of guarantor:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	Authorized signature:	 	 	 	 
	 

	 	 	 	 

	 	 

 

D-1

 

SCHEDULE “E”

TO THE CONVERTIBLE DEBENTURE INDENTURE AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

FORM OF CERTIFICATE OF TRANSFER

 

 

 

SCHEDULE “E”

FORM OF CERTIFICATE OF TRANSFER

Ivanhoe Energy Inc.

654 — 999 Canada Place

Vancouver, British Columbia, V6C 3E1

BNY Trust Company of Canada

11th Floor, 320 Bay Street

Toronto, Ontario M5H 4A6

Attention: Operation Department

Re: Transfer of Debentures

Reference is hereby made to the Indenture, dated as of June 9, 2011 (the “Indenture”),
among Ivanhoe Energy Inc., as issuer (the “Company”), and BNY Trust Company of Canada, as
trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the
Indenture.

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

[CHECK ALL THAT APPLY]

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

2. o Check if Transferee will take delivery of a beneficial interest in an Unrestricted
Global Debenture or an Unrestricted Definitive Debenture pursuant to Regulation S. The Transfer
is being effected pursuant to and in accordance with Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a
Person in the United States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities market and neither
such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with
a buyer in the United States, (ii) no directed selling efforts in the United States have been made
in contravention of the requirements of Regulation S under the Securities Act, and (iii) the
transaction is not part of a plan or scheme to evade the registration requirements of the
Securities Act.

3. o Check and complete if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Debenture or an Unrestricted Definitive Debenture pursuant to any provision of
the Securities Act other than Regulation S.

(a) o Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant
to and in accordance with Rule 144 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky securities laws
of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the U.S. Legend are not required in
order to maintain compliance with the Securities Act.

 

E-1

 

(b) o Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144A, Regulation S and Rule 144, and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky securities laws
of any State of the United States and (ii) the restrictions on transfer contained in the
Indenture and the U.S. Legend are not required in order to maintain compliance with the
Securities Act.

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

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Insert Name of Transferor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

Dated:                                         

 

E-2

 

ANNEX A TO CERTIFICATE OF TRANSFER

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

[CHECK ONE OF (a) OR (b) OR (c)]

	 	(a)	 	o a beneficial interest in the:

	 	(i)	 	o Restricted Global Debenture (CUSIP
 _____)

	 
	 	(ii)	 	o Unrestricted Global Debenture (CUSIP
 _____)

	 	(b)	 	o a Restricted Definitive Debenture

	 
	 	(c)	 	o an Unrestricted Definitive Debenture

	2.	 	After the Transfer the Transferee will hold:

[CHECK ONE OF (a) OR (b) OR (c)]

	 	(a)	 	o a beneficial interest in the:

	 	(i)	 	o Restricted Global Debenture (CUSIP
 _____)

	 
	 	(ii)	 	o Unrestricted Global Debenture (CUSIP
 _____)

	 	(b)	 	o a Restricted Definitive Debenture

	 
	 	(c)	 	o an Unrestricted Definitive Debenture

	 	 	in accordance with the terms of the Indenture.

 

E-3

 

SCHEDULE “F”

TO THE CONVERTIBLE DEBENTURE INDENTURE AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

FORM OF CERTIFICATE OF EXCHANGE

 

 

 

SCHEDULE “F”

FORM OF CERTIFICATE OF EXCHANGE

Ivanhoe Energy Inc

654 — 999 Canada Place

Vancouver, British Columbia, V6C 3E1

BNY Trust Company of Canada

11th Floor, 320 Bay Street

Toronto, Ontario M5H 4A6

Attention: Operation Department

Re: Exchange of Debentures

(CUSIP __________________)

Reference is hereby made to the Indenture, dated as of June 9, 2011 (the “Indenture”),
among Ivanhoe Energy Inc., as issuer (the “Company”), and BNY Trust Company of Canada, as
trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the
Indenture.

 _____ 
(the “Owner”) owns and proposes to exchange the Debentures
or interests in such Debentures specified herein, in the principal amount of $_____ (the
“Exchange”). In connection with the Exchange, the Owner hereby certifies that:

1. Exchange of Restricted Definitive Debentures or Beneficial Interests in a Restricted
Global Debenture for Unrestricted Definitive Debentures or Beneficial Interests in an Unrestricted
Global Debenture

(a) o Check if Exchange is from a beneficial interest in a Restricted Global Debenture to a
beneficial interest in an Unrestricted Global Debenture. In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Debenture for a beneficial interest in an
Unrestricted Global Debenture in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to the Global
Debentures and pursuant to and in accordance with the Securities Act of 1933, as amended (the
“Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the
U.S. Legend are not required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Debenture is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

(b) o Check if Exchange is from Restricted Definitive Debenture to Unrestricted Definitive
Debenture. In connection with the Owner’s Exchange of a Restricted Definitive Debenture for an
Unrestricted Definitive Debenture, the Owner hereby certifies (i) the Unrestricted Definitive
Debenture is being acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to Restricted Definitive
Debentures and pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the U.S. Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Debenture is being acquired
in compliance with any applicable blue sky securities laws of any state of the United States.

2. Exchange of Beneficial Interests in an Unrestricted Global Debenture for Beneficial
Interests in a Restricted Global Debenture 

In connection with the Exchange of the Owner’s beneficial interest in an Unrestricted Global
Debenture for a beneficial interest in a Restricted Global Debenture in an equal principal amount,
the Owner hereby certifies that the beneficial interest is being acquired for the Owner’s own
account without transfer.

 

F-1

 

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

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Insert Name of Transferor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

Dated:                                         

 

F-2

 

SCHEDULE “G”

TO THE CONVERTIBLE DEBENTURE INDENTURE AMONG

IVANHOE ENERGY INC.

AND

BNY TRUST COMPANY OF CANADA

COMMON SHARE LEGENDS

 

 

 

SCHEDULE “G”

COMMON SHARE LEGENDS

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED
STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (C) WITHIN THE
UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE SECURITIES ACT OR (2) RULE 144 UNDER THE
U.S. SECURITIES ACT, IF AVAILABLE, AND IN EACH CASE IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS IN THE UNITED STATES OR SECURITIES LAWS OF ANY OTHER APPLICABLE JURISDICTIONS.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA. PROVIDED THAT THE CORPORATION IS A “FOREIGN ISSUER” WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT AT THE TIME OF SALE, A NEW CERTIFICATE, BEARING NO LEGEND,
MAY BE OBTAINED FROM THE CORPORATION’S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY
EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE CORPORATION AND ITS TRANSFER AGENT, TO THE
EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904
OF REGULATION S UNDER THE SECURITIES ACT. THE CORPORATION’S TRANSFER AGENT MAY ALSO REQUIRE AN
OPINION OF COUNSEL IN CONNECTION WITH ANY OFFER, SALE OR TRANSFER OF THE SECURITIES BY THE HOLDER
HEREOF.

 

G-1Exhibit 10.1

Exhibit 10.1

RESTRICTED SHARE UNIT PLAN

The Board of Directors of Ivanhoe Energy Inc. (the “Company”) has established this Restricted
Share Unit Plan (the “Plan”) for the Company governing the issuance of Restricted Share Units (as
defined herein) of the Company to Service Providers (as defined herein) of the Company and its
Affiliates (as defined herein).

	1.	 	Purposes

	 
	 	 	The principal purposes of the Plan are as follows:

	 	(a)	 	to strengthen the ability of the Company to attract and retain qualified
Service Providers which the Company and its Affiliates require;

	 	(b)	 	to align the interests of Service Providers with the interests of the Company’s
shareholders; and

	 	(c)	 	to focus management of the Company and its Affiliates on operating and
financial performance and total long-term shareholder return by providing an increased
incentive to contribute to the Company’s growth and profitability.

	2.	 	Definitions

As used in this Plan, the following words and phrases shall have the meanings indicated:

	 	(a)	 	“Accelerated Vesting Event” means, in respect of a Grantee, a Termination
Without Cause occurring within six months of the effective time of a Change of Control;

	 	(b)	 	“Affiliate” has the meaning set forth in Section 1(2) of the Securities Act
(Ontario), as amended, and includes those issuers that are similarly related, whether
or not any of the issuers are corporations, companies, partnerships, limited
partnerships, trusts, income trusts or investment trusts or any other organized entity
and, for the purposes of this Plan, a reference to an Affiliate shall mean an Affiliate
of the Company within such meaning;

	 	(c)	 	“Board” means the board of directors of the Company as it may be constituted
from time to time;

	 
	 	(d)	 	“Change of Control” means an event pursuant to which:

	 	(i)	 	a merger, amalgamation, arrangement, consolidation,
reorganization or transfer takes place in which securities of the Company
having more than 50% of the total combined voting power of the Company’s
outstanding voting securities are acquired by a person or persons different
from the persons holding those voting securities immediately prior to such
event, and the composition of the Board following such event is such that the
directors of the Company prior to the transaction constitute less than 50% of
the Board membership following the event; or

 

 

 

	 	(ii)	 	any person, or any combination of persons acting jointly or in
concert by virtue of an agreement, arrangement, commitment, or understanding
acquires, directly or indirectly, 50% or more of the voting rights attached to
all outstanding voting securities; or

	 	(iii)	 	any person or any combination of persons acting jointly or in
concert by virtue of an agreement, arrangement, commitment or understanding
acquires, directly or indirectly, the right to appoint a majority of the
directors of the Company; or

	 	(iv)	 	the Company sells, transfers or otherwise disposes of all or
substantially all of its assets, except that no Change of Control will be
deemed to occur if such sale or disposition is made to a subsidiary or
subsidiaries of the Company;

	 	(e)	 	“Committee” has the meaning set forth in Section 3 hereof;

	 	(f)	 	“Consultant” means a person or company, other than an employee, executive
officer or director of the Company or an Affiliate that:

	 	(i)	 	is engaged to provide services to the Company or an Affiliate;

	 	(ii)	 	provides services under a written contract with the Company or
an Affiliate; and

	 	(iii)	 	spends or will spend a significant amount of time and
attention on the affairs and business of the Company or an Affiliate;

and includes, for an individual Consultant, a company of which the individual
Consultant is an employee or shareholder and a partnership of which the individual
Consultant is an employee or a partner;

	 	(g)	 	“Disability” means a physical or mental incapacity of the Grantee that has
prevented the Grantee from performing the duties customarily assigned to the Grantee
for one hundred and eighty (180) days, whether or not consecutive, out of any twelve
(12) consecutive months and that are in the opinion of the Board likely to continue;

	 	(h)	 	“Exchange” means the principal stock exchange upon which the Shares are listed
or upon which the Shares have been approved for listing;

	 	(i)	 	“Fair Market Value” means, with respect to a Share on any date, the weighted
average price of the Shares on the Exchange for the five days on which Shares were
traded immediately preceding that date; provided that if the Shares are not listed for
trading on a stock exchange on such date, the Fair Market Value shall be the price per
Share as the Board, acting in good faith, may determine;

	 	(j)	 	“Grant Date” means the effective date of the granting of a Unit Award as is
specified in the applicable Unit Award Agreement between the Company to the Grantee;

	 
	 	(k)	 	“Grantee” has the meaning set forth in Section 4 hereof;

	 	(l)	 	“Performance Measures” for any fiscal year or other period that the Board in
its sole discretion shall determine, means the performance measures to be taken into
consideration in awarding Restricted Share Units under the Plan;

 

- 2 -

 

	 	(m)	 	“Plan Trustee” means a Plan Trustee appointed by the Company pursuant to the
terms of an employee benefit plan trust agreement providing for contributions by the
Company to a trust created thereunder for the purpose of purchasing Shares on the open
market to be delivered to holders of Unit Awards pursuant to Section 5(c)(iii);

	 	(n)	 	“Restricted Share Unit” means the right of a Grantee to receive a Share or a
cash payment on the Vesting Date of such Restricted Share Unit, subject to adjustment
pursuant to the provisions of Section 5, in the manner and subject to the terms and
provisions set forth in the Plan and the applicable Unit Award Agreement;

	 	(o)	 	“Retirement” shall have such meaning as the Committee or the Board shall
determine from time to time;

	 
	 	(p)	 	“Service Provider” has the meaning set forth in Section 4 hereof;

	 
	 	(q)	 	“Shareholder” means a holder of Shares;

	 
	 	(r)	 	“Shares” means common shares in the capital of the Company;

	 
	 	(s)	 	“Termination Without Cause” has the meaning set forth in Section 5 hereof;

	 	(t)	 	“Trust Fund” means one or more trust funds, as specified by the Committee,
established by the Company for the purpose of funding Unit Awards granted pursuant to
the Plan;

	 
	 	(u)	 	“Unit Award” means an award of Restricted Share Units under the Plan;

	 
	 	(v)	 	“Unit Award Agreement” has the meaning set forth in Section 5 hereof; and

	 	(w)	 	“Vesting Date” means, with respect to any Restricted Share Unit, the date,
determined in accordance with Section 5(b), upon which the Shares or cash to be
received thereunder shall become deliverable to the Grantee of such Restricted Share
Unit.

	3.	 	Administration

The Plan shall be administered by the Board or by such committee as the Board delegates such
authority to from time to time (either the Board or such committee of the Board shall be referred
to as the “Committee” and any reference to the Board shall include a reference to the Committee, as
the context may require). The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise
all the powers and authorities either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including, without limitation, the authority:

	 	(a)	 	to make Unit Awards;

	 
	 	(b)	 	to determine the Fair Market Value of the Shares on any date;

	 	(c)	 	to determine the Service Providers to whom, and the time or times at which,
Unit Awards shall be granted;

 

- 3 -

 

	 	(d)	 	to determine the number of Restricted Share Units to be awarded pursuant to
each Unit Award;

	 	(e)	 	to determine the Vesting Dates of the Restricted Share Units provided that the
Vesting Date for all Restricted Share Units granted under a particular Unit Award shall
not be later than November 30 of the third year following the year in which the
particular Unit Award was made;

	 
	 	(f)	 	to prescribe, amend and rescind rules and regulations relating to the Plan;

	 
	 	(g)	 	to interpret the Plan;

	 
	 	(h)	 	to appoint or replace the Plan Trustee;

	 	(i)	 	to determine the terms and provisions of Unit Award Agreements (which need not
be identical) entered into in connection with Unit Awards; and

	 	(j)	 	to make all other determinations deemed necessary or advisable for the
administration of the Plan.

The Committee may delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, including without limitation, to a third-party
agent or trustee, including the Plan Trustee the authority to acquire Shares for delivery to
Grantees in accordance with the Plan, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.

For greater certainty and without limiting the discretion conferred on the Committee pursuant
to this Section, the Committee’s decision to approve the grant of a Unit Award in any year shall
not require the Committee to approve the grant of a Unit Award to any Service Provider in any other
year; nor shall the Committee’s decision with respect to the size or terms and conditions of a Unit
Award in any year require it to approve the grant of a Unit Award of the same size or with the same
terms and conditions to any Service Provider in any other year. The Committee shall not be
precluded from approving the grant of a Unit Award to any Service Provider solely because such
Service Provider may previously have been granted a Unit Award under this Plan or any other similar
compensation arrangement of the Company or an Affiliate. No Service Provider has any claim or right
to be granted a Unit Award.

	4.	 	Eligibility and Award Determination

Unit Awards may only be granted to full-time and part-time employees, senior officers,
directors or Consultants of the Company or an Affiliate (collectively, “Service Providers”);
provided, however, that the participation of a Service Provider in the Plan is voluntary. In
determining the Service Providers to whom Unit Awards may be granted (“Grantees”) and the number of
Restricted Share Units to be awarded pursuant to each Unit Award, the Committee may take into
account the following factors:

	 	(a)	 	compensation data for comparable benchmark positions among the Company’s
competitors;

	 
	 	(b)	 	the duties and seniority of the Service Provider;

 

- 4 -

 

	 	(c)	 	the performance of the Service Provider in the prior year relevant to the
Performance Measures of the Company for the relevant performance period;

	 	(d)	 	individual and/or departmental contributions and potential contributions to the
success of the Company; and

	 	(e)	 	such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan.

	5.	 	Terms and Conditions of Unit Awards

Each Unit Award granted under the Plan shall be subject to the terms and conditions of the
Plan and evidenced by an agreement between the Company and the Grantee (a “Unit Award Agreement”),
which agreement shall comply with, and be subject to, any applicable requirements of the Exchange
and the following terms and conditions (and with such other terms and conditions not inconsistent
with the terms of this Plan as the Committee, in its discretion, shall establish):

	 	(a)	 	Number of Restricted Share Units — The Committee shall determine the
number of Restricted Share Units to be awarded to a Grantee pursuant to the Unit Award
in accordance with the provisions set forth in Section 4 of the Plan.

	 	(b)	 	Vesting Date — Subject to Section 3(e) and the remaining provisions of
this Section 5, with respect to any Unit Award, the Restricted Share Units thereunder
shall vest as follows:

	 	(i)	 	as to 33 1/3 % of the Restricted Share Units with respect to
such Unit Award on the first anniversary of the Grant Date;

	 	(ii)	 	as to 33 1/3 % of the Restricted Share Units with respect to
such Unit Award on the second anniversary of the Grant Date; and

	 	(iii)	 	as to 33 1/3 % of the Restricted Share Units with respect to
such Unit Award on the third anniversary of the Grant Date;

provided, however, that if an Accelerated Vesting Event occurs in respect of a
Grantee prior to any of the Vesting Dates determined in accordance with the above
provisions, all of the Grantee’s Restricted Share Units that have not yet vested as
of such time shall vest on the earlier of: (i) the next applicable Vesting Date
determined in accordance with the Unit Award; and (ii) immediately prior to the
effective time of the Accelerated Vesting Event.

	 	(c)	 	Payment in Respect of Restricted Share Units

	 	(i)	 	Notwithstanding anything else contained herein, for a Grantee
who is subject to tax in a jurisdiction outside of Canada (including a Grantee
who may also be subject to tax in Canada), the Company, or the Affiliate in
whose service the Grantee may be, shall pay on a Vesting Date to such Grantee a
cash payment equal to the Fair Market Value of a Share on such Vesting Date
multiplied by the number of Restricted Share Units that vest in the Grantee on
such Vesting Date (as adjusted in accordance with the relevant provisions set
forth in this Section 5), in consideration for the surrender by the Grantee of
the right to receive such cash payment under such Unit Award.

 

- 5 -

 

	 	(ii)	 	Subject to Section 5(c)(i), the Committee may at any time
decide in its sole discretion that the Company, or the Affiliate in whose
service the Grantee may be, will pay on a Vesting Date to such Grantee a cash
amount equal to the Fair Market Value of the Shares that would be otherwise
deliverable on such Vesting Date under a Unit Award (as adjusted in accordance
with the relevant provisions set forth in this Section 5) (such fair value
being referred to herein as the “Settlement Amount”) in consideration for the
surrender by the Grantee of the rights to receive such Shares (or a cash
payment) under such Unit Award.

	 	(iii)	 	Subject to Section 5(c)(i), unless the Settlement Amount is
paid to a Grantee wholly in cash, the number of Shares that are deliverable to
a Grantee on a Vesting Date shall be acquired by and delivered to the Grantee
by the Plan Trustee (and not by the Company or any of its Affiliates) pursuant
to the terms of a benefit plan trust agreement between the Company and the Plan
Trustee, such Shares to be acquired on the Exchange by the Plan Trustee from
contributions made by the Company to the Trust Fund established under the
employee benefit plan trust agreement. Notwithstanding anything in this Plan
or in any benefit plan trust agreement to the contrary, any Shares acquired by
the Plan Trustee for the purposes of the Plan will be acquired on behalf, and
for the sole benefit, of a Grantee in respect of Restricted Share Units and not
on behalf, or for the benefit, of the Company or any of its Affiliates.

	 	(iv)	 	The Company or the Affiliate, as the case may be, shall be
entitled to withhold from any cash payments or Shares delivered to the Grantee
all amounts as may be required by law and in the manner contemplated by Section
7 hereof.

	 	(d)	 	Termination of Relationship as Service Provider — Unless otherwise
provided in a Unit Award Agreement pertaining to a particular Unit Award or any written
employment agreement governing a Grantee’s role as a Service Provider, or unless
otherwise determined by the Committee, the following provisions shall apply in the
event that a Grantee ceases to be a Service Provider:

	 	(i)	 	Termination for cause — If a Grantee ceases to be a
Service Provider as a result of termination for cause, effective as of the date
notice is given to the Grantee of such termination, all unvested Restricted
Share Units held by such Grantee shall be terminated and all rights to receive
any payment thereunder shall be forfeited by the Grantee following the date on
which such Grantee ceases to be a Service Provider.

	 	(ii)	 	Termination not for cause — If a Grantee ceases to be
a Service Provider as a result of being terminated other than a termination for
cause (a “Termination Without Cause”) and such Termination Without Cause is not
an Accelerated Vesting Event, effective as of the date which is six months
after the Termination Without Cause and notwithstanding any other severance
entitlements or entitlement to notice or compensation in lieu thereof, all
unvested Restricted Share Units held by such Grantee shall be terminated and
all rights to receive any payment thereunder shall be forfeited by the Grantee,
and the Grantee shall not be entitled to receive any compensation in lieu
thereof after the expiry of the six-month period.

 

- 6 -

 

	 	(iii)	 	Retirement — If a Grantee voluntarily ceases to be a
Service Provider as a result of Retirement, all unvested Restricted Share Units
held by such Grantee shall remain unaffected by the Retirement and shall
continue to vest in accordance with Section 5(b) and the applicable Unit Award
Agreement.

	 	(iv)	 	Disability — If a Grantee ceases to be a Service
Provider as a result of the Grantee’s Disability, all unvested Restricted Share
Units held by such Grantee shall remain unaffected by the Disability and shall
continue to vest in accordance with Section 5(b) and the applicable Unit Award
Agreement.

	 	(v)	 	Death — If a Grantee ceases to be a Service Provider
as a result of such Grantee’s death, the Vesting Date for all Restricted Share
Units held by such Grantee shall be the date of death of the Grantee.

	 	(vi)	 	Ceasing to be a Service Provider to an Affiliate — If
a Grantee ceases to be a Service Provider as a result of the Affiliate in whose
service such Grantee may be ceasing to be an Affiliate of the Company,
effective as of the date which is six months after the date upon which the
Affiliate ceases to be an Affiliate of the Company, all unvested Restricted
Share Units held by such Grantee shall be terminated and all rights to receive
any payment thereunder shall be forfeited by the Grantee, and the Grantee shall
not be entitled to receive any compensation in lieu thereof after the expiry of
the six-month period.

	 	(vii)	 	Voluntary Termination — If a Grantee ceases to be a
Service Provider for any other reason, effective as of the last day of any
notice period applicable in respect of such voluntary resignation, all unvested
Restricted Share Units held by such Grantee shall be terminated and all rights
to receive any payment thereunder shall be forfeited by the Grantee; provided,
however, that notwithstanding the foregoing, unvested Restricted Share Units
held by such Grantee shall not be affected by a change of employment or term of
office or appointment within or among the Company or an Affiliate so long as
the Grantee continues to be a Service Provider.

	 	(e)	 	Rights as a Shareholder — Under no circumstances shall Restricted
Share Units be considered Shares of the Company, nor shall they entitle any Grantee to
exercise voting rights or any other rights attaching to the ownership of Shares of the
Company, nor shall any Grantee be considered the owner of Shares by virtue of the fact
that Shares will be acquired by, or provided from, the Trust Fund in satisfaction of
Restricted Share Units.

	 
	 	(f)	 	Effect of Certain Changes — In the event:

	 	(i)	 	of any change in the Shares through subdivision, consolidation,
reclassification, amalgamation, merger or otherwise;

	 	(ii)	 	that any rights are granted to Shareholders to purchase Shares
at prices substantially below fair market value; or

 

- 7 -

 

	 	(iii)	 	that, as a result of any reorganization, recapitalization,
merger, consolidation or other transaction that is not a Change of Control, the
Shares are converted into or exchangeable for any other securities;

then, in any such case, the Committee may make such adjustments to the Plan and to
any Unit Awards outstanding under the Plan as the Committee may, in its sole
discretion, consider appropriate in the circumstances to prevent substantial
dilution or enlargement of the rights granted to Grantees hereunder.

	 	(g)	 	Dividends — In the event the Company pays a dividend on the Shares
subsequent to the granting of a Unit Award, the number of Restricted Share Units
relating to such Unit Award (the “Original RSUs”) shall be increased by an amount equal
to: (a) the product of the aggregate number of Original RSUs held by the Grantee on the
record date for such dividend multiplied by the per Share amount of such dividend (or,
in the case of any dividend payable in property other than cash, the per Share fair
market value of such property, as determined by the Board), divided by (b) the Fair
Market Value of a Share calculated as of the date on which the dividend is paid. In
the event that the Company pays any dividends on the Shares in additional Shares, the
number of Original RSUs shall be increased by a number equal to the product of (x) the
aggregate number of Original RSUs held by the Grantee on the record date of such
dividend, multiplied by (y) the number of Shares (including any fraction thereof)
payable as a dividend on one Share.

	 	(h)	 	Fractions — Notwithstanding any other provision of this Plan, where the
determination of the number of Restricted Share Units which have vested on any
particular Vesting Date would result in a fractional Restricted Share Unit, the number
of Restricted Share Units credited to the Grantee shall be rounded down to the next
whole number of Restricted Share Units. No fractional Shares shall be delivered
pursuant to this Plan nor shall cash be paid at any time in lieu of any such fractional
Share.

	 	(i)	 	Black-Out Periods — In the event the Vesting Date determined in
accordance with the terms of this Plan occurs within a period of time imposed by the
Company, pursuant to the Company’s policies, upon certain designated persons during
which those persons may not trade in any securities of the Company (a “Black-Out
Period”) or which vest within five business days after a Black-Out Period (not
including a Black-Out Period imposed due to a cease trade order), the Vesting Date of
the Restricted Share Units shall be ten business days from the date any Black-Out
Period ends.

	6.	 	Funding of Restricted Share Unit Awards

The Company may from time to time, on its own behalf and on behalf of such of its Affiliates
that employ Service Providers, make contributions to the Trust Fund in such amounts and at such
times as may be specified by the Committee for the purpose of funding, in whole or in part, awards
of Restricted Share Units which become payable to Service Providers pursuant to the Plan. Any
purchases of Shares by the Plan Trustee or otherwise pursuant to the Plan shall be made on the open
market by a broker designated by the Plan Trustee who is independent of the Company in accordance
with the by-laws, regulations and policies of the Exchange.

	7.	 	Withholding

When a Grantee or other person becomes entitled to receive cash or Shares under a Unit Award,
the Company shall have the right to withhold or to require the Grantee or such other person to
remit to the Company an amount sufficient to satisfy any withholding requirements relating thereto,
provided that the Company may permit the Affiliate in whose service such Grantee may be to withhold
or require the Grantee or such other person to remit to the Affiliate an amount sufficient to
satisfy any such withholding requirements. Unless the Committee otherwise determines, the
withholding shall be satisfied by the
Company or, where permitted by the Company, the Affiliate in whose service such Grantee may
be, withholding from the cash or Shares otherwise deliverable to the Grantee of such amount of cash
or number of Shares having a value, determined as of the date that the withholding tax obligation
arises, equal to the amount of the total withholding tax obligation.

 

- 8 -

 

	8.	 	Non-Transferability

Shares or cash deliverable upon vesting of a Restricted Share Unit shall only be delivered to
or to the order of, a Grantee by the Company or the Plan Trustee, as applicable, except that if a
Grantee dies, Shares or cash may be delivered to the Grantee’s legal representative or designated
beneficiary to whom the Restricted Share Units transfer by will or by the laws of descent and
distribution. Except for the foregoing and as otherwise provided in this Plan, no assignment,
sale, transfer, pledge or charge of a Restricted Share Unit, whether voluntary, involuntary, by
operation of law or otherwise, vests any interest or right in such Restricted Share Unit whatsoever
in any assignee or transferee and, immediately upon any assignment, sale, transfer, pledge or
charge or attempt to assign, sell, transfer, pledge or charge, such Restricted Share Unit shall
terminate and be of no further force or effect.

	9.	 	Amendment and Termination of the Plan

The Company retains the right to amend from time to time or to suspend, terminate or
discontinue the terms and conditions of the Plan and the Restricted Share Units granted hereunder
by resolution of the Board provided that no such amendment to the Plan shall cause the Plan to
cease to be subject to paragraph (k) of the definition of “salary deferral arrangement” as
contained in the Income Tax Act (Canada). Any amendments shall be subject to the prior consent of
any applicable regulatory bodies, including the Exchange, as may be required. Any amendment to the
Plan shall take effect only with respect to Unit Awards granted after the effective date of such
amendment, provided that it may apply to any outstanding Unit Awards with the mutual consent of the
Company and the Service Providers to whom such Unit Awards have been granted.

	10.	 	Foreign Grantees

	 	(a)	 	The Company may, without amending the Plan, modify the terms of Restricted
Share Units granted to participants who provide services to the Company or an Affiliate
from outside of Canada in order to comply with the applicable laws of such foreign
jurisdictions. Any such modification to the Plan with respect to a particular
participant shall be reflected in the Unit Award Agreement for such Grantee.

	 	(b)	 	The terms of the Plan and Restricted Share Units granted hereunder to
participants subject to taxation on employment income under the United States Internal
Revenue Code of 1986, as amended, shall be determined by taking into consideration the
provisions applicable to such persons as set forth in Schedule “A” hereto.

	11.	 	Miscellaneous

	 	(a)	 	Effect of Headings — The section and subsection heading contained
herein are for convenience only and shall not affect the construction hereof.

 

- 9 -

 

	 	(b)	 	Compliance with Legal Requirements — Neither the Company nor the Plan
Trustee shall be obliged to deliver any Shares if such delivery would violate any law
or regulation or any rule of any government authority or stock exchange. The Company or
the Plan Trustee may postpone the delivery of Shares under any Unit Award as the Board
may
consider appropriate, and may require any Grantee to make such representations and
furnish such information as it may consider appropriate in connection with the
delivery of Shares in compliance with applicable laws, rules and regulations. The
Company shall not be required to qualify for resale pursuant to a prospectus or
similar document any Shares delivered under the Plan, provided that, if required,
the Company shall notify any stock exchange and any other appropriate regulatory
bodies of the existence of the Plan and the granting of Unit Awards hereunder in
accordance with any such requirements.

	 	(c)	 	No Right to Continued Employment — Nothing in the Plan or in any Unit
Award Agreement entered into pursuant hereto shall confer upon any Grantee the right to
continue in the employ or service of the Company or an Affiliate, to be entitled to any
remuneration or benefits not set forth in the Plan or a Unit Award Agreement or to
interfere with or limit in any way the right of the Company or an Affiliate to
terminate any Grantee’s employment or service.

	 	(d)	 	Ceasing to be an Affiliate — Except as otherwise provided in this
Plan, Unit Awards granted under this Plan shall not be affected by any change in the
relationship between or ownership of the Company and an Affiliate. For greater
certainty, all outstanding Restricted Share Units shall remain valid in accordance with
the terms and conditions of this Plan and are not affected by reason only that, at any
time, any corporation, partnership or trust ceases to be an Affiliate.

	 	(e)	 	Expenses — All expenses in connection with the Plan shall be borne by
the Company.

	12.	 	Effective Date

The Plan shall take effect on •, 2011, the date of its adoption by the Board.

 

- 10 -

 

Schedule A

Special Provisions Applicable to Grantees Subject to Section 409A of the United States

Internal Revenue Code

This schedule sets forth special provisions of the Plan that apply to participants subject to
section 409A of the United States Internal Revenue Code of 1986, as amended. Terms defined in the
Plan and used herein shall have the meanings set forth in the Plan document, as amended from time
to time.

1. Definitions

For purposes of this schedule:

“Code” means the United States Internal Revenue Code of 1986, as amended, and any
applicable United States Treasury Regulations and other binding regulatory guidance thereunder.

“Section 409A” means section 409A of the Code.

“Separation From Service” shall mean that employment with the Company and any entity that
is to be treated as a single employer with the Company for purposes of United States Treasury
Regulation Section 1.409A-1(h) terminates such that it is reasonably anticipated that no further
services will be performed.

“Specified Employee” means a US Taxpayer who meets the definition of “specified employee,”
as defined in Section 409A(a)(2)(B)(i) of the Code.

“US Taxpayer” means a Grantee whose compensation from the Company is subject to Section
409A.

2. Compliance with Section 409A

In General. Notwithstanding any provision of the Plan to the contrary, it is intended that
any payments under the Plan either be exempt from or comply with Section 409A, and all provisions
of the Plan shall be construed and interpreted in a manner consistent with the requirements for
avoiding taxes or penalties under Section 409A. Each payment made in respect of Restricted Share
Units shall be deemed to be a separate payment for purposes of Section 409A. Each US Taxpayer is
solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed
on or for the account of such US Taxpayer in connection with the Plan (including any taxes and
penalties under Section 409A), and neither the Company nor any of its subsidiaries shall have any
obligation to indemnify or otherwise hold such US Taxpayer (or any beneficiary) harmless from any
or all of such taxes or penalties.

Distributions to US Taxpayers. Notwithstanding the provisions of Section 5 of the Plan to
the contrary, a lump sum payment in respect of any vested units credited to a US Taxpayer’s unit
account shall be made 30 days following the US Taxpayer’s Vesting Date with respect to such vested
units (or if later, the date on which the US Taxpayer returns to work following a leave of absence
during which a Vesting Date occurred), provided in all events that no distribution shall be made
hereunder later than the later of (A) the 15th day of the third month following the end
of the US Taxpayer’s taxable year in which the US Taxpayer’s right to the payment in respect of the
Restricted Share Units is no longer subject to a substantial risk of forfeiture or (B) the
15th day of the third month following the end of the Company’s first taxable year in
which the right to the payment is no longer subject to a substantial risk of forfeiture.

Distributions to Specified Employees. Solely to the extent required by Section 409A, any
payment in respect of vested units which is subject to Section 409A and which has become payable on
or following Separation From Service to any employee who is determined to be a Specified Employee
shall not be paid
before the date which is six months after such Specified Employee’s Separation From Service (or, if
earlier, the date of death of such Specified Employee). Following any applicable six month delay
of payment, all such delayed payments shall be made to the Specified Employee in a lump sum on the
earliest possible payment date.

 

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Tax Withholding. A US Taxpayer shall be required to pay to the Company, and the Company
shall have the right and is hereby authorized to withhold, from any cash or other compensation
payable under the Plan, or from any other compensation or amounts owing to the US Taxpayer, the
amount of any required withholding taxes in respect of amounts paid under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all obligations for the
payment of such withholding and taxes.

Funding of Units. If and to the extent use of the assets contributed to or held in the
Trust Fund to pay distributions in respect of vested units to a US Taxpayer could result in
accelerated or additional tax to the US Taxpayer under Section 409A (including without limitation
Section 409A(b)) of the Code, payment in respect of vested units to a US Taxpayer shall only be
made with assets that have not been held in the Trust Fund, and the US Taxpayer shall have no right
to or any interest in any of the assets of the Trust Fund.

3. Amendment of Schedule

Notwithstanding Section 9 of the Plan, the Board shall retain the power and authority to amend or
modify this schedule to the extent the Board in its sole discretion deems necessary or advisable to
comply with any guidance issued under Section 409A. Such amendments may be made without the
approval of any US Taxpayer.

 

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