SUBSCRIPTION AGREEMENT
Exhibit
99.1 Form of Subscription Agreement
THIS
SUBSCRIPTION AGREEMENT
(this
“Agreement”),
dated
as of April 27, 2007, by and among Bravo! Brands Inc., a Delaware corporation
(the “Company”),
and
the subscriber identified on the signature page hereto (the “Subscriber”).
WHEREAS,
the
Company and the Subscriber are executing and delivering this Agreement in
reliance upon an exemption from securities registration afforded by the
provisions of Section 4(2) as promulgated by the United States Securities
and
Exchange Commission (the “Commission”)
under
the Securities Act of 1933, as amended (the “1933
Act”).
WHEREAS,
the
parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Subscriber, as provided herein,
and the Subscriber, in the aggregate, shall purchase up to Six Million Two
Hundred FiftyThousand (6,250,000) shares (the “Shares”)
of the
Company’s $0.001 par value common stock (“Common
Stock”)
for a
purchase price of $0.04 per share (the “Purchase
Price”)
and
share purchase warrants (collectively the “Warrants”),
in
the form attached hereto as Exhibit
A,
to
purchase shares of Common Stock (the “Warrant
Shares”).
The
Shares, Warrants and the Warrant Shares are sometimes collectively referred
to
herein as the "Securities".
The
aggregate purchase price for the Shares and Warrants is Two Hundred Fifty
Thousand Dollars ($250,000).
NOW,
THEREFORE,
in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscribers hereby agree as follows:
1. Conditions
To Closing.
Subject
to the satisfaction or waiver of the terms and conditions of this Agreement,
on
the Closing
Date,
the
Subscriber shall purchase and the Company shall sell to the Subscriber the
number of shares of Common Stock designated on the signature page hereto
and the
amount of Warrants determined pursuant to Section 3 below for an amount equal
to
the purchase price designated on the signature page hereto. The Closing Date
shall be the date that the Subscriber funds representing the net amount due
to
the Company from the Purchase Price is transmitted by wire transfer or otherwise
to or for the benefit of the Company.
2. Closing.
The
consummation of the transactions contemplated herein shall take place, upon
the
satisfaction of all conditions to Closing set forth in this Agreement
(“Closing
Date”).
3. Warrants.
On the
Closing Date, the Company will issue and deliver Warrants to the Subscriber.
One
Warrant will be issued for every two dollars paid on the Closing Date for
shares
of Common Stock. The per Warrant Share exercise price to acquire a Warrant
Share
upon exercise of a Warrant shall be $0.04. The Warrants shall be exercisable
until five (5) years after the issue date of the Warrants. The Warrant exercise
price and amount of Warrant Shares issuable upon exercise of the Warrants
shall
be equitably adjusted to offset the effect of stock splits, stock dividends,
pro
rata distributions of property or equity interests to the Company’s
shareholders, and as otherwise described in the Warrant.
4. Subscriber's
Representations and Warranties.
The
Subscriber hereby represents and warrants to and agrees with the Company
that:
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(a) Information
on Subscriber.
The
Subscriber is, and will be at the time of exercise of any of the Warrants,
an
"accredited
investor",
as
such term is defined in Regulation D promulgated by the Commission under
the
1933 Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of United
States publicly-owned companies in private placements in the past and, with
its
representatives, has such knowledge and experience in financial, tax and
other
business matters as to enable the Subscriber to utilize the information made
available by the Company to evaluate the merits and risks of and to make
an
informed investment decision with respect to the proposed purchase, which
represents a speculative investment. The Subscriber has the authority and
is
duly and legally qualified to purchase and own the Securities. The Subscriber
is
able to bear the risk of such investment for an indefinite period and to
afford
a complete loss thereof. The information set forth on the signature page
hereto
regarding the Subscriber is accurate.
(b) Purchase
of Shares and Warrants.
On the
Closing Date, the Subscriber will purchase the Shares and Warrants as principal
for its own account for investment only and not with a view toward, or for
resale in connection with, the public sale or any distribution
thereof.
(c) Compliance
with Securities Act.
The
Subscriber understands and agrees that the Securities have not been registered
under the 1933 Act or any applicable state securities laws, by reason of
their
issuance in a transaction that does not require registration under the 1933
Act
(based in part on the accuracy of the representations and warranties of
Subscriber contained herein), and that such Securities must be held indefinitely
unless a subsequent disposition is registered under the 1933 Act or any
applicable state securities laws or is exempt from such
registration.
(d) Warrant
Shares Legend.
The
Shares and Warrant Shares shall bear the following or similar
legend:
"THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED
FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO BRAVO! BRANDS INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
(f) Warrants
Legend.
The
Warrants shall bear the following
or
similar legend:
"THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE
STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO BRAVO!
BRANDS
INC. THAT SUCH REGISTRATION IS NOT REQUIRED."
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(g) Restricted
Securities.
Subscriber understands that the Securities have not been registered under
the
1933 Act and such Subscriber will not sell, offer to sell, assign, pledge,
hypothecate or otherwise transfer any of the Securities unless (i) pursuant
to
an effective registration statement under the 1933 Act, (ii) such Subscriber
provides the Company with an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that a sale, assignment or transfer of the
Securities may be made without registration under the 1933 Act, or (iii)
Subscriber provides the Company with reasonable assurances (in the form of
seller and broker representation letters) that the Warrant Shares may be
sold
pursuant to (A) Rule 144 promulgated under the 1933 Act, or (B) Rule 144(k)
promulgated under the 1933 Act, in each case following the applicable holding
period set forth therein. Notwithstanding anything to the contrary contained
in
this Agreement, such Subscriber may transfer (without restriction and without
the need for an opinion of counsel) the Securities to its Affiliates (as
defined
below) provided that each such Affiliate is an “accredited investor” under
Regulation D and such Affiliate agrees to be bound by the terms and conditions
of this Agreement. All resales of the Securities will be conducted in compliance
with all applicable laws, including laws relating to “short sales”. For the
purposes of this Agreement, an “Affiliate”
of
any
person or entity means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with
such
person or entity. For purposes of this definition, “control”
means
the power to direct the management and policies of such person or firm, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise.
(h) Authority;
Enforceability.
This
Agreement and other agreements delivered together with this Agreement or
in
connection herewith have been duly authorized, executed and delivered by
the
Subscriber and are valid and binding agreements enforceable in accordance
with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to
or affecting creditors’ rights generally and to general principles of equity;
and Subscriber has full corporate power and authority necessary to enter
into
this Agreement and such other agreements and to perform its obligations
hereunder and under all other agreements entered into by the Subscriber relating
hereto.
(i) Correctness
of Representations.
Each
Subscriber represents as to such Subscriber that the foregoing representations
and warranties are true and correct as of the date hereof and, unless a
Subscriber otherwise notifies the Company prior to the Closing Date shall
be
true and correct as of the Closing Date.
5. Company
Representations and Warranties.
Except
as set forth in the Company's filings made with the Commission available
at the
XXXXX website, the Company represents and warrants to and agrees with each
Subscriber that:
(a) Due
Incorporation.
The
Company and each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the respective jurisdictions
of
their incorporation and have the requisite corporate power to own their
properties and to carry on their business as now being conducted. The Company
and each of its subsidiaries is duly qualified as a foreign corporation to
do
business and is in good standing in each jurisdiction where the nature of
the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not
have
a Material Adverse Effect. For purpose of this Agreement, a “Material
Adverse Effect”
shall
mean a material adverse effect on the financial condition, results of
operations, properties or business of the Company taken as a whole.
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(b) Shares
and Warrant Shares.
The
Shares and Warrant Shares to be issued upon exercise of the Warrants are
and
will be, as applicable, duly authorized, fully paid and
non-assessble.
(c) Authority;
Enforceability.
This
Agreement, the Warrants and any other agreements delivered together with
this
Agreement or in connection herewith (collectively “Transaction
Documents”)
have
been duly authorized, executed and delivered by the Company and are valid
and
binding agreements enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights
generally and to general principles of equity. The Company has full corporate
power and authority necessary to enter into and deliver the Transaction
Documents and to perform its obligations thereunder.
(d) The
Securities.
The
Securities upon issuance:
(i) are,
or
will be, free and clear of any security interests, liens, claims or other
encumbrances, subject to restrictions upon transfer under the 1933 Act and
any
applicable state securities laws; and
(ii) will
not
have been issued or sold in violation of any preemptive or other similar
rights
of the holders of any securities of the Company.
(e) Consents.
No
consent, approval, authorization or order of any court, governmental agency
or
body or arbitrator having jurisdiction over the Company, or any of its
affiliates, the OTC Bulletin Board (the “Bulletin
Board”)
nor
the Company's shareholders is required for the execution by the Company of
the
Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation,
the
issuance and sale of the Securities. The Transaction Documents and the Company’s
performance of its obligations thereunder has been approved unanimously by
the
Company’s directors.
6. Regulation
D Offering.
The
offer and issuance of the Securities to the Subscriber is being made pursuant
to
the exemption from the registration provisions of the 1933 Act afforded by
Section 4(2) of the 1933 Act promulgated thereunder. The Company will provide,
at the Company's expense, such other legal opinions in the future as are
reasonably necessary for the issuance and resale (if permitted under applicable
securities laws, and provided that Rule 415 of the the 1933 Act permits an
offering on a continuous or delayed basis) of the Common Stock issuable upon
exercise of the Warrants and the resale of the Shares.
7. Covenants
of the Company.
The
Company covenants and agrees with the Subscriber as follows:
(a) Listing.
The
Company will maintain the listing of its Common Stock on the American Stock
Exchange, Nasdaq SmallCap Market, Nasdaq National Market System, Bulletin
Board,
or New York Stock Exchange (whichever of the foregoing is at the time the
principal trading exchange or market for the Common Stock (the “Principal
Market”)),
and
will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Principal Market, as applicable.
The Company will provide the Subscriber copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common
Stock
from any Principal Market. As of the date of this Agreement and the Closing
Date, the Bulletin Board is and will be the Principal Market.
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(b) Reservation.
Prior
to the Closing Date, the Company undertakes to reserve, pro rata,
on
behalf of the holder of the Warrant, from its authorized but unissued common
stock, a number of common shares equal to the amount of Warrant Shares issuable
upon exercise of the Warrants.
(c) Reporting
Requirements.
From
the date of this Agreement and until the sooner of (i) two (2) years after
the
Closing Date, or (ii) until all the Warrant Shares have been resold or
transferred by all the Subscriber pursuant to a registration statement or
pursuant to Rule 144, without regard to volume limitation, the Company will
(v)
cause its Common Stock to continue to be registered under Section 12(b) or
12(g)
of the 1934 Act, (x) comply in all respects with its reporting and filing
obligations under the 1934 Act, (y) comply with all reporting requirements
that
are applicable to an issuer with a class of shares registered pursuant to
Section 12(b) or 12(g) of the 1934 Act, as applicable. The Company will use
its
best efforts not to take any action or file any document (whether or not
permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate
or suspend its reporting and filing obligations under said acts until two
(2)
years after the Closing Date. Until the earlier of the resale of the Warrant
Shares by the Subscriber or two (2) years after the Warrants have been
exercised, the Company will use its best efforts to continue the listing
or
quotation of the Common Stock on the Principal Market or other market with
the
reasonable consent of Subscriber holding a majority of the Warrants and Warrant
Shares, and will comply in all respects with the Company's reporting, filing
and
other obligations under the bylaws or rules of the Principal Market. The
Company
agrees to timely file a Form D with respect to the Securities if required
under
Regulation D and to provide a copy thereof to the Subscriber promptly after
such
filing.
8. Registration
Rights.
The
Company hereby grants to the Subscriber customary piggy-back registration
rights, if at any time after one (1) year from the Closing Date, the Company
proposes to register any of its securities on Forms X-0, X-0, X-0, XX-0 or
SB-2,
or any successor forms, under the 1933 Act.
9. Miscellaneous.
(a) Notices.
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 an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be: (i) if to the Company,
to:
Bravo! Brands, Inc., 00000 X.X. Xxxxxxx 0, Xxxxx 000, Xxxxx Xxxx Xxxxx, Xxxxxxx
00000, Attn: Xxx X. Xxxxxx, Xx., Esq., fascmile: (000) 000-0000, with an
additional copy to: Xxxxx & XxXxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000, Attn: Xxxxxx X. Xxxxxxxx, Esq., fascmile: (000) 000-0000,
and
(ii) if to the Subscriber, to: Salomom and Xxxx Xxxxxx Tenants in the entirety,
00000 Xxxxxxx Xxxxxxx, Xxxxx Xxxx Xxxxx, XX 00000.
(b) Entire
Agreement; Assignment.
This
Agreement and other documents delivered in connection herewith represent
the
entire agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by both parties. Neither
the Company nor the Subscribers have relied on any representations not contained
or referred to in this Agreement and the documents delivered herewith. No
right
or obligation of the Company shall be assigned without prior notice to and
the
written consent of the Subscriber.
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(c)
Counterparts/Execution.
This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile signature
and delivered by facsimile transmission.
(d) Law
Governing this Agreement.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York without regard to principles of conflicts of laws. Any
action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought exclusively in the state
courts
of New York located in New York City or in the Federal District Court for
the
Southern District of New York. The
parties and the individuals executing this Agreement and other agreements
referred to herein or delivered in connection herewith on behalf of the Company
agree to submit to the jurisdiction of such courts and waive trial by
jury.
The
prevailing party shall be entitled to recover from the other party its
reasonable attorney fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid
or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith
and
shall be deemed modified to conform with such statute or rule of law. Any
such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any
agreement.
(e) Specific
Enforcement, Consent to Jurisdiction.
The
Company and Subscriber acknowledge and agree that irreparable damage would
occur
in the event that any of the provisions of this Agreement were not performed
in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement
and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.
Subject to Section 9(d) hereof, each of the Company and the Subscriber hereby
waives, and agrees not to assert in any such suit, action or proceeding,
any
claim that it is not personally subject to the jurisdiction in New York of
such
court, that the suit, action or proceeding is brought in an inconvenient
forum
or that the venue of the suit, action or proceeding is improper. Nothing
in this
Section shall affect or limit any right to serve process in any other manner
permitted by law.
(g) Equal
Treatment.
No
consideration shall be offered or paid to any person to amend or consent
to a
waiver or modification of any provision of the Transaction Documents unless
the
same consideration is also offered and paid to all the Subscribers and their
permitted successors and assigns.
(i) Calendar
Days.
All references to “days” in the Transaction Documents shall mean calendar days
unless otherwise stated.
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SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT (A)
Please
acknowledge your acceptance of the foregoing Subscription Agreement by signing
and returning a copy to the undersigned whereupon it shall become a binding
agreement between us.
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a Delaware corporation
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Name:
Title:
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Dated: April 27,
2007
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SUBSCRIBER
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PURCHASE
PRICE
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SHARES
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WARRANTS
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