Prospectus
Supplement No. 2
(to
Prospectus dated August 11, 2008)
PURPLE
BEVERAGE COMPANY, INC.
12,325,521
Shares of Common Stock
This
prospectus supplement should be read in conjunction with the prospectus dated
August 11, 2008, (the “Prospectus”), which is to be delivered with this
prospectus supplement. This prospectus supplement updates the information in
the
Prospectus. If there is any inconsistency between the information in the
Prospectus and this prospectus supplement, you should rely on the information
in
this prospectus supplement.
The
shares that are the subject of the Prospectus have been registered to permit
their resale to the public by the selling stockholders named in the Prospectus.
We are not selling any shares of common stock in this offering, and therefore
will not receive any proceeds from this offering, other than the exercise price,
if any, to be received upon exercise of the warrants referred to in the
Prospectus.
This
prospectus supplement includes the following documents, as filed by us with
the
Securities and Exchange Commission:
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·
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Our
Current Report on Form 8-K filed on September 16,
2008.
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Investing
in our common stock involves a high degree of risk. Before making any investment
in our common stock, you should read and carefully consider the risks described
in the Prospectus under “Risk Factors” beginning on page 3 of the Prospectus, as
updated by this prospectus supplement.
You
should rely only on the information contained in the Prospectus, this prospectus
supplement or any other prospectus supplement or amendment thereto. We have
not
authorized anyone to provide you with different information.
Our
common stock is quoted on the regulated quotation service of the OTC Bulletin
Board under the symbol “PPBV.OB”.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of the Prospectus or this prospectus supplement. Any representation
to
the contrary is a criminal offense.
The
date
of this prospectus supplement is September 16, 2008
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): September 10, 2008
PURPLE
BEVERAGE COMPANY, INC.
(Exact
Name of Registrant as Specified in Charter)
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Nevada
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000-52450
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01-0670370
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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450
East Las Olas Blvd, Suite 830
Fort
Lauderdale, Florida
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33301
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(954)
462-8757
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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As
previously disclosed on Form 8-K filed on September 4, 2008, with the Securities
and Exchange Commission (the “SEC”), Purple Beverage Company, Inc. (the
“Company”) sought, and as of September 10, 2008, entered into, amendments to the
terms of its Subscription Agreements and warrants sold in its December 2007
private placement.
As
a
result of the amendments: (i) the Company issued newly-issued shares of
restricted common stock, in an amount equal to 15% of the number of shares
into
which each unexercised $2.00 warrant outstanding was exercisable, and each
$2.00
warrant (other than $2.00 warrants exercised or exercisable for registered
shares) will be forfeited and cancelled; (ii) the exercise price of all $2.00
warrants registered with the SEC has been adjusted to $0.40 per share; and
(iii)
the Company issued all previous purchasers of shares of common stock at prices
over $0.40 per share additional shares of common stock so that their effective
purchase price per share will be equal to $0.40 per share.
Accordingly,
after giving effect to the foregoing amendments, the Company issued
7,523,447
shares
of
common stock and after giving effect of such issuance, the Company’s outstanding
common stock will increase to 68,374,896 shares. In addition, the Company has
warrants to purchase 4,624,200 shares at an exercise price of
$0.40.
Additional
terms are set forth in the Company’s Current Report on Form 8-K dated September
4, 2008 filed with the SEC, which are incorporated herein by
reference.
Market-Standoff
The
terms
of the market standoff adopted pursuant to the amendment also provides that
the
subscribers’ agreements to refrain from sales at the request of an underwriter
or placement agent will be limited to a maximum of 9 months. The market standoff
will expire no later than 90 days following the date on which the Company enters
into an underwriting or placement agent agreement for a public offering. There
is also a condition that the Company’s officers, directors and major
shareholders will enter into equivalent market standoff agreements. In the
event
of any modification or release, all subscribers subject to the market standoff
will benefit on a pro rata basis and be treated comparably.
Warrant
Assignment Agreement
In
connection with the amendments, the Company may agree to the assignment and
exercise of $2.00 warrants at adjusted exercise prices to be agreed by
negotiation, or $0.40 per share as a maximum exercise price. In addition the
Company agreed to pursue a registered offering of its securities and to
file a registration statement with the SEC and use its best efforts to submit
an
American Stock Exchange or other national exchange listing application prior
to
January 30, 2009. The Company does not presently qualify for approval of an
original listing application with any national securities exchange and no $2.00
warrants have been exercised.
Consulting
Agreement
On
September 15, 2008, the Company entered into a consulting agreement (the
“Consulting Agreement”) with a consultant (the “Consultant”). The Consulting
Agreement will terminate on September 15, 2009 or within 30 days prior written
notice of either the Company or Consultant. Consultant will provide consulting
services including (i) assisting the Company in formulating potential business
and acquisition strategies and (ii) general business advice and business
development. For the provision of his consulting services, Consultant will
receive 2,500,000 shares of the Company’s common stock, par value $0.001 per
share (“Common Stock”) in consideration of bridge loans advanced by Consultant
and 2,000,000 shares of Common Stock issued under the Company’s 2007 Incentive
Plan.
Amendment
of 2007 Incentive Plan
On
September 15, 2008, the board of directors of the Company amended the 2007
Incentive Plan (the “Plan”) in order to increase the amount of restricted shares
or restricted share units that an individual can receive in one Plan Year (as
defined in the plan) from 1,000,000 shares to 2,000,000 shares.
Waiver
On
September 15, 2008, Theodore Farnsworth, Chief Executive Officer waived all
right to receive 2,000,000 shares of Common Stock granted pursuant to options
exercisable under the 2007 Incentive Plan (the “Plan”) of Venture Beverage
Company, which options were cancelled, deemed null and void, have no further
effect and are now available for re-issuance under the Plan. The Company will
issue 2,000,000 shares of restricted stock to the Consultant pursuant to the
Plan.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 1.01, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a
Registrant.
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On
September 12, 2008, the Company issued a Promissory Note in favor of a
lender (the “Note”) in the principal amount of $500,000. The Note
bears interest on the unpaid principal balance at a rate of 5% per annum. All
principal and accrued interest on the Note is due and payable on October
13, 2008. If the Company defaults on the Note, the Company will be
obligated to pay interest on amounts past due at a rate of 18% per annum. At
present, the Company has received $250,000 subject to the terms
of Note.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 2.03, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
2.04.
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet
Arrangement.
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On
August
8, 2008, the Company issued a promissory note in favor of Chelsea Development
International LTD in the principal amount of $250,000 (the “Chelsea Note”). The
Chelsea Note matured on September 8, 2008. Accordingly, the Company is currently
in default under the terms of the Chelsea Note.
On
June
6, 2008 the Company, issued to Ben Rabinowitz (“Rabinowitz”) a promissory note
in the outstanding principal amount of $250,000 (the “First Rabinowitz Note”).
On June 24, 2008 the Company, issued Rabinowitz a promissory note in the
outstanding principal amount of $250,000 (the “Second Rabinowitz Note” and
collectively with the First Rabinowitz Note, the “Rabinowitz Notes”). The First
Rabinowitz Note matured on August 6, 2008. The Second Rabinowitz Note matured
on
August 24, 2008. The Company has the ability to extend the maturity date of
each
of the Rabinowitz Notes for up to two 30-day periods in exchange for the
Company’s prompt issuance of 25,000 shares of Common Stock for each 30-day
extension for each Rabinowitz Note. Additionally, in accordance with the terms
of the Rabinowitz Notes, an event of default has occurred as a result of the
default under the Chelsea Note.
On
July
16, 2008, the Company issued a promissory note to Jay-2 Investments, LLC in
the
principal amount of $1,000,000 (the “Jay-2 Note”). In accordance with the terms
of the of the Jay-2 Note, an event of default has occurred as a result of the
default under the Rabinowitz Notes and the Chelsea Note. Upon the occurrence
of
the default, the interest rate on the Jay-2 Note became 18% per annum.
The
Company is currently in discussions with its various lenders regarding the
extensions of the maturity date of the notes, as applicable, and/or waivers
with
respect to each of the notes in default.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 2.04, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
5.02.
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Departure
of Directors of Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory Arrangements of Certain Officers.
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On
September 15, 2008, Michael W. Wallace, Chief Financial Officer of the Company
ceased to perform his respective duties. On September 15, 2008, the board of
directors of the Company appointed Theodore Farnsworth as the principal
financial and principal accounting officer of the Company.
Theodore
Farnsworth, 46, has served as the Company’s chief executive officer, president,
secretary and as a director since December 2007. Mr. Farnsworth was the chief
executive officer, president, secretary and as a director of Venture Beverage
Company from May 2007 to December 2007. From September 2001 to October 2007,
Mr.
Farnsworth served as chairman of Xstream Beverage Network, Inc. and from
November 2004 to November 2007, Mr. Farnsworth served as Xstream Beverage
Network, Inc.’s chief executive officer. Prior to that, from April 1998 to March
2001, Mr. Farnsworth served as chairman and founder of Farmbid.com, an
agricultural Internet portal site. From May 1997 to March 1998, Mr. Farnsworth
was president of Fontal Restaurant Group, Inc., parent of Burrito Grill
restaurants.
In July
2008, the Company issued two short-term notes payable to Theodore Farnsworth,
totaling $200,000 and, bearing annual interest of 2.42%, with unspecified
maturity periods. The notes were each for $100,000, and one of the $100,000
notes was repaid in July 2008.
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Item
7.01.
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Regulation
FD Disclosure.
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The
Company authorized additional amendments to the Subscription Agreements, and
the
2007 Warrants subject to receipt of approval required under the Subscription
Agreement. Upon receipt by the Company of the requisite consents as set forth
in
the Subscription Agreement and acceptance by the Company, the prior amendment
to
the Subscription Agreement will be amended to confirm that the exercise price
of
the $2.00 warrants assigned by the holder thereof shall be the price determined
by negotiation by the Company and any holder or assignee thereof. All applicable
anti-dilution, price protection and most favored nations provisions of the
Subscription Agreement will be determined in accordance with the to be
negotiated exercise price of the $2.00 warrants. In addition, the proposed
amendment eliminates the requirement that the Company to obtain approval to
file
a registration statement with the SEC.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 7.01, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d)
Exhibits
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Exhibit
No.
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Description
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10.1*
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Form
of Subscription Agreement, dated as of December 12,
2007
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10.2*
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Form
of Common Stock Purchase Warrant, dated as of December 12,
2007
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10.3**
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Amendment
to Subscription Agreement and to Common Stock Purchase Warrant to
Purchase
Shares of Purple Beverage Company, Inc., dated as of April 2, 2008
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10.4***
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Amendment
No. 2 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.5***
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Form
of Warrant Assignment Agreement
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10.6
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Amendment
No. 3 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.7
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500,000
Promissory Note, dated September 12, 2008
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10.8
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Consulting
Agreement dated September 15, 2008
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10.9
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Amendment
No. 1 to 2007 Incentive Plan
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10.10
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Waiver
Letter executed by Theodore Farnsworth dated September 15,
2008
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10.11****
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$250,000
Promissory Note to Chelsea Development International LTD, dated August
8,
2008
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10.12****
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$1,000,000
Promissory Note to Jay-2 Investments, LLC dated July 16,
2008
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*
Previously filed as Exhibits 10.7 and 10.8, respectively to Current Report
on
Form 8-K/A
filed
December 17, 2007.
**
Previously filed as Exhibit 10.1 to Current Report on Form 8-K filed April
4,
2008.
***
Previously filed as Exhibits 10.4 and 10.5, respectively to Current Report
on
Form 8-K filed September 3, 2008.
****
Previously filed as Exhibits 10.2 and 10.6, respectively to Current Report
on
Form 8-K filed September 9, 2008.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Purple
Beverage Company, Inc.
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Dated:
September 16, 2008
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By:
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/s/
Theodore
Farnsworth
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Name:
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Theodore
Farnsworth
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Title:
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Chief
Executive Officer
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INDEX
TO EXHIBITS
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Exhibit
No.
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Description
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10.1*
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Form
of Subscription Agreement, dated as of December 12,
2007
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10.2*
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Form
of Common Stock Purchase Warrant, dated as of December 12,
2007
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10.3**
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Amendment
to Subscription Agreement and to Common Stock Purchase Warrant
to Purchase
Shares of Purple Beverage Company, Inc., dated as of April 2, 2008
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10.4***
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Amendment
No. 2 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.5***
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Form
of Warrant Assignment Agreement
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10.6
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Amendment
No. 3 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.7
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500,000
Promissory Note, dated September 12, 2008
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10.8
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Consulting
Agreement dated September 15, 2008
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10.9
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Amendment
No. 1 to 2007 Incentive Plan
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10.10
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Waiver
Letter executed by Theodore Farnsworth dated September 15,
2008
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10.11****
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$250,000
Promissory Note to Chelsea Development International LTD, dated
August 8,
2008
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10.12****
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$1,000,000
Promissory Note to Jay-2 Investments, LLC dated July 16,
2008
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*
Previously filed as Exhibits 10.7 and 10.8, respectively to Current Report
on
Form 8-K/A
filed
December 17, 2007.
**
Previously filed as Exhibit 10.1 to Current Report on Form 8-K filed April
4,
2008.
***
Previously filed as Exhibits 10.4 and 10.5, respectively to Current Report
on
Form 8-K filed September 3, 2008.
****
Previously filed as Exhibits 10.2 and 10.6, respectively to Current Report
on
Form 8-K filed September 9, 2008.
AMENDMENT
NO. 3 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, par value $0.001 per share (the “
Common
Stock
”)
of
Purple Beverage Company, Inc. (this “
Amendment
”),
is
effective as of September __, 2008, by Purple Beverage Company, Inc., a Nevada
corporation (the “
Company
”),
and
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 a Common Stock Purchase Warrant to
purchase shares of Common Stock of the Company, which warrant was dated and
issued as of 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 Common Stock specified
therein (the “
2007
Underlying Shares
”)
at an
exercise price (the “Purchase Price” as defined in the 2007 Warrant) of $2.00
per share;
WHEREAS,
the Company and Holders have entered into Amendment No. 2 to the Subscription
Agreement and 2007 Warrant (the “
Prior
Consent
”)
and
desire to further amend the Subscription Agreement and 2007 Warrant as set
forth
herein; and
WHEREAS,
pursuant to the Prior Consent the Parties have contemplated the assignment
and
exercise of the 2007 Warrants exercisable for registered 2007 Underlying shares
and desire to confirm the Holder’s assignment of 2007 Warrants upon the actual
exercise at a price determined by the Company and assignee thereof and to
confirm all applicable anti-dilution, price protection and most favored nations
provisions of the Subscription Agreement, 2007 Warrants and related agreements
continue to provide for adjustment to the outstanding, uncancelled securities
of
the Company held by the Holders as is applicable to the actual agreed exercise
price of the assigned 2007 Warrants;
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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1.
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Consent
and Amendment of Warrant
.
The undersigned Holder (in each of the Holder’s capacity
as Subscriber and as a Holder of 2007 Warrants for the purposes
of such consent inasmuch as the separate consent is required for each
of
such purposes) hereby consents to the assignment of 2007
Warrants, the 2007 Underlying Shares of Common Stock of which have
been
registered for resale with the Securities and Exchange Commission,
and all other transactions, amendments, modifications and waivers to
the Subscription Agreement and 2007 Warrants as contemplated herein,
provided the exercise price of such 2007 Warrants shall be the price
determined by negotiation by the Company and any Holder or assignee
thereof. All provisions of the Prior Consent or the assignement which
made
reference to a specific exercise price for 2007 Warrants is hereby
amended
for the purpose of deleting any such reference and the approvals therein
shall not require a specific exercise price of 2007 Warrants following
the
Effective Date (as defined in the Prior
Consent).
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2.
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Amendment
of Section 9(p) of the Subscription Agreement
.
Section 9(p) of the Subscription Agreement is amended in its entirety
to
read as follows:
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“(p)
Intentionally Omitted.”
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.
PURPLE
BEVERAGE COMPANY, INC.
By:
______________________________________
Theodore
Farnsworth, Chief Executive Officer
HOLDER:
I
hereby
consent to the amendments set forth herein:
______________________________________
September __, 2008
Name:
Title:
PROMISSORY
NOTE
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$500,000.00
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September
12,
2008
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FOR
VALUE
RECEIVED, the undersigned, PURPLE BEVERAGE COMPANY, INC., a Nevada corporation
("Debtor"), promises to pay to the order of Barry Honig., or its successors
or
assigns ("Lender"), on October 13, 2008 ("Maturity Date"), at 551 Fifth Avenue,
Suite 1601, New York, New York 10176, or at such other place as the Lender
may
designate from time to time in writing to the Debtor, in lawful money of the
United States of America, the principal sum of Five Hundred Thousand Dollars
and
no cents ($500,000.00), together with interest on the unpaid principal balance
of this Note from the date hereof until paid at five percent (5%) per annum.
In
the event of Debtor's default hereunder, interest on amounts past due pursuant
to this Note shall be paid at a rate of eighteen percent (18%) per annum.
Interest shall be computed on the basis of a 360-day year.
The
delay
or failure to exercise any right hereunder shall not waive such right. The
undersigned hereby waives demand, presentment, protest, notice of dishonor
or
nonpayment, notice of protest, any and all delays or lack of diligence in
collection hereof and assents to each and every extension or postponement of
the
time of payment or other indulgence.
In
the
event of default hereunder such that this Note is placed in the hands of an
attorney for collection (whether or not suit is filed), or if this Note is
collected by suit or legal proceedings or through bankruptcy proceedings, Debtor
agrees to pay reasonable attorney’s fees and expenses of
collection.
This
Note
shall be governed by, and construed and interpreted in accordance with, the
laws
of the State of New York. Exclusive jurisdiction relating to this Note shall
vest in courts located in New York State.
IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Note
the
date and year first above written.
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PURPLE BEVERAGE COMPANY, INC.
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By:
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/s/
Theodore Farnsworth
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Name:
Theodore Farnsworth
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Title:
Chief Executive Officer
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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
Barry Honig, 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, Theodore
Farnsworth.
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.
(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).
(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.
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.
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.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
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Purple
Beverage Company, Inc.
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/s/
Barry
Honig
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By:
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/s/
Theodore
Farnsworth
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Barry
Honig
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Name:
Theodore Farnsworth
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Title:
Chief Executive Officer
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Address
for Notice:
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Address
for Notice:
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Barry
Honig
595
S. Federal Hwy.
Suite
600
Boca
Raton, FL 33432
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Theodore
Farnsworth, Chief Executive Officer
Purple
Beverage Company, Inc.
450
East Las Olas Blvd.
Suite
830
Fort
Lauderdale, Florida 33301
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EXHIBIT
A
Services
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A.
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Assist
the Company in formulating potential business and acquisition
strategies.
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B.
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General
business advice and business
development.
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AMENDMENT
NO.1 TO THE
2007
INCENTIVE PLAN
OF
PURPLE
BEVERAGE COMPANY, INC.
This
Amendment No. 1 (the “Amendment”) to the 2007 Incentive Plan (the “Plan”) of
Purple Beverage Company, Inc. (the “Company”) is made effective as of the
15
th
day of
September, 2008. Capitalized terms not otherwise defined herein shall have
the
meaning assigned to such terms in the Plan.
The
Plan
is hereby amended by deleting the text of Section 4.3(c) thereof in its entirety
and replacing it with the following:
“
Restricted
Shares or Restricted Share Units
:
The
maximum aggregate grant with respect to Awards of Restricted Shares or
Restricted Share Units in any one Plan Year to any one Participant shall be
2,000,000 Shares.”
Except
as
modified and amended hereby, the Plan remains in full force and effect with
no
further amendment or modification.
IN
WITNESS WHEREOF, Purple Beverage Company, Inc. has caused its duly authorized
officer to execute this instrument of amendment this 15
th
day of
September, 2008.
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PURPLE BEVERAGE COMPANY, INC.
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By:
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/s
Theodore Farnsworth
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CONSENT
LETTER
I,
Theodore Farnsworth, hereby waive all rights to receive 2,000,000 shares of
common stock, par value $0.001 per share, of Purple Beverage Company, Inc.
granted pursuant to options exercisable under the 2007 Incentive Plan (the
“Plan”) of Venture Beverage Company, which options are hereby cancelled and
shall be deemed to be null and void and have no further effect and shall be
available for re-issuance under the Plan.
Dated:
September 15, 2008
/s/
Theodore
Farnsworth
Name:
Theodore Farnsworth
Purple Beverage (CE) (USOTC:PPBV)
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