Exhibit 3
COLLATERAL AGENT AGREEMENT
BETWEEN:
CRYOPAK INDUSTRIES INC.
0000 Xxxxxxx Xxx
Xxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
(the "Company")
AND:
ESARBEE INVESTMENTS LIMITED
(the "Collateral Agent")
WHEREAS:
A. The Company has issued, or will issue, the Debentures to the Holders;
B. Each Debenture creates security in favour of its Holder and provides that
the Company shall grant a general security agreement (the "General
Security Agreement") with respect to the Debentures of the Company in
favour of a collateral agent for the Holder and all other Holders (pari
passu with similar security granted in favour of such other Holders);
C. Each Holder has, by its subscription for Debentures, appointed and
authorized the Collateral Agent to act as collateral agent and the
Collateral Agent has agreed to act as collateral agent on the terms and
conditions set out in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein contained, the
Holders, the Collateral Agent, the Company and the Subsidiary hereby agree as
follows:
1. DEFINITIONS
1.1 The following terms shall have the following respective meanings:
(a) "Debenture" means one of a series of Secured Subordinate Convertible
Debentures of the Company, together evidencing an aggregate
principal amount not exceeding $1,795,000, each of which ranks pari
passu without any preference or priority over one another or the
debentures of any other series and was issued by way of private
placement as of April 6, 2005;
(b) "General Security Agreement" means the general security agreement
dated as of April 6, 2005 made by the Company in favour of the
Collateral Agent as collateral agent for the Holders with respect to
the Debentures;
(c) "Holder" means the holder of a Debenture;
(d) "Holders' Action" means (i) a resolution of, or other instrument or
instruments in writing signed by, the Holders of 51% of the
aggregate principal amount of all Debentures for the time being
outstanding, or (ii) if the Holders of 51% of the aggregate
principal amount of all Debentures have appointed a receiver (which
term includes a receiver and manager) of the property and assets
charged by the Debentures and the General Security Agreement and
provided to the Collateral Agent written evidence of the appointment
of such receiver, a direction in writing by the receiver;
(e) "Maturity Date" means the earlier of: (a) April 8, 2010 and (b) the
date that all of the Debentures have been redeemed or converted as
set out in the Debentures; and
(f) "Security Documents" means, collectively, the General Security
Agreement and any amendment thereto, and the financing statement and
any financing change statement relating to the registration of the
General Security Agreement in the British Columbia Personal Property
Registry.
2. COLLATERAL AGENT
2.1 Acceptance by the Collateral Agent
The Collateral Agent hereby accepts the trusts, duties and responsibilities set
forth or provided for in this Agreement, and agrees to perform the same upon the
terms and conditions of this Agreement without compensation, but with the
benefit of the indemnity provided for in section 2.9 hereof.
2.2 Duties of the Collateral Agent
The Collateral Agent will act as agent of the Holders and as attorney for the
Holders, with full power of substitution, in the name of and on behalf of the
Holders, to do any and all acts and things as may be contemplated by the Holders
and each of them under their respective Debentures requiring the consent or
approval of the Holder (but, for greater certainty, not including the exercise
of the Conversion Rights thereunder) and to take any and all actions
contemplated to be taken by the Holders and each of them under Article 9 of
their respective Debentures and to execute and deliver and do all such acts,
deeds, documents, transfers, assignments, contracts, consents, financing
statements and things as may be required thereunder. Any action taken under this
Section 2.2 and under the Debentures may only be taken upon authorization by the
Holders pursuant to Holders' Action.
2.3 Duration of Appointment
The Collateral Agent shall hold office until dismissed pursuant to Holders'
Action and written notice thereof is received by the Collateral Agent and the
Company, or until the Collateral Agent resigns or until the Maturity Date. For
greater certainty, a receiver appointed by Holders' Action shall be entitled to
dismiss the Collateral Agent and direct the Collateral Agent to deliver to the
receiver the Security Documents with such endorsements, authorizations and
transfers as the receiver may request for the purpose of enabling the receiver
to enforce the Security Documents
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for the benefit of the Holders. If the Collateral Agent is dismissed pursuant to
Holders' Action other than by dismissal by a receiver, the Collateral Agent
shall not deliver the Security Documents to any person unless such delivery is
expressly authorized by Holders' Action. If the Collateral Agent wishes to
resign, it shall deliver written notice of its resignation to the Company and,
only if the Collateral Agent has been notified by Holders' Action of an event of
default under the General Security Agreement, also to the Holders or, if a
receiver has been appointed, to the receiver. Such resignation shall be
effective upon its receipt by the Company or, if a receiver has been appointed,
by a receiver or, if no receiver has been appointed, three days after the
Collateral Agent has mailed notice of its resignation to the Holders. If a
receiver has not been appointed, forthwith upon the resignation of the
Collateral Agent becoming effective, the Company shall appoint substantially on
the terms of this Agreement a replacement Collateral Agent and notify the person
who has resigned as Collateral Agent and the Holders of the identity and address
of the replacement Collateral Agent, whereupon the person which has resigned as
Collateral Agent shall deliver the Security Documents to the replacement
Collateral Agent. Notwithstanding a resignation of the Collateral Agent becoming
effective, a person who has resigned as Collateral Agent shall not deliver the
Security Documents to any person other than a receiver or a replacement
Collateral Agent unless such delivery has been expressly authorized by Holders'
Action or by the order of a court of competent jurisdiction.
2.4 Limitation of Responsibility
The Collateral Agent shall perform the mechanical and clerical functions in
connection with the administration of this Agreement which are specifically set
forth herein for the Collateral Agent and any other functions assigned to it by
Holders' Action and accepted by it and in connection therewith shall have such
powers as are reasonably incidental thereto. The responsibilities of the
Collateral Agent are strictly limited to those specifically set forth in this
Agreement, and no unstated functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Collateral Agent.
2.5 General Security Agreement
At or prior to the time of execution of this Agreement, the Company shall
execute and deliver the General Security Agreement to the Collateral Agent and,
on behalf of the Collateral Agent, execute and register in the British Columbia
Personal Property Registry a financing statement registering the security
interest of the Collateral Agent thereunder.
2.6 Delivery of Security Documents
The Collateral Agent shall hold the Security Documents on and subject to the
following terms and conditions:
(a) the Collateral Agent shall deliver the Security Documents to the
Company upon receipt of written evidence satisfactory to it in its
sole and unfettered discretion that the Debentures have been
surrendered to the Company upon payment by the Company to the
Holders of the full amounts owing thereunder;
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(b) the Collateral Agent shall deliver the Security Documents to the
Company upon receipt of written evidence satisfactory to it in its
sole and unfettered discretion that all of the outstanding principal
amount of Debentures have been converted into common shares in the
capital of the Company pursuant to the terms and conditions of the
Debentures and any amounts owing thereunder have been paid by the
Company;
(c) the Collateral Agent shall deliver the Security Documents to a
receiver appointed by Holders' Action as directed by the receiver
upon receipt of the required evidence of Holders' Action appointing
the receiver; and
(d) the Collateral Agent shall deliver the Security Documents as
directed by a court of competent jurisdiction (and forthwith notify
the Company and the Holders or, if a receiver has been appointed,
the receiver, if it receives any such direction).
2.7 Further Duties
The Collateral Agent shall have no responsibility in respect of care of the
Security Documents except the duty to exercise such care in the safekeeping
thereof as it would exercise if the Security Documents were the property of the
Collateral Agent. While in possession of the Security Documents, the Collateral
Agent shall have no duty to take any action to preserve or enforce any right of
the Collateral Agent or a Holder against the Company with respect to the
Debentures.
2.8 Reliance
In determining:
(a) which persons are from time to time entitled to be recognized as
Holders for the purpose of taking Holders' Action, the Collateral
Agent shall be entitled to inspect and rely upon, without
independent verification, the register of Holders maintained by the
Company and, as proof of the identity of each individual Holder, a
legible photocopy of current government-issued identification
bearing the signature of the Holder;
(b) which person is from time to time entitled to be recognized as a
receiver, the Collateral Agent shall be entitled to rely upon the
order of a court of competent jurisdiction or to inspect and rely
upon, without independent verification, the resolution or instrument
appointing such receiver pursuant to Holders' Action; and
(c) whether a Debenture has been surrendered to the Company for the
purpose of section 2.8(a), the Collateral Agent shall be entitled to
rely upon the certification of the President and/or the Chief
Executive Officer of the Company that the full amount owing under
the Debenture has been paid to its Holder together with a
satisfactory inspection by the Collateral Agent of either an
original copy of the Debenture or a receipt for full payment signed
by the Holder.
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The entitlement of the Collateral Agent to rely on the instruments and documents
referred to in (a), (b) and (c) above shall not oblige the Collateral Agent to
refer to, or to refer exclusively to, such instruments and documents for the
purpose of determining the validity of a Holders' Action and, in discharging its
trusts, duties and responsibilities under this Agreement, the Collateral Agent
may act upon any instrument, document, writing or signature believed by the
Collateral Agent in its sole and unfettered discretion to be genuine. If, with
respect to a proposed action to be taken by it, the Collateral Agent shall
determine in good faith that the provisions of this Agreement, or of any
instrument, document, resolution or directive of the Holders or a receiver
appointed thereby are or may be ambiguous or inconsistent, the Collateral Agent
may so notify the Holders or, if a receiver has been appointed, the receiver,
identifying the proposed action and the provisions that it considers are or may
be ambiguous or inconsistent, and may decline to perform such function or
responsibility unless and until it has received instructions pursuant to
Holders' Action to the sole satisfaction of the Collateral Agent clarifying such
ambiguity or eliminating such inconsistency.
2.9 Indemnity
The Company hereby agrees to hold the Collateral Agent harmless from and
against, and indemnify the Collateral Agent against in respect of, any and all
liabilities, obligations, losses, damages, penalties, actions, causes of action,
suits, proceedings, judgments, costs and expenses of any nature or kind
whatsoever (except such as arise from the Collateral Agent's wilful misconduct)
which may be imposed on, incurred by or asserted against the Collateral Agent in
any way relating to or arising out of the Collateral Agent's capacity as such,
any Security Document, any Holders' Action or any action taken or not taken by
the Collateral Agent or any of its employees, sub-agents or co-agents. The
Collateral Agent shall be entitled to receive upon demand made by it to the
Company reimbursement for its out-of-pocket disbursements incurred in
communicating with the Company or in the performance of its role as Collateral
Agent hereunder, the Subsidiary, Holders, a receiver or a court of competent
jurisdiction, but it shall not be entitled to receive any fee for its services
as Collateral Agent.
3. MISCELLANEOUS
3.1 Notices
Notice shall be sufficiently given to a Holder if mailed in Canada in a prepaid
envelope addressed to the Holder at his post office address appearing on the
register maintained by the Company, and shall be deemed to have been given at
the expiration of three days after mailing. Notice shall be sufficiently given
to the Company or the Collateral Agent if delivered to it during its normal
business hours at the address set out on the first page of this Agreement (or
such other address as directed by it under this provision) and shall be deemed
to have been given at the time of receipt (unless given after its normal
business hours, in which case it shall be deemed to have been given at the time
of its next opening for business). Notice shall be sufficiently given to a
receiver if delivered in accordance with the written instructions of such
receiver.
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3.2 Modification
The terms of this Agreement may be modified by instruments in writing signed by
the Company, the Collateral Agent, and the Holders as authorized pursuant to a
Holders' Action.
3.3 Severability
If any provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other provision hereof, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
3.4 Successor and Assigns
This Agreement shall be binding upon and shall enure to the benefit of the
parties thereto and their successors and assigns. The Company expressly consents
to an assignment authorized by Holders' Action by the Collateral Agent to the
Holders or a receiver appointed by them of the rights of the Collateral Agent
under this Agreement and the General Security Agreement.
3.5 Applicable Law
This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia.
3.6 Counterparts
This Agreement may be executed in any number of counterparts and by different
parties in separate counterparts, xxxxx of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same Agreement.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers or other representatives as of the
6(th) day of April, 2005.
CYROPAK INDUSTRIES INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
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ESARBEE INVESTMENTS LIMITED
By: /s/ Oded Tal
--------------------------------------------
Name: Oded Tal
Title: VP, Investments
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxxx
Title: CFO
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SCHEDULE A
FORM OF DEBENTURE
A-1
