Exhibit 1
SUBSCRIPTION AGREEMENT
TO: Cryopak Industries Inc.
0000 Xxxxxxx Xxx
Xxxxx, X.X.
X0X 0X0
The undersigned subscriber (the "Purchaser") hereby irrevocably subscribes for
Cdn$500,000 (principal amount in multiples of $1,000) of Secured Subordinate
Convertible Debentures of Cryopak Industries Inc. (the "Corporation"), on the
terms and conditions set out herein. The Debentures are convertible into Common
Shares of the Corporation at a price of $0.36 per Common Share in Year 1 and
Year 2, $0.40 per Common Share in Year 3, $0.44 per Common Share in Year 4 and
$0.49 per Common Share in Year 5, subject to adjustment as set out in the
Debenture.
DATED at Montreal, in the Province of Quebec this 6th day of April, 2005.
Esarbee Investments Limited 0000 Xxxx Xx., #000, Xxxxxxxx, XX, X0X 0X0
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(Name of Purchaser - please print) (Purchaser's Address)
/s/ Oded Tal /s/ Xxxx Xxxxxxxx
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Authorized Signature Authorized Signature, Xxxx Xxxxxxxx, CFO
Vice-President (000) 000-0000
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(Official Capacity or Title - please print) (Telephone Number)
Oded Tal 7,815,714 Common Shares
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(Please print name of individual whose signature Present Direct & Indirect Holdings of Securities
appears above if different than the name of the of the Corporation
subscriber printed above)
895962363RC0002
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Social Insurance Number or Business Number
Is the Purchaser a member of the Pro Group as
Is the Purchaser an Insider of the Corporation? defined by TSX?
|X| YES |_| NO |_| YES |_| NO
Registration Instructions Delivery Instructions
Mr. Oded Tal, 0000 Xxxx Xx., #000, Xxxxxxxx, XX X0X 0X0
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Name Address
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Account reference, if applicable Account reference, if applicable
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Address Contact Name
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Definitions
1. In this Agreement, unless the subject matter or context is inconsistent
therewith:
(a) "Agreement" means this agreement, as amended or supplemented from
time to time;
(b) "Business Day" means a day, other than a Saturday, on which Canadian
chartered banks are open for general banking business in Vancouver,
British Columbia;
(c) "TSX" means the TSX Venture Exchange, Inc.;
(d) "Closing Date" means such date, as soon as reasonably practicable
following TSX approval of the private placement contemplated hereby,
as determined by the Corporation;
(e) "Closing Time" means 10:00 a.m. (Vancouver time) on the Closing Date
or such other time as the Corporation may determine;
(f) "Collateral Agent Agreement" means the Collateral Agent Agreement
between the Corporation and Esarbee Investments Limited dated April
_____, 2005, as amended or supplemented from time to time;
(g) "Common Shares" means common shares in the capital of the
Corporation;
(h) "Debentures" means the Secured Subordinate Convertible Debentures of
the Corporation substantially in the form attached as Schedule "A"
hereto;
(i) "Proceeds" means proceeds from the sale of the Debentures;
(j) "Purchased Debentures" means the principal amount of Debentures
purchased by the Purchaser pursuant to this Agreement;
(k) "Subscription Price" means the aggregate subscription price paid by
the Purchaser for the Purchased Debentures, being the number of
Purchased Debentures multiplied by $1000.00 per Purchased Debenture;
(l) "Subsidiary" means Cryopak Corporation Ltd; and
(m) "Year" means the twelve (12) month period extending from the date of
issuance of the Debentures and the anniversary of such date in each
of the following Years up until the Maturity Date (as defined in the
Debentures).
Subscription for Debentures
2. The Purchaser hereby confirms its subscription for and agrees to take up
the Purchased Debentures as provided for on the initial page of this
Agreement and further agrees that the Subscription Price will be paid on
or before the Closing Date by certified cheque, bank draft or wire
transfer to the account set out below payable to XxXxxxxx Xxxxxxxx LLP, in
trust, as counsel to the Corporation or payable in such other manner as
may be specified by the Corporation.
Wire Transfer Account
---------------------
HSBC Bank Canada
000 Xxxx Xxxxxxx Xxxxxx
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Xxxxxxxxx, X.X. X0X 0X0
Account No. 266944-090
Transit No. 10020
Routing No. 000000000
Swift No. XXXXXXXX
Such funds shall be held in trust and may only be released to the
Corporation upon final approval by the TSX of the private placement
contemplated hereby. In the event that such approval is not received by
June 30, 2005, such funds shall forthwith be returned to the Purchaser, at
the address set forth on the execution page of this Agreement, together
with any interest accrued thereon, and this Agreement shall be deemed to
have been terminated.
3. The Purchaser acknowledges that this Agreement is subject to acceptance by
the Corporation. The Corporation acknowledges that the obligations of the
Purchaser hereunder are subject to final TSX approval of the private
placement contemplated hereby.
4. The Purchaser acknowledges that this Agreement is given for valuable
consideration and may not be withdrawn or revoked. The acceptance of this
Agreement shall be effective upon execution of this Agreement on behalf of
the Corporation.
5. In addition to one manually signed, completed copy of this Agreement
(including all applicable Annexes and, in the case of Purchasers who are
not individuals, a completed Form 4C - Corporate Placee Registration Form,
each in the form attached hereto), the Purchaser will execute and deliver
to the Corporation, at or before the Closing Time, or such later time as
the Corporation may accept, all other documentation as may be required by
applicable securities legislation, policy statements and orders and the
TSX to permit the issue and sale of the Purchased Debentures pursuant to
this Agreement and the issuance of the Common Shares issuable upon
conversion of the Debentures. The Purchaser acknowledges and agrees that
any such documentation, when executed and delivered by the Purchaser, will
form part of and will be incorporated into this Subscription Agreement
with the same effect as if each constituted a representation and warranty
or covenant of the Purchaser hereunder in favour of the Corporation and
the Purchaser consents to the filing of such documents as may be required
to be filed with any stock exchange or any securities regulatory authority
in connection with the transactions contemplated hereby.
Representations, Warranties and Covenants of the Purchaser
6. By executing this Agreement, the Purchaser represents and warrants to the
Corporation (and acknowledges that the Corporation is relying thereon)
that:
(a) the Purchaser has been independently advised as to and is aware of
the applicable restrictions on the resale of Debentures and the
Common Shares issuable upon conversion of the Debentures imposed by
securities legislation in the jurisdiction in which it resides and
is aware of the risks and other characteristics of such securities
and of the fact that the Purchaser may not be able to sell such
securities except in accordance with applicable securities
legislation and regulatory policies and the Purchaser (and any
others for whom it is contracting) is solely responsible (and the
Corporation is not in any way responsible) for compliance with
applicable resale restrictions;
(b) it and any beneficial purchaser for whom it is acting are resident
in the jurisdiction set out in the heading "Purchaser's Address"
opposite its signature as set forth above;
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(c) the Purchaser is either:
(i) purchasing as principal for its own account and not for the
benefit of any other person; or
(ii) an insurance company or extraprovincial insurance corporation
authorized to carry on insurance business under the Financial
Institutions Act (British Columbia), a trust company or
extraprovincial trust corporation authorized under the
Financial Institutions Act (British Columbia) to carry on
trust business or deposit business or a portfolio manager that
is registered or exempted from registration as a portfolio
manager under the Securities Act (British Columbia) and the
Purchaser is purchasing the securities as an agent or trustee
for accounts that are fully managed by it, provided that, as
used herein an account is "fully managed" by the Purchaser
only if the Purchaser makes the investment decisions for the
account and has full discretion to purchase or sell securities
for the account without requiring the client's express consent
to a transaction;
and the Purchaser is either:
(iii) an "accredited investor" as defined in Multilateral Instrument
45-103 - "Capital Raising Exemptions" such that one or more of
the categories set forth in Annex 1 to this Agreement
correctly and in all respects describes the Purchaser, and the
Purchaser has so indicated by checking the box opposite each
category on such Annex 1 which so describes it or the
beneficial purchaser, as applicable, and the Purchaser
acknowledges that by signing this Agreement it is certifying
that the statements made by checking the appropriate
accredited investor categories are true and correct;
(iv) one or more of:
A. a "director", "senior officer" or "control person" of
the Corporation, or of an "affiliate" of the Corporation
(within the meaning of these expressions as used in
applicable securities laws);
B. a spouse, parent, grandparent, brother, sister or child
of a director, senior officer or control person of the
Corporation, or of an affiliate of the Corporation;
C. a parent, grandparent, brother, sister or child of the
spouse of a director, senior officer or control person
of the Corporation, or of an affiliate of the
Corporation;
D. a "close personal friend" (within the meaning of that
expression as used in applicable securities laws),
including by reason of the fact that you have directly
known such individual well enough and for a sufficient
period of time and in a sufficiently close relationship
(where such relationship is direct and extends beyond
being a relative or a member of the same organization,
association or religious group or a client, customer or
former client or customer or being a close personal
friend of a close personal friend of such individual to
be in a position to assess the capabilities and the
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trustworthiness of such individual) of a director,
senior officer or control person of the Corporation, or
of an affiliate of the Corporation;
E. a "close business associate" (within the meaning of that
expression as used in applicable securities laws),
including by reason of the fact that you have had direct
sufficient prior business dealings with such individual
(where such relationship is direct and extends beyond
being a casual business associate or a person introduced
or solicited for the purpose of purchasing securities or
a client, customer or former client or customer or being
a close business associate of a close business associate
of such individual) to be in a position to assess the
capabilities and trustworthiness of such individual of a
director, senior officer or control person of the
Corporation, or of an affiliate of the Corporation;
F. a "founder" (within the meaning of that expression as
used in applicable securities laws) of the Corporation
or a spouse, parent, grandparent, brother, sister,
child, close personal friend or close business associate
of a founder of the Corporation;
G. a parent, grandparent, brother, sister or child of the
spouse of a founder of the Corporation;
H. a person or company of which a majority of the voting
securities are beneficially owned by, or a majority of
the directors are, persons or companies described in
clauses (iv)(A) to (iv)(G) above; or
I. a trust or estate of which all of the beneficiaries or a
majority of the trustees are persons or companies
described in clauses (iv)(A) to (iv)(G) above;
and has concurrently executed and delivered a certificate in
the form attached as Annex 3 hereto; or
(v) purchasing a sufficient number of Debentures such that the
aggregate acquisition cost to the Purchaser is not less than
$97,000;
(d) if the Purchaser is a resident, or the purchase and sale of the
Debentures by the Purchaser is otherwise subject to the applicable
securities laws of, Alberta:
(i) the Purchaser is either:
A. purchasing as principal for its own account and not for
the benefit of any other person; or
B. is trading for accounts fully managed by it and it is
(I) a trust corporation trading as a trustee or an
agent, (II) a portfolio manager trading as an agent or
(III) a person or company trading as an agent that,
except for an exemption under the Securities Act
(Alberta) or the regulations thereunder, is required to
be registered as a portfolio manager;
(e) if the Purchaser is a resident, or the purchase and sale of the
Debentures by the Purchaser is otherwise subject to the applicable
securities laws of, Ontario, it is an "accredited investor"
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as defined in OSC Rule 45-501, "Exempt Distributions" such that one
or more of the categories set forth in Annex 2 to this Agreement
correctly and in all respects describes the Purchaser, and the
Purchaser has so indicated by checking the box opposite each
category on such Annex 2 which so describes it or the beneficial
purchaser, as applicable, and the Purchaser acknowledges that by
signing this Agreement it is certifying that the statements made by
checking the appropriate accredited investor categories are true and
correct;
(f) if the Purchaser is a resident, or the purchase and sale of the
Debentures by the Purchaser is otherwise subject to the applicable
securities laws of, Quebec:
(i) it is a sophisticated purchaser within the meaning of Section
43, 44, or 45 of the Securities Act (Quebec) and the
Purchaser, if referred to in Section 44 of such Act, is
purchasing the Debentures for its own account, or if it is a
trust company licensed under the Act respecting trust
companies and savings companies (Quebec) or an insurance
company holding a license under an Act respecting insurance
(Quebec) or a dealer or advisor registered in conformity with
section 148 of the Securities Act (Quebec), it is purchasing
the Debentures for the portfolio of a third person managed
solely by that company, dealer or advisor; or
(ii) the total cost of the Debentures to it is at least $150,000
and it is acting for its own account;
(g) if the Purchaser is resident in a jurisdiction (the "International
Jurisdiction") outside of Canada and the United States:
(i) the Purchaser is knowledgeable of, or has been independently
advised as to, the applicable securities laws of the
International Jurisdiction (which are defined in this
Subscription Agreement to mean, in respect of each and every
offer or sale of Debentures and the Common Shares issuable
upon conversion of the Debentures, the securities legislation
having application and the rules, policies, notices and orders
issued by the securities regulatory authorities having
jurisdiction over the Purchaser and the Offering (other than
the laws of Canada and the U.S.) which would apply to this
subscription, if there are any);
(ii) the Purchaser is purchasing the Debentures pursuant to
exemptions from the prospectus and registration requirements
under the applicable securities laws of the International
Jurisdiction or, if such requirements are not applicable, the
Purchaser is permitted to purchase the Purchaser's Debentures
under the applicable securities laws of the International
Jurisdiction without the need to rely on such exemptions;
(iii) the applicable securities laws of the International
Jurisdiction do not require the Corporation to make any
filings or seek any approvals of any kind whatsoever from any
regulatory authority of any kind whatsoever in the
International Jurisdiction and the distribution of the
Debentures and the Common Shares issuable upon conversion of
the Debentures to the Purchaser by the Corporation complies
with all applicable securities laws of the International
Jurisdiction;
(iv) the Debentures and the Common Shares issuable upon conversion
of the Debentures are being acquired for investment only and
not with a view to resale and distribution; and
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(v) the purchase of the Debentures by the Purchaser does not
trigger:
A. any obligation to prepare and file a prospectus or
similar document, or any other report with respect to
such purchase; or
B. any registration or other obligation on the part of the
Corporation;
(h) if the Purchaser is not an individual and is a corporation,
partnership, party, trust, fund, association or other organized
group of persons it was not created and is not being used primarily
to permit any individual to purchase securities without a
prospectus;
(i) no person has made to the Purchaser any written or oral
representations:
(i) that any person will resell or repurchase the Debentures or
the Common Shares issuable upon conversion of the Debentures;
(ii) that any person will refund the purchase price of the
Debentures; or
(iii) as to the future price or value of any of the Debentures or
the Common Shares issuable upon conversion of the Debentures.
(j) the offer was not made to the Purchaser when the Purchaser was in
the United States;
(k) the Purchaser acknowledges that the Debentures and the Common Shares
issuable upon conversion of the Debentures have not been registered
under the United States Securities Act of 1933 (the "U.S. Securities
Act") and may not be offered or sold in the United States unless
subsequently registered under the U.S. Securities Act and the
securities laws of all applicable states of the United States or
unless an exemption from such registration requirements is
available, and that the Corporation has no obligation or present
intention of filing a registration statement under the U.S.
Securities Act in respect of such securities;
(l) the Purchaser is not a U.S. Person (as defined in Regulation S
promulgated under the U.S. Securities Act);
(m) the Purchaser is not and will not be purchasing Debentures for the
account or benefit of any U.S. Person;
(n) the Purchaser (or others for whom it is contracting hereunder) has
been advised to and has had the opportunity to consult its own legal
and tax advisors with respect to this Agreement, the exhibits and
the schedules attached hereto and the transactions contemplated
hereby (including without limitation any applicable resale
restrictions and tax considerations) and it (or others for whom it
is contracting hereunder) is solely responsible for compliance with
applicable resale restrictions and applicable tax legislation;
(o) the Purchaser has no knowledge of a "material fact" or "material
change" (as those terms are defined in the applicable securities
legislation) in the affairs of the Corporation that has not been
generally disclosed to the public, save knowledge of this particular
transaction;
(p) the Purchaser has the legal capacity and competence to enter into
and execute this Agreement and to take all actions required pursuant
hereto and, if the Purchaser is a corporation, it is duly
incorporated and validly subsisting under the laws of its
jurisdiction of
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incorporation and all necessary approvals by its directors,
shareholders and others have been given to authorize execution of
this Agreement on behalf of the Purchaser;
(q) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the
terms and provisions of any law applicable to, or the constating
documents of, the Purchaser;
(r) this Agreement has been duly executed and delivered by the Purchaser
and constitutes a legal, valid and binding agreement of the
Purchaser enforceable against the Purchaser in accordance with its
terms, subject to the qualification that enforcement thereof is
subject to applicable bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights generally; and
(s) if required by applicable securities legislation, policy or order or
by any securities commission, stock exchange or other regulatory
authority, the Purchaser will execute, deliver, file and otherwise
assist the Corporation in filing, such reports, undertakings and
other documents with respect to the issue of the Debentures and the
Common Shares issuable upon conversion of the Debentures as may be
required.
7. The foregoing representations, warranties and covenants are made by the
Purchaser with the intent that they be relied upon by the Corporation in
determining its suitability as a purchaser of Debentures, and the
Purchaser hereby agrees to indemnify the Corporation against all losses,
claims, costs, expenses and damages or liabilities which any of them may
suffer or incur as a result of reliance thereon. The Purchaser undertakes
to notify the Corporation immediately of any change in any representation,
warranty or other information relating to the Purchaser set forth herein
which takes place prior to the Closing.
Acknowledgements of Purchaser
8. THE PURCHASER FURTHER ACKNOWLEDGES THAT AN INVESTMENT IN THE DEBENTURES
AND COMMON SHARES ISSUABLE UPON CONVERSION OF THE DEBENTURES MUST BE
CONSIDERED SPECULATIVE AND IS SUBJECT TO A NUMBER OF RISK FACTORS. THE
SUBSCRIBER COVENANTS AND AGREES TO COMPLY WITH THE APPLICABLE SECURITIES
LEGISLATION, REGULATIONS, ORDERS OR POLICIES CONCERNING THE PURCHASE,
HOLDING OF, AND RESALE OF SUCH SECURITIES.
9. The Purchaser further acknowledges that it has not received, nor has it
requested, nor does it have any need to receive, any offering memorandum,
or other documents (other than an annual report, interim report or other
documents the contents of which are prescribed by statute) describing the
business and affairs of the Corporation which has been prepared for
delivery to, and review by, prospective purchasers in order to assist it
in making an investment decision in respect of the Debentures and, insofar
as the Purchaser is aware, the offering of the Debentures is not being
made through any advertisement in the printed media of general and regular
paid circulation, radio or television or any other form of advertisement
or as part of a general solicitation.
10. The Purchaser acknowledges that the offer made by this subscription is
irrevocable (subject to the Purchaser's right to withdraw its subscription
and to terminate its obligations as set out in this Agreement) and
requires acceptance by the Corporation and approval of the TSX.
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Representations and Warranties of the Corporation
11. The Corporation hereby represents and warrants to the Purchaser that:
(a) each of the Corporation and the Subsidiary has been duly
incorporated and is a valid and subsisting corporation under the
laws of its jurisdiction of incorporation, 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 the corporate existence, and has full
corporate power and authority to own, lease and operate its property
and assets, to conduct its business as such business is now being
conducted and as currently proposed to be conducted and to enter
into this Agreement and to perform its obligations hereunder;
(b) there has not been any material change in the assets, liabilities or
obligations (contingent or otherwise), business, operations or
capital of the Corporation since December 31, 2004, except as has
been publicly disclosed;
(c) the Corporation is a "reporting issuer" under the Securities Act
(British Columbia) and the Securities Act (Alberta) and is not in
default of any material requirements of the securities legislation
in these jurisdictions and, as at the date hereof, the Corporation
does not have any material change reports filed with the securities
regulators on a confidential basis;
(d) there are no claims, actions, suits, judgments, or proceedings
pending against or affecting the Corporation or the Subsidiary which
will or may have a material adverse effect upon the Corporation or
the Subsidiary, and, except as has been publicly disclosed by the
Corporation with respect to the convertible loan agreement (the
"CLA") dated as of February 24, 2000 between the Corporation and
ICSOS S.A. and the Corporation is not aware of any reasonable ground
for any such claims, actions, suits, judgments or proceedings;
(e) the issue of the Debentures has been approved by all requisite
corporate action and upon conversion of the Debentures, the Common
Shares issuable thereupon shall have been validly issued as fully
paid and non-assessable and all necessary corporate action has been
taken by the Corporation to allot and authorize the issuance of such
Common Shares. The Corporation has reserved for issuance that number
of Common Shares issuable upon the conversion of the Debentures;
(f) the TSX has approved the issuance of the Debentures and the listing
of the Common Shares upon the conversion thereof;
(g) the Corporation has not sustained, since December 31, 2004, 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. Except as has been
publicly disclosed, since December 31, 2004 (i) there has not been
any change in the authorized share capital of the Corporation, (ii)
the Corporation has not incurred any liabilities or obligations
(absolute, accrued, contingent or otherwise) or entered into any
transactions not in the ordinary course of business that are
material to the Corporation 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 Corporation's knowledge, threatened
claims or contingent liabilities), in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of the Corporation;
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(h) each of the Corporation and the Subsidiary has good and marketable
title to all movable property owned by it which is material,
individually or in the aggregate, to the Corporation. Any real
property held under lease by the Corporation or the Subsidiary,
which is material, individually or in the aggregate, to the
Corporation or the Subsidiary, as the case may be, is held by it
under valid, subsisting and enforceable leases with such exceptions
as are not material, individually or in the aggregate, to the
Corporation;
(i) each of the Corporation and the Subsidiary, 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;
(j) as of March 1, 2005, there are 39,128,087 Common Shares issued and
outstanding, all of which have been duly authorized and validly
issued as fully paid and non-assessable (and no others). As of March
1, 2005, there are no outstanding subscriptions, warrants, options,
agreements, convertible or exchangeable securities or other
commitments pursuant to which the Corporation is or may become
obligated to issue, sell, purchase, return or redeem any shares of
capital stock or other securities of the Corporation, other than in
connection with the private placement contemplated hereby and those
set out below:
(i) Incentive Stock Options 1,980,000
(ii) Warrants 2,953,890
(iii) Earn-out Shares 1,531,250
(vi) Cashless Stock Options (Xxxxxx Securities) 300,000;
(k) the Corporation has no material subsidiaries, as such term is
defined in the Canada Business Corporations Act, except for the
Subsidiary and as disclosed in the Corporation's Annual Information
Form for the fiscal year ended March 31, 2004 which has been duly
filed with the British Columbia Securities Commission and the TSX;
(l) the Corporation is a "foreign private issuer" as defined in Rule 3b
4(c) under the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and has filed with the United States
Securities and 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 U.S. Securities 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;
(m) neither the Corporation or the Subsidiary is in violation of its
constating documents, bylaws or resolutions of its directors or
shareholders or, except as has been disclosed by the Corporation
with respect to the CLA, 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
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effect on the financial position, business, affairs, prospects,
shareholders' equity or results of operations of the Corporation.
The compliance by the Corporation with all of the provisions of this
Agreement and the Collateral Agent Agreement and the consummation of
the transactions contemplated hereby and thereby, including the
issuance of the Debentures and the allotment and issuance of Common
Shares on exercise of the conversion right under the Debentures:
(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
Corporation pursuant to the terms of any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument to which the Corporation is a party or by which the
Corporation is bound or to which any of the property or assets
of the Corporation 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 Corporation; 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 Corporation 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 Corporation;
(n) all consents, approvals, permits, authorizations or filings as may
be required under United States and Canadian securities laws and the
rules of the TSX necessary for the execution and delivery of and the
performance by the Corporation of its obligations under this
Agreement, including the issuance of the Debentures and the
allotment and issuance of Common Shares on exercise of the
conversion right under the Debentures, have been made or obtained on
the Closing Date, other than the filing of the requisite
distributions reports and related documents;
(o) as at the Closing Date, no holder of outstanding Common Shares or
other securities of the Corporation will be entitled to any
preemptive or any similar rights to subscribe for or otherwise
acquire any of the Debentures or other securities of the
Corporation, and except as contemplated by this Agreement and except
as has been publicly disclosed by the Corporation, no rights,
warrants or options (other than under Corporation's stock option
plan) to acquire, or instruments convertible into or exchangeable
for any shares in the capital of the Corporation are outstanding;
(p) the Corporation has not been served with or otherwise received
notice of any material legal or governmental proceedings and there
are no legal or governmental proceedings pending to which the
Corporation is a party or of which any property or asset of the
Corporation 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 Corporation, or which might
reasonably be expected to materially and adversely affect the
consummation by the Corporation of the transactions contemplated
- 12 -
by this Agreement. To the best of the Corporation's knowledge, no
such proceedings have been threatened (implicitly or otherwise) or
contemplated against the Corporation by governmental or regulatory
authorities or any other parties;
(q) each of the Corporation and the Subsidiary 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 neither the Corporation or the Subsidiary is 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 Corporation;
(r) neither the Corporation nor the Subsidiary is 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 licence,
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
Corporation or which might reasonably be expected to materially and
adversely affect the consummation by the Corporation 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 Corporation or the Subsidiary, as now carried on or
proposed to be carried on. Neither the Corporation nor the
Subsidiary is aware of any legislation, regulations or proposed
legislative or regulatory changes which would materially and
adversely affect the business, prospects or operations of the
Corporation or the Subsidiary or the financial position,
shareholders' equity or results of operations of the Corporation;
(s) there are no outstanding obligations for the Corporation to purchase
or redeem any shares or other securities of the Corporation;
(t) the Corporation has full power, capacity and authority to execute
and deliver this Agreement and the Collateral Agent Agreement, to
comply with the provisions thereof and to duly perform and observe
all of its obligations thereunder;
(u) this Agreement and the Collateral Agent Agreement have been duly and
validly authorized, executed and delivered by the Corporation and
constitute valid and binding obligations of the Corporation
enforceable against it in accordance with their terms, subject to
the qualification that enforcement thereof is subject to applicable
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and all appropriate corporate and other
acts, conditions and things required to be done and performed and to
have happened prior to the execution and delivery of this Agreement
and the Collateral Agent Agreement in order to make all of the
obligations expressed to be incurred by the Corporation legal,
valid, binding and enforceable in accordance with the terms of this
Agreement and the Collateral Agent Agreement, subject to the
qualification that enforcement thereof is subject to applicable
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, have been done and performed in due and
strict compliance with all applicable laws and
- 13 -
regulations and the corporate constating documents of the
Corporation prior to the execution and delivery thereof;
(v) the execution and delivery by the Corporation of this Agreement and
the Collateral Agent Agreement and the performance by the
Corporation of its obligations thereunder, including the issuance of
the Debentures and the allotment and issuance of the Common Shares
on exercise of the conversion right under the Debentures, does not
and will not result in any breach of, or be in conflict with, or
constitute a default under or create a state of facts which after
notice or lapse of time or both, constitutes a default under, any
term or provision of the constating documents or resolutions of the
Corporation or any mortgage, note, indenture, contract, agreement
(written or oral), instrument, lease, licence or other document, to
which the Corporation is a party or to which it is subject or by
which it is bound or any judgment, decree, order, statute, rule or
regulation applicable to it, which breach, conflict or default would
have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Corporation; and
(w) the financial statements of the Corporation for the fiscal year
ended March 31, 2004 are true and correct in all material respects,
and the quarterly financial statements of the Corporation issued
thereafter (collectively, the "Financial Statements") are true and
correct in all material respects, present fairly the financial
position and condition of the Corporation 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 Corporation as at the dates indicated and have
been prepared in conformity with generally accepted accounting
principles in Canada applied on a consistent basis;
(x) other than as disclosed in the Financial Statements and except for
liabilities incurred by the Corporation since March 31, 2004 in the
ordinary course of business consistent with prior practice, the
Corporation has no liabilities or obligations of any nature (whether
absolute, accrued, contingent or otherwise) and has good and
marketable title to or is entitled to the benefits of all of its
properties and assets (real and personal, tangible and intangible,
including leasehold interests);
(y) other than pursuant to this Agreement or other Debentures being
issued concurrently herewith, or as set out in the attached Schedule
"B" hereto, the Corporation has not granted, nor agreed to grant,
any security interest on any of its property, assets or
undertakings;
(z) with such exceptions as are not material to the Corporation (i) the
Corporation 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, (ii) 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 Corporation, (iii) to the
knowledge of the Corporation, there are no actions, suits,
proceedings, investigations or claims threatened or pending against
the Corporation in respect of taxes, governmental charges or
assessments and (iv) there are no matters under discussion with any
governmental authority relating to taxes, governmental charges or
assessments asserted by any such authority;
- 14 -
(aa) the Corporation is not aware of any material claim of infringement
or breach by the Corporation of any patent, industrial or
intellectual property rights of any other person, nor has the
Corporation received any notice nor is the Corporation aware that
the use of the business names, trademarks, service marks and other
patent, industrial or intellectual property of the Corporation
infringes upon or breaches any industrial or intellectual property
rights of any other person;
(bb) the Corporation owns or possesses adequate enforceable rights to use
all patents, trademarks, service marks, copyrights and trade secrets
and other industrial and intellectual property right 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 No. 4,931,333 entitled THERMAL PACKAGING ASSEMBLY and
Canadian Patent No. 1,291,073 entitled THERMAL PACKAGING ASSEMBLY;
(cc) each of the most recently filed Form 20F, Annual Information Form,
quarterly and annual financial statements and other information
filed in accordance with Canadian and U.S. securities laws (the
"Securities Law Reports"), were, on the dates of their respective
filings, in compliance in all material respects with the
requirements of their respective report forms and the Canadian and
U.S. securities laws and did not, on the date of filing, contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. There have not been any material adverse
changes to the assets, liabilities, financial position or business
of the Corporation or any of its material subsidiaries since the
filing of the Securities Law Reports and no transaction has been
entered into by the Corporation or any material subsidiary which is
or may be material to the Corporation on a consolidated basis; and
(dd) CIBC Mellon Trust Company has been duly appointed as registrar and
transfer agent for the Common Shares.
Covenants of the Corporation
12. The Corporation hereby covenants with the Purchaser that:
(a) it will take all corporate action required to issue to the
Purchaser, upon the due conversion of Debentures, the Common Shares
issuable thereunder, as fully paid and non-assessable Common Shares
in the capital of the Corporation; and
(b) it will use its reasonable best efforts to maintain its status as a
"reporting issuer" under the Securities Act (British Columbia) and
the Securities Act (Alberta) for a period of two years from the
Closing Date.
Resale Restrictions
13. The Purchaser acknowledges that any resale of the Debentures, and the
Common Shares issuable upon conversion of the Debentures, will be subject
to resale restrictions contained in the policy of the TSX and in the
securities legislation applicable to the Purchaser.
- 15 -
General
14. The sale of the Debentures will be completed at the offices of XxXxxxxx
Xxxxxxxx LLP, in Vancouver, British Columbia, at the Closing Time on the
Closing Date, or at such other place or time as the Purchaser and the
Corporation may agree.
15. This Agreement shall be binding upon and enure to the benefit of the
Purchaser and the Purchaser's executors, personal representatives,
successors and assigns and the Corporation and its successors and assigns.
16. The representations and warranties of the Corporation contained herein
shall survive Closing for a period of one year.
17. The Corporation acknowledges and agrees that all reasonable costs incurred
by the Purchaser (including any fees and disbursements of any counsel
retained by the Purchaser) relating to the sale of the Debentures to the
Purchaser shall be borne by the Corporation.
18. The Corporation and the Purchaser shall be entitled to rely on delivery of
a facsimile copy of this Agreement, and acceptance by the Corporation of
such facsimile copy shall be legally effective to create a valid and
binding agreement between the Purchaser and the Corporation in accordance
with the terms hereof.
19. All notices which are permitted or required to be given hereunder shall be
validly given if actually delivered or if transmitted by electronic means
to the address of the Corporation hereinafter set forth and to the address
of the Purchaser as set forth on the execution page of this Agreement
(until notice of a change is given in accordance with the foregoing) and
shall be effective on the date of such delivery or transmission.
Notice to the Corporation shall be addressed to:
Cryopak Industries Inc.
0000 Xxxxxxx Xxx
Xxxxx, X.X.
X0X 0X0
Attention: Xxxxxx Xxxxxx
Chief Executive Officer and Corporate Secretary
Telecopier No.: (000) 000-0000
20. Each party shall from time to time do such further acts and execute and
deliver such further documents as shall be reasonably required in order to
fully perform and carry out the terms of this Agreement.
21. The headings of the sections of this Agreement are inserted for
convenience of reference only and shall not affect the meaning or
construction hereof.
22. The terms of this Agreement express and constitute the entire agreement
between the parties hereto as to the subject matter hereof, and no implied
term of any kind shall arise by reason of anything contained in this
Agreement.
- 16 -
23. Time is of the essence of this Agreement.
24. This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the laws of Canada applicable
therein.
25. In this Agreement, words importing the singular include the plural and
vice versa and words importing persons include firms or corporations.
ACCEPTANCE
Cryopak Industries Inc. hereby accepts the above subscription as of this 6th day
of April, 2005.
CRYOPAK INDUSTRIES INC.
Per: /s/ Xxxxxx Xxxxxx
----------------------------------
ANNEX 1
To be Completed by Accredited Investors(1)
The Purchaser and any beneficial subscriber is an "accredited investor", as such
term is defined in the Multilateral Instrument 45-103 - Capital Raising
Exemptions ("MI 45-103"), as at the time of Closing, the Purchaser and any
beneficial subscriber, as applicable, falls within one or more of the following
categories (Please check one or more, as applicable):
|_| (a) a person or company, other than a "mutual fund" or "non-redeemable
investment fund" (within the meaning of those expressions as used in
applicable securities laws), that, either alone or with a spouse,
has net assets of at least $5,000,000, and unless the person or
company is an individual, that amount is shown on its most recently
prepared financial statements;
|_| (b) an individual who, either alone or with a spouse, beneficially owns,
directly or indirectly, cash and securities ("financial assets")
having an aggregate realizable value that before taxes, but net of
any liabilities incurred or accrued for the purpose of financing the
acquisition or ownership of financial assets and liabilities that
are secured by financial assets, exceeds $1,000,000;
|_| (c) an individual whose net income before taxes exceeded $200,000 in
each of the two most recent years or whose net income before taxes
combined with that of a spouse exceeded $300,000 in each of the two
most recent years and who, in either case, reasonably expects to
exceed that net income level in the current year;
|_| (d) a person or company registered under the securities legislation,
regulations and rules of a province or territory of Canada as an
adviser or dealer, other than a limited market dealer registered
under the Securities Act (Ontario) or the Securities Act
(Newfoundland and Labrador);
|_| (e) an individual registered or formerly registered under the securities
legislation, regulations and rules of a province or territory of
Canada as a representative of a person or company referred to in
paragraph (e);
|_| (f) a person or company trading as agent on behalf of a fully managed
account if that person or company is registered or authorized to
carry on business under the securities legislation of a province or
territory of Canada or a country other than Canada as a portfolio
manager or under an equivalent category of adviser or is exempt from
registration as a portfolio manager or the equivalent category of
adviser;
|_| (g) a Canadian financial institution, or an authorized foreign bank
listed in Schedule III of the Bank Act (Canada);
|_| (h) an association under the Cooperative Credit Association Act (Canada)
located in Canada or a central cooperative credit society for which
an order has been made under subsection 473(1) of that Act;
|_| (i) a "subsidiary" (within the meaning of that expression as used in
applicable securities laws) of any person or company referred to in
paragraphs (g) and (h), if the person or company owns all of the
voting securities of the subsidiary, except the voting securities
required by law to be owned by directors of that subsidiary;
----------
(1) Ontario accredited investors should also complete Annex 2
- 2 -
|_| (j) the government of Canada or a province or territory of Canada, or
any crown corporation, agency, or wholly owned entity of the
government of Canada or a province or territory of Canada;
|_| (k) a municipality, public board or commission in Canada;
|_| (l) any national, federal, state, provincial, territorial or municipal
government of or in any country other than Canada (or a political
subdivision thereof), or any agency of that government;
|_| (m) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension
commission or similar regulatory authority of a province or
territory of Canada;
|_| (n) a mutual fund or non-redeemable investment fund that, in the "local
jurisdiction" (as defined in National Instrument 14-101 -
Definitions), distributes its securities only to persons or
companies that are "accredited investors";
|_| (o) a mutual fund or non-redeemable investment fund that, in the local
jurisdiction, is distributing or has distributed its securities
under one or more prospectuses for which the applicable securities
regulator has issued receipts;
|_| (p) a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act (Canada) or
under comparable legislation of a province or territory of Canada or
a country other than Canada, trading as a trustee or agent on behalf
of a "fully managed" account (within the meaning of that expression
as used in applicable securities laws);
|_| (q) a registered charity under the Income Tax Act (Canada) that, in
regard to the trade, has obtained advice from an "eligibility
adviser" (as defined in MI 45-103) or other adviser registered to
provide advice on the securities being traded;
|_| (r) an entity organized in a country other than Canada (or a political
subdivision thereof) that is analogous to any of the entities
referred to in paragraphs (g) through (k) and paragraph (m) in form
and function; or
|_| (s) a person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, except the
voting securities required by law to be owned by directors, are
persons or companies that are "accredited investors" (as defined in
MI 45-103);
ANNEX 2
To be Completed by Ontario Accredited Investors
The Purchaser is a resident of or otherwise subject to the securities
legislation of Ontario and is an "accredited investor", as such term is defined
in Ontario Securities Commission Rule 45-501 - Exempt Distribution ("OSC Rule
45-501"), as at the time of Closing, the Purchaser falls within one or more of
the following categories (Please check one or more, as applicable):
|_| (a) a bank listed in Schedule I or II of the Bank Act (Canada), or an
authorized foreign bank listed in Schedule III of that Act;
|_| (b) the Business Development Bank incorporated under the Business
Development Bank Act (Canada);
|_| (c) a loan corporation or trust corporation registered under the Loan
and Trust Corporations Act (Ontario) or under the Trust and Loan
Companies Act (Canada), or under comparable legislation in any
province or territory of Canada;
|_| (d) a co-operative credit society, credit union central, federation of
caisses populaires, credit union or league, or regional caisse
populaire, or an association under the Cooperative Credit
Associations Act (Canada), in each case, located in Canada;
|_| (e) a company licensed to do business as an insurance company in any
province or territory of Canada;
|_| (f) a subsidiary entity of any person or company referred to in
paragraph (a), (b), (c), (d) or (e), where the company owns all of
the voting shares of the subsidiary entity;
|_| (g) a person or company registered under the Securities Act (Ontario) or
securities legislation in another province or territory of Canada as
an adviser or dealer, other than a limited market dealer;
|_| (h) the government of Canada or of any province or territory of Canada,
or any crown corporation, instrumentality or agency of a Canadian
federal, provincial or territorial government;
|_| (i) any Canadian municipality or any Canadian provincial or territorial
capital city;
|_| (j) any national, federal, state, provincial, territorial or municipal
government of or in any country, or political subdivision of any
country, other than Canada, or any instrumentality or agency
thereof;
|_| (k) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a provincial
pension commission or similar regulatory authority;
|_| (l) a registered charity under the Income Tax Act (Canada);
|_| (m) an individual who beneficially owns, or who together with a spouse
beneficially own, cash, securities or any contract of insurance or
deposit or evidence thereof that is not a security for the purposes
of the Securities Act (Ontario) (collectively, "financial assets")
having an aggregate realizable value that, before taxes but net of
any liabilities incurred or assumed for the purposes of financing
the acquisition or ownership of financial assets and liabilities
that are secured by financial assets, exceeds $1,000,000;
|_| (n) an individual whose net income before taxes exceeded $200,000 in
each of the two most recent years or whose net income before taxes
combined with that of a spouse exceeded $300,000 in each of those
years and who, in either case, has a reasonable expectation of
exceeding the same net income level in the current year;
- 2 -
|_| (o) an individual who has been granted registration under the Securities
Act (Ontario) or securities legislation in another province or
territory of Canada as a representative of a person or company
referred to in paragraph (g), whether or not the individual's
registration is still in effect;
|_| (p) a promoter of the issuer or an "affiliated entity" of a promoter of
the issuer (within the meaning of that expression as used in OSC
Rule 45-501);
|_| (q) a spouse, parent, brother, sister, grandparent or child of an
officer, director or promoter of the issuer;
|_| (r) a person or company that, in relation to the issuer is an affiliated
entity or a person or company referred to in clause (c) of the
definition of distribution in subsection 1(1) of the Securities Act
(Ontario);
|_| (s) an issuer that is acquiring securities of its own issue;
|_| (t) a company, limited liability company, limited partnership, limited
liability partnership, trust or estate, other than a mutual fund or
non-redeemable investment fund, that had net assets of at least
$5,000,000 as reflected in its most recently prepared financial
statements;
|_| (u) a person or company that is recognized by the Ontario Securities
Commission as an accredited investor;
|_| (v) a mutual fund or non-redeemable investment fund that, in Ontario,
distributes its securities only to persons or companies that are
accredited investors;
|_| (w) a mutual fund or non-redeemable investment fund that, in Ontario,
distributes its securities under a prospectus for which a receipt
has been granted by the Director or, if it has ceased distribution
of its securities, has previously distributed its securities in this
manner;
|_| (x) a fully managed account if it is acquiring a security that is not a
security of a mutual fund or non-redeemable investment fund;
|_| (y) an account that is fully managed by a trust corporation registered
under the Loan and Trust Corporations Act (Ontario) or under the
Trust and Loan Companies Act (Canada), or under comparable
legislation in any other jurisdiction;
|_| (z) an entity organized outside of Canada that is analogous to any of
the entities referred to in paragraphs (a) through (g) and paragraph
(k) in form and function; and
|_| (aa) a person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, are persons or
companies that are accredited investors.
ANNEX 3
To be completed by "friends and family" subscribers (British Columbia and
Alberta only)
TO: Cryopak Industries Inc.
CERTIFICATE
In connection with the purchase by the undersigned purchaser (the "Purchaser")
of Debentures (the "Purchased Securities") of Cryopak Industries Inc. (the
"Corporation"), the Purchaser hereby represents, warrants, covenants and
certifies that:
1. the Purchaser is resident in the Province of British Columbia or Alberta
or is subject to the laws of the Province of British Columbia or Alberta;
2. the Purchaser is purchasing the Purchased Securities as principal for its
own account;
3. the Purchaser is (please initial the appropriate line):
|_| A. a director, senior officer or "control person" (within the
meaning of that expression as used in applicable securities
laws) of the Corporation, or of an "affiliate" (within the
meaning of that expression as used in applicable securities
laws) of the Corporation;
|_| B. a spouse, parent, grandparent, brother, sister or child of
__________________________________, who is a director, senior
officer or control person of the Corporation, or of an
affiliate of the Corporation;
|_| C. a parent, grandparent, brother, sister or child of
__________________________________, who is the spouse of a
director, senior officer or control person of the Corporation
, or of an affiliate of the Corporation;
|_| D. a close personal friend (by reason of the fact that you have
directly known such individual for a sufficient period of time
and in a sufficiently close relationship to be in a position
to assess the capabilities and the trustworthiness of such
individual) of __________________________________, who is a
director, senior officer or control person of the Corporation
, or of an affiliate of the Corporation;
|_| E. a close business associate (by reason of the fact that you
have sufficient prior direct business dealings with such
individual to be in a position to assess the capabilities and
the trustworthiness of such individual) of
__________________________________, who is a director, senior
officer or control person of the Corporation , or of an
affiliate of the Corporation;
- 2 -
|_| F. a "founder" (within the meaning of that expression as used in
applicable securities laws) of the Corporation or a spouse,
parent, grandparent, brother, sister, child, close personal
friend or close business associate of
__________________________________, who is a founder of the
Corporation;
|_| G. a parent, grandparent, brother, sister or child of the spouse
of __________________________________, who is a founder of the
Corporation;
|_| H. a person or company of which a majority of the voting
securities are beneficially owned by, or a majority of the
directors are, persons or companies described in subsections
3(a) to 3(g) above; or
|_| I. a trust or estate of which all of the beneficiaries or a
majority of the trustees are persons or companies described in
subsections 3(a) to 3(g) above.
4. the above representations, warranties and covenants will be true and
correct both as of the execution of this certificate and as of the closing
time of the purchase and sale of the Purchased Securities and will survive
the completion of the issue of the Purchased Securities; and
5. the foregoing representations, warranties and covenants are made by the
undersigned with the intent that they be relied upon in determining the
suitability of the undersigned as a purchaser of the Purchased Securities
and the undersigned undertakes to immediately notify the Corporation of
any change in any statement or other information relation to the Purchaser
set forth herein which takes place prior to the closing time of the
purchase and sale of the Purchased Securities.
Dated: __________________________, 2005.
__________________________________________
Print name of Purchaser
By: _____________________________________
Signature
_____________________________________
Title
FORM 4C
CORPORATE PLACEE REGISTRATION FORM
Where subscribers to a Private Placement are not individuals, the following
information about the placee must be provided. This Form will remain on file
with the Exchange. The Corporation, trust, portfolio manager or other entity
(the "Placee") need only file it on a one time basis, and it will be referenced
for all subsequent Private Placements in which it participates. If any of the
information provided in this Form changes, the Placee must notify the Exchange
prior to participating in further placements with Exchange listed companies. If
as a result of the Private Placement, the Placee becomes an Insider of the
Issuer, Insiders of the Placee are reminded that they must file a Personal
Information Form (2A) with the Exchange, or if applicable, Declarations with the
Exchange.
1. Placee Information:
(a) Name: Esarbee Investments Limited
(b) Complete Address: 0000 Xxxx Xx., #000
Xxxxxxxx, XX, X0X 0X0
(c) Jurisdiction of Incorporation or Creation: Federal, Canada
2. (a) Is the Placee purchasing securities as a portfolio manager (Yes/No)?
No
(b) Is the Placee carrying on business as a portfolio manager outside of
Canada (Yes/No)? _No___________
3. If the answer to 2(b) above was "Yes", the undersigned certifies that:
(a) It is purchasing securities of an Issuer on behalf of managed
accounts for which it is making the investment decision to purchase
the securities and has full discretion to purchase or sell
securities for such accounts without requiring the client's express
consent to a transaction;
(b) it carries on the business of managing the investment portfolios of
clients through discretionary authority granted by those clients (a
"portfolio manager" business) in ________________ [jurisdiction],
and it is permitted by law to carry on a portfolio manager business
in that jurisdiction;
(c) it was not created solely or primarily for the purpose of purchasing
securities of the Issuer;
(d) the total asset value of the investment portfolios it manages on
behalf of clients is not less than $20,000,000; and
(e) it has no reasonable grounds to believe, that any of the directors,
senior officers and other insiders of the Issuer, and the persons
that carry on investor relations activities for the Issuer has a
beneficial interest in any of the managed accounts for which it is
purchasing.
- 2 -
4. If the answer to 2(a) above was "No", please provide the names and
addresses of control persons of the Placee:
--------------------------------------------------------------------------
Name City Province or State Country
--------------------------------------------------------------------------
Indirectly controlled by:
--------------------------------------------------------------------------
The Xxxxxxx Xxxxxx Xxxxxxxx Montreal Quebec Canada
Family Trust
--------------------------------------------------------------------------
--------------------------------------------------------------------------
The undersigned acknowledges that it is bound by the provisions of applicable
Securities Law, including provisions concerning the filing of insider reports
and reports of acquisitions (See for example, sections 87 and 111 of the
Securities Act (British Columbia) and sections 176 and 182 of the Securities Act
(Alberta).
- 3 -
Acknowledgement - Personal Information
"Personal Information" means any information about an identifiable individual,
and includes information contained in sections 1, 2 and 4, as applicable, of
this Form.
The undersigned hereby acknowledges and agrees that it has obtained the express
written consent of each individual to:
(a) the disclosure of Personal Information by the undersigned to the Exchange
(as defined in Appendix 6B) pursuant to this Form; and
(b) the collection, use and disclosure of Personal Information by the Exchange
for the purposes described in Appendix 6B or as otherwise identified by
the Exchange, from time to time.
Dated at Montreal, Quebec on this ________ day of April, 2005.
Esarbee Investments Limited
(Name of Purchaser - please print)
/s/ Oded Tal
---------------------------- ------------------------------------------------
(Authorized Signature) (Authorized Signature)
Chief Financial Officer Vice President
---------------------------- ------------------------------------------------
(Official Capacity - please print)
Xxxx Xxxxxxxx Oded Tal
---------------------------- ------------------------------------------------
(please print name of individual whose signature
appears above)
THIS IS NOT A PUBLIC DOCUMENT
Schedule "A"
Secured Subordinate Convertible Debentures
CRYOPAK INDUSTRIES INC.
SECURED SUBORDINATE CONVERTIBLE DEBENTURE
(dated for reference April 6, 2005)
Without prior written approval of the TSX Venture Exchange and compliance
with all applicable securities legislation, the securities represented hereby or
issued upon the conversion hereof may not be sold, transferred, hypothecated or
otherwise traded on or through the facilities of the TSX Venture Exchange or
otherwise in Canada or to or for the benefit of a Canadian resident until August
7, 2005. Unless permitted under securities legislation, the holder of this
Debenture and the securities issuable upon conversion of this Debenture must not
trade those securities before the date that is 4 months and a day after the
later of (i) April 6, 2005 and (ii) the date the issuer became a reporting
issuer in Quebec.
No. 01 Cdn $500,000
1. PROMISE TO PAY
1.1 For value received, CRYOPAK INDUSTRIES INC. (hereinafter the "Company")
acknowledges itself indebted and promises to pay, upon presentation of
this Debenture, to Esarbee Investment Limited, the registered holder
hereof or its registered assigns (the "Debentureholder"), at 800 - 0000
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0 or at any other address indicated
by the registered holder hereof the principal sum of $500,000 Dollars in
lawful money of Canada (the "Principal").
1.2 Except as otherwise provided, the Principal and all other amounts payable
hereunder will become due and payable on April 8, 2010 or such other date
upon which the Debentureholder may declare the Principal to be due and
owing pursuant to Article 9 hereof (the "Maturity Date").
1.3 The Company shall pay to the Debentureholder the outstanding Principal of
the Debenture (unless such Debenture shall have been converted in
accordance with the provisions hereof) together with accrued and unpaid
interest thereon on the Maturity Date on presentation and surrender of the
Debenture.
1.4 Subject to deduction for any applicable Canadian withholding tax from the
amounts that would otherwise be payable hereunder, interest shall accrue
daily and be payable on the Principal of the Debenture, together with
accrued and unpaid interest for any prior Interest Period, on the last
Business Day of each Interest Period at the rate of fifteen percent (15%)
per annum from the date hereof until the Maturity Date.
1.5 The Company is entitled to deduct, withhold and remit, from any payment to
be made by the Company hereunder, the amount of any and all tax,
withholding tax, charge, deduction, impost or levy whatsoever now or
hereafter imposed, assessed or levied pursuant to any applicable law of
Canada or any other jurisdiction or any taxing authority thereof in
respect of any payment made or to be made by the Company hereunder.
1.6 The Company shall make all Principal and interest payments pursuant to the
Debenture to the Debentureholder at such place or places as the
Debentureholder advises the Company in writing. The Shares issuable to the
Debentureholder pursuant to the conversion of the Debentures shall also be
delivered to the Debentureholder as aforesaid.
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1.7 If the Company is not in default under this Debenture, the Company shall
have the right, on not less than 30 days' prior written notice to the
Debentureholder (the "Notice Period"), at any time after the first
anniversary of the date of this Debenture, of prepaying, without bonus or
penalty, the whole or any part of the Principal outstanding. During the
Notice Period, the Debentureholder may, at its option, convert the whole
or any part of the Principal outstanding under the Debenture into
fully-paid and non-assessable Shares in the capital of the Company (the
"Shares") at the Conversion Price (as defined below) in accordance with
Article 2 of this Debenture.
1.8 If the Debentureholder has given the Company a notice of conversion as
contemplated in Article 2 hereof prior to any prepayment being made by the
Company, the Company shall convert the amount of the Principal outstanding
as specified in such notice in accordance with the provisions of Article 2
(or if no amount is specified, the entire Principal outstanding) and shall
only be entitled to prepay, in full or in part, the balance of the
Principal not so converted or to be converted, if any.
2. CONVERSION OF THE DEBENTURE
2.1 The Debentureholder may elect at any time or from time to time, at the
Debentureholder's option, prior to the close of business on the Maturity
Date, to convert all or any portion of the then outstanding Principal of a
Debenture into fully paid and non-assessable Shares at the Conversion
Price (the "Conversion Right").
2.2 Upon the exercise of its Conversion Right, the Debentureholder shall
surrender the Debenture, together with the conversion form attached
hereto, duly executed (the "Conversion Notice"), to the Company at its
address set forth under Section 0 or at such other place as the Company
may advise the Debentureholder in writing. Conversion shall be deemed to
have been effected on the date (the "Conversion Date") on which the
Conversion Notice, duly and properly completed, is actually received by
the Company. Within the next five (5) Business Days, the Company shall
issue and deliver to the Debentureholder:
2.2.1 a certificate or certificates representing the number of
Shares purchased upon exercise of the Conversion Right,
rounded down to the nearest whole number, registered in the
name of the Debentureholder or otherwise as directed in the
Conversion Notice; and
2.2.2 cash for any fractional shares in an amount equal to the
product of (x) the Conversion Price per Share and (y) any
fraction of a Share remaining after conversion pursuant to
this Article; and
2.2.3 in the event of any partial conversion of a Debenture, a new
Debenture in identical form, the principal amount of which
shall be equal to the amount of Principal which was not
converted under this Section 0 hereof.
The Debentureholder shall be deemed to have become a shareholder of record
of Shares on the date that conversion is deemed to have been effected
pursuant to this Section 0.
2.3 If the trading price of the Shares for 90 consecutive trading days on the
Exchange is at least 250% of the Conversion Price (as defined below), the
Company may upon no less than 30 days' prior written notice from the
Company require the Debentureholder to exercise its Conversion Right as of
the date thereafter specified in such notice and the Debentureholder shall
forthwith convert all
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of the Principal outstanding under this Debenture into Shares at the
Conversion Price or failing such exercise will be deemed to have exercised
such Conversion Right and thereupon all rights of the Debentureholder to
enforce payment hereof or to receive interest shall cease and the
Debentureholder's only right will be to receive, upon surrender of this
Debenture, one or more certificates representing the Shares into which
such Debenture is to be converted together with any accrued but unpaid
interest to the date of such conversion.
2.4 Subject to adjustments as provided in Article 3 hereof, the conversion
price shall be:
Period
---------------------------------------------------
Price ($) From To
------------- ---------------------------------------------------
0.36 April 6, 2005 April 5, 2006
0.36 April 6, 2006 April 5, 2007
0.40 April 6, 2007 April 5, 2008
0.44 April 6, 2008 April 5, 2009
0.49 April 6, 2009 April 8, 2010
(the "Conversion Price").
2.5 The Company shall, prior to issuance of any Shares hereunder, and from
time to time as may be necessary (including following an adjustment
pursuant to Article 3), reserve out of its authorized but unissued Shares
a sufficient number of Shares to permit the conversion of this Debenture.
The Company covenants that all securities that may be issued upon exercise
of the Conversion Right will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable.
2.6 Notwithstanding any other provision of this Debenture, no Shares will be
issued upon the conversion hereof if the issuance of such Shares would
constitute a violation of the securities laws of any jurisdiction or
require the Company to prepare, file or deliver any form of prospectus,
registration statements, offering memorandum, filing statement or any
disclosure document similar to the foregoing.
2.7 Upon conversion of the entire amount contemplated in Section 2.1 or 2.3
and payment of any accrued but unpaid interest and, if applicable, the
delivery of the certificates for the appropriate number of Shares
registered in the Debentureholder's name pursuant to Section 2.2 or 2.3
shall constitute the performance of all the obligations of the Company
pursuant to this Debenture, such that all amounts due and payable pursuant
to this Debenture shall be deemed to have been paid and all the
obligations of the Company to the Debentureholder hereunder shall
forthwith cease and terminate.
3. ADJUSTMENTS FOR THE PURPOSES OF CONVERSION RIGHTS
3.1 The Conversion Price in effect at any date shall be subject to adjustment
from time to time as follows:
3.1.1 If and whenever at any time prior to the Maturity Date the
Company:
(a) issues Shares to the holders of Shares by way of a stock
dividend; or
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(b) subdivides or redivides the outstanding Shares into a greater
number of shares; or
(c) combines, reduces or consolidates the outstanding Shares into
a lesser number of shares;
(any such event being herein called a "Share Reorganization"),
the Conversion Price will be adjusted, effective immediately
after the record date at which holders of Shares are
determined for the purpose of such Share Reorganization, to a
price which is equal to the product of:
(i) the Conversion Price in effect immediately before such
record date; and
(ii) the fraction of which:
(A) the numerator is equal to the total number of
Shares that are outstanding on such record date
before giving effect to such Share Reorganization;
and
(B) the denominator is equal to the total number of
Shares that are or would be outstanding
immediately after such record date after giving
effect to such Share Reorganization and assuming
all rights to acquire Shares thereunder had then
been exercised.
3.1.2 If and whenever, at any time prior to the Maturity Date, there
is:
(a) a reclassification of the Shares outstanding, a change of
Shares into other shares or securities, or any other capital
reorganization of the Company except as described in
subsections 3.1.1 and 3.1.3;
(b) a consolidation, merger or amalgamation of the Company with or
into another corporation resulting in a reclassification of
the Shares outstanding or a change of Shares into other shares
or securities; or
(c) a transaction whereby all or substantially all of the
undertaking and assets of the Company become the property of
another corporation or entity
(any such event being herein called a "Corporate
Reorganization"), the Debentureholder who thereafter exercises
his right of conversion will be entitled to receive and will
accept, for the Conversion Price then in effect, in lieu of
the Shares to which he would otherwise have been entitled, the
kind and number or amount of shares or other securities or
property that he would have been entitled to receive as a
result of such Corporate Reorganization if, on the effective
date thereof, he had been the registered holder of the number
of Shares which he would have received had he so exercised
such right of conversion immediately before such effective
date.
3.1.3 If and whenever, at any time prior to the Maturity Date, the
Company issues by way of dividend or otherwise distributes to
all or substantially all holders of shares:
(a) shares of the Company;
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(b) evidence of indebtedness;
(c) any cash or other assets, excluding cash dividends;
(d) any rights, options or warrants to holders of Shares pursuant
to which the holders thereof are entitled to subscribe for,
purchase or otherwise acquire any Shares or securities
convertible or exchangeable into Shares;
and to the extent that such dividend or distribution does not
constitute an event described in subsections 3.1.1 and 3.1.2
(any of such non excluded events being herein called a
"Special Distribution") and effective immediately after the
record date at which holders of Shares are determined for
purposes of the Special Distribution, the Conversion Price
shall be reduced by such amount as is determined by the
Directors of the Company, acting reasonably, to be appropriate
in order to properly reflect the diminution of value of the
Shares as a result of such Special Distribution and the number
of Shares issuable upon conversion shall be correspondingly
increased.
3.2 The following rules and procedures will be applicable to adjustments made
pursuant to this Article 3:
3.2.1 the adjustments and readjustments provided for in this Article
3 are cumulative and, subject to subsection 3.2.2 below, will
apply (without duplication) to successive issues,
subdivisions, combinations, consolidations, distributions and
other events that require such an adjustment;
3.2.2 no such adjustment in the Conversion Price will be made unless
the price adjustment would result in an increase or decrease
of at least 1% in such Conversion Price, provided that any
such adjustment which, except for the provisions of this
subsection 3.2.2, would otherwise have been required to be
made, will be carried forward and taken into account in any
subsequent adjustment;
3.2.3 in the absence of a resolution of the Board of Directors of
the Company fixing a record date at which holders of Shares
are determined for purposes of any event referred to in this
Article 3, the Company will be deemed to have fixed as the
record date therefor the date at which the event is effected
or such other date as may be required by law;
3.2.4 in the event of any question arising with respect to the
application of any formula provided in this Article 3, such
questions shall be conclusively determined by the Board of
Directors whose determination shall be binding upon the
Company and the Debentureholder.
3.3 In the event of the occurrence of the matter referred to in subsection
3.1.1(a) and 3.1.3, no adjustment of the Conversion Price will be effected
pursuant to this Article 3, if the Debentureholder is allowed to
participate in such stock dividend or Special Distribution as if the
Debentureholder had exercised its conversion rights immediately prior to
such change becoming effective.
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3.4 The Company covenants with the Debentureholder that so long as the
Debenture remains outstanding, it will give notice to the Debentureholder,
in the manner provided in Article 10, of its intention to fix a record
date for any event referred to in subsections 3.1.1, 3.1.2 and 3.1.3,
other than any subdivision, redivision, reduction, combination or
consolidation of the Shares, which may give rise to an adjustment in the
Conversion Price, and, in each case, such notice shall specify the
particulars of such event and the record date and the effective date for
such event; provided that the Company shall only be required to specify in
such notice such particulars of such event as shall have been fixed and
determined on the date on which such notice is given. Such notice shall be
given not less than 10 days in each case prior to such applicable record
date. For a subdivision, redivision, reduction, combination or
consolidation of the Shares, the Company shall forthwith give notice to
the Debentureholder pursuant to Article 10 immediately after the
occurrence of such event.
3.5 The Company shall from time to time, upon the occurrence of any event
which requires an adjustment or readjustment as provided in Article 3,
deliver a notice in writing (an "Adjustment Notice") to the
Debentureholder specifying the nature of the event requiring the same, the
amount of the adjustment or readjustment and the new Conversion Price, and
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
3.6 Within the fifteen (15) Business Days next following receipt of an
Adjustment Notice, a Debentureholder may notify the Company that it
disputes the contents of the Adjustment Notice. In the event that the
parties are unable to resolve such dispute, the subject matter will be
conclusively determined by a firm of chartered accountants (other than the
Company's auditors) as may be selected by a majority in interest of the
Debentureholders and the Company. Such chartered accountants will be given
access to all necessary records of the Company and will deliver a notice
to the Company and the Debentureholders setting forth their determination
and the definitive adjustment or readjustment.
4. SUBORDINATION
4.1 The indebtedness and security evidenced by this Debenture will be
subordinate, subject and junior in right of payment, to the extent and in
the manner provided in this Article 4, without any further action or
documentation whatsoever being necessary to give effect to such
subordination, in right of payment to the prior payment in full of:
4.1.1 the obligations of the Company for principal, interest and
costs payable for money borrowed from HSBC Bank Canada which
are owing, in respect of which the Company has given security
pursuant to a security agreement registered at the Personal
Property Registry of British Columbia under base registration
numbers 677095A and 723300B over all present and
after-acquired property of the Company; and
4.1.2 the obligations of the Company to any other secured creditor
who has, prior to the date hereof, registered a financing
statement in respect of security granted by the Company to
such secured creditor, including the Prior Encumbrances set
out in Schedule "B" to the Subscription Agreement made between
the Company and the Debentureholder dated as of April 6, 2005
(together, the "Senior Debt").
4.2 Notwithstanding the above, the Debentureholder covenants that it will
direct the Collateral Agent (as defined below), to enter into any
agreement or do such acts or things as are reasonably
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required by a holder of Senior Debt to give effect to the subordination
provisions set out in Section 4.1.
5. SECURITY
5.1 In consideration of the advance of the Principal by the Debentureholder to
the Company and to secure the due payment of the Principal, interest in
accordance with Section 1.4 hereof and all monies now or at any time and
from time to time hereafter owing or payable by the Company to the
Debentureholder under the provisions of this Debenture (collectively the
"Obligations"), and as a general and continuing security for the payment
or other performance of the Obligations of the Company, the Company
hereby:
5.1.1 mortgages and charges by way of floating charge in favour of
the Debentureholder all of its present and after-acquired
undertaking and all of its present and after-acquired legal or
beneficial interest or estate in real or immovable property or
any other property other than personal property; and
5.1.2 grants to the Debentureholder a security interest in all of
the Company's present and after-acquired personal property
including, without limitation:
(a) all goods whether or not such goods are now or may in the
future become fixtures;
(b) all other personal property now owned or which may in the
future be acquired by or on behalf of the Company or in
respect of which the Company now or may in the future have any
right, title or interest and including, without limitation,
all accounts, chattel paper, documents of title (whether
negotiable or not), instruments, intangibles, money,
securities, contracts, licenses and other documents or records
in any form evidencing or relating to any of the foregoing
property;
(c) all renewal or, accretions to and substitutions for any of the
property described in subclauses (a) and (b) above; and
(d) all proceeds (including proceeds of proceeds) of any of the
property described in subclauses (a) and (b) above;
including, without limitation, a purchase-money security interest in such
collateral where applicable.
5.2 As additional security for the Obligations, the Company agrees to enter
into a general security agreement with the Collateral Agent (as defined
below) as agent for the Debentureholder in a form satisfactory to the
Collateral Agent.
5.3 The attachment of the security interest granted hereunder has not been
postponed and the security interest shall attach to any property of the
Company as soon as the Company has rights in such property.
5.4 For greater certainty, the security interest and other charges granted by
the Company pursuant to this Debenture secure payment, performance and
satisfaction of the Obligations.
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5.5 The last day of any term of years reserved by any lease, verbal or
written, or any agreement therefore, now held or hereafter acquired by the
Corporation is excepted out of the property hereby charged, but the
Corporation shall stand possessed of any such reversion upon trust to
assign and dispose thereof as the Debentureholder may direct. Where the
giving of a mortgage, charge and pledge or security interest on any real
or personal property held by the Corporation under lease requires the
consent of the lessor or sublessor of such property, the giving of the
mortgage, charge and pledge or security interest hereunder on such
property shall not take effect until such consent is obtained or legally
dispensed with but the suspension of the effect of the mortgage, charge
and pledge or security interest on such property shall not affect the
mortgage, charge and pledge or security interest on such property shall
not affect the mortgage, charge and pledge or security interest on any
other property of the Corporation.
6. APPOINTMENT OF COLLATERAL AGENT
6.1 The Debentureholder hereby appoints Esarbee Investments Limited, as
collateral agent (the "Collateral Agent"), as the agent of the
Debentureholder and attorney for the Debentureholder, with full power of
substitution, in the name and on behalf of the Debentureholder, to do all
acts and things as may be contemplated hereunder requiring the consent or
approval of the Debentureholder (but, for greater certainty, not including
the exercise of the Conversion Rights hereunder) or upon the occurrence of
an Event of Default pursuant to Article 6 hereof, subject to the terms and
conditions of the Collateral Agent Agreement between the Company and the
Collateral Agent dated as of April 6, 2005 (the "Collateral Agent
Agreement") attached hereto as Schedule "A".
6.2 No Debentureholder shall have any right to institute any action or
proceeding or to exercise any other remedy (not including the exercise of
Conversion Rights) pursuant to this Debenture or the general security
agreement referred to in Section 5.2 for the purpose of realizing on the
collateral charged hereby and thereby except by Holders' Action taken in
accordance with the Collateral Agent Agreement (as defined below).
7. REPRESENTATIONS AND WARRANTIES
7.1 The Company represents and warrants to the Debentureholder and
acknowledges that the Debentureholder is relying upon the representations,
warranties and covenants of the Company contained herein in connection
with the advance of the Principal, as follows:
7.1.1 the Company has all the necessary corporate power and capacity
to issue this Debenture and carry out and satisfy all its
obligations and conditions hereunder;
7.1.2 the issue of this Debenture was duly authorized by all
necessary corporate action of the part of the Company, its
directors and where applicable, its shareholders, as well as
by applicable regulatory authorities and third parties;
7.1.3 the obligations of the Company under this Debenture are valid
and binding on the Company and are enforceable against the
Company in accordance with its terms, subject to the customary
limitations with respect to bankruptcy, insolvency or other
laws affecting creditors' rights generally and to the
availability of equitable remedies;
7.1.4 the issue and sale of this Debenture and the compliance by the
Company of its terms do not and will not result in any
material breach, or violation of, or be in
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conflict with, or constitute a material default under, or
create a state of facts which after notice or lapse or time,
or both, would constitute a material default under, any term
or provision of the constating documents or by-laws of the
Company or any contract, mortgage, note, debenture, indenture,
joint venture or partnership agreement, lease, judgment,
decree, order, statute, rule, licence or regulation applicable
to the Company.
8. COVENANTS OF THE COMPANY
8.1 So long as the Debenture is outstanding or the Company has any obligations
hereunder, the Company covenants and agrees that:
8.1.1 The Company shall pay all principal and interest and other
amounts payable by it hereunder at the times and places and in
the manner provided herein;
8.1.2 The Company shall, and shall cause each subsidiary (other than
vertical amalgamations or mergers among wholly- owned
subsidiaries or between a subsidiary and the Company) to,
maintain its existence, power and capacity and carry on its
business in a commercially reasonable manner so as to preserve
and protect its undertaking and property and the revenues to
be earned therefrom;
8.1.3 The Company shall, and shall cause all subsidiaries to, comply
with all applicable laws which if not complied with would or
could reasonably be expected to result in a material adverse
change;
8.1.4 The Company shall, and shall cause the subsidiaries to, pay,
withhold and remit all Taxes required by applicable laws;
8.1.5 The Company shall, and shall cause the subsidiaries to,
maintain adequate books, accounts and records in accordance
with GAAP consistently applied;
8.1.6 The Company shall, on a consolidated basis, maintain with
responsible and reputable insurers, insurance in respect of
its undertaking and property against such casualties and
contingencies and in such types and in such amounts and with
such deductibles and other provisions as are customarily
maintained or caused to be maintained by persons engaged in
the same or similar businesses in the same jurisdictions under
similar conditions;
8.1.7 The Company shall promptly notify the Debentureholder in
writing of the occurrence of any default in connection with
any indebtedness or guarantee in an amount exceeding $50,000,
or any other occurrence which could, pursuant to such
indebtedness, prevent the Company from making, or the
Debentureholder from accepting and retaining, any payment of
principal or interest to the Debentureholder as required
hereunder.
8.2 So long as any Debentures are outstanding or the Company has any
obligations hereunder, the Company covenants and agrees that, without the
prior written consent of the Debentureholder Agent, it will not:
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8.2.1 declare or pay any dividends, purchase, redeem, retire or
otherwise acquire for value any of its capital to its
shareholders or make any distributions of assets to its
shareholders; and
8.2.2 modify or supplement its articles or by-laws.
8.3 So long as any Debentures are outstanding or the Company has any
obligations hereunder, the Company covenants and agrees that it will not
make any loans or guarantee the obligations of any other person, firm or
corporation (the "Financing"), other than a subsidiary, without providing
ten (10) days' prior written notice ("Loan Notice") to the
Debentureholder. If the Company has not received a written response
objecting to the proposed Financing from Debentureholders holding at least
51% of the aggregate principal amount of all Debentures within twenty-one
(21) days of the date of the Loan Notice, the Company may proceed with the
Financing.
9. DEFAULT AND EXECUTION
9.1 An event of default ("Event of Default") shall occur if:
9.1.1 the Company shall fail to pay to the Debentureholder any
amount of Principal or interest thereon when due and payable
hereunder;
9.1.2 any representations or warranties set forth in Article 7 are
incorrect in any material respect and the Company has failed
to cure such default within thirty (30) days after written
notice shall have been given to the Company by the
Debentureholder;
9.1.3 the Company shall fail to fulfill any of the covenants set
forth in Section 8 or Section 8.2 or perform or observe any
other terms, covenants or agreements contained herein on its
part to be performed and any such failure shall remain
unremedied for thirty (30) days after written notice shall
have been given to the Company by the Debentureholder;
9.1.4 other than in connection with the Company's obligations under
the convertible loan agreement (the "CLA") dated as of
February 24, 2000 between the Company and ICSOS S.A., the
Company and/or any of its subsidiaries shall fail to pay any
debt (including the Senior Debt) or other interest or premium
owing in an amount exceeding $50,000 when due and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such debt
(other than in the event that the debt does not relate to
monies borrowed and the Company is contesting its liability
therefore in good faith); or any other default under any
agreement or instrument relating to the such debt or any other
event shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to
accelerate or to permit the acceleration of the maturity of
the such debt; or any such debt shall be deemed to be due and
payable or required to be prepaid prior to the statutory
maturity thereof;
9.1.5 the Company and/or any of its subsidiaries shall admit in
writing its inability to pay its debts generally or shall make
a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Company or
any of its subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking
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liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee
or other similar official for it or for any substantial part
of its property which shall not be discharged within sixty
(60) days of appointment; or the Company or any of the
subsidiaries shall take any corporate action to authorize any
of the actions set forth above in this subsection 9.1.5);
9.1.6 any judgment or order for the payment of money, in the amount
of $50,000 or greater, shall be rendered against the Company
and/or any of its subsidiaries and either enforcement
proceedings shall have been commenced by any creditor upon
such judgment or order or there shall be any period of
twenty-one (21) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; and
9.1.7 any certificate or audit report with respect to the financial
statements of the Company herewith, heretofore or hereafter
furnished by or on behalf of the Company to the
Debentureholder, whether in connection with this Debenture or
otherwise, and whether furnished as an inducement to the
Debentureholder to extend any credit to or to enter into this
or any other agreement with the Company or not:
(a) proves to have been false in any material respect at the time
as of which the facts therein set forth were stated or
certified; or
(b) proves to have omitted any substantial, contingent or
unliquidated liability or claim against the Company.
9.2 The Company shall send a written notice to the Debentureholder (the
"Default Notice") advising them of an Event of Default not later than the
second (2nd) Business Day next following the occurrence thereof. If any
Event of Default shall have occurred and be continuing and in the event
that such default is not remedied within the five (5) days following the
date on which the Default Notice is to be given, the Debentureholder may
declare the principal and interest of the Debenture then outstanding to be
due and payable; in which event, anything herein to the contrary
notwithstanding, the principal amount and accrued interest shall forthwith
become immediately due and payable to the Debentureholder without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company.
9.3 Should an Event of Default occur, the Debentureholder may, at its option,
exercise its rights by any act, proceeding, recourse or procedure
authorized or permitted by law and may file its proof and any other
documents necessary or desirable so that the request of the
Debentureholder may be considered in any liquidation or other proceeding
with respect to the Company.
9.4 No remedy herein conferred upon or reserved to the Debentureholder is
intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now existing or hereafter to exist by law or by
statute.
9.5 The delay or omission of the Debentureholder to exercise any recourse
mentioned above shall not invalidate any such recourse nor be interpreted
as a waiver of any default hereunder.
11
9.6 The Debentureholder may waive any breach or default by the Company under
this Debenture and may waive its rights arising from the occurrence of an
Event of Default. No waiver or consent by the Debentureholder shall be
effective against or bind the Debentureholder unless it is in writing. Any
waiver or consent given by the Debentureholder or any failure on its part
to exercise any of its rights hereunder will not extend to or be taken in
any manner whatsoever to affect any subsequent breach or default or the
rights resulting or arising therefrom or to effect a waiver thereof.
9.7 Notwithstanding the above, should an Event of Default set out under
Section 9.1.4 occur, if the Debentureholder does not proceed with its
remedies under this Agreement within twenty-one (21) days of the date of
receipt of the Default Notice, the Debentureholder will not be entitled to
exercise any remedies with respect to such Event of Default.
9.8 The Company shall assume and pay all costs, charges and expenses including
solicitors' costs, charges and expenses as between solicitor and his own
client which may be incurred by the Debentureholder in respect of any
proceedings taken or things done by the Debentureholder or on its behalf
in connection with this Debenture to collect all amounts due hereunder or
otherwise exercise its rights, and the Company shall consent to those
costs, charges and expenses being charged.
10. ISSUANCE OF A REPLACEMENT DEBENTURE IN THE EVENT OF LOSS
10.1 In the event of the deterioration, loss, destruction or theft of this
Debenture, the Company shall, subject to Section 10.2, issue, sign and
deliver a new Debenture bearing the same date, the same Principal amount
and the same terms and conditions as the debenture so deteriorated, lost,
destroyed or stolen, in exchange for and in replacement of such
deteriorated debenture or in cancellation of such lost, destroyed or
stolen debenture.
10.2 The Debentureholder shall assume the cost of issuance of the replacement
debenture and shall also, as a condition to its issuance, provide to the
Company proof of the deterioration, loss, destruction or theft of the
original debenture which is reasonably acceptable to the Company,
including but not limited to a statutory declaration by the
Debentureholder or a senior officer thereof confirming such deterioration,
loss, destruction or theft and the Debentureholder may further be required
to deliver to the Company, at the Company's option, an indemnity in an
amount and a form satisfactory to the Company and to pay the reasonable
fees incurred by the Company with respect to such replacement.
11. NOTICE
11.1 Other than in the case of a general disruption of interruption in postal
services provided for below, all notices to be given hereunder shall be
deemed to be validly given to a party thereof if sent by telecopier or by
ordinary mail, postage prepaid, by letter or circular addressed to such
party at its post office address and shall be deemed to have been received
at the time effectively received if given by telecopier, and on the
seventh (7th) Business Day of uninterrupted postal service following the
day of mailing or at the time of actual delivery, if delivered.
If to the Company:
CRYOPAK INDUSTRIES INC.
0000 Xxxxxxx Xxx
Xxxxx, Xxxxxxx Xxxxxxxx
00
X0X 0X0
Telecopier: (000) 000-0000
Attention: President and Chief Executive Officer
If to the Debentureholder:
Esarbee Investments Limited
800 - 0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Oded Tal
The Company or the Debentureholder, as the case may be, may from time to time
notify the other in accordance with the provisions hereof, of any change
of address which thereafter, until changed by like notice, shall be its
address for all purposes of this Agreement. In the event of actual or
threatened postal interruption, notice shall be made by delivery or
telecopy. Receipt of a courtesy copy of any notice or other communication
shall not be a condition to the effectiveness thereof.
12. INTERPRETATION
12.1 A "trading day" means a day when the Shares of the Company have been
traded on the Exchange. Trading days shall be considered as "consecutive
trading days" notwithstanding the fact that the Shares of the Company may
not have been traded on the Exchange on any given date.
12.2 "Business Day" shall mean a day other than a Saturday, Sunday, or a day on
which Canadian Chartered banks are not open for business in the Province
of British Columbia. Any action required or permitted to be taken or made
hereunder on any day which is not a Business Day may be taken or made on
the next succeeding day that is a Business Day with the same force and
effect as if taken within the period for the taking of such action.
12.3 "Exchange" means the TSX Venture Exchange or such other stock exchange or
market on which the Shares may be listed or traded.
12.4. "Interest Period" means each consecutive calendar month from the date of
the issuance of this Debenture until the Maturity Date.
12.5 "Taxes" means all taxes of any kind or nature whatsoever including,
without limitation, income taxes, sales or value-added taxes, levies,
stamp taxes, royalties, duties, and all fees, deductions, compulsory loans
and withholdings imposed, levied, collected, withheld or assessed by any
governmental authority of or within Canada or any other jurisdiction
whatsoever having power to tax, together with penalties, fines, additions
to tax and interest thereon.
12.6 "Year" means the twelve (12) month period extending from the date of this
Debenture and from the anniversary of such date in each of the following
years up until the Maturity Date.
13
13. GENERAL MATTERS
13.1 The division of this Debenture into articles and the insertion of titles
shall not serve other than for purpose of consultation and shall have no
effect on the interpretation hereof.
13.2 For the purposes of all provisions under this Debenture, if the Company
sends a written notice to the Debentureholder(s) seeking the consent or
approval, as the case may be, of the Debentureholder(s) for any matter as
required by or in connection with this Debenture and the Company does not
receive any written notice back from the Debentureholder(s) withholding or
negating such consent or approval by the 10th Business Day (the "Deemed
Approval Date") after the date when the notice sent by the Company seeking
consent or approval is deemed to have been received pursuant to Section
11.1 hereof, then the Debentureholder shall be deemed to have granted
their consent or approval for the matter in question on the Deemed
Approval Date.
13.3 Unless otherwise expressly provided or unless the context otherwise
requires, words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall
include the feminine and neuter genders, all as the context may require.
13.4 Time shall be of the essence of this Debenture.
13.5 Each of the provisions contained in this Debenture is distinct and
severable and a declaration of invalidity, illegality or unenforceability
of any provision or part thereof by a court of competent jurisdiction
shall not affect the validity or enforceability of any other provision of
this Debenture.
13.6 Except as otherwise specifically provided, any reference in this Debenture
to any contract, agreement or any other instrument shall be deemed to
include references to the same as varied, amended, supplemented or
replaced from time to time, and any reference in this Debenture to any
enactment, including without limitation any statute, law, by law or
regulation, shall be deemed to include references to such enactment as re
enacted, amended or extended from time to time.
13.7 No modification, variation or amendment of any provision of this Debenture
shall be made except by written agreement, executed by the parties hereto
and no waiver of any provision hereof shall be effective unless in
writing.
13.8 This Debenture shall enure to the benefit of the Debentureholder and its
successors and permitted assigns and shall be binding upon the respective
successors and permitted assigns of the Company.
13.9 All references to "$" or dollars means lawful currency of Canada.
13.10 Notwithstanding any other provision of this Debenture, no Share or other
securities will be issued pursuant to this Debenture if the issuance of
such Shares or other securities would constitute a violation of the
securities laws of any jurisdiction or require the Company to prepare,
file or deliver any form of prospectus, registration statement, offering
memorandum, filing statement or any disclosure document similar to the
foregoing.
13.11 The Debentureholder acknowledges that the Shares or other securities to be
issued on exercise of this Debenture are subject to resale restrictions in
certain provinces or under the rules of any Exchange on which the Shares
may be listed.
14
13.12 The Debentureholder acknowledges that any certificate issued in respect of
the Shares or other securities issued upon the exercise hereof shall, if
subject to resale restrictions, bear a legend to that effect, and, without
limiting the generality of the foregoing, the certificates representing
the Shares issuable pursuant to this Debenture may bear such legends as
may, in the opinion of counsel to the Company after consultation with
counsel of the Debentureholder, be necessary in order to avoid a violation
of any securities laws of any jurisdiction, or to comply with the
requirements of any stock exchange on which the Shares are listed,
provided that if, at any time, in the opinion of counsel to the Company
after consultation with counsel of the Debentureholder, such legends are
no longer necessary in order to avoid a violation of any such laws, or the
holder of any such legended certificate, at its expense, provides the
Company with evidence satisfactory in form and substance to the Company
(which may include an opinion of counsel satisfactory to the Company) to
the effect that such holder is entitled to sell or otherwise transfer such
Shares in a transaction in which such legends are not required, such
legended certificates may thereafter be surrendered to the Company in
exchange for a certificate which does not bear such legends.
13.13 This Debenture, together with the Subscription Agreement made between the
Company and the Debentureholder dated as of April 6, 2005 and the
Collateral Agent Agreement, constitute the entire agreement between the
Company and the Debentureholder in respect of the purchase by the
Debentureholder of the Debenture and supercedes all prior agreements and
undertakings, both written and oral, between the Company and the
Debentureholder relating to purchase and sale of this Debenture and the
advance of the Principal and there are no warranties, representations,
terms, conditions or collateral agreements, expressed, implied or
statutory, other than those expressly set forth in this Debenture and in
the Subscription Agreement.
13.14 This Debenture and all documents ancillary hereto shall be governed by and
interpreted in accordance with the laws of the Province of British
Columbia, without regard to any conflicts of law principles, and the
federal laws of Canada applicable therein. Each of the parties hereto
irrevocably attorns to the non exclusive jurisdiction of the courts of the
Province of British Columbia.
14. ASSIGNMENT OF DEBENTURE
This Debenture is not a negotiable instrument. This Debenture may not be sold,
assigned or transferred to any person except with the prior written consent of
the Company.
IN WITNESS WHEREOF, Cryopak Industries Inc. has caused this Convertible
Debenture to be signed by its President and Chief Executive Officer and to be
dated as of the date set out above.
CRYOPAK INDUSTRIES INC.
Per:
-------------------------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
15
FORM OF CONVERSION NOTICE
(Article 2)
TO: CRYOPAK INDUSTRIES INC.
The undersigned, registered holder of the within Debenture, hereby irrevocably
elects to convert the present Debenture (or $_____________ of the aggregate of
the Principal thereof) for Shares of Cryopak Industries Inc. in accordance with
the terms and conditions of the present Debenture and directs that the Shares of
Cryopak Industries Inc. issuable and deliverable upon conversion be issued and
delivered to the person indicated below.
If less than the aggregate of the Principal under the present Debenture is to be
exchanged, indicate in the space provided the amount of the aggregate of the
Principal thereof to be exchanged.
Dated: _________________________________
_________________________________
(Signature of registered holder)
(If Shares of Cryopak Industries Inc. are transferable in compliance with all
applicable laws and are to be transferred and issued to a person other than the
registered holder, a form of transfer substantially in the form of the attached
Form of Transfer must be completed and the registered holder's signature must be
guaranteed by a chartered bank, by a trust company, or by a member firm of a
recognized stock exchange.)
Name:
________________________________________________________________________
(Print name in which Shares of Cryopak Industries Inc. transferable upon
conversion are to be transferred, delivered and registered)
________________________________________
(Address)
________________________________________
(City, province, country and postal code)
16
SCHEDULE A
COLLATERAL AGENT AGREEMENT
A-1
Schedule "B"
Prior Encumbrances Registered in British Columbia
------------------------------------------------------------------------------------------------------------
B.C. Base
Secured Party Description of Collateral Registration #
------------- ------------------------- --------------
------------------------------------------------------------------------------------------------------------
Bank of Montreal Instrument described as short term investment 9404997
certificate including all renewals and
replacements thereof, substitutions therefore,
accretions thereto and interest, income and
money therefrom and all proceeds thereof and
therefrom including accounts.
------------------------------------------------------------------------------------------------------------
Contract Funding Group Inc. (1) New Winpak L18 Pouch machine S/N 18262 and 293477A
all equipment under the lease, including all
goods, services, accessories, attachments,
replacements, substitutions and proceeds derived
therefrom.
------------------------------------------------------------------------------------------------------------
HSBC Bank Canada All of the debtor's present and after acquired 677095A
personal property and an uncrystallized floating
charge on land.
------------------------------------------------------------------------------------------------------------
AIG Credit Corp. of Canada All unearned premiums, dividends and loss 151679B
payments which reduce the unearned premium and
all tax and other refunds with respect to
insurance policies, as assigned to AIG Credit
Corp. of Canada.
------------------------------------------------------------------------------------------------------------
HSBC Bank Canada All of the debtor's present and after acquired 723300B
personal property and an uncrystallized floating
charge on land.
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