Unassociated Document


    SECURITIES
      PURCHASE AGREEMENT

    


     

    THIS
      SECURITIES PURCHASE AGREEMENT
      (this
“Agreement”)
      is
      made as of February _____, 2007, by and among Sub-Urban
      Brands, Inc.,
      a
      Nevada corporation (the “Company”),
      and
      _________________________________________________ (including any subsequent
      holder of the Note, as defined in herein), the “Investor”).

     

    1. Promissory
      Note and Shares.
      The
      Investor hereby agrees to purchase from the Company an investment unit
      consisting of an unsecured convertible promissory note (the “Note”),
      in
      substantially the form attached hereto as Exhibit
      A,
      and
      _________ shares of the Company’s common stock (the “Shares”).
      The
      Note shall have a principal balance of $__________ and shall be dated as of
      the date hereof. The Note shall be due and payable
      _________________________________ and shall accrue interest at ten percent
      (10%)
      per annum. The purchase price of the investment unit shall be $_________ (the
      “Purchase Price”). The Company and the Investor agree that 100% of the Purchase
      Price shall be allocated to the Note and no portion of the Purchase Price is
      allocated to the Shares. As a result, the parties agree that the Shares are
      being acquired at a discount to market in consideration of the purchase of
      the
      Note and based on, among other things, illiquidity of the Shares.

     

    1.3. Closing.
      The
      closing (the “Closing”)
      of the
      purchase and sale of the Note and Shares shall take place at the offices of
      the
      Company on February ______, 2007 (the “Closing Date”). 

     

    1.4. Registration
      Rights.
      The
      Company agrees to file a registration statement with the Securities and Exchange
      Commission (the “SEC”) in order to register the Shares, together with any Bonus
      Shares (as such term is defined below) (collectively, the “Registrable Shares”),
      for resale and to cause such registration to be declared effective by the SEC
      within seven (7) months of the Closing. In the event that the registration
      statement is not declared effective by the SEC on or before the seven-month
      anniversary of the Closing Date,
      the
      Company shall, at the first day of each calendar month thereafter and continuing
      for so long as the Registrable Shares are not registered, issue to the Investor
      ______ shares of common stock (the “Bonus Shares”). Notwithstanding the
      foregoing, the Company will include the Shares on its next Registration
      Statement filed with the SEC. The Investor specifically acknowledges that the
      Company currently has an obligation to register up to 2,200,000 shares of its
      common stock (together with additional shares to be issued on a monthly basis
      if
      such registration is not effective within seven months of the issuance of such
      shares) prior to or concurrently with the registration of the Shares. Such
      shares were issued by the Company on February ______, 2007 in connection with
      the issuance of up to $500,000 of unsecured convertible promissory notes. The
      Investor specifically acknowledges and agrees that the SEC may request that
      the
      number of shares in any registration statements filed by the Company for selling
      shareholders be cut back or registration delayed pursuant to the SEC’s
      interpretation of Rule 415 or other rules and regulations promulgated under
      the
      Securities Act of 1933, as amended. The Investor agrees that any such cut backs
      or delays in registration shall not be a breach of the Company’s obligation to
      register the Registrable Shares and shall not result in payment of Bonus Shares
      hereby.

     

    
      
        
        

      

      
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    2. Representations
      and Warranties of the Company.
      In
      connection with the transactions provided for herein, the Company hereby
      represents, warrants, and covenants to the Investor as of the date hereof and
      as
      of the Closing (and any subsequent closing) that:

     

    2.1. Organization,
      Good Standing, and Qualification.
      The
      Company is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of Nevada and has all requisite corporate power
      and
      authority to carry on its business as now conducted and as proposed to be
      conducted. The Company is duly qualified to transact business and is in good
      standing in each jurisdiction in which the failure so to qualify would have
      a
      material adverse effect on its business or properties.

     

    2.2. Authorization.
      All
      corporate action on the part of the Company, its officers, directors and
      stockholders necessary for (1) the authorization, execution and delivery of
      this
      Agreement, and (2) the authorization, execution, issuance and delivery of the
      Note and Shares has been taken or will be taken prior to the Closing.


     

    2.4. Valid
      Issuance.
      The
      offer, sale, and issuance of the Note and Shares as contemplated by this
      Agreement are exempt from the registration requirements of the Act and
      applicable state securities laws, and will be free of restrictions on transfer
      other than restrictions on transfer under this Agreement, the Note, or
      applicable state and federal securities laws. The Shares will be duly and
      validly issued, fully paid, and nonassessable, and will be free of restrictions
      on transfer other than restrictions on transfer under applicable state and
      federal securities laws. The Conversion Shares (as defined in the Note), when
      issued in accordance with the terms of the Note, will be duly and validly
      issued, fully paid, and nonassessable, and will be free of restrictions on
      transfer other than restrictions on transfer under applicable state and federal
      securities laws

     

    2.5. Enforceability.
      This
      Agreement and the Note and the transactions contemplated hereby and thereby
      constitute valid and legally binding obligations of the Company, enforceable
      in
      accordance with their respective terms, except (a) as limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, and other laws of general
      application affecting enforcement of creditors’ rights generally, or (b) as
      limited by laws relating to the availability of specific performance, injunctive
      relief, or other equitable remedies.

     

    3. Representations
      and Warranties of the Investor.
      In
      connection with the transactions provided for herein, the Investor hereby
      represents and warrants to the Company that:

     

    3.1. Authorization.
      Unless
      Investor is an individual, Investor has taken all necessary corporate or other
      entity actions for the authorization, execution and delivery of, and the
      performance of all obligations of Investor under, this Agreement and the other
      documents delivered pursuant to this Agreement. This Agreement constitutes
      the
      Investor’s valid and legally binding obligation, enforceable in accordance with
      its terms, except (a) as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, and other laws of general application affecting
      enforcement of creditors’ rights generally, or (b) as limited by laws relating
      to the availability of specific performance, injunctive relief, or other
      equitable remedies. 

     

    3.2. Purchase
      Entirely for Own Account.
      Investor acknowledges that this Agreement is made with Investor in reliance
      upon
      Investor’s representation to the Company that the Investor’s Note and Shares
      will be acquired for investment for Investor’s own account, not as a nominee or
      agent, and not with a view to the resale or distribution of any part thereof,
      and that Investor has no present intention of selling, granting any
      participation in, or otherwise distributing the same. By executing this
      Agreement, Investor further represents that Investor does not have any contract,
      undertaking, agreement, or arrangement with any person to sell, transfer, or
      grant participations to such person or to any third person, with respect to
      the
      Note and Shares. 

     

    
      
        
        

      

      
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    3.3. Disclosure
      of Information.
      Investor acknowledges that it has received all the information it considers
      necessary or appropriate for deciding whether to acquire the Note and Shares.
      Investor further represents that it has had an opportunity to ask questions
      and
      receive answers from the Company regarding the business, affairs and current
      prospects of the Company and the terms and conditions of the offering of the
      Note and Shares.

     

    3.4. Investment
      Experience.
      Investor acknowledges that it is able to fend for itself, can bear the economic
      risk of the loss of its entire investment, and has such knowledge and experience
      in financial or business matters that it is capable of evaluating the merits
      and
      risks of the investment in the Note and Shares. If other than an individual,
      Investor also represents it has not been organized solely for the purpose of
      acquiring the Note and Shares.

     

    3.5. Accredited
      Investor.
      Investor is an “accredited investor” within the meaning of Rule 501(a) of
      Regulation D, promulgated under the Securities Act of 1933, as amended (the
      “Act”), as presently in effect and
      Investor has executed the Certificate of Accredited Investor Status, attached
      hereto as Exhibit
      B.

     

    3.6. Restricted
      Securities.
      Investor understands that the Note and Shares are characterized as “restricted
      securities” under the federal securities laws inasmuch as they are being
      acquired from the Company in a transaction not involving a public offering
      and
      that under such laws and applicable regulations such securities may be resold
      without registration under the Act only in certain limited circumstances. In
      this connection, Investor represents that it is familiar with SEC Rule 144,
      as
      presently in effect, and understands the resale limitations imposed thereby
      and
      by the Act.

     

    3.7. Further
      Limitations on Disposition.
      Without
      in any way limiting the representations set forth above, Investor further agrees
      not to make any disposition of all or any portion of the Note and Shares unless
      and until: 

     

    (a) the
      transferee has agreed in writing for the benefit of the Company to be bound
      by
      this Section
      3;
      or

     

    (b) there
      is
      then in effect a registration statement under the Act covering such proposed
      disposition and such disposition is made in accordance with such registration
      statement; or

     

    (c) (i)
      Investor shall have notified the Company of the proposed disposition and shall
      have furnished the Company with a detailed statement of the circumstances
      surrounding the proposed disposition, and (ii) if reasonably requested by the
      Company, Investor shall have furnished the Company with an opinion of counsel,
      reasonably satisfactory to the Company, that such disposition will not require
      registration of such shares under the Act.

     

    
      
        
        

      

      
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    3.8. Tax
      Consequences.
      Investor acknowledges that the tax consequences to his or her of investing
      in
      the Note and Shares will depend on his or her particular circumstances, and
      neither the Company, shareholders, agents, officers, directors, employees,
      affiliates, or consultants of any of them will be responsible or liable for
      the
      tax consequences to him or her of an investment in the Company. Investor will
      look solely to, and rely upon, his or her own advisers with respect to the
      tax
      consequences of this investment. Investor acknowledges that there can be no
      assurance that the united States Internal Revenue Code or the Treasury
      Regulations thereunder will not be amended or interpreted in the future in
      such
      a manner so as to deprive the Company and the members of some or all of the
      tax
      benefits they might now receive, nor that some of the deductions claimed by
      the
      Company or the allocations of items of income, gain, loss, deduction, or credit
      among the members may not be challenged by the Internal Revenue
      Service.

     

    3.9 Legends.
      Investor agrees that the Note and Shares shall bear substantially the following
      legends, together with any additional legends required by state securities
      laws:

     

    “THIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
      THEY
      MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
      TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY
      TO
      THE BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
      PURSUANT TO RULE 144 UNDER SUCH ACT.”

     

    “THESE
      SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
      THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
      TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY
      TO
      THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
      PURSUANT TO RULE 144 UNDER SUCH ACT.”

     

    4. No
      Security.
      The
      Investor acknowledges that the Note is not secured by any assets of the Company
      and is subordinated in right of payment to the secured indebtedness of the
      Company. Notwithstanding the foregoing, Joseph Shortal has provided a personal
      guarantee for the Note in the form attached as Appendix
      A
      to the
      Note.

     

    5. Miscellaneous.

     

    5.1. Successors
      and Assigns.
      Except
      as otherwise provided herein, the terms and conditions of this Agreement shall
      inure to the benefit of and be binding upon the respective successors and
      assigns of the parties. Nothing in this Agreement, express or implied, is
      intended to confer upon any party other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations, or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement.

     

    5.2. Governing
      Law.
      This
      Agreement shall be governed by and construed under the laws of the State of
      California as applied to agreements among California residents, made and to
      be
      performed entirely within the State of California.

     

    
      
        
        

      

      
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    5.3. Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    5.4. Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    5.5. Notices.
      Except
      as may be otherwise provided herein, all notices and other communications
      required or permitted hereunder shall be in writing and shall be conclusively
      deemed to have been duly given (a) when hand-delivered to the other party,
      (b)
      when received when sent by facsimile to the address and number set forth below,
      (c) three (3) business days after deposit in the U.S. mail with first class
      or
      certified mail receipt requested, postage prepaid, and addressed to the other
      party as set forth below, or (d) the next business day after deposit with
      a national overnight delivery service, postage prepaid, addressed to the
      parties as set forth below with next-business day delivery guaranteed;
provided,
      however,
      that
      the sending party receives a confirmation of delivery from the delivery
      service provider.

     

    If
      to the
      Company:

     

    Sub-Urban
      Brands, Inc.

    8723
      Bellanca Avenue, Building A

    Los
      Angeles, CA 90045

    (310)
      670-0132 phone

     

    If
      to the
      Investor:

     

    At
      the
      address shown on the signature pages hereto.

     

    5.6. Expenses;
      Reimbursement of Legal Fees.
      If any
      action at law or in equity is necessary to enforce or interpret the terms of
      this Agreement (including the exhibits hereto), the substantially prevailing
      party shall be entitled to reasonable attorneys’ fees, costs and necessary
      disbursements in addition to any other relief to which such party may be
      entitled. 

     

    5.7. Entire
      Agreement: Amendments and Waivers.
      This
      Agreement (including the exhibits hereto) and the other documents delivered
      pursuant hereto constitute the full and entire understanding and agreement
      between the parties with regard to the subjects hereof and thereof. Any term
      of
      this Agreement may be amended and the observance of any term of this Agreement
      may be waived (either generally or in a particular instance and either
      retroactively or prospectively) only with the written consent of the Company
      and
      a majority of the Investors.
      Any
      waiver or amendment effected in accordance with this Section 6.8 shall be
      binding upon all the Investors and the Company.

     

    5.8. Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, such provision shall be excluded from this Agreement and the
      balance of the Agreement shall be interpreted as if such provision were so
      excluded and shall be enforceable in accordance with its terms.

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

     

     

    
      	 	THE
              COMPANY:
	 	 	 	 
	 	SUB-URBAN BRANDS,
              INC.
	 	 
	 	 	 	 
	 	By:	_______________________________________________
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 
	 	THE LENDER:
              
	 	
            	 	 
	 	
            	 	 
	 	By:	_______________________________________________
	 	Name:	_______________________________________________
	 	Title:	_______________________________________________
	 	 	
            	 
	 	 	Address:	____________________________________
	 	 	_______________________________________________
	 	 	_______________________________________________
	 	 	_______________________________________________


    

     

    
      
        
        

      

      
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    EXHIBIT
      A

     

    TO
      UNIT
      PURCHASE AGREEMENT

    


     

     

    CONVERTIBLE
      PROMISSORY NOTE

     

    
      
        
        

      

      
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    THIS
      CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE
      144
      UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
      OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
      REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO ACTION LETTER
      FROM
      THE SECURITIES AND EXCHANGE COMMISSION.

     

    THIS
      CONVERTIBLE PROMISSORY NOTE AND ANY SECURITIES INTO WHICH THIS CONVERTIBLE
      PROMISSORY NOTE IS CONVERTIBLE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED
      IN THAT CERTAIN NOTE PURCHASE AGREEMENT, DATED FEBRUARY 13, 2007, WHICH
      RESTRICTIONS ON TRANSFER ARE INCORPORATED HEREIN BY
      REFERENCE.

     

    CONVERTIBLE
      PROMISSORY NOTE

     

     

    
      	 	$________	 	
              February
                ____________, 2007

            
	 	10% per annum	 	
              Los
                Angeles,
                California

            


    

     

    FOR
      VALUE RECEIVED,
      Sub-Urban Brands, Inc., a Nevada corporation (“Company”), promises to pay to the
      order of ________________________________________, or its assigns (“Holder”),
      the principal sum of ___________________________ ($__________) with interest
      on
      the outstanding principal amount at the simple rate of ten percent (10%) per
      annum (calculated on the basis of a 360 day year). Interest shall commence
      with
      the date hereof and shall continue on the outstanding principal until paid
      in
      full or converted in accordance with paragraph 4. Upon the occurrence of an
      Event of Default, as defined below, the rate of interest accruing on the unpaid
      principal balance shall automatically and without further action by Investor
      be
      increased by eight (8) percentage points above the rate of interest otherwise
      applicable (the "Default Rate"), independent of whether Investor elects to
      accelerate the unpaid principal balance as a result of such
      default.

     

    1. This
      note
      (the “Note”) is issued pursuant to the terms of that certain Securities Purchase
      Agreement (the “Agreement”) dated as of February ________, 2007, by and among
      Company and Holder.

     

    2. Unless
      converted in accordance with Paragraph 6, this Note is due and payable on
      demand, which may be made at any time after the earlier of (i) _______________
      (the “Maturity Date”) or (ii) the occurrence of an Event of Default (as defined
      in Paragraph 5). Prepayment of principal under this Note without the express
      written consent of the Holder is not permitted except in accordance Paragraph
      6
      hereof. This Note is not secured by any assets of the Company and is
      subordinated in right of payment to the secured indebtedness of the Company.
      Notwithstanding the foregoing, Joseph Shortal has provided a personal guarantee
      for this Note in the form attached as Appendix
      A
      hereto.

     

    
      
        
        

      

      
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    3. All
      payments of interest and principal shall be in lawful money of the United States
      of America to Holder, at the address specified in the Agreement, or at such
      other address as may be specified from time to time by Holder in a written
      notice delivered to Company. All payments shall be applied first to accrued
      interest, and thereafter to principal. 

     

    4. No
      fractional shares shall be issued upon conversion of this Note. In lieu of
      any
      fractional shares to which the holder would otherwise be entitled, the Company
      shall pay cash equal to the product of such fraction multiplied by the price
      per
      share paid by the Investors purchasing the Conversion Shares (subject to
      adjustment for stock splits, dividends, and recapitalizations).

     

    5. Any
      of
      the following events are “Events of Default”: 

     

    5.1 The
      Company shall fail to make any payments of principal of or interest on this
      Note
      when due, and such failure to pay continues for more than ten (10) days after
      written notice thereof from the Holder to the Company; 

     

    5.2 The
      Company fails to comply with or to perform when due any other material term,
      obligation, covenant, or condition contained in this Note; 

     

    5.3
       Any
      representation or statement made by the Company to the Holder in this Note
      or
      the Agreement is false or misleading in any material respect either now or
      at
      the time made; 

     

    5.4 After
      April 1, 2007: 

     

    (a) The
      Company defaults under any loan, extension of credit, security agreement,
      purchase or sales agreement, or any other agreement, in favor of any other
      creditor or person that may materially affect the Company’s ability to repay
      this Note or to perform its obligations under this Note;

     

    (b)
       The
      Company becomes insolvent, a receiver is appointed for any substantial part
      of
      its property, the Company makes an assignment for the benefit of creditors,
      or
      any proceeding is commenced by the Company (i.e. a voluntary bankruptcy
      proceeding) or against the Company under any bankruptcy or insolvency laws;
      or

     

    (c) A
      material adverse change occurs in the Company’s financial condition from the
      date hereof or Holder reasonably believes the prospect of payment or performance
      of the indebtedness under this Note is impaired.

     

    Notwithstanding
      the immediately preceding paragraph, if any default (other than a default in
      payment or initial default of Subsections 5.4(a), (b) or (c) at April 1, 2007)
      is curable and if the Company has not been given a notice of breach of the
      same
      provision of this Note within the preceding three (3) months, it may be cured
      (and no event of default will be deemed to have occurred) if the Debtor, after
      receiving written notice from Holder demanding cure of such default: (a) cures
      the default within thirty (30) days; or (b) if the cure requires more than
      thirty (30) days, immediately initiates steps which Holder deems in its sole
      discretion to be sufficient to cure the default and thereafter continues and
      completes all reasonable and necessary steps sufficient to produce compliance
      as
      soon as reasonably practical. Upon any Event of Default, the Holder may declare
      the total outstanding principal and accrued, unpaid interest to be immediately
      due and payable. All of the rights and remedies of the Holder hereunder shall
      be
      cumulative, and none of which shall be exclusive, to the extent permitted by
      law. 

     

    
      
        
        

      

      
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    6. The
      Company may (i) prepay the outstanding principal balance and unpaid accrued
      interest of this Note in full or (ii) convert the outstanding principal balance
      and unpaid accrued interest of this Note into shares of the Company’s common
      stock (“Conversion Shares”) at a conversion price per share equal to 50% of the
      average market price during the five (5) days prior to conversion, immediately
      prior to or concurrently with the consummation of any sale of securities of
      the
      Company occurring after the date of the Agreement and having gross proceeds
      to
      the Company of at least $1,000,000. The Holder acknowledges that such Conversion
      Shares shall be subject to the terms and conditions set forth in Section 3
      of
      the Agreement and upon conversion, the Holder shall execute such documents
      or
      instruments as may be reasonable requested by the Company consistent with
      Section 3 of the Agreement. Without limiting the foregoing, the Holder
      acknowledges that the Conversion Shares will be characterized as “restricted
      securities” under the federal securities laws inasmuch as they are being
      acquired from the Company in a transaction not involving a public offering
      and
      that under such laws and applicable regulations such securities may be resold
      without registration under the Act, only in certain limited circumstances.
      As
      promptly as practicable after the date upon which conversion has occurred,
      the
      Company shall issue and deliver to the Holder a certificate or certificates
      for
      the full number of Conversion Shares to which the Holder is entitled and a
      check
      or cash with respect to any fractional interest in a Conversion Share as
      provided in Section 4. 

     

    7. This
      Note
      is to be construed in accordance with and governed by the internal laws of
      the
      State of California without giving effect to any choice of law rule that would
      cause the application of the laws of any jurisdiction other than the internal
      laws of the State of California to the rights and duties of the Company and
      the
      Holder. All disputes and controversies arising out of or in connection with
      this
      Note shall be resolved exclusively by the state and federal courts located
      in
      Los Angeles County in the State of California, and each of the Company and
      the
      Holder hereto agrees to submit to the jurisdiction of said courts and agrees
      that venue shall lie exclusively with such courts.

     

    8. Any
      term
      of this Note may be amended and the observance of any term of this Note may
      be
      waived (either generally or in a particular instance and either retroactively
      or
      prospectively), only with the written consent of the Company and the Holder.
      Any
      amendment or waiver effected in accordance with this paragraph shall be binding
      upon the Company and the Holder.

     

    9. The
      Company and all endorsers, guarantors and sureties of this Note and all other
      persons liable or to become liable on this Note severally waive presentment
      for
      payment, demand, notice of demand and of dishonor and nonpayment of this Note,
      notice of intention to accelerate the maturity of this Note, notice of
      acceleration, protest and notice of protest, diligence in collecting, and the
      bringing of suit against any other party, and agree to all renewals, extensions,
      modifications, partial payments, in whole or in part with or without notice,
      before or after maturity.

     

    
      
        
        

      

      
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    10. If
      one or
      more provisions of this Note are held to be unenforceable under applicable
      law,
      such provision shall be excluded from this Note and the balance of the Note
      shall be interpreted as if such provision were so excluded and shall be
      enforceable in accordance with its terms

     

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed by its
      officers, thereunto duly authorized, as of the date first above
      written.

     

    
      	 	 	 
	 	SUB-URBAN
              BRANDS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            


    

     

    
      
        
        

      

      
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    APPENDIX
      A

    TO
      CONVERTIBLE PROMISSORY NOTE

    


    GUARANTEE

     

     

    The
      undersigned, Joseph Shortal, is an Officer, Director, and principal stockholders
      of Sub-Urban Brands, Inc., a Nevada corporation (the “Company”), the maker of
      the attached promissory note (the “Note”). The undersigned unconditionally
      guarantees payment in full of all of the principal, interest and other monetary
      obligations of the Company under the Note, and the performance of all other
      terms, provisions, promises, and covenants of the Company in the Note and hereby
      consent to any extensions of time or changes in the manner of payment or
      performance of any of the terms and conditions of the Note, which the Holder
      (as
      defined in the Note) may grant to the Company, all without notice to the
      undersigned. The undersigned also agrees to indemnify and hold the Holder
      harmless against all losses (including reasonable attorneys’ and experts’ fees
      and court costs) in any way suffered or incurred or paid by Holder as a result
      of or in any way arising from a default by the Company under the Note or under
      this Guarantee by the guarantor. Nothing shall satisfy the liability of the
      undersigned except the full payment and performance of all of the obligations
      of
      the Company to the Holder under the Note. The obligations of the undersigned
      hereunder shall be direct and primary, arising in the same manner as if the
      undersigned had executed the Note. THE UNDERSIGNED ACKNOWLEDGES THAT THE
      TRANSACTION UNDER WHICH THIS GUARANTEE IS GIVEN IS A COMMERCIAL TRANSACTION,
      AND
      THE UNDERSIGNED WAIVES SUCH RIGHTS AS HE MAY HAVE UNDER APPLICABLE FEDERAL
      OR
      STATE LAW PERTAINING TO THE PREJUDGMENT REMEDIES AGAINST THE UNDERSIGNED. This
      guarantee shall be binding upon the undersigned and his respective heirs and
      legal representatives, and shall inure to the benefit of the Holder and its
      heirs, legal representatives, and assigns.

    


     

    ____________________________

    Joseph
      Shortal

     

    
      
        
        

      

      
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    EXHIBIT
      B

     

    TO
      UNIT
      PURCHASE AGREEMENT

     

     

    CERTIFICATE
      OF ACCREDITED INVESTOR STATUS

     

     

    Except
      as
      may be indicated by the undersigned below, the undersigned is an “accredited
      investor,” as that term is defined in Regulation D under the Securities Act of
      1933, as amended (the “Securities
      Act”).
      The
      undersigned has initialed the box below indicating the basis on which he is
      representing his status as an “accredited investor”:

     

    
      	
              ____

            	
              a
                bank as defined in Section 3(a)(2) of the Securities Act, or any
                savings
                and loan association or other institution as defined in Section 3(a)(5)(A)
                of the Securities Act whether acting in its individual or fiduciary
                capacity; a broker or dealer registered pursuant to Section 15 of
                the
                Securities Exchange Act of 1934, as amended (the “Securities
                Exchange Act”);
                an insurance company as defined in Section 2(13) of the Securities
                Act; an
                investment company registered under the Investment Company Act of
                1940 or
                a business development company as defined in Section 2(a)(48) of
                that Act;
                a small business investment company licensed by the U.S. Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958; a plan established and maintained by a state,
                its
                political subdivisions, or any agency or instrumentality of a state
                or its
                political subdivisions, for the benefit of its employees, and such
                plan
                has total assets in excess of $5,000,000; an employee benefit plan
                within
                the meaning of the Employee Retirement Income Security Act of 1974,
                if the
                investment decision is made by a plan fiduciary, as defined in Section
                3(21) of such Act, which is either a bank, savings and loan association,
                insurance company, or registered investment adviser, or if the employee
                benefit plan has total assets in excess of $5,000,000 or, if a
                self-directed plan, with investment decisions made solely by persons
                that
                are “accredited investors”;

            


    

     

    
      	
              ____

            	
              a
                private business development company as defined in Section 202(a)(22)
                of
                the Investment Advisers Act of
                1940;

            


    

     

     

    
      	
              ____

            	
              an
                organization described in Section 501(c)(3) of the Internal Revenue
                Code,
                corporation, Massachusetts or similar business trust, or partnership,
                not
                formed for the specific purpose of acquiring the securities offered,
                with
                total assets in excess of
                $5,000,000;

            


    

     

    
      	
              ____

            	
              a
                natural person whose individual net worth, or joint net worth with
                the
                undersigned’s spouse, at the time of this purchase exceeds
                $1,000,000;

            


    

     

    
      	
              ____

            	
              a
                natural person who had an individual income in excess of $200,000
                in each
                of the two most recent years or joint income with the undersigned’s spouse
                in excess of $300,000 in each of those years and has a reasonable
                expectation of reaching the same income level in the current
                year;

            


    

     

    
      	
              ____

            	
              a
                trust with total assets in excess of $5,000,000, not formed for the
                specific purpose of acquiring the securities offered, whose purchase
                is
                directed by a person who has such knowledge and experience in financial
                and business matters that he is capable of evaluating the merits
                and risks
                of the prospective investment; 

            


    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              ____

            	
              an
                entity in which all of the equity holders are “accredited investors” by
                virtue of their meeting one or more of the above standards;
                or

            


    

     

    
      	
              ____

            	
              an
                individual who is a director or executive officer of Sub-Urban Brands,
                Inc.

            


    

     

     

    IN
      WITNESS WHEREOF,
      the
      undersigned has executed this Certificate of Accredited Investor Status
      effective as of __________________, _____. 

     

     

    By:
      ________________________

     

    Name:
      ______________________

     

    Title:
      _______________________

     

    
      
        
        

      

      
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