NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(THE "SUBSCRIPTION AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE U.S.
SECURITY ACT OF 1933 ("XXX 0000 XXX"), OR ANY U.S. STATE SECURITIES LAWS, AND,
UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO
U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND
IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
TO: Cryopak Industries Inc. (the "Company")
0000 Xxxxxxx Xxx, Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx Xxxxxxxx X0X 0X0 Xxxxxx
1. Subscription
------------
1.1 The undersigned (the "Subscriber") hereby irrevocably subscribes for and
agrees to purchase 1,875,000 common shares in the capital of the Company (the
"Shares") at a price of CDN$0.80 per Share (such subscription and agreement to
purchase being the "Subscription"), for the total purchase price of
CDN$1,500,000 (the "Subscription Proceeds"), which is to be tendered at the
Closing (as hereafter defined), on the basis of the representations and
warranties and subject to the terms and conditions set forth herein.
1.2 In consideration of the Subscriber's Subscription, the Company shall, on the
Closing Date (as hereafter defined), issue to the Subscriber a non-transferrable
share purchase warrant (the "Warrant") to purchase 937,500 common shares in the
capital of the Company for a period of two (2) years from the Closing Date at a
price of CDN$1.25 per share. The Shares and the Warrants and, where the context
requires, the common shares underlying the Warrants, are herein collectively
called the "Securities".
1.3 This Subscription is part of an offering (the "Offering") of up to
CDN$6,000,000.
1.4 The Company hereby irrevocably agrees to sell, on the basis of the
representations and warranties and subject to the terms and conditions set forth
herein, to the Subscriber the Securities.
1.5 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company.
2. Payment
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2.1 The Subscription Proceeds shall be paid at the Closing by certified cheque
or bank draft, drawn on a Canadian, U.S. or any other chartered bank acceptable
to the Company, made payable to the Company.
3. Documents Required from Subscriber
----------------------------------
3.1 The Subscriber must complete, sign and return to the Company the following
documents:
(a) two (2) executed copies of this Subscription Agreement.
3.2 The Subscriber shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, stock exchanges and
applicable law.
4. Closing
-------
4.1 Closing of the offering of the Securities (the "Closing") shall occur on the
date of execution of this Agreement (the "Closing Date").
5. Acknowledgements of Subscriber
------------------------------
5.1 The Subscriber acknowledges and agrees that:
-2-
(a) no prospectus has been filed by the Company with the British Columbia
Securities Commission in connection with the issuance of the
Securities, the issuance is exempted from the prospectus requirement
of the Securities Act (British Columbia) R.S.B.C. 1996, c.418 (the
"B.C. Act") or any regulations (the "B.C. Regulations") promulgated
pursuant to the B.C. Act and that:
(i) the Subscriber is restricted from using most of the civil
remedies available under the B.C. Act and the B.C. Regulations;
(ii) the Subscriber may not receive information that would otherwise
be required to be provided to the Subscriber under the B.C. Act
and the B.C. Regulations; and
(iii) the Company is relieved from certain obligations that would
otherwise apply under the B.C. Act and the B.C. Regulations;
(b) none of the Securities have been registered under the 1933 Act, or
under any state securities or "blue sky" laws of any state of the
United States, and, unless so registered, may not be offered or sold
in the United States or, directly or indirectly, to U.S. Persons, as
that term is defined in Regulation S under the 1933 Act ("Regulation
S"), except pursuant to an effective registration statement under the
1933 Act, or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the 1933 Act;
(c) the Subscriber acknowledges that the Company has not undertaken, and
will have no obligation, to register any of the Securities under the
1933 Act;
(d) there are other restrictions on the Subscriber's ability to resell the
Securities and it is the responsibility of the Subscriber to find out
what those restrictions are and to comply with them before selling the
Securities;
(e) the Subscriber has been advised to consult the Subscriber's own legal,
tax and other advisors with respect to the merits and risks of an
investment in the Securities and with respect to applicable resale
restrictions and the Subscriber is solely responsible (and the Company
is not in any way responsible) for compliance with applicable resale
restrictions;
(f) the Subscriber and the Subscriber's advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from the Company
regarding the Offering, and to obtain additional information, to the
extent possessed or obtainable without unreasonable effort or expense,
necessary to verify the accuracy of the information contained in any
business plan, corporate profile or any other document provided to the
Subscriber;
(g) the books and records of the Company were available upon reasonable
notice for inspection, subject to certain confidentiality
restrictions, by the Subscriber during reasonable business hours at
its principal place of business and that all documents, records and
books pertaining to this Offering have been made available for
inspection by the Subscriber, the Subscriber's attorney and/or
advisor(s);
(h) all information which the Subscriber has provided herein to the
Company concerning itself, its investor status, financial position,
and knowledge and experience of financial and business matters is
correct and complete as of the date of this Agreement, and if there
should be any change in such information prior to the Subscription
being accepted by the Company, the Subscriber will immediately provide
the Company with such information;
(i) the Company is entitled to rely on the representations and warranties
and the statements and answers of the Subscriber contained in this
Subscription Agreement, and the Subscriber will hold harmless the
Company from any loss or damage it may suffer as a result of the
Subscriber's failure to correctly complete this Subscription
Agreement;
(j) the Subscriber will indemnify and hold harmless the Company and, where
applicable, its respective directors, officers, employees, agents,
advisors and shareholders from and against any and all loss,
liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably
incurred in investigating, preparing or defending against any claim,
lawsuit, administrative proceeding or investigation whether commenced
or threatened) arising out of or based upon any representation or
warranty of the Subscriber contained herein or in any document
furnished by the Subscriber to the Company in connection herewith
being untrue in any material respect or any breach or failure by the
Subscriber to comply with any covenant or agreement made by the
Subscriber to the Company in connection therewith;
-3-
(k) by execution hereof the Subscriber has waived the need for the Company
to communicate its acceptance of the purchase of the Securities
pursuant to this Subscription Agreement;
(l) the right is reserved to the directors of the Company to close the
subscription books at any time without notice and for any reason
whatsoever and that this Subscription may be accepted or rejected in
whole but not in part;
(m) the issuance and sale of the Securities to the Subscriber will not be
completed if it would be unlawful or if, in the discretion of the
Company acting reasonably, it is not in the best interests of the
Company;
(n) neither the United States Securities and Exchange Commission nor the
British Columbia Securities Commission or any other securities
commission or similar regulatory authority has reviewed or passed on
the merits of the Securities;
(o) there is no government or other insurance covering any of the
Securities;
(p) the Company has advised the Subscriber that the Company is relying on
an exemption from the requirements to provide the Subscriber with a
prospectus and to sell the Securities through a person registered to
sell securities under the B.C. Act and, as a consequence of acquiring
the Securities pursuant to such exemption certain protections, rights
and remedies provided by the securities legislation of British
Columbia or other relevant jurisdictions, including statutory rights
of rescission or damages, will not be available to the Subscriber; and
(q) this Subscription Agreement is not enforceable by the Subscriber
unless it has been accepted by the Company.
6. Representations, Warranties and Covenants of the Subscriber
-----------------------------------------------------------
6.1 The Subscriber hereby represents and warrants to and covenants with the
Company (which representations, warranties and covenants shall survive the
Closing) that:
(a) the Subscriber is acquiring the Securities as principal for the
Subscriber's own account, for investment purposes only, and not with a
view to, or for, resale, distribution or fractionalization thereof, in
whole or in part, and no other person has a direct or indirect
beneficial interest in such Securities;
(b) if the Subscriber is acquiring the Securities as a fiduciary or agent
for one or more investor accounts, the Subscriber has sole investment
discretion with respect to each such account and the Subscriber has
full power to make the foregoing acknowledgements, representations and
agreements on behalf of such account;
(c) the residence of the Subscriber set forth on the execution page hereof
is the true and correct residence of the Subscriber and he has no
present intention to become resident or domiciled in any other
province, state or other jurisdiction;
(d) should there be any change in any of the information which the
Subscriber has provided to the Company prior to the acceptance by the
Company of this subscription, the Subscriber will immediately provide
such information to the Company by telephone prior to such acceptance
and will confirm such information in writing;
(e) the Subscriber, if an individual, has attained the age of majority and
has the legal capacity and competence to enter into and execute this
Subscription Agreement and to take all actions required pursuant
hereto and, if the Subscriber is a corporation, it is duly
incorporated and validly subsisting under the laws of its jurisdiction
of incorporation and all necessary approvals by its directors,
shareholders and others have been obtained to authorize execution and
performance of this Subscription Agreement on behalf of the
Subscriber;
(f) the entering into of this Subscription Agreement and the transactions
contemplated hereby do not result in the violation of any of the terms
and provisions of any law applicable to, or the constating documents
of, the Subscriber or of any agreement, written or oral, to which the
Subscriber may be a party or by which the Subscriber is or may be
bound;
(g) the Subscriber has duly executed and delivered this Subscription
Agreement and it constitutes a valid and binding agreement of the
Subscriber enforceable against the Subscriber;
(h) the Subscriber is aware that an investment in the Company is
speculative and involves certain risks, including the possible loss of
the investment;
-4-
(i) the Subscriber, together with his advisor(s), if any, has the
requisite knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of the investment
in the Securities and the Company;
(j) the Subscriber (1) has adequate net worth and means of providing for
its current financial needs and possible personal contingencies, (2)
has no need for liquidity in this investment, and (3) is able to bear
the economic risks of an investment in the Securities for an
indefinite period of time;
(k) the Subscriber has made an independent examination and investigation
of an investment in the Securities and the Company and has depended on
the advice of his legal and financial advisors and agrees that the
Company will not be responsible in anyway whatsoever for the
Subscriber's decision to invest in the Securities and the Company;
(l) the Subscriber is not an underwriter of, or dealer in, the common
shares of the Company, nor is the Subscriber participating, pursuant
to a contractual agreement or otherwise, in the distribution of the
Securities;
(m) the Subscriber understands and agrees that the Company will refuse to
register any transfer of the Securities to a U.S. Person not made
pursuant to an effective registration statement under the 1933 Act or
pursuant to an available exemption from the registration requirements
of the 1933 Act;
(n) the Subscriber understands and agrees that the Company and others will
rely upon the truth and accuracy of the acknowledgments,
representations and agreements contained in sections 5 and 6 hereof
and agrees that if any of such acknowledgments, representations and
agreements are no longer accurate or have been breached, the
Subscriber shall promptly notify the Company;
(o) the Subscriber is not a "control person" of the Company as defined in
the B.C. Act, will not become a "control person" by virtue of this
purchase of the Securities and does not intend to act in concert with
any other person to form a control group;
(p) the Subscriber has no knowledge of a "material fact" or "material
change" (as those terms are defined in the B.C. Act) in the affairs of
the Company that has not been generally disclosed to the public, save
knowledge of this particular transaction;
(q) the Subscriber is not aware of any advertisement of any of the
Securities and is not acquiring the Securities as a result of any form
of general solicitation or general advertising including
advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees have been
invited by general solicitation or general advertising;
(r) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase any of the
Securities;
(ii) that any person will refund the purchase price of any of the
Securities; or
(iii) as to the future price or value of any of the Securities; and
(s) if subject to the applicable securities legislation of the Province of
Quebec, the Placee is purchasing a sufficient number of Securities
such that the aggregate acquisition cost to the Placee is not less
than $150,000 for such Securities.
6.2 In this Subscription Agreement, the term "U.S. Person" shall have the
meaning ascribed thereto in Regulation S and for the purpose of the Subscription
includes any person in the United States.
7. Acknowledgement and Waiver
--------------------------
7.1 The Subscriber has acknowledged that the decision to purchase the Securities
was solely made on the basis of publicly available information. The Subscriber
hereby waives, to the fullest extent permitted by law, any rights of withdrawal,
rescission or compensation for damages to which the Subscriber might be entitled
in connection with the distribution of any of the Securities.
-5-
8. Resale Restrictions
-------------------
8.1 The Subscriber acknowledges that any resale of the Securities will be
subject to resale restrictions contained in the securities legislation
applicable to each Subscriber or proposed transferee.
8.2 The Subscriber acknowledges that the Securities are being issued pursuant to
prospectus exemptions available under the B.C. Act and have not been registered
under the 1933 Act or the securities laws of any state of the United States and
that the Company does not intend to register same under the 1933 Act, or the
securities laws of any such state and has no obligation to do so. The Securities
may not be offered or sold in the United States unless the Securities are
registered in accordance with the 1933 Act and all applicable state securities
laws or exemptions from such registration requirements are available. The
Securities may not be offered or sold in British Columbia unless a prospectus
with respect to the Securities has been filed or exemptions from such prospectus
requirements are available.
8.3 Unless the Subscriber is otherwise exempted under the B.C. Act or the B.C.
Regulations and the applicable rules or policies of the TSX Venture Exchange
(the "Exchange"), the Securities must be unconditionally held for a period of
four (4) months from the Closing Date and may thereafter be subject to
restrictions or notice requirements under the B.C. Act or B.C. Regulations upon
disposition (ie. if the Subscriber is a control person as defined under the B.C.
Act at the time of a proposed sale of the Securities).
9. Legending and Registration of Subject Securities
------------------------------------------------
9.1 The Subscriber understands and acknowledges that upon the issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the 1933 Act or applicable U.S. State laws and regulations or
other applicable securities legislation or by the Exchange, the certificates
representing any of the Securities will bear appropriate legends in order to
reflect the non-registration of the Securities under the 1933 Act as well as all
applicable hold periods and restrictions on resale of the Securities.
9.2 The Subscriber hereby acknowledges and agrees to the Company making a
notation on its records or giving instructions to the registrar and transfer
agent of the Company in order to implement the restrictions on transfer set
forth and described in this Subscription Agreement.
10. Representations and Warranties of the Company
---------------------------------------------
10.1 The Company represents and warrants to the Subscriber that:
(a) it is a reporting issuer duly organized and validly existing under the
laws of its jurisdiction of incorporation, amalgamation or
continuance, it is in good standing with the corporate governmental
authorities of such jurisdiction with respect to the filing of annual
returns and such other filings as are necessary to maintain its
corporate existence and it has full corporate power to conduct its
business as such business is now being conducted;
(b) there are no claims, actions, suits, judgments, or proceedings pending
against or affecting the Company which will or may have a material
adverse effect upon the Company, nor does it know of any reasonable
ground for any such claims, actions, suits, judgments or proceedings;
(c) it has the full power and authority to enter into and to perform this
Subscription Agreement and to do all other acts which may be necessary
to consummate the transactions contemplated hereby, subject to all
applicable securities laws;
(d) the issue of the Shares and the Warrant has been approved by all
requisite corporate action; the Shares have been validly issued as
fully paid and non-assessable; and the common shares to be issued on
the exercise of the Warrant will, upon issue and delivery, be validly
issued as fully paid and non-assessable;
(e) the Exchange has approved the issuance of the Securities and the
issuance of the Securities is exempt from registration and prospectus
requirements under the B.C. Act and B.C. Regulations.
(f) The Company has not sustained, since December 30, 2001, being the date
of its latest quarterly financial statements, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labour
dispute or court or governmental action, order or decree or from any
regulatory body having jurisdiction. Since December 30, 2001: (i)
there has not been any change in the authorized share capital of the
Company, (ii) the Company has not incurred any liabilities or
obligations (absolute, accrued,
-6-
contingent or otherwise) or entered into any transactions not in the
ordinary course of business that are material to the Company, except
perhaps that the Company has recently renegotiated its union contract
with the IWA; and (iii) there has not been any material adverse
change, or any development involving a prospective material adverse
change (including prospective material adverse changes or, to the best
of the Company's knowledge, threatened claims or contingent
liabilities), in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of
the Company.
(g) The Company has good and marketable title to all movable property
owned by it which is material, individually or in the aggregate, to
the Company. Any real property held under lease by the Company, which
is material, individually or in the aggregate, to the Company is held
by it under valid, subsisting and enforceable leases with such
exceptions as are not material, individually or in the aggregate, to
the Company.
(h) The Company: (a) has been duly incorporated, organized and is validly
existing as a company in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own, lease and operate its property and assets, to conduct its
business as now conducted and as currently proposed to be conducted
and to carry out the provisions hereof; and (b) where required, has
been duly qualified as an extra-provincial or foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business.
(i) There are 21,342,444 common shares issued and outstanding, all of
which have been duly authorized and validly issued as fully paid and
non-assessable (and no others). There are no outstanding
subscriptions, warrants, options, agreements, convertible or
exchangeable securities or other commitments pursuant to which the
Company is or may become obligated to issue, sell, purchase, return or
redeem any shares of capital stock or other securities of the Company,
other than those set out below:
(i) Incentive Stock Options 3,699,000
(ii) Convertible Debenture 2,425,000
(iii) Earn-out Shares 3,000,000
(iv) Bonus Shares (Discovery Capital) 40,000
(v) Total Private Placement Share Subscriptions,
including this Subscription 7,500,000
(vi) Total Private Placement Warrant Subscriptions
(including Finder's Warrants) 3,750,000
(vii) Cashless Stock Options (Xxxxxx Securities) 300,000
(j) All necessary corporate action has been taken by the Company to
authorize the issuance of the Shares and allot and authorize the
issuance of the shares underlying the Warrants (the "Underlying
Shares"). The Shares have been issued as fully paid and non-assessable
and, upon due exercise of the Warrants in accordance with their terms,
the Underlying Shares issued by the Company will be validly issued as
fully-paid and non-assessable.
(k) The Company has no material subsidiaries, as such term is defined in
the Canada Business Corporations Act, except as disclosed in the
Company's Annual Information Form dated July 31, 2001.
(l) The Company is a reporting issuer under the laws of Alberta and
British Columbia and is in good standing as a reporting issuer or is
not on the list of defaulting issuers maintained pursuant to
securities laws of the said provinces. As at the Closing Date, the
Company is a "Qualifying Issuer", as such term is defined in the
Multi-Lateral Instrument 45-102, under applicable securities
legislation in Alberta and British Columbia.
(m) The Company is a "foreign private issuer" as defined in Rule 3b-4(c)
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and has filed with the United States Securities Exchange
Commission (the "SEC"), on a timely basis, all forms, reports,
schedules and other information (collectively, the "SEC Reports")
required to be filed by it with the SEC. The SEC Reports (i) complied
as to form in all material respects with the applicable requirements
of the 1933 Act, as amended, or the Exchange Act, and the respective
rules and regulations thereunder as in effect at the time they were
filed and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
-7-
(n) The Company is not in violation of its constating documents, by-laws
or resolutions of its directors or shareholders or in default in the
performance of any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is
subject, which violation, default or defaults, individually or in the
aggregate, would have a material adverse effect on the financial
position, business, affairs, prospects, shareholders' equity or
results of operations of the Company, except for the Company's
outstanding debentures in the aggregate face value of $3,637,500 (with
respect to which the interest payment due on June 7, 2001 was not paid
pursuant to discussions between the Company and certain
debentureholders as to withholding tax; the interest due on June 7,
2001, together with compound interest thereon, has been paid on the
date hereof, with cheques sent by courier to the debentureholders, and
no notice of default has been received by the Company with respect to
the non-payment of such interest). The compliance by the Company with
all of the provisions of this Agreement, the other Subscription
Agreements, the Shares, the Warrants and the consummation of the
transactions contemplated therein:
(i) will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien,
charge or encumbrance on any of the property or assets of the
Company pursuant to the terms of any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or
instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of
the Company are subject;
(ii) will not result in any violation of any of the terms or
provisions of the constating documents, by-laws or resolutions
of the directors or shareholders of the Company; and
(iii) will not result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties;
other than, in the case of clauses (i) and (iii) above, any breach,
default, violation or conflict which, individually or in the
aggregate, will not have a material adverse effect on the business,
affairs, prospects, financial position, shareholders' equity or
results of operations of the Company.
(o) All consents, approvals, permits, authorizations or filings as may be
required under United States and Canadian Securities Laws and the
rules of the Exchange necessary for the execution and delivery of and
the performance by the Company of its obligations under this
Agreement, the other Subscription Agreements, and the Warrants have
been made or obtained on the Closing Date, other than the filing of
the requisite distributions reports and related documents.
(p) As at the Closing Date, no holder of outstanding common shares in the
capital of the Company or other securities of the Company will be
entitled to any preemptive or any similar rights to subscribe for or
otherwise acquire any of the Shares, Underlying Shares or other
securities of the Company, and except as contemplated by this
Agreement and except as has been publicly disclosed by the Company, no
rights, warrants or options (other than under Company's stock option
plan) to acquire, or instruments convertible into or exchangeable for
any shares in the capital of the Company are outstanding.
(q) The Company has not been served with or otherwise received notice of
any legal or governmental proceedings and there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is the subject which is
reasonably likely, individually or in the aggregate, to have a
material adverse effect on the business, affairs, prospects, financial
position, shareholders' equity or results of operations of the
Company, or which might reasonably be expected to materially and
adversely affect the consummation by the Company of the transactions
contemplated by this Agreement. To the best of the Company's
knowledge, no such proceedings have been threatened (implicitly or
otherwise) or contemplated against the Company by governmental or
regulatory authorities or any other parties.
(r) The Company holds all of the permits, licenses and like authorizations
necessary for it to carry on its business in each jurisdiction where
such business is carried on. Each of such permits, licenses and like
authorizations is in good standing and the Company is not in default
with respect to filings to be effected or conditions to be fulfilled
in order to maintain such permits, licenses or like authorizations in
good standing, except where the failure to hold any such permit,
license or authorization or default does not have a material adverse
effect on the business, affairs, prospects, financial position,
shareholders' equity or results of operations of the Company.
(s) The Company is not in violation of any law, ordinance, administrative
or governmental rule or regulation or court decree applicable to it,
nor is it not in compliance with any term or condition of, nor has it
failed to obtain, any
-8-
license, permit, franchise or other administrative or governmental
authorization necessary to the ownership of its property or to the
conduct of its business, which violation, non-compliance or failure to
obtain would, individually or in the aggregate, have a material
adverse effect on the business, affairs, prospects, financial
position, shareholders' equity or results of operations of the Company
or which might reasonably be expected to materially and adversely
affect the consummation by the Company of the transactions
contemplated by this Agreement. All such licences, permits, franchises
or other administrative or governmental authorizations are valid and
subsisting and in good standing and none of the same contains any
term, provision, condition or limitation which has or would reasonably
be expected to affect or restrict in a materially adverse manner the
operation of the business of the Company, as now carried on or
proposed to be carried on. The Company is not aware of any
legislation, regulations or proposed legislative or regulatory changes
which would materially and adversely affect the business, prospects or
operations of the Company or the financial position, shareholders'
equity or results of operations of the Company.
(t) There are no outstanding obligations for the Company to purchase or
redeem any shares or other securities of the Company.
(u) Each of the Agreement, the other Subscription Agreements, the Shares
and the Warrants has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against it in accordance with
its terms, subject to the qualification that enforcement thereof is
subject to applicable bankruptcy, insolvency, reorganization or other
laws affecting credits' rights generally.
(v) The financial statements of the Company for the fiscal year ended
March 31, 2001 are true and correct in all material respects and the
quarterly financial statements of the Company issued thereafter are
true and correct in all material respects, present fairly the
financial position and condition of the Company as at the dates
indicated and the results of its operations for the periods specified,
reflect all material liabilities (absolute, accrued, contingent or
otherwise) of the Company as at the dates indicated and have been
prepared in conformity with generally accepted accounting principles
in Canada applied on a consistent basis.
(w) There is no person, firm or corporation acting or purporting to be
acting for the Company entitled to any commission, brokerage or
finder's fee payable by or on behalf of the Company in connection with
this Agreement or any of the transactions contemplated hereunder,
except for Stirling Mercantile Corporation, which is to receive
$87,500 as a finder's fee.
(x) With such exceptions as are not material to the Company: (a) the
Company has duly and on a timely basis filed all tax returns required
to be filed by it, has paid all taxes due and payable by it and has
paid all assessments and reassessments and all other taxes,
governmental charges, penalties, interest and other fines due and
payable by it and which are claimed by any governmental authority to
be due and owing and adequate provision has been made for taxes
payable for any completed fiscal period for which tax returns are not
yet required to be filed; and (b) there are no agreements, waivers or
other arrangements providing for an extension of time with respect to
the filing of any tax return or payment of any tax, governmental
charge or deficiency by the Company; (c) to the knowledge of the
Company, there are no actions, suits, proceedings, investigations or
claims threatened or pending against the Company in respect of taxes,
governmental charges or assessments; and (d) there are no matters
under discussion with any governmental authority relating to taxes,
governmental charges or assessments asserted by any such authority.
(y) The Company is not aware of any claim of infringement or breach by the
Company of any patent, industrial or intellectual property rights of
any other person, nor has the Company received any notice nor is the
Company aware that the use of the business names, trademarks, service
marks and other patent, industrial or intellectual property of the
Company infringes upon or breaches any industrial or intellectual
property rights of any other person, except the following:
(i) A complaint was received in or about 1996 from the owner of the
"Cryovac" trademark, alleging infringement by the Company and
demanding that the Company cease and desist the use of
"Cryopak". The Company responded and denied the infringement.
No infringement action has been instituted. In or about 1998,
the same party opposed the registration of the "Cryopak"
trademark in the European community (application number
141234). The Company won in the first instance, but this was
appealed by the other party. The appeal is still in process.
(z) The Company owns or possesses adequate enforceable rights to use all
patents, trademarks, service marks, copyrights and trade secrets and
other industrial and intellectual property rights, used or proposed to
be used in the conduct of its business and material thereto including,
without limiting the generality of the foregoing, U.S. Patent
-9-
No. 4,931,333 entitled THERMAL PACKAGING ASSEMBLY and Canadian Patent
No. 1,291,073 entitled THERMAL PACKAGING ASSEMBLY.
11. Adjustment to Subscription
--------------------------
11.1 The number of Securities to be issued pursuant to this Subscription will be
subject to adjustment in the event and in the manner following:
(a) if and whenever the shares at any time outstanding are subdivided into
a greater or consolidated into a lesser number of shares, the price
per Share under the Subscription will be decreased or increased
proportionately as the case may be and the exercise price per share
for the Warrants will be decreased or increased proportionately as the
case may be; and upon any such subdivision or consolidation the number
of Shares deliverable pursuant to the Subscription or the number of
common shares deliverable pursuant to the exercise of the Warrants
will be increased or decreased proportionately as the case may be;
(b) in case of any capital reorganization or of any reclassification of
the capital of the Company or in the case of the consolidation, merger
or amalgamation of the Company with or into any other company
(hereinafter collectively referred to as a "Reorganization"), the
number of Shares deliverable pursuant to the Subscription and the
number of common shares deliverable pursuant to the exercise of the
Warrants will be the equivalent number of shares or other securities
of the Company (or of the Company resulting from such Reorganization);
and
(c) the subdivision or consolidation of shares at any time outstanding
into a greater or lesser number of shares (whether with or without par
value) will not be deemed to be a Reorganization for the purposes of
this paragraph 11.
11.2 If any questions will at any time arise with respect to the price per share
of the Subscription or any adjustment provided for in paragraph 11.1, such
question will be conclusively determined by the Company's auditors, or, if they
decline to so act, any other firm of independent accountants, in Vancouver,
British Columbia, that the Company may designate and who will have access to all
appropriate records and such determination will be binding upon the Company and
the holder of the Subscription.
12. Securities Regulatory Approval & Closing
----------------------------------------
12.1 This Subscription Agreement is subject to the approval of all securities
regulatory authorities having jurisdiction. Upon the receipt of such approval
the Company shall cause certificates representing the Securities hereby
subscribed for to be forthwith delivered to the Subscriber against payment of
the Subscription Proceeds. The warranties of the Subscriber and of the Company
herein shall survive the closing hereof.
13. Further Acts
------------
13.1 The Subscriber shall execute such other documents as may be required to
give effect to the intent of this Subscription Agreement including any
questionnaires, undertakings and acknowledgements of the Exchange and the
British Columbia Securities Commission.
14. Governing Law
-------------
14.1 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the federal laws of Canada
applicable therein, and the parties hereto agree to attorn to the exclusive
jurisdiction of the courts of British Columbia.
15. Costs
-----
15.1 The Subscriber acknowledges and agrees that all costs and expenses incurred
by the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the purchase of the Securities shall be
borne by the Subscriber.
16. Survival
--------
16.1 This Subscription Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the completion of the purchase of the Securities by the
Subscriber pursuant hereto.
-10-
17. Withdrawal & Assignment
-----------------------
17.1 This Subscription Agreement has been entered into by the Subscriber for
valuable consideration and shall not be withdrawn or revoked by the Subscriber
and shall not be assignable by the Subscriber without the written consent of the
Company which consent may be unreasonably withheld.
18. Execution
---------
18.1 The Company shall be entitled to rely on delivery by facsimile machine of
an executed copy of this Subscription Agreement and acceptance by the Company of
such facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.
19. Severability
------------
19.1 The invalidity or unenforceability of any particular provision of this
Subscription Agreement shall not affect or limit the validity or enforceability
of the remaining provisions of this Subscription Agreement.
20. Entire Agreement
----------------
20.1 Except as expressly provided in this Subscription Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Subscription Agreement contains the entire agreement between the parties
with respect to the sale of the Securities and there are no other terms,
conditions, representations or warranties, whether expressed, implied, oral or
written, by statute or common law, by the Company or by anyone else.
21. Notice
------
21.1 Unless otherwise provided herein, any notice or other communication to a
party under this Agreement may be made, given or served by registered mail,
postage pre-paid, by fax or by delivery to the parties at the addresses as set
out in this Subscription Agreement. Any notice or other communication:
(a) mailed shall be deemed to have been received on the fifth business day
following its mailing;
(b) faxed shall be deemed to have been received on the business day
following the date of transmission; and
(c) delivered shall be deemed to have been received on the date of
delivery.
In the event of a postal strike or delay affecting mail delivery, the date of
receipt of any notice by mail is deemed to be extended by the length of such
strike or delay. Each party may change its address for service at any time by
providing notice in writing of such change to the other party.
22. Miscellaneous
-------------
22.1 This Subscription Agreement may be executed in any number of counterparts,
each of which, when so executed and delivered, shall constitute an original and
all of which together shall constitute one instrument.
22.2 The Agreement shall enure to the benefit of and is binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
22.3 Time is of the essence hereof.
22.4 This Agreement is dated for reference the last day of execution by a party.
22.5 The Company covenants and agrees, following the closing hereunder, to:
(a) appoint, as the collective representative of the Placee and Andell
Holdings LLC, one nominee of The Claridge Group as a Director of the
Company, such nominee to be appointed at the next meeting of the Board
of Directors of the Company and subject to such nominee being
reasonably acceptable to the Company; and
(b) apply for the listing of its common shares on an exchange or quotation
system which is more senior to the TSX Venture Exchange (ie. TSE) as
soon as the Company qualifies and it is reasonably appropriate for it
to do so.
-11-
23. Language
--------
23.1 The parties hereto confirm their express wish that this Agreement and all
documents and agreements directly or indirectly relating thereto be drawn up in
the English language.
23.2 Les parties reconnaissent leur volonte expresse que la presente convention
ainsi que tous les documents et contrats s'y rattachant directement ou
indirectement soient rediges en anglais.
IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement
as of the date first above mentioned.
Number of Shares to be purchased: 1,875,000
Total Subscription Proceeds: CDN$1,500,000
---------------------------------------------
(Name of Subscriber - Please type or print)
---------------------------------------------
(Signature and, if applicable, Office)
---------------------------------------------
(Address and Residence of Subscriber)
---------------------------------------------
(City, State or Province, Postal Code of
Subscriber)
---------------------------------------------
(Country of Subscriber)
---------------------------------------------
(Date of Execution)
A C C E P T A N C E
The above-mentioned Subscription Agreement in respect of the Securities is
hereby accepted by Cryopak Industries Inc.
DATED at , the day of , 2002.
Cryopak Industries Inc.
Per:
------------------------------
Xxxx Xxxx, CFO
