Exhibit 4.38
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 UNDER SAID ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO BRAVO! FOODS INTERNATIONAL CORP. THAT SUCH
REGISTRATION IS NOT REQUIRED.
Right to Purchase ___________ shares of
Common Stock of Bravo! Foods International
Corp. (subject to adjustment as provided
herein)
CLASS A COMMON STOCK PURCHASE WARRANT
No. 2005-A-001 Issue Date: January ___, 2005
BRAVO! FOODS INTERNATIONAL CORP., a corporation organized under the
laws of the State of Delaware (the "Company"), hereby certifies that, for
value received, *****************, or its assigns (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from the
Company at any time after the Issue Date until 5:00 p.m., E.S.T on the
fifth anniversary of the Issue Date (the "Expiration Date"), up to
_________ fully paid and nonassessable shares of the common stock of the
Company (the "Common Stock"), $.001 par value per share at a per share
purchase price of $_______. The aforedescribed purchase price per share,
as adjusted from time to time as herein provided, is referred to herein as
the "Purchase Price." The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided herein.
The Company may reduce the Purchase Price without the consent of the
Holder. Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Subscription Agreement (the
"Subscription Agreement"), dated January ___, 2005, entered into by the
Company and Holder's of the Class A Warrants.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Bravo! Foods International
Corp. and any corporation which shall succeed or assume the obligations of
Bravo! Foods International Corp. hereunder.
(b) The term "Common Stock" includes (a) the Company's Common
Stock, $.001 par value per share, as authorized on the date of the
Subscription Agreement, and (b) any other securities into which or for
which any of the securities described in (a) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of
assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any time shall
be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.
1. Exercise of Warrant.
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1.1. Number of Shares Issuable upon Exercise. From and after
the Issue Date through and including the Expiration Date, the Holder hereof
shall be entitled to receive, upon exercise of this Warrant in whole in
accordance with the terms of subsection 1.2 or upon exercise of this
Warrant in part in accordance with subsection 1.3, shares of Common Stock
of the Company, subject to adjustment pursuant to Section 4.
1.2. Full Exercise. This Warrant may be exercised in full by
the Holder hereof by delivery of an original or facsimile copy of the form
of subscription attached as Exhibit A hereto (the "Subscription Form")
duly executed by such Holder and surrender of the original Warrant within
three (3) days of exercise, to the Company at its principal office or at
the office of its Warrant Agent (as provided hereinafter), accompanied by
payment, in cash, wire transfer or by certified or official bank check
payable to the order of the Company, in the amount obtained by multiplying
the number of shares of Common Stock for which this Warrant is then
exercisable by the Purchase Price then in effect.
1.3. Partial Exercise. This Warrant may be exercised in part
(but not for a fractional share) by surrender of this Warrant in the manner
and at the place provided in subsection 1.2 except that the amount payable
by the Holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of whole shares of Common Stock designated by
the Holder in the Subscription Form by (b) the Purchase Price then in
effect. On any such partial exercise, the Company, at its expense, will
forthwith issue and deliver to or upon the order of the Holder hereof a new
Warrant of like tenor, in the name of the Holder hereof or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may request,
the whole number of shares of Common Stock for which such Warrant may still
be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common
Stock as of a particular date (the "Determination Date") shall mean:
(a) If the Company's Common Stock is traded on an
exchange or is quoted on the National Association of Securities Dealers,
Inc. Automated Quotation ("NASDAQ"), National Market System, the NASDAQ
SmallCap Market or the American Stock Exchange, LLC, then the closing or
last sale price, respectively, reported for the last business day
immediately preceding the Determination Date;
(b) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National Market System, the NASDAQ SmallCap
Market or the American Stock Exchange, Inc., but is traded in the over-the-
counter market, then the average of the closing bid and ask prices reported
for the last business day immediately preceding the Determination Date;
(c) Except as provided in clause (d) below, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of
persons qualified by education and training to pass on the matter to be
decided; or
(d) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the Company's charter,
then all amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation, dissolution or
winding up, plus all other amounts to be payable per share in respect of
the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
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1.5. Company Acknowledgment. The Company will, at the time of
the exercise of the Warrant, upon the request of the Holder hereof
acknowledge in writing its continuing obligation to afford to such Holder
any rights to which such Holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the Holder
shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such Holder any such
rights.
1.6. Trustee for Warrant Holders. In the event that a bank or
trust company shall have been appointed as trustee for the Holder of the
Warrants pursuant to Subsection 3.2, such bank or trust company shall have
all the powers and duties of a warrant agent (as hereinafter described) and
shall accept, in its own name for the account of the Company or such
successor person as may be entitled thereto, all amounts otherwise payable
to the Company or such successor, as the case may be, on exercise of this
Warrant pursuant to this Section 1.
1.7 Delivery of Stock Certificates, etc. on Exercise. The
Company agrees that the shares of Common Stock purchased upon exercise of
this Warrant shall be deemed to be issued to the Holder hereof as the
record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for such
shares as aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within three (3) business days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder hereof, or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of
duly and validly issued, fully paid and nonassessable shares of Common
Stock (or Other Securities) to which such Holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
Fair Market Value of one full share of Common Stock, together with any
other stock or other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise.
2. Cashless Exercise.
(a) If a Registration Statement (as defined in the
Subscription Agreement) ("Registration Statement") is effective and the
Holder may sell its shares of Common Stock upon exercise hereof pursuant to
the Registration Statement, this Warrant may be exercisable in whole or in
part for cash only as set forth in Section 1 above. If no such
Registration Statement is available during the time that such Registration
Statement is required to be effective pursuant to the terms of the
Subscription Agreement, then payment upon exercise may be made at the
option of the Holder either in (i) cash, wire transfer or by certified or
official bank check payable to the order of the Company equal to the
applicable aggregate Purchase Price, (ii) by delivery of Common Stock
issuable upon exercise of the Warrants in accordance with Section (b)
below or (iii) by a combination of any of the foregoing methods, for the
number of Common Stock specified in such form (as such exercise number
shall be adjusted to reflect any adjustment in the total number of shares
of Common Stock issuable to the holder per the terms of this Warrant) and
the holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.
(b) If the Fair Market Value of one share of Common Stock is
greater than the Purchase Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the holder may elect
to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by surrender of this Warrant at
the principal office of the Company together with the properly endorsed
Subscription Form in which event the Company shall issue to the holder a
number of shares of Common Stock computed using the following formula:
X=Y (A-B)
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A
Where X= the number of shares of Common Stock to be issued
to the holder
Y= the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the
Warrant being exercised (at the date of such
calculation)
A= the Fair Market Value of one share of the Company's
Common Stock (at the date of such calculation)
B= Purchase Price (as adjusted to the date of such
calculation)
(c) The Holder may employ the cashless exercise feature
described in Section (b) above only during the pendency of a Non-
Registration Event as described in Section 11 of the Subscription
Agreement.
For purposes of Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to
the Subscription Agreement.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Reorganization, Consolidation, Merger, etc. In
case at any time or from time to time, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person or (c)
transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the consummation of
such a transaction, proper and adequate provision shall be made by the
Company whereby the Holder of this Warrant, on the exercise hereof as
provided in Section 1, at any time after the consummation of such
reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock
(or Other Securities) issuable on such exercise prior to such consummation
or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.
3.2. Dissolution. In the event of any dissolution of
the Company following the transfer of all or substantially all of its
properties or assets, the Company, prior to such dissolution, shall at its
expense deliver or cause to be delivered the stock and other securities and
property (including cash, where applicable) receivable by the Holder of the
Warrants after the effective date of such dissolution pursuant to this
Section 3 to a bank or trust company (a "Trustee") having its principal
office in New York, NY, as trustee for the Holder of the Warrants.
3.3. Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any
transfer) referred to in this Section 3, this Warrant shall continue in
full force and effect and the terms hereof shall be applicable to the Other
Securities and property receivable on the exercise of this Warrant after
the consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may
be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4. In the event this Warrant does not continue in
full force and effect after the consummation of the transaction
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described in this Section 3, then only in such event will the Company's
securities and property (including cash, where applicable) receivable by
the Holder of the Warrants be delivered to the Trustee as contemplated by
Section 3.2.
3.4 Share Issuance. Until the Expiration Date, if the
Company shall issue any Common Stock except for the Excepted Issuances (as
defined in the Subscription Agreement), prior to the complete exercise of
this Warrant for a consideration less than the Purchase Price that would be
in effect at the time of such issue, then, and thereafter successively upon
each such issue, the Purchase Price shall automatically and with no action
required by the Company or Holder, be reduced to such other lower issue
price. For purposes of this adjustment, the issuance of any security or
debt instrument of the Company carrying the right to convert such security
or debt instrument into Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the Purchase Price
upon the issuance of the above-described security, debt instrument,
warrant, right, or option and again at any time upon any subsequent
issuances of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the Purchase
Price in effect upon such issuance. The reduction of the Purchase Price
described in this Section 3.4 is in addition to the other rights of the
Holder described in the Subscription Agreement.
4. Extraordinary Events Regarding Common Stock. In the event that
the Company shall (a) issue additional shares of the Common Stock as a
dividend or other distribution on outstanding Common Stock, (b) subdivide
its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common
Stock, then, in each such event, the Purchase Price shall, simultaneously
with the happening of such event, be adjusted by multiplying the then
Purchase Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained shall
thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 4. The number
of shares of Common Stock that the Holder of this Warrant shall thereafter,
on the exercise hereof as provided in Section 1, be entitled to receive
shall be adjusted to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the
numerator is the Purchase Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is
the Purchase Price in effect on the date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment
or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of the Warrants, the Company at its expense will
promptly cause its Chief Financial Officer or other appropriate designee to
compute such adjustment or readjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration
received or receivable by the Company for any additional shares of Common
Stock (or Other Securities) issued or sold or deemed to have been issued or
sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and
the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and
as adjusted or readjusted as provided in this Warrant. The Company will
forthwith mail a copy of each such certificate to the Holder of the Warrant
and any Warrant Agent of the Company (appointed pursuant to Section 11
hereof).
6. Reservation of Stock, etc. Issuable on Exercise of Warrant;
Financial Statements. The Company will at all times reserve and keep
available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock (or Other Securities) from time to
time issuable on the exercise
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of the Warrant. This Warrant entitles the Holder hereof to receive copies
of all financial and other information distributed or required to be
distributed to the holders of the Company's Common Stock.
7. Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby,
may be transferred by any registered holder hereof (a "Transferor"). On the
surrender for exchange of this Warrant, with the Transferor's endorsement
in the form of Exhibit B attached hereto (the "Transferor Endorsement
Form") and together with an opinion of counsel reasonably satisfactory to
the Company that the transfer of this Warrant will be in compliance with
applicable securities laws, the Company at its expense, twice, only, but
with payment by the Transferor of any applicable transfer taxes, will issue
and deliver to or on the order of the Transferor thereof a new Warrant or
Warrants of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for
the number of shares of Common Stock called for on the face or faces of the
Warrant so surrendered by the Transferor. No such transfers shall result
in a public distribution of the Warrant.
8. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant and, in the case of any such loss, theft or destruction of
this Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at
its expense, twice only, will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
9. Registration Rights. The Holder of this Warrant has been
granted certain registration rights by the Company. These registration
rights are set forth in the Subscription Agreement. The terms of the
Subscription Agreement are incorporated herein by this reference. Upon
the occurrence of a Non-Registration Event, or in the event the Company is
unable to issue Common Stock upon exercise of this Warrant that has been
registered in a Registration Statement described in Section 11 of the
Subscription Agreement, within the time periods described in the
Subscription Agreement, which Registration Statement must be effective for
the periods set forth in the Subscription Agreement, then upon written
demand made by the Holder, the Company will pay to the Holder of this
Warrant, in lieu of delivering Common Stock, a sum equal to the closing
price of the Company's Common Stock on the principal market or exchange
upon which the Common Stock is listed for trading on the trading date
immediately preceding the date notice is given by the Holder, less the
Purchase Price, for each share of Common Stock designated in such notice
from the Holder.
10. Maximum Exercise. The Holder shall not be entitled to exercise
this Warrant on an exercise date nor may the Company exercise its right to
give a Call Notice (as defined in Section 11) in connection with that
number of Common Stock which would be in excess of the sum of (i) the
number of Common Stock beneficially owned by the Holder and its affiliates
on an exercise date or Call Date, and (ii) the number of Common Stock
issuable upon the exercise of this Warrant with respect to which the
determination of this limitation is being made on an exercise date or Call
Date, which would result in beneficial ownership by the Holder and its
affiliates of more than 9.99% of the outstanding Common Stock on such date.
For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder. Subject to the foregoing, the Holder shall not be limited to
aggregate exercises which would result in the issuance of more than 9.99%.
The restriction described in this paragraph may be revoked upon sixty-one
(61) days prior notice from the Holder to the Company. The Holder may
allocate which of the equity of the Company deemed beneficially owned by
the Subscriber shall be included in the 9.99% amount described above and
which shall be allocated to the excess above 9.99%.