EXHIBIT 99.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of July 26, 2006 (this
"Agreement"), by and among Bravo! Foods International Corp., a Delaware
corporation with headquarters located at 11300 U.S. Highway 1, Suite 202 North
Palm Beach, FL (the "Company"), and the undersigned buyers (each, a "Buyer",
and collectively, the "Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Securities Purchase Agreement, to issue and sell to each Buyer (i) senior
convertible notes of the Company (the "Initial Notes") which will, among other
things, be convertible into shares of the Company's common stock, par value
$0.001 per share (the "Common Stock") (as converted, the "Initial Conversion
Shares") in accordance with the terms of the Notes and (ii) two series of
warrants (the " Warrants") which will be exercisable to purchase shares of
Common Stock (as exercised collectively, the "Warrant Shares").
B. In connection with the Securities Purchase Agreement, the Company has
agreed, upon the terms and subject to the conditions set forth in the
Securities Purchase Agreement, to issue and sell to each Buyer additional
senior convertible notes of the Company (the "Additional Notes", and
collectively with the Initial Notes, the "Notes"), which will be convertible
into shares of Common Stock (as converted, the "Additional Conversion Shares",
and collectively with the Initial Conversion Shares, the "Conversion Shares")
in accordance with the terms of the Additional Notes.
C. To induce the Buyers to execute and deliver the Securities Purchase
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.
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 each of the
Buyers hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Securities Purchase Agreement. As used
in this Agreement, the following terms shall have the following meanings:
a. "Additional Effectiveness Date" means the date the Additional
Registration Statement is declared effective by the SEC.
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b. "Additional Effectiveness Deadline" means the date which is 60
days after the Additional Filing Date (as defined below), or if there is
a review of the Registration Statement by the SEC, 90 days after the
Additional Filing Date.
c. "Additional Filing Date" means the date on which the Additional
Registration Statement (as defined below) is filed with the SEC.
d. "Additional Filing Deadline" means 30 days after the Company
Escrow Release Date (as defined in the Securities Purchase Agreement) to
the Company.
e. "Additional Registrable Securities" means (i) the Additional
Conversion Shares issued or issuable upon conversion or redemption of all
of the Additional Notes actually purchased and (ii) any share capital of
the Company issued or issuable with respect to the Additional Notes or
the Additional Conversion Shares as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on conversions of Additional Notes.
f. "Additional Registration Statement" means a registration
statement or registration statements of the Company filed under the 1933
Act covering any Additional Registrable Securities.
g. "Additional Required Registration Amount" means 130% of the
number of Additional Conversion Shares issued and issuable pursuant to
the Additional Notes as of the trading day immediately preceding the
applicable date of determination subject to adjustment as provided in
Section 2(e), without regard to any limitations on conversions of the
Additional Notes.
h. "Business Day" means any day other than Saturday, Sunday or any
other day on which commercial banks in the City of New York are
authorized or required by law to remain closed.
i. "Closing Date" shall have the meaning set forth in the
Securities Purchase Agreement.
j. "Effective Date" means the Initial Effective Date and the
Additional Effective Date, as applicable.
k. "Effectiveness Deadline" means the Initial Effectiveness
Deadline (as defined below) and the Additional Effectiveness Deadline, as
applicable.
l. "Filing Deadline" means the Initial Filing Deadline (as defined
below) and the Additional Filing Deadline, as applicable.
m. "Initial Effective Date" means the date the Initial Registration
Statement is declared effective by the SEC.
n. "Initial Effectiveness Deadline" means the date which is 60 days
after the earlier of (i) the Initial Filing Date and (ii) the Initial
Filing Deadline, or if there is a
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review of the Registration Statement by the SEC, 90 days after the
earlier of (i) the Initial Filing Date and (ii) the Initial Filing
Deadline, but in no event later than 120 days after the Closing Date.
o. "Initial Filing Date" means the date on which the Initial
Registration Statement (as defined below) is filed with the SEC.
p. "Initial Filing Deadline" means the later to occur of (i) the
date 30 days after the Closing Date and (ii) the date 15 days following
the effectiveness of the Form SB-2 filed pursuant to the Securities
Purchase Agreement, dated as of November 23, 2005, by and among the
Company and the investors listed on Exhibit A attached thereto, but in no
event later than 75 days after the Closing Date.
q. "Initial Registrable Securities" means the (i) the Initial
Conversion Shares issued or issuable upon conversion or redemption of the
Initial Notes, (ii) the Warrant Shares issued or issuable upon exercise
of the Warrants and (ii) any share capital of the Company issued or
issuable with respect to the Initial Conversion Shares, the Initial
Notes, the Warrant Shares or the Warrants as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on conversions of the Initial Notes or
exercises of the Warrants.
r. "Initial Required Registration Amount" means 130% of the sum of
(i) the number of Initial Conversion Shares issued and issuable pursuant
to the Initial Notes as of the trading day immediately preceding the
applicable date of determination, and (ii) the number of Warrant Shares
issued and issuable pursuant to the Warrants as of the trading day
immediately preceding the applicable date of determination, all subject
to adjustment as provided in Section 2(e), without regard to any
limitations on conversions of the Initial Notes or exercises of the
Warrants.
s. "Initial Registration Statement" means a registration statement
or registration statements of the Company filed under the 1933 Act
covering the Initial Registrable Securities.
t. "Investor" means a Buyer or any transferee or assignee thereof
to whom a Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a transferee or
assignee assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9.
u. "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
v. "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
pursuant to Rule 415 and the declaration or ordering of effectiveness of
such Registration Statement(s) by the SEC.
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w. "Registrable Securities" means the Initial Registrable
Securities and the Additional Registrable Securities.
x. "Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act covering
the Registrable Securities.
y. "Required Holders" means the holders of at least a majority of
the Registrable Securities.
z. "Rule 415" means Rule 415 under the 1933 Act or any successor
rule providing for offering securities on a continuous or delayed basis.
aa. "SEC" means the United States Securities and Exchange
Commission.
2. Registration.
a. Initial Mandatory Registration. The Company shall prepare, and,
as soon as practicable, but in no event later than the Initial Filing
Deadline, file with the SEC the Initial Registration Statement on Form
SB-2 covering the resale of all of the Initial Registrable Securities. In
the event that Form SB-2 is unavailable for such a registration, the
Company shall use such other form as is available for such a registration
on another appropriate form reasonably acceptable to the Required
Holders, subject to the provisions of Section 2(e). The Initial
Registration Statement prepared pursuant hereto shall register for resale
at least the number of shares of Common Stock equal to the Initial
Required Registration Amount determined as of date the Registration
Statement is initially filed with the SEC. The Initial Registration
Statement shall contain (except if otherwise directed by the Required
Holders) the "Selling Stockholders" and "Plan of Distribution" sections
in substantially the form attached hereto as Exhibit B. The Company shall
use its reasonable best efforts to have the Initial Registration
Statement declared effective by the SEC as soon as practicable, but in no
event later than the Initial Effectiveness Deadline. By 9:30 am on the
Business Day following the Initial Effective Date, the Company shall file
with the SEC in accordance with Rule 424 under the 1933 Act the final
prospectus to be used in connection with sales pursuant to such
Registration Statement.
b. Additional Mandatory Registrations. The Company shall prepare,
and, as soon as practicable but in no event later than the Additional
Filing Deadline, file with the SEC an Additional Registration Statement
on Form SB-2 covering the resale of all of the Additional Registrable
Securities not previously registered on an Additional Registration
Statement hereunder. In the event that Form SB-2 is unavailable for such
a registration, the Company shall use such other form as is available for
such a registration on another appropriate form reasonably acceptable to
the Required Holders, subject to the provisions of Section 2(e). Each
Additional Registration Statement prepared pursuant hereto shall register
for resale at least that number of shares of Common Stock equal to the
Additional Required Registration Amount as of date the Registration
Statement is initially filed with the SEC. Each Additional Registration
Statement shall contain (except if otherwise directed by the Required
Holders) the "Selling Stockholders" and "Plan of Distribution" sections
in substantially the form attached
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hereto as Exhibit B. The Company shall use its reasonable best efforts to
have each Additional Registration Statement declared effective by the SEC
as soon as practicable, but in no event later than the Additional
Effectiveness Deadline. By 9:30 am on the Business Day following the
Additional Effective Date, the Company shall file with the SEC in
accordance with Rule 424 under the 1933 Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement.
c. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and any
increase in the number of Registrable Securities included therein shall
be allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time the Registration
Statement covering such initial number of Registrable Securities or
increase thereof is declared effective by the SEC. In the event that an
Investor sells or otherwise transfers any of such Investor's Registrable
Securities, each transferee shall be allocated a pro rata portion of the
then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common Stock
included in a Registration Statement and which remain allocated to any
Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro
rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event
shall the Company include any securities other than Registrable
Securities on any Registration Statement without the prior written
consent of the Required Holders.
d. Legal Counsel. Subject to Section 5 hereof, the Required Holders
shall have the right to select one legal counsel to review any
registration or amendment or supplement thereto pursuant to this Section
2 ("Legal Counsel"), which shall be Schulte Roth & Zabel LLP or such
other counsel as thereafter designated by the Required Holders. Such
legal counsel shall receive copies of such registration prior to filing,
and shall have at least two days to review and provide comments thereon.
The Company and Legal Counsel shall reasonably cooperate with each other
in performing the Company's obligations under this Agreement.
e. Ineligibility for Form S-3. In the event that Form S-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the
Required Holders and (ii) undertake to register the Registrable
Securities on Form S-3 as soon as reasonably practicable after such form
is available (or if a Registration Statement has been filed by the
Company with the SEC and not declared effective prior to such date, as
soon as reasonably practicable after the applicable Effective Date), but
in no event later than 120 days after such form is available (or if a
Registration Statement has been filed by the Company with the SEC and not
declared effective prior to such date, 120 days after the applicable
Effective Date), provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such
time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
f. Sufficient Number of Shares Registered. In the event the number
of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities
required to be covered by such Registration Statement or
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an Investor's allocated portion of the Registrable Securities pursuant to
Section 2(b), the Company shall, to the extent such right is legally
available, amend the applicable Registration Statement, or file a new
Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required Registration
Amount as of the trading day immediately preceding the date of the filing
of such amendment or new Registration Statement, in each case, as soon as
practicable, but in any event not later than fifteen (15) days after the
necessity therefor arises. 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. For
purposes of the foregoing provision, the number of shares available under
a Registration Statement shall be deemed "insufficient to cover all of
the Registrable Securities" if at any time the number of shares of Common
Stock available for resale under the Registration Statement is less than
the product determined by multiplying (i) the Required Registration
Amount as of such time by (ii) 0.90. The calculation set forth in the
foregoing sentence shall be made without regard to any limitations on the
conversion of the Notes or the exercise of the Warrants and such
calculation shall assume that the Notes are then convertible into shares
of Common Stock at the then prevailing Conversion Rate (as defined in the
Notes) and that the Warrants are then exercisable for shares of Common
Stock at the then prevailing Exercise Price (as defined in the Warrants).
g. Effect of Failure to File and Obtain and Maintain Effectiveness
of Registration Statement. If (i) a Registration Statement covering all
of the Registrable Securities required to be covered thereby and required
to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the respective Filing Deadline (a "Filing
Failure") or (B) not declared effective by the SEC on or before the
respective Effectiveness Deadline (an "Effectiveness Failure") or (ii) on
any day after the Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot
be made (other than during an Allowable Grace Period (as defined in
Section 3(r)) pursuant to such Registration Statement or otherwise
(including, without limitation, because of a failure to keep such
Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement,
to register a sufficient number of shares of Common Stock or to maintain
the listing of the shares of Common Stock) (a "Maintenance Failure")
then, as partial relief for the damages to any holder by reason of any
such delay in or reduction of its ability to sell the underlying shares
of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each
holder of Registrable Securities relating to such Registration Statement
an amount in cash equal to (I) seventy-five one hundredths of a percent
(.75%) of the aggregate Purchase Price (as such term is defined in the
Securities Purchase Agreement) of such Investor's Registrable Securities
included in such Registration Statement on each of the following dates:
(i) the day of a Filing Failure; (ii) the day of an Effectiveness
Failure; and (iii) the initial day of a Maintenance Failure and (II) one
and one-half percent (1.5%) of the aggregate Purchase Price of such
Investor's Registrable Securities included in such Registration Statement
on each of the following dates: (i) on every thirtieth day (pro rated for
periods totaling less than thirty days) after the day of a Filing Failure
until such Filing Failure is cured; (ii) on every thirtieth day (pro
rated for periods totaling less than thirty days) after the day of an
Effectiveness Failure until such Effectiveness Failure is cured; and
(iii) on every thirtieth day (pro rated for periods totaling less than
thirty days) after the initial day of a Maintenance Failure until such
Maintenance Failure is cured. The payments to which a holder shall be
entitled pursuant to this Section 2(g) are referred to herein as
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"Registration Delay Payments." For the purpose of clarity, if a Filing
Failure, Effectiveness Failure or Maintenance Failure is continuing for
45 days, the amount of such Registration Delay Payments that shall have
accrued would be an amount equal to 3.0% of the aggregate Purchase Price
of such Investor's Registrable Securities included in such Registration
Statement. Registration Delay Payments shall be paid on the day of the
Filing Failure, Effectiveness Failure or the initial day of Maintenance
Failure, as applicable, and thereafter on the earlier of (I) on the
thirtieth day after the event or failure giving rise to the Registration
Delay Payments are incurred and (II) the third Business Day after the
event or failure giving rise to the Registration Delay Payments is cured.
In the event the Company fails to make Registration Delay Payments in a
timely manner, such Registration Delay Payments shall bear interest at
the rate of one and one-half percent (1.5%) per month (prorated for
partial months) until paid in full. Notwithstanding anything herein or in
the Securities Purchase Agreement to the contrary, (i) no Registration
Delay Payments shall be due and payable with respect to the Warrants or
the Warrant Shares and (ii) in no event shall the aggregate amount of
Registration Delay Payments (other than Registration Delay Payments
payable pursuant to events that are within the control of the Company)
exceed, in the aggregate, 10% of the aggregate Purchase Price.
Notwithstanding anything herein to the contrary, if the applicable
Effective Date has occurred and the Company has paid to the Investors the
Registration Delay Payments (including any accrued interest thereon, if
any), the Investors shall not be entitled to seek any additional cash
damages from any court, administrative body, tribunal or authority
against the Company with respect to such Filing Failure, Effectiveness
Failure, and/or Maintenance Failure, as applicable; provided, however,
that this sentence shall not preclude any Investor from seeking or
obtaining remedies or exercising any rights of such Investor under any
other Transaction Document (as defined in the Securities Purchase
Agreement).
3. Related Obligations.
At such time as the Company is obligated to file a Registration Statement
with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its
reasonable best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:
a. The Company shall submit to the SEC, within two (2) Business
Days after the Company learns that no review of a particular Registration
Statement will be made by the staff of the SEC or that the staff has no
further comments on a particular Registration Statement, as the case may
be, a request for acceleration of effectiveness of such Registration
Statement to a time and date not later than two (2) Business Days after
the submission of such request. The Company shall keep each Registration
Statement effective pursuant to Rule 415 at all times until the earlier
of (i) the date as of which the Investors may sell all of the Registrable
Securities covered by such Registration Statement without restriction
pursuant to Rule 144(k) (or any successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all of
the Registrable Securities covered by such Registration Statement (the
"Registration Period"). The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made)
not misleading.
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b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such
Registration Statement 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 such Registration Statement until such time as all of
such Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof
as set forth in such Registration Statement. In the case of amendments
and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section
3(b)) by reason of the Company filing a report on Form 10-QSB, Form
10-KSB or any analogous report under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), the Company shall have incorporated such
report by reference into such Registration Statement, if applicable, or
shall file such amendments or supplements with the SEC on the same day on
which the 1934 Act report is filed which created the requirement for the
Company to amend or supplement such Registration Statement.
c. The Company shall (A) permit Legal Counsel to review and comment
upon (i) a Registration Statement at least five (5) Business Days prior
to its filing with the SEC and (ii) all amendments and supplements to all
Registration Statements (except for Annual Reports on Form 10-KSB, and
Reports on Form 10-QSB and any similar or successor reports) within a
reasonable number of days prior to their filing with the SEC, and (B) not
file any Registration Statement or amendment or supplement thereto in a
form to which Legal Counsel reasonably objects. The Company shall not
submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior
approval of Legal Counsel, which consent shall not be unreasonably
withheld. The Company shall furnish to Legal Counsel, without charge, (i)
copies of any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to any Registration Statement,
(ii) promptly after the same is prepared and filed with the SEC, one copy
of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits and (iii) upon
the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and
supplements thereto. The Company shall reasonably cooperate with Legal
Counsel in performing the Company's obligations pursuant to this
Section 3.
d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge,
(i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated
therein by reference, if requested by an Investor, all exhibits and each
preliminary prospectus, (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 as such Investor may
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reasonably request) and (iii) such other documents, including copies of
any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.
e. The Company shall use its reasonable best efforts to (i)
register and qualify, unless an exemption from registration and
qualification applies, the resale by Investors of the Registrable
Securities covered by a Registration Statement under such other
securities or "blue sky" laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such
other actions as may be necessary to maintain such registrations 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 (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this Section 3(e), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any
such jurisdiction. The Company shall promptly notify Legal Counsel and
each Investor who holds Registrable Securities of the receipt by the
Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for
sale under the 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.
f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event, as promptly as practicable after
becoming aware of such event, 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
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3(r), promptly
prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to Legal Counsel and each Investor (or such
other number of copies as Legal Counsel or such Investor may reasonably
request). The Company shall also promptly notify Legal Counsel and each
Investor 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 Legal Counsel
and 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, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be
appropriate.
g. The Company shall use its reasonable 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 Legal Counsel
and each Investor who
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holds Registrable Securities being sold 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.
h. If any Investor is required under applicable securities laws to
be described in the Registration Statement as an underwriter, at the
reasonable request of such Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as an Investor may
reasonably request (i) 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
Investors, 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 Investors.
i. If any Investor is required under applicable securities laws to
be described in the Registration Statement as an underwriter, then at the
request of such Investor in connection with such Investor's due diligence
requirements, the Company shall make available for inspection by (i) any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other
agents retained by the Investors (collectively, the "Inspectors"), all
pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the "Records"), as shall be
reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector
shall agree to hold in strict confidence and shall not make any
disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified,
unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (b) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other
agreement of which the Inspector has knowledge. Each Investor agrees that
it shall, upon learning that disclosure of such Records is sought in or
by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, the Records deemed confidential.
Nothing herein (or in any other confidentiality agreement between the
Company and any Investor) shall be deemed to limit the Investors' ability
to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.
j. The Company shall hold in confidence and not make any disclosure
of information concerning an Investor 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 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 or any other agreement. The Company agrees
that it shall, upon
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learning that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Investor and
allow such Investor, at the Investor's expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for,
such information.
k. The Company shall use its reasonable best efforts either to (i)
cause all of the Registrable Securities covered by a Registration
Statement to be listed on each securities exchange on which securities of
the same class or series issued by the Company are then listed, if any,
if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (ii) secure designation and quotation of all
of the Registrable Securities covered by a Registration Statement on The
Nasdaq National Market or (iii) if, despite the Company's reasonable best
efforts to satisfy, the preceding clauses (i) and (ii) the Company is
unsuccessful in satisfying the preceding clauses (i) and (ii), to secure
the inclusion for quotation on The Nasdaq Capital Market or the American
Stock Exchange for such Registrable Securities and, without limiting the
generality of the foregoing, to use its reasonable best efforts to
arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to
such Registrable Securities. The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section 3(k).
l. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable,
facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be,
as the Investors may reasonably request and registered in such names as
the Investors may request.
m. If requested by an Investor, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective
amendment such information as an Investor reasonably requests to be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to
the number of Registrable Securities being offered or sold, the purchase
price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) as soon as
practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
and (iii) as soon as practicable, supplement or make amendments to any
Registration Statement if reasonably requested by an Investor holding any
Registrable Securities.
n. The Company shall use its reasonable best efforts to cause the
Registrable Securities covered by a Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
o. The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form
complying with, and in the manner provided by, the provisions of Rule 158
under the 1933 Act) covering a twelve-month period beginning not later
12
than the first day of the Company's fiscal quarter next following the
effective date of a Registration Statement.
p. The Company shall otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.
q. Within two (2) Business Days after a Registration Statement
which covers Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such
Registration Statement) confirmation that such Registration Statement has
been declared effective by the SEC in the form attached hereto as
Exhibit A.
r. Notwithstanding anything to the contrary herein, at any time
after the Effective Date, the Company may delay the disclosure of
material, non-public information concerning the Company the disclosure of
which at the time is not, in the good faith opinion of the Board of
Directors of the Company and its counsel, in the best interest of the
Company and, in the opinion of counsel to the Company, otherwise required
(a "Grace Period"); provided, that the Company shall promptly (i) notify
the Investors in writing of the existence of material, non-public
information giving rise to a Grace Period (provided that in each notice
the Company will not disclose the content of such material, non-public
information to the Investors) and the date on which the Grace Period will
begin, and (ii) notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that no Grace Period shall
exceed five (5) trading days and during any three hundred sixty five
(365) day period such Grace Periods shall not exceed an aggregate of
twenty (20) days and the first day of any Grace Period must be at least
five (5) trading days after the last day of any prior Grace Period (each,
an "Allowable Grace Period"). For purposes of determining the length of a
Grace Period above, the Grace Period shall begin on and include the date
the Investors receive the notice referred to in clause (i) and shall end
on and include the later of the date the Investors receive the notice
referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace
Period, the Company shall again be bound by the first sentence of Section
3(f) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an Investor
in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which
an Investor has entered into a contract for sale, and delivered a copy of
the prospectus included as part of the applicable Registration Statement
(unless an exemption from such prospectus delivery requirements exists),
prior to the Investor's receipt of the notice of a Grace Period and for
which the Investor has not yet settled.
4. Obligations of the Investors.
a. At least five (5) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each
Investor in writing of the information the Company requires from each
such Investor if such Investor elects to have any of
13
such Investor's Registrable Securities included in such 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 of a particular Investor that such
Investor shall furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be
reasonably required to effect the effectiveness of the registration of
such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
b. Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested
by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from such Registration Statement.
c. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(g) or the first sentence of 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(g) or the first sentence of 3(f) or
receipt of notice that no supplement or amendment is required.
Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities
with respect to which an Investor has entered into a contract for sale
prior to the Investor's receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f) and for which the Investor has not yet settled.
d. Each Investor covenants and agrees that it will comply with any
prospectus delivery requirements of the 1933 Act applicable to it in
connection with sales of Registrable Securities pursuant to the
Registration Statement.
5. Expenses of Registration.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees,
and fees and disbursements of counsel for the Company shall be paid by the
Company. The Company shall also reimburse the Investors for the reasonable fees
and disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2 and 3 of this Agreement, which amount
shall be limited to $15,000.
6. Indemnification.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
14
a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, members, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable attorneys' fees, amounts
paid in settlement or expenses, joint or several, (collectively,
"Claims") incurred in investigating, preparing or defending any action,
claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto
("Indemnified Damages"), to which any of them may become subject insofar
as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under
the securities or other "blue sky" laws of any jurisdiction in which
Registrable Securities are offered ("Blue Sky Filing"), or the omission
or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective
date of such Registration Statement, or contained in the final prospectus
(as amended or supplemented, if the Company files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements
therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of
this Agreement (the matters in the foregoing clauses (i) through (iv)
being, collectively, "Violations"). Subject to Section 6(c), the Company
shall reimburse the Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending
any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i)
shall not apply to a Claim by an Indemnified Person arising out of or
based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified
Person for such Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d) and (ii) shall not be
available to the extent such Claim is based on a failure of the Investor
to deliver or to cause to be delivered the prospectus made available by
the Company, including a corrected prospectus, if such prospectus or
corrected prospectus was timely made available by the Company pursuant to
Section 3(d); and (iv) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld
or delayed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by
the Investors pursuant to Section 9.
15
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in
the same manner as is set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration Statement and
each Person, if any, who controls the Company within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Party"), against any
Claim or Indemnified Damages to which any of them may become subject,
under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each
case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such
Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in
Section 7 shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or delayed;
provided, further, however, that the Investor shall be liable under this
Section 6(b) for only that amount of a Claim or Indemnified Damages as
does not exceed the net proceeds to such Investor as a result of the sale
of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of
any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented.
c. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a
Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party,
as the case may be; provided, however, that an Indemnified Person or
Indemnified Party shall have the right to retain its own counsel with the
fees and expenses of not more than one counsel for such Indemnified
Person or Indemnified Party to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred
to in the immediately preceding sentence shall be selected by the
Investors holding at least a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim
relates. The Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any
16
negotiation or defense of any such action or Claim by the indemnifying
party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person reasonably apprised at all times
as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying
party shall, without the prior written consent of the Indemnified Party
or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified
Party or Indemnified Person of a release from all liability in respect to
such Claim or litigation, and such settlement shall not include any
admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall
be subrogated to all rights of the Indemnified Party or Indemnified
Person with respect to all third parties, firms or corporations relating
to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.
d. The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
e. The indemnity agreements contained herein shall be in addition
to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however,
that: (i) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant
to such Registration Statement.
8. Reports Under the 1934 Act.
With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at
17
any time permit the Investors to sell securities of the Company to the public
without registration ("Rule 144"), the Company agrees to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements and the filing
of such reports and other documents is required for the applicable
provisions of Rule 144; and
c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement
by the Company, if true, 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 Investors to
sell such securities pursuant to Rule 144 without registration.
9. Assignment of Registration Rights.
The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of such Investor's
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; and (v)
such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.
10. 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 Required Holders. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.
18
11. Miscellaneous.
a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice
or election received from the such record owner of such Registrable
Securities.
b. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:
If to the Company:
Bravo! Foods International Corp.
11300 U.S. Highway 1, Suite 202
North Palm Beach, FL 33408
Telephone: (561) 625-1411
Facsimile: (561) 625-1413
Attention: Jeffrey J. Kaplan, Chief Financial Officer
With a copy (which shall not constitute notice) to Roy D.
Toulan, Jr., Vice President, General Counsel
With a copy (which shall not constitute notice) to:
Baker & McKenzie LLP
1114 Avenue of the Americas
New York, NY 10036
Telephone: (212) 626-4100
Facsimile: (212) 310-1600
Attention: Martin E. Weisberg, Esq.
If to Legal Counsel:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 756-2000
Facsimile: (212) 593-5955
19
Attention: Eleazer N. Klein, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set
forth on the Schedule of Buyers, or to such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to
the effectiveness of such change. Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. 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. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement, the other Transaction Documents (as defined in
the Securities Purchase Agreement) and the instruments referenced herein
and therein constitute the entire 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
20
forth or referred to herein and therein. This Agreement, the other
Transaction Documents and the instruments referenced herein and therein
supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts, each
of which shall be deemed an original but all of which shall constitute
one and the same agreement. 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.
i. 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 any 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.
j. All consents and other determinations required to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders.
k. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.
l. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other
Person.
m. The obligations of each Investor hereunder are several and not
joint with the obligations of any other Investor, and no provision of
this Agreement is intended to confer any obligations on any Investor
vis-a-vis any other Investor. Nothing contained herein, and no action
taken by any Investor pursuant hereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Investors are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated herein.
* * * * * *
1
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
COMPANY:
BRAVO! FOODS INTERNATIONAL CORP.
By: ____________________________________
Name:
Title:
2
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
KINGS ROAD INVESTMENTS LTD.
By: ____________________________________
Name:
Title:
3
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management, Inc.
By: ____________________________________
Name:
Title:
4
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
EVOLUTION MASTER FUND LTD. SPC,
SEGREGATED PORTFOLIO M
By: ____________________________________
Name:
Title:
5
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
STEELHEAD INVESTMENTS LTD.
By: ____________________________________
Name:
Title:
6
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
ALPHA CAPITAL AKTIENGESELLSCHAFT
By: ____________________________________
Name:
Title:
7
SCHEDULE OF BUYERS
Buyer's Address Buyer's Representative's Address
--------------- --------------------------------
Buyer and Facsimile Number and Facsimile Number
----- -------------------- --------------------
Schulte Roth & Zabel LLP
Kings Road c/o Polygon Investment Partners LP 919 Third Avenue
Investments Ltd. 598 Madison Avenue New York, New York 10022
14th Floor Attn: Eleazer Klein, Esq.
New York, NY 10022 Facsimile: (212) 593-5955
Attention: Erik M.W. Caspersen and Telephone: (212) 756-2000
Brandon L. Jones
Facsimile: (212) 359-7303
Telephone: (212) 359-7300
Residence: Cayman Islands
Evolution Master Fund Ltd. SPC c/o Evolution Capital Management LLC
Segregated Portfolio M Walker House, Mary Street
P.O. Box 908 GT George Town, Cayman Island
Attn: Richard Chisholm Facsimile:
808-441-4946 Telephone: 808-441-4917
Residence: Cayman Islands
Additional Copy to:
Evolution Capital Management, LLC
1132 Bishop Street,
Suite 1880
Honolulu, Hawaii 96813
Attention: Richard Chisholm
Facsimile: 808-441-4946
Telephone: 808-441-4917
Steelhead Investments Ltd. c/o HBK Investments L.P.
300 Crescent Court, Suite 700
Dallas, TX 75201
Attention: Legal (PP)
Telephone: 214-758-6107
Facsimile: 214-758-1207
Residence: Cayman Islands
Capital Ventures International c/o Heights Capital Management
101 California Street, Suite 3250
San Francisco, CA 94111
Attention: Martin Kobinger,
Investment Manager
Facsimile: 415-403-6525
Telephone: 415-403-6500
Residence: Cayman Islands
Alpha Capital Aktiengesellschaft
c/o Alpha Capital, AG
160 Central Park South
#2701
New York, New York 10019
Attention: Joe Hammer
Facsimile: (212) 586-8244
Telephone: (212) 586-8224
Residence: Lichtenstein
1
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
-------------------------------
OF REGISTRATION STATEMENT
-------------------------
American Stock Transfer and Trust Co.
[Address]
Attention:
Re: Bravo! Foods International Corp.
Ladies and Gentlemen:
[We are][I am] counsel to Bravo! Foods International Corp., a Delaware
corporation (the "Company"), and have represented the Company in connection
with that certain Securities Purchase Agreement (the "Securities Purchase
Agreement") entered into by and among the Company and the buyers named therein
(collectively, the "Holders") pursuant to which the Company issued to the
Holders (i) senior convertible notes (the "Notes") convertible into the
Company's common stock, par value $0.001 per share (the "Common Stock and (ii)
two series of warrants exercisable for shares of Common Stock (the "Warrants").
Pursuant to the Securities Purchase Agreement, the Company also has entered
into a Registration Rights Agreement with the Holders (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of
the Notes and the shares of Common Stock issuable upon exercise of the
Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration
Statement on Form SB-2 (File No. 333-_____________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities which names each of the Holders as a selling
stockholder thereunder.
In connection with the foregoing, [we][I] advise you that a member of the
SEC's staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER
TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
knowledge, after telephonic inquiry of a member of the SEC's staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.
This letter shall serve as our standing instruction to you that the
shares of Common Stock are freely transferable by the Holders pursuant to the
Registration Statement. You need not require further letters from us to effect
any future legend-free issuance or reissuance of shares of Common Stock to the
Holders as contemplated by the Company's Irrevocable Transfer Agent
Instructions dated July __, 2006.
2
Very truly yours,
[ISSUER'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF HOLDERS]
1
EXHIBIT B
SELLING STOCKHOLDERS
The shares of Common Stock being offered by the selling stockholders are
issuable upon conversion of the convertible notes and upon exercise of the
warrants. For additional information regarding the issuance of those
convertible notes and warrants, see "Private Placement of Convertible Notes and
Warrants" above. We are registering the shares of Common Stock in order to
permit the selling stockholders to offer the shares for resale from time to
time. Except for the ownership of the Convertible Notes and Warrants issued
pursuant to the Securities Purchase Agreement, the selling stockholders have
not had any material relationship with us within the past three years.
The table below lists the selling stockholders and other information
regarding the beneficial ownership of the shares of Common Stock by each of the
selling stockholders. The second column lists the number of shares of Common
Stock beneficially owned by each selling stockholder, based on its ownership of
the convertible notes and warrants, as of ________, 200_, assuming conversion
of all convertible notes and exercise of the warrants held by the selling
stockholders on that date, without regard to any limitations on conversions or
exercise.
The third column lists the shares of Common Stock being offered by this
prospectus by each selling stockholders.
In accordance with the terms of a registration rights agreement among the
Company and the selling stockholders, this prospectus generally covers the
resale of at least 130% of the sum of (i) the number of shares of Common Stock
issuable upon conversion of the convertible notes as of the trading day
immediately preceding the date the registration statement is initially filed
with the SEC and (ii) the number of shares of Common Stock issuable upon
exercise of the related warrants as of the trading day immediately preceding
the date the registration statement is initially filed with the SEC. Because
the conversion price of the convertible notes and the exercise price of the
warrants may be adjusted, the number of shares that will actually be issued may
be more or less than the number of shares being offered by this prospectus. The
fourth column assumes the sale of all of the shares offered by the selling
stockholders pursuant to this prospectus.
Under the terms of the convertible notes and the warrants, a selling
stockholder may not convert the convertible notes or exercise the warrants to
the extent such conversion or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of Common
Stock which would exceed 9.99% of our then outstanding shares of Common Stock
following such conversion or exercise, excluding for purposes of such
determination shares of Common Stock issuable upon conversion of the
convertible notes which have not been converted and upon exercise of the
warrants which have not been exercised. The number of shares in the second
column does not reflect this limitation. The selling stockholders may sell all,
some or none of their shares in this offering. See "Plan of Distribution."
1
Maximum Number of Shares
Number of Shares Owned to be Sold Pursuant to Number of Shares
Name of Selling Stockholder Prior to Offering this Prospectus Owned After Offering
- --------------------------- ----------------- --------------- --------------------
Kings Road Investments Ltd. (1) 0
<FN>
(1) Polygon Investment Partners LLP and Polygon Investment Partners LP
(the "Investment Managers") and Polygon Investments Ltd. (the "Manager") each
has the right to vote and dispose of the securities held by Kings Road
Investments Ltd. Alexander Jackson, Reade Griffith and Paddy Dear control the
Investment Managers and the Manager. The Investment Managers, the Manager,
Alexander Jackson, Reade Griffith and Paddy Dear disclaim beneficial ownership
of the securities held by Kings Road Investments Ltd.
</FN>
1
PLAN OF DISTRIBUTION
We are registering the shares of Common Stock issuable upon conversion of
the convertible notes and upon exercise of the warrants to permit the resale of
these shares of Common Stock by the holders of the convertible notes and
warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the
shares of Common Stock. We will bear all fees and expenses incident to our
obligation to register the shares of Common Stock.
The selling stockholders may sell all or a portion of the shares of
Common Stock beneficially owned by them and offered hereby from time to time
directly or through one or more underwriters, broker-dealers or agents. If the
shares of Common Stock are sold through underwriters or broker-dealers, the
selling stockholders will be responsible for underwriting discounts or
commissions or agent's commissions. The shares of Common Stock may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,
* on any national securities exchange or quotation service on which
the securities may be listed or quoted at the time of sale;
* in the over-the-counter market;
* in transactions otherwise than on these exchanges or systems or in
the over-the-counter market;
* through the writing of options, whether such options are listed on
an options exchange or otherwise;
* ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
* block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
* an exchange distribution in accordance with the rules of the
applicable exchange;
* privately negotiated transactions;
* short sales;
* sales pursuant to Rule 144;
2
* broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;
* a combination of any such methods of sale; and
* any other method permitted pursuant to applicable law.
If the selling stockholders effect such transactions by selling shares of
Common Stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of Common Stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of Common Stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of Common Stock in the course of hedging in
positions they assume. The selling stockholders may also sell shares of Common
Stock short and deliver shares of Common Stock covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of Common
Stock to broker-dealers that in turn may sell such shares.
The selling stockholders may pledge or grant a security interest in some
or all of the convertible notes or warrants or shares of Common Stock owned by
them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of Common Stock from
time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending, if necessary, the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer
and donate the shares of Common Stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer participating in the
distribution of the shares of Common Stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of Common Stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of Common Stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
Under the securities laws of some states, the shares of Common Stock may
be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of Common Stock may not be sold unless
such shares have been registered or qualified
3
for sale in such state or an exemption from registration or qualification is
available and is complied with.
There can be no assurance that any selling stockholder will sell any or
all of the shares of Common Stock registered pursuant to the registration
statement, of which this prospectus forms a part.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder,
including, without limitation, Regulation M of the Exchange Act, which may
limit the timing of purchases and sales of any of the shares of Common Stock by
the selling stockholders and any other participating person. Regulation M may
also restrict the ability of any person engaged in the distribution of the
shares of Common Stock to engage in market-making activities with respect to
the shares of Common Stock. All of the foregoing may affect the marketability
of the shares of Common Stock and the ability of any person or entity to engage
in market-making activities with respect to the shares of Common Stock.
We will pay all expenses of the registration of the shares of Common
Stock pursuant to the registration rights agreement, estimated to be $[ ] in
total, including, without limitation, Securities and Exchange Commission filing
fees and expenses of compliance with state securities or "blue sky" laws;
provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution.
Once sold under the registration statement, of which this prospectus
forms a part, the shares of Common Stock will be freely tradable in the hands
of persons other than our affiliates.