Item
6. Indemnification of Directors and Officers.
The
corporate laws of British Columbia allow the Registrant, and its corporate articles require it (subject to the provisions of the
Business Corporations Act (
British Columbia
) (the “BCBCA”) noted below), to indemnify its directors, former
directors, alternate directors and their heirs and legal personal representatives against all eligible penalties to which such
person is or may be liable, and the Registrant must, after the final disposition of an eligible proceeding, pay the expenses actually
and reasonably incurred by such person in respect of that proceeding if the eligible party has not been reimbursed for those expenses
and is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits
in the outcome of the proceeding. Each director and alternate director is deemed to have contracted with the Registrant on the
terms of the indemnity contained in the Registrant’s articles.
For
the purposes of such an indemnification:
“eligible
party,” in relation to the Registrant, means an individual who:
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(1)
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is
or was a director or officer of the Registrant;
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(2)
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is
or was a director or officer of another corporation:
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(i)
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at
a time when the corporation is or was an affiliate of the Registrant; or
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(ii)
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at
the request of the Registrant; or
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(3)
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at
the request of the Registrant, is or was, or holds or held a position equivalent to that
of, a director or officer of a partnership, trust, joint venture or other unincorporated
entity;
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and
includes, except in the definition of “eligible proceeding” and certain other cases, the heirs and personal or other
legal representatives of that individual;
“eligible
penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
“eligible
proceeding” means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives
of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held
a position equivalent to that of a director or officer of, the Registrant or an associated corporation:
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(1)
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is
or may be joined as a party; or
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(2)
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is
or may be liable for or in respect of a judgment, penalty or fine in, or expenses related
to, the proceeding;
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“expenses”
includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts
paid in settlement of a proceeding; and
“proceeding”
includes any legal proceeding or investigative action, whether current, threatened, pending or completed.
In
addition, under the BCBCA, the Registrant may pay, as they are incurred in advance of the final disposition of an eligible proceeding,
the expenses actually and reasonably incurred by an eligible party in respect of that proceeding, provided that the Registrant
first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses
is prohibited by the restrictions noted below, the eligible party will repay the amounts advanced.
Notwithstanding
the provisions of the Registrant’s articles noted above, the Registrant must not indemnify an eligible party or pay the
expenses of an eligible party, if any of the following circumstances apply:
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(1)
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if
the indemnity or payment is made under an earlier agreement to indemnify or pay expenses
and, at the time that the agreement to indemnify or pay expenses was made, the Registrant
was prohibited from giving the indemnity or paying the expenses by its memorandum or
articles;
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(2)
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if
the indemnity or payment is made otherwise than under an earlier agreement to indemnify
or pay expenses and, at the time that the indemnity or payment is made, the Registrant
is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;
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(3)
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if,
in relation to the subject matter of the eligible proceeding, the eligible party did
not act honestly and in good faith with a view to the best interests of the Registrant
or the associated corporation, as the case may be; or
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(4)
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in
the case of an eligible proceeding other than a civil proceeding, if the eligible party
did not have reasonable grounds for believing that the eligible party’s conduct
in respect of which the proceeding was brought was lawful.
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In
addition, if an eligible proceeding is brought against an eligible party by or on behalf of the Registrant or by or on behalf
of an associated corporation, the Registrant must not do either of the following:
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(1)
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indemnify
the eligible party under Section 160(a) of the BCBCA in respect of the proceeding; or
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(2)
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pay
the expenses of the eligible party in respect of the proceeding.
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Notwithstanding
any of the foregoing, and whether or not payment of expenses or indemnification has been sought, authorized or declined under
the BCBCA or the articles of the Registrant, on the application of the Registrant or an eligible party, the Supreme Court of British
Columbia may do one or more of the following:
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(1)
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order
the Registrant to indemnify an eligible party against any liability incurred by the eligible
party in respect of an eligible proceeding;
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(2)
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order
the Registrant to pay some or all of the expenses incurred by an eligible party in respect
of an eligible proceeding;
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(3)
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order
the enforcement of, or any payment under, an agreement of indemnification entered into
by the Registrant;
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(4)
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order
the Registrant to pay some or all of the expenses actually and reasonably incurred by
any person in obtaining an order under Section 164 of the BCBCA; or
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(5)
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make
any other order the court considers appropriate.
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