<PAGE>
POWER PLUS CORPORATION
NOTICE OF A SPECIAL MEETING OF
COMMON SHAREHOLDERS
NOTICE IS HEREBY GIVEN THAT a special meeting of holders of common shares of
POWER PLUS CORPORATION (the "Corporation") will be held in the Jasper Room, The
Westin Hotel at 320 - 4th Avenue S.W., Calgary, Alberta, T2P 2S6, at 1:00 p.m.
(Calgary time), on Friday, January 30, 1998 for the following purposes.
1. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the private placement
of up to and including 5,882,353 special warrants of the Corporation at a
purchase price of $0.85 per special warrant.
2. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the private placement
of a series of first fixed and floating charge secured convertible 10%
debentures in the aggregate principal amount of $5,000,000.
3. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to an amendment to the
conversion price of and the subordination of the issued and outstanding 10%
convertible secured special promissory notes and the 10% convertible
secured debentures of the Corporation.
4. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to extending the expiry
dates of the Class A Warrants, Class B Warrants, Class AA Warrants and
Class BB Warrants of the Corporation and to amend the respective exercise
prices thereof.
5. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to increasing the number
of stock options to be granted by the Corporation which were previously
approved by the shareholders, to up to and including 1,650,000 stock
options, setting the exercise price thereof and to extend the time within
which management may grant such options of the Corporation proposed to be
granted to directors, officers, employees and consultants of the
Corporation.
6. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the issuance of up to
400,000 units of the Corporation in payment and conversion of certain
outstanding indebtedness of the Corporation.
7. To approve and adopt, with or without modification, the ordinary resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the conversion of up
to $4,081,500 in principal amount of unsecured promissory notes of the
Corporation plus interest thereon into common shares at a conversion price
of $1.25 per common share.
8. To approve and adopt, with or without modification, the special resolution
as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the consolidation of
the issued and outstanding common shares of the Corporation on the ratio of
one (1) new common share for up to every five (5) common shares heretofore
outstanding.
9 To approve and adopt all other matters which may be properly come before
the meeting.
DATED at the City of Toronto, in the Province of Ontario, this 23rd day of
December, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
---------------------------------------
J. DOUGLAS ELLIOTT
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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IMPORTANT
It is desirable that as many shares as possible be represented at the meeting.
If you do not expect to attend and would like your shares represented, please
complete the enclosed documents instrument of proxy and return it as soon as
possible in the envelope provided for that purpose. All proxies, to be valid,
must be deposited at the office of the Registrar and Transfer Agent of the
Corporation, Montreal Trust Company of Canada, 6th Floor, 530 - 8th Avenue S.W.,
Calgary, Alberta, T2P 3S8, no later than forty-eight (48) hours prior to the
meeting or any adjournment thereof.
<PAGE>
POWER PLUS CORPORATION
Toronto Corporate Office
7850 Woodbine Avenue, Suite 201
Markham, Ontario
L3R 0B9
MANAGEMENT INFORMATION CIRCULAR
PURPOSE OF SOLICITATION
This management information circular is furnished in connection with the
solicitation of proxies by the management of Power Plus Corporation (the
"Corporation"), for the use at the special meeting of common shareholders of the
Corporation to be held on Friday, January 30, 1998, in the Jasper Room, The
Westin Hotel at 320 - 4th Avenue S.W., Calgary, Alberta, T2P 2S6 at the hour of
1:00 o'clock in the afternoon (Calgary time) or at any adjournment thereof for
the purposes set out in the accompanying notice of meeting (the "meeting").
Although it is expected that the solicitation of proxies will be primarily by
mail, proxies may also be solicited personally or by telephone, telegraph or
personal interview by regular employees of the Corporation, at a nominal cost.
In accordance with National Policy No. 41, arrangements have been made with
brokerage houses and other intermediaries, clearing agencies, custodians,
nominees and fiduciaries to forward solicitation materials to the beneficial
owners of the common shares held of record by such persons and the Corporation
may reimburse such persons for reasonable fees and disbursements incurred by
them in so doing. The cost of any such solicitation will be borne by the
Corporation.
This information circular and the accompanying instrument of proxy will be
mailed to all registered shareholders of the Corporation on or about January 7,
1998.
VOTING OF PROXIES
All common shares represented at the meeting by properly executed proxies will
be voted (including the voting on any ballot), and where a choice with respect
to any matter to be acted upon has been specified in the instrument of proxy,
the common shares represented by the proxy will be voted in accordance with such
specification. IN THE ABSENCE OF ANY SUCH SPECIFICATION, THE MANAGEMENT
DESIGNEES, IF NAMED AS PROXY, WILL VOTE IN FAVOUR OF THE MATTERS SET OUT
THEREIN.
THE ENCLOSED INSTRUMENT OF PROXY CONFERS DISCRETIONARY AUTHORITY UPON THE
MANAGEMENT DESIGNEES, OR OTHER PERSONS NAMED AS PROXY, WITH RESPECT TO
AMENDMENTS TO OR VARIATIONS OF MATTERS IDENTIFIED IN THE NOTICE OF MEETING AND
ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING. AS OF THE DATE
HEREOF, THE CORPORATION IS NOT AWARE OF ANY AMENDMENTS TO, VARIATIONS OF OR
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING. IN THE EVENT THAT OTHER
MATTERS COME BEFORE THE MEETING, THEN THE MANAGEMENT DESIGNEES INTEND TO VOTE IN
ACCORDANCE WITH THE JUDGMENT OF THE MANAGEMENT OF THE CORPORATION.
APPOINTMENT OF PROXY
A SHAREHOLDER HAS THE RIGHT TO DESIGNATE A PERSON, (WHO NEED NOT BE A
SHAREHOLDER OF THE CORPORATION), OTHER THAN J. DOUGLAS ELLIOTT AND MICHAEL J.
PERKINS, OFFICERS AND/OR DIRECTORS OF THE CORPORATION AND THEA L. PILUTIK, LEGAL
COUNSEL FOR THE CORPORATION AND THE MANAGEMENT DESIGNEES, TO ATTEND AND ACT FOR
HIM OR HER AT THE MEETING. In accordance with the by-laws of the Corporation,
such right may be exercised by inserting in the blank space provided, the name
of the person or persons to be designated and deleting therefrom, the names of
the management designees or by completing another proper instrument of proxy and
delivering same to the office of the Registrar and Transfer Agent of the
Corporation, Montreal Trust Company of Canada, 600, 530 - 8th Avenue S.W.,
Calgary, Alberta, T2P 3S8, no later than forty-eight (48) hours prior to the
meeting or any adjournment thereof. The Corporation reserves the right to
refuse acceptance of any instrument of
<PAGE>
proxy received thereafter.
REVOCATION OF PROXIES
A shareholder who has given a proxy may revoke it as to any matter upon which
a vote has not already been cast pursuant to the authority conferred by the
proxy. A proxy may be revoked by either executing a proxy bearing a later
date or by executing a valid notice of revocation, either of the foregoing to
be executed by the shareholder or by his authorized attorney in writing, or,
if the shareholder is a corporation, under its corporate seal by an officer
or attorney thereof duly authorized, and by depositing the proxy bearing a
later date with the Registrar and Transfer Agent of the Corporation, Montreal
Trust Company of Canada, at any time up to and including the last business
day preceding the date of the meeting or any adjournment thereof at which the
proxy is to be used or by depositing the revocation of proxy with the
chairman of such meeting on the day of the meeting, or any adjournment
thereof, or in any other matter permitted by law. In addition, a proxy may
be revoked by the shareholder personally attending at the meeting and voting
his shares.
ADVICE TO BENEFICIAL SHAREHOLDERS
Shareholders who do not hold their shares in their own name (referred to herein
as "Beneficial Shareholders") are advised that only instruments of proxy from
shareholders of record can be recognized and voted at the meeting. Beneficial
Shareholders who complete and return a proxy must indicate thereon the person
(usually a brokerage firm) who holds their shares as a registered shareholder.
Every intermediary (usually a brokerage firm) has its own mailing procedure, and
provides its own return instructions, which should be carefully followed. The
instrument of proxy supplied to Beneficial Shareholders is identical to that
provided to registered shareholders. However, its purpose is limited to
instructing the registered shareholder how to vote on behalf of the Beneficial
Shareholder.
All references to shareholders in this management information circular, the
accompanying instrument of proxy and notice of meeting are to shareholders or
record unless specifically stated otherwise.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The Corporation is authorized to issue an unlimited number of common shares,
without nominal or par value of which, as at the date hereof, 8,060,766 common
shares are issued and outstanding and entitled to vote at the meeting on the
basis of one vote for each common share held. The Corporation also is
authorized to issue an unlimited number of preferred shares, without nominal or
par value, of which none are presently issued and outstanding.
Holders of common shares of record at the close of business on December 24,
1997 (the "record date"), are entitled to vote such common shares at the
meeting on the basis of one vote for each common share held except to the
extent that, (i) such person transfers his or her shares after the close of
business on the record date, and (ii) such transferee, at least ten (10) days
prior to the meeting, produces properly endorsed share certificates to the
Secretary or Transfer Agent of the Corporation or otherwise establishes his
or her ownership of the shares, in which case the transferee may vote those
shares.
Paragraph 10.11 of By-law No. 2 of the Corporation provides that two (2)
shareholders, personally present and owning or representing by proxy not less
than ten percent (10%) of the issued common shares of the Corporation,
constitutes a quorum for the meeting in respect of holders of common shares.
As of the date of this management information circular, no person or
corporation, to the knowledge of the directors and the executive officers of the
Corporation, beneficially owns, directly or indirectly, or exercises control or
direction over more than ten (10%) percent of the voting rights attached to the
outstanding common shares of the Corporation that are entitled to vote at the
meeting except for BPI Canadian Opportunities Fund which controls
approximately 18% of the voting rights attached to the outstanding common
shares entitled to vote at the meeting.
<PAGE>
3
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
A. COMPENSATION OF EXECUTIVE OFFICERS
During the last fiscal period ended January 31, 1997, the Corporation or its
wholly owned subsidiaries employed ten (10) executive officers. The aggregate
cash compensation (including salaries, fees, directors' fees, commissions,
bonuses paid for services rendered during the most recently completed fiscal
year, bonuses paid during the most recently completed fiscal year for services
rendered in a previous year, and any compensation other than bonuses earned
during the most recently completed fiscal year the payment of which was
deferred) paid to such executive officers by the Corporation and its
subsidiaries for services rendered during the fiscal period ended January 31,
1997 was approximately $766,438.
B. COMPENSATION OF DIRECTORS
No cash compensation (including salaries, directors' fees, commissions, bonuses
paid for services rendered during the most recently completed fiscal year,
bonuses paid during the most recently completed fiscal year for services
rendered in a previous year, and any compensation other than bonuses earned
during the most recently completed fiscal year the payment of which was
deferred), was paid to the directors by the Corporation for services rendered
during the fiscal period ended January 31, 1997.
The directors of the Corporation are entitled to receive reimbursement for
travelling and other expenses properly incurred while attending meetings of the
board of directors or any committee thereof or in the performance of their
duties as directors of the Corporation.
Executive officers of the Corporation who also act as directors of the
Corporation, did not receive any additional compensation for services rendered
in such capacity, other than as paid by the Corporation to such executive
officers in their capacity as executive officers. See "Compensation of
Executive Officers".
C. PLANS AND SHARE OPTIONS
Pursuant to a resolution of the board of directors of the Corporation dated
June 20, 1996, the Corporation established a stock option plan for the board of
directors, management and employees of the Corporation (the "Plan"). The
shareholders approved and ratified the adoption of the Plan at the last annual
general and special meeting of shareholders. The purpose of the Plan is to
afford persons who provide services to the Corporation, whether as directors,
management, employees or otherwise, an opportunity to obtain a proprietary
interest in the Corporation by permitting them to purchase common shares of the
Corporation and to aid in attracting, as well as retaining and encouraging the
continuing involvement of such persons with the Corporation. Subject to the
terms of the Plan, the board of directors have full authority to administer the
Plan upon such terms as the board of directors, in their sole discretion, shall
determine, provided no option shall be granted under the Plan after July 10,
2001. Up to ten percent (10%) of the issued and outstanding common shares of
the Corporation, from time-to-time on a non-diluted basis, have been reserved
and set aside for issuance upon exercise of options which may be granted
pursuant to the Plan. A copy of the Plan may be obtained at no charge by each
shareholder of the Corporation upon written request being made to the chief
financial officer of the Corporation, at the executive offices of the
Corporation.
No stock options were granted to executive officers or directors during the last
fiscal year ended January 31, 1997. There are no stock options for directors
and officers issued and outstanding as of the date hereof. See "Particulars of
Matters to be Acted Upon - Stock Options".
<PAGE>
4
D. OTHER COMPENSATION
The Corporation does not have any pension or retirement plans. There is no plan
or arrangement in respect of compensation received or that may be received by
executive officers or directors in the most recently completed fiscal year with
a view to compensating those officers in the event of their termination of
employment or a change of responsibilities following a change of control.
Other than as herein set forth, the Corporation did not pay any additional
compensation to the executive officers or directors (including personal benefits
and securities or properties paid or distributed which compensation was not
offered on the same terms to all full time employees), during the last completed
fiscal year.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
Other than as herein set forth, no director, executive officer nor any of their
respective associates or affiliates is or has been at any time since the
beginning of the last completed fiscal year indebted to the Corporation or any
of its subsidiaries.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
There are no material interests, direct or indirect, of the current directors,
executive officers, and shareholders who beneficially own, directly or
indirectly, more than ten percent (10%) of the outstanding common shares or any
known associate or affiliates of such persons, in any transaction which has
materially affected the Corporation other than as hereinafter set forth.
PARTICULARS OF MATTERS TO BE ACTED UPON
To the knowledge of the board of directors of the Corporation, the only matters
to be brought before the meeting are those matters set forth in the accompanying
notice of meeting.
A. BACKGROUND
In order to satisfy the Corporation's ongoing financial needs for general
working capital and to continue the implementation of the proposed roll out of
new store and kiosk locations under the banner of the "Powerful Stuff" chain of
stores, the Corporation is proposing to implement a four-tiered revised
corporate finance plan designed to facilitate the foregoing.
a. Firstly, the Corporation expects to obtain regulatory approval to
complete a private placement of up to and including 5,882,353
special warrants (the "Special Warrants") of the Corporation having
a purchase price of $0.85 per Special Warrant, or an aggregate
amount of $5,000,000, including reasonable fiscal advisory and
finders' fees and commissions.
b. Secondly, the Corporation is seeking regulatory approval to issue a
series of $5,000,000 10% convertible first fixed and floating charge
secured debentures (the "1998 Debentures").
Pursuant to an extraordinary resolution of the holders of $6,000,000
10% convertible fixed and floating charge secured special promissory
notes (the "1996 Special Notes"), the holders of 1996 Special Notes
agreed to subordinate their rights to the payment of the Corporation's
obligations to the holders of 1998 Debentures.
The 1998 Debentures shall bear interest at a rate of 10% per annum,
which interest is payable semi-annually in common shares of the
Corporation at a deemed price of
<PAGE>
5
$0.85 per common share. The 1998 Debentures will be convertible into
units at the option of the holder at a price of $0.85 per unit. Each
unit shall consist of one common share and a share purchase warrant.
Each such warrant will entitle the holder to purchase one additional
common share at a price of $0.90 within two years from the date such
warrant is issued.
The Corporation shall also have a right to compel holders to convert
all or part of their 1998 Debentures, in certain specific
circumstances. See "Private Placement - 1998 Debentures".
c. Thirdly, the Corporation is seeking regulatory approval to amend the
conversion price of the 1996 Debentures underlying the 1996 Special
Notes from $2.50 per common share to $1.25 per common share. See
"Amendment to Terms of 1996 Debentures".
d. Fourthly, in order to ensure that the exercise price of the previously
issued and outstanding Class A Warrants, Class B Warrants, Class AA
Warrants and Class BB Warrants of the Corporation have a conversion
price comparable to that of the 1996 Special Notes, the Corporation is
seeking regulatory approval to amend the conversion price of all such
outstanding warrants to $1.25 per common share and to extend the
period of time for exercise of such outstanding warrants. See
"Amendments to Class A Warrants, Class AA Warrants, Class B Warrants
and Class BB Warrants.".
The following table represents the potential impact on the Corporation's share
capital if the revised financing plan as proposed by management is implemented.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
COMMON
CLASS OF SECURITIES SHARES POSSIBLE NEW CAPITAL TIMING
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current issued common shares 8,060,766 n/a n/a
- ----------------------------------------------------------------------------------------------------------------------
Class A Warrants outstanding proposed @ $1.25 vs. $1.50(1)
1,815,802 $2,269,755 June 1998
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Class B Warrants outstanding proposed @ $1.25 vs. $2.00(1)
1,787,500 $2,234,375 June 1998
- ----------------------------------------------------------------------------------------------------------------------
Class AA Warrants outstanding proposed @ $1.25 vs. $2.50(1)
2,234,056 $2,792,570 Sept. 1998
- ----------------------------------------------------------------------------------------------------------------------
Class BB Warrants outstanding proposed @ $1.25 vs. $2.50(1)
2,475,000 $3,093,750 Sept. 1998
- ----------------------------------------------------------------------------------------------------------------------
$6.0 million Special Notes convertible into common shares 4,800,000 n/a n/a
until July 31, 2001 convertible @ $1.25 vs. $2.50
- ----------------------------------------------------------------------------------------------------------------------
$4.1 million Bridge Loan convertible @ $1.25 3,280,000 n/a n/a
- ----------------------------------------------------------------------------------------------------------------------
$5.0 million convertible first secured debentures 5,882,353 $5,000,000 Jan. 1998
convertible @ $0.85 into a unit consisting of a common share
and a warrant(1)
- ----------------------------------------------------------------------------------------------------------------------
2 year warrants underlying the units of the 1998 Debentures 5,882,353 $5,294,118 Jan. 2002
exercisable @ $0.90(1)
- ----------------------------------------------------------------------------------------------------------------------
Pending $5.0 million Special Warrant private placement
financing:
a) common shares(1)(3) 5,882,353 $5,000,000 Jan. 1998
b) share purchase warrants @ $0.90(1)(3) 5,882,353 $5,294,118 Jan. 2000
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
6
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF COMMON SHARES, ASSUMING FULL DILUTION(2) 47,982,536
- ----------------------------------------------------------------------------------------------------------------------
CAPITAL AVAILABLE, ASSUMING FULL DILUTION $ 30,978,686
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
(1) Subject to regulatory, shareholder and agent approval.
(2) Excludes directors and officers incentive stock options.
(3) Excludes any additional securities which may be issued as a penalty. See
"Private Placement - Special Warrants".
Regulatory body approval in respect of the foregoing matters is subject to the
Corporation receiving shareholder approval with respect to each of the foregoing
matters. Management considers the foregoing revised corporate finance plan to
be in the best interests of the Corporation. Accordingly, management intends to
place before the meeting for approval and adoption, with or without
modification, various resolutions confirming, ratifying and approving each of
the foregoing matters. Unless such authority is withheld, the management
designees, if named as proxy, intend to vote the common shares represented by
any such proxy in favour of the following resolutions.
B. PRIVATE PLACEMENT - SPECIAL WARRANTS
Management intends to place before the meeting, for approval, confirmation and
adoption, with or without modification, an ordinary resolution ratifying the
offer and sale of up to 5,882,353 special warrants (the "Special Warrants") of
the Corporation at a purchase price of $0.85 per Special Warrant for aggregate
gross proceeds of up to $5,000,000, including reasonable fees, commissions and
expenses. Subject to shareholder approval, each Special Warrant shall entitle
the holder to acquire one (1) common share and one (1) common share purchase
warrant (the "regular warrant") at no additional cost during the period
commencing on the date of issuance and ending on the earlier of six (6)
business days after the date upon which a receipt for a final prospectus
relating to the common shares and regular warrants issuable upon exercise of the
Special Warrants (collectively, the "Underlying Securities") or an appropriate
exemption order is granted that permits the common shares and regular warrants
to be freely tradeable, or the date that is one (1) year following the date of
issuance of the Special Warrants. Any Special Warrant that is not exercised
prior to the aforesaid exercise date shall be deemed to be exercised without any
further action on the part of the holder on such date. Each regular warrant
will entitle the holder thereof to purchase one (1) common share of the
Corporation at a purchase price of $0.90 on or before two (2) years after the
date of issuance of the Special Warrants.
The holders of Special Warrants shall be entitled to receive 1.1 common shares
and 1.1 regular warrants without payment of further consideration if the
Corporation at any time is unable to file and qualify a final prospectus in
regard to the Underlying Securities on or before the date that is 180 days after
the date of closing of the proposed private placement of Special Warrants.
Accordingly, it is possible that an additional 1,000,000 common shares may be
issued pursuant to this provision.
Under the terms of the proposed financing, the Special Warrants are not
convertible into the Underlying Securities until such financing has received
shareholder approval. In addition, the Corporation has obtained regulatory
approval to complete this private placement, subject to, inter alia, receipt of
shareholder approval.
The complete text of the ordinary resolution which management intends to place
before the meeting for approval, confirmation and adoption, with or without
modification, is as follows.
BE AND IT IS HEREBY RESOLVED AS A RESOLUTION OF THE CORPORATION THAT:
1. THE ALLOTMENT AND ISSUANCE OF UP TO AND INCLUDING 5,882,353 SPECIAL
WARRANTS OF THE
<PAGE>
7
CORPORATION (THE "SPECIAL WARRANTS") AT A PURCHASE PRICE OF $0.85 PER
SPECIAL WARRANT FOR AGGREGATE GROSS PROCEEDS OF UP TO $5,000,000 IS
HEREBY RATIFIED AND CONFIRMED;
2. EACH SPECIAL WARRANT SHALL ENTITLE THE HOLDER TO ACQUIRE ONE (1)
COMMON SHARE AND ONE (1) COMMON SHARE PURCHASE WARRANT (THE "REGULAR
WARRANT") AT NO ADDITIONAL COST TO THE HOLDER DURING THE PERIOD
COMMENCING ON THE DATE OF ISSUANCE OF THE SPECIAL WARRANTS AND ENDING
ON THE EARLIER OF SIX (6) BUSINESS DAYS AFTER THE DATE UPON WHICH A
RECEIPT FOR A FINAL PROSPECTUS TO BE FILED BY THE CORPORATION RELATING
TO THE DISTRIBUTION OF THE COMMON SHARES AND THE REGULAR WARRANTS
ISSUABLE UPON EXERCISE OF THE SPECIAL WARRANTS (THE "UNDERLYING
SECURITIES") OR AN APPROPRIATE EXEMPTION ORDER IS GRANTED THAT PERMITS
THE COMMON SHARES AND REGULAR WARRANTS TO BE FREELY TRADEABLE, OR THE
DATE THAT IS ONE (1) YEAR FOLLOWING THE DATE OF ISSUE OF THE SPECIAL
WARRANTS. ANY SPECIAL WARRANT THAT IS NOT EXERCISED PRIOR TO THE
AFORESAID EXERCISE DATE SHALL BE DEEMED TO BE EXERCISED WITHOUT ANY
FURTHER ACTION ON THE PART OF THE HOLDER ON SUCH DATE;
3. EACH REGULAR WARRANT WILL ENTITLE THE HOLDER THEREOF TO PURCHASE ONE
COMMON SHARE OF THE CORPORATION AT A PURCHASE PRICE OF $0.90 PER
COMMON SHARE ON OR BEFORE THE DATE THAT IS TWO (2) YEARS AFTER THE
DATE OF THE ISSUANCE OF THE SPECIAL WARRANTS;
4. THE HOLDERS OF SPECIAL WARRANTS SHALL BE ENTITLED TO RECEIVE 1.1
COMMON SHARES AND 1.1 REGULAR WARRANTS IN LIEU OF ONE (1) COMMON SHARE
AND ONE (1) REGULAR WARRANT WITHOUT PAYMENT OF FURTHER CONSIDERATION
AT ANY TIME IF THE CORPORATION IS UNABLE TO FILE AND QUALIFY A FINAL
PROSPECTUS RELATING TO THE UNDERLYING SECURITIES ON OR BEFORE THE DATE
THAT IS 180 DAYS AFTER THE DATE OF CLOSING OF THE PRIVATE PLACEMENT OF
SPECIAL WARRANTS;
5. THERE SHALL BE RESERVED FOR ISSUANCE UP TO AND INCLUDING 12,941,176
COMMON SHARES OF THE CORPORATION FOR ISSUANCE AS CONTEMPLATED HEREIN;
6. THE SHAREHOLDERS OF THE CORPORATION ACKNOWLEDGE THAT THE OFFICERS AND
DIRECTORS OF THE CORPORATION MAY SUBSCRIBE FOR SPECIAL WARRANTS UNDER
THE PRIVATE PLACEMENT AND CONSENT TO THE ALLOTMENT AND ISSUANCE OF
SPECIAL WARRANTS AND THE UNDERLYING SECURITIES TO ANY SUCH SUBSCRIBING
DIRECTOR AND OFFICER;
7. ANY ONE (1) OFFICER OR DIRECTOR OF THE CORPORATION BE AND IS HEREBY
DIRECTED AND AUTHORIZED TO EXECUTE ALL DOCUMENTS AND TO DO ALL THINGS
AS MAY BE DEEMED NECESSARY OR DESIRABLE IN CONNECTION WITH COMPLETING
ALL MATTERS CONTEMPLATED BY THIS RESOLUTION; AND
8. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY, IN
THEIR SOLE DISCRETION, REVOKE THIS RESOLUTION BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION.
C. PRIVATE PLACEMENT - FIRST SECURED DEBENTURES
Management of the Corporation has made application to The Alberta Stock Exchange
for approval to complete a private placement of a series of first secured fixed
and floating charge 10% convertible debentures ("1998 Debentures") in the
maximum principal amount of up to $5,000,000. The 1998 Debentures will mature
on January 31, 2000, shall bear interest at a rate of 10% per annum, payable
semi-annually in common shares having deemed price of $0.85 each, and are
secured by way of a first fixed and floating charge against all of the assets of
the Corporation. The 1998 Debentures shall be convertible, in whole or in part,
at the option of the
<PAGE>
8
holder, into units of the Corporation at a conversion price of $0.85 per unit
(a "Unit") for a total of 5,882,353 Units. Each Unit will consist of one
common share and one share purchase warrant. Each share purchase warrant
shall be convertible into one common share of the Corporation at an exercise
price of $0.90 per common share, expiring two years after the date of
conversion. The total number of common shares of the Corporation reserved
for issuance upon conversion of the 1998 Debentures and share purchase
warrants shall be 11,764,706 common shares. Subject to the conditional
approval of The Alberta Stock Exchange and shareholder approval, it is the
intention of the Corporation to complete this private placement as soon as
possible. In view of the fact that the possible aggregate issuance of common
shares issuable upon conversion of such debentures represents over
twenty-five (25%) percent of the corporation currently issued and outstanding
share total, shareholder approval is required by The Alberta Stock Exchange.
Funds raised from this private placement will be used for general corporate
purposes. This private placement will not affect a change of control of the
Corporation.
At any time after January 31, 1998 and before January 31, 2000, the maturity
date, the Corporation may, by written notice, require holders of 1998
Debentures to convert all or any part of the principal amount of their 1998
Debentures into Units of the Corporation at a conversion price of $0.85,
provided that any common shares issued upon such conversion will first have
been qualified under a prospectus as free-trading shares and provided further
that the weighted average trading price of the common shares over the ten
(10) trading days prior to the date on which the Corporation gave notice (the
"Conversion Notice") to the holders of 1998 Debentures of its intention to
require such holders to convert their 1998 Debentures, is at least $1.70 per
common share on any stock exchange in Canada on which the common shares are
listed for trading. If a holder of 1998 Debentures has not converted their
1998 Debentures within 20 days of receipt of the Conversion Notice, the
Corporation may, at any time thereafter, pre-pay all or part of the 1998
Debentures to which the Conversion Notice applies, together with interest
thereon, and cancel any such 1998 Debentures so paid on a pro-rata basis.
The complete text of the ordinary resolution which management intends to place
before the meeting for approval, confirmation and adoption, with or without
modification, is as follows.
BE AND IT IS HEREBY RESOLVED AS A RESOLUTION OF THE SHAREHOLDERS OF THE
CORPORATION THAT:
1. A SERIES OF FIXED AND FLOATING FIRST SECURED 10% CONVERTIBLE
DEBENTURES ("1998 DEBENTURES") OF THE CORPORATION UP TO A MAXIMUM
PRINCIPAL AMOUNT OF $5,000,000 BE AND THE SAME IS HEREBY AUTHORIZED
AND THE ISSUANCE THEREOF TO SUBSCRIBERS THEREFORE AS COLLATERAL
SECURITY FOR ALL OF THE CORPORATION'S PRESENT AND FUTURE DEBTS,
LIABILITIES AND OBLIGATIONS TO THE HOLDERS THEREOF, BE AND THE SAME IS
HEREBY AUTHORIZED AND APPROVED;
2. THE 1998 DEBENTURES SHALL BE DATED AS OF A DATE DETERMINED BY THE
BOARD OF DIRECTORS, SHALL BE PAYABLE IN FULL ON OR BEFORE JANUARY 31,
2000 AND SHALL BEAR INTEREST AT A RATE OF TEN (10%) PERCENT PER ANNUM,
PAYABLE SEMI-ANNUALLY IN COMMON SHARES OF THE CORPORATION HAVING A
DEEMED PRICE OF $0.85 PER COMMON SHARE, UNTIL ALL AMOUNTS SECURED BY
THE 1998 DEBENTURES SHALL BE FULLY PAID AND SATISFIED;
3. THE 1998 DEBENTURES AND ANY AMENDMENTS THERETO SHALL BE IN A FORM ANY
ONE OFFICER OR DIRECTOR OF THE CORPORATION TOGETHER MAY APPROVE AND
THE APPROVAL OF ANY TWO OFFICERS OR DIRECTORS OF THE CORPORATION TO
THE FORM OF 1998 DEBENTURES OR AMENDMENTS THERETO, SHALL BE
CONCLUSIVELY APPROVED BY THEIR EXECUTION OF THE 1998 DEBENTURES OR
SUCH AMENDMENTS THERETO;
4. IN ORDER TO SECURE THE DUE PAYMENT OF THE PRINCIPAL OF, INTEREST ON
AND ALL OTHER MONIES SECURED BY THE 1998 DEBENTURES, THE CORPORATION
IS HEREBY AUTHORIZED AND
<PAGE>
9
EMPOWERED TO MORTGAGE AND CHARGE, AS AND BY WAY OF A FIRST FIXED AND
FLOATING CHARGE, ALL OF THE REAL PROPERTY AND OTHER ASSETS OF THE
CORPORATION, WHERESOEVER SITUATE, BOTH PRESENT AND FUTURE;
5. UP TO 5,882,353 UNITS OF THE CORPORATION ARE HEREBY RESERVED AND
AUTHORIZED FOR ISSUANCE TO HOLDERS OF THE 1998 DEBENTURES UPON
CONVERSION THEREOF AT A CONVERSION PRICE OF $0.85 PER UNIT AND UPON
COMPLIANCE WITH THE CONDITIONS OF THE 1998 DEBENTURES SUCH UNITS SHALL
BE ISSUED SUBSTANTIALLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF
THE 1998 DEBENTURES, EACH UNIT TO CONSIST OF ONE (1) COMMON SHARE AND
ONE (1) SHARE PURCHASE WARRANT ENTITLING THE HOLDER THEREOF TO
PURCHASE ONE (1) FURTHER COMMON SHARE OF THE CORPORATION AT AN
EXERCISE PRICE OF $0.90 PER SHARE, EXPIRING TWO YEARS AFTER THE DATE
OF ISSUANCE OF SUCH UNITS;
6. UP TO 11,764,706 COMMON SHARES OF THE CORPORATION BE RESERVED AND
AUTHORIZED FOR ISSUANCE UPON CONVERSION OF THE 1998 DEBENTURES INTO
UNITS OF THE CORPORATION OR UPON EXERCISE OF SHARE PURCHASE WARRANTS
ISSUED UPON CONVERSION OF THE UNITS, AND UPON COMPLIANCE WITH ALL
CONDITIONS WITH RESPECT TO THE CONVERSION OR ISSUANCE THEREOF, SUCH
COMMON SHARES SHALL BE ISSUED SUBSTANTIALLY IN ACCORDANCE WITH THE
TERMS AND CONDITIONS OF THE 1998 DEBENTURES OR THE SECURITIES INTO
WHICH THE 1998 DEBENTURES MAY BE CONVERTED;
7. 1,176,470 COMMON SHARES OF THE CORPORATION BE RESERVED AND AUTHORIZED
FOR ISSUANCE UPON PAYMENT OF INTEREST ACCRUED ON THE 1998 DEBENTURES,
WHICH COMMON SHARES SHALL BE ISSUED SUBSTANTIALLY IN ACCORDANCE WITH
THE TERMS AND CONDITIONS OF THE 1998 DEBENTURES;
8. ANY ONE OFFICER OR DIRECTOR OF THE CORPORATION TOGETHER BE AND ARE
HEREBY AUTHORIZED AND DIRECTED TO DO ALL SUCH THINGS AND TO EXECUTE
AND DELIVER ALL SUCH INSTRUMENTS, DEEDS AND DOCUMENTS, AND ANY
AMENDMENTS THERETO, AS MAY BE NECESSARY AND ADVISABLE IN ORDER TO
GIVE EFFECT TO THE FOREGOING RESOLUTIONS, THE ISSUANCE OF THE 1998
DEBENTURES, THE ISSUANCE OF UNITS ON CONVERSION OF THE 1998
DEBENTURES AND ALL OTHER MATTERS RELATED THERETO; AND
9. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY IN
THEIR SOLE DISCRETION REVOKE THIS RESOLUTION BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION.
D. AMENDMENT TO TERMS OF 1996 SPECIAL NOTES
Pursuant to the 1996 Special Note Trust Indenture the Corporation created,
allotted and issued a series of $6,000,000 10% convertible fixed and floating
charge secured special promissory notes (herein referred to as the "1996 Special
Notes"). Upon exercise, each $1,000 of principal amount of 1996 Special Notes
entitles the holder to acquire for no further consideration, $1,000 in principal
amount of 10% convertible fixed and floating charge secured debentures (herein
referred to as the "1996 Debentures"). The holders of the 1996 Debentures have
the right at any time, and from time to time, during the term of the 1996
Debentures to convert all or part of the principal amount of the 1996 Debentures
into common shares in the capital of the Corporation at a conversion price of
$2.50 per common share and upon the terms and conditions set forth in the 1996
Debentures. The 1996 Debentures are secured against the assets of the
Corporation and rank pari passu with one another.
Management intends to place before the meeting for approval, confirmation and
adoption, with or without modification, a resolution to amend the 1996 Special
Note Trust Indenture and the debenture trust indenture, dated as of August 8,
1996 and effective as of July 31, 1996 ("1996
<PAGE>
10
Debenture Trust Indenture") by way of supplemental indentures so that the
conversion price of the 1996 Debentures will be reduced from $2.50 per common
share to $1.25 per common share. As a result, the total number of common
shares reserved for conversion of the 1996 Special Notes and the underlying
1996 Debentures would be increased from 2,400,000 to 4,800,000 common shares.
Due to the proposed creation of the 1998 Debentures which will have a first
charge on the assets of the Corporation, management proposes that the 1996
Special Notes and 1996 Debentures be subordinated to the 1998 Debentures. By
an extraordinary resolution dated effective November 24, 1997, the holders of
the 1996 Special Notes resolved that the payment of any and all debts and
sums of money now or hereafter due and owing by the Corporation under the
1996 Special Note Trust Indenture, the 1996 Special Notes and the 1996
Debentures, shall be subordinated in all respects to the payment by the
Corporation of its obligations to the holders of 1998 Debentures and that any
security securing the 1996 Special Note Indenture, the 1996 Special Notes and
the 1996 Debentures shall rank after the rights and security of the holders
of 1998 Debentures. It was also resolved by the holders of 1996 Special
Notes that the conversion price of the 1996 Debentures be reduced to $1.25
per common share and that the holders would convert the principal amount of
the indebtdness plus all interest thereon into common shares at $1.25 upon
shareholder and regulatory approval. In all other respects the 1998
Debentures and the 1996 Debentures will be confirmed and ratified in all
respects.
The complete text of the ordinary resolution which management intends to place
before the meeting for approval, confirmation and adoption, with or without
modification, is as follows.
BE AND IT IS HEREBY RESOLVED AS A RESOLUTION OF THE CORPORATION THAT:
1. THE CONVERSION PRICE FOR THE SERIES OF UP TO $6,000,000 OF 10%
CONVERTIBLE FIXED AND FLOATING CHARGE SECURED DEBENTURES DUE ON JULY
31, 2001, CREATED, ALLOTTED AND ISSUABLE BY THE CORPORATION PURSUANT
TO A DEBENTURE TRUST INDENTURE DATED AUGUST 8, 1996 AND EFFECTIVE AS
OF JULY 31, 1996 (THE "1996 DEBENTURES") SHALL BE REDUCED FROM $2.50
PER COMMON SHARE TO $1.25 PER COMMON SHARE;
2. THERE SHALL BE RESERVED OUT OF THE CAPITAL STOCK OF THE CORPORATION
A SUFFICIENT NUMBER OF ADDITIONAL COMMON SHARES OF THE CORPORATION
FOR ISSUANCE UPON THE EXERCISE OF THE 1996 DEBENTURES PLUS ACCRUED
INTEREST THEREON AT THE NEW CONVERSION PRICE OF $1.25 PER COMMON
SHARE;
3. THE RIGHTS OF THE HOLDERS OF 1996 SPECIAL NOTES AND THE 1996
DEBENTURES RELATING TO PAYMENT AND TO SECURITY FOR THE 1996 SPECIAL
NOTES AND 1996 DEBENTURES SHALL BE SUBORDINATED TO THE RIGHTS TO
PAYMENT AND SECURITY OF THE HOLDERS OF 1998 DEBENTURES;
4. ANY ONE (1) DIRECTOR OR OFFICER OF THE CORPORATION BE AND IS HEREBY
AUTHORIZED TO EXECUTE ALL DOCUMENTS AND TO DO ALL THINGS AS MAY BE
DEEMED NECESSARY OR DESIRABLE IN CONNECTION WITH COMPLETING ALL
MATTERS CONTEMPLATED BY THIS RESOLUTION INCLUDING BUT WITHOUT
LIMITATION EXECUTING AND DELIVERING ALL TRUST INDENTURES AND
SUPPLEMENTAL TRUST INDENTURES AS MAY BE REQUIRED IN CONNECTION WITH
COMPLETING ALL MATTERS CONTEMPLATED BY THIS RESOLUTION;
5. THE 1996 DEBENTURES ARE HEREBY RATIFIED AND CONFIRMED IN ALL OTHER
RESPECTS;
6. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY IN
THEIR SOLE DISCRETION REVOKE THIS RESOLUTION BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION.
<PAGE>
11
E. AMENDMENTS TO CLASS A WARRANTS, CLASS AA WARRANTS, CLASS B WARRANTS AND
CLASS BB WARRANTS
Pursuant to a Plan of Arrangement which was approved by the shareholders of the
Corporation at an annual and special meeting held on July 24, 1996, the
Corporation reorganized and consolidated its share capital on the basis of
twenty (20) previously issued common shares being reorganized and consolidated
into one (1) consolidated common share and one (1) exchange right ("Exchange
Right"). Each Exchange Right entitled the holder thereof to purchase one
exchange unit ("Exchange Unit") of the Corporation at a purchase price of $2.00
per unit (equivalent of $0.10 per unit on a pre-consolidation basis),
exercisable by the holders thereof until 90 days following their date of issue.
Each Exchange Unit consisted of one (1) post-consolidation common share of the
Corporation and one (1) share purchase warrant ("Class A Warrant"). Each
Class A Warrant entitles the holder thereof to purchase one post-consolidation
common share of the Corporation at an exercise price of $2.00 per common share
and one (1) common share purchase warrant for no consideration ("Class AA
Warrant"), on or before January 30, 1998 (the "Class A Warrant Exercise Date").
The Class A Warrant Exercise Date was originally March 1, 1997 and was extended
to January 30, 1998 by resolution of the board of directors. Each Class AA
Warrant entitles the holder thereof to purchase one (1) post-consolidation
common share of the Corporation, at a purchase price of $2.50 per common share
on or before March 1, 1998 (the "Class AA Warrant Exercise Date").
On March 1, 1996, the Corporation completed a private placement of 46,000,000
special warrants (pre-consolidation) (the Class B Special Warrants) each of
which was exercisable into one (1) common share of the Corporation and one
(1) regular warrant ("Class B Warrant") Each Class B Warrant entitles the
holder thereof to acquire, on or before November 15, 1997 (the Class B
Warrant Exercise Date"), one (1) common share of the Corporation for a price
of $2.00 and one (1) share purchase warrant ("Class BB Warrant") at no
additional cost. As a result of a penalty clause in the special warrant
indenture, holders of the Class B Special Warrants became entitled without
additional cost to receive 1.1 common shares and 1.1 Class B Warrants in lieu
of the one (1) common share and one (1) Class B Warrant that they would have
otherwise received. Each Class BB Warrant entitles the holder thereof to
acquire, on or before March 1, 1998 ( the Class BB Warrant Exercise Date"),
one (1) common share of the Corporation at a price of $2.50.
Management has determined that it is appropriate, subject to regulatory and
shareholder approval, to:
(a) extend the Class A Warrant Exercise Date and Class B Warrant Exercise
Date until Tuesday, June 30, 1998;
(b) reduce the exercise price of the Class A Warrants and the Class B
Warrants from $2.00 per common share to $1.25 per common share;
(c) extend the Class AA Warrant Exercise Date and the Class BB Warrant
Exercise Date to September 30, 1998; and
(d) reduce the exercise price of the Class AA Warrants and the Class BB
Warrants from $2.00 per common share to $1.25 per common share.
At the meeting, management of the Corporation will seek approval of the
shareholders to amend the Class A Warrants, the Class B Warrants, the Class AA
Warrants and the Class BB Warrants by extending their respective expiry dates
and reducing their respective exercise prices as set out below.
<PAGE>
12
<TABLE>
<CAPTION>
WARRANTS PROPOSED PROPOSED
WARRANT CLASS OUTSTANDING EXPIRY DATE EXERCISE PRICE AVAILABLE CAPITAL
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 1,815,802 June 30, 1998 $1.25 $ 2,269,752.50
- -----------------------------------------------------------------------------------------
Class B 1,787,500 June 30, 1998 $1.25 $ 2,234,375.00
- -----------------------------------------------------------------------------------------
Class AA 2,234,056 Sept. 30, 1998 $1.25 $ 2,792,570.00
- -----------------------------------------------------------------------------------------
Class BB 2,475,000 Sept. 30, 1998 $1.25 $ 3,093,750.00
- -----------------------------------------------------------------------------------------
TOTAL 8,312,379 $10,390,447.50
- -----------------------------------------------------------------------------------------
</TABLE>
As of the date hereof, the following numbers and classes of Warrants, as
defined below, have been exercised at the following exercise prices.
<TABLE>
<CAPTION>
A B C D
WARRANT CLASS, ORIGINAL TOTAL PROCEEDS FROM TOTAL PROCEEDS IF
EXERCISE PRICE AND EXERCISE AT ORIGINAL EXERCISED AT NEW DIFFERENCE
NUMBER(1) PRICE PRICE ($1.25) BETWEEN B AND C
<S> <C> <C> <C>
78,046 Class A at $2.50 $195,115.00 $97,557.50 $97,557.50
- -----------------------------------------------------------------------------------------------------------
344,433 Class A at $2.00 $688,886.00 $430,541.25 $258,334.75
- -----------------------------------------------------------------------------------------------------------
4,225 Class AA at $3.00 $12,675.00 $5,281.25 $7,393.75
- -----------------------------------------------------------------------------------------------------------
687,500 Class B at $2.00 $1,375,000.00 $859,375.00 $515,625.00
- -----------------------------------------------------------------------------------------------------------
Total $2,271,676.00 $1,392,755.00 $878,921.00
- -----------------------------------------------------------------------------------------------------------
</TABLE>
NOTE:
(1) No Class BB Warrants have been exercised to date.
If the resolution reducing the exercise prices of the Class A Warrants, Class
B Warrants, Class AA Warrants and Class BB Warrants as described herein is
approved, and the board of directors elects to implement such amendments, the
Corporation will be required to reimburse, by payment of cash or by issuance
of common shares, those holders of Class A Warrants, Class B Warrants, Class
AA Warrants and Class BB Warrants (herein collectively referred to as the
"Warrants") who have previously exercised all or part of their Warrants in
the aggregate amounts set forth above under column D, being the difference
between the price paid by each such warrantholder upon the exercise of the
applicable Warrant and the price that such warrantholder would have paid
based on the reduced exercise price of $1.25 per common share.
NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION, THE BOARD
OF DIRECTORS OF THE CORPORATION MAY IN THEIR SOLE DISCRETION REVOKE THE
RESOLUTION RELATING TO AMENDMENT OF THE EXERCISE PRICE OF THE WARRANTS AND/OR
THE EXTENSION OF THE EXERCISE DATE OF THE WARRANTS BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION. THE EXTENT TO
WHICH THE BOARD OF DIRECTORS SHALL IMPLEMENT THE FOLLOWING RESOLUTION WILL BE
DEPENDENT ON, INTER ALIA, THE ABILITY OF THE CORPORATION, IN THE SOLE OPINION OF
THE BOARD OF DIRECTORS, TO REIMBURSE THE AMOUNTS AS SET FORTH ABOVE TO PREVIOUS
HOLDERS OF WARRANTS WHO HAVE ALREADY EXERCISED ALL OR PART OF THEIR WARRANTS.
IF IT IS DETERMINED BY THE BOARD OF DIRECTORS, IN THEIR SOLE DISCRETION, THAT
THE CORPORATION IS UNABLE OR UNWILLING TO REIMBURSE SUCH AMOUNTS, IT WILL NOT
PROCEED WITH THE FOLLOWING RESOLUTION, IN WHICH EVENT THE TERMS AND THE
CONDITIONS OF THE WARRANTS SHALL REMAIN AS IS, WITHOUT AMENDMENT, OR THE BOARD
OF DIRECTORS MAY EXTEND THE EXPIRY DATES ONLY.
The complete text of the ordinary resolution which management intends to place
before the
<PAGE>
13
meeting for approval, confirmation and adoption, with or without modification,
is as follows.
BE AND IT IS HEREBY RESOLVED AS A RESOLUTION OF THE CORPORATION THAT:
1. THE EXPIRY DATE FOR EXERCISE OF THE ISSUED AND OUTSTANDING CLASS A
WARRANTS OF THE CORPORATION SHALL BE EXTENDED TO ON OR BEFORE TUESDAY,
JUNE 30, 1998;
2. THE EXERCISE PRICE OF THE ISSUED AND OUTSTANDING CLASS A WARRANTS OF
THE CORPORATION SHALL BE REDUCED FROM $2.00 PER COMMON SHARE TO $1.25
PER COMMON SHARE;
3. THE EXPIRY DATE OF THE ISSUED AND OUTSTANDING CLASS B WARRANTS SHALL
BE EXTENDED TO OR BEFORE TUESDAY JUNE 30, 1998;
4. THE EXERCISE PRICE OF THE ISSUED AND OUTSTANDING CLASS B WARRANTS
SHALL BE REDUCED FROM $2.00 PER COMMON SHARE TO $1.25 PER COMMON
SHARE;
5. THE EXPIRY DATE OF THE ISSUED AND OUTSTANDING CLASS AA WARRANTS SHALL
BE EXTENDED TO WEDNESDAY, SEPTEMBER 30, 1998;
6. THE EXERCISE PRICE OF THE ISSUED AND OUTSTANDING CLASS AA WARRANTS
SHALL BE REDUCED FROM $2.00 PER COMMON SHARE TO $1.25 PER COMMON
SHARE;
7. THE EXPIRY DATE FOR EXERCISE OF THE ISSUED AND OUTSTANDING CLASS BB
WARRANTS SHALL BE EXTENDED TO OR BEFORE WEDNESDAY, SEPTEMBER 30, 1998;
8. THE EXERCISE PRICE OF THE ISSUED AND OUTSTANDING CLASS BB WARRANTS
SHALL BE REDUCED FROM $2.00 PER COMMON SHARE TO $1.25 PER COMMON
SHARE;
9. THE CORPORATION IS AUTHORIZED AND EMPOWERED TO REIMBURSE, BY PAYMENT
IN CASH OR ISSUANCE OF COMMON SHARES, THOSE PREVIOUS HOLDERS OF
CLASS A WARRANTS, CLASS B WARRANTS, CLASS AA WARRANTS AND CLASS BB
WARRANTS (COLLECTIVELY, THE "WARRANTS") WHO HAVE ALREADY EXERCISED
ALL OR PART OF THEIR WARRANTS IN AN AMOUNT EQUAL TO THE DIFFERENCE
BETWEEN THE PRICE PAID BY EACH SUCH WARRANTHOLDER UPON THE EXERCISE
OF THE APPLICABLE WARRANTS AND THE PRICE THAT EACH SUCH WARRANTHOLDER
WOULD HAVE PAID BASED ON THE REDUCED EXERCISE PRICE OF $1.25 PER
COMMON SHARE;
10. ANY ONE (1) DIRECTOR OR OFFICER OF THE CORPORATION BE AND IS HEREBY
AUTHORIZED TO EXECUTE ALL DOCUMENTS AND AGREEMENTS AND TO DO ALL
THINGS AS MAY BE DEEMED NECESSARY OR DESIRABLE IN CONNECTION WITH
COMPLETING ALL MATTERS CONTEMPLATED BY THIS RESOLUTION;
11. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY, IN
THEIR SOLE DISCRETION, REVOKE THIS RESOLUTION BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION.
F. STOCK OPTIONS
At the annual meeting of shareholders held on September 12, 1997, the
Corporation's shareholders approved, subject to regulatory approval, the
granting of options to purchase up to 950,000 common shares of the
Corporation at an exercise price of $1.25 per common share until September
30, 1997, to such officers, directors, employees, advisors and consultants of
the Corporation as the board of directors in its sole discretion deems
advisable. The Corporation subsequently announced that the board of directors
resolved, subject to shareholder and regulatory approval, to
<PAGE>
14
reduce the exercise price of these options to $1.00 and to extend the period
for the granting of them to March 2, 1998. On December 23, 1997, the
Corporation announced that the board of directors has further resolved,
subject to shareholder and regulator approval, to again reduce the exercise
price of these options to $0.60 per common share, to increase the number of
options in the aggregate to be granted from 950,000 common shares of the
Corporation to 1,650,000 common shares, and to extend the period for the
granting of them to March 31, 1998. There are currently no such stock
options granted, nor has there been any granted or exercised since the
approval and implementation of the Corporation's Reorganization Plan in early
1996.
The complete text of the resolution which management intends to place before the
meeting for approval, confirmation and adoption, with or without modification,
is as follows.
BE IT HEREBY RESOLVED AS A RESOLUTION OF THE CORPORATION THAT:
1. THE NUMBER OF STOCK OPTIONS TO PURCHASE COMMON SHARES OF THE
CORPORATION THAT MANAGEMENT OF THE CORPORATION MAY GRANT TO CERTAIN
OFFICERS, DIRECTORS, CONSULTANTS AND EMPLOYEES OF THE CORPORATION AS
PREVIOUSLY APPROVED BY THE SHAREHOLDERS OF THE CORPORATION AT THE
ANNUAL GENERAL MEETING OF SHAREHOLDERS HELD ON SEPTEMBER 12, 1997 IS
HEREBY INCREASED, SUBJECT TO REGULATORY APPROVAL, FROM 950,000 TO
1,650,000;
2. THE EXERCISE PRICE OF THE STOCK OPTIONS TO PURCHASE UP TO 1,650,000
COMMON SHARES OF THE CORPORATION IS HEREBY SET AT $0.60 PER COMMON
SHARE, SUBJECT TO REGULATORY APPROVAL;
3. THE PERIOD WITHIN WHICH MANAGEMENT MAY GRANT SUCH STOCK OPTIONS SHALL
BE EXTENDED, SUBJECT TO REGULATORY APPROVAL, UNTIL MARCH 31, 1998;
SUCH OPTIONS TO BE GRANTED BY THE BOARD OF DIRECTORS IN THEIR SOLE
DISCRETION AND AS THEY MAY DEEM ADVISABLE FROM TIME TO TIME PURSUANT
TO THE TERMS OF THE INCENTIVE STOCK OPTION PLAN OF THE CORPORATION;
AND
4. ANY ONE (1) OF THE DIRECTORS OR OFFICERS OF THE CORPORATION BE AND IS
HEREBY AUTHORIZED AND INSTRUCTED TO MAKE, OBTAIN OR EXECUTE ALL SUCH
APPLICATIONS, AUTHORIZATIONS, CERTIFICATES, DOCUMENTS, INSTRUMENTS AND
ALL FORMS PRESCRIBED BY ANY REGULATORY BODIES HAVING JURISDICTION AS
MAY BE NECESSARY OR DESIRABLE FOR THE IMPLEMENTATION OF THIS
RESOLUTION.
G. AMENDMENT TO DEBT CONVERSION SHARES
At the annual and special meeting of shareholders of the Corporation held on
July 24, 1996 the shareholders of the Corporation approved the Corporation's
reorganization plan ( the "Reorganization Plan"), to be implemented by the board
of directors of the Corporation in their sole discretion and as reasonably
modified from time to time. Full particulars of the Reorganization Plan are set
forth and described in the management information circular of the Corporation,
dated June 21, 1996, prepared for the purpose of the aforesaid meeting.
The Reorganization Plan as approved, included, among other matters, and subject
to regulatory approval, the conversion of certain debts of the Corporation (the
"Debts") into common shares of the Corporation at $2.00 per common share, on a
post-consolidation basis. Each such post-consolidation conversion share if
issued, would have included with it an Exchange Right, as part of the
Reorganization Plan. As well, pursuant to the Reorganization Plan, the number
of post-consolidation conversion common shares was not to exceed 400,000
post-consolidation shares of the Corporation (the "Approved Debt Conversion
Shares"). This proposed repayment and conversion of the Debts subsequently
received conditional regulatory approval, including the reservation of up to
400,000 Approved Debt Conversion shares for issuance. As of the date
<PAGE>
15
hereof, none of the Approved Debt Conversion Shares have been issued.
Subject to regulatory approval, the board of directors of the Corporation now
proposes to repay and convert the Debts into units ("Units") of the
Corporation at $0.85 per Unit as opposed to $2.00 per common share. Each
Unit of the Corporation shall consist of one (1) common share and one common
share purchase warrant entitling the holder thereof to purchase one common
share of the Corporation at a purchase price of $0.90 on or before two (2)
years after the date of issuance. The complete text of the resolution which
management intends to place before the meeting for approval, confirmation and
adoption, with or without modification, is as follows.
BE IT HEREBY RESOLVED AS A RESOLUTION OF THE CORPORATION THAT:
1. SUBJECT TO REGULATORY BODY APPROVAL, THE BOARD OF DIRECTORS OF THE
CORPORATION IS AUTHORIZED AND EMPOWERED TO REPAY AND CONVERT CERTAIN
OUTSTANDING INDEBTEDNESS OF THE CORPORATION INTO UNITS OF THE
CORPORATION AT A CONVERSION PRICE OF $0.85 PER UNIT UP TO A MAXIMUM OF
400,000 UNITS OF THE CORPORATION;
2. EACH UNIT OF THE CORPORATION SHALL CONSIST OF ONE (1) COMMON SHARE AND
ONE (1) SHARE PURCHASE WARRANT;
3. EACH SHARE PURCHASE WARRANT SHALL ENTITLE THE HOLDER THEREOF TO
PURCHASE ONE (1) COMMON SHARE OF THE CORPORATION AT A PURCHASE PRICE
OF $0.90 PER COMMON SHARE ON OR BEFORE THE DATE THAT IS TWO (2) YEARS
FROM THE DATE SUCH WARRANTS ARE ISSUED;
4. THERE SHALL BE RESERVED OUT OF THE CAPITAL STOCK OF THE CORPORATION A
SUFFICIENT NUMBER OF ADDITIONAL COMMON SHARES OF THE CORPORATION FOR
ISSUANCE UPON EXERCISE OF THE WARRANTS;
5. ANY ONE (1) OF THE DIRECTORS OR OFFICERS OF THE CORPORATION BE AND IS
HEREBY AUTHORIZED AND DIRECTED TO EXECUTE ALL DOCUMENTS AND TO DO ALL
THINGS AS MAY BE DEEMED NECESSARY OR DESIRABLE IN CONNECTION WITH
COMPLETING ALL MATTERS CONTEMPLATED BY THIS RESOLUTION; AND
6. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY IN
THEIR SOLE DISCRETION REVOKE THIS RESOLUTION BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION.
H. CONVERSION OF SHORT TERM DEBT
The Corporation executed and delivered certain promissory notes (the "Bridge
Loan Notes") evidencing an aggregate principal amount of $4,081,500 in unsecured
loans advanced to the Corporation and bearing interest at an annual rate of 10%
pending implementation of a bona fide reorganization of the financial affairs of
the Corporation. As a term of the Bridge Loan Notes, the Corporation obtained
regulatory approval of The Alberta Stock Exchange to reserve 180,000 common
shares for issuance to the Bridge Loan Note holders as bonus shares. The Bridge
Loan Note holders have agreed that the payment of any and all debts and sums of
money due and owing by the Corporation to the Bridge Loan Note holders shall be
paid in full and converted into common shares of the Corporation upon the basis
of a conversion price of $1.25 per common share. The conversion of the Bridge
Loan Notes shall be subject to regulatory approval.
The complete text of the resolution which management intends to place before the
meeting for approval, confirmation and adoption, with or without modification,
is as follows:
<PAGE>
16
BE AND IT IS HEREBY RESOLVED AS FOLLOWS:
1. ANY AND ALL DEBTS AND SUMS OF MONEY WHICH ARE NOW OR MAY HEREAFTER
BECOME DUE AND OWING BY THE CORPORATION TO THE HOLDERS OF AN AGGREGATE
PRINCIPAL AMOUNT OF $4,081,500 IN UNSECURED LOANS ADVANCED TO THE
CORPORATION AND BEARING INTEREST AT AN ANNUAL RATE OF TEN (10%)
PERCENT (THE "BRIDGE LOAN NOTES") SHALL BE PAID IN FULL BY CONVERSION
OF THE BRIDGE LOAN NOTES INTO COMMON SHARES OF THE CORPORATION AT A
CONVERSION PRICE OF $1.25 PER COMMON SHARE;
2. THERE SHALL BE RESERVED OUT OF THE CAPITAL STOCK OF THE CORPORATION A
SUFFICIENT NUMBER OF COMMON SHARES OF THE CORPORATION FOR ISSUANCE
UPON CONVERSION OF THE BRIDGE LOAN NOTES AND THE CORPORATION IS
AUTHORIZED AND EMPOWERED FROM TIME TO TIME TO ALLOT AND ISSUE FULLY
PAID AND NON-ASSESSABLE COMMON SHARES OF THE CORPORATION PURSUANT TO
THE CONVERSION OF THE BRIDGE LOAN NOTES AS CONTEMPLATED HEREIN;
3. ANY ONE (1) OF THE DIRECTORS OR OFFICERS OF THE CORPORATION BE AND IS
HEREBY AUTHORIZED AND DIRECTED TO DO SUCH THINGS AND TO EXECUTE AND
DELIVER ALL SUCH INSTRUMENTS, DEEDS AND DOCUMENTS AND ANY AMENDMENT
THERETO AS MAY BE NECESSARY OR ADVISABLE IN ORDER TO GIVE EFFECT TO
THIS RESOLUTION, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE ISSUANCE OF COMMON SHARES ON THE CONVERSION OF THE
BRIDGE LOAN NOTES AND THE EXECUTION AND DELIVERY OF ANY AND ALL
INDENTURES OR OTHER AGREEMENTS RELATING THERETO. APPLICATION SHALL BE
MADE TO THE ALBERTA STOCK EXCHANGE FOR APPROVAL OF ADDITIONAL LISTING
OF THE ADDITIONAL COMMON SHARES ISSUABLE UPON CONVERSION OF THE BRIDGE
LOAN NOTES, AND ANY ACTS TAKEN PRIOR TO THE EFFECTIVE DATE OF THIS
RESOLUTION BY ANY DIRECTOR OR OFFICER IN CONNECTION THEREWITH SHALL BE
AND IS HEREBY RATIFIED AND CONFIRMED; AND
4. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY IN
THEIR SOLE DISCRETION REVOKE THIS RESOLUTION BEFORE IT IS ACTED UPON
WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION.
II. CONSOLIDATION OF SHARE CAPITAL
Management requires flexibility in the future for financing options,
including the possibility of completing such financing in the United States
via the NASDAQ Small-Cap Market or on the AMEX Exchange. For these purposes
management may deem it necessary to consolidate the share capital of the
Corporation. Therefore management of the Corporation intends to place before
the meeting for approval, confirmation and adoption, with or without
modification, a special resolution approving the consolidation of the
Corporation's issued and outstanding common shares on a ratio of one (1) new
common share for up to each five (5) common shares heretofore outstanding.
The board of directors shall fix the exact ratio upon which the shares shall
be consolidated.
Notwithstanding the approval of the shareholders of the Corporation of the
foregoing consolidation the board of directors may in their sole discretion
revoke the resolution relating to the consolidation of share capital before it
is acted upon without further approval of the shareholders of the Corporation.
The complete text of the special resolution which management intends to place
before the meeting for approval, confirmation and adoption, with or without
modification, is as follows:
BE AND IT IS HEREBY RESOLVED AS A SPECIAL RESOLUTION OF THE CORPORATION THAT:
<PAGE>
17
1. THE ISSUED AND OUTSTANDING COMMON SHARES OF THE CORPORATION BE
CONSOLIDATED ON A RATIO OF ONE (1) NEW COMMON SHARE FOR UP TO EACH
FIVE (5) COMMON SHARES HERETOFORE OUTSTANDING; THE EXACT RATIO SHALL
BE SET BY THE BOARD OF DIRECTORS OF THE CORPORATION AND SUCH
CONSOLIDATION IS SUBJECT TO THE APPROVAL OF THE ALBERTA STOCK
EXCHANGE;
2. SHAREHOLDERS SHALL NOT BE ENTITLED TO RECEIVE FRACTIONAL SHARES AS A
RESULT OF A CONSOLIDATION, AND THE NUMBER OF SHARES ISSUABLE ON THE
CONSOLIDATION SHALL BE ROUNDED TO THE NEAREST WHOLE NUMBER OF SHARES;
3. ANY ONE DIRECTOR OR OFFICER OF THE CORPORATION BE AND IS HEREBY
AUTHORIZED TO TAKE FOR, ON BEHALF OF AND IN THE NAME OF THE
CORPORATION, ALL NECESSARY STEPS AND PROCEEDINGS TO EXECUTE AND
DELIVER AND FILE ANY AND ALL DOCUMENTS INCLUDING ARTICLES OF
AMENDMENT; AND TO DO ALL SUCH ACTS AND THINGS AS MAY BE NECESSARY OR
DESIRABLE TO GIVE EFFECT TO THE PROVISIONS OF THIS SPECIAL RESOLUTION;
AND
4. NOTWITHSTANDING THE APPROVAL OF THE SHAREHOLDERS OF THE CORPORATION AS
HEREIN PROVIDED, THE BOARD OF DIRECTORS OF THE CORPORATION MAY, IN
THEIR SOLE DISCRETION, REVOKE THIS SPECIAL RESOLUTION BEFORE IT IS
ACTED UPON, WITHOUT FURTHER APPROVAL OF THE SHAREHOLDERS OF THE
CORPORATION.
GENERAL
The approval of the special resolution set forth in this management
information circular requires, for the passing of same, a two-thirds (2/3)
majority of the votes cast at the meeting by the holders of common shares.
If such two-thirds (2/3) majority is not received with respect to the special
resolution, the Corporation will not proceed with such resolution. All other
matters to be brought before the meeting require, for the passing of same, a
simple majority of the votes cast at the meeting by the holders of common
shares.
The contents and the sending of this management information circular have been
approved by the board of directors of the Corporation.
CERTIFICATE
The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in the light of the circumstances in which it
was made.
DATED at the City of Toronto, in the Province of Ontario, this 23rd day of
December, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ J. Douglas Elliott
-----------------------------------------------
J. DOUGLAS ELLIOTT
Chief Executive Officer, President and Chairman
<PAGE>
POWER PLUS CORPORATION
INSTRUMENT OF PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT AND WILL BE USED AT THE SPECIAL MEETING OF
COMMON SHAREHOLDERS OF POWER PLUS CORPORATION. THE COSTS OF SOLICITATION WILL
BE BORNE BY POWER PLUS CORPORATION
The undersigned, being a common shareholder of Power Plus Corporation (the
"Corporation"), hereby appoints J. Douglas Elliott, President, Chief Executive
Officer and Chairman of the board of directors of the Corporation, or failing
him Michael J. Perkins, Secretary of the Corporation or Thea L. Pilutik, legal
counsel for the Corporation, or in the place and stead of the foregoing,
_______________________________ the true and lawful attorney and proxy of the
undersigned with power of substitution to attend, to act and vote in respect of
the common shares held by the undersigned at the special meeting of the common
shareholders of the Corporation to be held on January 30, 1998, and any
adjournment thereof. The undersigned hereby instructs said proxy to vote the
common shares represented by this instrument of proxy in the following manner.
1. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the private placement of
up to and including 5,882,353 special warrants of the Corporation at a purchase
price of $0.85 per special warrant.
2. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the private placement of a
series of 10% first fixed and floating charge secured convertible debentures in
the aggregate principal amount of $5,000,000.
3. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to an amendment to the
conversion price of the issued and outstanding 10% convertible secured special
promissory notes and the 10% convertible secured debentures of the Corporation
and the subordination of such special notes and debentures.
4. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to extending the expiry dates
of the Class A Warrants, Class B Warrants, Class AA Warrants and Class BB
Warrants of the Corporation and to amend the respective exercise prices thereof
to $1.25 per common share.
5. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to amending the terms and
conditions of certain stock options previously approved by the shareholders of
the Corporation by increasing the number of stock options to be granted up to
and including 1,650,000 of such stock options, by setting the exercise price
thereof and by extending the time within which management may grant such stock
options.
6. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the issuance of up to
400,000 units at a price of $0.85 per unit, of the Corporation in payment and
conversion of certain outstanding indebtedness of the Corporation.
<PAGE>
7. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the ordinary
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the conversion of certain
unsecured 10% promissory notes of the Corporation in an aggregate principal
amount of $4,081,500 and interest payable thereon into common shares at a
conversion price of $1.25 per common share.
8. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The approval and adoption, with or without modification, of the special
resolution as more particularly set forth in the management information circular
prepared for the purposes of the meeting, relating to the consolidation of the
issued and outstanding common shares of the Corporation on the ratio of one (1)
new common share for up to each five (5) common shares heretofore outstanding.
DATED this ____ day of ________________ , 1997.
----------------------------
(Signature of Shareholder)
----------------------------
(Name of Shareholder)
----------------------------
(Number of Shares Voted)
<PAGE>
-3-
IMPORTANT INSTRUCTIONS
Where a choice in respect to any matter to be acted upon is specified in this
instrument of proxy, the common shares represented by this instrument of proxy
will be voted in accordance with such specifications. IF NO DESIGNATION IN
FAVOUR OF OR AGAINST ANY MATTER SET OUT ABOVE IS MADE, THE MANAGEMENT DESIGNEES,
IF NAMED AS PROXY, WILL VOTE IN FAVOUR OF ALL MATTERS SET OUT HEREIN. THIS
INSTRUMENT OF PROXY ALSO CONFERS DISCRETIONARY AUTHORITY UPON THE MANAGEMENT
DESIGNEES OR OTHER PERSONS NAMED AS PROXY WITH RESPECT TO ANY AMENDMENT OR
VARIATION OF ANY OF THE PROPOSALS SET OUT ABOVE OR OTHER MATTERS WHICH MAY
PROPERLY COME BEFORE THE MEETING. MANAGEMENT IS NOT AWARE AT THE DATE HEREOF OF
ANY SUCH AMENDMENTS, VARIATIONS OR OTHER MATTERS TO BE PRESENTED AT THE MEETING.
To be valid, this instrument of proxy must be received by Montreal Trust Company
of Canada., 600, 530 - 8th Avenue S.W., Calgary, Alberta T2P 3S8, no later than
forty-eight (48) hours prior to the meeting or any adjournment thereof.
A COMMON SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
SHAREHOLDER), TO ATTEND AND ACT FOR HIM ON HIS BEHALF AT THE MEETING OTHER THAN
THE PERSONS DESIGNATED ABOVE. TO EXERCISE THIS RIGHT, THE SHAREHOLDER MAY
INSERT THE NAME OF THE DESIRED PERSON IN THE BLANK SPACE PROVIDED IN THIS
INSTRUMENT OF PROXY AND STRIKE OUT THE OTHER NAMES OR MAY SUBMIT ANOTHER
APPROPRIATE INSTRUMENT OF PROXY.
This instrument of proxy when mailed by the Corporation is undated. In the
event that same is not dated when returned by the shareholder, then same shall
be deemed to be dated as of the date that same was mailed by the Corporation.
