PURPLE BEVERAGE COMPANY, INC.

SUBSCRIPTION AGREEMENT

Purple Beverage Company, Inc. 450 E.
Las Olas Blvd., Suite 830 Ft.
Lauderdale, Florida 33301
Attn: Theodore Farnsworth, CEO
 
Dear Mr. Farnsworth:
 
The undersigned, Jay-2 Investments, LLC, a California limited liability company,
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 $1,000,000 (the “Note”), in the form
attached hereto as Exhibit A; not less than 200,000 shares (the “Shares”) of the
Company’s $.001 par value Common Stock (“Common Stock”); a two-year warrant, in
the form attached hereto as Exhibit B (the “A Warrant”), to purchase up to
200,000 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 Warrant Exercise Price”), in accordance
with this agreement. 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.
 
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 5, 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 A
Warrant, and the Initial Warrant Exercise Price shall be proportionately
adjusted. Any questions regarding this document or the investment described
herein should be directed to Theodore Farnsworth, Chief Executive Officer,
Purple Beverage Company, Inc., 450 E. Las Olas Blvd., Suite 830, Ft. Lauderdale,
Florida 33301; telephone: (877) 347-3836 X 210, fax: (954) 462-8758; e-mail:
tfarnsworth@drinkpurple.com.
 
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 of $1,000,000; (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); and (c) an A Warrant to
purchase up to 200,000 shares of Common Stock, for an aggregate subscription
price of $1,000,000, and tenders such purchase price by means of a check
(cashiers, certified, or personal), money order, or wire transfer made payable
to: “Purple Beverage Company, Inc.” The wire transfer instructions are:
 
Wachovia Bank
350 East Las Olas Blvd., Suite 830
Fort Lauderdale, FL 33301
954-462-8382
 
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Name: Purple Beverage Company, Inc.
Routing#: 067 006 432
Account#: 200 003 459 5990
 
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) up to an amount not to
exceed $1,000,000 and the net proceeds from the sale of the Shares and Common
Stock issuable upon exercise of the A Warrants, 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;

 

 
(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 it has obtained sufficient information, in its
judgment or that of its independent purchaser representative, if any, to
evaluate the merits and risks of this investment. The undersigned confirms that
it 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 its
experience and judgment, or that of its purchaser representative, if any, upon
such independent investigations as it, or they, deemed appropriate, and upon
information provided by the Company in writing or found in the books, records,
or documents of the Company and available at the EDGAR website of the Securities
and Exchange Commission (the “SEC”);

 
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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 or
available at the EDGAR website of the SEC. 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 or available at the EDGAR website of
the SEC;

 

 
(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;

 

 
(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;

 

 
(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;

 

 
(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

 

 
(i)
The undersigned has been informed of and understands the following.

 

 
(1)
There are substantial restrictions on the transferability of the Securities;

 

 
(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;

 

 
(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:

 

 
(1)
The approximate or exact length of time that the undersigned will be required to
remain a holder of the Securities;

 

 
(2)
The amount of consideration, profit, or loss to be realized, if any, as a result
of an investment in the Company;

 

 
(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;

 

 
(k)
The undersigned has not distributed any information relating to this investment
to anyone other than its members representative, and legal, tax and financial
advisors, if any;

 

 
(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, up to an amount not to exceed $1,000,000 and the net
proceeds from the sale of the Shares and Common Stock issuable upon exercise of
the A Warrants, 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;

 

 
(2)
The disposition of the Securities or any part thereof by the undersigned,
contrary to the foregoing declarations, representations, and warranties;

 

 
(3)
Any action, suit, or proceeding based upon:

 

 
(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

 

 
(ii)
the disposition of the Securities or any part thereof.

 
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
that occurs prior to the issue date of the Securities.
 
3. Transferability. Prior to the issue date of the Securities, the undersigned
agrees not to transfer or assign the obligations or duties contained in this
Subscription Agreement or any of the undersigned’s interest in this Subscription
Agreement 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.
 
5. Acknowledgements, Understandings, and Agreements of the Purchaser. The
undersigned acknowledges, understands, and agrees that
 

 
(a)
The Company reserves the right to reject all, but not less than all of this
subscription in its sole and absolute discretion for any cause or for no cause;

 

 
(b)
The undersigned will be promptly notified by the Company whether this
subscription has been accepted, and if not accepted in whole, the Company will
promptly pay and the undersigned agrees to accept the return of all of the funds
tendered to the Company as a refund or a return, and in either case without
interest thereon or deduction therefrom;

 

 
(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;

 

 
(e)
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

 

 
(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

 
6. Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties to the Purchaser:
 

 
(a)
Due Incorporation. The Company is a corporation or other entity duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization and has the requisite
corporate power to own its properties and to carry on its business as presently
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary, other than
those jurisdictions in which the failure to so qualify would not have a Material
Adverse Effect. For purposes hereof, a “Material Adverse Effect” shall mean a
material adverse effect on the financial condition, results of operations,
prospects, properties, or business of the Company and its Subsidiaries taken as
a whole. For purposes of this Agreement, “Subsidiary” means, with respect to any
entity at any date, any corporation, limited or general partnership, limited
liability company, trust, estate, association, joint venture or other business
entity of which more than 30% of (i) the outstanding capital stock having (in
the absence of contingencies) ordinary voting power to elect a majority of the
board of directors or other managing body of such entity, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such entity. As of the date hereof, the Company does not
have any Subsidiaries.

 
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(b)
Outstanding Stock. All issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable.

 

 
(c)
Authority; Enforceability. This Agreement, the Note, the Shares, the A Warrant,
and all other agreements delivered together with this Agreement or in connection
herewith to which the Company is a party (collectively, the “Transaction
Documents”) have been duly authorized, executed and delivered by the Company and
are valid and binding agreements of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights generally and to general principles of equity.
The Company has full corporate power and authority necessary to enter into and
deliver the Transaction Documents and to perform its obligations thereunder.

 

 
(d)
Capitalization and Additional Issuances. The authorized and outstanding capital
stock of the Company and Subsidiaries as of the date of this Agreement is set
forth in the Company’s Registration Statement on Form S-1, Pre-Effective
Amendment No. 2 (the “S-1”), as filed with the SEC on July 2, 2008. Subject to a
standard threshold of materiality, there are no outstanding agreements or
preemptive or similar rights affecting the Common Stock or equity and no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, or agreements or understandings with respect to the
sale or issuance of any shares of Common Stock or equity of the Company or
Subsidiaries or other equity interest in the Company or Subsidiaries except as
described therein.

 

 
(e)
Consents. No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
Subsidiaries or any of their Affiliates, the OTC Bulletin Board (“OTCBB”) or the
Company’s shareholders is required for the execution by the Company of the
Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the
issuance and sale of the Securities and the shares of Common Stock issuable upon
exercise of the A Warrants (“Warrant Shares”). The Transaction Documents and the
Company’s performance of its obligations thereunder have been approved by the
Company’s Board of Directors.

 

 
(f)
No Violation or Conflict. Assuming the representations and warranties of the
undersigned and the acknowledgements, understandings, and agreements of the
undersigned contained herein are true and correct, neither the issuance and sale
of the Securities and Warrant Shares nor the performance of the Company’s
obligations under the Transaction Documents by the Company will:

 
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(i) violate, conflict with, result in a breach of, or constitute a default (or
an event which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the articles of
incorporation or bylaws of the Company, (B) to the Company’s knowledge, any
decree, judgment, order, law, treaty, rule, regulation or determination
applicable to the Company of any court, governmental agency or body, or
arbitrator having jurisdiction over the Company or over the properties or assets
of the Company, (C) the terms of any bond, debenture, note, or any other
evidence of indebtedness, or any agreement, stock option or other similar plan,
indenture, lease, mortgage, deed of trust, or other instrument to which the
Company is a party, by which the Company is bound, or to which any property of
the Company is subject, or (D) the terms of any “lock-up” or similar provision
of any underwriting or other agreement to which the Company, or any of its
Affiliates is a party or obligor, except the violation, conflict, breach, or
default of which would not have a Material Adverse Effect or
 
(ii) result in the creation or imposition of any lien, charge or encumbrance
upon the Securities or any of the assets of the Company except as described
herein; or
 
(iii) result in the acceleration of the due date of any obligation of the
Company; or
 
(iv) will result in the triggering of any piggy-back registration rights,
ratchet, anti-dilution, price reset or similar rights of any person or entity
holding securities of the Company or having the right to receive securities of
the Company.
 

 
(g)
The Securities. The Securities upon issuance:

 
(i) are, or will be, free and clear of any security interests, liens, claims or
other encumbrances, subject to restrictions upon transfer under the Securities
Act and any applicable state securities laws;
 
(ii) have been, or will be, duly and validly authorized and on the date of
issuance of the Shares and Warrant Shares, such Shares and Warrant Shares will
be duly and validly issued, fully paid and non-assessable and if registered
pursuant to the Securities Act and resold pursuant to an effective registration
statement will be free trading and unrestricted;
 
(iii) will not have been issued or sold in violation of any preemptive or other
similar rights of the holders of any securities of the Company; and
 
(iv) will not subject the holders thereof to personal liability by reason of
solely being such holders.

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(h) Litigation. There is no pending or, to the best knowledge of the Company,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
that would affect the execution by the Company or the performance by the Company
of its obligations under the Transaction Documents. There is no pending or, to
the best knowledge of the Company, basis for or threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, which litigation, if adversely
determined, would have a Material Adverse Effect
 

 
(i)
No Market Manipulation. The Company has not taken, and will not take, directly
or indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities or Warrant Shares or
affect the price at which the Securities or Warrant Shares may be issued or
resold.

 

 
(j)
Information Concerning Company. Since the dates of the most recent financial
statements included in the S-1, there has been no Material Adverse Event
relating to the Company’s business, financial condition or affairs not disclosed
therein. The S-1, including the exhibits and financial statements included
therewith, does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, taken as a whole, not misleading in light of the
circumstances when made.

 

 
(k)
Stop Transfer. The Company will not issue any stop transfer order or other order
impeding the sale, resale, or delivery of any of the Securities, except as may
be required by any applicable federal or state securities laws and unless
contemporaneous notice of such instruction is given to the undersigned.

 

 
(l)
Defaults. The Company is not in violation of its articles of incorporation or
bylaws. The Company is not in (i) default under or in violation of any other
material agreement or instrument to which it is a party or by which it or any of
its properties are bound or affected, which default or violation would have a
Material Adverse Effect, (ii) default with respect to any order of any court,
arbitrator or governmental body or subject to or party to any order of any court
or governmental authority arising out of any action, suit or proceeding under
any statute or other law respecting antitrust, monopoly, restraint of trade,
unfair competition, or similar matters, or (iii) violation of any statute, rule,
or regulation of any governmental authority which violation would have a
Material Adverse Effect.

 
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(m)
No General Solicitation. The Company, and to its knowledge, no person acting on
its behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of the Securities.

 

 
(n)
No Undisclosed Liabilities. The Company has no liabilities or obligations which
are material, individually or in the aggregate, other than those incurred in the
ordinary course of the Company business since the date of the most recent
audited financial statements of the Company contained in the S-1, and which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect

 

 
(o)
No Undisclosed Events or Circumstances. Since the date of the most recent
audited financial statements of the Company contained in the S-1, no event or
circumstance has occurred or exists with respect to the Company or its business,
properties, operations or financial condition, that, under applicable law, rule
or regulation, requires public disclosure or announcement prior to fourteen days
after the date hereof by the Company but which has not been so publicly
announced or disclosed in the S-1.

 

 
(p)
Dilution. The Company’s executive officers and director understand the nature of
the Securities being sold hereby and recognize that the issuance of the
Securities and Warrant Shares will have a potential dilutive effect on the
equity holdings of other holders of the Company’s equity or rights to receive
equity of the Company. The board of directors of the Company has concluded, in
its good faith business judgment, that the issuance of the Securities is in the
best interests of the Company. The Company specifically acknowledges that its
obligation to issue the Warrant Shares upon exercise of the A Warrant is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other stockholders of the Company or parties
entitled to receive equity of the Company.

 

 
(q)
No Disagreements with Accountants and Lawyers. There are no material
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise between the Company and the accountants and lawyers presently
employed by the Company, including but not limited to disputes or conflicts over
payment owed to such accountants and lawyers, nor have there been any such
disagreements during the two years prior to the Closing Date.

 

 
(r)
Investment Company. The Company is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

 

 
(s)
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

 
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(t)
Reporting Company. The Company is a publicly-held company subject to reporting
obligations pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) and has a class of Common Stock registered pursuant to
Section 12(g) of the 1934 Act. Pursuant to the provisions of the 1934 Act, the
Company has timely filed all reports and other materials required to be filed
thereunder with the SEC during the preceding twelve months.

 

 
(u)
Quotation. The Company’s Common Stock is quoted on the OTCBB under the symbol
PPBV. The Company has not received any oral or written notice that its Common
Stock is not eligible nor will become ineligible for continued quotation on the
OTCBB nor that it does not meet all requirements for the continuation of such
listing. The Company satisfies all of its requirements for the continued
quotation of its Common Stock on the OTCBB.

 

 
(v)
DTC Status. The Company’s transfer agent is a participant in, and the Common
Stock is eligible for transfer pursuant to, the Depository Trust Company
Automated Securities Transfer Program.

 

 
(w)
Company Predecessor and Subsidiaries. All representations made by or relating to
the Company of a historical or prospective nature and all undertakings contained
herein shall, if applicable, relate, apply, and refer to the Company and the
Subsidiaries and their respective predecessors.

 

 
(x)
Solvency. Based on the financial condition of the Company as of June 30, 2008
after giving effect to the receipt by the Company of the purchase price of the
Securities, (i) the Company’s fair saleable value of its assets exceeds the
amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as
they mature; and (ii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such amounts are required
to be paid. To the best knowledge of the Company, no event has occurred that
would make the foregoing representations inaccurate as of the date this
Subscription Agreement is accepted by the Company. The Company does not intend
to incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its
debt).

 
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(y)
Correctness of Representations. The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all
material respects, and, unless the Company otherwise notifies the undersigned
prior to the date the Securities are delivered to the undersigned, shall be true
and correct in all material respects as such date; provided, that, if such
representation or warranty is made as of a different date in which case such
representation or warranty shall be true as of such date.

 

 
(z)
Survival. The foregoing representations and warranties shall survive the date on
which the undersigned’s subscription has been accepted by the Company.

 
7. Covenants of the Company. The Company covenants and agrees with the
undersigned as follows:
 

 
(a)
Stop Orders. The Company will advise the undersigned, within 24 hours after it
receives notice of issuance by the SEC, any state securities commission or any
other regulatory authority, of any stop order or of any order preventing or
suspending any offering of any securities of the Company, or of the suspension
of the qualification of the Common Stock of the Company for offering or sale in
any jurisdiction, or the initiation of any proceeding for any such purpose.

 

 
(b)
Listing/Quotation. The Company shall promptly secure the quotation or listing of
the Shares and Warrant Shares upon each national securities exchange, or
automated quotation system upon which they are or become eligible for quotation
or listing (subject to official notice of issuance) and shall maintain same so
long as the A Warrant is outstanding. The Company will maintain the quotation or
listing of its Common Stock on the OTCBB, American Stock Exchange, National
Capital Market, Nasdaq Global Market, Nasdaq Global Select Market, or New York
Stock Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock (the “Principal Market”), and will
comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Principal Market, as applicable.
The Company will provide the undersigned copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common Stock
from any Principal Market. As of the date of on which the Company has accepted
the undersigned’s subscription, the OTCBB is the Principal Market

 

 
(c)
Market Regulations. The Company shall notify the SEC, the Principal Market, and
applicable state authorities, in accordance with their requirements, of the
transactions contemplated by this Agreement, and shall take all other necessary
action and proceedings as may be required and permitted by applicable law, rule
and regulation, for the legal and valid issuance of the Securities to the
undersigned and promptly provide copies thereof to the undersigned.

 
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(d)
Filing Requirements. From the date of this Subscription Agreement and until
three (3) years thereafter (unless the Shares and the Warrant Shares have been
resold or transferred by the undersigned pursuant to a registration statement,
if any, or pursuant to Rule 144, [the date of occurrence of the second such
event being the “End Date”]), the Company will (A) cause its Common Stock to be
registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in all
respects with its reporting and filing obligations under the 1934 Act, and (C)
voluntarily comply with all reporting requirements that are applicable to an
issuer with a class of shares registered pursuant to Section 12(b) or Section
12(g) of the 1934 Act, if the Company is not subject to such reporting
requirements. The Company will not take any action or file any document (whether
or not permitted by the Securities Act or the 1934 Act or the rules thereunder)
to terminate or suspend its reporting and filing obligations under said acts
until the End Date. Until the End Date, the Company will take no action and will
not refrain from taking any action that would cause the listing or quotation of
the Common Stock on all Principal Markets to cease and will comply in all
respects with the Company’s reporting, filing, and other obligations under the
bylaws or rules of the Principal Market, as applicable. The Company agrees to
timely file a Form D with respect to the transaction contemplated hereby, if
required under Regulation D, and to provide a copy thereof to the undersigned
promptly after such filing.

 

 
(e)
Reservation. Prior to the Closing Date, and at all times thereafter, the Company
shall have reserved, on behalf of the undersigned, from its authorized but
unissued Common Stock, a number of share of Common Stock equal to the amount of
Warrant Shares issuable upon exercise of the A Warrant.

 

 
(f)
DTC Program. At all times that the A Warrant is outstanding, the Company will
employ as the transfer agent for the Common Stock, Shares and Warrant Shares a
participant in the Depository Trust Company Automated Securities Transfer
Program.

 

 
(g)
Taxes. From the date of this Agreement and until the End Date, the Company will
promptly pay and discharge, or cause to be paid and discharged, when due and
payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, property or business of the Company; provided,
however, that any such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate
proceedings and if the Company shall have set aside on its books adequate
reserves with respect thereto, and provided, further, that the Company will pay
all such taxes, assessments, charges, or levies forthwith upon the commencement
of proceedings to foreclose any lien which may have attached as security
therefor.

 
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(h)
Insurance. From the date of this Agreement and until the End Date, the Company
will keep its assets which are of an insurable character insured by financially
sound and reputable insurers against loss or damage by fire, explosion, and
other risks customarily insured against by companies in the Company’s line of
business, in amounts sufficient to prevent the Company from becoming a
co-insurer and not in any event less than one hundred percent (100%) of the
insurable value of the property insured less reasonable deductible amounts; and
the Company will maintain, with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated and to the extent available on commercially reasonable terms.

 

 
(i)
Books and Records. From the date of this Agreement and until the End Date, the
Company will keep true records and books of account in which full, true, and
correct entries will be made of all dealings or transactions in relation to its
business and affairs in accordance with generally accepted accounting principles
applied on a consistent basis.

 

 
(j)
Governmental Authorities. From the date of this Agreement and until the End
Date, the Company shall duly observe and conform in all material respects to all
valid requirements of governmental authorities relating to the conduct of its
business or to its properties or assets.

 

 
(k)
Intellectual Property. From the date of this Agreement and until the End Date,
the Company shall maintain in full force and effect its corporate existence,
rights, and franchises and all licenses and other rights to use intellectual
property owned or possessed by it and reasonably deemed to be necessary to the
conduct of its business, unless it is sold for value.

 

 
(l)
Properties. From the date of this Agreement and until the End Date, the Company
will keep its properties in good repair, working order and condition, reasonable
wear and tear excepted, and from time to time make all necessary and proper
repairs, renewals, replacements, additions, and improvements thereto; and the
Company will at all times comply with each provision of all leases to which it
is a party or under which it occupies property if the breach of such provision
could reasonably be expected to have a Material Adverse Effect.

 

 
(m)
Confidentiality/Public Announcement. From the date of this Agreement and until
the End Date, the Company agrees that it will not disclose publicly or privately
the identity of the undersigned unless expressly agreed to in writing by the
undersigned but only to the extent required by law and then only upon five days
prior notice to the undersigned.

 
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(n)
Non-Public Information. The Company covenants and agrees that neither it nor any
other person acting on its behalf will at any time provide the undersigned or
its agent or counsel with any information that the Company believes constitutes
material non-public information. The Company understands and confirms that the
undersigned shall be relying on the foregoing representations in effecting
transactions in securities of the Company. In the event that the Company
believes that a notice or communication to the undersigned contains material,
nonpublic information, relating to the Company or Subsidiaries, the Company
shall so indicate to the undersigned contemporaneously with delivery of such
notice or information. In the absence of any such indication, the undersigned
shall be allowed to presume that all matters relating to such notice and
information do not constitute material, nonpublic information relating to the
Company or its Subsidiaries.

 

 
(o)
Notices. For so long as the undersigned holds any of the Note, the Shares, the A
Warrant, or the Warrant Shares, the Company will maintain a United States
address and United States fax number for notices purposes under the Transaction
Documents.

 

 
(p)
No Loans Senior. Until the Note has been repaid in full, the Company will not
permit any person to become a creditor, whose obligations are senior to the
obligations of the Company as set forth in the Note; provided, however, that the
Company may incur obligations senior to those of the Note in respect of secured
trade payables and those in favor of licensed commercial lenders, in each case
incurred in the ordinary course of the Company’s business; provided, further,
that the Company’s obligation to its Chief Financial Officer in the principal
amount of $93,000 shall be deemed to be senior to the Company’s obligations
under the note, which $93,000 obligation shall be paid in full concurrently with
the acceptance of this Agreement by the Company. Except as described in the
previous sentence, no creditor or person has rights to payment from the Company
or to the Company’s assets upon distribution which rights are senior to the
rights of the undersigned upon acceptance of this Subscription Agreement by the
Company except for amounts that, as of the date such obligation was incurred or
the date on which such obligation will be incurred, are secured by assets of
equal or greater value in commercial arrangements incurred in the normal course
of business.

 
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(q)
The Company agrees to indemnify, hold harmless, reimburse and defend the
undersigned, the undersigned’s officers, directors, agents, Affiliates, members,
managers, control persons, and principal shareholders, against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable legal fees)
of any nature, incurred by or imposed upon the undersigned or any such person
which results, arises out of or is based upon (i) any material misrepresentation
by Company or breach of any material representation or warranty by Company in
any Transaction Document, or other agreement delivered pursuant hereto; or (ii)
after any applicable notice and/or cure periods, any breach or default in
performance by the Company of any material covenant or undertaking to be
performed by the Company under any Transaction Document, or any other agreement
entered into by the Company and the undersigned relating hereto.

 

 
(r)
In the event commencing one hundred and eighty-one (181) days after the date
this Subscription Agreement is accepted by the Company and ending one year after
such acceptance, the undersigned is not permitted to resell any of the Shares or
Warrant Shares without any restrictive legend or if such sales are permitted but
subject to volume limitations or further restrictions on resale as a result of
the unavailability to Subscriber of Rule 144(b)(1) under the 1933 Act (as in
effect and the date on which such subscription is accepted by the Company
pursuant to section 5, above) (a “144 Default”), for any reason except for the
undersigned’s status as an Affiliate or “control person” of the Company, then
the Company shall pay the undersigned as liquidated damages (“Liquidated
Damages”) and not as a penalty an amount equal to one and one-half percent
(1.5%) for each thirty (30) days (or such lesser pro-rata amount for any period
less than thirty (30) days) of the purchase price of the Shares and Warrant
Shares owned by the Subscriber during the pendency of the 144 Default. For
purposes of this Section 7(r), the purchase price of the Shares will be deemed
to be Two Dollars ($2.00) per Share. The purchase price of actually held Warrant
Shares will be the aggregate exercise price thereof. Liquidated Damages must be
paid in cash within ten (10) days after each thirty (30) day period or shorter
period for which Liquidated Damages are payable.

 
8. State Securities Laws. The Company represents that based on the accuracy of
the representations and warranties of the undersigned contained herein, the
offering and sale of the Securities is exempt from qualification under the
securities laws of the State of California.
 
9. Regulation D. 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 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.
 
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10. 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 but not in part by the Company in its
sole and absolute discretion for any cause or for no cause which if rejected
must be so rejected within twenty-four hours after delivery to the Company.
Acceptance of this offer by the Company shall be indicated by its execution
hereof.
 
11. Miscellaneous. The following provisions relate and apply to each of the
Transaction Documents and are deemed incorporated in each such other agreement
regardless of the actual agreement referred to.
 

 
(a)
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company, to: Purple Beverage Company,
Inc, 450 E. Las Olas Blvd., #830, Ft Lauderdale, Florida 33301, Attn: Theodore
Farnsworth, President, facsimile: (954) 462-8758, with an additional copy by
facsimile only (which shall not constitute notice) to: Bryan Cave LLP, 1900 Main
Street, Suite 700, Irvine, CA 92614, Attn: Randolf W. Katz, Esq., facsimile:
(949) 223-7100, (ii) if to the undersigned, to: the address and facsimile number
indicated on the signature page hereto, with an additional copy by facsimile
only (which shall not constitute notice)to: Grushko & Mittman, P.C., 551 Fifth
Avenue, Suite 1601, New York, New York 10176, facsimile: (212) 697-3575.

 

 
(b)
Entire Agreement Assignment. This Subscription Agreement and other documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by the Company and the undersigned. Neither the Company
nor the undersigned has relied on any representations not contained or referred
to in this Subscription Agreement and the documents delivered herewith. No right
or obligation of the Company or undersigned shall be assigned without prior
notice to and the written consent of the other party.

 
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(c)
Counterparts/Execution. This Subscription Agreement may be executed in any
number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Subscription Agreement may be executed by facsimile signature and delivered by
facsimile transmission.

 

 
(d)
Law Governing Subscription Agreement. This Subscription Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of laws. Any action brought by either
party against the other concerning the transactions contemplated by this
Subscription Agreement shall be brought only in the state courts of California
or in the federal courts located in the state of California, Los Angeles county.
The parties to this Subscription Agreement hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon
forum non conveniens. The parties executing this Subscription Agreement and
other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the in personam jurisdiction of such
courts and hereby irrevocably waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney’s fees and
costs. In the event that any provision of this Subscription Agreement or any
other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement.

 

 
(e)
Specific Enforcement, Consent to Jurisdiction. The Company and undersigned
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Subscription Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent or cure breaches of the provisions of this Subscription
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity. Subject to Section 11(d) hereof, the Company hereby irrevocably
waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction in California of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Nothing
in this Section shall affect or limit any right to serve process in any other
manner permitted by law.

 
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(f)
Damages. In the event the undersigned is entitled to receive any liquidated
damages pursuant to the Transaction Documents, the undersigned may elect to
receive the greater of actual damages or such liquidated damages.

 

 
(g)
Maximum Payments. Nothing contained herein or in any document referred to herein
or delivered in connection herewith shall be deemed to establish or require the
payment of a rate of interest or other charges in excess of the maximum
permitted by applicable law. In the event that the rate of interest or dividends
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Company to the undersigned and thus refunded to the Company.

 

 
(h)
Calendar Days. All references to “days” in the Transaction Documents shall mean
calendar days unless otherwise stated. The terms “business days” and “trading
days” shall mean days that the New York Stock Exchange is open for trading for
three or more hours. Time periods shall be determined as if the relevant action,
calculation or time period were occurring in New York City. Any deadline that
falls on a non-business day in any of the Transaction Documents shall be
automatically extended to the next business day and interest, if any, shall be
calculated and payable through such extended period.

 

 
(i)
Captions: Certain Definitions. The captions of the various sections and
paragraphs of this Subscription Agreement have been inserted only for the
purposes of convenience; such captions are not a part of this Subscription
Agreement and shall not be deemed in any manner to modify, explain, enlarge or
restrict any of the provisions of this Subscription Agreement. As used in this
Subscription Agreement the term “person” shall mean and include an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an unincorporated organization and a government or any department or
agency thereof.

 

 
(j)
Severability. In the event that any term or provision of this Subscription
Agreement shall be finally determined to be superseded, invalid, illegal or
otherwise unenforceable pursuant to applicable law by an authority having
jurisdiction and venue, that determination shall not impair or otherwise affect
the validity, legality or enforceability: (i) by or before that authority of the
remaining terms and provisions of this Subscription Agreement, which shall be
enforced as if the unenforceable term or provision were deleted, or (ii) by or
before any other authority of any of the terms and provisions of this
Subscription Agreement

 
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(k)
Successor Laws. References in the Transaction Documents to laws, rules,
regulations and forms shall also include successors to and functionally
equivalent replacements of such laws, rules, regulations and forms.

 
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):
 
Names(s)
JAY-2 INVESTMENTS, LLC
   
(address)
137 North Larchmont Boulevard, #484
 
Los Angeles, California 90004
 
Fax Number:

 
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SUBSCRIPTION AGREEMENT

SIGNATURE PAGE

Purchase Price subscribed:
 
$
1,000,000
   
Face Amount of Note:
 
$
1,000,000
 
 
         
Number of Shares subscribed: 
   
200,000
 
 
         
Number of A warrants: 
   
200,000
 

 
 JAY-2 INVESTMENTS, LLC
 Name of Purchaser(s) (Please print or type)

 

 
 Signature
 
 Signature

 
Social Security/Tax Identification Number:
 

Mailing Address:
137 North Larchmont Boulevard, #484
 
Los Angeles, CA 90004
 
Fax Number:

 
Executed at ______________________________, this 16th day of July, 2008.
(location)
 
SUBSCRIPTION ACCEPTED:

PURPLE BEVERAGE COMPANY, INC.
 
By:
/s/ Theodore Farnsworth
 
Theodore Farnsworth, Chief Executive Officer

DATE: July 16, 2008

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