DATED: JANUARY 21, 2000
BROCKER TECHNOLOGY GROUP LTD.
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MONTREAL TRUST COMPANY OF CANADA
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SPECIAL WARRANT INDENTURE
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PROVIDING FOR THE ISSUE OF
COMMON SHARES
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THIS SPECIAL WARRANT INDENTURE made as of the 21st day of January, 2000
BETWEEN:
BROCKER TECHNOLOGY GROUP LTD., a corporation incorporated under
the laws of the Province of Alberta,
(hereinafter called the "Corporation"),
OF THE FIRST PART
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THE MONTREAL TRUST COMPANY OF CANADA, a trust company duly
authorized to carry on business in the Province of Alberta and
all Provinces of Canada,
(hereinafter called the "Trustee"),
OF THE SECOND PART
WHEREAS the Corporation proposes to issue and sell on the date of
Closing hereof 1,800,000 Special Warrants, and proposes that each Special
Warrant shall be exchangeable for one Common Share, subject to adjustment as set
out below;
AND WHEREAS for such purpose the Corporation deems it necessary to
create and issue Special Warrants constituted and issued in the manner
hereinafter appearing;
AND WHEREAS the Corporation is duly authorized to create and issue
Special Warrants to be issued as herein provided, and to allot and issue the
Common Shares into which the Special Warrants are exchangeable;
AND WHEREAS all things necessary have been done and performed to make
the Special Warrants, when certified by the Trustee and issued as in this
Indenture provided, legal, valid and binding upon the Corporation with the
benefits and subject to the terms of this Indenture;
NOW THEREFORE THIS INDENTURE WITNESSETH that for good and valuable
consideration mutually given and received, the receipt and sufficiency of which
is hereby acknowledged, it is hereby agreed and declared as follows:
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ARTICLE I.
INTERPRETATION
1.01 Definitions
In this Indenture, unless there is something in the subject matter or
context inconsistent therewith:
(a) "Agency Agreement" means the Agency Agreement between the
Corporation and Thomson Kernaghan & Co. Limited dated the date
hereof; and may be amended from time to time;
(b) "Business Day" means, in respect of any city, a day which is not
a Saturday or Sunday or legal holiday in such city;
(c) "Closing" shall mean the time on which all transactions
contemplated herein and in the Agency Agreement are consummated;
(d) "Common Shares" means Common Shares in the capital of the
Corporation as such shares exist at the close of business on the
date of execution and delivery of this Indenture; provided that
in the event of any adjustment of subscription rights pursuant to
Section 4.06, "Common Shares" shall thereafter mean the shares or
other securities or property resulting from such adjustment;
(e) "Corporation's Auditors" means a firm of chartered accountants
duly appointed as auditors of the Corporation;
(f) "Counsel" means a barrister and solicitor (who may be counsel for
the Corporation) acceptable to the Trustee;
(g) "Director" means a director of the Corporation for the time
being, and reference without more to action by the directors
means action by the directors of the Corporation as a board or,
whenever duly empowered, action by an executive committee of the
board;
(h) "Dividends paid in the ordinary course" means dividends, whether
in cash or in shares of the capital stock of the Corporation,
paid in any fiscal year of the Corporation to the extent that the
aggregate of such cash and the paid-up capital of such shares
does not in such fiscal year exceed the greatest of:
(i) 150% of the aggregate amount of dividends paid by the
Corporation on the Common Shares in the period of 12
consecutive months ended immediately prior to the first
day of such fiscal year;
(ii) 80% of the aggregate amount of dividends paid by the
Corporation on the Common Shares in the period of 36
consecutive months ended immediately prior to the first
day of such fiscal year; and
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(iii) 100% of the consolidated net earnings of the
Corporation, before extraordinary items, for the period
of 12 consecutive months ended immediately prior to the
first day of such fiscal year (such consolidated net
earnings to be as shown in the audited financial
statements of the Corporation for such period of 12
consecutive months or, if there are no audited
financial statements in respect of such period,
computed in accordance with generally accepted
accounting principles consistent with those applied in
the preparation of the most recent audited consolidated
financial statements of the Corporation);
and for such purpose the amount of any dividend paid in shares
shall be the aggregate paid-up capital of such shares;
(i) "Exercise Date" with respect to any Special Warrant means the
date on which such Warrant is surrendered in accordance with the
provisions of Article IV;
(j) "Issue Date" has the meaning ascribed thereto in Section 2.02;
(k) "Person" means an individual, a corporation, a partnership, a
trustee or any unincorporated organization;
(l) "Qualification Date" means the date a receipt is issued for the
filing of a prospectus that qualifies the distribution of the
Common Shares issuable upon the exercise of the Special Warrants;
(m) "Qualifying Jurisdiction" means all jurisdictions in which the
Special Warrants may be lawfully effected and sold in compliance
with all applicable securities laws and in such a manner so as
not to require registration thereof or filing of a prospectus or
offering memorandum with respect thereto under such laws;
(n) "Shareholder" means a holder of record of one or more Common
Shares;
(o) "Special Warrant Indenture", "this Trust Indenture", "this
Indenture", "herein", "hereby" and similar expressions mean or
refer to this Indenture and any Indenture, deed or instrument
supplemental or ancillary hereto; and the expressions "Article",
"Section" and "Subsection" followed by a number mean and refer to
the specified article, section or subsection of this Indenture;
(p) "Special Warrants" means the Special Warrants exchangeable into
Common Shares evidenced by a certificate or certificates, issued
and certified hereunder and for the time being outstanding;
(q) "Time of Expiry" means 4:00 p.m. (Edmonton time) on the day which
is the earlier of: (i) five (5) days after the Qualification
Date, or (ii) one year from the date hereof;
(r) "Warrantholders" or "Holders" means the registered holders of the
Special Warrants for the time being;
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(s) "Warrantholders' Request" means an instrument signed in one or
more counterparts by Warrantholders entitled, at any one
particular time to acquire in the aggregate not less than 25% of
the aggregate number of Common Shares which could be purchased
pursuant to all Special Warrants, requesting the Trustee to take
some action or proceeding acquired therein;
(t) "Written order of the Corporation", "written request of the
Corporation", "written consent of the Corporation" and
"Certificate of the Corporation" mean, respectively, a written
order, request, consent and certificate signed in the name of the
Corporation by its chairman, vice-chairman of the board or
president or an executive vice-president or a director and, in
addition, by its secretary or treasurer or assistant secretary or
a director and may consist of one or more instruments so
executed;
words importing the singular number include the plural and vice versa and words
importing the masculine gender include the feminine and neuter genders.
1.02 Interpretation not Affected by Headings, etc.
The division in 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.
1.03 Currency
Except as otherwise noted, all dollar amounts herein are expressed in
Canadian dollars.
1.04 Applicable Law
This Indenture and the Warrants shall be construed in accordance with
the laws of the Province of Alberta and shall be treated in all respects as
Alberta contracts.
1.05 Non-Business Days
In the event that any action hereunder is required to permitted to
occur on any day that is not a Business Day, it shall occur or caused to be
occurred on the next Business Day thereafter.
1.06 Conflicts
In the event there is any conflict between this Indenture and the form
of Special Warrant certificate, the provisions herein shall govern and prevail.
ARTICLE II
ISSUE OF SPECIAL WARRANTS
2.01 Issue of Special Warrants
Special Warrants, in definitive form, entitling the registered holders
thereof to acquire an aggregate of 1,800,000 Common Shares (subject to
adjustment, as herein provided) are hereby authorized.
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2.02 Issue Date
(a) The Issue Date shall be a date to be determined by the
Corporation, which date shall not be later than January 21, 2000.
The Corporation shall determine, and shall execute and deliver to
the Trustee a written notice of, the Issue Date prior to the date
which has been determined to be the Issue Date.
(b) Upon the Issue Date, the Special Warrants authorized in Section
2.01 shall be created and shall be executed by the Corporation,
certified by or on behalf of the Trustee, and shall be delivered
by the Corporation to the Trustee to be held by the Trustee
pending compliance by it with the provisions of Section 5.05.
2.03 Form and Terms of Warrants
(a) Each Special Warrant authorized to be issued hereunder shall
entitle the holder thereof to acquire one Common Share at any
time from the issue thereof until the Time of Expiry.
(b) The number of Common Shares which may be acquired pursuant to the
Special Warrants may be adjusted in the events and in the manner
specified in Article IV.
(c) The Special Warrants Certificate (including the exercise form)
shall be substantially in the form set out in Schedule 2.03(c),
shall be dated as of the Issue Date, shall bear such
distinguishing letters and numbers as the Corporation shall with
the approval of the Trustee prescribe, and shall be issuable in
any denomination, excluding fractions.
2.04 Issue in Substitution for Lost Warrants
(a) In case any of the Special Warrants shall become mutilated or be
lost, destroyed or stolen, the Corporation, subject to applicable
law, shall issue and thereupon the Trustee shall certify and
deliver a new Special Warrant of like date and tenor as the one
mutilated, lost, destroyed or stolen in exchange for and in place
of and upon cancellation of such mutilated Special Warrant or in
lieu of and in substitution for such lost, destroyed or stolen
Special Warrant and the substituted Special Warrant shall be in a
form approved by the Trustee and shall be entitled to the benefit
hereof and rank equally in accordance with its terms with all
other Special Warrants issued or to be issued hereunder.
(b) The applicant for the issue of a new Special Warrant pursuant to
this Section shall bear the cost of the issue thereof and in case
of loss, destruction or theft shall, as a condition precedent to
the issue thereof, furnish to the Corporation and to the Trustee
such evidence of ownership and of the loss, destruction or theft
of the Special Warrant so lost, destroyed or stolen as shall be
satisfactory to the Corporation and to the Trustee in their
discretion and such applicant may also be required to furnish an
indemnity in amount and form satisfactory to them in their
discretion, and shall pay the reasonable charges of the
Corporation and the Trustee in connection therewith.
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2.05 Warrantholder not a Shareholder
The holding of a Special Warrant shall not constitute the holder
thereof a holder of Common Shares nor entitle him to any right or interest in
respect thereof except as herein and in the Special Warrant expressly provided.
2.06 Special Warrants to Rank Pari Passu
All Special Warrants shall rank pari passu, whatever may be the actual
date of issue of the same.
2.07 Signing of Special Warrants
The Special Warrants shall be signed by one of the chairman or
vice-chairman of the board or the president or an executive vice-president or a
vice-president or the secretary, treasurer, assistant secretary or assistant
treasurer of the Corporation. The signature of such officer may be mechanically
reproduced in facsimile and Special Warrants bearing such facsimile signature
shall be binding upon the Corporation as if they had been manually signed by
such officer. Notwithstanding that any of the persons whose manual or facsimile
signature appears on any Special Warrant as one of such officers may no longer
hold office at the date of such Special Warrant or at the date of certification
or at the delivery thereof, any Special Warrant signed as aforesaid shall be
valid and binding upon the Corporation.
2.08 Certification by the Trustee
(a) No Special Warrant shall be issued or, if issued, shall be valid
or entitle the holder to the benefit thereof until it has been
certified by or on behalf of the Trustee substantially in the
form of the certificate set out in Schedule 2.03(c) or in some
other form approved by the Trustee and such certification by the
Trustee upon any Special Warrant shall be conclusive evidence as
against the Corporation that the Special Warrant so certified has
been duly issued hereunder and that the holder is entitled to the
benefit thereof.
(b) The certification of the Trustee on Special Warrants issued
hereunder shall not be construed as a representation or warranty
by the Trustee as to the validity of this Indenture or of the
Special Warrants (except the due certification thereof) and the
Trustee shall in no respect be liable or answerable for the use
made of the Special Warrants or any of them or of the
consideration therefor.
ARTICLE III
EXCHANGE AND OWNERSHIP OF SPECIAL WARRANTS; NOTICE TO WARRANTHOLDERS
3.01 Exchange of Special Warrants
(a) Special Warrants to purchase any specified number of Common
Shares may, upon compliance with the reasonable requirements of
the Trustee, be exchanged for Special Warrants in other
denominations entitling the holder thereof to purchase an equal
aggregate number of Common Shares.
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(b) Special Warrants may be exchanged only at the principal offices
of the Trustee in the City of Calgary, or at any other place that
is designated by the Corporation with the approval of the
Trustee. Any Special Warrants tendered for exchange shall be
surrendered to the Trustee and cancelled.
3.02 Charges for Exchange
Except as otherwise herein provided, the Trustee shall, if required by
the Corporation, charge a reasonable sum for each new Special Warrant issued in
exchange for any Special Warrant, and payment of such charges and reimbursement
of the Trustee or the Corporation for any stamp taxes or governmental or other
charges required to be paid shall be made by the party requesting such exchange,
as a condition precedent thereto.
3.03 Non-Transferability of Special Warrants
(a) Except as provided for in subsection 3.03(b) of this indenture,
the Special Warrants shall be non-transferrable without the
written approval of the Corporation, which may be arbitrarily
withheld.
(b) In the event of the bankruptcy or death of a Warrantholder, the
Trustee, upon receipt of written proof thereof, may transmit the
Warrantholder's Special Warrants by operation of law to the
Trustee in bankruptcy, personal representative or surviving joint
tenant as the case may be.
3.04 Ownership and Transfer of Special Warrants
The Corporation and the Trustee may deem and treat the registered
owner of any Special Warrant as the absolute holder and owner of such Warrant
for all purposes, and the Corporation and the Trustee shall not be affected by
any notice or knowledge to the contrary. The registered owner of any Special
Warrant shall be entitled to the rights evidenced by such Special Warrants 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 owner of such Special Warrant
for the Common Shares purchasable pursuant thereto shall be a good discharge to
the Corporation and the Trustee for the same and neither the Corporation nor the
Trustee shall be bound to inquire into the title of any such registered owner.
3.05 Notice to Warrantholders
Unless herein otherwise expressly provided, any notice to be given
hereunder to Warrantholders shall be deemed to be validly given if such notice
is delivered personally or sent by prepaid ordinary or airmail to each
Warrantholder at their recorded address, or if sent to each Warrantholder at
their recorded address by any means of prepaid, transmitted or recorded
communication. A Notice so delivered shall be deemed to have been given when it
is delivered personally or to the recorded address as aforesaid; a notice so
mailed shall be deemed to have been given when deposited in a Post Office or
public letter box; and a notice so sent by any means of transmitted or recorded
communication shall be deemed to have been given when dispatched or delivered to
the appropriate communication company or agency or its representative for
dispatch.
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ARTICLE IV
EXERCISE OF SPECIAL WARRANTS
4.01 Method of Exercise of Warrants
(a) The holder of any Special Warrant may exercise the right thereby
conferred on him to acquire Common Shares by surrendering to the
Trustee at its principal offices in the City of Calgary or at any
other place or places that may be designated by the Corporation
with the approval of the Trustee: such Special Warrant, duly
completed and executed in the form set out in Schedule 2.03(c).
Subject to Section to 4.04, a Special Warrant exercised pursuant
to the foregoing paragraph of this Subsection 4.01(a) shall be
deemed to be surrendered upon personal delivery thereof to or, if
sent by mail or other means of transmission, upon receipt thereof
by, the Trustee.
(b) Any exercise referred to in Subsection 4.01(a) shall be signed by
the Warrantholder and shall specify the number of Common Shares
which the holder desires be issued (being not more than those
which he is entitled to acquire pursuant to the Special Warrant
surrendered), the person or persons in whose name or names such
Common Shares are to be issued, his or their address or addresses
and the number of Common Shares to be issued to each such person
if more than one is so specified. If any of the Common Shares
subscribed for are to be issued to a person or persons other than
the Warrantholder, the Warrantholder shall pay to the Trustee all
requisite transfer taxes and the reasonable expenses of the
Trustee.
4.02 Effect of Exercise of Special Warrants
(a) Upon exercise by the Holder of any Special Warrant in accordance
with Section 4.01, or deemed exercise of any Special Warrant in
accordance with Section 4.04 the Common Shares issuable
thereunder shall be deemed to have been issued and the person or
persons to whom such Common Shares are to be issued shall be
deemed to have become the holder or holders of record of such
Common Shares on the Exercise Date unless the transfer books of
the Corporation shall be closed on such date, in which case the
Common Shares so issuable for shall be deemed to have been issued
and such person or persons shall be deemed to have become the
holder or holders of record of such Common Shares on the date on
which such transfer books were reopened and such Common Shares
will be issued on the Exercise Date.
(b) When the transfer books of the Corporation have been open for
five business days after the due exercise of a Special Warrant as
aforesaid, the Corporation shall forthwith cause to be mailed to
the person or persons in whose name or names the Common Shares so
subscribed for are to be issued as specified in the subscription
endorsed on such Special Warrant at his or their respective
addresses specified in such subscription or, if so specified in
such subscription, cause to be delivered to such person or
persons at the office where such Special Warrant was surrendered,
a certificate or certificates for the appropriate number of
Common Shares not exceeding those which the Warrantholder is
entitled to purchase pursuant to the Special Warrant surrendered.
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4.03 Subscription for Less than Entitlement
(a) The Holder of any Special Warrant may exercise their Special
Warrant with respect to a number of Common Shares less than the
number which he is entitled to purchase pursuant to the
surrendered Special Warrant. In the event of any exercise for a
number of Common Shares less than the number which may be issued
pursuant to a Special Warrant, the Holder thereof upon exercise
thereof shall in addition be entitled to receive a new Special
Warrant Certificate in respect of the balance of the unexercised
Special Warrants.
(b) Notwithstanding anything herein contained, including any
adjustment provided for in Sections 4.06 and 4.07 the Corporation
shall not be required, upon the exercise of any Special Warrants,
to issue fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of fractional
Common Shares, the Corporation shall pay to the Holder who would
otherwise be entitled to receive fractional Common Shares upon an
exercise of Special Warrants, within ten Business Days after the
date upon which the fractional Common Shares would otherwise have
been deemed to have been issued pursuant to Sections 4.06 and
4.07, an amount in lawful money of Canada equal to the Current
Market Price of the Common Shares on the such date multiplied by
an amount equal to the fractional interest of Common Shares such
Holder would otherwise be entitled to receive upon such exercise,
provided that the Corporation shall not be required to make any
payment, calculated as aforesaid, that is less than $5.00.
4.04 Expiration of Warrants
(a) Immediately prior to the Time of Expiry, the rights of all
Holders of Special Warrants to acquire Common Shares shall be
deemed to be exercised by the Holder without any further action
by the Holder, and the Common Shares issuable thereby shall be
deemed to be issued to the Special Warrantholders at such time.
(b) Upon deemed exercise of the Special Warrants, the Corporation
shall cause to be mailed to the Warrantholders to the address on
the registers of the Trustee, a certificate or certificates for
the appropriate number of Common Shares registered in the same
manner as the applicable Special Warrant.
4.05 Cancellation of Surrendered Warrants
All Special Warrants surrendered to the Trustee pursuant to Section
2.04, 3.01 or 4.01 shall be cancelled and destroyed by the Trustee and, if
required by the Corporation, the Trustee shall furnish the Corporation with a
destruction certificate identifying the Special Warrants so destroyed and the
number of Common Shares which could have been purchased pursuant to each.
4.06 Adjustment of Subscription Rights Pursuant to Special Warrants
(a) In case of any reclassification of the Common Shares at any time
outstanding or change of the Common Shares into other shares, or
in case of the consolidation, amalgamation or merger of the
Corporation with or into any other corporation (other than a
consolidation, amalgamation or merger which does not result in
any
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reclassification of the outstanding Common Shares or a change of
the Common Shares into other shares), or in case of any transfer
of the undertaking or assets of the Corporation as an entirety or
substantially as an entirety to another corporation, at any time
prior to the Time of Expiry, the holder of any Special Warrant
who thereafter shall exercise his right to acquire Common Shares
thereunder shall be entitled to receive, and shall accept, in
lieu of the number of Common Shares to which he was theretofore
entitled upon such exercise, the kind and amount of shares and
other securities or property which such holder would have been
entitled to receive as a result of such reclassification, change,
consolidation, amalgamation, merger or transfer if, on the
effective date thereof, he had been the registered holder of the
number of Common Shares to which he was theretofore entitled upon
exercise. If necessary, appropriate adjustments shall be made in
the application of the provisions set forth in this Article IV
with respect to the rights and interests thereafter of the
holders of Special Warrants to the end that the provisions set
forth in this Article IV thereafter correspondingly be made
applicable as nearly as may reasonably be in relation to any
shares or other securities or property thereafter deliverable
upon the exercise of any Special Warrant. Any such adjustments
shall be made by and set forth in an indenture supplemental
hereto approved by the directors and by the Trustee and shall for
all purposes be conclusively deemed to be an appropriate
adjustment. The subdivision or consolidation of the Common Shares
at any time outstanding into a greater or lesser number of Common
Shares shall be deemed not to be a reclassification of the
capital of the Corporation for the purpose of this Subsection.
(b) If and whenever prior to the Time of Expiry the Common Shares
shall be subdivided into a greater or consolidated into a lesser
number of shares, or the Corporation shall issue Common Shares or
other participating shares as a stock dividend, any Warrantholder
who has not exercised his right of subscription on or prior to
the record date or effective date, as the case may be, of such
subdivision, consolidation or stock dividend, upon the exercise
of such right thereafter, shall be entitled to receive and shall
accept in lieu of the number of Common Shares which would
otherwise then have been subscribed for by him, the aggregate
number of Common Shares or other participating shares, or both,
that such holder would have been entitled to receive as a result
of such subdivision, consolidation or stock dividend if, on such
record date or effective date, he had been the registered holder
of the number of Common Shares so subscribed for.
(c) In any case in which this Section 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
Special Warrant exercised after such record date and before the
occurrence of such event the additional Common Shares issuable
upon such exercise by reason of the adjustment required by such
event; 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 Exercise Date or such later date as such holder
would, but for the provisions of this Subsection, have become the
holder of record of such additional Common Shares pursuant to
Section 4.02;
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(d) The adjustments provided for in this Section are cumulative, and
shall apply (without duplication) to successive subdivisions,
consolidations, distributions, issuances or other events
resulting in any adjustment under the provisions of this Section,
provided that, notwithstanding any other provision of this
Section, no adjustment shall be required unless such adjustment
would require an increase or decrease of at least 1% in the
number of Common Shares issuable upon the exercise of the Special
Warrants (provided however, that any adjustments which by reason
of this Subsection are not required to be made shall be carried
forward and taken into account in any subsequent adjustment).
(e) In the event of any question arising with respect to the
adjustments provided in this Section such question shall be
conclusively determined by a firm of chartered accountants
appointed by the Corporation and acceptable to the Trustee (who
may be the Corporation's auditors); 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 Warrantholders.
4.07 Adjustment if no Qualification Date
In the event that the Qualification Date has not occurred by 4:00 p.m.
on the day that is 120 days after the Issue Date then the number of Common
Shares (or other securities or property) a Warrantholder is entitled to receive
upon the exercise of any Special Warrant shall be adjusted to be equal to the
number that the Warrantholder would otherwise be entitled to receive multiplied
by 110%.
4.08 Proceedings Prior to any Action Requiring Adjustment
As a condition precedent to the taking of any action which would
require an adjustment in any of the subscription rights pursuant to any of the
Special Warrants, the Corporation shall take any action which may, in the
opinion of counsel, be necessary in order that the Corporation may validly and
legally issue as fully paid and non-assessable all the Common Shares which the
holders of such Special Warrants are entitled to receive on the full exercise
thereof in accordance with the provisions hereof.
4.09 Notice of Adjustment of Subscription Rights
Immediately after the occurrence of any event which requires an
adjustment in any of the subscription rights pursuant to any of the Special
Warrants, the Corporation shall forthwith:
(a) file with the Trustee a certificate of the Corporation specifying
the particulars of such event and the required adjustment and the
computation of such adjustment; and
(b) give notice to the Warrantholders of the particulars of such
event and the required adjustment in accordance with Subsection
5.04(a) and in the manner provided in Section 3.05.
4.10 Title to Special Warrants Surrendered
The Corporation and the Trustee shall not be bound to make any
inquiries relative to the title or lack thereof of the Special Warrants
surrendered by any person pursuant to the right of subscription herein
contained. Neither the Corporation nor the Trustee shall be liable in any manner
whatsoever to any
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person on account of any defect or lack of title to the Special Warrants
surrendered by any person aforesaid.
ARTICLE V
COVENANTS
5.01 General Covenants
The Corporation covenants with the Trustee that so long as any Special
Warrants remain outstanding:
(a) it will at all times maintain its existence; will carry on and
conduct its business in a proper, efficient and businesslike
manner and in accordance with good business practice; will keep
or cause to be kept proper books of account in accordance with
generally accepted accounting practice; and will, if and whenever
required in writing by the Trustee, file with the Trustee copies
of all annual statements of the Corporation furnished to its
shareholders after the date hereof;
(b) it will reserve out of its authorized but unissued Common Shares
until the Time of Expiry a sufficient number thereof to provide
the full exercise of the Special Warrants as contemplated herein;
(c) it will cause the Common Shares from time to time subscribed for
pursuant to the exercise of the Special Warrants in the manner
herein provided and the certificates representing such Common
Shares to be duly issued and delivered in accordance with the
Special Warrants and the terms hereof;
(d) All Common Shares which shall be issued upon exercise of the
right provided for herein or in the Special Warrants, shall be
fully paid and non-assessable; and
(e) generally it will well and truly perform and carry out all of the
acts or things to be done by it as provided in this Special
Warrant Indenture.
(f) it will use reasonable efforts to ensure that all Common Shares
outstanding or issuable from time to time (including without
limitation the Common Shares issuable on the exercise of the
Special Warrants) continue to be or are listed and posted for
trading on the Toronto Stock Exchange.
(g) it will make all requisite filings under applicable Canadian
securities legislation and stock exchange rules, including (on a
reasonable efforts basis) those necessary to remain a reporting
issuer, not in default in each of the Qualifying Jurisdictions
and those necessary to report the exercise of the right to
acquire Common Shares pursuant to Special Warrants.
(h) it will as soon as practicable file with and use its reasonable
best efforts to obtain a receipt on or before the Qualification
Date from each of the securities commissions in the Qualifying
Jurisdictions for the Prospectus so that the resale of such
Common Shares will not be subject to the prospectus requirements
nor any "hold period" under
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applicable securities legislation in such Qualifying
Jurisdictions (except that it is not required to take such steps
solely to enable a resale of Common Shares from the holdings of a
"control person", as defined in applicable securities laws).
(i) it will send written notice to the Trustee and, by prepaid
registered mail or courier, to each Holder of Special Warrants of
the issuance of the receipts referred to in subsection 5.01(h)
together with a commercial copy of the Prospectus, if any,
specifying the date on which the Special Warrants expire and, in
the case of the Trustee, copies of the receipts, as soon as
practicable but, in any event, not later than three days after
the latest date on which such a receipt is issued by any of the
Securities Commissions.
(j) if the Corporation shall not have received a receipt for the
Prospectus on or before the Qualification Date, the Corporation
will continue, until the Expiry Date, to use its reasonable best
efforts to obtain a receipt for the Prospectus from each of the
Securities Commissions.
5.02 Trustee's Remuneration and Expenses
The Corporation covenants that it will pay to the Trustee from time to
time reasonable remuneration for its services hereunder and will 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 the trusts hereby created (including the reasonable compensation
and the 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 the trusts hereof shall be finally and fully
performed, except any such expense, disbursement or advance as may arise from
its negligence or bad faith.
5.03 Securities Qualification Requirements
If, in the opinion of counsel, any prospectus or registration
statement is required to be filed with, or any permission is required to be
obtained from, any governmental authority in Canada or of any other jurisdiction
or any other step is required under any federal or provincial law of Canada or
in any other jurisdiction before any Common Shares which a Warrantholder is
entitled to acquire pursuant to his Special Warrant may properly and legally be
issued upon due exercise thereof, the Corporation covenants that it will take
such action so required.
5.04 Negative Covenants
(a) The Corporation covenants with the Trustee that so long as any
Special Warrants remain outstanding it will give to the Trustee
and to holders of Special Warrants in the manner provided in
Section 3.05 notice of its intention to fix a record date for any
event referred to in Section 4.06 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 in each
case not less than 10 days prior to the applicable record date.
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(b) The Corporation covenants with the Trustee that it will not close
its transfer books or take any action which might deprive or
unduly restrict the holder of a Special Warrant of the
opportunity of exercising his right of purchase pursuant thereto
during the period of 10 days after the giving of the notice
required by Subsection 5.04(a).
5.05 Delivery of Special Warrants
Unless directed otherwise by the Corporation, as soon as practicable
after the delivery to the Trustee of forms of Special Warrants by the
Corporation and of the list of Warrantholders, whichever is later, the Trustee
shall complete, certify and forward by first class insured mail to such
Warrantholders, the appropriate number of Special Warrants.
5.06 Performance of Covenants by Trustee
If the Corporation shall fail to perform any of its covenants
contained in this Warrant Indenture, the Trustee may notify the Warrantholders
of such failure on the part of the Corporation or may itself perform any of the
said covenants capable of being performed by it, but shall be under no
obligation to do so or to notify the Warrantholders. All sums expended or
advanced by the Trustee in so doing shall be repayable as provided in Section
5.02. No such performance, expenditure or advance by the Trustee shall be deemed
to relieve the Corporation of any default hereunder.
ARTICLE VI
ENFORCEMENT
6.01 Suits by Warrantholders
All or any of the rights conferred upon the holder of any Special
Warrant by the terms of such Special Warrant or of this Indenture, or of both,
may be enforced by the holder of such Special Warrant by appropriate legal
proceedings but without prejudice to the right which is hereby conferred upon
the Trustee to proceed in its own name to enforce each and all of the provisions
herein contained for the benefit of the holders of the Special Warrants from
time to time outstanding.
6.02 Immunity of Shareholders, etc.
The Warrantholders 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 shareholder, director or officer of the Corporation
for the issue of Common Shares pursuant to any warranty or on any covenant,
agreement, representation or warranty by the Corporation herein or in the
Special Warrants contained.
6.03 Limitation of Liability
The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the private property of any of the directors or
shareholders of the Corporation or any of the officers, employees or agents of
the Corporation, but only the property of the Corporation shall be bound in
respect hereof.
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ARTICLE VII
MEETINGS OF WARRANTHOLDERS
7.01 Right to Convene Meetings
The Trustee may at any time and from time to time and shall on receipt
of a written request of the Corporation or of any Warrantholders' Request and
upon being indemnified to its reasonable satisfaction by the Corporation or by
the Warrantholders signing such Warrantholders' Request against the cost which
may be incurred in connection with the calling and holding of such meeting,
convene a meeting of the Warrantholders. In the event of the Trustee failing
within 15 days after receipt of such written request of the Corporation or
Warrantholders' Request and indemnity given as aforesaid to give notice
convening a meeting, the Corporation or such Warrantholders, as the case may be,
may convene such meeting. Every such meeting shall be held in the City of
Edmonton, the City of Calgary, or such other place as may be approved or
determined by the Trustee.
7.02 Notice
At least 21 days' notice of any meeting shall be given to the
Warrantholders in the manner provided in Section 3.05 and a copy of such notice
shall be sent by post to the Trustee unless the meeting has been called by it
and to the Corporation 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 such notice to set out the terms of any
resolution to be proposed or any of the provisions of this Article.
7.03 Chairman
An individual nominated in writing by the Trustee shall be chairman of
the meeting and if no individual is so nominated, or if the individual so
nominated is not present within 15 minutes from the time fixed for the holding
of the meeting, the Warrantholders present in person or by proxy shall choose
some individual present to be chairman.
7.04 Quorum
Subject to the provisions of Section 7.12, at any meeting of
Warrantholders a quorum shall consist of Warrantholders present in person or by
proxy and entitled to purchase at least 25% of the aggregate number of Common
Shares which could be purchased pursuant to all the then outstanding Special
Warrants provided that at least two persons entitled to vote thereat are
personally present. If a quorum of the Warrantholders shall not be present
within one-half hour from the time fixed for holding any meeting, the meeting,
if summoned by the Warrantholders or on a Warrantholders' Request, 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 a non-business day) at the same time and
place and no notice need be given. At the adjourned meeting the Warrantholders
present in person or by proxy shall form a quorum and may transact the business
for which the meeting was originally convened notwithstanding that they may not
be entitled to purchase at least 25% of the aggregate number of Common Shares
which can be purchased pursuant to all the then outstanding Special Warrants.
7.05 Power to Adjourn
The Chairman of any meeting of which a quorum of the Warrantholders is
present may with
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the consent of the meeting adjourn any such meeting and no notice of such
adjournment need be given except such notice, if any, as the meeting may
prescribe.
7.06 Show of Hands
Every question submitted to a meeting shall be decided in the first
place by a majority of the votes given on a show of hands except that votes on
an extraordinary resolution 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.
7.07 Poll
On every extraordinary resolution, and on any other question submitted
to a meeting and after a vote by a show of hands when demanded by the chairman
or by one or more of the Warrantholders acting in person or by proxy and
entitled to acquire in the aggregate at least 1% of the aggregate number of
Common Shares which could be acquired pursuant to all the Warrants for the time
being outstanding, a poll shall be taken in such manner as the chairman shall
direct. Questions other than extraordinary resolutions shall be decided by a
majority of the votes cast on the poll.
7.08 Voting
On a show of hands every person who is present and entitled to vote,
whether as a Warrantholder or as proxy for one or more absent Warrantholders or
both, shall have one vote. On a poll each Warrantholder present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in respect of each whole Common Share which he is entitled to
purchase pursuant to the Special Warrant or Special Warrants then held by him. A
proxy need not be a Warrantholder.
7.09 Regulations
The Trustee or the Corporation with the approval of the Trustee may
from time to time make and from time to time vary such regulations as it shall
from time to time think fit for:
(a) the issue of instruments appointing proxies to represent
Warrantholders at any meeting of Warrantholders;
(b) the deposit of instruments appointing proxies at such place and
time as the Trustee, the Corporation or the Warrantholders
convening the meeting, as the case may be, may in the notice
convening the meeting direct;
(c) the deposit of instruments appointing proxies at some appointed
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, cabled or telegraphed 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; and
(d) the form of the instrument of proxy.
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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 Special Warrants, or as entitled to vote or be present at
the meeting in respect thereof, shall be persons who produce Special Warrants at
the meeting.
7.10 Corporation and Trustee may be Represented
The Corporation and the Trustee, by their respective directors, and
the counsel of the Corporation and the Trustee may attend any meeting of the
Warrantholders, but shall have no vote as such.
7.11 Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them by any other
provisions of this Indenture or by law, the Warrantholders at a meeting shall
have the following powers exercisable from time to time by extraordinary
resolution:
(a) power to agree to any modification, abrogation, alteration,
compromise or arrangement of the rights of Warrantholders or the
Trustee in its capacity as Trustee hereunder or on behalf of the
Warrantholders against the Corporation whether such rights arise
under this Special Warrant Indenture or the Warrants or
otherwise;
(b) power to direct or authorize the Trustee to enforce any of the
covenants on the part of the Corporation contained in this
Indenture or the Special Warrants or to enforce any of the rights
of the Warrantholders in any manner specified in such
extraordinary resolution or to refrain from enforcing any such
covenant or right;
(c) power to waive and direct the Trustee to waive any default on the
part of the Corporation in complying with any provisions of this
Indenture or the Special Warrants either unconditionally or upon
any conditions specified in such extraordinary resolution;
(d) power to restrain any Warrantholder from taking or instituting
any suit, action or proceeding against the Corporation for the
enforcement of any of the covenants on the part of the
Corporation contained in this Indenture or the Special Warrants
or to enforce any of the rights of the Warrantholders; and
(e) power to direct any Warrantholder who, as such, has brought any
suit, action or proceeding in connection with the enforcement of
rights arising pursuant to this Indenture to stay or discontinue
or otherwise deal with the same upon payment of the costs,
charges and expenses reasonably and properly incurred by such
Warrantholder in connection therewith.
7.12 Meaning of "Extraordinary Resolution"
(a) The expression "extraordinary resolution" when used in this
Indenture means, subject as hereinafter in this Section and in
Section 7.15 and 7.16 provided, a resolution proposed at a
meeting of Warrantholders duly convened for that purpose and held
in accordance with the provisions of this Article contained at
which there are present in person or by proxy Warrantholders
entitled to acquire at least 51% of the
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aggregate number of Common Shares which can be acquired pursuant
to all the then outstanding Special Warrants and passed by the
affirmative votes of Warrantholders entitled to acquire not less
than 75% of the aggregate number of Common Shares which can be
acquired pursuant to all the then outstanding Special Warrants
represented at the meeting and voted on the poll upon such
resolution.
(b) If, at any such meeting called for the purpose of passing an
extraordinary resolution, Warrantholders entitled to acquire 51%
of the aggregate number of Common Shares which can be acquired
pursuant to all the then outstanding Special Warrants are not
present in person or by proxy within one-half hour after the time
appointed for the meeting, then the meeting, if convened by
Warrantholders or on a Warrantholders' Request, shall be
dissolved; but in any other case it shall stand adjourned to such
day, being not less than 15 or 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 3.05. Such
notice shall state that at the adjourned meeting the
Warrantholders present in person or by proxy shall form a quorum
but it shall not be necessary to set forth the purposes for which
the meeting was originally called or any other particulars. At
the adjourned meeting the Warrantholders 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 by the requisite vote as
provided in Subsection 7.12(a) of this Indenture notwithstanding
that Warrantholders entitled to acquire 51% of the aggregate
number of Common Shares which may be acquired pursuant to all the
then outstanding Special Warrants 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.
7.13 Powers Cumulative
It is hereby declared and agreed that any one or more of the powers or
any combination of the powers in this Indenture stated to be exercisable by the
Warrantholders by extraordinary resolution or otherwise may be exercised from
time to time and the exercise of any one or more of such powers or any
combination or powers from time to time shall not be deemed to exhaust the right
of the Warrantholders to exercise such power or powers or combination of powers
then or any power or powers or combination of powers thereafter from time to
time.
7.14 Minutes
Minutes of all resolutions and proceedings at every such meeting
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 Warrantholders, 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 passed and taken.
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7.15 Instruments in Writing
All actions which may be taken and all powers that may be exercised by
the Warrantholders at a meeting held as hereinbefore in this Article provided
may also be taken and exercised by Warrantholders entitled to acquire 75% of the
aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding Special Warrants by an instrument in writing signed in one or more
counterparts by such Warrantholders in person or by attorney duly appointed in
writing and the expression "extraordinary resolution" when used in this
Indenture shall include an instrument so signed.
7.16 Binding Effect of Resolutions
Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article at a meeting of Warrantholders
shall be binding upon all the Warrantholders, whether present at or absent from
such meeting, and every instrument in writing signed by Warrantholders in
accordance with Section 7.15 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Trustee (subject to the provisions for its indemnity herein contained) shall be
bound to give effect accordingly to every such resolution and instrument in
writing.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
8.01 Provision for Supplemental Indentures for Certain Purposes
From time to time the Corporation (when authorized by a resolution of
its directors) and the Trustee may, subject to the provisions of these presents,
and they shall, when so directed by these presents, execute and deliver by their
proper officers, indentures or instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more or all of the following purposes:
(a) setting forth adjustments in the application of the provisions of
Article IV pursuant to section 4.06;
(b) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of counsel, are
necessary or advisable in the premises, provided that the same
are not in the opinion of the Trustee prejudicial to the
interests of the Warrantholders;
(c) giving effect to any extraordinary resolution passed as provided
in Article VII;
(d) making such provisions not inconsistent with this Special Warrant
Indenture as may be necessary or desirable with respect to
matters or questions arising hereunder or for the purpose of
obtaining a listing or quotation of the Special Warrants on any
stock exchange or bourse, provided that such provisions are not
in the opinion of the Trustee prejudicial to the interest of the
Warrantholders;
(e) adding to or altering the provisions hereof in respect of the
registration and transfer of Special Warrants, making provision
for the exchange of Special Warrants, and making any modification
in the form of the Special Warrants which does not affect the
substance thereof;
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(f) modifying any of the provisions of this Indenture or relieving
the Corporation from any of the obligations, conditions or
restrictions herein contained, provided that no such modification
or relief shall be or become operative or effective if in the
opinion of the Trustee such modification or relief impairs any of
the rights of the Warrantholders or of the Trustee, and provided
that the Trustee may in its uncontrolled discretion decline to
enter into any such supplemental indenture which in its opinion
may not afford adequate protection to the Trustee when the same
shall become operative; and
(g) for any other purpose not inconsistent with terms of this
Indenture, including the correction or rectification of any
ambiguities, defective provisions, errors or omissions herein,
provided that in the opinion of the Trustee the rights of the
Trustee and of the Warrantholders are in no way prejudiced
thereby.
ARTICLE IX
CONCERNING THE TRUSTEE
9.01 Trust Indenture Legislation
(a) In this Article, the term "Applicable Legislation" means the
provisions, if any, of the Business Corporations Act (Alberta)
and any other statute of Canada or a province thereof, and of
regulations under any such named or other statute, relating to
trust indentures or to the right, duties and obligations of
trustees and of corporations under trust indentures, to the
extent that such provisions are at the time in force and
applicable to this Indenture.
(b) If and to the extent that any provisions of this Indenture
limits, qualifies or conflicts with a mandatory requirement of
Applicable Legislation, such mandatory requirement shall prevail.
(c) The Corporation and the Trustee agree that each will at all times
in relation to this Indenture and any action to be taken
hereunder observe and comply with and be entitled to the benefits
of Applicable Legislation.
9.02 Rights and Duties of Trustee
(a) In the exercise of the rights and duties prescribed or conferred
by the terms of this Indenture, the Trustee shall exercise that
degree of care, diligence and skill that a reasonable prudent
trustee would exercise in comparable circumstances.
(b) Subject only to Subsection 9.02(a), the obligation of the Trustee
to commence or continue any act, action or proceeding for the
purpose of enforcing any rights of the Trustee or the
Warrantholders hereunder shall be conditional upon the
Warrantholders 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.
None of the provisions
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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.
(c) The Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the
Warrantholders at whose instance it is acting to deposit with the
Trustee the Special Warrants held by them, for which Special
Warrants the Trustee shall issue receipts.
(d) Every provision of this Indenture that by its term relieves the
Trustee of liability or entitles it to rely upon any evidence
submitted to it, is subject to the provisions of Applicable
Legislation, of this Section and of Section 9.03.
9.03 Evidence, Experts and Advisers
(a) In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Corporation shall
furnish to the Trustee such additional evidence of compliance
with any provision hereof, and in such form, as may be prescribed
by Applicable Legislation or as the Trustee may reasonably
require by written notice to the Corporation.
(b) In the exercise of its rights and duties, the Trustee may, if it
is acting in good faith, rely as to the truth of the statements
and the accuracy of the opinions expressed therein, upon
statutory declarations, opinions, reports, certificates or other
evidence furnished to the Trustee pursuant to a request of the
Trustee, provided that such evidence complies with Applicable
Legislation and the Trustee examines the same and determines that
such evidence complies with the applicable requirements of this
Indenture.
(c) Whenever Applicable Legislation requires that evidence referred
to in Subsection 9.03(a) be in the form of a statutory
declaration, the Trustee may accept such statutory declaration in
lieu of a certificate of the Corporation required by any
provision hereof. Any such statutory declaration may be made by
one or more of the chairman or vice-chairman of the board,
president, executive vice-presidents, vice-presidents, secretary,
treasurer, assistant secretary or assistant treasurer of the
Corporation.
(d) Proof of the execution of an instrument in writing, including a
Warrantholders' Request, by any Warrantholder may be made by the
certificate of a notary public, or other officer with similar
powers, that the person signing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to
such execution or in any other manner which the Trustee may
consider adequate.
(e) The Trustee may employ or retain such counsel, accountants,
engineers, appraisers or other experts or advisers as it may
reasonably require for the purpose of discharging its duties
hereunder and may pay reasonable remuneration for all services so
performed by any of them, without taxation of costs of any
counsel, and shall not be responsible for any misconduct on the
part of any of them.
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9.04 Documents, Moneys, etc., Held by Trustee
Any securities, documents of title or other instruments that may at
any time be held by the Trustee subject to the trusts hereof may be placed in
the deposit vaults of the Trustee or of any Canadian chartered bank or deposited
for safekeeping with any such bank. Unless herein otherwise expressly provided,
any moneys so held pending the application or withdrawal thereof under any
provisions of this Indenture, may be deposited in the name of the Trustee in any
Canadian chartered bank at the rate of interest (if any) then current on similar
deposits or, with the consent of the Corporation, may be (i) deposited in the
deposit department of the Trustee or any other loan or trust company authorized
to accept deposits under the laws of Canada or a province thereof, or (ii)
invested in securities issued or guaranteed by the Government of Canada or a
province thereof or in obligations, maturing not more than one year from the
date of investment, of any Canadian chartered bank or loan or trust company.
Unless the Corporation shall be in default hereunder, all interest or other
income received by the Trustee in respect of such deposits and investments shall
belong to the Corporation.
9.05 Action by Trustee to Protect Interests
The Trustee shall have power to institute and to maintain such actions
and proceedings as it may consider necessary or expedient to preserve, protect
or enforce its interest and the interests of the holders of Special Warrants.
9.06 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.
9.07 Protection of Trustee
By way of supplement to the provisions of any law for the time being
related to trustees, it is expressly declared and agreed as follows:
(a) The Trustee shall not be liable for or by reason of any
statements of fact or recitals in this Indenture or in the
Special Warrants (except the representation contained in Section
9.10 or in the certificate of the Trustee on the Special
Warrants) or required to verify the same, but all such statements
or recitals are and shall be deemed to be made by the
Corporation.
(b) Nothing herein contained shall impose any obligation on the
Trustee to see to or require evidence of the registration or
filing (or renewal thereof) of this Indenture or any instrument
ancillary or supplemental hereto.
(c) The Trustee shall not be bound to give notice to any person or
persons of the execution hereof.
(d) The Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequence of any
breach on the part of the Corporation of any of the covenants
herein contained or of any acts of the agents or servants of the
Corporation.
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9.08 Replacement of Trustee by Warrantholders
The Trustee may resign its trust and be discharged from all further
duties and liabilities hereunder by giving to the Corporation not less than 90
days' notice in writing or such shorter notice as the Corporation may accept as
sufficient. The Warrantholders by extraordinary resolution shall have power at
any time to remove the Trustee to appoint a new trustee. In the event of the
Trustee resigning or being removed as aforesaid 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 Warrantholders; failing such
appointment by the Corporation the retiring Trustee or any Warrantholder may
apply to a Justice of the Court of Queen's Bench of Alberta, on such notice as
such justice may direct, 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 Warrantholders. Any new trustee appointed under any
provision of this Section shall be a corporation authorized to carry on the
business of a trust company in the Province of Alberta. On any such 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 without
any further assurance, conveyance, act or deed; but there shall be immediately
executed, at the expense of the Corporation, all such conveyances or other
instruments as may, in the opinion of counsel, be necessary or advisable for the
purpose of assuring the same to the new trustee.
9.09 Replacement of Trustee by Corporation
The Corporation may, upon giving notice to the Trustee of not less
than 90 days' notice in writing, discharge the Trustee from all further duties
and liabilities hereunder. The Corporation shall, within a reasonable period of
time from such discharge, appoint a new trustee and failing such appointment a
Warrantholder may apply to a Justice of the Court of Queen's Bench of Alberta,
on such notice as the Justice may direct, for the appointment of a new trustee;
but a new trustee so appointed by the Corporation or the Court shall be subject
to removal by the Warrantholders in the manner described in Section 9.08. Any
new trustee appointed under the provisions of this Section shall be a
corporation authorized to carry on the business of a trust company in the
Province of Alberta. On any such 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 without any further assurance, conveyance,
act or deed; but there shall be immediately executed, at the expense of the
Corporation, all such conveyance or other instruments as may in the opinion of
counsel be necessary or advisable for the purpose of assuring the same to the
new trustee.
9.10 Conflict of Interest
(a) The Trustee represents to the Corporation that at the time of the
execution and delivery hereof no material conflict of interest
exists in the Trustee's role as a fiduciary hereunder and agrees
that in the event of a material conflict of interest arising
hereafter it will, within 90 days after ascertaining that it has
such material conflict of interest, either eliminate the same or
resign its trust hereunder.
(b) Subject to subsection 9.10(a) the Trustee, in its personal or any
other capacity, may buy, lend upon and deal in securities of the
Corporation and generally may contract any enter into financial
transactions with the Corporation or any Subsidiary of the
Corporation without being liable to account for any profit made
thereby.
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9.11 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.
9.12 Indemnity to the Trustee
Except for its act of gross negligence or wilful misconduct, the
Trustee shall not be liable for any act done or step taken or omitted by it in
good faith, or for any mistake of fact or law and the Company agrees to
indemnify and save harmless the Trustee from and against all claims, demands,
action, suits or other proceedings by whomsoever made, prosecuted or brought and
from all losses, costs, damages and expenses in any manner based upon,
occasioned by or attributable to any act of the Trustee in the execution of its
duties hereunder. It is understood and agreed that this indemnification shall
survive the termination of this indenture.
9.13 Trustee not required to give notice of default
The Trustee shall not be bound to give any notice or do or take any
act, action or proceeding by virtue of the powers conferred on it hereby unless
and until it shall have been required so to do under the terms hereof; nor shall
the Trustee be required to take notice of any default hereunder, unless and
until notified in writing of such default, which notice shall distinctly specify
the default desired to be brought to the attention of the Trustee and in the
absence of any such notice the Trustee may for all purposes of this Indenture
conclusively assume that no default has been made in the observance or
performance of any of the representations, warranties, covenants, agreements or
conditions contained herein. Any such notice shall in no way limit any
discretion herein given to the Trustee to determine whether or not the Trustee
shall take action with respect to any default.
ARTICLE X
NOTICE
10.01 Notice to the Corporation and the Trustee
(a) Unless herein otherwise expressly provided, any notice to be
given hereunder to the Corporation or the Trustee shall be deemed
to be validly given if delivered or if sent by registered letter,
postage prepaid:
To the Corporation: Brocker Technology Group Ltd.
1103 Toronto Dominion Tower
10088 - 102 Avenue
Edmonton, Alberta T5J 2Z1
ATTENTION: CORPORATE SECRETARY
To the Trustee: Montreal Trust Company of Canada
710, 530 - 8th Avenue S.W.
Calgary, Alberta
ATTENTION: MANAGER
CORPORATE TRUST DEPARTMENT
<PAGE>
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and any such notice delivered in accordance with the foregoing shall
be deemed to have been received on the date of delivery or, if mailed,
on the second business day following the date of the postmark on such
notice.
(b) The Corporation or the Trustee, as the case may be, may from time
to time notify the other in the manner provided in Subsection
11.01(a) of a change of address which, from the effective date of
such notice and until changed by like notice, shall be the
address of the Corporation or the Trustee, as the case may be,
for all purposes of this Indenture.
(c) If, by reason of a strike, lockout or other work stoppage, actual
or threatened, involving postal employees, any notice to be given
to the Trustee or to the Corporation hereunder could reasonably
be considered unlikely to reach its destination, such notice
shall be valid and effective only if it is delivered to an
officer of the party to which it is addressed or if it is
delivered to such party at the appropriate address provided in
Subsection 11.01(a) by cable, telegram, telex or other means of
prepaid, transmitted, recorded communication.
10.02 Time of the Essence
Time shall be of the essence of this Special Warrant Indenture.
10.03 Counterparts and Formal Date
This Indenture may be simultaneously executed in several counterparts,
each of which so executed shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution shall be deemed to bear date as of
January 21, 2000
The Corporation and the Trustee have caused these presents to be
executed by affixing their respective corporate seals, where required, attested
by the signatures of their proper officers in that behalf.
BROCKER TECHNOLOGY GROUP LTD.
Per: ____________________________________
(Corporate Seal)
MONTREAL TRUST COMPANY OF CANADA
Per: ____________________________________
Per: ____________________________________
(Corporate Seal)
