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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 2007
Warrant) 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:
ARTICLE 1
AMENDMENTS
1.
Amendments to the Subscription Agreement .
1.1
Elimination of Certain Contractual Limitations
.
U pon
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
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