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EXHIBIT 3.18
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as of this 12th
day of November, 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") and HUXTABLE'S FOODS, LLC., a
Delaware limited liability company (the "Vendor"),
WHEREAS:
A. In accordance with the terms and conditions of the Asset Purchase
Agreement, dated as of November 12, 1999 (the "Asset Purchase Agreement")
by and among the Company, International Menu Solutions USA, Inc. (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of the
Company, and the Vendor, the Company has agreed to issue to the Vendor in
partial payment of the Purchase Price for the Purchased Assets (each as
defined in the Asset Purchase Agreement) certain shares of Common Stock in
IMSC; and
B. As a condition to the Closing under the Asset 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");
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, each of the Company and the Vendor
hereby agrees 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
(as defined below) in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC (as defined below);
d. "Registrable Securities" means that number of shares of Common Stock
as is properly issuable from time to time to the Vendor or its
members pursuant to the Asset Purchase Agreement, 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 Asset Purchase Agreement.
2. REGISTRATION PROVISIONS.
2.1 If the Company, at any time within a period of either (a) four (4) years
from the date hereof to the extent that the Vendor elects to receive the
2001 Final Payment pursuant to Section 205(c) of the Asset Purchaser
Agreement or (b) five (5) years from the date hereof to the extent that
the Vendor elects to receive the 2002 Final Payment pursuant to Section
2.05(e) of the Asset Purchase Agreement, proposes to register any of its
Common Stock under the 1933 Act on any forms other than on Form S-4 or
S-8, 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 Vendor 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 business 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 or subsequently obtain piggyback rights superior to
the Vendor and is exercising such rights; and (iii) third, the Registrable
Securities of the Vendor requested to be included in such registration,
pro rata with the applicable securities of any party or parties holding
piggyback rights equal to the rights of the Vendor and is exercising such
rights.
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
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the following priority to the 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
Vendor's 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
Vendor both in respect of shares of Common Stock which it may hold at the
relevant time and in respect of shares of Common Stock which it may hold
in the future pursuant to the Asset Purchase Agreement, 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
favor 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 reasonable 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 the Vendor without charge promptly after the
same is prepared and filed with the SEC copies of the Registration
Statement and any amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all
exhibits, and the prospectus(es) included in such Registration Statement,
in such numbers as the Vendor may reasonably request.
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, 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 the Vendor of the issuance of such order and the
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 the Vendor provided to the Company unless: (i)
disclosure of such information is necessary to comply with federal or
state securities laws; (ii) the disclosure
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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 Agreement. The
Company agrees that it shall, upon learning the disclosure of such
information concerning the Vendor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt written notice to the Vendor and allow the Vendor, at the Vendor's
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
3.5 The Company shall furnish, without charge, to the Vendor such number of
prospectuses and other documents incident thereto as the Vendor from time
to time reasonably requests in writing in order to facilitate the
disposition of the Registrable Securities in accordance with the plan of
disposition set forth for the Vendor in the Registration Statement of
which such prospectus forms a part.
3.6 The Company shall notify the Vendor promptly and (if requested by the
Vendor) 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 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 the Company 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, any prospectus or any 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.
3.7 The Company shall, upon the occurrence of any event referred to in Section
3.6(iv) above, use its reasonable 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.
3.8 The Company shall cause all such Registrable Securities to be listed on
each securities exchange on which the Common Stock are then listed.
4. OBLIGATIONS OF THE VENDOR.
4.1 At least twenty (20) days prior to the first anticipated filing of the
Registration Statement, the Company shall notify the Vendor in writing of
the information the Company requires
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from the Vendor if the Vendor elects to have any of its 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
the 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 The 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 the Vendor has notified the
Company in writing of the Vendor's election to exclude all of the Vendor's
Registrable Securities from the Registration Statement.
5. INDEMNIFICATION AND CONTRIBUTION.
a. IMSC shall indemnify and hold harmless the Vendor, its members,
managers, directors and officers (if any), each underwriter, within
the meaning of the 1933 Act, who may purchase from or sell for the
Vendor 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 upon information furnished in writing 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
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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 upon information furnished in writing
to IMSC by a Seller expressly for use therein.
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
hereunder, 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
from 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. 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 5 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
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contribute to the amount paid or payable by such 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.
Except for any underwriting discount or commission attributable to the
Registrable Securities sold by the Vendor, all expenses of any nature incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3 shall be borne by the Company.
7. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Vendor 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 Vendor to sell securities of the Company to
the public without registration ("Rule 144"), the Company agrees to use its
commercially reasonable efforts 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 the Vendor so long as the Vendor owns Registrable
Securities promptly upon request, (i) a written statement by the
Company that it 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 requested to permit the Vendor to sell the
Registrable Securities pursuant to Rule 144 without registration.
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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 the Vendor. Any
amendment or waiver effected in accordance with this Section 8 shall be binding
upon the 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) the business day following the date
sent by facsimile (with receipt confirmed); (iii) three (3) days
after being sent by certified or registered mail, return receipt
requested, or (iv) one (1) business 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 Company:
International Menu Solution Corporation
350 Creditstone Road
Concord, Ontario
L4K 3Z2
Attention: Michael A. Steele
Telecopier No.: (905) 660-4585
with a copy to:
McCarter Grespan Robson Beynon
675 Riverbend Drive
Kitchener, Ontario
N2K 3S3
Attention: Thomas D. Beynon, Q.C.
Telecopier No.: (519) 742-1841
If to the Vendor:
Huxtable's Foods, L.L.C.
c/o Yellowstone Capital, Inc.
1100 Louisiana, Suite 5005
Houston. Texas 77002
Attention: Omar A. Sawaf.
Telecopier No.: (713) 650-0055
and
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c/o Austin Ventures
Norwood Tower, 13th Floor
114 West 7th St.
Austin, Texas 78701
Attention: Blaine Wesner
Telecopier No.: (512) 485-1995
with a copy to:
Locke Liddell & Sapp LLP
2600 Chase Tower
600 Travis
Houston. Texas 77002
Attention: Gene G. Lewis
Telecopier No.: (713) 223-3717
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 State of New York, without regard to conflicts
of law principles. 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 (together with the Asset Purchase 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, provided that the Vendor may assign its rights
hereunder to its members in connection with a distribution of the
Registrable
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Securities to its members, but the Company shall only be required to
provide notices hereunder to the Vendor or its designee.
f. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof
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.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement to be
executed as of the date first above written.
INTERNATIONAL MENU SOLUTIONS
CORPORATION
By: /s/ M. A. Steele
------------------------------------
Name: M. A. Steele
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Title: President
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HUXTABLE'S FOODS, L.L.C.
By:_____________________________________
Name: __________________________________
Title: _________________________________
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IN WITNESS WHEREOF the parties hereto have executed this Agreement to be
executed as of the date first above written.
INTERNATIONAL MENU SOLUTIONS
CORPORATION
By:_____________________________________
Name: __________________________________
Title: _________________________________
HUXTABLE'S FOODS, L.L.C.
By: /s/ Clifford C. Maynard
------------------------------------
Name: Clifford C. Maynard
----------------------------------
Title:
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