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EXHIBIT 3.8
Certificate No.: W-003 No. of Warrants: 62,500
WARRANTS
to Acquire Common Shares
of
INTERNATIONAL MENU SOLUTIONS CORPORATION
(Incorporated under the laws of the State of Nevada)
THIS IS TO CERTIFY THAT
FIRST ONTARIO FUND
234 Eglinton Avenue East
Suite 310
Toronto, Ontario
M4P 1K5
(the "holder") is the registered holder of the number specified above of
warrants (the "Warrants") of International Menu Solutions Corporation (the
"Corporation"), each of which entitles the holder, upon payment of $2.62 (the
"Conversion Price") in cash to acquire one fully paid and non-assessable common
share (a "Common Share") in the capital of the Corporation, subject to
adjustment as hereinafter provided, by surrendering to the Corporation at its
principal office in the Province of Ontario or to any other person at any other
place designated by the Corporation during normal business hours on a business
day at such place during the exercise period hereinafter referred to, this
Warrant Certificate, with a notice of exercise in the form annexed hereto duly
completed and executed by the holder, and payment of the applicable exercise
price.
The Warrants are being issued pursuant to a subscription agreement dated the
date hereof between the holder and the Corporation. The Warrants may be
exercised by the holder at any time and from time to time during the period
commencing on the date hereof and ending at 5:00 p.m. (Toronto time) on the
earlier of (i) the second anniversary of the Closing of the transaction whereby
the whole of the holder's loan to IMSI is converted to Common Shares pursuant to
a Forced Conversion (as such term is defined in the loan agreement dated the
date hereof between the Corporation, International Menu Solutions Inc., Bank of
Montreal Capital Corporation and the holder (the "Loan Agreement")); and (ii)
May 10, 2005 (the "Time of Expiry"). The holder may exercise less than all of
the Warrants evidenced by this Warrant Certificate.
Issuance of Share Certificates
As soon as practicable and in any event not later than the fifth business day on
which the transfer registers for the Common Shares have been open after the
exercise of any Warrant, after the surrender to the Corporation of this Warrant
Certificate in accordance with the foregoing, the Corporation will deliver to
the person or persons in whose name or names the Common Shares are to be issued
at its address shown on the notice of exercise, certificates representing the
Common Shares so acquired and, to the extent less than all of the Warrants
represented by this Warrant Certificate are exercised, a Warrant Certificate
representing the unexercised balance of Warrants.
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Rights of Holder Upon Exercise of all Warrants
On and after the date of exercise of all of the Warrants evidenced by this
Warrant Certificate, the holder will have no rights hereunder except to receive
certificates representing the Common Shares thereby issued to it upon surrender
of this Warrant Certificate to the Corporation at its principal office in the
Province of Ontario, or to any other person or at any other place designated by
the Corporation, during normal business hours on a business day at such place.
Fractions of Shares
No fraction of a Common Share shall be issued or transferred on the exercise or
deemed exercise of any Warrant. To the extent that any Warrant evidenced hereby
confers the right to acquire a fraction of a Common Share, the holder of such
Warrant shall be entitled to receive a cash payment equal to the fraction that
the holder would otherwise be entitled to receive multiplied by the Conversion
Price.
Compliance with Securities Laws
No Common Share will be issued or transferred pursuant to any Warrant if the
issuance or transfer of such Common Share would constitute a violation of the
securities laws of any applicable jurisdiction.
Adjustments
The rights of the holder, including the number of Common Shares to which it is
entitled upon the exercise of the Warrants, will be adjusted as provided in, and
in accordance with the provisions of, this Warrant Certificate and for such
purposes and as used herein (i) "Adjustment Period" means the period commencing
on the date hereof and ending at the Time of Expiry, and (ii) "Share Rate" means
the rate at which Common Shares may be acquired upon the exercise of any
Warrant, which rate, subject to adjustment as aforesaid, will be one Common
Share for each Warrant as of and from the date hereof.
If and whenever at any time during the Adjustment Period, the Corporation shall
(i) subdivide or redivide the outstanding Common Shares into a greater number of
Common Shares, (ii) consolidate, combine or reduce the outstanding Common Shares
into a lesser number of Common Shares, or (iii) issue Common Shares to all or
substantially all of the holders of Common Shares by way of a stock dividend or
other distribution, then, in each such event, the Share Rate will, on the
effective date of or the record date for such event, be adjusted to equal the
rate determined by multiplying the Share Rate in effect immediately prior to
such date by a fraction, of which the denominator shall be the total number of
Common Shares outstanding on such date immediately prior to giving effect to
such event, and the numerator shall be the total number of Common Shares
outstanding on such date after giving effect to such event. Such adjustment will
be made successively whenever any such event shall occur.
If and whenever at any time during the Adjustment Period, there is (i) any
reclassification of the Common Shares at any time outstanding, any change of the
Common Shares into other shares, securities or property or any other capital
reorganization of the Corporation (other than as described in the preceding
paragraph), (ii) any consolidation, amalgamation, arrangement, merger or other
form of business combination of the Corporation with or into any other
corporation or entity or otherwise resulting in any such reclassification or
change or any other capital reorganization of the Corporation, or (iii) any
sale, lease, exchange or transfer of the undertaking or assets of the
Corporation as an entirety or substantially as an entirety to one or more
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other corporations or entities, then, in each such event, the holder of any
Warrant which is thereafter exercised will be entitled to receive, and shall
accept, in lieu of the number of Common Shares to which the holder was
theretofore entitled upon such exercise or deemed exercise, the kind and number
or amount of shares or other securities or property which the holder would have
been entitled to receive as a result of such event if, on the effective date
thereof, the holder had been the registered holder of the number of Common
Shares to which the holder was theretofore entitled upon such exercise. If
necessary as a result of any such event, appropriate adjustments will be made in
the application of the provisions set forth in this paragraph with respect to
the rights and interests thereafter of the holder to the end that the provisions
set forth in this paragraph will thereafter correspondingly be made applicable
as nearly as may reasonably be in relation to any shares or other securities or
property thereafter deliverable upon the exercise of any Warrant.
If and whenever at any time during the Adjustment Period, the Corporation shall
take any action affecting the Common Shares (other than as described in the two
immediately preceding paragraphs), which, in the opinion of the directors of the
Corporation, would materially adversely affect the rights of the holder, the
Share Rate shall be adjusted in such manner and at such time, by action by the
directors, in their sole discretion as they may determine to be equitable in the
circumstances, acting reasonably, provided that no such adjustment will be made
unless the prior approval of any stock exchange on which the Common Shares are
listed for trading, if required, has been obtained. In the event the directors
of the Corporation determine by resolution to take no action to make such an
adjustment, such resolution shall be conclusive evidence that the directors have
determined that it is equitable in the circumstances to make no adjustment. In
the event that any such adjustment is made, the Corporation shall deliver a
certificate to the holder describing such adjustment.
In any case in which the three immediately preceding paragraphs shall require
that an adjustment shall become effective immediately after a record date for or
effective date of an event referred to herein, the Corporation may defer, until
the occurrence and consummation of such event, issuing to the holder of any
Warrant exercised after such record date or effective date and before the
occurrence and consummation of such event the additional Common Shares or other
securities or property issuable upon such exercise or deemed exercise by reason
of the adjustment required by such event; it being understood and agreed that
this Warrant Certificate shall thereupon be and be deemed to be evidence of the
holder's right to receive such additional Common Shares or other securities or
property upon the occurrence and consummation of such event and the right to
receive any dividend or other distribution in respect of such additional Common
Shares or other securities or property declared in favour of the holders of
record of Common Shares or of such other securities or property on or after the
exercise date, or such later date as at which the holder would, but for the
provisions of this paragraph, have become the holder of record of such
additional Common Shares or of such other securities or property pursuant to the
provisions hereof.
The adjustments provided for herein are cumulative, shall be computed to the
nearest one whole Common Share and will apply (without duplication) to
successive subdivisions, consolidations, distributions, issuances or other
events resulting in any adjustment under the provisions herein, provided that,
notwithstanding any other provision of this Warrant Certificate, no adjustment
of the Share Rate will be required (i) unless such adjustment would require an
increase or decrease of at least 1% in the Share Rate then in effect (provided,
however, that any adjustment which by reason of this subsection is not required
to be made will be carried forward and taken into account in any subsequent
adjustment), or (ii) in respect of any Common Shares issuable or issued pursuant
to any stock option or stock purchase plan in force from time to time for
directors, officers, employees or other service providers of the Corporation or
of subsidiaries of the Corporation or pursuant to the Warrants.
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In the event of any question arising with respect to the adjustments provided in
this Warrant Certificate, such question shall be conclusively determined by such
firm of chartered accountants as is appointed by the Corporation and acceptable
to the holder. Such accountants shall have access to all necessary records of
the Corporation and such determination, absent manifest error, shall be binding
upon the Corporation and the holder.
Upon a determination by the Corporation to take any action which would require
an adjustment in any of the rights under the Warrants, the Corporation will take
any action which may, in the opinion of counsel to the Corporation, be necessary
in order that the Corporation or its respective successors or successors to its
undertaking or assets, will be obligated to (and may validly and legally) issue
or transfer, as the case may be, all the Common Shares or other securities or
property which the holder would be entitled to receive thereafter on the
exercise in accordance with the provisions hereof.
At least five business days before the earlier of the effective date of or
record date for any event referred to above that requires or might require an
adjustment in any of the rights under the Warrants, the Corporation will give
notice to the holder of the particulars of such event and, to the extent
determinable, any adjustment required.
Upon each change in the Share Rate, the then applicable Conversion Price shall
be automatically adjusted, such that the Conversion Price thereafter shall be
equal to the product of the following formula:
New Conversion Price = Existing Conversion Price x Prior Share Rate
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New Share Rate
Covenants of the Corporation
The Corporation covenants with the holder that, so long as any of the Warrants
remain outstanding and may be exercised, unless otherwise consented to in
writing by the holder, it will:
(a) at all times maintain its corporate existence and that of its
subsidiaries and diligently preserve all of their respective rights,
powers, privileges and goodwill;
(b) have reserved for issuance such number of Common Shares as may be
issuable from time to time upon due exercise of the Warrants, and
such Common Shares, when issued on the due exercise of the Warrants,
will be issued as filly paid and non-assessable;
(c) not take any action which would have the effect of preventing the
holder from exercising any of the Warrants or receiving any of the
Common Shares upon such exercise;
(d) promptly make all requisite filings, including filings with
appropriate securities commissions and stock exchanges, if
applicable, in connection with the creation and sale of the
Warrants, the exercise of the Warrants and the issue or transfer of
the Common Shares issuable thereunder;
(e) on or before April, 2000, use its best efforts to obtain a final
receipt for an effective Registration Statement (or if the Common
Shares are listed for trading on The Toronto Stock Exchange, a
Prospectus in the Province of Ontario) which will qualify the Common
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Shares as free trading shares which are not subject to any hold
periods or resale restrictions, and to pay all listing fees in
connection with the listing of the Common Shares on such stock
exchange(s) as the common shares of the Corporation regularly trade:
(f) cause the Common Shares and the certificates representing the Common
Shares from time to time acquired pursuant to the exercise of the
Warrants to be duly issued and delivered in accordance with the
provisions hereof;
(g) comply and cause it subsidiaries to comply with all of the terms,
provisions and obligations contained in the Loan Agreement; and
(h) carry on and conduct the business of the Corporation, on a
consolidated basis, in a proper and efficient manner and keep or
cause to be kept proper books of record and account and make or
cause to be made therein entries properly recording all dealings and
transactions in relation to their business all in accordance with
generally accepted accounting principles.
Exchange of Warrant Certificates
On presentation at the principal office of the Corporation in the Province of
Ontario, on compliance with the reasonable requirements of the Corporation, one
or more Warrant Certificates may be exchanged at no cost to the holder for one
or more Warrant Certificates of different denominations evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or Warrant
Certificates being exchanged.
Transfer of Warrants
The Warrants evidenced by this Warrant Certificate may only be transferred by
the holder or its attorney duly appointed by an instrument in writing in form
and execution satisfactory to the Corporation and, upon compliance with
applicable securities legislation and such other reasonable requirements as the
Corporation may prescribe, such transfer will be duly notified on such register
of transfers by the Corporation.
For greater certainty, the Warrants evidenced by this Warrant Certificate are
not transferrable except (i) under the circumstances of and only as part of, a
transfer by the holder of its rights under the Loan Agreement; or (ii) a
transfer in other circumstances to a transferee which is neither a competitor of
the Corporation nor related in any way to a competitor of the Corporation
provided however in the event of default in any of the payment obligations of
the Corporation to the holder which continues for 90 days, this Warrant may be
transferred to any third party.
Warrantholder not a Shareholder
The holding of this Warrant Certificate will not constitute the holder a
shareholder of the Corporation or entitle it to any right or interest in respect
thereof except as otherwise provided herein.
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Surrender of Warrant Certificate
Surrender of this Warrant Certificate for any purpose will be deemed to have
been validly effected for such purpose only on personal delivery thereof to, or,
if sent by mail or other means of transmission, on actual receipt thereof by,
the Corporation or persons designated for such purpose at such office or one of
such designated other places.
Time of the Essence
Time will be of the essence hereof.
Governing Law
This Warrant Certificate shall be governed by the laws of the Province of
Ontario and the federal laws of Canada applicable therein.
IN WITNESS WHEREOF, the Corporation has caused this Warrant Certificate to be
signed by its officer duly authorized in that behalf as of this 10th day of May,
1999.
INTERNATIONAL MENU SOLUTIONS
CORPORATION
By: /s/
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE UNDERLYING COMMON SHARES
ISSUABLE UPON EXERCISE HEREOF WILL BE SUBJECT TO A HOLD PERIOD AND MAY NOT BE
TRADED UNTIL THE EXPIRY OF THE HOLD PERIOD EXCEPT AS PERMITTED BY AND IN
COMPLIANCE WITH APPLICABLE SECURITIES LEGISLATION.
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NOTICE OF EXERCISE
TO: INTERNATIONAL MENU SOLUTIONS CORPORATION (the "Corporation")
The undersigned holder of the Warrants evidenced by the within Warrant
Certificate hereby exercises its right to acquire ____________ Common Shares of
the Corporation (or such number of Common Shares or other securities or property
to which such exercise entitles it in lieu thereof or in addition thereto
pursuant to the provisions of the within Warrant Certificate) that are issuable
pursuant to such Warrants on the terms specified in such Warrant Certificate.
The undersigned holder hereby:
(i) |_| tenders herewith $_________________ on account of the applicable
aggregate Conversion Price OR
(ii) |_| tenders herewith $__________________ on account of the applicable
aggregate Conversion Price and elects to satisfy the balance of the
aggregate Conversion Price through a reduction in the principal
amount owing under the Loan Agreement OR
(iii) |_| elects to satisfy the entire aggregate Conversion Price through a
reduction in the principal amount owing under the Loan Agreement.
To the extent that any portion of the aggregate Conversion Price is not tendered
herewith and principal amount is owing to the holder under the Loan Agreement,
the holder will be deemed to have elected to satisfy such amounts of the
Conversion Price as may be purchased based on the outstanding principal amount
owing to the holder under the Loan Agreement.
The undersigned hereby irrevocably directs that the said Common Shares be issued
and delivered as follows:
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Name(s) in Full Address(es) Number(s) of
Common Shares
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(Please print full name in which share certificates (the "Certificates") are to
be issued. If any Certificates are to be issued to a person or persons other
than the holder of this Warrant Certificate, the holder must pay to the
Corporation all eligible transfer taxes or other government charges.)
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DATED this __ day of________________________, ______.
___________________________________ _________________________________________
Signature Guaranteed Signature of Holder
_________________________________________
Name of Holder
_________________________________________
Address of Holder
Certificates will be delivered or mailed as soon as practicable after the due
surrender of this Warrant Certificate as aforesaid.
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FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned holder of the Warrants to acquire common
shares of International Menu Solutions Corporation evidenced by the within
Warrant Certificate hereby sells, assigns and transfers such Warrants unto
_______________________________________________________ and does hereby
irrevocably constitute and appoint _____________________________________attorney
to transfer such Warrants on the register of transfers with full power of
substitution in the premises.
DATED this __ day of______________________, ____.
___________________________________ _________________________________________
Signature Guaranteed Signature of Holder (must be the same as
the name appears on the Warrant
Certificate)
_________________________________________
Name of Holder
_________________________________________
Address of Holder