AMENDMENT TO SUBSCRIPTION AGREEMENT AND TO COMMON STOCK PURCHASE WARRANT TO PURCHASE SHARES OF COMMON STOCK OF PURPLE BEVERAGE COMPANY, INC.
AMENDMENT
TO SUBSCRIPTION AGREEMENT AND TO COMMON STOCK
PURCHASE
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF PURPLE
BEVERAGE
COMPANY, INC.
This
Amendment to the Subscription Agreement and to Common Stock Purchase Warrant
to
purchase shares of Common Stock of Purple Beverage Company, Inc. (this
“Amendment”),
is
effective as of April 2, 2008, by Purple Beverage Company, Inc., a Nevada
corporation (the “Company”),
in
favor of the undersigned holder (the “Holder”).
The
Company and Holder are, together, the “Parties.”
RECITALS
WHEREAS,
effective December 12, 2007, the Company and the Holder entered into that
certain Subscription Agreement (the “Subscription
Agreement”),
pursuant to which the Company sold and issued to Holder certain Shares (as
defined therein) and granted to Holder that a Common Stock Purchase Warrant
to
purchase shares of Common Stock of the Company, which warrant was dated and
issued December 12, 2007 (the “2007
Warrant”),
and
entitled Holder, upon exercise thereof in accordance with the terms contained
therein, to purchase up to that number of shares of the Company’s Common Stock
specified therein (the “2007
Covered Shares”)
at an
initial per-share Purchase Price (as defined in the 0000 Xxxxxxx) of $2.00
(the
“2007
Warrant Original Purchase Price”);
WHEREAS,
the Company has determined that, in lieu of its currently procuring additional
financing from otherwise unaffiliated third parties in order to finance the
continued development of its business, the parties wish to amend certain terms
contained in the Subscription Agreement and in the 2007 Warrant, as well as
to
provide an enhanced opportunity to obtain certain financing from Holder and
certain other parties who received warrants at the same time and on the same
terms as the 2007 Warrant (collectively, the “Other
2007 Warrant Holders”),
by
offering a reduction to the 2007 Warrant Original Purchase Price for up to
50%
of the 2007 Covered Shares, which reduction shall be available until April
2,
2008 (the “Amendment
Effective Period”),
and a
grant of certain registration rights;
WHEREAS,
in connection with the exercise of the Amended Warrant Price Shares (as that
term is defined in Section 2.1) during the Amendment Effective Period (as that
term is defined in Section 2.1, below), the Company will grant to the Holder
a
new common stock purchase warrant (a “New
Warrant”),
in
the form attached hereto as Exhibit A, on a one-for-two basis, such that the
Holder will receive a New Warrant for the purchase of fifty percent of the
number of shares of Common Stock as the Holder purchases of Amended Warrant
Price Shares through the exercise of a 2007 Warrant during the Amendment
Effective Period;
NOW,
THEREFORE, in
consideration of the premises, the covenants made herein, and for such other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
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ARTICLE
1
AMENDMENTS
1. Amendments
to the Subscription Agreement.
1.1 Elimination
of Certain Contractual Limitations.
Upon
the
expiration of the Restriction Period (as defined in Section 4(o) of the
Subscription Agreement), none of the Amended Warrant Price Shares (as defined
in
Section 1.3(b) of the Registration Rights Agreement) shall remain subject to
any
of the time-based contractual limitations contained in such Section,
i.e.,
the
Holders’ covenants therein not to sell, pledge, hypothecate, or otherwise derive
economic value therefrom, and the issuance thereof during the Amendment
Effective Period shall not increase the number of Shares and Warrant Shares
(as
defined in the recitals to the Subscription Agreement) subject to the five
percent limitations set forth therein.
1.2 Waiver
of Certain Anti-dilution Protections.
Notwithstanding anything to the contrary contained in the Subscription
Agreement, none of the transactions contemplated by this Amendment, including
the issuance of any of the Amended Warrant Price Shares during the Amendment
Effective Period or shares of the Company’s common stock to Palladium Capital
Advisors, LLC, or any of its affiliates, in connection with the execution of
this Amendment or the issuance of any of the Amended Warrant Price Shares during
the Amendment Effective Period, shall result in the imposition of any of the
anti-dilution protections in favor of the Holder contained in the Subscription
Agreement.
1.3 Waiver
of Certain Offering Restrictions.
Notwithstanding anything to the contrary contained in the Subscription
Agreement, none of the transactions contemplated by this Amendment, including,
but not limited to, the issuance of any of the Amended Warrant Price Shares
during the Amendment Effective Period or shares of the Company’s common stock to
Palladium Capital Advisors, LLC, or any of its affiliates, in connection with
the execution of this Amendment or the issuance of any of the Amended Warrant
Price Shares during the Amendment Effective Period or the filing of any
registration statement in respect of any of the Shares, shall be deemed to
be a
violation of any of the offering or other restrictions imposed upon, or granted
by, the Company and in favor of the Holder contained in the Subscription
Agreement.
2. Amendment
to 2007 Warrant.
2.1 Limitations.
Effective solely for any exercise by Holder of up to fifty (50%) of the 2007
Covered Shares (collectively, the “Amended
Warrant Price Shares”)
occurring during the Amendment Effective Period, the “Warrant Price” specified
in Section 9 of the 2007 Warrant shall be $1.25 per share of such 2007 Covered
Shares. With respect to any Amended Warrant Price Shares that are not purchased
through the exercise of the 2007 Warrant during the Amendment Effective Period,
immediately upon the expiration thereof and without any further act of the
Parties, the 2007 Original Warrant Price shall be reinstated to such unpurchased
Amended Warrant Price Shares and thereafter shall apply to all unpurchased
2007
Covered Shares and this Amendment shall be of no further force and effect.
The
Company hereby represents that, concurrently with the delivery of this Amendment
to Holder, it is delivering to each of the Other Warrant Holders an amendment
to
its respective outstanding 0000 Xxxxxxx for its consideration and acceptance,
which amendment is identical to this Amendment in form and substance.
Accordingly, the Parties agree that any exercise of the Warrants held by the
Other Warrant Holders at the prices contained herein shall not be deemed to
trigger, or give rise to the triggering of, any anti-dilution protection
contained in the Warrants. The holder of the Amended Warrant Price Shares,
New
Warrant, and Common Stock issuable upon exercise of the New Warrant is granted
all of the rights and benefits granted pursuant to the Transaction Documents
(as
defined in the Subscription Agreement) to the holder of Warrants and Warrant
Shares (as defined in the Subscription Agreement).
2.2 Waiver
of Certain Anti-dilution Protections.
Notwithstanding anything to the contrary contained in the 2007 Warrants, none
of
the transactions contemplated by this Amendment, including the issuance of
any
of the Amended Warrant Price Shares during the Amendment Effective Period or
shares of the Company’s common stock to Palladium Capital Advisors, LLC, or any
of its affiliates, in connection with the execution of this Amendment or the
issuance of any of the Amended Warrant Price Shares during the Amendment
Effective Period, shall result in the imposition of any of the anti-dilution
protections in favor of the Holder contained in the 2007
Warrants.
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2.3 Conditions
Precedent.
As a
condition precedent to the effectiveness of the Amendment and the transactions
contemplated herein, the Other 2007 Warrant Holders holding not less than 70%
of
the Shares shall have signed an amendment to their respective Subscription
Agreements and 2007 Warrants in form and content substantially similar to this
Amendment, although it shall not be a condition precedent to the effectiveness
of the Amendment that any or all of such Other 2007 Warrant Holders shall have
purchased any of their respective 2007 Covered Shares during the Amendment
Effective Period.
3. Registration
Rights.
In
connection with this Amendment, the Company has agreed to grant to Holder,
and
to each of the Other 2007 Warrant Holders who shall have signed an amendment
to
their respective Subscription Agreements and 2007 Warrants in form and content
substantially similar to this Amendment, certain registration rights, as more
specifically set forth in the form of Registration Rights Agreement, attached
hereto as Exhibit B.
4. New
Warrants. In connection with this Amendment, the Company has agreed to grant
to
Holder, and to each of the Other 2007 Warrant Holders who shall have signed
an
amendment to their respective Subscription Agreements and 2007 Warrants in
form
and content substantially similar to this Amendment, certain New Warrants (in
the form attached hereto as Exhibit A) for the purchase of fifty percent of
the
number of shares of Common Stock as the Holder purchases of Amended Warrant
Price Shares through the exercise of a 2007 Warrant during the Amendment
Effective Period.
ARTICLE
3
MISCELLANEOUS
PROVISIONS
1. Re-affirmation
of Representations and Warranties.
If the
Holder purchases any Amended Warrant Price Shares through the exercise of a
2007
Warrant during the Amendment Effective Period, then the Holder hereby currently
re-affirms herein all of the representations and warranties initially made
by
the Holder in favor of the Company in the Subscription Agreement as if made
as
of the date of this Amendment and the Company hereby re-affirms herein all
of
the representations and warranties initially made by the Company in favor of
the
Holder in the Subscription Agreement as of the date of the Subscription
Agreement.
2. Miscellaneous
Provisions.
2.1 No
Further Amendments.
Except
as amended by this Amendment, the Subscription Agreement and the 2007 Warrant
remain unmodified and in full force and effect. In the event of any
inconsistency between the provisions of either the Subscription Agreement or
the
0000 Xxxxxxx and the provisions of this Amendment, the provisions of this
Amendment shall prevail. This
Amendment may only be modified or amended by a written agreement executed by
the
Company, and consented to by Holder, with the same formalities and in the same
manner as this Amendment.
2.2 Counterparts.
This
Amendment may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which when taken together shall constitute one
and
the same instrument. Facsimiles or portable document files transmitted by e-mail
containing original signatures shall be deemed for all purposes to be originally
signed copies of the documents which are the subject of such facsimiles or
files.
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2.3 Binding
on Successors.
This
Amendment shall be binding upon and shall inure to the benefit of the successors
and permitted assigns of the Parties.
2.4 Entire
Agreement.
Each of
the Subscription Agreement and the 2007 Warrant, as amended by this Amendment,
contains the entire understanding between the Parties and supersedes any prior
written or oral agreements between them respecting the subject matter contained
herein. There are no representations, agreements, arrangements or
understandings, oral or written, between the Parties relating to the subject
matter hereof that are not fully expressed herein.
IN
WITNESS WHEREOF, the Parties hereto have executed or have caused a duly
authorized officer to execute this Amendment all effective as of the day and
year first above written.
HOLDER:
I
hereby
consent to the amendments set forth herein and
¨ Exercise
________ of
the
2007 Warrants as of the date hereof; or
¨ Do
not
exercise any of the 2007 Warrants as of the date hereof.
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April
2, 2008
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[name]
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