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EXHIBIT 3.16
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT MADE AS OF THE 18 DAY OF October, 1999.
BY AND AMONG:
INTERNATIONAL MENU SOLUTIONS CORPORATION, a corporation incorporated
under the laws of the State of Nevada,
(sometimes referred to herein as "IMSC" or the "Company"),
OF THE FIRST PART,
- and -
XXXXXXX XXXXXXXX, of the City of Baie D'Urfe in the Province of
Quebec
(hereinafter called "Xxxxxxx")
OF THE SECOND PART,
- and -
XXXX XXXXXXXX, of the City of Baie D'Urfe in the Province of Quebec
(hereinafter called "Xxxx"),
OF THE THIRD PART,
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XXXXX AND XXXXXX INTERNATIONAL INC., a corporation incorporated
under the laws of Canada,
(hereinafter called "FNII"),
OF THE FOURTH PART,
(Xxxxxxx, Xxxx and FNII being hereinafter collectively called the
Vendors" and individually called a "Vendor")
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WHEREAS:
A. In accordance with the terms and conditions of Share Purchase Agreement
made the 5th day of October, 1999 (the "Share Purchase Agreement") between
the Company, International Menu Solutions Inc. ("IMSI"), a wholly-owned
subsidiary of the Company, and the Vendors, the Company has agreed, upon
the terms and subject to the conditions of the Share Purchase Agreement,
(i) to issue to the Vendors in partial payment of the Purchase Price for
the Purchased Shares (each as defined in the Share Purchase Agreement),
250,000 Class E Special Shares, Series 5 and 250,000 Class E Special
Shares, Series 6, (collectively, the "Special Shares") in the capital of
IMSI; and
B. As a condition to the Closing under the Share Purchase Agreement, the
Company has agreed to provide certain registration rights under the United
States Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933
Act"), and applicable state securities laws;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Vendors hereby
agree as follows:
1. DEFINITIONS.
Unless otherwise defined in this agreement or in the recitals hereto, the
following terms shall be deemed to have the following meanings:
a. "Common Stock" means common shares in the capital stock of the
Company;
b. "Person" means any corporation, limited liability company,
association, partnership, organization, business, individual or
governmental agency;
c. "Register, "registered", and "registration" refer to a registration
effected by preparing and filing one or more Registration Statements
in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on
a continuous basis ("Rule 415"), and the declaration or ordering of
effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "5EV);
d. "Registrable Securities" that number of shares of Common Stock as is
properly issuable from time to time in accordance with the
provisions of the Special Shares, as adjusted from time to time to
reflect subdivisions, consolidations and changes to the Common Stock
from time to time;
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e. "Registration Statement" means a registration statement of the
Company filed under the 1933 Act;
f. "SEC" means the United States Securities and Exchange Commission or
any successor entity.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Share Purchase Agreement.
2. REGISTRATION PROVISIONS.
2.1 If, the Company, at any time within five (5) years from the date hereof,
proposes to register any of its equity securities under the 1933 Act on
any forms other than on Form S-4 or S-B, or any successor or similar
forms, and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the
Company shall give prompt written notice to the Vendors of its intention
to effect such a registration and shall include (subject to the provisions
hereof) in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein
within 10 days after the receipt of the Company's notice.
2.2 If a Piggyback Registration is an underwritten primary distribution
registration on behalf of the Company, and the managing underwriters
advise the Company in writing that, in their opinion, the number of
securities requested to be included in such distribution or registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company or without adversely
affecting the marketability of the offering, the Company shall include in
such distribution or registration all or a portion of the following
securities in the following priority to the extent that the managing
underwriters deem advisable: (i) first, the securities the Company
proposes to sell; (ii) second, those securities granted to any party or
parties which obtained piggy back rights prior to the Vendor and is
exercising such rights; and (iii) third, the Registrable Securities of The
Vendors requested to be included in such registration.
2.3 If a Piggyback Registration is an underwritten secondary distribution or
registration on behalf of holders of the Company's securities or
securities convertible into the Company's securities, and the managing
underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such distribution or
registration exceeds the number which can be sold in an orderly manner in
such offering within a price range acceptable to the holders initially
requesting such distribution or registration, The Company shall include in
such registration or distribution securities in the following priority to
the
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extent that the managing underwriters deem advisable: (i) first, the
securities requested to be included therein by the holders requesting such
distribution or registration; and (ii) second, the Registrable Securities
requested to be included in such distribution or registration.
2.4 It is hereby expressly agreed by the parties hereto that all of the
Vendors' rights and privileges as set forth in this Section 2 and
elsewhere herein shall enure to the benefit of and may be exercised by the
Vendors both in respect of shares of Common Stock which they may hold at
the relevant time and in respect of shares of Common Stock which they may
hold in the future upon the exercise of the rights and privileges attached
to the Special Shares held by them, provided that, in such latter case, at
the time that they exercise the rights and privileges as set forth in this
Section 2 or elsewhere herein, they also covenant in favour of the Company
to deliver the appropriate number of shares of Common Stock to the
relevant parties at the relevant time.
3. ADDITIONAL REGISTRATION PROCEDURES.
3.1 The Company shall promptly prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus(es) used in connection with the Registration
Statement, which prospectus(es) are to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep the
Registration Statement effective at all times during the applicable
periods specified herein, and, during each such period, comply with the
provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration
Statement (as such securities may be split, reverse split or otherwise
changed from time to time in order to give full effect to any stock
dividends or similar transaction applicable to the Registrable
Securities). The Company shall use its best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof.
3.2 The Company shall furnish to each Vendor without charge promptly after the
same is prepared and filed with the SEC at least ten (10) copies of the
Registration Statement and any amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference
and all exhibits, the prospectus(es) included in such Registration
Statement.
3.3 The Company shall use its commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of The qualification of any of
the Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order or
suspension at the earliest possible moment and to notify each Vendor of
the issuance of such order and the
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resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.
3.4 The Company shall hold in confidence and not make any disclosure of
information concerning a Vendor provided to the Company unless: (i)
disclosure of such information is necessary to comply with federal or
state securities law; (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration
Statement; (iii) the release of such information is ordered pursuant to. a
subpoena or other final, non-appealable order from a court or governmental
body of competent jurisdiction; or (iv) such information has been made
generally available to the public other than by disclosure in violation of
this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning a Vendor is sought
in or by a court or governmental body of competent jurisdiction or through
other means, give prompt written notice to such Vendor and allow such
Vendor, at the Vendors expense, to undertake appropriate action to prevent
disclosure of or to obtain a protective order for, such information.
3.5 The Company shall cooperate with The Vendors who exchange the Special
Shares for Registrable Securities so as to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities which have the benefit of
an effective Registration Statement.
3.6 The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.
3.7 The Company shall furnish, without charge, to the Vendors such number of
prospectuses and other documents incident thereto as the Vendors from time
to time reasonably request in writing in order to facilitate the
disposition of the Registrable Securities in accordance with the plan of
disposition set forth for the Vendors in the Registration Statement of
which such Prospectus forms a part.
3.8 The Company shall notify the Vendors promptly and (if requested by the
Vendors) confirm such notice in writing (i) when a Registration Statement
or post-effective amendment to a Registration Statement has been filed,
and, with respect to a Registration Statement or any post-effective
amendment thereto, when the same has become effective, (ii) of the
issuance or threat of issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iii) of the receipt by IMSC of any
notification with respect to the suspension or threat of suspension of the
qualification of any of the Registrable Securities for sale in any state
in which such sale has previously been qualified or the initiation of any
proceeding for such purpose, or (iv) of The occurrence of any event which
makes any statement made in the Registration Statement, the Prospectus or
any
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document incorporated therein by reference untrue or which requires any
revisions to the Registration Statement or Prospectus so that they do not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading.
3.9 The Company shall, upon the occurrence of any event referred to in Section
3.8(ii) or (iv) above, use its best efforts to promptly prepare a
post-effective amendment to the applicable Registration Statement or
supplement to the related Prospectus so that, as thereafter delivered to
the purchasers of the Registrable Securities being sold thereunder, such
Prospectus does not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading.
3.10 The Company shall make reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement or
suspending the qualification of the Registrable Securities for sale in any
state where they have previously been qualified.
3.11 The Company shall cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company
are then listed.
4. OBLIGATIONS OF THE VENDORS.
4.1 At least thirty (30) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each Vendor in
writing of the information the Company requires from each such Vendor if
such Vendor elects to have any of such Vendors Registrable Securities
included in the Registration Statement. It shall be a condition precedent
to the obligations of the Company to complete the registration pursuant to
this Agreement with respect to the Registrable Securities that each Vendor
shall furnish to the Company such information regarding itself, as shall
be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.
4.2 Each Vendor agrees to cooperate with the Company as reasonably requested
by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Vendor has notified the
Company in writing of such Vendors election to exclude all of such Vendors
Registrable Securities from the Registration Statement.
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5. INDEMNIFICATION AND CONTRIBUTION.
(a) IMSC shall indemnify and hold harmless each Vendor, its directors
and officers (if any), each underwriter, within the meaning of the
1933 Act, who may purchase from or sell for the Vendors any
Registrable Securities and any person or entity who "controls" any
of the foregoing within the meaning of the 1933 Act (each, a
"Seller") from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation, amounts paid
in settlement of any litigation, commenced or threatened, or claim
based upon matters covered by the indemnities provided for in this
sentence, and expenses reasonably incurred in defending against any
such commenced or threatened litigation or claims), joint or
several, to which such Seller may become subject which arise out of
or are based on any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement, Prospectus
or other document incident to any registration, qualification or
compliance (or in any related registration statement, notification
or the like) required to be filed or furnished by reason of this
Agreement or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses are caused by
any such untrue statement or alleged untrue statement or omission or
alleged omission based solely upon written information furnished or
required to be furnished to IMSC by such Seller expressly for use
therein.
(b) Each Seller, severally and not jointly, shall be obligated to
indemnify IMSC, its directors and officers and each person, if any,
who "controls" IMSC within the meaning of the 1933 Act (each, an
"IMSC Affiliate"), from and against any and all losses, claims,
damages, liabilities and expenses (including, without limitation,
amounts paid in settlement of any litigation, commenced or
threatened, or claim based upon matters covered by the indemnities
provided for in this sentence, and expenses reasonably incurred in
defending against any such commenced or threatened litigation or
claims), joint or several, to which such IMSC Affiliate may become
subject which arise out of or are based on any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or other document incidental to
any registration, qualification or compliance (or in any written
related registration statement, notification or the like) required
to be filed or furnished by reason of this Agreement or caused by
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, based solely upon written information
furnished or required to be furnished to IMSC by a Seller expressly
for use therein, provided that the maximum liability of the Vendors
pursuant to this paragraph (b) shall be limited to the
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net amount of proceeds received by the Vendors from the sale of
Registrable Securities pursuant to such Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if
a claim in respect Thereof is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the
commencement thereof. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and counsel to the
indemnified party shall have reasonably concluded that there may be a
conflict between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different form or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of its election so to assume
the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed counsel in connection
with the assumption of legal defenses in accordance with the provision of
the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more
than one separate counsel representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section is held by a court of
competent jurisdiction to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by such
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indemnified party as a result of any losses, claims, damages, liabilities
or expenses referred to herein in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection with the statements or
omissions which resulted in such loss, claim, damage, liability or expense
as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
unindemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
6. EXPENSES OF REGISTRATION.
All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, accounting fees, and fees and disbursements of legal counsel of
the Company shall be borne by the Vendors, in accordance with the proportion of
the total gross proceeds received by the Vendors.
7. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Vendors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Vendors to sell securities of the Company to
the public without registration ("Rule 144"), the Company agrees to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements and the filing
of such reports and other documents is required for the applicable
provisions of Rule 144; and
c. furnish to each Vendor so long as such Vendor owns Registrable
Securities promptly upon request, (i) a written statement by the
Company that is has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company and, (iii) such other information
as may be reasonably
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requested to permit the Vendors to sell the Registrable Securities
pursuant to Rule 144 without registration.
8. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and each of the
Vendors. Any amendment or waiver effected in accordance with this Section 8
shall be binding upon each Vendor and the Company.
9. GENERAL.
a. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, the business day
following the date sent by facsimile (with receipt confirmed); (iii)
three (3) days after being sent by mail, or (iv) one business (1)
day after deposit with an internationally recognized overnight
delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers of such
communications shall be:
If to the Corporation:
International Menu Solutions Corporation
000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X0X0
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
XxXxxxxx Grespan Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx 0. Xxxxxx, Q.C.
Telecopier No.: (000) 000-0000
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If to the Vendors:
c/o Xxxxxxx Xxxxxxxx
0X Xxxxx Xxxxx
Xxxx X'Xxxx, Xxxxxx
X0X 0X0
with a copy to:
Xxxxxxxx Xxxxxxxxxx
0000 Xxxx Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
Each party shall provide five (5) days' prior written notice to the
other party of any change in address or facsimile number.
b. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or any delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.
c. This Agreement shall be governed by and interpreted in accordance
with the laws of the Province of Ontario. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction.
d. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein, with respect to the subject matter
hereof. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject
matter hereof. For greater certainty, this Agreement overrides any
reference to registration rights in any other agreement between the
parties hereto.
e. This Agreement shall enure to the benefit of and binds the parties
and their respective heirs, executors, administrators, personal and
legal representations, successors and permitted assigns. This
Agreement and the rights hereunder shall not be assigned by any of
the parties to this Agreement without the prior consent of all of
the parties hereto.
f. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
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g. This Agreement may be executed (by original or facsimile signature)
in two or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same
agreement.
h. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
IN WITNESS WHEREOF the parties hereto have executed this Registration Rights
Agreement to be executed as of date first above written.
INTERNATIONAL MENU SOLUTIONS
CORPORATION
Per: /s/
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Per: /s/
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/s/ Xxxxxxx Xxxxxxxx
----------------------------------- ----------------------------------------
Witness XXXXXXX XXXXXXXX
/s/ /s/ Xxxx Xxxxxxxx
----------------------------------- ----------------------------------------
Witness Xxxx XXXXXXXX
XXXXX AND NORTON
INTERNATIONAL INC.
Per: /s/
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