EXHIBIT 99.5
[FORM OF WARRANT]
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THIS CERTIFICATE IS EXERCISABLE (TOGETHER, THE
"SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO BRAVO! FOODS
INTERNATIONAL CORP., THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
BRAVO! FOODS INTERNATIONAL CORP.
SERIES A WARRANT TO PURCHASE COMMON STOCK
Warrant No.: _____________________
Number of Shares of Common Stock:_____________
Date of Issuance: July 27, 2006 ("Issuance Date")
Bravo! Foods International Corp., a Delaware corporation (the "Company"),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, [INSERT NAME OF HOLDER], the
registered holder hereof or its permitted assigns (the "Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the "Warrant"), at
any time or times on or after the date hereof, but not after 5:00 p.m., New
York time, on the Expiration Date (as defined below), ______________
(_____________)(1) fully paid nonassessable shares of Common Stock (as defined
below) (the "Warrant Shares"). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section 15. This
Warrant is one of the Warrants to purchase Common Stock (the "SPA Warrants")
issued pursuant to Section 1 of that certain Securities Purchase Agreement,
dated as of July 26, 2006 (the "Subscription Date"), by and among the Company
and the investors (the "Buyers") referred to therein (the "Securities Purchase
Agreement").
____________________
(1) Insert a number of shares equal to 30% of the number Conversion Shares (as
defined in the Notes) issuable upon conversion of the Initial Notes and the
Additional Notes issued to the Holder pursuant to the Securities Purchase
Agreement.
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1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions
hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on any day on
or after the date hereof, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as Exhibit A (the "Exercise
Notice"), of the Holder's election to exercise this Warrant and (ii) (A)
payment to the Company of an amount equal to the applicable Exercise
Price multiplied by the number of Warrant Shares as to which this Warrant
is being exercised (the "Aggregate Exercise Price") in cash or by wire
transfer of immediately available funds or (B) by notifying the Company
that this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 1(d)). The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the
Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. On or before the first (1st)
Business Day following the date on which the Company has received each of
the Exercise Notice and the Aggregate Exercise Price (or notice of a
Cashless Exercise) (the "Exercise Delivery Documents"), the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt of the
Exercise Delivery Documents to the Holder and the Company's transfer
agent (the "Transfer Agent"). On or before the third (3rd) Business Day
following the date on which the Company has received all of the Exercise
Delivery Documents (the "Share Delivery Date"), the Company shall (X)
provided that the Transfer Agent is participating in The Depository Trust
Company ("DTC") Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise to the
Holder's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program,
issue and dispatch by overnight courier to the address as specified in
the Exercise Notice, a certificate, registered in the Company's share
register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Notice and Aggregate Exercise
Price referred to in clause (ii)(A) above or notification to the Company
of a Cashless Exercise referred to in Section 1(d), the Holder shall be
deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the certificates evidencing such
Warrant Shares. If this Warrant is submitted in connection with any
exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the
number of Warrant Shares being acquired upon an exercise, then the
Company shall as soon as practicable and in no event later than five (5)
Business Days after any exercise and at its own expense, issue a new
Warrant (in accordance with Section 7(d)) representing the right to
purchase the number of Warrant Shares purchasable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but
rather the number of shares of Common Stock to be issued shall be rounded
up to the nearest whole number. The Company shall pay any and all taxes
which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant.
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(b) Exercise Price. For purposes of this Warrant, "Exercise Price"
means $0.73, subject to adjustment as provided herein.
(c) Company's Failure to Timely Deliver Securities. If the Company
shall fail for any reason or for no reason to issue to the Holder within
three (3) Business Days of receipt of the Exercise Delivery Documents, a
certificate for the number of shares of Common Stock to which the Holder
is entitled and register such shares of Common Stock on the Company's
share register or to credit the Holder's balance account with DTC for
such number of shares of Common Stock to which the Holder is entitled
upon the Holder's exercise of this Warrant, then, in addition to all
other remedies available to the Holder, the Company shall pay in cash to
the Holder on each day after such third Business Day that the issuance of
such shares of Common Stock is not timely effected an amount equal to
1.5% of the product of (A) the sum of the number of shares of Common
Stock not issued to the Holder on a timely basis and to which the Holder
is entitled and (B) the Weighted Average Price of the shares of Common
Stock on the Trading Day immediately preceding the last possible date
which the Company could have issued such shares of Common Stock to the
Holder without violating Section 1(a). In addition to the foregoing, if
within three (3) Trading Days after the Company's receipt of the
facsimile copy of a Exercise Notice the Company shall fail to issue and
deliver a certificate to the Holder and register such shares of Common
Stock on the Company's share register or credit the Holder's balance
account with DTC for the number of shares of Common Stock to which the
Holder is entitled upon the Holder's exercise hereunder, and if on or
after such Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of shares of Common Stock issuable
upon such exercise that the Holder anticipated receiving from the Company
(a "Buy-In"), then the Company shall, within three (3) Business Days
after the Holder's request and in the Holder's discretion, either (i) pay
cash to the Holder in an amount equal to the Holder's total purchase
price (including brokerage commissions, if any) for the shares of Common
Stock so purchased (the "Buy-In Price"), at which point the Company's
obligation to deliver such certificate (and to issue such shares of
Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such
shares of Common Stock and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the Weighted Average Price on
the date of exercise.
(d) Cashless Exercise. From and after the earlier of (x) the
Initial Effective Date and (y) the Initial Effectiveness Deadline (each
as defined in the Registration Rights Agreement), notwithstanding
anything contained herein to the contrary, if a Registration Statement
(as defined in the Registration Rights Agreement) covering the Warrant
Shares that are the subject of the Exercise Notice (the "Unavailable
Warrant Shares") is not available for the resale of such Unavailable
Warrant Shares, the Holder may, in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, elect instead to receive upon
such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless Exercise"):
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Net Number = (A x B) - (A x C)
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B
For purposes of the foregoing formula:
A= the total number of shares with respect to which this
Warrant is then being exercised.
B= the Weighted Average Price of the shares of Common Stock
(as reported by Bloomberg) on the date immediately
preceding the date of the Exercise Notice.
C= the Exercise Price then in effect for the applicable
Warrant Shares at the time of such exercise.
(e) Disputes. In the case of a dispute as to the determination of
the Exercise Price or the arithmetic calculation of the Warrant Shares,
the Company shall promptly issue to the Holder the number of Warrant
Shares that are not disputed and resolve such dispute in accordance with
Section 12.
(f) Limitations on Exercises.
(1) Beneficial Ownership. The Company shall not effect the
exercise of this Warrant, and the Holder shall not have the right
to exercise this Warrant, to the extent that after giving effect to
such exercise, such Person (together with such Person's affiliates)
would beneficially own in excess of 9.99% (the "Maximum
Percentage") of the shares of Common Stock outstanding immediately
after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock
beneficially owned by such Person and its affiliates shall include
the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such sentence is
being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of
this Warrant beneficially owned by such Person and its affiliates
and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned
by such Person and its affiliates (including, without limitation,
any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company's most recent
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Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB, Current Report on
Form 8-K or other public filing with the Securities and Exchange
Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company
or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within two Business
Days confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including the SPA Warrants, by the Holder and its affiliates since
the date as of which such number of outstanding shares of Common
Stock was reported. By written notice to the Company, the Holder
may from time to time increase or decrease the Maximum Percentage
to any other percentage not in excess of 9.99% specified in such
notice; provided that (i) any such increase will not be effective
until the sixty-first (61st) day after such notice is delivered to
the Company, and (ii) any such increase or decrease will apply only
to the Holder and not to any other holder of SPA Warrants.
(2) Principal Market Regulation. The Company shall not be
obligated to issue any shares of Common Stock upon exercise of this
Warrant or conversion of SPA Securities and no Buyer shall be
entitled to receive any shares of Common Stock if the issuance of
such shares of Common Stock would exceed that number of shares of
Common Stock which the Company may issue upon exercise or
conversion, as applicable, of the SPA Warrants and SPA Securities
or otherwise without breaching the Company's obligations under the
rules or regulations of any applicable Eligible Market (the
"Exchange Cap"), except that such limitation shall not apply in the
event that the Company (A) obtains the approval of its shareholders
as required by the applicable rules of the Eligible Market for
issuances of shares of Common Stock in excess of such amount or (B)
obtains a written opinion from outside counsel to the Company that
such approval is not required, which opinion shall be reasonably
satisfactory to the Required Holders. Until such approval or
written opinion is obtained, no Buyer shall be issued in the
aggregate, upon exercise or conversion, as applicable, of any SPA
Warrants or SPA Securities, shares of Common Stock in an amount
greater than the product of the Exchange Cap multiplied by a
fraction, the numerator of which is the total number of shares of
Common Stock underlying the SPA Warrants issued to such Buyer
pursuant to the Securities Purchase Agreement on the Issuance Date
and the denominator of which is the aggregate number of shares of
Common Stock underlying the SPA Warrants issued to the Buyers
pursuant to the Securities Purchase Agreement on the Issuance Date
(with respect to each Buyer, the "Exchange Cap Allocation"). In the
event that any Buyer shall sell or otherwise transfer any of such
Buyer's SPA Warrants, the transferee shall be allocated a pro rata
portion of such
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Buyer's Exchange Cap Allocation, and the restrictions of the prior
sentence shall apply to such transferee with respect to the portion
of the Exchange Cap Allocation allocated to such transferee. In the
event that any holder of SPA Warrants shall exercise all of such
holder's SPA Warrants into a number of shares of Common Stock
which, in the aggregate, is less than such holder's Exchange Cap
Allocation, then the difference between such holder's Exchange Cap
Allocation and the number of shares of Common Stock actually issued
to such holder shall be allocated to the respective Exchange Cap
Allocations of the remaining holders of SPA Warrants on a pro rata
basis in proportion to the shares of Common Stock underlying the
SPA Warrants then held by each such holder. In the event that the
Company is prohibited from issuing any Warrant Shares for which an
Exercise Notice has been received as a result of the operation of
this Section 1(f)(2), the Company shall pay cash in exchange for
cancellation of such Warrant Shares, at a price per Warrant Share
equal to the difference between the Weighted Average Price and the
Exercise Price as of the date of the attempted exercise.
(g) Insufficient Authorized Shares. If at any time after the
Stockholder Approval Date (as defined in the Securities Purchase
Agreement), while any of the Warrants remain outstanding, the Company
does not have a sufficient number of authorized and unreserved shares of
Common Stock to satisfy its obligation to reserve for issuance upon
exercise of the Warrants at least a number of shares of Common Stock
equal to 130% (the "Required Reserve Amount") of the number of shares of
Common Stock as shall from time to time be necessary to effect the
exercise of all of the Warrants then outstanding (an "Authorized Share
Failure"), then the Company shall immediately take all action necessary
to increase the Company's authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount
for the Warrants then outstanding. Without limiting the generality of the
foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than
sixty (60) days after the occurrence of such Authorized Share Failure,
the Company shall hold a meeting of its stockholders for the approval of
an increase in the number of authorized shares of Common Stock. In
connection with such meeting, the Company shall provide each stockholder
with a proxy statement and shall use its reasonable best efforts to
solicit its stockholders' approval of such increase in authorized shares
of Common Stock and to cause its board of directors to recommend to the
stockholders that they approve such proposal.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price and the number of Warrant Shares shall be adjusted from time to
time as follows:
(a) Adjustment upon Issuance of shares of Common Stock. If and
whenever during the Full Adjustment Period (as defined herein), the
Company issues or sells, or in accordance with this Section 2 is deemed
to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding any and all shares of Common Stock
deemed to have been issued by the Company in connection with any Excluded
Securities (as defined in the Notes)) for a
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consideration per share (the "New Issuance Price") less than a price (the
"Applicable Price") equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (the foregoing a
"Dilutive Issuance"), then immediately after such Dilutive Issuance, the
Exercise Price then in effect shall be reduced to an amount equal to the
New Issuance Price. Upon each such adjustment of the Exercise Price
hereunder, the number of Warrant Shares shall be adjusted to the number
of shares of Common Stock determined by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant
Shares acquirable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment. If and whenever after the Full Adjustment
Period, the Company engages in a Dilutive Issuance, then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be
reduced to an amount equal to the product of (A) the Exercise Price in
effect immediately prior to such Dilutive Issuance and (B) the quotient
determined by dividing (1) the sum of (I) the product derived by
multiplying the Exercise Price in effect immediately prior to such
Dilutive Issuance and the number of shares of Common Stock Deemed
Outstanding immediately prior to such Dilutive Issuance plus (II) the
consideration, if any, received by the Company upon such Dilutive
Issuance, by (2) the product derived by multiplying (I) the Exercise
Price in effect immediately prior to such Dilutive Issuance by (II) the
number of shares of Common Stock Deemed Outstanding immediately after
such Dilutive Issuance. As used herein, "Full Adjustment Period" means,
initially, the period commencing on the Subscription Date and ending on
and including the twelve month anniversary of the Effective Date (as
defined in the Registration Rights Agreement); provided, however, that
if, during the 3 month period commencing on the date the Form SB-2 (SEC
file number 333-130535) filed by the Company on December 21, 2005 is
declared effective by the United States Securities and Exchange
Commission, the Weighted Average Price of the Common Stock on each of any
10 Trading Days during any 20 consecutive Trading Day period is less than
$0.50 (as adjusted for stock splits, stock dividends, reverse stock
splits, recapitalizations, reclassifications and similar events) (the
"Extension Event") then, the Full Adjustment Period shall continue
through the twenty-four month anniversary of the Effective Date. For
purposes of determining the adjusted Exercise Price under this Section
2(a), the following shall be applicable:
(i) Issuance of Options. If the Company in any manner grants
any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or
upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the
Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company
at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(a)(i), the "lowest price
per share for which one share of Common Stock is issuable upon
exercise of such Options or upon conversion, exercise or exchange
of such Convertible Securities" shall be equal to the sum of the
lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the
granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option. No further adjustment of the
Exercise Price
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or number of Warrant Shares shall be made upon the actual issuance
of such shares of Common Stock or of such Convertible Securities
upon the exercise of such Options or upon the actual issuance of
such shares of Common Stock upon conversion, exercise or exchange
of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Company in
any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is
issuable upon the conversion, exercise or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this
Section 2(a)(ii), the "lowest price per share for which one share
of Common Stock is issuable upon the conversion, exercise or
exchange" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with
respect to one share of Common Stock upon the issuance or sale of
the Convertible Security and upon conversion, exercise or exchange
of such Convertible Security. No further adjustment of the Exercise
Price or number of Warrant Shares shall be made upon the actual
issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities, and if any such issue
or sale of such Convertible Securities is made upon exercise of any
Options for which adjustment of this Warrant has been or is to be
made pursuant to other provisions of this Section 2(a), no further
adjustment of the Exercise Price or number of Warrant Shares shall
be made by reason of such issue or sale.
(iii) Change in Option Price or Rate of Conversion. If the
purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise
or exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at
any time, the Exercise Price and the number of Warrant Shares in
effect at the time of such increase or decrease shall be adjusted
to the Exercise Price and the number of Warrant Shares which would
have been in effect at such time had such Options or Convertible
Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate,
as the case may be, at the time initially granted, issued or sold.
For purposes of this Section 2(a)(iii), if the terms of any Option
or Convertible Security that was outstanding as of the date of
issuance of this Warrant are increased or decreased in the manner
described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of
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such increase or decrease. No adjustment pursuant to this Section
2(a) shall be made if such adjustment would result in an increase
of the Exercise Price then in effect or a decrease in the number of
Warrant Shares.
(iv) Calculation of Consideration Received. In case any
Option is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have
been issued for a consideration of $0.01. If any shares of Common
Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount received by
the Company therefor. If any shares of Common Stock, Options or
Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company
will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company will be the Weighted Average
Price of such security on the date of receipt. If any shares of
Common Stock, Options or Convertible Securities are issued to the
owners of the non-surviving entity in connection with any merger in
which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity
as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined
jointly by the Company and the Required Holders. If such parties
are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined within five
(5) Business Days after the tenth day following the Valuation Event
by an independent, reputable appraiser jointly selected by the
Company and the Required Holders. The determination of such
appraiser shall be final and binding upon all parties absent
manifest error and the fees and expenses of such appraiser shall be
borne by the Company.
(v) Record Date. If the Company takes a record of the holders
of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of
Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or
Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.
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(b) Adjustment upon Subdivision or Combination of Common Stock. If
the Company at any time on or after the Subscription Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. If the Company at any time on
or after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(b) shall become effective
at the close of business on the date the subdivision or combination
becomes effective.
(c) Other Events. If any event occurs of the type contemplated by
the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of Warrant Shares so as
to protect the rights of the Holder; provided that no such adjustment
pursuant to this Section 2(c) will increase the Exercise Price or
decrease the number of Warrant Shares as otherwise determined pursuant to
this Section 2.
3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "Distribution"), at any time after the issuance of this
Warrant, then, in each such case:
(a) any Exercise Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of
shares of Common Stock entitled to receive the Distribution shall be
reduced, effective as of the close of business on such record date, to a
price determined by multiplying such Exercise Price by a fraction of
which (i) the numerator shall be the Weighted Average Price of the shares
of Common Stock on the Trading Day immediately preceding such record date
minus the value of the Distribution (as determined in good faith by the
Company's Board of Directors) applicable to one share of shares of Common
Stock, and (ii) the denominator shall be the Weighted Average Price of
the shares of Common Stock on the Trading Day immediately preceding such
record date; and
(b) the number of Warrant Shares shall be increased to a number of
shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for
the determination of holders of shares of Common Stock entitled to
receive the Distribution multiplied by the reciprocal of the fraction set
forth in the immediately preceding paragraph (a); provided that in the
event that the Distribution is of shares of Common Stock (or common
stock) ("Other Shares of Common Stock") of a company whose common shares
are traded on a national securities exchange or a national automated
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quotation system, then the Holder may elect to receive a warrant to
purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those
of this Warrant, except that such warrant shall be exercisable into the
number of shares of Other Shares of Common Stock that would have been
payable to the Holder pursuant to the Distribution had the Holder
exercised this Warrant immediately prior to such record date and with an
aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the
Distribution pursuant to the terms of the immediately preceding paragraph
(a) and the number of Warrant Shares calculated in accordance with the
first part of this paragraph (b).
4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase Rights. In addition to any adjustments pursuant to
Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property (excluding, however, any grants, issuances
or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property in connection with any
Excluded Security (as defined in the Notes)) pro rata to the record
holders of any class of shares of Common Stock (the "Purchase Rights"),
then the Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) immediately before
the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights.
(b) Fundamental Transactions. The Company shall not enter into or
be party to a Fundamental Transaction unless (i) the Successor Entity
assumes in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section (4)(b) pursuant to written agreements in form
and substance satisfactory to the Required Holders and approved by the
Required Holders prior to such Fundamental Transaction, including
agreements to deliver to each holder of Warrants in exchange for such
Warrants a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the
value for the shares of Common Stock reflected by the terms of such
Fundamental Transaction, and exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and satisfactory to the Required Holders and
(ii) the Successor Entity (including its Parent Entity) is a publicly
traded corporation whose common stock is quoted on or listed for trading
on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the
provisions of this Warrant referring to the "Company" shall refer instead
to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named
as the Company herein. Upon consummation of the Fundamental Transaction,
the Successor Entity shall deliver to the Holder
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confirmation that there shall be issued upon exercise of this Warrant at
any time after the consummation of the Fundamental Transaction, in lieu
of the shares of the Common Stock (or other securities, cash, assets or
other property) issuable upon the exercise of the Warrant prior to such
Fundamental Transaction, such shares of publicly traded Common Stock (or
their equivalent) of the Successor Entity, as adjusted in accordance with
the provisions of this Warrant. In addition to and not in substitution
for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which all or substantially all of the
holders of shares of Common Stock are entitled to receive securities or
other assets with respect to or in exchange for shares of Common Stock (a
"Corporate Event"), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an
exercise of this Warrant at any time after the consummation of the
Fundamental Transaction but prior to the Expiration Date, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other
property) purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction, such shares of stock, securities, cash, assets
or any other property whatsoever (including warrants or other purchase or
subscription rights) which the Holder would have been entitled to receive
upon the happening of such Fundamental Transaction had the Warrant been
exercised immediately prior to such Fundamental Transaction. Provision
made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Required Holders. The provisions of this
Section shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events and shall be applied without regard to
any limitations on the exercise of this Warrant. Notwithstanding the
foregoing, in the event of a Fundamental Transaction, at the request of
the Holder delivered before the 90th day after such Fundamental
Transaction, the Company (or the Successor Entity) shall purchase this
Warrant from the Holder by paying to the Holder, within five Business
Days after such request (or, if later, on the effective date of the
Fundamental Transaction), cash in an amount equal to the Black Scholes
Value of the remaining unexercised portion of this Warrant on the date of
such Fundamental Transaction; provided, however, that after (3) years
from the Issuance Date in the event of a Fundamental Transaction where
the Change of Control Consideration (as defined in the Notes) is equal to
200% or more of the Exercise Price the Holder shall not be entitled to
such Black Scholes Value.
5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be required to
protect the rights of the Holder. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Exercise
Price then in effect, (ii) shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, before the Stockholder Approval Date, so long as any of the SPA
Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common Stock, solely for
the purpose of effecting the exercise of the SPA Warrants, the number of shares
of Common Stock as shall from time to time be necessary to effect the exercise
of the SPA Warrants then outstanding (without regard to any limitations on
exercise), and (iv) shall, from and after the
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Stockholder Approval Date, so long as any of the SPA Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the
exercise of the SPA Warrants, 130% of the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of the SPA Warrants
then outstanding (without regard to any limitations on exercise).
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or
be deemed the holder of share capital of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person's capacity as the Holder of this Warrant, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which such
Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with
copies of the same notices and other information given to the shareholders of
the Company generally, contemporaneously with the giving thereof to the
shareholders.
7. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be transferred, the
Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new
Warrant (in accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant Shares
being transferred by the Holder and, if less then the total number of
Warrant Shares then underlying this Warrant is being transferred, a new
Warrant (in accordance with Section 7(d)) to the Holder representing the
right to purchase the number of Warrant Shares not being transferred.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss,
theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall execute and
deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying
this Warrant.
(c) Exchangeable for Multiple Warrants. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Warrant or Warrants (in accordance with
Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new
Warrant will represent the right to purchase such portion of such Warrant
Shares as is designated
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by the Holder at the time of such surrender; provided, however, that no
Warrants for fractional shares of Common Stock shall be given.
(d) Issuance of New Warrants. Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant, such new
Warrant (i) shall be of like tenor with this Warrant, (ii) shall
represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case
of a new Warrant being issued pursuant to Section 7(a) or Section 7(c),
the Warrant Shares designated by the Holder which, when added to the
number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date,
as indicated on the face of such new Warrant which is the same as the
Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.
8. NOTICES. Whenever notice is required to be given under this Warrant,
unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide
the Holder with prompt written notice of all actions taken pursuant to this
Warrant, including in reasonable detail a description of such action and the
reason therefore. Without limiting the generality of the foregoing, the Company
will give written notice to the Holder (i) immediately upon any adjustment of
the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen days prior to the date
on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to
any grants, issuances or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Required
Holders; provided that no such action may increase the exercise price of any
SPA Warrant or decrease the number of shares or class of stock obtainable upon
exercise of any SPA Warrant without the written consent of the Holder. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the SPA Warrants then outstanding.
10. GOVERNING LAW. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant 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.
11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly
drafted by the Company and all the Buyers and shall not be construed against
any person as the
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drafter hereof. The headings of this Warrant are for convenience of reference
and shall not form part of, or affect the interpretation of, this Warrant.
12. DISPUTE RESOLUTION. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within two Business Days of receipt of the Exercise Notice giving
rise to such dispute, as the case may be, to the Holder. If the Holder and the
Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within three Business Days of such
disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall, within two Business Days submit via facsimile (a) the
disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant. The Company shall cause at its expense the
investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.
13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction
Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of
the Holder right to pursue actual damages for any failure by the Company to
comply with the terms of this Warrant. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder
and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach,
the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.
14. TRANSFER. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company, except as may otherwise be
required by Section 2(f) of the Securities Purchase Agreement.
15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:
(a) "Black Scholes Value" means the value of this Warrant based on
the Black and Scholes Option Pricing Model obtained from the "OV"
function on Bloomberg determined as of the day immediately following the
public announcement of the applicable Fundamental Transaction and
reflecting (i) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of this Warrant as
of such date of request and (ii) an expected volatility equal to the 100
day volatility obtained from the HVT function on Bloomberg; provided that
if such function yields a volatility (x) less than 50%, the expected
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volatility shall be equal to 50% and (y) greater than 80%, the expected
volatility shall be equal to 80%.
(b) "Bloomberg" means Bloomberg Financial Markets.
(c) "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.
(d) "Common Stock" means (i) the Company's shares of Common Stock,
par value $0.001 per share, and (ii) any share capital into which such
Common Stock shall have been changed or any share capital resulting from
a reclassification of such Common Stock.
(e) "Common Stock Deemed Outstanding" means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to Sections
2(a)(i) and 2(a)(ii) hereof regardless of whether the Options or Convertible
Securities are actually exercisable at such time, but excluding any shares of
Common Stock owned or held by or for the account of the Company or issuable
upon exercise of the SPA Warrants.
(f) "Convertible Securities" means any stock or securities (other
than Options) directly or indirectly convertible into or exercisable or
exchangeable for shares of Common Stock.
(g) "Eligible Market" means the Principal Market, The New York
Stock Exchange, Inc., The Nasdaq National Market or the Nasdaq Capital
Market.
(h) "Expiration Date" means the date sixty (60) months after the
Initial Closing Date (as defined in the Securities Purchase Agreement)
or, if such date falls on a day other than a Business Day or on which
trading does not take place on the Principal Market (a "Holiday"), the
next date that is not a Holiday.
(i) "Fundamental Transaction" means that the Company shall,
directly or indirectly, in one or more related transactions, (i)
consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Person, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties
or assets of the Company to another Person, or (iii) allow another Person
to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the Person or Persons
making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (iv) consummate
a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person
acquires more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other
Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock purchase agreement or other
business combination), (v) reorganize, recapitalize or reclassify its
Common Stock, or (vi) any "person" or "group" (as these terms are used
for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall
become the "beneficial
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owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 50% of the aggregate ordinary voting power represented by
issued and outstanding Common Stock.
(j) "Options" means any rights, warrants or options to subscribe
for or purchase shares of Common Stock or Convertible Securities.
(k) "Parent Entity" of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or,
if there is more than one such Person or Parent Entity, the Person or
Parent Entity with the largest public market capitalization as of the
date of consummation of the Fundamental Transaction.
(l) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or
agency thereof.
(m) "Principal Market" means the NASD OTC Bulletin Board.
(n) "Registration Rights Agreement" means that certain registration
rights agreement by and among the Company and the Buyers.
(o) "Required Holders" means the holders of the SPA Warrants
representing at least a majority of shares of Common Stock underlying the
SPA Warrants then outstanding.
(p) "Successor Entity" means the Person (or, if so elected by the
Required Holders, the Parent Entity) formed by, resulting from or
surviving any Fundamental Transaction or the Person (or, if so elected by
the Required Holders, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(q) "Trading Day" means any day on which the Common Stock are
traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal
securities exchange or securities market on which the Common Stock are
then traded; provided that "Trading Day" shall not include any day on
which the Common Stock are scheduled to trade on such exchange or market
for less than 4.5 hours or any day that the Common Stock are suspended
from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending
at 4:00:00 p.m., New York time).
(r) "Weighted Average Price" means, for any security as of any
date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York
City time, and ending at 4:00:00 p.m., New York City time, as reported by
Bloomberg through its "Volume at Price" function or, if the foregoing
does not apply, the dollar volume-weighted average price of such security
in the over-the-counter market on the electronic bulletin board for such
security during the period beginning at 9:30:01 a.m., New York City time,
and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg,
or, if no dollar volume-weighted average price is reported for such
security by
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Bloomberg for such hours, the average of the highest closing bid price
and the lowest closing ask price of any of the market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). If the Weighted Average Price
cannot be calculated for such security on such date on any of the
foregoing bases, the Weighted Average Price of such security on such date
shall be the fair market value as mutually determined by the Company and
the Required Holders. If the Company and the Required Holders are unable
to agree upon the fair market value of the such security, then such
dispute shall be resolved pursuant to Section 12 with the term "Weighted
Average Price" being substituted for the term "Exercise Price." All such
determinations shall be appropriately adjusted for any share dividend,
share split or other similar transaction during such period.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase
Common Stock to be duly executed as of the Issuance Date set out above.
BRAVO! FOODS INTERNATIONAL CORP.
By: ________________________________________
Name:
Title:
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
BRAVO! FOODS INTERNATIONAL CORP.
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of Bravo!
Foods International Corp., a Delaware corporation (the "Company"), evidenced by
the attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:
________ a "Cash Exercise" with respect to ___________ Warrant Shares;
and/or
________ a "Cashless Exercise" with respect to _________ Warrant Shares.
2. Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum
of $___________________ to the Company in accordance with the terms of the
Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
4. Notwithstanding anything to the contrary contained herein, this
Exercise Notice shall constitute a representation by the holder of the Warrant
submitting this Exercise Notice that, after giving effect to the exercise
provided for in this Exercise Notice, such holder (together with its
affiliates) will not have beneficial ownership (together with the beneficial
ownership of such Person's affiliates) of a number of shares of Common Stock
which exceeds the Maximum Percentage of the total outstanding shares of Company
Common Stock as determined pursuant to the provisions of Section 1(f) of the
Warrant.
Date: _______________ __, ______
___________________________________________
Name of Registered Holder
By:
___________________________________
Name:
Title:
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby
directs American Stock Transfer Trust to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated
July 27, 2006 from the Company and acknowledged and agreed to by American Stock
Transfer Trust.
BRAVO! FOODS INTERNATIONAL CORP.
By: __________________________________________
Name:
Title: