PURPLE BEVERAGE COMPANY, INC. SUBSCRIPTION AGREEMENT
000
X.
Xxx Xxxx Xxxx., Xxxxx 000
Xx.
Xxxxxxxxxx, Xxxxxxx 00000
Attn:
Xxxxxxx Xxxxxxx, CFO
Dear
Xx.
Xxxxxxx:
The
undersigned, Xxx Xxxxxxxxxx, hereby subscribes to purchase the securities (the
“Securities”)
of
Purple Beverage Company, Inc., a Nevada corporation (the “Company”),
consisting of a promissory note in the face amount of up to $3,000,000 (the
“Note”),
in
the form attached hereto as Exhibit
A;
up to
600,000 shares (the “Shares”)
of the
Company’s Common Stock (such number of Shares to be calculated on a pro rata
basis determined by the face amount of the Note); a two-year warrant, in the
form attached hereto as Exhibit
B
(the
“A
Warrant”),
to
purchase up to 600,000 shares of the Company’s Common Stock (the number of
shares of the Company’s Common Stock underlying the A Warrant to be calculated
on a pro rata basis as determined by the face amount of the Note) at an exercise
price of $2.00 per underlying share (the “Initial
A Warrant Exercise Price”);
and a
two-year warrant, in the form attached hereto as Exhibit
C
(the
“B
Warrant;”
together with A Warrant, the “Warrants”),
to
purchase up to 600,000 shares of the Company’s Common Stock (the number of
shares of the Company’s Common Stock underlying the B Warrant to be calculated
on a pro rata basis as determined by the face amount of the Note) at an exercise
price of $3.50 per underlying share (the “Initial
B Warrant Exercise Price;”
together with Initial A Warrant Exercise Price, the “Initial
Warrant Exercises Prices”),
in
accordance with the following paragraphs. This subscription may be rejected
in
whole or in part by the Company, in its sole and absolute discretion for any
cause or for no cause.
The
undersigned acknowledges that the minimum individual subscription for the
purchase of the Securities is $250,000. If, between the date that the
undersigned has completed the subscription procedures as set forth in this
Subscription Agreement and the date on which such subscription is accepted
by
the Company pursuant to section 8, below, the Company subdivides or combines
its
issued and outstanding shares, the number of Shares set forth here and above,
the number of shares represented by the Warrants, and the Initial Warrant
Exercise Prices shall be proportionately adjusted. Any questions regarding
this
document or the investment described herein should be directed to Xxxxxxx
Xxxxxxx, Chief Financial Officer, Purple Beverage Company, Inc., 000
X.
Xxx Xxxx Xxxx., Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx 00000;
telephone: (000)
000-0000
X 000;
fax: (000) 000-0000;
e-mail:
xxxxxxxx@xxxxxxxxxxx.xxx.
1. Purchase.
Subject
to the terms and conditions hereof, the undersigned hereby
irrevocably agrees to purchase the Securities, consisting of (a) the Note with
an initial face amount set forth on the Signature Page; (b) that number of
Shares set forth on the Signature Page (such Shares valued at the 10-trading-day
Volume Weighted Average Price, with the final such trading day being the trading
day immediately preceding the execution of this Subscription Agreement by the
undersigned, but in no event, valued at less than $2.00 per Share); (c) an
A
Warrant to purchase up to that number of shares of shares of the Company’s
Common Stock set forth on the Signature Page; and (d) a B Warrant to purchase
up
to that number of shares of shares of the Company’s Common Stock set forth on
the Signature Page, for an aggregate subscription price set forth on the
Signature Page, and tenders such purchase price by means of a check (cashiers,
certified, or personal), money order, or wire transfer made payable to:
“Xxxxx
Xxxx LLP Client Trust Account, as Escrow Agent for Purple Beverage Company,
Inc.”
The
wire transfer instructions are:
1
California
Bank & Trust
0000
Xxxxxxx Xxxxxx
Xxxxx
Xxxx, XX 00000
(000)000-0000
Name:
Xxxxx Xxxx LLP Client Trust Account
Routing#:
000000000
Swift
#:
CALBUS 66
Trust
Account: #33-400021-41
f/b/o
Purple Beverage Company, Inc. / 0213855
2. Representations
and Warranties of the Purchaser.
The
undersigned hereby makes the following representations and warranties to the
Company, and the undersigned agrees to indemnify, hold harmless, and pay all
causes
of
action, lawsuits, debts, controversies, damages, claims, demands and judgments
(including litigation expenses and reasonable attorneys' fees) incurred by
the
Company, and its
past
and present officers, directors, employees, agents, successors and
assigns,
whether
or not under federal or state securities laws, arising out of or in connection
with the undersigned’s misrepresentation or breach of any of the representations
and warranties set forth herein, including, without limitation,
|
(a)
|
The
undersigned is the sole and true party in interest and is not purchasing
the Securities for the benefit of any other person and has
not granted any other person any right or option or any participation
or
beneficial interest in any of the Securities;
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(b)
|
The
undersigned confirms receipt and careful review of all written material
provided by, or on behalf of, the Company in respect of its business
and
prospects, and all information provided by the Company to its stockholders
and the undersigned in respect of its business and prospects, including
all attachments and exhibits thereto. The undersigned understands
that all
books, records, and documents of the Company relating to this investment
have been and remain available for inspection by the undersigned
upon
reasonable notice. The undersigned confirms that all documents requested
by the undersigned have been made available, and that the undersigned
has
been supplied with all of the additional information concerning this
investment that has been requested. The undersigned confirms that
he has
obtained sufficient information, in his judgment or that of his
independent purchaser representative, if any, to evaluate the merits
and
risks of this investment. The undersigned confirms that he has had
the
opportunity to obtain such independent legal and tax advice and financial
planning services as the undersigned has deemed appropriate prior
to
making a decision to subscribe for the Securities. In making a decision
to
purchase the Securities, the undersigned has relied exclusively upon
his
experience and judgment, or that of his purchaser representative,
if any,
upon such independent investigations as he, or they, deemed appropriate,
and upon information provided by the Company in writing or found
in the
books, records, or documents of the
Company;
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2
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(c)
|
In
evaluating the suitability of this investment the undersigned has
not
relied upon any representations or other information (whether oral
or
written), other than that furnished to the undersigned by the Company
or
its representatives. The undersigned acknowledges and represents
that no
representations or warranties have been made to the undersigned by
the
Company or its directors, officers or any agents or representatives
with
respect to the business of the Company, the financial condition of
the
Company and/or the economic, tax or any other aspect or consequence
of the
purchase of the Securities and the undersigned has not relied upon
any
information concerning the Company, written or oral, other than supplied
to the undersigned by the Company;
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(d)
|
The
undersigned has such knowledge and experience in financial and business
matters that the undersigned is capable of an evaluation of the merits
and
risks of the undersigned’s investment in the
Securities;
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(e)
|
THE
UNDERSIGNED IS AWARE THAT AN INVESTMENT IN THE COMPANY IS HIGHLY
SPECULATIVE AND SUBJECT TO SUBSTANTIAL RISKS.
The undersigned is capable of bearing the high degree of economic
risk and
burdens of this venture, including, but not limited to, the possibility
of
a complete loss, the lack of a sustained and orderly public market,
and
limited transferability of the Securities, which may make the liquidation
of this investment impossible for the indefinite future. The
undersigned has the financial ability to bear the economic risks
of its
investment, has adequate means of providing for its current needs
and
personal contingencies, and has no need for liquidity in this investment.
The undersigned's commitment to investments that are not readily
marketable is not disproportionate to its net worth, and this investment
will not cause such overall commitment to become
excessive;
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(f)
|
The
offer to sell the Securities was directly communicated to the undersigned
by such a manner that the undersigned, or his purchaser representative,
if
any, was able to ask questions of and receive answers from the Company
or
a person acting on its behalf concerning the terms and conditions
of this
transaction. At no time, except in connection and concurrently with
such
communicated offer, was the undersigned presented with or solicited
by or
through any leaflet, public promotional meeting, television advertisement,
or any other form of general
advertising;
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(g)
|
The
Securities are being acquired solely for the undersigned’s own account for
investment, and are not being purchased with a view towards resale,
distribution, subdivision, or fractionalization
thereof;
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(h)
|
The
undersigned understands that the Securities have not been registered
under
the Securities Act of 1933, as amended (the “Securities
Act”),
or any state securities laws, in reliance upon exemptions from regulation
for non–public offerings. The undersigned understands that the Securities
or any interest therein may not be, and agrees that the Securities
or any
interest therein will not be, resold or otherwise disposed of by
the
undersigned unless the Securities are subsequently registered under
the
Securities Act and under appropriate state securities laws or unless
the
Company receives an opinion of counsel satisfactory to it that an
exemption from registration is
available;
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3
| (i) |
The
undersigned has been informed of and understands the
following:
|
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(1)
|
There
are substantial restrictions on the transferability of the
Securities;
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(2)
|
No
federal or state agency has made any finding or determination as
to the
fairness for public investment, nor any recommendation nor endorsement,
of
the Securities;
|
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(j)
|
None
of the following information has ever been represented, guaranteed,
or
warranted to the undersigned, expressly or by implication by any
broker,
the Company, or agent or employee of the foregoing, or by any other
person:
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(1)
|
The
approximate or exact length of time that the undersigned will be
required
to remain a holder of the
Securities;
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(2)
|
The
amount of consideration, profit, or loss to be realized, if any,
as a
result of an investment in the
Company;
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(3)
|
That
the past performance or experience of the Company; its officers,
directors, associates, agents, affiliates, or employees; or any other
person will in any way indicate or predict economic results in connection
with the plan of operations of the Company or the return on the
investment;
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(k)
|
The
undersigned has not distributed any information relating to this
investment to anyone other than his purchaser representative, if
any, and
no other person except such personal representative and the undersigned
has used this information;
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(l)
|
The
undersigned hereby agrees to indemnify the Company and to hold it
harmless
from and against any and all liability, damage, cost, or expense,
including its attorneys’ fees and costs, incurred on account of or arising
out of:
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(1)
|
Any
material inaccuracy in the declarations, representations, and warranties
hereinabove set forth;
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(2)
|
The
disposition of the Securities or any part thereof by the undersigned,
contrary to the foregoing declarations, representations, and
warranties;
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(3)
|
Any
action, suit, or proceeding based
upon:
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(i)
|
the
claim that said declarations, representations, or warranties were
inaccurate or misleading or otherwise cause for obtaining damages
or
redress from the Company; or
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(ii)
|
the
disposition of the Securities or any part
thereof.
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4
The
foregoing representations, warranties, agreements, undertakings and
acknowledgements are made by the undersigned with the intent that they be relied
upon in determining the undersigned’s suitability as a purchaser of the
Securities. In addition, the undersigned agrees to notify the Company
immediately of any change in any representation, warranty or other
information.
3. Transferability.
The
undersigned agrees not to transfer or assign the obligations or duties contained
in this Subscription Agreement or any of the undersigned’s interest herein
except to a subsidiary or affiliate of the undersigned.
4. Accredited
Investor; Off-Shore Transaction; Not a U.S. Person.
The
undersigned is an “accredited
investor,”
as
that term is defined in Rule 501(c) of Regulation D promulgated under the
Securities Act, or is not a “U.S.
Person,”
as
that term is defined in Rule 902(k) of Regulation S promulgated under the
Securities Act. If the subscriber is not a U.S. Person, this Subscription and
the transactions contemplated herein constitute an “off-shore
transaction,”
as
that term is defined in Rule 902(h) of Regulation S promulgated under the
Securities Act.
5. Acknowledgements,
Understandings, and Agreements of the Purchaser.
The
undersigned acknowledges, understands, and agrees that:
|
(a)
|
The
Company reserves the right to reject all or any part of this subscription
in its sole and absolute discretion for any cause or for no
cause;
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(b)
|
The
undersigned will be promptly notified by the Company whether this
subscription has been accepted, either in whole or in part, and if
not
accepted in whole, agrees to accept the return of a proportionate
part of
the funds tendered to the Company as a refund or a return, and in
either
case without interest thereon or deduction
therefrom;
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(c)
|
The
Securities shall be deemed issued and owned by the undersigned upon
the
Company’s receipt of the purchase price therefor and its acceptance
thereof;
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(d)
|
The
Securities (and their component parts) have not been registered under
the
Securities Act or any other applicable securities laws, by reason
of their
issuance in a transaction that does not require registration thereunder
(based in part on the accuracy of the representations and warranties
of
the undersigned contained herein), and that the Securities must be
held
indefinitely unless a subsequent disposition is registered as required
or
is exempt from such registration;
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(e)
|
The
Securities and Exchange Commission (the “SEC”)
currently takes the position that coverage of short sales of shares
of the
Company’s Common Stock “against
the box”
prior to the effective date of a Registration Statement registering
the
re-sale of the Shares is a violation of Section 5 of the Securities
Act,
as set forth in Item 65, Section 5 under Section A of the Manual
of
Publicly Available Telephone Interpretations, dated July 1997, compiled
by
the Office of Chief Counsel, Division of Corporation Finance of the
SEC;
and
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5
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(f)
|
The
undersigned shall not use any of the Shares to cover any short sales
made
prior to the effective date of such registration statement or the
date on
which the shares are subject to sale under Rule
144.
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6. State
Securities Laws.
The
offering and sale of the Securities is intended to be exempt from qualification
under the securities laws of such states in which the securities are offered
and
sold.
7. Regulation
D and Regulation S.
Notwithstanding anything herein to the contrary, every person or entity who,
in
addition to or in lieu of the undersigned, is deemed to be a “purchaser”
pursuant to Regulation D or Regulation S promulgated under the Securities Act
or
any state law, does hereby make and join in making all of the covenants,
representations, and warranties made by the undersigned.
8. Acceptance.
Execution and delivery of this Subscription Agreement shall constitute an
irrevocable offer to purchase the Securities indicated, which offer may be
accepted or rejected in whole or in part by the Company in its sole and absolute
discretion for any cause or for no cause. Acceptance of this offer by the
Company shall be indicated by its execution hereof.
9. Binding
Agreement.
The
undersigned agrees that the undersigned may not cancel, terminate, or revoke
this Subscription Agreement or any agreement of the undersigned made hereunder,
and that this Subscription Agreement shall survive the death or disability
of
the undersigned and shall be binding upon the heirs, successors, assigns,
executors, administrators, guardians, conservators, or personal representatives
of the undersigned.
10. Choice
of Law; Forum.
Notwithstanding the place where this Subscription Agreement or any counterpart
hereof may be executed by any of the parties hereto, the parties expressly
agree
that all the terms and provisions hereof shall be construed under the laws
of
the State of Florida and that any actions related hereto shall be brought in
a
court of competent jurisdiction located in the County of Broward, State of
Florida.
IN
WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on
the
date set forth on the signature page.
The
undersigned desires to take title in the Securities as an individual. The exact
spelling of name(s) under which title to the Securities shall be taken, and
the
exact location for delivery of the Securities, is (please print):
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Name(s)
|
Xxx
Xxxxxxxxxx
|
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|
(address)
|
000
Xxxxxxxxx Xxx. Xxxxx 000
|
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Xxxxxxxx
XX 00000
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6
SIGNATURE
PAGE
|
Purchase
Price subscribed: $250,000
|
Face Amount of Note:
|
$250,000
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||
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Number of Shares subscribed:
|
50,000
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|||
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Number of A Warrants:
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50,000
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|||
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Number of B Warrants:
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50,000
|
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Xxx
Xxxxxxxxxx
|
Name
of
Purchaser(s) (Please print or type)
|
/s/
Xxx Xxxxxxxxxx
|
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Signature
|
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Signature
|
Social
Security/Tax Identification Number: _________________________
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Mailing Address:
|
000
Xxxxxxxxx Xxx
|
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Xxxxx
000
|
||
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Xxxxxxxx,
XX 00000
|
Executed
at 000
Xxxxxxxxx Xxx,
this
6th
day
of
June, 2008.
(location)
SUBSCRIPTION
ACCEPTED:
|
/s/
Xxxxxxx Xxxxxxx
|
|
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Xxxxxxx
Xxxxxxx, Chief Financial Officer
|
DATE: June
6,
2008
7
