Under Section 162 of the Act, and subject to Section 163 of the
Act, we may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of the proceeding, provided that we must not make such payments unless
we first receive from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited under Section 163 of the Act, the eligible party will repay the amounts advanced.
Under Section 163 of the Act, we must not indemnify an eligible party against eligible penalties to which the eligible
party is or may be liable or pay the expenses of an eligible party in respect of that proceeding under Sections 160, 161 or 162 of the Act, as the case may be, if any of the following circumstances apply:
if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the
agreement to indemnify or pay expenses was made, we were prohibited from giving the indemnity or paying the expenses by our memorandum or articles;
if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the
time that the indemnity or payment is made, we are prohibited from giving the indemnity or paying the expenses by our memorandum or articles;
if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good
faith with a view to the best interests of our company or the associated corporation, as the case may be; or
in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible partys conduct in respect of which the proceeding was brought was lawful.
If an eligible proceeding is brought against an eligible party by or on behalf of our company or by or on behalf of an
associated corporation, we must not either indemnify the eligible party against eligible penalties to which the eligible party is or may be liable, or pay the expenses of the eligible party under Sections 160, 161 or 162 of the Act, as the
case may be, in respect of the proceeding.
Under Section 164 of the Act, and despite any other provision of
Part 5, Division 5 of the Act and whether or not payment of expenses or indemnification has been sought, authorized or declined under Part 5, Division 5 of the Act, on application of our company or an eligible party, the Supreme Court of British
Columbia may do one or more of the following:
order us to indemnify an eligible party against any liability
incurred by the eligible party in respect of an eligible proceeding;
order us to pay some or all of the expenses
incurred by an eligible party in respect of an eligible proceeding;
order the enforcement of, or payment under, an
agreement of indemnification entered into by us;
order us to pay some or all of the expenses actually and
reasonably incurred by any person in obtaining an order under Section 164 of the Act; or
make any other
order the court considers appropriate.
Section 165 of the Act provides that we may purchase and maintain insurance
for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding
or having held a position equivalent to that of a director or officer of, our company or an associated corporation.
Under
our articles, and subject to the Act, we must indemnify a director, former director or alternate director and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and we must,
after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each eligible party is deemed to have contracted with our company on the terms of the indemnity
contained in our articles.