CONSULTING AGREEMENT
This
CONSULTING AGREEMENT (this “Agreement”)
is
entered into as of September 15, 2008, by and between Purple Beverage Company,
Inc., a Nevada corporation (the “Company”)
and
Xxxxx Xxxxx, an individual (the “Consultant”).
Recitals
WHEREAS,
the Company has a pre-existing relationship with Consultant and Consultant
has
previously discussed with the Company his skills and relationships and has
offered to make introductions useful to the Company, and has advanced certain
funds as short-term bridge loans to the Company and Company now desires to
engage Consultant to provide certain Services (as defined in Section
3 below)
for compensation, and Consultant desires to provide the Services to the Company,
upon the terms and subject to the conditions set forth below.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Engagement.
The
Company hereby engages Consultant to provide the Services during the Term (as
defined below), and Consultant hereby accepts such engagement to provide the
Services during the Term (the “Engagement”).
2. Term
of Engagement; Termination.
a. Term.
The
Engagement shall commence on the date hereof and shall terminate on the first
anniversary of the date hereof, unless earlier terminated in accordance with
Section
2(b)
below
(the “Term”).
b. Termination.
This
Agreement may be terminated by Consultant or the Company at any time upon thirty
(30) days prior written notice of such termination to the other
party.
c. Effect
of Termination.
In the
event of a termination of this Agreement, (i) Consultant shall still be entitled
to receive all of the Consulting Shares (as defined in Section
4)
and
(ii) the Company shall reimburse Consultant for all expenses previously approved
by the Company incurred by Consultant in connection with Consultant’s
Engagement.
3. Services
to be Provided by Consultant.
During
the Term, Consultant shall provide services to the Company as set forth on
Exhibit
A,
as well
as any other services that are mutually agreed between the parties hereto
(collectively, the “Services”).
The
parties hereto acknowledge and agree that the Services to be provided are in
the
nature of advisory services only, and Consultant shall have no responsibility
or
obligation for execution of the Company’s business or any aspect thereof nor
shall Consultant have any ability to obligate or bind the Company in any
respect. Consultant shall have control over the time, method and manner of
performing the Services. Consultant shall render such services as are from
time
to time requested by the Chief Executive Officer of the Company, Xxxxxxxx
Xxxxxxxxxx.
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4. Compensation.
In
consideration for the Services to be provided hereunder, Consultant shall
receive, promptly after the execution of this Agreement, as a consulting fee,
4,500,000 shares of the Company’s common stock, par value $0.001 per share (the
“Consulting
Shares”)
consisting of 2,500,000 shares in consideration of bridge loans advanced by
Consultant and 2,000,000 shares issued under the Company’s 2007 Incentive
Plan.
5. Piggy-Back
Registration Rights.
(a) The
Company shall notify Consultant in writing at least twenty (20) days prior
the
filing of any registration statement under the Securities Act of 1933, as
amended (the “Securities
Act”),
in
connection with a public offering of shares of the Company's
common stock (the “Common
Stock”)
(including, but not limited to, registration statements relating to secondary
offerings of securities of the Company but excluding any registration statements
(i) on Form S-4 or S-8 (or any successor or substantially similar form), or
of
any employee stock option, stock purchase or compensation plan or of securities
issued or issuable pursuant to any such plan, or a dividend reinvestment plan,
(ii) otherwise relating to any employee, benefit plan or corporate
reorganization or other transactions covered by Rule 145 promulgated under
the
Securities Act, or (iii) on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the resale
of
the Consulting Shares and will afford Consultant an opportunity to include
in such registration statement all or part of the Consulting Shares held by
Consultant. In the event Consultant desires to include in any such registration
statement all or any part of the Consulting Shares held by Consultant,
Consultant shall within ten (10) days after the above-described notice from
the
Company, so notify the Company in writing, including the number of
such Consulting Shares Consultant wishes to include in such registration
statement. If Consultant decides not to include all
of his Consulting Shares in any registration statement thereafter
filed by the Company Consultant shall nevertheless continue to have the right
to
include any Consulting Shares in any subsequent registration statement or
registration statements as may be filed by the Company with respect to the
offering of the securities, all upon the terms and conditions set forth herein.
(b) In
connection with its obligation under this
Section 5,
the
Company will (i) furnish to Consultant without charge, at least one
copy of any effective Registration Statement and any post-effective amendments
thereto, including financial statements and schedules, and, if
Consultant so requests in writing, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference) in the
form filed with the Securities and Exchange Commission; and (ii) deliver to
Consultant and the underwriters, if any, without charge, as many copies of
the
then effective the prospectus included the Registration Statement, as the same
may be amended or supplemented, (including such prospectus subject to
completion) (the “Prospectus”)
and
any amendments or supplements thereto as such Persons may reasonably
request.
(c) As
a
condition to the inclusion of his Consulting Shares,
Consultant shall furnish to the Company such information regarding
Consultant and his affiliates and the distribution proposed by
Consultant as the Company may request in writing or as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
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(d) Consultant agrees
by acquisition of Consulting Shares that, upon receipt of any notice
from the Company of the happening of any event that, in the good faith judgment
of the Company’s Board of Directors, requires the suspension of
Consultant ’s rights under this
Section 5, Consultant will
forthwith discontinue disposition of Consulting Shares pursuant to the
then current Prospectus until Consultant is advised in writing by the Company
that the use of the Prospectus may be resumed. If so directed by the Company,
on
the happening of such event, Consultant will deliver to the Company
(at the Company’s expense) all copies, other than permanent file copies then in
buyer’s possession, of the Prospectus covering such Consulting Shares
at the time of receipt of such notice.
(e) Consultant hereby
covenants with the Company (i) not to make any sale
of Consulting Shares without effectively causing the prospectus
delivery requirements under the Securities Act to be satisfied, and (ii) if
such
Consulting Shares are to be sold by any method or in any transaction other
than on a national securities exchange, the Nasdaq National market, Nasdaq
SmallCap Market or in the over-the-counter market, in privately negotiated
transactions, or in a combination of such methods, to notify the Company at
least 5 business days prior to the date on which Consultant first offers to
sell
any such Consulting Shares.
(f) Consultant acknowledges
and agrees that the Consulting Shares sold pursuant to the
Registration Statement described in this Agreement are not transferable on
the
books of the Company unless the stock certificate submitted to the transfer
agent evidencing such Consulting Shares is accompanied by a
certificate reasonably satisfactory to the Company to the effect that (x)
the Consulting Shares have been sold in accordance with such
Registration Statement and (y) the requirement of delivering a current
Prospectus has been satisfied.
(g) Consultant shall
not take any action with respect to any distribution deemed to be made pursuant
to such Registration Statement, which would constitute a violation of Regulation
M under the Securities Exchange Act of 1934, as amended, or any other applicable
rule, regulation or law.
(h) Upon
the
expiration of the effectiveness of any Registration Statement,
Consultant shall discontinue sales of shares pursuant to such Registration
Statement upon receipt of notice from the Company of his intention to
remove from registration the shares covered by such Registration Statement
which
remain unsold, and Consultant shall notify the Company of the number of
shares registered which remain unsold immediately upon receipt of such notice
from the Company
(i) In
the
case of the registration of any underwritten primary offering initiated by
the
Company (other than any registration by the Company on Form S-4 or Form S-8
(or
any successor or substantially similar form), or of (i) an employee stock
option, stock purchase or compensation plan or of securities issued or issuable
pursuant to any such plan, or (ii) a dividend reinvestment plan) or any
underwritten secondary offering initiated at the request of a holder of
securities of the Company pursuant to registration rights granted by the
Company, Consultant agrees not to effect any public sale or distribution of
securities of the Company, except as part of such underwritten registration,
during the period beginning fifteen (15) days prior to the closing date of
such
underwritten offering and during the period ending ninety (90) days after such
closing date (or such longer period as may be reasonably requested by the
Company or by the managing underwriter or underwriters).
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(j) Anything
to the contrary contained in this Agreement notwithstanding, when, in the
opinion of counsel for the Company, registration of
the Consulting Shares is not required by the Securities Act, in
connection with a proposed sale of such Consulting Shares,
Consultant shall have no rights pursuant to this
Section 5.
In
furtherance and not in limitation of the foregoing, Consultant shall have
no rights pursuant to this Section 5 at
such time as all of Consultant’s Consulting Shares
may be sold in a three-month period pursuant to Rule 144.
6. Expenses.
The
Company shall reimburse Consultant for all reasonable expenses incurred by
Consultant in providing the Services hereunder no later than thirty (30) days
after the submission of an invoice evidencing such expenses in a form reasonably
satisfactory to the Company; provided that the Company shall not be obligated
to
reimburse Consultant for expenses if incurred without the Company’s prior
written approval.
7. No
Exclusivity.
The
Company hereby acknowledges and agrees that nothing in this Agreement shall
prohibit Consultant from continuing to provide services similar to the Services
to other companies or otherwise engaging in Consultant’s business activities.
8. Independent
Contractor Status.
It is
understood and agreed that in the performance of the Services hereunder,
Consultant is acting as an independent contractor and not as an agent or
employee of, or partner, joint venturer or in any other relationship with,
the
Company. Consultant acknowledges that no income, social security or other taxes
will be withheld or accrued by the Company, on Consultant’s behalf. Neither the
Company nor Consultant has the authority to bind the other in any agreement
without the prior written consent of the entity to be bound.
9. Confidentiality.
In
connection with Consultant’s Engagement, it is contemplated that the Company
will not supply Consultant with non-public or proprietary information concerning
the Company and its business and operations and affiliates without the prior
written agreement of Consultant to receive such Confidential Information
(“Confidential
Information”).
10. Publicity.
No
party hereto shall disclose the existence or terms of this Agreement to any
person or entity without the prior written consent of the other party
hereto.
11. Legal
Representation.
Each
party hereto acknowledges that it has been represented by independent legal
counsel in the preparation of the Agreement. Each
party recognizes and acknowledges that counsel to the Company has represented
Consultant in connection with various legal matters and each party waives any
conflicts of interest or other allegations that it has not been represented
by
its own counsel.
12. Consultant
Representations.
In
connection with the Consulting Shares to be acquired by Consultant hereunder,
Consultant represents and warrants to the Company that:
a. Consultant
acknowledges that Consultant has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers to other representatives
of
the Company concerning an investment in the Consulting Shares, and any
additional information which Consultant has requested.
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b. Consultant
has had experience in investments in restricted and publicly traded securities,
and has had experience in investments in speculative securities and other
investments which involved the risk of loss of investment. Consultant
acknowledges that an investment in the Consulting Shares is speculative and
involves the risk of loss. Consultant has the requisite knowledge to assess
the
relative merits and risks of this investment and Consultant can afford the
risk
of loss of his entire investment in the Consulting Shares.
c. Consultant
is an accredited investor, as that term is defined in Regulation D promulgated
under the Securities Act of 1933.
d. Consultant
is acquiring the Consulting Shares for Consultant’s own account for investment
and not with a view toward resale or distribution thereof except in accordance
with applicable securities laws.
13. General
Terms.
a. Any
notice to be given hereunder by a party to any other party hereto may be
effectuated in writing by personal delivery, by mail, registered or certified,
postage prepaid, with return receipt requested, or by facsimile or other
electronic transmission and addressed to such party at the address set forth
on
the signature page below.
b. If
any
provision of this Agreement is determined by a court of competent jurisdiction
to be invalid or unenforceable, that provision shall be deemed modified to
the
extent necessary to make it valid or enforceable, or if it cannot be so
modified, then severed, and the remainder of the Agreement shall continue in
full force and effect.
c. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations and enforcement of this Agreement (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively
in
the state and federal courts sitting in the City of New York. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York for the adjudication of any
dispute hereunder or in connection herewith or with respect to the enforcement
of this Agreement, and hereby irrevocably waives, and agrees not to assert
in
any suit, action or proceeding, any claim that it is not personally subject
to
the jurisdiction of any such court. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.
d. This
Agreement embodies the entire understanding of the parties hereto with respect
to the subject matter hereof, and supersedes all prior or contemporaneous
agreements, arrangements or understandings with respect to the subject matter
hereof, whether oral or written.
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e. This
Agreement may not be modified except in a writing signed by the parties hereto.
f. No
term
of this Agreement may be waived, except in a writing signed by the party hereto
entitled to the benefit of such term.
g. Each
party hereto represents and agrees that such party is authorized to enter into
this Agreement and this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable in accordance with its terms. This
Agreement may not be assigned by any party.
h. This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same Agreement.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
| /s/ Xxxxx Xxxxx | By: | /s/ Xxxxxxxx Xxxxxxxxxx | |
|
Xxxxx Xxxxx |
Name: Xxxxxxxx Xxxxxxxxxx |
||
|
Title:
Chief Executive Officer
|
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|
Address
for Notice:
|
Address
for Notice:
|
||
|
Xxxxx
Xxxxx
000
X. Xxxxxxx Xxx.
Xxxxx
000
Xxxx
Xxxxx, XX 00000
|
Xxxxxxxx
Xxxxxxxxxx, Chief Executive Officer
000
Xxxx Xxx Xxxx Xxxx.
Xxxxx
000
Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
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||
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EXHIBIT
A
Services
|
A.
|
Assist
the Company in formulating potential business and acquisition
strategies.
|
|
B.
|
General
business advice and business
development.
|
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