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EXHIBIT 3.12
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG:
INTERNATIONAL MENU SOLUTIONS CORPORATION,
a corporation incorporated under the laws of the State of Nevada,
(sometimes referred to herein as "ISMC" or the "Company"),
OF THE FIRST PART,
-and-
VICTOR FRADKIN,
of the City of Richmond Hill, in the Regional Municipality of York
(hereinafter called "Victor"),
RHYS QUIN,
of the City of Toronto, in the Municipality of Metropolitan Toronto
(hereinafter called "Rhys"),
LAUDERDALE CAPITAL CORP.
a corporation incorporated under the laws of the Province of Ontario
(hereinafter called "Lenco"),
LARRY HOFFMAN,
of the City of Toronto, in the Municipality of Metropolitan Toronto
(hereinafter called "Larry"),
(Victor, Rhys, Lenco and Larry being hereinafter individually called the
"Holder of Special Shares" and collectively called the "Holders of Special
Shares")
OF THE SECOND PART.
WHEREAS:
A. In connection with the Share Purchase Agreement by and among the parties
of even date herewith (the "Share Purchase Agreement"), a subsidiary of
the Company, International Menu Solutions Inc. ("IMSI") has agreed, upon
the terms and subject to the conditions of the Share Purchase Agreement,
to issue and sell to the Holders of Special Shares, Class B Shares, Class
C Shares and Class D Shares (the "Special Shares") in the capital of IMSI,
and the rights, privileges, restrictions and conditions ascribed to such
stock shall include the rights to exchange such Special Shares for shares
of the Company's Common Stock (as hereafter defined); and
B. To induce the Holders of Special Shares to execute and deliver the Share
Purchase
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Agreement the Company has agreed to provide certain registration rights
under the 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 as provided for
herein:
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 Holders of
Special Shares hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meaning:
a. "Common Stock" means common shares in the capital oak of the Company
as presently constituted;
b. means a corporation, a limited liability company an association, a
partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a 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 Statements(s) by
the United States Securities and Exchange Commission (the "SEC");
d. "Registrable Securities" means 2,200,00 shares of Common Stock;
e. "Registration Statement" means a registration statement of the
Company filed under the 1933 Act. Capitalized terms used herein and
not otherwise defined herein shall have the respective meaning set
forth in the Share Purchase Agreement.
2. REGISTRATION.
a. Registration. The Company shall prepare. and, on or prior to April
30, 1999 (the "Filing Deadline"), file with the SEC a Registration
Statement on Form SB-2 (the "Registration Statement") or, if such
form is unavailable for such a registration, on such other form as
is available for such a registration for but not
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limited to the Registrable Securities, which Registration shall
include not less than 2,200,000 shares of Common Stock which IMSC
shall hold for the Holders of Special Shares and which shall be
available upon exchange of the Special Shares. Such Registration
Statement(s) shall state that, in accordance with Rule 416
promulgated under the 1933 Act, such Registration Statement also
registers such indeterminate number of additional shares of Common
Stock as may become issuable upon exchange of the Special Share to
prevent dilution resulting from stock splits, stock dividends or
similar transactions. The Company shall permit the Registration
Statement to become effective within five (5) business days after
receipt of notice from the SEC and any applicable state securities
commissions and such Registration Statement's effectiveness pursuant
to Rule 415 at all times until the earlier of (i) the date as of
which the Holders of Special Shares may sell all of the Registrable
Securities without restriction pursuant to Rule 144(k) promulgated
under the 1933 Act (or successor thereto) or (ii) the fifth
anniversary from effective date of the Registration Statement. In
the event that following February 28, 2000 it is determined that the
number of shares of Common Stock required to satisfy the exchange of
the Special Shares is less than 2,200,000 the obligation of IMSC to
maintain the Registration Statement for Common Stock for the Holders
of Special Shares shall be reduced from 2,200,000 shares of Common
Stock to such lesser number (the "Revised Number of Common Stock").
In the event that following February 28, 1999 it is determined that
the number of shares of Common Stock required to satisfy the
exchange of the Special Shares is greater than 2,200,000, IMSC shall
file an amendment or supplement so the Registration Statement hereby
increasing the number of shares offered in the Registration
Statement accordingly. Through its best efforts, the Company will
maintain the effectiveness of the Registration Statement until the
date being the fifth anniversary of such Registration Statement's
initial effective date (herein called the "End Date").
b. Demand Registration. At any time subsequent to the End Date until
November 30, 2013, the Holders of Special Shares shall have the
right to "demand" on one occasion only, the filing of a registration
statement to register that number of shares in the Common Stock
issued or issuable to the Holders of Special Shares which have not
yet been sold. In order to exercise such a "demand right" the
Holders of Special Shares holding at least fifty percent (50%) of
the issued and outstanding Special Shares (counted as a single
class) at the time, must give IMSC not less than ten (10) days
advance written notice that IMSC effect a registration. Whenever
IMSC shall be requested, pursuant to this paragraph 2.b., to effect
the registration of any shares of Cannon Stock under the 1933 Act,
IMSC mall properly give written notice of such proposed registration
to all Holders of Special Shares. Upon such demand and subject to
the limitation of paragraph 2.c. herein, IMSC shall as expeditiously
as possible, use its best
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efforts to cause a registration statement covering the following
securities to become effective.
1. the shares of Common Stock which 11450 has been requested to
register pursuant to this paragraph 2.b., and
2. such other sham of Common tweaks the Company Stock shall be
included in such registration; provided, however that if the
securities which at are subject of such registration are
offered through an underwriter or group of underwriters and
such underwriter(s) requests that to additional shares of
Common Stock desired by the Company to be registered be
excluded from such registration and such request is reasonable
in light of prevailing market conditions, the Holder of
Special Shares shall not be obligated to include such
additional shares Common Stock of the Company.
Further, through its best efforts, the Company shall maintain the
registration statement contemplated in this paragraph 2.b. effective until
the earlier of (i) the date as of which the Holders of Special Shares may
sell all of the Registrable Securities without restriction pursuant to
Rule 144(k) promulgated under the 1933 Act (or successor thereto) or (i)
the third anniversary from the effective date of the registration
statement contemplated in this paragraph 2.b.
c. Incidental Registration. If the Company at any time subsequent to
the End Date, proposes to register any of its securities under the
1933 Act (otherwise than pursuant to paragraph 2.b.) on any forms
other than Form S-4, Form S-8, or any similar form then in effect,
it shall each such time give written notice to all Holders of
Special Shares holding the Special Shares of its intention so to do
and, upon the written request of any Holders of Special Share given
within 20 days after the giving of any such notice (which request
shall state the proposed method of distribution of such shares of
Common Stock) the Company shall use its best efforts to cause all
such shares of Common Stock, the holder or holders of which shall
have so requested registration thereof, to be included under the
proposed registration on for disposition (in accordance with she
proposed methods thereof, as aforesaid) by the prospective seller or
seller. of she shares of Common Stock so registered; provided,
however, that if the securities which are the subject of such
registration are offered trough an underwriter or group of
underwriters and such underwriter(s) requests that the additional
shares of Common Stock desired by the holders of Special Shares we
be registered be excluded from such registration, and such request
is reasonable in light of prevailing market conditions, die Company
shall not be obligated to include such additional shares of Common
Stock of the Holders of Special Shares. The Company shall use its
best efforts to maintain the effectiveness of such registration
statement for a period of three years.
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3. RELATED OBLIGATIONS
3.1 The Company shall prepare and file with she 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(s) effective at all times during the Registration Period, and,
during 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. Without limiting the generality of
the foregoing, as promptly as practicable after becoming aware of such
event, the Company shall notify each Holder of Special Shares in writing
of the happening of any event of which the Company has knowledge, as a
result of which the prospectus included in a Registration Statement, as
then in effect, includes an untrue statement of a material fact or
omission to state a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and promptly prepare a. supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver ten
(10) copies of such supplement or amendment to each Holder of Special
Shares (or such other number of copies as such Holder of Special Shares
may reasonably request). The Company shall also promptly notify each
Holder of Special Shares in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when
a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to each
Investor by facsimile on the same day of such effectiveness and by
overnight mail) (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
3.2 The Company shall furnish to each Holder of Special Shares without charge
(i) promptly after the same is prepared and filed with the SEC at least
one copy of the Registration Statement and any thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits, the prospectus(es) included in such
Registration Statement (including each primary prospectus) and, with
regards to the Registration Statement, any correspondence by or on behalf
of the Company to the SEC or the staff of the SEC and any correspondence
from the SEC or the staff of the SEC to the Company or its
representatives, (ii) upon the effectiveness of any registration
statement, ten (10) copies of the prospectus included in such registration
statement and all amendments and supplements thereto (or such other number
of copies of each Holder of Special Shares may reasobably request) and
(iii) such other documents, including an preliminary prospectus, as such
Holder of Special Shares may reasonably request in order so facilitate the
disposition of the Registrable Securities owned by such Holder of Special
Shares, a well as any other
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documents deemed by the Company to be material to the filing and
effectiveness of such Registration Statement.
3.3 the Company shall use its best 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 Holder of Special Shares 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 make any disclosure of
information concerning a Holder of Special Shares provided to the Company
unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (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 intonation is ordered
pursuant to a subpoeno or other final, non-appealable order from a court
or governmental body of competent jurisdiction, or (iv) such information
has been made generally available so 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
Holder of Special Shares is sought in or by a court or governmental body
of compentant jurisdiction or through other means, give prompt written
notice to such Holder of Special Shares and allow such Holder of Special
Shares, as the Holder of Special Shares' expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.
3.5 The Company shall use reasonable efforts to (i) register and qualify the
Registrable Securities covered by a registration statement filed pursuant
to paragraphs 2.a. or 2.b. of this Agreement under such other securities
or "blue sky laws of not less than five jurisdictions in the United States
requested by the majority of Holders of Special Shares (counted as a
single class) in addition to any jurisdictions desired by the Company,
(ii) prepare and file those such jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may in necessary to maintain the effectiveness thereof
during the Registration Period, (iii) take such other actions as may be
necessary to maintain such negotiations and qualifications in effect at
all times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall
not be required in connection therewith or as a condition thereto to (a)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (b) subject itself to
general tension in any such jurisdiction, or (c) file a general consent to
service of process in any such jurisdiction. The Company shall promptly
notify each Holder of Special Shares who holds Registrable Securities of
the receipt by the Company of any
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notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under she
securities or "blue sky" laws of any jurisdiction in the United States or
its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
3.6 At the request of the Holders of Special Shares who hold a majority of the
Registrable Securities being sold, the Company shall furnish, on the date
that Registrable Securities are delivered to an underwriter, if any, for
sale in connection with any registration statement (i) if required by an
underwriter, a letter, dated such date, from the Company's independent
certified public accountants in form and substance as is customarily given
by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, and (ii) an
opinion, dated as of such date, of counsel representing the Company for
purposes of such registration statement, in form, scope and substance as
is customarily given in an underwritten public offering, addressed to the
underwriters and the Holders of Special Shares.
4. OBLIGATIONS OF THE HOLDERS OF SPECIAL SHARES
a. At least thirty (30) days prior to the first anticipated filing date
of the Registration Statement the Company shall notify each Holder
of Special Shares in writing of the information the Company requires
from each such Holder of Special Shares if such holder elects so
have any of such holder's 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
Holder of Special Shares 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.
b. Each Holder of Special Shares 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 each Holder of Special Shares has notified the Company in
writing of such Holder of Special Shares' election to exclude all of
such holder's Registrable Securities from the Registration
Statement.
5. EXPENSES OF REGISTRATION.
All reasonable expenses incurred in connection with a registration, filings or
qualifications pursuant to paragraph 2.a. and 3 (other than underwriting
discounts and commissions) including, without limitation, all registration and
accounting fees, and fees and disbursements of counsel and auditors for the
Company shall be borne by the Company. All expenses
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incurred in connection with a registration pursuant to 2.b. shall be borne by
the Company and the selling shareholders equally.
6. NOTICES.
a. Arty 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 so have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by
facsimile, provided a copy is mailed by certified mail, return
receipt requested: (iii) three (3) days after being sent by
certified mail, return receipt requested, or (iv) one (1) day after
deposit with an internationally recognized overnight delivery
service, in each case properly addressed so the party so receive the
same. The addresses and facsimile numbers of such communications
shall be:
If to the Corporation:
International Menu Solutions Corporation
172 King Street Bass
Toronto, Ontario
M5A IJ3
Attention: Michael A. Steele
Telecopier No.: (416) 366-6368
with a copy to:
McCarter Grespan Robson Beynon
675 Riverbend Drive
Kitchener, Ontario
N2K 3S3
Attention: Thomas P. Beynon, Q.C.
Telecopier No.: (519) 742-1841
If to the Holders of Special Shares:
Victor Fradkin
623 Canville Road
Richmond Hill, Ontario
L4C 6E5
Telecopier No.: (905) 669-0699
Rhys Quin
275 Kennedy Road
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Scarborough, Ontario
M1M 3P6
Telecopier No.: (905) 669-0699
Lauderdale Capital Corp.
24 Lauderdale Drive
Toronto, Ontario
M2L 2A9
Telecopier No.: (416) 962-0037
Larry Hoffman
51 Abbotsford Road
Gormley, Ontario
LOH 1G0
Telocopier No.: (905) 669-0699
with a copy to Stephen Witten:
Minden, Gross, Grafstein & Greenstein
600 - 111 Richmond Street West
Toronto, Ontario
M5H 2H5
Telecopier No.: (416) 864-9223
If to a Holder of Special Shares, to its address and facsimile
number as above-noted, with copies to such holder's counsel as
above-noted. Each party shall provide five (5) days' prior written
notice to the other party of only change in address or facsimile
number.
b. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, delay by a party in exercising such right or
remedy, shall act operate as a waiver thereof.
c. This Agreement shall be governed by and interpreted in accordance
with the laws of Sir State of New York without regard to the
principles of conflict of laws. 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 and the Share Purchase Agreement constitute the
entire
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agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth as referred
to herein and therein. This Agreement and the Share Purchase
Agreement supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and
thereof.
e. This Agreement shall inure to the benefit and of and be binding upon
the permitted successors and assigns of each of the parties hereto.
This Agreement and the rights hereunder shall not be assigned by any
of the parties of 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.
g. This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the two agreements. This Agreement,
once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this 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 hereof have executed this Registration Rights
Agreement as of the first day of December, 1998.
INTERNATIONAL MENU SOLUTIONS
CORPORATION
Per: /s/
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Title: President
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/s/ /s/ Victor Fradkin
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Witness Victor Fradkin
/s/ /s/ Rhys Quin
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Witness Rhys Quin
/s/ /s/ Larry Hoffman
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Witness Larry Hoffman
LAUDERDALE CAPITAL CORP.
Per: /s/
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Title: President
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