Exhibit 99
Exhibit: Series J Convertible Preferred Certificate of Designation
CERTIFICATE TO SET FORTH DESIGNATIONS, VOTING POWERS,
PREFERENCES, LIMITATIONS, RESTRICTIONS, AND RELATIVE
RIGHTS OF SERIES J 8% CUMULATIVE CONVERTIBLE
PREFERRED STOCK, $.001 PAR VALUE PER SHARE
It is hereby certified that:
I. The name of the corporation is Bravo! Foods International Corp.
(the "Corporation"), a Delaware corporation.
II. Set forth hereinafter is a statement of the voting powers,
preferences, limitations, restrictions, and relative rights of shares of
Series J 8% Cumulative Convertible Preferred Stock hereinafter designated
as contained in a resolution of the Board of Directors of the Corporation
pursuant to a provision of the Articles of Incorporation of the Corporation
permitting the issuance of said Series J 8% Cumulative Convertible
Preferred Stock by resolution of the Board of Directors:
Series J 8% Cumulative Convertible Preferred Stock, $.001 par value.
1. Designation: Number of Shares. The designation of said series of
Preferred Stock shall be Series J 8% Cumulative Convertible Preferred Stock
(the "Series J Preferred Stock"). The number of shares of Series J
Preferred Stock shall be 500,000. Each share of Series J Preferred Stock
shall have a stated value equal to $10 (as adjusted for any stock
dividends, combinations or splits with respect to such shares) (the "Stated
Value"), and $.001 par value. The Corporation may issue the Series J
Preferred Stock in one or more tranches.
2. Dividends.
(a) The Holders of outstanding shares of Series J Preferred
Stock shall be entitled to receive preferential dividends in cash out
of any funds of the Corporation legally available at the time for
declaration of dividends before any dividend or other distribution
will be paid or declared and set apart for payment on any shares of
any Common Stock, or other class of stock presently authorized or to
be authorized (the Common Stock, and such other stock, being
hereinafter collectively the "Junior Stock"), except for the Series
D, G and H Preferred Stock, at the rate of 8% simple interest per
annum on the Stated Value per share payable quarterly commencing with
the quarter ending December 31, 2002, when as and if declared. The
Holder, however, at its option and upon written advance notice to the
Corporation, may receive dividend payments in additional fully paid
and non assessable shares of Series J Preferred Stock at a rate of
one share of Series J Preferred Stock for each $10 of such dividend
not paid in cash, and the issuance of such additional shares shall
constitute full payment of such dividend.
(b) The dividends on the Series J Preferred Stock at the rates
provided above shall be cumulative whether or not earned so that, if
at any time full cumulative dividends at the rate aforesaid on all
shares of the Series J Preferred Stock then outstanding from the date
from and after which dividends thereon are cumulative to the end of
the quarterly dividend period next preceding such time shall not have
been paid or declared and set apart for payment, or if the full
dividend on all such outstanding Series J Preferred Stock for the
then current dividend period shall not have been paid or declared and
set apart for payment, the amount of the deficiency shall be paid or
declared and set apart for payment (but without interest thereon)
before any sum shall be set apart for or applied by the Corporation
or a subsidiary of the Corporation to the purchase,
redemption or other acquisition of the Series J Preferred Stock, and
before any dividend or other distribution shall be paid or declared
and set apart for payment on any Junior Stock and before any sum
shall be set aside for or applied to the purchase, redemption or
other acquisition of Junior Stock.
(c) Dividends on all shares of the Series J Preferred Stock
shall begin to accrue and be cumulative from and after the date of
issuance thereof. A dividend period shall be deemed to commence on
the day following a quarterly dividend payment date herein specified
and to end on the next succeeding quarterly dividend payment date
herein specified.
3. Liquidation Rights.
(a) Upon the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, the Holders of the
Series J Preferred Stock shall be entitled to receive before any
payment or distribution shall be made on the Junior Stock, out of the
assets of the Corporation available for distribution to stockholders,
the Stated Value per share of Series J Preferred Stock and all
accrued and unpaid dividends to and including the date of payment
thereof. Upon the payment in full of all amounts due to Holders of
the Series J Preferred Stock the Holders of the Common Stock of the
Corporation and any other class of Junior Stock shall receive all
remaining assets of the Corporation legally available for
distribution. If the assets of the Corporation available for
distribution to the Holders of the Series J Preferred Stock shall be
insufficient to permit payment in full of the amounts payable as
aforesaid to the Holders of Series J Preferred Stock upon such
liquidation, dissolution or winding-up, whether voluntary or
involuntary, then all such assets of the Corporation shall be
distributed to the exclusion of the Holders of shares of Junior Stock
ratably among the Holders of the Series J Preferred Stock.
(b) Neither the purchase nor the redemption by the Corporation
of shares of any class of stock nor the merger or consolidation of
the Corporation with or into any other corporation or corporations
nor the sale or transfer by the Corporation of all or any part of its
assets shall be deemed to be a liquidation, dissolution or winding-up
of the Corporation for the purposes of this paragraph 3.
4. Conversion into Common Stock. Shares of Series J Preferred Stock
shall have the following conversion rights and obligations:
(a) Subject to the further provisions of this paragraph 4 each
Holder of shares of Series J Preferred Stock shall have the right at
any time subsequent to thirty (30) days after the issuance to the
Holder of Series J Preferred Stock, to convert such shares into fully
paid and non-assessable shares of Common Stock of the Corporation (as
defined in paragraph 4(i) below) determined in accordance with the
Conversion Price provided in paragraph 4(b) below (the "Conversion
Price"); provided, that the aggregate Stated Value to be converted
shall be at least $10,000 (unless if at the time of such conversion
the aggregate Stated Value of all shares of Series J Preferred Stock
registered to the Holder is less than $10,000, then the whole amount
may be converted). All issued or accrued but unpaid dividends may be
converted at the election of the Holder simultaneously with the
conversion of principal amount of Stated Value of Series J Preferred
Stock being converted.
(b) The number of shares of Common Stock issuable upon
conversion of each share of Series J Preferred Stock shall equal sum
of (A) the Stated Value per share and (B) at the Holder's election
accrued and unpaid dividends on such share, divided by the Conversion
Price. The Conversion Price for the Series J Preferred shall be
equal to $0.25 per share of Common Stock.
(c) The Holder of any certificate for shares of Series J
Preferred Stock desiring to convert
any of such shares may give notice of its decision to convert the
shares into common stock by delivering or telecopying an executed and
completed notice of conversion to the Corporation and delivering
within three business days thereafter, the original certificate for
the Preferred Stock properly endorsed for or accompanied by duly
executed instruments of transfer (and such other transfer papers as
said Transfer Agent may reasonably require) to the Corporation. Each
date on which a notice of conversion is delivered or telecopied to
the Corporation in accordance with the provisions hereof shall be
deemed a Conversion Date. A form of Notice of Conversion that may be
employed by a Holder is annexed hereto as Exhibit A. The Corporation
will transmit the certificates representing the shares of common
stock issuable upon conversion of any Series J Preferred Stock
(together with the Series J Preferred Stock representing the shares
not converted) to the Holder via express courier, by electronic
transfer or otherwise, within five business days after receipt by the
Corporation of the original or telecopied notice of conversion and
the Series J Preferred Stock representing the shares to be converted
("Delivery Date"). The Holder of the shares so surrendered for
conversion shall be entitled to receive on or before the Delivery
Date a certificate or certificates, which shall be expressed to be
fully paid and non-assessable for the number of shares of Common
Stock to which such Holder shall be entitled upon such conversion
registered in the name of such Holder. The Corporation is obligated
to deliver to the Holder simultaneously with the aforedescribed
Common Stock, at the election of the Holder, additional Common Stock
representing the conversion at the Conversion Price, of dividends
accrued on the Series J Preferred Stock being converted. In the case
of any Series J Preferred Stock, which is converted in part only, the
Holder of shares of Series J Preferred Stock shall upon delivery of
the certificate or certificates representing Common Stock also
receive a new share certificate representing the unconverted portion
of the shares of Series J Preferred Stock. Nothing herein shall be
construed to give any Holder of shares of Series J Preferred Stock
surrendering the same for conversion the right to receive any
additional shares of Common Stock or other property which results
from an adjustment in conversion rights under the provisions of
paragraph (d) or (e) of this paragraph 4 until Holders of Common
Stock are entitled to receive the shares or other property giving
rise to the adjustment.
In the case of the exercise of the conversion rights set forth
in paragraph 4(a) the conversion privilege shall be deemed to have
been exercised and the shares of Common Stock issuable upon such
conversion shall be deemed to have been issued upon the date of
receipt by the Corporation of the Notice of Conversion. The person
or entity entitled to receive Common Stock issuable upon such
conversion shall, on the date such conversion privilege is deemed to
have been exercised and thereafter, be treated for all purposes as
the record Holder of such Common Stock and shall on the same date
cease to be treated for any purpose as the record Holder of such
shares of Series J Preferred Stock so converted.
Upon the conversion of any shares of Series J Preferred Stock
no adjustment or payment shall be made with respect to such converted
shares on account of any dividend on the Common Stock, except that
the Holder of such converted shares shall be entitled to be paid any
dividends declared on shares of Common Stock after conversion
thereof.
The Corporation shall not be required, in connection with any
conversion of Series J Preferred Stock, and payment of dividends on
Series J Preferred Stock to issue a fraction of a share of its Series
J Preferred Stock and shall instead deliver a stock certificate
representing the next whole number.
(d) The Conversion Price determined pursuant to Paragraph 4(b)
shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall at any time (A)
declare any dividend or distribution on its Common Stock or
other securities of the Corporation other than the Series J
Preferred Stock, (B) split or subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue by reclassification of
its Common Stock any shares or other securities of the
Corporation, then in each such event the Conversion Price shall
be adjusted proportionately so that the Holders of Series J
Preferred Stock shall be entitled to receive the kind and
number of shares or other securities of the Corporation which
such Holders would have owned or have been entitled to receive
after the happening of any of the events described above had
such shares of Series J Preferred Stock been converted
immediately prior to the happening of such event (or any record
date with respect thereto). Such adjustment shall be made
whenever any of the events listed above shall occur. An
adjustment made to the Conversion pursuant to this paragraph
4(d)(i) shall become effective immediately after the effective
date of the event retroactive to the record date, if any, for
the event.
(e) (i) In case of any merger of the Corporation with or
into any other corporation (other than a merger in which the
Corporation is the surviving or continuing corporation and
which does not result in any reclassification, conversion, or
change of the outstanding shares of Common Stock) then unless
the right to convert shares of Series J Preferred Stock shall
have terminated, as part of such merger lawful provision shall
be made so that Holders of Series J Preferred Stock shall
thereafter have the right to convert each share of Series J
Preferred Stock into the kind and amount of shares of stock
and/or other securities or property receivable upon such merger
by a Holder of the number of shares of Common Stock into which
such shares of Series J Preferred Stock might have been
converted immediately prior to such consolidation or merger.
Such provision shall also provide for adjustments, which shall
be as nearly equivalent, as may be practicable to the
adjustments provided for in paragraph (d) of this paragraph 4.
The foregoing provisions of this paragraph 4(e) shall similarly
apply to successive mergers.
(ii) In case of any sale or conveyance to another person
or entity of the property of the Corporation as an entirety, or
substantially as an entirety, in connection with which shares
or other securities or cash or other property shall be
issuable, distributable, payable, or deliverable for
outstanding shares of Common Stock, then, unless the right to
convert such shares shall have terminated, lawful provision
shall be made so that the Holders of Series J Preferred Stock
shall thereafter have the right to convert each share of the
Series J Preferred Stock into the kind and amount of shares of
stock or other securities or property that shall be issuable,
distributable, payable, or deliverable upon such sale or
conveyance with respect to each share of Common Stock
immediately prior to such conveyance.
(f) Whenever the number of shares to be issued upon conversion
of the Series J Preferred Stock is required to be adjusted as
provided in this paragraph 4, the Corporation shall forthwith compute
the adjusted number of shares to be so issued and prepare a
certificate setting forth such adjusted conversion amount and the
facts upon which such adjustment is based, and such certificate shall
forthwith be filed with the Transfer Agent for the Series J Preferred
Stock and the Common Stock; and the Corporation shall mail to each
Holder of record of Series J Preferred Stock notice of such adjusted
conversion price.
(g) In case at any time the Corporation shall propose:
(i) to pay any dividend or distribution payable in
shares upon its Common Stock or make any distribution (other
than cash dividends) to the Holders of its Common Stock; or
(ii) to offer for subscription to the Holders of its
Common Stock any additional shares of any class or any other
rights; or
(iii) any capital reorganization or reclassification of
its shares or the merger of the Corporation with another
corporation (other than a merger in which the Corporation is
the surviving or continuing corporation and which does not
result in any reclassification, conversion, or change of the
outstanding shares of Common Stock); or
(iv) the voluntary dissolution, liquidation or winding-
up of the Corporation; then, and in any one or more of said
cases, the Corporation shall cause at least fifteen (15) days
prior notice of the date on which (A) the books of the
Corporation shall close or a record be taken for such stock
dividend, distribution, or subscription rights, or (B) such
capital reorganization, reclassification, merger, dissolution,
liquidation or winding-up shall take place, as the case may be,
to be mailed to the Transfer Agent for the Series J Preferred
Stock and for the Common Stock and to the Holders of record of
the Series J Preferred Stock.
(h) So long as any shares of Series J Preferred Stock shall
remain outstanding and the Holders thereof shall have the right to
convert the same in accordance with provisions of this paragraph 4
the Corporation shall at all times reserve from the authorized and
unissued shares of its Common Stock a sufficient number of shares to
provide for such conversions.
(i) The term Common Stock as used in this paragraph 4 shall
mean the $.001 par value Common Stock of the Corporation as such
stock is constituted at the date of issuance thereof or as it may
from time to time be changed or shares of stock of any class of other
securities and/or property into which the shares of Series J
Preferred Stock shall at any time become convertible pursuant to the
provisions of this paragraph 4.
(j) The Corporation shall pay the amount of any and all issue
taxes (but not income taxes) which may be imposed in respect of any
issue or delivery of stock upon the conversion of any shares of
Series J Preferred Stock, but all transfer taxes and income taxes
that may be payable in respect of any change of ownership of Series J
Preferred Stock or any rights represented thereby or of stock
receivable upon conversion thereof shall be paid by the person or
persons surrendering such stock for conversion.
(k) In the event a Holder shall elect to convert any shares of
Series J Preferred Stock as provided herein, the Corporation may not
refuse conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any
violation of law, or for any other reason unless, an injunction from
a court, on notice, restraining and or enjoining conversion of all or
part of said shares of Series J Preferred Stock shall have been
issued and the Corporation posts a surety bond for the benefit of
such Holder in the amount of 150% of the Stated Value of the Series J
Preferred Stock and dividends sought to be converted, which is
subject to the injunction, which bond shall remain in effect until
the completion of arbitration/litigation of the dispute and the
proceeds of which shall be payable to such Holder in the event it
obtains judgment.
(l) In addition to any other rights available to the Holder,
if the Corporation fails to deliver to the Holder such certificate or
certificates pursuant to Section 4(c) by the Delivery Date and if
after the Delivery Date the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Common Stock which the
Holder anticipated receiving upon such conversion (a "Buy-In"), then
the Corporation shall pay in cash to the Holder (in addition to any
remedies available to or elected by the Holder) the amount by which
(A) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
exceeds (B) the aggregate Stated Value of the shares of Series J
Preferred Stock for which such conversion was not timely honored,
together with interest thereon at a rate of 16% per annum, accruing
until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a
penalty). For example, if the Holder purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted conversion of $10,000 of Stated Value of
Series J Preferred Stock, the Corporation shall be required to pay
the Holder $1,000, plus interest. The Holder shall provide the
Corporation written notice indicating the amounts payable to the
Holder in respect of the Buy-In.
5. Mandatory Conversion.
(a) The shares of Series J Preferred Stock and dividends not
previously converted into shares of Common Stock shall be converted
into shares of Common Stock, at the option of the Corporation,
without further action of the Holder on the date that is five years
from the date of issuance thereof ("Mandatory Conversion Date"), at
the Conversion Price and on the conversion terms specified in
paragraph 4(b). Deliveries of Common Stock upon Mandatory Conversion
shall be made as if the Mandatory Conversion Date were a Conversion
Date.
(b) Notice of conversion of Series J Preferred Stock by the
Corporation pursuant to this paragraph 5 shall be given by mail or in
such other manner as may be prescribed by resolution of the Board not
less than thirty (30) days prior to the Mandatory Conversion Date.
As applicable, the notice shall specify the number of shares to be
converted, the date fixed for conversion, and the conversion price
per share.
(c) The Holder of any certificate for shares of Series J
Preferred Stock that is converted pursuant to this Section 5 shall
surrender such certificate at the principal office of any transfer
agent for said stock (the "Transfer Agent") properly endorsed for or
accompanied by duly executed instruments of transfer (and such other
transfer papers as said Transfer Agent may reasonably require). The
Holder of the shares so surrendered for conversion shall be entitled
to receive (except as otherwise provided herein) a certificate or
certificates which shall be expressed to be fully paid and non-
assessable for the number of shares of Common Stock to which such
Holder shall be entitled upon such conversion registered in the name
of such Holder.
(d) On and after the Mandatory Conversion Date and
notwithstanding that any certificate for shares of Series J Preferred
Stock so called for conversion shall not have been surrendered for
cancellation, all dividends on the Series J Preferred Stock called
for conversion shall cease to accrue and the shares represented
thereby shall no longer be deemed outstanding and all rights of the
Holders thereof as Holders of the Corporation shall cease and
terminate, except the right to receive the shares of Common Stock
upon conversion as provided herein.
(e) In no event shall a Mandatory Conversion occur without the
consent of the Holder of Series D Preferred Stock at any time unless
(i) the Common Stock to be delivered upon conversion will be upon
delivery and thereafter immediately resalable, without restrictive
legend and upon such resale freely transferable on the transfer books
of the Corporation; and (ii) the Closing Bid Price of the Common
Stock for the twenty-two (22) trading days preceding the Mandatory
Conversion Date ("Conversion Lookback Period") is not less than 300%
of the Conversion Price determined pursuant to Section 4(b); and
(iii) the reported daily trading volume of the Common Stock during
each trading day during the Conversion Lookback Period is not less
than 100,000 Common Shares per day. In any event, the Corporation
may not effect a Mandatory Conversion without the consent of the
Holder after the occurrence (whether continuing or not) of an Event
of Default as defined in Section 8 hereof.
6. Voting Rights. The shares of Series J Preferred Stock shall not
have voting rights.
7. Redemption. From and after two (2) years after the issuance of
the Series J Preferred Stock the Corporation will have the option, provided
notice is given to the Holder within two (2) days of delivery of a Notice
of Conversion ("Notice of Redemption") of redeeming the Series J Preferred
Stock ("Optional Redemption") which is the subject of the Notice of
Conversion, by paying to the Holder a sum of money equal 135% of the Stated
Value of the aggregate of the Series J Preferred Stock being redeemed plus
the dollar amount of accrued dividends on the Series J Preferred Stock
being redeemed ("Redemption Amount"). The
Company may give a Notice of Redemption only if the Conversion Price
elected by the Holder is calculated pursuant to Section 4(b)(y) of this
Certificate of Designation. The date Notice of Redemption is given by the
Corporation is the "Redemption Date." A Notice of Redemption must be
accompanied by a certificate signed by the chief executive officer or chief
financial officer of the Corporation stating that the Corporation has on
deposit and segregated ready funds equal to the Redemption Amount. The
Redemption Amount must be paid in good funds to the Holder on the Delivery
Date. In the event the Corporation fails to pay the Redemption Amount by
such Delivery Date, then the Redemption Notice will be null and void with
respect to the Series J Preferred Stock for which the Redemption Amount had
not been timely paid; the Corporation will thereafter have no further right
to effect an Optional Redemption; and the Holder may elect, at any time, to
convert the Preferred Stock which was the subject of the Notice of
Redemption at the Conversion Price employed in the related Notice of
Conversion. Any Notice of Redemption must be given to all Holders of
Series J Preferred Stock in proportion to their holdings of Series J
Preferred Stock on a Redemption Date.
8. Event of Default. The occurrence of any of the following events
of default ("Event of Default") shall, after the applicable period to cure
the Event of Default, cause the dividend rate of 8% described in paragraph
2 hereof to become 15% from and after the occurrence of such event:
(a) The Corporation fails to pay any dividend payment required
to be paid pursuant to the terms of paragraph 2 hereof or the failure
to timely pay any other sum of money due to the Holder from the
Corporation and such failure continues for a period of ten (10) days
after written notice to the Corporation from the Holder.
(b) The Corporation breaches any material covenant, term or
condition of the Subscription Agreement entered into between the
Corporation and Holder relating to Series J Preferred Stock
("Subscription Agreement") or in this Certificate of Designation, and
such breach continues for a period of seven (7) days after written
notice to the Corporation from the Holder.
(c) Any material representation or warranty of the Corporation
made in the Subscription Agreement, or in any agreement, statement or
certificate given in writing pursuant thereto shall be false or
misleading.
(d) The Corporation or any of its subsidiaries shall make an
assignment of a substantial part of its property or business for the
benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property
or business, or such a receiver or trustee shall otherwise be
appointed.
(e) Any money judgment, confession of judgment, writ or
similar process shall be entered against the Corporation, a
subsidiary of the Corporation, or their property or other assets for
more than $50,000, and is not vacated, satisfied, bonded or stayed
within 45 days.
(f) Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or
against the Corporation or any of its subsidiaries.
(g) An order entered by a court of competent jurisdiction, or
by the Securities and Exchange Commission, or by the National
Association of Securities Dealers, preventing purchase and sale
transactions in the Corporation's Common Stock.
(h) The Corporation's failure to timely deliver Common Stock
to the Holder pursuant to paragraph 4 hereof or the Subscription
Agreement.
(i) Delisting of the Common Stock from the NASD OTC Bulletin
Board or such other principal exchange on which the Common Stock is
listed for trading, notification that the Corporation is not in
compliance with the conditions for such continued listing, or non
-compliance with the requirements for such continued listing.
9. Status of Converted or Redeemed Stock. In case any shares of
Series J Preferred Stock shall be redeemed or otherwise repurchased or
reacquired, the shares so redeemed, converted, or reacquired shall resume
the status of authorized but unissued shares of Preferred Stock and shall
no longer be designated as Series J Preferred Stock.
Dated: September 25, 2002
BRAVO! FOODS INTERNATIONAL CORP.
s/s Roy G. Warren
By: Roy G. Warren, Chief Executive Officer
EXHIBIT A
- ---------
NOTICE OF CONVERSION
(To Be Executed By the Registered Holder in Order to Convert the Series J
Convertible Preferred Stock of Bravo! Foods International Corp.)
The undersigned hereby irrevocably elects to convert $______________
of the Stated Value of the above Series J Convertible Preferred Stock into
shares of Common Stock of Bravo! Foods International Corp. (the
"Corporation") according to the conditions hereof, as of the date written
below.
Date of Conversion: ___________________________________________________________
Applicable Conversion Price Per Share: $0.25
Number of Common Shares Issuable Upon This Conversion: ________________________
Signature: ____________________________________________________________________
Print Name: ___________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
Deliveries Pursuant to this Notice of Conversion Should Be Made to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________